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Nalli Silk Sarees Private Limited was a family owned and operated business that retailed Indian ethnic wear. This 83-year-old company had enjoyed impressive growth with a $95 million turnover, a 22-store retail footprint, and had outdone its competitors by being the only player in its segment to have a national presence. Headquartered in Chennai, India, the company built its unique national brand by emphasizing innovation, customer centric practices, quality, and honesty across the store's retail operations. In 2011, with changing dynamics in the Indian apparel market, the company started to face intense competition from small and large Indian and foreign retailers. The company's chairman, Dr. Nalli Kuppusamy Chetty, announced a $25 million expansion plan and proposed the opening of 12 new stores over a period of two years. This case focuses on the company's pricing strategy, merchandising process, and product assortments to support its own competitiveness and overall customer experience.
Top Competitors
Babu Silk & Readymades Prakash Silks & Sarees Ritika Private Limited Ramachandra Silks Pioneer Embroideries Limited Kalanjali Arts & Crafts The Chennai Silks
Demand of more wage by regular labour who are working in Nalli Group. Main market & customer for Nalli Group
In year 2009-10 , India was the second largest customer and second largest producer of Silk in the World. India had number of silk wearing centres spread across the country and each center had its own uniquedesign, pattern and style of weaving. For Nalli group main center was locked in small temple town of Kanchipuram 70 km from Chennai. So they are targeting small town of Chennai, but now its time to wake up because other competitor are coming and capturing the market by attracting people and giving them huge discount on sarees.
New Innovation
In 1930, chinnasamy become the first saree retailer to use high quality chemical dyes from Switzerland. In 1980 Nalli become the first textile retailer in India to use bar codes and computer for their biling and back office use. They also introduced a new sentence that RESPECTING A CUSTOMERS HONOUR MATTERS MORE TO US THAN HIS MONEY
Most of the initial stores that were that were setup by Nalli were housed properties owned by the group.
Vendor Management
The Nalli group built deep and extensive relationship with weavers in Kanchipuram. This is important because to capture the market of Chennai this will be very important. As Nalli group
expanded its operation . It would not not be only to deepen relationship with its existing vendors but also identify high quality and consisting vendors in an already shrinking weaving industry.
Conclusion
Nalli group had perform really very well in market area and were doing more and more innovation for their customers and also face the completion in well manner from last 83 years. There was limited brand awareness amongst the new customer segments and competiton was only intensifying. Sales volumes were also expected to drop due to an increase in the price of raw silk and precious metals such as gold and silver which were intrinsic to the saree weaving process. So, charging a premium for the reliability and quality that the brand offered. But he really wondered how would customers and competitor respond to such a drastically different approach.