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Final Project

Date: 20, dec.09

Topic: How Companies Grow?

Submitted to:

Umair Saeed

Submitted By:

Sidra Anjum
Arusa Sarwar
Farah Munavar
Hissam Mehmood
Haroon Abbas
Umair Saeed

Management Sciences

Comsats Institute of Information and Technology

 As we know that: Starting a business takes vision, passion, perseverance—and a
plan. Every company passes through these stages.

$ales

Maturity
Take off

Success

Survival
Existence
TIME

 Like people, organizations go through stages.

 Takeoff refers to a period of rapid growth typically characterized by
sales
 Increasing in multiples.
 Surging customer demand must be balanced with the limitations of the
 Manufacturing, financial, and human resources.

As the organization has four basic functions that are:

1. Operations (property, plant, and equipment)
2. Finance (cost controls, borrowing capacity)
3. Human Resources (competent middle management)
4. Marketing (planning, promotion, sales)

As GROWTH is a STRATEGIC objective.

"Strategy is the direction and scope of an organization over the long-term: which
achieves advantage for the organization through its configuration of resources
within a challenging environment, to meet the needs of markets and to fulfill
stakeholder expectations."

In order to grow strategically companies need to keep those given points in

mind while designing strategy.

1. Goals: Establish desired short, mid and long-term outcomes in

alignment with your company's vision.
2. Market Conditions: Understanding the external and environmental
factors that create your’ "playing field".
3. Target Markets: Determining which markets you can cost effectively
enter and compete in.
4. Market Scope: Knowing what kind of activities and marketing are
involved in each of your target markets.
5. Advantages: Defining how your product or service performs better
than the competition in those markets.
6. Resources: Acquiring the required skills, assets, financing,
relationships, technical competence, and tools needed to succeed.
7. Community Impact: Leveraging the value and support of those who
are potential stakeholders in and around your business.
8. Implementation: Establish reasonable deadlines so that your
systems and leadership have adequate time to align with your
marketing and sales efforts.

Business Plan: Strategically Planning for Growth

Five Key Elements
Here are five key elements to consider when drafting your business plan for
growth.
1. Define your goals and priorities. Create a list of long-term goals. Be
sure to choose goals that are SMART: specific, measurable, achievable,
realistic, and timed. These goals will guide you as you work through your
business plan for growth, and will help focus your efforts on doing what it will
take to achieve these goals.
2. Set up a timeline. A timeline with milestones should be established to
mark your progress against reaching your goals. Include details in the
timeline such as customers you hope to acquire, and additional employees
you might need to hire. Elaborate on how these activities will contribute to
achieving your goals for growth.
3. Plan for cash. Growth strategies such as geographic or product
expansion can initially generate negative cash flow. Increasing revenues
doesn't necessarily mean increased profits, because at the outset, the cost
to achieve growth can be high. Your financial plan, especially your cash flow
projections, will be vital in determining how you’ll sustain your company’s
growth—without putting you under.
4. Profile competitors. Have new competitors emerged since you
established your company? How have your existing competitors changed in
response to your entrance into the market? Be aware of how your
competition can affect your goals. Strategies to address competitive forces
can include adjustments in:
• Price
• Speed
• Quality
• Niche markets
5. Track your progress and evaluate the results. To track your
progress, establish company and industry benchmarks against which you
can measure your performance. Conduct a gap analysis which compares
“Where are we today?” with “Where do we want to be?”
How Companies Grow Organically:
On the other hand, companies can also grow organically. To grow a
business organically common management theories and fads about strategy,
superior talent, superior leadership, strong vision, innovation, globalization,
outsourcing, off shoring, and unique products or services are not necessary if
you want to grow an organization organically.
Companies that grow organically have a simple, easy-to-understand strategy
and business model. The strategy model can be easily explained to and
understood by employees at any level. These companies are disciplined and
focused. Big innovations and new business models are not prevalent.
With simplicity comes employee understanding and engagement; employees
know where the company is headed, how it will get there, and what their
individual role is in that growth. Employees understand why their job is
important and how it fits into the big picture. Simplicity is the key.
Instill a “small company soul” into a “big company body.”
 A small company soul is entrepreneurial. Employees have a
sense of ownership of the customer, are held accountable for results,
and share in the rewards of those results. Entrepreneurial employees
are like - well - like entrepreneurs. They are energized and engaged in
the day-to-day business because they feel they have some control over
their destiny, they have autonomy and respect, and they feel rewarded
for their efforts.

1. It Starts by Growing Great Employees:

It can be done by helping our clients to "grow great employees,"
by offering needed skills and understanding to managers and leaders,
could yield enormous benefit -- both in terms of better business results
and more enjoyment and satisfaction in the workplace.
1) Helping clients -- organizations and individuals -- clarify and
then move toward their hoped-for future.

Three ways to do that:

• The first is through "strengthening leaders," which includes doing
one-on-one executive coaching, as well as working with senior
teams to support them in being as effective as possible.
• Our second practice area is "clarifying vision and strategy" – to
help client-organizations create an accurate picture of their
current state, then visualize the future they want to create for
themselves as an organization, look at what's in their way, and
then craft strategies and tactics for getting there.
• In third area -- "building skills and knowledge" – To offer learning
programs to support clients in making sure that employees are
capable of creating the kind of organization they visualize.
Focus on finding and developing managers who work according to
these principles -- and then supporting them to hire, train and develop
staff to do so, as well.
1. On Building Your Environment:
To create an environment that supports trust, engagement, and growth.
For example, let's say an employee comes to you, the manager, with a
problem. You can tell him you respect his point of view, and that you want to
create an environment that supports trust, engagement, and growth. Lots of
managers do this, and it's generally well-intended. And, most of the time, it
has no impact whatsoever. The employee doesn't feel respected and trusted
as a result of you telling him that you respect and trust him.
Contrast this with what happens if, instead, you simply listen carefully:
suspend your judgments and advice for the moment, and really seek to
understand the employee's situation, what she thinks and feels about it, how
she's tried to resolve it. Right then, that employee is going to feel trusted
and respected.
Of course, you need to follow listening with clear agreements, good
delegation, consistent follow-through, etc. But listening well is almost always
the best place to start if you're sincere about wanting to create a positive
environment.
2. On Changing Culture:
1. Identifying key behaviors that need to be altered in order to shift the
culture;
2. Making sure they're not in conflict with existing core values and beliefs
in the culture

3. Making those new behaviors easy, rewarding, and normal.

4. Companies should make more of a distinction between good

performers and poor performers. In too many companies, if you're
doing a fantastic job, you don't get treated or rewarded that much
differently from someone who's doing a lousy job. Especially at junior
levels: the compensation tends to be exactly the same; and poor
performers tend not to get fired, or even reprimanded, unless they do
something really egregious. The result is that great performers get
disheartened and stop trying, or go someplace else -- and poor
performers just keep on being poor performers.

5. If companies would teach their managers to set clear parameters of

success and hold people accountable for achieving them, and if
performance management systems were better set up to truly reward
individual success, it would be very different. Excellent employees
would get appreciation, challenge, promotions, money, and autonomy
(the things that most people find valuable), and would continue to
benefit the company as they continued to develop and contribute their
skills and talents. Poor performers would be given a clear
understanding of how they were expected to improve, and, if they
continued to perform poorly, they would be terminated.

6. Not only would it create much better business results, but it would go a
long way to creating that environment of trust, engagement, and
growth you asked about earlier.
 7. Sometimes, people talk as though businesses have to make a choice:
that they can either go for great results, or be supportive of the human
beings that work for them. My strong belief -- as I'm sure you can tell
by now -- is that businesses need to do both in order to succeed. Great
businesses set the bar high -- envisioning and requiring great results --
and they support their good people by giving them the tools, the skills,
the understanding and the trust they need in order to clear that bar
with room to spare.
1. Diversify: Small-business, ideas for diversifying your product or
service line:
• Sell complementary products or services
• Teach adult education or other types of classes
• Import or export yours or others' products
• Become a paid speaker or columnist
"Diversifying is an excellent growth strategy, as it allows you to have
multiple streams of income that can often fill seasonal voids and, of course,
increase sales and profit margins.
Here’s the example of the Habib Group of Industries Under
this context:
History:

Habib group was founded by Seth Ismaeel Habib who had died in1931 and the
business passed to hands of his four sons, Mohammad Ali Habib, Ahmad Habib,
Dawood Habib and Ghulam Ali Habib who shifted to Karachi when Pakistan into
existence. After nationalization the members of Habib family also split and are now
operating in to two distinct groups headed by Rafiq Habib and children of late
Rashid D Habib but Habib Bank A G Zurich is a joint venture of all the Habibians

The Origin of what is now known as the Habib Group of companies can be traced to
Habib Esmail, and his association with the firm of Khoja Mithabani Nathoo, a leading
metals dealer established in Bombay in 1841. Habib joined the firm at the age of 13
for a monthly salary of Rs. 5. Through his hard work and determination he became
partner at the age of 18 and also became the president of the Copper and Brass
Merchants Association.
Habib sent his representative to Europe in 1912 and followed that up by
establishing branch offices in Genoa and Vienna. Simultaneously, he began business
relationship with Japan and China importing hosiery, yarn, glassware and cutlery
and exporting cotton.
He started the firm "Habib & Sons" in 1921 and changed the family name to
"Habib". His four sons namely Ahmed Habib, Dawood Habib, Mohammed Ali Habib
and Ghulam Ali Habib joined the business. The firm expanded rapidly - banking
remaining a core business.
This in turn led to the formation in 1941 of Habib Bank Ltd. Bombay, as a public
limited company. The bank was to become the flagship of the family’s industrial and
commercial ventures. Prior to the creation of Pakistan the bank moved its head
office to Karachi and played a vital role in providing the basic banking and financial
needs of this new country.
A network of branches and training centers were established in former East and
West Pakistan.
When all banks in Pakistan were nationalized in 1974, Habib Bank was one of the
largest commercial banks in South Asia with 875 branches in Pakistan and 44
branches overseas, including 20 in the United Kingdom.

As HABIB group of companies are engaged in various businesses and have met their
maturity level with respect to their growth.
• Banking & Finance
• Insurance
• Textile
• Sugar and Alied
• Biofuels
• Terminals and Storage
• Processed Foods
• Automobiles
• Community Development
At International level:
Habib Group of companies are working Internationally in following given
businesses.
Banking and Finance:
In Pakistan and internationally, the Habib name is synonymous with excellence in
banking. From the pre-Partition era to the present day, the Habib Group has been
providing customers with the very best and most extensive banking services,
cutting edge technologies, and exemplary client relationship management.
As testament to their excellence, the Habib Group has been recognized by the
Pakistani government on more than one occasion. During the time of Partition, the
Habib Group received a personal invitation by Quaid-e-Azam Mohammad Ali Jinnah
to establish the first commercial bank in Pakistan. As the only Muslim bank in pre-
Partition India, Habib Bank Limited had been instrumental in providing financial
support to the Indian Muslim community. In the newly established Pakistan, Habib
Bank Limited continued to demonstrate excellence and innovation in the banking
sector. From 1947 till nationalization, Habib Bank Limited registered exceptional
growth rates and rapid development. When the un favourable policy of
nationalization was repealed, the Habib Group was awarded the first license to
establish a commercial bank. As a result of this directive, Bank AL Habib was
formed in 1992, and quickly developed into one of the leading banks of the
country.
The Habib Group continues to demonstrate preeminence in the banking industry.
It currently operates 4 major banks, Bank AL Habib, Habibsons Bank, Habib
Overseas Bank Limited and Habib African Bank. Together, these banks have a
network that stretches across three continents. The banks deposits, advances,
profits, foreign trade business, investments and shareholders equity have shown
a tremendous growth over the years.

Insurance:
Habib Insurance Company Limited, one of the pioneer projects of Habib Group was
established in 1942 in Bombay, with a paid-up share capital of Rs 2.5 million. After
partition, the company moved its head office to Karachi and over the years raised
its capital through the issue of bonus shares.
By maintaining a sound underwriting policy, Habib Insurance Company Limited
earned the reputation of being very profitable and liquid. In 1972, despite life
insurance business being nationalized, the company managed to achieve one of the
highest rates of return in the industry. Indeed the company in the form of returns
has paid back to its shareholders cash dividends and bonus shares in excess of two
hundred times of their investment.
By adopting its prudent underwriting policies, Habib Insurance Company Limited
has achieved to secure amongst the most solvent reserves and capital to net
premiums, gross premiums, and claims ratios in the industry.
Habib Insurance Company Limited continues to maintain its selective approach
towards the business it underwrites, and is now looking ahead to the rapidly
changing industrial and financial environment in Pakistan. New products and new
markets are being explored, and the company is investing its resources in people
and ideas to meet these challenges. The company aims to, Inshallah, provide high
quality service to all their customers, and to continue giving its shareholders a
consistent return on their investment.
The Karachi Stock Exchange Limited, in 1981 introduced their scheme of
acknowledging the top 25 companies of the stock exchange. Habib Insurance
Company Limited has been honored by them and has received the award eleven
times, for the years 1981, 1982, 1983, 1984, 1985, 1986, 1987, 1988, 1989, 1993,
and for 1997.
Our general insurance business focuses on Fire, Marine, Motor, Engineering, Medical
and Miscellaneous Insurance. We have technical underwriters who have built up our
six decades of insurance experience and have amongst the best reinsurance
arrangements in the world with top companies.
HSM Textiles:

A part of Habib Sugar Mills, HSM Textiles was established in 1979 with the purpose
to manufacture and export high quality terry products. At present HSM textiles
exports to Europe, the US and Canada.
Habib Sugar Mills Limited:
Habib Sugar Mills Limited was incorporated as a Public Limited Company in
1962 with its Head Office in Karachi and its plant located at Nawabshah, 300
kilo-meters north east of Karachi.
The original machinery for the sugar division was supplied by M/s. B.M.A. of
Germany and the process was Double Carbonation Double Sulphitation
(D.C.D.S). The capacity of the plant at its inception was 1,500 tons of sugar-
cane crushing per day. The mill commenced its production in January, 1964
and was the second sugar mill in the province of Sindh. Present capacity /
capability of the mill is 7000 - 7500 tons of sugar-cane crushing per day. The
capacity has been enhanced by balancing, modernization and replacements
(B.M.R) as well as change in manufacturing process from Double Carbonation
Double Sulphitation (D.C.D.S) to Defecation Remelt Carbonation Sulphitation
(D.R.C.S.) also under B.M.R. during the last three and a half decades in
various stages of implementation.
In the year 1967-68, a Distillery to produce industrial alcohol from molasses
was added to the plant. The machinery / equipment for the distillery was
supplied by M/s. Spechim Limited of France. This distillery division has over
the period of time contributed handsomely to the profitability of the
company, besides boosting its export.
In the year 1978-79, the management decided to diversify into other fields of
manufacture and established a textile division at Karachi. The produce of the
textile division is mainly exported.
The company also set-up a tank terminal in the Port area of Karachi for
purposes of handling and storage of bulk liquid cargo such as molasses,
edible oil and industrial alcohol.
The company has made steady growth over the period of time. As at April
2002, the capital base of the company has increased from its inception level
of Rs. 12 million to Rs. 162 million as a result of issuance of bonus and right
shares from time to time.
The company's performance during the past forty years has been
satisfactory as is established by the trend of efficyiency, growth in earnings
and financial stability. Hand-in-hand with the prosperity of the company, the
shareholders have been correspondingly rewarded by a consistent policy of
the Board of Directors towards payment of stock and cash dividends.
The company was awarded Trophy and Certificate of Merit by the Karachi
Stock Exchange (Guarantee) Limited in 1980, 1981, 1982, 1983, 1986 and
1990. Further the selection committee of International Gold Mercury Award
selected Habib Sugar Mills Limited for awarding their International Award in
1982. The company was also conferred the award for the highest sucrose
recovery throughout Pakistan by the Pakistan Society of Sugar Technologists
in their 25th Annual Convention held in 1990.
The company has kept up its activities relating to improved production and
quality of its products in response to the needs of the farmers in particular
and the nation in general. The company's policy falls in line with the
following directives of the Government:-
• Duration of the crushing period be reduced as far as possible in the
interest of farmers.

• Extract maximum sucrose contents by crushing the available

quantities of sugar-cane in more conducive climatic conditions.

• Continue to improve the quality standards of its products.

• Increase overall efficiency in operations so as to control wastage and

optimize capacity utilization.
The satisfactory performance and the growth in turnover and profitability of
the company is due to hard work and excellent efforts put in by the workers,
staff members and full co-operation received from our sugar-cane farmers.
Pollution Free Environment at Nawabshah
The company continues to attach great importance to a pollution free
environment and have installed fly ash removal system and slop treatment
plant in its sugar and distillery divisions respectively, involving a capital
outlay of approximately Rs. 60 million.

The fly ash removal system installed in the boilers of the mills has
completely eliminated the spread of black soot particles. Similarly, the slop
treatment plant has fully eradicated the unpleasant smell from the distillery.
By the Grace of Allah, successful operation of these projects have ensured a
pollution free environment for the citizens of Nawabshah.

A team of Sindh Environment Protection Agency (SEPA) visited the mills at

Nawabshah in 1995 and lauded the efforts of the management in ensuring a
pollution free environment.

Bio Fuels:
In the year 1967 a Distillery unit was added to produce industrial alcohol from
sugarcane molasses, having a capacity of 65,000 liters/day, mainly for exports.
Messrs Spechim Limited, France, supplied the machinery and equipment for the
Distillery. The division has over the years contributed handsomely to the
profitability of the company, besides boosting its exports. The current capacity is
135,000 litres a day.
Habib Foods Ltd.

Habib Food Products and the TAZA brand was established in 2004, and has
subsequently evolved into a multidimensional, multi-product business with
sales in over 3 continents.
Every step in the production of our foods, from procurement, to
manufacturing, to distribution, is subject to rigorous quality control tests.
TAZA products are made from the very freshest of herbs, meats and
vegetables, and are cooked exclusively in state-of-the-art facilities.
Habib Motorcycles (Pvt.) Limited:
Habib Motorcycles (Pvt.) Limited is the latest venture of the Habib Group of
Companies within the engineering sector.
Watch TVC-1 [WMV—1.40Mb]
Watch TVC-2 [WMV—5.40Mb]
Watch TVC-3 [WMV—9.10Mb]
The Group has collaborated with leading international automobile manufacturers to
develop the HB 70 motorcycle for the Pakistani market. The HB 70 has been
designed to give the rider a winning combination of power, efficiency, aesthetics
and value for money.
The HB 70 motorcycle has been assembled with superior machinery from quality
conscious vendors and has been approved by the Engineering Development Board
(EDB) as well as the Pakistan Standard for Quality Control (PSQCA).

Habib motorcycles are backed with a company warranty of 6 months, or 6,000 km,
depending on what comes first. Habib Motorcycles has also established an
extensive country-wide sales and after-sales network to better serve customers.
Specialized warranty 'Satellite' workshops that are fitted with ultra-modern tools
and equipment and manned by thoroughly trained technicians have been set up at
accessible locations all over the country. Furthermore, the company offers
preferred customers special service right at their door step, saving them the hassle
of workshop visits.

Habib Motorcycles (Pvt.) Limited serves to provide 100% customer satisfaction

through the provision of high quality, performance-oriented products, supplemented
with thorough professional service.