44690714-fab-india
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INTERNATIONAL MARKET RESEARCH
SRUTI AHIR---------------------------------------------------------------0920849AROMAL JOE-------------------------------------------------------------0920806SUBHADEEP SAHA------------------------------------------------------0920831TONY K ROY--------------------------------------------------------------0920835DIBYAJYOTI PAL----------------------------------------------------------0920814
FABINDIA
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We Are.. fabindia
Headquarters: Delhi Area, India Industry: Retail Type: Privately Held Status: Operating Company Size: 1,000 employees Founded: 1958 Website: http://www.fabindia.net
Our MissionMission: Our Endeavour is to provide customers with hand crafted products which help support and encourage good craftsmanship.
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GOALS AND OBJECTIVES
•To capture and establish a niche market in Germany.•To increase sales and profits through exporting our products to our European partners.•To provide products that differentiates fashion in Europe.
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Why In Germany ??10/21/2009
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PRODUCTS THAT FAB INDIA PLANS TO EXPORT
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POTENTIAL PARTNERS FOR FABINDIA IN EUROPE
Inditex Group Gap Inc Hennes & Mauritz
Inditex Group Gap Inc. H&M1-yr sales growth 4.4% 7.8% 11.4%
1-yr net income growth
13.1% 16.1% 11.8%
No. Of countries they operate
73 44 34
COMPETITOR ANALYSIS
Inditex Group Gap Inc. H&MWorldwide 4430 3465 1800Germany 73 - 346Austria 12 - 61Netherlands 23 - 98Sweden 10 - 156
Stores in Various Countries
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Insights…
Headquarters: Stockholm Area, SwedenIndustry: RetailType: Public CompanyStatus: OperatingCompany Size: 53,430 employees2006 Revenue: 68,400 mil [SEK] (12%) Founded: 1947Website: http://www.hm.com
H & M: Hennes & Mauritz AB (operating as H&M), is a Swedish clothing company, known for its fast fashion clothing offerings for women, men, teenagers and children. H&M has more than 1,800 stores in 34 different countries
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WHY H&M?Gap Inc. Has no stores in the above mentioned European countries. Although Inditex is one of the world’s largest apparel retailers, comprising of 4430 stores worldwide, but it has only 73 stores in Germany, 12 in Austria,23 in Netherlands, and 10 in Sweden.Though H&M has only 1800 stores worldwide but number of stores in Germany(346), Austria(61), Netherlands(98), & Sweden(156) are much greater in comparison to Inditex.H&M holds the maximum market share in Germany in the Apparel Sector.Annual sales growth of H&M was recorded to be 11.4%, much higher to that of Inditex(4.4%) and Gap Inc.(7.8%)Germany is H&M’s #1 market accounting for about 25%of its sales.
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Companies and their products export to EUROPEName of the
CompanyExport Market Product Export
Uzma international (China)
European Market Silk dresses, Silk tops, Silk skirts, Silk kurties, Silk trousers, Silk stoles, Silk wrap tops, Silk kaftans, Silk dusters
Ronak Weaving/ Garments (Surat, INDIA)
Europe, America, Bangladesh, Australia, and all other capital markets
•Georgette Fabric•Chiffon Fabric•Crepe Fabric•Satin Fabric•Fashion wears, Men’s wear, women's wear, swim wear, Beach wears, Children wear, Fashion Accessories like stoles, hand bags, scarves Etc.
Shubhangi Overseas
USA, European Countries DESIGNER SALWAR KAMEEZLEHNGA CHOLILADIES KURTISDESIGNER SAREESHOME FURNISHING
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Fabindia S.W.O.T. Analysis Differentiable products Brand recognition and loyalty Diverse product mix Partnering with suppliers In- house manufacturing Price Trends Setter Different categories of stores Customer Loyalty
No specific promotions strategy Limited channels of business Sourcing strategy skewed towards suppliers Inconsistent quality of Products Inconsistent service in stores
Substitute producing competitors Not in touch with FashionTrends
In store merchandising & navigation Promoting e-business channel Organic foods market Customer acquisition strategies
Stre
ngth
sTh
reat
s
Wea
knes
ses
Oppo
rtuni
ties
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P.E.S.T. AnalysisPolitical •EXIM policy might affect export rates which might harm the revenue of the company
•Abide by the German import policies and rules & regulations.
Economical •Poor results in aggregate figures resulted in collapse of some textile firms in Germany.•Changes in exchange rates can affect the revenue of the firm.
Social •Germans are open to other cultures if they find it interesting .•European countries prefers and support new trends in fashion.
Technological •Introduce and produce new fabrics of cotton, silk, chiffon, georgette, satin suitable with German Climate.•Amalgamation of cotton and wool, preferable for the cold climate.
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Production Details
Sourcing of Raw Materials like silk, cotton, etc from Indian Suppliers.
Designing of Garments or accessories in the Creative Studio of Fabindia by the help of Fashion Designers.
Completion of the Sample in the creative studio itself by expert tailors.
Send the Sample to the manufacturing unit for large scale production of the same single design.
•All the necessary production will be done in India.•There are 22,000 small sources from rural areas in India.•Top four states of sources in India are Andhra Pradesh, Uttar Pradesh, Gujrat, and Rajasthan.•Technical persons are more available in India rather than Germany for the production of ethnic garments.•We won’t be setting up our manufacturing units in Germany.
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TARGET MARKETOurs is a niche market comprising of:
• Indians & also Asians residing in Germany• Experimenters in Germany• Socio-Cultural Party-Goers
Total Ethnic Minority population 1951–2001, in millions and percentage of GB populationyear 1951 1961 1971 1981 1991 2001
per cent 0.4 1.0 2.3 3.9 5.2 7.9
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LogisticsTOP FIVE LOGISTICS COMPANIES IN INDIA
TNT AFL DHL BLUE DART GATI
Why TNT ???•It is India’s best logistics provider . It operates in 200 countries world wide. •It provides many categories of logistics services such as 9:00 Express, 10:00 Express, 12:00 Express, Economy Express, and Special Priority Express.•TNT ensures that our parcels, documents and freight items are delivered safely and on time throughout the world. •TNT provides the widest range of time definite and day definite express delivery services in 200 countries. TNT has built our reputation on a record of commitment to meeting the needs of our customers.
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Pricing & ProductPRICING OF PRODUCTS BY COMPETETORS
(uzma)Category Ranging fromKid’s wear E9.99- E11.99Men SHERWANIS- E111.11 – E 6.99
KURTAS- E 5.99 Ladies SALWARS-E 9.99 – E49.99
SAREES- E5.99 – E69.99
•Our Pricing Strategy: Skimming approach to cater to the needs of a niche market.
•The per capita income of germany is $37428 •The per capita income of U.S.A is $41209 •And so we have used prices similar to that of U.S.A in GERMANY
PRODUCT RANGE MENS WEAR Long kurtha Short kutha Pituk silk mutka
€ 12 - € 19 € 7 - € 11 € 31 - € 47
WOMENS WEAR Chudidar Sarees Top girls
€ 14 - € 21 € 24 - € 38 € 12 - € 16
ACCESORIES Purse jewlerry
€ 26 - € 40 € 10 - € 80
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PromotionGerman Garment sector’s
Promotion Strategymagazines;
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TV; 10fashion shows
25print; 30
other methods ;
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PLACELargest German and non-German ethnic groups
RHINE –RUHR (METROPOLITAN REGION)RHINE –RUHR (METROPOLITAN REGION):•COLONG is the largest city of the Rhineland, the very Western part of Germany. •Its very famous, Particularly among young Germans, Cologne and Düsseldorf are known for its nightlife and open-minded atmosphere. •Rhinelanders, Westfalians and others Turks, Poles, Italians, Dutch, French, Arabs, Iranians, South Asians like Indians, and Japanese (Google)•Rhine – Ruhr will be our target market because it has the heighest number of Indians and Asians.•The age distribution in germany:
• 0–14 years: 13.9% (male 5,894,724/female 5,590,373)• 15–64 years: 66.3% (male 27,811,357/female 26,790,222) • 65 years and over: 19.8% (male 6,771,972/female 9,542,348)
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Financial Aspects of Fabindia and H&MProjected Profit and LossNew Look is in the early stage of development, thus initial projections have only been made on accounts that are believed to most drive the income statement.
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Financial aspects of Fabindia and H&MThe net income of H&M is 1881.2 US$ of which 5% is usually kept aside for further expansions. This fund is more than enough for H&M for taking the risk of new ventures. The annual reports of H&M and fabindia are as givenFABINDIASales turnover in 2007-08Rs 260 croreGrowth in sales35-40 %Gross marginAbout 40 %
HENNES & MAURITZGross profit for 2008 was SEK 54468m equivalent to EUR 5245.48m Net profit was SEK 13588 m equivalent to EUR 1305.69m. The above data shows that both the companies are in a sound financial position in order to enter into a partnership which would further nourish and develop their business.
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Financial aspects of Fabindia and H&MGetting into the details :-•The manufacturing cost of a garment as per the present market prices is round about 50 to 65 euros when converted•This can be sold by H&M at the prevailing normal garment prices of 100 euros.•Fabindia can cover the extra costs of exports by a margin it gets by selling the product at a price of 75-80 euros to H&M.•In this manner, there is high profitability in the business proposal for both the companies as there is a high margin per product.
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KEY ISSUES•To convince and promote the European consumers about Indian ethnic wear.•Inflationary pressures on core areas across Europe are hitting the consumer’s ability to spend on discretionary areas. •An expected downturn in consumer confidence across Europe will intensify competition for share of consumer spend. •The end products, i.e, the ethnic garment should be compatible with the European weather and comfortable with consumers.
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RISKS & REWARDS
RISKS:•Dealing with a different language , business culture and legal system can increase the risk of confusion and potential problems.•Sometimes extra delay of delivering the goods to H&M can increase our financial burden.•There are risks of changes in exchange rates.
REWARDS:•Capturing the new niche market of Germany and its neighboring countries.•Earning new and extra profits through extra sales.•Establishing brand value through double tagging.
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THANK YOU
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