Role of Private Sector

The biggest weakness of private firms in the marble market is lack of management skills. Managers and owners of these firms do not employ efficient management techniques. During our survey and visits from companies, we found that firms do not have any professional staff to use financial management methods and need high quality of machinery which derivation to conduct marketing operations and market research, and these firms do not have any Research & Statistics Department that before going to implementation of that business must hove the environmental analyses which can help them in find donors and customer R&D unit. This paper emphasizes that private firms along with their association must take the management issue very seriously. The paper presents the following recommendations for private firms and their associations:

1. There are two associations of marble producers in Afghanistan, namely Afghanistan Marble Granite Processing Association (AMGPA) and Afghanistan Marble Industry Association (AMIA). The paper strongly recommends that these two associations merge into a single association in order to have a stronger negotiation power. Merging both associations into one can help both the government to provide them with a single help package, and the association to have more power for lobbying. It can help them to solve the problem of their industrial park in Arghandai.1Moreover, merging to a unified association has other benefits e.g. it will cost less to provide training for the members and they can benefit from the spillover effect of their activity within the association.

2. Since entering the marble business and establishing a quarry or processing unit requires investing huge capital, and since the concentration ratio in the marble market is higher and most firms struggle to expand or to even conserve their share at the market, this paper suggest that firms can engage in mergers and/or create joint-ventures. This can help them raise sufficient capital and use the information and experience of each other in the market to become more competitive.

3. Marble firms should hire professional managers or build their management capacity. This will help them increase their efficiency, and practice successful market and production strategies, which will ensure their long-term growth.

4. The marble associations should hire professional staff to manage their affairs and to provide them with professional advises. They should using modern marketing tools such creation of a website, and carry out R&D activities. This can bring transparency and alleviate conflict of interest within the association.

5. In terms of strategy, private firms should practice competition through prices. By decreasing their prices, they can increase their sales and thus expand their market share. This in turn increases their profit. Such a strategy has been discussed in detail in Chapter 2.

Date: 2015-01-29; view: 735