4. Startup
Decision making
› To work together
Markets and operations(1992-1996)
› Applied loan for S & T with the help of Tariq family firm
asset
Entering in Saudi Arabia(Al-Markaz)
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In mid 1993 a Saudi acquaintance visited mushrooms
Offered partnership to them
Start small setup in Saudi Arabia
30% share S&T,
30 percent Saudi national investment,
two shahazad family member(live in Saudi Arabia)
invested 15% each
5.
Mushroom growth
› Sale increase 10%(1994)
› Establish 6 shops in 4 major cities
› Shahazad handle activities and establish
basic goals
7.
integrated unit finance issues
› Direct payments of almost Rs.15 million(from late
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1993 to mid 1994) Exhibit 4
Another payment of 2.5 they get from NDFC
In June project cost increased up to 37.5 million
Started construction of the factory
bought land for plant
Cost of equipment rise
8.
Options for the 20 mile plant of styles and
trend
› (1995) need more money
› Shahazad want to work with his mother
› Mushrooms chain handed over to
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Nadira(shahazad opinion after some time Tariq
agreed)
(1n 1995 ) they want to sell plant of 20 mile
No buyer were found
Tariq invested 15 million and become major
shareholder(69%)
Nadira invested 1.6 million(16% share)
9.
Operations(1996 to 1999)
› Shahazad had complete control of
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operational and financial issues
Nadira become non working
partner(because of personal life)
Loan amount from NDFC was 30 million
Shahazad hope of rescheduling loan.
Installed dying and knitting after getting loan
from NDFC
Shahazad change the approach of limited
design
Introduce new design every two week.
Sell left over stock with exhibition
10.
Mushrooms in 1999
› Grown to 12 stores all over the county
› 8 were company owned
› 4 franchised
› Nothing in written on franchise
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agreement(because of trust on tariq)
Frances paid 250,000 to 400,000
Company get 25% from franchise revenue
Started mushroom club in 1996
8,000 customer were member in 1998
No nation wide competition till 1999
11.
Products
› Mushroom retail outlet
Target at New born baby to 12 year
Both boys and girls
For main two seasons summer and winter
Shahazad wife handled design
Production
Garment produce in makeshift factory
Located in shahazad home
From small begging
1999 have 80 worker(in production and
packaging)
› No accounts department
› No H.R department
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12.
Al Markaz( Saudi Arabia operation)
› Shahazad brother in law managed al- Markaz
import logistics
› Price at Saudi Arabia 50% higher then Pakistan
› Sale took place in Sami permanent bazaar in
Saudi Arabia
› good idea reasons
Less inventory
Give profit
Introduce Pakistani products in Saudi Arabia.
13.
Event after Tariq death
› Tariq died of liver disease in London (April 1999)
› Loan recovery of NFDC thread
The situation in July 1999
› Shahazad send written notice to Nadira and
Tariq’s father to resolve loan problem
› Nadira interested to buy mushroom but she didn't
purchase it because of further issues
› Shahazad want to continue mushroom
15.
Mushroom
› Independency of stores and franchise
› Nothing in written on franchise agreement
› no of account department
› no H.R Department
› No R&D department
› Delay in shipment
16.
Style and tend
› Loan from NDFC was Rs.30 million
› Not generating profit
› Need more money for development
› Have to pay loan amount
› How to pay loan
› Death of Tariq
› Partnership issues
› Nadira did not take interest in problems
› Shahazad did not have enough money to solve
problems
17. Tariq and Nadira did not take interest in
company issues
Lack of action on small problems
All activates handling by Shahazad
Undefined structure of company
Lack of strong leadership
Lack of planning of money execution
Quick decision of integrated unit
18. Sale S&T
Public shares
Partnership
Expansion plan defects
Divestiture (opposite to investment)
