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Strategic Management – 1
Group A
Presented by:
Abhishek Kumar Pandey
Introduction
• India is the world's second-largest producer of textiles and garments.
TEXTILE APPAREL
To improve technical skills in apparel industry government
established 75 apparel training and design centers across India.
MARKET SHARE
KEY PLAYERS IN THE INDUSTRY
Company Business areas
• A small apparel manufacturer create styles that appeal to those of different cultures.
• Manufacturers avoid creating too many items that styles were prevalent long ago.
• Demographical factor like average age of the population also affects the styles in demand.
Authority Factor
• Government Introduced Integrated textile park in the 12th five year plan
• The scheme would facilitate textile units to meet international environmental and social
standards.
Natural and Environment Factors
• Pollutants released by the global textile industry are continuously doing unimaginable harm to the
environment. It pollutes land and makes them useless and barren in the long run.
• The industry is moving towards long-term sustainable options with new products like organic clothing
• Many textile manufacturers are moving towards sustainable growth.
Security Factors
• Have a high competition of eating up of market share from creation of counterfeit and duplicate products.
Technological Factors
• Institutions like NIFT , NID encouraging development of new technological processes in fibre and apparel
manufacturing.
• Development and Implementation of new human resource programs.
Economic Factor
• Economic factors can have both positive and negative impacts on the clothing industry. During economic boom periods,
people have more disposable income. Hence, they may buy more clothing, increasing sales for clothing manufacturers,
wholesalers and retailers. However, recessions have the opposite effect. Sales for these various clothing entities may be
significantly lower. Consequently, retailers may be stuck with large amounts of inventory.
• The middle class which currently forms up to be around 40% of the population is growing both in its income and also
size which is good for apparel industry as they the major target customer for this industry.
• As the labour cost raising in China major companies looking for alternate solution in other countries, which may prove
to be favourable for the India because it will make Indian industry more competitive in global market.
Political Factors:-
• Political and legal sectors includes the policies and the regulations of the government which the organizations need to
follow to be considered legal.
• Tax Policy
• Employment laws
• Trade restrictions
Porter’s 5 force model
1. Threats of new entrants
2. Bargain power of buyers
3. Bargain power of suppliers
4. Threats of substitute product
5. Intensity of rivalry
Threat of new entrants
• Economics of scale – High
- Large existing firms buy raw material in bulk so it reduces the average cost and they achieve
economics of scale
- So difficult for new entrants to enter the market
Buyer
• When customer buys in bulk bargaining power of buyer is high
Supplier
• Many small suppliers are present in the market so bargain power of supplier is low
• Suppliers have high bargaining power when the supply is for unique product
Ex. Fur
Threat of substitute product
• Low cost incurred by buyer while switching to substitute due to preference for small local
stores and traditional wear.
• High propensity of buyers to substitute due to low prices, good performance of the product
• Extreme rivalry among established brand create the great threat to profitability
• Competition is high in textile and apparel industry due to high growth rate
• Like: Louies Philip, Allen solly, Peter England, Van Heusen
Strategic Group Analysis
• Such groups can usually be identified using two or perhaps three sets of
characteristics as the bases of competition.
Strategic Group Mapping
• Strategic group mapping is analytical tool used for showing
competitive positions that rival firm occupy in the industry.
• Identification of close and distant rivals.
• Identification of attractive and unattractive positions of the firms
in industry.
• Identifying a strategic group a firm should consider entering in.
High ZARA
Mango
Trendy
Tommy Hilfiger
Lifestyle
Pantaloons
Big Bazaar
Price High