Group Report on Partex Group PDF

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mgt 212 report on partex group...

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Business Report PARTEX Furniture Industries Ltd.

Prepared for:

Prepared by:

MGT 201

1. Debayan Ukil (1431057030)

Sec: 01

2. Mahbub Elahi Kafi (1510535630)

FALL 2015

3. Evan Shahriar Ahmed (1510894030)

Shahid Hossain

4. Kaniz Ismot Zahan (1510288030)

Department of Management

5. Farhana Yeasmin Seema (1512989630)

North South University

6. Sabid Bin Anwar (1510396030)

Letter of Acknowledgement First of all, we would like to express our deep gratitude to Almighty for showing us the correct path for the successful preparation of the project for the course MGT210 conducted by our honorable teacher Shahid Hossain sir. It was a great pleasure to prepare this project paper on Partex Furniture Industries Limited. We would like to thank and convey our gratitude to our honorable teacher Mr. Shahid Hossain, NSU Business School, for giving us the opportunity to work on this project. We would also like to express our sincere appreciation for his support, guidance and comprehensive feedback. We would like to express our appreciation towards Mr. Aklas K. Chowdhury(AGM, HR & Admin), Engr. Md. Abdur Rouf(Asst. General Manager, Production) and Md. Al Helal Anwar(General Manager, Production) of Partex Furniture Industries Limited for their exquisite guidance and support throughout the project. This project is not free from limitations. There might still be some minor mistakes such as typing errors despite our utmost care. We apologize for this.

1. Debayan Ukil (1431057030

……………………

2. Mahbub Elahi Kafi (1510535630)

……………………

3. Evan Shahriar Ahmed (1510894030)

……………………

4. Kaniz Ismot Zahan (1510288030)

……………………

5. Farhana Yeasmin Seema (1512989630)

..………………….

6. Sabid Bin Anwar (1510396030)

…………………….

Table of Contents Type chapter title (level 1) Type chapter title (level 2)

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PARTEX FURNITURE INDUSTRIES LIMITED

Mission Statement: Partex Furniture Industries Ltd. is a concern of Partex Star Group that offers high-quality, moderately priced furniture that enhances the living standard of the society. The goal is to help people develop higher-quality lifestyles at affordable prices. The company views itself as allies with its customers, employees, partners, the society and the environment alike. Partex Furniture Industries Ltd. aims to become a recognized member of the society in terms of its brand name by providing the community with products that enrich the peoples' lives. The mission is to serve the community as the company grows, maintaining annual profitability and to be the quality concerned leading market oriented furniture manufacturer, sales and distributor of Bangladesh.

Slogan: “Total care”

Vision: Partex Furniture Industries Ltd. intend to be the leading furniture solution provider in Bangladesh achieving their business vision through growth in market reach, increasing operation size, international distribution, total service and consistent branding activities by being the most customer focused, innovative, cost effective and efficient, environmentally responsible and quality concerned company in the business.

Mission: Partex Furniture Industries Limited’s mission is to be the quality concerned leading market oriented furniture manufacturer, sales and distributor of Bangladesh by: 

Introducing new and innovative products.



Assuring quality products from advanced manufacturing facilities.



Exceeding customer satisfaction and granting trust through quality services.



Recognizing individual contribution.

Executive Summary: Partex Star Group is one of the largest Bangladeshi diversified private sector enterprises. The Group, the then Partex Group, started its journey in 1962, with the torchbearer, Mr. M.A. Hashem, the founder Chairman of the then Partex Group, an eminent industrialist of the country.Partex Star Group owns and successfully operates twenty manufacturing, service and trading concern delivering best values to customers through its products and services. Our business primarily exists in two different areas – consumer durables like different types of boards(particle board, veneer board, melamine faced chip board, plywood, PVC sheet) doors and door frames & furniture to FMCG like dairy products, cookies, spices, etc. Partex Furniture Industries Limited is a concern of the Partex Star Group and is a growing company in furniture industries of Bangladesh, it almost has gone the market leader position in Partex board and upper class wooden furniture.. Partex furniture produces the following:

Laminated board: The raw material of LB is cheeps of wood. The lamination paper (melamine paper, pvc and normal paper) which are imported from abroad is attached into both upward and backward side of the board and the bits of this board are covered by edging.

Partex board: Raw material of this board is cheeps of solid timber. It is made using high technological machineries. Wooden furniture: The wooden furniture is made by Furnitex board which is attached with the veneer. The whole frame of the product is wood and the body is made by Furnitex board besides many wooden furniture are made by traditional way which is made by pure wood. The financial information about Partex Furniture Industries Limited is not accessible since the annual report is not available due to their confidentiality. Still Md. Al Helal Anwar (General Manager, Production) helped us with some informations (Interview, 29th November 2015). Annual turnover of Partex Furniture in the year 2014 was Tk 135 crore whereas in this year (2015) sales has increased to almost Tk 180 crore (increasing by 33.33%). The total market size of furniture industry is Tk 4000 crore (Organized Market- Tk 1500 crore and Unorganized Market – Tk 2500 crore).The foolowing shows the position of Partex Furniture in the organized Market.

Name

Market Size

Rank

Otobi

400

1st

Partex

180

2nd

Hatil

160

3rd

Navana

140

4th

Akhtar

120

5th

Brothers

80

6th

Nadia

60

7th

Md. Al Helal Anwar also helped us by providing some future planning information of Partex Furniture. Partex Furniture is now targeting to expand their maket size to Tk. 300 crore from Tk. 180 crore. They are going to do that with by adding new machines and by launching new products such as Fire rated door (UL certified-under righter laboratory) first in Bangladesh which will protect buildings from accidents( Burning)

According to Md. Al Helal Anwar Furniture sector of Bangladesh has a huge potentiality to expand itself in the International market. He says “All we need is some initiatives by government” such as

 Developing the infrastructure  Inviting foreign companies to invest in this industry to develop local companies  Reduce tax & duties on raw materials

Officer’s of the firm:

Name

Rank

Annual Salary

Sultana Hashem

Chairperson

Tk. 58, 11,150*

Mr. Aziz Al Kalser

Vice Chairman

Tk. 39, 05,570*

Mr. Aziz Al Mahmud

Managing Director

Tk. 29, 05,570*

Tabassum Kalser

Director

Tk. 29, 05,570*

Savera H. Mahmud

Director

Tk. 29, 05,570*

*Imaginary value (Based on the interview with Aklas K. Chowdhury, AGM, HR & Admin, Interview, 29th Nov, 2015 gave us an idea of the salary)

SITUATIONAL ANALYSIS OF PARTEX FURNITURE:

Situational Analysis is a methodical collection and assessment of past and present economical, political, social, and technological data, aimed at recognition of internal and external forces that

may influence the organization's performance and choice of strategies, and analysis of the organization's current and future strengths, weaknesses, threats and opportunities.

The importance of Situational Analysis is that it helps to anticipate the internal and external factors that affect the company which prevail at a given time. This analysis mainly consists of applying SWOT technique to understand the situation at company level and analyze the global environment which impacts the industry in which the company is performing. By carrying out this analysis, the company can get a snap shot of the current situation which will help the managers to take necessary actions of taking advantages of the situation. Aspects such as performance, competitors and customers are analyzed in this stage. The purpose of the situational analysis is to signify to a company about the organization and product position, as well as the overall survival of the business, within the environment. Companies must be able to outline opportunities and problems within the environment so that they can know their capabilities in the market. (Kristie Lorette, (n.d))

External Factors A business does not perform in a vacuum. It has to act and react to what happens outside the factory and office walls. These factors that happen outside the business are beyond the organization’s control and are known as External Factors or Influences. While an organization may have contingency plans in place to deal with external influences that affect its business, sometimes the best it can do is improvise when they occur. The external factors might include customers, competitors, suppliers, legal and technological changes, the economic and political environment, etc.

 Customers

Customers are the final-users of the product and services, the most critical aspect of the environment. Customers like and dislike changes rapidly, people live in a tight social system that creates and encourages trends. It is important to predict changes in user’s product requirements, developing technologies that can change how the products are used. Thus the Partex Furniture Industries Limited has its Facebook page (https://www.facebook.com/pages/Partex-FurnitureIndustries-Ltd/557714274290886?rf=237548613060499.) and uses YouTube to introduce new products in the market. Moreover, their sales center consists of CPA(Corrective & Preventive Action Team) so that both the existing and potential customers get proper assistance in knowing and using the furniture of Partex and also helps Partex Furniture to know that what is happening actually

 Competitors

Competitor’s actions affect the ability of the business to make profits, because competitors will continually seek to gain an advantage over each other, by differentiating their product and

service, and by seeking to provide better value for money. The Partex Furniture Industries Limited produces furniture symbolizing individual care such as (child care, medi care, home care, edu care, eco care, corporate care, wedding care). Since Bangladesh is progressing in the furniture market sector sales, Partex faces a lot of competitors. Its main competitors are Otobi, Hatil, Navana, Akhtar, Brothers and Nadia

 Suppliers

Suppliers provide businesses with the materials they need to carry out their business activities. A supplier's action will directly impact the business it supplies. For instance, if PFIL’s (Partex Furniture Industries Limited) suppliers provide inferior quality materials it can lead to decreasing product quality. An increase in raw material prices will affect PFIL’s Marketing Mix strategy and may even force price increases. This is the reason for which Partex Furniture Industries Limited maintain a close relationships with its suppliers to remain competitive in the market and secure its quality products.

 Economic Factors

Economic factors include economic growth, interest rates, exchange rates and the inflation rates. These factors have considerable impacts on how businesses operate and make decisions. For example, high interest rates of Bangladesh deters investment because it costs more to borrow, thus to what extent PFIL (Partex Furniture Industries Limited) can grow and expand depends on it. On the other hand, inflation in Bangladesh may provoke higher wage demands from employees; as a result it would raise costs of PFIL. However, higher national income growth of this country may boost demand for PFIL’s products as well. (Mehdi Hedayatpour, 2014)

 Political Factors Business decisions may be influenced by political factors. These refer to the government policy such as the degree of intervention in the economy. What goods and services does a government want to provide? To what extent does it believe in subsidising firms? What are its priorities in terms of business support? Political decisions can impact on many vital areas for business such as the education of the workforce, the health of the nation and the quality of the infrastructure of the economy such as the road and rail system. If the political factors are favorable for PFIL

(Partex Furniture Industries Limited), then it would be able to continue its production with minimal obstackles and constantly research for improvements. (Mehdi Hedayatpoor, 2014)

Internal Factors Internal factors are the factors that have a direct impact on the business. These factors are generally controllable because the company has control over these factors. It influences company’s activities and involves some direct and indirect cost if a company wants to change them. Internal factors are important because it influences company’s daily activities, decisions, employee’s behavior and attitudes. The company’s mission statement, leadership style, resources are vital part of internal factors. A good internal environment will attract high quality applicants for job and qualified workers are asset to the company. Productivity will rise as the workers are qualified and cost per worker will fall. The internal factors for PFIL (Partex Furniture Industries Limited) are:

1. Level of ManagementIt is an important internal factor for a company. It is a part of the company which maintains and responsible for the productivity and employee’s work performance. PFIL (Partex Furniture Industries Limited) has three levels of management. These are –

a) Strategic Management LevelIt consists of Board of Directors, Chief Executive Officer and Chief Finance Officer. The Chairperson of PFIL (Partex Furniture Industries Limited) is Sultana Hashem and The Chief Executive Officer of PFIL is K M Ali (Board of Directors and Key Executives, Partex Star Group). They are top-level managers with the responsibility to determine objectives, policies and plans of the company. They spend more time in planning and organizing. They prepare long-term

plans and require more conceptual skills. They are also directly responsible to the shareholders and are final authority in the company. b) Technical Management LevelIt includes Departmental Heads, Branch Managers, Junior Executives, Finance Managers and Purchase Managers. Under Corporate affairs department, PFIL (Partex Furniture Industries Limited) has Human Resource Manager and Compliance Manager. For Sales Department, it has distribution manager and district manager, for marketing department it has sales promotion manager. In Manufacturing Department, PFIL (Partex Furniture Industries Limited) has Plant Manager and Service centre manager and for Financial Department, it has Auditors. They all are known as Middle Managers .They execute policies and plans given by Strategic level. They spend more time in Co-coordinating and communicating. They have limited authority. They are directly responsible to Chief Executive Officers and Board of Directors. Middle Managers require more technical skills and less conceptual skills. (Aklas K. Chowdhury, AGM,HR & Admin, Interview, 29th Nov, 2015).

c) Operational LevelIt includes foremen and supervisors. For Sales Department, PFIL (Partex Furniture Industries Limited) has shop managers. These are first level managers. Their work is to direct employees and develop morale in them. They maintain a link between technical and operational level. They spend time mainly in directing and controlling and it is their responsibility to get the work done by the workers. They report directly to the middle management. They need mostly communication and technical skills. (Aklas K. Chowdhury, AGM, HR & Admin, Interview, 29th Nov, 2015).

2. Research and DevelopmentPartex is transforming itself into a marketing powerhouse in the furniture sector with a wide range of product choice. Research and Development is one of the way by which PFIL can experience future growth in their sales. PFIL’s research and development department is mainly

focusing on product ideas. They are working effectively on distribution system. This department is also working on marketing mix that is Product, Price, Place and Promotion. They are trying to find whether its product’s price is reasonable or expensive and whether customers are willing to pay this price. They are trying to make products always available to customers and they are trying to increase their promotions. Partex is spending a lot of money on TV advertisements which was their sector of weakness before. It is also doing sales promotions. A promotion creates awareness about its products and will assist people to buy it. (Aklas K. Chowdhury, AGM, HR & Admin, Interview, 29th Nov, 2015).

3. Organization CultureCulture includes company’s vision, values, norms, systems, symbols, language, assumptions, beliefs and habits. PFIL’s (Partex Furniture Industries Limited) culture is based on its values. Its values include Customer focused and Innovative, competitive and efficient, Environmental stewardship and Excellence in Quality (‘MARKETING STRATEGY OF PARTEX FURNITURE: A STUDY OF PARTEX FURNITURE INDUSTRIES LIMITED’) ). So, this company considers the significance of ethics, human and environmental matter when conducting its business. Values are important building blocks of culture. Organization culture is important for PFIL as it allows managers and employees to learn more about each other. It also teaches employees to respect diversity and individual differences. (Aklas K. Chowdhury, AGM, HR & Admin, Interview, 29th Nov, 2015).

4. Roles of ManagersManagers of PFIL (Partex Furniture Industries Limited) play a vital role in its growth and evolution. Its managers are qualified and they have leadership skills. Therefore, they can easily implement any change in the company. Their managers work as center for sending and receiving information. They also take important decision in various situations and sometimes they are the risk takers. Managers should handle any kind of unfavorable situation wisely. Communication is

at the core of managing change effectively. PFIL’s managers can communicate effectively with their employees about its vision. As a result, PFIL can achieve its goals. (Roles a Manager plays in an Evolving Organization, 2014, Boundless Management)

5. Financial PositionPFIL’s number of shareholders has increased by 23.79%. Its turnover in 2014 was Tk 1350 million* and shareholder equity was Tk. 745.93 million*. Board of Directors of Partex prefer cash dividend of Tk10 per ordinary share. Its Current ratio has increased from Tk. 2.73 to Tk. 4.07*, which indicates ...