FLOW OF PRESENTATION

Introduction
Timeline
Products and Competition
Environment Scan
Business Level Strategy
Corporate Level Strategy
Organizational Structure
Evaluation
Recommendations
INTRODUCTION

0 India's largest private platform for products that are made from
traditional techniques, skills and hand-based processes
0 Initially commenced as a village based industry in 1960 by John
Bissell
0 Links over 40,000 craft based rural producers to modern urban
markets
0 Promotes inclusive capitalism, through its unique COC
(community owned companies) model

PHILOSOPHY
VISION
In addition to making profits, our aim is
constant development of new hand woven products, a
fair, equitable and helpful relationship with our
producers and maintenance of quality on which our
reputation rests.

MISSION
Our endeavor is to provide customers with
hand crafted products which help support and
encourage good craftsmanship.




OBJECTIVES

o To create an interest and a market for cottage
industries

o To continuously support Organic agriculture

o To follow the policy of Fair Trade
FABINDIA
6
John
Bissell
starts
Fabindia
as a
whole
sale
export
compan
y
Added
ready to
wear
garments
to the
retail
offering
Marketing
focus shifts
from exports
to local
Indian retail
William
Bissell
takes
over as
MD,
Fabindia
Has 6
stores
in
metros
>Food
products
range
launched.
>20
stores
across the
metros,
and start
expandin
g to Tier 2
and 3
Body
care
product
range
launched,
Fabindia
Sana
108
retail
stores
across
India
and 6
stores
at
interna
tional
1960
Early
80s
1990s 1999 2001 2004 2006 2010
PRODUCTS
External Environment Scan

There are three levels of External Environment
scanning

1. Remote

2. Industry

3. Competitive/Business Environment

1. Remote PESTEL Analysis
2. Industry Environmental
Scanning

3. Competitive and Business Environment
Unorganized
sector
Organized
Sector
Garments Based
(Shoppers Stop,
Pantaloons, Westside,
Reliance Trends,
Globus)

Government
Handloom Initiatives
(Khadi Gramodyog,
Cottage Industries
Emporium, State
Government
departments)

Designer Boutiques

Ethnic wear retailers
like Khadder, W and
Good Things, and
Stand alone stores like
Shristi, Biba, Anokhi
Local tailors who
provide customised
garments to the
customers at
reasonable prices

Local NGOs selling
wares,

Regional -Law
Garden Market for
buying handicraft and
Gujarati outfits
SWOT Analysis
Strengths
Differentiable products
Diverse product mix
International appeal
Eco-friendly, ethical, natural & stylish
Creates employment for craftsmen in
rural India
Different categories of stores
Constant development & innovations -
product line
Big distribution network
In-house manufacturing
Customer Loyalty
Weakness
No specific promotions strategy
Limited channels of business
Sourcing strategy skewed towards
suppliers
Inconsistent quality of products
Inconsistent service in stores

Opportunities
In store merchandising,
Promoting e-business channel,
Interactive website for customized
designing
Organic foods market,
Customer acquisition Strategies

Threats
Time-lines and Delivery schedules
dependent on too many variables,
Monitoring and Supervision - bench
marking of traditional skills based
products,
Building Capacity - time and resource
intensive,
Not in touch with Fashion Trends,
Competition from leading Italian brands
& stores.
RETAIL EXPANSION
Fabindia Store locations

0 108 stores in 40 major cities
of India.
0 6 stores in international
places including UAE, Dubai,
Bahrain, Italy and Rome.
0 Online Shopping & Exports to
34 countries


BUSINESS LEVEL STRATEGY
How to
Grow
How to
Compete
Where
to
Compete
BUSINESS LEVEL STRATEGY
15
A delighted Customer is our
Best Brand Ambassador
USP : quality of the fabric and the
cultivated image of Indianness
Does not follow any customer
acquisition strategy: focuses on
customer retention
Key element: word of mouth
publicity ( Zero advertising except
print ads during promotions ),
advertorials, mobile marketing,
in-store posters
Mystery Shopper Program: to
check the customer satisfaction
level
Repeat customers
New customers
CORPORATE LEVEL
STRATEGY
0 Value Creation
0 Demand in the West for Indian products
0 Rural Upliftment
0 Elements of Corporate Strategy
0 Creating Future Direction
0 Style of Centre
0 Corporate Portfolio
0 Diversification
0 Financials
Future Direction
0 Organic Food

0 Furniture and Home
Dcor.

0 More retail stores in
India and abroad.
Store Layout
0 It has designed the
stores decor and
ambience keeping in
mind different locations.
0 The layout usually keeps
clothes section at the
back of the store and the
entrance area is utilized
for home products.
0 The exclusive jeweler
counter is also kept in
the fronts.

INTEREST COVERAGE RATIO
8.41
9.27
10.75
16.54
3.27
4.15
5.51
2.08
0
2
4
6
8
10
12
14
16
18
Year 2005 Year 2006 Year 2007 Year 2008
Fabindia
Pantaloons
The interest coverage ratio of Fabindia is far higher than that of Pantaloons.
Hence, raising funds through debt is not a big challenge.
INTEREST COST AS % OF
SALES
1.09
1.14
0.96
0.69
2.14
1.49
2.25
2.08
0
0.5
1
1.5
2
2.5
Year 2005 Year 2006 Year 2007 Year 2008
Fabindia
Pantaloons
The interest cost as a percentage of sales for Fabindia is far lesser than that of
Pantaloons. Hence, raising funds through debt is again not a big challenge.
PROFIT MARGIN RATIO (IN
%)
The PAT as a percentage of sales of Fabindia is higher than that of Pantaloons.
Though retail industry works at low margins, Fabindias margins are quite high.
Hence, raising funds through debt is not a big challenge.
5.66
5.78
6.3
6.02
3.41
3.27
3.63
2.71
0
1
2
3
4
5
6
7
Year 2005 Year 2006 Year 2007 Year 2008
Fabindia
Pantaloons
MANAGING DYNAMIC SCOPE
OF FABINDIA
Geographical
Presence
74 cities, 6
countries
Supply Chain
Management
Increasing
Portfolio
Textiles:
Kitchen
Linen,
coverings,
curtains and
garments
Organic food,
Body Care
Products,
Home
Products
Online Stores
Online
channel,
Non
Exclusive
selling
Products
available in
other online
avenues
Aggressive
Expansion
Initially took
18 yrs for a
second
outlet
2006-60
stores
2013-169
stores
Multiple
community
17 supplier
region
companies
all over India
Holding:
49%
FabIndia,
26%
Artisans,
Guide them
CHANGE AND RENEWAL
Stake
March, 2013: Acquired 40% in Organic India
L Capital 8% which values FabIndia at Rs1400 crore
Azim Premji Invest 7% stake
Leverage
Organic India 60% revenues by exports, plans to enter herbal
cosmetics and beauty products in 5 years
Leveraging the rural base (2.4 mn hectares, 200 artisan clusters)
Balance
Balancing wealth creation for PEs and social objective soul
Tight rope walk needed for expansion and exploring newer
avenues
ORGANIZATIONAL STRUCTURE
0 Employee strength 1500+
0 FabIndia employees 1100
0 Contracted staff 400
0 An equal opportunity employer
0 1.78-1 mix (Men-Women)
0 76% of management are women
0 Over 30% staff have been with the company
for over 5 years
0 Ratio of HR to staff = 1:125
Consistent standards of service
Excellent level of customer interaction
High levels of personalization
Very high initiative to get feedback and give follow up
To the customer
Conformity to all processes
High productivity
Excellent customer feedback
Training ground for new employees and stores
To the organization
High investment in team member development
Stress reduction in the working environment as
process conformation increases
Highly motivated team
To the store team
0 Shared Ownership
0 Entrepreneurial work culture
0 Performance and Development Focus
0 Centers of Excellence

How FabIndia operates?
0 Community-based business
0 Act as intermediary
0 Challenges:
0 How to achieve scale?
0 Quality assurance
0 Innovative re-organization created 17 Supplier
Region Companies (SRCs)
Typical Order Flow between Stores,
SRC and Artisans / Producers
Evaluation
0 Clarity in vision on the part of the founder promoter
played a major role in the success of Fabindia.
0 The vision puts across the following points:
0 Recognition of hidden talent within India to make
unique textile products
0 Presence of global market for handcrafted products
0 Need to collaborate and upgrade skill sets to meet
contemporary tastes

Financial Strategy Evaluation
0 Using ones own capital for business is a risk taken up by a
promoter; however the capital so used is interest free.
0 Fabindia funded its expansion plans by offloading equity at
select intervals.
0 The expansion plans and drive of Fabindia came when
economic liberalization was ushered in India.
0 Subsequent drive across India coincides with the growth in
the numbers of the Indian middle class.
0 The concept of Community owned Companies, is another
good sustainable nancial strategy from Fabindia.

Technology Strategy
Evaluation
0 The products sold by Fabindia require the talent and
skill of the craftsmen.
0 All the products are of traditional nature, no patents
or trademarks.
0 Fabindia has not invested extensively in production
facilities as its products are manufactured by the
artisans themselves.
0 The entire technology strategy is sustainable as
nobody can claim ownership to the techniques being
made use of to manufacture the products.

Marketing Strategy
Evaluation
0 Product products are manufactured in an eco-friendly
manner using the traditional skill sets. FabIndia has
created a niche eco friendly product basket that is
sustainable.
0 Place - Initial focus on the export market, later on the
domestic market.
0 Promotion - Fabindia does not advertise. Given the size of
the domestic market and its appetite for ethnic products,
the market for Fabindia products are sustainable.
0 Pricing - Products are priced as per the grade of the
material. Unique designs not found elsewhere normally
justify the price charged.


RECOMMENDATIONS
0 Heavy investments in back-end of value chain
0 Supply chain development for efficiency and quality management
0 Expansion aiding strong regional presence
0 Outlets to counter regional competition
0 Sourcing from local suppliers for outlet and other regions will be
easier
0 Growth through harnessing new customers
0 Cannot depend on existing customers to counter competition
0 Must create new customers in all segments


THANK YOU