Strategic Business Plan For Ghandhara Nissan Limited

Semester Project
STRATEGIC BUSINESS
PLAN FOR
GHANDHARA NISSAN
LIMITED
Conducted By:
Name of Student: Muhammad Asif Khan
Student ID: MB-2-05-51271
Semester: Fall-2015
Submitted To:
Course Instructor: Dr.Hanif Muhammad
Course ID: 70415
Page 1 of 59

Campus: PAF-KIET (City Campus)
Strategic Audit Sheet for Ghandhara Nissan Limited
STRATEGIC AUDIT HEADING
ANALYSIS
(+) FACTORS (-) FACTORS
COMMENTS
1) CURREENT SITUATION:
A) Past Corporate Performance
Includes:
B) Strategic Posture:
Current Mission
Current Objective
Current Strategies
Current Policies
SWOT ANLYSIS BEGINS:
2) Corporate Governance
A) Board of Directors
B) Top Management
3) EXTERNAL ENVIRONMENT
(EFAS):
(Opportunities & Threats)
A) Societal Environment
B) Task Environment
(Industry Analysis)
4) INTERNAL ENVIRONMENT (IFAS):
(Strengths & Weaknesses)
A) Organization Structure
B) Organization Culture
C) Organization Resources
i) Marketing
ii) Finance
iii) Research & Development
iv) Operations & Logistics
v) Human Resources
vi) Information Systems
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5) ANALYSIS OF STRATEGIC
FACTORS (SFAS):
A) Key Internal and External
Strategic Factors (SWOT)
B) Review of Mission And
Objectives
6) ALTERNATIVES AND RECOMMENDATIONS:
A) Strategic Alternatives
B) Recommended Strategy
7) IMPLEMENTATION:
8) EVALUATION & CONTROL:
Current Situation
Past Corporate Performance:
Ghandhara Nissan Was established as a private limited company in August 1981
to import and market Nissan vehicles in Pakistan. It also has been marketing
Nissan Diesel Trucks assembled in the country. It was converted into a public
limited company in May 1992 to undertake production of Nissan Vehicles. The
company has a very low market share and its products are not doing so well in
Pakistan market from its beginning. The reasons to which this state is attributed
include lack of financial resources, internal strife in the company, and
restructuring efforts. To handle this situation the company is considering to have
their loans converted into equity, or to sell the stakes to a new group so that
outstanding loans could be paid or rescheduled. The problems of Nissan are
further aggravated by stiff competition from the large car market covered mainly
by Toyota and Honda.
Present Status:
To analyze the past performance of the Ghandhara Nissan Limited the following
evaluation has been done from their last year financial report displayed for the
stakeholders:
i) Return on Investment (ROI)= Net Profit After Tax
Total Assets
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= 508,867,000
3,571,264,000
= 14.24%
II) Return on Equity Net Profit after (ROE)= Net Profit after Taxes
Shareholder’s Equity
= 508,567,000
1,274,111,000
= 39.90%
III) Earnings per Share (EPS ) = Net Profit after Taxes – Preferred Stock Dividend
Avg. number of Common Share
= 508,867,000 – 90,005,000
45,002,500
= Rs.9.30
OR
Return on Share (ROS) = Net Income after Taxes
Number of Common Stock
= 508,867,000
45,002,500
= Rs.11.30
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To analyze company’s long term investment ability:
Leverage Ratios:
i) Debt to Asset Ratio = Total Debt
Total Assets
= 1,248,858,000
3,571,264,000
= 0.3496
II) Debt to Equity Ratio = Total Debt
= 1,248,858,000
1,274,111,000
= 0.980
ii) Long term Debt to Capital Structure = Long Term Debt
= 435,544,000
1,048,195,000
= 0.415
Common Size Statements and comparison with last year:
Ghandhara Nissan Limited
Balance Sheet:
As on June 30, 2015
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Assets:
2015
Common
Size 2014
Common
Size
Difference
(+ or -)
Non Current Assets:
Property, Plant, and
Equipment
1,74
9,285
0.
49
1,76
4,038 0.51
(14,7
53)
Intangible Assets 88
0.0000
2 118 0.00003 (30)
Long term Investments
1
92,630
0.
05
1
52,630 0.04
40,
000
Long term Loans 6,477
0.001
8 4,864 0.00
1,
613
Long term deposits 16,633
0.004
7 8,031 0.0023
8,
602
Total
1,96
5,113
0.
55
1,92
9,681 0.56
35,
432
Current Assets:
Stores, Spares and Loose tools 50,174
0.01
4 44,055 0.05
6,
119
Stock-in-Trade
6
23,847
0.
17
6
92,474 0.66
(68,6
27)
Trade Debts
3
45,727
0.
10
3
95,583 0.12
(49,8
56)
Loans and Advances 40,212
0.
01 25,541 0.01
14,
671
Deposits and Prepayments 39,094
0.
01 15,721 0.00
23,
373
Other receivables 30,749
0.
01 49,102 0.01
(18,3
53)
Short term investment 30,092
0.
01 38,109 0.01
(8,0
17)
Taxation-Net
1
17,341
0.
03 96,070 0.03
21,
271
Bank Balance
3
28,915
0.
09
1
48,618 0.04
180,
297
Total
1,60
6,151
0.
45
1,50
5,273 0.44
100,
878
Total Assets
3,57
1,264
1.
00
3,43
4,954 1.00
136,
310
EQUITY AND LIBILITIES:
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Share Capital And Reserves:
Share Capital
4
50,025
0.
13
4
50,025 0.13 -
Share Premium 40,000
0.
01 40,000 0.01 -
Unappropriate Profit
7
84,086
0.
22
3
34,375 0.10 449,711
Total Equity
1,27
4,111
0.
36
8
24,400 0.24 449,711
Surplus on Revolution of fixed
Assets
1,04
8,295
0.
29
1,05
4,188 0.31 (5,893)
Liabilities:
Non Current Liabilities:
Liabilities against assets subject
to finance lease 45,635
0.
01 13,006 0.0038
32,629
Long term deposits 9,611
0.
01 10,611 0.0031
(1,000)
Deferred Liabilities
1
11,969
1.
98 94,795 0.03
17,174
Deferred Taxation
2
68,329
1.
59
1
58,039 0.05
110,290
Total
4
35,544
7.
46
2
76,451 0.08
159,093
Current Liabilities:
Trade and other payable
6
42,881
0.7
4
7
67,840 0.22
(124,959
)
Accrued Mark-up 7,985
0.0
9 5,178 0.0015
2,80
7
Short term finances 32,259
0.0
4
4
48,861 0.13
(416,602
)
Running Finances under mark-
up arrangements
1
18,802
0.4
3 54,380 0.02
64,42
2
Current portion of liabilities
against assets subject to
finance lease 11,387
0.0
2 3,656 0.00
7,73
1
Total
8
13,314
0.2
3
1,27
9,915 0.37
(466,601
)
Total Liabilities 1,24 0.3 1,55 0.45 (307,508
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8,858 5 6,366 )
Total Equities and Liabilities
3,57
1,264
1.0
0
3,43
4,954 1.00
136,31
0
“Amount in 000”
Profit Loss Account (Income Statement)
For the Year Ended June 30, 2015
Particulars
2015
Common
Size 2014
Common
Size
Difference
(+ or -)
Revenue (Sales)
5,445,39
2 1
2,619,9
10 1
2,825,48
2
Less: Cost of Sales
4,314,37
8 1
2,148,8
21 1
2,165,55
7
Gross Profit
1,131,01
4 0
471,0
89 0
659,92
5
Less: Distribution Cost
56,4
35 0
19,3
18 0
37,11
7
Administration
Expenses
168,9
95 0
124,5
65 0
44,43
0
Other Expenses
58,3
48 0
19,9
88 0
38,36
0
Add: Other Income
26,3
35 0
12,6
95 0
13,64
0
Profit from Operations
873,5
71 0
319,9
13 0
553,65
8
Less: Finance Cost
86,2
94 0
50,2
18 0
36,07
6
Profit Before Taxation
787,2
77 0
269,6
95 0
517,58
2
Less: Taxation
278,4
10 0
95,7
65 0
182,64
5
Profit after Taxation
508,8
67 0
173,9
30 0
334,93
7
“Amount in 000”
Z-Value (Altman’s S Bankruptcy Formula):
Z-Value formula combines five ratios by weighting them according to their
importance to a corporation’s financial strength. The Formula is:
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Z= 1.2X1+1.4x2+3.3x3+0.6x4+1.0x5
X1= Working Capital (%) = 792,837,000 = 0.220
Total Assets 3,571,264,000
X2= Retained Earnings (%) = 784,086,000 = 0.219
X3= Earnings Before interest & Taxes (%)
Total Assets
= 787,277,000 = 0.220
3,571,264,000
X4= Market Value of Equity (%) = 1,274,111,000 = 1.020
Total Liabilities 1,248,858,000
X5= Sales (Number of times) = 5,445,392,000 = 1.524
Z-Value = 1.2 (0.220) + 1.4 (0.219) + 3.3 (0.220) + 0.6 (1.020) + 1.0 (1.524)
= 0.264 + 0.3066 + 0.726 + 0.612 + 1.524
Z-Value = 3.4326
Note:
• Score below 1.81 indicates sufficient credit problems
• Score above 3.0 indicates a healthy firm
• Score between 1.81 and 3.0 indicates the question mark of uncertainty
Index of Sustainable Growth:
This is useful to learn if a company embarking on a growth strategy will need to
take on debt to fund this growth, the index indicates how much of the growth
rate of sales can be sustained by internally generated funds.
If the planned growth rate calls for a growth rate higher than the g*, extended
capital will be needed.
The formula is:
g*= [P (1-D) (1+L)]
[T-P (1-D) (1+L)]
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P= (Net Profit before Tax / Net Sales) x 100 = 787,277,000/5,445,392,000*100
= 14.45
D= Target Dividends / Profit after Tax = 90,005,000/508,567,000
= 0.1768
L= Total Liabilities / Net Worth = 1,248,858,000/1,274,111,000
= 0.9801
T= (Total Assets / Net Sales) x 100 = 3,571,264,000/5,445,392,000*100
= 65.58
g* = [14.45 (1-0.1768) (1+0.9801)]
[65.58-14.45 (1-0.1786) (1+.9801)]
g* = 23.553
42.077
g* = 0.5597 or 55.97%
Note: If the planned growth rate is higher than the g*, extended capital is
required.
Leverage Buy Out:
Operating Cash Flow:
Net Income= 787,277,000
Add: Depreciation= 75,575,000
Depletion= --------
Amortization= --------
Interest Expense= --------
Income Tax Expense= 162,374,000
Operating Cash Flow= 1,025,226,000
Free Cash Flow:
Net Income= 787,277,000
Add: Depreciation= 75,575,000
Depletion= ----------
Amortization= ----------
Total 862,852,000
Less: Capital Expenditures= 17,517,000
Dividends= 90,005,000
Free Cash Flow= 755,330,000
Nissan Motors Corporation (Global)
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VISION:
Enriching People’s Lives
MISSION:
• Nissan provides unique and innovative automotive products and services
that deliver superior measurable values to all stakeholders*in alliance with
Renault.
• Nissan will continue to offer innovative products and services today and in
the future.
• What drives us and gives birth to new value is the Nissan spirit, embodied in
the phrase.
• The power comes from inside.
• Nissan builds high-quality cars that are safe and have the bold design and
innovative technology to satisfy our customers’ needs.
• As a responsible corporate citizen, Nissan is committed to contributing to
the advancement of society and the preservation of our natural
environment.
• Our corporate vision is enriching people’s lives.
Nissan (Corporate):
• Established in Yokohama, Kanagawa in 1933, Nissan Motor Co., Ltd.
currently manufactures vehicles in 20 countries around the world, including
Japan and sells them over 170 countries. Global production volume of
fiscal 2013 was 5.08 million units.
• Nissan, Infiniti & Datsun (Brand)
• Nissan has a portfolio of three brands, Nissan, Infiniti and Datsun.
• Nissan vehicles are marketed in all major markets worldwide.
• Infiniti was launched as a premium brand in North America in 1989. The new
global headquarters for Infiniti in Hong Kong was opened in 2012 with sales
operations in over 50 countries.
• Global unit sales of Nissan Motor Co., Ltd. in fiscal 2013 totaled 518.8 million
vehicles.
• In 2012, Nissan Motor Co., Ltd. announced the return of the Datsun brand.
Datsun is for risers, optimistic, up-and-coming customers in high-growth
markets.
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Strategy:
Focus:
Brand power:
To strengthen Nissan’s brand power, we will expand our strength in
engineering and production to the sales, marketing and ownership
experience. We will raise the level of interaction with our customers to
create a world-class standard of service that will build lasting relationships
with every Nissan car owner. We recognize that having a stronger brand
will help close the gap with our top competitors in every measurable area –
from revenue generation to overall opinion and purchase intention.
Sales power:
Sales power in the mid-term plan refers to fully grasping the needs of
customers in each market, resulting in more sales volume and greater
market share. In emerging markets, we will focus on building a robust
dealer network with market positioning and staffing optimized to meet the
needs of local Nissan customers. In mature markets, where our dealer
network is already established, we will take a strategic approach to
improve customer loyalty and improve sales efficiency by increasing sales
volume per outlet.
Enhancing quality:
Nissan intends to make steady progress in improving product quality. During
Nissan Power 88, our aim is to raise Nissan into the top group of global
automakers in product quality and elevate Infiniti to leadership status
among peer luxury products.
Zero-emission leadership:
Nissan has taken the lead as the all-time volume leader in dedicated
electric vehicle sales. The Nissan LEAF is the best-selling EV in the world.
Nissan’s EV lineup has expanded with the launch of the e-NV200 light
commercial vehicle. An all-electric premium car will be launched by Infiniti
in the near future. Together with our alliance partner Renault, we have
plans to launch eight all-electric vehicles. In addition, Nissan continues to
take a leadership role in every aspect from the development of batteries,
chargers and vehicle lineup to electric grid studies, battery recycling and
the use of batteries for energy storage, so that we will contribute to the
establishment of sustainable mobility.
Business expansion:
Regarding the 8% market share objective under Nissan Power 88, we
estimate that 35% of the growth in volume will come from mature markets
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and 65% will come from emerging markets. We will achieve this through a
steady tempo of new product launches averaging every six weeks, a
continued focus on growth markets and the expansion of our Infiniti and
light commercial vehicle businesses. Investments in manufacturing
capacity expansion, particularly in China, North America, Brazil, Russia and
India, will enable us to increase sales volume.
Cost leadership:
We have been successful in reducing costs by 5% annually, due mainly to
our cross-functional monozukuri activities involving our supplier base. As our
production footprint is increasingly global, we will maintain this pace by
enhancing and deepening these activities in every Nissan production base
across the regions. Moreover, evaluating not only purchasing costs but also
logistics and in-house costs, we have set an objective to reduce total costs
by 5% each year.
Together with a stronger brand, investments in products, technologies and
global capacity, we aim to both achieve and grow beyond the Nissan
Power 88 plan.
Mid – term plan Nissan Power 88:
Nissan operates its business based on a six-year mid-term plan, Nissan Power 88,
which began in fiscal year 2011. Power derives its significance from the strengths
and efforts we will apply to our brands and sales. Our commitment is to renew our
focus on the overall customer experience, elevating Nissan’s brand power and
ensuring quality and excellence for every person who buys a Nissan car.
88 denote the measurable rewards from achieving our plan. We aim to achieve
a global market share of 8%, up from 5.8% in 2010, and we will increase our
corporate operating profit to a sustainable 8%, up from 6.1% in 2010.
Nissan is implementing six tactics under Nissan Power 88:
Business expansion in progress:
• During fiscal year 2013, we made record investments to grow and enhance
our operations. Our capital expenditures peaked as a percentage of
Page 13 of 59

revenue. At the same time, we will reap the benefits of our newly installed
capacity.
• In November 2013 in Mexico, and in February 2014 in Brazil, we opened
new plants. We expanded operations at plants in Russia and India.
• In June 2013, we started production in Vietnam. We began a capacity-
development project in Myanmar in September 2013.
• And we executed expansion plans for our plants in Indonesia in May 2014
and in Thailand in June.
• Nissan will continue to drive into untapped markets. During 2014, we began
production activities in Nigeria - the largest and most affluent market in
Sub-Saharan Africa.
• Nissan is the first major auto brand to localize production in Nigeria. During
2014, we expect the Datsun brand to drive strong sales in high-potential
markets worldwide.
• In the last fiscal year, we began local production and sales of the Datsun
GO in India. Since then, production and sales of the Datsun GO-plus have
started in Indonesia.
• In April 2014, we unveiled the all-new Datsun on-DO in Moscow and began
Datsun sales in Russia in September.
• In June, we showcased the Datsun model that will be sold in South Africa.
During 2014, we will continue to evaluate potential expansion opportunities
for the Datsun brand.
• The Renault-Nissan Alliance is a strategic partnership between France-
based Renault and Nissan, which is based in Japan. Together Renault and
Nissan sell one in ten of all cars worldwide.
• The companies, which have been strategic partners since 1999, sold 8.3
million cars in nearly 200 countries in 2013. In addition to AVTOVAZ, the
Alliance operates strategic collaborations with other automakers including
Germany's Daimler, China's Dongfeng, and India's Ashok Leyland.
• The 15-year old Alliance between Nissan and Renault delivered a record
2.9 billion euros in synergies in 2013. Purchasing, power train and vehicle
engineering remained the biggest contributors as the Alliance geared up
for the launch of its first Common Module Family (CMF) vehicles.
• Through the Renault-Nissan Alliance, we are offering more than just cars;
we are working toward the creation of a zero-emissions society. This process
will involve mass production of vehicles for sustainable mobility for markets
throughout the world. Collaboration with countries, local governments,
electricity providers and many experts will be required to help develop the
necessary infrastructure and to make the whole system work.
• Nissan is committed to zero-emission leadership, and taking the initiative to
make the necessary investments to make it happen. Zero-emission mobility
is our passion, a true breakthrough and a key to our future.
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Convergence Projects:
• Since April 1, 2014, the Renault-Nissan Alliance launched convergence
projects in four key functions to enhance performance and achieve at
least a €4.3 billion annualized synergy goal by 2016. To achieve that
synergy target, the Alliance will focus on closer
integration in four key areas: R&D, Manufacturing & Logistics, Purchasing,
and Human Resources.
Common Module Family (CMF):
• Common Module Family (CMF) is the Alliance’s unique system of modular
architecture and an increasing source of synergies.
• CMF enables Renault and Nissan to build a wide range of vehicles from a
smaller pool of parts, while at the same time increasing customer choice
and quality. Small vehicles are based on CMF-A, while mid-sized vehicles
are CMF-B, and the largest vehicles are CMF-C/D.
• In November 2013, Nissan began selling its first vehicle on CMF in the United
States; the new Rogue sports utility vehicle is built on the CMF-C/D. The
following month, Nissan began selling the X-Trail crossover SUV in Japan,
also based on CMF. In February, Nissan began selling the Qashqai
crossover in Europe. Renault’s first CMF vehicle, the new Espace, will launch
in 2015. It will also be built on CMF C/D architecture.
• In 2013, the Alliance also began development work on the CMF-A, the
most affordable category of cars. Production of CMF-A vehicles will begin
in 2015 at the Renault-Nissan Alliance plant in Chennai, India.
Alliance and Daimler New Plant in Mexico:
In June 2014 the Renault-Nissan Alliance and Daimler AG announced joint
development of premium compact vehicles and joint production in
Mexico. The Alliance and Daimler will establish a 50:50 joint venture which
will oversee construction and operation of the new plant in Aguascalientes
in north-central Mexico. The new plant will be built in the immediate vicinity
of an already existing Nissan plant and will have an annual capacity of
300,000 vehicles when fully ramped up.
Infiniti models will start production in 2017, and Mercedes-Benz models will
follow in 2018.
Autonomous drive technologies:
Nissan will be ready with revolutionary, commercially-viable Autonomous
Drive in multiple vehicles by the year 2020. Our R&D activities are
progressing rapidly and testing is underway on public roads. Nissan’s goal is
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to put autonomous drive within the reach of most consumers. We forecast
significant demand for autonomous drive as consumers understand its
benefits.
By the end of 2016, Nissan will make available the next two technologies under its
autonomous drive strategy. We are bringing to market a traffic-jam pilot, a
technology enabling cars to safely navigate on congested highways. In the same
timeframe, we will make fully-automated parking systems available across a wide
range of vehicles.
This will be followed in 2018 by the introduction of multiple-lane controls, allowing
cars to negotiate hazards and change lanes. And before the end of the decade,
we will introduce intersection-autonomy, enabling vehicles to negotiate city
cross-roads without driver intervention.
Nissan is an industry leader toward the introduction of vehicle enhanced systems,
aimed at relieving motorists of mundane tasks while increasing safety, reducing
congestion and helping to lower emissions.
Nissan in Pakistan
Nissan is represented by Ghandhara Nissan Limited in Pakistan and operates
under the leadership of CEO Mr. Ahmad Kuli Khan Khattak. Ghandhara Nissan
Limited is committed to serve the market efficiently, through satisfying internal
and external customers and be accountable to stakeholders and the community
as responsible corporate citizens. They are determined to reciprocate their trust
reposed in Nissan by delivering on promises to customers, providing quality
product, economically priced vehicles complete with after sales service.
Vehicles:
Nissan has been offered following vehicles with the collaboration of the
Ghandhara Nissan Limited:
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Passenger Cars:
• Sunny (Discontinued)
• TEANA (Discontinued)
• TIDA (Discontinued)
Jeep 4x4:
• X-TRAIL
• Patrol
Light Commercial Vehicle:
• Pick Up
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• Urvan
Bus:
• Civilian
Ghandhara Nissan Limited (GNL) is a part of Group of Companies of Bibojee
Services (Pvt.) Limited. The Company was incorporated in 1981 as Private Limited
Company having the sale Licensee for the distribution of Nissan vehicles in CBU
condition in Pakistan; it was converted in to a Public Company listed in Karachi
Stock Exchange.
GNL has Technical Assistance Agreement with Nissan Motor Co. Japan and joint
Venture Agreement with Nissan Diesel Co. Japan for the progressive Assembly of
Passenger Cars, Light Commercial Vehicles and Heavy Duty Vehicles. GNL’s Car
and Truck are located at port Qasim adjacent to each other.
It is the only Automobile Company in the country assembling a complete range
of product i.e. passenger cars, light commercial vehicles and heavy-duty trucks
and buses.
The company is committed to achieve high quality products, customer’s
satisfaction, market leadership, contribution to the economic growth of Pakistan
and comply with all regulatory and other requirements for making the
environment user friendly.
Head Office:
Ghandhara House, 109/2, Clifton,
Karachi.
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E-mail: info@ghandhara.com.pk
Plant (Truck):
Plot Survey No. 362, Deh Kanto, KDA Scheme No. 25-A, Port Bin Qasim,
Karachi.
Plant (Car):
Plot Survey No. 362, Deh Kanto, KDA Scheme No. 25-A, Port Bin Qasim,
Karachi.
Nissan’s Vision:
To maximize market share by producing and marketing highest quality vehicles in
Pakistan.
Nissan’s Mission:
• As a customer oriented Company, Provide highest level of customer
satisfaction.
• To accelerate performance in all operating areas, ensuring growth of the
Company and increasing return to the stakeholders.
• To create a conducive working environment leading to enhanced
productivity, job satisfaction and personal development of the employees.
• To contribute to social welfare by adopting environment friendly practices
and processes for the well being of society.
Current Objectives:
• Maximize its market share in automotive sales in Pakistan Market.
• Create new joint ventures to achieve its ultimate goal.
• Focusing on its product line of LCVs, Trucks and Buses and maximize its
profit.
Current Strategies:
• Presently Ghandhara Nissan Limited has been focusing on horizontal
growth strategy through creating a joint venture with dongfeng and has
formed its subsidiary as Ghandhara Nissan Dongfeng Limited.
• They also opted retrenchment strategy for its product line and discontinued
the passenger cars production.
Current Policies:
Page 19 of 59

• GNL is emphasizing to carry out its business in an ethical manner that it will
become beneficial for all of its stakeholders.
• Unnecessary competition must be avoided.
• Focusing on business expansion.
SWOT ANALYSIS BEGINS
Corporate Governance:
Board of Directors Responsibilities:
• Board of Directors is responsible to evaluate quarterly, half yearly and
annual performance of the GNL.
• Review and approve policies proposed by the top management for the
GNL & for its subsidiaries and wherever necessary recommend suggestions.
Board of Directors Continuum:
Board directors actively participate in policy formulation, approval and
implementation. It is possible due to the most of the top management of the
Ghandhara Nissan Limited are the part of the top management team of the
company. They are not only part of the policy making team, but also the part
of policy implementation.
Inside Directors:
Mr. Raza Kuli Khan Khatak
Lt. Gen. (Retd.) AliKuli Khan Khattak
Mr. Ahmed Kuli Khan Khatak
Mr. Mushtaq Ahmed Khan (FCA)
Ch. Sher Muhammad
Mr. Jamil A. Shah
Outside Direstors:
Syed Haroon Rashid
Mr. Mohammad Zia
Mr. Larbi Hbil
Top Management:
The top management of GNL is consisted of the following:
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Mr. Raza Kuli Khan Khatak Chairman
Lt. Gen. (Retd.) AliKuli Khan Khattak President
Mr. Ahmed Kuli Khan Khatak Chief Executive Officer
Mr. Aqiel Amjad Ghani Company Secretary
Mr. Muhammad Saleem Baig Chief Financial Officer
Competency of Top Management:
Director’s and top management Profile:
Mr. Raza Kuli Khan Khattak - Chairman
Raza Kuli Khan Khattak, MA (Oxon) was educated at Aitchison
College,Lahore and Brasenose College Oxford from where he graduated
with honours in 1961. He subsequently joined his father in the Family Business
and is presently the Chairman of ‘Bibojee’ / Gen Habibullah’s Group of
Companies.
Lt.Gen.(Retd.) Ali Kuli Khan Khattak - President
General Ali was educated / trained at Aitchison College, Lahore and the
Royal Military Academy Sandhurst and holds a Masters Degree from the
Quaid-e-Azam University, Islamabad.
He retired from the Pakistan Army as its Chief of General Staff in 1998 and
then joined the Family Business which includes, Tyre manufacturing,
Automobiles, Insurnace, Cotton Spinning Mills, Woollen Textiles, Finance,
Construction and Trading Services Companies. He is the Chairman of The
General Tyre and Rubber Company of Pakistan Ltd., President of
Ghandhara Nissan Limited and also the Chief Executive of Gammon
Pakistan.
Directorships in Companies:
- Bibojee Services (Pvt.) Ltd.
- Babri Cotton Mills Ltd.
- Janana De Malucho Textile Mills Ltd.
- Rehman Cotton Mills Ltd.
- Bannu Wollen Mills Ltd.
- Universal Insurance Co. Ltd.
- Ghandhara Industries Limited
- Pakistan Tobacco Co.
- Liaquat National Hospital
Page 21 of 59

Mr. Ahmed Kuli Khan Khattak - Chief Executive
Educational Qualification:
• Graduated from Pakistan Air Force.
• Completed Various Courses from PAF.
Experience:
Served PAF for nearly 21 years during which he achieved different
Honours Award Medals then he retired in 1987 as Wing Commander.
16 years management experience in the business of Automobile and
Textile Sector.
He is also the Chairman of All Pakistan Textile Mills Association
(APTMA)
- The General Tyre & Rubber Co.of Pak.Ltd.
- Ghandhara Industries Ltd.
Mr. Mushtaq Ahmed Khan (FCA) - Group Director Finance
Educational Qualification:
• Fellow Member of the Institute of Chartered Accountants of
Pakistan.
Experience:
34 years experience in Financial Management, since 1975 serving the
Bibojee Group as Group Director Finance.
- The General Tyre & Rubber Co.of Pak.Ltd.
- Ghandhara Industries Ltd.
Mr. Jamil Ahmed Shah - Director
Page 22 of 59

Mr. Jamil Ahmed Shah has over 47 years of experience in working with
different automobile companies in Pakistan. He is working in Ghandhara
Industries Limited and Ghandhara Nissan Limited as Adviser to Chairman
since 1995.
- Ghandhara Industries Limited
- Ghandhara Nissan Limited
Responsibilities of the Top Management:
The top management of the company has responsible for the following:
• Top management is responsible to develop and implement strategies that
will help the GNL to maximize its profits and achieve its vision.
• They responsible to carry out the company’s operations in a manner that it
will be meeting or exceed company’s define ethical standards of running
business.
• They are responsible to make sure that the Ghandhara Nissan Limited
strategies are developed in accordance with the company’s mission in
order to achieve its vision.
• They responsible to produce the vehicles that will be environment friendly
and will provide value to the customers through exceeding their
expectations.
• They are responsible to increase stakeholder’s wealth through increasing
company’s profit.
• They are responsible to maintain a safe and healthy workplace through
ensuring that the company’s define ethical standards no discrimination on
the basis of sex, color, religion disability or nay other impermissible factors.
Executive Leadership:
Executive leadership of the company is based on the following:
• Mr. Raza Kuli Khan Khatak Chairman
• Lt. Gen. (Retd.) AliKuli Khan Khattak President
• Mr. Ahmed Kuli Khan Khatak Chief Executive Officer
They are responsible to provide the strategic direction to the company and
motivate all the relevant participants to achieve their predefined goals. CEO is
responsible to lead the entire organization and motivate them for them
attainment of the goals collectively and individually.
Page 23 of 59

Social Responsibility:
The GNL is committed to operate its business in an ethical and responsible
manner that it will become mutually beneficial for the organization and as well as
for its stakeholders including stock holders, customers and the for the society
where we are operating our business.
They are also committed to provide environmental friendly vehicles and
completely adhere with the laws pertaining for the same. To achieve zero
emission is our strategy for the long term.
Competency of Top Management:
The top management is competent enough to manage the affairs of the
Ghandhara Nissan Limited in accordance to its vision and mission. Most of the top
management representatives are foreign qualified and running the affairs of the
more than one business at one time. The Chief Executive Officer of the company
is the grandson of the Chairman and Son of the President and belongs to the third
generation of the Bibojee Group.
The experience of all the top management is multifaceted and they are part of
the different other company’s boards. These companies are belongs to the
different sector of the industries which are tyre manufacturing, textile and
insurance.
External Environment (EFAS):
Global Scenario of Auto Industry:
The automotive industry is considered as an economic heavyweight due to which
it has acquired the status of a key sector of the economy of every major country
in the world. The annual global turnover of the auto industry during the year 2005
remained $2.8 trillion, while the size of trade has grown to a massive level of $
1,016 billion, which represents 9% of the world merchandise trade. In 2006, over 69
million motor vehicles, including cars, vans, trucks, buses and coaches were
produced worldwide. In 2006 Japan (11.484 million units), US (11.264 million units),
China (7.189 million units), Germany (5.820 million units) and South Korea (3.840
million units) were the top five motor vehicle producing countries in the world.
Auto industry employed directly over 5% of the world’s total manufacturing labour
force and contributed over $ 634 billion in tax revenues of twenty countries only.
Page 24 of 59

The auto industry is one of the largest investors in Research and Development,
which help to increase the technology level in other industries as well.
The competition in the global market is getting fiercer; the global players are
eying their presence in the new developing markets. The markets in Canada,
USA, Western Europe and Japan are stagnating, while those in South America
(especially Brazil), Eastern Europe (especially Russia), and Asia are growing. China
has become the second largest car market in the world outrunning Germany last
year and getting closer to Japan this year.
The global industry is slowly and gradually shifting towards Asian countries, mainly
because of saturation of automobile industry in the Western world. The world'
largest automobile manufacturers are planning to invest into production facilities
in emerging Asian markets in order to reduce production costs. Low cost vehicles
(scooters, motorcycles, small passenger cars etc) are driving the growth of
automotive industry in China and other developing economies. It offers immense
opportunities for global players in these economies. These emerging markets
include Latin America, China, India, Malaysia and other markets in Southeast
Asia. From a long-term perspective, cheap financing and price discounts, rising
income levels, and infrastructure developments will drive the growth in majority of
the Asian automotive market. Pakistan also have the opportunity to become a
part of the global supply chain by increasing capacities, achieving certain level
of economies of scale, technology up gradation and skilled human resource. To
save the time in designing and improving the quality of automobiles, the world
automobile companies are adopting computer aided manufacturing tools due
to rising pressure of cost and quality. The changing models, fuel efficiency, cutting
costs and enhancing user comfort without compromising quality are the most
important challenges for the auto industry in a fast globalizing world.
Global auto industry is faced with two following challenges which need to be
addressed in order to remain competitive;
• The carbon and climate protection
• Make the availability of vehicles at low cost with new climate friendly
energies.
i) The auto industry is generally faced with a multiplicity of taxes; the
presumptive tax regime has led to increase in prices of imported inputs and
the finished goods. Component manufacturers are struggling to compete with
under-invoicing, misdeclaration and smuggling. Import of used parts is still
continuing at a large scale.
ii) Imposition of Federal Excise Duty on the royalty and technical fee remitted
to the suppliers of technology remains a potential barrier to innovation.
Page 25 of 59

iii) High cost of capital and relatively difficult access for the small and medium
enterprises and lack of any incentive in the financial policy for the auto
industry. Need of a dedicated fund for technology and Human Resource
Development.
iv) Manufacturing of modern machine tools and dies & moulds
Market Structure:
The market structure of the automobile industry in Pakistan is concentrated. In
economic term, we could say it’s an oligopoly, which is characterized by
imperfect competition in which the industry is dominated by a small number of
suppliers. This is because the auto industry is highly capital-intensive, requiring high
investments and the products are expensive. Hence the barriers to entry are high,
resulting in the presence of limited number of suppliers.
Moreover, the market can also be categorized as price-oriented. As care are
luxury items, especially in developing countries (Pakistan being one of them), the
demand for them is elastic. Any price change affects the sales of the company
to a great extent.
Economic Position of the Market:
Pakistan is amongst a few countries of the world which manufacture all kinds of
vehicles, i.e. 2/3 wheelers, motorcars, LCVs, tractors, prime-movers & trucks and
buses. The total country requirements are generally met from the local
production except the import of certain categories of trucks & prime-movers.
Import of used cars is allowed to the bonafide ex-patriate Pakistani’s and
travelers only under the baggage scheme. The presence of few of world
acclaimed brands and multinationals in the manufacturing of vehicles for the last
2 to 3 decades and their regular expansion plans speaks of their confidence in
the market, government policies and economic potential of the country. Pakistan
auto industry turnover during the year 2005-06 crossed US $ 3.6 billion,which
comes to 2.8% of GDP (2005-06), thus saving substantial foreign exchange on
imports. The job contribution by auto industry comes to nearly 1.392 million, which
includes direct jobs of nearly 192,000. The auto industry remains a second largest
taxayer in terms of its contribution to customs duty, sales tax and withholding tax.
The export contribution, however, is marginal and growing slowly, which otherwise
has high potential to grow in the coming years.
Growth Opportunities:
Page 26 of 59

In Pakistan context ,there are 10 cars in 1,000 persons which is one of the lowest in
the emerging economies which itself speaks of high potential of growth in the
auto sector and more so in the car production. Rising per capita income with a
changing demographic distribution and an anticipated influx of 30 to 40 million
young people in the economically active workforce in the next few years
provides a stimulus to the industry to expand and grow.
• Auto sector contributes 16% to the manufacturing sector, which is 19% of
the total GDP. It is expected that to increase to around 25% in the next 5 to
7 years. Auto industry’s present contribution to GDP stands at 2.8%, which is
expected to reach 5.6%. The GDP is expected to grow from $145 billion to
$210 billion by the year 2012 and it will aim to increase continuous basis.
• The government’s strong commitment on investment in the infrastructure
projects, particularly the roads and highways, ports and shipping and
Pakistan’s unique geographical location, providing an easy ground access
to Central Asian Republics, China, Afghanistan, Iran and India are
expected to push the auto industry growth in the cars, LCVs and HCV
sectors. The growth of the auto component industry is directly linked to the
growth in assembly sector. As the Pakistan auto industry is expected to
reach a critical mass of production of cars and LCVs within next 5 to 10
years, the components production will become more competitive,
technologically advanced and taking its due share in the global supply
chain.
• Above factors in view and the governments’ commitment to create stable
and predictable policy environment, involving the stakeholders in the
consultation process, implementation and assessment of policies will lead
to more investment, high production, innovation and competitiveness
besides maintaining the high growth of recent years.
Progress of Pakistan’s automotive industries:
Sales summary of automotive products manufactured and sold in Pakistan:
Automotive
Products
Sales in units
2014-15 2013-14 2012-13 2011-12 2010-11 2009-10 2008-09 2007-08
Passenger
Cars
151134 118102 118830 157325 127944 12957 82844 164,650
Truck 4111 2663 1948 2394 2942 3620 3136 5,350
BUS 569 577 510 609 515 657 685 1,195
Jeeps (4X4) 1163 1151 1438 342 807 1201 1066 1,448
Pick-Ups 27656 17635 15042 21472 17746 16496 15397 21,321
Page 27 of 59

Total Sale 184,633 140,128 137,768 182,142 149,954 34,931 103,128 193,964
Overall Sales of Passenger Cars:
Passenger Cars
Category Wise
Sales in units
2014-15 2013-14 2012-13 2011-12 2010-11 2009-10 2008-09 2007-08
1300 CC and
above
78533 58050 60103 65816 61147 61008 38,755
50,82
4
1000 cc 19133 16455 13308 29981 23360 23696 16,152
48,88
7
800 cc & Below
1000cc
53468 43597 45419 61528 43437 39253 27,937
64,93
9
Total 151134 118102 118830 157325 127944 123957 82844 164650
Page 28 of 59

Task Environment:
a) Threat of new entrant:
There is a strong probability that the number of competitors in the auto
product will be increased and the existing ones, those who has not been
operating the manufacturing facilities will start their operation in the years
to come.
b) Bargaining Power of the Buyers:
The data reveal that the inflation of the economy has been upward
trending in the past decades, on the other hand the economy is also
progressing rapidly the purchasing ability of the buyers has been increased
and this trend will be remain same, if there is no political disturbance in the
market.
c) Bargaining power of the supplier:
The growth in the automotive industry will strengthen the bargaining power
of the suppliers and the availability of the limited number of suppliers
endorsed it.
d) Rivalry among the competing firms:
The market is oligopolistic which can be changed as pure, perfect
competition in the near future, if number of mnaufacturer inreases.
e) Relative Power of unions, governments, special interest groups:
The trade unions are not in a very strong position in the industry, but they
exist through the auto industry and the provincial governments are now
responsible to deal with the labour intensive issues.
Page 29 of 59

The importers of the auto products can also disturb the local manufacturing
industries through influencing over the government. At present the
government has shown the rigid attitude towards the minization of duties
on the import auto products.
Summary of External Environment (EFAS):
Factors Weight Rating Weighted Score
Opportunities:
• Large Market segment
with potential
purchasing ability
• Sustainable growth of
economy
• Consistency of political
government
• Strict import policy of the
government
• Stability of the region
• Cost effective and fuel
efficient vehicle is
required by the
customer
.20
.05
.05
.05
.05
.10
4
3
3
4
1
4
.80
.15
.15
.20
.05
.40
Threats:
• Unavailability of Highly
Skilled manpower
• Expensive Raw Material
• New entrant in same
industry.
• Strong competitors
existing in the market
with global image which
can counterfeit the
strategies
.10
.15
.10
.15
4
4
2
4
.40
.60
.20
.60
Total 1.00 3.55
Rating Criteria:
4= The response is superior
Page 30 of 59

3= The response above average
2= The response is average
1= The response is poor
Competitive Profile Method:
An overview of the competitor’s performance in past years:
Atlas Honda Motors (Manufacturer of Honda Autos):
Product
Sales in Units
2014-15 2013-14 2012-13 2011-12 2010-11 2009-10 2008-09 2007-8
Honda Civic 7805 9933 9950 4977 6365 5908 4662 5,762
Honda City 15817 13741 11285 7142 9121 8212 6482 8,439
Total Sale 23622 23674 21235 12119 15486 14120 11144 14201
Indus Motors Limited (manufacturer of Toyota and Daihatsu Autos):
Page 31 of 59

Product
Sales in Units
2014-15 2013-14 2012-13 2011-12 2010-11 2009-10 2008-09 2007-8
Toyota
Corolla
51398 29087 32608 46207 41111 43510 26760
33,64
0
Diahatsu
Core
0 0 71 3857 6007 5301 5,852
12,20
4
Toyota
Fortuner
722 390 812 0 0 0 0
Sigma
Defender
441 761 626 342 807 1201 1066
1,41
3
Toyota
hilux
4823 4520 4282 4413 2897 2012 1534
2,00
1
Toal Sale 57384 34758 38399 54819 50822 52024 35212 49258
Pak Suzuki Limited (manufacturing Suzuki Autos):
Page 32 of 59

Product
Sales in Units
2014-15 2013-14 2012-13 2011-12 2010-11 2009-10 2008-09 2007-8
Suzuki Cultus 13837 14682 13308 13693 11428 12658 9198 27,563
Suzuki
WagonR
5246 1621 0 0 0 0 0 0
Suzuki Alto 0 0 0 16288 11932 10794 6550 19,097
Suzuki
Mehran
29886 29509 32407 35131 24119 22513 13421 35,526
Suzuki Bolan 23582 14088 12941 22540 13311 11439 8664 17,209
Suzuki
Potohar
0 0 0 0 0 0
3
5
Suzuki Ravi 22815 12419 10734 17015 14601 13211 11900
11,85
7
Total Sales 95366 72319 69390 104667 75391 70615 49733 111287
Page 33 of 59

Dewan Farooq Motors Limited (manufaturer of Hyundai Autos):
Product
Sales in Units
2014-15 2013-14 2012-13 2011-12 2010-11 2009-10 2008-09 2007-8
Hyundai
Santro
50 152 0 0 0 244 404 2,227
Hyundai
Shehzore
10 680 0 0 203 1127 1883 6,848
Total Sales 60 832 0 0 203 1371 2287 9075
Hino Pak Motors Limited (manufacturers of Hino Autos):
Page 34 of 59

Product
Sales in Units
2014-
15
2013-
14
2012-
13
2011-
12
2010-
11
2009-10
2008-
09
2007-8
Hino Bus 475 496 410 490 409 517 523 926
Hino Truck 1510 1055 842 1163 1338 2037 1724 2,652
Total Sales 1985 1551 1252 1653 1747 2554 2247 3578
Master Motors Limited (manufacturer of Master Autos):
Product
Sales in Units
2014-15 2013-14 2012-13 2011-12 2010-11 2009-10 2008-09 2007-8
Page 35 of 59

Master 811 650 583 693 736 505 362 619
Master 12 5 4 23 0 19 1 7
Master 80 16 26 44 45 128 42 515
Total Sales 903 671 613 760 781 652 405 1141
Competitive Profile Matrix:
The following competitive profile method provides is for passenger car:
Critical Success
Factors
Weight
Nissan
Rating
Score
Toyota
Rating
Score
Honda
Rating Score
Suzuki
Rating
Score
Comments
Relevant Market
Share
.20 1 .20 4 .80 3 .60 4 .80
Inventory System .10 3 .30 4 .40 3 .30 3 .30
Financial Position .10 4 .40 3 .30 4 .40 3 .30
Product Quality .10 2 .20 4 .40 4 .40 2 .20
Consumer Loyalty .10 2 .20 4 .40 4 .40 3 .30
Sales Distribution .05 3 .15 3 .15 2 .10 4 .20
Organization .10 4 .40 4 .40 3 .15 3 .30
Page 36 of 59

Structure
Production
Capacity
.10 4 .40 3 .30 2 .20 4 .40
E-Commerce .05 2 .10 3 .15 2 .10 2 .10
Price Competitive .10 2 .20 2 .20 2 .20 3 .30
Total 1.00 2.55 3.5 2.85 3.2
The following competitive profile method provides is for LCV, Trucks & Buses:
Critical Success
Factors
Weight
Nissan
Rating
Score
Hino
Rating
Score
Master
Rating Score
Hyundai
Rating
Score
Comm
ents
Relevant Market
Share
.20 4 .80 4 .80 2 .40 3 .60
Inventory
System
.10 3 .30 4 .40 3 .30 3 .30
Financial
Position
.10 4 .40 3 .30 3 .30 3 .30
Product Quality .10 3 .30 4 .40 3 .30 3 .30
Consumer
Loyalty
.10 3 .30 4 .40 3 .30 3 .30
Sales Distribution .05 3 .15 3 .15 3 .15 3 .15
Organization
Structure
.10 4 .40 4 .40 3 .30 3 .30
Production
Capacity
.10 4 .40 3 .30 2 .20 2 .20
E-Commerce .05 2 .10 2 .10 2 .10 2 .10
Price
Competitive
.10 3 .30 3 .30 2 .20 2 .20
Total 1.00 3.45 3.55 2.55 2.75
Rating Criteria:
4 = Major Strength
3= Minor Strength
2= Minor Weakness
1= Major Weakness
Page 37 of 59

Internal Environment (IFAS):
Corporate Structure:
Page 38 of 59

Corporate Culture:
The GNL possesses a cooperative culture where the every individual who has an
association with the company has right to express their views and put suggestions
for the improvement irrespective of his / her designation. This culture has helped
them when they developed a new venture with the Dongfeng.
In contrast to the bureaucratic style of working their executive has adopted the
culture of autocratic where everyone can be a part of decision making and
freely put their views regarding product improvement and for the enhancement
of organizational efficiency.
Corporate Resources:
Marketing:
Presently GHNL has not been carried out any rigorous marketing camping for its
product but their marketing department responsible to closely work with the sales
team and help them out to achieve their defined targets and closely get the
feedback from the customers to improve its customer service after sales and will
get responses from them for the future improvement of the product / vehicles.
Present Performance of Ghandhara Nissan Limited:
The following table shows the year wise sales progress of the GHNL.
Product
Sales in Units
2014-
15
2013-
14
2012-
13
2011-
12
2010-
11
2009-
10
2008-
09
2007-8
Nissan Bus 0 6 0 6 0 30 0 54
Nissan
Truck
852 378 226 224 487 519 551 1,166
Dongfeng
Bus
0 0 0 0 0 2 8 18
Dongfeng
Truck
0 0 0 0 0 0 4 -
Total Sales 852 384 226 230 487 551 563 1238
Page 39 of 59

• Have a Glance over the performance of Ghandhar Industries Limited a
sister concern of the Ghandhara Nissan Limited:
Isuzu
Product
Sales in Units
2014-
15
2013-
14
2012-
13
2011-12
2010-
11
2009-
10
2008-
09
2007-8
Isuzu Bus 938 580 297 314 381 559 495 913
Isuzu
Truck
82 70 96 90 106 89 135 201
Total
Sales
1020 650 393 404 487 648 630 1114
Page 40 of 59

Finance:
Presently GNL is not in very sound financial position but fair enough to accelerate
for the attainment of its higher goals. They already paid dividends to the
shareholders at the end of last fiscal year. Cash flows are positive and relevant
financial ratios reflect sound financial status of the company and will allow them
to expand it vertically.
Research & Development:
Currently GNL has not allocated heavy budget for its R&D activities, they are
receiving technical assistance form Nissan Global. And the new products and the
amendments in the present products are made in coordination of the Nissan
Global.
Operations & Logistics:
Company has well versed infrastructure for its automotive products, but unable to
capitalize in term of production. From the past decade ,they are working under
capacity.
Human Resource Management:
Currently the Human Resource has been considered as a casual resource for the
organization instead of developing them as a competitive advantage.
Information System:
Information system plays very vital role in the organization’s success and GNL is in
process to optimize the efficiency and accuracy of its information system through
synchronizing its subsidiary.
Summary of Internal Factors:
Factors Weight Rating Weighted Score
Strengths:
• Competent top
management with
diversified experience of
industries.
.10
.10
4
4
.40
.40
Page 41 of 59

• Ability to integrate
vertically in the market
through utilizing existing
infrastructure.
• Sound financial position
of the company.
• Successfully expanded
through new joint
venture.
• Ability to grow in
diversified auto products
range.
.10
.10
.10
4
3
4
.40
.30
.40
Weaknesses:
• Past introduced vehicles
are unable to capture
the market.
• Unable to achieve
economies of scale
• Unable to clearly define
long term goals mostly
focusing on short term
objectives.
• Lack of ownership
among the employees.
• Unable to apply
economy of scope to
minimize cost.
• Lack of Research &
development
.10
.10
.10
.05
.10
.05
1
1
1
2
2
1
.10
.10
.10
.10
.20
.05
Total 1.00 2.65
Rating Criteria:
1= Major Weakness
2 = Minor Weakness
3= Minor Strength
4= Major Strength
Analysis Strategic Factors (SFAS)
Page 42 of 59

Key Internal and External Strategic Factors (SWOT):
TOWS Analysis:
Internal Factors
External Factors
Strengths
1. Competent top
management with
diversified
experience of
industries.
2. Ability to integrate
vertically in the
market through
utilizing existing
infrastructure.
3. Sound financial
position of the
company.
4. Successfully
expanded through
new joint venture.
5. Ability to grow in
diversified auto
products range.
Weaknesses
1. Past introduced
vehicles are
unable to capture
the market.
2. Unable to achieve
economies of
scale
3. Unable to clearly
define long term
goals mostly
focusing on short
term objectives.
4. Lack of ownership
among the
employees.
5. Unable to apply
economy of scope
to minimize cost.
6. Lack of Research &
development
Opportunities
1. Large Market
segment with
potential
purchasing ability
2. Sustainable growth
of economy
3. Consistency of
political
government
4. Strict import policy
of the government
5. Stability of the
region
6. Cost effective and
fuel efficient
SO Strategies
• The management
of GNL must utilize
its diversified
experience to
expand Nissan
products through
effectively utilizing
the favorable
conditions for the
auto industry. (S1,
O1, O2, O3, O4,O5)
• Through clever
planning GNL can
produce fuel
efficient vehicles
WO strategies
• Through offering
new products with
distinctive features
can help the GNL
to capture mega
market share. (W1,
O1)
• Existing economic
conditions will help
the GNL to
achieve
economies of
scale. (W2, O2,)
• The consistency of
political
Page 43 of 59

vehicle is required
by the customers.
for the customers.
(S5, O6)
governments and
their policies will
help the GNL to
develop and
achieve their long
term goals. (W3,
O3, O4)
• The GNL must
invest more on R&
D to produce cost
effective and fuel
efficient vehicles
for the customers.
(W6, O6)
Threats
1. Unavailability of
Highly Skilled
manpower
2. Expensive Raw
Material
3. New entrant in
same industry.
4. Strong competitors
existing in the
market with global
image which can
counterfeit the
strategies
ST Strategies
• The raw material
can be minimized
through achieving
vertical integration.
(S2, T2)
• GNL sound
financial allows
them to invest on
Human Resource
Development to
avoid scarcity of
Skilled Human in
future. (S3, T1)
• Through creating
more joint ventures
the threats of new
entrant can be
eliminate or
minimized. (S4,T3)
• GNL can cope
with the existing
competitors
through producing
diversified auto
products for the
market. (S5, T4)
WT Strategies
• Investment on
Human Resource
Development will
help the
organization to get
over the skill
redundancy and
will enable them to
produce quality
vehicles according
to the customer
requirements. (W1,
T1)
• Through achieving
economies of
scale they can
minimize overall
production cost of
vehicles. (W2, T2)
• GNL must focus on
Long term plan
which will help
them to minimize
new entrants’
threat in the
industry. (W3, T3)
• GNL can create a
Page 44 of 59

synergy among the
employees,
production and
Research &
Development to
minimized
competitor’s
influence on the
market. (W4, W5,
W6, T4)
SPACE (Strategic Position and Action Evaluation) Matrix:
Financial Position Rating
Return on investment 5
Leverage 5
Liquidity 4
Working Capital 5
Cash Flow 5
Inventory Turnover 5
Earnings Per Share 4
Price Earnings Ratio 5
Total 38
Industry Position Rating
Market Share 3
Product Quality 4
Product Life Cycle 3
Customer Loyalty 3
Capacity Utilization 3
Technological Know -how 5
Control Over Suppliers & Distributors 5
Total 29.0
Stability Position Rating
Technological Changes -2
Rate of Inflation -2
Demand variability -4
Price Range of Competing products -5
Barriers to entry into market -5
Page 45 of 59

Competitive Pressure -1
Price Elasticity of Demand -2
Risk involved in Business -3
Total -24
Competitive Position Rating
Growth potential -1
Profit Potential -2
Financial Stability -2
Extent Leveraged -3
Resource Utilization -6
Ease of Entry into market -1
Productivity, Capacity utilization -2
Total -17
Rating Criteria:
• For Financial Position (FP)and Industry Position(IP):
+1 (Worst) to +7 (Best)
• For Stability Position (SP) and Competitive (Position):
-1 (Best) to -7 (Worst)
Conclusion:
FP Average = 38/8 = 4.75
IP Average = 29/7 = 4.14
SP Average= -24/8 =- 3.00
CP Average= -17/7 = -2.42
Directional Vector Coordinates:
x-axis = -2.4 + (4.14) = +1.74
y-axis = -3.0 + (4.75) = +1.75
Conclusion:
The GHNL must pursue the following Aggressive Strategies:
• Backward, Forward, Horizontal integration
• Market Penetration
• Market Development
• Product Development
• Diversification
• Retrenchment
Page 46 of 59

FP (+7)
(-7)CP IP (+7)
Page 47 of 59
Conservative
Market Penetration
Market Development
Product Development
Related diversification
Aggressive
Backward Forward horizontal
integration
Market Penetration
Product development
Diversification (Related and
unrelated)
Defensive
Retrenchment
Divestiture
Liquidation
Competitive
Backward, Forward, horizontal
Integration
Market Penetration
Market Development
Product Development
According to space
matrix score the GHNL
must adopt the
aggressive strategy to
achieve its vision.
According to space
matrix score the GHNL
must adopt the
aggressive strategy to
achieve its vision.

SP (-7)
BCG Matrix:
Sales progress of GNL product category wise:
Product Category
Sales in Units
2014-15 2013-14 2012-13 2011-12 2010-11
Nissan
Bus
Bus - 6 - 6 -
Relative Market
Share
0% 0.185% - 0.251% -
Nissan
Truck
Truck 852 378 226 224 487
Relative Market
Share
21% 14% 12% 9% 17%
Sales Revenue 5,445,392,000 2,619,910,000 1,852,238,000 1,388,002,000 2,650,068,000
Net Profit 508,867,000 173,930,000 138,385,000 (85,968,000) 7,097,000
Auto Industry Growth Rate:
Growth trend of Auto Industry In Pakistan:
Year 2014 2013 2012
Growth Rate -2.6 -12.8 3.4
Page 48 of 59

Relative Market Share Position
High Medium
Low
1.0 0.5 0.0
High 20.0
Industry Sales Growth
Medium 0.0
Page 49 of 59
II
Stars
II
Stars
I
Question Marks
I
Question Marks
III
Cash Cows
III
Cash Cows
IV
Dogs
IV
Dogs
Nissan’s Buses
presently existing in
this Category

Low -20.0
Internal External (IE) Matrix:
X-axis = Weighted Average Score of IFE = 2.65
Y-axis = Weighted Average Score of EFE = 3.55
Total IFE Weighted Score
Strong Average Weak
3.0 to 4.0 2.0 to 2.9 1.0 to
1.9
4.0 3.0 2.0
1.0
High 3.0 to 4.0
Medium 2.0 to 2.99
Total EFE Weighted Score
2.0
Low 1.0 to 1.9
Page 50 of 59
Nissan’s Trucks
presently existing in this
category
II IIII
IV V
VII
VI
VIII IX

1.0
Total EFE Weighted Score
Conclusion:
IE matrix suggests Grow and Build Strategy comprises on following:
• Backward, Forward, or Horizontal Integration
• Market Penetration
• Market Development
• Product Development
Grand Strategy:
Sales Progress of GNL:
Following is the overall summary of GNL progress year wise:
Particulars
Sales in Units / Amount in Rupees
2014-15 2013-14 2012-13 2011-12 2010-11
Total Sales 852 384 226 230 487
Sales Growth in % 121.88% 69.91% -1.74% -53% -14.11%
Sales Revenue 5,445,392,000 2,619,910,000 1,852,238,000 1,388,002,000 2,650,068,000
Sales Revenue
Growth in %
107.85% 41.45% 33.45% -47.62% 10.30%
Net Profit / Loss 508,867,000 173,930,000 138,385,000 (85,968,000) 7,097,000
Profit / Loss Growth in
%
192.57% 25.69% 260.97% -1311% 107.98%
Auto Industry Progress:
Auto Industry growth rate in Pakistan:
Page 51 of 59

Year
Growt
h Rate
Percent
Contribution in
Large Scales
Manufacturing
2014 -2.6 -3.4
2013 -12.8 -19.9
2012 3.4 17
Page 52 of 59
Rapid Market Growth
Weak Strong
Competitive Competitive
Position Position
Slow Market Growth
Quadrant I
Market Development
Market Penetration
Product Development
Forward Integration
Backward Integration
Horizontal Integration
Related Diversification
Quadrant IV
Unrelated Diversification
Joint Ventures
Quadrant III
Retrenchment
Unrelated Diversification
Divesture
Liquidation
Quadrant II
Market Development
Market Penetration
Product Development
Horizontal Integration
Divesture
Liquidation

Strategic Alternatives and Recommended Strategy:
Strategic Alternatives:
GHNL can choose one of the following strategies to increase its market share and
to penetrate in to the market fully.
1) Reintroduce its Passenger Cars:
GHNL must have to come back
with a differentiated auto product
in the passenger car market to
become a leader in automotive
product manufacturing in Pakistan.
2) Acquisition of Existing Brand to Increase its Market Share in HCV & LCV:
Page 53 of 59
GNL’s own progress
and related market
growth bring it to
this quadrant.

GNL can also increase its market
share in HCV and LCV through
acquiring the existing brand in the
Market. It will help them increase
its market with minimum time
frame.
3) Export of LCV & HCV:
Beside serving and operating in
the current market GNL can
choose to increase its product
sale through exporting their
existing products to other markets.
Quantitative Strategic Planning Matrix:
Page 54 of 59

Reintroducing
Passenger
Cars
Acquisition of
existing Brand
to increase
market share in
LCV and HCV
Export of
LCV , HCV
Key Factors Weight AS TAS AS TAS AS TAS
Opportunities:
• Large Market segment with potential,
purchasing ability
• Sustainable growth of economy
• Consistency of political government
• Strict import policy of the government
• Stability of the region
• Cost effective and fuel efficient vehicle
are required by the customer
Threats:
• Unavailability of Highly Skilled Manpower
• Expensive Raw Material
• A New entrant in same industry.
• Strong competitors existing in the market
with global image which can counterfeit
the strategies
.20
.05
.05
.05
.05
.10
.10
.15
.10
.15
4
3
3
4
3
4
3
3
2
4
.80
.15
.15
.20
.15
.40
.30
.45
.20
.60
2
4
3
3
3
2
2
3
4
3
.40
.20
.15
.15
.15
.20
.20
.45
.40
.45
1
3
3
4
3
4
3
4
2
-
.20
.15
.15
.20
.15
.40
.30
.60
.20
-
Sub Total 1.00 3.4 2.6 2.35
Strengths:
• Competent top management with
diversified experience of industries.
• Ability to integrate vertically in the market
through utilizing existing infrastructure.
• Sound financial position of the company.
• Successfully expanded through new joint
venture.
• Ability to grow in diversified auto
products range.
Weaknesses:
• Past introduced vehicles are unable to
capture the market.
• Unable to achieve economies of scale
• Unable to clearly define long term goals
mostly focusing on short term objectives.
• Lack of ownership among the
employees.
• Unable to apply economy of scope to
minimize cost.
• Lack of Research & development
.10
.10
.10
.10
.10
.10
.10
.10
.05
.10
.05
3
4
4
-
-
4
3
3
2
1
4
.30
.40
.40
-
-
.40
.30
.30
.10
.10
.20
3
2
4
4
2
4
3
3
3
4
2
.30
.20
.40
.40
.20
4
3
4
2
4
.40
.30
.40
.20
.40
.40
.30
.30
.15
.40
.10
2
3
2
3
3
2
.20
.30
.20
.15
.30
.10
Sub Total 1.00 2.5 3.15 2.95
Page 55 of 59

Total 5.9 5.75 5.30
Rating Criteria:
1= Not Attractive
2= Somewhat Attractive
3= Reasonably Attractive
4= Highly Attractive
Recommended Strategy:
The score of the QSPM model reveals that the GNHL must develop a strategy to
reintroduce the passenger cars to increase its market share. But it is not necessary
that the GNL must choose one strategy at one time. They can choose to drive
one or more strategy to achieve its vision. It all depends upon the management
commitment and the availability of financial resources and the consistency of the
political and economical stability of the economy of the market.
It is better for the GNL to focus on different strategies for its different products for
passenger car they can opt reintroduce their products with a distinction or
differentiation from the existing competitors’ products. They have to produce the
passenger cars with unique features and characteristics which cannot be easily
available in others. If it is not possible to offer the passenger cars below the
competitors’ price then it must not be more than their products. They must focus
to produce the passenger cars in all the categories from 600 cc to more than
1300 cc.
For their LCV and HCV products they can choose one of the strategy or the both
strategy to increase their revenues as their LCV and HCV are the cash cows for
the GNL so they can earn more revenue through exporting them and they can
increase their market influence through acquiring the existing brand.
Long Term Plan:
• Capture 25% auto market share in Pakistan in all four wheel categories.
Medium Term Plan:
• Rejuvenate Nissan as the first choice in auto solution.
Short Term Plan:
• Revamp operational process to achieve economies of scale.
Implementation:
Page 56 of 59

Programs:
To drive their strategies in right direction they must develop following programs:
Research & Development:
GNL must increase its Research & development budgets to produce a new kind
of automotive products to meet the market requirements.
They must create a “concept future car” for the customers. It can be done
through continuously seeking responses from the customers and the potential
customers.
Total Quality Management:
Without quality products it is impossible to create a positive image of the GNL
products in the car markets. To achieve this GNL management must develop a
quality conscious culture within the organization. They must implement the
concept that:
“Quality is everyone’s responsibility”
Within the organization the concept must be enforced in a way that everyone
will become quality conscious. It is not only up to the quality department to make
sure the quality policy will be implemented; all the departments and their
respective employees must be fully adhered with quality concept and make sure
that it must be implemented.
Marketing:
The marketing Strategy must be focused to develop the brand image of the GNL
products that Nissan will become the first and the foremost choice of every
customer of auto products. Whenever they think to buy the auto products, they
compel to think about the Nissan, first.
The Marketing strategies will be device separately for passenger cars and for LCV
& HCV auto products (Trucks & Buses). The Market can be segmented into three
broader categories:
• Individuals and Families
• Industrial and Business Entities
• Government Markets
Page 57 of 59

Finance:
Strong financial controls will be implemented to improve the efficiency and
reduce the cost of products. It can be done through allocating budgets to each
department with a great care, and evaluate their performance in accordance
with the allocated budgets.
To achieve the desired results the dividends must hold for 3 to 5 years to reinvest in
the future activities and ask the shareholders to enjoy the increasing market price
of the GHNL shares.
Information System:
Information is one of the key resources for any organization. The uninterrupted
and accurate flow of information will allow them to the management to make
effective decisions at all levels. To develop and effective information system
within the organization GNL must adopt an ERP system to integrate all its
departments and resources.
Human Resource Management:
Human Resource is one of the vital resources for the organizations to achieve their
vision or to translate their vision in to reality. GNL must nurture the following
concept for its human resources:
“We produce perfect vehicles because our employees are perfect”
To implement this concept the all Human Resource related policies and
procedures must be revaluated and if necessary must revise.
The concept of HR business partner can also be adopted to effectively utilize this
resource. For this the management must introduce the employee stock option for
the employees.
Budgets:
• The Research and Development budgets must be increase up to 100%.
Page 58 of 59

• Market budgets must be increase up to 50%, with a view to increase the
company operated showrooms all over the market, and effectively
manage the after sale service of the products.
Procedures:
• For the effective implementation of GNL strategies, the SOP for the each
process and work will be developed for every department.
• The standards and parameters for each process must be defined and it will
make sure that no work will be carried out in contradict of GNL’s define
standards and procedures.
Evaluation and Control:
To achieve the desired goals and to rejuvenate the Nissan passenger cars
products into the market following landmarks must be achieved by the GNL and
compromise on desired results:
• 10% growth must be achieved by GNL in term of sales of auto products.
• The manufacturing cost must be reduced by 10% and it must be made sure
that no unnecessary penny will be spent or wasted.
• Number of complaints regarding the products must be reduced 10% and
struggling to bring it up to 0.
• Operational output must be increased by 10% until and unless the
economies of scale and economies of scope will be achieved.
• Continuous improvement policy must be adopted to fully penetrate into
the passenger car market.
Page 59 of 59

Strategic Business Plan For Ghandhara Nissan Limited

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