SWOT Analysis
Before stepping into any venture, one has to analyze the strengths, weaknesses, opportunities and threats
(SWOT). An industrial / sectoral SWOT analysis is given below. A prospective entrepreneur would
have to conduct a micro-level SWOT analysis on the basis of the intended city / town / village for his
business
SWOT Analysis
Strengths
1. Stock of skilled craftsmen;
2. Low manufacturing cost;
3. Low capital investment in
machinery;
4. Price inelasticity of demand for
gold jewelry implying the relative
ease with which an entrepreneur
may pass on increase in costs to the
customer.
5. Easy exit since gold stock can be
resold easily (though capital gains
/ loss possible due to change in
gold price);
6. Premium mark-up is accepted in
general by customers if they
perceive that the jewelry item
they are purchasing is unique or
has a designer’s value. Thus
there is greater opportunity for an
entrepreneur to charge higher
mark-up on exclusively
positioned jewelry line.
Weakness
1. Weak sharing of information and best
practices within the industry. Trade
secrets tend to be kept within family;
2. Demand for exclusivity prevails over
demand for standardized items. Thus
the degree of mechanization of the
jewelry manufacturing process tends
to be low;
3. Maintaining exclusivity of designs is
difficult due to absence of copyright
laws within the industry.
Investment in exclusive designers is
thus risky.
4. Highly skilled craftsmen are
concentrated in few clusters, mainly
in Karachi and Lahore;
5. Practice of hallmarking products for
export is low, thus non-hallmarked
items are less reliable abroad than
competitive but hallmarked jewelry.
1.
2.
3.
4.
5.
Opportunities
Increasing population thus
expanding potential domestic
market;
Gold price is perceived to be
outmatching inflation thus purchase
of gold jewelry is more readily
justified in terms of future security.
Increasing demand for 22k gold
jewelry abroad amongst South
Asian expatriates;
Increasing demand of 18k jewelry
within Pakistan provides opportunity
for jewelers to increase their stock
size and range with lesser investment
in gold.
Increasing participation of females in
work-force, thus greater purchasing
power of women to
1.
2.
3.
4.
Threats
Improving trade relations with India
may lead to import of competitive
jewelry items into Pakistani Market;
Competition from Far-East Asian
countries is already somewhat visible;
Proper designing matching the market
taste is crucial to sales, if designing
does not match the market demand,
the entrepreneur may be stuck with
slow conversion of stock to sales.
Frequent turnover of key craftsmen
risks loss of quality and exclusivity;