PROJECT REPORT

ON
KNITWEAR
INDUSTRY:
TOMMY HILFIGER
SUBMITTED BY
TANISHA PURI
ANUSHKA AGARWAL
NITYA KHANNa
AVANTIKA SINGH
RISHIKA KHERA
 TABLE OF CONTENTS

TOMMY HILFIGER: overview

Hilfiger in India
Profile of competitors
Indian textile industry
Knitwear industry: India
GROWTH of industry
Export import overview
Factors affecting cost
Recent trends in the industry
Opportunities and threats
PEST
SWOT
References
 INTRODUCTION
The Tommy Hilfiger brand was launched in 1985. Tommy is
a range of clothing designed to bring 'American classics
with a twist' to consumers. Today, those consumers
represent people from all races and backgrounds and can
be found in practically every country around the world. As a
truly global brand, Tommy's preferred suppliers are those
who can fully appreciate each individual marketplace.
Tommy is a range of clothing designed to bring 'American
classics with a twist' to consumers. The company’s apparel
products are recognised throughout the world for their
classic and timeless designs.

OVERVIEW OF the Company

• Tommy Hilfiger Group is a multi-billion dollar global

apparel brand
• Since 1985, the Company’s strategy has been to
develop and a highly recognizable lifestyle brand.
• The Company seeks to deliver superior styling, quality
and value to its consumers worldwide.
 • Tommy Hilfiger Group has become a 3 billion EUR
worldwide apparel and retail company.

Tommy Hilfiger in India

• Tommy Hilfiger was bought to into India through a joint
venture between the Murjani group and the Lalbhai
group, which owns the Arvind brand.
• Called Arvind murjani brands private limited, the joint
venture has entered into a licensing agreement for
marketing and distribution of Tommy Hilfiger apparels
in India.
• ABM introduced Tommy Hilfiger in freestanding
speciality stores across the country in spring 2004.
• Tommy Hilfiger responded to the diversity of his
customers by adding more variety to his clothing line
and has succeeded in making clothing that many
people enjoy wearing. His fragrances have been a huge
success as well. The clothing line has expanded by
including home products, eyewear, footwear,
swimwear, jewelry, and divisions such as Tommy
Hilfiger Athletics. Tommy Hilfiger is a true American
Designer.

Profile of COMPETITORS
While older companies like Levi-Strauss, Timberland or even
Ralph Lauren have been slow in entering the mass designer
fashion stakes--some being particularly wary of attempting
to enter ethnically or racially identified areas of consumer
culture—and while many other companies have been
content with their long established market niches and
hierarchies of market segmentation, the story of Hilfiger’s
company are just the opposite.

Beginning with a line of preppy looking, clean-cut and

conservative sportswear--similar to that offered by The GAP,
but somewhat more expensive--Hilfiger set out in the early
1990s to compete against department store staple lines like
Ralph Lauren and Liz Claiborne with essentially Young
Republican clothing. In the course of only a few years this
basically khaki, crew and button-down WASP style, while
remaining a constant theme in Hilfiger collections, has been
submitted to variations which were intended to bring the
product closer to Hip-Hop style—bolder colors, bigger and
baggier styles, more hoods and cords, and more
prominence for logos and the Hilfiger name. These
variations on a house-in-the-Hamptons theme opened up
the doorway to African- American consumers, and Hilfiger's
status is often closely linked to his popularity among
African-Americans.
But at the same time, that market has clearly been only one
focus for Hilfiger's ambitions, set on maintaining and
expanding markets among non- black consumers, and
continually multiplying the range of products offered. In
addition to hip-hop styles Hilfiger now sells golf wear,
casual sportswear, jeans, sleepwear, underwear,
spectacles, fragrances, and even telephone beepers.
Tommy has recently moved into women wear, and offers a
women's cologne to go with the popular men's line. Not
content with crossing all these areas of the mass market,
Hilfiger seems currently to be conducting a foray into more
classic designer markets with high-fashion shows marked by
his appearance at the British fashion shows in 1996 and by
the introduction of a line of brightly colored menswear that
was clearly his attempt to become more of a haute-couture
designer.

Hilfiger's success has been quite astounding since the

initial public offering of TOM in 1992. The company now
has over 850 in store department store sales points in the
US. In addition there are now almost 50 Hilfiger speciality
stores across the country--a figure that has almost doubled
in the course of two years. The company's annual report in
early 1996 showed that revenue in the last quarter of 1995
was over $130 million, a 47% increase over the previous
year. The company's cost for goods sold was less than $72
million, leaving more than $58 million in gross profits--a
rate of gross profits of more than 80%. The sound financial
health of the company ensures its regular appearance on
stockbrokers' to-buy lists, even though share prices keep
rising. Early in 1995 the small consortium of TOM's original
investors-- which had bought the company from Mohan
Murjani in the late 1980s--sold their remaining TOM stock
for over $50 million, after a year in which the value of the
stock had increased by 106%. Hilfiger himself was one of
this small group, of course, and after his profit- taking he
remained as an employee of the company drawing more
than $6 million a year in salary.

The economic success of TOM is explicable largely because

the company has led the way in many of the aspects of
mass customization. TOM's corporate strategies have been
ahead of those of many of its competitors, and have always
stressed the acceleration of product delivery, new forms of
retailing partnership, innovative EDI usage for inventories
and customer tracking--and of course, the speedy and
timely introduction of new lines and redesigned goods,
assuring consumers a wide range of product choices
(something which Hilfiger himself sees as crucial in
provoking and expanding demand).

TOM has been especially willing--again, leading the field—to

engage in what is now a standard industry practice of
licensing.

TOM has licensing agreements with some of the world's

major clothing companies. This network of links has been
methodically and aggressively built up in just the last few
years: Pepe plc for jeans, Stride Rite for shoes, Liberty
Optical for eyewear, Estee Lauder for fragrance, Russell
Newman for shirts, Jockey for underwear, and so on. While
licensing agreements probably have little impact on
consumer consciousness, one advantage they have for a
company like TOM is that they offer the borrowed cachet of
known and respected manufacturers. This is all important in
negotiating sales points with department stores and
generally in testifying to the quality of TOM products. Most
of TOM's retailing partnerships are with department stores,
and in 1995 about 70% of Hilfiger's products were sold at
those venues. Added to TOM's strategies for speeding up
product design, delivery, and turnover, licensing helps
ensure access to what is still the principal channel for
clothing sales in the US where 65% of all clothing is sold by
only 35 companies, the majority of which are chain retailers
with department stores in malls and urban spaces all across
the country

Profiles of some rivals...

Duke
Duke, reportedly rated by ORG-MARG as the top T-shirt
maker in the country. It also makes trousers, shirts, jackets,
sweaters and thermal underwear. T-shirts account for 60-65
per cent of the company's total revenues. Domestic sales
account for 80 per cent. Its overseas buyers include Gap,
Wal-Mart and Target.
Today, Duke embraces a complete vertically integrated
garment manufacturing plant, with knitting, dyeing,
processing, finishing, mercerizing, compacting, embroidery
and printing under one roof.
Duke Fashion (India) Ltd pioneered the T-shirt culture, and
gradually established several new trends in knitted
garments and fabric research.
BENETTON
When Benetton was started in 1989 in India, all they
found themselves selling were jeans and T-shirts.
Benetton now sells 1,500 styles as compared to the 400
they started with. The €1.7 billion Italian fashion company
had entered India through a joint venture with DCM but
now Benetton India is a wholly owned subsidiary after
they broke up a few years back.

LEVIS
Levi's has excellent brand architecture in place and it is
performing well. The market for denim, especially at the
premium end, is growing between 15 and 20 %annually.
The four sub-brands are pretty well straddled. It has
30%of the premium denim market in the country, and
about 10 per cent of the overall market across price
segments.

REEBOK
Reebok is the brand for sportswear — shoes, T-shirts etc
— while Rockport is for a premium range of footwear and
apparel marked by 3R’s — rugged, refined and relaxed.
Entering India in 1995, Reebok has captured a market
share of 50 per cent followed by Nike.
 Indian textile industry
The textile industry is one of the oldest industries in India. It
has played an important role in generating foreign
exchange reserves and creating employment opportunities.
The industry is very vast with over 30,000 readymade
garments manufacturing units and employs nearly three
million people (Indian Apparel Portal: 1998). It has been
estimated that the size of industry is Rs. 78000 crore.

The concept of readymade garments (apparels) is relatively

new for the Indians. Traditionally, Indians preferred dresses
stitched by local tailors, who had tailoring units in townships
or cities and catered exclusively to local demand. The
growing fashion consciousness during the 1980s and the
convenience offered by ready-to-wear garments were
largely responsible for the development of the branded
apparel industry in India. Other factors which contributed to
its growth were:

 Greater purchasing power in the hands of the youth,

 Access to fashion trends outside the country, and
  The superior quality of fabrics.

KSA Technopak study shows that 48 percent of the

population of India is in the age group of 15-44 years, and
this group is already into ready-to-wear apparel. There is
rapid growth in 15-44 years age group and this group has
both the willingness and the ability to pay.

Moreover, the spending on clothing and footwear is quite

high in India, when compared to the developed countries. It
is estimated that Indians spend 9% of their disposable
income on clothing and footwear, which is significantly
higher than the US (5%). Moreover, the expenditure on
clothing is higher in the higher income levels.

A study conducted by National Council for Applied Economic

Research (NCAER) in the late 1990s revealed that there has
been a gradual increase in the purchasing power of the
people. According to the report, the population in the
income range of Rs 45,000 -Rs 2,15,000 per annum was
increasing at a fast pace. In 1997-98, there were 33 million
households in this income group and this number is
expected to increase to 75 million by 2006-07.
Indian garments export business has made great strides in
the past few years and today many of the leading fashion
labels, from all over the world, are known to source their
products from India. This speaks volume of India as a major
supplier of top quality fashion garments.

Indian Textile Clusters

Product Cluster Product
Cluster Stat
Specialisatio Locatio State Specialisat
Location e
n n ion
Powerloom & Malegao Maharas
Powerloom
Guntur AP Cotton n htra
Ginning Maharas RMG/
Mumbai
Nagari AP Powerloom htra Hosiery
Narsapur AP Crochet lace Maharas Powerloom,
Nagpur
Pochamp Tie and htra RMG
AP
ally dyeing Maharas
Pune RMG
Anantpur AP Jeans/ RMG htra
Sirsilla AP Powerloom Maharas
Solapur Powerloom
Warangal AP Powerloom htra
Delhi Delhi RMG/ Hosiery Balasore Orissa Powerloom
Ahmedab Gujar Dhenkan
RMG Orissa Powerloom
ad at al
Jetpur Gujar Textile Ganjam Orissa Powerloom
(Rajkot) at printing Nuapatn
Orissa Tussar silk
Gandhina Gujar a
Powerloom
gar at Amritsar Punjab Powerloom
Gujar Ludhian Woollen
Surat Powerloom Punjab
at a knitwear
Gujar Rajastha
Vijapur Weaving Jaipur Garments
at n
Hary Rajastha Hand
Bhiwani Powerloom Jodhpur
ana n processing
Hary Kishang Rajastha
Gurgaon RMG Powerloom
ana arh n
Hary Sangane
Panipat Powerloom Rajastha Hand block
ana r&
n printing
Bangalor Karn Bagru
RMG
e ataka Bhavani
Karn & Home
Belgaum Powerloom TN
ataka Chennim textiles
Karn alai
Bellary Jeans Home
ataka Karur TN
Karn textiles
Gadag Powerloom Tie & dye,
ataka
Karn hand
Mysore Silk Madurai TN
ataka printing,RM
G
Ernakula Keral Powerloom
m a Rajapaly Surgical
TN
Keral am textiles
Faizlure Powerloom
a Salem TN Powerloom
Keral Suramp
Kannur Handloom TN Powerloom
a atti
MallappurKeral Knitwear/
Powerloom Tirupur TN
am a Hosiery
Keral Handloom &
Palakkad Powerloom Agartala Tripura
a Loin Looms
Burhanpu Banda UP Powerloom
MP Powerloom
r Gorakhp
UP Powerloom
Chanderi MP Handloom ur
Indore MP RMG Jhansi UP Powerloom
RMG/ Kanpur UP Hosiery
Jabalpur MP
Powerloom Chikan
Lucknow UP
Maheshw embroidery
MP Handloom
ar Mau UP Powerloom
Ujjain MP Powerloom Noida UP RMG
Maha Varanasi UP Powerloom
Bhiwandi rasht Powerloom Hosiery/
ra Kolkata WB
RMG
Maha Ranagha
Ichalkara WB Powerloom
rasht Powerloom t
nji
ra
Source: D&B Research,
Maha UNIDO, SIDO
Madhavn
rasht Powerloom
agar
ra
Structure of the Textile & Apparel
Industry in India

 Covers a Gamut of activities :From production of raw

materials like cotton, jute, silk and wool to providing
high value-added products such as fabrics and
garments
 Wide range of raw fibres
Natural fibres like cotton, jute, silk and wool to
Man made fibres like polyester, viscose, acrylic and
multiple blends of such fibres
 Plays a key role in the economy. Provides direct
employment to an estimated 38 million people and
contributes five per cent to GDP.
 Significant contributor to trade. Exports growing at 11.8
per cent estimated to grow at 15 to 18 percent.

 Financially strong players at the back end. State of the

art spinning facilities
 Large weaving capacity. However, a major capacity is in
the unorganized / small scale sector.
 Processing is the weakest link in the entire chain.
Barring a few large, organized sector players, operating
largely in the 100% Cotton and / or Cotton Rich blends
in finer counts & in denim, this sector is unorganized
 In Towels & Home Textiles, some significant players that
compete strongly with Pakistan, Turkey & China
 Garment making has a number of small to large
players. Larger companies expanding capacity rapidly.
Most have Full Package capability.
 Large number of retailers at the front end, though only
a few are big (relatively).

RAW MATERIALS
• Abundant availability of raw materials – largest cotton
acreage.
• One of the largest polyester yarn producers
SPINNING
• Accounts for about 22 per cent of the world’s spindle
capacity
• Second highest spindlage

KNITTING
• Highly fragmented, small-scale and labour-intensive
• Highest loomage in the world and contributes about
61per cent to the world
 Knitwear industry in India
Tirupur, Tamil Nadu is the Knitwear cluster of India. This
cluster is widely recognized as a `dynamic’ cluster with
necessary `vertical’ depth, critical mass of enterprises as
also appropriate factor conditions. This has helped it to be
largely export oriented in terms of over eighty percent of
its €1.3 billion a year turnover. The growth of the cluster
has been propelled by strong associations. Our
interventions emphasized on cluster wide dissemination
on several critical areas as also catalyzing several new
pursuits.

Features of Knitwear Industry

• Low cost labour force, sizeable supply of fabric, raw
material and spinning and dyeing facilities.
• Existence of many associations for the knitwear cluster
well connected with each other
• TEA (Tirupur Exporters Association) works together with
the Government and local companies to ensure better
infrastructure and other facilities for the cluster.
• Design oriented production – companies investing in
design proposals to clients
• Formation of NIFT TEA FASHION INSTITUTE – school for
apparel design set up to help the exporters
• Major exports to European brands : Upim, Diesel,
Marlboro, Rinascente, Champion, Liberti, C&A,
Wallmart, JC Penny, GAP, Mark & Spencers, Sara
Lee,Tomy Hilfiger, Karstadt Quell etc
 • Tirupur garment exports amount to €1.6 billion
international market and €454.5 million in the domestic
market.
 The sector is competitive and likely to see
increased investment from global players(KPMG ANALYSIS)

GROWTH OF THE
INDUSTRY
• In India the knitwear industry after struggling for many
years is according to many experts preparing to take
off. It is not surprising that the knitwear industry is
gaining prominence in India as India has a history of a
rich industry for textiles and fashion. Today there are
over 30 knitwear companies of significance in India.
These companies produce garments that meet
international standards through their own work as well
as through assistance provided by the International
Wool Secretariat.
• The knitwear industry of Ludhiana is gearing up to
adopt measures that will ensure that it remains
competitive.
• A Memorandum of Understanding was signed between
the Federation of Knitwear, Textile and Allied Industries
Association and Apex Cluster Development Services, a
cluster development consultancy, to enable Ludhiana’s
knitwear industry competitive.
 • There is tremendous potential for exports from India of
woollen knitwear,” enlightens Dr. Chaudhuri. But the
West European market is fiercely competitive.
“Fortunately in India it is a sellers market so it is easy,”
he adds. But India can also be very competitive price-
wise. The IWS has helped Indian manufacturers to learn
about the latest trends in knitwear fashion.

IMPORT EXPORT
SCENARIO
Today there is a global market for hand knitwear products;
however, most of this international market remains
untapped by India. India is not currently a large exporter of
knitwear garments; rather the country focuses on its
domestic market. India has great potential to expand into
the global knitwear market as its products are competitive
particularly from a price standpoint. As time continues to
progress India is continuing to learn to keep up with and
compete with the international market. The domestic
market for knitwear items is particularly strong in the local
regions of Northern India due to the weather that is
experienced there. Items are often purchased locally at
markets or handmade at home while the international
market relies on online purchases.
Immediately after the cessation of ATC (Agreement on
Textiles and Clothing) in December 2004, limiting exports of
textiles and garments from India, there was a 25% spurt in
exports of garments in the following year. This has since
slowed down to around 10%. A number of supplying
countries from Asia have come into existence, notably,
Bangladesh, Vietnam, Srilanka, Cambodia and Pakistan
resulting in cut-throat competition in the supply of popular
varieties helping to bring down prices. India has had to
adopt innovative practices by upgrading the quality of
product in order to sustain (leave alone increase) her
market share in the world community. In recent years,
appreciation of the Indian Rupee vs.US $ and the downslide
in US economy has had a restraining effect on garment
exports from India, but the industry is now coming to terms
with the development.

Knits have been more successful especially in export

channels. Strong production clusters like Tirupur and
Ludhiana have led to growth of accessories sector as well,
albeit slowly.The immense growth of the knitwear industry
has motivated the manufacturers to explore overseas
market. During the financial year 2009, exports of woven
and knit garment exports to South Africa amounted to
$42.51million USD. China is a major supplier of garments to
South Africa, followed by India and Mauritius. Looking at
export shares, Korea (6%) and Taiwan (5.5%) are ahead of
India, while Turkey (2.9%) has already caught up and others
like Thailand (2.3%) and Indonesia (2%) are not much
further behind. The reason for this development is the fact
that India lags behind these countries in investment levels,
technology, quality and logistics.
The knitwear industry, which had registered Rs 10,000 cr in
exports last year, is finding it difficult to maintain the 20
percent growth rate it has maintained for the past few
years. They may register a growth of 5 percent. Though the
industry had shown a steady export growth, this year the
target was scaled down by 25 to 30 percent, and this year it
has been further downsized to 5 to 10 percent. The demand
of the exporters for an upward revision of prices by about 5
percent has been met with resistance by the importers, who
find the cost of import from China competitive.
India has great potential to expand into the global knitwear
market as its products are competitive particularly from a
price standpoint. As time continues to progress India is
continuing to learn to keep up with and compete with the
international market. The domestic market for knitwear
items is particularly strong in the local regions of Northern
India.
The rate of modernization is also found to be very low as
compared to the major competing countries. We have to
improve on indigenous technology development and the
government has to take initiatives in this regard apart from
present technology Up gradation and Fund schemes and
other measures.

Every year India imports nearly 20 million kilogrammes of

greasy wool from Australia for fabrics and shawls and nearly
16 million kilogrammes of clean scoured for non-apparel
items. Nearly six million kilogrammes of wool is used per
annum in India to produce knitwear.

The power loom sector and the cotton yarn industry are the
worst hit, as the appreciating rupee has resulted in fewer
export orders, and lesser margins.
Though the industry had shown a steady export growth, this
year the target was scaled down by 25 to 30 percent, and
this year it has been further downsized to 5 to 10 percent.
The demand of the exporters for an upward revision of
prices by about 5 percent has been met with resistance by
the importers, who find the cost of import from China
competitive.

As far as the export market is concerned. India’s

performance in woollen garments is quite negligible,”
informs Dr. S.K.Chaudhuri, Director of IWS London, Indian
Branch. With Italy being the number one woollen fabric
manufacturer and Germany coming a close second there is
not much chance for new entrants. In the knitwear division
80 per cent of the world exports are from Italy. Taiwan,
Hong Kong and Mauritius.
Factors affecting cost
In terms of cost, India has an advantage over
comparative countries
• This inherent strength in availability of raw materials
prevents any supply-side shocks
• Ample availability of a variety of raw materials at low
costs
• Availability of skilled labour and low labour costs
• Growing demand in domestic market
• Government support

Do more indepth analysis

 RECENT TECHNOLOGY
USED IN THE KNITWEAR
INDUSTRY
The art of knitting has come of age. From hand knitting to
hand operated machines was a long way. Gradually it
upgraded to power operated V-Bed and circular knitting,
and then it leapfrogged to microprocessor controlled
machines. Now lately CAD/CAM has revolutionized the
knitting industry. However, in the developing countries they
still use manually operated flat and V-bed knitting machines
for their bulk production since cheap labour is available.

The other reasons being flexibility in knitting and

economical for smaller design lots. However, quality on
these machines remain a suspect because settings of stitch
length and feed tensions may vary from machine to
machine, which pose problems in sizing.

The weaving and knits sector lies at the heart of the

industry. In 2004-05, of the total production from the
weaving sector, about 46 per cent was cotton cloth, 41 per
cent was 100% non-cotton including khadi, wool and silk
and 13 per cent was blended cloth. Three distinctive
technologies are used in the sector – handlooms,
powerlooms and knitting machines. They also represent
very distinctive supply chains. The handloom sector
(including khadi, silk and some wool) serves the low and the
high ends of the value chain – both mass consumption
products for use in rural India as well as niche products for
urban & exports markets. It produces, chiefly, textiles with
geographical characterization (e.g., cotton and silk sarees in
Pochampally or Varanasi) and in small batches. Handloom
production in 2003-04 was around 5493 mn.sq.meters of
which about 82 per cent was using cotton fibre. Handloom
production is mostly rural (employing about 10 million,
mostly, household weavers) and revolves around master-
weavers who provide designs, raw material and often the
loom.

Weaving, using powerlooms, was traditionally done by

composite mills that combined it with spinning and
processing operations. Over the years, government
incentives and demand for low cost, high volume, standard
products (especially sarees and grey cloth) moved the
production towards powerloom factories and away from
composite mills (that were essentially full line variety
producers). While some like Arvind Mills or Ashima
transformed themselves into competitive units, others
gradually closed down. In 2003-04, there remained 223
composite mills that produced 1434 mn. sq. mts. of cloth.
Most of these mills are located in Gujarat and Maharashtra.
Most of the woven cloth comes from the powerlooms
(chiefly at Surat, Bhiwandi, NCR, Chennai). In 2005, there
were 425,792 registered powerloom units that produced
26,947 mn. sq. mts of cloth and employed about 4,757,383
workers. Weaving sector is predominantly small scale, has
on an average 4.5 power looms per unit, suffers from
outdated technology, and incurs high co-ordination costs.
Knits have been more successful especially in export
channels. Strong production clusters like Tirupur and
Ludhiana have led to growth of accessories sector as well,
albeit slowly. The hosiery sector, on the other hand, has
largely a domestic focus and is growing rapidly.
 OPPORTUNITIES AND
THREATS

PEST analysis
Political-legal

 Complete elimination of the quota restrictions under

the Multi Fibre agreement (MFA) since January 2006
 Inflexible Indian Labor laws
 De-reservation of garments from SSI sector since
2001
Economic

 All capital goods in the textile sector have been

covered by Export Promotion Capital Goods
scheme, which attracts 5 per cent customs duty
without any countervailing duty.
 Union budget 2006-2007: Ad valorem component
of customs duty on textile fabrics and garment has
been reduced from 20% to 15%.
 Per Capita income spent on branded garments is
less than that in the developed countries.
 Demand for branded garments is more income
elastic than price elastic

Socio-Cultural
  Increased disposable income of Indian households
 People are exposed to the western lifestyle and there
is a drastic shift in their taste and preferences
 Continuing shift in customer preference towards
ready-to-wear products
 Consumers more aware of brands and are now more
style and brand conscious.
 Styles and trends changing faster than ever which
reduces the shelf life of fabrics as well as readymade
garments
 Customers accepting the casual and colorful look
even at work.

Technological

 Pedal-operated machines in the 60s, the industry

moved on to power-operated machines and steam
presses in the mid-80s, started assembly line
manufacturing in the late 80s and then entered the
phase of using computerized machines. This in short
summarizes the usage of technology in garment
industry over the years.
  IT tools being used for tracking of stock keeping
units.
 IT helps improve the supply chain management, for
direct marketing, for identifying customer
preferences in multiple geographies.
 Regular innovations in color, style, design, fabric,
finish and fit are necessary in the dynamic industry,
which in turn requires automated machinery and IT
solutions.
 Automation brings down the total cost of production
by at least 10 to 15 per cent, out of which the saving
on fabric alone would be 5 to 7 per cent.
 Cost of technology is however a deterrent
 E-retailing

SWOT Analysis
Strengths
 Self reliance
 Manufacturing flexibility

 Abundance of raw material production

 Design expertise
 Availability of low cost skilled labour
  Growing economy and domestic market
 Progressive reforms
 Presence across the value chain

Weakness
 Highly fragmented industry
 High dependence on cotton

 Lower productivity and Cost Competitiveness

 Declining mill segment
 Technological obsolescence
 Effect of Historical Government Policies
 Non participation in trade aggrements

Opportunities
 End of quota regime
 Shift in domestic market to branded readymade
garments
 Increased disposable income
 Emerging mall culture and retail expansion Research
and Development and Product Development
 Textile economy to grow to $ 85 bn. by 2010.
 Creation of 12 million new jobs in Textile Sector.
 To increase Indias share in world trade to 6% by 2010.
 Achieve export value of $ 40 Billion by 2010.
  Modernisation and consolidation for creating a globally
competitive industry.
 The future outlook for the industry looks promising,
rising income levels in both urban and rural markets
will ensure a rising market for the cotton fabrics
considered a basic need in the realm of new economic
reforms (NER) proper attention has been given to the
development of the textiles industry in the Tenth plan.
Total outlay on the development of textile industry as
envisaged in the tenth plan is fixed at Rs.1980 crore.
The production targets envisaged in the terminal year
of the Tenth plan are 45,500 million sq metres of cloth
4,150 million kg of spun yarn and 1,450 million kg of
man made filament yarn. The per capita availability of
cloth would be 28.00 sq meters by 2006-2007 as
compared to 23.19 sq meters in 2000-01 showing a
growth of 3.19 percent. The export target of textiles
and apparel is placed at $32 billion by 2006-2007 and
$50 billion by 2010.

Threats
 Stiff competition from developing countries; especially
China
 Pricing pressure

 Locational disadvantage
 International labour and environmental laws
 Competition in Domestic Market
 Ecological and Social Awareness
 Regional alliances
 Threat of New Entrants: New entrants to an industry
can raise the level of competition, thereby reducing its
attractiveness. New entrants frequently bring
additional capacity to an industry. Thus it is possible
that prices will be bid down and industry profits
diminished. In the knitwear industry, new entrants
could quickly enter the industry because it costs little
in time or money to enter the market and compete
effectively, and there are few economies of scale in
place, or have little protection for the key
technologies, so that new competitors can quickly
enter the market.
 Threat of Substitutes: Substitutes are new products (or
services) that are quite different than the original
product or service. A threat exists when a product’s
demand is affected by the price change of a substitute
product. When the demand for a product declines due
to either lower prices of better performing substitute
product, low brand loyalty, new current trends or low
switching cost. There is a high threat of substitutes in
the knitwear industry such as sweater, cardigan and
cashmere or other dressing and the fashion trend
change in every season, people wants to buy the
 fashionable clothing and make the elastic of the
knitwear is very high.
 Bargaining Power of Buyers: A ratio of suppliers to
buyers in the market is the foremost factor affects the
buyer’s power. If there are many suppliers and only a
few buyers, the buyer’s have the power to negotiate
the price.

RECOMMENDATION
 The government should take steps in improving the
Knitwear Industry.
 Improve the technology used by the industry.
  Labour should get a better environment to work in and
fair wages.

 The Knitwear Industry should be innovative so that it

doesn’t get choked out due to outdated technology.

 India should participate in trade agreements and

should take help from the developed countries.

 The pricing pressure should be reduced.

 Latest use of technology and by improving the knitwear

industry competition can be reduced.

REFERENCES
• Dictionary of textiles-Phyllis G Tortora &Robeet S Merkel
• Encyclopedia of textiles-Judith Jerde
• Textiles today a global survey of trends & traditions
• Knitted clothing technology-Tery Brackenbury
• Google search engine
• http://global.tommy.com/

General comments
Provide Intext citations (Otherwise no grades will be given)

Do Proper Formatting

Follow the structure given in the brief

Provide Introduction

Do more indepth analysis of cost factors

First give overview, then History

Segment wise study

Product differentiation factors

Recent trends ?

Supply ?

Taste and Preferences affecting demand

Other aspects given in the brief

Diagrams?
Provide Indian competitors and overview of Indian
Knitwear industry