INDEX: 3--COOPERATE STRATEGY & MARKET OVERVIEW------------ 5 4 --THE MARKETING STRATEGIES INITIATIVES UNDERTAKEN BY PCS IN THE DECLING PROFIT

SITUATION-------------------- 9 5--- RECENT TRENDS IN PROFIT PERFORMANCE-------------14 6-- WHAT ARE THE IMPLICATION FOR MANUFACTURING OF THE MARKETING INITIATIVES-----------------------------------------16 7. ADVICE AND CONCLUSIONS----------------------------------------21 8 GRAPH --------------------------------------------------------------------- 18

Corporate strategies: Corporate strategies are that to take particular direction and methods with the company objectives which is help for the achievement of company long terms goals. There are number of models of strategies such as Michael porter five forces model and Gary Hamel and C.K Prahalad model have been used to develop corporate strategies. These days more recent approaches have used in the companies for the need of adopt and changes in the business environment. The establishing of cooperate strategies involves in the companies for the purpose and the scope of the organization activities and nature of the business and taking its environment because they will easily to operate its business plan in the market place without any hassle. The competition it faces into consideration as well. Corporate planning and business plan are used to implement cooperate strategies. From BNET Business Dictionary http://dictionary.bnet.com/definition/Corporate+Strategy.html- reference Corporate Strategy focuses on: 1. 2. 3. 4. 5. 6. 7. 8. Technology Rate of return Market Market Size and future growth opportunities Capability of production / Production Capability Product offered Processes Capacities

Corporate strategy is designed according to objective, product, market and approach of a business unit. The strategy and goals should be feasible both economically and technically. The corporate strategy should be distinguished from competitors and should be designed according to the business environment and market conditions It should also be acceptable to employees, suppliers, shareholders and customers and should

reflect a fair trade image ensuring growth of the business. Corporate strategy should be designed considering the present conditions and should provide a solution to survive the stiff competition and produce product and services at an acceptable cost. The two most factors to be considered in today's competitive environment and financial and technical. Market changes rapidly and it affects businesses, processes so the organisations must design a strategy that helps the organisation to perform according to the financial market. The second factor is technology as in the fast paced environment technology becomes obsolete often so proper research should be done to ensure that the investment in done in the right direction. The corporate strategy should be reviewed according to the business needs and market demands as these factors have utmost importance. SWOT analysis focuses on strengths, weaknesses, opportunities and threats and should be done to get a fair image of the present and future situations. The organisation should invest time and resources to ensure that proper research and studies are conducted to help them act according to the business strategy Market overview These days market has become tough for every business from last decade and its becoming very hard to sustain in the market place for long time because of number of factors like competition, financial crisis, low prices products, number of similar companies and products, cooperate governance, government protocols. Until these issues in the business environment it's very difficult to create the cooperate strategies. e.g., we can see that from the case study of the European brewing industry since in the early 90s. That time Europe was centre of the beer industry and most consumption brewing market was there but after that brewing was declining because of number of factors like government rule and regulations and increasing health awareness. These were the major issues who affected the business strategies of various brewing companies in Europe. One more example we can see that in the Wimp-bill-den case study it was also deal with brewing product. That time WBD strategy was make high quality product and sell in higher prices because there was not enough competitors and competition in the market. When another different brewing competitors came into the market with same quality products with lower prices then the customers has become price sensitive. They started buying the low cost products since they got that ones of the same quality as that of Wimm-bill-dann. Because of increasing competition and lower prices sales of the brewing products was increasing as compare WBD time but WBD sale was reducing and share prices were declining in the market. WBD was again maintained its position in the market during 2003-06 because company started all business analysis regarding to the manufacturing differences. The later on it was done one more important thing. WBD closed its mineral water plant and they focused to reduce its cost on products and bonus system as well after that WBD increased its gross profit and sales many time fold in the market. Also another case can be taken from the Babcock and Wilcox as they had a failed corporate strategy based on market descriptions which led to the company losing millions of dollars. The company had forecasted huge amount of business on the account of the current market scenario but it didnt take into account other factors such as supplier capability, workforce required and all that important data which led to the company downfall and subsequent losses. 2a) the marketing strategies initiatives undertaken by PCS in the declining profit situation:

The attachments for the beverages, food, drip mats is attached with the assignment. The major order winners were the quality and reliability where as in the foods section it was quality and speed. In the drip mat section price was not that an order winner but quality and delivery speed and reliability were the major factors. In the windowed carton category growth is expected to increase as per the market survey and also it has high profit margins. The order sizes are also high and includes high inventory. In the case of other market segments it was giving more than half of the income for the PCS. It was forecasted to be stable with a slight increase in growth. The order size in this was mainly medium but on the whole it was of a varying nature. Price: the orders for the existing beverage customers were not low price orders and the other hand side Maister tea prices were high. Quality: The quality of cartons delivered to these existing customers had to be ranked high in their quality as the company had a long-established relationship but in the Maister tea quality is also high ranked but it's not good as compare existing customers. (Major order winner) Delivery speed time: (order winner / ref attachment) The PCS Company delivered the goods to their existing customers after the items were ready for supply. PCS were not strict enough in terms of delivery-speed time when supplying goods to their existing buyers and thus sometimes late deliveries took place. On the other hand the company kept strict standards when supplying goods to Maister teas as this company being a new buyer for cartons, the PCS had to keep up with their good marketing strategy. Quality Control: The Company focused on quality standards on initial production orders, usually in the presence of the customer's representatives. This level of quality generally tends to fall in the subsequent orders. But PCS has to keep up to their quality levels as inspection of the patrolling quality staff is present to verify the standards. The Maister Tea Company has rules about its quality and takes into account strict internal quality of the goods it purchases. Printing Process: The printing processes used for the existing buyers were 4,5 but those used for the Maister Teas were lithographic printing which could print the 5 colours customized according to the use of the Maister company. Delivery arrangements: Raw material: The raw material purchased for the existing buyers was low and was purchased only as per the requirement. The reason for the company not being able to deliver the finished goods on time was when the company ran out of the raw material, it cost the company time to buy new raw material which extended the delivery date. As the Maister company were supplied goods on weekly call offs, PCS had to have the raw material for completion of the cartons as the rules of the Maister Teas were strict and needed due attention. Work in progress: There were times when due to faulty planning the work was stagnated which were mainly due to overloading of the downstream processes and un-sequential nature of orders. While dealing with Maisters Teas Company, PCS had to complete their order on time in order to keep a good rapport with the company. Finished goods: PCS delivered goods to their existing customers on the completion of the finished goods even if the delivery date exceeded. But for the Maister Teas, PCS made it sure to deliver the cartons on time as PCS did want loose business with this company. Beverages

PCS is a reputed company in terms of selling cartons and supplies goods to companies like the ARD Coffee, Tea Speciality Packers and Maister Teas as it is keen on selling high quality products, follows a accurate delivery speed time, sells newer product designs and makes 4-5 colours of cartons as to suite its buyers. Initiatives: Initiatives it was took big order which were large in quantity as compare to actually capacity and they were tried to increase its sale and production which will be increased its net income of the company. Rationale: Maister teas and Maister cakes were the bigger customers of the PCS and they both had always given large order to the PCS. Why PCS was thinking about Maister because PCS would create lot of revenue from them and it can increase its profit because annual expenditure of the company was very high. They were tried to make strong relationship with suppliers. All these factors mentioned most of the contribution was coming from Maister. They got big orders from Maister but its contribution was not meet with actually forecast level because they lost quality and quantity in their orders. Finally they got negative contribution like 20 percent in the negative and overall result came on reduction in profits. During the process PCS had put more loads on machines because of overload bad result came on quality then number of rejection in the orders after that PCS gave the compensation to the Maister. PCS has already not in good position again they got big losses in business. Drip mats Initiatives: PCS initiatives was regarding Drip mat to decrease the sales effort in the market place and to find and develop the other business opportunity for the benefit of profit with the company existing needs. Rationale: profit margin was very low in drip mats. Market was declining the drip mats because quality was very high and changed the machine schedule time as well. The delivery was also not on the right time. Many orders in this category were one off orders and also the majority of the orders were on an annual call off. Many products in this category were doing good business with good returns on investment. But the PCS managers overlook such small profits and went behind major ones without actually studying the case and it was because of that reason that the strategy failed and the company went into lots of losses. WINDOWED CARTON MARKETS Initiative:To give more attention to this segment as very few competitors posses such capability of manufacturing windowed cartons at high speed and quality. According to the attachment TN1 it shows that the window carton market had tremendous potential and was giving high returns on investment. If it had worked according to the forecasted levels it would have generated huge amount of profits to PCS. OTHER MARKET SEGMENT Initiative:-

To defend the market at its present condition and to provide the customers with top quality service. This segment provided PCS with almost half of its revenue and hence it cant be neglected. They are lot of competition in this market and a little mistake in providing the customer with the best service can lead to the customers going to the competition and can lead to further losses to the company. Hence it can be concluded that this segment requires proper attention and care and the customers should be provided very good service in order to retain them and increase profits. Answer to question 2B We can see that from the attachment TN/7. Most of the sales were coming from Maister teas. We can said that differences in price sensitive regarding to forecast it was not very high even it is showing the affect on reduction of sales price according to the said products. IN TN/7 the price sensitive sales were 900 but it was expecting to the forecast. it should be 1194 It is creating major negative impacts on net income of the company although company was already facing other losses because of other factors like labour, raw material, overtime. Last year company got big contracts from customers but they didn't take harmful precaution into consideration regarding that which was already knows that. They knew about plant capacity but they ignored this things after that they completed his orders five days later as compare to the time of delivery. Quality was not good after that what number of rejections in the delivery. Due to number of rejection in the delivery Maister cakes was demanding about compensation and asking about complete his rejected cartoons and covered his losses whatever given by u people. After all these things Peterson cartons service came in losses and finally total negative impact came on net income and profit. Peterson cartoon services got a big contract from Maister teas and Maister cakes which is specially mentioned for quality and quantity in his orders but because of PCS over confidence they were not produce enough quantity on time and they were prevent quality as well in the orders after that PCS as lost his trust on Maister cakes and Maister teas because from very long time they had good relation in business. Most important thing more of the sales and profit always had come from both companies but due to quality issue and time of delivery. PCS lost his good will in front of Maister cakes and Maister tees because both were very serious about quality and on time delivery. They had also losses in labour and material. They got also losses in low order size drip mats because they changed the process of printing they were using lithographic printing process. Which were not again increased his profit margin. In the process of drip mats they didn't used gluing process basically its require for that because of that not enough work in the all the sections. Again they met with losses in labour problem and decreased his productivity as well. After the analysis I conclude that PCS was not able to maintain his quality and quantity process because they don't have well equipped machine and enough capacity to complete his orders therefore they will not satisfies their customers and theyre not getting returns on production cost and net income. Answer to Question 2C CAPACITY Lithographic printing is traditional printing technique used by PCS. These comes in different types namely L1,L2,L3,L4 and L5 each of these print different width of cardboard up to

maximum size and maximum colours. The first 6 month of year was the transition and implementation phases. 1st three month and 2nd three month, however the new strategies were implemented by the company in the later of the year. Due to the long relationship with ARD coffee and tea speciality Packers, it was the companys responsibility to deliver them high quality products within the estimated delivery times. The types of cartons supplied to the above mentioned companies were those with 4, 5 colour and for this purpose, the printers used L2, L4, L5 as these could produce maximum colour. One of the main reasons for the utilization of the L5 type printers by the PCS for making cartons was its capacity to provide maximum size and colour. This was its main advantage over the other 2 printers L2 (which make 40 size prints) and L4 (printed 4 colour cartons) In the manufacturing of window cartons, the W1 and W2 machines were in maximum demand in the 3rd quarter and towards the end of the year as it was a promotional exercise undertaken by PCS and the customers used it on a one off basis and hence, this product was manufactured only once by PCS. Keeping in mind; the previous loss the PCS undertook new marketing strategy. Litho printing during Q3 & Q4 was used the most, and the L5 became overloaded& its utilization capacity went up to 113%. This lead to severe compromise of the quality of the cartons supplied to Maister teas and Maister cakes and this lead to severe losses to PCS. The drip mat processing machines D1 had increased its capacity in the 2nd and 3rd quarter of the year. The main reason for this is as it was this time of when the carton making industry was in its lead and as these mats made of the same material as that used to for carton manufacturing. One of the main reason for this process to face losses irregular order taken by the company in appropriate distribution of workloads, and that the other mats like glueing had to be compromised. Which lead to the reduction in growth of these processes in Q4. Exhibit 8 states the following This new strategy maximum overtime premium in September, October, and November reducing the gross profit of the PCS investment returns. Litho printing (L5) Master Teas and Master cakes were PCSs 2 most important customers as they have large scale cartons making order to PCS. The cartons order were the ones 5 colours which lead to over usage of the L5 printing machines and this lead to reduction in the utilization of other machines. The drip mats used similar material. The drip mats used similar material & cartons were manufactured using L5 and the cartons processed try it were low quality and did not meet standard of masters company 60 inch die cutting and increasing depts. As per exhibit 6 the usage of C1 and C2 in the Q3 & Q4 reduced where as C# usage accelerated in the period Q1 & Q2 and in Q4. C4 & C5 utilization progressed in Q3 & Q4. Window cartons The main reason for windowed cartons being so popular was that they could be used for special occasions & to box special items. These were customized are to the buyer needs and this further its saves. PCS was the leading manufacturer of these cartons as other companies did not have enough resources to manufacture than. Exhibit 6 The windowed cartons W1 & W2 in quarter 3 beyond its upper limit but this gradually reduced in Q4 as customers made use of these cartons on-off and hence the PCS Company

manufactured this product only one a year. Estimating & Job costing The job costing system of Peterson carton service is not well organised, but weekly records of the companys different processes were maintained, thus variations in this system were expected by the management. This lead to marked fluctuations in the order value which lead to different in the actual & estimated order value. The new order taken by company had an obvious effect of this system and made it time consuming as labour forces had to be increased orders. According to the table of TN/1, the actual cost is than the estimated cost and thus the variances are in negatives expect for companies FC Bruce in industrial products, AB products is Pharmaceuticals and pride are in drip mats. The conclusion is that, lack of concentration of the company on job costing According in TN/11 (attached) the estimated material yield was 62.5 and it was less than then average. The tolerance limit was very high resulted and lots of losses to the company & high investment. Material yield was 78.4% for work order number 17063 which was above the tolerance was acceptable between positive 10% and negative 10% which was question in the area. The graph states there are high contribution variances for Maisters companies. This occurred mainly attention to the job costing system. Which resulted is manufacturing of exercises goods. Thus the conclusion is that due to faulty job costing and improper estimation led to losses to company. [pic] Answer to Question 2D Marketing strategy Beverage & food One of the reason why PCS had indulged in the sales of multiple products was to make rise its overall working capacity and to its gross sales. The company had made an assumption that if they implemented the strategy of increasing work load would in time its overall profit, thus increasing the sales of the company by 22%. But this assumption did not prove too successful as was expected because the company had not made appropriate estimates of its production capacity which lead to problems in its utilization. Maister group of companies was an important customer for PCS was getting order on large scale from it. This was the main reason for PCS to give priority while supplying goods to them. The company due to its inappropriate decision making lead to late delivery of goods to the Maisters. This occurred as the PCS tried to take order more than its production capacity, which should not had been done. For the company to be able to concentrate on its quality standards, it has to be aware of its production capacity. This will help to it to supply products within the estimated time frame and proper planning. Drip mats This product has a low sales margin declined the gross profit of the company. The focus on this product reduced the amount of time and workload distribution of other process, thus PCS focused on promoting & selling other products. The gross profit of the company declined mainly the companys capacity. Instead of focusing on getting new customers the company should focus on the existing customers. The company

from making nasty decision and increasing the working capacity so as to prevent compromise in its quality. Window cartons The company decided to promote windowed cartons to its sales and PCS was one of its leading markets. This product was the focus of the companys products as the company had estimated to make profit from its sales. The reason of the company to make high in this process was that the company customized this product & gave the buyer full customers satisfaction. But this lead the company to ignore costing which the company should have given priority and this affected its profit to some extent. Manufacturing strategy keeping in mind the earlier losses, the PCS Company decided to change its equipment to replace it new equipment to prevent extra loading on equipment (L4 & L5). As the company was taking orders on such a large scale. It was overloading the company in terms of machinery & employees, due to which the company spent unnecessary funds on overtime premium. In spite of utilization then funds, the company could not manufacture high quality products and this lead to complaints by customers.PCS should not has taken order which were not manageable to an extent and compromised the quality of its products. The company finance and capital investment was weakening. PCS company was indulged in taking a lots of sub contract for product like drip mats, etc. If the company would have focused on its primary products then it would not have landed in this situation.