A PROJECT REPORT ON INDUSTRIAL EXPOSURE
LAKHANI FOOTWEAR LIMITED
In partial fulfilment of the requirement for the award of degree of Bachelor¶s in Business Administration (B.B.A.)
2009-2012
Submitted By:
SANCHIT KOHLI BBA-4TH C ROLL NO.139
Under the Guidance of:
MS.AARUSHI MALHOTRA
BHARATI VIDYAPEETH¶s INSTITUTE OF MANAGEMENT & RESEARCH, NEW DELHI
An ISO 9001:2008 Certified Institute ³A´ Grade
ACKNOWLE
E ENT
I am very t ankful t everyone who all supported me, for I have completed my project effectively and more over on time. I am equally grateful to my teacher Ms.Aarushi Malhotra She gave me moral support and guided me in different matters regarding the topic. She had been very kind and patient while suggesting me the outlines of this project and correcting my doubts. I thank her for her overall supports.
I am also very indebt to Mr SUNIL KUMAR, my guide in Lakhani. Who helped me a lot in gathering different information and guiding me from time to time in making this project .Despite of his busy schedules, he gave me different ideas in making this project unique. Last but not least I would like to thank my colleagues to lay their helpful hands whenever required.
CONTENTS
CHAPTER 1: INTRODUCTION
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OVERVIEW OF INDIAN ECONOMY AND ITS GROWTH OVERVIEW OF INDUSTRY INDUSTRY INTRODUCTION COMPANIES CONTRIBUTION WITH IN THE INDUSTRY SCOPE OF IMPROVEMENT OF COMPANY IN THE INDUSTRY
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PROFILE OF THE ORGANISATION HISTORY OF THE COMPANY NATURE OF BUSINESS VISION AND MISSION STATEMENT OF COMPANY ORGANISATION STRUCTURE KEY COMPITITORS OF THE COMPANY.
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CHAPTER 2: COMPANY ANALYSIS
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CURRENT ISSUES OF THE COMPANY PEST ANALYSIS PORTERS 5 FORCES MODEL SWOT ANALYSIS USP OF MARKETING DEPARTMENT
CHAPTER3: MARKETING STRATEGIES
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INTRODUCTION AND IMPORTANCE OF MARKETING STRATEGIES MARKETING MIX OF THE COMPANY STP ANALYSIS OF THE COMPANY BCG MATRIX OF THE COMPANY
CHAPTER4: FINANCIAL ANALYSIS
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SOURCES OF FINANCE KEY INVESTMENTS RATIO ANALYSIS
CHAPTER5: HR-POLICIES AND STRATEGIES
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SOURCES OF RECRUITMENT PROCESS OF RECRUITMENT
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BENEFITS OF COMPANSATION SYSTEM
CHAPTER6: PRODUCTION POLICIES
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PRODUCTION PROCESS PRODUCTION LAYOUT KEY CUSTOMERS QUALITY CONCEPT USED BY THE COMPANY
CHAPTER 7: FINDINGS AND CONCLUSIONS
BIBLIOGRAPHY
INDUSTRIAL VISIT REPORT
CHAPTER-1 INTRODUCTION
OVERVIEW OF INDIAN ECONOMY AND ITS GROWTH.
³Although, the uncertainty in the shape of the global economic recovery is still persisting, however the situation has significantly improved as compare to first quarter of last year. Indian economy is bracing for higher economic growth backed by uninterrupted foreign inflows, eloquent growth in industrial output but the higher inflation and interest rates would also follow.´ It s almost a decade since we entered into the 2000s. Economic growth in these years wasn¶t so impressive for the western economies. It proves to be one of the worst economic periods for those economies. Indeed, the so-called fastest growing economies (such as India, Brazil, China, Mexico, Russia, and Indonesia) have seen an unprecedented economic expansion because, the eastern economies were the producers and the western economies were the consumer and the same trend would likely to continue as the companies, nowadays, are more conscious about the cost. Rising input cost (or raw material) are forcing the corporations in the industrialized economies to shift their focus on the cost-effective region to keep up the pricing competitiveness in the specific industry, they are in. Change in consumer trend is also major concern for the companies to invest more in the process of innovation, research and development (R&D). As the economic pace is picking up, global commodity prices have staged a comeback from lows and global trade has also seen a decent growth over the last two years. Unprecedented Government intervention and exceptionally large interest rate cuts by the central bank in advanced and emerging economies have contributed a lot to pull the global economy up from the deepest recession since the World War II. Several Governments around the world launched the stimulus packages to prop up the economic growth, generate employment opportunities and the overall economic growth with the aim to reduce uncertainty in the economy and increased confidence. The acute phase of the financial crisis has passed and the global recovery is underway. Since the announcement of the previous budget amid large fiscal deficit and uncertainties in the Indian Economy, Finance Minister Pranab Mukherjee has announced the growth specific budget for the country. Central government is trying to help states to meet fiscal consolidation by improving tax policy and administration, budget management,
rationalization of expenditure and better public financial management. India¶s economic
growth is vulnerable to the Monsoon as the Agriculture and allied sectors alone contributes almost 18 per cent to the annual GDP of India. Last year¶s nasty monsoon has swayed the
economic growth. Earlier, the CSO has forecasted the growth of annual GDP at 7.2 per cent in Feb this year. Now, the India¶s national income statistics shows the growth of 6.5 per cent, anticipation that the agricultural and allied sectors would suffer a contraction of GDP by 2 per cent, while the Service industry would grow by more than 8.7 per cent. Within the boundaries, the most important issue is price stability i.e. Inflation, specially that arising from supply constraints restricting farm sector output growth. As per the report, advance estimate data shows the food grain production in 2009-10 is likely to be 216.9 million tonne, which is 17.6 mt lower than the last yearµs production. Sugarcane output too has a shortfall of almost 12 per cent compared to last year, which has led to big gap between demand and domestic production of sugar. India is the largest consumer of sugar in the world and these combined factors would lead to sharp rise in prices of sugar in both domestic and international market. The overall effect of the shortfall in agriculture production would likely to seen on the economic growth by nearly 2 per cent, as the sector accounts for more than 18 per cent of the total GDP.
This entry gives GDP growth on an annual basis adjusted for inflation a nd expressed as a percent.
Year 2003 2004 2005 2006 2007 2008 2009 2010
GDP - real growth rate 4.30 % 8.30 % 6.20 % 8.40 % 9.20 % 9.00 % 7.40 % 7.40 %
Rank 54 16 43 24 23 23 28 10
Percent Change
93.02 % -25.30 % 35.48 % 9.52 % -2.17 % -17.78 % 0.00 %
2003
2004
2005
2006
2007
2008
2009
2010 0 1 2 3 4 5 6 7 8 9 10
The factors that are dri ing economic growth in India are; Firstly, it is domestic consumption. The annual growth in real consumption expenditure over the past four years has been, on average, 6.3 percent. With easy liquidity conditions spurring demand for personal loans, and adequate capacity in the manufacturing sector, there has been a consumption boom. Secondly, rise of in estment. The consumption boom that started at the beginning of this decade has triggered an investment boom. Real investment has grown at a robust rate since 2002±03, averaging 17 percent a year in the past four years. During this period, the contribution of investment to growth has exceeded the contribution of final consumption expenditure. The current investment ra as a proportion of GDP, is te, 35.1 percent, and it is expected to increase in the medium term. Thirdly, increase in employment. The rate of growth in the labour force that was 1.60 percent in the previous period of six years accelerated to 2.54 percent du ring the period 1999±2000 to 2004±05. Thankfully, the rate of growth of employment too accelerated from 1.57 percent in the first period to 2.48 percent in the second period. We have, therefore, more persons employed and contributing to the national output . Paradoxically, we also have, in absolute number, more persons unemployed.
Fourthly, increase in productivity of both capital and labour. Rodrik and Subramanian, in an IMF working paper of 2004, pointed out that India seems to have large amount of productivity growth from relatively modest reforms. A more recent paper by Barry Bosworth, Susan Collins, and Arvind Virmani (2006) has confirmed this. They have concluded that output per worker grew at 1.3 percent annually during 1960±80 and total factor productivity (TFP) was barely above zero. In contrast, growth in output per worker nearly tripled to 3.8 percent during 1980±2004, while TFP increased tenfold to 2 percent.
Indian Economy Sectors
The Three Sectors of the Indian Economy are;-
Primary Sector
The Primary sector of the economy is the change of natural resources into primary products. Most products from this sector provide raw materials for other industries. The share of primary sector has decreased from the past four decades. In 1970 the share of the sector was 50% which has reduced to 29% in 1995 and is now further reduced to 25%. Major businesses in this sector are agriculture, agribusiness, fishing, forestry, all mining and quarrying industries. When the economic activity depends mainly on exploitation of natural resources then that activity comes under the primary sector. More than 52% of country's population depends on agriculture, a sector contributing only 17.5% of the GDP.
Secondary Sector
The secondary sector of the economy includes those economic sectors that create a finished usable product and hence depend on primary sector industries for the raw materials. This sector includes Mining, manufacturing and construction. The secondary sector contributes 24% of the share in Indian economy. All industrial production where physical goods are produced come under the secondary sector. Index of industrial production, which measures the overall industrial growth rate, stood at 5.2% in 2010 and is expected at 7.5% in 2011.Textile industries, steel industries, footware industry; automobile sectors are good example of this sector.
Tertiary Sector
The Tertiary sector includes service industry and it holds the highest importance among all sectors. The tertiary sector of economy involves the provision of services to business as well as final consumers. Services may involve the transport, distribution and sale of goods from producer to consumers as may happen in wholesaling and retailing, or may involve the provision of a service, such as in pest control or entertainment. The tertiary sectors account for 51% of the GDP. The tertiary sectors may include: Insurance Banking Transport The higher the productivity in primary and secondary sector and lower the employment in these sectors, the better it is. People need more and more services for leading qualitatively better lifestyle. They need more means of transport, more communication and educational facilities, more training, more medical facilities, entertainment, technical facilities, banking facilities etc. Tertiary sector depends on scientific research and innovative developments to increases productivity and it provides engineering and construction consultancy support services for all projects in all sectors. Developed countries employee more than 80% the services sector. India is the fifteenth largest country in the world in terms of services' output. This sector provides employment to 23% of the workforce and is the fastest growing sector, with a growth rate of 7.5% in 1991±2000 up from 4.5% in 1951±80. It has the largest share in the GDP, accounting for 53.8% in 2010 up from 15% in 1950.
Business services like information technology, information technology enabled services, business process outsourcing contribute to one third of the total output of services in 2000. The growth in the IT sector is due to the availability of a large pool of low cost and highly skilled, educated and fluent English-speaking people. Foreign clients have also expressed their interest in outsourcing much of their operations to India Excellent infrastructure in the service sector and the lowest communication cost has helped India to be a dominant player in these sectors.
OVERVIEW OF INDUSTRY
Industry Introduction
Lakhani is one of the most quality conscious, progressive footwear companies manufacturing branded footwear such as Lakhani Hawai & Flite slippers, School -mate, Canvas shoes, Sparx sports shoes etc. Headquartered in New Delhi, Lakhani maintains a fine combination of comfort, style, and workmanship and is embarking upon appreciable growth plans for the future. The company began as a small enterprise in 1976, was officially incorporated in 1984 & further went into public listing in 1995 . According to the 2008 Business Survey, it has now emerged as the
second largest footwear producer in India.
Products:
Lakhani Footwear has a plethora of diverse operations in its portfolio, most of which may be classified into three main divisions: ? Whole Sale Operations ? Retail Operations ? Export Operations Products comprise a wide range of quality footwear in the following brands: 1. Hawaii Slippers: Hawaii is the most popular brand in the Lakhani portfolio. It comes in diverse shades and styles and its comfort value makes it a favourite among all age groups. With an output of 300000 pairs a day, Lakhani is one of the largest manufacturer of Hawaii in India.
2. Flite: Flite is Lakhani's most exclusive brand. Its unique ³fashionable and light´ quality is ensured by its manufacturing process, involving cutting-edge EVA technology. Available in an array of colours and designs, it is among the popular products in the casual footwear industry.
3. Schoolmate: Schoolmate is a range of school shoes for boys and girls and is an expression of Lakhani's faith and commitment towards the young leaders of tomorrow. Made with special care to pamper thousands of tiny feet, each pair bears the mark of superb workmanship and adaptable design. .
COMPANY¶S BACKGROUND STUDY
Lakhani Foot Wear(RFW), a part of Lakhani Group which has major interest in Footwear production, was incorporated in Sep 13, 1984 as a private limited company to market market the products of group concerns such as hawai slippers, light weight slippers, canvas shoes, PVC footwear etc. It was subsequently converted into a public limited company on March 31, 1993. In the year 1995-96 the company has transformed from solely a Trading/marketing agency to that of a full/fledged manufacturing unit by putting up a facility to produce 50000 pairs of hawai and light weight chappals per day on a two shift basis at Bahadurgarh, Haryana. This project was part financed by RFW's maiden public issue aggregating Rs.4.50 crores at a premieum of Rs. 50 per each share of facevalue of Rs. 10. In the year 1999, the company has expanded the capacity of it's Bahadurgarh plant. The company has implemented a Hitech Hawai manufacturing plant at Bhiwadi(Rajasthan), which is the largest Hawai manufacturing plant in India during the year 1999-2000. The commercial production of this new plant has commenced in the month of July 2001.
Production and Growth
The company has established 6 manufacturing plants spanning North India. These are located in Delhi, Bahadurgarh (Haryana) and Bhiwadi (Rajasthan). With a cumulative area of over 120,000 sq. feet, these units have a huge set up enabling massive production. Each manufacturing unit is equipped with world-class machinery and hi-tech product testing laboratories. IN FY10, Hawaii footwear (Lakhani) could contribute 40% of sales, Light slippers (Flite) 40% and Sports shoes and sandals 20% of sales.
COMPANY CONTRIBUTION WITHIN THE INDUSTRY
The Company constituted the ³Remuneration Committee to recommend the Board of Directors, the compensation and remuneration of Directors and Senior Managerial Personnel. TERMOFREFERENCES The remuneration policy of the Company is directed towards rewardin performance, based on periodic g review of performance and achievements and is primarily based on the following criteria: Performance of the Company, its divisions and units. Track record, potential, personal attitude & performance of individual manager and external competitive environment. COMPOSITION The Committee comprised three Non-executive cum Independent Directors namely Mr. Pankaj Shrimali, Mr. S.K. Sapra and Mr. Vivek Kumar. Mr. Pankaj Shrimali is the Chairman of the Committee.mittee is to motivate employees to excel in their performance, recognize their contribution and retain talent in the organization.
Unique Feature of Lakhani Footware Plant
We "Lakhani Footwears Ltd.", are one of India's most quality conscious & progressive footwear companies. Available for men, women and children, our product range include formal leather footwear, formal ladies footwear, leather footwear, kids footwear, school shoes, ladies slippers, beach slippers, and many other.
Established at New Delhi, 1976, our company was started under the vision of Late Shri Moolchand Dua. After him, his two sons Mr. M.L. Dua (Director) & Mr. R. K. Dua (Executive Director) are looking after the involved business operations.
Today, we are managed by a group comprising of industry experts with relevant experience in all involved business functions. Headquartered in Delhi, India, we have maintained a fine combination of comfort, style & workmanship in our extensiv footwear product range. . e
Our Promoters
We µLakhani Group,¶ have successful history of over 31 years in the footwear industry. This is ensured by virtue of our promoters & associates who have adopted forward thinking philosophy that is backed by ultimate goal of customer satisfaction.
SCOPE OF IMPROVEMENT OF COMPANY WITH IN THE INDUSTRY
Benchmarking is the process through which a company measures its products, services, and practices against its toughest competitors, or those companies recognized as leaders in its industry. Benchmarking is one of a manager's best tools for determining whether the company is performing particular functions and activities efficiently, whether its costs are in line with those of competitors, and whether its internal activities and business processes need improvement. The idea behind benchmarking is to measure internal processes against an external standard. It is a way of learning which companies are best at performing certain activities and functions and then imitating ²or better still, improving on²their techniques. Benchmarking focuses on company -to-company comparisons of how well basic functions and processes are performed. Among many possibilities, it may look at how materials are purchased, suppliers are paid, inventories are managed, employees are trained, or payrolls are processed; at how fast the compa ny can get new products to market; at how the quality control function is performed; at how customer orders are filled and shipped; and at how maintenance is performed
Profile of the organization
History of the company
The company was incorporated on 13th September, 1984 as a Private Limited Company. The company was subsequently converted into a Pubic Limited Company on 31at March, 1993. LAKHANI FOOTWEARS LTD. is a marketing company of the Lakhani Group and at present, it is closely held.
The Hawai & Light weight chappal Industry comprises of about 30 units in the organised sector and a number of smaller units in the unorganised sector. It is estimated that both these sectors together produce about 550 million pairs per annum. The contribution of organised sector is about 50% in this production. There is a demand and supply gap of about 150 million pairs per annum. In veiw of this, the company is selling up modern plant to manufacture 50,000 pairs of Hawai & lightweight Chappals per day on two shift basis under the present project. The Company will continue its marketing for products of group concerns even after commencing its own manufacturing activities. The Group comprises of five different manufacturing units with total factory space of over 1,20,000 sq.ft., over 1100 employees in different disciplines and has a network of over 200 distributors and 20,000 dealers. The group manufactures Rubber Hawai Chappals, Canvas Shoes, sports shoes, casual shoes, leather shoes and light weight chappals. Its total daily production of all footwear is approx. 50,000 pairs per day of which approximately 90% a Hawai & Lightweight Chappals - a segment in which the group is one of the top manufacturers in India. M/S Lakhani Rubbers, which is a partnership firm of Mr. R.K. Dua (HUF), Mr. M.C. Dua (HUF) and Smt. Usha Dua, started its business in 1979. The firm is engaged in manufacturing of light weight rubber chappals and allied rubber products. Lakhani Rubber Ltd. was incorporated in the year 1982 and started its' operation from 1st October 1984. The company is engaged in the production of rubber footwear. Patel Oil Mills is also a partnership firm of Mr. Mukund Lal Dua and Mr. Ramesh Kumar Dua which commenced its operation in the year 1985.
The firm manufactures Hawai Chappals, Canvas Shoes and allied rubber goods. Looking at the rising demand of leather products, Lakhani International, a partnership firm of Mr. Mukund Lal Dua and Mr. Ramesh Kumar Dua was formed which started its' business in 1991. Nu-Wave Shoes, a proprietorship firm and mainly engaged in manufacturing of PVC footwears with a small production of rubber and canvas shoes. Gumber Dyeing & Printing Works a partnership firm of Mr. M.L. Dua & R.K. Dua, started its business in 1991. The firm is mainly engaged in mixing rubber compounds and packing the finished goods of Lakhani Rubbers. 2000 - Lakhani Footwears has approved a proposal to split its each equity share of Rs 10 face value into shares of Rs 5 each. - The Unit-II at Bahadurgarh, Haryana, caught fire on October 12. 2010 - Lakhani Footwears Ltd has appointed Mr. Pankaj Shrimali as an Additional Director w.e.f. May 29, 2010.
Nature of business
VISION AND MISSION STATEMENT OF COMPANY Vision Statement
Lakhani¶s Vision vividly declares the company¶s commitment to community and sustainable development issues making this an essential part of the five interdependent and intertwined business goals for the company. The essence of this resolve is contained in the fifth goal or ³diamond´ which envisages that LAKHANI inspires trust and respect.
Mission Statement
Leadership ± Maintain our relationship of the Indian footware industry. Throughout the continuous modernization and expansion of our Manufacturing facilities and activities and through establishment of a wide and efficient marketing network Profitability-Achieve a fair and reasonable return on capital by promoting productivity throughout the company Growth- Ensure a steady growth of business by strengthening our position in the footware industry. Quality- Maintain high quality of our products and services and ensure their supply their supply at fair prices. E uity- Promote and maintain fair industrial relations and an environment for the effective involvement, welfare, and development of staff at all levels. Pioneering- Promote research and development efforts in the areas of product development and energy, and fuel conservation and to innovate and optimize productivity.
KEY COMPETITORS OF THE COMPANY.
REEBOK
Reebok: Reebok specializes in the design, marketing and distribution of sports and fitness products including footwear, apparel and accessories, as well as footwear and apparel for non-athletic use. The company has three main product categories: Rbk, Performance, and Classic. Each of these product categories features product offerings for both men and women that are designed for specific consumer groups. Reebok has operations in the UK, Europe and in various and in various Asian countries. It is headquartered in canton, Massachusetts. The acquisition of Reebok by Adidas-Salomon was completed in January 2006.
ADIDAS
ADIDAS: Adidas ltd is a German sports apparel manufacturer and part of the Adidas group, which consist of Reebok sportswear company, Taylor Made-Adidas golf company, and Rockport. Adidas is the largest sportswear manufacturer in Europe and the second largest sportswear manufacturer in the world. Company¶s revenue for 2006 was listed at about US $ 13.625 billion and the 2007 figure was listed about $ 15.6 billion. It has more than 170 subsidiaries guarantee marketplace presence for Adidas products around the world.
ACTION
Action: Action shoes ltd. is a leading leather shoes brand and is engaged in the manufacturing, supplying and exporting of the footwear¶s. It is the only Indian leather shoe brand that occupies fifth ranking among the top shoes manufacturing companies in the world.
PUMA
The company is known for its soccer(Futbul) shoes and has sponsored acclaimed soccer player, including Pelé, Eusébio, Johan Cruijff, Enzo Francescoli, Diego Maradona, Lothar Matthäus, Kenny Dalglish, Didier Deschamps and Gianluigi Buffon. Puma is also the sponsor of the Jamaican track athlete Usain Bolt. In the United States, the company is probably best known for the suede basketball shoe it introduced in 1968, which eventually bore the name of New York Knicks basketball star Walt "Clyde" Frazier, and for its endorsement partnership with Joe Namath.
BATA
Bata: Bata industries is a specialized division of the world¶s largest shoe manufacturer: the Bata shoe Organization (BSO). Bata industries has operations and production facilities in most of the countries worldwide. Bata India Limited is the largest footwear retailer in India. Bata India is a manufacturer of footwear. Types of footwear offered by the company include rubber, canvas, leather and plastic footwear. The company also markets apparel under the brand names of North Star, Power and Ambassador. Bata India has five manufacturing plants and acquires its leather from two tanneries in Mokamehghat (Bihar) and Batanagar. It is headquartered in West Bengal, India.
Companies Profile
COMPARISON OF COMPANIES:
Companies Nike Adidas Bata Liberty Puma Action
Average Growth Rate(200508) 10.5% 22.46% 7.8% 11.16% 19.5% 16.1%
COMPARISON OF COMPANIES (PORTER¶S MODEL):
Basis of Nike comparison
Barriers to Entry Bargaining Power of buyers Bargaining power of suppliers Threats of Substitute Rivalry among the existing competitors Absent Low
Adidas Lakhani Action Bata
Absent Low Absent High Absent High Absent High
Liberty
Absent High
Low
Low
High
High
High
High
High High
High High
High High
High High
High High
High High
CHAPTER-2 COMPANY ANALYSIS
CURRENT ISSUES OF THE COMPANY
Awards & Accolades in 2010
1.Bal maysore project ace award winner 2008. 2.Bal maysore spocsap support. 3.Ritham synthetics textiles mumbai sap support 4. Lakhani footware limited new delhi is afs project execution with sap india. 5.National Safety Award for 2008 from Government of India Ministry of Labour & Employment to Lakhani footware
LAKHANI LAUNCHES LIGHT WEIGHT SPORTS SHOES
PEST ANALYSIS
Footwear Industry ± PEST Analysis
Political
? Recent merger between Adidas and Reebok ? home market lobbying/pressure groups ? Very few sporting events apart from cricket fixtures to attract customers
Economic
? Marginal share of 2.44 percent in global trade worth US$ 97.606 billion ? Estimated target of 12 bn $ (7bn $ export + 5 bn $ domestic) trade by the year 2012 overseas economies and trends ? The Indian footwear retail market is expected to grow at a CAGR of over 20% for the period spanning from 2008 to 2011. Footwear is expected to comprise about 60% of the total leather exports by 2011 from over 38% in 2006-07 ? Growing middle class and growing buyer power leading customers to look for branded shoes. ? seasonality issues ± sports is more of a rage in summers ? Lack of targeting of market segments for kids and women
Social
? lifestyle trends ± upward shift ? demographics ? consumer attitudes and opinions changing favourably towards branded shoes ? media views ? consumer buying patterns ? fashion and role models ? buying access and trends ? advertising and publicity
Technological
? Competing technology development ? India offers benefits like low cost of production, abundant raw material, and a huge consumption market ? research funding in design and requirements ? manufacturing maturity and capacity ? information and communications ? consumer buying mechanisms/technology ? innovation potential ? technology access, licensing, patents
PORTERS 5 FORCES MODEL
1. RIVALRY AMONG E ISTING PLAYERS (High)
The footware industry has large number of sports produces thus making it a low concentration market. The four biggest footware players in the international footware industry are; 1.Nike 2.Puma 3.Addidas 4.Liberty 5.Action
2. THREAT OF NEW ENTRANTS (High)
1.Cost advantage. 2. economics of scale 3. government;s policies 4.capital requirements. 5. power of retailiation towards entering companies.
3. THREAT OF SUBSTITUTE PRODUCTS OR SERVICES (Low)
It is very low due to industry¶s characterstics. Low cost leaders are more likely to lower costs to entice customers to stay with their product, invest to develop substitues,purchase patents.
4. BARGAINING POWER OF BUYER (Low)
Power ful customers that force firms to produce goods/serviece at lower profits may exit the market rather than earn below average profits leaving the low cost organization in a monopoly positions.buyers then loose much of their buying power.the boom in the infrastructure industry of india has benefitted the footware industry immesely in the present day context Lakhani footware have become more powerful than buyers in the current situation the company is moving into direct marketing thus removing middlemen.
5. BARGAINING POWER OF SUPPLIERS (Low)
Cost leaders are able to absorb greater price increases before it must raise price to customers.low since sequel is vertically is integrated and china isthe leading producer of the sports shoes.
SWOT ANALYSIS
Strengths
Existence of more than sufficient productive capacity in Tanning Easy availability to Export Market Export Friendly government policies Well established linkage with buyers in EU and USA
Weaknesses
Environmental Problem Delay in delieveries Uneconomical size of manufacturing units Non availability of quality footwear components Little Brand Image
Opportunities
De-reservation of the footwear sector Growing fashion consciousness globally Growing international and domestic market Use of modern technology
Weaknesses
Entry of multinational in domestic market Stiff competition from other countries
Exhibit strengths in manufacturing ,eg. strength in classic shoe manufacturing
Limited scope for mobilising funds through private placement and public issues,as many business are family owned
The SWOT analysis of the company is stated as under:-
Strengths
It is having a good image and brand loyalty among consumers. Perceived to be of very superior quality cement when compared to others. Good packaging Strong distribution network Advanced technologies Eco friendly
Weakness
Not able to use foreign technologies in full swing. Poor Promotional activities.
Opportunities
Rapid growth is taking place in Bihar and Madhya Pradesh. As Indian core industry is also growing at rate of nearly 10% per annum, it is having a good future.
Threats
Large number of players in cement industry makes it more competitive for LAKHANI to Carefully price its product and at the same time satisfy its dealers and customers. Players such as ultratech, Jaypee Cement, Prism Cement, and Birla Samrat are eating up considerable market share. Due to India¶s exponential growth many new international cement companies are Expected in coming years which will bring a tide of change and can start price war. The emergence of small players in this market may increase the competition and Start the malpractices, and heavy discounts to retailers. They can also influence many Retailers by giving better profit margins, and other benefits
USP of Marketing Department
Marketing Department
LAKHANI believe in ³To deliver value to its customer by offering the highest quality products and dedicated services´ .It has initiated numerous measure to create customer delight.LAKHANI is essentially a people¶s brand of cement with more than 80 per cent of sales made through an extensive dealer network that covers every state in India. Its customer base represents the masses of India - individual homebuilders in small towns, rural and semiurban India.
Durabillity
The product offered by Lakhani footware are of top quality and created to last for a very long time. These products are usually made with very fine quality of fabric and materials.stiched with best machines by skilled operators and finished to perform.
Reliability
Lakhani footware has takes pride in itself as being one of the most reliable brands in the market. Their returns and refunds policy enables a consumer to return any faulty by Lakhani with in 60 days after purchase as long as the does¶t looks in a used condition.
CHAPTER-3 MARKETING STRATEGIES
INTRODUCTION AND IMPORTANCE OF MARKETING STRATEGIES
Marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest
opportunities to increase sales and achieve a sustainable advantage. A marketing strategy should be centred on the key concept that customer satisfaction is the main goal. Marketing strategy is a method of focusing an organization's energies and resources on a course of action which can lead to increased sales and dominance of a targeted market niche. A marketing strategy combines product development, promotion, distribution, pricing, relationship management and other elements; identifies the firm's marketing goals, and explains how they will be achieved, ideally within a stated timeframe. Marketing strategy determines the choice of target market segments, positioning, marketing mix, and allocation of resources. It is most effective when it is an integral component of overall firm strategy, defining how the organization will successfully engage customers, prospects, and competitors in the market arena. Corporate strategies, corporate missions, and corporate goals. As the customer constitutes the source of a company's revenue, marketing strategy is closely linked with sales. A key component of marketing strategy is often to keep marketing in line with a company's overarching mission statement.
Importance of Marketing Strategy
The importance of marketing plans outweighs any other decision that can be taken in the realm of marketing strategies. Yes, marketing plan is essential to grab the market segment before any other player captures the market. What are the target groups? Which segment of the market presents higher revenue generating opportunities? These are some of the questions that marketing teams ponder over, in the pursuit of achieving a good plan.
This is where the importance of marketing research comes into picture. The market research team analyzes and understands the requirements of the consumers. Conducts polls and researches and comes up with data and statistics that help to logically target a market. Another factor that governs the marketing plans is the marketing mix elements. Marketing mix elements are the sets of factors that help firms to achieve their targets of reaching the products to the consumers and also achieve organizational objectives. The importance of marketing mix is, that it takes into account the four P's of marketing, that are Product, Price, Promotion and Place of distribution.
MARKETING MIX OF THE COMPANY
PRODUCT
1 Men¶s sports shoes, men¶s casula shoes 2 women¶s sports shoes 3 children sports shoes 4 Bathroom slippers 5 stylish men¶s sandle 6 Athelits sports shoes 7 children school shoes 8 Hawai chappal
PRICE
LAKHANI FOOTWARE is a premierglobal player in the design, distribution and marketing of lifestyle products such as men¶s women¶s and children¶s assessories. Lakhani provide the shoes at low cost. Men¶s Sports shoes; 60$-120$ Women¶s; 30$-60$
PLACE
Lakhani footware has its 2000 stores across 15 countries. Lakhani footware operations are spead thouth out the country with 200 moder shoes Factories. 60 sales offices,and several zonal offices. It has a work force of about 15000 persons and a country wide distribution network of over 8000 dealers. However the channel of distribution of Lakhani is two stage distributions
PRODUCER
C&F AGENTS
DEALERS
CONSUMER
PROMOTION
The promotional activities of Lakhani footware are not very poor. However some of them are as under; Through websites Television advertisements Hoardings in dealers shop
Hoardings in public places and public transport. Catalogues Online Personal book sales promotion
STP ANALYSIS OF THE COMPANY
SEGMENTATION
Lakhani footware has segmented its customer in the following ways: Understanding needs and preferences of consumers -- Having housing, infrastructure, and commercial construction, as demand drivers, the company analyze the needs and preferences of consumers in these sectors. similar needs and preferences are included in this segment. Targeting the segment that the company can best meet the needs and preferences of - The Company targets the customers, of which it can meet the needs and preferences. I.e. customer needs higher- strength or low price. Provide required product to meet targeted customers' needs and preferences -Delivering up to the expectations of the targeted segment.
However the main segmentation that the company is doing for its customers is:-
Full Coverage
The company is happy to provide its product to everyone. The company says whosoever byes our product is our customer moreover, the company focuses on mass marketing and retail marketing
TARGETING
Its customer base represents the masses of India - towns, rural and semi-urban India. The company targets on the every person in the country It targets the Manufacturing companies like addidas nike etc It Targets to cover all over world.
POSITIONING
A good brand positioning help guide marketing strategy by clarifying the brands essence but goals it help the consumer achieve and how it does so in a unique way. The result of the positioning is the successful creation of a customer focused value proposition, a cogent reason why the target market should buy the product.
BCG MATRIX OF THE COMPANY
Accordingly, the BCG matrix divides products/businesses into four Categories: Stars: These high growth products in a fast growing market need more resource
commitments.
Cash Cows: These are low growth, high market share products, where minimal
investments are envisaged. Indeed, cash cows provide the cash flows that support other businesses.
Question Marks: These are low market share business units in high growth markets.
Investment is needed to build them into stars Dogs: These are low growth and low market share businesses which generate just enough cash to maintain themselves. They are businesses from which the company is likely to withdraw in the near future.
In The above matrix, Lakhani falls in the quadrant of ³CASH COW´ with Respect to the market leader. The circle represents the absolute market Share (11.16%) of Lakhani in the footware industry.
CHAPTER4 FINANCIAL ANALYSIS
SOURCES OF FINANCE
Lakhani footware Limited raised Rs735484.32 lakhs in 2010 from its main sources however, the main sources of finance in Lakhani Limited are:-
Share holders Fund
Shareholder funds is all the money belonging to common stock shareholders which includes the balance of share capital, all profits retained and money classified as reserves. However the money that was raised in 2010 was Rs 646948.97 lakhs by share holders which further divides Share Capital to Rs15, 795.10 lakhs and Reserves and Surplus to Rs 628,153.87 lakhs.
Loan Funds
A Loan Fund is a source of money from which loans are made for small business development projects. A loan is made to one person or business at a time and, as repayments are made, funds become available for new loans to other businesses. Hence, the money revolves from one person or business to another. The fund that was raised by the company during 2010 by loan funds was Rs 32,382.32 Lakhs.
Deferred Tax Liabilities An account on a company's balance sheet that is a result of temporary differences between the company's accounting and tax carrying values, the anticipated and enacted income tax rate, and estimated taxes payable for the current year. This liability may or may not be realized during any given year, which makes the deferred status appropriate. The fund that was raised by the company during 2010 by Deferred Tax Liabilities was Rs 36,153.03 Lakhs.
KEY INVESTMENTS
Footwear firm Lakhani on Monday said it plans to more than double its outlets in the country in the next two and half years and increase turnover of the retail division by almost five-fold to Rs100 crore. The company is also looking to move beyond footwear into apparels and accessories. ³For the next two years, our focus would be on extending our exclusive chain in the western and southern states. Our target is to have 200 exclusive Lakhani outlets across the country by March 2012, from 88 currently,´ Lakhani Footwear head of operations (retail) Kewal Dhar said. He, however, refused to disclose the investment plans for the expansion and said details have yet to be worked out. ³Last year our company had a turnover of Rs407 crore, of which Rs21 crore came from the retail division. With the expansion in place, we expect the division¶s contribution to rise almost five-fold to Rs100 crore by 2011-12,´ Dhar said. The Delhi-based firm manufactures around three lakh pairs of footwear every day and has brands like Lakhani Hawai, Sparx, Flite, Mary Jane and Boston. Although it is present through thousands of multi-branded outlets across the country, Lakhani¶s exclusive outlets has so far been restricted to northern states. Dhar said the company is planning to diversify into apparels and accessories range but the launch would take at least a year. ³We have some plans in this segments but it will take about a year before we make a formal entry,´ Dhar said, without giving further details. He said Lakhani is also developing specialised products for catering to individual sports and plans to launch them by beginning of next fiscal. Asked about the impact of the economic slowdown, Dhar said: ³We never witnessed any slowdown in our sales and nor have we closed even a single store because of fall in business. We cater for the lower and mid segments where consumers continued to buy despite slowdown.´
RATIO ANALYSIS
The ratio analysis of the company for the fiscal year 2009 and 2010 is stated below:-
RATIO
CURRENT RATIO QUICK RATIO CASH RATIO DEBTORS TURNOVER RATIO NETASSETS TURNOVER RATIO CURRENT ASSETS TURNOVER RATIO INVENTORY TURNOVER RATIO DEBT EQUITY RATIO EQUITY RATIO NET PROFIT RATIO
FY¶09
1.31 0.91 0.95 27.12 1.33 2.89 7.49 0.49 0.72 20.92
FY¶10
1.07 0.72 0.76 24.22 1.41 3.18 6.79 0.50 0.84 20.53
The diagrammatic iew of the ratio analysis is stated under:-
30
25
20
15
10
5
0
FY'09
FY'10
Current Ratio shows an average ratio of 1.21which is less than the ideal ratio is 2:1. Cash Ratio shows as average greater than its ideal ratio that is 0.5. Debtors Turnover Ratio shows the amount of credit sales has been increased, collection period is derived as 18 days In the calculation of Working capital Turnover Ratio there is an ade quacy of fund except the year 2009-2010. Gross profit ratio is fluctuating during the period of study. Inventory Turnover ratio implies that the Inventory has been utilized efficiently.
CHAPTER5 HR-POLICIES AND STRATEGIES
SOURCES OF RECRUITMENT
LAKHANI offers employment opportunities in a wide range of functions. The process of recruitment in LAKHANI is fair and transparent, with adequate opportunities to look for suitable candidates both internally and from outside. Recruitment is a continuous process in LAKHANI. They regularly hold walk-in interviews in principal cities. Campus interviews are arranged in leading institutes and universities. In other cases, applications are invited for specific vacancies announced through advertisements in leading newspapers or announced in this website. However some of the sources are as follows: TRANSFERS The employees are transferred from one department to another according to their efficiency and experience in acc limited PROMOTIONS the employees are promoted from one department to another with more benefits and greater responsibility based on efficiency and experience. PRESS ADVERTISEMENTS Advertisements of the vacancy in newspapers and journals are a widely used source of recruitment in the company. The main advantage of this method is that it has a wide reach, so it is used by acc limited EDUCATIONAL INSTITUTES various management institutes, engineering colleges, medical Colleges etc. are a good source of recruiting well qualified executives, engineers, etc. They provide facilities for campus interviews and placements. This source is known as Campus Recruitment and it is also used by the company LABOUR CONTRACTORS Manual workers can be recruited through contractors who maintain close contacts with the sources of such workers. This source is used to recruit labor for construction jobs. however child labor is not used by the company
PROCESS OF RECRUITMENT
Recruitment in LAKHANI is a very fair and transparent process with adequate opportunities to look for suitable candidates internally as well as from outside. Applicants are generally invited on the basis of specific advertisements in newspapers and websites. A Committee of officers called the Central Recruitment Committee handles the entire recruitment process comprising screening of applications, preliminary short-listing, interviews and final selection. Every attempt is made to make the selection process as objective as possible by incorporating tests of competence. In some cases, outside consultants are retained. All decisions of the recruitment committee are recorded in respect of each candidate. Candidates are informed of their short-listing and selection immediately after the interview or at the earliest thereafter. The process of Recruitment in Lakhani Ltd
1. Identify vacancy 2. Prepare job description and person specification 3. Advertising the vacancy 4. Managing the response 5. Short-listing 6. Arrange interviews 7. Conducting interview and decision making
TRANING AND DEVLOPEMENT PROGRAMME OF THE COMPANY
Our new Performance Management System incorporates a process called Competency Assessment and Training and Developmental Needs wherein appraisers are specifically called upon to identify and assess training needs of employees at specific intervals that do not coincide with Performance Appraisals. This is so that training needs can be assessed objectively. Training is imparted to take care of an individual¶s career development as well as functional and skill enhancement. Competency and Development training inputs include Skill and general performance enhancement, communication skills and Career development. Functional training needs are identified and conducted by functional departments while Corporate HR organizes competency and developmental inputs.
BENEFITS OF COMPANSATION SYSTEM
Employee welfare receives prime attention at LAKHANI. We have several schemes for general welfare of employees and their families. These cover education, healthcare, retirement benefits, loans and financial assistance and recreation facilities.
Education
Education is imparted not only to children of LAKHANI employees but also more importantly to children from rural areas who do not have access to any medium of information or education. Wherever possible, LAKHANI provides funds and infrastructure to help set up local schools, colleges and centres for learning and education. They offer attractive scholarship allowances for children studying at places away from their parents, merit scholarships for outstanding children and financial assistance for employees¶ children to pursue higher professional education.
Health Care
Liberal medical benefits are made available to employees and their family members by way of reimbursements towards normal medical treatment, domiciliary treatments and special sanctions for serious illness. Each of their townships has well-equipped health care centres
with qualified medical staff and facilities, ambulance, referrals and tie-ups with reputed hospitals for specialised treatment. In addition, there are regular health checkups, camps and programmes. LAKHANI takes pride in providing various forms of medical assistance to the families of their employees and also to all those living in surrounding villages. Each factory has a medical centre with full-fledged doctors and the latest of basic equipment. Mobile medical services are provided in the vicinity and regular medical camps are held to eradicate diseases, offer medical help, treatment and preventive care.
Financial Assistance
Employees are eligible to apply for loans and financial assistance for various purposes such as purchase of assets, residential premises as well as a scheme that provides for supply of cement at subsidized rates to those building their own houses.
Accommodation
At our cement plants and factories, employees are provided furnished and unfurnished accommodation based on their entitlements. At many locations, the employees are given free electricity, free water supply and free bus facility for nearby places and schools. These houses are well-maintained and periodically upgraded.
CHAPTER6 PRODUCTION POLICIES
PRODUCTION PROCESS
Everything starts out as a concept, including shoes. In the beginning, they're designed on paper, but then they're put on something called a "last." Think of it like a shoe blank. It's blank white, but it's a three-dimensional model of a shoe. This is how the designers get a more accurate depiction of their could-be shoe. Once the design is finalized, the fabric is cut and shaped to the specifications required for the shoe. Once the basic shapes have been cut, a machine called a skiving machine thins the edges so the various pieces are easier to sew together. The top half of the shoe is called "the upper." The pieces of the upper are sewn together first, then flattened out to give it a smooth finish. At this point, the upper is still a flat, almost U-shaped area of material. Along the inside of the "U," a leather or plastic edge is sewn on to give it a decorative look and hide any unfinished edges. Then the upper is placed back onto the last, with a layer of lining underneath it. An insole is glued
underneath them, and then the lining is glued to the upper.Machines smooth out the excess material hanging over the insole by tucking it back in underneath the shoe. The bottom of the shoe is smoothed out and then a sole is placed on it to cover up any unsightly extras, and to make the shoe comfortable and durable. Excess glue is removed, laces are put in, the blank is taken out, and the shoe is finished.
PRODUCTION LAYOUT
KEY CUSTOMERS
A customer (also known as a client, buyer, or purchaser) is usually used to refer to a current or potential buyer or user of the products of an individual or organization. LAKHANI believe in ³To deliver value to its customer by offering the highest quality products and dedicated services´ .It has initiated numerous measure to create customer delight However going beyond the supply of cement, they offer LAKHANI Help services to share knowledge about the process of home building and correct procedures of product usage. Its customer base represents The masses of India - individual homebuilders in small towns, rural and semi-urban India. Shoes Companies. An Individual for personal use (Retail Marketing). Shoe Market Demand.
QUALITY CONCEPT USED BY THE COMPANY
Product Development has always been an important activity at LAKHANI, arising out of a focus on quality and process improvement. It has been a constant partner, driving research, innovation and evaluation. LAKHANI has effectively pledged its reputation as the market leader in the quality of shoes. Maintaining this lead calls for harnessing the resources and expertise of the company from applied research and production to marketing. Accordingly, all LAKHANI factories are equipped with state-of-the-art process control instrumentation and associated quality control and testing laboratories manned by qualified personnel. As a result of this focus on quality,LAKHANI shoes specifications exceed those set by BIS by a wide margin. Today, all LAKHANI shoes plants have the ISO 9001 Quality Systems certification. This demonstrates our tradition of providing reliable and consistent quality through the application of modern technology, and justifies the preferences of a nationwide customer base.
CHAPTER 7 FINDINGS AND CONCLUSIONS
FINDINGS
LAKHANI FOOTWEAR is highly focused on its future objectives & expansion plans, but at the same time it has to maintain a balance between the present plan & the future one. On the basis of strategic analysis following recommendations will help in achieving its future goals effectively & efficiently: LAKHANI LTD must focus on its Vision & Mission in order to attain its objective. LAKHANI LTD should focus on expanding its market in order to grab the market shares. It should also try to maximize the shareholders¶ wealth. LAKHANI LTD should not choose those projects which may dilute the brand name just for the sake of gaining market shares. LAKHANI LTD has a high growth potentials, so it should try to raise funds timely in order to meet its target LAKHANI LTD should not do overpromise as it will deteriorate its goodwill. LAKHANI LTD must focus on its competitors¶ strategies in order to gain a competitive edge. LAKHANI LTD should try to go for diversification to minimize risk factor & to explore new market as well.
CONCLUSION
Keeping pace with changing times and an ever-growing need for specialized Services, LAKHANI has begun offering its marketing expertise and distributaries facilities to other producers in cement and related areas. However a precondition of all such agreemen is t quality control supervision to be carried out by an LAKHANI expert located at the franchisee¶s plant. Each of the regional Marketing offices has a customer services cell that is managed by qualified civil engineers. These, in addition to handling after-sales servicing, function as advisory bodies that can help customers, make the right choice of cement for a specific area of application. LAKHANI can provide expert advice on getting the best value from cement and offer assistance on related issues in civil construction projects.
Besides this, technical books/booklets on footwears, shoes and slippers and maintenance are regularly must be available for the benefit of the customers. In addition to this, LAKHANI also publish free booklet, which profiles the Latest information on concrete research, design and maintenance.
Thus to conclude it can be said that Lakhani footwear has its branches spread all over India LAKHANI Limited company product are the profitable not only in India but also in the Whole world.
BIBLIOGRAPHY
BOOKS
MARKETING MANAGEMENT BY PHILIPS KOTLER MARKETING AND SALESMANSHIP BY B.S. RAMAN
NEWSPAPER
THE HINDUSTAN TIMES MINT NEWSPAPER
WEBSITES www.Lakhani.com www.bloomberg.com
www.hindustantimes.com www.moneycontrol.com
www.wikipedia.com
doc_542757952.docx
LAKHANI FOOTWEAR LIMITED
In partial fulfilment of the requirement for the award of degree of Bachelor¶s in Business Administration (B.B.A.)
2009-2012
Submitted By:
SANCHIT KOHLI BBA-4TH C ROLL NO.139
Under the Guidance of:
MS.AARUSHI MALHOTRA
BHARATI VIDYAPEETH¶s INSTITUTE OF MANAGEMENT & RESEARCH, NEW DELHI
An ISO 9001:2008 Certified Institute ³A´ Grade
ACKNOWLE
E ENT
I am very t ankful t everyone who all supported me, for I have completed my project effectively and more over on time. I am equally grateful to my teacher Ms.Aarushi Malhotra She gave me moral support and guided me in different matters regarding the topic. She had been very kind and patient while suggesting me the outlines of this project and correcting my doubts. I thank her for her overall supports.
I am also very indebt to Mr SUNIL KUMAR, my guide in Lakhani. Who helped me a lot in gathering different information and guiding me from time to time in making this project .Despite of his busy schedules, he gave me different ideas in making this project unique. Last but not least I would like to thank my colleagues to lay their helpful hands whenever required.
CONTENTS
CHAPTER 1: INTRODUCTION
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OVERVIEW OF INDIAN ECONOMY AND ITS GROWTH OVERVIEW OF INDUSTRY INDUSTRY INTRODUCTION COMPANIES CONTRIBUTION WITH IN THE INDUSTRY SCOPE OF IMPROVEMENT OF COMPANY IN THE INDUSTRY
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PROFILE OF THE ORGANISATION HISTORY OF THE COMPANY NATURE OF BUSINESS VISION AND MISSION STATEMENT OF COMPANY ORGANISATION STRUCTURE KEY COMPITITORS OF THE COMPANY.
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CHAPTER 2: COMPANY ANALYSIS
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CURRENT ISSUES OF THE COMPANY PEST ANALYSIS PORTERS 5 FORCES MODEL SWOT ANALYSIS USP OF MARKETING DEPARTMENT
CHAPTER3: MARKETING STRATEGIES
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INTRODUCTION AND IMPORTANCE OF MARKETING STRATEGIES MARKETING MIX OF THE COMPANY STP ANALYSIS OF THE COMPANY BCG MATRIX OF THE COMPANY
CHAPTER4: FINANCIAL ANALYSIS
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SOURCES OF FINANCE KEY INVESTMENTS RATIO ANALYSIS
CHAPTER5: HR-POLICIES AND STRATEGIES
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SOURCES OF RECRUITMENT PROCESS OF RECRUITMENT
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BENEFITS OF COMPANSATION SYSTEM
CHAPTER6: PRODUCTION POLICIES
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PRODUCTION PROCESS PRODUCTION LAYOUT KEY CUSTOMERS QUALITY CONCEPT USED BY THE COMPANY
CHAPTER 7: FINDINGS AND CONCLUSIONS
BIBLIOGRAPHY
INDUSTRIAL VISIT REPORT
CHAPTER-1 INTRODUCTION
OVERVIEW OF INDIAN ECONOMY AND ITS GROWTH.
³Although, the uncertainty in the shape of the global economic recovery is still persisting, however the situation has significantly improved as compare to first quarter of last year. Indian economy is bracing for higher economic growth backed by uninterrupted foreign inflows, eloquent growth in industrial output but the higher inflation and interest rates would also follow.´ It s almost a decade since we entered into the 2000s. Economic growth in these years wasn¶t so impressive for the western economies. It proves to be one of the worst economic periods for those economies. Indeed, the so-called fastest growing economies (such as India, Brazil, China, Mexico, Russia, and Indonesia) have seen an unprecedented economic expansion because, the eastern economies were the producers and the western economies were the consumer and the same trend would likely to continue as the companies, nowadays, are more conscious about the cost. Rising input cost (or raw material) are forcing the corporations in the industrialized economies to shift their focus on the cost-effective region to keep up the pricing competitiveness in the specific industry, they are in. Change in consumer trend is also major concern for the companies to invest more in the process of innovation, research and development (R&D). As the economic pace is picking up, global commodity prices have staged a comeback from lows and global trade has also seen a decent growth over the last two years. Unprecedented Government intervention and exceptionally large interest rate cuts by the central bank in advanced and emerging economies have contributed a lot to pull the global economy up from the deepest recession since the World War II. Several Governments around the world launched the stimulus packages to prop up the economic growth, generate employment opportunities and the overall economic growth with the aim to reduce uncertainty in the economy and increased confidence. The acute phase of the financial crisis has passed and the global recovery is underway. Since the announcement of the previous budget amid large fiscal deficit and uncertainties in the Indian Economy, Finance Minister Pranab Mukherjee has announced the growth specific budget for the country. Central government is trying to help states to meet fiscal consolidation by improving tax policy and administration, budget management,
rationalization of expenditure and better public financial management. India¶s economic
growth is vulnerable to the Monsoon as the Agriculture and allied sectors alone contributes almost 18 per cent to the annual GDP of India. Last year¶s nasty monsoon has swayed the
economic growth. Earlier, the CSO has forecasted the growth of annual GDP at 7.2 per cent in Feb this year. Now, the India¶s national income statistics shows the growth of 6.5 per cent, anticipation that the agricultural and allied sectors would suffer a contraction of GDP by 2 per cent, while the Service industry would grow by more than 8.7 per cent. Within the boundaries, the most important issue is price stability i.e. Inflation, specially that arising from supply constraints restricting farm sector output growth. As per the report, advance estimate data shows the food grain production in 2009-10 is likely to be 216.9 million tonne, which is 17.6 mt lower than the last yearµs production. Sugarcane output too has a shortfall of almost 12 per cent compared to last year, which has led to big gap between demand and domestic production of sugar. India is the largest consumer of sugar in the world and these combined factors would lead to sharp rise in prices of sugar in both domestic and international market. The overall effect of the shortfall in agriculture production would likely to seen on the economic growth by nearly 2 per cent, as the sector accounts for more than 18 per cent of the total GDP.
This entry gives GDP growth on an annual basis adjusted for inflation a nd expressed as a percent.
Year 2003 2004 2005 2006 2007 2008 2009 2010
GDP - real growth rate 4.30 % 8.30 % 6.20 % 8.40 % 9.20 % 9.00 % 7.40 % 7.40 %
Rank 54 16 43 24 23 23 28 10
Percent Change
93.02 % -25.30 % 35.48 % 9.52 % -2.17 % -17.78 % 0.00 %
2003
2004
2005
2006
2007
2008
2009
2010 0 1 2 3 4 5 6 7 8 9 10
The factors that are dri ing economic growth in India are; Firstly, it is domestic consumption. The annual growth in real consumption expenditure over the past four years has been, on average, 6.3 percent. With easy liquidity conditions spurring demand for personal loans, and adequate capacity in the manufacturing sector, there has been a consumption boom. Secondly, rise of in estment. The consumption boom that started at the beginning of this decade has triggered an investment boom. Real investment has grown at a robust rate since 2002±03, averaging 17 percent a year in the past four years. During this period, the contribution of investment to growth has exceeded the contribution of final consumption expenditure. The current investment ra as a proportion of GDP, is te, 35.1 percent, and it is expected to increase in the medium term. Thirdly, increase in employment. The rate of growth in the labour force that was 1.60 percent in the previous period of six years accelerated to 2.54 percent du ring the period 1999±2000 to 2004±05. Thankfully, the rate of growth of employment too accelerated from 1.57 percent in the first period to 2.48 percent in the second period. We have, therefore, more persons employed and contributing to the national output . Paradoxically, we also have, in absolute number, more persons unemployed.
Fourthly, increase in productivity of both capital and labour. Rodrik and Subramanian, in an IMF working paper of 2004, pointed out that India seems to have large amount of productivity growth from relatively modest reforms. A more recent paper by Barry Bosworth, Susan Collins, and Arvind Virmani (2006) has confirmed this. They have concluded that output per worker grew at 1.3 percent annually during 1960±80 and total factor productivity (TFP) was barely above zero. In contrast, growth in output per worker nearly tripled to 3.8 percent during 1980±2004, while TFP increased tenfold to 2 percent.
Indian Economy Sectors
The Three Sectors of the Indian Economy are;-
Primary Sector
The Primary sector of the economy is the change of natural resources into primary products. Most products from this sector provide raw materials for other industries. The share of primary sector has decreased from the past four decades. In 1970 the share of the sector was 50% which has reduced to 29% in 1995 and is now further reduced to 25%. Major businesses in this sector are agriculture, agribusiness, fishing, forestry, all mining and quarrying industries. When the economic activity depends mainly on exploitation of natural resources then that activity comes under the primary sector. More than 52% of country's population depends on agriculture, a sector contributing only 17.5% of the GDP.
Secondary Sector
The secondary sector of the economy includes those economic sectors that create a finished usable product and hence depend on primary sector industries for the raw materials. This sector includes Mining, manufacturing and construction. The secondary sector contributes 24% of the share in Indian economy. All industrial production where physical goods are produced come under the secondary sector. Index of industrial production, which measures the overall industrial growth rate, stood at 5.2% in 2010 and is expected at 7.5% in 2011.Textile industries, steel industries, footware industry; automobile sectors are good example of this sector.
Tertiary Sector
The Tertiary sector includes service industry and it holds the highest importance among all sectors. The tertiary sector of economy involves the provision of services to business as well as final consumers. Services may involve the transport, distribution and sale of goods from producer to consumers as may happen in wholesaling and retailing, or may involve the provision of a service, such as in pest control or entertainment. The tertiary sectors account for 51% of the GDP. The tertiary sectors may include: Insurance Banking Transport The higher the productivity in primary and secondary sector and lower the employment in these sectors, the better it is. People need more and more services for leading qualitatively better lifestyle. They need more means of transport, more communication and educational facilities, more training, more medical facilities, entertainment, technical facilities, banking facilities etc. Tertiary sector depends on scientific research and innovative developments to increases productivity and it provides engineering and construction consultancy support services for all projects in all sectors. Developed countries employee more than 80% the services sector. India is the fifteenth largest country in the world in terms of services' output. This sector provides employment to 23% of the workforce and is the fastest growing sector, with a growth rate of 7.5% in 1991±2000 up from 4.5% in 1951±80. It has the largest share in the GDP, accounting for 53.8% in 2010 up from 15% in 1950.
Business services like information technology, information technology enabled services, business process outsourcing contribute to one third of the total output of services in 2000. The growth in the IT sector is due to the availability of a large pool of low cost and highly skilled, educated and fluent English-speaking people. Foreign clients have also expressed their interest in outsourcing much of their operations to India Excellent infrastructure in the service sector and the lowest communication cost has helped India to be a dominant player in these sectors.
OVERVIEW OF INDUSTRY
Industry Introduction
Lakhani is one of the most quality conscious, progressive footwear companies manufacturing branded footwear such as Lakhani Hawai & Flite slippers, School -mate, Canvas shoes, Sparx sports shoes etc. Headquartered in New Delhi, Lakhani maintains a fine combination of comfort, style, and workmanship and is embarking upon appreciable growth plans for the future. The company began as a small enterprise in 1976, was officially incorporated in 1984 & further went into public listing in 1995 . According to the 2008 Business Survey, it has now emerged as the
second largest footwear producer in India.
Products:
Lakhani Footwear has a plethora of diverse operations in its portfolio, most of which may be classified into three main divisions: ? Whole Sale Operations ? Retail Operations ? Export Operations Products comprise a wide range of quality footwear in the following brands: 1. Hawaii Slippers: Hawaii is the most popular brand in the Lakhani portfolio. It comes in diverse shades and styles and its comfort value makes it a favourite among all age groups. With an output of 300000 pairs a day, Lakhani is one of the largest manufacturer of Hawaii in India.
2. Flite: Flite is Lakhani's most exclusive brand. Its unique ³fashionable and light´ quality is ensured by its manufacturing process, involving cutting-edge EVA technology. Available in an array of colours and designs, it is among the popular products in the casual footwear industry.
3. Schoolmate: Schoolmate is a range of school shoes for boys and girls and is an expression of Lakhani's faith and commitment towards the young leaders of tomorrow. Made with special care to pamper thousands of tiny feet, each pair bears the mark of superb workmanship and adaptable design. .
COMPANY¶S BACKGROUND STUDY
Lakhani Foot Wear(RFW), a part of Lakhani Group which has major interest in Footwear production, was incorporated in Sep 13, 1984 as a private limited company to market market the products of group concerns such as hawai slippers, light weight slippers, canvas shoes, PVC footwear etc. It was subsequently converted into a public limited company on March 31, 1993. In the year 1995-96 the company has transformed from solely a Trading/marketing agency to that of a full/fledged manufacturing unit by putting up a facility to produce 50000 pairs of hawai and light weight chappals per day on a two shift basis at Bahadurgarh, Haryana. This project was part financed by RFW's maiden public issue aggregating Rs.4.50 crores at a premieum of Rs. 50 per each share of facevalue of Rs. 10. In the year 1999, the company has expanded the capacity of it's Bahadurgarh plant. The company has implemented a Hitech Hawai manufacturing plant at Bhiwadi(Rajasthan), which is the largest Hawai manufacturing plant in India during the year 1999-2000. The commercial production of this new plant has commenced in the month of July 2001.
Production and Growth
The company has established 6 manufacturing plants spanning North India. These are located in Delhi, Bahadurgarh (Haryana) and Bhiwadi (Rajasthan). With a cumulative area of over 120,000 sq. feet, these units have a huge set up enabling massive production. Each manufacturing unit is equipped with world-class machinery and hi-tech product testing laboratories. IN FY10, Hawaii footwear (Lakhani) could contribute 40% of sales, Light slippers (Flite) 40% and Sports shoes and sandals 20% of sales.
COMPANY CONTRIBUTION WITHIN THE INDUSTRY
The Company constituted the ³Remuneration Committee to recommend the Board of Directors, the compensation and remuneration of Directors and Senior Managerial Personnel. TERMOFREFERENCES The remuneration policy of the Company is directed towards rewardin performance, based on periodic g review of performance and achievements and is primarily based on the following criteria: Performance of the Company, its divisions and units. Track record, potential, personal attitude & performance of individual manager and external competitive environment. COMPOSITION The Committee comprised three Non-executive cum Independent Directors namely Mr. Pankaj Shrimali, Mr. S.K. Sapra and Mr. Vivek Kumar. Mr. Pankaj Shrimali is the Chairman of the Committee.mittee is to motivate employees to excel in their performance, recognize their contribution and retain talent in the organization.
Unique Feature of Lakhani Footware Plant
We "Lakhani Footwears Ltd.", are one of India's most quality conscious & progressive footwear companies. Available for men, women and children, our product range include formal leather footwear, formal ladies footwear, leather footwear, kids footwear, school shoes, ladies slippers, beach slippers, and many other.
Established at New Delhi, 1976, our company was started under the vision of Late Shri Moolchand Dua. After him, his two sons Mr. M.L. Dua (Director) & Mr. R. K. Dua (Executive Director) are looking after the involved business operations.
Today, we are managed by a group comprising of industry experts with relevant experience in all involved business functions. Headquartered in Delhi, India, we have maintained a fine combination of comfort, style & workmanship in our extensiv footwear product range. . e
Our Promoters
We µLakhani Group,¶ have successful history of over 31 years in the footwear industry. This is ensured by virtue of our promoters & associates who have adopted forward thinking philosophy that is backed by ultimate goal of customer satisfaction.
SCOPE OF IMPROVEMENT OF COMPANY WITH IN THE INDUSTRY
Benchmarking is the process through which a company measures its products, services, and practices against its toughest competitors, or those companies recognized as leaders in its industry. Benchmarking is one of a manager's best tools for determining whether the company is performing particular functions and activities efficiently, whether its costs are in line with those of competitors, and whether its internal activities and business processes need improvement. The idea behind benchmarking is to measure internal processes against an external standard. It is a way of learning which companies are best at performing certain activities and functions and then imitating ²or better still, improving on²their techniques. Benchmarking focuses on company -to-company comparisons of how well basic functions and processes are performed. Among many possibilities, it may look at how materials are purchased, suppliers are paid, inventories are managed, employees are trained, or payrolls are processed; at how fast the compa ny can get new products to market; at how the quality control function is performed; at how customer orders are filled and shipped; and at how maintenance is performed
Profile of the organization
History of the company
The company was incorporated on 13th September, 1984 as a Private Limited Company. The company was subsequently converted into a Pubic Limited Company on 31at March, 1993. LAKHANI FOOTWEARS LTD. is a marketing company of the Lakhani Group and at present, it is closely held.
The Hawai & Light weight chappal Industry comprises of about 30 units in the organised sector and a number of smaller units in the unorganised sector. It is estimated that both these sectors together produce about 550 million pairs per annum. The contribution of organised sector is about 50% in this production. There is a demand and supply gap of about 150 million pairs per annum. In veiw of this, the company is selling up modern plant to manufacture 50,000 pairs of Hawai & lightweight Chappals per day on two shift basis under the present project. The Company will continue its marketing for products of group concerns even after commencing its own manufacturing activities. The Group comprises of five different manufacturing units with total factory space of over 1,20,000 sq.ft., over 1100 employees in different disciplines and has a network of over 200 distributors and 20,000 dealers. The group manufactures Rubber Hawai Chappals, Canvas Shoes, sports shoes, casual shoes, leather shoes and light weight chappals. Its total daily production of all footwear is approx. 50,000 pairs per day of which approximately 90% a Hawai & Lightweight Chappals - a segment in which the group is one of the top manufacturers in India. M/S Lakhani Rubbers, which is a partnership firm of Mr. R.K. Dua (HUF), Mr. M.C. Dua (HUF) and Smt. Usha Dua, started its business in 1979. The firm is engaged in manufacturing of light weight rubber chappals and allied rubber products. Lakhani Rubber Ltd. was incorporated in the year 1982 and started its' operation from 1st October 1984. The company is engaged in the production of rubber footwear. Patel Oil Mills is also a partnership firm of Mr. Mukund Lal Dua and Mr. Ramesh Kumar Dua which commenced its operation in the year 1985.
The firm manufactures Hawai Chappals, Canvas Shoes and allied rubber goods. Looking at the rising demand of leather products, Lakhani International, a partnership firm of Mr. Mukund Lal Dua and Mr. Ramesh Kumar Dua was formed which started its' business in 1991. Nu-Wave Shoes, a proprietorship firm and mainly engaged in manufacturing of PVC footwears with a small production of rubber and canvas shoes. Gumber Dyeing & Printing Works a partnership firm of Mr. M.L. Dua & R.K. Dua, started its business in 1991. The firm is mainly engaged in mixing rubber compounds and packing the finished goods of Lakhani Rubbers. 2000 - Lakhani Footwears has approved a proposal to split its each equity share of Rs 10 face value into shares of Rs 5 each. - The Unit-II at Bahadurgarh, Haryana, caught fire on October 12. 2010 - Lakhani Footwears Ltd has appointed Mr. Pankaj Shrimali as an Additional Director w.e.f. May 29, 2010.
Nature of business
VISION AND MISSION STATEMENT OF COMPANY Vision Statement
Lakhani¶s Vision vividly declares the company¶s commitment to community and sustainable development issues making this an essential part of the five interdependent and intertwined business goals for the company. The essence of this resolve is contained in the fifth goal or ³diamond´ which envisages that LAKHANI inspires trust and respect.
Mission Statement
Leadership ± Maintain our relationship of the Indian footware industry. Throughout the continuous modernization and expansion of our Manufacturing facilities and activities and through establishment of a wide and efficient marketing network Profitability-Achieve a fair and reasonable return on capital by promoting productivity throughout the company Growth- Ensure a steady growth of business by strengthening our position in the footware industry. Quality- Maintain high quality of our products and services and ensure their supply their supply at fair prices. E uity- Promote and maintain fair industrial relations and an environment for the effective involvement, welfare, and development of staff at all levels. Pioneering- Promote research and development efforts in the areas of product development and energy, and fuel conservation and to innovate and optimize productivity.
KEY COMPETITORS OF THE COMPANY.
REEBOK
Reebok: Reebok specializes in the design, marketing and distribution of sports and fitness products including footwear, apparel and accessories, as well as footwear and apparel for non-athletic use. The company has three main product categories: Rbk, Performance, and Classic. Each of these product categories features product offerings for both men and women that are designed for specific consumer groups. Reebok has operations in the UK, Europe and in various and in various Asian countries. It is headquartered in canton, Massachusetts. The acquisition of Reebok by Adidas-Salomon was completed in January 2006.
ADIDAS
ADIDAS: Adidas ltd is a German sports apparel manufacturer and part of the Adidas group, which consist of Reebok sportswear company, Taylor Made-Adidas golf company, and Rockport. Adidas is the largest sportswear manufacturer in Europe and the second largest sportswear manufacturer in the world. Company¶s revenue for 2006 was listed at about US $ 13.625 billion and the 2007 figure was listed about $ 15.6 billion. It has more than 170 subsidiaries guarantee marketplace presence for Adidas products around the world.
ACTION
Action: Action shoes ltd. is a leading leather shoes brand and is engaged in the manufacturing, supplying and exporting of the footwear¶s. It is the only Indian leather shoe brand that occupies fifth ranking among the top shoes manufacturing companies in the world.
PUMA
The company is known for its soccer(Futbul) shoes and has sponsored acclaimed soccer player, including Pelé, Eusébio, Johan Cruijff, Enzo Francescoli, Diego Maradona, Lothar Matthäus, Kenny Dalglish, Didier Deschamps and Gianluigi Buffon. Puma is also the sponsor of the Jamaican track athlete Usain Bolt. In the United States, the company is probably best known for the suede basketball shoe it introduced in 1968, which eventually bore the name of New York Knicks basketball star Walt "Clyde" Frazier, and for its endorsement partnership with Joe Namath.
BATA
Bata: Bata industries is a specialized division of the world¶s largest shoe manufacturer: the Bata shoe Organization (BSO). Bata industries has operations and production facilities in most of the countries worldwide. Bata India Limited is the largest footwear retailer in India. Bata India is a manufacturer of footwear. Types of footwear offered by the company include rubber, canvas, leather and plastic footwear. The company also markets apparel under the brand names of North Star, Power and Ambassador. Bata India has five manufacturing plants and acquires its leather from two tanneries in Mokamehghat (Bihar) and Batanagar. It is headquartered in West Bengal, India.
Companies Profile
COMPARISON OF COMPANIES:
Companies Nike Adidas Bata Liberty Puma Action
Average Growth Rate(200508) 10.5% 22.46% 7.8% 11.16% 19.5% 16.1%
COMPARISON OF COMPANIES (PORTER¶S MODEL):
Basis of Nike comparison
Barriers to Entry Bargaining Power of buyers Bargaining power of suppliers Threats of Substitute Rivalry among the existing competitors Absent Low
Adidas Lakhani Action Bata
Absent Low Absent High Absent High Absent High
Liberty
Absent High
Low
Low
High
High
High
High
High High
High High
High High
High High
High High
High High
CHAPTER-2 COMPANY ANALYSIS
CURRENT ISSUES OF THE COMPANY
Awards & Accolades in 2010
1.Bal maysore project ace award winner 2008. 2.Bal maysore spocsap support. 3.Ritham synthetics textiles mumbai sap support 4. Lakhani footware limited new delhi is afs project execution with sap india. 5.National Safety Award for 2008 from Government of India Ministry of Labour & Employment to Lakhani footware
LAKHANI LAUNCHES LIGHT WEIGHT SPORTS SHOES
PEST ANALYSIS
Footwear Industry ± PEST Analysis
Political
? Recent merger between Adidas and Reebok ? home market lobbying/pressure groups ? Very few sporting events apart from cricket fixtures to attract customers
Economic
? Marginal share of 2.44 percent in global trade worth US$ 97.606 billion ? Estimated target of 12 bn $ (7bn $ export + 5 bn $ domestic) trade by the year 2012 overseas economies and trends ? The Indian footwear retail market is expected to grow at a CAGR of over 20% for the period spanning from 2008 to 2011. Footwear is expected to comprise about 60% of the total leather exports by 2011 from over 38% in 2006-07 ? Growing middle class and growing buyer power leading customers to look for branded shoes. ? seasonality issues ± sports is more of a rage in summers ? Lack of targeting of market segments for kids and women
Social
? lifestyle trends ± upward shift ? demographics ? consumer attitudes and opinions changing favourably towards branded shoes ? media views ? consumer buying patterns ? fashion and role models ? buying access and trends ? advertising and publicity
Technological
? Competing technology development ? India offers benefits like low cost of production, abundant raw material, and a huge consumption market ? research funding in design and requirements ? manufacturing maturity and capacity ? information and communications ? consumer buying mechanisms/technology ? innovation potential ? technology access, licensing, patents
PORTERS 5 FORCES MODEL
1. RIVALRY AMONG E ISTING PLAYERS (High)
The footware industry has large number of sports produces thus making it a low concentration market. The four biggest footware players in the international footware industry are; 1.Nike 2.Puma 3.Addidas 4.Liberty 5.Action
2. THREAT OF NEW ENTRANTS (High)
1.Cost advantage. 2. economics of scale 3. government;s policies 4.capital requirements. 5. power of retailiation towards entering companies.
3. THREAT OF SUBSTITUTE PRODUCTS OR SERVICES (Low)
It is very low due to industry¶s characterstics. Low cost leaders are more likely to lower costs to entice customers to stay with their product, invest to develop substitues,purchase patents.
4. BARGAINING POWER OF BUYER (Low)
Power ful customers that force firms to produce goods/serviece at lower profits may exit the market rather than earn below average profits leaving the low cost organization in a monopoly positions.buyers then loose much of their buying power.the boom in the infrastructure industry of india has benefitted the footware industry immesely in the present day context Lakhani footware have become more powerful than buyers in the current situation the company is moving into direct marketing thus removing middlemen.
5. BARGAINING POWER OF SUPPLIERS (Low)
Cost leaders are able to absorb greater price increases before it must raise price to customers.low since sequel is vertically is integrated and china isthe leading producer of the sports shoes.
SWOT ANALYSIS
Strengths
Existence of more than sufficient productive capacity in Tanning Easy availability to Export Market Export Friendly government policies Well established linkage with buyers in EU and USA
Weaknesses
Environmental Problem Delay in delieveries Uneconomical size of manufacturing units Non availability of quality footwear components Little Brand Image
Opportunities
De-reservation of the footwear sector Growing fashion consciousness globally Growing international and domestic market Use of modern technology
Weaknesses
Entry of multinational in domestic market Stiff competition from other countries
Exhibit strengths in manufacturing ,eg. strength in classic shoe manufacturing
Limited scope for mobilising funds through private placement and public issues,as many business are family owned
The SWOT analysis of the company is stated as under:-
Strengths
It is having a good image and brand loyalty among consumers. Perceived to be of very superior quality cement when compared to others. Good packaging Strong distribution network Advanced technologies Eco friendly
Weakness
Not able to use foreign technologies in full swing. Poor Promotional activities.
Opportunities
Rapid growth is taking place in Bihar and Madhya Pradesh. As Indian core industry is also growing at rate of nearly 10% per annum, it is having a good future.
Threats
Large number of players in cement industry makes it more competitive for LAKHANI to Carefully price its product and at the same time satisfy its dealers and customers. Players such as ultratech, Jaypee Cement, Prism Cement, and Birla Samrat are eating up considerable market share. Due to India¶s exponential growth many new international cement companies are Expected in coming years which will bring a tide of change and can start price war. The emergence of small players in this market may increase the competition and Start the malpractices, and heavy discounts to retailers. They can also influence many Retailers by giving better profit margins, and other benefits
USP of Marketing Department
Marketing Department
LAKHANI believe in ³To deliver value to its customer by offering the highest quality products and dedicated services´ .It has initiated numerous measure to create customer delight.LAKHANI is essentially a people¶s brand of cement with more than 80 per cent of sales made through an extensive dealer network that covers every state in India. Its customer base represents the masses of India - individual homebuilders in small towns, rural and semiurban India.
Durabillity
The product offered by Lakhani footware are of top quality and created to last for a very long time. These products are usually made with very fine quality of fabric and materials.stiched with best machines by skilled operators and finished to perform.
Reliability
Lakhani footware has takes pride in itself as being one of the most reliable brands in the market. Their returns and refunds policy enables a consumer to return any faulty by Lakhani with in 60 days after purchase as long as the does¶t looks in a used condition.
CHAPTER-3 MARKETING STRATEGIES
INTRODUCTION AND IMPORTANCE OF MARKETING STRATEGIES
Marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest
opportunities to increase sales and achieve a sustainable advantage. A marketing strategy should be centred on the key concept that customer satisfaction is the main goal. Marketing strategy is a method of focusing an organization's energies and resources on a course of action which can lead to increased sales and dominance of a targeted market niche. A marketing strategy combines product development, promotion, distribution, pricing, relationship management and other elements; identifies the firm's marketing goals, and explains how they will be achieved, ideally within a stated timeframe. Marketing strategy determines the choice of target market segments, positioning, marketing mix, and allocation of resources. It is most effective when it is an integral component of overall firm strategy, defining how the organization will successfully engage customers, prospects, and competitors in the market arena. Corporate strategies, corporate missions, and corporate goals. As the customer constitutes the source of a company's revenue, marketing strategy is closely linked with sales. A key component of marketing strategy is often to keep marketing in line with a company's overarching mission statement.
Importance of Marketing Strategy
The importance of marketing plans outweighs any other decision that can be taken in the realm of marketing strategies. Yes, marketing plan is essential to grab the market segment before any other player captures the market. What are the target groups? Which segment of the market presents higher revenue generating opportunities? These are some of the questions that marketing teams ponder over, in the pursuit of achieving a good plan.
This is where the importance of marketing research comes into picture. The market research team analyzes and understands the requirements of the consumers. Conducts polls and researches and comes up with data and statistics that help to logically target a market. Another factor that governs the marketing plans is the marketing mix elements. Marketing mix elements are the sets of factors that help firms to achieve their targets of reaching the products to the consumers and also achieve organizational objectives. The importance of marketing mix is, that it takes into account the four P's of marketing, that are Product, Price, Promotion and Place of distribution.
MARKETING MIX OF THE COMPANY
PRODUCT
1 Men¶s sports shoes, men¶s casula shoes 2 women¶s sports shoes 3 children sports shoes 4 Bathroom slippers 5 stylish men¶s sandle 6 Athelits sports shoes 7 children school shoes 8 Hawai chappal
PRICE
LAKHANI FOOTWARE is a premierglobal player in the design, distribution and marketing of lifestyle products such as men¶s women¶s and children¶s assessories. Lakhani provide the shoes at low cost. Men¶s Sports shoes; 60$-120$ Women¶s; 30$-60$
PLACE
Lakhani footware has its 2000 stores across 15 countries. Lakhani footware operations are spead thouth out the country with 200 moder shoes Factories. 60 sales offices,and several zonal offices. It has a work force of about 15000 persons and a country wide distribution network of over 8000 dealers. However the channel of distribution of Lakhani is two stage distributions
PRODUCER
C&F AGENTS
DEALERS
CONSUMER
PROMOTION
The promotional activities of Lakhani footware are not very poor. However some of them are as under; Through websites Television advertisements Hoardings in dealers shop
Hoardings in public places and public transport. Catalogues Online Personal book sales promotion
STP ANALYSIS OF THE COMPANY
SEGMENTATION
Lakhani footware has segmented its customer in the following ways: Understanding needs and preferences of consumers -- Having housing, infrastructure, and commercial construction, as demand drivers, the company analyze the needs and preferences of consumers in these sectors. similar needs and preferences are included in this segment. Targeting the segment that the company can best meet the needs and preferences of - The Company targets the customers, of which it can meet the needs and preferences. I.e. customer needs higher- strength or low price. Provide required product to meet targeted customers' needs and preferences -Delivering up to the expectations of the targeted segment.
However the main segmentation that the company is doing for its customers is:-
Full Coverage
The company is happy to provide its product to everyone. The company says whosoever byes our product is our customer moreover, the company focuses on mass marketing and retail marketing
TARGETING
Its customer base represents the masses of India - towns, rural and semi-urban India. The company targets on the every person in the country It targets the Manufacturing companies like addidas nike etc It Targets to cover all over world.
POSITIONING
A good brand positioning help guide marketing strategy by clarifying the brands essence but goals it help the consumer achieve and how it does so in a unique way. The result of the positioning is the successful creation of a customer focused value proposition, a cogent reason why the target market should buy the product.
BCG MATRIX OF THE COMPANY
Accordingly, the BCG matrix divides products/businesses into four Categories: Stars: These high growth products in a fast growing market need more resource
commitments.
Cash Cows: These are low growth, high market share products, where minimal
investments are envisaged. Indeed, cash cows provide the cash flows that support other businesses.
Question Marks: These are low market share business units in high growth markets.
Investment is needed to build them into stars Dogs: These are low growth and low market share businesses which generate just enough cash to maintain themselves. They are businesses from which the company is likely to withdraw in the near future.
In The above matrix, Lakhani falls in the quadrant of ³CASH COW´ with Respect to the market leader. The circle represents the absolute market Share (11.16%) of Lakhani in the footware industry.
CHAPTER4 FINANCIAL ANALYSIS
SOURCES OF FINANCE
Lakhani footware Limited raised Rs735484.32 lakhs in 2010 from its main sources however, the main sources of finance in Lakhani Limited are:-
Share holders Fund
Shareholder funds is all the money belonging to common stock shareholders which includes the balance of share capital, all profits retained and money classified as reserves. However the money that was raised in 2010 was Rs 646948.97 lakhs by share holders which further divides Share Capital to Rs15, 795.10 lakhs and Reserves and Surplus to Rs 628,153.87 lakhs.
Loan Funds
A Loan Fund is a source of money from which loans are made for small business development projects. A loan is made to one person or business at a time and, as repayments are made, funds become available for new loans to other businesses. Hence, the money revolves from one person or business to another. The fund that was raised by the company during 2010 by loan funds was Rs 32,382.32 Lakhs.
Deferred Tax Liabilities An account on a company's balance sheet that is a result of temporary differences between the company's accounting and tax carrying values, the anticipated and enacted income tax rate, and estimated taxes payable for the current year. This liability may or may not be realized during any given year, which makes the deferred status appropriate. The fund that was raised by the company during 2010 by Deferred Tax Liabilities was Rs 36,153.03 Lakhs.
KEY INVESTMENTS
Footwear firm Lakhani on Monday said it plans to more than double its outlets in the country in the next two and half years and increase turnover of the retail division by almost five-fold to Rs100 crore. The company is also looking to move beyond footwear into apparels and accessories. ³For the next two years, our focus would be on extending our exclusive chain in the western and southern states. Our target is to have 200 exclusive Lakhani outlets across the country by March 2012, from 88 currently,´ Lakhani Footwear head of operations (retail) Kewal Dhar said. He, however, refused to disclose the investment plans for the expansion and said details have yet to be worked out. ³Last year our company had a turnover of Rs407 crore, of which Rs21 crore came from the retail division. With the expansion in place, we expect the division¶s contribution to rise almost five-fold to Rs100 crore by 2011-12,´ Dhar said. The Delhi-based firm manufactures around three lakh pairs of footwear every day and has brands like Lakhani Hawai, Sparx, Flite, Mary Jane and Boston. Although it is present through thousands of multi-branded outlets across the country, Lakhani¶s exclusive outlets has so far been restricted to northern states. Dhar said the company is planning to diversify into apparels and accessories range but the launch would take at least a year. ³We have some plans in this segments but it will take about a year before we make a formal entry,´ Dhar said, without giving further details. He said Lakhani is also developing specialised products for catering to individual sports and plans to launch them by beginning of next fiscal. Asked about the impact of the economic slowdown, Dhar said: ³We never witnessed any slowdown in our sales and nor have we closed even a single store because of fall in business. We cater for the lower and mid segments where consumers continued to buy despite slowdown.´
RATIO ANALYSIS
The ratio analysis of the company for the fiscal year 2009 and 2010 is stated below:-
RATIO
CURRENT RATIO QUICK RATIO CASH RATIO DEBTORS TURNOVER RATIO NETASSETS TURNOVER RATIO CURRENT ASSETS TURNOVER RATIO INVENTORY TURNOVER RATIO DEBT EQUITY RATIO EQUITY RATIO NET PROFIT RATIO
FY¶09
1.31 0.91 0.95 27.12 1.33 2.89 7.49 0.49 0.72 20.92
FY¶10
1.07 0.72 0.76 24.22 1.41 3.18 6.79 0.50 0.84 20.53
The diagrammatic iew of the ratio analysis is stated under:-
30
25
20
15
10
5
0
FY'09
FY'10
Current Ratio shows an average ratio of 1.21which is less than the ideal ratio is 2:1. Cash Ratio shows as average greater than its ideal ratio that is 0.5. Debtors Turnover Ratio shows the amount of credit sales has been increased, collection period is derived as 18 days In the calculation of Working capital Turnover Ratio there is an ade quacy of fund except the year 2009-2010. Gross profit ratio is fluctuating during the period of study. Inventory Turnover ratio implies that the Inventory has been utilized efficiently.
CHAPTER5 HR-POLICIES AND STRATEGIES
SOURCES OF RECRUITMENT
LAKHANI offers employment opportunities in a wide range of functions. The process of recruitment in LAKHANI is fair and transparent, with adequate opportunities to look for suitable candidates both internally and from outside. Recruitment is a continuous process in LAKHANI. They regularly hold walk-in interviews in principal cities. Campus interviews are arranged in leading institutes and universities. In other cases, applications are invited for specific vacancies announced through advertisements in leading newspapers or announced in this website. However some of the sources are as follows: TRANSFERS The employees are transferred from one department to another according to their efficiency and experience in acc limited PROMOTIONS the employees are promoted from one department to another with more benefits and greater responsibility based on efficiency and experience. PRESS ADVERTISEMENTS Advertisements of the vacancy in newspapers and journals are a widely used source of recruitment in the company. The main advantage of this method is that it has a wide reach, so it is used by acc limited EDUCATIONAL INSTITUTES various management institutes, engineering colleges, medical Colleges etc. are a good source of recruiting well qualified executives, engineers, etc. They provide facilities for campus interviews and placements. This source is known as Campus Recruitment and it is also used by the company LABOUR CONTRACTORS Manual workers can be recruited through contractors who maintain close contacts with the sources of such workers. This source is used to recruit labor for construction jobs. however child labor is not used by the company
PROCESS OF RECRUITMENT
Recruitment in LAKHANI is a very fair and transparent process with adequate opportunities to look for suitable candidates internally as well as from outside. Applicants are generally invited on the basis of specific advertisements in newspapers and websites. A Committee of officers called the Central Recruitment Committee handles the entire recruitment process comprising screening of applications, preliminary short-listing, interviews and final selection. Every attempt is made to make the selection process as objective as possible by incorporating tests of competence. In some cases, outside consultants are retained. All decisions of the recruitment committee are recorded in respect of each candidate. Candidates are informed of their short-listing and selection immediately after the interview or at the earliest thereafter. The process of Recruitment in Lakhani Ltd
1. Identify vacancy 2. Prepare job description and person specification 3. Advertising the vacancy 4. Managing the response 5. Short-listing 6. Arrange interviews 7. Conducting interview and decision making
TRANING AND DEVLOPEMENT PROGRAMME OF THE COMPANY
Our new Performance Management System incorporates a process called Competency Assessment and Training and Developmental Needs wherein appraisers are specifically called upon to identify and assess training needs of employees at specific intervals that do not coincide with Performance Appraisals. This is so that training needs can be assessed objectively. Training is imparted to take care of an individual¶s career development as well as functional and skill enhancement. Competency and Development training inputs include Skill and general performance enhancement, communication skills and Career development. Functional training needs are identified and conducted by functional departments while Corporate HR organizes competency and developmental inputs.
BENEFITS OF COMPANSATION SYSTEM
Employee welfare receives prime attention at LAKHANI. We have several schemes for general welfare of employees and their families. These cover education, healthcare, retirement benefits, loans and financial assistance and recreation facilities.
Education
Education is imparted not only to children of LAKHANI employees but also more importantly to children from rural areas who do not have access to any medium of information or education. Wherever possible, LAKHANI provides funds and infrastructure to help set up local schools, colleges and centres for learning and education. They offer attractive scholarship allowances for children studying at places away from their parents, merit scholarships for outstanding children and financial assistance for employees¶ children to pursue higher professional education.
Health Care
Liberal medical benefits are made available to employees and their family members by way of reimbursements towards normal medical treatment, domiciliary treatments and special sanctions for serious illness. Each of their townships has well-equipped health care centres
with qualified medical staff and facilities, ambulance, referrals and tie-ups with reputed hospitals for specialised treatment. In addition, there are regular health checkups, camps and programmes. LAKHANI takes pride in providing various forms of medical assistance to the families of their employees and also to all those living in surrounding villages. Each factory has a medical centre with full-fledged doctors and the latest of basic equipment. Mobile medical services are provided in the vicinity and regular medical camps are held to eradicate diseases, offer medical help, treatment and preventive care.
Financial Assistance
Employees are eligible to apply for loans and financial assistance for various purposes such as purchase of assets, residential premises as well as a scheme that provides for supply of cement at subsidized rates to those building their own houses.
Accommodation
At our cement plants and factories, employees are provided furnished and unfurnished accommodation based on their entitlements. At many locations, the employees are given free electricity, free water supply and free bus facility for nearby places and schools. These houses are well-maintained and periodically upgraded.
CHAPTER6 PRODUCTION POLICIES
PRODUCTION PROCESS
Everything starts out as a concept, including shoes. In the beginning, they're designed on paper, but then they're put on something called a "last." Think of it like a shoe blank. It's blank white, but it's a three-dimensional model of a shoe. This is how the designers get a more accurate depiction of their could-be shoe. Once the design is finalized, the fabric is cut and shaped to the specifications required for the shoe. Once the basic shapes have been cut, a machine called a skiving machine thins the edges so the various pieces are easier to sew together. The top half of the shoe is called "the upper." The pieces of the upper are sewn together first, then flattened out to give it a smooth finish. At this point, the upper is still a flat, almost U-shaped area of material. Along the inside of the "U," a leather or plastic edge is sewn on to give it a decorative look and hide any unfinished edges. Then the upper is placed back onto the last, with a layer of lining underneath it. An insole is glued
underneath them, and then the lining is glued to the upper.Machines smooth out the excess material hanging over the insole by tucking it back in underneath the shoe. The bottom of the shoe is smoothed out and then a sole is placed on it to cover up any unsightly extras, and to make the shoe comfortable and durable. Excess glue is removed, laces are put in, the blank is taken out, and the shoe is finished.
PRODUCTION LAYOUT
KEY CUSTOMERS
A customer (also known as a client, buyer, or purchaser) is usually used to refer to a current or potential buyer or user of the products of an individual or organization. LAKHANI believe in ³To deliver value to its customer by offering the highest quality products and dedicated services´ .It has initiated numerous measure to create customer delight However going beyond the supply of cement, they offer LAKHANI Help services to share knowledge about the process of home building and correct procedures of product usage. Its customer base represents The masses of India - individual homebuilders in small towns, rural and semi-urban India. Shoes Companies. An Individual for personal use (Retail Marketing). Shoe Market Demand.
QUALITY CONCEPT USED BY THE COMPANY
Product Development has always been an important activity at LAKHANI, arising out of a focus on quality and process improvement. It has been a constant partner, driving research, innovation and evaluation. LAKHANI has effectively pledged its reputation as the market leader in the quality of shoes. Maintaining this lead calls for harnessing the resources and expertise of the company from applied research and production to marketing. Accordingly, all LAKHANI factories are equipped with state-of-the-art process control instrumentation and associated quality control and testing laboratories manned by qualified personnel. As a result of this focus on quality,LAKHANI shoes specifications exceed those set by BIS by a wide margin. Today, all LAKHANI shoes plants have the ISO 9001 Quality Systems certification. This demonstrates our tradition of providing reliable and consistent quality through the application of modern technology, and justifies the preferences of a nationwide customer base.
CHAPTER 7 FINDINGS AND CONCLUSIONS
FINDINGS
LAKHANI FOOTWEAR is highly focused on its future objectives & expansion plans, but at the same time it has to maintain a balance between the present plan & the future one. On the basis of strategic analysis following recommendations will help in achieving its future goals effectively & efficiently: LAKHANI LTD must focus on its Vision & Mission in order to attain its objective. LAKHANI LTD should focus on expanding its market in order to grab the market shares. It should also try to maximize the shareholders¶ wealth. LAKHANI LTD should not choose those projects which may dilute the brand name just for the sake of gaining market shares. LAKHANI LTD has a high growth potentials, so it should try to raise funds timely in order to meet its target LAKHANI LTD should not do overpromise as it will deteriorate its goodwill. LAKHANI LTD must focus on its competitors¶ strategies in order to gain a competitive edge. LAKHANI LTD should try to go for diversification to minimize risk factor & to explore new market as well.
CONCLUSION
Keeping pace with changing times and an ever-growing need for specialized Services, LAKHANI has begun offering its marketing expertise and distributaries facilities to other producers in cement and related areas. However a precondition of all such agreemen is t quality control supervision to be carried out by an LAKHANI expert located at the franchisee¶s plant. Each of the regional Marketing offices has a customer services cell that is managed by qualified civil engineers. These, in addition to handling after-sales servicing, function as advisory bodies that can help customers, make the right choice of cement for a specific area of application. LAKHANI can provide expert advice on getting the best value from cement and offer assistance on related issues in civil construction projects.
Besides this, technical books/booklets on footwears, shoes and slippers and maintenance are regularly must be available for the benefit of the customers. In addition to this, LAKHANI also publish free booklet, which profiles the Latest information on concrete research, design and maintenance.
Thus to conclude it can be said that Lakhani footwear has its branches spread all over India LAKHANI Limited company product are the profitable not only in India but also in the Whole world.
BIBLIOGRAPHY
BOOKS
MARKETING MANAGEMENT BY PHILIPS KOTLER MARKETING AND SALESMANSHIP BY B.S. RAMAN
NEWSPAPER
THE HINDUSTAN TIMES MINT NEWSPAPER
WEBSITES www.Lakhani.com www.bloomberg.com
www.hindustantimes.com www.moneycontrol.com
www.wikipedia.com
doc_542757952.docx