Strategic Analysis Of Raymond Apparel Ltd.

Business Policy Assignment

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Raymond Apparel Ltd.

Most respected textile company of India. Fully integrated manufacturers of Worsted Suiting's. Multi-product & Multi-divisional Raymond Group. 60% share of Indian worsted suiting market. Produces 25 million mtr of high value pure wool, wool blended & premium polyester viscose suiting in addition to half million blankets and shawls , plush-velvet.

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Fashion Brands
Pioneer in certain homegrown fashion brands Raymond Manzoni (luxury lifestyle) Park Avenue (premium formal wear) Parx (premium casual wear) Be (designer women wear) Zaap! (premium infants and kids wear) Color Plus (premium smart casual wear) Notting Hill (popular segment)

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Indian Apparel Industry

Three segments of activities Spinning , Weaving & Garmenting. Facing various upheavals. Gaining stronger position. The Catalysts - a buoyant domestic economy.

Strategic Group
Madura , Arvind Mills , Wills Lifestyle major competitors in readymade garment business. Reid And Taylor under fabric range.

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Key Dominant Features

Market Size & Growth Rate total sale of $20.4 billion in 2008-10 , growing at CAGR of 14.86% Degree of Rivalry Degree of rivalry is high as there are large no. of player. 80% of the total market is unorganized. Regulatory Environment 100% FDI is allowed 49% Share of foreign player in joint venture for retail Technology Up gradation Fund Scheme (TUFS) Scope of Competitive Rivalry Learning and Experience effects Degree of Product Differentiation

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Industry Driving Forces

Increasing globalization of Industry.
Technological change and manufacturing process innovation.

Growing buyer preferences for differentiated products instead of standardizes commodity products.
Regulation influences and government policy changes. Changing social concerns , attitudes and lifestyles.

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Industry Attractiveness
Porters Five Force Model
Buyer bargaining power

Threat of new entrants

Rivalry

Threat of substitutes

Suppliers bargaining power

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Threat of New Entrants

Economies of Scale are high. Brand Identity of a company in this industry is high. Capital requirement to establish a regional or a national level operation are high . This industry is not lucrative. The companies operating at the national level do manage to make economic profit , but the entry barriers at this stage are very high. But this high capital requirement is not an issue for the international players , & thus the entry of strong international brand in the domestic market is inevitable. Thus the Threat of New Entrants is moderate.

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Threat of Substitutes
The threat of substitution from the garments provided by the unorganized sector is high.

Bargaining Powers of Buyers

Buyer Concentration is very low. Buyer volume is also generally low. Buyer information is high. Product differences and brand identity are quite high. Ability to backward integrate is very low. Thus the bargaining power of buyers are low.

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Bargaining Power of Supplies

Differentiation of input is pretty low. Presence of substitute inputs to cotton like polyester , wool , lycra etc. are present. Thus we can say presence of substitute inputs is avg Importance of volume to suppliers is very high. Cost relative to total purchases in Industry is low. Thus the bargaining power of supplies is low.

The Degree of Rivalry

Fixed costs are high in this industry. Product differences are high. Brand Identity is high. Exit Barriers are also high for national leveled operations. Thus the degree of rivalry in this industry is high.
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Generic Strategies followed at Raymonds App. Ltd.

Strategic Advantage Uniqueness perceived By the customer Industry Differentiation Wide Raymond App Ltd Strategic Target Particular Segment Only
Focus

Low Cost position

Overall

Cost Leadership

Raymond App. Ltd. Mainly follows the strategy of differentiating through high quality perceived brands like Raymond , Manzoni , Park Avenue , Parx.
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Threats to Sustainability And Companys Response

Imitation Substitution Holdup Slack

Strategic Recommendations
Women Segment is relatively new , which is 35% of the total domestic market , this part of the market should be focused upon. Focus on accessories. Zapp is Premium Kids Wear , to come up with Popular Segment for Kids Wear To expand to International markets starting with area with sizeable Indian population.
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 To eliminate this philosophy that only the quality of the product will create demand , and start brand building exercise for all the Raymond App. Ltd. Brands. To increase the consistency of advertising , and also increase the no. of brands for which ads are run.

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THANK YOU

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