Entrepreneurship (MGT602) spring 2013 Assignment no.

02 Due Date: 25-06-2013 Marks 30 TOPIC: Role of Cottage Industry in Pakistan

Name: Nayyab Nasir Awan Student ID: Mc100401463

Q NO.1: Write a comprehensive note on football industry in Pakistan. Your answer should not exceed 250 words. ANSWER:
Pakistan football industry is one of the promising secondary industries of the country and is also known as the world leader in manufacture of footballs. In Sialkot around 85% of worlds demand of hand stitched soccer balls are made here. Pakistan has exported around 3.5 million balls for the FIFA World Cup in South Africa. 40 million soccer balls are produced annually and what is fascinating is that all the 40 million footballs are produced from one city Sialkot; it has a long tradition of nearly 100 years for producing soccer balls. It has also gained an international celebrity status in 1880s when it produced the Tango ball in 1982 FIFA World cup. Football industry in Sialkot provides jobs for over 600,000 people with an annual turnover of some $1.3 billion in exports. Sialkot industry benefits from the report by IMAC which states that no one under the legal age of 14 is working in the city's football industry. Manufacturing of sports articles started in Sialkot in the beginning of the 20th century and the industry started gaining influence in the later decades Currently there are 2 factories working in Sialkot for the sports sector at large scales those are AwanSports and Forward. Around four out of every 10 footballs worldwide are made in Pakistan. But now the game is changing. For a long period industry has enjoyed the leadership status in international market but for the last decade it has not only lost its status but considerable market share.

Q NO.2: With reference to football industry in Pakistan, What are the challenges that entrepreneurs have to face (mention at least five)? What role govt can play to cope up with these challenges (mention at least five)? ANSWER:

The challenges the entrepreneurs have to face with reference to football industry in Pakistan now days are: POWER SHORTAGE: Due to the serious power shortage in Pakistan since 2008, Entrepreneurs are having difficulty fulfilling and completing orders. This problem affects product process as it decreases and cost incurred increases, this also causes delays in orders Due to this problem many orders have been shifted from Pakistan to china. COST OF PRODUCTION: The power shortage has affected the cost of production in fact it has been increased since 2008. Due to this rise suppliers attraction has been waning. The rate of electricity has been doubled and the cost of production has been increasing as well, the currency of our currency has been devalued all these have resulted in increase of cost of production. LABOR RIGHT ISSUES AND CHALLENGES: To eradicate the problem of child labor serious actions have been taken by Sialkot chamber of commerce and industry since 1990s when American and European countries accused this industry of using child labor. 93% of child labor has been successfully eradicated with the help of organizations and steps are being taken for their social protection. FINANCIAL PROBLEMS: More than 90% firms have small units. To move forward they have to adopt latest technology and machinery and provide training to their employees for that they need financial capital. Banks have increased their interest level by 15% and fewer loans are available due to their smallness. So high cost of capital and lower availability of loans restrict the industry to grow further. AUTOMATION: Automation is also one of the challenges of faced by entrepreneurs. During the last decade china has used the automated method to produce footballs as machine stitched balls as they have better production capacity and incur less cost. GOVERNMENTS ROLE: The Role government can play to cope up with challenges are: AWARENESS OF SOCIAL RESPONSIBILITY: They should aware the people and entrepreneurs of their social obligation ass well their obligation to their labor and to see to their health and protection. OVERCOME ENERGY CRISIS: Government should handle or try to overcome the energy crisis prevailing in our country because it is the most important step that should be taken for the betterment of our industry.

TECHNICAL KNOW HOW: Government should develop technical institutes to produce skilled labor and for the benefit of people so they can get proper technical education. EFFICIENCY IN LABOR: By providing technical education and workshops for the labor and educating them to improve the efficiency in labor to polish their skill institutes to be made and they should be trained properly. LOWER INTEREST RATES: To reduce the financial problems government should make the policies to reduce interest rates for business proposals and to make policies for small firms to provide financial support to them on low interest rates so they can adopt new technology and machinery.