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ATTIRE A New You, Everyday A New You, Everyday

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ATTIRE

ATTIREA New You, Everyday

A New You, Everyday

CURRENT PRODUCT LINE : Youth casuals and Party wearCURRENT MARKET SEGMENT : The Youth segment, with prominent focus on the college goers who form a major chunk in casual clothing.

CURRENT BUSINESS MODEL : We are a manufacturing concern which has a sole shop in a Delhi market but majorly distribute our products in the existing retail shops and showrooms.CURRENT BUSINESS : Indian Apparel Industry. OVERVIEW

VISIONTo attain market leadership in fashion industry by offering apparels of unmatched superiority and fostering a culture of employee empowerment and customer satisfaction while following the highest ethical and professional standards.

MISSIONWe help the fashion savvy youth become trend setters through our premium collection made exclusively for the youth.

GOALSTo become market leader in the youth apparel segmentTo create and establish a fashion statement among the youth with our high quality and unparalleled offeringsTo help the youth set a new trend everydayTo establish long lasting and mutually beneficial relationship with all our stakeholders- suppliers, distributers, buyers, government, community and so forthTo be a socially responsible and highly ethical corporate

OBJECTIVESGreater market shareHigher growth rateHigher earningsLoyal customersAffordable priceHighly motivated employees Higher or better product quality(shall also be used as product differentiation strategy in market)

STRATEGIC ANALYSISOf the total Indian retail market, 8% constitutes the organised retail segment which is estimated to grow at a rate of almost 30% by 2015. Clothing & Apparel make up almost a third of the organized retail segment, followed by Food & Grocery and Consumer Electronics.The Indian apparel industry has an overwhelming presence in the economic life of the country. It is one of the earliest industries to come into existence in the country. It provides one of the basic necessities of lifeIt also plays a pivotal role through its contribution to industrial output, employment generation, and the export earnings of the country. Currently, it contributes about 14 percent to industrial production, 4 percent to the GDP, and 17 percent to the countrys export earnings. It provides direct employment to over 35 million people.

INDUSTRY ANALYSIS

The Indian apparel industry is estimated to be worth Rs. 3,270 billion in 2011-12Expected to grow at a compounded annual growth rate of 8.7 per cent till 2016. growth would primarily be driven by surge in demand for readymade apparels in semi-urban areas, rising income levels and youth population andincreasing preference for branded apparel.

2. MARKET ANALYSISIndian apparel market is segmented in three different ways:

1. Segmentation by user category: The domestic apparel industry has 3 segments, viz Mens wear, Womens wear and Kids wear. Menswear accounts for 40% of the total market .

a.) Mens wear: Mens wear market in India is the fastest growing apparel segment. The entire apparel industry (2011-12 estimates), including domestic and exports, is pegged at Rs 3,270 billion and is expected to grow by 11% to Rs 10,320 billion by 2020. Currently menswear is the major segment of the market (Rs 720 billion) and is growing at a compounded annual growth rate (CAGR) of 9%. Gucci, Hugo Boss, Salvatore Ferragamo, Armani, Versace, Brioni, Ermenegildo Zegna, Canali, Corneliani, Alfred Dunhill, Cadini, are all present in India mens wear market.

b.)Womens wear: Womens formal wear and ethnic wear markets are still ruled by unorganized players. With more women expected to enter corporate world, both these segments are good opportunities because of the market size. Historically, the mens apparel market in India has been significantly larger than the womens apparel market. With only 20 percent of Indias urban women in the workforce, womens wardrobes have traditionally been limited to home wear and items for special occasions. Now, women are more willing to dress differently when they venture beyond the hometo shop, for example, or visit a school or office. The trend of women opting for readymade versions of ethnic dresses is also catching up (think of Meena Bazaar, Suruchis, etc.)

c.) Kids wear: Kids wear is a major category with few established players viz., Lilliput, Gini and Jony, Catmoss, Benetton, Disney, Barbie etc. It still holds a large opportunity which is clearly untapped. The Indian kids wear retail market is expected to touch Rs 580 billion by 2014. At present, the size of kids wear market in India is estimated at about Rs 380 billion.

2. Segmentation by Use: A rough estimate of the segmentation by use shows that-Casual apparel dominates and accounts for more than 50% by value.27% sports, 15% formals and 5% ethnic wear.

3. Segmentation by Price: Low-end market: volume driven, products are mostly unbranded and dominated by large number of manufacturers, mostly regional or even local players. Mid-range market: quality products. Manufacturers large and medium. High-end market: premium and super premium product categories. Dominated by MNC and major Indian manufacturers.

3. ANALYSIS OF THE INTERNAL ENVIRONMENTAnalysing the internal environment essentially consists carrying out a SWOT analysis, i.e. an analysis of the strengths, weaknesses, opportunities and threats to the company. The strengths and weaknesses, which are internal to an organization, should be analysed and used to tap the opportunities and minimise threats present in the firms external environment.The following slides present the SWOT of the readymade garments industry as well as of Attire.

SWOT ANALYSIS OF READYMADE GARMENTS INDUSTRY

STRENGTHS:

Increasing disposable incomes of the peopleBrand conscious customersAvailability of cheap finance and of low cost and skilled manpowerGrowing domestic market , increase in number of mallsIndependent and self-reliant industry

OPPORTUNITIES:

Increasing demand for luxury brands from the middle classLarge potential in international marketProduct development and diversification to cater to global needsResearch and new product development can help the companies to move across the value chainIncreased use of CAD for designing capabilities

WEAKNESSES:

Predominance of unorganized sectorTechnological obsolescence in the supply chainInfrastructural bottlenecks and efficiency such as transaction time at ports and transportation timeUnfavorable labor laws

THREATS:

Increased competition in the domestic marketsRising prices of inputs-raw materialCheaper importsChanging governments policy on FDICompetition from developing countries especially China

B. SWOT ANALYSIS OF ATTIRE

STRENGTHS:Financially soundLocated in the heart of the cityLow prices of the merchandize attract customersDeals in all types of apparels of youthHelps youth keep up with the fashion trendsOwns private label brandsWEAKNESSES:Acute lack of awareness about the storeMost customers visit the existing stores only while passing byLow percentage of national brands in the store-a major constraintProduct variety is available but more SKUs are not present due to inefficient back end infrastructurePoor inventory control at certain locations is a concern

OPPORTUNITIES:Located at a prime location where economies of concentration , information etc existDelhi has one of the highest per capita income, thus the spending power of people is highYouth needs more variety in apparelsLarge potential to reduce operation cost in cities using strong supply chainTHREATS:New brand name in the market-no backing by an established brand unlike competitorsFollowing stores are in close proximity to the store Westside(1.5 km),Pantaloons(500 m),Reliance Trends(500m)Operating costs are too highWalmart serves as the biggest threatwhen it comes to backward integration

The IFE Matrix : Internal Factor EvaluationKEY INTERNAL FACTORSWEIGHTRATEWEIGHTED SCORESTRENGTHS:i.Financially sound0.1140.44ii.Located in the heart of the city0.1240.48iii.Low prices of the merchandize attracts customers0.1040.40iv.Deals in all types of apparels of youth0.0840.32VHelps youth keep up with the fashion trends0.0630.18vi.Owns private label brands0.0630.18

KEY INTERNAL FACTORS

WEIGHTRATEWEIGHTED SCORE

WEAKNESSES: i.Acute lack of awareness about the store0.1220.24ii.Most customers visit the existing stores only while passing by0.1020.20iii.Low percentage of national brands in the store0.0810.08iv.Product variety is available but more SKUs are not present due to inefficient back end infrastructure0.0920.18v.Poor inventory control at certain locations is a concern0.0810.08Total12.78

CONCLUSION FROM IFE Since the weighted score > 2.5, it is considered that the organization is internally strong to withhold or counter competition.

The EFE Matrix : External Factor EvaluationKEY EXTERNAL FACTORSWEIGHTRATEWEIGHTED SCOREOPPORTUNITIES:i.Increasing population of the youth0.1340.52ii.Westernisation and globalisation in India, due t which fashion industry in India is gaining momentum0.1240.48iii.Increasing per capita income0.0830.24iv.More no. of people joining the workforce0.0930.27VAbility to grow rapidly because of sharply rising demand in one or more market segments0.1030.30vi.Emerging new technologies like internet and e-commerce helping in lower costs and new sales/growth opportunities0.1240.48vii.Immense popularity of Bollywood among youngsters who emulate the stars to upkeep with latest trends0.0430.12

KEY EXTERNAL FACTORS

WEIGHTRATEWEIGHTED SCORE

THREATS: i.Potential competition from online avenues like Myntra, Jabong, etc.0.1020.20ii.Competition from existing and established players0.1120.22iii.High economies of scale required to produce goods that could be considered substitute in cheap fashion industry0.0510.05iv.Increasing bargaining power of suppliers due to inflation thereby increasing costs0.0610.06TOTAL1.002.94

CONCLUSION FROM EFESince the weighted score > 2.5, it is considered that the organization has enough opportunities in the external environment and is in a favourable position to withhold or counter competition.

4. ANALYSIS OF THE EXTERNAL ENVIRONMENTThe external environment of an organization is majorly composed of the politico-legal environment, the economic environment, the socio-cultural environment and the technological environment. Therefore, what follows is a PEST analysis of Attire.

I. POLITICAL FACTORSThere has been implementation of several programs by the Government of India (termed as GOI from now onwards in the report) to help the textile and apparel industry adjust to the new trade environment.

IMPORT-EXPORT POLICYAt present, the import duty on synthetic fabrics is about 21 per cent.In the wake of sluggish demand from traditional markets, the apparel sector has been pressing for import of synthetic fabrics at a lower duty of 5 per cent in the entire 12th Five-Year PlanDuring 2012-13, India's apparel exports declined by about 6 per cent year-on-year to $12.9 billion on account of weak demand from the western markets. The US and EU together account for 60 per cent of India's total garment exportsAccording to ApparelExport Promotion Council(AEPC) the cost of credit is too high for the industry. At present, the exporters get credit at 12.5 per cent so there is a need to provide export credit at fixed 7.5 per cent to the sector

TARIFF BARRIERSUnder the United States-IndiaTextile Agreement of January 1, 1995, India agreed to reduce tariffs on textiles and apparel and remove all import restrictions on these productsIndia agreed to bind tariffs at 20 percent ad valorem for yarns, fibers, Industrial fabrics, and home furnishings, 35 percent for most apparel fabrics, and 40 percent for apparel goodsAlthough India has significantly reduced its textile and apparel tariffs, these tariffs still rank among the highest in the world, especially on products that can be domestically substituted. Additionally, domestic taxes and levies, which are applied to both imported and domestic goods, make the effective tariff rates much higherApparel products are not subject to excise duties and most other miscellaneous taxes, but are categorized as restricted imports. Several types of Indian tariffs and other taxes are shown on the following page:

Type of tariff and tax Applied on:Basic customs duty - Levied on assessed c.i.f. value of imports plus landing charges; generally does not exceed 1 percent of the c.i.f. value.Surcharge on customs duty - Selected textile imports. Discontinued as of April 1, 1999. Calculated on the assessed value plus the basic customs duty.Basic excise duty - Countervailing duty on imports to offset levies on domestically produced like products. Varies by product, ranging from zero on natural fibers to 32 percent on polyester filament yarn. Grey fabrics and certain cotton yarns are exempt from excise duty. Levied on the sum of assessed value, basic customs duty, and surcharge.Surcharge on excise duty - Selected textile items (manmade fibers and yarns). Most fabrics are exempted. Surcharge is 15 percent on excise duty. For example, on an 8 percent basic excise duty, the surcharge would be 1.2 percent.Cess tax - All textile items. This tax is 0.05 percent of the assessed import value plus custom duties including surcharge.Special additional duty - Counterbalance to sales tax and other local taxes on like products. Assessed at 4 percent of the sum of assessed value, basic customs duty, surcharge, excise duty (including surcharge), and cess

NON-TARIFF BARRIERSIMPORT LICENSINGIndia has liberalized its import licensing regime for textiles and apparel, but still limits market access for imported apparel. Currently, unrestricted importation applies to items such as yarns and fabrics intended for further processing. Apparel and made-up textile goods generally require a special import license (SIL) or are subject to import restrictions that apply to consumer goodsCUSTOMSThe country has cumbersome customs procedures that are regarded as highly bureaucratic and time-consuming. Documentation requirements are extensive and delays frequent. imports are often misclassified and improperly valued for assessment of duties and procedures are not consistent among different ports of entry imports of missing components of kits are often assessed duties twice, once when the kit is originally imported and again, when the missing component is separately imported (despite a no charge notation on the invoice). Similar difficulties and bureaucratic delays with the export and reimport of capital goods for repairs are also cited.MARKING, LABELING, AND PACKAGING REQUIREMENTSMarking, labeling, and packaging requirements applicable to textile and apparel products are technically complex and difficult to fulfill.Textiles Regulation 1988, which is designed to protect consumers, imposes strict safety and marking guidelines on fabrics and other textile products that are sold in the home market.The regulation requires all tops, yarns, and fabrics to have the statutory markings prescribed in the government notification and states that such markings should in no way mislead consumersCloth, for example, must be marked with the name and address of the manufacturer, a description of the cloth, sort number, length in meters and width in centimeters, and washing instructionsManmade fiber cloth must also indicate whether the cloth was made from spun or filament yarn, the month and year of packing, and the exact composition of the clothAnd so on.

EXPORT-IMPORT POLICYThe GOIs EXIM policy provides for a variety of largely export-related assistance to firms engaged in the manufacture and trade of textile products. This policy includes fiscal and other trade and investment incentives contained in various programs, as discussed below.Duty Entitlement Passbook Scheme (DEPS) is available to Indian export companies and traders on a pre- and post-export basisThe Export Promotion Capital Goods (EPCG) scheme is available to export companies and traders who provide the GOI with information on the type and value of capital goods they are importing and the exports they expect to produce using those imports. Depending upon the level of the export commitment at the time of import goods, the GOI provides exporters with a license allowing them to import capital goods duty-free or at preferential rates of duty.Pre- and Post-Shipment Financing provided by RBI through commercial banks on presentation of required documentsExport Processing and Special Economic Zones - Units in the EPZs that export all of their output can import industrial inputs free of customs duty. A 5-year tax holiday is allowed to any industrial unit in a EPZ and all profits of 100-percent EOUs are exempted from income tax. To attract investment, the GOI allows 100-percent foreign ownership of units in the EPZs as well as the SEZs. The SEZs were created recently, with the conversion of four EPZs into SEZs. The GOI treats SEZs as foreign territory for trade and tariff purposes. Units in SEZs may engage in manufacturing, trading, and services; are exempt from routine examination of exports by customs; and can sell in the domestic market on payment of duty as applicable to imported goods

NON TRADE POLICIESTechnology Upgradation Fund - The GOI has set up a Technology Upgradation Fund (TUF) to alleviate the problem of high capital costs in India and to encourage modernization of the textile and apparel industry.Cotton Technology Mission - The GOI has set up a Cotton Technology Mission to increase research on improving productivity and quality of Indian cotton and bringing about improvements in the marketing infrastructure and the raw cotton processing sector.Quota Entitlement Policy - Textile and apparel trade was for many years largely governed by the terms of the 1974 Multifiber Arrangement (MFA) and predecessor arrangements. On January 1, 1995, the Agreement on Textiles and Clothing (ATC) entered into force as part of the WTO agreements and replaced the MFA. Under the MFA, the United States, the European Union (EU), Canada, and Norway negotiated bilateral agreements with India and other textile and apparel exporting countries that established quantitative limits or quotas on their exports of certain textile and apparel articles. The ATC provides for the elimination of the quotas and complete integration of textiles and apparel into the WTO regime

INVESTMENT POLICIES AND FOREIGN DIRECT INVESTMENTAs a part of its economic reforms, the GOI has liberalized its investment policies for the textile industry. The RBI now grants automatic approval within a period of 2 weeks to all proposals involving foreign equity up to 51 percent in the manufacture of textile productsFDI in Indias textiles industry has been low largely because the GOI first allowed FDI rather late in the mid-1990s, when most funds were being invested in Southeast Asian countries such as Indonesia and Thailand.83 Between 1994 and June 1998, India approved 402 textile projects totaling $650 million (Rs26 billion) in FDI.84 Of these projects, 63 involved technical assistance and 339 involved financial assistance. Actual FDI inflow totaled an estimated $143 million, or 22 percent of the amount approved

NATIONAL TEXTILE POLICY 2000The NTP 2000 aims to improve the competitiveness of the Indian textile industry in order to attain $50 billion per year in textile and apparel exports by 2010.86 The NTP 2000 opens the countrys apparel sector to large firms and allows up to 100 percent FDI in the sector without any export obligationAccording to the GOI, the deregulation will help the apparel sector develop state-of-the-art apparel manufacturing facilities and reach economies of scale to withstand competition from low-cost countries and increase apparel exports to $25 billion by 2010The NTP 2000 liberalizes government controls and regulations so that different sectors within the textile and apparel industry can function in a more competitive environment

Effect of VAT and Service Tax ChangesFor the past two years, Indias apparel industry is going through a period of turbulence, unexpected changes and challenges. In 2011, the industry struggled due to the unexpected fluctuation on fiber prices, and especially the price of cotton. The introduction of 10% excise duty on branded apparel in the Union Budget for 2011-12 added to the problems faced by apparel manufacturers and retailers. The Union Budget for 2012-13 provided minor relief in terms of excise duty, but service tax rate was increased from 10.3% to 12.36%. At the same time, many of the state governments implemented VAT on apparel. The weak economic outlook, reduced consumer spending, and rising costs, coupled with the newly introduced excise duty on branded apparel, increase in service tax, and implementation of VAT remained the moot points of the industry for the year 2012.

OTHER FACTORSAbsence of strong political eadershipConfrontational politics

The Indian economy has continuously recorded high growth rates and has become an attractive destination for investments. India is the second most preferred destination for foreign investors, according to the report 'Doing Business in India' by Ernst & YoungThe resilience that Indian economy has shown in last 5 years by being far less impacted by the global financial meltdown indicates the structural strengths of the growth model.The current scenario of Indian economy has been characterised by optimistic growth and strong macro-economic fundamentals, particularly with tangible progress towards fiscal consolidation and a strong balance of payments positionIndian GDP has grown at an average growth rate of ~7% in the last decade to reach at US$ 1.8 trillion in 2012-13 making it worlds 10th largest economy. It is expected to grow despite having tough situation in the global markets. GDP per capita has also increased multifold during the same time period.Foreign Direct Investment has also played a key role in putting India on fast growth track. It has been on a constant rise since 2002-03 and has registered a strong CAGR of 16% in the last decade to reach at more than US$ 22 bn. in 2012-13 from US$ 5 bn. in 2002-03. Peak investment of US$ 38 bn. was achieved during 2008-09 & 2009-10 but due to global meltdown & Eurozone crisis, decline in the investment is experienced in last few yearsAlthough the Indian rupee remained relatively stable during 1993-97, the currencies of most of its competitors depreciated significantly against the currencies of the United States and EU countries, which made Indias products less price competitive against its competitorsWhen consumer demand began moving away from cotton to manmade fibers, India did not have a large production base for manmade-fiber fabrics, so prices were highII. Economic Factors

EFFECT OF TAXESEFFECT OF EXCISE DUTYintroduction of 10% excise duty on branded apparel in 2011-12 with an abatement rate of 55%In 2012-13, abatement rate increased to 70%, but the excise duty increased from 10% to 12%. As a consequence, the effective excise duty decreased from 4.5% to 3.6%, a reduction of 90 basis pointsVAT: A Contentious IssueFor a manufacturer and retailer, value-added tax, or VAT, is applicable to the value addition part of the product. However, from the consumers perspective, the tax is an additional burden, as she/he has to pay a higher amount for the same apparel. Apparel retailers are forced to think about the impact of any kind of purchase price increase on consumer spending and often need to shrink their own profit margin so that the effect of price rise will not get transferred to the end consumer. VAT being a concern of state governments rather than the Union government, there are differences in the tax rates imposed. Governments in Delhi, Uttar Pradesh, Punjab, and Rajasthan charge a VAT of 5% on apparel while most other states charge 4%. On textile items, some states are charging VAT, while some other states were forced to rollback VAT after an initial announcement. Nonetheless, the imposition of VAT has added to the complexities of the countrys textile and apparel value chain that extends across more than one state, and has negatively affected both consumers and manufacturers of readymade apparel.

SERVICE TAXIn fiscal 2012-13, the service tax was increased by 2% and additional service categories, which were previously exempted from tax, were included in the listAs a result, retailers and manufacturers witnessed an increase in their costs, as they had to pay an additional tax for each service they had used, e.g. rent, electricity, etc.Most of the retailers had to compromise on their profit margin so as to protect the customer from the heat of the taxOVERALL IMPACT OF TAXES Due to the combined effect of taxes, the average sales price of apparel products increased by 5-6%. The prices of branded apparel had already increased by 10-12% in the previous year on account of the high raw material price and the introduction of excise duty. Most apparel retailers had witnessed a negative growth of 4-5% in their volume sales for the first half of the fiscal year 2012-13. But they managed to maintain their revenues due to the increase in average sales price. The EBITDA margins of some retailers plummeted as transferring all the cost to consumer was not possible. Most of the retailers attributed the drop in EBITDA margin to the hike in service tax and also power cost, which increased by 25-30% per unit. Additionally, the share price of most retailers dipped in 2011 and 2012 due to declining volume growth and increasing price. Policy reforms on FDI in multi-brand retail helped some apparel retailers to perform better in the share market in the latter part of 2012.

GST: THE SOLUTION AWAITEDMany apparel retailers are looking forward to the implementation of the Goods and Services Tax (GST) which is expected to come into effect by fiscal 2013-14 GST is expected to not only solve the problem of service tax, but also reduce the other tax related complexity in value chain through the introduction of uniform SGST (State GST). It might in fact impact the apparel industry in a positive way as it will reduce tax payments in services, real estate rents and other service-related activities. The benefits will percolate upstream to the apparel manufacturer as well.

III. TECHNOLOGICAL FACTORSThe average annual investment in machinery per establishment in Indias apparel sector is only $2,900, compared with Hong Kongs $2.5 million and Chinas $1 millionThe new precutting machines are being installed at an average annual rate of 2.9 machines per unit in South Korea, compared with 2.3 machines per unit in China, 2.0 machines per unit in Thailand, and almost nil in IndiaThe low level of technology has contributed to low productivity and deprived the sector of benefits of economies of scaleUnder Indian labor laws, firms had been discouraged from installing labor-saving machinery and equipment, thereby leading to low sector productivity and inferior product qualityA limited fabric base and lack of product specialization are major weaknesses of the Indian apparel sector. The predominance of cotton apparel reflects the fact that Indian cotton traditionally has been much less expensive than synthetics and cotton blends.Quality problems are another deterrent to expanding export shares in the global market. The majority of fabrics made in India are of low quality and limited varieties, which limits the product range and tends to lower the unit value realized in dollar terms.

5. COMPETITIVE ANALYSIS : MICHAEL PORTERS 5 FORCES

Threat of substitute products- ethnic wear, local shops providing copied or defective products at a cheaper rate , brands offering clothings and garments in the price range of Rs. 500-3000. Rivalry among existing players- High competition in the players as discount offers, sales periods, promotional schemes are similar in all the competitive brands . and are given out at the same time so that no brand eats others shares. The only way to have an edge in the market is through product differentiation. But no one brand enjoys a significant market share.Barriers to entry- government regulations to enter the industry are not very strict and difficult to handle. No special patents and intellectual rights needed to enter and existing players cant restrict the entry of a new player in any significant way. There is no legal cost involved to exit the industry and only high levels of unused inventory can be the major cost that the player needs to bear.Bargaining power of suppliers- Majority of the suppliers dont exercise siginificant bargaining power as suppliers are present in plenty of numbers providing similar quality of cloth at similar rates and manufacturers have the plenty of option of switching suppliers. Bargaining power of customers- Customers have very high bargaining power in this industry as infinite number of options and choices are available to the customer in all fields of clothing.

MAJOR COMPETITORSPantaloonsLifestyleShoppers StopReliance TrendsMaxMarks and SpencersWestside

VALUE CHAIN ANALYSIS

A value chain describes the full range of activities that firms and workers carry out to bring a product from its conception to its end use and beyond.

Our

Designers, Manufacturers and the Sales Department work together to make decisions about product specifications, material sourcing and retail strategy.SOURCING DECISIONS

GARMENT SPECIFICATION DESIGNS

PORTFOLIO ANALYSIS

According to the BCG Matrix, the business or products are classified as low or high performance depending upon their market growth rate and relative market share.

Market Share- It is the percentage of the total market that is being serviced by a company measured either in revenue terms or unit volume terms.Growth Rate- It is used as a measure of a markets attractiveness.PORTFOLIO ANALYSIS : BCG MATRIX

STAR (High growth, high market share)

Stars are leaders in business. They require heavy investment to maintain its large market share. Attempts should be made to hold the market share otherwise the star will become a cash cow. It leads to large amount of cash consumption and cash generation. RECOMMENDATIONSMaintain the market position.Invest for further growth.

CASH COW (Low growth, high market share)They are the foundation of the company and stars of yesterday.The generate more cash than required.They extract the profits by investing as little cash as possible.

RECOMMENDATIONSNeed to maintain the market share to generate cash flows.There is not much potential for generating higher profits.

DOGS (Low growth, low market share)They do not have much potential to bring in cash.Here, the business is at a declining stage.

RECOMMENDATIONThere isnt any growth opportunities.The only solution is divesture strategy.The cash flows are negative.

QUESTION MARK(High growth, low market share)Most businesses start of as question marks.They will absorb great amounts of cash if the market share is low.? Have the potential to become star and eventually cash cow but can also become a dog.Investments should be high for question marks.

RECOMMENDATIONSThe market strategy is to get markets to adopt these products.The company needs to increase its market share quickly and the best way is to invest heavily in them.

ATTIRES POSITION IN BCG MATRIXSince Attire is a new readymade garments company, it finds itself in a market with high growth rate and has a low market share. Thus it is a question mark where the products offered for the youth are yet to be discovered and accepted by them.

The returns are thus lower due to the low market share but with extensive marketing of its product, the demand for the products will increase.

The company has to invest heavily in them to gain market share and there are a lot of unrealized opportunities as well.

GEs SPOTLIGHT GRID

LOWMEDIUMHIGHSTRONGAVERAGEWEAK10.06.73.31.06.73.31.0

INDUSTRY ATTRACTIVENESS Retail sector growth- 25-30%Market size- 40 -50 croresIntensity of competition-highSeasonality-highRegulation-lessCapital requirements-Retailing- around 5-10 lakhsManufacturing- around 50 lakhs-2 crores

COMPETITIVE POSITIONMarket share-0.0013%Technological know-how- required in designing , capital investment, machine operations etcProduct quality-superiorPrices- highly competitive Service network- 2 stores in Delhi initially

ATTIRE AFTER AN YEAR OF COMMENCEMENT

EVALUATION STRATEGIESDirect Feedback: Observing in the showroom about customer reaction to our product(s) on a busy Sunday evening. This is done by getting feedback forms filled by customers while billing takes place and/or hiring interns (preferably college students) who act as mystery shoppers and then give feedback. We also obtain feedback from salesmen and retailers as they are the ones who are in direct touch with customers.

2. Supply chain analysis: This addresses the following questions:Is your supply chain well organized?- Yes. (Raw Material Supplier-Manufacturer-Distributors-Customers)Is it functioning properly? Yes. (We are clear as to which raw material is to be procured from which supplier, the agreements entered into with them, the margins offered to both suppliers and distributors, inventory levels maintained at every level, and inventory replenishment level, if the feedback is being passed on to the previous level and being taken care of or not, etc.)Do we need to add more or reduce some elements? - Add more (Seeing the response from the customers and the increase in demand for our products, we believe that we need to add more raw material suppliers and also distribution channels in the form of, say, shopping malls, discount stores and exports later on.)Do you need to supply more quantity through distributors rather than your exclusive shops? - Yes. Wed like to take help of multi brand outlets in shopping malls for that since that would help us increase our reach. Dilution of brand name or increase in competition by rival products kept around the companys product will be taken care of by appointing training promoters from Attires side at each such outlet.

Raw material supplierManufacturerDistributors

Customers

3. Clearance rate in fresh period-

Clearance rate basically implies how much of the product was sold during the fresh and discount period. During the fresh period, approximately 70% of the goods were sold out of the total manufactured goods of 1 lakh.However during the discount period, only 5% of the products were being sold.

Leftover Rate-Leftover rate helps to find out the number of products which are unsold even after the discount and fresh sale.Even after providing discount, the number of units which remained unsold accounted to approximately 25,000. The total number of products manufactured were about 1 lakh.

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5. Payment CyclePayment cycle helps to find out the cash flow of the business and whether the products are being sold easily or not.The total number of products sold accounted to about 75000 of the total products manufactured. Even the distributers made the payments on time and thus the cash flows were stable for the company.

ANALYSIS OF RATIOSRATIOQTR 1QTR 2QTR 3QTR 41. Current Ratio0.50.91.522. Quick ratio0.10.30.71.23. Debtors Turnover478104. Profit margin %102023395. Sales Revenue growth rate0.01%2%6%10%6. Return on assets0%2%2%3%7. Return on capital employed0%1%1%1%

8. Debt equity ratio56449. Enterprise Value1,000,0001,000,0001,000,00010,000,000

An analysis of key financial ratios over four quarters in the first year of establishment of our business clearly reflects that the business is growing very quickly. The profit margins have increased substantially and so have sales growth, return on assets, return on capital employed, etc.

EXPANSION STRATEGIES

GEOGRAPHICAL EXPANSION: This approach involves expanding our business from its original location to one or more additional geographic sites, and is particularly well suited for us as our products may be appealing to consumers in other markets and where we can get a wider range of consumer base. Geographic expansion can help us reduce costs, gain access to new markets and talent pools, and perhaps, most importantly, provide a robust pipeline to fuel our companys future growth. We are presently operating only in Delhi NCR region and we are planning to expand to nearby regions like Ludhiana, Chandigarh, Punjab, Ahmedabad and Haryana. We are planning to hire a distributor in all these regions through which we will circulate our product in the new areas. This wont increase our efforts considerably as we would need to take care of only transportation of our goods to our distributors in these areas and the rest would be handled by them.

DESIGNS: We had started with 10 designs in our garments range when we had initially come in the market. But during the past year we realised that 10 designs are not enough to get noticed in the market. So this season, we are planning to come up with a wider range of designs in all our categories starting from the plain and simple designs to extravagant and party wear designs. The new designs will all be different from each other and would be made keeping in mind the different classes of customers we have or are targeting. For now, the target is to come up with atleast 20 designs so that in retail stores our products get a significant shelf space and we have better chances of being noticed by the customers.

QUANTITY: When we had ventured into the business, we had started with 4 basic sizes of the 10 designs we were manufacturing. This way we had produced around 400 pieces of our product which is acceptable in the garment industry as a respectable quantity to be produced in a season but is not significant enough to help a business grew radically. So this season we plan to introduce more sizes in our range, especially targetting customers who dont usually get their sizes in other standardised brands and thus have to often get their clothes stitched. We would come up with new sizes in our product range, thus increasing our quantity of products manufactured while providing a new range of choice for a select class of customers. This will give us an advantage in terms of customers noticing and preferring our product.

VARIETY: We had only started with garments for college going kids and young people. But a business grows significantly, when it can become a one stop shop for customers. So this year, we are planning to expand into a variety of related products like accessories, undergarments, scarfs. This wont entail any major technological or labour advancement in our already established manufacturing setup and can be produced using the same mechanism. It will help us venture into new markets and expand our customer base. It will also help us widen our possibilities of growth. Todays customers need something different and out of the box and venturing into a new variety of product line will help us create new and unique combinations of designs by mixing accessories with clothes.

DISTRIBUTION CHANNEL:Thefuture growthof our business will depend in part on our ability to expand our existing relationships with distributors, to identify and develop additional channels for the distribution and sale of our products and to manage these relationships. As part of ourgrowth strategy, we may expand our relationships with distributors and develop relationships with new distributors. We will also look to identify and developnew relationshipswith additional parties that could serve as outlets for our products, or that could provide additional opportunities for our existing sales channels. Apart from our existing retail and wholesale channels, the new distribution channels we would expand in are:

Sales reps: Hiring sales repsto widen our reach. By choosing reps who work independently, we can avoid the costs associated with opening additional offices in targeted areas.

Internet: E-commerce is the latest fad and on a rise nowadays and we would become a part of this trend by making our product available online too.

Road shows: Hiring distributors in new areas entail increase in cost and efforts. Instead of this, we can adopt road shows as part of our expansion plan. Every year before a season starts, every zone has an exhibition of garments where all the retailers of that zone show up. These exhibitions happen at a gap on 1-2 days in every zone. We would go on a road show and display our products in the exhibitions of all zones. This way in a span of 15 days we can cover all the zones and get new retailers who will buy our product. This will save costs and help us reach out to new markets which otherwise was impossible at this stage.

THANK YOU!