Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
SUBMITTED TO
SUBMITTED BY
Dr. Himani Sharma Abhishek
Thaor (B 29)
Faculty, ABS Anil Yadav
(B 42)
Manoj Dasgupta (B
45)
Nilava Das
(B 46)
Tarun Patra
(B 58)
ACKNOWLEDGEMENT
Brief Contents
1. Leather Industry
d. Leather statics
a. History
b. Company’s Vision
c. Core Values
d. Target Segment
g. Brand Positioning
h. Brand Communication
i. Distribution Network
j. New Products
3. Strategies
i. Differentiation
ii. Focus
i. Horizontal Integration
iii. Diversification
4. Business Models
a. ETOP
c. BCG matrix
d. SWOT analysis
5. Recommendations
a. Brand Extension
6. Conclusion
7. Bibliography
Leather Industry
In
India
LEATHER AND ALLIED INDUSTRIES – AN
OVERVIEW AND
PROSPECTS
Products Exported
Leather Footwear
Footwear Components (Shoe Uppers, Soles etc.)
Leather Garments
Leather Goods (Including Harness & Saddlery, Leather
Gloves etc.)
Karnataka Bangalore
Northern Region
Punjab Jalandhar
Delhi Delhi
Eastern Region
Leather
Hides 65 million pieces
Skins 170 million pieces
Leather Products
Leather Statistics
Country-Wise India's Export of Leather and Leather
Products
Value in thousand US$)
COUNTRY 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01
U.S.A. 295.62 298.75 251.40 252.71 258.24 343.21
Germany 400.38 362.88 363.41 364.19 293.59 308.13
U.K. 200.93 204.92 219.26 235.79 266.29 271.35
Italy 221.26 182.99 221.53 197.16 165.47 241.06
Spain 50.75 46.97 54.96 69.23 66.72 100.88
Hong Kong 59.46 59.07 53.93 53.26 55.22 98.42
France 88.73 72.34 79.01 79.77 84.36 90.84
Netherlands 38.65 38.48 43.83 49.78 44.17 55.82
Portugal 23.70 20.21 31.91 29.39 24.41 37.44
Russia 47.58 30.22 50.99 25.19 27.97 31.49
Denmark 27.81 23.34 21.73 18.82 28.30 28.77
Australia 40.74 36.91 36.83 35.39 31.84 28.44
Canada 22.84 19.63 21.69 18.77 21.42 26.71
Sweden 12.70 11.20 12.76 15.40 19.79 25.47
S. Africa 31.06 25.70 25.10 26.29 24.28 23.46
Switzerland 20.25 21.14 22.78 21.49 16.13 18.61
Austria 18.37 18.18 20.16 17.22 14.65 15.04
Japan 21.52 13.36 14.31 7.30 8.36 13.32
Greece 5.27 6.33 6.92 5.75 4.50 5.95
New Zealand 4.95 4.59 4.17 4.79 5.28 3.81
Others 130.41 121.07 115.23 127.20 143.45 202.76
TOTAL 1762.97 1618.27 1671.90 1654.89 1604.35 1970.98
Key Characteristics
Strengths
• High Growth
• Ready availability of highly skilled and cheap manpower
• Large raw material base
• Policy initiatives taken by the Government
• Capability to assimilate new technologies and handle large
projects
• Continuous emphasis on product development and design up
gradation
Weaknesses
• Lack of warehousing support from the government
• International price fluctuation
• Huge labor force resulting in high labor charges
• Lack of strong presence in the global fashion market
• Unawareness of international standards by many players
Threats
• Major part of the industry is unorganized
• Limited scope for mobilizing funds through private
placements and public issues (many businesses are family-
owned)
• Difficulty in obtaining bank loans resulting in high cost of
private borrowing
• Stricter international standards
• High competition from East European countries and other
Asian countries
• Lack of communication facilities and skills
Leather Garments
The name Hidesign was formed by merging the words "hide" and
"design" . And true to its name, Hidesign went on to become a
premier design house for leather goods, gaining acceptance
even in the highly competitive western markets.
Natural
Hidesign sees great value in natural beauty. The soft,
sensuous leathers and smooth solid brass fittings speak of
the highest quality natural materials.
Craftsmanship
Every Hidesign product is uniquely handcrafted. There is no
mass manufacture at Hidesign, and the great
traditional skills of our craftsmen are encouraged to be
perfected over years.
Innovation
All these years this brand has never compromised on quality. The
main USP of this brand is its craftsmanship. The brand still uses
the traditional craftsmanship and 70% of the work is by hand. The
brand depends heavily on the craftsmanship. The core value of
the brand is its attitude, tradition and its commitment to
environment. Instead of using the much polluting dyes, the brand
uses vegetable dyes.
Relevance
The brand is relevant to customer because of the change in the
lifestyle of the upwardly mobile Indians.
Value
Although the brand is priced astronomically , the target group is
finding value in this product. But with these prices the brand is
out of reach to most Indians.
Positioning
The brand rightfully identified its core value and the positioning is
in line with the strength of the brand . The choice of the media
and the copy of the campaign also reflects the positioning.
Portfolio
The brand has wide range of models and is seriously looking into
expanding to different segments with in the category. The
company is planning to introduce bags for the college going
under a separate brand name.
Management
The brand has been built over time and the management has
been careful in building the core values of the brand.
Support
There has been lot of support for the brand building efforts . The
company has been spending the money wisely and carefully.
Marketing
The overall marketing activities has been perfect and has helped
the company to create a world class brand.
Hidesign is an internationally successful brand in the
“affordable luxury” category. It’s a brand that is born out
of passion, sets its first foot internationally and then
comes to Indian market almost two decades of marketing
its presence in various parts of the globe.
When Hidesign started off in India, way back in 1996, the whole
process was to establish brand salience. The initial focus was to
set up stores at the tourist places primarily to see how the Indian
audience take to the brand. It was good to see that the Indian
audience did find an affinity to the brand and many of them
became hard core Hidesign loyalist. Hidesign community grew
primarily through word of mouth and the company encouraged
this as a feeling of belonging, of being a Hidesign customer.
Brand Communication
Hidesign focuses on fashion and lifestyle media for their
communication in India. One could find Hidesign in Femina,
Jetwings, l’officiel, Marie Claire, Brunch and some newspaper
supplements like Mumbai Mirror, Delhi Times etc. Hidesign
launches its new collections through fashion shows, once a year.
Senior media personnel are invited to attend the show, at
Pondicherry, coupled with visit to the factory. Local fashion shows
are also organized at cities like Cochin, Hyderabad and Calcutta.
Designs
Hidesign has three design set ups. UK, India and Italy.
Collections
Hidesign has two seasonal collections: Spring - Summer and
Autumn – Winter.
The products are classified in two types. Core and Collection.
Core is the classical range which consists of the ‘most sold’ types
that are available through the year. Collections are seasonal and
time bound. If a collection becomes successful, it goes to the
core. New designs keep coming in and old ones are replaced. The
feedback on design changes is gathered from customers when
they purchase from the retail outlets. It is also derived from the
kind of bags sold at various stores and ‘the most sold and least
sold’ designs.
International Distribution
Initially, Hidesign was an exclusively export-oriented outfit,
fulfilling orders from European and American distributors. It
concentrated on taking small orders and fulfilling them to high
quality standards and delivering on time. This proved crucial in
building its reputation among high-end overseas customers and
in gaining their initial goodwill.
Differentiation Focus
Distribution
1. Differentiation
Hi design stresses on natural leather processing to show
authenticity & differentiation.
Leather Checking
Unlike most mass produced leather goods, Hidesign bags are
made using Full Grain Hide leather that needs no correction.
Hidesign has its own tannery to ensure that the best quality hides
are used. In stage 2, the leather is tanned by the time honoured
traditional method of vegetable tanning hides in extracts of bark
and seed (which represent the required tannic acid) collected
from renewable sources in the forests of Africa and India. Only
after these vegetable extracts have been fully absorbed oils &
waxes applied to make the hides supple. This method, though
more extensive and time consuming, is by far the most thorough
and environment friendly.
The leathers are checked to ensure that the Classic leather has
sufficient body for a briefcase to be firm, built is not too boardy.
Casual leather is checked for its softness, without looseness and
wrinkles. Keeping the tradition and environment in view, Hidesign
products are normally hand-dyed. This enhances the strength and
the beauty gained from the vegetable tanning process.
Cutting
Hidesign still insists on hand-cutting with knives, for with its tiny
sharp cutting point, it enables the skilled pattern cutter to make
clean cuts and go around corners exactly as per the pattern.
Hand-cutting allows the cutter to lay down the whole leather on
the table and place various patterns onto it to ensure correct
matching between adjoining pieces on the bag before actually
cutting. Inherited talents and long apprenticeships gives Hidesign
this unique strength to handle natural leathers that most
factories, dependant on machine clicker cutting, cannot cope up
with
Constructing the Bag
A high quality bag requires a great deal of preparation. A
common misconception is that cutting leather and stitching it
together makes a bag. Although this may be true of inexpensive
bags, the making of a high quality bag requires very little
stitching but great deal of work constructing a bag.
Final Product
Hidesign knows no other way of making bags that will
give years of pleasure.
2. Focus
Focus on uniqueness and innovation. Each product was “limited
edition”
INNOVATION:
Hidesign products are unique. The multicultural design team has
won several international awards for its excellence and design
leadership. True to its values, Hidesign constantly innovates to
stay in touch with the continuing fast moving changes in the
lifestyle of its customer.
2. Vertical Integration
Company expands its operation either backward into an industry
that produces input for the company’s product or forward into an
industry that uses or distributes company’s products.
Backward Integration
The core value of the brand is its attitude, tradition and its
commitment to environment.
Kapur did not like the look of normal leather, which seemed to
slick to him. He saw some samples of leather that had been
tanned using traditional methods of soaking the hides in
vegetable extracts, and liked the different look this gave the
material hence, Hidesign set up two wholly-owned tanning
establishments near Chennai to maintain control over the quality
of its leather. Where most other bags used plated-metal fittings,
Kapur insisted on solid brass.
3. Diversification
Hidesign was viewed as a product out of the mainstream in its
export markets, carried by exclusive distributors who built
something of a cult following within each of their geographies so,
Hidesign products were typically sold in stores with more of a
fashion emphasis. But in 2000 the brand started Diversifying into
retail which signaled a new era for Hidesign. By 2006, the firm
owned 35 stores in India and had announced plans for 17 more.
Designing Profiles
After analyzing the environmental factors they are recorded into
the profiles.
Problems of Tanneries
• Environmental pollution due to lack of
facilities for treatment and disposal of
hazardous wastes.
Opportunities:
• Abundant scope to supply finished leather to
multinationals setting up shops in India.
• Growing fashion consciousness globally.
• Product diversification in leather garments and goods.
• Growing domestic and international market.
Porter five forces analysis
This five forces analysis is just one part of the complete Porter
strategic models. The other elements are the value chain and
the generic strategies
The Five Forces
The brand has been able to identify and satisfy the customer's
desires. The customers were in need of a brand that can offer
them quality and looks which was lacking in the unbranded
products. The brand is relevant to customer because of the
change in the lifestyle of the upwardly mobile Indians. Although
the brand is priced astronomically , the target group is finding
value in this product. But with these prices the brand is out of
reach to most Indians.
Market growth rate is only one factor in industry attractiveness, and relative
market share is only one factor in competitive advantage. The growth-share
matrix overlooks many other factors in these two important determinants of
profitability.
The framework assumes that each business unit is independent of the others.
In some cases, a business unit that is a "dog" may be helping other business
units gain a competitive advantage.
The matrix depends heavily upon the breadth of the definition of the market.
A business unit may dominate its small niche, but have very low market
share in the overall industry. In such a case, the definition of the market
can make the difference between a dog and a cash cow. While its
importance has diminished, the BCG matrix still can serve as a simple tool
for viewing a corporation's business portfolio at a glance, and may serve as
a starting point for discussing resource allocation among strategic business
units.
Strengths:
WEAKNESSES:
• Their products are only for the higher income class people
and very few for middle class people.
OPPURTUNITIES:
THREATS:
Solutions:-
• Approach 1 : Launch the new variety keeping the same
brand name: Hidesign Brand Extension
Bibliography
1.Strategic Management An Integrated Approach
- Charles W. L. Hill
- Gareth R. Jones
3. www.cityleathers.com/leatherBags.htm
4. www.hidesign.com/home.mvc/TheProduct
5. http://www.livemint.com/2009/08/23111919/Hidesign-to-
focus-on-Indiaspe.html
6. http://www.dare.co.in/people/case-studies/hidesign-to-
expand-the-brand.htm
7. http://www.ameinfo.com/44375.html
8. http://www.avg.com/in-en/homepage
9. www.hidesign.com/content/Images/showroom.jpg