SIL: Value Chain and Strategic Choices

Prior to 2011, Service Industries Limited’s (SIL) production for the Pakistani market was sold through the marketing and retailing network of Service Sales Corporation (SSC), as both SIL and SSC were owned by the Service Group. However, in 2011, the companies parted ways based on two main conditions. First, SSC would continue to buy shoes worth at least PKR 3.8 billion from SIL till 2021. Second, SIL would give exclusive license to SSC to use Servis brand for the shoe business till 2021. Omar Saeed, CEO of SIL, is reflecting on the previous four years’ performance for the shoe business division. It has not met the sales target for 2014, domestic sales are dependant on SSC and Klara (SIL’s own brand of wholesale), the European market is presurizing SIL to reduce prices as well as provide high variety and low volume orders, and more efforts need to be made to utilize SIL’s manufacturing facilities. Omar has to make SIL’s strategy for 2021, when SSC may not be there to give business worth PKR 3.8 billion, as well as plan the necessary roadmap. SIL’s top management wants to see SIL as a global player in its line of business