TERM PAPER

SUBJECT-BUSINESS ENVIORNMENT
TOPIC- HANDICRAFT
SUBMITTED TO: MISS PALWINDER KAUR
SUBMMITTED BY: ARUN KUMAR SAINI
ROLL NO: RT1903A25
CLASS: MBA 1ST SEM
SECTION: T1903(c)
REG NO: 10907007

INTRODUCTION OF THE CONCEPT PESTLE

ANALYSIS:--
 PESTLE stands for political, economical, sociological, technological,
legal, environment.
PESTLE analysis is in effect an audit of organizations environmental
influences with the purpose of using this information to guide
strategic decision-making. A PESTLE analysis is a useful tool to
understand the big picture of the environment in which an
organization is operating. After understanding these environments
this is possible to take advantage of maximize the opportunities and
minimize the threats of an organization. Now we will discuss all the
factors of PESTLE analysis briefly and we will know that how they
are effecting our environment:--

Political:-- What is happening politically in the environment in

which we are operate, in which we include tax policy, employment
laws, environmental regulations, trade restrictions and reform,
tariffs and political stability etc.

Economic:-- In this we include that what is happening in our

economy such as economic growth/ decline, interest rates,
exchange rates and inflation rate, wage rates, minimum wage,
working hours, unemployment (local and national), credit
availability, cost of living, etc.

Sociological:-- What is occurring socially in the markets in which we

expect to operate, cultural norms and expectations, health
consciousness, population growth rate, age distribution, career
attitudes, emphasis on safety, global warming.
 Technological: -- We know that technology is changing daily in
which we are operating our business. What is happening
technology-wise which can impact what you do, technology is
leaping every two years, how will this impact our products or
services, things that were not possible five years ago are now
mainstream, e.g. mobile phone technology, web 2.0, blogs, social
networking websites. New technologies are continually being
developed and the rate of change itself is increasing. There are also
changes to barriers to entry in given markets, and changes to
financial decisions like outsourcing and in sourcing.

Legal: -- What is happening with changes to legislation. This may

impact employment to access to materials, quotas, resources,
imports/ exports, taxation etc

Environmental: -- In environment we include that factors which are

impacting within the environment. These factors are either internal
or may be external.

THE PESTLE PROCESS

(1) To decide how the information is to be collected and by
whom.
 (2) To identify appropriate sources of information.
(3) To gather the information
(4) To analyze the gathered information
(5) To identifies the most important issues.
(6) To identify strategic option.
(7) To write report.
(8) Disseminates the finding.
(9) To decide which trend should be monitored on an
ongoing basis.

HANDICRAFT
Handicraft is known as a type of work where useful and decorative
procedure are made completely by hand and using simple tools. In
the handicraft we include cultural and religious items. Items made
by group production or machines are not handicrafts. There is
difference between handicraft and art and craft. Handicraft items
are intended to be used, worn, etc. its purpose clear of simple
decoration. We generally consider in handicraft more traditional
work. This work is daily part of life, while art and craft implies more
of a hobby pursuit and an expression or perfection of creative
techniques.

Different Items of Handicrafts-

(1) Bamboo and Cane Craft- Arunachal Pradesh is famous for its
cane and bamboo. Arunachal is only a state where the
 traditional handicrafts are made since ages and are the product
which is much within the country as well as abroad. In the
abroad they gained popularity. Bamboo and cane are crafted
dexterously into colorful basket mats, cane belts, attractive
smoking pipes, combs, and household tools. Tribal women
wearing rings and headbands made of cane are popular.

(2) Decorative Arts-The decorative art means that a number of

arts and crafts for the making of handmade and functional
work in a great range of materials. It includes ceramic, wood,
glass, metal, textiles, and many others. The field includes
ceramic, glassware, furniture, furnishings, but not usually
architecture. The decorative arts are categorized in opposition
to the fine art. Its name is painting, drawings, photography, and
large-scale sculpture, which generally have no function other
than to be looked at. There is a between decorative and fine art
based on functionality, intended purpose, importance, status as
a unique creation, or single-artist production. Decorative arts,
or furnishings, may be fixed for example, wallpaper, or
moveable for example, lamps. Applied art includes the
decorative art.

(3) Crochet – Crochet is a process of creating fabric from yarn or

thread using a crochet hook. Crochet is same as knitting, it
consist of pulling loops of yarn through other loops. The
difference between knitting and crochet is one loop is active at
one time and a crochet hook is used instead of knitting needles.

(4) Embossing- Embossing is also a type of handicraft. It is a

process of creating a three-dimensional image or design in
paper and other materials. It is typically accomplish with a
combination of heat and presser on the paper.
(5) Wood Carving- Wood carving is a form of working wood by
mean of a cutting. In the hand this may be a power tool
resulting in a wooden figure this may be abstract in nature or
in sculptural.

(6) Woodturning- It is a form of woodworking that is used to

wooden object on lather. Woodturning is different from other
form of wood working. In the woodworking, wood is moving
while a stationery tool is used to cut and shape it. Many
intricate shapes and designs can be made by turning wood.

(7) Tooth and Horn Carving- Tooth and horn carving refer to
objects carved out of animal teeth and horns, and in the circle
of collectors, it refers specially to works carved out of ivory
and rhinoceros horns. Ivory is naturally beautiful, white, and
soft, and is therefore very exquisite and fall of artistic charm;
Rhinoceros horn carving is famous for it.

(8) Spinning- Spinning is an ancient textile art in which plant,

animals or synthetic fibers are twisted together to form yarn.
For thousands of years, fiber was spun by hand using simple
tools, the spindle, and distaff. Only in the High Middle Ages did
the spinning wheel increase the output of individual spinners,
and mass-production only arose in the 18th century with the
beginnings of the Industrial Revolution. Hand-spinning
remains a popular handicraft.

(9) Stained Glass- Stained glass refers to the material of colored

glass or the craft of working with it. Stained glass is that glass
that has been colored by adding metallic salts during its
manufacture. The colored glass windows in which small pieces
of glass are arranged to form pattern or picture, held together
by strips of lead and supported by a rigid frame.
(10) Shoemaking- Shoemaking is a traditional handicraft
profession, which has been largely superseded by industrial
manufacture of footwear. Shoemakers or cordwainers cobblers
being, historically, those that repair shoes may produce a range
of footwear items, including shoes, boots, sandals, clogs, and
moccasins. Such items are generally made of leather, wood,
rubber, plastic, jute, or other plant material, and often consist
of multiple parts for better durability of the sole, stitched to
leather upper
As to see above items of handicraft, we can say that there are many
items of handicraft. They look like very attractive. Most items are
made with lather, wood, horns, and teeth of animals, paper, glass,
metal etc. The demand of handicraft items is very high in the home
country and other countries.
First of all we are doing SWOT analysis of Handicraft in India-

STREANTHES OF HANDICRAFT-

 Large, diversified and potential market.

 There is large product variety and range is available because of
diversified culture.
 It has strong, diversified and supportive retail infrastructure.
 Diversified product range that service different market.
 Cheap labor rates that result to competitive price.
 Need low capital investment.
 There is flexible production flexibility.
 Low barriers of new entry

WEAKNESSES OF HANDICRAFT-
 -Lack of infrastructure and communication facilities.

-Unawareness about international requirements and market.

-Lack of co-ordination between government bodies and private

players.

-Inadequate information of new technology.

-Inadequate information of current market trends.

-Less interest of young people in craft industry.

-Lack of skilled labor.

-Still confined to rural areas and small cities and untapped

market.

-Lack of promotion of products

OPPORTUNITIES OF HANDICRAFT
-Rising demand for handicraft products in developed countries such
as USA, Canada, Britain, France, Germany, Italy etc.
-Developing fashion industry requires handicrafts products.
-Development of sectors like Retail, Real Estate that offers great
requirements of handicrafts products.
-Development of domestic and international tourism sector.
E-Commerce and Internet are emerged as promissory distribution
channels to market and sell the craft products.

THREATS OF HANDICRAFT
- Competition in domestic market.
-Balance between high demand and supply.
- Quality products produced by competing countries like China,
South Africa.
- Better Trade terms offered by competing countries.
- Increased and better technological support and Rend facility in
competing countries.
The PESTLE analysis of handicraft is very necessary; we can do the
PESTLE analysis as following –
PESTLE ANALYSIS OF HANDICRAFT-

ECONOMIC ANALYSIS OF HANDICRFT- The role of Handicraft

Industries in Rural India Economy is very important and its
contribution in the rural economy of India is increasing
progressively. The Ministry of Rural Development and the Ministry
of Rural Economy, under Government of India are the two main
governing authorities, which drafts and implements policies for the
handicraft industries in rural India economy. The handicrafts
industry of India comes under the unorganized sector of village
economy of India.
India is basically an agriculture-based country and the development
of rural economy of India depends upon the development on 70
crore rural population.
The rural economic policies of India is drafted according to the
needs of rural India since, majority of the population that is about
70% lives in about 600,000 small villages. The rural India is almost
wholly agriculture based and a small part of the rural Indian
population is engaged with small industries like handlooms,
handicrafts and other traditional produce. The role of Handicraft
Industries in Rural India Economy became important, since today
the organized sector of Indian industry is ready to absorb the
products from these industries. Moreover, with liberal trade and
export policy, the export of the Indian handicrafts industry is on an
all time high.
The main products that are manufactured by the rural handicrafts
industry of India are as follows -
-Art metal wares
-Wood wares
-Hand printed & textiles & scarves
-Embroidered & crocheted goods
-Shawls as art wares
-Zari and zari goods
-Limitation jewelry
-Miscellaneous handicrafts

The major importers of rural Indian handicrafts are as follows -

-Art metal wares - USA, Germany, UK & Italy
-Wood wares - USA, UK, Germany and France
-Hand printed & textiles & scarves - USA, UK, Germany & Canada
-Embroidered & crocheted goods - USA, Saudi Arabia, UK, Germany
-Shawls as art wares - Saudi Arabia, USA, Japan & UK
-Zari and zari goods - UK, USA, Japan & Saudi Arabia
Imitation jewelry - USA, UK, Saudi Arabia & Germany
Miscellaneous handicrafts - USA, Germany, UK, & France

Presently, the global market of handicraft is valued at US$ 400

billion and India's share in the global market stands at 2% only.
However, the handicraft industries in rural India economy
registered an annual growth rate of 15% consistently over the last
decade and it is estimated to grow at the rate of 42% over the next
five years annually.

Although, the Handicraft Industries in Rural India Economy is

witnessing steady growth over the last five years but its growth is
snowed under by certain bottlenecks, like the following -
The manufacturing process does not compliments with orders of
such products
Use of primitive techniques
High manufacturing cost
Poor quality of products
Product design and development to be aligned with the background
and history of the craft, the producer, and the market requirements
Poor standard of raw materials
Lack of standardized vendor and suppliers
Lack of standardized raw materials
Improper pricing of finished products
Absence of proper incentives and schemes by the Government of
India
Unorganized investment patterns and lack of regular investors
Lack of proper marketing channels
Poor access to urban markets
The Government of India has announced a Comprehensive Policy
Package for SSI & Tiny Sector. Besides, there are other policies in
existence to support the SSI sector. These are as follows: 
1) Enhancing the excise exemption limit for SSIs - The limit
has been enhanced from Rs.50 lakhs to Rs.1 crore with effect to
improve the competitiveness of Small Scale Sector.  
2) Credit Linked Capital Subsidy Scheme for Technology Up
gradation - The Government has approved the scheme; wherein
12% back ended capital subsidy would be admissible on loan
advanced to SSI by the scheduled Commercial Banks, designated
SFIs for Technology Up gradation in certain sub-sectors.  
3) Enhancement of Investment Ceilings for Small Scale
Service & Business Enterprises- The limit has been enhanced from
Rs.5 lakhs to Rs.10 lakhs. 
4) Grants for ISO-9000 to continue - The ongoing scheme of
granting of Rs.75, 000 to each small scale enterprise for obtaining
the ISO-9000 certification will continue.
5) SSI Association to develop and operate Testing
Laboratories - A onetime capital grant of 50% will be given on
reimbursement basis to the SSI Association who is interested to
develop and operate Testing Laboratories. 

6)  Working Capital to SSIs - The Nayak Committee’s

recommendations regarding provision of 20% of the projected
turnover as working capital is being recommended to the financial
institutions and banks. 
SOCIAL ANALYSIS OF HANDICRAFT-
The problem of child labor is not a related feature of modern
society only. In fact, the problem has been there since the very dawn
of human civilization. The reasons responsible for this phenomenon
are varied and have been changing as the years rolled on. Avenues
of child labor over the years have broadened. As a matter of fact, the
problem is vexed and wide spread and is not a characteristic of any
particular type of economy. Any work, whether manual or mental,
which is undertaken by a child, who is below 14 years of age.
Includes children prematurely leading adult lives, working long
hours for low wages under conditions damaging toothier health and
to their physical and mental development, sometimes separated
from their families.
Agriculture, handicrafts work and traditional occupations in this
part of the country have engaged a large chunk of the child workers.
The working conditions of the children in the handicraft sector are
dreadful, inhuman, and uncongenial for the proper growth and
development of the children. Various socio-economic, geographical,
and demographic factors are responsible for such a high proportion
of child labor in India. Cheapness of the child labor in the
agricultural and handicraft sector in India has led to the availability
of the child labor in abundance. This has also resulted in their low
level of schooling and a greater number of dropouts.
So at last we can say that in India most of the child labour is working
in the handicraft. Handicraft is a very good source of the income of
rural peoples of India.

LEGLE ANALYSIS OF HANDICRAFT-

The legal environment of the country is very favorable to the sector
of handicraft. Government of the India made many acts or
restrictions on the large scale industries so that we can save the
handicraft in the country. Government of India also makes the rules
that the certain percentage of the product of Indian industries may
export. So that the handicraft industry of the country is save. These
programs adopted by the government of India for the balanced
development of rural areas in the country. India's handicraft exports
increased by a whopping 177 per cent in September, raising hopes
of a turnaround in the country's overseas trade that has been
battling global recession for the last 11 months.

Exports of handicrafts, 71 per cent of which are picked up by

customers in the US and EU, increased to $46.87 million in
September this fiscal, against a mere $16.88 million a year ago.

This increase came after a 21 per cent decline reported in the

previous month of August, according to the data given by the
Handicrafts Export Promotion Council (EPCH).

There are signs of improvements in the traditional markets.

Christmas and New Year orders are better.

The EPCH is organizing its annual flagship Indian Handicrafts and

Gifts Fair from October 10 at Greater Naiad. Around 3,500 global
buyers have confirmed participation in the fair, Amphora said,
adding the fair would boost business feeling.

Though a low-value portfolio in the country's exports basket of $170

billion, handicrafts exports employ seven million people. Lakhs of
artisans have been facing tough times due to a demand slump in
major international markets.

In fact, the handicrafts exports started declining much before the

global financial crisis erupted in the middle of 2008. Exports have
been declining for the last two years from $3.8 billion in 2006-07 to
$1.79 billion in 2008-09
POLITICAL ANALYSIS OF HANDICRAFT IN THE COUNTRY-

The political environment of the country is not the favored of the

sector of handicraft. The politician of the country do not takes
interest on these products of the country because they want to
develop the industrial development in the country. They do not
attend the basic strength that is in the rural development in the
country. Most of the population of the country lives in the villages of
the country. About 70 percent out of the total population lives in the
villages. If we do not develop the villages of the country then could
not become the powerful.
At last we can say that politician has to take part in the development
in the country.

TECHNOLOGICAL ENVIORNMENT OF THE HANDICRAFT IN THE

COUNTRY-

Last about 50 years our technology is growing rapidly. Today

technology reaches on a high peak. Industries are using high-tech
machineries for its production. Its result is directly on our
handicraft sector. The cost of the production of the industries may
very low as compare to the product of handicraft. Its effect goes
directly on the sale of handicraft in the country. The product that is
makes by the industries are more attractive. For example textile
industries adopt new machinery with new designs the customers of
the product attractive to the product of industries. Technology is the
main cause to finish the name of handicraft in the India. Today most
of the businessman of handicraft closes their business due to new
technology in the country.

CONCLUSION- At last we can say that some external environment of

the handicraft is in the favor of handicraft while other is not the
favored of handicraft. Economic environment is in the favor of the
handicraft. Most of the countries are the buyer of the handicraft of
India. India is basically an agriculture-based country and the
development of rural economy of India depends upon the
development on 70 crore rural population.
Some of the countries of exporter of handicraft are as follows-
Germany, UK, & Italy, Wood wares - USA, UK, Germany, and France
-Hand printed & textiles & scarves - USA, UK, Germany, & Canada
-Embroidered & crocheted goods - USA, Saudi Arabia, UK, Germany
-Shawls as art wares – Saudi.
Political environment is not the favor of handicraft in India. Legal
environment is in the favor of handicraft. Government is restricting
industries to produce of handicraft goods. Social environment of the
handicraft is free for country of India. India has child labor in the
country. At last we can say that technological and political
environment is not the favor of handicraft in the country.

THANKS……………………………………………………….