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Please don't provide the answer which is already on chegg because it is wrong. Please Read the whole document and analysis each situation, in each assignment question. Like Capacity expansion, Increment in advertising budget, Market development and Product development.

Indus Crafts - Decision Dilemma (B) After getting the cost and profitability analysis report from Amir, based on this report Zahid decided to go for uneven as well as a special order by availing the outsourcing opportunity from Sukkur Central Jail Crafts Unit. Earlier, he was concerned about the quality and customization issues from outsourcing, but later during the year when the customer received his order, customer feedback was satisfied with the product's quality. It was December 2015 when Zahid pondered over the yearly performance of Indus Crafts. Overall, it was a profitable year, but then he thought about the two unusual orders given to him. Even though he fulfilled those orders, but still the bottleneck remained the same. The capacity constraint remained there as he thought about the next year demand forecast. Zahid also thought about the previous day meeting with Jahangir in which he showed him some pictures of his exhibitions. Jahangir was happy at the timely delivery of his special order so he decided to consider Indus crafts for his future orders as well. He showed him the changing trend in cultural products as now these products have many alternative uses and the demand for these products was higher as compared to the traditional ralli quilt and Ajrak shawl (Exhibit 1&2). Zahid wondered whether he could go for the market or product development or combined in its product line of Ralli and Ajrak by investing its resources as it might have a positive impact on the company's profitability. As the company was growing, Zahid was seriously discerning about the future strategy and long- term sustainability of the company. He had 12 million rupees from his personal savings and he wanted to invest that money in developing his business. He needs to decide about the growth strategy for his company and for the sustainability of his business. Moreover, as advertisement played a major role on the demand of cultural product, Zahid also wants to adopt a sustainable advertising strategy which can give boost to his business. Industrial & Market Analysis Over the time the status of the Sindhi cultural industry has remained quite gloomy. The traditional items including Ajrak, Ralli quilt and cap were absconding from the lifestyle of the modern generation. Modern generation has been heavily influenced by western culture had turned away from their own cultural heritage. The true remains of this culture could be found in the interior Sindh villages where folks still use these cultural items. The negligence of government in protecting this cultural heritage, unavailability of credit facilities to workers, unfavorable wages to the workers, increasing rates of raw materials, electricity breakdowns and declining margins have remained the other major causes. Today, only 110 Ajrak workshops have been operating throughout Sindh out of which 30 workshops have been replaced by iron, steel, and other industries. The original Ajrak has been deteriorated by latest textile printing machines which can copy the Ajrak pattern more quickly.? Despite the appalling turnaround in the Sindhi cultural industry, there was a hope. The bequest of Sindhi culture has been intervening in modern fashion. The modern fashion has embraced the Sindhi legacy in its own way hence giving life to a dying industry. In this regard, international exposure has played an important role. Many international exhibitions and museums have played their part in exposing this rich heritage to the whole world. These include "Fabric of Belonging Exotic Quilts from Pakistan and India" held at Brigham Young University in 2014, MSU Eli and Edythe Broad Art Museum, USC Pacific Asia Museum exhibition held in 2013, 17th European Patchwork Meeting held in 2011 attended by over 20,000 people around the Europe, "South Asian Seams: Quilts of India, Pakistan and Bangladesh exhibition held at University of Nebraska, Lincoln in 2010 and International Folk Art Market in Santa Fe, New Mexico featured from 2004 to 2014. Sindhi media had also played a vital role in reforming Sindhi culture. Different NGOs including SANA (Sindhi Association of North America) and SGA (Sindh Graduate Association) and other cultural administrations have been working on saving the rich culture by arranging different cultural events and exhibitions throughout the country. These efforts had shown positive results as Ralli quilts and Ajrak were widely accepted by urban families as well as foreigners. Moreover, the different uses of Ajrak and Ralli quilts like printed shirts, purses, cushions, bed sheets, pillows handbags, laptop/book covers, wall hangings and printed vessels has played its part in keeping alive this heritage. However, this cannot be said for Sindhi cap which has rapidly declined and nothing worth sharing has been done to save this legacy apart from Sindhi Topi and Ajrak day celebrated in every 1st week of December since 2009. Today, this cap has been used only on marriages and special occasions like Topi Ajrak day and Eid festive. Yet, like Ajrak and Ralli quilts it could be saved by altering its usage but the pressing question has persisted that what could be the alternative use of a Sindhi Cap? What could be the new market for this product? Also, Zahid need to keep in mind the changing dynamics of the market and should think about the future strategy of Indus Crafts. Currently Zahid was earning a return of 6 percent by serving in existing market with 3 product lines. He was operating at 70 percent of capacity and had an additional 30 percent capacity available to fulfil any uneven or concessional offers He also had outsourcing opportunity with which he can deal order flow if necessary. Zahid thought about all these aspects and developed 4 strategic options for his future business strategy. Capacity Expansion Expand the capacity by inserting another workshop in current business for Ralli and Ajrak separately. Through this option, he can not only fulfil the current demand but also uneven orders he may get in future. In order to avail this option he needs an investment of 5 million rupees which includes the fixed expenses and variable expenses i.e. two separate workshops for ralli and ajrak making, direct material and direct labor costs including labor recruiting and training costs, electricity, depreciation, supervision, selling and general admin and head office support costs. The new workshops will be supervised by workshop managers and their salary and other expenses will be covered under supervision costs. The full capacity of new workshops would be 2000 units out of which 1300 and 700 units would be the capacity of ralli and ajrak respectively. The workshop will operate at 80 percent of full capacity with the production ratio of 70 percent units of Ralli and 30 percent of Ajrak. As a result, the sales of new workshop would increase to Rs.0.51 million which will be 51.82 percent of existing sales at the cost of 92.7 percent of additional sales. The return on investment of these workshop would be 10.24 percent. Increment in Advertising Budget Increase the advertising budget by investing 2.23 million rupees. Advertising can play a positive role on the market demand of cultural products. Hence if 2.23 million is invested on conducting 360 degree integrated marketing campaign for promoting cultural products then it will increase the visibility of these products in current market; as a result the demand will also increase. This advertising budget will be evenly used in promotion of all 3 product lines utilizing all the ATL and BTL activities and indulging TV, Radio, Social Media, Newspapers and Out of Home advertising channels. Zahid consulted a local advertising agency which will perform this campaign and as an estimate every 1000 rupees invsted will increase the demand by 1 unit. Therefore if Zahid decides to operate at full capacity then the sales will increase by 36.88 percent with a realized profit of 0.54 million and ROI would be 24.86 percent. However, operating at full capacity still leaves idle advertising budget for 730 units. But if Zahid decides to invest full advertising budget then the additional demand of 730 units will yield sales of 2.29 million and a profit of 0.23 million. Along with that it will also contribute in generating the ROI of 10.59 percent but due to supply shortage Zahid could not achieve these additional sales and profits. Market Development In this option, he considered to increase his market share by expanding towards urban cities as well foreign markets. He thought to open up his dedicated outlets in Karachi, Hyderabad and Islamabad with the target sales of 1000 units for each outlet. Apart from that he also thought to take part in exhibitions in European countries where he expects to sell 500 units of inventory. Overall the total expenses of opening up new markets in three different locations along with two exhibitions in foreign markets will require an investment of 3.58 million. With his current capacity he can fulfil only 1500 units of inventory whereas for the remaining 2000 units he have to think about some other suitable options or else he may lose the opportunity to enter in new markets. In terms of profits, he can lose 0.535 million if he left this capacity issue unsolved. The ROI at his current full capacity of 1500 units would be 15.04% whereas at full demand of 3500 units of new geographic markets would be 19.78%. Product Development Zahid has an opportunity to introduce new product lines in his Ralli and Ajrak range. He can introduce different variants of household items such as apparels, wall hangings, bedsheets, table covers, handbags, and cushion covers in Ralli and Ajrak designs. He have two options to pursue this opportunity. First, he can install machinery imported from China to produce these things in Ajrak and Ralli pattern. The machinery would reduce his cost in terms of labor but he needs to hire new labor force or train his current labor force to properly install and work on new machines and it will also increase some other expenses such as fuel and electricity expenses. The machinery would no doubt increase the productivity in terms of output units and reduce the lag time however it may lose the charm of aesthetic and fine details of handmade products. The total installation cost of new machinery including labor training would be Rs. 5.75 million and the unit sales would be 10,000 units with the return on investment of 28.26 percent affiliating the risk of [product quality, distribution and recovery of receivables. Whereas if Zahid decided to introduce handmade product lines then the total cost of introducing this option would be 4.15 million including a new workshop, hiring and training of labor force, Page 36 and other expenses. The total operating capacity of this option would be 5000 units and the selling price ranges in between 3000 to 15000 rupees. The return on investment of this option would be 81.32 percent. Even though investment in new product development has lucrative returns but it will also increase challenges for the company as entering in new market with a completely different line of products will not only increase the uncertainty but it will also pose new challenges in terms of human resource, marketing, supply chain and customer development. He have to choose any option or combination to devise the future strategy of Indus Crafts by evaluating risks and returns of each strategic option. Assignment Questions 1. Evaluate the risk and return affiliated with all strategic alternatives available for Indus Crafts. 2. Choose a Strategic Option Options for Indus Crafts in association with minimizing risks and maximizing returns