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Project PresentationBusiness policy and strategyGroup membersAHSAN ROUF L1F08MBAM0089OSMAN QADIR L1F08MBAM0081KANWAL EJAZ L1F07MBAM2083SHEHAR BANO L1F07MBAM2041HASAN NASIR L1F05BBAM2050

History of QarshiConceptualized by Allama IqbalHakim M. Hassan Qarshi established a herbal clinic in the heart of Lahore Beadon rdM. Iqbal Qarshi carried the torch in form of Qarshi Dawakhana 1968.Later it evolved into Qarshi industries.

Evolution of Qarshi chronological

Whats Qarshi all about? Product portfolio

Organizational structureIntroduction

Locations in LahoreHead OfficeJam-e-Shirin Boulevard,15-G, Gulberg-III, Lahore, PakistanPh: +92-42-111 200 300 +92-42-5831924 - 5Fax: +92-42-5834057Email: headoffice@qarshi.com

Research & DevelopmentP.O. Qarshi New Shalimar,Multan Road, Lahore, PakistanPh: +92-42-7463134 - 7463135Fax: +92-42-7463137Email: rnd@qarshi.com

Number of Total EmployeesThere are more than 1600 Workers who are currently working in Qarshi industries all over Pakistan.

Nature of businessNatural Medicines

Health Supplements

Refreshing Syrups

Natural Mineral Water

Food and Farm products

Type of ownershipA 100% privately owned organizationCapital structure

Equity financingdebt financing 100%0%VISION STATEMENT

To be the leader in Natural Medicines, Health Supplements, Refreshing Syrups, Natural Mineral Water, Food and Farm Products in our region by the year 2010.

MISSION STATEMENT

To become a brand of choice by:Conducting goods manufacturing practices to the entire satisfaction of our National and International customers, and providing them with quality products.

Bringing about continuous improvement in all areas through a dedicated, sincere and competent workforce, supervised by a team of highly qualified and committed professionals.

GOALS & OBJECTIVES

Establish qarshi products as an all-round-the-year productsIncrease qarshi product acceptability in the new generationRemind and reassure our existing customersCounter growing competition from allopathicTarget newer potential TM segments and increase consumer baseModify attitudes of non-users of Qarshi products and encourage trialMaintain strategic business partnership with Metro

Core competenciesProduction capabilities of producing at high volumes.Ability to highly diversify the product portfolio.Background from tib.Good will and good brand image in market.Springley is the only natural mineral water available in market.Ability to produce herbal medicine.Favorable capital structure (zero liabilities).Research and development capabilities.Ability to maintain high quality in their products.State of the art machinery and equipment.

Key success factorsExpertise and proficiency in herbal medicinePlants and equipments for appropriate production levelsReputation in fair dealing b to bFinancial resourcesStrong continuous research and developmentFavorable capital structureCulture as defined by managementOwnership Cleanliness Competition Productive Hard Work

Culture reflected by practicesHigh centralizationEntrepreneurial Seth cultureHuman resources head cannot use his authorityLack of authority/empowerment at all levelsEverything is being controlled and interfered in by C.E.OExtensive job bindings (pay less work more)

Main STRATEGIES UNDER TAKEN:

Strategic head

At corporate levelThe main objective of the business is to earn high revenues and high financial growth. The firm applies an aggressive strategy based upon push strategy mainly focusing on the distribution efficiency. Being the market leaders for their main products Qarshi industries use build and grow strategy on corporate levels.

At business unit level:

On the business unit level Qarshi is applying diversification strategy ensures many products to be order qualifiers and most of them are sliding towards order winners.

24At Functional levelTwo way relationship with distributorsBased upon SCMC which stands for sales channel and marketing control. coordinate all the marketing activities and sales channel Ensure maximum efficiency in the operation of the distribution channel.Extensive job rotation and duty assignment, in order to ensure the involvement

External And Internal Assessment

STEPLE analysis

Social analysis:Huge number of people living under the poverty linesingle mothers or fathers are in insignificant numberCultural values and norms are highly celebrated and it creates a high demand for goods and services during any nearing event.

Cont..Technological analysis:For Qarshi technology plays a vital part since it is in manufacturing sector. The world is technology driven nowadays Another perspective is in medicine sector which is something that always needs to be improvedCont..Economical analysis:Recession stage of economical cycleHigh inflation rates 80/20 rule is valid for such economyEconomy is witnessing a shift from agro based to industry based

Cont..Political analysis:Pakistan is politically an unstable territory Government still swings between military dictatorships and democratically chosen parliamentarians. Foreigners are reluctant to invest in Pakistan

Cont..Legal issues:Alcoholic element in any beverage, or soft drink.Proper tax laws Property, intellectual property and patents.Environmental analysis:Green house gases. disrupting noise pollution. Environmental safety and sensitivity.

Porters 5 Forces Model

Threat of New EntrantLowThreats of Substitutes HighBargaining Power of Consumers Moderate Bargaining Power of SupplierLowRivalry among Competing FirmsHigh to moderate

overall industry= mature and competitiveS.W.O.T Matrix For Qarshi IndustriesExternal and internal assessmentStrengths:Backward integrationResearch and developmentBrand recognitionLargely diversifiedHigh Environmental concernsWeaknesses:Lack employee motivationHigh centralizationPursuing with failuresLack customer driven approachOpportunities:Trend for consuming natural productsIncreasing demand for herbal medicineHealth consciousnessNew SBUs (juices)Market potentialEcological organizationsS.O strategiesEnhance the operations in foreign markets.(s1,o1,o2)Carry out a marketing awareness campaign for addressing to health conscious market segment.(s5,o3)W.O strategiesAbandon failed products and deploy resources in new attractive SBUs. (w3,o4)Threats:CompetitionPrice warEconomic downturnLow entry barriers of industryContinuous increase in prices, taxes and labor costS.T strategiesUse differentiation strategy for products. (s2,t1,t2)Use push strategy for SBUs which are less profitable by producing in bulk. (s1,t5)W.T strategiesImprove internal organization structure and accompany it with suitable culture. (w1,w2,t1)BCG MATRIX FOR QARSHI External and internal assessment

C.P.M- Competitor Profile Matrix

External and internal assessment

No.Core competenciesIndustry weight ageQarshi industriesHamdard industriesMarhaba industriesratingtotalratingTotalratingtotalResearch and development0.170.5140.6820.34Backward vertical integration0.0540.230.1530.15Brand image0.1820.3630.5420.36Promotional activities0.0730.2130.2110.07Human resource management0.1310.1330.3920.26Distribution network0.1030.320.2030.30Price competitiveness0.0630.1820.1220.12Market share0.1440.5630.4210.14Foreign operations0.1020.240.4010.112.653.111.84The Space Matrix

External and internal assessmentAxis XInternal Strength PositionExternal Strength PositionCompetitive AdvantageIndustry strengthProduct QualityMarket ShareBrand ImageResearch and development(Worst -6, Best -1)-2-1-3-1Growth potentialEntry of new firms Access to FinancingCompetition pressure(Worst +6, Best +1)+3+4+3+3Average Score = -1.75Average Score = +3.25Total X-Axis Score = +1.5Axis yFinancial StrengthEnvironment StrengthROILeverageLiquidityCash Flow(Worst +6, Best +1)+1+2+3+2InflationTechnologyDemand ElasticityTaxation(Worst -6, Best -1)-6-4-3-4Average Score = +2Average Score = -4.25Total Y-Axis Score = -2.2540 Conservative

AggressiveDefensiveCompetitive-2.251.5+6.00-6.00-6.00+6.00EFE - External Factor Evaluation MatrixExternal and internal assessmentFactorsWeightRatingWeighted ScoreOpportunities:Trend for consuming natural products0.1040.1Demand for herbal medicines increasing 0.1040.4health consciousness 0.0520.1new SBUs, as to juices0.1030.3market potential0.1020.2Ecological organization0.0540.2Threats:competition0.1530.45Price war 0.1040.4Over diversification0.0510.05Economic downturn0.1020.2Low entry barriers of the industry 0.0530.15Continuous increase in prices, taxes and labor cost 0.0520.1Total Weighted Score12.65THE GRAND STRATEGY MATRIXExternal and internal assessmentQuadrant 2Quadrant 1

Quadrant 3Quadrant 4Weak competitive positionStrong competitive positionSlow market growthRapid market growthMARKET ANALYSISMarketing head

Methods of SegmentationDemographic Segmentation:Religion:On the basis of cure:For profession and life styles:Psychographic Segmentation:Like customer needed a quality refreshing beverages

Cont..Behavioral SegmentationBehavioral OccasionsBehavioral SegmentationBenefitsUser RateLoyalty StatusReadiness StageAttitude toward product

Target Market:Families of urban population.Concerned about their health and preferring quality natural products.School/college/university students engaged in sports activities.Professional AthletesClub-level Athletes Field Workers

Marketing mixMarketing Marketing mix of QarshiProductPricePlace Promotion

Quality List Price ChannelAdvertisingFeaturesDiscount Location Personal SellingBrand Name Allowance TransportationSale Promotion

Market shareMarketing head

Market share in red syrup market

Market share in johar joshanda market

Unique selling points100 % pure and natural productsPositioned as differentiated products as to quality and wholesomenessTrustworthy brand name

competitorsCompetitive analysis

Competitive AnalysisIn red syrup market:HamdardLifestyle In herbal and natural medicine market:HamdardMarhabahashmiOther competitorsMineral water:Nestle purelifeCoca cola kinleyPepsi aquafinaAnd many others.Financial strategiesFinancial issues

The core strategymilk and invest

According to this strategy is to get share of profit from one business unit and finance other SBUs.

Qarshi industriesincome statementFor the years2009-10(1st qrtr)2008-092007-08particularsRsRsRssales$4,838,635,742$3,701,435,578$3,155,784,214cost of sales$967,727,148$899,986,248$676,789,658gross profit$3,870,908,594$2,801,449,331$2,478,994,556operating cost$486,404,004$428,035,524$385,231,971operating profit$3,384,504,590$2,373,413,807$2,093,762,585administrative cost$1,211,885,542$1,156,138,807$1,080,989,785net profit before interest and tax$2,172,619,048$1,217,275,000$1,012,772,800interest0$0$0Net profit before tax$2,172,619,048$1,217,275,000$1,012,772,800Income tax (@ 16 %)$347,619,048$167,900,000$139,692,800net profit$1,825,000,000$1,049,375,000$873,080,000Qarshi industriesbalance sheetas on 31st,march 2010AssetsRsLiabilitiesRsintangible fixed assets$255,356,718owner's equity$3,928,564,884tangible fixed assets$2,298,210,458current assets$903,569,923quick assets$471,427,786total$3,928,564,884Total$3,928,564,884Financial evaluationFinancials

RatiosRsturnover ratiosfixed asset turnover1.89Total Asset Turnover1.23profitability ratiosProfit Margin38%ROA46%ROE46%solvency ratiosEquity Multiplier1interpretationLiquidity ratios and solvency ratios:Since liquidity ratios are calculated relatively to current liabilities owed by the business and in Qarshis case there are no current liabilities, which makes liquidity ratios impossible rather unimportant.EPSBeing a private limited company Qarshi has no shares in the market.

Asset utilization ratiosFixed asset turnover=1.89:Qarshi in 2010 first quarter the fixed asset turnover ratio is 1.89 reflecting the high efficiency of revenues as to the investment in fixed assets. Total assets turnover =1.23:it shows that Qarshis investment in its assets is returning high sales and adding value to the organization.

Profitability ratiosNet Profit Margin = 37%the firm is having a ratio of 37 % from total sales as net income and remaining 63% of sales are accounting for costs and taxes.ROE=46%Qarshi a healthy ratio of 46 % shows an above par rating for return on equity proving Qarshi to be a growing organization.Profitability ratios (cont..)ROA=46%46% is the return on assets for Qarshi industries which is more than good rate of growthNOTE:Its the same as return on equity because of the capital structure being composed of just equity.

Long term solvencyEquity Multiplier=1Equity multiplier or financial leverage shows the ratio of assets which are being acquired from equity. The higher it is the lower will be the interest expense and consequently the costs for the firm.just equity and no debts as Qarshi has and thats why equity multiplier is 1. Management STRATEGIES UNDER TAKEN:

Strategic head

Human Resource Managementheaded by Brig.(Rtd) Taimur, It administers various benefit programs (health insurance and medical allowances) as wellEqual Employment Laws and Occupational safety LawsRecruitment StrategyRecruit as neededJob Orientation and Training StrategyAn initial orientationTime to time training of communication skills.Performance AppraisalThe employees work performance is measured against the set objectives and are graded and rewarded annually according to their performance

Administration

Coordination among different departmentsMake tactical plans for implementation of strategies at the final level Act as a support to workforce

Decision Makingcentralized decision making process, where most of the decisions can be overridden by the Chief Executive Officer Majority of the decisions taken by the chief executive officer

Total Quality ManagementTradition of Research, Assurance of Quality

To become No.1 Quality Brand, was an important vision set out in 2005,Taking care of quality at every stage of productionExtensive checking and testing to assure quality

Motivation and Incentive TechniquesThe company is limited in terms of employee motivation incentive plans small incentive plans are made for the sales team based on achieving annual objectives.Ummrah ticketsFacilities, allowances etc are also providedOther strategiesStrategic headR & DQarshi has always been emphasizing on quality which lead to research and development.R&D Department has developed a complete profile of 207 products based on indigenous knowledge of Tibb-e-Islami and ayurveda Main role is to provide lead to production dept to pursue business level strategyprocurementheaded by DGM Admin and Commercial. Packaging, bottling are outsourcedLong term and consolidated relationship with supplier to avoid conflict and costly delays.Production three different plants for processing: natural medicinesJam-e-Shirin farm products like jams and juicesAll these production facilities are located in HATTAR Industrial Estate, NWFP.

Control proceduresManagement control

Marketing controlMarketing is not considered as the guiding philosophy for the organization as a whole rather its importance is limited to advertising.use sales as marketing appraisal procedures.outsource all the A.T.L (above the line) marketing activities to an advertising agency named as MANHATTON US BROTHERS.

Production controlThe production department is using LEVEL STRATEGY for production. it carries batch production.The C.E.O himself gives a detailed visit once a month to ensure the operation to be working as planned.Quality control Qarshi industries has been awarded with 7 certificates in the past acknowledging a superior level of quality maintenance.ISO-9001: 2000, Quality Management SystemISO-14001: 2004, Environmental Management System.HACCP, Food Safety System.As the product is in the development process continuous checks and laboratory testing is done on different sample units out of a test batch.Human resource controlfrom recruiting to exit interviews all are conducted by the human resource department.selects appropriate employees out of the pooled talent, and alongside provide training to employees.C.P.A:CPA stands for cost preventive actions which is an allegation on those employees which take any action which is not favorable for the organization.

Finance controlAlong with capital budgeting and structuring the department is also charged with the responsibility to set prices of the products

C.E.Os involvementInternal auditIf every things going well whats the issue?Main issue

Problems (management)High employee turnoverWeak lines of authorityHigh job bindingsHigh frequencies of meetingsBarriers for implementation of new ideasLacks employee empowermentOver interference of C.E.OOvertime without pay

We saw something else!!Group analysis

Qarshi through my lensManagers lack authorityentrepreneurial (Saith) cultureLacks marketing as a guiding philosophyLacks integration between departmental goals and objectivesManagement by tactics rather strategies (short term management)Using management by extrapolationHuman resource policies lack any incentives or financial motivation for employees

Strategic alternativesThe way out?

Solutions to problemsEmpower managers.Integrate the goals of all the departments.Marketing importance.Encourage creativity and performance.Remove operational bottle necks.Improve incentive and promotion policies.Change of culture.Rationalization + intuition

In a nut shellApplication gaps of performance from theory.Absence of strategic nature of management.culture or orientation of organization is mechanistic.

Recommendations Apply strategic management process (from vision till implementation).Carry out differentiation along with image building branding.Deal with marketing dilemma of pricing.Balance the culture between mechanistic and organic.

The game plan for futureOur words of advice

2010 to 2011The organization must instantly take a feedback from its employees regarding human resource issues.Listen to their concerns as to package, job specifications and their commitment to organization.Promote consumer orientation by delegating authority to marketing department.

2011 to 2012Revise the strategic management modelchange in culture.adequate promotional mix, resonate brand and position in the market.Enter foreign marketsReposition springley on its point of differentiation.

2012 to 2013Plan special campaigns to promote corporate brand image.Promote new products in the market extensively such as juices, farm products and make to drink products.Apply market penetration strategy in local markets.Get into market development once local leadership is gained.Proliferate and maintain jam-e-shireen.

Chart138.68620313.96887847.16549839.29795112.18597548.02186339.03952110.08854550.71552337.3120859.1608152.90500437.2628079.1349353.16432635.8696398.85025854.78795733.803369.14470256.53483833.77438110.52259155.27837134.55433511.47829253.65646235.39569712.18611352.18422235.93181312.99422850.71125135.69680412.53831751.46837435.29783212.9518651.54585932.43448117.20708950.07164934.79642814.48441450.41314233.80711414.95023351.09013134.45612511.3151854.10485233.782210.89659655.19284634.02042410.81012855.07419836.62934310.57989252.59785137.24150710.69042751.95304438.111512.22673749.50630635.34650313.8932350.48252934.85886518.05596346.50239141.28558715.23952742.72758834.09841819.12352346.77805934.46214219.56437745.87228832.02846617.41967950.43667331.49752316.0504952.39031335.06201610.35912954.54997536.8398949.44117753.67938336.58168410.82432152.5672736.81718711.24135851.91604537.0820510.59827252.31967839.33361410.19537450.47101241.3910199.32847749.280504

Rooh AfzaAll other red syrupsJam-e-Shirin

Sheet1Other Red Syrups No. 2All other red syrupsTotal Jam-e-ShirinJan-0738.68620313.96887847.165498Feb-0739.29795112.18597548.021863Mar-0739.03952110.08854550.715523Apr-0737.3120859.1608152.905004May-0737.2628079.1349353.164326Jun-0735.8696398.85025854.787957Jul-0733.803369.14470256.534838Aug-0733.77438110.52259155.278371Sep-0734.55433511.47829253.656462Oct-0735.39569712.18611352.184222Nov-0735.93181312.99422850.711251Dec-0735.69680412.53831751.468374Jan-0835.29783212.9518651.545859Feb-0832.43448117.20708950.071649Mar-0834.79642814.48441450.413142Apr-0833.80711414.95023351.090131May-0834.45612511.3151854.104852Jun-0833.782210.89659655.192846Jul-0834.02042410.81012855.074198Aug-0836.62934310.57989252.597851Sep-0837.24150710.69042751.953044Oct-0838.111512.22673749.506306Nov-0835.34650313.8932350.482529Dec-0834.85886518.05596346.502391Jan-0941.28558715.23952742.727588Feb-0934.09841819.12352346.778059Mar-0934.46214219.56437745.872288Apr-0932.02846617.41967950.436673May-0931.49752316.0504952.390313Jun-0935.06201610.35912954.549975Jul-0936.8398949.44117753.679383Aug-0936.58168410.82432152.56727Sep-0936.81718711.24135851.916045Oct-0937.0820510.59827252.319678Nov-0939.33361410.19537450.471012Dec-0941.3910199.32847749.28050435.941292166712.49169751.3365909722

Chart110078.75202611.4163268.0381941.2034840078.7520260.12635110079.47870510.1232977.5832921.8243220079.4787050.15078710084.4675876.7171766.1699132.0489130084.4675870.17357910087.0550235.7368514.7639121.9644040087.0550230.10176610088.2777314.6004434.8275781.6656350088.2777310.15378310087.1580075.8663255.2632711.2693880087.1580070.09273910087.635554.3549386.2125241.4445450087.635550.06291410086.5344733.5371087.7942071.8859380086.5344730.06054310087.867572.8728687.0776881.6630240087.867570.0777510084.8352334.0903918.3543141.9411490084.8352330.11908810083.3271236.2854447.6586382.2318340083.3271230.12705310085.3845864.8291966.255312.408770085.3845860.13396810083.7912355.3426297.704222.5289040083.7912350.1833410083.1972386.7805735.9587913.1397140083.1972380.23746610079.7247615.0783857.9213685.8796820079.7247610.26116210087.006125.0889283.6548821.54438502.27120687.006120.16960710085.8460575.4129464.4975111.96023401.86676885.8460570.10691510085.7017453.9026963.1049922.3481282.204392.03647885.7017450.087235

TOTAL JOSHANDAQarshi Johar JoshandaAhmed JoshandaOTHERS (SACHET PAPER)Hamdard JoshinaTotal Werrick PharmaMarhaba JoshandaQarshi Johar JoshandaQarshi Pura (POLYTHYLENE)

Sheet1TOTAL JOSHANDAQarshi Johar JoshandaAhmed JoshandaOTHERS (SACHET PAPER)Hamdard JoshinaTotal Werrick PharmaMarhaba JoshandaQarshi Johar JoshandaQarshi Pura (POLYTHYLENE)Jul-0710078.75202611.4163268.0381941.203484NANA78.7520260.126351Aug-0710079.47870510.1232977.5832921.824322NANA79.4787050.150787Sep-0710084.4675876.7171766.1699132.048913NANA84.4675870.173579Oct-0710087.0550235.7368514.7639121.964404NANA87.0550230.101766Nov-0710088.2777314.6004434.8275781.665635NANA88.2777310.153783Dec-0710087.1580075.8663255.2632711.269388NANA87.1580070.092739Jan-0810087.635554.3549386.2125241.444545NANA87.635550.062914Feb-0810086.5344733.5371087.7942071.885938NANA86.5344730.060543Mar-0810087.867572.8728687.0776881.663024NANA87.867570.07775Apr-0810084.8352334.0903918.3543141.941149NANA84.8352330.119088May-0810083.3271236.2854447.6586382.231834NANA83.3271230.127053Jun-0810085.3845864.8291966.255312.40877NANA85.3845860.133968Jul-0810083.7912355.3426297.704222.528904NANA83.7912350.18334Aug-0810083.1972386.7805735.9587913.139714NANA83.1972380.237466Sep-0810079.7247615.0783857.9213685.879682NANA79.7247610.261162Oct-0810087.006125.0889283.6548821.544385NA2.27120687.006120.169607Nov-0810085.8460575.4129464.4975111.960234NA1.86676885.8460570.106915Dec-0810085.7017453.9026963.1049922.3481282.204392.03647885.7017450.087235