Strategic Management on

Arvind Mills

Competitive position

• Return on Asset : 11%

• Market Share: 10.12%
• Largest Competitor Market Share (S Kumar's): 9.51%
• Relative Market Share: 1.06, which determines that Arvind Mills is the market leader in
textile industry.
 Porter’s 5-force Model
1. Threat of New Entrants – High
a) Fragmented industry
b) Supportive policies
c) Growing domestic and exports opportunities
d) The sector is competitive and likely to see increased investment from global players
2. Supplier Power – Low
a) Abundant supply of raw materials Major Competitors
b) Not all companies have complete integration
(like Arvind)
c) Well established supplier base
3. Competitive Rivalry – High
a) Competitive structure (Fragmented)
b) Lack of industry leadership
c) Demand Condition (growing)
d) No significant exit barriers
4. Buyer Power – Medium
a) Growing domestic and exports demand, buyers are large in number.
b) Wide range and variety of products
c) Alternative suppliers
d) Switching cost from one buyer to the other low
e) Buyer can integrate backwards and can have captive supply source.
5. Threat of Substitutes – Low
a) No significant threat
 ENVIRONMENTAL THREATS AND OPPORTUNITY PROFILE
(ETOP)
ENVIRONMENT SECTORS
a) Market Environment
b) Technological Environment
c) Supplier Environment
d) Economic Environment
e) Regulatory Environment
f) International Environment

Technological Environment
STATE OF TECHNOLOGY
• Mills with obsolete and old machinery.
• Spinning and weaving became two different split operations, disturbing the integrated plants.
• Spinning the capital intensive part was handled by the automatic mills
• Labor intensive component outsourced by textile companies.

SOURCES OF TECHNOLOGY
• International markets with remarkable, sophisticated, electronically controlled textile
machineries.
• The technology ensured good quality product with minimum labor input

TECHNOLOGICAL DEVELOPMENTS
• No developments in Indian Market.

REASON:
• Protected domestic market.
• Import of capital goods was controlled by rigid licensing and high import tariffs.
IN INTERNATIONAL MARKET
 Major technological developments:
 Development of sophisticated, electronically controlled textile machinery.
 Such machineries ensured good quality product with minimum labor inputs.
 ECONOMIC ENVIRONMENT
I. MARKET ENVIRONMENT

• DOMESTIC MARKET ENVIRONMENT

• Protected domestic market
• The products of Arvind Mills were not up to the international standards
• The lower end market was dominated by power looms.
• The upper end market was dominated by major mills and spinning mills set up as
100% EOUs.
II. International Environment

• Textile is an International or Global Industry

• The Company has got Global opportunities
• Mergers and Acquisitions abroad
• Third largest denim producer in the world
• Low cost of domestically produced cotton
• Low cost of labor and weak currenc
Capability Nature of
Impact of each factor
factor Impact
Readiness of domestic and
Financial
international investors to invest and
capability
good financial performance
Marketing Good quality, good packaging, low
capability price

Operational Constant innovation & improvement

capability in processing
Growth opportunities for employees,
Personnel
handling responsibility & free access
capability
to senior officials
Information Usage of Advanced Softwares for
Management recording minutest operations, huge
System databank
Well thought out strategy &
General successful takeover of failed firms &
Management hence establishing Arvind Mills as a
Global Company

Competitive Advantage of Arvind Mills

 Focus on Retail company want to achieve 80% of its sale through Apparel.
 Globalization Strategy
 Launching of spectrumplaza.com
 Tie ups with Indiatimes.com and relief
 Attractive Customer
Segment
Flying Ruff n
Newport Excalibur
Machine Tuff
Launched 1980 1993 1997 1995
Age 18 &
15-30 18-28 15-30
group Above
Price
500-2500 600-1500 299-699 500-1000
range
Hike in Hike in ----
Difficulties Distribution
excise to excise to
faced hurdle
8% 8%
Own Own
Retailer Big Bazaar
outlet outlet
Tag Line The ---- ----
Who
Measure
Needs
of
Horne?
Success
 International Brands
Arrow Lee Wrangler Tommy
Hilfiger
License Culet, VF VF JV with
d Peabody corporation corporatio Mirjana
& co., n group
USA
Age 27-35 4-14 & 17- 17-25 18 &
group 25 &25-40 Above
specifics Four sub Adjudged •Fashion Introduced
brand the images conscious men’s
•Classic fashion •Love sportswear
•Premiu award wearing , men’s
m “most denim on Jeanswear
weekend , junior
•Urban admired
•Retail Jeanswear
•Sports Jeanswear
ambience
” brand
was given
importanc
e
Value Chain in the Textile
Industry

12
Product Flow
Information Flow
 PROCESS DIAGRAM

Strategies for future

• Vertical integration, diversification and huge capacity setup.
• Process innovation and cost player strategy to defend its
Foreign Market.
• Improving its supply chain and inventory management
through further tying up with farmers, usage of ERP system
and increase in the plant efficiency with the use of
technology.
• Alliance with establish brands.
• Explore the rural market with affordable brands like Newport.