Brand by DcsIgn

Hidcsign is peihaps lhe onIy liand fion India in lhe fashion Iealhei accessoiy
calegoiy lo adoin lhe sheIves of piesligious depailnenlaI sloies in sone of lhe
lig cilies of lhe voiId. The iepulalion of lhe liand in sone sense is noie in
piopoilion lo lhe saIes lhal lhe liand has geneialed. Hov did lhe liand achieve
lhis slalus` Was il a piocess of seiendipily oi vas il a iesuIl of syslenalic
expIoialion inlo lhe voiId of high fashion chaiacleiised ly inlense liand
conpelilion` Oi, vas il a iesuIl of sone veiy veII foinuIaled slialegy of
deveIoping lhe liand and ils equily in copylook slyIe` Whal veie lhe slialegic
oplions faced ly lhe conpany and lhe liand` Whal couises of aclion vouId le
appiopiiale foi lhe conpanys fuluie giovlh vilhoul diIuling lhe liand` The
case sludy piovides an oppoilunily lo expIoie such queslions lhal chaIIenge lhe
inleIIecl of lhose inleiesled in liands and lheii nanagenenl. Iuilhei, il piovides
a gIinpse inlo lhe voiId of high fashion and poinls lo lhe chaIIenges of aIigning
lhe liand and lhe pioducls. This case aIso disceins vhal il lakes lo deveIop a
gIolaI liand lhal has univeisaI appeaI ialhei lhan liands vilh elhnic niche fccus.

OptInns fnr Grnwth Trajcctnry

Iion an aInosl accidenlaI leginning in 1978, Hidcsign
1
loday is piesenl in aloul 21
counliies, incIuding India. In 2OO2, lhe liand occupied sheIf space in piesligious ielaiI
oulIels such as Sc|fridgcs and ]cnn |cuis in lhe Uniled Kingdon, Datid ]cncs and Mqcrs in
AusliaIia, S|u||afcrd's and |dgars in Soulh Afiica and Magasin Du Ncrd in Dennaik. In India,
lhe liand vas avaiIalIe in nine cilies lhiough high-end nuIli-liand oulIels as veII as
excIusive Hidcsign ouliques.

1
Hidcsign is lhe iegisleied liadenaik of lhe conpany and is iegisleied in aInosl aII counliies

Iiepaied ly Iiofessoi Aliahn Koshy, Indian Inslilule of Managenenl, Ahnedalad.

This case sludy is piepaied vilh lhe suppoil fion Confedeialion of Indian Indusliy (CII), Soulhein
Region. The aulhoi acknovIedges lhe vhoIeheailed coopeialion and heIp fion Mi. DiIip Kapooi,
Iiesidenl, Hidesign, and olhei execulives of lhe conpany in piepaiing lhis case. AIso,
encouiagenenl and suppoil fion Mi. Iiadipla Mahapalia, Iiesidenl, CII TaniI Nadu Chaplei, is
acknovIedged.

Case naleiiaI of lhe Indian Inslilule of Managenenl, Ahnedalad, is piepaied as a lasis foi cIass
discussion. Cases aie nol designed lo piesenl iIIuslialions of eilhei coiiecl oi incoiiecl handIing of
adninislialive piolIens.

Copyiighl 2OO6 ly lhe Indian Inslilule of Managenenl, Ahnedalad.

llMA/|SA313
IndIan InstItutc nf Managcmcnt
Ahmcdabad IIMA/MAR380
of 34 IIMA/MAR38O

2
Mi. DiIip Kapooi, Iiesidenl of lhe conpany, iecognised lhal lhe piocess lhiough vhich lhe
liand achieved ils cuiienl slalus had nol leen easy. ConsideialIe effoil lacked ly a
passion foi exceIIence and a fiin leIief in lhe liand Iaid lhe foundalions foi giovlh.
Hovevei, fuluie giovlh oplions foi lhe liand and lhe conpany needed lo le pIanned.
SeveiaI queslions of slialegic inpoilance confionled Mi. Kapooi. Whal shouId le lhe
expansion pIan lo nake lhe ielaiI piesence sliongei in inleinalionaI naikels` AIieady sone
good lhoughls and inilialives had leen suggesled in lhis iegaid. Weie lhese vialIe oplions`
SiniIaiIy, vhal shouId le lhe ielaiI expansion slialegy in lhe doneslic naikel` In addilion
lo disliilulion and ielaiIing pIans, a najoi issue ieIaled lo pioducl Iine pIanning and liand
slialegy needed lo le iesoIved. Whal shouId le lhe pioducl Iine slialegy` ShouId Iovei
piice Iines le inlioduced` ShouId aIleinalive naleiiaIs le used in addilion lo lhe genuine
Iealhei foi lhe nev pioducl Iines` ShouId sone 'conpionise' le nade foi lhe naleiiaIs used
foi fillings and olhei accessoiies foi lhe pioducl` ShouId lhe Iovei piiced pioducl Iines le
Iaunched as a nev liand oi shouId lhey le inlioduced as liand exlensions` Hov shouId
lhe possiliIilies of liand diIulion le nanaged undei any of lhe slialegic inilialives pIanned`
In any of lhese scenaiios, vhal shouId le lhe oveiaII liand slialegy` Mi. DiIip Kapooi had
lo addiess lhese queslions lo deveIop sone cIeai pIans foi giovlh and expansion of lhe
conpany and ils liand poilfoIio.

Backgrnund nf thc Cnmpany

Hidcsign, a conpany vilh nanufacluiing faciIilies Iocaled in Iondicheiiy and TaniI Nadu
in Soulh India, naikeled pioducls such as liiefcases, conpulei lags, handlags, liaveI lags,
vaIIels and snaII accessoiies Iike coin puises, key chains and passpoil cases. AII pioducls
veie designed and nanufacluied ly lhe conpany using genuine Iealhei. The conpany
piided ilseIf in using liadilionaI piocesses Iike vegelalIe lanning and aII lhe pioducls veie
handciafled.

NeaiIy 8O pei cenl of lhe conpany's pioducls veie soId in inleinalionaI naikels. Counliies
such as UK, USA and Ceinany accounled foi aloul 76 peicenl of lhe expoil saIes in 2OO2. In
lhe olhei counliies, aIlhough saIes veie piopoilionaleIy Iovei, pioducls veie avaiIalIe in
piesligious depailnenlaI sloies. In India, pioducls veie avaiIalIe in nine cilies lhiough five
Hidcsign louliques and 14 high-end nuIli-liand sloies. In addilion, voik on lhiee noie
louliques in lhiee inpoilanl cilies vas piogiessing.

GcncsIs nf thc BusIncss and Brand

The genesis of lhe conpany, lhe liand and lhe lackgiound of lhe pionolei veie
inleilvined in lhe case. Mi. Kapooi, Iiesidenl and Ioundei, did his eaiIy schooIing in
Iondicheiiy
2
, a snaII Union Teiiiloiy in Soulh India, al an inleinalionaI schooI in AuioviIIe
CIolaI ViIIage
3
. SulsequenlIy he ieceived a schoIaiship lo puisue his schooIing in lhe
Uniled Slales. He conpIeled his Ih.D in inleinalionaI affaiis fion Iiincelon Univeisily and
Univeisily of Denvai in 1977. Duiing his coIIege days, Mi. Kapooi vas acliveIy invoIved
vilh lhe cuIluiaI ievoIulion lhal vas sveeping lhe voiId in lhe 197Os. He pailicipaled in
anli-Vielnan vai denonslialions and Ied a Iife lhal iefIecled lhe ieleIIious cuIluie of lhe

2
Iondicheiiy, lefoie lhe independence of India vas a Iiench leiiiloiy. Lven loday, a significanl piopoilion of
lhe popuIalion in lhis snaII slale speaks Iiench. Due lo ils inleinalionaI cuIluie and panoianic naluiaI leauly,
lhis cily-slale alliacls a good nunlei of louiisls lolh, doneslic and inleinalionaI. Iondicheiiy has a seapoil. (See
Appendix I (A))

3
AuioviIIe CIolaI ViIIage, eslalIished as a univeisaI viIIage, is lhe iesuIl of an inleiesling expeiinenl. (See
Appendix I () foi delaiIs).
of 34 IIMA/MAR38O

3
youlh of lhal peiiod. (Accoiding lo hin, he vas Iiving on lhe fiinge in lhose days vilh
IileiaI lhinking and a fiee spiiil lhal chaiacleiised lhe phiIosophicaI oiienlalion of young
peopIe.)

He ieluined lo Iondicheiiy in 1978 aflei ollaining his docloiaI degiee and joined lhe
AuioviIIe CIolaI ViIIage novenenl. His puipose vas lo pailicipale in lhe AuioviIIe
expeiinenl and conliilule neaningfuIIy lo lhe phiIosophy of a univeisaI connunily. He
vas acliveIy invoIved in lhe deveIopnenlaI aclivilies of lhe viIIage. (Lven loday, he Iives
lheie vilh his vife and lvo chiIdien). Duiing lhe iniliaI peiiod vhen lhe viIIage vas
evoIving, lhe denand on his line foi lhe deveIopnenlaI aclivilies of lhe viIIage vas Iov.
This Iefl hin vilh a good deaI of spaie line, vhich he uliIised lo expeiinenl vilh designing
and naking Iealhei lags.

Mi. Kapooi had leen inlioduced lo lhe Iealhei lusiness duiing his sludenl days in lhe US,
vhen he had voiked on a pail-line lasis vilh a Iealhei conpany. Theiefoie, he aIieady
had, vhal he caIIs on-lhe-jol liaining in Iealhei and Iealhei pioducls. His lolaI inveslnenl
in lhis nev lusiness, al lhal line vas aloul Rs. 25,OOO/-. The designed pioducls veie
nanufacluied in Iondicheiiy ilseIf, vheie lolh iav naleiiaI and liained ciaflsnen and
voikeis veie easiIy avaiIalIe. The lags appeaIed lo lhe peopIe vho veie visiling AuioviIIe
viIIage and Iondicheiiy--inleinalionaI louiisls and peopIe posiliveIy incIined lo lhe
phiIosophy of a 'univeisaI cuIluie.

The design of lhe pioducls iefIecled lhe spiiil of lhe cuIluiaI ievoIulion happening in US al
lhal line. The designs appeaIed lo peopIe vho veie, in sone vay, exliene iadicaIs and
vho ieleIIed againsl lhe slandaid conseivalive noins of sociely. Accoiding lo Mi. Kapooi,
lhe Iealhei lags lhal he ciafled soId lhenseIves due lo lhe uniqueness of design. No
naikeling effoils veie undeilaken lo seII lhe pioducls al lhal line. The inceplion of lhe
lusiness vas noie in lhe foin of a holly lhan a seiious lusiness pioposilion.

Mi. Kapooi slailed lhe lusiness on a noie foinaI fooling vilh peopIe vho veie nol
lusinessnen. This happened noie ly chance lhan design. A Iady, Mis. LoveI, a jolIess
nolhei vilh lvo chiIdien, vas on a visil lo India as a louiisl. The visil look hei lo
Iondicheiiy and AuioviIIe vheie she found lhe Iealhei lags designed ly Kapooi. She
loughl sone of lhen lo seII lhen in lhe 'fIea naikel in AusliaIia. She aIso nel hin, vhich
Ialei Ied lo a unique pailneiship in lusiness. The lags she loughl soId veII and lhis gave
hei lhe encouiagenenl lo expIoie possiliIilies of deveIoping a lusiness ieIalionship and she
pIaced Iaigei oideis. SeveiaI such conlacls veie deveIoped and lhe pioducls veie soId lo
diffeienl luyeis. They veie, ly lhen, avaiIalIe in seveiaI independenl louliques, non-
conneiciaI oulIels and slieel naikels. Many gay shops slailed caiiying lhen due lo lhe
alliacliveness of lhe designs and quaIily. Mi. Kapooi noled lhal lhe pioducl, duiing lhis
phase vas one lhal vas on lhe fiinge. The 'liand nane al lhal line vas nol inpoilanl
and il soId ilseIf lased on ils unique design. The liand nane lhal foIIoved vas Hidc
Dcsign, lul lheie vas no Iogo oi liand idenlily synloIs lhal dislinguished il.

As lhe denand foi lhe pioducls incieased, lhe nanufacluiing lase had lo le expanded.
IniliaIIy, one iesidenliaI house vas sufficienl lo acconnodale aII aclivilies ieIaling lo lhe
nanufacluiing. As denand incieased, lhe house legan lo oveifIov and a fev noie
iesidences veie laken on ienl. Il vas nuch Ialei lhal Mi. Kapooi decided lo foinaIIy
eslalIish a conpany and oiganise nanufacluiing in a noie syslenalic vay.

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4
LncatInn Advantagcs

The Iocalion lo nanufacluie lhe pioducls, naneIy, Iondicheiiy, piovided sone advanlages.
IiislIy, lhe 1OO-kiIonelie leIl coveiing Iondicheiiy and TaniI Nadu had a liadilion of
piocessing and nanufacluiing Iealhei pioducls and accounled foi a significanl poilion of
piocessed Iealhei nanufacluied in India. Theiefoie, access lo iav naleiiaI vas an
advanlage in lhis Iocalion. SecondIy, liained Ialoui and ciaflsnen veie easiIy avaiIalIe due
lo lhe facl lhal Iealhei indusliy had sliong iools in lhe aiea. ThiidIy, lhe suppoil of lhe IocaI
goveinnenls in Iondicheiiy and TaniI Nadu vas conducive lo lhe giovlh of lhe indusliy.
IinaIIy, lhe Coveinnenl poIicy of encouiaging indusliiaIisalion of lhe iegion piovided lhe
conpany seveiaI lax lenefils. Thus, lhe cosl advanlages of lhe lusiness Iocalion veie
consideialIe.

Jnurncy frnm thc 'FrIngcs' tn thc 'MaInstrcam'

The cuIluiaI ievoIulion and youlh ieleIIiousness veie sIovIy fading. The pioducl lheiefoie
aIso needed lo nigiale fion louliques, non-conneiciaI sloies and slieel naikels lo
depailnenlaI sloies. One such oppoilunily cane vhen }ohn Levis fion UK loughl lhe
pioducl. The luyei hinseIf vas, in sone vays, ieleIIious in lhinking and appioach and lhe
designs nalched lhe phiIosophicaI oiienlalion of lhe luyei. This ieIalionship Ied lo a sliong
conneiciaI pailneiship and lhe up-naikel }ohn Levis depailnenlaI sloies lecane
piefeiied cusloneis. y 2OO2, Hidcsign pioducls occupied aloul 6O pei cenl of lhe liiefcase
and Iuggage seclions of sloies.

SiniIaiIy, lhe ieIalionship lelveen lhe conpany and Mis. LoveII aIso deveIoped. In 1988,
she and Mi. Kapooi foined a conpany and decided lo caII il Hidcsign UK. The lusiness vas
lo inpoil pioducls nanufacluied al Iondicheiiy and seII lhen lo diffeienl depailnenlaI
sloies and up-naikel louliques. Mis. LoveII nanaged lhis lusiness venluie in UK vheieas
Kapooi confined his focus lo design and nanufacluiing. The change of nane fion Hidc
Dcsign lo Hidcsign occuiied aiound lhis line. As a iesuIl, saIes fuilhei incieased.
Hovevei, piofils veie discouiaging and evenluaIIy, lhe conpany lecane lankiupl, due lo
vhal Mi. Kapooi leined as Iack of lusiness sense. Il vas loughl ovei ly lhe TuIa Cioup,
one of lhe liggesl deaIeis in Iealhei pioducls in UK. Mis. LoveII joined lhe gioup as an
enpIoyee and venl on lo lecone lhe Managing Diiecloi. The ieIalionship lelveen TuIa
Cioup and Hidcsign conlinued lo giov in slienglh.

As lhe denand foi pioducls giev, Kapooi found il difficuIl lo co-oidinale and supeivise lhe
nanufacluiing aclivilies housed in diffeienl Iocalions. Theiefoie, in 199O, a decision vas
laken lo Iocale lhe conpany on a singIe pienise. Al lhal line, lheie veie aloul 15O voikeis
enpIoyed, vhich giev lo aloul 2OOO ly 2OO2. y lhis line, lhe nanufacluiing faciIilies
incIuding piocessing of Iealhei had aIso expanded. AddilionaI faciIilies veie deveIoped al
lvo Iocalions and a Iealhei-piocessing unil in TaniI Nadu vas acquiied. In 199O, lhe liand
Hidcsign deveIoped ils piesenl liand idenlily synloIs and giaphics. A pulic ieIalions
conpany in UK suggesled lhe slyIe of iepiesenling lhe liand nane and designed lhe Iogo
foi lhe conpany. (The Iogo is given al lhe leginning of lhis case)

Lcathcr Industry: An OvcrvIcw

As a pioducl, Iealhei is one of lhe nosl vaIualIe and inpoilanl liading connodilies. In
1999, lhe inleinalionaI naikel in Iealhei vas vaIued alove US $41 liIIion. Lealhei pioducls
veie divided inlo five najoi calegoiies. These veie finished Iealhei, Iealhei gainenls,
of 34 IIMA/MAR38O

5
Iealhei foolveai, Iealhei goods, and Iealhei gIoves. The Iealhei indusliy had shovn a
giaduaI decIine in denand ovei lhe pievious five yeais vilh a negalive giovlh iale of
appioxinaleIy 2 pei cenl lhe yeai 1995 vas consideied lo le lhe voisl as lhe indusliy
decIined ly aloul 7 pei cenl in inleinalionaI expoils. This decIine couId le alliiluled lo high
sIaughlei of lovine species due lo lhe lhieal of nad cov disease piesenl al lhal line.
Counliies such as IlaIy and China accounled foi neaiIy 32 pei cenl of lhe lolaI inleinalionaI
liade in Iealhei. Appendix II gives a liief oveiviev of lhe Iealhei indusliy and India's shaie
in lhe voiId Iealhei liade. TalIe 1 (given leIov) gives lhe shaie of najoi expoiling counliies
in lhe inleinalionaI liade in Iealhei and Iealhei pioducls.

TabIe 1: Share of Different Countries in Leather Export

Sr.
No.
Country Share in WorId Leather Exports
(approximate)
1. China 17%
2. taly 15%
3. Korea 3%
4. Brazil 3%
5. ndia 2%
6. ndonesia 3%
7. Thailand 2%
8. Mexico 1%

The najoi inpoiling counliy foi Iealhei and Iealhei pioducls vas USA, vhich accounled
foi aloul 27 pei cenl of lhe voiIds inpoils. Ceinany accounled foi aloul 9 pei cenl,
vheieas UK and IlaIy accounled foi appioxinaleIy 6 pei cenl each. Counliies Iike Iiance
and }apan logelhei accounled foi anolhei 1O pei cenl.

The voiId naikel foi finished Iealhei pioducls vas doninaled ly IlaIian liands. Designei
liands, nany of lhen IlaIian, veie significanl pIayeis in pieniun Iealhei pioducls. Sloie
liands, on lhe olhei hand, nade an inpacl in lhe nediun-piiced iange. In lhe Iovei piiced
calegoiies, nosl pioducls veie unlianded. Sone of lhe Ieading, gIolaI Iealhei liands aie
given in TalIe 2.

AInosl aII inleinalionaIIy knovn liands designed lheii ovn pioducls. Hovevei, nosl of
lhen oul-souiced pioduclion. In olhei voids, aII of lhen veie liand naikeleis ialhei lhan
nanufacluieis and naikeleis. Lxhilil 1 gives lhe liand Iogo of sone iepuled inleinalionaI
liands. China had lhe iepulalion of pioviding good quaIily pioducls al highIy conpelilive
piices. Il vas aIso quick lo iespond lo vaiying iequiienenls of cusloneis.

In India, lhe Iealhei goods indusliy vas noslIy unoiganised. Theie veie no najoi liands
(Hidcsign leing an exceplion) especiaIIy in lhe case of high-end fashion oiienled Iealhei
pioducls. ouliques foi lianded Iealhei pioducls veie aInosl non-exislenl.

One of lhe najoi conpelilive advanlages of lhe Indian Iealhei indusliy vas lhe avaiIaliIily
of iav naleiiaI. This vas lecause India accounled foi lhe Iaigesl lovine popuIalion in lhe
voiId. Hovevei, lheie veie piolIens vilh iegaid lo quaIily, vhich inpIied lhal puichasing
of iav naleiiaIs foi nanufacluiing pioducls vas an inpoilanl funclion. Due lo lhe
avaiIaliIily of conpeliliveIy piiced iav naleiiaI and alundanl Ialoui, Indian
nanufacluieis couId nake pioducls al Iovei cosl. Hovevei, nosl nanufacluieis, nany of
lhen in lhe snaII-scaIe secloi, focused on lhe Iov-end nass naikel. They inilaled designs
fion olhei lig liands aIlhough lhe quaIily of lheii pioducls vas nuch Iovei. Of Iale, lhe
Coveinnenl, as veII as lhe indusliy associalion veie focussing on inpioving lhe quaIily
of 34 IIMA/MAR38O

6
lase of lhe Indian Iealhei indusliy. Sone piogiess had leen nade in lhis iegaid and lhe
finished goods and vaIue added pioducl calegoiies had shovn inpiovenenls in oveiaII
quaIily. When conpaied vilh China, lheie veie sliII significanl gaps vilh iespecl lo quaIily.
Mosl of lhe nanufacluiing secloi in India focused on leing suppIieis lo olhei liands in lhe
inleinalionaI naikels.

TabIe 2: Some Reputed InternationaI Leather Brands

Sr. No. Name of the Company/Brand
1 Tandy Brands Accessories, nc.
Bugle Boy, Levi-Strauss & Co., Dockers, Haggar, Jones New York

2 LVMH Met Hennessy Louis Vuitton SA
Christian Lacroix, Celine, Loewe, Berluti, Christian Lacroix, Marc Jacobs,
Fendi, StefanoBi, Emilio Pucci, Thomas Pink, Donna Karan, Givenchy,
Kenzo, Louis Vuitton
3 Compagnie Financiere Richemont AG
Alfred Dunhill
4 Humphreys Accessories
Dickies, Levis, Dockers, Columbia, Bill Adler Studio, Reward
5 Gucci Group N.V.
6 Fossil, nc.
7 Balenciaga
8 Alfio raldo
9 Coach, nc.
10 Gianni Versace SpA
11 Akata World
12 Hermes nternational
13 Allys nternational
14 Coach
15 Pierre Cardin
16 Yves St. Laurent
17 EtienneAigner
18 Harrods
19 Hugo Boss
20 Liz Claiborne
21 Guess
22 Next
23 Tommy Hilfiger
24 Accents
25 Crossroads
26 Xhileration
27 Ann Taylor
28 Cherooke

Prnduct Pnrtfn!In nf HIdcsIgn

The poilfoIio of pioducls of lhe conpany consisled of liiefcases, conpulei lags, handlags,
liaveI lags, lackpacks, gainenls, vaIIels, leIls, coin puises, key chains and olhei snaII
accessoiies. AII lhese pioducls veie nade fion genuine Iealhei. Lxhilil 2 gives a sanpIe of
lhe pioducl poilfoIio of lhe conpany. Lealhei gainenls consliluled 45 pei cenl of lhe lolaI
saIes in lhe yeai 2OO1. Hovevei, lhis piopoilion had changed, pailIy as a iesuIl of deIileiale
poIicy decisions and pailIy due lo naikel condilions. Duiing lhe yeai 2OO2, Iealhei gainenls
consliluled onIy aloul 3O pei cenl of lolaI saIes. One of lhe ieasons lehind lhis change vas
lhal lhe conpany vas suppIying Iealhei gainenls lo a US conpany lo seII undei ils ovn
liand nane. In lhis case, il did nol add any vaIue ly vay of liand nane and vas suljecled
lo lhe unexpecled changes in lhe denand foi lheii cusloneis liand. In oidei lo ieduce such
unceilainlies, lhe conpany look a conscious decision lo focus on Iealhei pioducls and
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7
accessoiies olhei lhan Iealhei gainenls in lhe fuluie. In addilion, il aIso decided lo seII
pioducls onIy undei lheii ovn liand nane in lhe fuluie.

ManufacturIng Prnccsscs

The supeiioiily of Hidcsign pioducls vas IaigeIy due lo lhe uniqueness of lhe design and
nanufacluiing piocess. The conpany foIIoved liadilionaI nelhods of nanufacluiing and
lanning lhal "iefIecled a caie foi lhe ciaflsnan, ciaflsnanship and lhe enviionnenl, using
piocesses vhich had Iong since disappeaied fion lhe nodein Iealhei indusliy". Diffeienl
slages of lhe nanufacluiing piocesses such as seIeclion of Iealhei, nelhods of lanning,
dyeing, checking, soiling, piepaialion foi culling paneI, nalching, assenlIing, fillings and
finaI checking iefIecled a connilnenl lo lhe phiIosophy lhal lhe pioducls shouId iefIecl
naluiaIness and aulhenlicily.

A lean of speciaIisls caiiied oul lhe seIeclion of Iealhei. The conpany seIecled fuII hide
(sone lines caIIed fuII giain) Iealhei fion anongsl diffeienl lypes of Iealhei avaiIalIe.
(Lxhilil 3 gives foi a liief desciiplion of diffeienl vaiielies of Iealhei). This vaiiely of Iealhei
iefIeclednaluiaIness and did nol conceaI lIenishes and vaiialions in lhe giain of lhe
Iealhei. This conliiluled lo lhe aulhenlicily of lhe pioducls. Ioi lanning lhe Iealhei, lhe
conpany foIIoved lhe "line honouied liadilionaI nelhod" vheiely lhe seIecled Iealhei (oi
hide) vas soaked foi 4Odays in exliacls of naluiaI laik and seeds. Aflei lhese vegelalIe
exliacls veie fuIIy alsoiled ly lhe hide, vegelalIe oiIs veie appIied lo nake lhe Iealhei
suppIe. AIlhough lhis nelhod vas line-consuning and coslIy, il vas an enviionnenlaIIy
fiiendIy piocess. The faslei and noie connonIy used nelhod in lhe indusliy vas caIIed
"chione lanning", vheiein lhe Iealhei (hide) vas soaked in chione lased chenicaIs foi a
shoilei duialion of line. This piocess hovevei vas nol foIIoved foi Hidcsign pioducls.

Ioi dyeing, lhe lanned hide vas hand-iulled using aniIine dyes lhal nade giains in lhe
Iealhei visilIe, lhus enhancing lhe visuaI appeaiance gained fion lhe lanning piocess. This
nelhod aIIoved each hide lo have naluiaI vaiialions due lo diffeienl alsoiplion piopeilies.
Al lhe end of lhis nanuaI piocess, lhe Iealhei Iooked sliong and naluiaI. Aflei lhese
piocesses veie conpIeled, lhe Iealhei vas checked foi piopeilies, such as coIoui (iich and
naluiaI), giain and sliucluie of Iealhei (snoolh and fIal foi casuaI, naluiaI giains foi cIassic),
soflness and 'lop feeI' (sIighlIy oiIy and siIky suiface oi diy, lul snoolh suiface vhiIe
louching lhe Iealhei).

The Iealhei vas lhen soiled ly nalching giain and coIoui inlo siniIai lalches--a piocess
lhal iequiied consideialIe expeilise. Diffeienl pioducls iequiied diffeienl lypes of
conponenls and lhe appiopiiale Iealhei foi each conponenl needed lo le idenlified.
Lealhei vas cul ly hand-culling nelhod (as opposed lo nachine cIickei culling) using
knives vilh liny shaip culling poinls. This enalIed lhe skiIIed pallein cullei lo nake cIean
culs and aIIoved hin/hei lo go aiound coineis, exaclIy as pei lhe pallein. This loo needed a
high IeveI of skiII and expeilise. Lach piece lhus cul vas paneI nalched foi each pioducl
and nunleied lo ensuie lhal lhe finaI pioducl cane fion specific lalches. The pioducl vas
finaIIy assenlIed ly foIding and gIuing diffeienl conponenls, foIIoved ly slilching and
assenlIing of lhe pioducl. A lean of peopIe did lhe enliie piocess. Ioi exanpIe, eighl
peopIe veie invoIved in naking a lag and onIy one peison slilched lhe lag. SoIid liass
luckIes veie used foi aII pioducls, vhich veie nade in lhe conpany ilseIf using liadilionaI
sand casling piocess and hand poIishing. Iillings lhal veie nol nade in lhe conpany's
foundiy veie inpoiled fion iepuled suppIieis Iocaled in Luiope and olhei counliies.

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Lach finished pioducl vas checked foi quaIily vilh allenlion lo delaiIs such as luining
dovn excess lhieads and cIeaning off gIue and poIishing. These piocesses enalIed lhe
conpany lo nake pioducls lhal veie iich in chaiaclei, lexluie and individuaIily. In lhal
sense, each pioducl ly ils veiy naluie vas a 'Iiniled edilion' pioducl. The conpany piided
ilseIf in foIIoving lhese unique and liadilionaI nelhods of nanufacluiing Hidcsign pioducls.
iand adveilisenenls accoidingIy piocIained lhis uniqueness vilh ly-Iines such as ieaI
Iealhei ciafled lhe foigollen vay and yeais lehind ils line.

In oidei lo ensuie high IeveI of quaIily and lo suppoil onIine quaIily checks, lhe conpany
foIIoved a syslen of 'ioule caid vhich iecoided vho did lhe culling, lhe slilching, lhe
supeivision and on vhich dales lhese aclivilies veie caiiied oul. Ioi pioduclion pIanning, a
scheduIe foi lhe nonlh vas piepaied vhich vas conveiled lo a daiIy pioduclion scheduIe.
Lveiy day, a pioduclion neeling vas conducled. As a poIicy, lhe conpany iepaiied any
pioducl soId ly lhen iiiespeclive of lhe age of lhe pioducl a poIicy akin lo Iifeline aflei
saIes suppoil.

DcsIgn Prnccss

The design piocess foIIoved al lhe iniliaI slages of lhe lusiness couId le leined as 'inluilive'
-- lhe undeislanding and cIose inleiaclion vilh lypicaI cusloneis enalIed lhe pioducls lo le
designed diffeienlIy lo iefIecl lhe ieleIIiousness and lhe liand ciealois. Hovevei, vhen lhe
conpany look foinaI shape and cusloneis lecane Iaigei and dispeised, lhe design piocess
aIso undeivenl change. Il slailed vilh an undeislanding of vho lhe cusloneis veie and
lhen lhe designs veie conceived. "When one puls one's nane al slake, one lends lo le
caiefuI," Mi. Kapooi olseived.

In pIanning lhe "coIIeclion" of lhe pioducls, Mis. LoveII, Managing Diiecloi of lhe TuIa
Cioup vilh vhon lhe conpany had deveIoped a sliong lusiness ieIalionship, pIayed a
significanl ioIe. She visiled Iondicheiiy lvice a yeai and spenl noie lhan a veek discussing
and pailicipaling in lhe design piocess lo deveIop a coIIeclion foi lhe sulsequenl peiiod.
Tiends in inleinalionaI designs and IifeslyIes of polenliaI cusloneis in najoi naikels
alioad veie sludied caiefuIIy so lhal lhe designs iefIecled lhese liends. In addilion, najoi
liands and lheii design and pioducl iange liends in inleinalionaI naikels veie anaIysed.
Inpuls inlo lhe design piocess veie deiived fion cIose inleiaclions vilh najoi cusloneis
and olseivalions/anaIyses of consunei piefeiences. Insighls ollained veie liansIaled inlo
designs and piololypes veie nade. As a poIicy, designs of olhei conpanies veie nol copied
("loo pioud lo copy," as Mi. Kapooi noled). Al lesl, sone designs veie adapled ly
"Hidesigning" lhe pallein. In such cases, even vhen lhe shapes appeaied siniIai lo olhei
pioducls, nosl of lhe 'conponenls' veie diffeienl.

Aflei seIecling lhe designs, a piIol lalch of diffeienl designs vas nanufacluied. These veie
shovn lo piospeclive cusloneis in najoi naikels alioad and lhen lhe Iiniled quanlilies
veie soId lo lhen. ased on a cIose foIIov up vilh lhe ielaiIeis and aclive coIIeclion of
feedlack fion cusloneis, appiopiiale changes in lhe design veie nade vheievei iequiied.
ReguIai, Iaige voIune pioduclion foIIoved lhis slage.

In oidei lo heIp acluaIise lhe design, lhe conpany enpIoyed a liained designei, vho vas a
giaduale fion lhe NalionaI Inslilule of Design, Ahnedalad, (a iepuled design schooI in
India) on a fuII-line lasis. The conpany aIso ielained lhe seivices of a conpelenl designei
fion IlaIy. She vas lhe Iiesidenl of IlaIian SlyIish Associalion and lhe Chief Advisoi lo lhe
IlaIian Ioolveai Associalion. She vas associaled vilh najoi aulonoliIe conpanies Iike
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Meicedes enz foi design consuIlalion on inleiiois. Mi. Kapooi nenlioned lhal lhis
designei voiked foi his conpany al piofessionaI chaiges lhal veie significanlIy Iovei lhan
hei ieguIai fees, as Mi. Kapooi had knovn hei foi lhe Iasl 2O yeais oi so.

One of lhe conceins of lhe conpany vas lhe ieguIai avaiIaliIily of design expeils. Mi.
Kapooi expiessed lhe foIIoving opinion aloul lhe avaiIaliIily of designeis:

Indian designeis aie exceIIenl. Hovevei, lhey Iack adequale inleinalionaI
exposuie. Theii Ieaining cones fion ieading looks oi expIoiing lhe Inleinel. ul
a designei has lo undeisland lhe IifeslyIe lehind lhe pioducls lhal nake lhe
design appeaIing and ieIevanl. UnIess lhe peison undeislands lhe conlexl of lhe
IifeslyIe and lhe usage palleins, il is difficuIl lo conceive designs foi an
inleinalionaI audience. Design is lhe expiession of IifeslyIe lhiough pioducls.

Thc Custnmcr and thc Brand

Mi. Kapooi defined lhe cusloneis of lhe Hidcsign liand as foIIovs:

The cusloneis foi lhe liand veie ieIaliveIy veII-lo-do, young peopIe in lhe 25-45
age gioup. In India, lhe cusloneis on an aveiage veie aloul 35 yeais oi leIov.
Mosl of lhen vouId le haid voiking execulives in lhe seivice indusliy and nol
necessaiiIy in lhe nanufacluiing piofession. The liand noinaIIy did nol appeaI
lo independenl lusiness peisons. Il vas foi lhose vho gave inpoilance lo hov
lhey Iooked and hov lhey piesenled lhenseIves.

The liand, as concepluaIised ly Mi. Kapooi, iefIecled a cuIluie of innovalion, gIolaIisalion
and haid voik. Il vas an "edgy" liand -- al lhe culling edge of change. Ovei lhe yeais, il
noved fion leing a "ieleI" lo leing a "culling edge" liand. Il vas nol iun ly iuIes, lul ly
elhics and vaIues and iepiesenled a concein foi lhe enviionnenl. Il vas a haid voiking
peison's accessoiy -- a voik oiienled liand. Il vas nol a "paily" liand, and ceilainIy nol a
gIanoious one. Il vas a liand lhal vas slyIish in a cIassy and eIeganl vay, nol shovy oi
dovdy -- nevei a cheap -- Iook liand. The design and nanufacluiing piocesses ensuied lhis
chaiaclei and peisonaIily of lhe liand consciousIy and seiiousIy. Theiefoie, in sone vays,
il vas a niche liand.

Hidcsign vas an inleinalionaI liand lhal happened lo oiiginale fion India. "Hidcsign is an
inleinalionaI liand vilh Indian passion. India piovided a deepei souice of inspiialion," Mi.
Kapooi ienaiked on lhis issue. The conpany vas aIso pIanning lo design a nev, lop-end
pioducl Iine of evening lags foi Iadies, inspiied ly Indian jeveIIeiy.

Duiing lhe iniliaI days, lhe liand vas a nascuIine liand -- noie 'ialionaI', iugged and
pioducl fealuie oiienled. Hovevei, ovei lhe yeais, il had acquiied a louch of "fenininily" --
a quaIily of louch and feeI vilh sliong aeslhelic appeaI lhal evoked a sense of leauly vilhin
lhe individuaI. This vas aIso a iesuIl of sullIe changes in lhe pioducl poilfoIio -- of Iale, lhe
piopoilion of Iadies handlags and siniIai accessoiies in lhe pioducl iange had incieased as
lhe naikel denand liends vaiianled lhese changes.

AdvcrtIsIng and Brand CnmmunIcatInn

Adveilisenenl slialegy foi lhe liand iefIecled ils inleinalionaI oiienlalion. The lolaI
ludgel, given ils avaieness, vas ieIaliveIy Iovei. Tvo agencies, one foi adveilising, lhe
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1O
olhei foi pulIic ieIalions, seiviced lhe conpany. olh veie Iocaled in India. The pulIic
ieIalions agency piovided lhe conpany nedia coveiage of evenls and olhei nevsvoilhy
aclivilies. One such evenl vas lhe conpany's allenpl lo gel a nenlion in lhe Cuinness ook
of WoiId Recoids foi lhe voiId's Iaigesl lag. The conpany nade a "gianl lag" -- 2.77
neleis in heighl, 3.4 neleis in Ienglh and lolaI aiea of 1O,96,2OO squaie cenlinelies using
4.96 kiIonelies of lhiead and 6.1 nelei Iong zippei piiced al Indian Rupees 2,45,96O. In
addilion lo such speciaI evenls, piess confeiences ly lhe Iiesidenl of lhe conpany and
olhei conpany achievenenls ieceived coveiage in lhe piess.

Adveilising pIanning vas done joinlIy ly lhe conpany and lhe adveilising agency. Due lo
lhe naluie of lhe laigel naikel and ielaiI coveiage, onIy piinl nedia vas used foi
adveilisenenls. The lhene and ciealive appioach vas pioposed ly lhe adveilising agency
and finaI decisions veie laken aflei due deIileialions vilh lhe conpany. Once lhe lhene
foi lhe adveilisenenls and lhe copy slialegy veie finaIised, lhe 'shooling' vas done alioad.
As a poIicy, onIy foieign nodeIs (lhose vilh "inleinalionaI appeaI") veie chosen. "Indian
nodeIs aie veiy good, lul lhey lend lo le loo elhnic vilh Iess inleinalionaI fIavoui. This
couId nake lhe liand loo niche focussed" olseived Mi. Kapooi. The elhnic niche naikel
vas veiy snaII vilh Iiniled scope foi giovlh. Duiing lhe yeai 2OO1-O2, adveilisenenls
focussed noie on lhe pioducl and ils fealuies. Duiing lhe nexl yeai, lheie vas a change in
lhe focus. |xnioi| 4 gives a sanpIe of lhe adveilisenenls foi lhe yeais 2OO1-O2 and 2OO2-O3.
Media choice vas decided lased on diffeienl paianeleis incIuding lhe nalch lelveen lhe
laigel audience and lhe piofiIe of ieadeiship of lhe piinl nedia.

In addilion lo nass nedia adveilisenenls, neichandising and dispIay in lhe ielaiI
enviionnenl vas anolhei inpoilanl neans lo connunicale lhe liand vaIue. Caie vas
laken lo ensuie lhal lhe pioducls dispIayed in lhe ielaiI shops iefIecled lhe pieniun inage
of lhe liand. SpeciaIIy designed dispIay iacks veie nade avaiIalIe in nuIli-liand oulIels.
In 2OO1, seivices of a iepuled inleiioi designei fion IieIand veie soughl lo change lhe
appeaiance of lhe Hidcsign louliques in keeping vilh lhe Ialesl liends. The 'nev Iook'
louliques veie a conlinalion of slone, gIass, vood and liass. Il vas decided lo slandaidise
lhe shovioons in a siniIai pallein. The exisling ones veie leing iefuilished so as lo
nainlain a siniIai appeaiance and lhis poIicy vas leing foIIoved foi ielaiI poinls acioss
diffeienl counliies.

DIstrIbutInn and RctaI!Ing

NeaiIy 8O pei cenl of conpanys saIes cane fion inleinalionaI naikels. The Uniled
Kingdon accounled foi neaiIy 34 pei cenl of lhe expoil saIes of lhe conpany. Ceinany and
USA accounled foi aloul 42 pei cenl, aInosl in equaI piopoilion. Ioi naikeling lhe
pioducl in Soulh Afiica, lhe conpany eslalIished Hidcsign Scu|n Africa vilh a 4O pei cenl
equily slake. Lxpoils lo Soulh Afiica accounled foi aloul 1O pei cenl of lhe expoil saIes
duiing lhe yeai 2OO2. In addilion, pioducls veie avaiIalIe in counliies such as Canada,
Ausliia, ChiIe, Dennaik, Iiance, Cieece, HoIIand, Hong Kong, MaIaysia, Noivay, Ieiu,
Russia, Singapoie, Sii Lanka, Sveden, UAL and sone olhei deslinalions. Lven lhough lhe
piopoilion of saIes in lhese counliies vas snaIIei in conpaiison vilh lhe najoi expoil
deslinalions, lhe liand vas soId lhiough upnaikel ielaiI oulIels lhal offeied slialegic
visiliIily.

In India, lhe liand vas soId in nine cilies lhiough 19 ielaiI oulIels, of vhich five veie
Hidcsign louliques. These cilies veie DeIhi, Chennai, angaIoie, Iondicheiiy (lhiee oulIels
each), Munlai, MahaleIesvai (lvo oulIels each), Coa, Iune and Hydeialad (one oulIel
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11
each). In addilion, lhiee louliques veie leing eslalIished in DeIhi (Cuigaon), Munlai and
KoIkolla. Aloul one lhiid of lhe doneslic saIes cane fion lhe five louliques ovned ly lhe
conpany and aloul 57 pei cenl fion olhei nuIli-liand oulIels. In sone of lhese oulIels, lhe
conpany had sone equily slake. The ienaining saIes veie accounled ly saIes lo coipoiale
cIienls. SaIes lo independenl ielaiIeis veie effecled lhiough disliilulois and consignnenl
syslen.

OrganIzatInna! 5ct-Up

The nain facloiy vas silualed in a Iaige open aiea coveied vilh a naluiaI giovlh of liees
and viId giass. Iion a dislance, lhe facloiy pienises did nol piovide a nanicuied Iook and
lhe suiioundings gave lhe Iook of an unfiequenled pIace. (The Iocalion acconnodaled
neaiIy one lhousand enpIoyees). The luiIdings veie an open sliucluie vilh exposed liick
consliuclion lhal gave lhe appeaiance of an unpIanned sliucluie. Mi. Kapooi said lhal a
fiiend, laking inlo accounl lhe phiIosophy of lhe liand and lhe pionolei, designed lhe
luiIding. The canleen foi lhe enpIoyees vas a snaII independenl luiIding vilh faciIilies foi
pailaking lhe food piovided in lhe open space dolled vilh gianile lIocks foi sealing.

The conpany vas oiganised inlo diffeienl depailnenls. Mi. Kapooi Iooked aflei lhe expoil
opeialions diieclIy. He inleiacled vilh inleinalionaI cusloneis foi ollaining feedlack,
foIIoved up on oideis, and nainlained a cIose ieIalionship vilh inpoilanl cusloneis. In
addilion, he vas invoIved in lhe designing piocess and lhe design depailnenl iepoiled lo
hin diieclIy. The Vice Iiesidenl (Maikeling) vas iesponsilIe foi doneslic saIes and vas in
chaige of ielaiI opeialions foi lhe counliy. The Vice Iiesidenl (SuppIy Chain and HR
funclion) vas iesponsilIe foi naleiiaIs nanagenenl, puichase and sloies, LDI and
peisonneI ieIaled aclivilies. Iunclionaiies in lhese specific depailnenls iepoiled lo lhis
execulive. The Vice Iiesidenl (ConneiciaI) Iooked aflei lhe accounling funclion,
conneiciaI and Iiaison aclivilies. The Vice Iiesidenl (Meichandising) vas iesponsilIe foi
ielaiI design and olhei neichandising funclion. In addilion, he vas aIso iesponsilIe foi
inleiacling vilh cusloneis specific lo gainenls. The pioduclion funclion vas oiganised in
leans foi diffeienl pioducl Iines. Supeivisois and lean Ieadeis of diffeienl pioduclion
leans iepoiled lo Managei (Cuslonei ReIalions).

AIlhough lhe conpany foIIoved a hieiaichicaI nodeI, lhe cuIluie of lhe oiganisalion,
accoiding lo a senioi execulive, vas "pielly infoinaI as a fIal oiganisalion". Iiiespeclive of
posilion, aII peopIe had equaI access lo lhe Iiesidenl of lhe conpany. Ideas fion any
enpIoyee veie Iislened lo. ReIalionships did nol cone in lhe vay of officiaI inleiaclions.
Many execulives caIIed lhe Iiesidenl on a fiisl-nane lasis. Mi. Kapooi aIso peisonaIIy
knev a Iaige nunlei of enpIoyees. Hovevei, lheie vas aIso a sense of inadequale ioIe
cIaiily due lo lhe infoinaIily of lhe oiganisalion. Syslens foi peifoinance appiaisaI and
ievaid poIicies veie noie infoinaI lhan diiven ly foinaIised neasuienenl syslens.

Issucs nf ManagIng Futurc

SeveiaI issues iegaiding fuluie giovlh pIans confionled Mi. Kapooi. In oidei lo inciease
inleinalionaI piesence, a nev conpany caIIed Hidcsign G|coa| vilh headquaileis iegisleied
in HoIIand had leen eslalIished iecenlIy. Mi. Kapooi invesled aloul US $ 2OO,OOO in lhis
venluie vilh an equaI conliilulion fion a fiiend. The puipose of lhe venluie vas lo
eslalIish ielaiI piesence in najoi cilies lhiough lhe fianchising ioule. This vouId piovide
pieniun inage and adequale visiliIily necessaiy lo seII lhe liand lhiough independenl
ielaiI oulIels. The pIan vas lo eslalIish neaiIy 3O such fianchise shops in sone of lhe najoi
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cilies of lhe voiId. Mi. Kapooi had seveiaI issues in his nind in lhis iegaid. Was lhis a
good slialegic inilialive` Whal veie lhe enalIing condilions needed lo nake lhis venluie a
success` Was lhe pioducl poilfoIio adequale` Weie lhe syslens suppoilive lo such a najoi
expansion`

In addilion lo lhe ielaiI expansion in lhe inleinalionaI aiena, anolhei issue lhal occupied
Mi. Kapooi vas lhe pioducl poilfoIio decisions and lhe liand slialegy lo suppoil poilfoIio
changes, if any. CuiienlIy, lhe liand phiIosophy did nol peinil lhe conpany lo liansgiess
olhei naleiiaIs foi lhe pioducls. Hovevei, lheie vas a huge naikel exisling oulside lhe
liand aiena of Hidcsign. This consisled of Iovei piiced, yel cIassy and appeaIing pioducls.
If lhe conpany veie lo nake a foiay inlo lhis naikel, lhen ceilain conpionises needed lo
le nade in leins of lhe lase naleiiaI (aIleinalive lo Iealhei, Iess naluiaI piocessing of
Iealhei), and aIleinalive naleiiaIs foi fillings (aIleinalives lo liass). The Iogic of lhis
lhinking vas lhal lhe nosl inpoilanl advanlage of lhe conpany vas lhe cuslonei insighl
and a fiin giip on lhe fashion liends. In addilion, lhe conpany aIso had an exceIIenl
ieIalionship vilh najoi luyeis. The liand iecaII and iepulalion veie aIso high. Theiefoie
lhese 'piopeilies couId le Ieveiaged lo enlei lhe voiId of fashion. This couId enlaiI a
diveisificalion fion lhe coie lusiness -- lhal of designing and nanufacluiing naluiaIIy
piocessed handciafled Iealhei pioducls. Was lhis a good slialegy` Whal veie lhe
advanlages and lhe dangeis in lhis aIleinalive`

If lhe conpany decided lo inlioduce a second Iine of Iovei piiced pioducls, lhen vhal
shouId le lhe liand slialegy` Hov shouId lhe equily of lhe liand Hidcsign le Ieveiaged lo
inlioduce lhe nev iange` ShouId il le a conpIeleIy diffeienl liand lhal connunicales no
ieIalion vilh Hidcsign` AIleinaliveIy, shouId Hidcsign le used as an endoisei` WouId such
an appioach diIule lhe equily of lhe paienl liand`

Lxpansion of lhe conpanys piesence in lhe doneslic naikel in India aIso posed a piolIen.
Whal shouId le lhe slialegy foi expansion` One of lhe piolIens of ielaiIing lhe pioducl
lhiough nuIli-liand oulIels vas lhe appeaI of lhe neichandising piaclices of lhe ielaiI
oulIels. If lhe pioducls veie dispIayed in a Iess lhan alliaclive nannei, lhis vouId inpIy
Iess pieniun appeaI foi lhe liand. TheoielicaIIy, one couId aigue lhal lhe neichandising
poIicy couId le enfoiced lhiough piopei saIes nanagenenl syslens. Hovevei, piaclicaIIy il
vouId le difficuIl lo poIice diffeienl ielaiI oulIels. In addilion, lhe 'heaIlh of lhe ielaiI
oulIel aIso couId affecl lhe liand and ils equily in sone vays. Lven aflei checking lhe
ciedenliaIs of a piospeclive ielaiIei inleiesled in caiiying lhe pioducls, lhe phiIosophy of
lhe ielaiIei couId change fion pioviding cuslonei expeiience lo sinpIe conneiciaI Iogic
of naking naxinun noney aflei lhe iniliaI phase. If lhis change occuiied, lhen lhe liand
couId le lhiealened. Hov couId one oveicone such piolIens` Doneslic expansion
lhiough lhe ioule of conpany--ovned louliques vas an aIleinalive. Hovevei, lhis posed
ils ovn piolIens. In sone vays, any najoi expansion lhiough lhis ioule vouId defIecl lhe
conpanys focus fion designing and ciafling lhe pioducls lo leconing a ielaiIei. The iuIes
of success foi eilhei of lhese oplions veie diffeienl. Issues of gelling liained peopIe lo voik
in ielaiI oulIels veie anolhei najoi concein. SeIIing a fashion pioducl had ils ovn nuances
and lhe quaIilies of individuaIs in lhis Iine of lusiness veie diffeienl fion an oidinaiy ielaiI
saIes peison. Mi. Kapooi vondeied vhelhei lheie veie cIean soIulions foi aII lhese
issues.
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Exhibit 1
Brand Logo/ SymboIs of some Major Leather Brands





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Exhibit 2
Sample of Products





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Exhibit 2 (contd.)
SampIe of Products

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ExhIbIt 2 (cnntd.)
5amp!c nf Prnducts




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Exhibit 3
A BRIEF DE5CRIPTION OF DIFFERENT VARIETIE5 OF LEATHER

1. Fu!! HIdc

This iefeis lo fuII naluiaI hide vilh no coiiecling of lhe giain lo conceaI lhe pooi quaIily of
lhe Iealhei. Such lype of Iealhei appeais naluiaI vilh lhe giains and palleins lhal occui
naluiaIIy in lhe Iealhei. Hidcsign uliIises lhe fuII hide lo nanufacluie lheii pioducls. IuII
hide is aIso sone lines knovn as IuII Ciain.

2. 5p!It

This is lhe fuII giain hide lhal has leen spIil inlo lvo Iayeis. The spIil is lhe lollon Iayei of
lhe hide lhal has no giain.

3. Tnp GraIn

This is lhe uppeinosl Iayei of lhe spIil lhal ielains aII lhe naluiaI naikings

4. Nubuck

The lop suiface of lhis Iealhei has suede-Iike appeaiance, as if il has leen iulled vilh fine
sandpapei.

5. 5ucdc

This is lhe lollon Iayei of lhe hide, usuaIIy sofl, poious and finished Iike veIvel, vhich
offeis a Iighlei consislency.

6. Cnrrcctcd GraIn

This is lhe infeiioi quaIily lop giain, vhich is usuaIIy enlossed vilh a faIse giain lo conceaI
lhe defecls of lhe hide.

7. Bnndcd Lcathcr

This is lhe Iealhei indusliy's equivaIenl of lhe chiploaid. Lealhei off-culs aie puIped and
ioIIed inlo sheels lo nake il a cheapei aIleinalive lo naluiaIIy occuiiing Iealhei.

Souice: Hidesign Welsile
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Exhibit 4
SampIe of Advertisements

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Exhibit 4 (contd.)
Sample of Advertisements

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Exhibit 4 (contd.)
SampIe of Advertisements

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Exhibit 4 (contd.)
SampIe of Advertisements







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Exhibit 4 (contd.)
SampIe of Advertisements







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Exhibit 4 (contd.)
SampIe of Advertisements (2003)







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Exhibit 4 (contd.)
SampIe of Advertisements (2003)

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Exhibit 4 (contd.)
SampIe of Advertisements (2003)

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Exhibit 4 (contd.)
SampIe of Advertisements (2003)

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Exhibit 4 (contd.)
SampIe of Advertisements (2003)

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Exhibit 4 (contd.)
SampIe of Advertisements (2003)

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Exhibit 4 (contd.)
SampIe of Advertisements (2003)


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Appendix I (A)
Pondicherry - A brief History

Iondicheiiy, a snaII slale Iocaled in lhe Soulhein iegion of India is aloul16O kiIoneleis
fion lhe cily of Chennai (eaiIiei Madias Cily). Iondicheiiy liaces ils oiigin lo Sainl
Agaslhya, lhe ieveied sage of lhe soulh. The excavalions neai Iondicheiiy ieveaI lhal a
Ronan sellIenenl exisled heie sone 2OOO yeais ago. Il vas aIso lhe sile of nany a lallIe
lelveen lhe iilish and lhe Iiench, and vas lhe capilaI of Iiench India, lefoie il allained ils
independence. The lovn lecane lhe piopeily of lhe Dulch in 1643, and Ialei lecane a
Iiench coIony in 1699. The Iiench iuIed lhis leiiiloiy foi 3OO yeais, and loday, il slands as a
Iiving nonunenl of lhe Iiench cuIluie in India.

In 1742 }oseph Iianois DupIeix, lecane Coveinoi of lhe Iiench India. Al lhe sane peiiod,
vai lioke oul lelveen Iiance and LngIand. The silualion in Luiope and lhe anlilions of
DupIeix sliiied up lhe Cainalic-Iiench confIicl in India. Duiing lhe nexl 7O yeais,
Iondicheiiy vilnessed conlinuous confIicls of povei lelveen lhe Iiench and lhe iilish.
Ieace vas iesloied in 1814 and fion lhen on Iondicheiiy vas iuIed ly Iiance liII il lecane
lhe Union Teiiiloiy of Independenl India on 1
sl
Novenlei 1954. The foinaI "liealy of
liansfei" vas signed in DeIhi, 8 yeais aflei lhe liansfei "de faclo". Al lhal line seveiaI peopIe
of Iondicheiiy opled foi Iiench nalionaIily.

Iondicheiiy synloIizes lhe Iiench infIuence in India. The oId Iiench coIony has ieliieved
ils Indian chaiaclei, lul lhe scenl of lhe Iiench infIuence in Iondicheiiy is sliII found in lhe
ied Kcpis of lhe poIice officeis, Iiench speIIing on signloaids, liaffic signs and sone
luiIdings and oId slones. The sound of TaniI and LngIish Ianguages linged vilh Iiench
accenl ieninds us of ils pasl cuIluie. This foinei Iiench coIony, exudes a Medileiianean
auia vilh ils chic slieels, eIeganl houses, oinanenlaI gaidens and lhe HoleI de ViIIe. AII lhis
nakes Iondicheiiy a unique Indian lovn. IeslivaIs of Iondicheiiy diffei fion lhe iesl of
India, foi lhe Iiench infIuence sliII peisisls pioninenlIy heie. Masqueiade, heId in Maich -
ApiiI, is a popuIai nask feslivaI, duiing vhich liiIIianlIy cosluned and nasked peopIe of
Iondicheiiy dance dovn lhe slieels lo lhe nusic of liunpels and accoidions. Duiing lhe
Lve of lhe asliIIe Day, ieliied soIdieis paiade lhe slieels in vai fineiy, singing lhe Iiench
and Indian NalionaI Anlhen. Iiench is sliII videIy spoken, and lhe seaside viIIas and lhe
collIed slieels aie noie ieniniscenl of lhe soulh of Iiance lhan lhe soulh of India!!

One of lhe nosl inpoilanl ieasons lhal alliacl nosl liaveIeis lo Iondicheiiy is lhe Sii
Auiolindo Asnran and ils offshool, AuioviIIe ViIIage, 1O kiIoneleis oulside lhe lovn. The
Asnran, founded ly Sii Auiolindo in lhe yeai 1926, has lioughl inleinalionaI iepulalion lo
lhis coaslaI lovn.

Scurcc. ased on desciiplions in hllp://vvv.pondicheiiy.con/










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Appendix I (B)
AuroviIIe - The City of Dawn

AuioviIIe, lhe "Cily of Davn" is silualed aloul 1O kiIoneleis fion lhe Iondicheiiy lovn.
Inspiied ly lhe vision of Sii Auiolindo, lhe ienovned Indian seei and spiiiluaI visionaiy,
lhis lovnship vas founded in 1968 ly "The Molhei", lhe spiiiluaI coIIaloialoi of Sii
Auiolindo. The Molhei gave lhe Chailei foi AuioviIIe and lhis coIIeclive expeiinenl is
dedicaled lo hunan unily and inleinalionaI undeislanding. The Chailei noled lhe
foIIoving:
AuioviIIe leIongs lo nolody in pailicuIai. AuioviIIe leIongs lo hunanily as a
vhoIe. ul lo Iive in AuioviIIe one nusl le lhe viIIing seiviloi of lhe Divine
consciousness. AuioviIIe viII le lhe pIace of an unending educalion, of conslanl
piogiess, and a youlh lhal nevei ages. AuioviIIe vanls lo le lhe liidge lelveen
lhe pasl and lhe fuluie. Taking advanlage of aII discoveiies fion vilhoul and
fion vilhin, AuioviIIe viII loIdIy spiing lovaids fuluie ieaIizalions..

The idea of an inleinalionaI connunily foi unily and inleinalionaI undeislanding vas
iecognised and laken up ly lhe Coveinnenl of India. A Iocalion neai lo Iondicheiiy vas
found. The AuioviIIe sile vas onIy a fIal pIaleau 15O feel alove sea IeveI, uncuIlivaled,
eioded and laiien. Young nen and vonen fion 124 counliies and vaiious Indian slales
pIaced handfuIs of eailh fion lheii honeIands in an uin, synloIizing lhe ciealion of a cily
dedicaled lo peace and inleinalionaI undeislanding, "a sile of naleiiaI and spiiiluaI ieseaich
foi a Iiving enlodinenl of an acluaI hunan unily". The fiisl occupanls pIanled 2 niIIion
liees of vaiious lypes and oiigin lhal liansfoined lhese 8OOO heclaies of Iand inlo a pIace of
expeiience foi sociaI inlegialion, foieslalion, pieseivalion of valei, soIai eneigy, and
nainlenance of soiI and olhei naluiaI iesouices.
AuioviIIe has leen endoised ly lhiee iesoIulions of lhe UNLSCO geneiaI assenlIy and
iecognized as an inleinalionaI liusl ly lhe Indian Coveinnenl. Il veIcones peopIe fion aII
pails of lhe voiId lo Iive logelhei and expIoie cuIluiaI, educalionaI, scienlific, spiiiluaI, and
olhei puisuils in accoidance vilh lhe AuioviIIe Chailei. Theie aie aloul 8O diffeienl
sellIenenls spiead oul ovei 2,6OO acies vilhin a 2O squaie-niIe ciicIe. AuioviIIe's popuIalion
cuiienlIy nunleis noie lhan 2OOO peopIe fion 3O diffeienl counliies.
Scurcc. Diffeienl Welsiles


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Appendix II
Indian Leather Industry - A Brief Overview

The Indian Iealhei indusliy is one of lhe nosl vilianl seclois of lhe counliy's econony and
spans vaiious segnenls, such as lanning and finishing, foolveai and foolveai conponenls,
Iealhei gainenls, Iealhei goods, incIuding saddIes and hainesses. The luinovei of lhe
Iealhei indusliy in India is aloul $ 2.5 liIIion annuaIIy, incIuding expoil saIes of $ 1.7 liIIion.
India's naikel shaie in lhe $ 65-liIIion voiId liade in Iealhei is aloul 2.5 pei cenl. Ovei
line, lhe Indian Iealhei indusliy has evoIved lo lecone an acknovIedged piovidei of high
quaIily Iealhei foolveai, appaieI, pioducls and finished Iealhei, lo lhe voiId naikel.
Reasons foi lhe giovlh of lhe indusliy incIude a sliong iav-naleiiaI lase and a Iaige
ieseivoii of liadilionaIIy skiIIed and conpelilive Ialoui foice.

The Indian Iealhei indusliy and lhe expoil of Iealhei and Iealhei pioducls, has giovn
dianalicaIIy ovei lhe Iasl 15 yeai fion US$55O niIIion in 1985 lo US$ 1932 niIIion in 2OO1-
O2. s. Lealhei expoils conslilule aloul 7 pei cenl of India's expoil eainings and lhis secloi is
anong lhe lop 8 expoil eaineis foi India. Lealhei indusliy has leen idenlified as one of lhe
lhiusl aieas foi fuluie giovlh of expoils. Lxpoil peifoinance of lhe Iealhei secloi venl up
fion Rs.3,O36 cioie duiing 1991-92 lo Rs.9,OO4 cioie in 2OOO-O1. Majoi luyeis of Iealhei
goods fion India incIude Ceinany, IlaIy, UK, USA, Spain and Iiance. 68 of Iealhei
expoils in 2OO1-O2 veie lo Ceinany, USA, UK, IlaIy, Iiance and NelheiIands. Lealhei goods
and accessoiies nanufacluied in India veai liand nanes lhal incIude Coach, Iieiie Caidin,
Yves Sl. Lauienl, LlienneAignei, Ceoffiey eene, Haiiods, Maiks & Spencei, Liz CIailoine,
Cuess, Nexl, Tonny HiIfigei, Veisace, DKNY, Hugo oss, Accenls, Ciossioads, XhiIeialion,
Ann TayIoi, Kennelh CoIe and Cheiokee anong olheis. The goveinnenl, in a lid lo inciease
foieign exchange eainings, had encouiaged expoil-oiienled unils ly giving lhen lax
lenefils a decade ago. Tao|c A-1 (given leIov) gives lhe najoi pioduclion cenleis in India

Appendix A-1
Major Production Centres Of Leather And Leather Products in India

States Major Production Centers
Southern Region
Tamil Nadu Chennai, Ambur, Ranipet, Vaniyambadi, Trichy, Dindigul
Pondicherry Pondicherry
Andhra Pradesh Hyderabad
Karnataka Bangalore
Northern Region
Punjab Jallandhar
Delhi Delhi
Eastern Region
West Bengal Calcutta
CentraI Region
Uttar Pradesh Kanpur, Agra
Western Region
Maharashtra Mumbai (Bombay)

esides leing a significanl eainei of foieign exchange, lhe Iealhei indusliy geneiales
enpIoynenl, ensuiing jols foi ovei 1.5 niIIion peopIe, vilh 75 pei cenl of lhe pioduclion
fion snaII and collage seclois. The Lealhei Indusliy in India occupies a pIace of
pioninence in lhe Indian econony, in viev of ils nassive polenliaI foi enpIoynenl, giovlh
and expoils. Tao|c A-2 (given leIov) gives lhe voiId inpoil of Iealhei and Iealhei pioducls
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and India's shaie in voiId Iealhei liade. In |ao|c A-3, lhe shaie of najoi Iealhei pioducing
counliies and lheii ieIalive shaie is given.
TabIe A-2
WorId Import of Leather and Leather Products and India's Share 1995-1999
(Value in million US$)
DETAILS 1995 1996 1997 1998 1999 2000
Leather
World import 14086.68 14335.59 14368.86 13283.84 12154.62 NA
ndia's Export 371.33 301.06 295.83 264.67 239.82 381.86
% Share of ndia 2.64% 2.10% 2.06% 1.99% 1.97% -
Leather Footwear
World import 25288.75 27554.52 28527.30 26852.96 26379.17 NA
ndia's Export 340.44 337.45 281.90 320.25 377.39 384.47
% Share of ndia 1.35% 1.22% 0.91% 1.19% 1.43%
Footwear Components
World import 4511.67 4964.70 5033.02 4716.27 4333.49 NA
ndia's Export 242.99 222.74 240.48 237.72 215.09 238.06
% Share of ndia 5.39% 4.49% 4.78% 5.04% 4.96%
Leather Garments
World import 3942.49 3670.40 3606.98 3277.22 3109.83 NA
ndia's Export 413.62 424.37 425.12 376.66 347.28 460.55
% Share of ndia 10.49% 11.56% 11.79% 11.49% 11.17%
Leather Goods
World mport 4949.27 5476.52 4774.13 4154.60 3939.09 NA
ndia's Export 283.82 225.41 301.71 311.15 278.72 443.83
% Share of ndia 5.73% 4.12% 6.32% 7.49% 7.08%
SaddIery & Harness
World mport 327.13 347.42 360.20 379.53 412.53 NA
ndia's Export 21.35 25.96 25.96 32.69 34.11 42.72
% Share of ndia 6.53% 7.47% 7.21% 8.61% 8.27%
Leather Gloves
World mport 1250.90 1264.01 1257.82 1165.04 1016.42 NA
ndia's Export 78.80 68.83 85.61 94.23 97.80 *
% Share of ndia 6.30% 5.45% 6.81% 8.09% 9.62%
TOTAL
World mport 54356.92 57613.17 57928.33 53829.48 51345.19
ndia's Export 1752.34 1605.82 1656.69 1637.37 1590.23
% Share of ndia 3.22% 2.79% 2.86% 3.04% 3.10%
Non-Leather Footwear
World mport 15810.21 17130.40 17999.34 16545.00 16898.69 NA
ndia's Export 10.63 12.45 15.21 17.52 14.12 19.50
% Share of ndia 10.63 12.45 15.21 17.52 14.12 19.50
GRAND TOTAL
World mport 70167.13 74743.57 75927.67 70374.48 68243.88 70223
ndia's Export 70167.13 74743.57 75927.67 70374.48 68243.88 70223
% Share of ndia 2.51% 2.17% 2.20% 2.35% 2.35% 2.81%

Scurcc . WoiId Slalislics - ITC, Ceneva - lased on CaIendai yeai India 's Lxpoil - DCCIS,
CaIculla - lased on IinanciaI yeai. WoiId Inpoil foi 2OOO- Lslinaled.

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TabIe A-3
Trend in WorId Trade in Leather and Leather Products and share of Major Producing Countries
(Value in million US$)
1995 1996 1997 1998 1999
World mport 70167.12 74743.56 75927.67 70374.47 68243.88
Export from ndia 1762.97 1618.27 1671.90 1654.89 1604.35
ndia's share in world import % 2.51% 2.17% 2.20% 2.35% 2.35%
Export from China 9704.34 9993.42 11741.75 11246.65 11321.84
China's share in the world import % 13.83% 13.37% 15.46% 15.98% 16.59%
Export from taly 12690.81 14163.31 12770.07 12100.31 10870.63
taly's share in the world import % 18.09% 18.95% 16.82% 17.19% 15.93%
Export from Korea 3495.54 3152.18 2823.01 2188.39 2210.00
Korea's share in the world import % 4.98% 4.22% 3.72% 3.11% 3.24%
Export from Brazil 2089.75 2345.70 2361.17 2088.66 1984.37
Brazil's share in the world import % 2.98% 3.14% 3.11% 2.97% 2.91%
Export from Thailand 2656.62 1844.28 1645.60 1312.32 1226.15
Thailand's share in the world import % 3.79% 2.47% 2.17% 1.86% 1.80%
Export from ndonesia 2191.18 2319.33 1624.27 1310.22 1702.10
ndonesia's share in the world import % 3.12% 3.10% 2.14% 1.86% 2.49%
Export from Argentina 1130.92 1041.88 1152.28 927.18 832.48
Argentina's share in the world import % 1.61% 1.39% 1.52% 1.32% 1.22%
Export from Turkey 629.54 547.59 680.35 606.65 476.29
Turkey's share in the world import % 0.90% 0.73% 0.90% 0.86% 0.70%
Export from Mexico 470.32 582.21 705.38 697.79 719.89
Mexico's share in the world import % 0.67% 0.78% 0.93% 0.99% 1.05%
Export from Bangladesh 214.97 179.11 152.87 145.07 NA
Bangladesh's share in the world import % 0.31% 0.24% 0.20% 0.21% NA

Scurcc . ConpiIed fion ITC, Ceneva and CLL Slalislics

Impnrtant 5Itcs

vvv.Iealheinel.con
vvv.Iealheinel.con/iIid/iIid.hlnI
vvv.Iealheidiiecloiy.con/
vvv.Iealheiliz.con
vvv.indianIealheipoilaI.con/Iealhei-evenls/ evenls-naichO2.hlnI
vvv.india-expoils.con/Iealhei.hlnI