1
Contents
EXUCTIVE SUMMARY .......................................................... 2
History of PEL............................................................................ 3
Division of PEL .......................................................................... 3
PEL’s Hierarchy Chart ............................................................... 9
PELS’s Competitors ................................................................. 10
Pel’s departments...................................................................... 11
Finance Department.................................................................. 13
HR Department......................................................................... 14
Marketing Mix or 4Ps of PEL: ................................................. 17
PEL’s environments ................................................................. 21
SWOT Analysis Of Pak Elektron (PEL) .................................. 23
Conclusion ................................................................................ 26
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Executive Summary
Pak Electrons Limited (PEL) is the flag bearer of the Saigol Group of Companies. The products
manufactured by PEL has always been of a high standard, and the name 'PEL' is synonymous with
QUALITY all over Pakistan. Since its inception, the company has been working for the
advancement and development of engineering know-how in Pakistan. The company has produced
hundreds of engineers, skilled workers, and technicians through its apprenticeship schemes &
training programs.
The company comprises of two divisions:


Appliances Division: This Division of PEL consists of home appliances manufacturing
Refrigerators particularly. Air Conditioners, Deep Freezers, Microwave Ovens, Washing
Machines and Water Dispensers
Power Division: PEL Power Division is one of the major electrical equipment suppliers to
WAPDA & KESC. It includes Distribution Transformers, Power Transformers, Energy
Meters, Switchgears, Grid Stations, and EPC Contracting.
In 1956, the Saigol Group of Companies purchased major shares of PAK Elektron Limited. At
this junction, the company was only manufacturing transformers and switchgears. With the Saigols
in management, PEL expanded into Refrigerators & Air Conditioner manufacturing and now it
has become a Giant in the World of Appliances.
PEL has long been known in Pakistan as a company that produces quality products. PEL has
created brand loyalty among its users, and the company credits that to its high quality and vast
product range. PEL has been continuously adding new products to its range. As a result, PEL has
registered a significant increase in its sales volume during the last ten years.
One sector in Pakistan that has grown considerably in the past is the Home Appliances Division.
There is a high competition in this sector and PEL has survived this competition with great flair.
PEL enjoys a good reputation in the market for its home appliances.
PEL is in a growth phase in this sector. This sector carries a lot of potentials, and PEL can capitalize
on this fact.
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1. History of PEL
Pak Elektron was setup in 1956 as a Public Limited Company with the object of initially
producing transformers, switchgears, and electric motors. AEG experts and PEL personnel
carried out the designing and production of this equipment jointly.
After the conclusion of joint venture agreement with AEG Saigol Group acquired the PEL
COMPANY in October 1978. The company floated its shares to the general public and was
listed on Karachi Stock Exchange (KSE) and Lahore Stock Exchange (LSE).
In 1980, Appliances Division was established and in 1981 its starts the production of Window
Type Air Conditioners with the technical collaboration of General Corporation of Japan. This air
conditioner was well received in the market for its quality. Subsequently in 1987 the production
of Refrigerators and Deep Freezers was started.
In 1993 the company has started the assembly of Compressors for Refrigerators and Deep
Freezers under technical collaboration with Messrs. NECCHI COMPRESSORI of Italy.
It was in early 70s that PEL became known in overseas markets due to its quality. The company
started its export to countries like Saudi Arabia, Abu Dhabi, Qatar etc. Later on PEL supplied
electrical equipment’s to various other countries in the Middle East, Far East and Africa with
great success.
Vision
“To providing engineering goods and services through continuous improvement”
Mission Statement
“To provide quality products & services to the complete satisfaction of our customers and
maximize returns for all stakeholders through optimal use of resources, To focus on personal
development of our employees to meet future challenges, To promote good governance,
corporate values and a safe working environment with a strong sense of social responsibility”
2. Division of PEL
There are two division of PEL:
4
•
•
Power Division
Appliances Division
This division is comprised for four departments.
I.
Power Division
The most powerful revenue generating business unit of PAK Elektron, produces Transformers,
Switchgears and Energy Meters for the public sector such as KESC Karachi Electric Supply
Corporation, LESCO and PESCO.


Distribution Transformers
Power Transformers
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II.

Energy Meters

Grid Stations

Switchgears
Appliances Division
6
The Appliances Division of PEL is the pioneer manufacturer of electrical goods in Pakistan. The
Division’s product portfolio comprises of air-conditioners, refrigerators, televisions, microwave
ovens, and split air-conditions. PEL is one of the three leading players in the home appliances
market.
Product line of appliance division

Refrigerators

Air Conditioners
7
•
Deep Freezers
•
Microwave Ovens
International market
PEL exports to customers and see potential in following countries and has continued business
in these countries.
• Qatar
• Saudi Arabia
• Malaysia
• Afghanistan
• Tanzania
• UAE
• Zimbabwe
• Kazakhstan
• Kuwait
• Yemen
• Botswana
• Congo
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• Swaziland
• Kenya
• Nigeria
• Rwanda
• Jorden
• Namibia
• Bulgaria
• Libya
• South Africa
• Guine
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3. PEL’s Hierarchy Chart
Sales &
Marketing
Power
Division
Manufacturi
ng
EPC
Contracting
Appliances
Division
Sales &
Marketing
Manufacturi
ng
Director
Operations
Finance /
Accounts
Chairman
Managing
Director
Supply
Management
Finance
QA&QC
HRD /
IR&A
Internal
Audit
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4. PELS’s Competitors
PEL is organized into two business divisions
•
•
Appliances Division
Power Division
PEL’s direct competitors in Appliance division





Dawlance
Haier
Orient
Waves
LG
PEL’s direct competitors in Power division




1.
Siemens (transformers) (switch gear) (power transformer)
Transfopower (transformers)
Microtech (energy meters)
Alstom Grid Pakistan (EPC project)
Brief introduction of all the departments
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Accounts
budgeting
Taxation
PEL's Deprments
Finance
Sale return
Audit
Human resource
mangement
Marketing
ERP
Account
receivable
IT department
Sale department
5. Pel’s departments
i. Human resource department
Department Human resource department of the PEL Company is very much conscious about
hiring the employees for the company. The standards he set for hiring the new people. HRM
department of the company mainly makes the external recruitment . This is usually done through
web sites. Their channel of hiring are LinkedIn, rozi dot com and their own channel PEL career
portal. For the fresher PEL follow merit system take properly tests and interviews and for
experience holder they took directly interview. The HR department of PEL is responsible for
providing on-the-job as well as refresher training for all employees. Compliance with labor, tax
and employment laws is a vital part of safeguarding the organization’s continued existence.
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ii.
IT Department
IT department are fully responsible for providing service of internet in Organization. IT
department perform the functions of web links for advertisement of PEL products and maintain
the Web-side of PEL. IT teams of PEL develop tools to collect, store, manage, secure and
distribute data to employees who need access to the latest information to make decisions about
strategic, financial and operational issues Admin Department Administration department is
backbone of an organization. An effective administrator is an asset to an organization. This
department’s function is to handle organization, master planning, financial review, land
acquisition, site accessibility/use, easement standards and outreach and other public concerns.
iii.
Marketing department
Marketing department generally analyze the needs and wants of the customer. Then this
department tells about the customer needs to the company which in turn launches the products
according to the needs of the customers. Marketing department is responsible for making strong
advertisement for the products. PEL marketing department are fully responsible for the
promoting of new and existing products using different tools of marketing. They identify the
target customers and audience. First the select the market and visit the market then setting up the
market strategies. After all that they communicate and sell product to customer through event,
exhibitions, seminars, direct sale, viral marketing, direct marketing and advertising. They also
work with the product development team.
iv.
Sale department
Sale department holds the sale of the company. They handle the overall offices of Pakistan. Sale
department deal with 32 offices. Their only responsibility to sell the products to their suppliers.
v.
Audit department
Audit department that every transaction check like disposal of fixed assets to be approved by top
management and acquiring new assets with approve of tope management. This department also
see financial control on assets & accounts and to avoid errors fraud and theft and sure that
Financial statement prepare according to International Accounting Standard.
vi.
Finance Department
This department is manage the money of the organization. Finance department of the PEL
mange the money, make the statement, mange loan, identifies the new investments, mange the
taxation and financial planning. In this department have further categories.
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I.
Account departments
Following Functions perform by accounts department of PEL. First they keep the record of
expenses and investments and keeping the bills paid. Second they manage the payment or salary
of the employees and make sure everyone gets paid including the government and report to their
senior.
II.
Budgeting department
This department of the PEL forecast the future transactions. This entails making at calculated
attempt into knowing what the future holds. Forecasting may not be perfect as evidence has
shown but it is better to have a forecast to work with than not having any as this will help you get
prepared. There are many statistical tools developed over the years to help managers
and accountants make better forecast. And they make plane on the biases of forecast.
III.
Taxation Department
Pel Taxation department manage the taxes. The make strategies to reduces the tax and calculate
the tax.
IV.
Sale return
This department of the Pel manage the sale returns
V.
Account receivable
Pel’s account receivable department mange the account receivables
PEL’s finance department
6. Finance Department
This department is manage the money of the organization. Finance department of the PEL
mange the money, make the statement, mange loan, identifies the new investments, mange the
taxation and financial planning. In this department have further categories.
These are some function perform by Pel’s finance department.
•
Evaluate the new project
•
Arrangement of monitory funds for the project
•
Handle the salary of employees
•
Accounts receivable and accounts payable
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•
Sale return
•
Dealing with bank and financial institution
•
Taxation handling
•
Auditing of financial reports
Ratios of Pel
I.
Current ratio
It’s measures the firm’s ability to meet its short-term obligations. Pel’s current ratios is 2.41
time.
II.
Total assets turnover
It’s that measures a company’s ability to generate sales from its assets by comparing net sales
with average total assets. Pel’s total assets turnover is 0.71 times .
III.
Return on equity
that measures the ability of a firm to generate profits from its shareholders investments in the
company. Pel’s return on equity is 1.22
IV.
Gross profit ratio
that shows the relationship between gross profit and total net sales revenue. Pel’s gross profit
ratios is 29.41%.
7. HR Department
PEL established this department from its establishment to till now providing the best employees
to company. This department works that how they can hire the best people and how they can cope
with modern technology and how they can made their employees to use this modern technology.
The Human Resource Department at PEL is engaged in the areas of Recruitment and Selection,
Training and Development, Performance Management, and Organizational Development, and
strives to align these functions with the overall business strategy. We place great emphasis on
people development so that people and the organization perform at maximum capacity in a high
effective manner.
i.
Recruitment and Selection
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The company aims to recruit and select staffs which are needed to achieve its strategic directions
and who show attributes that are consistent with the organization’s directions and culture. The
purpose of recruitment and selection is the cost efficiency to make the performance of company
more effective. As under the employment legislation every person should have the equal
opportunity for job.
So PEL Company also hiring the best staff according to employment legislation and to make
operational process more effective and efficient by lowering the cost included direct and indirect
cost both. PEL recruit electronically through the Internet. They give ad on their website
https://PEL.com.pk (Career Portal)
https://www.linkedin.com
https://www.rozee.pk
According to Human resource practices these procedures are not very simple for filling of any
vacancy. Once the organization’s human resource needs have been determine, they necessarily
have to be filled. These staffing activities include the following:


Recruiting job candidates
Selecting the most appropriate job applicants for the available job
ii. Recruitment and Selection Process
PEL Company follows the whole procedures for which are acceptable at national and international
level both. Mean they follow the standard operating procedure for recruitment and selection.








Seek Information
Send Information to HR Department
Approval of Form
Selection
Tests
Interview
Medical Test
Back Ground Reference
iii.
Training at PEL
Training in PEL. Is basically of two types:


Training to new employees
Training to existing employees
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iv.
Performance Appraisal in PEL
In PEL performance appraisal is recognized as an important element of the jobs of managers and
supervisor. It provides significant help in meeting departmental and company objective. Given the
vital role of performance appraisals, PEL needs to check appraisal system, and the uses of such
appraisal system to determine whether key personnel decisions are affected by employee’s age,
race, sex, religion, colour, national origin or handicap.
v.
Compensation and Rewards
Compensation and benefits are the rewards which are given to the employees for their best
performance and also to make them satisfy at the workplace by giving them the incentives, bonus,
allowances.
vi.
Pay For Performance
Salary progress during an employee career with PEL is a function of performance over time. Better
performance is important higher pay. Performance is also key factor in consideration for
promotion.
vii.
Performance Designation
Performance designations are defined as follows.
a. Outstanding
Individual’s performance consistently exceeds performance criteria in virtually all major
responsibility areas and objectives:
b. Very Good
Individual performance consistently exceeds performance criteria in some major responsibility
areas and objectives and achieves criteria in all others. Response to unplanned circumstances meets
or exceeds what would be expected.
c. Good
Individual’s performance fully meets performance criteria in all major responsibilities areas.
Performance is that of an employee who is competent, knowledge, and capable of consistently
achieving quality results on increasing demanding objectives. Unplanned circumstances did not
prevent the meeting object.
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d. Satisfactory
Individual’s performance meets performance criteria in most areas but not up to required criteria
and work accomplished:
8. Marketing Mix or 4Ps of PEL:
Price
Penetration pricing
Skimming pricing
Product life cycle pricing
Competitive based pricing
Products
Power division
Appliances division
Marketing
Mix
Place
Direct distribution channel
Indirect distribution channel
i.
Promotion Mix
Advertising
Personal selling
Public relations
Sales prommotion
Products offered by PEL:
The PEL Company consist of two divisions:


Appliances Division
Power Division
Appliances Division:
This Division of PEL consists of appliances manufacturing.





Air conditioners
Refrigerators
Deep freezers
Water Dispensers
Microwave oven
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

PEL LED
Washing machines
PEL Air Conditioners
PEL window-type air conditioners were introduced in 1981 in technical collaboration with
General Corporation of Japan. Ever since their launch, PEL air conditioners have a leading
position in the market. Recognizing the shift in consumers' preference from window-type to splittype air conditioners, PEL has focused its manufacturing efforts on split-type air conditioners.
PEL Refrigerators
The manufacturing of Refrigerators started in 1986-87 in technical collaboration with M/s IARSILTAL of Italy. Like air conditioners, PEL's refrigerators are also in great demand. Today, PEL
Crystal has 30% market share across Pakistan.
PEL Deep Freezers
PEL deep freezers were introduced in 1987 in technical collaboration with M/s Ariston of Italy.
Power Division
PEL's Power Division consists of three Main Products:
 Energy Meters;
 Transformers; and
 Switch gears.
ii. Pricing strategies of PEL
Power Division Pricing Procedure








First the tender is received which shows the demand of the product.
It is send to the production department.
They make calculations about material cost, labor costs and Factory overhead, further taxes
and duties are also calculated.
Investment is calculated
Then gross margin is added.
Gross Margin= Labor Cost + FOH + Profit+ Financial cost + Miscellaneous cost
Financial cost is found out
Term and conditions may be different in some cases.
Appliances Division Price Procedures


Sales tax, Octopi, excise duty is calculated above the cost of production.
There is also a pricing trend depending on the models most demanded.
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

Price is charged according to demand.
Consumer product forces also show seasonal, variation i.e., their prices raise during
wedding season and before Eid-ulAzha and Eid-ul-fitar.
iii. Distribution Channels used by PEL
PEL uses different distribution channels .There are different levels. Distribution Channels can be
described by the numbers of channel levels involved. PEL uses both of the two major Marketing
channels.
Direct Marketing Channel
It’s a marketing channel that has a no intermediary levels. PEL’s power division uses this type of
channels. Its major clients are large organizations and not the end user. So people from these
organization directly contact PEL’s marketing department of power division when tenders are
flooded, design, specification and price are discussed.
Indirect Marketing Channel
It is a marketing channel containing one or more intermediary levels. PEL’s appliances division
works this way. These products are sold through authorized dealer shops or PEL’s own outlets.
Region Distribution
Appliance Division
PEL has got a very effective distribution system that ensures the widespread supply of company’s
product throughout the country for the sake of proper management.
ZONE AREA COVERED




Northern and Gilgit Baltistan Zone
Punjab and N.W.F.P
Southern Zone
Sindh and Baluchistan
REGIONS
The zones have been further divided in to six different regions.






Karachi
Multan
Lahore
Gujranwala
Rawalpindi
Faisalabad
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iv.
Promotion Mix:
Advertisement performs key objectives in any company or an organization growth. This is quiet
necessary part of an organization. Pak Electron Limited uses advertising personal selling, sales
promotion and public relations to pursue its advertising and marketing objectives.
Appliances Division:




To achieve the sales objectives
To increase recall
To restore the message in the customer mind.
PEL has different Advertising messages for different products.
Media for Advertising
There are three types of media on which advertisement are given:
Electronic Media
In the electronic media, there are many entertainments, business channels where PEL Company
do advertisement. Some of the channels are
PTV
ARY
Geo TV
STN
PTV World
GEO News etc.
Print Media
Print media is also very important in advertisement field. Today, there are many newspapers,
magazines and periodicals available where PEL do advertisement.
Out-Door Media



Normal Boarding
Neo-signs
Billboards Advertisement
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9. PEL’s environments
i. Macro environment
Its include:
Political & Legal Forces:
We pride ourselves in being a responsible corporate citizen and abide by the laws and regulations
of Pakistan. Laws and regulations, and other factors controlled by the Government affect PEL
and its activities. PEL Company is very much conscious about the political and legal
environment of the country. The company changes its labor wages which is registered whenever
a govt. changes the labor laws.
Technological Forces:
PEL Company tries to adopt the future technology for using in the product. They always keep in
view the technology for increasing the quality of the product for their customers. On the basis of
modern technology, company is the market leader regarding the appliances.
Economic Forces:
Economic forces means change in disposable Income, flections in the market, inflation, change
in rate of interest etc. Company always keep in mind the economic conditions of the country and
sets its prices accordingly.
Social Cultural Forces:
It includes environmental concerns, work life quality attitudes and also work force diversity etc.
PEL Company keeps in view the social culture changes of the country and sets its target
accordingly.
ii.
Micro Environment
It Includes:
Customers:
PEL Company customers include various government organization such as wapda and Karachi
power company regarding power divisions. PEL Company has also an internal and external
customers. Internal customers are those who are the employees of the company which don’t
makes big effect on the sales. External customers are those which are the outsides the company
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such as general pubic except employees. We recognize the importance of customer relationship
management and have made significant investments in this regard over the years going beyond
extending credit facilities and trade discounts.
Suppliers:
We also acknowledge that engaging reputed and dependable suppliers as business partners for
supply of raw material, industrial inputs, machinery and equipment is the key to our continuous
and sustainable growth. Our success and performance depends upon the loyalty of our customers
with the PEL brand and effective supply chain management.
Competitors:
PEL Company has its competitors like Dawlance, Waves, LG, Haier etc. PEL Company makes
close analysis of its competitors to understand its strategies and to overcome its deficiencies.
Public Pressure Groups:
There is no public pressure group which affect the working of the company because PEL
Company makes product by viewing all its aspects which don’t affect the societal environment
of the economy.
Dealer
Pel nationwide Dealer and Service Centre Network provides us access to a wide range of customers
and enables us to provide quality after sales services. Due to market competition Pel gave
affordable credit policies to its customers.
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10.SWOT Analysis Of Pak Elektron (PEL)
Strengths
1. Strong Brand Image
Weaknesses
2. Strong Dealer Network
1. Lack Of Advertisement
3. Free Customer Service
2. Lack Of Product Range
4. Leader In WRAC (Window
Room Air Conditioner)
3. Financial Problems
5. Leader In Power Division
Opportunities
Threats
1. Exploration of Market In
Pakistan
1. Strong Competition
2. Increase in Product Range
3. Price War
3. Export Opportunity
4.Instability Of Government
2. China’s Product
Explanation of PEL’s SWOT analysis
Strengths
PEL has the following strengths and is in more competitive position in these areas than its
competitors. Following are the main strong points of PEL.
i.
Strong Brand Image
PEL has created the strong brand image in the mind of the customers through higher quality and
low price. The customers of the PEL always prefer to buy the PEL home appliances like WRAC
split AC and refrigerators whenever they wanted to buy.
ii.
Strong Dealer Network
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It is also the plus point for the PEL that it has also developed the strong dealer network in the
market. The dealers are always trying to sell the PEL appliance to the customers because they
know there are high margin in the PEL products. They can get more money after selling the PEL
products. The management of PEL also provides more incentives to their dealers than their
competitors
iii.
Free Customer Service
PEL provides free customer service for one year to its customers. So the customers always buy
the PEL products due to its free service and it becomes loyal customer for the PEL. PEL always
provides help to their customers for repairing WRAC, Refrigerators and other items. PEL always
make efforts to satisfy the customers.
iv.
Leader In WRAC (Window Room Air Conditioner)
It is another strong point that PEL is a market leader in WRAC. The window room air
conditioner is more demanded by the customers than its competitor’s air conditioners because it
has more durability in operating systems and cools the room in few minutes. PEL always strives
to provide the innovative features in WRAC. PEL air conditioner is cheaper and has a higher
quality than others WRAC. That’s why customers always purchase the PEL window air
conditioner.
v.
Leader In Power Division
In Pakistan the PEL is almost leader in power division. Almost all power division are provided
by PEL to wapda.
Weaknesses
Overcome on these weaknesses then it can become a market leader in the home appliance. Like
other companies PEL has some weaknesses in operating the business. If PEL loses some
competitive edge in the following points:
i.
Lack Of Advertisement
PEL was a very lack of advertisement according to other appliances companies. So it is a big
weakness of PEL.
ii.
Lack Of Product Range
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PEL has introduced more products of consumer items but there are more needs to develop new
consumer items like PEL washing Machines, Vacuum cleaner and other items. Due to lack of
product Range, Company cannot earn more profit because consumers have high demand of these
products and they say that if company is investing in these products then we can keep all PEL
items and we never need to keep other’s company products.
iii.
Financial Problems
Sometimes PEL faces the financial problems because its stocks are so much piled up in the stores
that create the problem of cash flow because when the stocks are not sold and the production is
in process for 24 hours a day than the company faces such problems.
Opportunities
For the PEL there are more opportunities for expansion the business. If PEL realize that
opportunities then it will be more fruitful and profitable for the company.
i.
Exploration of Market In Pakistan
PEL has the opportunity to explore the market in all over the Pakistan. Even though PEL
introduce its products in all cities of Pakistan but there are so many places that have the capacity
to absorb the PEL’s products.
ii.
Increase in Product Range
It is the main opportunity for the PEL that it can increase its product range that will be a more
profitable for the company. There are more needs to develop new consumer items like PEL
washing Machines, Vacuum cleaner and other items. Due to lack of product Range, Company
cannot earn more profit because consumers have high demand of these products.
iii.
Export Opportunity
PEL Company has also the opportunity to export their products in other international countries
like UAE, SAUDI ARABIA, and other Arabic and African countries.
Threats
PEL Company in such a competitive era has many threats as well. These threats are for the
present situations and future. Company should make its policies and strategies according to these
threats. So following are the main threats for the PEL:
26
i.
Strong Competition
There is very strong competition for the home appliance in the market. So every company tries to
come in the number 1 position for achieving the maximum shares in the market.
China’s Product
ii.
China’s products are another threat for the Pakistani companies because these products are
cheaper than the Pakistani products. An even china product not well in quality but it is
comparatively in low prices than the consumer’s home appliance that are manufactured by the
indigenous company.
iii.
Price War
As there is stiff competition in the home appliance market that will cause the price war. So every
company reduces the prices of its products to increase the sales. It will not only reduce the profit
margin of the company but also reduce the quality of products. So price war is the main threats
for all the companies, which are operating in these products.
iv.
Instability Of Government
The rapid changes in governments will become threats for the companies because every
government adopts its own policies for the industries. So it increases the uncertainty for the
investors who want to invest heavy amount in their new projects.
11.Conclusion
To conclude we can say that we had a wonderful and learning experience in Pak Elektron Limited
which make possible us to write this report. In Pakistan the brand Image of Pak Elektron limited
is excellent in minds of its customers. The company has good strengths and so it can make rapid
progress in local as well as in foreign markets. In our views the management philosophy is the
main hurdle in progress of the company. Now, the company’s focus is only profit and employer’s
oriented which cause employees’ low motivation. No doubt PEL is making excellent products, but
unfortunately PEL is not realizing creative advertising is also important part of their marketing
success.
The future strategic alliances of PEL will helpful for the company to expand its technical
production capacity and also will expand the target market. We see the future of PEL very bright
as it is finding new opportunities and the company has the potential to compete with any challenge
in the market as it is in the market since an era of above 50 years.