ACKNOWLEDGEMENTS All praise is due to Almighty “ALLAH”, the most merciful and the most beneficent, who bestowed upon me health, power of communication and opportunity to successfully complete my post graduate studies. Countless salutation be upon the Holy Prophet “Hazrat Muhammad” (Peace be upon Him), the most perfect and torch of guidance and knowledge for humanity as a whole. I express my deepest gratitude and profound regards to my advisor …………………..for his scholarly advice, useful comments,

untiring

help,

continuous

encouragement,

kind

supervision and timely checking up of this manuscript during the course of study. Without his efforts this study would not have been possible in this shape. I will also thanks to my friends ………………….for their good wishes and timely assistance in the completion of this research work. I would feel it incomplete without saying thanks to my loving parents and other family member who ed and encouraged me throughout my educational career. At the end I hope that reader would forgive me for advertent errors.

EXECUTIVE SUMMARY Utility Stores Corporation of Pakistan is one of the Government owned organization established in July, 1971. It was started with the aim of providing products of everyday use to average income groups at lower prices than prevailing in the market. Utility Stores Corporation is considered to be the largest chain of retailers in Pakistan and also proved to be a profitable organization, if properly managed. In chapter No. 1, there is an introduction to retailing and retailers concept. From this chapter one can easily understand the exact nature of retailing. It also includes the classification of retailers on different criteria. After thoroughly studying this chapter the reader can proceed further with better understanding of the report. After knowing the exact nature of retailing and other related concepts the reader can know the type of organization present in US. In the 2nd chapter there is comprehensive information about the Utility

Stores

objectives,

Corporation

management,

of

Pakistan.

products,

Its

mission,

distribution

of

purpose

Utility

&

Stores

throughout the country and other detailed information is given in this chapter. Chapter 3rd includes different financial statements of US for the year 2005. It highlights the financial position of the organization in the year 2005. These statements can also be compared against the financial statements of 2004 given with it. This comparison will enable a reader to reach a conclusion about the financial health of the organization.

2

Now when the reader moves on to next chapter which is also the main body of the discussion, he will know about the current position of US in the

market.

In

this chapter

detailed

SWOT

Analysis

information about the Utility Stores is given. After studying this chapter a person can easily rate the US after knowing its internal strengths and weaknesses and also predict about its future by knowing in detail about the external opportunities and threats present in the market for it. Finally in the last chapter conclusion is drawn on the basis of SWOT Analysis information and other information about the US. This project also ends with few suggestion and recommendation given by me which are also based on the above analysis.

3

NATURE & IMPORTANCE OF RETAILING For every successful large retailer like Publix supermarkets, Crate & Barrel stores, and of course Wal – Mart, thousands of tiny retailers

serve

consumers

in

very

small

areas.

Despite

their

differences, all have two common features. They link predictors and ultimate consumers and they perform valuable services for both. In all likelihood, all of these firms are retailers, but not all of their activities may qualify as retailing. Let’s see how that can be.

Retailing and retailers: Retailing (or retail trade) consists of the sale, and all activities directly related to the sale of goods and services to ultimate consumers for personal, nonbusiness use. Although most retailing occurs through retail stores, it may be done by any institution. A Tupperware rep selling plastic containers at lunchtime meetings at a factory is engaged in retailing, as is a farmer selling vegetables at a roadside stand. A firm – manufacturer, wholesaler, or retailer – that sells something to ultimate consumers for their nonbusiness use is making a retail sale. This is true regards of how the product is sold (in person, online or by telephone, mail or vending machine) or where it is sold (in a store, at the consumer’s home or on the internet). However, a firm engaged primarily in retailing is called a retailer.

4

A drawing of a self-service store

Economic justification for retailing: As we know that, all middlemen basically serve as purchasing agents for their customers and as sales specialists for their suppliers. To carry out these roles, retailers perform many activities, including anticipating customers, wants, developing assortments of products, acquiring market information and financing. It is relatively easy to become a retailer. No large investment in production equipment is required, merchandise can often be purchased

5

on credit, and store space can be leased with no “down payment’ or a simple website can be set up at relatively little cost. This large number of companies, many of which are trying to serve and satisfy the same market segments, results in fierce competition and better values for shoppers. To enter retailing is easy, to fail is even easier. To survive in retailing, a firm must do a satisfactory job in its primary role catering to consumers. Stanley Marcus, the former chairman of Nieman Marcus, described a successful retailer as “a merchant who sells goods that won’t come back to customers who will”. Of course, a retail firm also must fulfill its other role serving producers and wholesalers. This dual role is both the justification for retailing and the key to success in retailing.

The Retail Life Cycle: The important distinction between the retail life cycle theory and the two preceding theories of retail change is that the retail life cycle theory attempts to identify the speed with which change occurs. This theory suggests that the pace of innovation in retailing accelerates over time within any particular retail form.

The following are

descriptions of the stages of the retail life cycle:  Innovation Stage: A radical departure occurs from the prevailing method of retail operations in the market. The innovation may center on cost, methods of operation, product assortment, or another innovation that attracts customers.  Accelerated Development: This stage is characterized by growth in both sales and profits of the new form of retailing. This stage is also

6

characterized by geographic expansion for the innovator of the format and the appearance of competitors that imitate the method.  Maturity: This is the most significant stage in the life cycle in that competition is the most intense. The prevalence of competition makes this stage the most managerially challenging. Profits begin to decline, industry-wide, in the maturity stage.  Decline: This

stage

can

often

be

avoided

or

delayed

by

repositioning and adaptation on the part of competitors. But, an institutional form may, in fact, succumb to cultural, technological, or competitive changes and disappear from the market. Such may be the case with the “old style” department store characterized by Sears until the late 1980s. Sears has now adapted to market trends and demands with new merchandise and methods of operations.

Physical facilities: Later in this chapter well will classify retailers according to their product assortments, price strategies and promotional methods. Here, well look at physical facilities, which represent the distribution element of a retailer’s marketing mix. Firms that operate retail stores must consider four aspects of physical facilities.

Location Thus a store’ site should be the first decision made abut facilities. Considerations such as surrounding population, traffic and cost determine where a store should be located.

Size This factor means the total square footage of the physical store, not the magnitude of the firm operating store.

7

Design This factor refers to a store’s appearance, both exterior and interior.

Layout The amount of space allocated to various product lines, specific locations of products and a floor plan of display tables and racks comprise the store’s layout. As would be expected the location, size, design and layout of retail stores are based on where consumers live and how they like to go about their shopping.

CLASSIFICATION OF RETAILERS To understand how retailers serve both suppliers and customers, we will classify retailers on two bases, form of ownership and marketing strategies. Any retail firm can be classified according to both bases.

Retailers’ classification form of ownership: Classification of retailers with reference to form of ownership is given below.

Independent Stores: An independent retailer is a company with a single store that is not d with a contractual vertical marketing system. Most retailers are independents, and most independents are quite small. Independent retailers typically are viewed as having higher prices

than

chain

stores.

However,

because

of

differences

in

merchandise and services, it is difficult to compare the prices of chains

8

and independents directly. For instance, chains often have their own private brands that are not sold by independents. Also, independents and chains stores frequently provide customs with different levels and perhaps quality of services.

Contractual vertical Marketing Systems: In a contractual vertical marketing system, independently owned firms together under a contract specify how they will operate. The three types of contractual VMS are discussed below:

Retailer cooperatives and voluntary chains The main differences between these two types of systems are who organize them. A retailer cooperative is formed by a group of small retailers that agree to establish and operate a wholesaler that enters into a contract with interested retailers. Historically these two forms of contractual VMS have been organized for defensive reasons to enable independent retailers to compete effectively with large, strong chains.

Franchise Systems Franchising involves a continuing relationship in which a parent company

provides management assistance and the right to use its

trademark in return for payments from the owner of the individual business unit. The parent company is called a franchisor, whereas the owner of the unit is called a franchisee. The combination of franchiser and franchises comprises a franchise system. There are two kinds of franchising: 

Product and trade name franchising. Historically the

dominant kind, product and trade name franchising is prevalent in the automobile (Ford, Honda) and petroleum (Chevron, Texaco) industries.

9

It is a distribution agreement under which a supplier authorize a dealer to sell a product line, using the parent company’s trade name for promotional purposes. 

Business

format

franchising.

Much

of

franchising

growth and publicity over the past three decades had involved the business format kind (used by firms such as Kentucky Fried Chicken, Midas, and H&R Block). This kind of franchising covers an entire method (or format) for operating a business

Retailers classified by marketing strategies Whatever its form of ownership, a retailer must develop marketing mix strategies to success in its chosen target markets. In retailing, the marketing mix emphasizes product assortment, price, location, and promotion and customer services designed to aid in the sale of a product. They include credit, delivery, gift wrapping, product installation, merchandise returns, store hours, parking and very important personal service. We will now describe the major types of retail stores, paying particular attention to the following three elements of marketing mixes: 

Breadth and depth product assortment



Price level



Amount of customer services.

10

Table –:

Retail Stores Classified by Key Marketing Strategies

Type of Store

Breadth and Depth of Assortment

Price Level

Amount of Customer Services

Department Store

Very broad, deep

Avoids price competition

Wide array

Discount Store

Broad, Shallow

Emphasizes low price

Relatively few

Limited Line Store

Narrow, deep

Traditional types avoid price competition new kinds emphasize low price

Vary by type

Specialty Store

Very narrow, deep

Avoids price competition

At least standard’ extensive in some

Office price retailer

Narrow deep

Emphasizes low prices

Few

Category Killer Store

Narrow, very deep

Emphasize low prices

Few to moderate

Supermarket

Broad, deep

Some emphasize low prices other avoid price competition

Few

Convenience Store

Narrow, shallow

High prices

Few

Warehouse Club

Very broad, very shallow

Emphasizes very low prices

Few (open only to )

Department Stores: A department store is a large scale retailing institution that has a very broad and deep product assortment, tries not to compete on the basis of price, and provide a wide array of customer services. The combination of distinctive, appealing merchandise and numerous customer services, such as alterations, various credit plans, and bridal registry, is supposed to allow the stores to charge full (or non – discounted) prices.

11

Department stores face serious challenges. Because of their prime (that is, busy but expensive) locations and abundant customer services, their operating expenses are considerably higher than most other retailers. Intense horizontal competition also tests department stores. Other retail institutions such as shoppers away from department stores by offering lower prices. To varying degrees, retail chains such as Target, Wal-Mart, Circuit City and Home Depot vie with traditional department stores, the convenience of buying from catalogs or online represents still more competition. Overall, department stores share of total retail trade has dropped about 5 percentage points in recent years.

Discount stores: Discount retailing involves comparatively low prices as a major selling point combined with reduced costs of doing business. The prime example of discount store, a large-scale retailing institution that has a broad, shallow product assortment, low prices, and few customer services. A discount store normally carries a broad assortment of soft goods (particularly apparel) and hard goods (including popular brands of appliances and home furnishings) and s them heavily. Wal-Mart, Kmart, and Target are the largest discount store chains. Discount stores have had a major impact on retailing, prompting many merchants to lower their prices.

Limited-Line Stores: Much of the “action” in retailing in recent years has been in limited-line stores. This type of institution has a narrow but deep dropout assortment and selected customer services. Traditionally,

12

limited-line stores selling products such as clothing, baked goods, and furniture sought to maintain full, or nondiscounted, prices. As discussed in relation to off-price retailers and category-killer stores, new types of limited-line retailers have gained a foothold by emphasizing low prices. The breadth of assortment varies somewhat across limited-line stores. A store may choose to concentrate on: 

Several

related

product

lines

(shoes,

sportswear’s,

and

accessories) 

A single product line (shoes).



Part of one product line (athletic footwear). We identify limited-line stores by the name of the primary

product line-furniture store, hardware store, or clothing store, for example.

Specialty Stores: A very narrow and deep product assortment, often concentrating on a specialized product line (baked goods) or even party of a specialized product line (cinnamon rolls), is offered to consumers by a specialty store. Examples of specialty stores are donut shops, furriers, athletic, footwear stores, meat markets and dress shops. Most specialty stores strive to maintain manufacturers suggested prices, although they may offer their own store brands at lower prices. Typically, they provide at least standard customer services. The prosperity of specialty stores depends on their ability to attract and then satisfy consumers who especially want deep assortments and extensive, top-quality services.

13

Off- price Retailers: This type of institution features

a narrow, deep product

assortment, low prices, and few customer services. Off-price retailers are most common in the areas of apparel and footwear. To the extent possible, off-price retailers concentrate on well known producer’s brands they often buy manufacturer’s excess output, inventory remaining at the end of a fashion season, or irregular merchandise (called seconds) at lower than normal wholesale costs. In turn, their prices are much lower than prices for regular, in season merchandise sold in other stores. Customers are attracted by the low prices and fairly current fashions. Factory outlets are a special type of off-price retailer. They usually sell a single company’s merchandise. This type of institution gives manufacturers another channel for their products on over which they have complete control.

Category killer stores: A phenomenon of the 1980s a category killer store has a narrow but very deep assortment, low prices and few to moderate customer services. This type of store aims to capture a large portion of sales in a specific product category and in doing kill the competition. A category killer concentrates on a single product line or several closely related lines. What distinguishes a category killer is the combination of low prices and many different sizes, models, styles and colors of the products. Category killer stores are taking sales and customers away from long standing retailers, especially specialty stores and department stores.

14

Supermarkets: As with discount, the word supermarket can be used to describe a method of retailing and a type of institution. As a method, supermarket retailing features several related product lines, a high degree of self-service, largely centralized checkout, and competitive prices.

Supermarket

retailing

is used to sell various kinds of

merchandise, including building materials, office products, and of course groceries. The term supermarket usually refers to an institution in the grocery retailing field. In this context a supermarket is a retail institution that has a moderately broad, moderately deep product assortment spanning groceries and some nonfood line, and offers relatively few customer services. Most supermarkets emphasize price. Some use price offensively featuring low prices to attract customers. Others use price defensively relaying leader pricing to avoid a price disadvantage. For many years the supermarket has been under siege from competitors. Typically supermarkets have reacted to competitive pressure in either of two ways: Some cut costs and stressed low prices, offering more private brands and generic products and few customers’

services.

Others

expanded

their

store

sizes

and

assortments, adding more nonfood lines and groceries ethnic foods, for example attuned to a particular market area.

Convenience stores: To

satisfy

increasing

consumer

demand

for

convenience,

particularly in suburban areas, the convenience store emerged several decades ago. This retail institution concentrates on selected groceries and nonfoods (especially beverages, snacks, and cigarettes), typically

15

has higher prices than other grocery stores and offers few customer services. Its label reflects the institutions appeal and explains how its higher prices are justified. Convenience stores are typically located near residential areas and are open extended hours, in fact some never close. Examples of convenience store chains are 7-Eleven (originally open from 7 a.m to 11 p.m but now open 24 hours daily in most locations). Convenience

stores

compete

to

some

extent

supermarkets and fast food restaurants. FurthermoreTo

with

both

boost

their

competitiveness, convenience stores are adjusting their marketing strategies.

Warehouse clubs: Another institution that has mushroomed since the mid 1980s is the warehouse club, sometimes called a wholesale club. A combined retailing and wholesaling institution, it has very broad but very shallow product assortments, extremely low prices, and few customer services. Warehouse clubs are open only to who pay an annual fee of about $25 to $100. Their target markets are small businesses (some purchasing

merchandise

for

resale),

select

groups

(such

as

government personnel and credit union ) and to an increasing degree individual consumers. A warehouse club carries about the same breath of assortment as a large discount house but in much less depth, for each item, the club stocks only one or two brands and a limited number of sizes and models. It is housed in a warehouse type building with tall racks that display merchandise at ground level and store it at higher levels. The primary advantage of a warehouse club is its extremely low prices. Prices for household consumers typically are about %5 higher

16

than prices offered to business . This institution has some limitations. Customers ordinarily must pay cash and handle their own merchandise, even heavy, bulky item. Moreover some shoppers prefer deeper assortments of products and smaller quantities of packages.

Non store retailing: A large majority about 80% of retail transactions are made in stores. However, a growing volume of sales is taking place away from stores. Retailing activities resulting in transactions that occur way from a physical store are called non store retailing. It is guesstimated that sales volume through nonstore retailing sales for almost 20% of total retail trade. We will consider five types of nonstore retailing; direct selling, telemarketing,

automatic

vending,

online

retailing

and

direct

marketing. Rather than worrying about the confusing names, focus on the features and competition across the five types. Each type may used not just by retailers but by other types of organizations as well.

Direct Selling Telemarketing:

Automatic Vending Online Retailing: Direct Marketing:

17

LOGO AND INTERNAL PICTURE OF UTILITY STORES OUTLET

18

INTRODUCTION In almost all the societies, there is, inter alia, a general tendency to acquire more and more wealth by all means. Similar situation was also being faced by Pakistan where majority of the private traders were applying tactics like creation of artificial shortages of essential items of consumption, black-marketing, charging high prices etc. The public had become hostages in the hands of the unscrupulous traders and had no option but to buy from them at what ever prices they demanded. In order to tide over this situation, and to provide economic relief to the public, the Federal Government established Utility Stores Corporation (USC) in July 1971 and placed it under the control of Ministry of Industries, Production & Special Initiatives. The USC started its operations by taking over 20 stores from the staff Welfare Organization, of the Establishment Division and gradually started increasing its numbers. To exercise better command and control, the USC established Regional Offices in different big cities to cater to the requirements of these additional stores in an organized and economical manner. Some Government and private departments also invited USC to open its stores for their employees for which they provided rent-free store accommodation. The USC also opened a large number of stores in different cities and towns by acquiring shops on rent at market rates.

MISSION The USC is committed to provide clean, graded, hygienically fit, unadulterated genuine food and non-food items to the public and specially to the poorer segments of the society, at comparatively cheaper rates than the market and to offer them a pleasant

19

environment of mutual confidence while making their purchases. It is also committed towards its obligation to provide economic relief to the public by playing its role as a price and deterrent to profiteering, hoarding and black-marketing.

OBJECTIVES The basic objective of the USC is to provide essential and other items of daily use to the public, specially the poorer segments of the society, at prices comparatively lower than the market. It is, therefore, required to act as a price and deterrent to profiteering, hoarding and black marketing, thereby to provide economic relief to the public.

OPERATIONS & FUNCTIONS The entire operations of the USC are monitored by a Board of Directors which periodically provides policy guidelines. The Secretary, Industries and Production is Chairman of the Board of Directors. The operational activities of the USC are managed by the Managing Director who is assisted by six General Managers. It has eleven Regional offices which are headed by Regional Managers. Each Regional Manager is assisted by s officer, Area managers and other staff. Each USC region operates stores in its Region. These stores are supplied the required goods through Trucks from the Regional Ware Houses which are established in all USC Regions. The sale prices are fixed by the Head Office located at Islamabad. The Head Office makes procurements centrally and places orders on the suppliers to deliver goods to the Regional Warehouses based on their fortnightly/monthly demands. The stores sell goods and deposit sale proceeds in the local designated bank branches on daily or twice a day basis from where these are

20

remitted on daily basis to the Head Office which release payments to the suppliers on due dates. Region/Province-wise Total stores in operation as on 5th Jan'05 are 352. Under a phased programme, the USC is opening at least 20 new stores every year.

21

MESSAGE OF THE MANAGING DIRECTOR From time immemorial after descending of the human beings on this planet, the instinct of greed and pursuit for amassing wealth ignited and betrayed them. This damaged the whole civilization and the human values of peace, love and fraternity started vanishing. Then, onwards human relations and values of love and fraternity

Brig. Hafeez Ahmed

(R)

became conditional to the wealth and fortunes that a man carried. Today also in our most advanced and progressive civilization, human beings are not prepared to let go any anti-human opportunity of adding to their wealth and making their fortunes better. Earning pure and unadulterated wealth to any extent is not prohibited by any religion if it is spent on society's welfare. But living in a human society it is an uncivilized attitude to become eccentric or self centered and safe guard own personal interests at the cost of his fellow human beings. 2.

Unfortunately, in many of the traders of our society this haunt

for illegal wealth has found deep roots. A variety of tactics, strategies, ways and means are chalked out for putting the public in difficult economic situations and for chiseling their real income. For example creating artificial shortages of essential food & non foods items of public consumption, adulteration, giving less weight items, selling unhygienic and ungenuine sub standard items, overcharging etc. Consequently, purchasing items of basic human needs become quite difficult for the public specially for the poorer segments of the society.

22

3.

We at the Utility Stores by the grace of All Mighty Allah and the of the Government are trying our best to stabilize the prices of essential and other food and non-food items. These stores are operating for the public welfare. The present Government is also committed to provide maximum economic relief to the public for which it has inter alia started a number of projects including mega projects. These efforts are going to reduce poverty and improve the standard of living of our peoples. In line with the policies of the Government, the Utility Stores are playing role of combating inflation and price spiral.

Utility

Stores

retail

hygienically

fit,

genuine,

unadulterated items of correct weight at prices lower than the market. Profit making is not our mission. We only charge nominal profit to meet our overhead expenditures. On an average a customer makes savings from 8% to 10% while shopping from the Utility Stores. The public can also play their role for promoting our mission by making a habit of purchasing their day to day requirements from the Utility Stores so that a strong pressure is built against the unscrupulous

profiteers

and

they

also

start

charging

reasonable profit from the public, sell pure items of correct weight etc. This will leave positive effects on the economic conditions of the peoples and not only make their life more comfortable but will facilitate them in leading a better life and converting Pakistan into a strong, peaceful and serene country.

23

ROLE & SERVICES: The USC has been successfully playing its role as a price and deterrent to profiteering, hoarding and black marketing since last 33 years. It has intervened the market at a number of times when the unscrupulous private traders had created artificial shortage of essential items like sugar, vegetable ghee, atta, red chillies, pulses etc. With the of the Government, these crisis situations were averted by the USC by arranging large stocks of items of shortages and selling the same at reasonable prices, in retail as well as wholesale from its 930 stores spread all over the country. The numbers of stores were subsequently reduced due to closure of economically unavailable stores.

24

BOARD OF DIRECTORS S.No 1. 2.

NAMES Secretary, Mr.M. Abdullah Yousaf Arshad Jamil Khokha Brig. (Rtd) Hafeez Ahmad Syed Zaheer Ali Shah Mr. Fazli-Qadir Mr. Inayatullah Khan Mr. Abdul Wadood Khan Mr. Arshad Saeed Khan Mr. Umar Khitab

3. 4. 5. 6. 7. 8. 9. 10.

DESIGNATION Chairman Member

MOIPSI Chairman CBR FA, MOIP & Sir

Member Member

Add. Secretary MOIP JS (CS), SI & MOIP

Member

GM (F), SEC

Member

Member Member Member

GM (F&A),USC

Secretary

Member Member

Secretary

Member

Member Chairman US

Member

Member

Member

Member

25

Diagrammatical Presentation of Hierarchy

26

MAJOR ITEMS: The USC is presently retailing over 2500 food & non food items of daily consumption. Major items being sold by the USC are given below. On an average, a customer when purchases kitchen and other items from the Utility Stores makes a saving of 8% to 10% as compared with the purchases of identical items from a private retailer. The items sold at Utility Stores are hygienically fit, unadulterated, genuine, clean, graded, of correct weight and are cheaper than the market.

LIST OF MAJOR ITEMS S.No Name of Items 01.

Atta

02. 03 04. 05. 06. 07. 08. 09. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23.

Sugar Dalda Ghee/Oils Rice Pulses/Baisen Yellow Label Tea Tapal Tea Lux Soap B/S Surf Excel 1 Kg Biscuits( All Varity of LU,English,Peak Freens) Rafhan Custard Rafhan Kheer Fauji Corn Flacks Fauji Porridge Food Fauji Custard Pdr Kashmir Ghee Life Buoy Ariel Washing Powder Safe Guard Soap Sufi Washing Soap Toilet Rolls/Tissue Papers Laziza Products Jam/Jalies/Tomato Ketch-up

27

24. 25. 26. 27. 28.

Vermicillies/Macrooni Rooh Afza Spices Nestle Products ( Dry Milk/Baby Food/Coffee) Cooking Oil/Pakwan

PRICES OF MAJOR ITEMS: Name of Item

USC Sale Price

Market Price

35.00 18.00 26.00 29.00 32.00 36.00 45.00 48.00 95.00 115.00 60.00 26.00 34.00 55.00 29.00 64.00 39.00 15.00 15.00 19.00

38.00 22.00 38.00 32.00 34.00 38.00 48.00 52.00 100.00 118.00 62.00 32.00 42.00 63.50 34.00 73.00 47.00 18.00 18.00 22.00

PACK) USC Turemeric Powder 100 gms (HARD

16.00

20.00

PACK) USC Garam Masala Powder 50 gms (HARD

13.00

16.00

PACK) USC coriander Powder 200 gms H/P

16.00

20.00

Super Basmati Rice Tota Rice Sugar Dal Chana Moong Washed Mash Washed White Gram Tapal Danedar Tea 200 gms Tapal Danedar Tea 400 gms Yellow Label Tea 400 gms (Leaf) Supreme Tea 250 gms Dentonic Tooth Paste 100 gms Dentonic Tooth Paste 125 gms Shezan Tomato Ketchup 830 gms Mango pickle 325 gms (Shezan) Mango pickle 1000 gms (Shezan) Apple Jam 440 gms (Shezan) National Biryani Masala 45 gms National Bombay Biryani Masala 70 gms USC Red Chilli Powder 200 gms (HARD

28

USC Garam Masala Powder 50 gms USC Crystal Iodized Salt 800 gms USC Kenya Tea 200 gms Utility Ghee 1 Kg Pouch Utility Ghee 5 Kg Tin

16.00 6.00 45.00 64.00 325.00

Utility Cooking/Oil 1 Ltr Utility C/Oil 5 Ltr

64.00 325.00

Dalda Ghee 5 Kg Dalda Ghee 2.5 Kg Dalda C/Oil 5 Ltr Dalda C/Oil 2.5 Ltr Lux Bath Size Surf Excel 400 gms Surf Excel 1000 gms Sufi Soap

375.00 195.00 375.00 195.00 21.50 47.00 108.00 47.00

18.00 9.00 48.00 66.00 to 70.00 330.00 to 370.00 66.00 to 72.00 330.00 to 370.00 395.00 205.00 395.00 205.00 22.00 48.00 110.00 48.00

29

DISTRIBUTION OF STORES

PROVINCE WISE STORES: 1. 2. 3. 4. 5. 6. 7.

(AS ON 1ST DECEMBER 2005)

Islamabad Capital Territory Punjab Sind N.W.F.P Baluchistan Azad Kashmir Northern Area Total

REGION WISE NO OF STORES:

26 172 53 73 19 08 02 353 (AS ON 7TH DECEMBER

2005)

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

Abbottabad Faisalabad Hyderabad Islamabad Karachi Lahore Multan Peshawar Quetta Rawalpindi Sargodha Total:

33 25 19 40 34 38 21 45 19 50 28 352

SUPER STORES REGION WISE STORES THAT YIELDED ABOVE ONE MILLION SALE IN OCTOBER 2005

30

Abbottabad Store Code No. AD-27 AD-29 AD-32 AD-25 AD-34

Name of Store Al Quresh Market Ougi Kaghan road Balakot Bank Road Muzaffarabad (A.K) Shankiari City Madina Market Gilgit

Faisalabad Store Code No. FD-5001 FD-5003 FD-5021

Name of Store Gulistan Colony Faisalabad Madina Town No.1 Faisalabad Amir Colony Okara

Islamabad Store Code No. ID-1001 ID-1016 ID-1038 ID-1041 ID-1024 ID-1029 ID-1017 ID-1002 ID-1039

Name of Store F-7, Markaz Cafee Irum Market I-10, Markaz Kalor Syedan F-8, Markaz Rawalakot (A.K) Itwar Mazar Aabpara Market G-9, Markaz

Karachi Store Code No. KI-0010 KI-0064 KI-0067

Name of Store Gulshan 13/C Sumera Centre Gulshan-e-Iqbal Block 13/C Karachi Gulshan-e-Johar 16/A Karachi Dewan-e-Khas Karachi

31

KI-0068 KI-0046

Gulshan 4/B Karachi Defence 31/C 1st Border Commercial Area Phase-V PDOHA, Karachi

Multan Store Code No. MN-0725

Name of Store Cement Factory Dara Ghazi Khan

Lahore Store Code No.

LE-009 LE-0032 LE-0008 LE-0036 LE-0702

Name of Store Allama Iqbal Town Family Market 14 – Pak Block No.1 Blue World Area Lahore Barkat Market Garden Town Lahore Shan Market Lahore B-1 Model Town Lahore Township, Commercial Sector Madina Road Lahore College Road Gujrat

32

Peshawar Store Code No. PR-8001 PR-8153 PR-8096

Name of Store Super Market 2-Islamia Road Peshawar Cantt Hayat Abad Super Market Phase-1 Peshawar Khyber View Plaza (KV) Abdara Chowk University Road Peshawar

Rawalpindi Store Code No. RI-2001 RI-2020 RI-2024 RI-2050 RI-2051 RI-2053 RI-2063 RI-2049 RI-2006 RI-2010 RI-2056

Name of Store Muslim Town Sadiq Abad Rawalpindi Misrial Road Rawalpindi Chandni Ckowk Basement of Al-Noor Plaza Rawalpindi Chakwal Talagang Road Chakwal Gate No.1 POF Wah Cantt Talagang Opppsite GPO Chakwal Road Talagang GT Road Gujar Khan Civil Line Jehlum New Katarian P/956 Rawalpindi. Kurri Road Satti Plaza Near Haroon Chowk Rawalpindi Jand Main Road District Attok

Sargodha Store Code No. SA-1006

Name of Store College Road Near Faitma Hospital Sargodha

33

EMPLOYMENT: The USC has provided employment opportunities to 1020 employees.

STAFF POSITION OF USC REGION WISE Region

Total No. of Employees

Abbottabad Faisalabad Hyderabad Islamabad Karachi Lahore Multan Peshawar Quetta Rawalpindi Sargodha

67 60 44 120 88 120 52 105 44 146 53

Total: Head Office Project

899 101 20

G. Total:

1020

SPECIAL OFFERS:

a. There is a general tendency that during the holy month of Ramzan, the prices of essential consumer items are substantially increased by the traders/retailers in the private sector. This results into lot of difficulties for the public. In order to overcome this situation, the USC

34

as a pioneer started offering Relief Packages during Ramzan ul Mubarik since last 13 years. It announces 3% to 15% price reduction on different essential and other items during Ramzan which leaves a very healthy impact on the prices of essential items in the country. During last Ramzan the USC offered price reduction on over 450 essential and other items from 3% to 15%. Due to this, the private traders in competition also kept their prices low throughout the country which resulted in control over price spiral and provided economic relief to the public.

b.

The USC offers Special Relief Packages also periodically during

the year by reducing prices of a large number of essential and other items. To provide benefit to maximum number of public, the USC also arranges mobile stores in far areas. This also leaves healthy impact on the prices throughout the country. It has recently offered an Eid ul Azha Relief Package w.e.f 1st Jan'05.

c.

The USC purchases confiscated items ceased by the custom

authorities and retail them at comparatively cheaper rates through its selected stores.

d.

In order to relief to the public and to check draining out

to the private wholesalers and retailers, the prices of items reduced by the USC are however not fixed below the cost price or the whole sale prices.

RELIEF PROVIDED DURING LAST TEN YEARS: a

Average No. of Stores per year

583

35

b c

d

e f

Total Sales Approximately 8% to 10% Price Relief directly ed on to the public. Approximately Indirect Price Relief availed by the public due to Utility Stores presence in the market (At least 30 Private Stores in the vicinity of each Utility Store kept their prices low in competition with the Utility Stores) Total Approximate Relief ed on during 10 years Total Approximate Annual Average Relief ed on to the public

Rs. 40397 Million Rs. 3232 to Rs. 4040 Million

Rs. 4040 Million x 30 = Rs. 121200 Million, or Rs. 121.20 Billion.

RS. 125.24 Billion. Rs. 12.52 Billion.

36

UTILITY STORES CORPORATION OF PAKISTAN (Pvt) Ltd BALANCE SHEET AS AT JUNE30, 2004

2005

2004

Rupees, Fixed Assets

Rupees

135,839,595

143,004,374

1,006,786

1,047,062

CURRENT ASSETS Stores and spares Stock-in-trade

421,118,472

253,822,472

Trade debts

111,808

13,720,497

Loans and advances

3,340,016

4,925,635

Trade Deposits and short Term

4,988,679

3,979,398

-Prepayments Other receivables

45,413,198

10,479,667

Taxation

5,189,067

4,386,938

Cash and bank balances

140,322,777

79,241,470

Total current assets

621,490,803

371,603,139

Total Assets

757,330,398

514,607,513

SHARE CAPITAL AND RESERVES Share capital Authorized

750,000,000

150,000,000

Issued, subscribed and paid up

737,731,420

134,715,180

Accumulated loss

(931,318,824)

(1,177,327,644)

(193,587,404)

(1,042,612,464)

Grant related to assets Long term loan

3,787,771 -

3,987,369 301,500,000

37

CURRENT LIABILITIES Short term finance

-

301,516,238

Deposits

6,594,343

5,645,085

Creditors

837,823,383

636,112,708

Accrued liabilities

84,333,049

74,136,783

Interest accrued on short term finance

-

231,786,410

Other liabilities

10,167,838

1,585,445

Provision for taxation

8,211,418

949,939

947,130,031

1,251,732,608

___________

__________

CONTINGENCIES

757,330,398

514,607,513

38

UTILITY STORES CORPORATION OF PAKISTAN (Pvt) Ltd PROFIT AND LOSS FOR THE YEAR ENDED JUNE 30, 2005 2005

2004

Rupees

Rupees

Sales

2,736,023,473

1,434,415,050

Cost of sales

(2,493,832,631)

(1,278,212,231)

Gross profit

242,190,842

156,202,819

Other operating income

239,893,203

42,688,494

(191,805,624)

(159,557,689)

istrative expenses

(28,841,349)

(23,737,745)

Profit from operations

261,437,072

15,595,879

Selling and distribution expenses

Finance cost

(1,748,135)

(41,116,095)

Profit/(loss) before taxation

259,688,937

(25,520,216)

Provision for taxation

(13,680,117)

(7,172,075)

Net profit/(loss) from ordinary activities Extraordinary item Net profit for the year

246,008,820 246,008,820

(32,692,291) 150,000,000 117,307,709

39

UTILITY STORES CORPORATION OF PAKISTAN (Pvt) Ltd CASH FLOW STATEMENT FOR THE YEAR ENDED JUNE 30, 2005 2005 Rupees

2004 Rupees

259,688,937

(25,520,216)

Cash flows from operating activities Profit/(loss) before taxation Adjustment for non cash items: Depreciation

9,195,305

10,136,297

Gain on disposal of fixed assets

(191,705)

(1,013,921)

Amortization of grant related to assets

(199,598)

(210,224)

Finance cost

1,748,135

1,357,492

10,552,137

10,269,644

270,241,074

(15,250,572)

Working capital changes: (Increase)/decrease in current assets Stores and spares Stock-in-trade Trade debts

40,276 (167,296,000)

595,987 (61,877,204)

13,608,689

-

Loans and advances

1,585,619

12,694,469

Trade deposits and short term prepayments

1,009,281

502,119

Other receivables

(34,933,531)

5,076,979

(188,004,228)

(43,007,650)

Increase/(decrease) in current liabilities Deposits Creditors Accrued liabilities Interest accrued on short term finances Other liabilities

949,258

(597,823)

201,710,675

(63,021,018)

10,196,266

(197,537)

(231,786,410) 8,582,393 (10,347,818)

33,007,346 1,432,979 (29,376,053)

40

Cash generated from/(used in) operations

71,889,028

(87,634,275)

Cash generated from/(used in) operations

71,889,028

(87,634,275)

Taxes paid

(7,220,767)

(3,691,943)

Finance cost paid

(1,748,135)

(1,357,492)

62,920,126

(92,638,710)

-

150,000,000

62,920,126

57,316,290

(2,178,759)

(2,577,889)

339,938

1,623,276

(1,838,821)

(954,613)

Net cash generated before extraordinary item Extraordinary item Net cash generated from operating activities Cash flows from investing activities Purchase of fixed assets Proceeds from disposal of fixed assets Net cash used in investing activities Cash flows from financing activities Conversion of short term finance into

-

301,500,000

Long term Conversion of long term loan into equity

(301,500,000)

-

Conversion of finance to equity

603,016,240

-

Net cash from financing activities

301,516,240

Net income in cash and cash equivalent

362,597.545

Cash and cash equivalent at the beginning of year (222,274,768)

.

301,500,000 357,861,677 (580,136,445)

beginning of year Cash and cash equivalent at the end of year

__________

___________

140,322,777

(222,274,768)

41

UTILITY STORES CORPORATION OF PAKISTAN (Pvt) Ltd STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED JUNE 30, 2005 Share capital

Accumulated

total

Loss _________________Rupees__________________ Balance as at July 01, 2003 Net profit for the year ended June 30, 2004 Balance as at June 30, 2004 Net profit for the year ended June 30, 2005

134,715,180

(1,294,635,353)

(1,159,920,173)

-

117,307,709

117,307,709

134,715,180

(1,177,327,644)

-

246,008,820

(1,042,612,464) 246,008,820

Shares issued against long term loan

301,500,000

-

301,500,000

Shares issued against short term finance

301,516,240

-

301,516,240

Balance as at June 30, 2005

737,731,420

(931,318,824)

(193,587,404)

42

SWOT Analysis What is SWOT Analysis? SWOT analysis is a basic, straightforward model that provides direction and serves as a basis for the development of marketing plans. It accomplishes this by assessing an organizations strengths (what an organization can do) and weaknesses (what an organization cannot do) in addition to opportunities (potential favorable conditions for an organization) and threats (potential unfavorable conditions for an organization). SWOT analysis is an important step in planning and its value is often underestimated despite the simplicity in creation. The role

of

SWOT

analysis

is

to

take

the

information

from

the

environmental analysis and separate it into internal issues (strengths and weaknesses) and external issues (opportunities and threats). Once this is completed, SWOT analysis determines if the information indicates something that will assist the firm in accomplishing its objectives (a strength or opportunity), or if it indicates an obstacle that must be overcome or minimized to achieve desired results (weakness or threat)

Elements of SWOT Analysis Strengths and Weaknesses Relative to market needs and competitors’ characteristics, a manager must begin to think in of what the firm can do well and where it may have deficiencies. Strengths and weaknesses exist internally within a firm, or in key relationships between the firm and its customers. SWOT analysis must be customer focused to

gain

maximum benefit; strength is really meaningful only when it is useful

43

in satisfying the needs of a customer. At this point, the strength becomes a capability. When writing down strengths, it is imperative that they be considered from both the view of the firm as well as from the customers that are dealt with. These strengths should be realistic and not modest. A welldeveloped listing of strengths should be able to answer a couple of questions. What are the firm’s advantages? What does the firm do well? A customer-focused SWOT may also uncover a firm’s potential weaknesses. Although some weaknesses may be harmless, those that relate to specific customer needs should be minimized if at all possible. In addition, a focus on a firm’s strengths in advertising is promotion is important to increase awareness in areas that a firm excels in. This method not only evokes a positive response within the minds of the consumer, but pushes the weaknesses further from the decision making process. Weaknesses should also be considered from an internal and external viewpoint. It is important that listing of a firm’s weaknesses is truthful so that they may be overcome as quickly as possible. Delaying the discovery of weaknesses that already exist within a company will only further hurt the firm. A well-developed listing of weaknesses should be able to answer a few questions. What can be improved? What is done poorly? What should be avoided? The role of the internal portion of SWOT is to determine where resources are available or lacking so that strengths and weaknesses can be identified. From this, the marketing manager can then develop marketing strategies that match these strengths with opportunities

44

and thereby create new capabilities, which will then be part of subsequent SWOT analysis. At the same time, the manager can develop strategies to overcome the firm’s weaknesses, or find ways to minimize the negative effects of these weaknesses.

Opportunities and Threats Managers who are caught up in developing strengths and capabilities may ignore the external environment. A mistake of this magnitude could lead to an efficient organization that is no longer effective when changes in the external environment prohibit the firm’s ability to deliver value to its targeted customer segments. These changes can occur in the rate of overall market growth and in the competitive, economic, political/legal, technological, or sociocultural environments. Changes in the Competitive Environment: One of the largest trends in the U.S. economy in recent years has been the rapid decline in the number of small, independently owned retail businesses. Small mom-and-pop supermarkets and locally owned bookstores are fading away quickly and will soon be extinct. Likewise, many locally owned restaurants around the country are experiencing difficulties due to the growth of large, national restaurant chains. The most recent businesses to face extinction are neighborhood hardware stores, which have lost customers to retail giants such as Home Depot and Lowes. Although they cannot be competitive with pricing, hardware retailers such as Ace Hardware and True Value expect to survive by offering outstanding service and convenient locations.

45

Changes in the Socio cultural Environment: Social and cultural influences cause changes in attitudes, beliefs, norms, customs, and lifestyles. A firm’s ability to foresee changes in these areas can prove beneficial while failure to react to these changes can be devastating. For example, the sales of Mexican-food products have increased at an annual rate of approximately 12 percent. The trend went unnoticed by major food producers for a long time. However, Heinz Company recognized the existence of a viable opportunity and responded by introducing two versions of salsa-style ketchup. Although Heinz’s strategy was sound, its salsa ketchup eventually failed due to poor distribution during the implementation phase. Product modifications are often used to take advantage of market opportunities. However, these changes can also create potential new competitive threats. When Heinz introduced salsa-flavored ketchup, it added Old El Paso and Pace to its set of brand competitors that previously included Hunt’s and Del Monte. Likewise, the action of other companies can also change the competitive set. Failure to re-evaluate and

realign

the

threats

and

opportunities

in

the

Sociocultural

environment can hurt a firm. Changes in the Political/Legal Environment: Regulatory actions by government agencies often restrict the activities of companies in affected industries. The American Disabilities Act of 1990 placed restrictions on the way firms construct their places of business and design jobs. Companies with significant investment facilities that did not comply with the law viewed its implementation as a major threat. On the other hand, companies that market products

46

designed to assist disabled shoppers and employees saw the act as a key opportunity. Lawsuits against the tobacco industry have lead to dramatic changes in

the

way

cigarette

companies

market

their

product.

Today,

companies such as Phillip Morris are airing ments illustrating the negative effects of their products. In addition, a proposed settlement agreement between the industry and the attorney general of several states represent a threat that could result in a ban on some types of cigarette advertising and the regulation of nicotine by the FDA. As can be seen, it is important to identify political/legal threats and opportunities in order to keep an edge on the market. Changes in the Internal Organizational Environment: Various elements within an organization’s internal environment can also have an

impact on marketing

activities.

Changes

in the

structuring of departments, lines of authority, top management, or internal political climate can all create internal weaknesses that must be considered during the SWOT analysis as well as in the development of the marketing plan. McDonald’s has recently been feeling increased competitive pressure from Wendy’s and Burger King. In order to increase market share, McDonald’s created new marketing campaigns and

new

sandwiches.

However,

McDonald’s

failed

to

get

the

cooperation of all its franchisees. When store sales began to fall, individual franchisees started to band together to gain power to protect their investments. The increased power of the franchisees forced McDonald’s to pull several ment campaigns due to lack of . Prior to this McDonald’s was used to getting their way with franchisees. Now, the shift in power from McDonald’s to its franchisees has created an internal weakness that the company must address as it

47

develops and implements new marketing strategies. Again, it is necessary

to

emphasize

the

importance

of

evaluating

specific

opportunities and threats within your company.

48

SWOT ANALYSIS OF UTILITY STORES STRENGTHS: Company strength is a successful application of a competency or exploitation of a critical factor to develop company competitiveness. Following are the main points which show the strength of US.

•

Government Ownership: One of the most strengthening points for Utility Stores

Corporation is that it is one of the organizations owned by Government. It is a strong point because being a government ownership there are a lot of advantages for this organization. •

Lower Prices: This organization of retail stores aimed at providing quality

products at cheaper rates. By comparing its prices with other retailers it is found that there is an obvious difference in its prices. They offer many of the same products at lower prices as provided by its competitors. e.g. It provides sugar at far lower prices than that provided by other retailers. •

Super Stores: Along with retail outlets in different areas it has a chain of

super stores in the busy location of different regions. These super stores provide a wider range of products than it provides in retail outlets with discount prices. •

Centralized Procurement:

49

The head office situated in Islamabad purchases all the products/goods provided by Utility Stores centrally. This centralized purchase of product is beneficial as in bulk purchases reduce the cost of products. •

Distribution Channels: It has its own distribution channel which distributes its

commodities to regional offices and then from each regional office goods are supplied to each retail outlet on daily basis according to fixed quota. For long distance it uses other distribution services like trains and other private transport facilities, while, and for small distances it uses its own distribution services. •

Own Products: Many of the products they are selling are under its own

brand name. e.g. Utility Salt, Utility Floor, Utility Oil & Ghee, Utility pickles, Utility Spices etc. •

Directed at the Average Pakistani: The corporation aims at providing products that are in the

range

of

average

Pakistani,

not

only

targeting

the

upper

community. •

Largest Chain of Retailers in Pakistan: It is the largest chain of retail stores in Pakistan, so it can

easily attain the large share of market. Middle class people prefer to go to Utility Stores instead of going anywhere for fulfilling their consumption needs.

50

•

Subsidies on Taxes: Being an organization owned by Government it

receives subsidies on various levels which automatically minimizes its cost and increasing its profit margins. They also receive subsidies in taxes while purchasing in bulk. •

No Brand Names: Utility Stores Corporation does not use brand names

due to which it does not have to pay high prices for its products. •

Low operating Costs: Utility Stores have lower operating expenses which

lower its costs and increase the profitability of the organization.

51

WEAKNESSES: A company weakness is an unsuccessful application of a competency or the non-exploitation of a critical factor that diminishes company competitiveness. •

Management Inefficiency: It was the management inefficiency that Utility Stores suffers

heavy losses in the previous year. Although currently there is considerable increase in the revenue of the Utility Stores but still there is a need for the improvement of Management. Just like other Governmental Organizations the employs gives less attention to their work. •

Security Issues For Outlets: There is no security for the retail outlets. Due to insecurity

these outlets are exposed to robberies etc. e.g. recently one of the utility store at Hayatabad was robbed. •

Lesser Variety: Although Utility Stores is providing goods to the consumers

on less prices than other retailers. Still there are problems regarding the variety and the quality of products. There is no such variety of products as available in the market due to which many customers shop from other retailers for their required brand. •

Quality Of Products: Similarly many of the products available in Utility Stores are

of inferior quality due to which buyer goes to other shops for these products as they have both the inferior and superior quality of

52

products. Utility Stores also lose potential customers who want to buy all their consumption items of their required brand and quality from one retailer. •

Lack Of Employ Training: There is no appropriate training for the employs working at

the retail outlets regarding management of retail outlet and interpersonal skills. If the employ is properly trained and well versed there will be potential increase in the number of buyers. •

No ment: In the previous years Utility Stores have a considerable

ment in different Medias like Television, Newspapers etc. currently there is not any proper ment for the Utility Stores due to which a greater share of the customers in the market does not know about the Utility Stores. •

Lack Of Research and Development: As we know that R&D plays an important role in the

establishment and improvement of any organization. There is lack of R&D in the Utility Stores, which causes great harm to its existence, and there is no chance of development and innovation in its operations. •

Customer services: Another weakness of Utility Stores is that it does not

provide any type of customer services. While many of other large retail stores provides many of these services which added to their value. Similarly customer services never let the customer to go anywhere else.

53

•

Location: Location is one of the most important considerations

for retail stores. If a retailer is located in the front of the market it can easily catch the eyes of customer instead of one located some where in the corner. Many of the Utility Stores are located in places which are off the sight. Most of the population of the locality does not know about them, so how can such a shop/retailer be prosperous in the long run.

54

OPPORTUNITIES: Like many businesses there are a lot of opportunities for Utility Stores Corporation to grow as one of the largest chain in the world. Here are some of the opportunities present for Utility Stores Corporation which can considerably enhance the overall organization: •

Diversification in Product Line: There is a great need for increase in the product line

they

are

offering

to

customer.

It

can

positively

help

the

organization to attract the larger share of the market. Similarly it will also add to the revenue and popularity of the largest chain of retailers in Pakistan. •

Targeting New Markets and Locations: There are still many of the potential locations and

markets where there are no Utility Stores. If the US consider these locations and open their retail stores over there they can make increase in their market share by making new customers. •

Privatization: As it is noticed that privatization of many sick

industrial

units

and

organization owned

by

the Government

positively converted these sick units into profitable ones. Similarly if the Government privatizes US its profitability may also increases because it is seen that most of the Govt. owned corporation lead to losses and are shut down. •

Expected Increase In Demand:

55

As we know that there is a rapid increase in the market day by day so Utility Stores Corporation needs to get ready for the expected increase in demand due to several factors. There must be flexibility in their plan so they can easily manage the situation which is unknown. This will also increase the market share which in turn will increase the wealth of the organization.

•

Mergers, t Venture & Strategic Alliances: In recent years many of the big organizations have

take benefits from becoming involved in mergers, t ventures and strategic alliances. Sometimes when an organization is at the closing end of the life cycle it take part in a t venture or become merged in any other organization having same business to come out of losses. Similarly in mergers and t ventures one sick unit can take benefits from the experience of well established organization. So, if Utility Stores Corporation also makes an alliance with any established chain of retailers then it grow further. •

Changing The look of Utility Stores: In this modern world even in Pakistan customers are

conscious about the presentation of anything they are going to purchase. The Utility Stores have to adopt the modern methods of retailing so as to penetrate the market and gain more popularity. It must have to change its look because people want change.

56

•

Use of Information Technology: This is the era of Information Technology and many

of the businesses and organizations are taking advantages of it. Its an opportunity for Utility Stores corporation that, if they adopt Information Technology in its operation it can track the efficiency of its outlets at any time and can make implement related decision at the same time. Implementing Information Technology will help it many other issues also like record keeping, communication within organization etc.

57

THREATS: Along with opportunities there are a lot of threats present in the market, this harms the popularity of the Utility Stores Corporation. Few of the potential threats to the organization are stated below. •

Competitors: In case of Utility Stores Corporation there are

present many competitors in the market who provides the same products. Many such retailers are convenient to approach and have most of the products of daily life. Similarly large number of retail chains is also growing which produces more competition and potential threat to Utility Stores. e.g. Need Super Stores, Day To Day Stores, Seven Eleven Stores, etc which are trying to capture the market and causes competition for the US. •

Competitors providing Innovative Product & Services: In the recent years there are a lot of innovations

made in the structure and services provided by the retailers. New retailing techniques are introduced in the recent years. The retailing trend is totally changed from that of retailing in the past. Most of the new retailers are applying these modern techniques and trying to become the market leaders. •

International Chain of Retailers: Now a day some of the international chain of

retailers is also targeting our markets which make it tough for the Utility Stores to survive. These chains are much stronger than

58

Utility Stores so they are tightening the competitive position of retail industry.

CONCLUSION Retailing comprises a large industry of any country. Similar is the case with Pakistan because there are thousands of small and big retailing units in Pakistan making a large industry. Most of these retailers are usually located in the residential areas while some medium and large sized retailers are located in some prime and expensive locations for the convenience of different types of people. Usually small retailers provides products of every day use while big retailers like supermarkets provides a wide ranges of product including some routine or day to day use products. Pakistan is considered to be an under developed and poor country of the world. The standard of living of people in Pakistan is very low, even a large percentage of people come under below poverty level. Majority of them does not afford even basic necessities of life and strive for them. Being realizing these problems Government of Pakistan decided to relieve these people to some extent by providing them basic necessity items on comparatively cheaper rates than provided by general retailers. In order to tide over this situation, and to provide economic relief to the public, the Federal Government established Utility Stores Corporation (USC) in July 1971. It was one of the appreciable steps taken by the Government of Pakistan at that time. Hence the Utility Stores Corporation of Pakistan was established targeting an average Pakistani, and here average people

59

include both lower and middle class people and even some segments of upper class. If we review the financial statements of Utility Stores Corporation of Pakistan, we will find that it has improved to a greater extent in the current year 2005. As we know that in the last few years Utility Stores Corporation had suffered heavy losses due to inefficiency of the management and some other internal factors. In those years the sales volume of US was also very lower but in 2005 it emerged again as a strong chain of retailers in Pakistan. It becomes possible due to timely decision by the management of US and due to introduction of new and attractive incentives to the masses. Similarly in the recent year the operating expenses of Utility Stores were also reduced to greater extent which intern increased the profitability of the organization. Now the management of Utility Stores Corporation is considering different issues so as to maintain the profitability higher and providing relief to masses. The management is considering different areas where there is no Utility Stores till now and these areas are potential markets for retailing. It is noticed that Utility Stores Corporation open almost 10 to 15 new outlets each year. Similarly the SWOT analysis of Utility Stores Corporation reveals that at present US is at very strong position in the market as it has very lower prices in comparison with general stores. Similarly it provides basic necessities like floor, sugar, rice, cereals etc on almost 10% to 15% lower than the general market rates. Similarly there are a lot of opportunities present in the market in favour of US. These opportunities can enable US to excel the market in the long run. By utilizing these opportunities Utility Stores can better face

60

the tough competition in the market and capture the greater share of market.

61

SUGGESTIONS & RECOMMENDATIONS Utility Stores Corporation was established in 1971, with the aim to provide economic relief to poor communities of Pakistan. It was aimed at providing needed goods to people at far lower prices charged by general retailers. Utility store was the leading retail chains in Pakistan but due certain factors it lost its popularity among people and suffered heavy losses. In the current year 2005 Utility Stores has regained its position by applying some new methods and planning its operations with new dimensions. Similarly the management of US is seriously

thinking

over

certain

alternatives

for

maintaining

its

profitability in the future. The Utility Stores have a great potential and flexibility

for

development

both

in

its

operations

and

physical

appearance. If these developments are made accordingly, then a time will come when the US will be again considered as the largest chain of retailers. In the following paragraphs there are few suggestions & recommendations given for the improvement in value of US. These suggestions are largely based on the premise that US can be successful in the long run in of sales volume and profitability if these suggestions and recommendations are really considered.  First of all there are some critical management issues which

needs proper attention and must be corrected to be successful in the long run. The most critical of these management

issues

is

corruption,

which

is

usual

in

Government organization and lead many such organization to closing points. This issue can be easily controlled by continuous monitoring of operations by any Government institution. If this issue is controlled then people will feel the

62

improvement in quality of products provided by them and profits will also grow.  In this 21st century there are very abrupt changes and advancements are occurring in the retailing industry. So for keeping pace with the current market trends there is a need for Research & Development in the Utility Stores Corporation which will track the advancement in retailing and also help to implement them in US. Although such a setup increases cost of the organization but its advantages far more than that of cost incurred.  As we know that to survive in such a competitive market of retailing most of the organization have allotted handsome amounts for ments as ment is considered an important weapon for surviving in the market. Previously the US has used to in different Medias but now a day there is no ment of Utility Stores in any media due to which it sales are a bit lower. The US should have to find the ways to the organization so as to increase its profits in the future.  The management of US should have to find the ways of reducing the operating costs of the organization. The reduced operating

costs

will

increase

the

profit

margins

of

the

organization.  The US may be more profitable in the long run if it makes an alliance with any large national or international retail chain like chen one, ARY cash n carry etc. the US may also hire consultants

from

such

organizations

for

helping

it

in

development.

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 Similarly in Pakistan privatization is considered as a key of success, that’s why Government has privatized many of the organizations. In my view the Utility Stores Corporation can also be more profitable if its privatized completely or partially, transferring the management in the hands of private owners.

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