TRAVANCORE COIR COMPANY - A BUSINESS PLAN

ByHanie Salim

Kevin Toms SkariaN VinayakNandu Raj

Anoop Kumar K T

Enhanced quality through innovative and aesthetic design with a societal obligation.

Objective

VisionTo become a company, deeply rooted in societal commitment, with a strong global and local presence, churning out quality products that are innovative, viable and handy and; in the process earning a due profit for the benefit of our stakeholders, employees and shareholders.

• Founded in 1878• Symbolizes the entire coir industry in full bloom• Deeply rooted in ethical conduct • Concerned about environment even while chasing dreams• Company aims at large-scale expansion:

– expand export network– venture into the domestic market – enhance funding to its R&D Department

Executive Summary

Strengths:– Sound legacy of the Company– Strong balance sheet and finances– Eco-friendly nature of the product– Durability and easy handling of the raw material– Newer processing technologies– Support from the MSME (Micro, Small and Medium

Enterprises) Ministry and the central, state governments– Huge popularity of coir décor products in foreign

countries

SWOT Analysis

Weaknesses:– Lack of availability of good quality coir pith locally;

increased production cost– Lack of awareness amongst local consumers– Brand image (misconception) of an ultra-luxury product– Lack of cohesion among manufacturers; poor lobbying

power for the sector– Fluctuating currency rates leading to random profits and

uncertain buying costs

SWOT Analysis

Opportunities:– Growing buying power of the Indian consumer.– Substantial increase in the size of the target market

segment (Middle-class and above)– Growing interest of the new Indian consumer in

‘affordable’ luxury – Virtually untapped rural and semi-urban markets– Rising awareness among consumers about eco-

friendliness of products– Absence of strong market rivals in the domestic segment

SWOT Analysis

Threats:– New market niche exploration– Growth of coir sector in foreign countries (Sri Lanka and

ASEAN members)– Lowering of import duties on coir and rival products– Worker unions clamouring for hike in pay– Inflation leading to greater input costs– Substitute man-made materials – Challenge from newer entrants into the domestic

segment

SWOT Analysis

• Garner necessary financial resources• Set up an ultra-modern coir processing, coloring and coir-

extracting unit• Set up an excellent R&D team • Source coconut fibre, even from Tamil Nadu initially• Train the workers at regular intervals and revise their pay

time-to-time so as to nip the ‘union-menace’ in the bud

Stage I

• Participate in global coir fests in 5 robust markets: China, USA, UK, Hong Kong and Japan

• Put up stalls offering a veritable feast of coir products to the viewers - engage good interlocutors and do retail trade

• Identify and penetrate newer foreign markets• Bag tenders for franchises from local investors • Closely monitor transactions and advise corrective measures

Stage II

• Set up exclusive company show rooms in big cities• Constantly approach the big business houses with excellent

aesthetic methods to enhance the office atmosphere• Engage in retail trade in cities• House a designer at each store to do exclusive coir-décor in

customers’ houses• Maintain servicing facility at such stores• Set up permanent stalls in Duty-Free space of airports and

replicate domestic model in foreign markets

Spreading our wings domestically

• Encourage Self-Help Groups (SHGs) to process coir in its initial stages

• Set-up a Smoothening Fund to buttress the sourcing units • Set up collection-units in rural and semi-urban areas• R&D team should concentrate more on the design domain.• In case of failure on any front, hotly debate the possible issues and

come up with remedies. Closely monitor competitors and ‘beat them in their trade’.

Pricing strategy: Fix price on all fronts for a stipulated period.

Resource gathering front

Developing niche market to a comprehensive market segment• Main focus of R&D team on innovation • Expand international presence. Keep monitoring• Enhance number of domestic outlets and set-up independent

design studios exclusively for coir décor• Expand into more cities• Foray into owning plantations for self-reliance• Raise value for quality-coir; augment local supply to reduce

costs

Stage III

• Products of unparalleled quality • Recruit fresh graduates from design schools and fashion

institutes • Linking products to the Company’s strong brand name

– E.g.. Mercedes Benz, ITC Classmate, Indica Vista etc.• Aim to increase the variety of products – onus is on R&D• Smart and attractive packaging

– E.g.. Electronic equipment, modern soaps etc.

Product

4 Ps

• Find new untapped foreign markets and locate local distributors

• Ensure good initial visibility – floor space in showrooms• During the spreading out stage, slowly set up own exclusive

retail outlets in cities • Sense the local pulse and market products by door-to-door

aggressive marketing• E-marketing - we propose to put up a website where people can

actually design the coir products they need; e-advertising– E.g.. www.naturalrugstore.co.uk , luxury car

websites, DELL

Place

4 Ps

• Special significance to indigenous pricing• In the initial stages, the price should be based on cost-plus

mechanism• After stabilizing our position, we should try to milk the

demand for our product and raise the price• At our company outlets, we should lower the price a bit• Resort to differential pricing (during maturity stage and

beyond) since competitors can catch up fast

Price

4 Ps

A three stage plan has been devised:

Stage I - creating awareness about the product among customers

Stage II - familiarizing customers with our product line and convincing them about their superiority

Stage III - rising as the market leader of the niche with a strong base of loyal customers and customer evangelists

Promotion

4 Ps

Stage I• Organize trade fairs in at least 4 of the hub cities of the target

foreign market to attract the attention of the local customers • Ensure sound operations in at least 3 new international markets• Local focus: Channel this profit towards opening small outlets

in other interior décor and furniture showrooms; initiate advertising

• A fully functional interactive state-of-the-art web page has to be designed to lure the tech-savvy customer

Promotion Cont…

4 Ps

Stage II• Fully functional mini outlets which exclusively deal with coir

products in at least 80 % of the home decor shops • Employ catchy slogans and visual aids for publicity• Concentrated marketing effort:

– Grant fat discounts on items to the uber-rich– Conduct a Gala dinner for independent designers and the elite to make

them aware of the Company’s products and their quality e.g. Tiscon

• Door-to-door marketing with credible marketers to attract the upper middle class

• Social events to win crowd support and trust

Promotion Cont…

4 Ps

Stage III• Upgrade the retail outlets to stand-alone ones• Go for tie ups with construction firms and take up the entire

interior decoration (coir-themed) of multi storied structures• Approach big business houses to revamp their workspaces on

coir theme; trendy and ‘green’ buildings• The international markets should be further expanded - at least

4 independent foreign platforms (cluster of nations) in all• Regular social events should be organized under the firm’s

banner to ensure the continued loyalty of the customers

Promotion Cont…

4 Ps

Company Hierarchy

Summary• Aim: Expand export network to a few more foreign

countries and then foray into the domestic market • Source raw materials locally to reduce production

costs• To ensure employee co-operation – enhance perks

and set up pension fund (General Reserve spin-off) • Contingency Fund to buffer out fluctuations in

currency rates and to build faith among suppliers• Go for aggressive and innovative marketing• Stay deeply rooted in values and work for the larger

interest of the society, stakeholders and beneficiaries