Business Policies &

Strategic Analysis
Group VI
Debarghya Mukherjee (Roll-26)
Debjit Sengupta (Roll-27)
Dibyajyoti Bhattacharji (Roll-28)
Harpreet Kaur (Roll-29)
Dipro Sengupta (Roll-30)
The Fabric Of India
 Philosophy
“FabIndia was founded
with the strong belief
that there was a need
for a vehicle to market
the vast and diverse
craft traditions of India
and thereby help fulfil
the need to provide and
sustain rural
employment.”
“Our endeavour is to
provide customers with
hand crafted products
which help support and
encourage good
craftsmanship.” John
Bissell, Founder of
FabIndia
 Vision & Mission
 Background
Ø John Bissell established FabIndia in 1960.
Ø Primary aim was to fuse the best aspects of East &
West collaboration.
Ø Initially, FabIndia started as a wholesale export
company, concentrating on the export of upholstery
fabrics, durries and rugs.
ØFirst retail store opened at
Greater Kailash in New Delhi in
1976
ØIn 1999, on John Bissell’s death,
his son William aged 32,formally
took over as the Managing Director
of FabIndia
ØPresently, FabIndia has 128 retail
stores across India.
Ø
 Businesses
 Retail
The retail channel is already developed within India with
almost 128 stores in Tier 1 and Tier II cities.
Fabindia also owns retail stores in Rome (Italy),
Guangzhou (China), Dubai (UAE), Kathmandu (Nepal)
Manama (Bahrain) and Doha (Qatar).
The product range consists of:
 Garments for men, women, children and infants;
garment, accessories;
 Home furnishings – bed, bath, table and kitchen linen,
upholstery fabric, curtains, floor coverings
 Non textile products like furniture, lights, lamps and
stationery.
 Fabindia’s product line also includes organic foods and
body care products.
 Fabindia Organics carries several types of cereals,
grains, pulses, spices, sugar, tea, coffee, honey, fruit
preserves and herbs.
 Wholesale exports
As of today, Fabindia exports to more than 34 countries.
The clients are wholesalers as well as secondary
retailers.
Products exported include home linens as well as
garments.
Fabindia develops a special collection for exports
markets twice every year.
Institutional Sales
Fa b in d ia e n visa g e s to se rvice h ig h b u sin e ss in stitu tio n a l
se g m e n t e sp e cia lly th e h e rita g e h o te ls a n d m u ltin a tio n a l
co rp o ra te h o u se s.
It p ro vid e s cu sto m iza tio n a n d in te rio r d e sig n in g
co n su ltin g fo r clie n ts like h e rita g e h o te ls, re so rts a n d
co rp o ra te h o u se s.
Internal Environmental
Analysis
STRENGT 
HS Differentiable products No specific promotions WEAKN
ESSES
Brand recognition and loyalty strategy

Diverse product mix Limited channels of business

Partnering with suppliers Sourcing strategy skewed

In-house manufacturing towards suppliers

Price Trends Setter Inconsistent quality of

Different categories of stores products

Customer Loyalty Inconsistent service in stores

OPPORTU 
NITIES In store merchandising & Substitute producing THREA
TS
navigation competitors
Promoting e-business channel Not in touch with Fashion

Organic foods market Trends

Customer acquisition

Strategies
Resource Audit
 Owned
Number of employees: 850 on the rolls, 1,000
consultants and on contract
Number of craftspeople supplying products:
40,000
Heavy Machinery owned: Hydro Extractors &
Dry Cleaning Machines
Trademarks owned: Fabindia® is a registered
trademark used for Decorative Pillows Natural
Fiber Fabrics and Soft Furnishings In Cotton,
Silk, Linen and Wool, Namely, Upholstery
Fabric, Cotton Fabric, Spun Silk Fabric, Linen
Fabric and Wool Spun Yarn Fabric and owned
by Fabindia Overseas Pvt. Ltd., Fabindia,
Incorporated.
 Joint Ventures
Fabindia has around 35 joint venture
companies in different states, with weavers
and craftsmen holding 51% stake in each of
these companies. These joint ventures ensure
investment back into the supply base, making
it easier for weavers to access funds and
design inputs.
In 2009, Fabindia has picked up a 25% stake in
the UK-based womenswear retailer EAST for
an undisclosed amount with an option to
acquire the rest by 2012
 Supplier Arrangement
 Fabindia links over 40,000 craft based rural producers to modern
urban markets, thereby creating a base for skilled, sustainable
rural employment, and preserving India's traditional
handicrafts in the process.
 Fabindia promotes inclusive capitalism, through its unique COC
(community owned companies) model. The COC model
consists of companies, which act as value adding
intermediaries, between rural producers and Fabindia.
 Predominantly rural based suppliers
 Designers work with weavers. The artisans sometime suggest
designs.
 No written contracts for suppliers behavior
 New suppliers usually come with referrals of existing suppliers
 New suppliers are first given trial orders
 Bank loans are provided to weavers
 No goods are returned back to suppliers, even if they are
defective or late
Core Competency
 Definition

e capabilities that are critical to a business achie

Fabindia ’ s Core Competencies

To provide its customers with
quality products which reflect the
unique Indian culture and
tradition
To deliver hand crafted products
which help in the empowerment of
rural craftsmen through the
Community Owned Companies (COC)
Model
Competitor Analysis
  Organized Retail:
q Retail Stores (Shopper’s Stop, Pantaloons, Globus,
etc.)


hs :-
Pan-India presence and awareness
ses :-
er expertise
t diversity lacking
tive Pricing
as per running trends and serve to fads-inconsistency towards churning out quality offering
supply chains and short product development life cycles
ticity of handcrafts-No craftsmark present to validate the crafts as against the Fabindia o
rketing communications spend
consciousness and adherence to standards
 q Government Initiatives ( Cottage Industries
Emporium, Khadi Gram Udyog, State Government
Department)

Weaknesses : -
1.Ambience-non-attractive to modern day shoppers are fed on the excellent ambi
fixed and subsidies boost these initiatives over time
2.Standardization defeats customization hands-down.
governments facilitating permanent trade of national handicrafts.
 q Designer Boutiques: (Ritu Kumar’s, Ritu Beri’s,
Rohit Bal, Manish Malhotra, Sabyasachi Mukherjee,
etc.)


ths :- Weaknesses :-
t customization facilities
1.Exorbitant
-extremelyprices
high -not meant for masses
t level of customer intimacy
2.Not -aRelationship
robust supplymarketing
chain-not meant to be a pan-India ope
  Unorganized Sector:-
q Single location stores and local tailoring
units:-


ngths :- Weaknesses :-
1.Source of
ctive in addressing finance
high -not secure
geographical dispersion
2.Next-toavailable
omization facility -nil brand equity
3.Customer loyalty-low
4.Scarcity of skilled manpower-lack of ability to employ the same-criti
 q Non Government Organizations & Self Help
Groups


Weaknesses :
1.Lack of expertise on part of the manpower
local communities
s self-reliant 2.Lack of ambition to spread out on a pan-India or even a regi
eurs and hence a women can scales
3.Lack supplement the male’s income towards a family
of economy
 Financial Comparisons
Financial aspects of Fabindia have been
compared with Pantaloons

Though not a direct competitor, it represents
the Indian Retail Industry very well

Financials for its direct competitors such as
Anokhi, Co-optex etc. were not available,
restricting comparison

This assessment contrasts the performance of
Fabindia with respect to the biggest retailer of
India

The interest coverage ratio of Fabindia is far higher
than that of Pantaloons. Hence, raising funds through
debt is not a big challenge.
T h e in te re st co st a s a p e rce n ta g e o f sa le s fo r
Fa b in d ia is fa r le sse r th a n th a t o f Pa n ta lo o n s. H e n ce ,
ra isin g fu n d s th ro u g h d e b t is a g a in n o t a b ig
ch a lle n g e .
T h e PA T a s a p e rce n ta g e o f sa le s o f Fa b in d ia is h ig h e r
th a n th a t o f Pa n ta lo o n s. T h o u g h re ta ilin d u stry w o rks a t
lo w m a rg in s, Fa b in d ia ’ sm a rg in s a re q u ite h ig h . H e n ce ,
ra isin g fu n d s th ro u g h d e b t is n o t a b ig ch a lle n g e .
 Recommendations
Heavy investments in back-end of value chain
 Supply chain development for efficiency and
quality management
Expansion aiding strong regional presence
 Outlets to counter regional competition
 Sourcing from local suppliers for outlet and other
regions will be easier
Growth through harnessing new customers
 Cannot depend on existing customers to counter
competition
 Must create new customers in all segments
Tie up with different types of graduate schools for
talent
 Rural management graduates for managing supply
chain and rural initiatives
 Management graduates for helping growth in
front-end and retail arms

 References
Competitive Strategy by Michael E. Porter
Principles of Marketing by Philip Kotler
Consumer Behavior & Marketing Strategy by
J.P Peter & J.C Olson
www.fabindia.com
en.wikipedia.org

 Thank You