ACKNOWLEDGEMENTS

All praise is due to Almighty “ALLAH”, the most merciful and the

most beneficent, who bestowed upon me health, power of

communication and opportunity to successfully complete my post

graduate studies. Countless salutation be upon the Holy Prophet

“Hazrat Muhammad” (Peace be upon Him), the most perfect

and torch of guidance and knowledge for humanity as a whole.

I express my deepest gratitude and profound

regards to my advisor …………………..for his scholarly advice,

useful comments, untiring help, continuous encouragement, kind

supervision and timely checking up of this manuscript during the

course of study. Without his efforts this study would not have

been possible in this shape.

I will also thanks to my friends ………………….for

their good wishes and timely assistance in the completion of this

research work.

I would feel it incomplete without saying thanks to

my loving parents and other family member who supported and

encouraged me throughout my educational career.

At the end I hope that reader would forgive me for

advertent errors.

EXECUTIVE SUMMARY

Utility Stores Corporation of Pakistan is one of the Government

owned organization established in July, 1971. It was started with the

aim of providing products of everyday use to average income groups

at lower prices than prevailing in the market. Utility Stores Corporation

is considered to be the largest chain of retailers in Pakistan and also

proved to be a profitable organization, if properly managed.

In chapter No. 1, there is an introduction to retailing and retailers

concept. From this chapter one can easily understand the exact nature

of retailing. It also includes the classification of retailers on different

criteria. After thoroughly studying this chapter the reader can proceed

further with better understanding of the report.

After knowing the exact nature of retailing and other related

concepts the reader can know the type of organization present in

USCP.

In the 2nd chapter there is comprehensive information about the

Utility Stores Corporation of Pakistan. Its mission, purpose &

objectives, management, products, distribution of Utility Stores

throughout the country and other detailed information about USCP is

given in this chapter.

Chapter 3rd includes different financial statements of USCP for

the year 2005. It highlights the financial position of the organization in

the year 2005. These statements can also be compared against the

financial statements of 2004 given with it. This comparison will enable

a reader to reach a conclusion about the financial health of the

organization.

Now when the reader moves on to next chapter which is also the

main body of the discussion, he will know about the current position of

2

USCP in the market. In this chapter detailed SWOT Analysis information

about the Utility Stores is given. After studying this chapter a person

can easily rate the USCP after knowing its internal strengths and

weaknesses and also predict about its future by knowing in detail

about the external opportunities and threats present in the market for

it.

Finally in the last chapter conclusion is drawn on the basis of

SWOT Analysis information and other information about the USCP. This

project also ends with few suggestion and recommendation given by

me which are also based on the above analysis.

3

NATURE & IMPORTANCE OF RETAILING

For every successful large retailer like Publix supermarkets,

Crate & Barrel stores, and of course Wal – Mart, thousands of tiny

retailers serve consumers in very small areas. Despite their

differences, all have two common features. They link predictors and

ultimate consumers and they perform valuable services for both. In all

likelihood, all of these firms are retailers, but not all of their activities

may qualify as retailing. Let’s see how that can be.

Retailing and retailers:

Retailing (or retail trade) consists of the sale, and all activities

directly related to the sale of goods and services to ultimate

consumers for personal, nonbusiness use. Although most retailing

occurs through retail stores, it may be done by any institution. A

Tupperware rep selling plastic containers at lunchtime meetings at a

factory is engaged in retailing, as is a farmer selling vegetables at a

roadside stand.

A firm – manufacturer, wholesaler, or retailer – that sells

something to ultimate consumers for their nonbusiness use is making a

retail sale. This is true regards of how the product is sold (in person,

online or by telephone, mail or vending machine) or where it is sold (in

a store, at the consumer’s home or on the internet). However, a firm

engaged primarily in retailing is called a retailer.

4

A drawing of a self-service store

Economic justification for retailing:

As we know that, all middlemen basically serve as purchasing

agents for their customers and as sales specialists for their suppliers.

To carry out these roles, retailers perform many activities, including

anticipating customers, wants, developing assortments of products,

acquiring market information and financing.

It is relatively easy to become a retailer. No large investment in

production equipment is required, merchandise can often be

purchased on credit, and store space can be leased with no “down

payment’ or a simple website can be set up at relatively little cost. This

large number of companies, many of which are trying to serve and

satisfy the same market segments, results in fierce competition and

better values for shoppers.

5

To enter retailing is easy, to fail is even easier. To survive in

retailing, a firm must do a satisfactory job in its primary role catering

to consumers. Stanley Marcus, the former chairman of Nieman Marcus,

described a successful retailer as “a merchant who sells goods that

won’t come back to customers who will”. Of course, a retail firm also

must fulfill its other role serving producers and wholesalers. This dual

role is both the justification for retailing and the key to success in

retailing.

The Retail Life Cycle:

The important distinction between the retail life cycle theory and the

two preceding theories of retail change is that the retail life cycle

theory attempts to identify the speed with which change occurs.  This

theory suggests that the pace of innovation in retailing accelerates

over time within any particular retail form.  The following are

descriptions of the stages of the retail life cycle:

 Innovation Stage: A radical departure occurs from the prevailing

method of retail operations in the market.  The innovation may center

on cost, methods of operation, product assortment, or another

innovation that attracts customers.

 Accelerated Development: This stage is characterized by growth

in both sales and profits of the new form of retailing.  This stage is also

characterized by geographic expansion for the innovator of the format

and the appearance of competitors that imitate the method.

 Maturity: This is the most significant stage in the life cycle in that

competition is the most intense. The prevalence of competition makes

this stage the most managerially challenging.  Profits begin to decline,

industry-wide, in the maturity stage.

6

 Decline: This stage can often be avoided or delayed by repositioning

and adaptation on the part of competitors. But, an institutional form

may, in fact, succumb to cultural, technological, or competitive

changes and disappear from the market. Such may be the case with

the “old style” department store characterized by Sears until the late

1980s. Sears has now adapted to market trends and demands with

new merchandise and methods of operations. 

Physical facilities :

Later in this chapter well will classify retailers according to their

product assortments, price strategies and promotional methods. Here,

well look at physical facilities, which represent the distribution element

of a retailer’s marketing mix.

Firms that operate retail stores must consider four aspects of

physical facilities.

Location

Thus a store’ site should be the first decision made abut

facilities. Considerations such as surrounding population, traffic and

cost determine where a store should be located.

Size

This factor means the total square footage of the physical store,

not the magnitude of the firm operating store.

Design

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

interior.

Layout

The amount of space allocated to various product lines, specific

locations of products and a floor plan of display tables and racks

comprise the store’s layout.

7

As would be expected the location, size, design and layout of

retail stores are based on where consumers live and how they like to

go about their shopping.

CLASSIFICATION OF RETAILERS

To understand how retailers serve both suppliers and customers,

we will classify retailers on two bases, form of ownership and

marketing strategies. Any retail firm can be classified according to

both bases.

Retailers’ classification form of ownership:

Classification of retailers with reference to form of ownership is

given below.

Independent Stores:

An independent retailer is a company with a single store that is

not affiliated with a contractual vertical marketing system. Most

retailers are independents, and most independents are quite small.

Independent retailers typically are viewed as having higher

prices than chain stores. However, because of differences in

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

and independents directly. For instance, chains often have their own

private brands that are not sold by independents. Also, independents

and chains stores frequently provide customs with different levels and

perhaps quality of services.

Contractual vertical Marketing Systems:

In a contractual vertical marketing system, independently owned

firms join together under a contract specify how they will operate. The

three types of contractual VMS are discussed below:

8

Retailer cooperatives and voluntary chains

The main differences between these two types of systems are

who organize them. A retailer cooperative is formed by a group of

small retailers that agree to establish and operate a wholesaler that

enters into a contract with interested retailers.

Historically these two forms of contractual VMS have been

organized for defensive reasons to enable independent retailers to

compete effectively with large, strong chains.

Franchise Systems

Franchising involves a continuing relationship in which a parent

company provides management assistance and the right to use its

trademark in return for payments from the owner of the individual

business unit. The parent company is called a franchisor, whereas the

owner of the unit is called a franchisee. The combination of franchiser

and franchises comprises a franchise system.

There are two kinds of franchising:

Product and trade name franchising. Historically the

dominant kind, product and trade name franchising is prevalent in the

automobile (Ford, Honda) and petroleum (Chevron, Texaco) industries.

It is a distribution agreement under which a supplier authorize a dealer

to sell a product line, using the parent company’s trade name for

promotional purposes.

Business format franchising. Much of franchising

growth and publicity over the past three decades had involved the

business format kind (used by firms such as Kentucky Fried Chicken,

Midas, and H&R Block). This kind of franchising covers an entire

method (or format) for operating a business

9

Retailers classified by marketing strategies

Whatever its form of ownership, a retailer must develop

marketing mix strategies to success in its chosen target markets. In

retailing, the marketing mix emphasizes product assortment, price,

location, and promotion and customer services designed to aid in the

sale of a product. They include credit, delivery, gift wrapping, product

installation, merchandise returns, store hours, parking and very

important personal service.

We will now describe the major types of retail stores, paying

particular attention to the following three elements of marketing

mixes:

Breadth and depth product assortment

Price level

Amount of customer services.

Table –: Retail Stores Classified by Key Marketing Strategies

Type of Store Breadth and Depth of Assortment

Price Level Amount of Customer Services

Department Store

Very broad, deep Avoids price competition

Wide array

Discount Store Broad, Shallow Emphasizes low price Relatively few

Limited Line Store

Narrow, deep Traditional types avoid price competition new

Vary by type

10

kinds emphasize low price

Specialty Store Very narrow, deep Avoids price competition

At least standard’ extensive in some

Office price retailer

Narrow deep Emphasizes low prices

Few

Category Killer Store

Narrow, very deep Emphasize low prices Few to moderate

Supermarket Broad, deep Some emphasize low prices other avoid price competition

Few

Convenience Store

Narrow, shallow High prices Few

Warehouse Club

Very broad, very shallow

Emphasizes very low prices

Few (open only to members)

Department Stores:

A department store is a large scale retailing institution that has a

very broad and deep product assortment, tries not to compete on the

basis of price, and provide a wide array of customer services. The

combination of distinctive, appealing merchandise and numerous

customer services, such as alterations, various credit plans, and bridal

registry, is supposed to allow the stores to charge full (or non –

discounted) prices.

Department stores face serious challenges. Because of their

prime (that is, busy but expensive) locations and abundant customer

services, their operating expenses are considerably higher than most

other retailers.

Intense horizontal competition also tests department stores.

Other retail institutions such as shoppers away from department stores

by offering lower prices. To varying degrees, retail chains such as

Target, Wal-Mart, Circuit City and Home Depot vie with traditional

department stores, the convenience of buying from catalogs or online

represents still more competition. Overall, department stores share of

11

total retail trade has dropped about 5 percentage points in recent

years.

Discount stores:

Discount retailing involves comparatively low prices as a major

selling point combined with reduced costs of doing business.

The prime example of discount store, a large-scale retailing

institution that has a broad, shallow product assortment, low prices,

and few customer services. A discount store normally carries a broad

assortment of soft goods (particularly apparel) and hard goods

(including popular brands of appliances and home furnishings) and

advertises them heavily. Wal-Mart, Kmart, and Target are the largest

discount store chains. Discount stores have had a major impact on

retailing, prompting many merchants to lower their prices.

Limited-Line Stores:

Much of the “action” in retailing in recent years has been in

limited-line stores. This type of institution has a narrow but deep

dropout assortment and selected customer services. Traditionally,

limited-line stores selling products such as clothing, baked goods, and

furniture sought to maintain full, or nondiscounted, prices.

As discussed in relation to off-price retailers and category-killer

stores, new types of limited-line retailers have gained a foothold by

emphasizing low prices.

The breadth of assortment varies somewhat across limited-line

stores. A store may choose to concentrate on:

Several related product lines (shoes, sportswear’s, and

accessories)

A single product line (shoes).

12

Part of one product line (athletic footwear).

We identify limited-line stores by the name of the primary

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

example.

Specialty Stores:

A very narrow and deep product assortment, often concentrating

on a specialized product line (baked goods) or even party of a

specialized product line (cinnamon rolls), is offered to consumers by a

specialty store. Examples of specialty stores are donut shops, furriers,

athletic, footwear stores, meat markets and dress shops.

Most specialty stores strive to maintain manufacturers suggested

prices, although they may offer their own store brands at lower prices.

Typically, they provide at least standard customer services. The

prosperity of specialty stores depends on their ability to attract and

then satisfy consumers who especially want deep assortments and

extensive, top-quality services.

Off- price Retailers:

This type of institution features a narrow, deep product

assortment, low prices, and few customer services. Off-price retailers

are most common in the areas of apparel and footwear.

To the extent possible, off-price retailers concentrate on well

known producer’s brands they often buy manufacturer’s excess

output, inventory remaining at the end of a fashion season, or irregular

merchandise (called seconds) at lower than normal wholesale costs. In

turn, their prices are much lower than prices for regular, in season

merchandise sold in other stores. Customers are attracted by the low

prices and fairly current fashions.

Factory outlets are a special type of off-price retailer. They

usually sell a single company’s merchandise. This type of institution

13

gives manufacturers another channel for their products on over which

they have complete control.

Category killer stores:

A phenomenon of the 1980s a category killer store has a narrow

but very deep assortment, low prices and few to moderate customer

services. This type of store aims to capture a large portion of sales in a

specific product category and in doing kill the competition.

A category killer concentrates on a single product line or several

closely related lines. What distinguishes a category killer is the

combination of low prices and many different sizes, models, styles and

colors of the products. Category killer stores are taking sales and

customers away from long standing retailers, especially specialty

stores and department stores.

Supermarkets:

As with discount, the word supermarket can be used to describe

a method of retailing and a type of institution. As a method,

supermarket retailing features several related product lines, a high

degree of self-service, largely centralized checkout, and competitive

prices. Supermarket retailing is used to sell various kinds of

merchandise, including building materials, office products, and of

course groceries.

The term supermarket usually refers to an institution in the

grocery retailing field. In this context a supermarket is a retail

institution that has a moderately broad, moderately deep product

assortment spanning groceries and some nonfood line, and offers

relatively few customer services. Most supermarkets emphasize price.

Some use price offensively featuring low prices to attract customers.

Others use price defensively relaying leader pricing to avoid a price

disadvantage.

14

For many years the supermarket has been under siege from

competitors. Typically supermarkets have reacted to competitive

pressure in either of two ways: Some cut costs and stressed low prices,

offering more private brands and generic products and few customers’

services. Others expanded their store sizes and assortments, adding

more nonfood lines and groceries ethnic foods, for example attuned to

a particular market area.

Convenience stores:

To satisfy increasing consumer demand for convenience,

particularly in suburban areas, the convenience store emerged several

decades ago. This retail institution concentrates on selected groceries

and nonfoods (especially beverages, snacks, and cigarettes), typically

has higher prices than other grocery stores and offers few customer

services.

Its label reflects the institutions appeal and explains how its

higher prices are justified. Convenience stores are typically located

near residential areas and are open extended hours, in fact some

never close. Examples of convenience store chains are 7-Eleven

(originally open from 7 a.m to 11 p.m but now open 24 hours daily in

most locations).

Convenience stores compete to some extent with both

supermarkets and fast food restaurants. Furthermore To boost their

competitiveness, convenience stores are adjusting their marketing

strategies.

Warehouse clubs:

Another institution that has mushroomed since the mid 1980s is

the warehouse club, sometimes called a wholesale club. A combined

retailing and wholesaling institution, it has very broad but very shallow

product assortments, extremely low prices, and few customer services.

15

Warehouse clubs are open only to members who pay an annual fee of

about $25 to $100. Their target markets are small businesses (some

purchasing merchandise for resale), select groups (such as

government personnel and credit union members) and to an increasing

degree individual consumers.

A warehouse club carries about the same breath of assortment

as a large discount house but in much less depth, for each item, the

club stocks only one or two brands and a limited number of sizes and

models. It is housed in a warehouse type building with tall racks that

display merchandise at ground level and store it at higher levels.

The primary advantage of a warehouse club is its extremely low

prices. Prices for household consumers typically are about %5 higher

than prices offered to business members. This institution has some

limitations. Customers ordinarily must pay cash and handle their own

merchandise, even heavy, bulky item. Moreover some shoppers prefer

deeper assortments of products and smaller quantities of packages.

Non store retailing:

A large majority about 80% of retail transactions are made in

stores. However, a growing volume of sales is taking place away from

stores. Retailing activities resulting in transactions that occur way from

a physical store are called non store retailing. It is guesstimated that

sales volume through nonstore retailing sales account for almost 20%

of total retail trade.

We will consider five types of nonstore retailing; direct selling,

telemarketing, automatic vending, online retailing and direct

marketing. Rather than worrying about the confusing names, focus on

the features and competition across the five types. Each type may

used not just by retailers but by other types of organizations as well.

16

Direct Selling

Telemarketing:

Automatic Vending

Online Retailing:

Direct Marketing:

17

LOGO AND INTERNAL PICTURE OF UTILITY STORESOUTLET

18

INTRODUCTION

In almost all the societies, there is, inter alia, a general tendency to

acquire more and more wealth by all means. Similar situation was also

being faced by Pakistan where majority of the private traders were

applying tactics like creation of artificial shortages of essential items of

consumption, black-marketing, charging high prices etc. The public

had become hostages in the hands of the unscrupulous traders and

had no option but to buy from them at what ever prices they

demanded. In order to tide over this situation, and to provide economic

relief to the public, the Federal Government established Utility Stores

Corporation (USC) in July 1971 and placed it under the control of

Ministry of Industries, Production & Special Initiatives. The USC started

its operations by taking over 20 stores from the staff Welfare

Organization, of the Establishment Division and gradually started

increasing its numbers. To exercise better command and control, the

USC established Regional Offices in different big cities to cater to the

requirements of these additional stores in an organized and

economical manner. Some Government and private departments also

invited USC to open its stores for their employees for which they

provided rent-free store accommodation. The USC also opened a large

number of stores in different cities and towns by acquiring shops on

rent at market rates.

MISSION

The USC is committed to provide clean, graded, hygienically fit,

unadulterated genuine food and non-food items to the public and

specially to the poorer segments of the society, at comparatively

cheaper rates than the market and to offer them a pleasant

environment of mutual confidence while making their purchases. It is

19

also committed towards its obligation to provide economic relief to the

public by playing its role as a price moderator and deterrent to

profiteering, hoarding and black-marketing.

OBJECTIVES

The basic objective of the USC is to provide essential and other items

of daily use to the public, specially the poorer segments of the society,

at prices comparatively lower than the market. It is, therefore, required

to act as a price moderator and deterrent to profiteering, hoarding and

black marketing, thereby to provide economic relief to the public.

OPERATIONS & FUNCTIONS

The entire operations of the USC are monitored by a Board of Directors

which periodically provides policy guidelines. The Secretary, Industries

and Production is Chairman of the Board of Directors. The operational

activities of the USC are managed by the Managing Director who is

assisted by six General Managers. It has eleven Regional offices which

are headed by Regional Managers. Each Regional Manager is assisted

by accounts officer, Area managers and other staff. Each USC region

operates stores in its Region. These stores are supplied the required

goods through Trucks from the Regional Ware Houses which are

established in all USC Regions. The sale prices are fixed by the Head

Office located at Islamabad. The Head Office makes procurements

centrally and places orders on the suppliers to deliver goods to the

Regional Warehouses based on their fortnightly/monthly demands. The

stores sell goods and deposit sale proceeds in the local designated

bank branches on daily or twice a day basis from where these are

remitted on daily basis to the Head Office which release  payments to

the suppliers on due dates. Region/Province-wise Total stores in

20

operation as on 5th Jan'05 are 352.  Under a phased programme, the

USC is opening at least 20 new stores every year.

21

MESSAGE OF THE MANAGING DIRECTOR

From time immemorial after descending of

the human beings on this planet, the instinct of

greed and pursuit for amassing wealth ignited

and betrayed them. This damaged the whole

civilization and the human values of peace, love

and fraternity started vanishing. Then, onwards

human relations and values of love and fraternity

became conditional to the wealth and fortunes that a man carried.

Today also in our most advanced and progressive civilization, human

beings are not prepared to let go any anti-human opportunity of

adding to their wealth and making their fortunes better. Earning pure

and unadulterated wealth to any extent is not prohibited by any

religion if it is spent on society's welfare. But living in a human society

it is an uncivilized attitude to become eccentric or self centered and

safe guard own personal interests at the cost of his fellow human

beings.

2. Unfortunately, in many of the traders of our society this haunt for

illegal wealth has found deep roots. A variety of tactics, strategies,

ways and means are chalked out for putting the public in difficult

economic situations and for chiseling their real income. For example

creating artificial shortages of essential food & non foods items of

public consumption, adulteration, giving less weight items, selling

unhygienic and ungenuine sub standard items, overcharging etc.

Consequently, purchasing items of basic human needs become quite

difficult for the public specially for the poorer segments of the society.

3. We at the Utility Stores by the grace of All Mighty Allah and

the support of the Government are trying our best to stabilize

22

Brig. Hafeez Ahmed (R)

the prices of essential and other food and non-food items.

These stores are operating for the public welfare. The present

Government is also committed to provide maximum economic

relief to the public for which it has inter alia started a number

of projects including mega projects. These efforts are going to

reduce poverty and improve the standard of living of our

peoples. In line with the policies of the Government, the Utility

Stores are playing role of combating inflation and price spiral.

Utility Stores retail hygienically fit, genuine, unadulterated

items of correct weight at prices lower than the market. Profit

making is not our mission. We only charge nominal profit to

meet our overhead expenditures. On an average a customer

makes savings from 8% to 10% while shopping from the

Utility Stores. The public can also play their role for promoting

our mission by making a habit of purchasing their day to day

requirements from the Utility Stores so that a strong pressure

is built against the unscrupulous profiteers and they also start

charging reasonable profit from the public, sell pure items of

correct weight etc. This will leave positive effects on the

economic conditions of the peoples and not only make their

life more comfortable but will facilitate them in leading a

better life and converting Pakistan into a strong, peaceful and

serene country.

23

ROLE & SERVICES:

The USC has been successfully playing its role as a price moderator

and deterrent to profiteering, hoarding and black marketing since last

33 years. It has intervened the market at a number of times when the

unscrupulous private traders had created artificial shortage of essential

items like sugar, vegetable ghee, atta, red chillies, pulses etc. With the

support of the Government, these crisis situations were averted by the

USC by arranging large stocks of items of shortages and selling the

same at reasonable prices, in retail as well as wholesale from its 930

stores spread all over the country. The numbers of stores were

subsequently reduced due to closure of economically unavailable

stores.

24

BOARD OF DIRECTORS

S.No NAMES DESIGNATION1. Secretary, MOIPSI Chairman2. Mr.M. Abdullah

YousafChairman CBR Member

3. Arshad Jamil Khokha FA, MOIP & Sir Member4. Brig. (Rtd) Hafeez

AhmadMember

5. Syed Zaheer Ali Shah

Add. Secretary MOIP Member

6. Mr. Fazli-Qadir JS (CS), SI & MOIP Member7. Mr. Inayatullah Khan Member8. Mr. Abdul Wadood

Khan Member

9. Mr. Arshad Saeed Khan

GM (F), SEC Member

10. Mr. Umar Khitab GM (F&A),USC Secretary

Member

Member

Member

Member

MemberMember

Member

Member

Secretary

ChairmanUSCP

25

Diagrammatical Presentation of Hierarchy

26

MAJOR ITEMS:

The USC is presently retailing over 2500 food & non food items of

daily consumption. Major items being sold by the USC are given below.

On an average, a customer when purchases kitchen and other items

from the Utility Stores makes a saving of 8% to 10% as compared with

the purchases of identical items from a private retailer. The items sold

at Utility Stores are hygienically fit, unadulterated, genuine, clean,

graded, of correct weight and are cheaper than the market.

LIST OF MAJOR ITEMS

S.No Name of Items

01. Atta

02. Sugar

03 Dalda Ghee/Oils

04. Rice

05. Pulses/Baisen

06. Yellow Label Tea

07. Tapal Tea

08. Lux Soap B/S

09. Surf Excel 1 Kg

10. Biscuits( All Varity of LU,English,Peak Freens)

11. Rafhan Custard

12. Rafhan Kheer

13. Fauji Corn Flacks

14. Fauji Porridge Food

15. Fauji Custard Pdr

16. Kashmir Ghee

17. Life Buoy

18. Ariel Washing Powder

27

19. Safe Guard Soap

20. Sufi Washing Soap

21. Toilet Rolls/Tissue Papers

22. Laziza Products

23. Jam/Jalies/Tomato Ketch-up

24. Vermicillies/Macrooni

25. Rooh Afza

26. Spices

27. Nestle Products ( Dry Milk/Baby Food/Coffee)

28. Cooking Oil/Pakwan

PRICES OF MAJOR ITEMS:

Name of Item USC Sale Price

Market Price

Super Basmati Rice 35.00 38.00

Tota Rice 18.00 22.00

Sugar 26.00 38.00

Dal Chana 29.00 32.00

Moong Washed 32.00 34.00

Mash Washed 36.00 38.00

White Gram 45.00 48.00

Tapal Danedar Tea 200 gms 48.00 52.00

Tapal Danedar Tea 400 gms 95.00 100.00

Yellow Label Tea 400 gms (Leaf) 115.00 118.00

Supreme Tea 250 gms 60.00 62.00

28

Dentonic Tooth Paste 100 gms 26.00 32.00

Dentonic Tooth Paste 125 gms 34.00 42.00

Shezan Tomato Ketchup 830 gms 55.00 63.50

Mango pickle 325 gms (Shezan) 29.00 34.00

Mango pickle 1000 gms (Shezan) 64.00 73.00

Apple Jam 440 gms (Shezan) 39.00 47.00

National Biryani Masala 45 gms 15.00 18.00

National Bombay Biryani Masala 70 gms 15.00 18.00

USC Red Chilli Powder 200 gms (HARD

PACK)

19.00 22.00

USC Turemeric Powder 100 gms (HARD

PACK)

16.00 20.00

USC Garam Masala Powder 50 gms (HARD

PACK)

13.00 16.00

USC coriander Powder 200 gms H/P 16.00 20.00

USC Garam Masala Powder 50 gms 16.00 18.00

USC Crystal Iodized Salt 800 gms 6.00 9.00

USC Kenya Tea 200 gms 45.00 48.00

Utility Ghee 1 Kg Pouch 64.00 66.00 to 70.00

Utility Ghee 5 Kg Tin 325.00 330.00 to 370.00

Utility Cooking/Oil 1 Ltr 64.00 66.00 to 72.00

Utility C/Oil 5 Ltr 325.00 330.00 to

29

370.00Dalda Ghee 5 Kg 375.00 395.00

Dalda Ghee 2.5 Kg 195.00 205.00

Dalda C/Oil 5 Ltr 375.00 395.00

Dalda C/Oil 2.5 Ltr 195.00 205.00

Lux Bath Size 21.50 22.00

Surf Excel 400 gms 47.00 48.00

Surf Excel 1000 gms 108.00 110.00

Sufi Soap 47.00 48.00

30

DISTRIBUTION OF STORES

PROVINCE WISE STORES:   (AS ON 1ST DECEMBER 2005)

1. Islamabad Capital Territory 26

2. Punjab 172

3. Sind 53

4. N.W.F.P 73

5. Baluchistan 19

6. Azad Kashmir 08

7. Northern Area 02

  Total 353

REGION WISE NO OF STORES: (AS ON 7TH DECEMBER 2005)

1. Abbottabad 33

2. Faisalabad 25

3. Hyderabad 19

4. Islamabad 40

5. Karachi 34

6. Lahore 38

7. Multan 21

8. Peshawar 45

9. Quetta 19

10. Rawalpindi 50

11. Sargodha 28

   Total: 352

31

SUPER STORES

REGION WISE STORES THAT YIELDED

ABOVE ONE MILLION SALE IN OCTOBER 2005

Abbottabad

Store Code No.

Name of Store

AD-27 Al Quresh Market OugiAD-29 Kaghan road BalakotAD-32 Bank Road Muzaffarabad (A.K)AD-25 Shankiari City AD-34 Madina Market Gilgit

Faisalabad

Store Code No.

Name of Store

FD-5001 Gulistan Colony FaisalabadFD-5003 Madina Town No.1 FaisalabadFD-5021 Amir Colony Okara

Islamabad

Store Code No.

Name of Store

ID-1001 F-7, MarkazID-1016 Cafee Irum MarketID-1038 I-10, MarkazID-1041 Kalor SyedanID-1024 F-8, MarkazID-1029 Rawalakot (A.K)ID-1017 Itwar MazarID-1002 Aabpara Market ID-1039 G-9, Markaz

32

Karachi

Store Code No.

Name of Store

KI-0010 Gulshan 13/C Sumera Centre Gulshan-e-Iqbal Block 13/C Karachi

KI-0064 Gulshan-e-Johar 16/A KarachiKI-0067 Dewan-e-Khas KarachiKI-0068 Gulshan 4/B KarachiKI-0046 Defence 31/C 1st Border Commercial Area Phase-V

PDOHA, Karachi

Multan

Store Code No.

Name of Store

MN-0725 Cement Factory Dara Ghazi Khan

Lahore

Store Code No.

Name of Store

Allama Iqbal Town Family Market 14 – Pak Block No.1 Blue World Area Lahore

LE-009 Barkat Market Garden Town LahoreLE-0032 Shadman Market LahoreLE-0008 B-1 Model Town LahoreLE-0036 Township, Commercial Sector Madina Road LahoreLE-0702 College Road Gujrat

33

Peshawar

Store Code No.

Name of Store

PR-8001 Super Market 2-Islamia Road Peshawar CanttPR-8153 Hayat Abad Super Market Phase-1 PeshawarPR-8096 Khyber View Plaza (KV) Abdara Chowk University Road

Peshawar

Rawalpindi

Store Code No.

Name of Store

RI-2001 Muslim Town Sadiq Abad RawalpindiRI-2020 Misrial Road Rawalpindi RI-2024 Chandni Ckowk Basement of Al-Noor Plaza RawalpindiRI-2050 Chakwal Talagang Road ChakwalRI-2051 Gate No.1 POF Wah CanttRI-2053 Talagang Opppsite GPO Chakwal Road TalagangRI-2063 GT Road Gujar KhanRI-2049 Civil Line JehlumRI-2006 New Katarian P/956 Rawalpindi.RI-2010 Kurri Road Satti Plaza Near Haroon Chowk RawalpindiRI-2056 Jand Main Road District Attok

Sargodha

Store Code No.

Name of Store

SA-1006 College Road Near Faitma Hospital Sargodha

34

EMPLOYMENT:

The USC has provided employment opportunities to 1020 employees.

STAFF POSITION OF USC REGION WISE

Region Total No. of Employees

Abbottabad 67

Faisalabad 60

Hyderabad 44

Islamabad 120

Karachi 88

Lahore 120

Multan 52

Peshawar 105

Quetta 44

Rawalpindi 146

Sargodha 53

Total: 899

Head Office 101

Project 20

G. Total: 1020

SPECIAL OFFERS:

35

a. There is a general tendency that during the holy month of Ramzan,

the prices of essential consumer items are substantially increased by

the traders/retailers in the private sector. This results into lot of

difficulties for the public. In order to overcome this situation, the USC

as a pioneer started offering Relief Packages during Ramzan ul Mubarik

since last 13 years. It announces 3% to 15% price reduction on

different essential and other items during Ramzan which leaves a very

healthy impact on the prices of essential items in the country. During

last Ramzan the USC offered price reduction on over 450 essential and

other items from 3% to 15%. Due to this, the private traders in

competition also kept their prices low throughout the country which

resulted in control over price spiral and provided economic relief to the

public.

b.        The USC offers Special Relief Packages also periodically during

the year by reducing prices of a large number of essential and other

items. To provide benefit to maximum number of public, the USC also

arranges mobile stores in far areas. This also leaves healthy impact on

the prices throughout the country. It has recently offered an Eid ul

Azha Relief Package w.e.f 1st Jan'05.

c.         The USC purchases confiscated items ceased by the custom

authorities and retail them at comparatively cheaper rates through its

selected stores.     

d.         In order to pass relief to the public and to check draining out to

the private wholesalers and retailers, the prices of items reduced by

the USC are however not fixed below the cost price or the whole sale

prices.

36

RELIEF PROVIDED DURING LAST TEN YEARS:

a Average No. of Stores per year 583

b Total Sales   Rs. 40397 Million

cApproximately 8% to 10% Price Relief directly passed on to the public. 

Rs. 3232 to Rs. 4040 Million

d

Approximately Indirect Price Relief availed by the public due to Utility Stores presence in the market (At least  30 Private Stores in  the vicinity of each Utility Store kept their prices low in  competition with the Utility Stores)

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

eTotal Approximate Relief Passed on during 10 years

RS. 125.24 Billion.

fTotal Approximate Annual Average Relief passed on to the public

Rs. 12.52 Billion.

37

UTILITY STORES CORPORATION OF PAKISTAN (Pvt) Ltd

BALANCE SHEET

AS AT JUNE30, 2004

2005 2004

Rupees, Rupees

Fixed Assets 135,839,595 143,004,374

CURRENT ASSETS

Stores and spares 1,006,786 1,047,062

Stock-in-trade 421,118,472 253,822,472

Trade debts 111,808 13,720,497

Loans and advances 3,340,016 4,925,635

Trade Deposits and short Term 4,988,679 3,979,398

-Prepayments

Other receivables 45,413,198 10,479,667

Taxation 5,189,067 4,386,938

Cash and bank balances 140,322,777 79,241,470

Total current assets 621,490,803 371,603,139

Total Assets 757,330,398 514,607,513

SHARE CAPITAL AND RESERVES

Share capital

Authorized 750,000,000 150,000,000

Issued, subscribed and paid up 737,731,420 134,715,180

Accumulated loss (931,318,824) (1,177,327,644)

(193,587,404) (1,042,612,464)

Grant related to assets 3,787,771 3,987,369

Long term loan - 301,500,000

38

CURRENT LIABILITIES

Short term finance - 301,516,238

Deposits 6,594,343 5,645,085

Creditors 837,823,383 636,112,708

Accrued liabilities 84,333,049 74,136,783

Interest accrued on short term finance - 231,786,410

Other liabilities 10,167,838 1,585,445

Provision for taxation 8,211,418 949,939

947,130,031 1,251,732,608

CONTINGENCIES ___________ __________

757,330,398 514,607,513

39

UTILITY STORES CORPORATION OF PAKISTAN (Pvt) Ltd

PROFIT AND LOSS ACCOUNT

FOR THE YEAR ENDED JUNE 30, 2005

2005 2004

Rupees Rupees

Sales 2,736,023,473 1,434,415,050

Cost of sales (2,493,832,631) (1,278,212,231)

Gross profit 242,190,842 156,202,819

Other operating income 239,893,203 42,688,494

Selling and distribution expenses (191,805,624) (159,557,689)

Administrative expenses (28,841,349) (23,737,745)

Profit from operations 261,437,072 15,595,879

Finance cost (1,748,135) (41,116,095)

Profit/(loss) before taxation 259,688,937 (25,520,216)

Provision for taxation (13,680,117) (7,172,075)

Net profit/(loss) from ordinary activities 246,008,820 (32,692,291)

Extraordinary item - 150,000,000

Net profit for the year 246,008,820 117,307,709

40

UTILITY STORES CORPORATION OF PAKISTAN (Pvt) LtdCASH FLOW STATEMENT

FOR THE YEAR ENDED JUNE 30, 2005

2005 2004 Rupees RupeesCash flows from operating activities

Profit/(loss) before taxation 259,688,937 (25,520,216)

Adjustment for non cash items:

Depreciation 9,195,305 10,136,297

Gain on disposal of fixed assets (191,705) (1,013,921)

Amortization of grant related to assets (199,598) (210,224)

Finance cost 1,748,135 1,357,492

10,552,137 10,269,644

270,241,074 (15,250,572)

Working capital changes:

(Increase)/decrease in current assets

Stores and spares 40,276 595,987

Stock-in-trade (167,296,000) (61,877,204)

Trade debts 13,608,689 -

Loans and advances 1,585,619 12,694,469

Trade deposits and short term prepayments 1,009,281 502,119

Other receivables (34,933,531) 5,076,979

(188,004,228) (43,007,650)

Increase/(decrease) in current liabilities

Deposits 949,258 (597,823)

Creditors 201,710,675 (63,021,018)

Accrued liabilities 10,196,266 (197,537)

Interest accrued on short term finances (231,786,410) 33,007,346

Other liabilities 8,582,393 1,432,979

(10,347,818) (29,376,053)

41

Cash generated from/(used in) operations 71,889,028 (87,634,275)

Cash generated from/(used in) operations 71,889,028 (87,634,275)

Taxes paid (7,220,767) (3,691,943)

Finance cost paid (1,748,135) (1,357,492)

Net cash generated before extraordinary item 62,920,126 (92,638,710)

Extraordinary item - 150,000,000

Net cash generated from operating activities 62,920,126 57,316,290

Cash flows from investing activities

Purchase of fixed assets (2,178,759) (2,577,889)

Proceeds from disposal of fixed assets 339,938 1,623,276

Net cash used in investing activities (1,838,821) (954,613)

Cash flows from financing activities

Conversion of short term finance into - 301,500,000

Long term

Conversion of long term loan into equity (301,500,000) -

Conversion of finance to equity 603,016,240 - .

Net cash from financing activities 301,516,240 301,500,000

Net income in cash and cash equivalent 362,597.545 357,861,677

Cash and cash equivalent at the beginning of year (222,274,768) (580,136,445)

beginning of year

__________ ___________

Cash and cash equivalent at the end of year 140,322,777 (222,274,768)

42

UTILITY STORES CORPORATION OF PAKISTAN (Pvt) Ltd

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED JUNE 30, 2005

Share capital Accumulated total

Loss

_________________Rupees__________________

Balance as at July 01, 2003 134,715,180 (1,294,635,353) (1,159,920,173)

Net profit for the year ended June 30, 2004 - 117,307,709 117,307,709

Balance as at June 30, 2004 134,715,180 (1,177,327,644) (1,042,612,464)

Net profit for the year ended June 30, 2005 - 246,008,820 246,008,820

Shares issued against long term loan 301,500,000 - 301,500,000

Shares issued against short term finance 301,516,240 - 301,516,240

Balance as at June 30, 2005 737,731,420 (931,318,824) (193,587,404)

43

SWOT Analysis

What is SWOT Analysis?

SWOT analysis is a basic, straightforward model that provides direction

and serves as a basis for the development of marketing plans. It

accomplishes this by assessing an organizations strengths (what an

organization can do) and weaknesses (what an organization cannot do)

in addition to opportunities (potential favorable conditions for an

organization) and threats (potential unfavorable conditions for an

organization). SWOT analysis is an important step in planning and its

value is often underestimated despite the simplicity in creation. The

role of SWOT analysis is to take the information from the

environmental analysis and separate it into internal issues (strengths

and weaknesses) and external issues (opportunities and threats). Once

this is completed, SWOT analysis determines if the information

indicates something that will assist the firm in accomplishing its

objectives (a strength or opportunity), or if it indicates an obstacle that

must be overcome or minimized to achieve desired results (weakness

or threat)

Elements of SWOT Analysis

Strengths and Weaknesses

Relative to market needs and competitors’ characteristics, a manager

must begin to think in terms of what the firm can do well and where it

may have deficiencies. Strengths and weaknesses exist internally

within a firm, or in key relationships between the firm and its

customers. SWOT analysis must be customer focused to gain

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

44

in satisfying the needs of a customer. At this point, the strength

becomes a capability.

When writing down strengths, it is imperative that they be considered

from both the view of the firm as well as from the customers that are

dealt with. These strengths should be realistic and not modest. A well-

developed listing of strengths should be able to answer a couple of

questions. What are the firm’s advantages? What does the firm do

well?

A customer-focused SWOT may also uncover a firm’s potential

weaknesses. Although some weaknesses may be harmless, those that

relate to specific customer needs should be minimized if at all possible.

In addition, a focus on a firm’s strengths in advertising is promotion is

important to increase awareness in areas that a firm excels in. This

method not only evokes a positive response within the minds of the

consumer, but pushes the weaknesses further from the decision

making process.

Weaknesses should also be considered from an internal and external

viewpoint. It is important that listing of a firm’s weaknesses is truthful

so that they may be overcome as quickly as possible. Delaying the

discovery of weaknesses that already exist within a company will only

further hurt the firm. A well-developed listing of weaknesses should be

able to answer a few questions. What can be improved? What is done

poorly? What should be avoided?

The role of the internal portion of SWOT is to determine where

resources are available or lacking so that strengths and weaknesses

can be identified. From this, the marketing manager can then develop

marketing strategies that match these strengths with opportunities

and thereby create new capabilities, which will then be part of

45

subsequent SWOT analysis. At the same time, the manager can

develop strategies to overcome the firm’s weaknesses, or find ways to

minimize the negative effects of these weaknesses.

Opportunities and Threats

Managers who are caught up in developing strengths and capabilities

may ignore the external environment. A mistake of this magnitude

could lead to an efficient organization that is no longer effective when

changes in the external environment prohibit the firm’s ability to

deliver value to its targeted customer segments. These changes can

occur in the rate of overall market growth and in the competitive,

economic, political/legal, technological, or sociocultural environments.

Changes in the Competitive Environment:

One of the largest trends in the U.S. economy in recent years has been

the rapid decline in the number of small, independently owned retail

businesses. Small mom-and-pop supermarkets and locally owned

bookstores are fading away quickly and will soon be extinct. Likewise,

many locally owned restaurants around the country are experiencing

difficulties due to the growth of large, national restaurant chains. The

most recent businesses to face extinction are neighborhood hardware

stores, which have lost customers to retail giants such as Home Depot

and Lowes. Although they cannot be competitive with pricing,

hardware retailers such as Ace Hardware and True Value expect to

survive by offering outstanding service and convenient locations.

Changes in the Socio cultural Environment:

46

Social and cultural influences cause changes in attitudes, beliefs,

norms, customs, and lifestyles. A firm’s ability to foresee changes in

these areas can prove beneficial while failure to react to these changes

can be devastating. For example, the sales of Mexican-food products

have increased at an annual rate of approximately 12 percent. The

trend went unnoticed by major food producers for a long time.

However, Heinz Company recognized the existence of a viable

opportunity and responded by introducing two versions of salsa-style

ketchup. Although Heinz’s strategy was sound, its salsa ketchup

eventually failed due to poor distribution during the implementation

phase.

Product modifications are often used to take advantage of market

opportunities. However, these changes can also create potential new

competitive threats. When Heinz introduced salsa-flavored ketchup, it

added Old El Paso and Pace to its set of brand competitors that

previously included Hunt’s and Del Monte. Likewise, the action of other

companies can also change the competitive set. Failure to re-evaluate

and realign the threats and opportunities in the Sociocultural

environment can hurt a firm.

Changes in the Political/Legal Environment:

Regulatory actions by government agencies often restrict the activities

of companies in affected industries. The American Disabilities Act of

1990 placed restrictions on the way firms construct their places of

business and design jobs. Companies with significant investment

facilities that did not comply with the law viewed its implementation as

a major threat. On the other hand, companies that market products

designed to assist disabled shoppers and employees saw the act as a

key opportunity.

47

Lawsuits against the tobacco industry have lead to dramatic changes

in the way cigarette companies market their product. Today,

companies such as Phillip Morris are airing advertisements illustrating

the negative effects of their products. In addition, a proposed

settlement agreement between the industry and the attorney general

of several states represent a threat that could result in a ban on some

types of cigarette advertising and the regulation of nicotine by the

FDA. As can be seen, it is important to identify political/legal threats

and opportunities in order to keep an edge on the market.

Changes in the Internal Organizational Environment:

Various elements within an organization’s internal environment can

also have an impact on marketing activities. Changes in the structuring

of departments, lines of authority, top management, or internal

political climate can all create internal weaknesses that must be

considered during the SWOT analysis as well as in the development of

the marketing plan. McDonald’s has recently been feeling increased

competitive pressure from Wendy’s and Burger King. In order to

increase market share, McDonald’s created new marketing campaigns

and new sandwiches. However, McDonald’s failed to get the

cooperation of all its franchisees. When store sales began to fall,

individual franchisees started to band together to gain power to

protect their investments. The increased power of the franchisees

forced McDonald’s to pull several advertisement campaigns due to lack

of support. Prior to this McDonald’s was used to getting their way with

franchisees. Now, the shift in power from McDonald’s to its franchisees

has created an internal weakness that the company must address as it

develops and implements new marketing strategies. Again, it is

necessary to emphasize the importance of evaluating specific

opportunities and threats within your company.

48

SWOT ANALYSIS OF UTILITY STORES

STRENGTHS:

Company strength is a successful application of a

competency or exploitation of a critical factor to develop company

competitiveness. Following are the main points which show the

strength of USCP.

Government Ownership:

One of the most strengthening points for Utility Stores

Corporation is that it is one of the organizations owned by

Government. It is a strong point because being a government

ownership there are a lot of advantages for this organization.

Lower Prices:

This organization of retail stores aimed at providing quality

products at cheaper rates. By comparing its prices with other

retailers it is found that there is an obvious difference in its prices.

They offer many of the same products at lower prices as provided

by its competitors. e.g. It provides sugar at far lower prices than

that provided by other retailers.

Super Stores:

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

super stores in the busy location of different regions. These super

stores provide a wider range of products than it provides in retail

outlets with discount prices.

Centralized Procurement:

The head office situated in Islamabad purchases all the

products/goods provided by Utility Stores centrally. This centralized

49

purchase of product is beneficial as in bulk purchases reduce the

cost of products.

Distribution Channels:

It has its own distribution channel which distributes its

commodities to regional offices and then from each regional office

goods are supplied to each retail outlet on daily basis according to

fixed quota. For long distance it uses other distribution services like

trains and other private transport facilities, while, and for small

distances it uses its own distribution services.

Own Products:

Many of the products they are selling are under its own

brand name. e.g. Utility Salt, Utility Floor, Utility Oil & Ghee, Utility

pickles, Utility Spices etc.

Directed at the Average Pakistani:

The corporation aims at providing products that are in the

range of average Pakistani, not only targeting the upper

community.

Largest Chain of Retailers in Pakistan:

It is the largest chain of retail stores in Pakistan, so it can

easily attain the large share of market. Middle class people prefer to

go to Utility Stores instead of going anywhere for fulfilling their

consumption needs.

Subsidies on Taxes:

Being an organization owned by Government it receives

subsidies on various levels which automatically minimizes its cost

50

and increasing its profit margins. They also receive subsidies in

taxes while purchasing in bulk.

No Brand Names:

Utility Stores Corporation does not use brand names

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

Low operating Costs:

Utility Stores have lower operating expenses which

lower its costs and increase the profitability of the organization.

51

WEAKNESSES:

A company weakness is an unsuccessful

application of a competency or the non-exploitation of a critical factor

that diminishes company competitiveness.

Management Inefficiency:

It was the management inefficiency that Utility Stores suffers

heavy losses in the previous year. Although currently there is

considerable increase in the revenue of the Utility Stores but still

there is a need for the improvement of Management. Just like other

Governmental Organizations the employs gives less attention to

their work.

Security Issues For Outlets:

There is no security for the retail outlets. Due to insecurity

these outlets are exposed to robberies etc. e.g. recently one of the

utility store at Hayatabad was robbed.

Lesser Variety:

Although Utility Stores is providing goods to the consumers

on less prices than other retailers. Still there are problems regarding

the variety and the quality of products. There is no such variety of

products as available in the market due to which many customers

shop from other retailers for their required brand.

Quality Of Products:

Similarly many of the products available in Utility Stores are

of inferior quality due to which buyer goes to other shops for these

products as they have both the inferior and superior quality of

products. Utility Stores also lose potential customers who want to

52

buy all their consumption items of their required brand and quality

from one retailer.

Lack Of Employ Training:

There is no appropriate training for the employs working at

the retail outlets regarding management of retail outlet and

interpersonal skills. If the employ is properly trained and well versed

there will be potential increase in the number of buyers.

No Advertisement:

In the previous years Utility Stores have a considerable

advertisement in different Medias like Television, Newspapers etc.

currently there is not any proper advertisement for the Utility Stores

due to which a greater share of the customers in the market does

not know about the Utility Stores.

Lack Of Research and Development:

As we know that R&D plays an important role in the

establishment and improvement of any organization. There is lack

of R&D in the Utility Stores, which causes great harm to its

existence, and there is no chance of development and innovation in

its operations.

Customer services:

Another weakness of Utility Stores is that it does not

provide any type of customer services. While many of other large

retail stores provides many of these services which added to their

value. Similarly customer services never let the customer to go

anywhere else.

Location:

53

Location is one of the most important considerations for

retail stores. If a retailer is located in the front of the market it can

easily catch the eyes of customer instead of one located some

where in the corner.

Many of the Utility Stores are located in places which

are off the sight. Most of the population of the locality does not

know about them, so how can such a shop/retailer be prosperous in

the long run.

54

OPPORTUNITIES:

Like many businesses there are a lot of opportunities for

Utility Stores Corporation to grow as one of the largest chain in the

world. Here are some of the opportunities present for Utility Stores

Corporation which can considerably enhance the overall organization:

Diversification in Product Line:

There is a great need for increase in the product line

they are offering to customer. It can positively help the organization

to attract the larger share of the market. Similarly it will also add to

the revenue and popularity of the largest chain of retailers in

Pakistan.

Targeting New Markets and Locations:

There are still many of the potential locations and

markets where there are no Utility Stores. If the USCP consider

these locations and open their retail stores over there they can

make increase in their market share by making new customers.

Privatization:

As it is noticed that privatization of many sick industrial

units and organization owned by the Government positively

converted these sick units into profitable ones. Similarly if the

Government privatizes USCP its profitability may also increases

because it is seen that most of the Govt. owned corporation lead to

losses and are shut down.

Expected Increase In Demand:

As we know that there is a rapid increase in the

market day by day so Utility Stores Corporation needs to get ready

for the expected increase in demand due to several factors. There

55

must be flexibility in their plan so they can easily manage the

situation which is unknown. This will also increase the market share

which in turn will increase the wealth of the organization.

Mergers, Joint Venture & Strategic Alliances:

In recent years many of the big organizations have

take benefits from becoming involved in mergers, joint ventures

and strategic alliances. Sometimes when an organization is at the

closing end of the life cycle it take part in a joint venture or become

merged in any other organization having same business to come

out of losses.

Similarly in mergers and joint ventures one sick unit

can take benefits from the experience of well established

organization. So, if Utility Stores Corporation also makes an alliance

with any established chain of retailers then it grow further.

Changing The look of Utility Stores:

In this modern world even in Pakistan customers are

conscious about the presentation of anything they are going to

purchase. The Utility Stores have to adopt the modern methods of

retailing so as to penetrate the market and gain more popularity. It

must have to change its look because people want change.

Use of Information Technology:

This is the era of Information Technology and many of

the businesses and organizations are taking advantages of it. Its an

opportunity for Utility Stores corporation that, if they adopt

Information Technology in its operation it can track the efficiency of

56

its outlets at any time and can make implement related decision at

the same time. Implementing Information Technology will help it

many other issues also like record keeping, communication within

organization etc.

57

THREATS:

Along with opportunities there are a lot of threats present in

the market,

this harms the popularity of the Utility Stores Corporation. Few of the

potential threats to the organization are stated below.

Competitors:

In case of Utility Stores Corporation there are

present many competitors in the market who provides the same

products. Many such retailers are convenient to approach and have

most of the products of daily life. Similarly large number of retail

chains is also growing which produces more competition and

potential threat to Utility Stores. e.g. Need Super Stores, Day To

Day Stores, Seven Eleven Stores, etc which are trying to capture the

market and causes competition for the USCP.

Competitors providing Innovative Product & Services:

In the recent years there are a lot of innovations

made in the structure and services provided by the retailers. New

retailing techniques are introduced in the recent years. The retailing

trend is totally changed from that of retailing in the past. Most of

the new retailers are applying these modern techniques and trying

to become the market leaders.

International Chain of Retailers:

Now a day some of the international chain of retailers

is also targeting our markets which make it tough for the Utility

Stores to survive. These chains are much stronger than Utility

Stores so they are tightening the competitive position of retail

industry.

58

CONCLUSION

Retailing comprises a large industry of any country.

Similar is the case with Pakistan because there are thousands of small

and big retailing units in Pakistan making a large industry. Most of

these retailers are usually located in the residential areas while some

medium and large sized retailers are located in some prime and

expensive locations for the convenience of different types of people.

Usually small retailers provides products of every day use while big

retailers like supermarkets provides a wide ranges of product including

some routine or day to day use products.

Pakistan is considered to be an under developed and poor

country of the world. The standard of living of people in Pakistan is

very low, even a large percentage of people come under below poverty

level. Majority of them does not afford even basic necessities of life

and strive for them. Being realizing these problems Government of

Pakistan decided to relieve these people to some extent by providing

them basic necessity items on comparatively cheaper rates than

provided by general retailers. In order to tide over this situation, and to

provide economic relief to the public, the Federal Government

established Utility Stores Corporation (USC) in July 1971. It was one of

the appreciable steps taken by the Government of Pakistan at that

time.

Hence the Utility Stores Corporation of Pakistan was

established targeting an average Pakistani, and here average people

include both lower and middle class people and even some segments

of upper class.

If we review the financial statements of Utility Stores

Corporation of Pakistan, we will find that it has improved to a greater

extent in the current year 2005. As we know that in the last few years

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Utility Stores Corporation had suffered heavy losses due to inefficiency

of the management and some other internal factors. In those years the

sales volume of USCP was also very lower but in 2005 it emerged again

as a strong chain of retailers in Pakistan. It becomes possible due to

timely decision by the management of USCP and due to introduction of

new and attractive incentives to the masses. Similarly in the recent

year the operating expenses of Utility Stores were also reduced to

greater extent which intern increased the profitability of the

organization.

Now the management of Utility Stores Corporation is

considering different issues so as to maintain the profitability higher

and providing relief to masses. The management is considering

different areas where there is no Utility Stores till now and these areas

are potential markets for retailing. It is noticed that Utility Stores

Corporation open almost 10 to 15 new outlets each year.

Similarly the SWOT analysis of Utility Stores Corporation

reveals that at present USCP is at very strong position in the market as

it has very lower prices in comparison with general stores. Similarly it

provides basic necessities like floor, sugar, rice, cereals etc on almost

10% to 15% lower than the general market rates. Similarly there are a

lot of opportunities present in the market in favour of USCP. These

opportunities can enable USCP to excel the market in the long run. By

utilizing these opportunities Utility Stores can better face the tough

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

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SUGGESTIONS & RECOMMENDATIONS

Utility Stores Corporation was established in 1971, with

the aim to provide economic relief to poor communities of Pakistan. It

was aimed at providing needed goods to people at far lower prices

charged by general retailers. Utility store was the leading retail chains

in Pakistan but due certain factors it lost its popularity among people

and suffered heavy losses. In the current year 2005 Utility Stores has

regained its position by applying some new methods and planning its

operations with new dimensions. Similarly the management of USCP is

seriously thinking over certain alternatives for maintaining its

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

flexibility for development both in its operations and physical

appearance. If these developments are made accordingly, then a time

will come when the USCP will be again considered as the largest chain

of retailers.

In the following paragraphs there are few suggestions &

recommendations given for the improvement in value of USCP. These

suggestions are largely based on the premise that USCP can be

successful in the long run in terms of sales volume and profitability if

these suggestions and recommendations are really considered.

First of all there are some critical management issues which

needs proper attention and must be corrected to be successful

in the long run. The most critical of these management issues is

corruption, which is usual in Government organization and lead

many such organization to closing points. This issue can be

easily controlled by continuous monitoring of operations by any

Government institution. If this issue is controlled then people will

feel the improvement in quality of products provided by them and

profits will also grow.

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In this 21st century there are very abrupt changes and

advancements are occurring in the retailing industry. So for

keeping pace with the current market trends there is a need for

Research & Development in the Utility Stores Corporation which

will track the advancement in retailing and also help to implement

them in USCP. Although such a setup increases cost of the

organization but its advantages far more than that of cost

incurred.

As we know that to survive in such a competitive market of

retailing most of the organization have allotted handsome

amounts for advertisements as advertisement is considered an

important weapon for surviving in the market. Previously the USCP

has used to advertise in different Medias but now a day there is no

advertisement of Utility Stores in any media due to which it sales

are a bit lower. The USCP should have to find the ways to

advertise the organization so as to increase its profits in the

future.

The management of USCP should have to find the ways of

reducing the operating costs of the organization. The reduced

operating costs will increase the profit margins of the organization.

The USCP may be more profitable in the long run if it makes an

alliance with any large national or international retail chain like

chen one, ARY cash n carry etc. the USCP may also hire

consultants from such organizations for helping it in development.

Similarly in Pakistan privatization is considered as a key of

success, that’s why Government has privatized many of the

organizations. In my view the Utility Stores Corporation can also

be more profitable if its privatized completely or partially,

transferring the management in the hands of private owners.

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