CASE STUDY PRESENTATION ON

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April 16, 2006

• CASE STUDY PRESENTATION ON
• NOVA FASHION GARMENTS PRIVATE LIMITED
• PRESENTATION BY
• GROUP 3
• Mr. K. Chandrasekhar
• Mr. Dinesh Chandra
• Mr. Dipak D. Sanghavi
• Mr. Sarvesh Ranjan

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• Background of the Case
• well-known manufacturer of ready-made garments
• established in 1970
• Mr. Arun Kumar Jain is the Managing Director
• company manufactures a wide line of products
  especially in gents wear.
• The company has a network of branches and
  dealers throughout the country.
• A young management trainee was asked to collect
  the successful strategic examples from various
  sources

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Issues in the Case

• The company is facing several problems in
  increasing its market share.
• High taxes leading to high prices
• Fashion changing very fast / Dead stocks
• New players / Unhealthy competition
• wider choice at competitive price
• The company is in the process of evolving a
  strategic market orientation in order to compete
  successfully in the changing marketing
  environment.

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Strategy Examples
Du-Pont Nylon Reliance Nirma Balsara
Rolls Royce Beecham Procter Gamble
Amul Hyundai Bisleri
Ponds Maggie Noodles Pioma Industries
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Common successful strategies drawn from
examples  Ø      Creation of Brand Equity Ø     
Product Differentiation/Diversification Ø     
Market Segmentation/New market expansion Ø     
Aggressive Advertising/Unique Selling
Proposition Ø      Effective Distribution
System Ø      Competitive pricing strategy  
Global Economic Prospects 2004, World Bank
Study Table 2.2 Page 74.
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ASSUMPTIONS

1. Assumed that the relevant period is during
   late 80s.
2. Sufficient Financial strength to make investment
   for expansion / diversification.
3. Poor integration of distribution channels of the
   company.
4. Company having proper succession planning.

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Methodology of Analysis
Environmental Analysis
Customer Analysis
Industry Analysis SWOT Analysis
Competitor Analysis
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Environmental Analysis
Political Govt. Policies not very conducive.
High taxes controls. Quota
Economical High taxes leading to high prices.
Social Demographic changes Change in buying
behavior
Technical Technical know-how Change in
manufacturing process
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INDUSTRY ANALYSIS

• Apparel Industry is one of Indias largest
  foreign exchange earners.
• It accounts for 12 of countrys total exports.
• Very diverse in terms of size, production
  facilities, types of apparel manufactured,
  quality of output, fabric requirement, price
  sensitivity etc.
• Garment industry is extremly fragnented.

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SWOT ANALYSIS
Strengths- -Established manufacturer of readymade
garments. -Wide line of products. -Specializing
exclusively in gents wear. -Network of branches
dealers throughout the country. -Financial
soundness Weakness- -Rising manufacturing
costs -Poor marketing plan -Poor
inventory/materials management -Poor R D. -Poor
brand image. -Lacks corporate direction -High
price compared to competitor -Poor market survey/
Customer trends -Lack of strategic market
orientation. -Poor integration of distribution
channels  
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Opportunities- - Identification of new market
segments. -Strengthening the brand. -Driving new
product development based on customers
need -Improving customer experience -Utilizing
new marketing technology. -Gathering meaningful
customer insight -Vertical integration. -Exports.
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Threats - -Attack on core business. -Compressed
product life cycle -Increase in domestic
competition -Fast changes in customer
tastes -Down trend in pricing -Low market growth
rate Opportunities-
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Competitors Analysis  
Competitive Pricing
Strategy Driven
Unhealthy Competition
Large in Number
Marketing Oriented

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CUSTOMER ANALYSIS

• fashion conscious
• knowledgeable
• price conscious
• younger generations preference for trendy
  fashion garments at an affordable price.

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Observation and Research
The company is facing several problems in
increasing its market share. High cost, companys
inability to identify the customers changing
taste resulting in accumulation of dead stock and
weak sales team are taking its toll on companys
profitability.   The competition has also
intensified in the market and the consumers are
offered wide choices at a competitive price.
Hence the company has to evolve a new market
strategy for increasing the market share.   The
Gap analysis unveils the areas where the company
needs to reinforce the strategies for cornering a
substantial market share. Garment industry is a
growing market and being the market mover gives
the firm an upstart. Nova Garments is an
established company but lacks the market research
wing, which can capture the emerging fashion
trends. The company also lacks an in-house
Designing Centre which is essential for success
of any garment manufacturer. The Brand building
exercise has never been given the due importance
for creating everlasting customer affiliations.
Various promotional avenues have not been
harnessed.    
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  The Recommendations
1. company needs to be customer centered,
win customers from competitors, keep and grow by
delivering greater value. The company has to
target customers activities, lifestyle and
social space. 2. Market segmentation,
target marketing and market positioning
3. Company must think through the four Cs of
Customer solution, Customer cost, Convenience
and Communication first and then build the four
Ps of Product, Price, Place and Promotion.
4. focusing on shorter response time , identify
and catch a winning fashion trend while its
competitors are struggling to catch up.
5. company can either establish a design team to
identify the prevalent fashion trends and styles
or outsource the same keeping in mind the cost
benefit analysis.
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  The Recommendations (Cont.)
6. Company can adopt a strategy of
reducing the quantity of manufactured items and
reducing its exposure to any single product.
7. Instead of more quantities per style, the
company has to devote efforts for more styles so
that even if a style fails, there are new styles
already waiting to take up the space. 8.
For flexibility and control, the company has to
work as vertically integrated group with
up-to-date equipment. 9. Super charged
product development would give the creative edge
in the highly competitive market. Even if the
cost of product development is high, it will be
adequately compensated by higher realized
margins. The entire product development cycle
begins with market research.
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  The Recommendations (Cont.)

10.This will require investment in
information technology and communication
infrastructure to keep streaming up-to-date trend
information to the people making the product and
business decisions. 11.Rather than
concentrating on forecasting accurately, the
company has to develop its business around
reacting swiftly and responds to the actual need.
12. The company should diversify in to
highly lucrative womens wear and should exploit
the massive export potential.
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NOVA
YOUR BRAND
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Conclusion

• With the abolition of the export quota
  regime for garments under WTO since 2005, the
  company should capitalize the export potential
  available for the companys product.
• The industry will be restructured as follows
•  
• i) Joint ventures and strategic alliances with
  leading world manufacturers will be promoted.
• ii) Schemes with necessary infrastructural
  facilities for the establishment of
  textile/apparel parks will be designed with the
  active involvement of State Governments,
  Financial Institutions and the private sector.
• iii) Setting up of strong domestic retail
  chains to ensure easy availability of branded
  Indian products will be encouraged.
• iv) As the International borders blur Supply
  Chain Management and Information Technologies
  take a crucial role in Apparel manufacturing.
  Global partners in the clothing supply chain
  are exchanging information electronically, thus
  the need for Indian Clothing Industry to spruce
  up.

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Conclusion

• v) The 3C's of Commitment, Co-ordination and
  Co-operation need to be applied at all levels by
  the industry to be able to maintain its presence
  in the global market.
•  
• The industry view is currently positive,
  and it is felt that most clothing firms have
  improved in technology and in operational
  performance. Two alternative strategies are
  suggested for future competitiveness
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• A strong combination of design and marketing.
  This would allow the firm to build a brand with a
  strong reputation.
•  
• Strength in service, particularly in efficient
  turnaround of orders. This would allow the
  company to build strength as a contract
  manufacturer.

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Conclusion

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• The companys vision should be of a
  knowledge-intensive industry that is equally
  strong on design, marketing, logistics
  management, technology...and positioned in
  markets where these strengths make sense. It
  could make reference to fashion and to branding.
  

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THANK YOU FOR YOUR TIME, PATIENCE AND
CONSIDERATION !!!