1

STRATEGIC PLANNING AND BUSINESS POLICY

A STUDY OF BAHRIA TOWN

USMAN NASIR
SALEH FAISAL
HAMAD KHALID
INSTRUCTOR: SIR ASIF AYUB KIYANI

Contents
VISION STATEMENT..................................................................................................... 3
MISSION STATEMENT............................................................................................... 3
HISTORY AND OVERVIEW OF BAHRIA TOWN............................................................4
Economic Development.............................................................................................. 4
Infrastructure Development....................................................................................... 4
Welfare Projects.......................................................................................................... 5
PRODUCTS.................................................................................................................. 5
Bahria Town Lahore:................................................................................................... 6
Bahria Town Education..................................................................................................... 6
Bahria Town Health Care................................................................................................... 6
Bahria Town Trust............................................................................................................ 6
ORGANIZATION CHART............................................................................................... 7
EXTERNAL AND INTERNAL AUDIT...............................................................................8
THE INPUT STAGE..................................................................................................... 11
EFE (EXTERNAL FACTOR EVALUATION MATRIX).........................................................11
ANALYSIS OF EFE MATRIX......................................................................................... 13
ANALYSIS OF IFE MATRIX.......................................................................................... 16
CPM (COMPETITIVE PROFILE MATRIX).......................................................................18
ANALYSIS OF CPM MATRIX:....................................................................................... 18
COST LEADERSHIP STRATEGY.................................................................................. 18
DIFFERENTIATION STRATEGY.................................................................................... 20
FOCUS STRATEGY..................................................................................................... 20
MATCHING STAGE..................................................................................................... 21
SWOT MATRIX........................................................................................................... 22
BOSTON CONSULTING GROUP (BCG) MATRIX...........................................................23

3
THE GRAND STRATEGY MATRIX................................................................................. 25
QSPM MATRIX (QUANTITATIVE STRATEGIC PROFILE MATRIX)..............................32
CHARACTERISTICS OF AN EFFECTIVE EVALUATION SYSTEM..................................41
CONCLUSION............................................................................................................ 43

VISION STATEMENT
The vision of Bahria Town is to be the largest real estate developer in Pakistan with its prime
focus on the middle class customers. To build the future, we need ideas, the free flow of those ideas,
and the effective use of human power and technology to shape those ideas into life changing ground
realities. Bahria Town wants to capitalize on the countless opportunities being provided by

globalization and to use advancement in technology to build innovative structures.

MISSION STATEMENT
Bahria Town aspires to be Pakistans greatest builder of all times, with projects offered to an eclectic mix
of segments , at choice locations with world class amenities, while ensuring the highest international
standards, timely delivery, and lifelong customer satisfaction.

HISTORY AND OVERVIEW OF BAHRIA TOWN

Bahria Town is one of the largest real-estate developers in Asia. Bahria Town has projects in
Lahore, Rawalpindi, and Islamabad and is planning to develop projects in Murree and Karachi.
The principal sponsor of the Bahria Town initiative is Malik Riaz Hussain.
Bahria Town has been shaping landscapes and lives in Pakistan since the company's inception in
1996. Not just building homes, Bahria Town has developed value-added, master-planned
communities housing thousands of families enjoying a complete living experience. When
complete, projects such as the JV D&B Valley, Golf City, Garden City, Bahria Icon and many
more under development will accommodate more than a million residents and will cover over 1
billion sq ft. Bahria Towns 21,000 employees are delivering USD 5 billion of iconic
developments, driving leadership, pioneering innovation and creating a legacy for generations to
come. Bahria Town is the prime mover of the Pakistan's real estate and construction sector.

Economic Development

Created direct employment for 21,000 people and 100,000 families.

Providing economic sustenance for over 1 Million families through supply chain and
associated employment.
Driving and injecting foreign investment during these difficult times and building 2
Sheraton Hotels with investment of more than USD200 million.
Generated demand for 55 factories from cement, paint, bricks, glass and tiles to
aluminum.
Bahria Town has paid direct and indirect taxes worth billions of rupees to the
government.

Infrastructure Development

Delivered and developed Asias largest private housing scheme.

Development projects of billions of rupees which have introduced a new lifestyle to
the nation. Bahria
Town maintains its indigenous project development department with equipment
worth more than Rs 6.5 billion.
Delivered communities the size of cities with complete infrastructure including grid
stations, hospitals, schools, recreational facilities, security,civic amenities, utilities,
emergency services and futuristic lifestyle in a gated community.
Committed to bridge the annual deficit of 700,000 houses by providing housing
solutions starting from Rs. 3.5 Lakhs, catering to all socio-economic classes.

Welfare Projects

Providing daily free meals, twice a day, to more than 35,000 people throughout
Pakistan under Bahria Town Dastarkhawan.
Thousands benefit from free medical treatment ranging from dialysis to open heart
surgery, bone marrow transplant to general treatments in 3 large Bahria Town Trust
hospitals.
Mobile dispensaries providing free medicines in rural areas.
Regular financial support to Al-Shifa Trust,Shaukat Khanum Memorial Trust, Sahara
Trust, SOS Village and many more welfare organizations.
Running centers for over 4,000 orphans with educational and lodging facilities.
Delivered thousands of Pakistans first low cost 5 marla houses of Rs 3.5 and 5 Lakhs
only.
Conducted combined marriages of more than 4,500 couples.
Providing micro-finance loans to students in Rawalpindi Agricultural University.
Running various schools, institutes and colleges in different cities and villages with
more than 7,000 students.
Always at the forefront in helping the nation in times of natural calamities &
unfortunate incidents such as the 2005 devastating earthquake, Margalla Tower & fire
at the Marriott Hotel and Ghakhar Plaza Rawalpindi. Also led many relief teams for
the aid of IDPs, which provided financial, medical & food assistance. Medical Camp
established at Swabi has served over 30,000 patients already.

Bahria town offers its products and services throughout Pakistan in cities including Rawalpindi
and Lahore.

PRODUCTS
Bahria Town Rawalpindi:
Safari Villas
Meadows
Bahria/ Safari Homes
Awami Villas
Bahria Heights
Executive Lodges
Overseas Enclave
Safari Apartments
Safari Valley

Bahria Town Lahore:

Awami Villas
Bahria Orchard
Umer Usman & Ali Blocks
Safari Villas
Overseas Enclave
Executive Lodges
Canal View Residency
Park Lane Tower
SERVICES
Bahria Town Education
Bahria Town Health Care
Bahria Town Trust

ORGANIZATION CHART

CHAIRMAN

MANAGING
DIRECTOR

TECHNICIAL
DIRECTOR

TECHNICIAL
DEPT

MECHINICAL
DEPT

QC
SECTION

INSPECTIO
N SECTION

QS SECTION

REPAIR
AND
MAINTAIN
ANCE
SECTION

DESIGN
AND
DRAWING
SECTION

ADMIN
DIRECTOR

PROJECT
MGT.
DEPT

BUSINESS
DEVELOPMENT

ADMIN
DEPT

HRM
DEPT

PROCU
REMEN
T

DEPT

GROUTIN
G UNIT

BORE PILING
UNIT

SALE
S
AND
MAR
KETI
NG
SECTI
CUST
OME
R
RELA
TION
SHSE

R&D
SECTI
ON

GENERAL
SECTION

LOGISTIC
SECTION

STAFF
MGMT

STAFF
DEV
SEC

ACCOUNT
DEPT

PROCUR
EMENT
SECTION

HO
ACC
OU
NT

STORE

GRO
UTI
NG
ACC
OU

SECTION

BOR
E
PILI
NG
UNI
T

EXTERNAL AND INTERNAL AUDIT

Strengths:

1. Bahria Town maintains its indigenous project development department: All the
construction projects are supervised by the project department, so therefore individual
attention can be paid to every project undertaken by Bahria Town.

2. Bahria Town has over 20,000 dedicated workforce: Employees are an asset for any
organization and Bahria Town maintains over 20,000 dedicated employees which instill
customer confidence and satisfaction.

3. Bahria town has Training and development programs for all levels: To ensure
professionalism and commitment Bahria Town conducts regular training seminars to keep
its employees up to date with new market developments.
4.

Reward control mechanisms are effective: Employees are rewarded for taking initiative
and showing excellent performance. Performance in linked to pay to generate healthy
competition.

5. Bahria Town is supported by a full team of qualified architects and engineers: To

maintain its construction quality Bahria Town is home to most qualified technical staff.
6. Bahria Town operates Pakistans largest private sector fleet of heavy earth moving
equipment: To support growing housing needs in Pakistan Bahria Town has its own
equipment thus ensuring that there are no delays in developmental projects.

Weaknesses:

10

1. Bahria town is an ongoing venture, it is expanding rapidly: As Bahria Town is

expanding to various cities in Pakistan it is having difficulty in managing such wide scope
of operations.
2. Less focus on R&D leads to stagnant environment: Currently Bahria Town is not
focusing on R&D activities due to which the company is finding it difficult to grow.
3. Lack of co-ordination between different departments regarding sales and purchase:
due to beauratic inertia the sales and purchasing department is not performing effectively
and there is a delay in various administrative procedures.
4. Less advertising on electronic media as compared to print media: Currently Bahria
Town is advertising on billboards throughout the city and is not focusing on print and
electronic media.

Opportunities:

1. The construction sector in Pakistan has the potential to export services worth US$ 1
billion per year: Due to its construction of international standard Bahria Town has the
opportunity to expand o overseas markets like Dubai and UAE.
2. In Pakistan there is shortage of over 800,000 housing units: Recent increase in population
has created dearth of housing facilities and Bahria Town can capitalize on this opportunity.
3. Due to rapid urbanization more and more population is migrating to urban centers: As
more and more population migrates to urban centers more housing facilities are required and
Bahria Town has an excellent opportunity to capture the market.
4. As a consequence of social change joint family system is on the decline: In Pakistan more
and more married couples prefer to live separately and therefore require cheaper housing
facilities.

Threats:

11

1. Due to rise in inflation in Pakistan the cost of construction material has

skyrocketed: The cost of construction material is relatively high and therefore is a threat
for construction industry.
2. Cost of transportation and cost of labor has increased: Due to increase in fuel prices
the cost of transportation of raw material and labor has increased.
3. Increasing percentage of tax payment on property by the government: Government
has increased tax on property and this is causing a decline in the construction sector.
4. The current political instability and security situation in Pakistan has prompted the
investors to seek business in other countries: Due to security situation in the country
the investors are hesitant to invest. This is posing a real threat for the construction
industry.
5. Several upcoming housing schemes like Jinnah Garden and Divine Gardens has
increased competition: As new construction schemes are emerging there is an increased
competition for capturing the market and this factor therefore poses the biggest threat for
Bahria Town.

THE INPUT STAGE

12

EFE MATRIX

CPM MATRIX

IFE MATRIX

EFE (EXTERNAL FACTOR EVALUATION MATRIX)

KEY EXTERNAL
FACTORS
OPPORTUNITIES
1. Construction
industry has
potential to
export services
worth US$ 1
Billion to
Middle East
markets
2. Shortage and
demand for
nearly 800,000
housing units
3. Increasing trend
of migration to
urban centers
4. Increasing

WEIGHT

RATING

WEIGHTED
SCORE

0.09

0.36

0.08

0.32

0.06

0.18

0.06

0.12

13

population
5. Joint family
0.03
system on the
decline
6. Partnership with 0.03
other
construction
groups
7. Real Estate
0.12
sector has
registered over
88% growth
since 2000.
THREATS
8. Increasing cost
of construction
material
9. Increasing cost
of transportation
and labor
10. Increasing
percentage of
tax on property
11. Instability in the
country
12. Widespread
corruption in
society
13. Upcoming
housing
schemes
TOTAL

0.06

0.12

0.48

0.12

0.48

0.12

0.24

0.07

0.14

0.10

0.4

0.10

0.2

0.02

0.08

3.18

ANALYSIS OF EFE MATRIX

Bahria Town is actively pursuing investment projects in foreign markets like Dubai and UAE. To
cater for shortage of housing in Pakistan Bahria Town is developing schemes like Awami Villas
for lowe middle class clients. In addition Bahria Town is pursuing strategies with various
construction groups like Harclow and HRL to provide low cost housing to its clients.

14

Bahria Town has established a relationship of trust with its clients and for this purpose it has
established a customer support and service department. Its specific task is to prevent bureaucratic
inertia and deal with all clients fairly without any financial mishandling. Thus Bahria Town
differs from several other governmental departments with regard to client satisfaction. Several
competitors of Bahria Town have emerged recently but none pose a serious threat so far due to
the reliability of Bahria Town.
The cost of construction material such as cement has increased 10kg to 15kg per bag and to cope
with this threat Bahria Town is offering European style compact housing.
Increasing labor and transportation costs are post a threat to the business in the current prevailing
environment but overall the EFE matrix score of 3.18 indicates that Bahria Town is taking
advantage of its external opportunities and avoiding threats facing the firm.

IFE (INTERNAL FACTOR EVALUATION MATRIX)

KEY INTERNAL
FACTORS
STRENGHTS
1. Over 20,000
dedicated

WEIGHT

RATING

WEIGHTED
SCORE

0.07

0.21

15

workforce
2. Bahria Town
offers more
than 200
designs of
housing and
floor plans
3. Fully
integrated
Enterprise
Resource
Planning and
Management
system
4. Bahria Town is
supported by
team of
qualified
engineers and
architects
5. Bahria Town
maintains
project
development
department
with equipment
worth more
than Rs 6.5
billion
WEAKNESSES
1. Bahria Town is
expanding
rapidly and
therefore
difficult to
manage and
control
2. Less focus on
R&D leads to
stagnant
environment
3. Lack of coordination
between
different
departments

0.10

0.4

0.08

0.32

0.15

0.45

0.15

0.6

0.15

0.15

0.10

0.2

0.02

0.04

16

regarding sales
and purchase
4. Information
regarding
housing
interior and
exterior not
updated
regularly
5. Less
advertising on
print and
electronic
media
6. TOTAL

0.03

0.03

0.15

0.15

2.55

ANALYSIS OF IFE MATRIX

Bahria Town has a committed workforce to support its various projects and this is a strength of
the company as motivated workforce enables the company to achieve financial growth.
Innovation is important to any business that is why Bahria Town offers various interior and
exterior designs for construction to its clients which is a unique concept in Pakistan and represent
a major strength for the company.

17

Bahria Town supports a fully integrated Resource Management system. It has a database of all
the critical strategic information which is updated regularly and provided to the concerned
departments for implementation.
Bahria Town is supported by qualified engineers and architects. These professionals are hired
from abroad to keep the quality of construction up to the required standard. Bahria Town has its
own project development department whose sole purpose is to consider the financial viability of
any upcoming project as well as accessing the various changes that are needed to be made to the
existing projects, therefore this is a major strength.
Due to several upcoming projects and rapid expansion Bahria Town faces some managerial
hurdles due to which several other problems are arise. This is a major weakness. Bahria Town
needs to focus itself more towards the R&D and at this point in time much of the focus is on
capturing the huge domestic and foreign markets. This represents a minor weakness. Bahria
Town needs to increase co-ordination between different departments regarding sales and
purchase. This factor represents a minor weakness.
Bahria Town is currently not updating the information regarding different housing designs. This
represents a major weakness. It needs more focus on R&D.
Recently Bahria Town has started advertisement on billboards across many cities and has shown
paid documentaries on the television but this aspect needs more attention therefore this factor
represents a major weakness.
An overall score of 2.55 suggests that Bahria Town needs improvement in several functional
areas like advertising and R&D and overall co-ordination between different departments.

18

CPM (COMPETITIVE PROFILE MATRIX)

AUTHORITY
BAHRIA TOWN
DEFENCE HOUSING

EMAAR

19

CRITICAL SUCCESS
FACTORS
1. Advertising
2. Product quality
3. Management
4. Financial
position
5. Customer
loyalty
6. Global
expansion
7. Market share
8. Price
competitiveness
9. TOTAL

WEIGHT RATING SCORE RATING SCORE RATING SCORE

0.20
0.12
0.08
0.12

1
4
3
4

0.20
0.48
0.24
0.48

3
4
1
3

0.6
0.48
0.08
0.36

3
4
3
4

0.6
0.48
0.24
0.48

0.20

0.8

0.8

0.6

0.17

0.68

0.34

0.68

0.05
0.06

3
3

0.15
0.18

3
1

0.15
0.06

2
2

0.1
0.12

3.21

2.87

ANALYSIS OF CPM MATRIX:

The analysis of CPM matrix shows that Emaar is performing slightly better than Bahria Town in
various aspects of the business. The Defence Housing Authority performing as good as Bahria
Town.

STRATEGIES
COST LEADERSHIP STRATEGY
TYPE 1 (LOW COST STRATEGY)
To pursue type 1 low cost strategy Bahria Town has developed Awami Villas. This project
focuses on low cost quality housing. Awami Villas caters exclusively to the demand of the lower
income class and is aimed to lessen the housing crisis of the country. The housing units are based
on pre-fabricated technology imported from Malaysia for building low cost houses in Pakistan.
Bahria Town also operates and owns fleet of earthmoving equipment and several workshops in
order to reduce cost of hiring and repairing of machinery.
Bahria Town has achieved economies of scale through partnership with various other
construction groups like Areaa, Halcrow and HRL. It has steadily increased its production
capacity and is expanding to cities like Karachi and overseas.

3.3

20

Bahria Town also owns various factories which provide support to the projects by investing in
industries for vertical integration. These include:
Bahria Town Asphalt Plants
Bahria Town Batching Factory
Bahria Town Crusher Factory
Bahria Town Hollow Blocks Factory
Bahria Town Kerb Stone Factory
Bahria Town Pipe Factory

TYPE 2 (BEST VALUE STRATEGY)

To pursue type 2 strategy Bahria Town has developed projects such as Executive Meadows,
Overseas Inclave and Bahria Homes.
Executive Meadows are detached villas which provide high end luxurious living with all
amenities of life. It is specifically designed for clients who want the best product money can buy.
Overseas Inclave is a project specifically designed for expatriates who wish to live in Pakistan
while enjoying the same environment as of any developed country. The development works at
the Overseas Enclave are proceeding with full swing. Massive resources are deployed at the site
to complete this project by Habib Rafiq Limited.

Several upcoming projects are also underway to attract client who are not price sensitive. These
include:
1. Bahria Golf City
2. Sheraton Golf & Country Club
3. Sheraton Hotel

DIFFERENTIATION STRATEGY
Bahria Town is actively pursuing differentiation strategies. It is developing Bahria Golf city
which is Golf course resort housing project over the lush green hills of Islamabad. It offers 18hole golf course which it first of its kind in Pakistan. No other real estate company has an
attractive and safe investment offer than this.

21

In addition Bahria Town has recently developed a housing scheme known as Bahria Homes. It
has been developed in collaboration with Turkish Construction company Areaa. These homes
have also been benefited from the advanced architectural designs and technologies catering to
seismic safety requirements.
Bahria Town offers First Formula 1 racing track with full proof safety provided to Bahria Town
residents. It has developed Gold Class cinema with reclining seats showing latest movies.

FOCUS STRATEGY
Bahria Town primarily caters to upper class and expatriates. Therefore its primary focus is to
develop such schemes which provide the same environment and facilities as in any developed
country. It had developed Executive Meadows and Overseas enclave for this specific purpose.
Bahira Golf City is another upcoming project which caters to customers who are not price
conscious.

22

MATCHING STAGE

SWOT

SPACE

BCG

IE MATRIX

GRAND STRATEGY MATRIX

SWOT MATRIX
STRENGTH-OPPORTUNITY (SO) STRATEGIES:
1. Develop new housing schemes for middle-class segment of population (S1, S11, O2 and
O5) (Product Development)
2. Start new projects overseas (S2,S10,O1) (Market Development)

23

3. Intensify marketing efforts to make public aware of state of the art technology used by
Bahria Town (S9, O4) (Market Penetration)
4. Advertise the variety of housing designs offered by Bahria Town (S8, O2) (Market
Penetration)
5. Constantly add new construction designs to attract the influx of people to urban centre
(S8, O3) (Product Development)

WEAKNESS-OPPORTUNITY (WO) STRATEGIES:

1. Focus more on R&D activities (W2, O3) (Product Development)
2. Increase public awareness about modern technology being employed by Bahria Town to
increase market share (W5, O4) (Market Penetration)
3. Focus marketing efforts on married couples through increasing advertising on electronic
and print media (W5, O7) (Market Penetration)
4. Deploy more resources to R&D to focus on customer preferences to increase market
share (W2, W3, O2) (Market Penetration)

STRENGTH-THREAT (ST) STRATEGIES:

1. Maintain and increase the level of professionalism in the organization and hire more
technical staff (S3, S10, T6) (Market Penetration)
2. Increase marketing efforts to instill the confidence of investors (S3, S4, T5) (Market
Penetration)
3. Open more workshops to lower the cost of repair of machinery (S11, T2) (Backward
Integration)

WEAKNESS-THREAT (WT) STRATEGIES:

1. Re-structure the sales and purchase department to improve intra-departmental coordination to satisfy more customers to increase market share (W3, T6) (Product
Development)
2. Hire more staff to focus on R&D (W3, T6) (Product Development)
3. Hire more managers to manage several up-coming projects (W1, T6) (Product
Development)

24

BOSTON CONSULTING GROUP (BCG) MATRIX

Bahria Town is positioned in quadrant III (Cash Cow) of BCG matrix. Bahria Town has
relatively high market share in real estate sector but due to rise in inflation and economic
recession the boom in construction industry has disappeared. Currently Bahria Town has started
several up-coming projects like Bahria Golf City and Bahria Garden City. Bahria Town is also
pursuing related diversification and has constructed Sheraton Golf & Country Club and
Sheraton Hotel. Bahria Town is also pursuing unrelated diversification by constructing ACE
International Academy, Bahria University City and Bahria Town Hospital Lahore & Islamabad.
The stream of cash flows is steady and due to increasing population the market share is ever
increasing.

High

Medium

25

II
Medium

Stars

I
Question Marks

BAHRIA TOWN

III
Cash Cows

IV
Dogs

Low

THE GRAND STRATEGY MATRIX

Bahria Town is positioned in quadrant IV of the grand strategy matrix. Bahria Town is pursuing
related diversification and has constructed Sheraton Golf & Country Club and Sheraton Hotel.
Bahria Town is also pursuing unrelated diversification by constructing ACE International
Academy, Bahria University City and Bahria Town Hospital Lahore & Islamabad. In addition
Bahria Town is also pursuing partnerships with other construction groups like Areaa

26

Construction, HRL and Wilson Associates to achieve economies of scale. Bahria Town is also
aggressively pursuing new housing projects in Karachi. It has recently started several projects in
UAE.
Rapid Market Growth

Quadrant II

Quadrant I

Weak Competitive Position

Strong Competitive Position

Quadrant III

BAHRIA TOWN
Quadrant IV

Slow Market Growth

SPACE MATRIX

Related diversification
Unrelated diversification
Joint ventures

27

FINANCIAL STRENGTH
1. The Current Ratio of Bahria Town for the year 2009-10 is 1.19 which indicates the
company has good financial health and has the ability to meet its short term obligations.
Current assets

2438.65

Current liabilities

2047.24

1.19

(Figures in Rs crore)
Assigned rating to this factor: 4

2. The Debt to Asset ratio of Bahria Town is 0.593 which indicates that Bahria Town is
strong financially and relies less on creditors for its ventures.
Total Debt
Total Assets

1297.84

0.593

2187.65

Assigned rating to this factor: 4

3. Bahria Towns Net Reserves increased by Rs. 522 crore for the year 2009-10.

Assigned rating to this factor: 4

TOTAL: 12

INDUSTRY STRENGTH

28

1. Economic recession has slowed down the growth in real-estate sector.

Assigned rating to this factor: 3

2. The government has increased tax on property.

Assigned rating to this factor: 2

3. Price of construction raw material has increased due to inflation.

Assigned rating to this factor: 4

TOTAL: 3

ENVIRONMENTAL STRENGTH
1. Political instability has diminished foreign investment in the country.

Assigned rating to this factor: -6

2. Inflation rate in Pakistan has reached a recent high point of 15.7%.

Assigned rating to this factor: -5

3. High risk involved in construction industry due to slow growth rate.

Assigned rating to this factor: -4
TOTAL: -15

29

COMPETITIVE STRENGTH

1. Bahria Town has largest workforce of over 20,000 employees.

Assigned rating to this factor: -1

2. Bahria Town has largest fleet of earth moving equipment in Pakistan.

Assigned rating to this factor: -1

3. Bahria Town has fully integrated Enterprise Resource Planning and Management system.

Assigned rating to this factor: -1

TOTAL: -3

CONCLUSION

FS AVERAGE: +123 4
IS AVERAGE:

93

ES AVERAGE: -153
CA AVERAGE: -33
-1+ (3)

2 (x-axis)

-5+4

-1 (y-axis)

-5
-1

30

31

THE DECISION STAGE

QSPM MATRIX

32

QSPM MATRIX (QUANTITATIVE STRATEGIC PROFILE MATRIX)

KEY
FACTORS
OPPORTUNI
TIES

WEIGHT

Construction
industry has
potential to
export services
worth US$ 1

0.09

START NEW
PROJECTS IN
KARACHI
STRATEGY 1
AS
TAS

FOCUS ON EXISTING
MARKETS IN ISLAMABAD
AND LAHORE
STRATEGY 2
AS
TAS

---

---

---

---

33

Billion to
Middle East
markets
Shortage and
demand for
nearly 800,000
housing units
Increasing
trend of
migration to
urban centers
Increasing
population
Joint family
system on the
decline
Partnership
with other
construction
groups
THREATS
Increasing cost
of construction
material
Increasing cost
of
transportation
and labor
Increasing
percentage of
tax on property
Instability in
the country
Upcoming
housing
schemes
TOTAL
STRENGHTS
Over 20,000
dedicated
workforce
Bahria Town
offers more
than 200
designs of

0.08

0.32

0.08

0.06

0.24

0.06

0.06

0.24

0.06

0.03

0.09

0.06

0.03

0.12

0.03

0.12

0.12

0.48

0.12

0.12

0.48

0.07

0.14

0.07

0.10

0.10

0.10

0.10

0.4

0.10

0.07

0.28

0.21

0.10

0.4

0.3

34

housing and
floor plans
Fully
integrated
Enterprise
Resource
Planning and
Management
system
Bahria Town is
supported by
team of
qualified
engineers and
architects
Bahria Town
maintains
project
development
department
with equipment
worth more
than Rs 6.5
billion
WEAKNESSE
S
Bahria Town is
expanding
rapidly and
therefore
difficult to
manage and
control
Less focus on
R&D leads to
stagnant
environment
Lack of coordination
between
different
departments
regarding sales
and purchase
Information
regarding

0.08

0.32

0.24

0.15

0.6

0.45

0.15

0.6

0.45

0.15

0.15

0.6

0.10

0.2

0.3

0.02

0.04

0.08

0.03

---

---

---

---

35

housing
interior and
exterior not
updated
regularly
Less
advertising on
print and
electronic
media
TOTAL

0.15

0.15

4.63

0.3

4.45

ANALYSIS
The QSPM matrix concludes that Bahria Town should start new projects in Karachi as it is the
largest city of Pakistan and also the hub of financial activities. More and more population is
migrating to Karachi to find employment opportunities. The markets in Islamabad and Lahore
are saturated and too many housing projects have already been started in the area so Bahria Town
should pursue to expand its operations.

STRATEGY IMPLEMENTATION
LONG TERM STRATEGY
Expand to new geographical locations like Karachi through extensive market development and
market penetration. Currently the company has extensive presence in Rawalpindi and Islamabad.

DIVISION 1 MECHINICAL DEPARTMENT:

Bahria Town needs to implement needs to hire more employees in order to streamline its repair
and department section. Bahria Town also needs to hire more technical staff in order to
effectively monitor and inspect the construction of new houses.

DIVISION 2 BUSINESS DEVELOPMENT DEPARTMENT:

36

The sales and marketing section needs to increase its marketing effort and advertise more on
electronic media. It needs more resource allocation towards this department. The marketing
efforts are currently being focused on advertisement on billboards and print media.
The R&D section of Bahria Town needs to develop and implement standardized international
infrastructure standards more rapidly due to rapidly changing technological requirements.

DIVISION 3 STAFF MANAGEMENT SECTION:

The Human Resource department needs to increase the frequency of training seminars and all
employees should at least attend one training seminar per year.

POLICY IMPLEMENTATION:
Bahria Town needs to pursue the following policies to support its long term objectives:
1. Recruit more technical and management staff to fill in rapidly increasing vacancies.
2. Centralize some of the core activities of the business in order to ensure that they are
functioning effectively at the start as Bahria Town is expanding to new geographical
locations.
3. Increase the number of heavy earth moving equipment in order to cater for increasing
housing demand.
4. Stress upon quality control processes to improve and maintain its construction quality.
5. Link performance with pay to increase employee morale and productivity.

RESOURCE ALLOCATION:
As Bahria Town is expanding to new geographical location it needs to establish new SBUS.
resources should be allocated towards purchasing land. Human resources should also be
allocated towards recruiting and selection of new workforce. Analysis of market conditions
should be undertaken to ensure that only competent workforce is hired.

MATCHING STRUCTURE WITH STRATEGY:

Bahria Town is expanding rapidly and in order to expand to new geographical location Bahria
Town needs to incorporate some changes in its organizational structure. It needs to establish a
separate requirement and selection centre in order to recruit workforce on a massive level. The

37

mechanical department need to create a separate section for procurement of new machinery on
order.
A separate office of regional financial officer and regional marketing officer needs to be set up in
order to handle the financial and marketing endeavors in these specific areas.

RE-ENGINEERING:

Bahria Town needs to reduce costs of its housing facilities in order to cater for middle
class population. Bahria Town is the first Company in Pakistan to introduce low cost housing
project Awami Villas deploying the steel patent pre-fabricated modular structure technology.
It has greatly increased the market share of Bahria Town. It is also the only housing society in
Pakistan with standardized international infrastructure standards.

MARKETING ISSUES:
Bahria Town needs to have more focus on electronic media advertising. In order to compete with
the upcoming and existing competition Bahria Town needs to pursue the following policies:
1. Advertize more on television.
2. Televise exclusive documentaries on leading news channels.
3. Improve the website and make it more user friendly.

MARKET SEGMENTATION:
Although Bahria Town at this moment is the market leader in real estate sector so it needs not to
pursue this strategy. However, the competitors are focusing on middle class population by
offering them cheaper housing facilities. Bahria Town also needs to divert its focus on this
segment of the market. Bahria Town has developed Awami Villas project to cater for the middle
class customers. Currently Bahria Town is focusing on capturing the vast population segments in

38

Karachi. Its main focus would be on more affluent areas of Karachi while keeping focus on
middle class customers.

PRODUCT POSITIONING:
Due to the recent recession the customers want economic living while enjoying the same
amenities of life as any high class living area. So in order to fulfill this demand Bahria Town has
started the project Safari Villas to cater for middle class consumers. It is an enclosed community
with all the necessities of life. Bahria Town is also focusing on customers on the high end of the
market. It has started the project of the Meadows to fulfill this exclusive purpose. Several
upcoming projects are also in the pipe line which include:
1. Bahria Golf City
2. Sheraton Golf & Country Club

RESEARCH AND DEVELOPMENT ISSUES

Bahria Town is pursuing the second approach to R&D which is innovator imitator. Bahria Town
has its own research and development section. Some of the recent developments on this front are:
1. Showcase of innovative design, incorporating cutting-edge sustainable concepts into
elegant contemporary design.
2. The only housing society in Pakistan with standardized international infrastructure
standards.
3. The first Company in Pakistan to introduce low cost housing project Awami Villas
deploying the steel patent pre-fabricated modular structure technology.

MANAGEMENT INFORMATION SYSTEM ISSUES:

Bahria Town is the first Real Estate Development and Marketing Company in Pakistan to have
a fully integrated Enterprise Resource Planning and Management System seamlessly
integrating various intra-company processes for the ultimate benefit to the customer and
maximum returns to the Company.

39

STRATEGIC PLANNING AT BAHRIA TOWN

At Bahria Town all the strategic planning revolves around the strategic department and its
strategists. As a construction company Bahria Town needs to make a lot of strategic decisions
regarding which market to penetrate and what type of housing facilities to offer their clients
based on their financial needs. Due to recent economic recession the construction industry is
experiencing a slow growth rate and there are a number of problems faced by Bahria Town
which require strategic planning. These include:

Difficulty in finding skilled workers

Difficulty in finding and keeping qualified managers
Difficulty in finding and keeping qualified subcontractors
Declining profit margins
Increased competition
Health care, liability, and workers compensation insurance costs

In order to cope with these problems Bahria Town needs to implement the following possible
strategies which include:

Subcontractors need increased fees.

Design professional need increased fees.
Workers (internal clients) need substantial wage increases.
The project cost to the owner must be lowered.

Bahria Town has gained strategic advantage over its competitors as it is sensitive to the needs of
its customers. Low cost housing is being provided by Bahria Town. The Design Wing of Bahria
Town works in co-ordination with the strategic department to provide the customers with variety
of choices for design of their homes.
To gain competitive advantage Bahria Town has pursued the following strategies:

Understanding that true value is what clients are willing to pay for.
Identifying your clients highest needs and deliver on them.

40

Providing innovative solutions to clients problems.

Defining value and service from the clients perspective.

ADAPTING TO CHANGE

The strategic management process is based on the belief that organization should continuously
monitor internal and external factors so that timely change can be made as needed. To survive,
all organization must be capable of astutely identifying and adapting to change. The strategic
management process aimed at allowing organization to effectively adapt to change over the long
run.

EVALUATION OF STRATEGIES
The final stage in strategic management is strategy evaluation and control. All strategies are
subject to future modification because internal and external factors are constantly changing. In
the strategy evaluation and control process managers determine whether the chosen strategy is
achieving the organization's objectives. The fundamental strategy evaluation and control
activities are: reviewing internal and external factors that are the bases for current strategies,
measuring performance, and taking corrective actions.
Strategic management is a broader term that includes not only the stages already identified but
also the earlier steps of determining the mission and objectives of an organization within the
context of its external environment. The basic steps of the strategic management can be
examined through the use of strategic management model.
The strategic management model identifies concepts of strategy and the elements necessary for
development of a strategy enabling the organization to satisfy its mission. Historically, a number
of frameworks and models have been advanced which propose different normative approaches to
strategy determination. However, a review of the major strategic management models indicates
that they all include the following elements:
Performing an environmental analysis.
Establishing organizational direction.
Formulating organizational strategy.
Implementing organizational strategy.
Evaluating and controlling strategy.

41

Strategic management is a continuous and dynamic process. Therefore, it should be understood

that each element interacts with the other elements and that this interaction often happens
simultaneously.

DIFFICULTIES IN STRATEGY EVALUATION

1. Increase in environments complexity
2. Difficulty predicting future with accuracy
3. Increasing number of variables
4. Rate of obsolescence of plans
5. Domestic and global events
6. Decreasing time span for planning certainty
Strategy Evaluation Should:

Initiate managerial questioning of evaluation and assumptions

Trigger review of objectives & values

Stimulate creativity in generating alternatives

Managers and employees of the firm should continually be aware of progress being made toward
achieving the firms objectives. As critical success factors change, organizational members
should be involved in determining appropriate corrective actions.

CHARACTERISTICS OF AN EFFECTIVE EVALUATION SYSTEM

Strategy-evaluation activities must be economical; too much information can be just as

bad as too little information.

42

Strategy-evaluation activities should also be meaningful; they should specifically relate to

a firms objectives.

Strategy-evaluation activities should provide timely information; on occasion and in

some areas, managers may need information daily.

Strategy evaluation should be designed to provide a true picture of what is happening.

REMULTS CRITERION

Consistency:
There must be a consistency between goals and objective of Bahria Town. As new housing
schemes are emerging and as they try to capture the markets in Islamabad and Rawalpindi Bahria
Town needs to make sure that all its departments are performing according to the planned goals
and objectives.
Consonance:
Consonance basically identifies set of trends in the market based on the external environment. As
population is increasing and due to rapid urbanization the housing needs of people are increasing day by
day. Also due to inflation and rise in prices people require cheap housing and Bahria Town is responding
to all these factors.

Feasibility:
The strategy implemented by the company must be within its available resources so that the
resources are not over taxed. Currently Bahria Town needs to implement market development
because it has the resources to expand to new location. It can easily establish the supporting
infrastructure to accomplish this task.
Advantage:
Bahria Town has competitive advantage over its competitors because it has Pakistans largest
private sector fleet of heavy earth moving equipment and the service workshops. It is also offering
housing schemes for people belonging to varying economic classes. The technology employed by Bahria
Town is latest and to some extent cheap so it has gained edge over its competitors.

43

CONCLUSION
After conducting the internal and external assessment and making different matrixes we can safely
conclude that Bahria Town is the market leader in the construction industry in Pakistan. It has set the
benchmark for others to follow. It has employed latest technology in construction of houses for the first
time in Pakistan, and in addition Bahria Town introduced the concept of European Style living in
Pakistan. Bahria Town caters to all segments of the society and therefore is very successful in capturing
the real estate industry. When Bahria Town started in 1996 customers and the general public at large were
skeptical about the reliability of its administration and financial transparency. But due to one success after
the other the customer confidence in Bahria Town is ever high and more and more people are joining the
Bahria Town family.

44

REFERENCES
1. http://www.bahriatown.com
2. www.wikipedia.com

3. http://www.kulzick.com/stu/rumelt.htm
4. http://money.cnn.com/real_estate/
5. http://www.msnbc.msn.com/id/8874568/
6. http://online.wsj.com/public/page/news-real-estate-homes.html
7.

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