khaadi business case (semester project)

Need to be written

Mission

1998 Started with offering customers kurtas and loose fabric made from hand-woven fabric.

Core Ideology Hand woven fabric with blend of both eastern and western touch.

D Design Department creates a design and send it to R&D department R

Research & Development department build few of the Complete samples for approvals.

S Style is responsible for approval and M

Marketing is responsible for marketing and segmentation of products.

01 100 % In-house

All The Products were developed in-house and stores were company operated

02 20-30 % In-house

Offloaded itself from in-house development and adopted franchise model.

03 5% In-house

Completely focus on design and R&D. Increase global presence.

Stores WWW

Khaadi SWOT Analysis - Pakistan

W S

O

Strength Customer Equity Tailoring Service Supply Chain New Stock every two weeks Brand Name Innovation Culture

T Recession Intense Competition

Threat

Weak clothing line for men Cost Structure Online Presence

Weakness

New Products New Markets Increase online presence

Opportunity

Low Quality Low Price

High Quality Low Price

High Quality Low Price

High Quality High Price

Quality

Price

STP – Pakistani Market

High Quality High Price

Khaadi Segmentation-Targeting-Positioning

Customer with High Purchase

Power

Segment who wants unstitched clothes

Segment who want Eastern Clothes

Segment who want Western Clothes

Segment who want Accessories

Segment who want Kids Clothes

Segment who want Home Accessories

169 bn $ Exports 235 bn $ Imports 10 % Unemployment

Economic Growth 3.9 9 % Inflanation Rate 2.19 $ Exchange Rate

80 Million Population 10,500$ GDP/Capita 800 bn $ GDP

PEST Analysis

Environment

Social

Technology

Legal

Economic

Political

Democratic Representation

Division among multiple bodies

Stable Foreign Policy

Involvement in many global initiatives

PEST Analysis

Environment

Social

Technology

Legal

Economic

Political

Service Sector contributes 67% of GDP

10,000$ GDP/Capita

Reducing Public Debt in Progress

Free Trade Agreements

Rigid Labor Trends

High Taxes

PEST Analysis

Environment

Social

Technology

Legal

Economic

Political

Significant GAP between different classes

Islamic Culture but blended with western

touch

PEST Analysis

Environment

Social

Technology

Legal

Economic

Political

Significant Growth in R&D

National Innovation Strategy

Double Digit Growth in technology sector

Increase number of skilled scientist

PEST Analysis

Environment

Social

Technology

Legal

Economic

Political

8 7 6 5

52% of Women prefer to wear Hijab 31% of women prefer to wear western touch clothes

Clothing Preference TV Radio Social Media Print Media Stores

Touch Points asfasfasdfasdfa

Point 4 afasdfasdf.

Point 5

72% Of Urban Population Women 50% 70% Turks 20% Kurds

Urban Population Istanbul Ankara Izmir Bursa Adana Gaziantep Konya Antalya

Concentration 52% - 25-69 Years 17% - 16 to 24 Years 17% - 6-14 Years

Age Distribution 28% - Food 20% - Transport 19% - Housing & Utilities 8% - Furnishing & Maintain. 6% - Restaurants 6% - Clothing 4% - Recreation

$ Preferences

Consumer Analysis - Turkey

Women Clothing Preference - Turkey

Buyers

High Per Capita So customer have high

bargaining Power / Ample Brands

Suppliers

Limited suppliers for raw material so higher

bargaining power.

New Entrant

Other Pakistani Brands will follow Khaadi

Success Story

Substitute

Western products /

• Nearly 58 thousand active companies and 1 mn people (2 mn including unregistered) employed in the textile , ready wear and leather industry. (Source: Social Security Institution, 2014)

Manufacturing Production

Value

(USD bn)

2014

Number of

Companies

2014

Share of SMEs

in

Total Number

of Companies,

20124

Number of

Foreign

Companies

2014

Number of

Employees

2014

Number of

Employees (incl.

unregistered

employees), 2014

Manufacturing of Textile 26,5 17.313 98.0% 493 430.213 450,000

Manufacturing of Ready Wear 19,5 33.977 99.5% 130 454.754 1,500,000

Manufacturing of Leather

Products 2,6 6.425 99.9% 107 60.591 NA

Total 48,6 57.715 99.1% 730 945.558 NA

Source: Ministry of Science Industry and Technology, Social Security Institution, Ministry of Economy, 2014

Turkey’s Position

Turkey’s Position

Turkey’s Position in the World and EU

Category World Rank EU Rank

Thread manufacturing 3 1

Knit fabric manufacturing 2 1

Woven fabric manufacturing 5 2

Textile exports to World/EU 7 2

Clothing exports to World/EU 7 3

Cotton manufacturing 8 NA

Cotton consumption 4 NA

Organic cotton manufacturing 3 NA

Knitted clothing exports 5 NA

Woven clothing exports 9 NA

Hosiery manufacturing 2 NA

Raw cotton imports 3 NA

of the clothing production is exported. (

of the clothing exported is cotton clothing.

• Turkey is a of ready-

wear products but a net importer of textiles.

Turkey Exporter / Importer ?

• Main threat: Low priced imports from China

• Main strategy: Concentration on high value added products and branding

Industry Direction

Top Brands in Turkish Clothing Industry

Top Brands in Turkish Clothing Industry

Heavily westernized tilted brands have occupied the ready wear industry

Strength Weakness Opportunity Threat

Khaadi SWOT w.r.t. Turkey

1. Country of Origin 2. Traditional culture

look 3. Fast Paced Products

Rollout 4. Muslim Brand

Inheritance 5. Foreign Policy

1.First time experience of Turkish market 2. No supply and

Brand

1. Expats may act as ambassadress

2. Additional revenue stream

3. Use tourism hub for brand

awareness of khaadi to other

countries

1. Local competitors 2. Turkish may not

accept the brand 3. Small number of

Textile suppliers

Huge Potential wrt customer

base

A High Priced brand in Pakistan may be perceived

as low price Brand in

Low Priced Labor

Turkey as country

People don’t know about

Khaadi

Khaadi is still closer to Turkish

Traditional culture but not to western brands in

turkey

Khaadi vs local brands

Its already a big ready to wear

industry .

Still Khaadi have to optin for

textile import from Pakistan if

Khaadi will manufacture

product in Turkey

Industry

Pakistani recession vs new revenue stream

Core suppliers for textile in turkey

will be a challenge

Khaadi SWOT Pakistan &

Turkey

Recommended Business Model

Send Value Added and Furnished Products to Turkey and Sell it in Turkey

Pakistan should be the headquarter for Production

Recommended Business Model

Izmir

Western Touch Products Only

Istan

bul

Ankara

Recommended Business Model