1.

1 INTRODUCTION TO THE STUDY

Organization
An organization is a social unit, which is deliberately constructed and reconstructed
from time to time in order to seek certain specific goals. It is an association formed by a group
of people who believe that there are certain benefits available from working together towards
achieving a specific goal.

Basically, an Organization in its simplest form is a person or group of people

intentionally organized to accomplish an overall, common goal or sets of Goals. Business
Organizations can range in size from one person to tens of thousands.

There are several important aspects to consider about the goal of the business
organization. These features are explicit (Deliberate and Recognized) or implicit (“Behind the
scene”). Ideally these features are carefully considered and established, usually during the
strategic planning process.

All organizations have a management structure that determines the relationships

between functions and positions, and subdivide and delegate roles, responsibilities, and
authority to carry out definite tasks.
Organizations are open systems, i.e. they affect and get affected by the environment beyond
their boundaries.

NATURE AND SCOPE OF THE STUDY

The nature and scope of an organization is about the division of work, interrelated
activities, assigning duties to employees, decision process etc.…up to what extent.

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OBJECTIVES OF THE STUDY

 To Know about the company.

 To study the organizational culture and structure.

 To study the various products offered by the company.

 To study the various departmental functions.

 To experience how theoretical knowledge is applied in practical life.

 To find the ways by which the business promotes their business.

 To know the role of agents in the organization.

 To determine the customer’s perception.

 To determine the customer’s expectations.

 To determine the problem faced by the customer while investing in the business

 To identify the target market of the organization.

Methodology

The data for the study has been collected from secondary and primary source.

Primary data

Primary data is original research that is obtained through first-hand investigation, Information
Given by department managers and personal observations.

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Secondary Data

Secondary data is the information that is already available.

Official websites, getting information from known sources.

Limitations

 There are difficulties in obtaining data from executives and managers due to their
busy schedule.

 An in-depth study could not be carried on due to lack of sufficient time.

 The reliability of the data used for the study depends on the company’s reports and
information given by the executive’s.

 The company has limitations to disclose their financial details so a detailed analysis of
the same was not possible.

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1.2 INDUSTRY PROFILE

The Textile Sector in India ranks next to Agriculture. Textile is one of India’s oldest
industries and has a formidable presence in the national economy in as much as it contributes
to about 14 per cent of manufacturing value-addition, accounts for around one-third of our
gross export earnings and provides gainful employment to millions of people. The textile
industry occupies a unique place in our country. One of the earliest to come into existence in
India, it accounts for 14% of the total Industrial production, contributes to nearly 30% of the
total exports and is the second largest employment generator after agriculture. Textile
Industry is providing one of the most basic needs of people and the holds importance;
maintaining sustained growth for improving quality of life. It has a unique position as a self-
reliant industry, from the production of raw materials to the delivery of finished products,
with substantial value-addition at each stage of processing; it is a major contribution to the
country's economy. This paper deals with Global Scenario, Indian Scenario of Textile
Industry. Profile, structure and functions involved in a company. It is a great opportunity for
trainee to study the Organization and learn functions involved and make sure to understand
Theoretical concepts in Practical and Practical concepts in Theory.

Global Scenario

Market Share of Major countries in Global Textile Industry as of 2006

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The Invention:

English inventors in the 18th century began to automate textile cottage industry
processes including carding, spinning and weaving. James Hargreaves developed the
Spinning Jenny, a device which replaced eight hand spinners in one operation. Richard
Arkwright assembled these processes and started the first factory on the Derwent River in
Cromford, England in 1771.

Following the American Revolution, several founding fathers felt manufacturing

should remain in England. Alexander Hamilton felt otherwise and wanted to establish a
model mill village in Paterson, New Jersey. His ideas were ahead of their time. The "National
Manufactory" went out of business in 1796.

Samuel Slater of Rhode Island visited several mills owned by Arkwright and
associates, memorized the essential features and returned to the US. In 1792, he opened a
yarn spinning mill in Pawtucket, Rhode Island, the first successful automated yarn spinning
in the US. In 1814, James Cabot Lowell of Boston built a factory in Waltham, up the Charles
River from Boston. Later, the Boston Associates built an entire mill town on the Merrimack
River, and later named it "Lowell" in memory of James Cabot Lowell.

Development in Textile Industry

1793 - Eli Whitney and Hogden Holmes developed a simplified method of removing
the cotton lint from the seed. Whitney’s, and especially Holmes' saw tooth gin, revolutionized
the cotton industry by dramatically increasing the productivity of cotton ginning.

In the early 1800s, cotton was raised in the southern United States and exported to
mills in England and the north. Leaders such as William Gregg of South Carolina advocated a
home-based textile industry for the south but the time was not right. Northern mills resisted
the growth of mills outside New England. Textile machinery was built in New England and
New Jersey and imported from Europe. After the Civil War, the global scenario slowly
replaced slaves with free workers. The industry remained largely in the north until after the

5
1880s. Leaders such as Edwin Michael Holt and family of Alamance Country, North
Carolina built mills in large numbers throughout the south as the 19th century closed.

Merchants contracted for goods through agents. The Cone family moved from
Baltimore to Greensboro and brokered sales. The Belk family bought goods from Cone to sell
in the dry goods stores. Merchants such as Marshall Fields of Chicago bought goods from
mills through intermediaries. Later, in order to better control supply, the Cones and the Fields
built mills of their own, e.g., cone mills and Fieldcrest Mills Machinery was imported from
the north and from Europe.

World War I and the naval blockade imposed by England on German shipping, and
the use of U-boats by Germany to harass English vessels brought the realization that the
United States must be independent of England and Germany for machinery and dyestuffs.
New companies emerged to satisfy the war effort and remained strong for several decades
following the war. World War II once again emphasized the need for self-sufficiency.
Following the war, however, imported machinery and dyes, especially from Germany and
Switzerland, once again supplemented and eventually replaced domestic supply. American
textile companies thrived with the use of imported machinery and dyestuffs.

In the 1990s, a new world order began to replace the Made in the USA ideas. Buying
from the lowest cost producer drove many textile manufacturers out of the production side
and into imports. Manufacturing companies changed to marketing companies. The textile
industry is undergoing a major reorientation towards non-clothing applications of textiles,
known as technical textiles, which are growing roughly at twice rate of textiles for clothing
applications and now account for more than half of total textile production. The processes
involved in producing technical textiles require expensive equipments and skilled workers
and are, for the moment, concentrated in developed countries. Technical textiles have many
applications including bed sheets; filtration and abrasive materials; furniture and healthcare
upholstery; thermal protection and blood-absorbing materials; seatbelts; adhesive tape, and
multiple other specialized products and applications. The Indian Textile industry has been
undergoing a rapid transformation and is in the process of integrating with the world textile
trade and industry. This change is being driven by the progressive dismantling of the MFA
and the imperative of the recently signed General Agreement Trade & Tariff. In this bold,
new scenario, India has to move beyond its role of being a mere quota satisfying country.
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Leading Manufacturers in Textile Industry:

Most of the production happens in Asian countries. China and India are the leading
manufacturers in textile. Textile Industry has different sectors like Jute, yarn, apparel,
clothing and garments. Each country has its specification in respective sectors. Coming to
India, India is large manufacturer of yarn. China for silk yarn and so on. Below table gives
information regarding leading exporters & market share in world economy.

Leading Exporters & Market Share in World Economy

Role of Asian Countries:

The Textile & Clothing trade in the global market is fast changing with the scaling up
of uses of textiles in diverse areas. Asian countries including India play a dominant role in the
international trade of the global market. China has the major share in textile and clothing
trade in the international market etc. Both Bangladesh and Hong Kong have a significant
share. However, India is still on the back seat. It is reported that Asian counties export most
of textile and apparel to Europe and North America and USA etc.

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 Asian countries are gaining in textile trade due to lower costs compared to African,
European and South American countries. As per the Global Textile and Apparel Industry:
Vision 2015, World textile and apparel trade is expected to reach US$805bn by 2015 from
US$650bn in 2010. At present few countries like Bangladesh, Thailand, Cambodia, Sri
Lanka, Pakistan contribute major share in Forex earnings of their country from Textile and
Clothing trade, though their share in the world market is not very significant.

Asian countries are facing challenges in the global market due to volatility in price,
rising input cost, energy crisis and lack of marketing initiative/exposure etc. In addition,
initiatives need to be made in the area of Research and Development, Skill development and
Capacity building of the industry as a whole. Industry has to be in demand driven mode.

It is also noticed that tariff rate in few Asian countries are extremely high, which
became a barrier to scale up the share in the international market. At present a few Asian
countries are enjoying a special status in the global market as per WTO guidelines and able to
retain share till date. But this may not last long because of growing competition emerging
from other countries. Government of the concerned countries also facilitated the sector to
grow by framing policy and keeping provision of incentives/concessions to encourage for
international marketing. However, India is not enjoying such status and over the years.
India’s contribution from textile & clothing trade in country’s total forex earning shows a
declining trend in the last decade. Govt. of India has made a good no. of initiatives for
capacity building, skill development, product diversification and enhancing global share.

Global Trends in Consumer Behaviour

The textile industry in developed countries has often found itself unable to compete
with low-value goods made with cheap labour in developing nations. As a result, textile
industry jobs continue to move out of industrial countries and into developing countries (U.S.
Embassy). According to Senators Jesse Helms (R-NC) and Ernest Hollings (D-SC), the
textile and apparel industry has lost 700,000 jobs since NAFTA’s implementation in January
1994; North Carolina alone lost 124,700 jobs. Textile output has fallen 22.2 percent since
1994, and apparel output has declined more than 14 percent.

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 However, the focus of production shifted into advanced market sectors and the
industry has maintained profitability by making sizeable capital investments in computer and
mechanization technology (Cline 56, 84). Between 1975 and 1985, U.S. textile mills
reinvested 80 to 85 percent of their retained earnings, spending $1.4 billion per year on new
plant facilities and equipment. Between 1984 and 1986 this figure rose to $1.6 billion per
year. Firms invested in computer-controlled systems and robotics in order to improve
productivity while cutting labour costs.

Glen Raven Mills, Inc., a textile manufacturer in North Carolina, employs a “five
minute rule:” if the product requires more than five minutes of labour, production is shifted
overseas. As a result, domestic production concentrates on specialty fabrics, which continue
to succeed in the domestic and overseas markets. However, even in the specialty fabrics
divisions, the fabric is produced domestically and then shipped to China to cut and sew the
fabric into finished products.

Global Silk Scenario

In comparison with other natural textile fibres in use worldwide, silk occupies only a
very small slice of world production, consumption and demand. In pure volume terms, the
share of silk in the global fibre market is thus dwarfed by the two other major categories,
namely, cotton and wool. Though the volume of silk trade is comparatively low, the value of
international trade in silk and silk products is significant. The world demand for silk is on the
increase particularly since the past two decades. However, the traditional silk producing
countries like Japan, Korea and Brazil have drastically cut their production. In all these
countries, silk production which is highly labour intensive industry has been slowly replaced
by the highly profitable electronic industry.

Indian Scenario

Indian textile enjoys a rich heritage and the origin of textiles in India traces back to
the Indus valley Civilization where people used homespun cotton for weaving their clothes.
Rig-Veda, the earliest of the Veda contains the literary information about textiles and it refers
to weaving. Ramayana and Mahabharata, the eminent Indian epics depict the existence of

9
wide variety of fabrics in ancient India. These epics refer both to rich and stylized garment
worn by the aristocrats and ordinary simple clothes worn by the common people. The
contemporary Indian textile not only reflects the splendid past but also cater to the
requirements of the modern times. The history of textiles in India dates back to the use of
mordant dyes and printing blocks around 3000 BC. The diversity of fibres found in India,
intricate weaving on its state-of-art manual looms and its organic dyes attracted buyers from
all over the world for centuries. India saw the building up of textile capabilities,
diversification of its product base, and its emergence, once again, as an important global
player.

The Indian Textiles Industry has an overwhelming presence in the economic life of
the country. Apart from providing one of the basic necessities of life, the textiles industry
also plays a pivotal role through its contribution to industrial output, employment generation,
and the export earnings of the country. It contributes about 14 per cent to industrial
production, 4 per cent to the GDP, and 17 per cent to the country's export earnings. It would
provide direct employment to over 35 million people by 2010, which includes a substantial
number of people from less privileged sections of society. In India, weaving and yarn making
was started four thousand years ago. Industrial revolution was started in 18th century. At the
same time all the industries were developed. In India, textile industry was started by British
in late 18th century with large machinery and technology. Indian textile and garment makers
target 15- 20% growth in FY’14.

India’s Silk Imports (all silk commodities) in million USD

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India’s Raw silk production, export, import and Demand supply gap

World Raw Silk Production

Silk production in the different countries is given in the below table. In addition to the
following countries, 30 more countries, such as, Vietnam, Indonesia, Philippines, Iran, etc are
also now taking up silk production. All the developing countries are now exploring the
possibilities to take up silk production primarily due to two main reasons i.e. labour
intensiveness and high foreign exchange earnings.

World raw silk production was 76,291 metric tonnes in the year 1999. It was because
of the general awareness on the natural fibres and the preference to wear clothes produced
from natural fibres. China, undoubtedly, is the mightiest player in world silk market with an
annual silk output of around 65,000 metric tonnes. China attained the number one position in
silk production in early 70s, snatching it from Japan. It is the largest silk producer of natural
silk. It produces the superior quality raw silk of international standards having a share of 90
per cent of global exports and more than 60 per cent of world raw silk production.

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 Japan’s silk production was 43,150 metric tonnes in 1938 and the same has been
reduced to 394 metric tonnes in 2002. The production of raw silk in temperate countries such
as Japan and South Korea is declining steadily. In all other countries, the raw silk production
is in fluctuating trend. The silk production in India has gone up from 690 metric tonnes in
1938 to 14,617 metric tonnes in 2002.

Structure of Textile Industry in India

Mills, power looms and handlooms constitute three independent sectors of the Indian
textile industry. The mill sector is organized, mechanized and modernized production of yarn
whereas the power loom and handloom sectors have remained technologically backward and
stagnant. Almost all the spun yarn made in India come from the organized sector, reflecting
the highly capital intensive nature of yarn spinning.

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 The power loom industry produces a wide variety of cloth, both grey as well as
processed. Production of cloth as well as generation of employment has been rapidly
increasing in the power loom sector. There are 22.38 lakh power looms in the country as on
31st December, 2009 distributed over approximately 5.03 lakh units. This is about 60.39 % of
the total looms in the world. The power loom sector contributes about 62 % of the total cloth
production of the country, and provides employment to about 55.95 lakh persons during the
year 2008-09. As an economic activity, handloom is the 2nd largest employment provider
next only to agriculture. The sector with 60.40 % about 35 lakh handlooms provides
employment to 65 lakh persons, of which 60.40 % are women and 35 % belong to minority
section of the society.

The textiles sector is the second largest provider of employment after agriculture.
Thus, the growth and all round development of this industry has a direct bearing on the
improvement of the economy of the nation. The Indian textiles and apparel industry has an
unbalanced structure, 95% of the industry is the unorganized and only 5 % is the organized.
Sector consolidation process in certain segments, to take advantage of economies of scale is
necessary. This will generate more employment, as smaller operations affect cost and
competitiveness.

The textile industry is mainly a labor intensive industry as it provides livelihood to the
huge population, mainly consists of unskilled workers, and thus plays a pivotal role in the
development of any economy. As this particular industry also comes under the basic
necessities of human beings, it impacts a lot to the society as a whole.

1.3 Industry & Market Analysis

The Textile Industry occupies a vital place in the Indian economy and contributes
substantially to its exports earnings. Textiles exports represent nearly 30 per cent of the
country's total exports. It has a high weight age of over 20 per cent in the National
production. It provides direct employment to over 15 million persons in the mill, power loom
and handloom sectors. India is the world’s second largest producer of textiles after China. It
is the world’s third largest producer of cotton-after China and the USA-and the second largest

13
cotton consumer after China. The textile industry in India is one of the oldest manufacturing
sectors in the country and is currently largest sector.

The textile industry encompasses a range of industrial units, which use a wide variety
of natural and synthetic fibre to produce fabrics. The textile industry can be broadly classified
into two categories, the organized mill sector and the unorganized mill sector. Considering
the significance and contribution of textile sector in national economy, initiative and efforts
are being made to take urgent and adequate steps to attract investment and encourage wide
spread development and growth in this sector.
It is the single largest employer in the industrial sector employing about 38 million
people. If employment in allied sectors like ginning, agriculture, pressing, cotton trade, jute,
etc. are added then the total employment is estimated at 93 million. The net foreign exchange
earnings in this sector are one of the highest and, together with carpet and handicrafts,
account for over 37 % of total export earnings at over US $ 10 billion. Textiles, alone,
account for about 25 % of India’s total forex earnings.

India’s textile industry since its beginning continues to be predominantly cotton based
with about 65 % of fabric consumption in the country being accounted for by cotton. The
industry is highly localized in Ahmedabad and Bombay in the western part of the country
though other centres exist including Kanpur, Calcutta, Indore, Coimbatore, and Sholapur.

Silk Industry in India

Silk industry in India is an agro-based cottage industry providing gainful employment

to 65 lakhs people spread over 45,000 villages. Silk industry is ideally suited to the rural
development of the country and silk weaving is as old as cotton weaving in India. A large
number of handlooms are weaving silk fabrics all over the country especially in Bengal,
Punjab, Assam, Uttar Pradesh, Bihar, Tamilnadu and the former princely States of Mysore
and Kashmir. There are about 1.32 lakhs of handlooms engaged in pure silk weaving in India.
Silk industry is known for more than 2000 years and Indian silk attracted the attention of
Europe in the mediaeval period.

14
 India, the second biggest silk producer has an ancient silk culture. Some believe that
in India, Himalayas is the homeland of silk. It was on the legendary silk route, this stretched
6000 miles across the heartland of Asia from China to the Mediterranean. In any case, the
link between China and Sub-Himalayan regions establishes the cultivation of silk in the
Kashmir valley from time immemorial. Fascinated by the elegant nature of silk, princely
rulers like Tippu Sultan of Mysore propagated and encouraged Cultivation of silk in India.
Also, during the times of war, the British Administration in India accorded top priority to silk
cultivation especially in the Bengal region. This is because silk was used extensively for the
Manufacture of parachutes. In many states of India, silk rearing and reeling were introduced
only to help the agriculturists with a part time vocation. Karnataka is leading in the
production of raw silk, West Bengal comes second. Other States which produce raw silk are
Andhra Pradesh, Tamilnadu and Jammu & Kashmir.

Exports of Silk in India decreased to 16.99 USD Million in 2016 from 57.41 USD
Million in 2015. Exports of Silk in India averaged 236.32 USD Million from 1996 until 2016,
reaching an all time high of 392.43 USD Million in 2005 and a record low of 16.99 USD
Million in 2016.

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Formation of Central Silk Board

The first authentic inquiry into the conditions of Indian silk industry was undertaken
in 1914-15 by H. Maxwell Lefroy and E. C. Ansorge (Lefroy and Ansorge, 1915). In a report
they observed that the industry was scattered and unorganized producers were subjected to
exploitation. They suggested formation of a central organization to address the needs of the
industry (Lefroy and Ansorge, 1915). Subsequent recommendations by a Silk Panel in 1946
lead to the formation of the Central Silk Board in 1949.

Central Silk Board (CSB) is a statutory body, under the administrative control of the
Ministry of Textiles, Government of India. One of the earliest commodity boards to be
constituted by the Government of India, the Board coordinates the development of sericulture
and advises the Government on policies governing export and import. It has the responsibility
for pre-shipment inspection of silk goods exported from the country. The Board is also
responsible for organizing sericultural research, training, basic seed (egg) production and
collection of statistics pertaining to sericulture and silk industry (National Commission of
Agriculture, 1976 and Gopalachar, 1978).

The Central Silk Board (CSB) established a number of sericulture research

institutions in 1960s. With systematic efforts, it became possible in 1970s to develop a
technology suitable for tropics. New mulberry varieties coupled with agronomical practices
were made available to the farmers. Packages of practice were developed for silkworm
rearing, besides realising new bivoltine races. Popularisation of the bivoltine hybrids was
given priority. Since seed preparers started using bivoltine as a male parent for the
preparation of cross breeds, the traditional poor yield crosses have been replaced to the extent
of 85%. Consequent to this, mulberry sericulture was spread to non- traditional states like
Kerala, Maharashtra, Rajasthan and Gujarat in the 1980s. While other crops (grains) perish
due to very little precipitation, mulberry survives such acute situation where ground water is
also not available for raising the crops, thus providing subsistence to a large number of
farmers (National Commission of Agriculture, 1976).

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 India's Position in Global Textiles and Clothing Industry:

India's position in the World Textiles Economy :-

 Second largest producer of raw cotton.

 Third largest producer of cotton yarn.
 Third largest producer of cellulosic fibre/yarn.
 Second largest producer of silk.
 Fifth largest producer of synthetic fibre/yarn.
 Largest producer of jute

INDIAN TEXTILE
INDUSTRY

COTTON
MAN-MADE TEXTILE WOOLEN JUTE
vds
SILK

DECENTRALIZED ORGANISED
SECTOR SECTOR

HANDLOOMS POWERLOOMS MILLS

(CLOTH) (PRIVATE,
(CLOTH)
PUBLIC & co-
operative)

17
1.4 Some of the key players in the Industry

Below are the competitors for M.C. Silks & Sarees :-

 Kuberan Silks
 N.S.K. Wholesale Saree Centre
 Ramishetty Pure Silk Saree Manufaturers
 Angadi Silks

1.5 Environmental Study – PEST

A PEST (Political, Economic, Social and Technological) analysis is a major part of

the environmental scanning section of strategic management and it is used by companies
during market research and strategic analysis.

Using a PEST analysis helps a business to understand various macro environmental

factors that they need to take into consideration when determining the decline or growth of a
particular market.

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Pest Analysis of Textile Industry:

Political (legal) aspects-

An Industry will not be able to gain success, good reputation and trust if it will not
consider legal and political sector as part of their strategy. Political and legal sectors include
the needs of the company to follow the given policies and regulations of the government in
order to be considered as legal and authorized business company. In this manner, industry
should be able to consider political and legal aspects so as to show that they value the policies
and regulations of the government in any of the business operations.
 Tax policy
 Employment laws
 Political stability
 Environmental regulations
 Trade and tariff restrictions

Economic Aspects-

It is important that apparel must also give enough attention to its economic stability. The
economic goal of a certain industry is like an axis in which other objectives or goals are
revolving. The economic factor involves the context in which an industry belongs, i.e. the
configuration of the competition in which a company operates the active demand of the
products, general economic condition of the nation or region, conditions in relation with other
industries, and the situation of the resource markets.
 Economic stability
 Economic growth
 Interest rates
 Inflation rates
 Exchange rates

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Socio-cultural sector-

Society and culture is an important factor that must be given emphasis by any
business, specifically those who are operating in the global arena. It is important that the
company must operate in compliance with the social systems in order to gain good reputation
and effective public image. On the other hand, cultural aspects is equally essential, in order to
understand the various needs of different individuals that belongs to different cultures.
 Population growth rate
 Age distribution
 Career attitudes
 Consumer behavior
 Religion and culture itself

Technological aspects-

The complexities of achieving business success through increased efficiency,

effectiveness and competitiveness, combined with innovative applications of modern
technology, has heightened the awareness of both technology and business managers towards
more strategically oriented approaches for planning and management of any industry. Hence,
it is important that industry must be able to give consideration to the technological aspects
like:-

 Distribution and communication channels

 Technology incentives
 Automation
 Rate of technological change
 Environmental and ecological aspect
 Barriers to entry
 Production level
 Outsourcing decisions

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 Here we analyze the sector's dynamics through Porter's five-factor model. The Indian
textile industry is one of the oldest and most significant industries in the country. It accounts
for around 4 per cent of the gross domestic product (GDP), 14 per cent of industrial
production and over 13 per cent of the country's total export earnings. In fact, it is the largest
foreign exchange earning sector in the country. Moreover, it provides employment to over
35million people. The Indian textile industry is estimated to be around US$ 52 billion and is
likely to reach US$ 115 billion by 2012. The domestic market is likely to increase from US$
34.6 billion to US$ 60 billion by 2012. It is expected that India's share of exports to the world
would also increase from the current 4 per cent to around 7 % during this period. Textile
industry provides one of the most fundamental necessities of the people. It is an independent
industry, from the basic requirement of raw materials to the final products, with huge value-
addition at every stage of processing. In fact, it is estimated that one out of every six
households in the country directly or indirectly depends on this sector. Here we analyze the
sector's dynamics through porter five – factor model.

1.6 Market Forces - Porter's Model:

Threat of new entrants-

Indian Textile Industry is very dependent on personal contacts and experience. The
new actors would have to bring some kind of client base along with the new establishment.
Product differentiation may constitute a barrier of entry as manufacturers are heavily
dependent on references and word of mouth. Without any established client portfolio it is

21
difficult to attract, endure increased costs in creating sample collections to show potential
customers. Hence, in start-up phase costs are not only associated with the manufacturing
required but also with the costs for designers and creating samples. In the sense of reference
dependency, barriers of entry are considered as very strong. As the new entrant has limited
experience in textile manufacturing and there are no built up relationships with customers,
they might experience disadvantages relative to the established competitors. Governmental
policies do affect the business environment to some extent. An example of this is subsidies,
which are offered to Companies establishing production in certain regional areas. In addition
to these potential barriers of entrance, new entrants may have second thoughts about entering
the new market, if existing manufacturers may retaliate on new entrants. The Indian textile
industry though, has such a large population of manufacturers so any new actors may hardly
be noticed by the competition, which minimizes the risk for retaliation.

Bargaining power of customers (demand scenario)- Global textile & clothing industry
is currently pegged at around US$ 440 bn. US and European markets dominate the global
textile trade accounting for 64% of clothing and 39% of textile market. With the dismantling
of quotas, global textile trade is expected to grow (as per Mc Kinsey estimates) to US$ 650
bn by 2010 (5 year CAGR of 10%). Although China is likely to become the 'supplier of
choice', other low cost producers like India would also benefit as the overseas importers
would try to mitigate their risk of sourcing from only one country. The two-fold increase in
global textile trade is also likely to drive India's exports growth. India's textile export (at US$
15 bn in 2005) is expected to grow to US$ 40 bn, capturing a market share of close to 8% by
2010. India, in particular, is likely to benefit from the rising demand in the home textiles and
apparels segment, wherein it has competitive edge against its neighbour. Nonetheless, a rapid
slowdown in the denim cycle poses risks to fabric players.

Bargaining power of suppliers (supply scenario)- India is a country where we have

numerous players in textile industry which all are varied in terms of size and power. There
has been increase in production and supply of textile products in last few decades globally,
mainly due to rapidly changing social and economic structures of the countries worldwide. In
past few years, especially after removal the trade related tariffs and non tariff barriers in
2005, Asian countries such as India, China, Hongkong and Japan have emerged as major
players in this particular industry, mainly due to their changes on economic front and
infrastructure developments.
22
 The large number of available suppliers in India gives an initial indication of a weak
bargaining position for the supplier group. Additionally, the supplier group lacks switching
costs and has a low level of product differentiation. This leads to great possibilities for textile
manufactures to scout the supplier group for the best terms and prices for production. As a
result, manufacturers can contact a large number of suppliers and play suppliers against each
other. Such behavior weakens the bargaining power for suppliers and as a result pushes prices
down and makes prices similar among suppliers.

Threat of substitute products- When using such a broad terms as textile, there are
obvious reasons for identifying substitute product groups proves difficult. Of course, there are
variations in types of clothing and material. Variations in textile segment can also be
identified as trends in fashion and styles.

Competition revolutionary-
The textile manufacturing industry has numerous manufacturers. It is a massive sector
with thousands of companies located mostly in Asian region. High growth rate of textile
exports indicates that the rivalry between manufacturers is low. The growth rate is high in
some product segments but even negative in others. Hence, the rivalry between apparel
manufacturers is diverse since they enjoy different growth rates.
Additionally, textile as a perishable product group is in the risk of temptations to cut prices
when demand slackens. For example, when there are recessions in the business cycle apparel
prices will drop significantly in price. Both these factors exemplify and indicate that the
rivalry between manufacturers is high.

As Indian apparel manufacturers are pressured to lower prices in order to stay

competitive with companies abroad, the overall rivalry within the industry gets companies to
expand their customer base in order to keep profits up. It is therefore reasonable to believe
that such expansions may occur on the behalf of competitors if possible, and thereby increase
the rivalry in the industry.

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 CHAPTER - 2

COMPANY PROFILE

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2.1 COMPANY PROFILE

M C Silks and Sarees is a well known player in the textile industry in Bangalore. It
was started in the year 1976 with 1 handloom to manufacture fine and quality silk sarees. It
was a giant set up at Yelahanka running successfully since then till date.

M C Silks and Sarees is headquartered at Bangalore, Karnataka manufacturing silk

sarees. The manufacturing unit currently has 650 power looms and around 400 hand looms.
This unit accounts for more than 90% of the Company’s sales every year. Apart from
manufacturing, the organization purchases certain types of sarees from Madanapalli, Andhra
Pradesh and then sells them here.

The manufacturing unit has been equipped with a fully functional power looms. It has
been maintaining a standard Quality control check and has never compromised on it. The
Company has maintained good relationships with customers and big brands, nearly 60% of
customers have been with the Company for a longer duration.

M C Silks and Sarees is currently maintained by three brothers and do not wish to
handover the management to outsider. They follow a very strict credit policy.

2.2 The Mission & Vision

Mission:
The mission of M C Silks & Sarees is to empower the dominance of the Organization
in the market of Karnataka and develop and expand strong presence in the Indian market.
Their products, operations and services are benchmarked against the best.

Vision:
Through an integrated system of tools, techniques and training, M C Silks & Sarees
constantly thrives to achieve and maintain the highest quality parameters in most versatile
processes constant process of continuous improvement and development of its own processes
keys to the consistency of the company’s survival and success over a period.

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Process Flow

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2.3 SWOT Analysis

SWOT analysis is a structured planning method used to evaluate Strength, Weakness,

Opportunity and Threat involved in a business or project. It can be carried out for product,
place Industry and firm. It involves specifying the objective of the business or project and
identifying the internal and external factors that are favorable and unfavorable to achieving
that objective.

Strengths- Characteristics of the business that give it an advantage over others

 Abundant raw material

 Low cost skilled labor

 Presence across the value chain

 Growing domestic market

 Increasing presence across entire value chain

 Cheap and skilled manpower

 Sharp reduction in borrowing costs.

 Truly vertically integrated from raw material to finished products.

 Flexible in terms of production quantity and lead time.

 Delivering the goods at the right time.

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Weakness - Characteristics that place the business at a disadvantage relative to others

 Cost competitiveness
 Tech obsolescence.

 Caters mainly to the low-end class.

 Low level of training.

 Lack of economies of scale and advance processing capabilities.

Opportunities - Elements that business could exploit to its advantage

 Huge demand for value added goods across many states of the country especially
during marriage and festive seasons.

 Relocation from high cost economies.

 Large and relatively untapped domestic market

 Large Indian expatriate community. Hence there is large demand for Indian
Garments.

 Rate of import duties is minimal.

 Extensive commercial interactions have greatly helped in laying the foundation

Threats - Elements in the environment that could cause trouble for the business.

 Domination of large firms in the Industry, Threats from the new entrants
 Not well educated labours, half the machines are not upgraded.
 One machine gives only one type of design. If requirement is high, takes more time to
produce a specific type of saree design.

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2.4 Target Markets

The consumers a company wants to sell its products and services to, and to whom it
directs its marketing efforts. Identifying the target market is an essential step in the
development of a marketing plan. A target market can be separated from the market as a
whole by geography, buying power and demographics, as well as by psychographics.

Not all products and services are meant for all types of consumers. In fact, companies
may tweak certain aspects of a product, such as the amount of sugar in a soft drink, so that it
is more likely to be purchased by consumers with varying tastes. Creating the target market
may require the use of limited product roll-outs and focus groups, allowing product managers
to get a feel for which aspects of the product are the strongest.

M C Silks and Sarees manufacture sarees with export quality hence they have many
local customers and get from various parts of the country.
Some of the local customers are Angadi Silks, SVT textiles, Sudarshan store and few
other small retailers.

Customers from other states are completely wholesalers. M C Silks does not
encourage retailers. Their business strategy is B2B. At M C Silks, this engagement with large
and prominent customers represents the cornerstone of its strategy. Over the years, the
Company has selected to maintain good relationship with prominent brands. The advantage
of working with these large, prominent and demanding clients is that competition at this level
is relatively limited on account of the high quality standards required.

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 2.5 The Balanced Score Card Approach

A framework that translates an organization's strategy into a set of objectives and

measures and aligns the organization to them through its planning and control processes.

Nine out of 10 organizations fail to execute their strategies. Research has shown that
70% of organizations that use a formal process to manage strategy out-perform their peers by:

 Growing Revenue
 Gaining Customer Loyalty
 Strengthening Weavers Commitment
 Optimizing Resource Allocation
 Reducing Cycle Times
 Managing Risk
All these are reasons for the Organization to become a good Organization.

Financial:

Objectives- To generate constant revenue and more than the previous year and so on.
Company tries to become financially strong to get the things done on time.

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Measures- It can be measured through increasing the sales. If there is a reduction in the
internal process such as rework, scraps, etc. which will help the organization to earn more on
their financials and good income.

Targets- Targets are to increase the sales of the organization, expand the services of the
organization. Reduce as much as possible in the manufacturing process such as scraps,
wastages, etc. Make the required budgeting using the budgeting control techniques.

Initiatives- If new technology is implemented it will help the organization to reduce the
cost per product produced, use of man power and methods which use to control them, i.e. few
enterprise level initiatives, if implemented would also help the organization to grow in their
financials. Increasing the distribution network would also help the organization to grow.

Internal Business Process:

Objectives- Reduce defects to minimum which will help in reducing the scraps, wastages,
and rework. It is to meet the expected quality standards.

Measures- To identify efficient labor & reduce rework.

Targets- To implement the process of doing things which will help in achieving the
expected standards and the quality of the goods, help in reducing scraps, rework, etc.

Learning And Growth:

Objectives- To become the market leader in the industry.

Measures- Own experience of the weavers from or with fellow weavers will help them to
grow in the organization & to grow in the organization hierarchy.

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Targets- Quality assurance in the organization will help them to manufacture good quality
of sarees.

Initiatives- It can be achieved through expanding distribution of the goods, connecting to

new buyers in the market and manufacturing the goods through fixed standards.

Customer:

Objectives - 100% customer satisfaction.

Measures- Through proper market research, through feedback, customer response can be
recorded and can be looked upon.

Targets - To achieve customer satisfaction, to give proper quality of products and to serve
after sales. It is to manufacture a premium quality of class sarees

Initiatives- Market research, Feedback can be used to get the proper idea about the
customers. On time delivery of the goods as per the deadline allotted.

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 CHAPTER - 3

ORGANIZATION STRUCTURE

33
3.1 Organization Structure – An Introduction

Organization design is not simply about mapping out an Organizational structure, but
also about how the organization is aligned with all other aspects, functions, processes and
strategies within the business. When looking at organization design, the context within which
the business exists must be taken into consideration.

An organization is ‘a person or group of people intentionally organized to accomplish

an overall, common goal or set of goals’.
Organizations are social entities that are goal-directed, designed as deliberately structured and
co-ordinate activities systems, and linked to the external environment. On the basis of
relationship, an organization may of two types—formal and informal.

Formal organization refers to the structure of well-defined jobs, each bearing a

definite measure of authority, responsibility and accountability.
Informal organization refers to the relationship between people in the organization based on
personal attitudes, emotions and prejudices, likes and dislikes.

There are five common forms of organization structure—Line, Functional, Line and
Staff, Committee and matrix organization.

Line organization: In this, there is a chain of authority which flows from upward to down
word.

Functional organization:
In this form of organization all activities in the organization are grouped according to
the basic functions, i.e., production, finance, marketing, headed by a specialist. The size of
each department varies according to business needs. For example, most manufacturing
organizations have a large production department compared to the size of other functions.
Some organizations merge sales and marketing. The general point is that such a structure
allows employees with specialist skills to deploy these to their best abilities.

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Line and Staff Organization:
In this form of organization the structure is basically that of line organization but
functional experts are appointed to advise the line authority in their respective field.

Committee Organization:
Committee is a group of individuals formed permanently or temporarily for a
particular purpose through free interchange of ideas.

Project or Matrix Organization:

In it authority flows vertically within functional departments. A matrix structure is
one which sets out to reconcile the competing demands of customers and the need for a
strong bureaucratic and efficient functional presence. This type of structure is commonly
observed in organizations which are highly project-based – for example, civil engineering
companies.

Obviously, there are greater tensions between the requirements of different projects
and functions, but the idea is to enable employees to locate themselves within a strongly
multi-project environment.

The Present Organization Structure:

Organization is managed by three proprietors. One of them manages the production

unit, one manages the sales unit and the other handles the existing customers and customer
acquisition.

Person In-charge of production unit takes care of everything related to it and it also
has few managers working under him to maintain weavers, books of accounts and take care
of day to day activities.

Production department is divided into two parts – Handlooms and Power looms. Each
department has supervisors and maintenance head. Production heads takes care of production
or processing. Maintenance heads takes care of operation and functioning of looms. Quality
head directs all the weavers in the factory to deliver the expected result.

35
 Maintenance department handles machinery. Staff involved in maintenance
department works for full day in shift basis, because machinery has to run continuously. They
check machines for every two hours.

Suggested Organization Structure

Matrix structure will work for this organization where in all the departments will be
working in tandem to produce a single final product. Here, all the weavers have to work
together to produce sarees. Along with them all other departments like Maintenance, Finance
department have to work together to complete the tasks successfully.

Review of the Existing Organization Structure

A review of Organization structure and its performance is done through the principles of
management.

14 Principles of management:

1. Division of work- Here, in this organization work is not divided but the entire
saree will be weaved by a single weaver. Type of saree to be weaved will be decided
by the quality department.

2. Authority- Managers must be able to give orders. Authority gives them this right.
Note that responsibility arises wherever authority is exercised.
In the factory, there are managers give order to supervisors regarding quantity and
quality of production and supervisors give order to workers.

3. Discipline- Weavers must obey and respect the rules that govern the organization.
Good discipline is the result of effective leadership, a clear understanding between
management and workers regarding the organization's rules, and the judicious use of
penalties for infractions of the rules.
36
 Coming to discipline, workers in the Organization are well, though they are not well
educated.

4. Unity of command- Every employee should receive orders from only one superior.
There are different stages in production, so only one representative of each stage gives
commands to workers.
5. Unity of direction- Each group of organizational activities that have the same
objective should be directed by one manager using one plan.

Most experienced employees are working in the Organization for more than
20 years. So they have good respect towards each other. They follow the objective
directed by manager

6. Subordination of individual interests to the general interest- The interests

of any one employee or group of employees should not take precedence over the
interests of the organization as a whole.

7. Remuneration- Workers must be paid a fair wage for their services.

Workers are getting paid as per the piece produced and supervisors get enough
salaries.

8. Centralization- Centralization refers to the degree to which subordinates are

involved in decision making. Whether decision making is centralized (to
management) or decentralized (to subordinates) is a question of proper proportion.
The task is to find the optimum degree of centralization for each situation.

Decision making is centralized in most of the situations. Only few situations like
welfare of workers decision making process involves subordinates.

37
9. Scalar chain- The line of authority from top management to the lowest ranks
represents the scalar chain.
Cross communication takes place in the Organization.

10. Order- This principle is concerned with systematic arrangement of men, machine,
material etc. there should be specific place for every employee in organization.
Systematic Order is there in the Organization.

11. Equity- Managers should be kind and fair to their subordinates.

Yes, managers are kind enough and fair to the subordinates.

12. Stability of tenure of personnel- High employee turnover is inefficient.

Management should provide orderly personnel planning and ensure that replacements
are available to fill vacancies. Replacements are not available.

13. Initiative- Employees who are allowed to originate and carry out plans will exert
high levels of effort.
Employees in the Organization have no chance to originate and carry out the plans.

14. Esprit de corps- Promoting team spirit will build harmony and unity within the
organization.
It doesn’t happen in the Organization.

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 CHAPTER - 4

BUSINESS / UNIT LEVEL ANALYSIS

39
Purchasing Function

Materials purchased - with specifications: The firm is involved in manufacturing of silk

sarees with fully equipped Machinery. M C Silks purchases jerry well in advance and starts
manufacturing even before taking up the order.

Suppliers of materials: M C Silks purchases jerry material from different Suppliers. They
purchase different quality raw materials from different places like Karnataka, Andhra Pradesh
and Tamil Nadu.

Supplier selection procedure: The firm has following criteria to select the suppliers of
materials. They are:
 They should be able to deliver the raw material in time and in required quantity at any
time.
 They carry material from suppliers to the Mill as per the requirement and orders they
receive.

Purchasing schedule: The firm purchases the raw material once in two months depending on
the stock and expected sales.

Inspection of purchased material: As there are not many raw materials purchased,
inspection is not done before the purchase but after it is delivered because of the trust
between them. Inspection is done by the factory manager of Quality Assurance department by
himself once delivered to the factory.

Warehousing & Inventory Management Function (materials):-

There is a separate section for maintenance of raw material. A person called supervisor is
a head of that section. He records all the details of raw material from the time when it comes.

 How much material is used per day.

 How much material is of waste quality

 How much quantity of material is wasted.

40
  How much material is leftover.

 What kind of material is needed for production as per the order.

Production Function

Production Process: Production for small and lower quality sarees takes place even before
the order is placed by the customer. While high quality sarees are produced only based on the
requirement and typically production starts two days after the receipt of the payment.
Different types of looms and labor for different types of sarees.

Sales & Distribution Function

Sales unit is located in Chickpet and is open only for wholesalers. Firm does not have
time to engage with retailers or tertiary customers. MOQ for the sales is 300 sarees of any
variety or combination of different varieties and qualities of sarees.
Distribution is done through delivery partner who delivers to the door of the customer
and on time every time.

Pricing and Promotion

The sarees prices range from Rs. 5,000 up to Rs. 75,000. No promotional activities
are carried out by the firm.

Recruitment & Selection procedure: The firm has no as such recruitment or selection
procedure because weavers are already appointed and organization always doesn’t need new
weavers as the work is already organized and since the workers are paid as per piece rate
system attrition rate is very less.

Finance / Accounting Function

Accounting Practice:
The following are the accounting practices carried on in the firm. They are:
 Raw material purchase account. It contains types of material purchased.

41
  Production account. It contains types of product manufactured.

 Sales account. It involves types of products sold.

 Financial accounting which is maintained by accountant manager in the firm.

Various heads of accounts:

 Purchasing register
 Process register
 Material handling register
 Quality register
 Store register
 Dispatched register

Working Capital Requirement:

There is always a need for working capital in order to run the day to day activities of
an organization. The organization has enough capital to fulfill the requirements of day to day
activities firm and incase of emergencies it prefers to take capital from the bank.

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 CHAPTER - 5

SUMMARY OF OBSERVATIONS & CONCLUSION

43
5.1 Findings

 Textile Industry is the second largest Industry in India.

 Organization has senior most work forces working from many years and is
maintaining the same quality of work.

 Most of the labour in the organization is illiterate and non-technical. Though they are
not well educated, work done by them is of good quality.

 This study gives idea about how to maintain functions in an organization & how to
deal with labour force in a firm and make sure they work.

 To grow in the Industry; work continuously with a particular objective, goal, vision,
mission and Target.

44
5.2 Recommendations

 Company has to recruit employees who are technically good at respective work.

 Workers should have minimum technical knowledge.

 Quarters and Premises in the factory should be maintained good.

 Workers should be accommodated in pakka houses than in kachha houses as this

ensures their safety.

45
5.3 Learning Outcomes

 I learnt functions of various departments involved in the Organization.

 I learnt even with Illiterate people an organization can run its functions.

 I learnt how to get work done by workers in the Organization.

 Production process, Finance and Sales are the most important in any Industry.

 Quality function has significant impact on the Sales of Goods and Services.

46
5.4 Conclusion

 Organization study makes a trainee to understand the Global Scenario, Indian
Scenario of Industry and its Profile. Textile Industry is second largest in India. Most
of the labours are working in this Industry and contribution of silk to the industry is
very high.
 Coming to the Organization, it is one of the largest organizations in Bangalore in silk
sarees manufacturing sector. It plays a major role in inter state sales.
 Functions like Production, Quality, Material handling are very well in the
Organization. Sales & Distribution, Marketing functions are handled by Head office
of the company.
 Organization structure is good and it is maintained by proprietors of the Organization.
Productivity of the Organization is good.

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 BIBLIOGRAPHY

Text Books & Reference Books

Philip Kotler, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha, “Marketing
Management”, 14th Edition, Pearson Education Inc., New Delhi

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http://www.slideshare.net/fullscreen/Gstheproud007/pest-analysis-of-textile-industry/7

https://txm.vdma.org/documents/199718/952080/Indienreport%20August%202013.pdf/1c15c087
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http://www.yarnsandfibers.com/preferredsupplier/reports_fullstory.php?id=659

http://www.studymode.com/essays/Textile-Industry-In-India-714304.html?topic

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