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Al Karam Textiles SWOT Analysis

Al Karam Textiles SWOT Analysis is briefly explained in the below article.

 

STRENGTHS

1)    ISO Certification:

Al-Karam Textiles have received ISO 9000, as well as ISO 14000 certifications from internationally renowned ISO auditors. This is a big strength because the existence of non-harmonized standards for similar technologies in different countries or regions can contribute to so-called “technical barriers to trade”.

2) State of the art equipment

Al – Karam Textiles have imported the latest machinery from Europe. Their machinery comprises of equipment used in spinning and weaving. They use the latest type of loom. Therefore, their products are capable of meeting international standards of weaving, dyeing and printing, for example using dyes that do not irritate the skin.

3) Brand Name

Al-Karam Textiles have established a big name for themselves in the textiles and garments industry. Their brand name is very strong in the Pakistani mass and industrial market as well as some industrial buyers in the USA and Europe. Their brand name has a lot of appeal in the Pakistani mass market and they have very loyal customers, who trust the quality of design and the quality of the cloth itself.

4) Availability of cheap labor

Although their workers are paid better than other workers in the same industry, their wage rate is still much lower than what workers get in other countries. This, coupled with their modern machinery, gives them the competitive edge over rival firms in the global marketplace.

5) Access to high quality cotton (in short staple category)

Al-Karam Textiles produces yarn for its fabrics, as it has a composite spinning unit. This basically means that it makes its own thread, uses that thread to produce the cloth and use that cloth to make finished items like bedsheets, towels and clothes etc.

6) Own Power Generation

Al Karam Textile Mills are powered by their own 6.4 M Watt Generator and hence are not dependant on KESC power supply. Power costs in the country, especially in Karachi are among the highest in the world also load shedding plays havoc with production schedules.

 

Weaknesses

1).Weak Information Systems

Al-Karam Textiles is an established textile company, which has excellent production facilities. They have excellent machinery and CAD/CAM systems. But it is still conventionally operated – most of the emphasis is on machine and worker efficiency. They still have not progressed to the information systems, which can help their cause in the international arena.

2). ‘Seth’ culture

The work culture in Al – Karam textiles is like that of a traditional ‘Seth’ owned company. There is no little formal documentation in the offices, the people are hired on an ad-hoc basis, qualifications are not taken into account while selecting the people for their jobs, and the growth of the company is dependant on the wishes and whims (the personal vision) of the ‘Seth’. In these cases, it is hard to separate the owner from his company. The Seth’s personality decides the future path of the company.

3). Weak R&D facilities

There is hardly any investment in research and development in the Al Karam Textiles, or indeed in any other Pakistani industry, which puts Pakistani textile companies at a significant disadvantage in the world forum. Pakistan’s main competitors, India and China, on the other hand have been investing heavily in BMR for a longer period of time and so have infrastructure already in place to exploit the situation that is expected to arise in 2005 with the abolishment of quotas.

4). Lack of HR development

Modern technology in the textile sector requires educated and trained technicians. Similarly, modern management techniques are a major need, particularly in areas of Marketing, Finance and Human Resource Management.

 

Opportunities

  • Big opportunities in the local low-end market
  • International brand of designer wear

 

Threats

  • Political/Economic Instability
  • Piracy of designs
  • Brand name infringement
  • Tough international and national competitors
  • Lack of conducive environment for business
  • Absence of quota under WTO
  • Anti-dumping laws
  • Uncertainty of Cycle

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