Strategic Management of Square Textile Essay Example

Strategic Management of Square Textile Paper Historical Background Square Group is one of the most renounced pharmaceutical companies in Bangladesh. This group inaugurated their journey through Square firm in 1958. This is the first medicine exporting firm in the country. It’s contributing to the national economy by exporting medicine from 1987 to till now. Square group is no longer confined to medicine production. They have diversified their activities. In 1988 they established Square Toiletries. In 1997 they established Square Textiles. In 2000 Square spinning started exporting by satisfying the local market. In 2001 Square group lunched many other firms: Knit Fabrics, Square Fashions Limited, Square Informatics, Square Consumer Product and Square Hospital. Now their total asset is about $200 million. And, yearly investment is about $300 million. The companies of Square Group of Industries are †¢ Square Pharmaceuticals Ltd. †¢ Square Textiles Ltd. †¢ Square Spinning Ltd. †¢ Square Toiletries Ltd. †¢ Square Consumer Products Ltd. †¢ Square Informatix Ltd. †¢ Square Health Products Ltd. †¢ Square Agro Ltd. Square Textile Ltd. tarted its operation in 1997. It was enlisted in Dhaka Stock Exchange Chittagong Stock Exchange in 2002. The business lines of Square Textile Ltd. are manufacturing and marketing of yarn. Its factory is located in Gazipur, Dhaka. It manufactures 100% Cotton Ring Span Yarn or Hosiery, 100% Cotton OE Rotor For Hosiery and Knit Fabrics for 100% export oriented readymade Garments Industry. Company Profile The Square Textile is locat ed in Saradaganj, Kashimpur, Gazipur, Bangladesh. Its office is located at Uttara in Dhaka. We will write a custom essay sample on Strategic Management of Square Textile specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Strategic Management of Square Textile specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Strategic Management of Square Textile specifically for you FOR ONLY $16.38 $13.9/page Hire Writer The business lines of Square Textiles Limited are manufacturing and marketing of yarn. 1,223 employees are working in this organization. Authorized capital of the company is tk. 1000 million. It’s paid- up capital is tk. 251. 90 million. Mission Statement The mission statement of Square Textiles Limited is â€Å"Our mission is realization of vision through maximum production of goods and services strictly on ethical and moral standards at minimum costs to the society ensuring optimum benefits to the shareholders and other stakeholders. This mission is envisioned by the concept of business which ensures well being of the investors, stakeholders, employees and members of the society which will create new wealth in the form of goods and services. Key product/Service As stated earlier the business line of the company is manufacturing and marketing of yarn. It manufactures †¢ 100% Cotton Ring Span Yarn For Hosiery †¢ 100% Cotton OE Rotor Yarn for Hosiery †¢ Knit Fab rics for 100% export oriented readymade Garments Industry. It also performs the services of dying post mercerization fabric dying The final output is marketwise by Square Fashion Ltd. In Square Textile Limited two types of products are produced in two different units. These are as follows Unit 1: Combed and Carded Yarn from a count range of Ne. 10 to Ne. 80. Unit 2: Combed Ring Yarn from a count range of Ne. 20 to Ne. 40. In Square Spinning Ltd. 100% Cotton Carded and Combed Yarn in the count range of Ne. 16 to Ne. 30 are produces. Finally in Square Fashion’s Ltd. Readymade Knit Apparels like T-shirts, Polo shirts, Tank tops, Pajamas, Sport wear, Under garments, Men’s Ladies fashion wear , Kids wear etc Strategic Goals Objectives The company sets the following objectives for it to achieve †¢ To strive hard to optimize profit through conduction of transparent business operations within the legal and social framework with malice to none and justice for all †¢ To create more jobs with minimum investments †¢ To be competitive in the internal as well as external markets †¢ To maximize export earning with minimum imported in-puts †¢ To reduce the income gap between top and bottom categories of employees. Thus the company focuses to pole-star its mission that fulfill the objective with emphasis on the quality of the product , process and services blended with good – governance that help build the image of the most enable corporate – citizenship at home and abroad . The company wants to produce such society friendly goods and services that go to satisfy the wants of all the relevant party without disturbing or damaging the socio- economic and ecological, balance of the mother earth and the process of human civilization leading to peaceful co-existence of all the leaving beings. The company always strives for top quality products at the least cost reaching the lowest rungs of the economic class of people in the country. The company values its obligation to the greater society as well as it strives to protect the interests of it’s shareholders and to ensure highest return and growth of their assets. Marketing Scenario Potential Customer The target market for products produced in Square Textiles Ltd. and Square Spinning Ltd. is Export Oriented Readymade Garments Industry. Readymade Garments exporter that is Knit Fabrics, Sweater and Denim manufacturer. In Bangladesh Beximco Kitting, Grameen Knitwear, Shasha Denim, Knit Concern etc are the customers. Target market for products produced in Square Fashion Ltd. is Europe and U. S. A. Square Textiles does not direct sales in overseas market but sometimes India, Pakistan other countries take their yarn. Size and Growth of the Market The Company’s marketing operations continued its emphasis on export sales over the years as depicted below | | | | | |Year 2006 |Year 2005 |Year 2004 | |(a) Quality sold (Kg) | | | | |Local sales |99,800 |527,903 |539,417 | | |(0. %) |(3. 7%) |(3. 9%) | |Export Sales |14,554,342 |13,817,314 |13,129,599 | | |(99. 3%) |(96. 3%) |(96. %) | |Total Sales |14,654,142 |14,345,217 |13,669,016 | | |(100%) |(100%) |(100%) | |(b) Sales Revenue | | | | |( Taka ) | | | |Local Sales |9,455,588 |32,576,936 |46,956,494 | | |(0. 4%) |(1. 8%) |(2. 3%) | |Export Sales |2,093,214,675 |1, 756,441,450 |2,029,968,545 | | |(99. 6%) |(98. 2%) |(97. %) | |Total Sales |2,102,670,263 |1,789,018,386 |2,076,925,039 | | |(100%) |(100%) |(100%) | The above figures show that the export sales increased by 19% in 2006over the previous year with greater exposure to international market scenario and risk. Competitor Analysis Only in few years back textile sector in Bangladesh was left behind but current scenarios is different. In recent years a mentionable figure of money has been invested in this industry. Government is also encouraging this sector. Government is making some favorable policies and minimizing the regulations, so that this sector can be grown up. Among the domestic companies Square is one of the leading one. The other potential competitors are Padma Textiles, Shamim Textile etc. Competition will be severe after 2005, that is, during the post multifiber agreement period. World market will be Quota free at that time. So Bangladesh will have to compete with countries like Srilanka, China, Pakistan, Vietnam etc. Management of the Company [pic] The entire management process comprises the following units: Executive Management The Managing Director, the CEO is the head of the Executive Management Team which comprises senior members of the Management Apparatus. Within the limits of delegated authority and responsibility by the Board of Directors, Executive Management operates through further delegation of authority at every echelon of the line management. The executive Management operates within the framework of Policy Planning strategies set by the Top Management with periodic performance reporting for guidance. The Executive Management is responsible for preparation of segment plans / sub – segment plans for every profit centers with budgetary targets for every items of goods services and are held accountable for deficiencies, with appreciation for outstanding and exceptional performances. These operations are continuously carried out by the Executive Management through series of Committees, sub – Committees, Committees standing Committees assisting the line management. Management Committee Comprising top executives, deal with entire organizational matters. Standing Committee Standing Committee comprises the following committee †¢ Audit Commit †¢ Employment Relations Committee †¢ Management Committee Trend of Performance Production and Productivity The Company’s installed capacity during the year 2006 remained at the same level of the previous year at 59,472 spindles 768 Rotor heads with production capacity (at average 30s/10s counts) as follows: [pic] The above statistics depict a picture of continuous growth in production and production efficiency which has been achieved by the production – addicted management at the factory level as well as the top. The total production increased year-on-year basis at the rates of 0. 41% and 0. 47% during the years 2005 and 2006 respectively. The Company’s operations are carried out on an aggregate basis and managed as a single operating segment. Accordingly the Company operates in one segment of developing manufacturing and marketing of cotton mixed yarn for human as well as industrial use. Profitability The company’s operating financial result of the last ten year has been enlisted below [pic] Business Level Strategy Square textile Ltd. follows the integrated low cost/differentiation strategy. Integrated Low-cost/Differentiation Strategy Low Cost |Differentiation | |Lower output costs per employee |Unique product or services | |Individual group incentive plans |Creative, risk taking employees | |Behavioral encouragement plans |Long term focus | | |Team based incentives | SWOT Analysis SWOT analysis means the analysis of strength, weakness, opportunity and threats. For Squar e Textiles Ltd. , it is given below: Strength Square Textiles Ltd. is a rapidly expending company. Standing its journey in 1998 it has already doubled the net turnover by the year of 2006. All the units of the factory enjoy highly of machinery are imported from Germany, Switzerland, Italy Japan. As a result it can maintain a smooth rate of production. Well trained human recourses are strength of the company. They train up their key personally in the country and abroad, so that the company can get some competitive advantages over the competitions. The HRM practice is also remarkable. Weakness There are too many departments under the super vision of the general manager which can cause low productivity due to large span of super vision. Opportunity There are bright opportunities for the Company in the overseas market. If it can communicate well and capture a significant market portion in the Europe and USA market, it can get scale of economic. Threat The increasing numbers of competitor may be a great threat for the company. Beside the political instability, industry dispute, taken off the quota system are also threat for the company. Possible Measure Improved Performance From the analysis with the organization structure it has seen that its span of super vision is too large. A number of departments report directly to the general manager. If the number were less the efficiency and productivity of the organization might be increased. Quality control department should remain prompt always. So that it can maintain a certain level of standard as per the market demand to capture the foreign market share it should strive more Concluding Remark The floaurishment of any industry requires combined efforts and co-operation from several parties. Social, political and macro economic environment play pivotal role in this regard. Though Square Textile is a newly Ventured Company in the respective sector, its growth and expansion is praiseworthy. It’s contributing the country and serving the nation in different ways. If it can up hold it’s much toward advancement, it will be able to set a role model in our country.