Embed Size (px)
Citation preview
0 | P a g e
2013STRATEGIC AUDIT
Group Members:Muhammad AliMuhammad AbdullahAmna Mehdi JanjuaMuhammad BilalAli Hayat
Group No 4 – BBA 8A
STRATEGIC AUDIT
Table of ContentsSTRATEGIC AUDIT..........................................................................................................................1
COMPANY OVERVIEW....................................................................................................................3
History:...................................................................................................................................... 3
Introduction of Servis Shoes:.....................................................................................................3
Vision:....................................................................................................................................4
Mission Statement:................................................................................................................4
Values & Beliefs:.................................................................................................................... 5
Goals & Objectives:................................................................................................................5
INDUSTRY ANALYSIS (EXTERNAL ENVIROMENT)............................................................................6
Shoe Industry of Pakistan:.........................................................................................................6
Industry Growth Trends & Challenges In Respect Of Very Critical Points:.................................6
Overcapacity Production:...................................................................................................... 6
Product Differentiation:.........................................................................................................6
Switching Costs:.....................................................................................................................7
Concentration and Balance:...................................................................................................7
Diversity of Competitors:.......................................................................................................7
Macro Environment (PESTLE Analysis):......................................................................................7
Social & Cultural Environment:..............................................................................................7
Cultural Environment:............................................................................................................8
Political Environment:............................................................................................................8
Legal Environment:................................................................................................................9
Technological Environment:..................................................................................................9
Demographic Environment:.................................................................................................10
Economic Environment:.......................................................................................................10
Competitive Analysis:...............................................................................................................10
BATA:................................................................................................................................... 10
STARLET............................................................................................................................... 11
INTERNAL ANALYSIS.....................................................................................................................12
Organizational Level:............................................................................................................... 12
1 | P a g e
Strategy:...................................................................................................................................12
Other Strategies:..................................................................................................................12
Overview Of Company Functions / Department......................................................................13
Retail Operations:......................................................................................................13
Whole Sale Department:...........................................................................................13
Corporate Sales Department.....................................................................................14
Product Development Centre....................................................................................14
Chief Merchant Organizing Department....................................................................14
Sourcing Department.................................................................................................15
Replenishment Department......................................................................................15
Finance & Accounts Department...............................................................................15
Marketing Department..............................................................................................15
SWOT Analysis:........................................................................................................................ 16
Strengths:.............................................................................................................................16
Weakness:............................................................................................................................16
Opportunities:......................................................................................................................17
Threats:................................................................................................................................17
Marketing Mix (4P’s):...............................................................................................................17
Price:.................................................................................................................................... 17
Promotions:......................................................................................................................... 17
Placement (Distribution):.....................................................................................................18
Positioning:.......................................................................................................................... 18
FINANCIAL ANALYSIS................................................................................................................... 18
CONCLUSION............................................................................................................................... 19
Competitive Advantage Of Servis:...........................................................................................19
Main Risks For Servis:.............................................................................................................. 20
Suggestions & Recommendations:..........................................................................................20
2 | P a g e
COMPANY OVERVIEW
History:
The story of ‘Servis’ begins with a group of friends - young, energetic, fresh from college
- who established Service Industries more than 50 years ago. These young men, named Ch.
Nazar Muhammad (Late), Ch. Muhammad Hussain (Late) – both from Gujrat district and Ch.
Muhammad Saeed (Late) from Gujranwala District, started business in 1941 at a small scale in
Lahore. At that time, they were only manufacturing handbags and some other sports goods.
Within years their business flourished remarkably and they were supplying their products to
every corner of India at the time of Partition.
In 1954, they installed a shoe manufacturing plant at industrial area Gulberg, Lahore
which started production in the same year. The industry started manufacturing various types of
shoes. Later management shifted the factory from Lahore to Gujrat. Service Sales Corporation
(Pvt.) Ltd. – the Group’s marketing company – was established in 1959. Humility, fairness, and
respect were the values close to the heart of these founders and it were these values that led
to phenomenal success of the Group over the years.
Today, the production side of the company has flourished into Service Industries Limited
(SIL) which has world-class shoes, tires, tubes, and rubber production facilities in Gujrat and
Muridke. SIL is also the leading exporter of footwear. Service Sales Corporation (Pvt.) Ltd. (SSC)
is today Pakistan’s leading footwear retailer which is also diversifying into other businesses.
A humble venture of friends has grown into a Group that makes a difference in lives of
millions of people every day today.
Introduction of Servis Shoes:
Servis Shoes is Pakistan’s leading retailer that has set new record standards and created
new benchmarks in the retail industry. With its world class retail systems, dynamic approach to
business and highly energetic team, Servis shoes is today heading toward becoming a regional
retail player. The main business of Servis shoes is to purchase the shoes from Servis industries
limited and also from leading international and national footwear brands and take the
3 | P a g e
ownership after adding up its margin. The ownership includes cost of marketing of the shoes,
logistics arrangements to circulate the shoes, management and fixed assets costs. Servis has its
own marketing network and distribution network in the country. Sales are carried out through
wholesale and retail outlets, which are located in famous trade centers in various cities and
towns all over the country.
The company’s corporate head office is located at Lahore while other regional offices
are set in different major cities of the country.
Vision:
“To be the market leader, providing quality footwear, tyre & tube and allied products. To strive
for excellence and global recognition by continuous improvement, innovation, dedication and
growth.”
Mission Statement:
In simple words Mission of Service Industries Limited, is to satisfy its customers by
providing quality & reasonable priced footwear’s and other products throughout the country,
and to satisfy its employees through good management. The detailed points of their mission
statements are given as follows:
To be a result oriented and profitable company by consistently improving market share,
quality, diversity, availability, presentation, reliability and customer acceptance.
To emerge as a growth oriented concern ensuring optimum return and value addition to its
shareholders.
To ensure cost consciousness in decision making and operations without compromising the
commitment to quality.
To create an efficient resource management and interactive business environment, evolving
an effective leadership by creating a highly professional and motivated management team
fully equipped to meet any challenge
To keep abreast with modern technology and design to optimize production and enhance
brand image to attain international recognition for the company’s products.
4 | P a g e
To set up highly ethical business standards and be good corporate citizens, contributing
towards the development of the national economy and assisting charitable causes.
To adopt appropriate safety rules and environment friendly policies.
Values & Beliefs:
Servis core values are integrity, comfort, sentiment. Servis Shoes is always a head in
providing our customers and consumers their best weather it comes to variety of shoe range
with affordable price or customer services of Servis Shoes. Making Servis a well know brand is
always being the first concern, whether it’s CEO, Marketing managers or Area sales manager of
the company every individual who is part of Servis is on its toes to perform his/her part in
building brand and giving best and performing his job effectively.
Servis Shoes Company create its Brand by presenting its target audience a positive
image of its brand and by creating awareness and this was all done by practicing all the
marketing strategies.
Goals & Objectives:
The goals and objectives of Servis are as follows:
Our products should meet the customer expectations
Our basic concern is to satisfy customer.
Our aim is to provide good job opportunities and satisfaction to people.
We should respect our competitors.
Employees are as important as external customers.
Teamwork and cooperation are more important than individual action.
Never be satisfied with the level of quality, always strive for continuous improvement.
No compromise on quality.
5 | P a g e
INDUSTRY ANALYSIS (EXTERNAL ENVIROMENT)
Shoe Industry of Pakistan:
Pakistan produces annually around 240 million pairs of footwear of which approximately
20 million pairs are exported. The industry has had a significant increase in export in recent
years – exports now stand at around US$150 million per year. Craft manufacturers/cobblers
cover a large portion of footwear manufacturing in Pakistan and only around 20% of the sector
is organized.
This means that Pakistan has a strong domestic market. But still it is considered small as
compared to other global competitors like China which is considered one of the world largest
footwear manufacturers. This still doesn’t mean that it can’t compete against the international
competitors because the threat of new entrants is low in this industry because of 25% tariff for
international brands and also because of the threat of smuggling.
Industry Growth Trends & Challenges In Respect Of Very Critical Points:
Shoe industry in Pakistan is growing rapidly and a lot of companies are competing for
market share so the rivalry among the firms is intense.
Overcapacity Production:
Industry is producing more than its demand in the total production of industry, because
there are local manufacturers and imports of shoes from China. So there is threat of price war.
Product Differentiation:
Most shoe companies are using direct inject technology by which shoe is made as a
single piece and ultimately there is no any kind of stitches in the shoes. This gives competitive
advantage to most companies in overall industry.
6 | P a g e
Switching Costs:
Lots of companies are fulfilling the needs of buyers on low prices ultimately switching
cost is low so the overall industry suffers because imported shoes are more cheaper and
famous among the young people.
Concentration and Balance:
In these aspects there is intense rivalry among competitor because many companies
trying to chase same customers.
Diversity of Competitors:
Local companies are implementing more diverse strategies on distribution and retail
channel, so overall industry is not stable. The reason is that many local companies are entering
very quickly and vice versa because they could not stay for long time in the market.
Macro Environment (PESTLE Analysis):
Servis is considered a market leader in the shoe industry. It functions primarily in
Pakistan however it has explored markets outside Pakistan and is slowly establishing in Kenya
as the locals there have the same tastes as Pakistanis. It did expand to Dubai and Saudi Arabia
however it ended its operations due to failure and returned to Pakistan.
Social & Cultural Environment:
For every business, society matters a lot as their target market is also in that society.
Social environment mainly consists of Family, educational institutions and religion. Servis as a
shoe market target men, women and kids in a society. Shoes are the basic needs for every
family. Servis has divided its target market as family needs e.g. in a family if there are school
going children then they need school shoes of different colors (back and white mainly, or if
there are teenagers who are usually party animals want some funky and party wears, Servis
provides that category too or there are singles/parents living in a family then they have variety
of their shoes too (women and men) for different occasions.
Thus, it fulfills Pakistan’s need for a shoe store which caters to everyone in the family.
7 | P a g e
If we take above example of school going children then Servis as a shoe brand targets students
as well which includes all kind of students from kinder garden till college going students.
Like Family and Educational institutes, religion also effects business socially as some people are
really attached to their religion. As Servis is a Pakistani Shoe company and the religion in
Pakistan is Islam, they should keep in their minds while making product that the material they
are using is “halal”. E.g. they can’t use any animal’s skin that is haram in our religion.
Cultural Environment:
Culture is the environment that surrounds you at work all of the time. Culture is a
powerful element that shapes your work enjoyment, your work relationships, and your work
processes. But, culture is something that you cannot actually see, except through its physical
manifestations in your work place. Culture is made up of the values, beliefs, underlying
assumptions, attitudes, and behaviors shared by a group of people.
Servis is very keen on its corporate environment as it focuses on every employee to be
trained to ensure a standard service among all the stores.
Political Environment:
No matter how attractive the economic prospects of a particular country or region are,
doing business there might prove to be financially unsuccessful if the host government imposes
heavy financial penalties on a company or if unanticipated events in the political arena lead to
the loss of income-generating assets. The political environment in which the firm operates (or
plan to operate) will have a significant impact on a company's international marketing activities.
The greater the level of involvement in a foreign markets, the greater the need to monitor the
political climate of the countries business is conducted. Changes in government often result in
changes in policy and attitudes towards foreign business. E.g. Servis is a Pakistani company and
as the economic conditions of Pakistan are not very good then the company may suffer from
political situations while trading their products internationally. Servis has accepted Pakistan’s
politically unstable environment and hasn’t allowed it to influence it directly. As it caters to all
income groups it has been able to diversify its risk.
8 | P a g e
Legal Environment:
The legal environment is derived partly from the political climate in a country and has
three distinct dimensions to it:
The domestic laws of each of your foreign market
The domestic laws of your home country
International law in general
Domestic laws govern marketing within a country, e.g. the physical attributes of a
product will be influenced by laws (designed to protect consumers) relating to the purity, safety
or performance of the product. Domestic laws might also constrain marketers in the areas of
product packaging, marking and labeling.
Buyers and sellers are at times also subject to international law, which may be defined
as that body of rules which regulates relationships between countries or other international
legal persons.
Technological Environment:
Technology can be defined as the method or technique for converting inputs to outputs
in accomplishing a specific task. Thus, the terms 'method' and 'technique' refer not only to the
knowledge but also to the skills and the means for accomplishing a task. Technological
innovation, then, refers to the increase in knowledge, the improvement in skills, or the
discovery of a new or improved means that extends people's ability to achieve a given task.
Changes in the technological environment have had some of the most dramatic effects
on business. A company may be thoroughly committed to a particular type of technology, and
may have made major investments in equipment and training only to see a new, more
innovative and cost-effective technology emerge. Technology becomes obsolete very quickly
and getting replaced by new models. E.g. Servis as a shoe company uses machinery while
making products so they should keep in their minds that with new innovations they have to
change their technological instruments. By technology a company can update their business.
Furthermore, changes in the technological can affect cost (efficient production, lowers the unit
costs of production), quality (introduce new and better features), and result in new innovations.
9 | P a g e
Only recently has Servis made its database computerized which should have been done
long before and this technological shift would make it more efficient.
Demographic Environment:
The demographic environment includes the study of human population in terms of size,
location, age, sex race, occupation and other statistical information. Servis target both male and
female and provides benefits to them by manufacturing innovative designs. They also target all
income groups including rural and urban areas. Servis has 30 outlets in Karachi
There are 67 Mega stores of service which basically cater to upper class while other outlets
including 36 factory outlets (FOL) cater lower and middle class.
Economic Environment:
Every business needs to be cautions of its economic environment and Servis is no
exception. In Pakistan robust economic growth, favorable economic policies and increase in key
economic indicators have all supported growth within the banking sector.
Service main strengths help it to survive as it provides products for all income brackets.
In 2010 it was awarded by Germany for being first Pakistani company to give an MNC tough
competition.
Competitive Analysis:
The two major direct competitors of Servis are as following
BATA:
Bata Pakistan Ltd. was formed in Pakistan in1952. Bata's strength lies in its worldwide
presence. While local companies are self-governing, each one benefits from its link to the
international organization for back-office systems, product innovations and sourcing.
Although Bata operates in a wide variety of markets, climates and buying power Bata
companies share the same leadership points. Two important ones are product concept
10 | P a g e
development and constant improvement of business processes in order to offer customers
great value and the best possible service. Bata offers Wide product assortments.
Bata collections target a wide range of customers and offer an excellent price-quality
ratio. Bata’s exclusive models along with national and international brands are carefully
selected and updated in response to market demand.
Qualified and enthusiastic sales associates who take customer’s satisfaction to heart. In
many countries customer service goes beyond the stores with home deliveries, orders made
possible via catalogues, the web or even call centers.
Easy-to-shop store layouts with clear product displays by category and by style. Any
Bata store in the world we repair, exchange or refund any products with defects. We exchange
or refund unworn merchandise if you change your mind.
STARLET
The best located and most successful, the growth rate of Starlet shoes in Pakistan has
been recognized. The Unit is equipped with the most advanced and modern 24 station
polyurethane sole injection machine. The global fashion market is growing by leaps and bounds
and indeed, the fashion footwear industry is no exception.
There are new fashion icons and trends governing consumer choices now. Starlet makes
sure that its customers always get the cutting-edge fashion footwear that they desire, be it
formal shoes with the finest embellishments, or a profusion of delicate flowers. It ensures that
Starlet is a brand that caters to local needs. Their magazine is launched for the loyalty card
members of Starlet Shoes. This magazine is delivered bimonthly at customer address via courier
thus creating a customer brand bond.
Market Share Of
Companies
Number Of
Outlets
11 | P a g e
Servis 5%
Bata 6%
Starlet 2%
Others 87%
400 Approx.
400 Approx.
12 Approx.
-
INTERNAL ANALYSIS
Organizational Level:
To achieve gigantic results, business should be in a complete organized structure. In
other words we can say that there should exist a complete coordination between employer and
employee both a horizontal and vertical level.
Servis Industries (Pvt.) Ltd. Just only performs the manufacturing activities at Gujrat and
Muridke, whereas selling activities are performed through Servis sales Corporation, which is
also a member of Servis Group of Industries. Service Sales Corporation has its 400+ stores in
whole of the country for selling activities of Servis group on industries and every person has
complete knowledge about his/her duties and responsibilities. Therefore we can say that Servis
group of industries has strong organization setup which is key element of its success.
Strategy:
Their plan devised to maintain and build competitive advantage over the competition.
They are constantly developing new products to keep pace with industry’s rapidly changing
needs. They have a cost leadership strategy. They are providing goods at low prices and are
thus providing good value for money. They are doing this because as inflation rate is high and
most of the target audience is middle class thus they have to provide shoes accordingly. This
strategy so far has been successful but is not foolproof and will provide danger for Servis in the
coming future.
Other Strategies:
They basically focus on the following aspects:
12 | P a g e
Servis brands are the preferred choice in their categories. Consumer insight drives all
aspects of its marketing and communication efforts.
Servis communication to the consumer is relevant, cutting-edge, and adheres to the highest
standards of responsible communication.
Servis is seen as the No. 1 career destination for talented, motivated and ambitious
professionals (According to them).
Servis result-oriented organizational structure ensures effective communication and
empowered self-management.
Fully integrated systems (Servis, suppliers, customers) ensure efficient business processes.
Overview Of Company Functions / Department
Retail Operations:
Manages Overall Retail Operations
Stores Management
Sales Projections
Revenue Generation
Achievement Of Sales Targets
Identification Of New Business Locations
Keeping An Eye On The Competitor’s Strategies
Improving Customer Services, Etc.
Over 400 Outlets In18 Districts
These 18 Districts Are Further Divided In 3 Regions I.E. North, Central And South Headed
By Operation Heads.
Whole Sale Department:
Wholesale – Business Centers
The department is responsible for sales of products in large quantities to different
dealers and retailers through its Wholesale Business Centers.
13 | P a g e
Wholesale – Key Accounts & Modern trade
The department is responsible for key dealers and Servis stalls at hyper markets such as
Makro, Metro, Hyperstar, etc.
Wholesale Distribution
Responsible for Wholesale footwear products selling to retailers through Distributors
and Wholesale Business Centers.
Corporate Sales Department
Responsible for selling footwear products to institutions like Army, Police, Schools, etc.
Product Development Centre
Responsible for developing full range of products keeping in mind the latest trends,
competition, and the future needs of customers. The range development team conceives new
ideas for the coming season and then gets the samples made through designers.
Chief Merchant Organizing Department
Responsible for merchandising of all the channels such as A-Pair, FOL, Mega Stores, Best
Value Stores, Shoe Planet, etc.
Chief Merchant Organization – Planning
Responsible for providing a financial and fact based analytical point of view to all
decisions through consulting the historical data. Creating profitable yet achievable financial
plans. Performing assortment analytics to support buying process. Determining purchase
commitment based on bottom up need. Optimizing allocation effectiveness with managing
inventory flows.
14 | P a g e
Chief Merchant Organization – Supply Chain
The supply Chain focuses on the efficient execution of warehouse operations to achieve
minimum order processing lead time, efficient replenishment of articles & assortments with an
emphasis on driving down operating costs while increasing service levels
Sourcing Department
Responsible for taking the buying decisions. The products are acquired through various
sources including our factories in Gujrat & Muridke. This department is also responsible for
vendor development as well. The sourcing department is also responsible for negotiating and
fixing pricing issues related to different articles.
Replenishment Department
Responsible for ensuring that the products are available at the shops, on the shelves, at
the right time, in coordination with planning department.
Finance & Accounts Department
This department is responsible for taking all financial decisions for the Company and
also performs the treasury function. Management of overall accounts of SSC and it’s
subsidiaries, verification of stock statements, personal accounts matters, conducting business
reviews, budgetary planning and controls, arrangement of funds, disbursements of salaries, etc.
encompass the scope of the department.
Marketing Department
The decision how to market the product is taken by some of the top management and
marketing personals. Since the company believes on research based marketing so all the
representatives are directed to research about any specified product. Upon this research the
top level personals get together to take the final decisions. Marketing department is
responsible for the whole, marketing strategy. How to market an existing product and how to
launch a new product. A specified budget is allocated for the marketing and launching purposes
for the whole year. Advertisement campaigns are also launched for the different brands by the
15 | P a g e
marketing department. This department is responsible for all marketing support to SSC
including the marketing research, consumer insights, brand management, launching campaigns,
looking after corporate social responsibility, liaison with agencies, etc.
SWOT Analysis:
Strengths:
Servis brand itself is strength
Quality, pricing strategy of shows and variety in shoes are greatest strengths of Servis
Servis captures the whole family-men, women and kids.
Servis focus on every class of the society-upper class, middle class and lower class
Servis own its own factories one in Gujarat and other is in Faisalabad
Servis administration is sincere with their employees; they give good training skills and
benefits to them.
Servis provides good discount in every occasion of year like Eid, summer, winter and school
season.
Servis apart from retailing sector have open up a pharmacy sector which provides all kind of
medical services to hospitals.
Servis provide benefits to their loyal customers too like offering loyalty cards and greet on
occasions through mails and special discounts.
Weakness:
Servis has not been able to provide its services at international level. They started their
business in Dubai and Saudi Arabia but they had to wind up soon.
Servis usually has trouble from suppliers; the raw materials are not supplied at time.
Manual work in factories took more control; technological changes (new machineries) in
factories came in 2010 which was very late as BATA has automated system.
There are only two factories of Servis in whole Pakistan. They cannot build more because of
economic problems in country.
16 | P a g e
Due to the problems in supplying area, sometimes the manufacturing of shoes is affected
and the company imports from China and Indonesia.
Opportunities:
Don Carlos and Liza-brands of Servis gives Servis a lot of profit, they have an opportunity to
extend these brands internationally.
For Servis, Bata making its shops next to it can be a threat but according to Servis they take
it as an opportunity by making an environment of shoe market so that it become easy for
customers to reach them in short period of time.
They also take advantages of seasons like summer, winter etc by turning them into their
occasions like Eid and school season in which they give discounts and customers get
delighted and shop more which increases their turnover rate.
In rural areas the market measure is very low so servis took it as an opportunity and started
their market in those areas.
Threats:
Servis has a huge threat from domestic rivals like BATA.
Inflation is also fearful threat for Servis.
Due to WTO more foreign companies can enter in country and can be competitor of SSC.
Marketing Mix (4P’s):
Price:
The price of Servis is another one of its strengths. It basically targets price sensitive
people and have ranges of shoes going for lower middle to elite class. One such example can be
that its Don-Carlos simple shoes are priced to target lower middle to middle class while its
Maximus range is supposedly targeting Upper middle to elite class.
Promotions:
Servis has decided this year to aggressively promote its brands. The main forms of
promotional activity used are TV adverts which are colorfully designed to attract it’s target
17 | P a g e
audience. The other forms which they use to a lesser extent are the website which offers the
user to view an enlargement of the shoe and posters. Word of mouth is also heavily relied on
as Servis had primarily built its reputation from it.
Placement (Distribution):
Most of Servis outlets are company owned thus what it produces it also retails itself.
Servis outlets are located both in the rural areas and the urban areas and are easily accessible
to the consumers. There are basically 3 types of Servis Outlets:
Factory Outlets (Contains Low Cut Price Shoes And Promotions, Sales Discount)
Servis Store (Oldest And Contains Both Domestic & International Brands)
Servis Megastore (Contains Large Variety Of Shoes)
Positioning:
When people think of Servis the words affordable, satisfactory, accessible and durable
comes to their minds. In comparison to other shoe brands Servis has positioned itself as a
consistent company offering goods which will last and be easy on the pocket. The sheer number
of years it has been around evokes a trust that the new and upcoming brands cannot tackle
with. So the position that it has created in the mind of the consumer is “AFFORDABLE SHOES
PROVIDING GOOD VALUE FOR MONEY”.
FINANCIAL ANALYSISRatio Year 2012 Year 2011 Conclusion
Current Ratio 1.280 0.840 It has a weak current ratio and needs to improve even more because the ratio between current assets and
liabilities is less.Quick Ratio 1.218 0.471 There is an increase in the quick ratio which shows that
firm’s performance has increased since 2011.Average Inventory
Turnover Period80.60 62.92 As the inventory turnover is high thus the inventory
turnover is not adequate and will cause cost to the firm.Gross Profit Margin
Ratio16.24 15.43 Compared to standard ratio this ratio is lower which
shows low short term liquidity efficiency at the same time holding less than sufficient current assets mean
18 | P a g e
inefficient use of resourcesNet Profit Margin
Ratio13.74 5.23 It is very clear from the calculations that the working
capital of the Servis has increased doubled of that last year, which shows good short term liquidity efficiency.
CONCLUSION
Competitive Advantage Of Servis:
This shoes the current competitive advantages of Servis:
Service Differentiation: Servis continue to be efficient in its delivery of products to the
distributors. It also maintains healthy relationship with its suppliers and distributors.
Image Differentiation: It sponsor celebrities for its advertisements and continue to sponsor
important events.
Personnel Differentiation: In case of Servis, it continues to hire and train people to make an
overall good impression of the company. The sales and the marketing staff should be given
training regarding proper handling of contracts and distributors.
Direct inject technology Differentiation: Servis has a main strength which makes the Servis
superior than other footwear's that is Direct Inject technology. Direct inject technology is a
technology by which company makes the shoes as a single piece, there are no kind of
stiches on the shoes and this technology is only present in the factory that is present in
Gujrat
Brand strategy: Servis brand strategy differentiates it from their competitors and underpins
their approach to product development. They continue to build a focused, segmented and
differentiated brand portfolio and commit resources to full range of brands deployed in the
key industry areas that offer the most robust source of volume and profit growth.
Integration Strategy: Another plus point of Servis is its integration. It has both forward and
backward integration meaning it is its own manufacturer and distributor thus it has gained
its own way of doing things. Other than that its raw material come from its own subsidiaries
thus the bargaining power of supplier and distributor is always low.
19 | P a g e
Main Risks For Servis:The 2 main risks faced by Servis are as follows:
Low Quality Of Shoes
High Competition In The Market
These factors are the cause of declining market share of Servis shoes. One of the major
factors of low market share of Servis is poor quality of Servis shoes. It is not improving its
quality whereas the quality of shoes of other companies like Bata, Hush puppies and starlet is
much better than Servis so people these brands.
In recent years, Pakistan has been bombarded with so many shoe companies. Their
shoes are more trendy and fashionable. This has affected the market share of Servis. Also Servis
lack variety in features. Except for the basics, there are no fancy shoes to attract the teenagers
or even adults. People nowadays are more concerned with comfort, appearance and other
superficial attributes in even the smallest of things.
So in order to retain its market share Servis must focus on these main causes which are causing
decline in market share of Servis. If these are catered well and effective planning and execution
is done Servis can generate more market share through shoes.
Another issue that Servis has recently removed was ineffective advertisement which had
created a lack in communication between the customer and the brand but now with their
SHOES FOR EVERYONE campaign they have changed this and are attracting new customers.
Suggestions & Recommendations:Following are some of the suggestions and recommendations to increase the work life
and sale volume of Servis shoes:
Servis should focus on the quality of the products along with keeping consumer
preferences their priority.
Servis should develop proper marketing division which can highlight differentiation
among Servis and its competitors.
Focus more on existing brands and innovating them
Separate outlets for ladies Variety (MUST)
Regular market surveys
20 | P a g e
Full utilization of the available resources.
Focus on customer awareness.
The process of decision making can be improved.
Can get access to the markets globally.
Ensure full check and balance.
Conducting a customer survey will be most helpful to assess the needs of current
customers.
21 | P a g e
