Understanding the Business

8/12/2019 Understanding the Business

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Understanding The BusinessA shoe has much more to offer than just to walk

Organized Footwear Retailing in India

Major players with SWOT analysis

Footprint best place to shop footwear

KPIs


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Retail Industry in India

Retail is an ancient old industry which started with bartersystem.

The Indian retail sector accounts for over 20% of thecountrysgross domestic product (GDP) and contributes8% to total employment.

Current estimated value of Indian Retailing Industry is

$500 Billion USD and is pegged to reach $1.3 trillionUSD by 2020.

The Indian retail industry has experienced growth of10.6% between 2010 and 2012 and is expected toincrease to USD 750-850 billion by 2015.


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Overview of Indian footwearindustry Mens segment accounts for 59 per cent of the market,

while womenssegment contributes 41 per cent.

The overall share of organized retail is 20 per cent and is

expected to reach 25-30 per cent by 2015.

Exclusive-brand outlets account for over 50 per cent of

the footwear market followed by multi-brand outlets at 28

per cent.

Urban India is estimated to contribute 70 per cent to the

overall footwear market.


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Organized Footwear market in India

The organized segment makes up for 37 per cent.

Men's footwear requirements are met more by organized

sector as compared to women.

37 organized

63Unorganized


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Opportunities in the IndianFootwear Industry Abundant scope to supply finished leather to multinationals setting up shop

in India

Growing fashion consciousness globally. Use of information technology and decision support software to help

eliminate the length of the production cycle for different products.

Product diversification - There is lot of scope for diversification into other

products, namely, leather garments, goods etc.

Growing international and domestic markets. Aim to present the customer with new designs, infrastructure, country &

company profiles.

Exhibit strengths in manufacturing, for example, strengths in classic shoe

manufacturing, hand crafting etc.


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Key Players

This section provides business overview and financial

status of key players in the Indian footwear market. The

key players discussed in the report are Bata India Ltd.,Liberty Shoe Ltd., Khadim India Ltd., Adidas AG, NIKE

Inc., Reliance footprints and Puma AG.


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Bata India

Incorporated as Bata Shoe Company Private Limitedin 1931, the company was set up initially as a small

operation in Konnagar (near Calcutta) in 1932. Bata India is the largest company for the Bata Shoe

Organization in terms of sales pairs and the secondlargest in terms of revenues.

It has more than 1200 stores across the Country. First manufacturing facility in Indian shoe industry to

ISO : 9001certification. Company went public in 1973 and change its name to

BATA INDIA limited.


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SWOT Analysis for BATA India

Strengths Strong Brand Image,

Closely identified with footwear byconsumers,

Six manufacturing locations,

Highest numbers of Stores in India,

Reach to the Customers.

Weakness

The Company has a large labor forceresulting in high employee costs.

The Company has been in existencefor more than seven decades and facesa challenge in switching to newproduction technologies.

Old style design in shoes.

Opportunity India is a very large market and offers

good demand potential for footwearwhich is an item of mass consumption.

The per capita consumption is 1.1pairs

per annum, opportunity for increase in

consumption.

Threat The Company faces competition from

the unorganized market which is ableto sell footwear at low cost due tolower overheads and manufacturingcosts.

Increased competition from leadingmultinational players in the sports

segment.


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Liberty Shoes LTD

Incorporated in 1944 at karnal. Began Footwear manufacturing in 1946.

Renamed as liberty in 1954. Switched over to 100% exports in 1968. Re-entered domestic market in 1983. First public issue (IPO) in 1994 ( over sub. 42 times

at a premium of inr89/-) Worlds fifth largest leather footwear manufacturer. Capacity of manufacturing 60,000 pairs a day. Liberty manufactures footwear under 10 differentbrands-force10, tip-top, senorita, geo sports etc.


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SWOT Analysis for Liberty Shoes LTDStrength Easy availability of low cost of labor.

Exposure to export markets. Safety measures

Presence of top shoe making technology

in the field.

Hygienic environment.

Well-established linkages with buyers in

UK and USA and other parts of theworld.

Weaknesses High prices

Less design as compare to other brands.

People perception.

Opportunities Growing fashion consciousness globally. Product diversification -there is lot of

scope for diversification into otherproducts, namely, leather garments,goods etc.

Growing international and domesticmarkets.

Retain customers through qualitysupplies and timely deliveries.

Threats Entry of multinationals in domestic

market. Availability of footwear at low prices. Stiff competition from other countries. Fast changing fashion trends are difficult

to adapt for the Indian leather industries.


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M&B

M&B is one of the major players in the footwear businessin India.

M&B has two manufacturing facility one each in Baddiand Noida. One of the fastest growing footwear brands in India with

more than 75 company owned stores spread across thecountry making M&B.

M&B has very strong distribution network across Indiaare sold in over 1000 stores across India. ID is the flagship brand of M&B which is targeted

towards fashion savvy youngsters it is one of the popularbrands among the youth community in India.


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SWOT Analysis for M&BStrength Brand Portfolio

Quality Product Large Dealers Network

Designing team & philoshy

Hygienic environment.

Own production unit

Weaknesses High prices

Presence only in casual shoe Category

People perception.

Opportunities Growing fashion consciousness globally. Growing Customers for Footwears. Growing international and domestic

markets. Retain customers through quality

supplies and timely deliveries.\ Change in customer perception from

footwear being a essential commodityto being a style statementproduct

Threats Entry of multinationals in domestic

market. Availability of footwear at low prices. Stiff competition from other countries. Fast changing fashion trends are difficult

to adapt for the Indian leather industries.


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Reliance Footprints

An subsidiary of Reliance Industries Limited.

Incorporated in 2007 with its first store in Hyderabad &

Bangalore (Indra Nagar). One of the fastest growing footwear retailer having 164 plus

stores at 87 plus cities and 21 states.

Has exclusive tie ups with International brands like ASICS,

TIMBERLAND, AIRWALK etc. RFL has more than 50 brands in its Portfolio and deals in all

segments Mens,Ladies, Sports, Kids Etc.

RFL currently has 6% share approx in the industry


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SWOT Analysis for Reliance FootprintsStrength Brand Portfolio. Multi brand Retailer. Growing Company with Existing Goodwill

of the parent company Reliance IndustriesLimited.

Presence of top shoe making technology inthe field.

Tie ups with major footwear companiesinternationally.

Availability of products for different

income group customersWeaknesses High prices Availability of Merchandise Location of the stores Merchandise according to company and

not according to the store location.

Opportunities

Growing Brand consciousness Customer.

With more than 50% of Domestic marketunexplored by Footwear companies.

Growing international and domestic

markets.

Growing Demand for specialized

footwear's.

Threats Entry of multinationals in domestic market.

Availability of footwear at low prices.

Stiff competition from other countries.

Fast changing fashion trends are difficult to

adapt for the Indian leather industries.


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Footprint best place to shopfootwear 50 top Brands at one location gives customers a chance to

chose from them.

Every segment of Product available under one Roof fromMens,Ladies, Sportsand Kids.

Pricing Strategy of the company allows customer of every

level ( Rich, Middle class, Lower middle class) shop under

one roof. The number of Staff available at store to assist customers is

high in comparison to its Competitors.

Availability of International brands at the store giving

customers assurance of quality products in the store.


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Target customers for companies

PUMA, NIKE

ADIDAS

ACTION, LIBERTY,

NIKE, ADIDAS

BATA, ACTION, LIBERTY,

NIKE, ADIDAS, RELAXO

BATA, ACTION, RELAXO

RICH CLASS

UPPER MIDDLE

CLASS

LOWER MIDDLE

CLASS

LOWER INCOME

GROUP

Relia

nceFootprints


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KPIs (Key Performance Indicators) UPTUnit per Ticket/Bill

FUPTFootwear Unit Per Ticket/ Bill

ATVAverage Ticket Value

CONVERSION

Loyalty

SPFSales Per Sq Ft


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Reliance

FootprintsLTD

Anubhav AgarwalDMIT

Documents

Understanding the Business