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MET ASIAN MANAGEMENT DEVELOPMENT CENTRE [2012 2013]

A Project Report On
Comfort shoes
Submitted By:

Rahul Keshavan Submitted to:

Vaishali Pardesi

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ACKNOWLEDGEMENT

I owe a great many thanks to great many people who helped and supported me during the course of this research. My deepest thanks to VAISHALI PARDESI, the guide of the project for guiding and correcting various documents of mine with attention and care. She has taken pain to go through the project and make necessary corrections as and when needed. I express my thanks to the Mr. Arun Patil, Course Coordinator, MET Institute for extending his support. My deep sense of gratitude to the helpful people for their support and I would also like to thank designated persons I would also thank my institution and my faculty members without whom this project would have been a distant reality. I also extend my heart felt thanks to my family and well wishers.

Rahul Keshavan

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INDEX
Serial No Topic Page no

1. 2.

Executive summary Industrial Analysis 2.1 Major markets for Indian footware

7 8 10 13

3.

Analysing of competitor 3.1 PRICE BRANDS 3.2 Key Players of the Industries COMPARISON OF

DIFFERENT 13

14 17 18 19 21 22

4. 5 6. 7 8

MISSION AND VISION STATEMENT Competitor advantage Goals OF The Company Value proposition Materials used in the production

8.1 Raw Materials used in shoes 9. Marketing Mix

22 24

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9.1 Segmentation Serial No 9.2 9.3 9.4 9.5 9.6 10. 11. 12. 13. 14. 15. 16. Targeting Positioning Pricing Promotion Distribution SWOT Analysis Financial Analysis Website Plan Web Critique of your competitors
34 37 45 46

Topic

Page no

Future Scope for expansion and innovation 48 Competitors Grid Conclusion

50 51

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Serial no

TABLE INDEX

Page No

2.1 2.2 2.3

Indias export Segmentwise classification of prices

8 10

Country-wise export of Footwear from India 5 11 years

3.1 11.1 11.2 11.3

PRICE COMPARISON OF DIFFERENT BRANDS BALANCE SHEET AS ON 31TH MARCH ,2012 BALANCE SHEET AS ON 31TH MARCH ,2012 COMPARATIVE BALANCE SHEET STATEMENT :-

13 39 41

43

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Serial no

Figure index

Page no 9

2.1

INDIA S FOOTWEAR EXPORT GROWTH OVER THE LAST FOUR DECADES

2.2

Indias Exports of Footwear Country-wise Share in Total Exports (2007-2011) Source: DGCI& S

2.3 3.1 9.1 9.2

Current Export of Footwear and Projections by 2010-11

12 14 24 27

competitors analysis figure PRODUCT MIX WIDTH Targeting

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Executive summary We know that a person can be best described with his shoes. we have come up with a unique and simple product Comfort SHOES .These days in our hectic lives, we face a general problem of bad odour from a pair of shoes worn by us for long duration .People sitting close to us or in our nearby surrounding start getting irritated as well as they get bad smell that is more than difficult to bear up.So, to over come this problem we have come up with a solution for you Comfort SHOES. Comfort shoes avid range of fragrance pad gives the consumers a varied range to choose from. (the inner part of fragrance pad is so designed that it will fit only to COMFORT shoes) Comfort shoes feature of acupressure will not only seek to health problems but also dilutes problems of leg sprains and muscle strains. Additional materials like KELVAR has been used to enhance the quality. As this is a new product with new additional features of fragrance pad and acupressure points in the sports shoes for the first time, so reasonable Price is set based largely on competitors price, by comparing quality, and features. Our product is compared with products in upper middle and lower middle category i.e. with Adidas, Nike, Action, Reebok etc also As the product has special feature like acupressure points and fragrance pad it will be characterized by high level of perceived quality and features with price just high enough but not out of customers reach.Determinig all these factors Rs1500.00 to 4000.00 is set. Promotion mix like Advertising, Sales promotion, Direct marketing and public relation are used to build a brand image and increase the sales volume. Price range of product:

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2.INDUSTRIAL ANALYSIS Nearly 75% of Indias Export of Footwear is to the European Countries and the USA. The Indian Footwear Industry provides employment opportunities to a total of 1.1 million people, mostly from the weaker sections of the society. Out of this, about 0.2 million are employed in the organized sector, 40% of who are women. Remaining 0.9 million people are engaged in unorganized footwear sector like rural artisans, cottage and household units etc. The Footwear Sector is now de-licensed and de-reserved, paving the way for expansion of capacities on modern lines with state-of-the-art machinery. To further assist this process, the Government has permitted 100% Foreign Direct Investment through the automatic route for the Footwear Sector. Table 2.1 Indias export

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Figure 2.1 INDIA S FOOTWEAR EXPORT GROWTH OVER THE LAST FOUR DECADES

Footwear export has increased from US$40.15 million in 1977-78 to US$ 1475.83 million in 2007-08 Figure 2.2 Indias Exports of Footwear Country-wise Share in Total Exports (20072011) Source: DGCI& S

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Retail footwear segment in Indian is very price sensitive and has been steadily growing over the year. Major part of the demand is met by the unorganised sector and still there is a shortfall of 300 million pairs. Branded shoe market only account for 20% of the entire market. While international brands largely dominate the higher end of the spectrum, the lower end of the market is dominated by homegrown players as well as unorganised players. While men's footwear is the biggest target category (contributing almost 48%), children's (11%) and women's lifestyle footwear (41%) is not behind in the race. Table 2.2 Segment wise classification of price ranges in the mens footwear segments: Segments Mass market Economy market Sports market Premium leathers Luxury Price Ranges in Rs 185 700 700- 1000 1000 3000 3000- 5000 10000- 50000 % of growth 60% (Liberty Bata) 30% (Bata Liberty) 7% (Nike Adidas) 5% (Charles and Keith) 1% (Gucci Louis Vuitton)

2.1 Major Markets for Indian Footwear: The European Union and the USA are the major markets for Indian Footwear accounting for 79.95% and 9.22% share respectively in Indias total footwear export. The major markets for Indian Footwear are Germany 16.66%, UK 16.31%, Italy 15.32%, USA 9.22%, France 7.81%, Spain 5.10%, Netherlands 4.91%, Portugal 2.50%, UAE 2.48% and Denmark 1.18%. These 10 countries together accounts for nearly 81.49% of Indias total leather products export.

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Table 2.3 Country-wise export of Footwear from India 5 years (Value in Million US $) CAGR Growth 2003-04 2005-06 2007-08 2009-10 2010-011 % 146.23 164.73 170.97 217.23 245.92 13.87%. 154.44 192.62 195.78 208.2 240.77 11.74%. 107.65 103.63 134.35 186.11 226.10 20.38%. 89.17 107.34 131.07 127.15 136.01 11.13%. 50.84 64.84 74.48 99.81 115.24 22.70%. 38.06 46.86 63.7 64.57 75.22 18.56%. 20.09 20.03 32.96 48.57 72.49 37.82%. 15.12 18.75 22.15 35.03 36.86 24.95% 14.94 18.36 25.78 34.64 36.61 25.11% 11.7 13.75 18.37 14.65 17.44 10.49% 8.44 8.00 11.58 10.11 12.48 10.27% 6.29 6.95 6.77 7.99 12.04 17.62% 8.71 9.84 11.95 10.91 10.41 4.55% 7.23 6.72 8.26 12.11 8.54 4.25% 2.01 2.55 3.17 3.07 4.63 23.19% 86.81 125.8 133.9 156.76 225.07 26.89% 767.73 910.77 1045.24 1236.91 1475.83 17.74%

Country Germany UK Italy USA France Spain Netherlands Portugal UAE Denmark Australia Sweden Canada South Africa Japan Others Total

Source: DGCI&S

Footwear is the engine of growth of the leather industry, currently accounting for an export value of US$1212 million, holding a major share of 41% in Indias total leather trade. Considering this fact, we have set an ambitious target of US$ 4.5 billion in respect of Footwear export from India by 2010-11 where the overall export of leather products will reach US$6.98 billion, wherein footwear alone will account for a share of 65% in Indias total leather export trade.
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Figure 2.3 Current Export of Footwear and Projections by 2010-11

Future growth of Indian footwear industry in India will continue to be market driven and oriented towards the European and the US markets. Technology partnerships with major merchandising houses in USA and market leaders in Europe are decided advantages in the integrated developmental plan of India. Investment backed technology support for footwear component industry is being sought to be outsourced. Footwear is the engine of growth of the leather industry, currently accounting for an export value of US$1212 million, holding a major share of 41% in Indias total leather trade. An ambitious target of US$ 4.5 billion in respect of Footwear export from India by 2010-11 where the overall export of leather products will reach US$7 billion, wherein footwear alone will account for a share of 65% in Indias total leather export trade

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3.Analyzing Of competitor
3.1 PRICE COMPARISON OF DIFFERENT BRANDS BRANDS Category(upper middle-lower middle) PUMA PRODUCT RANGE PRICE RANGE 1500-6500 RUNNING, CASUAL,SOCCER,CYCLE ,etc.

ADDIDAS

1500-4500

RUNNING, TENNIS,TRAINERS, BASKET BALL, etc. TRAINERS, FOOTBALL, RUNNING, GOLF, BASKET BALL etc WALKING, AEROBICS, RUNNING, BAKET BALL, etc.. CASUAL,SOCCER,CYCLE,RUNNING,etc

NIKE

1700-5000

REEBOK

1300-4000

ACTION

900-2800

BATA

1000-1700

Soccer,running,casual etc.

Since the product has added features and enhanced quality so the product will be perceived similar to product in upper middle and in lower middle category so the price of the product will be compared with Adidas, Nike and Reebok Our products price is based largely on competitors price, by comparing quality, and features. Our product is compared with products in upper middle and lower middle category i.e. with Adidas, Nike, Action, Reebok etc.
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Figure 3.1 competitors analysis figure

3.2 Key Players of the Industries. Domestic Players: BATA:Bata India is the largest company for the Bata Shoe Organization in terms of sales pairs and the second largest in terms of revenues. With 1250 stores across the country, it also has the widest retail network within the BSO

Liberty:Liberty Shoes Ltd. is the only Indian company that is among the top 5 manufacturers of leather footwear in the world with a turnover exceeding U.S. $100 million.
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Company produces more than 50,000 pairs of footwear a day covering virtually every age group and income category. Products are marketed across the globe through 150 distributors, 350 exclusive showrooms and over 6000 multi-brand outlets, and sold in thousands every day in more than 25 countries including fashion-driven, quality-obsessed nations like France, Italy, and Germany. Global Market: Adidas:Adidas Ltd. is a major German sports apparel manufacturer and part of the Adidas Group, which consists of Reebok sportswear company, Taylor Made- Adidas golf company, and Rockport. Besides sports footwear, the company also produces other products such as bags, shirts, and other sports and clothing related goods. The company is the largest sportswear manufacturer in Europe and the second largest sportswear manufacturer in the world Nike:Nike, Inc. is a major publicly traded sportswear and equipment supplier based in the United States. The company is headquartered in the Portland metropolitan area of Oregon, near Beaverton. It is the world's leading supplier of athletic shoes and apparel and a major manufacturer of sports equipment Reebok:Reebok International Limited is a producer of athletic footwear, apparel, and accessories and is currently a subsidiary of Adidas. The name comes from the Afrikaans spelling of reebok, a type of African antelope or gazelle. The company, founded in Bolton, United Kingdom, in 1895, was originally called J.W. FOSTER & SONS but was renamed Reebok in 1958.

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Puma:Puma AG Rudolf Dassler Sport (officially styled PUMA) is a major German multinational company that produces high-end athletic shoes, lifestyle footwear and other sportswear. Formed in 1924 by Rudolf Dassler, the company is based in Herzogenaurach, Germany.

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4.MISSION AND VISION STATEMENT

Mission Statement

Our mission is to be a leader in Indian footwear industry...

By bringing compelling lifestyle, performance and fashion brands

With excellent quality, superior customer service and state-of-the-art manufacturing facilities

Vision Statement

Our vision is to become a global leader in footwear industries by...

Bring in distinctive shoe wears through our strong retail chains

Staying abreast to the latest technology advancement and customer demand

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5.Competitor advantage

Focus on exports, develop international quality products. Should be in constant touch with international fashion trends and designs. Need to have a wide product range to cater to all markets segments. Raw material sourcing critical as prices fluctuate often. Domestic market - need to focus on distribution. Product branding essential. Price of the product is less as compared to other compnies After sales service to the customers Website for total information to the customer Proper and relevant information for shopping of the online Door to door delivery service with exchange fecility

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6.Goals OF The Company

1) Location: "Right Place, Right choice" Location is the most important ingredient for any business that relies on customers, and is typically the prime consideration in a customers store choice. Locations decisions are harder to change because retailers have to either make sustainable investments to buy and develop real estate or commit to long term lease with developers. When formulating decision about where to locate, the retailer must refer to the strategic plan: Investigate alternative trading areas. Determine the type of desirable store location Evaluate alternative specific store site

2) Merchandise: The primary goal of the most retailers is to sell the right kind of merchandise and nothing is more central to the strategic thrust of the retailing firm. Merchandising consists of activities involved in acquiring particular goods and services and making them available at a place, time and quantity that enable the retailer to reach its goals. Merchandising is perhaps, the most important function for any retail organization, as it decides what finally goes on shelf of the store.

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3) Pricing: Pricing is a crucial strategic variable due to its direct relationship with a firm's goal and its interaction with other retailing elements. The importance of pricing decisions is growing because today's customers are looking for good value when they buy merchandise and services. Price is the easiest and quickest variable to change.

4) Target Audience: "Consumer the prime mover" "Consumer Pull", however, seems to be the most important driving factor behind the sustenance of the industry. The purchasing power of the customers has increased to a great extent, with the influencing the retail industry to a great extent, a variety of other factors also seem to fuel the retailing boom. 5) Scale of Operations: Scale of operations includes all the supply chain activities, which are carried out in the business. It is one of the challenges that the Indian retailers are facing. The cost of business operations is very high in India.

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7. Value proposition

COMFORT shoes behave like an extension of the foot, which is a complex structure of bone, muscle and fatty tissues.

Comfort shoes provide the user with a comfortableness and uniqueness to the maximum.

Comfort shoes avid range of fragrance pad gives the consumers a varied range to choose from. (the inner part of fragrance pad is so designed that it will fit only to COMFORT shoes)

The fragrance provided with the shoes will save the user from embarrassments arising from bad odour .

Comfort shoes feature of acupressure will not only seek to health problems but also dilutes problems of leg sprains and muscle strains. Would be available at all the shoe store and can be ordered online where home delivery services would be provided for free

Discount and warranty services would be given

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8.Materials used in the production

8.1 Raw Materials used in shoes To enhance performance, sophisticated shoe structures are employed which make use of viscous and elastic foam materials such as ethylene vinyl acetate (EVA) and polyurethane (PU). The use of viscous plastics in the heel area serves to absorb the impact forces during the initial ground contact, and provides the foot with a soft cushioning effect. Additional materials used: 1. KELVAR (Used to enhance the quality) The Properties of KEVLAR. KEVLAR is one of the most important manmade organic fibers ever developed. Because of its unique combination of properties it is used today in a wide variety of industrial applications. The fiber possesses a remarkable combination of properties that has led to its use in a variety of commercial products since the 1970's Fibers of KEVLAR consist of long, interconnecting molecular chains produced from poly-paraphenylene terephthalamide. General Features of KEVLAR: High Tensile Strength at Low Weight Low Elongation to Break High Modulus (Structural Rigidity) Low Electrical Conductivity High Chemical Resistance Low Thermal Shrinkage High Toughness (Work-To-Break) Excellent Dimensional Stability High Cut Resistance Flame Resistant, Self-Extinguishing

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2.Material used in making of fragrance pad and acupressure point Vegetable tanned sheepskin Active carbon filter prevents odor Slightly padded with latex foam Fragrance Breathable leather shoe liner protects the inside of shoes from dampness, bacteria causing odor.

Product attributes Provides freshness to feet by its pleasant smell. Acupressure will act as a reliever of pain. Replacable fragrance and acupressure pad(the inner part of fragrance pad is so designed that it will fit only to COMFORT shoes) Pioneered in comfort Best for athletes Provides firmness to feet Style quotient also maintained Available in varied range of price and size with a warranty of 1 year.

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9.Marketing Mix

9.1 PRODUCT MIX FOR COMFORT SHOES

Figure 9.1PRODUCT MIX WIDTH

RUNNING

CRICKET

ATHELETE

TENNIS

SOCCER

WITH FRANGANCE PAD

SIZE -6 TO10

PRODUCT LENGTH

WITH FRANGANCE PAD & ACU PRESSURE

PRODUCT DEPTH =VARIANTS X SIZES 2 X 5 = 10

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9.1 SEGMENTATION Geographic City: More focus on metro cities because people believe in trying innovative, new and better products. Demographic: Age: 14 years and above. Gender: Male and female both. Income: earning above Rs 20000 thousand P.M. Occupation: Students, Athletes. Psychographic: Socio-economic: Upper-middle. Lower-middle. Life-style: Sport-oriented, formals outdoor oriented.

Behavioral: Benefits: Quality, service, after sell service. User status: Non user, potential user, first time user.

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9.2 TARGETING
1. Measurable: Size ,purchasing power ,characteristics of the segments 2. Substantial: A segment should be largest possible homogeneous groups worth going after with a tailored marketing program e.g.earning capacity 20,000p.m. 3. Accessible: Reach should be good. 4. Differentiation: People have different perception about different marketing mix. A business man and a sports person will have different feel about COMFORT shoes. 5. Actionable: Effective programs can be formulated for attracting and serving the segments.

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Figure 9.2 TARGETING

TARGETING
UNAWARE

AWARE

NOT TRIED

TRIED

NEGATIVE OPINION

NEUTRAL

POSITIVE OPINION

REJECTED

NOT YET REPEATED

REPEATED

LOYAL TO OTHER BRANDS

SWITCHER

LOYAL TO BRAND

LIGHT USER

REGULAR USER

HEAVY USER

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9.3POSITIONING
Positioning through point of difference by presenting and highlighting the new attributes of comfort shoes. Relevance Feasibility Distinctiveness Believability Communicability Sustainability

9.4 Pricing
Pricing is the process of determining what a company will receive in exchange for its products. Pricing factors are manufacturing cost, market place, competition, market condition, Quality of product. Setting the price As this is a new product with new additional features of fragrance pad and acu pressure points launching for the first time, so reasonable price should be set according to the following factor. 1. 2. 3. 4. 5. 6. Selecting the price objective. Determine demand. Estimate cost. Analyzing competitors cost price and offers. Selecting price method. Final price Selecting the price objective Product quality leadership
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As the product has special feature like acupressure points and fragrance pad it will be characterized by high level of perceived quality and features with price just high enough but not out of customers reach. Determining the demand 1. Product is distinctive because of its special feature in it (fragrance pad & acupressure), which makes it different from others. 2. Buyers less aware of substitute since there is no other player in the market with such features, so in respect of its features buyers will not get any substitute. 3. Expenditure is smaller part of the buyers total income .since the price of footwear is small part of the total income. 4. The product has more quality and exclusiveness. So according to this market for the product will be fewer prices sensitive and price can be kept a little higher than other products. Estimating cost The total cost depends on fixed and variable cost. it is important to know how cost vary with different levels of production ,and accordingly cost are estimated. Economies of scale are used to minimize the cost in long run.

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9.5 Promotion

Marketing activity used to communicate to consumer about the organization its product, its activity and directly or indirectly expenditure.

Promotion mix Advertising Sales promotion Direct marketing public relation Advertising : A paid form of non personal communication through media. We are promoting our shoe as it provides. -Nice fragrance -acupressure point that help to control blood pressures. As our logo & caption we did it which we have taken also suggest that we have created a product which is beneficial for the customer ,because no such shoes has been launched yet which have acupressure point and fragrance paid along with good quality

Sales promotion An activity or material that Offer a direct inducement to purchase . We can do our sales promotion by: 1. Sport sponsorship By sponsoring local sports events. 2. Event sponsorship
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3. 4.

5.

6.

7.

By sponsoring events like new year eve. Advertisement on wheels Contests Contest like marathon race can be organized to build brand image and increase the sales volume. Tying up with core companies having brand name and involved in making only sports accessories or associating with brand companies producing health care gadgets to get the benefits of their brand value and increase the sales volume . Using print media Sport magazines Weekly magazines e.g. india today Health magazines Newspaper Electronic media Adds on TV and internet Radio Bill boards.

Direct marketing public relation: Public relation will be used to explain the benefits of comfort shoes (like benefits of pleasant fragrance and acupressure points in shoes ).Direct marketing like internet and catalogs will be used to inform the targeted segments about the feature of the product and various models of the product

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9.6 DISTRIBUTION
Distribution is one of the four elements of marketing mix. An organization or set of organizations (go-betweens) involved in the process of making a product or service available for use or consumption by a consumer or business user.

DISTRIBUTION CHANNEL

Chain of intermediaries, each passing the product down the chain to the next organization, before it finally reaches the consumer or end-user. This process is known as the 'distribution chain' or the 'channel.' Each of the elements in these chains will have their own specific needs, which the producer must take into account, along with those of the all-important end-user.

CHANNELS

A number of alternate 'channels' of distribution may be available:

Distributor, who sells to retailers Retailer (also called dealer or reseller), who sells to end customers Advertisement typically used for consumption goods Distribution channels may not be restricted to physical products alone. They may be just as important for moving a service from producer to consumer in certain sectors, since both direct and indirect channels may be used. Hotels, for example, may sell their services (typically rooms) directly or through travel agents, tour operators, airlines, tourist boards, centralized reservation systems, etc. There have also been some innovations in the distribution of services. For example, there has been an increase in franchising and in rental services - the latter
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offering anything from televisions through tools. There has also been some evidence of service integration, with services linking together, particularly in the travel and tourism sectors.

CHANNEL LEVELS Their are four channel levels by which a company can reach to consumers. zero level channel 1- level channel 2- level channel But we will be using only first three channel for our product distribution. 1. Zero level channels consist of a manufacturer selling directly to final consumer. we will be selling our shoes by internet selling(by sending mails, by using sites such as e-bay ,amzon, alibaba.com).We will also sell our shoes directly to various institutes and sports academy. 2. 1-level channels, In 1-level channel we use only one intermediary or distributor, who will supply goods to the retailer and they will also provide feedback to the company about demand of consumers. Exclusive showrooms can be used with wide coverage to cover different price points and target different segment of customers, which will generate sales volume. 3. 2 -level channels contains two intermediaries selling to retailers through wholesaler and finally to customer inorder to cover the maximum targeted segment .(Here benefits of influence of distributor is used)

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10. SWOT Analysis

STRENGTHS:

Existence of more than sufficient productive capacity in tanning. Easy availability of low cost of labour. Exposure to export markets. Managements with business background become quality and environment conscious.

Presence of qualified leather technologists in the field. Comfortable availability of raw materials and other inputs. Massive institutional support for technical services, designing, manpower development and marketing.

Exporter-friendly government policies. Tax incentives on machinery by Government. Well-established linkages with buyers in EU and USA.

WEAKNESSES:

Low level of modernisation and upgradation of technology, and the integration of developed technology is very slow.

Low level of labour productivity due to inadequate formal training / unskilled labour.

Horizontal growth of tanneries. Less number of organised product manufacturers. Lack of modern finishing facilities for leather.
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Highly unhygienic environment. Unawareness of international standards by many players as maximum number of leather industries are SMEs.

Difficulties in accessing to testing, designing and technical services. Environmental problems. Non availability of quality footwear components Lack of fresh investment in the sector. Uneconomical size of manufacturing units. Competition among units vying for export orders leading to undercutting. Little brand image. Poor labour productivity. Lack of awareness about consistent in plant training and retraining- Inconsistent quality high rejection rate

Low machine and material productivity. Lack of quality job work units

Delayed deliveries Weak support infra- structure for exports

OPPORTUNITIES:

Abundant scope to supply finished leather to multinationals setting up shop in India.

Growing fashion consciousness globally. Use of information technology and decision support software to help eliminate the length of the production cycle for different products

Product diversification - There is lot of scope for diversification into other products, namely, leather garments, goods etc.

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Growing international and domestic markets. Exposure to newer markets through Fairs/ BSMs Retain customers through quality supplies and timely deliveries Aim to present the customer with new designs, infrastructure, country & company profiles.

Use of modern technology Exhibit strengths in manufacturing, for example, strengths in classic shoe manufacturing, hand crafting etc.

De-reservation of the footwear sector.

THREATS:

Entry of multinationals in domestic market. Stiff competition from other countries.(The performance of global competitors in leather and leather products indicates that there are at least 5 countries viz, China, Indonesia, Thailand, Vietnam and Brazil, which are more competitive than India.)

Non- tariff barriers - Developing countries are resorting to more and more non tariff barriers indirectly.

Improving quality to adapt the stricter international standards. Fast changing fashion trends are difficult to adapt for the Indian leather industries.

Limited scope for mobilising funds through private placements and public issues, as many businesses are family-owned

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11. Financial Analysis

Investment Opportunities and Tax Pattern in Industries Investment Opportunities: The Government of India is keen to promote investments into the Indian leather sector, and for this purpose, it has radically simplified and rationalized the policies, procedures and regulatory aspects. The current industrial policy is very conducive to the promotion of Indian leather industry both in terms of domestic trade as well as exports. Taxation:

India has a well developed tax structure. Income tax, Customs duties, Central Excise, Sales Tax and Service tax are the main taxes levied by the Central Government

VAT, Stamp duty, State Excise, Land Revenue, Tax on professions are the principal taxes levied by the State Governments

Local Bodies are empowered to levy tax on properties, octroi and for utilities like water supply, drainage etc.

Corporate Tax is currently taxed at:

30% in the case of domestic companies and surcharge @ 10% of tax 40% in the case of foreign companies and surcharge @ 2.5% of tax

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Special Economic Zone (SEZ) Parks:

A Footwear SEZ Park is being established in Tamil Nadu, at the SIPCOT Industrial Estate at Irungattukottai, situated at a distance of 34 kms from Chennai.

A land of 150 acres has been earmarked for this purpose and it is proposed to make available about 105 acres of saleable land to domestic as well as international footwear companies.

The State Industries Promotion Corporation of Tamil Nadu Ltd (SIPCOT) is the implementation agency for this project.

The Footwear Park will be developed on global standards, with adequate common infrastructure facilities such as Design Studio, testing and on-site training facilities, Display Centre-cum-Warehouse, non-conventional energy and other energy saving applications.

Another SEZ for Leather Products is also under way at Ranipet in Tamil Nadu, in an area of about 260 acres. Apart from the above, there is a proposal to setup 10 Small Integrated Leather Parks (SILP) in different parts of the country.

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Table 11.1 BALANCE SHEET AS ON 31TH MARCH ,2012

PARTICULAR SOURCES FUNDS OF

31.03.2011

31.03.2012

Share holders Funds Share capital Reserve surplus Loan Funds Secured Loans 82,65,32,740 1,03,31,65,87 3 1,01,68,62,654 17,49,91,716 1,20,81,57,589 17,04,00,000 & 1,05,29,98,993 1,22,33,98,993 97,77,89,285 1,14,81,89,285

Unsecured Loans Deffered Tax Deffered Liability Total APPLICAION OF FUNDS Fixed Assets Gross block Less: Depreciation Tax

19,03,29,914

6,52,89,687

7,08,75,737

2,30,55,51,334

2,42,72,22,611

1,31,72,96,575 47,08,47,571

1,26,0640,151 40,60,66,799

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Net Block

84,64,49,004 84,77,41,185

85,45,73,352 1,54,92,360,8 7,00,65,712

Add: Capital 12,92,181 Work in progress Investment Currenent Assets,Loan & advance Inventories Sundry Debtors 67,27,25,412 70,43,22,494

20,33,98,812

20,33,98,812

76,18,73,108 72,41,47,983 4,49,26,777

Cash & Bank 5,14,67,849 Balances Loans& Advances 28,16,65,313

27,49,86,325

1,71,01,81,068

1,80,59,34,19 3 42,93,74,450 2,28,01,656 1,25,44,11,337 1,35,37,58,087

Less: current 44,25,19,417 liability 1,32,50,314 provision Net current assets Total

2,30,55,51,334

2,42,72,22,611

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Table 11.2 COMPARATIVE INCOME STATEMENT FOR THE YEAR ENDED 31 MARCH 2010,2011AND 2012.
31-Mar2012(12) Net Sales (OI) Material Cost Increase Decrease Inventories Personnel Expenses Manufacturing Expenses Gross Profit Administration Selling and Distribution Expenses EBITDA Depreciation Depletion and Amortization EBIT Interest Expense Other Income Pretax Income Rs mn 2404.44 %OI 100.00 31-Mar2011(12) Rs mn 2478.51 %OI 100.00 31-Mar2010(12) Rs mn 2221.52 %OI 100.00

905.59

37.66

1107.36

44.68

1116.30

50.25

447.72

18.62

220.38

8.89

-29.34

-1.32

209.19 254.89

8.70 10.60

226.09 270.45

9.12 10.91

212.33 296.39

9.56 13.34

587.06

24.42

654.23

26.40

625.84

28.17

336.68

14.00

346.01

13.96

312.89

14.08

250.38

10.41

308.22

12.44

312.95

14.09

65.95 184.43 125.64 14.08

2.74 7.67 5.23 0.59

63.80 244.42 133.46 50.71

2.57 9.86 5.38 2.05

46.33 266.62 88.17 16.67

2.09 12.00 3.97 0.75

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Provision for Tax Extra Ordinary and Prior Period Items Net Net Profit Adjusted Net Profit Dividend Preference

72.87

3.03

161.67

6.52

195.12

8.78

-2.34

-0.10

6.45

0.26

24.02

1.08

0.00 75.21 75.21

0.00 3.13 3.13

4.39 159.62 159.62

0.18 6.44 6.44

0.74 171.83 171.83

0.03 7.73 7.73

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Table 11.3 COMPARATIVE BALANCE SHEET STATEMENT :(RS Crores)

Mar ' 2012

Mar ' 2011

Mar ' 2010

Sources of funds
Owner's fund Equity share capital Share application money Preference share capital Reserves & surplus 17.04 105.30 17.04 97.78 17.04 81.82

Loan funds
Secured loans Unsecured loans Total 82.65 16.44 221.44 103.32 15.06 233.19 104.03 22.02 224.91

Uses of funds
Fixed assets Gross block 131.73 126.06 110.55

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Mar ' 2012 Less : revaluation reserve Less : accumulated depreciation Net block 47.08 84.64

Mar ' 2011 40.61 85.46

Mar ' 2010 35.55 75.01

Capital work-in-progress Investments

0.13 20.34

1.55 20.34

8.14 17.10

Net current assets

Current assets, loans & advances Less : current liabilities & provisions Total net current assets Miscellaneous expenses not written Total 171.02 54.70 116.32 221.44 180.59 54.75 125.84 233.19 182.61 57.94 124.67 224.91

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12.Website plan
The website would be more prcised and would be easily accessible to the customers All the details regarding to the product will be given on line and the customer query will be solved if any regarding the product will be on a fast basis It would help the customer to register themselves with us and by this the would be frequent offers relating to the product With the help of our website they can order tailor made shoes for themselves They could order their product online and they can make the payment as they want like 1.card payment 2.cash on delivery Whichever they are comfortable This would help me to catch up market and the customer could be gained and any complains it could be solved by improving . Through website the customer will easily be touch with the company and know about its position.

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13. Web Critique of your competitors

It has been seen that the companies are more concentrating on their sales of the product through the internet through their web sites. In country like India it is one of the most cost effective method to reach the product to the masses or the customer. The websites play a major role for these companies to push their product as it provides a wide reach . Puma This is the company where the website provides a lot of info regarding the product . It doesnt have any sales option so it doesnt help in selling of the product .it is over loaded with information Rebook It This is the company where the website provides a lot of info regarding the product . It doesnt have any sales option so it doesnt help in selling of the product .it is over loaded with information. In this website there no options of comments so that the customers wants are not known. Adidas The website is user friendly provides essential details and information regarding the product and guides the customer to proper options gives all details about the product and it has a smooth approach in getting in the customers. Here the customers can write their views and by this the tries to improve on it.

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Liberety

Liberty Shoes Ltd. is the only Indian company that is among the top 5 manufacturers of leather footwear in the world with a turnover exceeding U.S. $100 million. Company produces more than 50,000 pairs of footwear a day covering virtually every age group and income category. Products are marketed across the globe through 150 distributors, 350 exclusive showrooms and over 6000 multi-brand outlets, and sold in thousands every day in more than 25 countries including fashion-driven, quality-obsessed nations like France, Italy, and Germany. They have a great promotion strategy and is user friendly and fully equipped with information.

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14. Future Scope for expansion and innovation

Abundant scope to supply finished leather to multinationals setting up shop in India.

Growing fashion consciousness globally. Use of information technology and decision support software to help eliminate the length of the production cycle for different products

Product diversification - There is lot of scope for diversification into other products, namely, leather garments, goods etc.

Growing international and domestic markets. Exposure to newer markets through Fairs/ BSMs Retain customers through quality supplies and timely deliveries Aim to present the customer with new designs, infrastructure, country & company profiles.

Use of modern technology Exhibit strengths in manufacturing, for example, strengths in classic shoe manufacturing, hand crafting etc.

More use of websites to develop the market demand so that it would be cost effective.

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Key Drivers:

Increasing consumerism and fashion consciousness driving the market Manufacturers emphasizing on branding leather products Export market expected to grow. Many international brands have started outsourcing from India.

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15.Competitors grid

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16. Conclusion
The plan was well received by me and the main aim to become the Indias best foot ware industry will be accomplished in the near future. Comfort shoes is the only company where the customer will receive or can purchase the best shoes which will be durable and will not give out odour at any time
From all the all the aspects of the company we considered it can be said there are a lot of pros and cons that go into making of a successful foottware company in the foot ware sector in India strategy by understanding the consumer and the selling strategy developed

according to the range of customers. Progress on the right strides towards achieving their targets, which would be achieved at a slow rate as the product is relatively new for the company.

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Bibliography Website like www.liberty.com www.puma.com www.reebok.com www.bata.com www.adidas.com Reference taken from the certain books of marketing as well as the study material provided during the academics.

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