Fab India

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STRATEGIC ANALYSIS FABINDIA

Group V: Budhaditya Banerjee Sourabh Dhariwal Tarun Daga Uma Balakrishnan

AGENDA
‡ ‡ ‡ ‡ ‡ ‡ Timeline Fabindia under John Bissell Fabindia under William Bissell Competitor Analysis SWOT Analysis Buying Behaviour and the Way Ahead ± Organic Food ± Apparel ± Home Furnishings & Furniture

‡ Financial Comparisons ‡ Recommendations at a Glance

TIMELINE
FabIndia Indian Economy
Post 47- govt supports socialism & nationalism 1957- Govt sets up KVIC

1960- Incorporation in Delhi 1976- First retail store in GK 1977- Contemporarizes design 1981- Introduction of garments

1990- Fiscal deficit reaches 8.5% 1991- Indian economy opens up

1992- Liaison with Habitat ends 1994-Second store opens in Delhi 1999- William Bissell becomes MD 2003-Vision Plan I originates 2004- Goes online 2006- 8% economic growth 2005- Vision Plan II is born 2006- Garments make 70% revenue 2006- Govt allows foreign single brand outlets

FABINDIA UNDER JOHN BISSELL
‡ Founded by American, John Bissell to:
± Develop market for hand-woven products ± Provide rural employment

‡ Incorporated in 1960 in Delhi to export upholstery fabric ‡ By 1965, revenues of Rs. 2 million due to: ± AS Khera, supplier of hand-woven rugs etc from Panipat ± Habitat, major UK buyer of Fabindia Panipat products

‡ 1974 saw Fabindia s first retail store in Greater Kailash with ad-hoc merchandising ‡ 1977-Featured contemporary design to attract consumers and designers ‡ Garments were introduced in 1980s after John Bissell got khadi shirts made for himself ‡ Habitat was acquired in 1992 and Fabindia could no longer continue selling to it ‡ John Bissell dies in 1998, passing the baton to son William Bissell who becomes MD in 1999

FABINDIA UNDER WILLIAM BISSELL
‡ End of license raj, and liberalization gave textiles duty concessions on machine imports ‡ William s vision included expansion, depending less on exports and setting up retail operations ‡ India saw robust economic growth, change in consumer patterns and growth of middle class by 2006 ‡ 2003 saw the birth of Vision Plan I ± Planned to grow to revenues of Rs. 1 b from Rs. 360 m in 4 years ± Achieved it in two years and Vision Plan II came along ± It planned to achieve revenues of Rs. 2 b by March 2009

COMPETITOR ANALYSIS
‡ Organized Retail: Retail Stores (Shopper s Stop, Pantaloons, Globus, etc.) Weaknesses:1. Product diversity lacking 2. Stock as per running trends and serve to fads-inconsistency towards churning out quality offerings in hand crafts 3. Authenticity of handcrafts-No craftsmark present to validate the crafts as against the Fabindia offerings which have the same imprinted on them Strengths:1. Strong Pan-India presence and awareness 2. Man-power expertise 3. Competitive Pricing 4. Robust supply chains and short product development life cycles 5. High marketing communications spend 6. Quality consciousness and adherence to standards

COMPETITOR ANALYSIS
Government Initiatives ( Cottage Industries Emporium, Khadi Gram Udyog, State Government Department) Strengths:1. Source of finances is fixed and subsidies boost these initiatives over time 2. Tie-ups with foreign governments facilitating permanent trade of national handicrafts. Weaknesses:1. Ambience-non-attractive to modern day shoppers are fed on the excellent ambiences of the retail formats. 2. Standardization defeats customization hands-down.

COMPETITOR ANALYSIS
Designer Boutiques: (Ritu Kumar s, Ritu Beri s, Rohit Bal, Manish Malhotra, Sabyasachi Mukherjee, etc.) Strengths:1. Product customization facilities-extremely high 2. Highest level of customer intimacyRelationship marketing Weaknesses:1. Exorbitant prices-not meant for masses 2. Not a robust supply chainnot meant to be a panIndia operation

COMPETITOR ANALYSIS
‡ Unorganized Sector:Mom-and-pop stores and local tailoring units:-

Strengths:1. Effective in addressing high geographical dispersion 2. Customization facility available...
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