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SWOT ANALYSIS of Shoe Making Industry

SWOT ANALYSIS of Shoe Making Industry

Discuss SWOT ANALYSIS of Shoe Making Industry within the Principles of Management ( P.O.M) forums, part of the PUBLISH / UPLOAD PROJECT OR DOWNLOAD REFERENCE PROJECT category; SWOT ANALYSIS STRENGTHS:-  Educated proprietor – knows the legal methods of handling and managing a SSI.  Leather in ...

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SWOT ANALYSIS of Shoe Making Industry
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Abhijeet S
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SWOT ANALYSIS of Shoe Making Industry - September 27th, 2010

SWOT ANALYSIS

STRENGTHS:-

 Educated proprietor – knows the legal methods of handling and managing a SSI.
 Leather in India is the cheapest in price as compared to most of the countries of the world, as India is the largest producer of livestock and thus the livestock is readily available.
 Financial support and other support from government is provided to a huge extent like
o Cheap Bank Finance
o Under the government’s Focus Scheme, the company is funded by 50% for buying the machines.
o Duty Drawbacks
o Exempt from Sales Tax
o Exempt from Excise Duty
o It is even easier to get licenses and permissions, etc.

 Export promotion council works as a guide for the company. It informs them about the various know how, for e.g. the way to get the various licenses from the DGFT, any new type of schemes, or any important technical know-how.


 It exports to various countries rather then to only one single country. This is exactly why its still running even though the dollar is depreciating





WEAKNESS:-

 India – exports only 0.33% of the total world’s export because though India is the 2nd largest producer of footwear, it itself is the biggest consumer.

 No specific marketing strategy.

 Cost of multiple tier sales and distribution since he has no direct buyers and sells through C&F agents.

 Low production capacity. Lack of funds to increase the production facility.

 No branding.




OPPURTUNITIES:-

 Increase in population – shoes is such a commodity which is required by almost everyone who can afford to buy it. India presently exports only 0.33%, so there is a huge scope for improvement in exports.


 Opportunities in the Indian market – along with the export market he can also target the domestic market i.e. India since India in itself is the second largest consumer of shoes.


 Niche market – since Shumaker is into shoe making it can concentrate on the niche market in the shoe segment which has higher profit margins.




THREATS:-

 China –It exports 80% of the total world’s footwear export. The labour is cheaper over there and the production capacity is very high as compared to India.

 The Chinese government provides much more incentives as compared to India.

 Africa – which is the cheapest for the leather

 INFLATION in India - The cost of the leather has gone up by 20% whereas the cost of the adhesives has increased by 15% so even though the orders have increased the profit margin is still unstable. Usually the profit margin for the manufacturing unit is about 25 to 30% but now due to the inflation, it has reduced to 10%.

 Depreciating dollar: the company is facing low profits from its business in U.S. as the dollar depreciates.
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