PEL

NATIONAL UNIVERSITY OF MODERN LANGUAGES DEPARTMENT OF MANAGEMENT SCIENCES LAHORE CAMPUS

FINAL INTERNSHIP REPORT Pak Elektron Limited Project of NUML

Submitted By Zahid Zamir Roll No Lc-2112

____________________________________________________ Master of Business Administration Session January 2009 to December 2012

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Pak Elektron Limited

Project of National University of Modern Languages Lahore

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National University of Modern Languages Faculty of Management Sciences

It is hereby certified that the report has been thoroughly and carefully read and recommended to the Faculty of Management Sciences for acceptance of final internship, by Zahid Zamir Roll No.LC-2112, Session (Jan 2009 to Dec 2012) Morning, in partial fulfillment of the requirements for the degree of Master of Business Administration of National University of Modern Languages Lahore.

Supervisor Name

_________________

Supervisor Signature

_________________

Panel Members Name

_________________

Panel Members Signatures

________________

Head of Department
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TABLE OF CONTENTS

TITLE PAGE

PAGE NO

LETTER OF TRANSMITTAL

iviv

ACKNOWLEDGEMENT

iv

EXECUTIVE SUMMARY

iv

Chapter # 1: INTRODUCTION OF ORGANIZATION (PEL)

01

1.1 1.2 1.3 1.4

Introduction of the PEL Historical Background of PEL Vision of PEL Mission of PEL

02 06 08 08

Chapter # 2: PRODUCTS & SERVICES of PEL Chapter # 3: DEPARTMENTS OF PEL Chapter # 4: PERSONAL EXPERIENCE

09 15 21

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Chapter # 5: ANALYSIS on PEL

25

5.1

SWOT Analysis 5.1.1 5.1.2 5.1.3 5.1.4 Strengths Weaknesses Opportunities Threats

26 26 26 27 27 28 28 28 29 30

5.2

PEST Analysis 5.2.1 5.2.2 5.2.3 5.2.4 Political Economical Social Technological

Chapter # 6: SUGGESTIONS & RECOMMENDATIONS

32

Chapter # 7: CONCLUSION

37

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Letter of Transmittal

Head of Management Sciences Department National Universit y of Modern Languages Lahore Campus Respected Sir, It is to present you the internship report which was executed at Pak Electron Limited to fulfill the requirements of BBA (HONS) degree program. This report is arranged according to the guideline given by the department. It was m y first professional experience. During internship I applied the knowledge that I gain from NUML. Through this report I introduce the Pak Electron Limited, its working structur e and products, detail of m y working and learning from that company and impact of internship on m y career in future. I have tried m y best to explain the experience and knowledge that I have gained from internship, to make this report inclusive to meet the readers expectations. Regards, Zahid Zamir

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Acknowledgment

I have discovered a responsibilit y in me to learn from others that has shaped m y life. The work with some unidentified people makes life easier every day. I think it is a proper way to recognize all these strangers and those people who are close to me and have directl y shaped my life during m y work. First, I want to express m y gratefulness to m y parents for their persistent provision and encouragement which I received during my career. I have a great depth of thankfulness to all my teachers for their treatment and helping approach during my stay in the institution. I would like to thank them for his great help in carrying out m y duties. I would like to express m y appreciation to people who help me personall y during the course of m y studies. Last but not utmost, it forces me much to acknowledge those who helped me to get the knowledge of the marketing and support me constantl y during m y internship program.

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Executive summary

Pak Electron Limited (PEL) is a standard of Saigol group of companies. Products manufactured by PEL always been the high level and the name (PEL ) is s ymbol of excellence throughout the Pakistan. Since its beginning, the company has been working for the development and progress in Pakistan . The PEL has produced hundreds of engineers, skilled workers and technicians through its internship and training programs. The company consists of two divisions: The first one is Appliances Division. This division consists of manufacturing the specific appliances like refrigerators, microwave ovens, washing machines etc. The second division of PEL is the Power Division . PEL Power Division consists of manufacturing high-power electrical equipment like energy meters,

switchgears and transformers etc. And these are supplied to WAPDA and KESC. In 1980 the company prolonged into consumer products with the introduction of window air conditioners and today also the split AC, refrigerators, freezers, compressors and microwave ovens .PEL products from the beginning have been of the highest standard and the name PEL is synonymous qualit y throughout the Pakistan. Since its beginning, the company has been acting as an institution that works for the promotion and development of knowledge in Pakistan .

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Chapter # 1

Introduction of

Pak Elektron Limited

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INTRODUCTION OF PELS BUSINESS

PEL is one of the oldest manufacturing units of Home Appliance in Pakistan. PEL products are produced of extraordinary qualit y and have been introduced over the years. PEL was established with the partnership of Technology AEG Germany in 1956. In 1980 PEL prolonged their business into consumer domestic market with introduction of window A C. In October 1978, PEL was attained by the Saigol group of compani es. PEL has continued on the track of regaining of business, both in power and electrical divisions. Efforts to increase efficiency, product qualit y and expansion have produced the positive results. While increasing business capacities that need surplus working capital have legitimate much and ease their cash flow, which could offer horizontal operations. Business in the Energy Division is endorsing confident and is estimated to develop more in the years certifying. PEL is travel around the export market for our food products division. The Crystal brand refrigerator launched in 1998 has become a captain source of our persistent development. This movement is expected to endure in the upcoming years. Furthermore air conditioner sales have not grasped the required ranks due to some severe fault in import processes and smuggled goods, the contraction in the size of the labor market and capital controls. In order to get reliabilit y, customer base company is moving towards a strate gy of diversifying its product. As a result Appliances Division is being strengthened by which

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the marketing grid has extended with a focus on setting up the sales team and dealer network. 3S concept introduced above , is working effectivel y in our service network. Exceptional devotion is being given to going up the variet y of products introducing fresh models, sizes and colors. Demand for appliances and particularl y refrigerators which are emergent at a speedy level has improved mostl y by the increasing role of cons umer financing through financial institutes and estimated schemes which are attained by retailers. POWER DIVISION Products manufactured in the power division are transformers, energy meters and switch gears. Business in this division has suffered seriousl y in recent years due to problems in absorptive WAPDA and KESC. The theft up gradation neediest WAPDA distribution was introduced by the new administration. The production of energy meter single phase and three phases are moving toward a finest level. The plans to improve productivit y and qualit y of our meters are also in growth. Our actions to suppl y distribution transformers for WAPDA have recentl y taken a significant enlargement . Subsequentl y, PEL is planning to increase our production volume of transformers through improved methods of

production processes with the use of labor, produc t modernization and the process of re-engineering. We are waiting to get the level of production capacit y of 2,000 transformers per year. A break in the business thr ough switchgear has been attained. PEL has successfull y supplied a large order
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of WAPDA switchgear against international bidding. Since all the activities of the Energy Divis ion are conducting against international tenders or advances, the chronic problem of late payments has also been resolute. APPLIANCES DIVISION Business in the appliances division has shown mixed trend but the company is finall y on the perfect track. Refrigerator glass with smooth design and Dan Foss compressor with certification of compliance with Dan Foss Germany was launched in February 1999. This has been very well received in the market and our refrigerators sales have been increased. This trend is expected to continue in the coming year as a result of the company's innovative approach to product development, along with forceful marketing strategy. Freezer experienced and certified by Dan Foss Germany and value-added aesthetics has also been well received by the market. We have been suppl ying our Deep Freezers to Coca-Cola International and Lever Brothers and intend our attention on institutional sales of this product. Sales of window air conditioner is about the same level as last year, but have not reached the desired level with pressure on prices and exchange rates are caused the losses to back up PEL Limited. The core cause for this situation is a massive arrival of imported products in addition of smuggling suppl y of air conditioners. It is estimated that after terminating old stocks of smuggled goods have been drained and fresh supplies are not permitted. The company to
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compact with the above situation has boarded on a major plan to improve product qualit y, expand product range, introduce energy proficient

models, add competitive features such as remote control, added filters, and to improve the product creativel y. After cont inuous struggles in recent years PEL have been able to develop a new variet y of models with the brand names of "energy saving". Cooling and balance of this machine is experienced and certified by U.S. Copeland. This has received a very optimistic response from the market because of its energy proficiency savings, cooling, low noise, compact size and features friendly character. PEL expects that the company will make breakthrough the capacit y of energy savings as we have done effectivel y in the case of Crist al brand refrigerators. It also a great exercise that is being done to decrease material costs and improve the manufacturing process. Technical support of international companies and foreign laboratories made this goal to much energetic. PEL APPLIANCES LTD Freezers and window air conditioners are subsidiary products.

Optimisticall y, PEL Appliances Limited will travel to a recovering condition in the following years. PEL DAEWOO ELECTRONICS LTD Contract for converting Sony television plant was finalized and PEL has started production of its products since May 1999. Under this setting up

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television equipment are supplied to us by Sony and then these necessaries are renewed into television and are marked through its own s ystem. TV tariff structure has been reorganized in the federal budget for 2001-2002 and as a result blessedness of locall y enlarged televisions has upgraded significantly. Sony aims to take full advantage of this situation and capacit y of locall y assembled televisions resultantl y is estimated to increase miscellaneous. Agreement for the makeover of the flat screen TV has been finalized and excellentl y started production in September 2000.

HISTORY & BACKGROUND

Pak Elektron Limited (PEL) is the innovator manufacturer of electrical appliances in Pakistan. It was established in 1956 in mechanical coalition with AEG of Germany. In October 1978, the company was recognized by the Saigol Group of Companies. At that time, the company was manufacturing onl y transformers and circuit breakers. With Saigols in supervision, PEL initiated increasing its product range by entering into the manufacturing of air conditioning. In 1981 , the company st arted to manufacture window air conditioners. In 1987, while expanding the product assortment further, the company started to manufacture

refrigerators and freezers. In 1988 , a subsidiary company was established which is called the (PEL Appliances Limited ). In 1992, the product variet y again prolonged and company start to manufacturing energy savers. In 1993 it established a joint venture with (Daewoo Electronics Limited) of South Korea to manufacture the color televisions. PEL is one
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of the prominent manufacturers of electrical products in Pakistan, concentrating on consumer and engineering sections. The company has a resilient presence in the power equipment market and is well recognized in the appliance market. The Energy Division mainl y manufactures transformers, energy meters and circuit break ers and is a prominent supplier to WAPDA and KESC and commands a market share of approximatel y 36% in transformers, 35% of energy meters and 34% in switch gears. These actions are based on the allocation of ord ers by WAPDA, KESC and deliveries to private consumers. The PEL Appliances Division has a resilient position in the local market of home appliances, specifying in refrigerators and air conditioners, with an expected market share of 28% and 10% correspondin gl y. In the last five years, the companies have made the substantial improvement to increase the sale through product modernization, competitive prices and a durable

distribution set-up. The industry of consumer durables has recentl y experienced prompt growth in demand compelled by low commodit y prices, the introduction of consumer finance initiatives, low interest rates and the purchasing power of consumers has improved. In the same way, the construction movement in the country and upgrading of the set-up of the WAPDA and KESC are the main drivers behind the growth of food industry equipment. PEL is in healthy position in development of consumer appliances and power equipment markets. The question is to certificate that PEL should finance their advance needs. Both subsidiaries

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namel y (PEL Appliances Limited (PAL) and PEL Daewoo Electronics Limited (PDEL) had be merged into PEL through the decision of Resolutions by the Honorable High Court, Lahore. Since its beginning, the company has always been contri buting to the advancement and expansion of the engineering sector in Pakistan by introducing a range of excellent electrical utensils and appliances and by producing hundreds of engineers, technicians and skilled workers through their internship and training programs.

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Mission Statement

Providing

qualit y

products

and

services

for

the

customer

satisfaction to maximize profitabilit y for all stakeholders through the finest use of possessions . Focus on the personal development of our human resources t o meet future experiments through good governance, corporate values and a safe working environment with a strong wisdom of social

responsibilit y.

Vision statement

To excel in providing engineering goods and services through continuous improvement.

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CHAPTER#2

Products & Services

Of PEL

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Products & Services of PEL

The company comprises of two divisions: Appliances Division Power Division

Products of Power Division The Power Division of PEL has following products; EPC Contracting Power Transformer Distribution Transformer Dry type Transformer Energy Meter Switch gear Transformer Services

Appliances Division Business in the appliances division has shown mixed trend, but the company is finall y on track. Crystal Fridge with aerodynamic design and Dan Foss compressor with compliance authorization Germany was Dan Foss launched in February 1999. This has been very healthy received in the market and our refrigerator sales have shown an increase of 125%
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since 1999. This trend is expectable to continue in the upcoming year as a result of the company's innovative methodology to product improvement with marketing strategy. Deep an aggressive freezer experienced and licensed by Dan Foss developed aesthetics Germany and has also bee n well received by the market. PEL has been suppl ying our Deep Freezers to Coca-Cola international and lever Brothers and aim to continue our attention on institutional sales this product. Sales window air conditioner is not closel y on the same level but have last year reached the desired level with a pressure on prices and the impact exchange rates causing increased losses of the subsidiar y Appliances Limited PEL. The main cause for this condition is an enormous coming of imported products as a result of the change in the assessment recorders that allow during prices imports and under-charging. In addition , smuggling suppl y air

conditioning also persistent after the announcement by the Government to execute such activities controls on. It is estimated that after terminating old stocks of smuggled goods have been bushed and other supplies are not certified. The company to deal with the above circumstances has get on a key plan to increase product qualit y, expand product series, introduce models power effective, adding competitive sorts such as remote control, filtered added and to improve product aesthetics. After continuous efforts in years the recent PEL have been able to develop a new range of models from Energy Saver under the name. "Cooling and this machine balance is tested and certified by U.S. Copeland. This has very positi ve received a

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response from the market because their savings from energy efficiency, cooling, low noise, compact size, features friendl y character. PEL expects that the company will make a development in the amount of energy savings as we have successfull y performed in the case of the addition of Crystal Refrigerators. In mark being a great workout to do to decrease material costs and improve manufacturing process. Technical support and know how being acquired international companies and foreign laboratorie s for achieve this goal. PEL APPLIANCES LTD. Freezers and window air conditioners are subsidiary products of PEL . Its Appliances Limited is predictable to grow in healthier situation in following years. PEL DAEWOO ELECTRONICS LTD. Agreement for converting Sony television plant established and PEL has started production of its products since May 1999. Under this

prearrangement TV kits were supplied to us by Sony and renewed televisions are distributed to them and markets through its own network. The conversion price of $ U.S. called by us is charged attached televisions every fortnight. TV bill structure had been reorganized in the federal budget 2001-2002 and as a result of locall y assembled televisio ns inviolabilit y has considerabl y improve. Sony intends to make the most of this volume
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situation and of locall y assembled televisions is expected to increase resultantl y collectors. Agreement for the conversion of flat screen television has VEGA also resolved and we have started production successfull y In September 2000.

Appliance division has following products;

Refrigerators PELs refrigerators are available in 6 series of different colors, models, prices, and capacities. The series are as follow Expression Series Premier Series 6-Series Deluxe Series Smart Series Mini Series

Air Conditioners The air conditioners are available in three types; Split Air Conditioners Window Air Conditioners Floor Standing Air Conditioners

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Microwave Oven PEL also introduced series of furnace models "Silver PEL line" Microwave. PEL offers 26 different oven models with different prices, models and dimensions. Washing Machine PELs washing machines are available in different models. The series are as follow; Magic Clean PWM7700 Magic Clean PWM512

Water Dispensers PEL also introduce water dispensers. The main objective of introducing is to increase its product line and provide value to customers.

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CHAPTER # 3
Departments Of

PEL

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Departments of PEL
Dep a rt me n ts Th er e a r e 6 m aj o r d ep a rt m en t s i n P E L whi ch ar e a s fo l l o w: 1 . Ma rk et i n g D e pa rt m e nt 2 . Fi na n ce De p ar t m ent 3 . P ro du ct i on D ep a rt m ent 4 . Hum an De p ar t m ent 5 . Adm i ni s t r at i on D e p a rt m ent 6 . R es e a rc h & D ev el op m en t D ep ar t m ent

1. M AR K E T I N G D E PA RT ME NT Thi s d ep a rt m ent i s co nt rol l e d b y t h e Ma na gi n g D i r e ct or . Th en fu rt he r dow n t h e hi er a r ch y a re : B r and M an a ge r s. C r edi t Di st ri but i on Ma na ge r . C ust om er s e rvi c e a gent s. In s t i t ut i o n al sa l e s m an a ge r .

Th er e a r e s i x b r an c he s o f P E L i n P ak i s t an . Th e y a r e i n c ha r ge of R e gi on al S al e s M an a ge r (R S M) . P ol i ci es s u gge st ed b y t h e s al es o f fi c e f or t he wh ol e r e gi on. Th e cu s t om e r s e rv i c e po l i ci e s ar e d ef i n ed b y t h e C ust om e r S er v i c e M a na ge r of t h e o ff i c e . Th e obj e ct i v e s a re gi v e n t o r e gi on al s al es m a n a ge r of

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e ac h p ar t i cul a r r e gi on a nd ad di t i on al obj e ct i v e a re p e r fo rm ed b y t h e R S M an d s al es a gen t s t o a chi ev e t h e d e m an d. In La h or e , t hi s d ep a rt m en t i s u s e u p b y t he s e p e opl e w ho a r e as fol l ow : RSM S al es A r e a M a na ge r S al es Ex e c ut i v e

Thi s d e p art m e nt co nt r ol s t he 4P s o f m a rk et i n g l i ke pr o du ct , p ri ci n g, P l a c em ent an d p r om ot i on . Th e y are a l so r es p ons i bl e f or the

m odi fi c at i on and m odi fi c at i o n o f t h e va ri ous b r an ds o f t he com p an y an d n e w p ro du ct s. Th e y m a y r e c om m e nd ch an ge s i n col o r an d s i z e of pr odu ct t h at i s be i n g u s e d b y c ust o m e rs. Th e y t r y t o i n t r od uc e m od e rni z at i ons i n pr odu ct s t o m ak e t hem e ye - c a t chi n g f or cus t om e rs an d t o com p e t e w i t h c om pe t i t o rs D a wl an c e, W a ve s et c. Th e re a r e pr i nt an d el e ct ron i c m ed i a fo r a ct i v e sup po rt t he i d e a .

2. FI NA N CE DE PA RT ME NT

Th e d ep a rt m en t i s or ga ni z ed b y t h e C hi e f Fi na n ci al O f fi c e r. Th e m ai n r es p ons i bi l i t y of t he fi na n ce d ep a rt m en t i s t o p ro vi d e fun di n g i n a cc o rd an c e a cc o rdi n g wi t h to t he com p an y an d p ol i c y s us t a i n for di f fe r en t d ep a rt m en t s fo r e a ch

t h ei r

ne ed

fi n a n ci al

bu d ge t

de pa rt m e nt i n d ep en de nt l y. A l l pu r ch as es ar e m ad e wi t h t he fi na n ce de pa rt m e nt ; t hi s de pa rt m e nt i s di vi d ed i nt o t h r e e s e ct i on s:

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Fi na n ce Ac c ou nt s C r edi t C o nt rol

(i ) Fi n an c e Fi na n ce d e al s wi t h B an ks (i i ) A c cou n ts Ac c ou nt s a r e d e al wi t h t h e co st i n g s yst e m , bi l l i n g, o pe r at i ons m an a ge m e nt a nd i nt e rn al a udi t . (i i i ) C r ed i t Con t rol Thi s se ct i on o f t he fi n an c e d ep a rt m en t r ec ov e r y p ro c ed ur es . 3. PRODUCTION DEPATMENT Thi s d e pa rt m e nt h a ndl es t h e m anu f a ct u r e o f p ro du ct s . Thi s d ep a rt m ent i s gi v en b y t h e obj e ct i v e s of s en i o r m an a gem e nt t o p ro du c e a nu m b er of p ro du ct s t ha t a re d et e rm i ne d b y past s al es d at a an d m a rk et co ndi t i o ns. T hi s de pa rt m e nt i s r e spo ns i bl e fo r q u al i t y co n t ro l , so fo r ex am pl e w e s ee t hat t h e r e a r e no de f e ct s o r d ef i c i e n ci es i n an y pr odu ct . In a br o ad , i t i s a h abi t t o i m p l em ent n e w t e chn ol o gi e s an d t o ke ep u p t o d at e on a n y n e w m a chi n er y o r ot he r e qui pm e nt t o ge t a bet t e r p r odu ct p er fo rm an c e. Af t e r t he m an uf a ct ur e o f a n ew pro du ct , i t i s t r a nsp or t e d t o Ge rm a n y fo r t ec hn i c al ass es sm ent fo r D an F os s C om p an y. A ft e r a ut ho ri z a t i o n of t h e s a m e, t he n i t s m aj o ri t y p ro du ct i on i s s t a rt ed . h and l e s c r ed i t an d

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4. HUMAN RESOURCE DEPARTMENT

Thi s de p ar t m ent u ses t h e f or ei gn e m pl o ye e s el e ct i on cri t eri a i .e . di f f e re nt s et s o f gui de l i n es f or se l e ct i n g e m pl o ye e s. A ft e r sel e ct i on of t he em pl o ye e s but al s o p ro vi d e t ra i ni n g an d i m p r ov e t h ei r ski l l s . T he he ad o f hum a n r eso ur c es d ep a rt m en t c a l l e d Hum a n R es ou r c es M an a ge r. FU NC T IO NS R e c rui t m ent S el e ct i on T ra i ni n g T ra ns f er F i r i n g d e ci s i on s La b or A f f ai rs S t a f f W el f ar e Hu m a n r es ou r ce pl an ni n g fo r t h e nex t fi v e ye a r s.

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5 . A DM IN IS T R AT I O N DE PA RT ME NT Th e m ai n r esp on si bi l i t i es a r e: Mai nt en an c e S up po r t Mai nt en an c e o f P ri n ci p l e s In s p e ct i o n of t h e m at e ri al i n an d out o f t h e f a ct o r y Mai nt en an c e F a ct or y Ass i st al l de p art m e nt s a bou t m at e ri al s

6. RESEARCH & DEVELOPMENT DEPARTMENT This is the most important department regarding the future of the company as a market leader in this department is continuall y in touch with the market to meet customer preferences and product specifications. After a thorough anal ysis of customer expectations then this department gives its recommendations to senior management for changes in the product for market success. This department conducts market surveys to obtain information. This department is also responsible for bringing new technologies into products.

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CHAPTER # 4

Personal Experience

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Personal Experience
My knowledge of Marketing and Advertising helped me while doing internship. I learned a lot during this activity that how much important it is to organize the things in proper manner, sending advertising material (posters, stickers, wobblers, buntings, banners etc.) and letters or

Notification to all area sale offices of PEL. Arbitrarily calling existing customers in different areas of Pakistan and asking them if they were gratified with the product they purchased, and then make a customer satisfaction report. Preparation of monthly report 0f Sales Plan vs. Actual Production. Visit to Lahore sales office in order to ge t the information regarding PEL competitors. Preparation of the comparing report of competitors and world wellknown brands in order to make easy to compare and know the strength and weaknesses of PEL home appliances. Preparation of daily sales and collection report. I participate with our Print Media manager and select the price tags which have circulated all over Pakistan in PEL presentation and whole sale centers. New Things Learned
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Some of the new things I learned here were which are as follow: How to work both individuall y and in groups in a stress-free and tense condition . Working under the command of someone. How to manage the business while introducing new products. Tolerance is very important in relationships, like anger can lose your customer . To increase sales and stay competitive with the best brands that is necessary to keep their dealers happy by giving them incentives. How to consolidate with other sales areas of PEL by phone / fax. How to deal with customer complaints, so of satisfy them. How to manage promotional materials. How to manage time for several instant tasks in hours. How to bring about communication between different departments .

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CHAPTER# 5

Analysis Of

Pak Electron Limited

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SWOT ANALYSIS OF PEL

The

following

is

an

assessment

of

the

strengths,

weaknesses,

opportunities and threats of Pak Elektron Limited: Strengths Widespread focus on supreme qualit y of products Strong brand image Strong dealer network Strong grip in home appliances Highl y skilled and expert Management Modernized research and development department High qualit y p roducts and brilliance after sales service

Weaknesses Lack of advertisement Lack of product range as compared to competitors Weak marketing strategies than competitors Vast unreached markets of Pakistan as PEL has dealer networks in onl y 24 cities of Pakistan PEL is not conducting E -Business and some of its comp etitors are conducting business online like Waves.

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Opportunities Reaching the large unreached markets of Pakistan Formation of strategic alliances with potential partners Online and more modified marketing Transmission of online business along with traditional element and pointing business Foreign alliances especiall y in technology and development Increase in product range Increase in production capacit y Reaching foreign markets

Threats Strong competition both in appliances and power products industry Un-explored markets may be confronted by foreign companies Financial Problems Deteriorating political conditions Increasing prices due to inflation Slow growth rate in Pakistan Uncertaint y of government Increase in fuel prices & electricit y power failure Difficulties in recovery from debtors i-e liquidit y problems

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PEST Analysis
Political: The political environment in Pakistan has been presenting quite unsteady and affecting circumstances to virtually all the business in the country. Sadl y the condition has much emphasized in the recent periods. Where the political and governmental policies and conditions influence all

businesses in one way or the other, the relative impact and importance of the fundamental political situation can be determined according to the nature of the commerce and the kinds of establishments it has with the external entities for its operations and market. With a sound

establishment, nature of products (white goods) and a leading group of companies, PEL has a buffer to its advantage against the ever changing political conditions. Proprietorship by such a prominent group brings opportunities concerning politicization for governmental policies and other politicall y relating concerns. Economical: The econom y is facing a far stretching inflation period supplemented by a severe energy crisis which has not affected onl y the market but also the costs of production and the suppl y chain. The demand for refrigerators - a power product of PEL in home appliances, and A/Cs, as well as other products, has been comprehensivel y affected due to frequent power outages and increase in utilit y charges. On the contrary, the conditions
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have increased the demand for generators . The increase in costs of production can be signified by an increase in utilit y expense by approximatel y 10 mi llion rupees a month, where the company meets the power shortage through its own generators. So as a result the retailers a suppl y chain will be affected. As per the future prospects, major investments in the energy sector are to be expected . If such struggles by public and or private enterprises come by, should provide PEL with an opportunit y for its power products, which includes commercial t ype electrical equipment like transformers, switch gears etc and EPC

contracting. Social: Pakistan is an LDC with a large population base. Certain dynamics over the years have shaped the consumer first choice categorized by an increasing demand in home appliances. However a standard underl ying consumer buying decisions is to prefer imported bra nds, when personal economics are no restriction. However, an increased reliance on locall y manufactured and branded goods has increased over the recent times, as a healthier competition has risen following establishment of various

manufacturers with in the country. Regarding marketing ethics and environmental concerns, though awareness has increased over recentl y, appeal to such problems and concerns by the general public remain low.

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Technological: PEL being a home and power appliances company appeals a close relation with the technological environment available in Pakistan. This

environment itself has improved over the years and provided opportunities for newtechnologicall y more advances ventures, such as added

production lines for more advanced kinds o f A/Cs, Refrigerators and better power appliances. Though the technological environment in

Pakistan may not be advances to a high degree, it still provides a good base line for an appliances company that is not involved in difficult and high end products, but rather requires more of a common technology. The competitive advantage and marginal decreases in costs of production for appl ying technology in Pakistan however may be argued over. The capital costs for bringing in new technolog y may exceed the choice of using labor- for labor costs are lower in Pakistan. On the contrary, technology may provide a higher level of qualit y. Thus there lies the principle of trade-off between costs vs. quality. Currentl y the technological

environment in Pakistan does offer a higher level of technology but with higher costs. Thus where the marginal cost may decrease the overall investment may not suggest that PEL would essentiall y do so as it is not currentl y involved in the production of high -end products, which can be produced equall y goo d by a much cheaper labor. The technological environment regarding communications has substantiall y increased over the recent years. Such advancement has assisted PEL to provide better
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customer relationship management (CRM). PEL has a well-established network of more than 1300 dealerships, display and customer care center that communicate with a central customer service department and a call center. The system keeps a close watch on the day to day bas es and enjoys good relationship with its customers.

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CHAPTER# 6
Suggestions & Recommendations On PEL

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Suggestions
PEL is facing financial problems PEL must try to come out of curse of loans because it is paying billions in interest to financial associations every year. For this PEL must try to realize more on equit y and graduall y take release from all the loans. PEL must strengthen its collection policies as it faces difficulties in recovery from debtors which creates liquidit y problems for the company. The PEL must have to appl y better marketing strategies to attract the customers, like other competitors are doing suc h as Dawlance, Orient and Waves etc. PEL has narrow product range as compared to its competitors e.g. kitchen appliances lik e sandwich makers, juicers etc. s o additional pro ducts must be included in PELs product range. PEL must add attractive and advanced models and introduce new features in its products like LED (Light Emitting Diode) temperature, LCD displays on refrigerators. The company must change the advertising theme and slogan to attract and for the attention of customers. They must show some creativit y in all promotional activities. So PEL must come with some attractive slogan t o gain more competitive advantage over its competitors. PEL has to work on their distribution network and must be spread in the unreache d areas and cities of Pakistan. PEL must form strategic alliances with potential partners to strengthen the grip over national markets and reach

international markets a s PEL has recently entered into a strategic alliance with LG.
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PEL must start selling its products online besides brick and mortar business to reach the international customers especiall y as WAVES is already following this strategy. PEL like other big companies should also use bill-boards for advertising purposes. As PEL statements are an equal opportunit y employer so PEL must hire more female employees because there are onl y 10 female employees in a huge organization of almost 700 employees. PEL must set away a specific quota for female employees. Separate washrooms and prayer rooms must be provided for females in all departments. PEL must introduce more innovative and new products which are available at International level . PEL must organize team work within bureaucracy and try to move toward small company thinking. PEL must have an Extrane t for creating horizontal relationships with its suppliers and dealers. Employees at PEL still mark attendance on manual records although whole organization is computerized so there must be an automatic attendance system for employees.

RECOMMENDATIONS
After looking into different weaknesses and future threats I recommend the following steps to PAK Elektron Limited in order to deal with future problems; PEL should present a true decentralize setup in the

organization, giving everyone some grounds for dec ision making, increase employees involvement in day to day planning and recollect back the
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assurance plus satisfaction of the employees. PEL should also consider the importance of advertising for their new products, which plays an important role in raisin g awareness, customer favorites and maximizing market share. It should also use some tools such as organizin g

promotional events, programs and gifts, etc. PEL needs to strengthen its monitoring and inspection network in order to minimize the miss -use of resources by employees and verify the correctness of the data collected by them. PEL should also make sure equal price incentives to all the retailers in order to increase their willingness to offer more shelf space to the company. PEL should also take care of the economic, political f actors such as inflation, Government Policies while projecting the Cost of Production for future because this will help the company in entering into a fix price contracts for the purchases of material a t a single time similarl y than it will be able to charge stable prices to its customer. PEL should also adopt any other methodology for projecting upcoming time period sales, which should include seasonal factors consideration in order to get accurate futu re assessments. As brand name is very important factor in consumer buying behavior, thus it is advised that PEL should work on the brand image. It already has a strong brand name but it has more to do, mainl y through advertising, to compete with its direct competitors and other international brands. The company should add more features to their products. People are attracted towards a product with unique features and
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something that would make the customers feel that they have got their moneys worth. The company should take measures to improve the qualit y of their products. Thus the company is directed to take steps towards improving the quality of its products and cosmetic features; otherwise it will lose a portion of potential customers to their competitor s. PEL should have to cut down on the great margins to the dealers and give more incentives to the consumers to healthier competition in the market f rom push strategy to pull strategy. PEL extra effort should be on electronic media to get competitive advantage over the competitors. They have to increase their advertising expenditures. Introduction of seasonal schemes can help to increase sales.

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CHAPTER # 7

Conclusion

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CONCLUSION
M y own finding is that people while purchasing a specific item have an excessive courtesy in the brand name, qualit y and features. Strong brand name has very good impression in consumers mind and they usuall y favor to purchase the same brand which they believe that is remarkable. As now a day s consumers demand is for Haier & Dawlance refrigerator. People have strong guarantee in these brand names. All other factors like price, advertisement, word of mouth and even dealers are secondary importance in this concern. I believe that PEL is focusing more on Push Strategy & Dealers network rather than Pull Strategy to create consumer demands in the market. PEL is not targeting through nominal advertising, directing marketing efforts by using progressive supportive communication tools. This is factual that new technologies and designs generate new customs for marketers to reach & anal yze consumers interactivel y, but still greater part of consumers in Pakistan is being affected by traditional media Television, Magazines and Newspapers. Although PEL is doing some advertising efforts but problem is that there is no creativit y in ads.

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