INTRODUCTION

ABOUT THE TEXTILE INDUSTRY:

The Textile Industry is the single largest industry in India and accounts for 31.1 per cent of the total value of exports and therefore occupies a vital place in the Indian economy. It has a high weight age of over 20 per cent in the National production. It provides direct employment to over 15 million persons in the mill, powerloom and handloom sectors. India is the world’s second largest producer of textiles after China. It is the world’s third largest producer of cotton-after China and the USA-and the second largest cotton consumer after China. The textile industry in India is one of the oldest manufacturing sectors in the country and is currently it’s largest.

The Textile industry occupies an important place in the Economy of the country because of its contribution to the industrial output, employment generation and foreign exchange earnings. The textile industry in INDIA encompasses a range of industrial units, which use a wide variety of natural and synthetic fabrics.

Textile Industry has not been able to meet its full potential because of fragmentation of the industry and the use of obsolete and old technologies. This erosion of competitiveness has been overcome by a few players and groups by organizing themselves along modern lines. But most of the Textile industry has small and medium scale industries and intense competition exists.

The Textile industry is an Industry that experiences lots of changes, fluctuations… These changes are not only because of seasonal demand due to changes in the Weather and also due to changes in style, trends etc due to impacted by the Social personalities, Movies, TV etc…

The textile industry is generally needs more of working capital as most of the amount is spent on labor, rent, procuring raw materials etc… also since most of sales are done on credit…

Due to seasonal fluctuations in demand and also the credit cycles, the company requires cash in the winter and rainy season, so it is necessary for the company to take Cash Credit or Over Draft Facility from the Bank.

Bangalore Hosiery Manufacturing Company:

VISION:

To constantly upgrade and provide a wide range of the products to meet the growing needs of the customer at affordable prices and to confidently compete in the South Indian Textile Market.

MISSION:

Produce quality and fault free products for its valued customers by continuous improvements, upgrading of resources, setting quality objectives by analyzing customers' feedback .85865685

To be a `1crore in revenue company be 2014

ORGANIZATIONAL STRUCTURE:

MARKETING CHANNEL:

Finance & Marketing:SR. SACHIDANANDA

Production Manager:R.CHANDRASHEKAR

Administration:R.VIJAYSHANKAR

Looks after Sales and marketing Manages the Agents and also The Finance and accounts of the company.

Looks after the production so as to meet the consumer demand & ensures packaging & dispatching of products on Time.

Looks after the overall Administration and Facilities management to ensure optimal production and also personnel management.

ORVEE

ORVEEAGENT

RETAILERR

ABOUT BANGALORE HOSIERY MANUFACTURING

COMPANY:

Bangalore Hosiery Manufacturing Company (ORVEE) was started in the Sep 16, 1964 as by the late S Revanna, it is now managed by their sons as a Partnership firm. BHMC in Textile industry, it has been a manufacturing and selling of Woolen Baby wear (0-5years) under the brand “ORVEE”

The Brand ORVEE stands for “R” which stands for Revanna the founder of the company and “V” for Vanajamma and his wife.

For over 48years. It has good foothold in South India mainly in the States like Karnataka, Kerala, and Tamil Nadu.

BHMC is known for the best product finishing and packaging in the industry, thus has differentiating from other competitors.

The manufacturing unit is in Bangalore near Lalbagh, Sudhamanagar; this location has helped in getting easy access to logistics as there are a lot of logistic providers easily available. Also due to many small industries located in this area access to local labor is also easily available, also the Rent in the area is also affordable and suitable premises can be found Manufacturing Set-up.

THE MARKET

BHMC is the manufacturing of Woolen Wear targeting mainly the age group of 0-5, during this age that on every kid’s Wardrobe is incomplete without a Sweater and being in INDIA where the Birthrate is a at a Healthy 21% every year, shows a Good and reliable and sustainable market. Even though the product is for babies, it is necessary to target mothers as they act as proxy to the babies. Since the product is sold to retailers, the packaging must appeal to mothers.

The products manufactured are sold to both retailers and wholesalers with the help of Agents. The sales to retailers constitutes about 90% of the total sales, the remaining 10% is sold to wholesalers.

The Southern Part of India which has states Karnataka, Tamil Nadu, Kerala, Andhra Pradesh are the potential Market for Geographically about 55% of the revenue is from Tamil Nadu, Kerala Market constitutes about 25%, Karnataka constitutes 10% and remaining is from states like Goa, Maharashtra and AP.

The demand for products is seasonal and dependent on the monsoon season which isn’t consistent from year to year.

PRODUCTSThe company is mainly involved in winter wear and The products manufactured and marketed by BHMC include

Woolen Sweaters Gloves Socks caps

Shawls.

SWOT

STRENGTHS

40 year old brand Experienced management and Staff Good presence in South Indian Market Flexibility in Operations Trust and reliability Good profitability

WEAKNESSESS

Small player Lack of financial resources Dependence on Suppliers Lack of inventory storage facility Lack of new products and innovation Usage of obsolete methods of production.

OPPORTUNITIES

Large Untapped market Diversification into other apparels Outsourcing High Growth Potential

THREATS

Competition Products from China Entry of Big players Loss of key staff members New technology Changes in Lifestyle

Global Warming

PORTERS 5 FORCES

5 FORCES ANALYSIS

BARGAINING POWER OF BUYERS: LOW

The winter wear for babies is considered a must and people think that want the best for the babies so price isn’t a major factor for the buyers. Also the prices of baby products are significantly low compared to Adult Apparel, so buyers don’t feel the need to bargain. Also baby products are generally a Onetime expense, so buyers don’t know the right price.

BARGAINING POWER OF SUPPLIERS: MODERATE

Since wool can be used in a various other uses, so suppliers have an edge, however since the need for wool is seasonal, the suppliers can’t increase the prices drastically and mostly depends on the Scale of the buyer.

THREAT OF SUBSTITUTES: HIGH

Off late the introduction of Sweat shirts, Jerkin, Synthetic fabrics…etc are indeed a threat to the product.

THREAT OF NEW ENTRANTS: LOW

In the apparel industry Brand name does count and is not very easy for new entrants to enter the industry. Also the apparel industry is a much matured industry and due to lot of players do exist. So people don’t find this industry that attractive.

RIVALRY AMONG EXISTING COMPETITION: HIGH

The competition is higher and the market share is fiercely contested because the apparel industry has grown and matured over hundreds of years.

Many traditional players have established niche which is very hard to break down.

THE PROBLEM:

PROBLEM

Due to recent financial meltdown SME had suffered massively this forced to halt expansion and upgradation plans were postponed, this helped the financially stronger industries to lay a foundation to tap the markets of the South India. Now the competition has intensified ORVEE has chance to lose its customer base.

Orvee is heavily dependent on Rains which in the past few years has become inconsistent as has affected in proper analysis of demand. The customers are demanding further improvement in the products and there is a

need to expand the existing the current product offering. Also sales are done mostly on Credit and customers can’t be forced be pay early, in the Non season the finances are very low and company is can’t advantage of prices in the non season.

THE PLAN

IMPORTING FROM CHINA

WHY???

China has become the Factory of the World; everything is “Made in China”. The main reason China has become the so is because of the Cheap Labour available here. This has led in making China the largest exporter in the World.

This Importing of products from China is not new idea. ORVEE plans to follow the strategies made by Mobile Companies like Micromax, Karbonn, Maxx Mobiles etc… A few years ago many China Made mobiles hit the Indian Market but were soon lost out, because no one trusted the Phones without the Brand and In came companies like Micromax, Karbonn… they imported the phones from China Branded it, with good and safe packaging are able establish themselves well in India and are able to Compete with big and Traditional Players like Nokia, Sony Ericsson, Samsung etc.. The only reason they were so successful is because they branded their products.

Similarly Orvee would like to Import from China and Market it with its own Brand. People would argue that Micromax, Karbonn mobile brand spent a lot on Advertising. This wouldn’t be necessary as Orvee would be doing this in a very small scale; Since Orvee is an established brand it doesn’t need high advertisement expenses.

OBJECTIVES OF THE PLAN

To increase the product offering. To optimize the use of existing Marketing channels. To increase customer base To reduce overhead costs To Avoid cost on New Machinery and Equipments To extend the sales season pre winter and early summer too. Helps in Diversification into similar products.

PROS.

To increase the product offering. To optimize the use of existing Marketing channels. To increase customer base To reduce overhead costs To Avoid cost on New Machinery and Equipments To extend the sales season pre winter and early summer too. Helps in Diversification into similar products.

CONS.

High inventory Costs. Low quality products. Risk of Losing of Brand Value. Unknown Demand?? Other players with Similar ideas High Cash requirement. Exposure to Double Governmant Regulation.

FEASIBILTY AND SUCCESS

STAGES OF BUSINESS PLAN

1. REQUEST FOR PRO-FORMA INVOICE.

This is the first stage, here the buyers request for the quotation and price of items that need to produced. The manufacturer quotes the price and if it’s acceptable. We can go to the next stage.

2. NEGOTIATION OF TERMS & CONDITIONS.

Since the transaction is between 2 countries and involves a lot of money, it is required that both parties carefully plan and ensure that everything works fine.

3. INITIAL PAYMENT AND START OF PRODUCTION

During this the buyer has to pay 50% of the amount of the order and to start the production.

4. MANUFACTURING AND PROCESSING OF GOODS

The production and manufacturing is stated and it will ideally take about 2 months to complete the manufacturing.

5. IMPORT ARRANGEMENT

The company will have make arrangements to import and goods, by contacting ports and ay container charges.

6. PROCUREMENT

The goods shall be procured and sent to the manufacturer’s production facility.

7. REBRANDING AND PACKAGING

In this stage, the products is rebranded and repacked with brand “ORVEE”

8. WAREHOUSING

Since a container load worth of goods is bought, it is necessary to in warehouse, As the products will be sold throughout the year.

9. SELLING

The goods will be marketed and sold as and when the customer demands the product.

WHY THIS PLAN IS DIFFERENT?

Even though many companies tried this, they failed. They failed to continue to relationship with the producer, also since they are forced to buy a container load of goods. Also the buyers resold the products to other manufacturers, this made the Chinese products common and no company was able to capitalize on differentiation of products.

We here plan to build a relationship with the sellers and also rebranding with our brand, this gives trust to the customers and are considered more reliable, than the thousands of Chinese products available locally.

As we plan to make products as per our specification and ensuring in the terms those products made to us are not allowed to replicated for other buyers, ensure safety and helps to build on product portfolio

CONCLUSION:

We strongly recommend this business plan, as this will work out well in the long term, Even though the company may suffer from loss of net profit and in a 2-3years. It can easily reap the revenue and the diversification and increased product offering will lead better and add to brands image. And more importantly better profits.

APPENDIX