Strategic Management Assignment
TABLE OF CONTENT
Company Name (background): TANISHQ
TypeA subsidiary of TITAN Industries
HeadquartersHosur, Tamil Nadu, India
CompetitorsAsmi, Nakshatra Diamonds, Gili, Nirvata Diamonds, D’damas Diamonds, Adora Diamonds, Kiah Diamonds 2.VISION
To be a world-class, innovative, progressive organization and to build India’s most desirable jewelry. 3.MISSION
To create beauty for both of our customers by innovating beautiful, ethnic and traditional yet unique design jewelry based on a customer-centric approach, and to contribute to the community. 4.GOALS
It is for you. Our goal is to make branded jewelry affordable to all Indian women with the surety of being 100% pure. 5.INDUSTRYANALYSIS
Jewelry is a thriving industry in India with annual turnover of over 60,000 crores. Since 90’s, the industry has seen a surge in demand upto 45% due to ease of gold imports. According to World Gold Council estimates, India held 7% of world’s gold stock (9,500 tonnes). 5.2.COMPETITION
At national level, there are no competitors. Major competition is family owned independent jewelers (over 25,000 in numbers) 5.3.INDUSTRY TURNOVER
Ticket prices range from 1 Lac to several Crores of rupees. Jeweler-Customer relation-ship prevails the buying pattern. For an average jeweler, impulsive buying is limited to 2~3 times a year. Selection process is lengthy. 5.4.DEMAND
Following are some important factors in jewelry buying patterns in India. a)22 karat gold – notion of purity. Any less, not acceptable. b)Plain jewelry is in high demand, primarily from the fact the majority believe in “gold as an investment” rather than “adornment”. However, there is a shift in this pattern as almost 57% of customers want to keep a balance between investment and adornment orientation. (Source: Tanishq value proposition research, 2005) c)Pricing power – with customers as gold prices are known, craftsmanship costs can be estimated and jeweler margins are typically 5 ~ 15%. However, this is not the case in gem-studded jewelry (Tanishq focus) as customers cannot accurately estimate gems prices. d)Major seasons of buying are festivals e.g . Diwali, wedding seasons etc. Impulsive buying limited to 2~3 times a year only. e)Buying is quality centered.
f)Jeweler-customer trust relationship – a very important factor g)Jewelry shop design – people want high inventory and jewelry designs in showrooms. 5.5.VERTICAL INTEGRATION
Exhibit-1 shows the typical value chain in Indian jewelry. The whole chain is a long-term relationship. Vendor own gold inventories whereas Jewelers are retail stockists. Vendor controls 3~4 Head karighars, who in turn control 10~20 karighars. Karighar typically receive 30~40 Rs/gm.
Exhibit – 1
Customers want depth in design and differentiation within the plan jewelry segment. For Tanishq, the only area to compete was on the basis of “Purity of Gold” claim. In this aspect, the “Karat meter” and “Free of cost testing” strategy worked very well for them increasing number of walk-ins by 60% and increased revenue during 2004 ~ 2005.
The gem-studded jewelry only took pace since early 2000’s with improved economic conditions and globalization impact and increased urbanization. Tanishq’s target market was...