Daewoo

Brief History and Background:
Our proposed organization for analysis of vision and mission statement is Sammi-Daewoo Express Bus service Pakistan. Sammi –Daewoo Express Bus service Pakistan as shows the name is Transportation Company based in Pakistan. Daewoo started its operation in 1998 in Pakistan. Soon, it became popular because of its features for no compromise on quality of services. In Jan 2004, it is owned by Sammi Corporation, Seoul, South Korea. Now, Sammi Daewoo bus service Pakistan is providing 44 destinations all over the country including almost All Punjab, most part of NWFP, Karachi, Hyderabad and Sakhar in Sind.
History and introduction of industry:
When Pakistan came into being in1947, the only reliable, valuable and comfortable mean of transport was railway. With the passage of time other means of transport also developed. Especially Pakistan developed air transport. In 1960’s firstly buses are introduced in Pakistan as urban transport mean. In this era, main policy of government is to shift railway rush to road transport. So many new roads were constructed and developed in many cities. Many new buses were imported. This system continued for more than 15 years, but after this private sector came and flourished because public transport could not be managed after start, so lack of funds declined public buses too much. In 1977, the Punjab Road Transport Corporation’ (PRTC) and Punjab Urban Transport Corporation (PUTC) were established in the province of Punjab (Lahore Development Authority and World Bank/International Development Association 1980). The functions of the PRTC and PUTC were to provide an efficient, adequate, economical, and properly coordinated system of road-based intercity and urban public transport services, respectively. PUTC was also responsible to provide bus stands; develop amenities; purchase, manufacture, maintain, and repair buses; and provide other related services in urban areas. Later, PUTC developed its own maintenance and body building workshops, central stores, offices, and a central transport training institute. In 1991, a draft National Transport Policy was published by the National Transport Research Centre (NTRC). This policy suggested the adoption of a bus-based public transport system, as compared to a rail-based mass transit system, as the preferred urban transport model in the metropolitan cities of Pakistan (Govt. of Pakistan, NTRC 1991). This approach may have been adopted due the lack of finance available from the World Bank to implement a rail-based mass transit system
It has been widely recognized that economies with better road networks are positioned more advantageously in terms of overall competitiveness as compared to economies having poor networks.

Pakistan has a road network covering 258,350 Km including 176,589 Km of high type roads and 81,761 Km of low type roads. Total roads, which were 229,595 Km in 1996-97, increased to 258,350 Km by 2008-09 indicating an increase of 12.5%.

This continues improvement in roads reflects the government’s enhanced focus and importance of this network.

Source: Economic Survey of Pakistan 2008-09

Bus service in urban areas, between cities and domestically is well established with services run by both public and private sectors. Bus services like Daewoo Express, Kohistan, Skyway and Niazi Bus have set up modern intercity service in Pakistan which connects to most cities in Pakistan and runs 24 hours a day. Intercity buses tend to be more modern and well kept as compared to urban transport within cities which are also well established.

Since 2000, the government has taken a comprehensive initiative to modernize the existing domestic bus fleets and minimally impact the environment. This public-private enterprise would gradually introduce 8,000 CNG buses throughout the country and 800 buses in Karachi. This venture will ensure high standards of efficiency and cleanliness.
Govt. of Punjab took latest initiative by importing 2000 CNG buses for all cities of Punjab for inner city transportation. Turkey is also working on better transport system of provincial capital better public transport.
The main problems which are facing by transport industry all over the country are:
1. Public transport issues
Upto 20 years old buses are plying on our roadway.
Shortage of public transportation is causing overloading vehicles.
Lack of government run public transportation has resulted into many small transportation companies and those are difficult to regulate
2. Road infrastructure issues
Parking spaces are not available in the major cities, leading to congestion and road crashes due to unauthorized parked vehicles.
Road side hazard is big issue in Pakistan because there is no established Safety Design Standards.
3. Vehicle safety issues
4. Legal issue

Transportation network of any country is of vital importance to its development and affects all sectors through economic linkages. It ensure save and timely travel, encourages business activities and cuts down transportation costs while granting producers access to markets for their goods. A reliable transportation network also provides swift access to labor force and hence generates employment opportunities. An efficient transportation network encompasses road, rail and aviation.

Road transportation is a key component of transportation but is often overlooked in many developing countries. The reliable, well-maintained and least costly road transportation is essential in getting the masses to work and acts as significant tool in fight against poverty.
Analysis of Vision Statement:
The vision statement of Sammi-Daewoo is:
“Sammi-Daewoo Express Bus Service operating throughout the length and breadth of Pakistan facilitating the people to transport themselves and their belongings to / from every nook and corner of the country. Linking Pakistan with its neighbors and trade partners as well as providing them with safe corridors to pass through.”
The analysis of this vision shows us the future goal of Sammi-Daewoo in Pakistan that the words which are used in this statement are very concrete, concise. These words are not covering a broad aspect but also providing a specific meaning too. The first phrasal word which has been used in statement is “length and breadth of Pakistan”. This shows the broad scope of the Daewoo, they want to cover every steep and corner of the country through their services. Daewoo wants not only to cover transport but also wants to cover other services and belongings related to transportation. Daewoo future goal is also to link Pakistan with its neighbors which are mainly China, India and Iran. Other than neighbors, they want to link Pakistan with its trade partners. Pakistan has plan to link by road with mid Asian states and turkey, so Daewoo may want to provide it services. The last point is to provide safe journey, it includes safe path, comfortable and luxury buses and best value added services.
Proposed Vision Statement:

After deep analysis and observation and after study of vision important ingredients, the suggestion is that, Sammi Daewoo vision statement is too good because it is short but comprehensive, it have all practically possible future goals and destinations. So suggest any other vision statement only will result to change the basic objectives of organization. The vision statement is motivated, both for inner and external customers and for society too. So we can say Sammi Daewoo has clear vision.
Analysis of Sammi Daewoo Mission statement:

Sammi Daewoo mission statement is:
“The period of our existence comprises of our march towards our vision. Blessed with the confidence of our clients, our pace to materialize our vision is progressive far from any signs of tiring journey. Equipped with the courtesy of our team members, holding the tools of quality like luxury, comfort, safety, economy and punctuality we continue to penetrate deeper and deeper into the hearts of our clients. Our endeavor is guided by the principles that we have to hand down to our successors such systems, techniques and methods that lead to a world that is green in environment, traffic flow, safety, security.”
Mission Components and Sammi Daewoo Mission Statement:
1. Customers:
Sammi Daewoo Mission Statement clearly indicates its customers, to motivate their customers and to attract more customers Daewoo mentioned in Mission “Blessed with the confidence of our clients”.Another part of Mission Statement also provides authenticity to value their customers, they say “we continue to penetrate deeper and deeper into the hearts of our clients.

2. Products and Services:
Sammi Daewoo mission Statement as such not clearly mentioned their product or services but they indicated its properties which provide information about their services too. They claimed that “our pace to materialize our vision is progressive far from any signs of tiring journey.”
So it indicating that they providing transport services.
3. Markets:
Sammi Daewoo didn’t clear about their markets in which they are flourishing or they want to capture but they referred to their vision in which Sammi Daewoo indicated much emphasized manner that our market is every nook and corner of Pakistan and to link Pakistan with its neighbors and trade partners too. The reference of mission statement is: “The period of our existence comprises of our march towards our vision.”
4. Technology:
Sammi Daewoo provided importance to technology component too. Daewoo claimed that “holding the tools of quality” and “we have to hand down to our successors such systems, techniques and methods that lead to a world that is green in environment, traffic flow, safety, security.”
It gives message of using latest technology method and systems which not provide luxury and comfort to users but also friendly to environment too.
5. Concern for Survival, Growth and Profitability:

Like all other good companies and good mission statements Sammi Daewoo mission statement indicated this component too. It stated “Our endeavor is guided by the principles that we have to hand down to our successors such systems, techniques and methods that lead to a world that is green in environment, traffic flow, safety, security.”
Daewoo claimed to work on green environment safety and security which are components for faster growth and profitability and survival

1. Philosophy:
Sammi Daewoo philosophy is to “Equipped with the courtesy of our team members, holding the tools of quality like luxury, comfort, safety, economy and punctuality we continue to penetrate deeper and deeper into the hearts of our clients.”.
This is too clear statement to give message of their philosophy.
2. Self-Concept:
The self concept of Sammi Daewoo is too work on quality of services and to work on more comfortability for customers and to make environment more green and secure.
3. Concern for Public Image:
The last line of mission statement provides the concern to society and towards public image of Daewoo. They claimed “a world that is green in environment, traffic flow, safety, security.
4. Concern for employees:
It is necessary to motivate employees, so that they work in organization as they work for own. So, usually good organizations include a part for employees so that they motivate and get persuasion to work on company goals. Sammi Daewoo also gave importance to their employees they sated in mission statement as: “Equipped with the courtesy of our team members”
This is too motivated sentence because it used the word of courtesy which means to work for any other not as a duty but as a humble.

Suggestions for Sammie Daewoo Mission statement: To purpose a revised mission statement for Daewoo is too difficult because they have all components of mission statement, but after our group discussion we proposed nd suggested another statement:
““We exist to provide a quality, timely, secure transport through highly advance equipment to the people of Pakistan. And provide businesses with transportation of their goods city to city fastly, accurately and with care. We are here to provide improved standard of Intercity Bus service in Pakistan and a safe, customer focused, commercially sound bus services for the community which is available 24/7. We are doing our best to strive to be a leader in the industry setting the benchmarks not following them”.
Industry scanning:
No doubt transportation means are changing and developing day by day and in all over the world people are going for better and better way of transport. Especially in Pakistan where air transport and railway are almost in governmental control and their decline is now no more hidden story. Road transport is 1st choice of people. Another reason is load shedding of CNG compel people to use public transport. Another reason is thousands of thousands people are travelling daily for their jobs, businesses and education with in cities and to other cities. Road public transport is not so much developed in Pakistan so it has great attractiveness and growth for already existing investors and for new ones too.
Porter five forces model for competitive analysis:
1. Rivalry among the competitors:
Over all in transport industry rivalry among the competitors is high and according to porter it is the most important force; but in this case Daewoo has edge because they select destinations and class which is not covering by other competitors. First of all their location is unique, they are in middle of city Lahore and their other cities locations are also different and away from their competitors location who are in same location. Secondly Daewoo doesn’t cover lower class they are covering middle class while their competitors are away from upper middle class. So for Daewoo this force is low.
2. Potential entry of new competitors:
It is a little bit difficult for new competitors to entre because already existing competitors are too much strong and have a class and base of customers. But it is also possible a competitor with high investment good quality and lower prices can cover a gap between Daewoo and other competitors. So we can say it is average force for Daewoo.
3. Potential development of substitute products:
It is already discussed that in Pakistan the substitute of road transport, railway and airlines are almost monopolist and governmental, although there is a little part of airlines which is now private but there quality and prices are not too much favorable. They are declining day by day. So this force is also low for Daewoo.
4. Bargaining power of suppliers:
For Daewoo there is no much problem of suppliers they are getting usually their spare parts and technology from their home country South Korea and their local suppliers are also have good reputation so it is difficult to say this force strong.
5. Bargaining power of customers:
We have already discussed the customer base of Daewoo, they are usually targeted upper middle class, and they have no choice expect Daewoo if they want to use public transport and in urban areas Daewoo tracks are unique in a way that they are in elite areas and no other transport facility is available for transport.

Opportunities and threats of Daewoo bus service:
OPPORTUNITIES:
There are many opportunities in the industry. Those are as follow:
1. Population Growth: Population growth is a very important factor to be considered in this industry. Because travelling of people is usually measured by the population size of the country. And Pakistan is having growth rate of its population of approx. 2.14%. So this opportunity holds more weightage (i.e. 0.082) and company has much ability to gain competitive advantage by this opportunities.
2. Railway Downfall: Railway is losing its reliability day by day. Mass population is more willing to travel on busses despite the fact that it is not enough speedy as compared to railway. So this change is creating a huge opportunity for our company to catch more market share. So we weighted this opportunity 0.072 and company has its operations capable enough to avail this opportunity.
Government Support for Busses at Cheap Rates: Government is supporting this industry by minimizing the duty on import of CNG busses. With the help of this policy our company has an opportunity to increase its capacity. So weight of this opportunity is assigned as 0.063. But availing this opportunity could be hard for
1. company because CNG is not effective enough for long routes but we can run those busses using petrol.
2. Increase in Fuel Prices: Due to high unbearable inflation for last 3 years petroleum prices have increased by more than 100%. This factor forced population to move towards public transportation instead of using their own personal transportation. This created good opportunity for us to gain market share.
3. No Reliable Big firm competing: There is no reliable multi-national group operating in Pakistan who provides transportation services. So public mostly likes to depend on Daewoo because of its timely and up to date buses to travel. Plus no reliable group is providing businesses with transportation services so this is an extra opportunity to avail. So we weight this opportunity 0.055
4. Development of Gwadar seaport:Gwadar is also a good opportunity for our company. Gwadar is said to be one of great seaport of the world in next few years. So industrialists and investors are looking for this new business site. So good transportation for this area is a best opportunity for our company. So this opportunity weights about 0.068.
5. Swat Re-establishment: Now Swat is once again trying to regain its reputation as a great tourist place. So this is good opportunity for our company to connect other areas with Swat. And it is weighted as 0.065.
6. Expansion of Roads: Current Government and as well as previous government played an important role in establishment and expansion of road networks. It is a very important opportunity for our company because in coming future we will be able to create as large network as needed between the cities of Pakistan. So we weighted this opportunity by 0.081. and as our company has enough ability to enlarge its network by increasing capacity.

THREATS: This industry also contains many threats.
1. Competitors struggling to compete in the industry: Competitors are rapidly following our benchmarks. So in future this can move us into danger zone confronting new competitors. This threat is weighted as 0.070. But our company has enough capability to secure its competitive edge.
2. PIA & Railways Betterment/Privatization Plans: As government is planning to improve PIA and railways in future. This is a small threat for us because it can capture our customers. We weighted this threat as 0.058. It is a small threat because our customer’s loyalty will play important role in securing us from this threat.
3. Inflation in Oil and Lubricants: As prices of Oil and Lubricants is increasing day by day which is making hard for us to maintain the profitability margin and this can force us to lose competitive advantage of being cost efficient. We weighted this threat as 0.064.
4. Uncontrollable Terrorism: In Pakistan there is a great threat for multi-national companies regarding terrorism. Company can’t control over this threat and as these type of threats are coming in daily routine so company is aware enough. That’s why we weighted it as 0.047.
5. Competitor coming up with cheap rates: as our company is an multi-national organization so it is unable to maintain cheap rates as compared to local companies. This is an important threat for us. Hence we weighted it as 0.066.
6. Competitors providing more intercity bus stops: The Local companies are having more intercity bus stops than us. They are even covering the small towns all over the Punjab. This threat is not strong enough because Daewoo is already working on opening more and more intercity bus stops. So this threat is weighted as 0.059
7. Low Disposable Income: Due to inflation disposable income is decreasing day by day. This can threaten our company to reduce prices. As our company is targeting middle-upper class so we can overcome this threat. This threat is weighted as 0.05.
8. Increasing number of Riots: its and social threat for our company because mostly riots in Pakistan result in damage of busses and other transport. But our company has overcome this threat by establishing network among city administration.
Sammi Daewoo Strengths & Weaknesses:
The main strengths & weaknesses of Sammi Daewoo
STRENGTHS:
1. Bus drivers minimum 3 years’ experience: Daewoo Bus Service has its very important strength i.e. the driver which is newly hired is required to have experience of minimum 3 year.
2. “International Workshop & training institute”:Sammi Daewoo has its own training center and also a workshop for its drivers and buses. Which is its unique strength from all other competitors as no one else owns such a distinctive competency.
3. Increase in newspaper advertisement 10-15%: Daewoo has expanded his marketing efforts and increased its advertisement from 10-15% as compared to its competitors.
4. Have motivated and well trained crew: In this industry most companies lack motivated employees, due to which most of them lack well experienced drivers. But Sammi Daewoo has its motivated crew and it takes care of its human resources.
5. More than 18 routes and 325 departures/day:Sammi Daewoo has huge operations management system as it is operating at more than 18 routes with 325 departures per day. And also smooth and timely operations are one of the major strength of Daewo.

6. Feedback system through 3 ways: Daewoo takes care of its customers. And due to which it provides 3 ways of giving feedback. Firstly comments card are provided in buses, second feedback boxes are available at all terminals and third feedback facility is also available on its website.

7. 98% bus departures and arrivals are on time: Daewoo’s best strategy and also its distinctive competency is its punctuality. 98% of its schedules are completed on time. Other 2% includes delays due to some environmental factors.
8. Qualified employees with appropriate degree: Daewoo staff comprises of well qualified employees who are managing the operations of the company.
9. Website resource to provide information 24/7: Daewoo online services include complete information for schedules of coming days for its customers. None other company is providing such services.
10. Safe, secure and Timely Image in Customers mind: Daewoo one of the important strength is also its brand image in customers’ mind, which helps in maintaining the relationship with its customers.
11. Increase in cargo bus service market share to 12%: Cargo service of Sammi Daewoo is performing very well. And due to its affordable rates in cargo service its market share has reached up to 12%.
12. Luxurious 200+ buses in market: Daewoo is the only bus service owning most luxurious buses in this market.
13. Sales up by 11% after starting services in Sindh: Since railway has shown bad image Daewoo is taking advantage of this gap of railway and since then it has started its services from Punjab to Sindh and it resulted 11% increase in company’s sales.
14. Strong image as foreign group: Sammi Daewoo Express Bus Service is the only foreign group working in this industry and has good image as an foreign company working in Pakistan.

WEAKNESSES:
1. High fares as compare to competitor: In this industry price of the service also matters a lot. Daewoo provide its customers a value added and luxurious services which disables Daewoo to bring down its prices.
2. Still at least 50 more cities to target:Sammi Daewoo is providing services in many cities but still it need to go for market development. Competitors in this industry are providing services also many other small cities in which Daewoo has not yet introduced.
3. Terminals need renovation: Daewoo has been a popular brand since it has been introduced. There are such bus stops which are in need of renovation, as they have not been renovated since their initial days.
4. In city location of the terminals causes extra time & cost: Daewoo’s mostly terminals are located in middle of the cities. It creates ease for customers to access the terminals. But it makes hard for the drivers to maintain its punctuality as approaching highway takes almost 30 minutes. Whereas competitors are locating their terminals near entrance of the cities.
5. Don’t stop the bus during journey even customer wants it: Daewoo has a policy of nonstop journey. This policy sometime creates problem for customers when they face a severe emergency.
6. Empty seats at the time of departure decreases profitability margins: Daewoo has strong reputation regarding punctuality of arrivals as well as departures. That’s Daewoo can’t wait if half of the bu Insufficient capacity of Terminals to handle rush hours: During the rush hours customers feel problem while buying the tickets. Daewoo needs to expand its reception capacity to overcome this weakness.
7. Away from other terminals create problems for customers usually 30 min away: If customer traveling on Daewoo to Lahore and then he want to go to Kasoor, he needs a another bus other than Daewoo to travel next location then he’ll take 30 minutes to go to any other bus station. Because Daewoo’s location is much different from its competitors.
8. Away from other terminals create problems for customers usually 30 min away: If customer traveling on Daewoo to Lahore and then he want to go to Kasoor, he needs a another bus other than Daewoo to travel next location then he’ll take 30 minutes to go to any other bus station. Because Daewoo’s location is much different from its competitors.
Critical success factors:
For transport industry major critical success factors (CSR) are:
1. Downfall of railway and PIA
2. Expansion of roads
3. Availability of facilities
4. Routes and destinations
5. Location
6. Price competitiveness
7. Technology improvement
8. Management
9. Brand impact

Competitive Profile Matrix:

Sammi
Daewoo
Bilal
Movers
Niazi
Express

Weight
Rating
Score
Rating
Score
Rating
Score
Downfall of railway and PIA
0.2
4
0.8
3
0.6
2
0.4
Expansion of roads
0.15
3
0.45
2
0.3
3
0.45
Availability of facilities
0.05
4
0.2
3
0.15
1
0.05
Routes and destinations
0.2
1
0.2
3
0.6
4
0.8
Location
0.05
3
0.3
2
0.1
1
0.05
Price competitiveness
0.1
1
0.1
3
0.3
4
0.4
Technology improvement
0.1
3
0.3
2
0.2
1
0.1
Management
0.1
4
0.4
2
0.2
1
0.1
Brand impact
0.05
3
0.15
2
0.1
1
0.05

1.00

2.9

2.35

2.4

EFE Matrix for Sammi Daewoo Bus Service:
Key External Factors
Weights
Rating
Weighting Score
Opportunities

Increase in number of customers because of decline in other way of transport.
0.09
4
0.36
Pakistan Railways downfall increased demand for Road Transport
0.07
4
0.28
Government Support for C.N.G Buses
0.06
1
0.06
load shedding of C.N.G and higher fuel prices (up to 100%) shifting people to public transport
0.07
2
0.14
No Reliable Big firm competing in the Industry
0.05
4
0.2
Development of Gwadar seaport-new economic hub
0.07
3
0.21
Swat Re-establishment as tourist hill station
0.06
3
0.18
Expansion of Road Network-North to South
0.08
4
0.32

Threats

Competitors rapidly struggling to compete in the industry
0.07
3
0.21
PIA & Railways Betterment/Privatization Plans
0.06
2
0.12
Inflation in Oil and Lubricants
0.06
1
0.06
Uncontrollable Terrorism
0.05
2
0.1
Competitor coming up with cheap rates
0.07
2
0.14
Competitors providing more intercity bus stops
0.06
2
0.12
Low Disposable Income of People
0.05
1
0.05
Increasing number of protests
0.03
1
0.03

Total
1

2.58

The score above 2.5 shows the firm is above than average.
IFE (Internal Factor Evaluation) Mtrix:
IFE Matrix for Sammi Daewoo Bus Service:

Key Internal Factors
Weight
Rating
Weighted Score

STRENGTHS

1
Bus drivers minimum 3 years’ experience
0.07
4
0.28
2
Have our own first “International Workshop & training institute (32 KM Multan road)
0.06
3
0.18
3
Increase in newspaper advertisement 10-15%
0.04
3
0.12
4
Have motivated and well trained crew
0.06
4
0.24
5
Providing services on more than 18 routes and operating more than 325 departures per day
0.04
3
0.12
6
Proper feedback system through 3 ways
0.02
3
0.06
7
98% bus departures and arrivals are on time
0.07
4
0.28
8
Have qualified employees with appropriate degree.
0.05
3
0.15
9
Website resource to provide information 24/7
0.03
3
0.09
10
Safe, secure and timely image in customers mind.
0.06
4
0.24
11
Increase in cargo bus service market share to 12%
0.05
3
0.15
12
Luxurious 200+ buses in market
0.04
4
0.16
13
Sales up by 11% after starting services in Sindh
0.04
3
0.12
14
Strong image as foreign group
0.05
4
0.2

WEAKNESSES

1
High fares as compare to competitor
0.07
1
0.07
2
No services in small cities still at least 50 more cities to target.
0.06
1
0.06
3
Terminals need renovation.
0.03
1
0.03
4
In city location of the terminals causes extra time (at least 30 minutes) & cost
0.02
2
0.04
5
Don’t stop the bus for long time at any cost even customer wants it.
0.04
1
0.04
6
Difficult to fill empty seats at the time of departure decreases profitability margins.
0.05
1
0.05
7
Insufficient capacity of Terminals to handle rush hours.
0.03
2
0.06
8
Away from other terminals create problems for customers usually 30 min away.
0.02
2
0.04

1

2.78