PROJECT REPORT
ON
KNITWEAR INDUSTRY:
TOMMY HILFIGER
SUBMITTED BY
TANISHA PURI
ANUSHKA AGARWAL
NITYA KHANNa
AVANTIKA SINGH
RISHIKA KHERA
TABLE OF CONTENTS
TOMMY HILFIGER: overview
Hilfiger in India
Profile of competitors
Indian textile industry
Knitwear industry: India
GROWTH of industry
Export import overview
Factors affecting cost
Recent trends in the industry
Opportunities and threats
PEST
SWOT
References
INTRODUCTION
The Tommy Hilfiger brand was launched in 1985. Tommy is a range of
clothing designed to bring 'American classics with a twist' to consumers.
Today, those consumers represent people from all races and backgrounds
and can be found in practically every country around the world. As a truly
global brand, Tommy's preferred suppliers are those who can fully
appreciate each individual marketplace. Tommy is a range of clothing
designed to bring 'American classics with a twist' to consumers. The
company’s apparel products are recognised throughout the world for their
classic and timeless designs.
OVERVIEW OF the Company
• Tommy Hilfiger Group is a multi-billion dollar global apparel brand
• Since 1985, the Company’s strategy has been to develop and a highly
recognizable lifestyle brand.
• The Company seeks to deliver superior styling, quality and value to its
consumers worldwide.
•
Tommy Hilfiger Group has become a 3 billion EUR worldwide
apparel and retail company.
Tommy Hilfiger in India
• Tommy Hilfiger was bought to into India through a joint venture
between the Murjani group and the Lalbhai group, which owns the
Arvind brand.
• Called Arvind murjani brands private limited, the joint venture has
entered into a licensing agreement for marketing and distribution of
Tommy Hilfiger apparels in India.
•
ABM introduced Tommy Hilfiger in freestanding speciality stores
across the country in spring 2004.
• Tommy Hilfiger responded to the diversity of his customers by adding
more variety to his clothing line and has succeeded in making clothing
that many people enjoy wearing. His fragrances have been a huge
success as well. The clothing line has expanded by including home
products, eyewear, footwear, swimwear, jewelry, and divisions such as
Tommy Hilfiger Athletics. Tommy Hilfiger is a true American
Designer.
Profile of COMPETITORS
While older companies like Levi-Strauss, Timberland or even Ralph Lauren
have been slow in entering the mass designer fashion stakes--some being
particularly wary of attempting to enter ethnically or racially identified areas
of consumer culture—and while many other companies have been content
with their long established market niches and hierarchies of market
segmentation, the story of Hilfiger’s company are just the opposite.
Beginning with a line of preppy looking, clean-cut and conservative
sportswear--similar to that offered by The GAP, but somewhat more
expensive--Hilfiger set out in the early 1990s to compete against department
store staple lines like Ralph Lauren and Liz Claiborne with essentially Young
Republican clothing. In the course of only a few years this basically khaki,
crew and button-down WASP style, while remaining a constant theme in
Hilfiger collections, has been submitted to variations which were intended to
bring the product closer to Hip-Hop style—bolder colors, bigger and baggier
styles, more hoods and cords, and more prominence for logos and the
Hilfiger name. These variations on a house-in-the-Hamptons theme opened
up the doorway to African- American consumers, and Hilfiger's status is
often closely linked to his popularity among African-Americans.
But at the same time, that market has clearly been only one focus for
Hilfiger's ambitions, set on maintaining and expanding markets among nonblack consumers, and continually multiplying the range of products offered.
In addition to hip-hop styles Hilfiger now sells golf wear, casual sportswear,
jeans, sleepwear, underwear, spectacles, fragrances, and even telephone
beepers. Tommy has recently moved into women wear, and offers a
women's cologne to go with the popular men's line. Not content with
crossing all these areas of the mass market, Hilfiger seems currently to be
conducting a foray into more classic designer markets with high-fashion
shows marked by his appearance at the British fashion shows in 1996 and by
the introduction of a line of brightly colored menswear that was clearly his
attempt to become more of a haute-couture designer.
Hilfiger's success has been quite astounding since the initial public offering
of TOM in 1992. The company now has over 850 in store department store
sales points in the US.
In addition there are now almost 50 Hilfiger
speciality stores across the country--a figure that has almost doubled in the
course of two years. The company's annual report in early 1996 showed that
revenue in the last quarter of 1995 was over $130 million, a 47% increase
over the previous year. The company's cost for goods sold was less than $72
million, leaving more than $58 million in gross profits--a rate of gross profits
of more than 80%. The sound financial health of the company ensures its
regular appearance on stockbrokers' to-buy lists, even though share prices
keep rising. Early in 1995 the small consortium of TOM's original investors-which had bought the company from Mohan Murjani in the late 1980s--sold
their remaining TOM stock for over $50 million, after a year in which the
value of the stock had increased by 106%. Hilfiger himself was one of this
small group, of course, and after his profit- taking he remained as an
employee of the company drawing more than $6 million a year in salary.
The economic success of TOM is explicable largely because the company
has led the way in many of the aspects of mass customization. TOM's
corporate strategies have been ahead of those of many of its competitors,
and have always stressed the acceleration of product delivery, new forms of
retailing partnership, innovative EDI usage for inventories and customer
tracking--and of course, the speedy and timely introduction of new lines and
redesigned goods, assuring consumers a wide range of product choices
(something which Hilfiger himself sees as crucial in provoking and
expanding demand).
TOM has been especially willing--again, leading the field—to engage in what
is now a standard industry practice of licensing.
TOM has licensing agreements with some of the world's major clothing
companies. This network of links has been methodically and aggressively
built up in just the last few years: Pepe plc for jeans, Stride Rite for shoes,
Liberty Optical for eyewear, Estee Lauder for fragrance, Russell Newman for
shirts, Jockey for underwear, and so on. While licensing agreements
probably have little impact on consumer consciousness, one advantage they
have for a company like TOM is that they offer the borrowed cachet of
known and respected manufacturers. This is all important in negotiating
sales points with department stores and generally in testifying to the quality of
TOM products. Most of TOM's retailing partnerships are with department
stores, and in 1995 about 70% of Hilfiger's products were sold at those
venues.
Added to TOM's strategies for speeding up product design,
delivery, and turnover, licensing helps ensure access to what is still the
principal channel for clothing sales in the US where 65% of all clothing is
sold by only 35 companies, the majority of which are chain retailers with
department stores in malls and urban spaces all across the country
Profiles of some rivals...
Duke
Duke, reportedly rated by ORG-MARG as the top T-shirt maker in the
country. It also makes trousers, shirts, jackets, sweaters and thermal
underwear. T-shirts account for 60-65 per cent of the company's total
revenues. Domestic sales account for 80 per cent. Its overseas buyers include
Gap, Wal-Mart and Target.
Today, Duke embraces a complete vertically integrated garment
manufacturing plant, with knitting, dyeing, processing, finishing, mercerizing,
compacting, embroidery and printing under one roof.
Duke Fashion (India) Ltd pioneered the T-shirt culture, and gradually
established several new trends in knitted garments and fabric research.
BENETTON
When Benetton was started in 1989 in India, all they found themselves
selling were jeans and T-shirts. Benetton now sells 1,500 styles as
compared to the 400 they started with. The €1.7 billion Italian fashion
company had entered India through a joint venture with DCM but now
Benetton India is a wholly owned subsidiary after they broke up a few
years back.
LEVIS
Levi's has excellent brand architecture in place and it is performing well.
The market for denim, especially at the premium end, is growing between
15 and 20 %annually.
The four sub-brands are pretty well straddled. It has 30%of the premium
denim market in the country, and about 10 per cent of the overall market
across price segments.
REEBOK
Reebok is the brand for sportswear — shoes, T-shirts etc — while Rockport
is for a premium range of footwear and apparel marked by 3R’s — rugged,
refined and relaxed.
Entering India in 1995, Reebok has captured a market share of 50 per
cent followed by Nike.
Indian textile industry
The textile industry is one of the oldest industries in India. It has played an
important role in generating foreign exchange reserves and creating
employment opportunities. The industry is very vast with over 30,000
readymade garments manufacturing units and employs nearly three million
people (Indian Apparel Portal: 1998). It has been estimated that the size of
industry is Rs. 78000 crore.
The concept of readymade garments (apparels) is relatively new for the
Indians. Traditionally, Indians preferred dresses stitched by local tailors, who
had tailoring units in townships or cities and catered exclusively to local
demand. The growing fashion consciousness during the 1980s and the
convenience offered by ready-to-wear garments were largely responsible for
the development of the branded apparel industry in India. Other factors
which contributed to its growth were:
 Greater purchasing power in the hands of the youth,
 Access to fashion trends outside the country, and
 The superior quality of fabrics.
KSA Technopak study shows that 48 percent of the population of India is in
the age group of 15-44 years, and this group is already into ready-to-wear
apparel. There is rapid growth in 15-44 years age group and this group has
both the willingness and the ability to pay.
Moreover, the spending on clothing and footwear is quite high in India,
when compared to the developed countries. It is estimated that Indians
spend 9% of their disposable income on clothing and footwear, which is
significantly higher than the US (5%). Moreover, the expenditure on clothing
is higher in the higher income levels.
A study conducted by National Council for Applied Economic Research
(NCAER) in the late 1990s revealed that there has been a gradual increase in
the purchasing power of the people. According to the report, the population
in the income range of Rs 45,000 -Rs 2,15,000 per annum was increasing at a
fast pace. In 1997-98, there were 33 million households in this income group
and this number is expected to increase to 75 million by 2006-07.
Indian garments export business has made great strides in the past few years
and today many of the leading fashion labels, from all over the world, are
known to source their products from India. This speaks volume of India as a
major supplier of top quality fashion garments.
Indian Textile Clusters
Cluster
Location
Guntur
State
AP
Product
Specialisation
Powerloom &
Cotton Ginning
Powerloom
Crochet lace
Nagari
AP
Narsapur AP
Pochampall
AP
Tie and dyeing
y
Anantpur AP
Jeans/ RMG
Sirsilla
AP
Powerloom
Warangal AP
Powerloom
Delhi
Delhi RMG/ Hosiery
Gujara
Ahmedabad
RMG
t
Jetpur
Gujara
Textile printing
(Rajkot)
t
Gandhinaga Gujara
Powerloom
r
t
Gujara
Surat
Powerloom
t
Gujara
Vijapur
Weaving
t
Harya
Bhiwani
Powerloom
na
Harya
Gurgaon
RMG
na
Harya
Panipat
Powerloom
na
Bangalore Karnat RMG
Cluster
Location
State
Maharasht
ra
Maharasht
Mumbai
ra
Maharasht
Nagpur
ra
Maharasht
Pune
ra
Maharasht
Solapur
ra
Balasore Orissa
Dhenkanal Orissa
Ganjam Orissa
Nuapatna Orissa
Amritsar Punjab
Malegaon
Product
Specialisation
Powerloom
RMG/ Hosiery
Powerloom,
RMG
RMG
Powerloom
Powerloom
Powerloom
Powerloom
Tussar silk
Powerloom
Woollen
Ludhiana Punjab
knitwear
Jaipur
Rajasthan Garments
Hand
Jodhpur Rajasthan
processing
Kishangar
Rajasthan Powerloom
h
Sanganer
Hand block
Rajasthan
& Bagru
printing
Bhavani &
Chennimal TN
Home textiles
ai
aka
Karnat
Belgaum
Powerloom
aka
Karnat
Bellary
Jeans
aka
Karnat
Gadag
Powerloom
aka
Karnat
Mysore
Silk
aka
Ernakulam Kerala Powerloom
Faizlure
Kerala Powerloom
Kannur
Kerala Handloom
Mallappura
Kerala Powerloom
m
Palakkad Kerala Powerloom
Burhanpur MP Powerloom
Chanderi MP Handloom
Indore
MP RMG
RMG/
Jabalpur
MP
Powerloom
Maheshwar MP Handloom
Ujjain
MP Powerloom
Mahar
Bhiwandi
Powerloom
ashtra
Mahar
Ichalkaranji
Powerloom
ashtra
Madhavnag Mahar
Powerloom
ar
ashtra
Karur
TN
Madurai
TN
Rajapalya
TN
m
Salem
TN
Surampatti TN
Home textiles
Tie & dye,
hand
printing,RMG
Surgical textiles
Tirupur
TN
Agartala
Tripura
Banda
Gorakhpu
r
Jhansi
Kanpur
UP
Powerloom
Powerloom
Knitwear/
Hosiery
Handloom &
Loin Looms
Powerloom
UP
Powerloom
UP
UP
Powerloom
Hosiery
Chikan
Lucknow UP
embroidery
Mau
UP
Powerloom
Noida
UP
RMG
Varanasi UP
Powerloom
Kolkata WB
Hosiery/ RMG
Ranaghat WB
Powerloom
Source: D&B Research, UNIDO,
SIDO
Structure of the Textile & Apparel
Industry in India
 Covers a Gamut of activities :From production of raw materials like
cotton, jute, silk and wool to providing high value-added products such
as fabrics and garments
 Wide range of raw fibres
Natural fibres like cotton, jute, silk and wool to
Man made fibres like polyester, viscose, acrylic and multiple blends of
such fibres
 Plays a key role in the economy. Provides direct employment to an
estimated 38 million people and contributes five per cent to GDP.
 Significant contributor to trade. Exports growing at 11.8 per cent
estimated to grow at 15 to 18 percent.
 Financially strong players at the back end. State of the art spinning
facilities
 Large weaving capacity. However, a major capacity is in the
unorganized / small scale sector.
 Processing is the weakest link in the entire chain. Barring a few large,
organized sector players, operating largely in the 100% Cotton and / or
Cotton Rich blends in finer counts & in denim, this sector is
unorganized
 In Towels & Home Textiles, some significant players that compete
strongly with Pakistan, Turkey & China
 Garment making has a number of small to large players. Larger
companies expanding capacity rapidly. Most have Full Package
capability.
 Large number of retailers at the front end, though only a few are big
(relatively).
RAW MATERIALS
•
Abundant availability of raw materials – largest cotton acreage.
• One of the largest polyester yarn producers
SPINNING
• Accounts for about 22 per cent of the world’s spindle capacity
•
Second highest spindlage
KNITTING
• Highly fragmented, small-scale and labour-intensive
•
Highest loomage in the world and contributes about 61per cent to the
world
Knitwear industry in India
Tirupur, Tamil Nadu is the Knitwear cluster of India. This cluster is
widely recognized as a `dynamic’ cluster with necessary `vertical’ depth,
critical mass of enterprises as also appropriate factor conditions. This has
helped it to be largely export oriented in terms of over eighty percent of
its €1.3 billion a year turnover. The growth of the cluster has been
propelled by strong associations. Our interventions emphasized on cluster
wide dissemination on several critical areas as also catalyzing several new
pursuits.
Features of Knitwear Industry
• Low cost labour force, sizeable supply of fabric, raw material and
spinning and dyeing facilities.
• Existence of many associations for the knitwear cluster well connected
with each other
• TEA (Tirupur Exporters Association) works together with the
Government and local companies to ensure better infrastructure and
other facilities for the cluster.
• Design oriented production – companies investing in design proposals
to clients
• Formation of NIFT TEA FASHION INSTITUTE – school for
apparel design set up to help the exporters
• Major exports to European brands : Upim, Diesel, Marlboro,
Rinascente, Champion, Liberti, C&A, Wallmart, JC Penny, GAP,
Mark & Spencers, Sara Lee,Tomy Hilfiger, Karstadt Quell etc
• Tirupur garment exports amount to €1.6 billion international market
and €454.5 million in the domestic market.
 The sector is competitive and likely to see
increased investment from global players(KPMG ANALYSIS)
GROWTH OF THE INDUSTRY
• In India the knitwear industry after struggling for many years is
according to many experts preparing to take off. It is not surprising that
the knitwear industry is gaining prominence in India as India has a
history of a rich industry for textiles and fashion. Today there are over
30 knitwear companies of significance in India. These companies
produce garments that meet international standards through their own
work as well as through assistance provided by the International Wool
Secretariat.
• The knitwear industry of Ludhiana is gearing up to adopt measures
that will ensure that it remains competitive.
• A Memorandum of Understanding was signed between the Federation
of Knitwear, Textile and Allied Industries Association and Apex
Cluster Development Services, a cluster development consultancy, to
enable Ludhiana’s knitwear industry competitive.
• There is tremendous potential for exports from India of woollen
knitwear,” enlightens Dr. Chaudhuri. But the West European market
is fiercely competitive. “Fortunately in India it is a sellers market so it is
easy,” he adds. But India can also be very competitive price-wise. The
IWS has helped Indian manufacturers to learn about the latest trends
in knitwear fashion.
IMPORT EXPORT SCENARIO
Today there is a global market for hand knitwear products; however, most of
this international market remains untapped by India. India is not currently a
large exporter of knitwear garments; rather the country focuses on its
domestic market. India has great potential to expand into the global knitwear
market as its products are competitive particularly from a price standpoint.
As time continues to progress India is continuing to learn to keep up with
and compete with the international market. The domestic market for
knitwear items is particularly strong in the local regions of Northern India
due to the weather that is experienced there. Items are often purchased
locally at markets or handmade at home while the international market relies
on online purchases.
Immediately after the cessation of ATC (Agreement on Textiles and
Clothing) in December 2004, limiting exports of textiles and garments from
India, there was a 25% spurt in exports of garments in the following year.
This has since slowed down to around 10%. A number of supplying
countries from Asia have come into existence, notably, Bangladesh,
Vietnam, Srilanka, Cambodia and Pakistan resulting in cut-throat
competition in the supply of popular varieties helping to bring down prices.
India has had to adopt innovative practices by upgrading the quality of
product in order to sustain (leave alone increase) her market share in the
world community. In recent years, appreciation of the Indian Rupee vs.US $
and the downslide in US economy has had a restraining effect on garment
exports from India, but the industry is now coming to terms with the
development.
Knits have been more successful especially in export channels. Strong
production clusters like Tirupur and Ludhiana have led to growth of
accessories sector as well, albeit slowly.The immense growth of the knitwear
industry has motivated the manufacturers to explore overseas market.
During the financial year 2009, exports of woven and knit garment exports to
South Africa amounted to $42.51million USD. China is a major supplier of
garments to South Africa, followed by India and Mauritius. Looking at
export shares, Korea (6%) and Taiwan (5.5%) are ahead of India, while
Turkey (2.9%) has already caught up and others like Thailand (2.3%) and
Indonesia (2%) are not much further behind. The reason for this
development is the fact that India lags behind these countries in investment
levels, technology, quality and logistics.
The knitwear industry, which had registered Rs 10,000 cr in exports last
year, is finding it difficult to maintain the 20 percent growth rate it has
maintained for the past few years. They may register a growth of 5 percent.
Though the industry had shown a steady export growth, this year the target
was scaled down by 25 to 30 percent, and this year it has been further
downsized to 5 to 10 percent. The demand of the exporters for an upward
revision of prices by about 5 percent has been met with resistance by the
importers, who find the cost of import from China competitive.
India has great potential to expand into the global knitwear market as its
products are competitive particularly from a price standpoint. As time
continues to progress India is continuing to learn to keep up with and
compete with the international market. The domestic market for knitwear
items is particularly strong in the local regions of Northern India.
The rate of modernization is also found to be very low as compared to the
major competing countries. We have to improve on indigenous technology
development and the government has to take initiatives in this regard apart
from present technology Up gradation and Fund schemes and other
measures.
Every year India imports nearly 20 million kilogrammes of greasy wool from
Australia for fabrics and shawls and nearly 16 million kilogrammes of clean
scoured for non-apparel items. Nearly six million kilogrammes of wool is
used per annum in India to produce knitwear.
The power loom sector and the cotton yarn industry are the worst hit, as the
appreciating rupee has resulted in fewer export orders, and lesser margins.
Though the industry had shown a steady export growth, this year the target
was scaled down by 25 to 30 percent, and this year it has been further
downsized to 5 to 10 percent. The demand of the exporters for an upward
revision of prices by about 5 percent has been met with resistance by the
importers, who find the cost of import from China competitive.
As far as the export market is concerned. India’s performance in woollen
garments is quite negligible,” informs Dr. S.K.Chaudhuri, Director of IWS
London, Indian Branch. With Italy being the number one woollen fabric
manufacturer and Germany coming a close second there is not much chance
for new entrants. In the knitwear division 80 per cent of the world exports
are from Italy. Taiwan, Hong Kong and Mauritius.
Factors affecting cost
In terms of cost, India has an advantage over comparative countries
•
This inherent strength in availability of raw materials prevents any
supply-side shocks
• Ample availability of a variety of raw materials at low costs
• Availability of skilled labour and low labour costs
• Growing demand in domestic market
• Government support
Do more indepth analysis
RECENT TECHNOLOGY USED
IN THE KNITWEAR INDUSTRY
The art of knitting has come of age. From hand knitting to hand operated
machines was a long way. Gradually it upgraded to power operated V-Bed
and circular knitting, and then it leapfrogged to microprocessor controlled
machines. Now lately CAD/CAM has revolutionized the knitting industry.
However, in the developing countries they still use manually operated flat
and V-bed knitting machines for their bulk production since cheap labour is
available.
The other reasons being flexibility in knitting and economical for smaller
design lots. However, quality on these machines remain a suspect because
settings of stitch length and feed tensions may vary from machine to
machine, which pose problems in sizing.
The weaving and knits sector lies at the heart of the industry. In 2004-05, of
the total production from the weaving sector, about 46 per cent was cotton
cloth, 41 per cent was 100% non-cotton including khadi, wool and silk and
13 per cent was blended cloth. Three distinctive technologies are used in the
sector – handlooms, powerlooms and knitting machines.
They also
represent very distinctive supply chains. The handloom sector (including
khadi, silk and some wool) serves the low and the high ends of the value
chain – both mass consumption products for use in rural India as well as
niche products for urban & exports markets. It produces, chiefly, textiles
with geographical characterization (e.g., cotton and silk sarees in
Pochampally or Varanasi) and in small batches. Handloom production in
2003-04 was around 5493 mn.sq.meters of which about 82 per cent was
using cotton fibre. Handloom production is mostly rural (employing about
10 million, mostly, household weavers) and revolves around master-weavers
who provide designs, raw material and often the loom.
Weaving, using powerlooms, was traditionally done by composite mills that
combined it with spinning and processing operations.
Over the years,
government incentives and demand for low cost, high volume, standard
products (especially sarees and grey cloth) moved the production towards
powerloom factories and away from composite mills (that were essentially
full line variety producers). While some like Arvind Mills or Ashima
transformed themselves into competitive units, others gradually closed down.
In 2003-04, there remained 223 composite mills that produced 1434 mn. sq.
mts. of cloth. Most of these mills are located in Gujarat and Maharashtra.
Most of the woven cloth comes from the powerlooms (chiefly at Surat,
Bhiwandi, NCR, Chennai).
In 2005, there were 425,792 registered
powerloom units that produced 26,947 mn. sq. mts of cloth and employed
about 4,757,383 workers.
Weaving sector is predominantly small scale, has
on an average 4.5 power looms per unit, suffers from outdated technology,
and incurs high co-ordination costs. Knits have been more successful
especially in export channels. Strong production clusters like Tirupur and
Ludhiana have led to growth of accessories sector as well, albeit slowly. The
hosiery sector, on the other hand, has largely a domestic focus and is growing
rapidly.
OPPORTUNITIES AND
THREATS
PEST analysis
Political-legal
 Complete elimination of the quota restrictions under the Multi
Fibre agreement (MFA) since January 2006
 Inflexible Indian Labor laws
 De-reservation of garments from SSI sector since 2001
Economic
 All capital goods in the textile sector have been covered by
Export Promotion Capital Goods scheme, which attracts 5 per
cent customs duty without any countervailing duty.
 Union budget 2006-2007: Ad valorem component of customs
duty on textile fabrics and garment has been reduced from 20%
to 15%.
 Per Capita income spent on branded garments is less than that in
the developed countries.
 Demand for branded garments is more income elastic than price
elastic
Socio-Cultural
 Increased disposable income of Indian households
 People are exposed to the western lifestyle and there is a drastic shift
in their taste and preferences
 Continuing shift in customer preference towards ready-to-wear
products
 Consumers more aware of brands and are now more style and
brand conscious.
 Styles and trends changing faster than ever which reduces the shelf
life of fabrics as well as readymade garments
 Customers accepting the casual and colorful look even at work.
Technological
 Pedal-operated machines in the 60s, the industry moved on to
power-operated machines and steam presses in the mid-80s, started
assembly line manufacturing in the late 80s and then entered the
phase of using computerized machines. This in short summarizes
the usage of technology in garment industry over the years.
 IT tools being used for tracking of stock keeping units.
 IT helps improve the supply chain management, for direct
marketing, for identifying customer preferences in multiple
geographies.
 Regular innovations in color, style, design, fabric, finish and fit are
necessary in the dynamic industry, which in turn requires automated
machinery and IT solutions.
 Automation brings down the total cost of production by at least 10
to 15 per cent, out of which the saving on fabric alone would be 5 to
7 per cent.
 Cost of technology is however a deterrent
 E-retailing
SWOT Analysis
Strengths





Self reliance
Manufacturing flexibility
Abundance of raw material production
Design expertise
Availability of low cost skilled labour



Growing economy and domestic market
Progressive reforms
Presence across the value chain
Weakness







Highly fragmented industry
High dependence on cotton
Lower productivity and Cost Competitiveness
Declining mill segment
Technological obsolescence
Effect of Historical Government Policies
Non participation in trade aggrements
Opportunities










End of quota regime
Shift in domestic market to branded readymade garments
Increased disposable income
Emerging mall culture and retail expansion Research and
Development and Product Development
Textile economy to grow to $ 85 bn. by 2010.
Creation of 12 million new jobs in Textile Sector.
To increase Indias share in world trade to 6% by 2010.
Achieve export value of $ 40 Billion by 2010.
Modernisation and consolidation for creating a globally competitive
industry.
The future outlook for the industry looks promising, rising income
levels in both urban and rural markets will ensure a rising market for
the cotton fabrics considered a basic need in the realm of new
economic reforms (NER) proper attention has been given to the
development of the textiles industry in the Tenth plan. Total outlay on
the development of textile industry as envisaged in the tenth plan is
fixed at Rs.1980 crore. The production targets envisaged in the
terminal year of the Tenth plan are 45,500 million sq metres of cloth
4,150 million kg of spun yarn and 1,450 million kg of man made
filament yarn. The per capita availability of cloth would be 28.00 sq
meters by 2006-2007 as compared to 23.19 sq meters in 2000-01
showing a growth of 3.19 percent. The export target of textiles and
apparel is placed at $32 billion by 2006-2007 and $50 billion by 2010.
Threats
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Stiff competition from developing countries; especially China
Pricing pressure
Locational disadvantage
International labour and environmental laws
Competition in Domestic Market
Ecological and Social Awareness
Regional alliances
Threat of New Entrants: New entrants to an industry can raise the
level of competition, thereby reducing its attractiveness. New entrants
frequently bring additional capacity to an industry. Thus it is possible
that prices will be bid down and industry profits diminished. In the
knitwear industry, new entrants could quickly enter the industry
because it costs little in time or money to enter the market and
compete effectively, and there are few economies of scale in place, or
have little protection for the key technologies, so that new
competitors can quickly enter the market.
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Threat of Substitutes: Substitutes are new products (or services) that
are quite different than the original product or service. A threat exists
when a product’s demand is affected by the price change of a
substitute product. When the demand for a product declines due to
either lower prices of better performing substitute product, low brand
loyalty, new current trends or low switching cost. There is a high
threat of substitutes in the knitwear industry such as sweater, cardigan
and cashmere or other dressing and the fashion trend change in every
season, people wants to buy the fashionable clothing and make the
elastic of the knitwear is very high.
Bargaining Power of Buyers: A ratio of suppliers to buyers in the
market is the foremost factor affects the buyer’s power. If there are
many suppliers and only a few buyers, the buyer’s have the power to
negotiate the price.
RECOMMENDATION
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The government should take steps in improving the Knitwear Industry.
Improve the technology used by the industry.
Labour should get a better environment to work in and fair wages.
The Knitwear Industry should be innovative so that it doesn’t get
choked out due to outdated technology.
 India should participate in trade agreements and should take help from
the developed countries.
 The pricing pressure should be reduced.
 Latest use of technology and by improving the knitwear industry
competition can be reduced.
REFERENCES
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Dictionary of textiles-Phyllis G Tortora &Robeet S Merkel
Encyclopedia of textiles-Judith Jerde
Textiles today a global survey of trends & traditions
Knitted clothing technology-Tery Brackenbury
Google search engine
http://global.tommy.com/
General comments
Provide Intext citations (Otherwise no grades will be given)
Do Proper Formatting
Follow the structure given in the brief
Provide Introduction
Do more indepth analysis of cost factors
First give overview, then History
Segment wise study
Product differentiation factors
Recent trends ?
Supply ?
Taste and Preferences affecting demand
Other aspects given in the brief
Diagrams?
Provide Indian competitors and overview of Indian Knitwear industry