Skriti Handicraft



INTERNATIONAL BUSINESS PROJECT

GO GLOBAL

JOINT VENTURE WITH FROEIGN FIRM

Presented by:Dhananjay Kumar Jaipuria institute of management, Noida

Index 1. Introduction of Handicraft industry 2. Company profile • Introduction • Vision & Mission • 4 P’s • Distribution 3. Aspects we look into before entering into Foreign market • Global environment • SWOT analysis • Michael porter model 4. Strategy adopted 5. Ansoff Model 6. Value chain model 7. Conclusive observation

Introduction of Handicraft industry: India is a country of rich culture, history and traditions. India is one of the major producer and supplier of Handicrafts products in the world. Before the industrial development, this art and industry was a potential economic advantage for the country During recent years, the importance of handicrafts has been surged due to their cultural and financial values. The small scale industries - including handicrafts can play a major role in the development of the economy of both developed and the developing countries equally. The Indian handicrafts industry is highly labor intensive, cottage based and decentralized industry. Most of the manufacturing units are located in rural and small towns. Handicraft industry is a major source of income for rural communities employing over six million artisans including a large number of women and people belonging to the weaker sections of the society. Because of low capital investment people can start their business on small scale. Through this flexibility the demand and supply can be managed. Though Indian Handicraft industry is considered a cottage industry, but it has evolved as one of the major revenue generator over the years. There has been consistent growth of 15% over few years and the industry has evolved as one of the major contributor for export and foreign revenue generation. There is huge demand for the Indian Handicraft products in both national and international market. To match the demand and supply with quality, there is need to have greater technological support and innovativeness with the uniqueness in industry.

Company profile: Name of the firm Year of inception Product Registered office Manufacturing center Places where we export Email ID

Sanskriti Handicrafts 1990 Imitation Jewellery Jaipur (Rajasthan) Delhi, Moradabad, Sambhal, Jaipur ,kohima U.S.A , U.K and Germany www.skriti.com

Introduction: Sanskriti Handicrafts, incepted in the year 1990, has been leading the rich Sanskriti Handicraft and artifacts cultural heritage. We are a noteworthy manufacturer of fashion Accessories and Costume Jewelry like Bone Jewelry and Horn jewelry. We have been successful in carving a niche for ourselves in the India of handicraft domestic market. We ensure and have the capacity to provide our esteemed customers with an exquisite blend of art with traditional designs. Our long years of experience and expertise in our arena give us the benefit of being one of the premium leaders in the fashion industries.. We have sufficient and well-equipped infrastructure facilities which enable us to cater to our clients with fine range of products and services within the committed time frames.

Vision: To make the global presence Mission: To be a leading exporter and supplier of finest quality products through competitive price, quality selection and transparent dedication, honesty and integrity to buyer

Product Range: Sanskriti Handicrafts is a trusted manufacturer and exporter of an innovative and creative range of products like: Designer Fashion Jewelry Glass Beads Jewelry Bone Jewelry Horn Jewelry Shell Jewelry Wooden Beads Jewelry Antique Silver Plated Jewelry Designer Lac Jewelry Necklace Earrings Bracelet set Pendant

Price Domestic customer :- vary from Rs 200 to 50,000 Foreign customer :- vary from $ 10 to $ 10000

Place :-

covering all metro cities including Banglore , Ahmehdabad ,Rajasthan Agra , Varanasi, Goa, Hydrabad Foreign countries like U.S.A,U.K and Germany

Promotion :- Promotion through ATL and BTL marketing.

Distribution channel:

PRODUCERS Export Marketing organization

Agent

Retail chain

Specialized Retailer

Buying group

Departmental store

Importer/Wholesaler

Mail order Catalogues

E-Shop

CONSUMER

While exporting, we are choosing the right trading partner. As the trade structure of the handicrafts and wooden gifts market in the EU is very complex. Therefore it is a must for us to export to the EU to find out the best trading partner according to their specific profile, product range and goals. Some main distribution channels exporter may consider are • • • • •

Agents Importers-wholesalers Buying Groups Retailers Export marketing organization

Aspects we looked into before going global 1.)Global environment for handicraft jewellery: Handicraft jewellery has found a place in this growing global market and is very much in demand across the world because of its quality and design. Handicraft jewellery is nowadays is considered to be a fashion statement in developed country because of its unique design and the countries are as follows with their respective demand. USA- 31% UK – 11% Germany- 11% France – 5% Japan – 4 % Italy – 4% •

Political factor-

Countries like USA and UK are fully developed nations and have a democratic political environment which means that there aren’t any pressures on trading countries as the trading policies are very favorable and encouraging for the Indian handicraft jewellery traders to export their goods to USA and UK. Similarly, In 2000, the U.S. consumer market for fine and costume jewelry rose 5 percent over 1999 levels to $39.8 billion; today, the United States is the Largest market for jewelry in the world. It is followed by the EU, with total sales in 2003 estimated at $25 billion, an increase of 8 percent between 1999 and 2003. According to retailers, although Ceramics and glass have historically been their number one selling category; it is now jewelry and other fashion accessories such as belts and handbags. European Union (EU) under whom Germany does trading is very encouraging about trading policies with SAARC as under whom India comes which makes less restrictive policies of trading for India to trade with a country like Germany. •

Cultural factors-

Handicraft jewellery being hand-made and unique has a lot of hard work put in it which makes it costly and a trouble to afford. In countries like France, fashion is like water to people, which means precious to them in day to day life. Thus, in France demand is not huge as there are already many fashion jewellery categories already in their domestic market and same goes for Italy. But, USA and UK don’t have any fashion industry of their own and rely on other exporting countries for fashion ornaments like Indian made handicraft jewellery and this is reason that the demand is huge. Not only this, but citizens of USA and UK are fond of being unique and they see that handicraft jewellery is hand made and different from other type of jewellery. Culture of these countries sees uniqueness and different things is positive light.

• Economical factorsUSA, UK, and Germany being developed countries are economically stable and have a good economic infrastructure which derives that poverty percentage is low and purchasing power of people in these countries is high. For eg: USA is known for maximum number of millionaires and billionaires in this world. Due to the high purchasing power, people are able to purchase costly handicraft jewellery as per their requirements. This clearly means “More the money, more the buying power of consumers” These countries have stable economies, so people are not reluctant about spending their income on lavish and luxurious ornaments.

• Social factors-

In the above stated countries, people are very conscious about their clothing and whether their jewellery is matching their clothing or not and whether it is different from what others are wearing or not, be it any kind social gathering. This type of fashion conscious consumers who are large in number have raised the demand of handicraft jewellery and increased its market.

2.) SWOT analysis: Strength1. 2. 3. 4. 5. 6. 7.

Abundant and cheap labor hence can compete on price Hand made and hence has few competitors Variety of products which are unique Exporters willing to handle small orders Increasing emphasis on product development and design up gradation Rich and diversified culture producing wide array of handicraft jewellery Current and potential internal market based on tourism.

Weaknesses1. 2. 3. 4. 5.

Inconsistent quality Inadequate market study and marketing strategy Lack of adequate infrastructure and communication facilities Capacity to handle limited orders Untimely delivery schedule

Opportunities – 1. Large discretionary income at disposal of consumer from developed countries. 2. Use of e-commerce in direct marketing. 3 .Rising appreciation for handicrafts by consumers in the developed countries 4. Duty drawbacks for all exporters. 5. Increasing flow of Tourists provide market for products.

Threats1. Decline in India’s share due to better quality products produced by competitors from Europe, South Africa, South Asia, etc. Better terms of trade by competing countries 2. Better packaging 3. Stricter international stand.

3.)Micheal porter model

Potential entrants : Jewellary products includes precious & semi precious stones and products of metals like Brass, Copper, Bronze and Bell metal. There are many countries who are trying to enter and create a place for themselves in the handicrafts jewellary industry. Mainly the countries who are more of labour intensive are trying to enter into the market

BUYERS :Since product is fashion accessories therefore bargaining power is moderate.

INDUSTRY COMPETITORS :Other handicraft firm like Indian Handicraft ,Krivi Internationals are the industry competitor since they are in same jewellery business SUPPLIERS :Bargaining power of supplier are high since they are supply high quality of glass beads, natural bone and horn.

SUBSTITUTES :Diamond ,pearl,gold brass platinum jewellery could be substitute for handicraft jewellary in the market but there are many other handicrafts products and various other accessories which are trying to grab the customers attention.

Strategy adopted by Sanskriti Handicraft

Strategy:

High

Local responsiveness Low

MULTI DOMESTIC STRATEGY

TRANSNATIONAL STRATEGY

INTERNATIONAL STRATEGY

GLOBAL STRATEGY

Low

High Global Integration

We are adopting International strategy as our product is standardized and we are less sensitive to customer preference and adhere core value and Indian culture. As we are promoting Indian ART and Culture so our global integration will be less and confine to Indian Territory for the manufacturing. We will export our product following the international strategy. Reasons behind to follow the export policy to go global1. Promoting Indian art and culture. 2. Cheap & creative labor 3. Adequate Facilities are available at lower cost. . Reasons behind to “GO GLOBAL” – Although our Indian home market is not saturated but the demand of handicraft jewelry in foreign countries are encouraging . Tourism and e-commerce are playing an important role to make aware of foreign customer demand. We are going global at lower scale initially.

Ansoff Model

Consumer

International Retail outlet Importer

Importer’s Agent

Domestic Consumers Exporter DEVELOPMENT(Warehousing :(TouristMARKET and other local packaging strategy as we are going to new market with our current buyers) We are adopting market development for shipment) product range. Germany & U.S.A, U.K are the new markets in which we are currently showing there interest, where demand for our product are impressive Regulations (Export Certificates)

Fumigation

Domestic Buyer (Transportation, warehousing, Design and quality inspection

VALUE CHAIN OF HANDICRAFT JEWELLERY

Raw Materials (Imported)

Craft men and women

Local Raw Material Supplier (Wood, Bead, Glass, bone and Horn, Shell)

Conclusion:

In the changing world scenario, craft products exported to various countries form a part of lifestyle products in international market. The impact is due to the changing consumer taste and trends. In view of this it is high time that the Indian handicraft industry went into the details of changing designs, patterns, product development, requisite change in production facilities for a variety of materials, production techniques, related expertise to achieve a leadership position in the fast growing competitiveness with other countries. So Sanskriti Handicraft is ready to explore the foreign market. We will begin our journey by exporting in the potential countries like Germany, USA, UK taken all factors under consideration. We will try to add value to our customers by providing them quality product.