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AMITY BUSINESS SCHOOL (AMITY UNIVERSITY, NOIDA)
Mr. ASHOK SHARMA (32) PROGRAM LEADER MBA-MKT & SALES (2007-09) AMITY BUSINESS SCHOOL AMITY UNIVERSITY, NOIDA
MUKESH KUMAR SINGH ASHISH BHARDWAJ (13) MANAS RASTOGI (28) MANISH KUMAR (29)
OUR BUSINES PLAN IS A EXPORT PLAN OF HANDICRAFTS FROM INDIA TO GERMANY.
TABLE OF CONTENTS
Executive summary ……………………………………………………4 Mission and history .............................................................…...5 The Present scenario of crafts and art works….……………..6 Steps of the plan………………………………………………...8 Selection of the product………………………………………...9 Evaluation of the product……………………………………...10 Goal settings…………………………………………………….10 Industry analysis…………………………….………………….10 Company analysis………………………………………………14 Probability of success…………………………………………..16 Market factor assessment……………………………………....17 Supporting functions…………………………………………...26 Marketing strategy……………………………………………..26 Sales forecast……………………………………………………28 Business plan summary………………………………………...29
and fine quality of wooden products includes crosses. As a result of a rigorous planning process. We have a very successful distribution chain in the Indian market. Strategically add value to the products 3. At INDIAN ART AND CRAFT PVT LTD. come to us. Handicrafts depict craftsman's talent in a way different from the machine -made counterparts. Ensure that all ingredients in the network are meeting our high standards of performance 2. photo frames. Our exclusive range of products includes aluminum bowls. which may not necessarily be entirely done by hand. A combination of skill and sincere workmanship combines to create appealing handicrafts. all the handicrafts and art works undergo through various stages of production. as per our own designs or according to your designs and specifications. India has a rich history of Handicrafts. trays.we also have our own production in Noida. Explore new themes as a way to expand impact 4. We manufacture ethnic and traditional Indian handicrafts in wood and aluminum. Each and every article. cabinets and many more. Created with an unerring eye to detail and a stringent check over quality. who have been mastering these arts for generations.4 We. Karnataka. We have engaged traditional and creative designers as we believe that innovation plays a key role in shaping of traditional handicrafts. Kerala and Tamilnadu . also known as craft work is a type of work where useful and decorative devices are made completely by hand or using only simple tools. It is a measure of our success that we have satisfied clients and trustworthy in abroad. trays. Build an infrastructure to support the initiatives that follow from imperatives 1-4 . we have identified five strategic imperatives on which it must deliver in order to maximize its potential for impact: 1. Even if only one stage of the work is done manually. a feel of elegance and a measure of comfort. painstakingly handcrafted by our skilled craftsmen. candle holders. Jammu & Kashmir (Srinagar). INDIAN ART AND CRAFT PVT LTD is interested in giving our customers’ interior a touch of class. Handicrafts. We have experienced that there is not any tough task to perform while distributing these products. the final product will be called a piece of handicraft. Position our business as a major participant in each and every platform 5. We collect our products from states like UP (Saharanpur). Our premium quality products are appreciated all over the world. The significance of handicrafts lies in its selfsufficiency and use of materials. As our business in reaching towards saturation in the Indian market. We have earned a respectable position as leading manufacturers and exporters of Wooden and Aluminum handicrafts. boxes. we are planning to export our products in the international market. vases etc.
launched in 1999. We realized that Indian handicrafts across the world drew lot of attention and appreciation for their traditionality. . and create sustainable environment for the craftsmen and artists. the genuine desire to promote Indian handicrafts. designs and colors. INDIAN ART AND CRAFT PVT LTD traditional Indian handicrafts. Our locational factor too helped us to access the information on traditional art forms and their practitioners.5 Mission and history: Our mission is to make our business break all the horizons and provide our customers a unique experience by providing very good products and services. However. guided us in our endeavor. The idea is to improve their compensation by doing away with the middlemen and also ensure that you receive the product of at a reasonable price. Most of craft products displayed on our site are directly procured from the craftsmen. Besides commercial interest. there was a gap in the supply of the genuine. and aestheticity. we have emerged as one of the credible names in providing exquisite Indian handicraft products all across the country. traditional Indian handicraft products in the market. The idea was to make ethnic Indian products accessible across the globe with a simple click on a mouse. we want to expand our boundaries in other continents also. Today. So we are now focusing on the expansion part. We took up the project Crafts in India to provide the appreciators of Indian art an outlet from where they could purchase ethnic Indian handicraft products executed in traditional techniques.
Richly embroidered garments. The repertoire of saris ranges from Banarsi Amru. woven shawls and household items are in vogue these days. table mats. Most of the crafts from the past continue to flourish due to their utilitarian nature. There is a great demand for rich brocades and zari work. to enchant the modern Indian woman. Tanchoi from Surat. People wear them under the prescription of astrologers. Rajasthan. The present status of craft in India owes much to the rich craft traditions of the past. Carpet weaving industry is the largest export oriented craft industry from India. Gems and semi precious stones are not only used in making jewelry. This obsession is strong till date and India has become the largest importer of gold in the world. which is growing by the day. A variety of floorings and traditional durries are flooding the markets these days and decorating the floors of Indian homes. India has an obsession with gems and jewelry since ancient times when India was referred to as the 'golden bird'. hand printing etc are in great demand now a days. household furnishings etc made out using the various styles of textile printing ranging from tie and dye.6 Present scenario of crafts and art works The roots of Indian art and crafts are entrenched very deep and they are capable of influencing the generations passing by. and Kancheevaram to the cotton saris from the tribal regions of Bihar and Madhya Pradesh etc. The present day jewelry tradition of India is a fine example of assimilation between traditional and modern designs and techniques. napkins. as it is strongly believed in India that Gems and semi precious stones. A variety of local jewelry traditions (of different states) are present in India with the modern day gem and diamond cutting and polishing industry. and popularity in domestic and foreign markets. affect ones future and destiny. Gujarat. Mainly craftsmen from Kashmir. One can get a variety of garments made of different silks and mixed fabrics. There is a huge domestic market for a hoard of utilitarian craft items such as bedcovers. their availability to the common people. There is a flourishing market for pherans and tablecloths from Kashmir. . Madhya Pradesh. but for medicinal purposes. Products like bed sheets. Paithani. Patola. There is a profusion of materials available to the consumers these days. which has become the status symbol in traditional Indian homes. North Eastern states etc create these products. Punjab. block printing. The increasing demand for Indian jewelry and gems has made this craft tradition into a full-fledged large scale organized industry. Not only there is a great demand for costly silk carpets from Kashmir. Woolen shawls from Himachal and North Eastern states too are popular. but there is also demand for woolen and non-woolen carpets.
mats. embellished wooden sculptures. marble and wood inlay work. cushions. enameled furniture. cabinets. traditional paintings. papier-mâché products. brass and silverware. curtains. silk carpets. metal. silver cutlery. The demand for decorative items such as traditional wall hangings. tablemats. The popularity of these handicraft products is increasing in the domestic markets due to the increasing demand for traditional . utensils. durries etc. garden pots. bags. stone and wood carvings. metal furniture. wood and stone sculptures etc is also on the rise in India and abroad. terracotta items. brass pots. wood furniture. jute and coir items. Most of the units producing utilitarian craft items have attained the status of small-scale industry. wrought iron furniture and decorative pieces. rugs. leather products. cane. boxes. toys. carpets.7 sheets.
So our plan includes these following steps: • • • • • • • • • • • SELECTION OF THE PRODUCT WITH EXPORT POTENTIAL PLANNING GOAL SETTING (long-term goals AND short-term goals) INDUSTRY ANALYSIS BUSINESS/COMPANY ANALYSIS DETERMINING PROBABILITY OF SUCCESS MARKET FACTOR ASSESSMENT (COUNTRY/RATING) SUPPORT FUNCTIONS MARKETING STRATEGY SALES FORECAST INTERNATIONAL BUSINESS PLAN SUMMARY . Again there is one very important thing which has given us. Because the business plan contains detailed financial projections. an in-depth analysis of our readiness to export can be completed. and a market plan. it's an incredibly useful tool for business planning. Our business plan is a export plan.8 BUSINESS PLAN A business plan is a document that summarizes the operational and financial objectives of a business and contains the detailed plans and budgets showing how the objectives are to be realized. For anyone starting a business. it's a vital first step. Once the business plan is completed. needs a very good evaluation. OUR BUSINES PLAN IS A EXPORT PLAN OF HANDICRAFTS FROM INDIA TO GERMANY. forecasts about your business's performance. This plan will serve as a step-by-step guide to lead us through the process of exporting our product to an international market. The whole plan is divided into sections. For exporting a product from INDIA to other countries. International Business Plan: Purpose The purpose of the International Business Plan is to prepare our business to enter the international marketplace.
Furnishing. Sculpture. Artificial Jewelry and other handicraft products. • • . China and India in particular. The wooden handicraft sector provides a high ratio of value addition. as the rich heritage of India. being spread all over the country in rural and urban areas. SELECTION OF THE PRODUCT: We deal in handicraft and art items like metalware. are major suppliers of giftware and handicrafts to the German market. Furnishing. wooden handicraft and other handicraft products etc. Sculpture. Marble inlay work. EU member states and Asian countries. and other handicraft products. and has emerged as one of the major sources of foreign exchange earnings for India Our success in the domestic market which says that there is no such complexity in distributing these products. These are the basic reason of choosing these products for export:• The reputation of India in the “handicraft export business”.Hand-knotted carpets. Art metalware. Handicraft Industry has been globally considered. metal. Notebooks & Albums. wood and cane wares. beads. wood. The wooden handicrafts industry plays an important role in the Indian economy.9 1. woodware. This industry requires low capital investment and other resources. Marble Inlay Work. Furnishing. fashion jewelry. Paintings. laces. such as Paintings. We have experienced that there is a great potential for products like ------. Notebooks & Albums. India is one of the important suppliers of handicrafts to the world market. Marble Inlay Work. zari goods. shawls as artware. This is why Indian Handicraft is in huge demand all over the world due to its unique appeal and craftsmanship. embroidered and crocheted goods. Sculpture. wooden handicraft. Hand-printed textiles. stone. The Indian handicrafts industry is highly labor intensive cottage based industry and decentralized. Indian Handicrafts are available in brass. handprinted textiles and leather.
4. These main things make our product different from the others. the exports increases by 10. There has been a consistent annual growth rate of more than 15 per cent over a 10-year period. want to get the desired increment in the exports. we also want to reach to the countries which are having similar cultural attributes. We will to be familiar with the market conditions and to know the rules as far as possible.02% over the similar period during 2004-2005. so that we can try to get some relief from the GERMAN GOVT. atleast. From the second year we will try to use our one year experience in Germany. from 3. select a freight forwarder etc. Short term goals: first year goals. Though India's share in international handicrafts market . in this test the testing department verifies that the products are not hazardous. Again we are offering our products at a very competitive rate. We use the best ingredients in our products. EVALUATION OF THE PRODUCT In this stage there is a need to identify some unmatched features provided in our products. and the reason of the sale of our products in the international market The first part----For making the customers know about our product and make them buy is not a big deal. We will try to build a strong relationship with the customers and we will also try to identify some bulk buyers. The second part---. In 2005-2006 the exports of Indian handicrafts has shown an increase of US$ 298. Not only that our product quality is very good. 3. We also have a proper testing department which passes the product through a test. i.e.87 million. INDUSTRY ANALYSIS Generally considered a cottage industry. GOAL SETTINGS:Long term goals: Our long term goal is to increase the international market coverage and to increase the exports by 15% annually. Indian Handicrafts and Gifts Industry has outgrown its image to evolve into a rapid growing industry with a turnover from US $ 1. After spending one year in the German market. we will surely have a insight of the ways of doing business. We can use the name of INDIA for it.Attend export seminars. Within 5 years of the start we.6% to a respectable 10% share in global handicraft exports. Not only this.There is a huge demand of these types of products in the countries like GERMANY.2 million to US$ 1. So based on these points we have decided that these very products will be exported to GERMANY.9 billion in the last decade.10 2.
76 464. 288. i.14 crores (increase of 19.94 16.33 20.52 19.05 274.e.90 192.06. 39. (April-March) 2005-06 2006-07 4135. Handicrafts Total 3662.91 24.85 to Rs.14 3282.80 21. the world handicrafts market is estimated to be of the order of US $235 billion.04 827.89 10.01% in rupees term).26 37.06 1180.42 96.11 .56 3811.07 911.33 392.17 17288.94 24.35 86.2546 *45. 2761.45 386.85 1064. the export figures have shown an increase of US$ 528.14 34.82 INCREASE IN % OVER 2005-06 Artmetal Wares Woodwares Handprinted Textiles & Scaraves Embroidered & Crocheted Goods Shawls as Artwares Zari & Zari Goods Imitation Jewelry Misc.89 38.97 47.01 62.14 543. 526.12 584.52 85.18 5860.23 347. the exports increased by 16.MARCH 2005 2006.08 40.29 crores.39 78.02 2465.96 17.3607 12.47 5.70 millions.11% over the similar period during 2005 .11 is just about 2 %.07 COMPARED TO THE CORRESPONDING PERIOD OF APRIL. Export Data (Product Wise) 2006-07---According to the provisional data available. Details are given below – STATEMENT PRESENTING PROVISIONAL EXPORT FIGURES OF HANDICRAFTS DURING THE PERIOD APRIL. The industry is expected to triple its export turnover to Rs.MARCH 2006 .62 1291.35 216.14. the export of handicrafts has shown an increase of Rs.09 2652.98 853.11 567.11 Items RUPEES IN CR.52 14526. In dollar terms.68 91. from Rs.60 260.86 2513. INCREASE US$ IN IN % MILLIONS OVER 2005(April-March) 06 2005-06 2006-07 *44.17.000 crore by 200910 that in turn will also create around 20 lakh new job opportunities.46 10.70 4711.05 2.70 13.45 110.06 2053.
In dollar terms.2006.08 190. Imitation Jewellery & Misc.85 35. HANDICRAFTS 7.96%. 24. INCREASE US$ IN MILLIONS INCREASE IN 2005. 34.12 During the period.50 34. 22.19 & SCARAVES 239.87%.Imitation Jewellery & Misc.09 7.3607 208.96 MISC.89%.84%.92 16. Handprinted Textiles & Scarves.08 (APRIL) According to the provisional data available the exports of Handicrafts have shown an increase of Rs.49 5.86 millions US$ i.97%. Embroidered & Crochetted Goods.55% & 8.19%.69 3.78 25.92% over the similar period in 2006.73 131. Woodware.05% & 2. 19.2007.54%. the exports of Art Metalware.13.11%.98 66.43 18.98 19.30%.62 13.14 43.53 22. 37.15.99 47. 40.30 ZARI & ZARI GOODS 177.21 53. Woodware. 17.08%.2546*45.94% in US$ terms respectively. an increase of 18. 35.89%. Overall an increase in the rupee terms was 19.33%.815.64 29. 96.76%.16 19.00 184.08 95. Handicrafts showed an increasing trend of 12.92 ITEMS ARTMETAL WARES WOODWARES HANDPRINTED TEXTILES 110.93 crores.04%.01 54.14 36.83% in rupees terms respectively and 14.26 4. the exports have shown the increase of 34.84 23.52% in rupees terms respectively and 10.02 2.2008 COMPARED TO THE CORRESPONDING PERIOD OF APRIL 2006 .34.16 292. 20.95 15. Handicrafts showed an increasing trend of 13.41 SHAWLS AS ARTWARES 16.55 964.54 16. 33.26% in rupees term.76 19.50%.45 46. 95. Embroidered & Crochetted Goods. Handprinted Textiles & Scarves.48 crores.36. REVIEW EXPORTS DURING 2007 . 19. 16.44 5. 148. Shawls as Artware.64 94. Overall an increase in the rupee terms was 18.75 10.08%.90 22.48 33. Zari & Zari Goods.37 219.87 23. US$ at the rate of * RUPEES IN CR. 91.43% in US$ terms respectively.47% & 5.26 During the period.70%. 38.47 236.07 14.41%. 94.e.2007.55 to Rs. 21. 10.IN % 2005-06 2006-07 % OVER 06 07 OVER (April-March) 2005-06 (April-March) 2005-06 *44.11%.83 TOTAL 18.33%.35%. Zari & Zari Goods.55 8.75 EMBROIDERED & CROCHETTED GOODS 11.14%.14%.964.99%. from Rs.39%. Shawls as Artware.84 34.80 3.01% and increase in the US$ terms was 16.82 40. the exports increased by 18.96% & 7. 23.26% and increase in the US$ .97 IMMITATION JEWELLERY 815. Details are as under: STATEMENT SHOWING PROVISIONAL EXPORT FIGURE OF HANDICRAFTS DURING THE PERIOD APRIL 2007 . the exports of Art Metalware.
5341 37.8517 61.0019 2001 .8124 9.6376 15.0162 19.2001 Value (In Million US$) 294.5755 Source: DGCI&S 2002 .4608 24.13 terms was 18.013 29.6554 14.8287 27.0536 20.4103 25.205 12.554 31.1673 47.2344 9.176 56.1987 30.6174 37.2003 Value (In Million US$) 324.5125 Major Importers of Indian Handicraft Products: .2002 Value (In Million US$) 219.9376 14.243 21.2585 37.92%.4357 29.89 12.6047 79.8394 19.3164 30.9196 17. Top Ten Destinations of India's Export for Handicrafts Rank Country Name 1 2 3 4 5 6 7 8 9 10 USA UK Germany France Netherlands Spain Italy UAE Canada BelgiumLuxembourg 2000 .
and high potential for export and foreign exchange earnings for the country. there is a great demand for Indian handicrafts today that is being nurtured by different government and non-governmental organizations. . These main things make our product different from the others. cost and aesthetics. COMPANY ANALYSIS: We use the best ingredients in our products. Unlike in the past when the industry was battling to carve a niche in the market. Chhattisharh.2 billion. carpets and floor coverings. hand-knotted and embroidered textiles. leather goods. Uttaranchal. of India. the crafts and craftspeople have a vital role to play in modern India – not just as part of its cultural and tradition. and other handicraft products. Presently handicrafts are being considered as vocational media and it is also opted for style statement and the leisure pursuit. high ratio of value addition. hand-printed textiles. We also have a proper testing department which passes the product through a test. that allow for the allotment of built-up stalls to artisans on a fortnightly rotation basis at nominal costs. Today. Furnishing. wooden handicraft and other handicraft products”. The export earnings from Indian handicrafts industry for the period 1998-99 amounted to US$ 1.14 The dynamism of handicrafts industry in India is unparalleled . in this test the testing department verifies that the products are not hazardous. stoneware. The nine items that account for nearly 63 percent of export turnover include art metalware.be it the traditional Indian arts and crafts or a customized version of an overseas art form. Marble Inlay Work.The industrial revolution and the increasing productivity had slowed down the growth and the quality of arts and crafts. Notebooks & Albums. In India handicraft sector is considered the second largest employment generator after agriculture. Indian Handicraft is expected to triple its export turnover to Rs. 39. Handprinted textiles. The sector is economically important from the point of view of low capital investment. The source of this information is Department of IT. Jharkhand. To centralize and better organize the sector. wooden handicraft. the government has also initiated the concept of 'Towns of Excellence' that are providing recognition to production areas where the handicrafts have been traditionally developed. Today. there are 35 urban 'Haats' all across the country. Furnishing. fashion jewelry. handprinted textiles and leather. We deal in handicraft and art items like metalware. shawls as artware. woodware. embroidered and crocheted goods. Jammu and Kashmir and the North-Eastern region have been focused on as they have abundant growth prospects. In 2006 Orissa. Sculpture. woodware. but for some decades now. Art metalware.000 crore (excluding carpets) by 2009-10 which will turn also create around 20 lakh new employment opportunities. Govt. zari goods. but as part of its economic future. laces. 5. Sculpture. The market is developing due to the huge demand of its products in terms of utility. Paintings. We have experienced that there is a great potential for products like – “Hand-knotted carpets. wood and cane wares. Again we are offering our products at a very competitive rate. the scenario has changed and machine-made products no longer attract the people. Marble inlay work.
South Asia. South Africa.15 SWOT ANALYSIS OF THE COMPANY Strengths Abundant and cheap labour hence can compete on price • Low capital investment and high ratio of value addition • Aesthetic and functional qualities • Wrapped in mist of antiquity • Hand made and hence has few competitors • Variety of products which are unique • Exporters willing to handle small orders • Increasing emphasis on product development and design upgradation Weaknesses • • • • • • • Inconsistent quality Inadequate market study and marketing strategy Lack of adequate infrastructure and communication facilities Capacity to handle limited orders Untimely delivery schedule Unawareness of international standards by many players in the market Opportunities • • • • Rising appreciation for handicrafts by consumers in the developed countries Widespread novelty seeking Large discretionary income at disposal of consumer from developed countries Growth in search made by retail chains in major importing countries for suitable products and reliable suppliers. Opportune for agencies to promote marketing activities • Use of e-commerce in direct marketing Threats ( Decline in India’s share due to) Better quality products produced by competitors from Europe. etc. Better terms of trade by competing countries Consistent quality and increasing focus on R&D by competing countries Better packaging Stricter international standards .
table accessories.” So.S. today the U. Currency fluctuations can cause difficulty while processing a transaction.5 billion in 1999. The German giftware and handicrafts market grew from DM 29. Germany is the largest market for giftware and handicrafts items in Europe. if you conduct business that has a time-lag prior to payment. . sweets. the mechanisms for protection often stop at country borders. rules and remedies varying accordingly. artmetalware. imitation jewellers. Success rate of small business houses are also very high. The size of the total German giftware and handicrafts market varies according to the definition of giftware and handicrafts. This change may have made your product competitive in an area where you were previously struggling. Africa and Asia. certain apparel/textile items and others. For example. Italy. watches/jewellery. Germany is supplied with giftware and handicrafts from Germany as well as the surrounding European countries such as France. Patent and copyright protections are specific to each country with the laws. dollar is relatively weak when compared to many major foreign currencies. discs/videos. With its present size around DM 29. Another common risk is currency fluctuation. a fluctuation in the exchange rate could cause deals to go sour.9% per annum. by analyzing all the pros and corns of the business we can never neglect the success of these products. it can also open or close markets by changing our competitiveness. woodware and furniture. A member of and situated within the European Union. Switzerland and the United Kingdom and from all other parts of the world: Russia. the most common issues are about intellectual property rights (IPR). While IPR issues may also arise domestically. scents/cosmetics. books. But again we should not forget the uniqueness of our product and the image of Indian art and craft products in the world. Would sale or use of your IPR in another country hurt you? Is your product unique enough or difficult enough to reproduce to inherently protect you? You can help protect yourself from illegal fakes coming into the any country by registering your products. If we are selling a product or service that will be paid immediately upon securing a contract.16 6. Consider the ramification of IPR theft on your existing business. the risk associated with fluctuation is minimal. and it is growing till now at a good rate of 8. Latin America. However. Christmas decoration. toys/computer games.5 billion it corresponds to a broad definition of giftware and handicrafts that includes the following items: home furnishings. With over 82 million inhabitants. While currency fluctuation can be a problem during a transaction. artificial flowers/plants. DETERMINING PROBABILITY OF SUCCESS There are many risks associated with international trade.1 billion in 1998 to DM 29. “Research shows that small business failure rates among new businesses are significantly lower for new businesses that have developed a business plan.
Climate: Temperate. Terrain: Low plain in the north.900. (2007) 2.e. Frankfurt (644. Cities: Capital--Berlin (population about 3. wheat. about the size of Montana.5%.). chemicals.7 million).000). barley.): $3. medical technology. environmental technology.7%. Branches: Executive--president (titular chief of state). potatoes. natural gas. Industry (29. hills. Federal Constitutional Court. Bremen (543.9% of GDP): Products--corn. (137.2%.4 million).. promulgated on May 23. Basic Law. optics. Per capita income (PPP. On October 3. Cologne (964. Other cities--Hamburg (1. the Federal Republic of Germany and the German Democratic Republic unified in accordance with Article 23 of the F. fisheries. sugar. Stuttgart (582. electrical. Major political parties: Social Democratic Party (SPD).821 sq. forestry. Christian Social Union (CSU).000). Hanover (516. high plains. It also includes the Market Access.1% of GDP): Types--car-making. Administrative divisions: 16 Laender (states). Social/Cultural and economical analysis. mountainous alpine region in the south. Founded: 1949 (Basic Law. 1949). chancellor (executive head of government). Munich (1. 1990.000). mechanical.000). Left Party (LP). cooler and rainier than much of the United States. Product Potential and Local Distribution and Production analysis. Essen (603.17 7. beets. Geography Area: 357. Natural resources: Iron. Inflation rate (consumer prices.R.000). Suffrage: Universal at 18 Economy GDP (2007 est. hops. Alliance 90/Greens. Constitution.2 million). judicial--independent. Dusseldorf (568. Agriculture (0. Annual growth rate: (2006) 2. Free Democratic Party (FDP).G. i.000). legislative--bicameral parliament. Dortmund (592. mi.000).000 sq. 2006): $31. lignite. Government Type: Federal republic. and basins in the center and east.000). hard coal. 2007): 2. MARKET FACTOR ASSESMENT: This part includes demographic. potash.1 trillion. km. biotech . and precision engineering. viticulture. Christian Democratic Union (CDU). political.
The German economy showed substantial improvement in 2007 at 2.0% nationwide.S. such as the gradual increase in the mandatory retirement age from 65 to 67--a move that would add 2. and is privatizing telecommunications and postal services. As a result. with exports accounting for more than one-third of national output. U. but it is still significantly higher--15. With a more sluggish global economy. Major suppliers--France.7% growth in GDP for 2008. Germans often describe their economic system as a "social market economy. West Germany experienced almost continuous economic expansion. manufactured goods. growth was at 2. motor vehicles. From the 1948 currency reform until the early 1970s. Netherlands.18 and genetic engineering.. lower growth is expected for 2008. and U. Major markets--France. apparel.5% growth due to the effect of recent economic reforms and strong global economic growth. there has been active political debate and some rollback of these labor reforms.5% and stubbornly high unemployment. The government forecasts 1. The export-led recovery is now filtering through to the domestic economy where private consumption has long been at a low level.7% growth. petroleum products. Germany adopted a complex set of labor/social welfare reforms to overcome structural weaknesses of the German welfare state and to create policies more conductive to employment. accounting for over half of the economic growth in recent years. the euro. privatized the national airline. the coalition government of Chancellor Angela Merkel initiated additional reform measures.1%--in the German states that make up the former East Germany. Since unification. The economy then experienced 8 consecutive years of growth that ended with a downturn beginning in late 1992.03 trillion: chemicals. aerospace. Imports--$844 billion: food. however. U. iron and steel products. most notably the government decided to extend the payment period of unemployment benefits to older workers in early 2008. Germany is a strong advocate of closer European economic integration.5 million to the workforce by 2030.S. electrical products. Trade (2006): Exports--$1." The German Government provides an extensive array of social services. while promoting competition and free enterprise. In the early-mid 2000s. In 2006. manufactured goods.5% despite a 3 percentage point VAT hike at the beginning of the year. and the European Central Bank sets monetary policy. The state intervenes in the economy by providing subsidies to selected sectors and by owning some segments of the economy.K. . Germany has seen annual average real growth of only about 1. logistics. Real gross domestic product (GDP) growth slowed down. and its economic and commercial policies are increasingly determined within the European Union (EU). Germany uses the common European currency. Germany is the world's third-largest economy and the largest in Europe. Unemployment in 2007 dropped to an annualized average of 9. electrical products. Defying a skeptical German public. The German economy is heavily export-oriented. and even declined. exports traditionally have been a key element in German macroeconomic expansion. The government has restructured the railroad system on a corporate basis. Germany had its best year since 2000 with 2. from the mid-1970s through the recession of the early 1980s. motor vehicles. Subsequently. for 2007. nanotechnology.
prompting many skilled easterners to seek work in the west. and a small Slavic minority known as the Sorbs lives in eastern Germany. Germany had made great progress in raising the standard of living in eastern Germany. the U. and heavy electrical equipment. chemicals. the U. exports to Germany were $ 71 billion while U. 1990).S. There are. with important tax. and U. Germany is strategically placed to take advantage of the rapidly growing central European countries. more than 7 million foreign residents. is third-largest source of FDI in Germany). For 2005.-German trade has continued to grow strongly. machinery.S. imports from Germany were more than $113 billion. data processing equipment.'s fifth-largest trade deficit is with Germany.S.000 people in the United States. mostly from Turkey. Germany has a sizable ethnic Turkish population. Germany is also a prime destination for political and economic refugees from many developing countries. on some measures. export categories include aircraft. the process of convergence between east and west is taking longer than originally expected and. However. Despite persistence of some structural rigidities in the labor market and extensive government regulation. and productivity continues to lag. the government will extend funds to promote eastern economic development through 2019. German export sales are concentrated in motor vehicles.S.000 people in Germany. and unit labor costs have decreased in the last 10 years.S. and motor vehicles and parts.S. . the economy remains strong and internationally competitive. has stagnated since the mid-1990s.S. unemployment is twice as high. introducing a market economy and improving its infrastructure. At the same time. Eastern economic growth rates have been lower than in the west in recent years. investment in Germany was 45 billion euros (11. or FDI. At nearly $45 billion. Cultural/social analysis Most inhabitants of Germany are ethnic German. however. since the German government undertook citizenship and immigration law reforms in 2002. social security. amounted to 233 billion euros (29 % of all German foreign direct investment. Much bilateral trade is intra-industry or intra-firm. is the number-one destination for German FDI). Due to restrictive German citizenship laws. firms employ about 510. The United States is Germany's second-largest trading partner.S.5 % of all FDI invested in Germany. Germany is still an export powerhouse. German investment in the U. and financial sector reforms. the most recent year for which statistics are available. many of whom are the families and descendents of so-called "guest workers" (foreign workers. more foreign residents have had the ability to naturalize. while U. electrical equipment. Additionally. German firms likewise employ about 746. The current government has addressed some of the country's structural problems. invited to Germany in the 1950s and 1960s to fill labor shortages) who remained in Germany. telecommunications equipment. U. Two-way trade in goods totaled $184 billion in 2007. Germany has a liberal foreign investment policy. most "foreigners" do not hold German citizenship even when born and raised in Germany. An ethnic Danish minority lives in the north. U. Major U.19 Fifteen years after reunification (October 3. Eastern consumption levels are dependent on public net financial transfers from west to east totaling about $13 billion per year. In addition to social assistance payments.S. U. Although production costs are very high.S.
Precise description of articles Volume or quantity in normal commercial units. dried flowers.e. Documentation and legal requirements For doing business in GERMANY imported goods must be accompanied by a customs declaration. The invoice should contain: Name (company) and address of seller and buyer. technological development. T-shirts (12.7-20 percent). Custom duties Customs duties vary according to material and product. Distribution channels are varied and similar to the United States..R. a certificate of origin may be required in some cases. In addition. We will appoint an agent or distributor who can maintain a stock sufficient to answer short-notice orders. potpourri (16. and an invoice in duplicate. Number. and the trade and technical schools of the Federal Republic of Germany (F. Germany is a broadly middle class society. however. particularly in the initial presentation. The commercial invoice must show the country of purchase and the country of origin of the goods. Since the end of World War II. Normally the German importer files this declaration. are major suppliers of giftware and handicrafts to the German market. A generous social welfare system provides for universal medical care.2) and handwoven. concerning multi-level networking systems. the majority of customs duty rates falls in the range of 5-8 percent. Before appointing any such agent we will look at the traditional chain of supply in the GERMAN market. Terms of delivery and Payment. woollen blankets (13. China and India in particular. the number of youths entering universities has more than tripled. For example: Customs Duties (in percent) .4 percent). a well-prepared translation gives an important marketing edge. i. With a per capita income level of more than $28.) are among the world's best. i. Millions of Germans travel abroad each year. Market Access EU member states and Asian countries. Though duties are high for a few items.0-13. and economic productivity. and other social needs. so-called snowball or pyramid distribution systems. We will first have a comprehensive product literature and data sheets professionally translated into German.G. There are certain restrictions.700. Invoice price (in invoice currency).20 Germany has one of the world's highest levels of education.. Place and date of issue. which has to be submitted in writing. kind of packages. Although English is widely understood.e. unemployment compensation.
7. Compliance with EU standards and regulations is strongly suggested. five identical samples of one product group not exceeding a total value of DM 50.5 5. Protecting the Intellectual Property The EU’s legislative framework for copyright protection consists of a series of Directives covering areas such as the legal protection of computer programs.21 Ceramics Toys Stationery Plush animals Quilts/blankets Candles Silver jewellery : : : : : : : 4. and the legal protection of databases. the toy regulation and the electronic standards have to be observed because of safety considerations: Tariff barriers Germany's regulations and bureaucratic procedures can be a difficult hurdle for companies wishing to enter the market and require close attention by U.S.3 8. only few product groups in the giftware and handicrafts field that have to follow standards. which is eventually passed on to the consumer in form of the value-added tax (VAT). complicate access to the market for many products.4 6. There are.e.8 2. exporters. however. Complex safety standards.5 2.5 In addition. snakeskin or hides of some animal. Product Standards In view of the wide field of products that could be considered as giftware and handicrafts. not normally discriminatory but sometimes zealously applied. Items that originate from certain animal species.. But the VAT has to be paid when entering the German market by the exporter/German importer. and that they obtain timely testing and certification.1 . there is a 19 percent sales tax. We will do our homework homework thoroughly and make sure we know precisely which standards apply to their product. the duration of protection of authors’ rights and neighboring rights. i. exporters should be aware that one sample with a maximum value of DM 50 each or. While the quality regulations for candles are obligatory assuring a certain level of quality. it is difficult to name standards.0 7. . The CE-mark (including conformity statement and technical documentation) is mainly required for toys (88/378/EEC standard). It is essential that CE-labelling be observed where required. it must be ensured that the export of these products complies with the Convention on Endangered Species (CITES). Regarding sample orders. are usually customs free.6 .6.
the European Commission acceded to the World Intellectual Property Organization (WIPO) Madrid Protocol. It guarantees authors’ exclusive reproduction rights with a single mandatory exception for technical copies (to allow caching). The on-line copyright Directive (2001/29/EC) addresses the vexing problem of protecting rights holders in the online environment while protecting the interests of users. and maintain a market position. after which the term can be extended for another ten-year term. Conversely. They will then be granted exclusive rights to use the designs anywhere in the EU for up to . A German trademark is registered for ten years. as well as registered trademarks. This list is meant to reflect different cultural and legal traditions. The regulation provides for two types of design protection. such as titles. ISPs and hardware manufacturers. directly applicable in each EU member state: the registered Community design and the unregistered Community design. expand. the Commission is now focusing on ensuring that the framework is enforced accurately and consistently across the EU.g. 2004. holders of eligible designs can use an inexpensive procedure to register them with the EU’s Office for Harmonization in the Internal Market (OHIM). administered by WIPO. and the Community Trademark system. Trademarks are regulated by the German Trademark Act. For companies looking to protect trademarks in three or more EU countries. Additional fees become due if the extension fee is not paid in a timely fashion. Under the registered Community design system. Spain.. administered by OHIM. The EU-wide Community Trademark (CTM) can be obtained via a single language application to the Office of Harmonization in the Internal Market (OHIM) in Alicante. e.": Trademarks trademarks (“Marken”) are signs that serve to distinguish the goods and/or services of one enterprise from those of another. The Trademark Act further provides protection of commercial designations (trade names and other company designations. holders of international registrations under the Madrid Protocol will be entitled to apply for protection of their trademarks under the Community Trademark system Designs The EU adopted a regulation introducing a single Community system for the protection of designs in December 2001. 2004. which covers both trademarks that are used although not registered. and includes private copying "on condition right holders receive fair compensation. and the trading name of works. They enable their holders to build up. and. The accession of the Madrid Protocol establishes a link between the Madrid Protocol system. the CTM is a more cost-effective option than registering separate national trademarks. Spain. for films and books). based in Alicante. On October 1. As of October 1. Community Trademark applicants and holders are allowed to apply for international protection of their trademarks through the filing of an international application under the Madrid Protocol.22 Almost all Member States have fully implemented the rules into national law. It lasts ten years and is renewable indefinitely. and an exhaustive list of other exceptions that individual Member States can select and include in national legislation.
while the total European market should amount to DM 12 billion. Valentines Day and the German counterpart of Thanksgiving. Product potential Market insiders estimate the total volume of the seasonal items market.7 billion. KG. it has been possible to register Community Trademarks at the Office for Harmonization in the Internal Market. This step often makes sense if an enterprise seeks protection not only in one country. A recent survey shows that apart from their school days.8 percent of the German adults) old. Spain (http://oami. Ernstthal Margarete Steiff GmbH. Glinde Jet Papier GmbH. Alicante. European Trademarks Since 1996. Indian Christmas decorations as candle stands or Christmas tree hangings and soft toys find a ready market in Germany if they are moderately priced.23 twenty-five years. For example. about DM 3 billion were spent alone for Christmas decoration. Roedental Walther-Glas GmbH.europa. Hoehr-Grenzhausen Fartak. Bad Driburg . Bernau Krebs-Glas-Lauscha GmbH. the use of a Community Trademark in only one member state is sufficient to meet the requirement of use for the entire territory of the European Union. Lahr GIES Kerzen. Unregistered Community designs that meet the Regulation’s requirements are automatically protected for three years from the date of disclosure of the design to the public. Thailand. With the fast ageing of the German population a stronger demand for hobby and crafts is likely. It is advisable to consider use of both community and single country protection systems simultaneously. most of the Germans who do regular DIY or hobby work are between 60 and 69 years (10. Giengen WMF AG. However. Seib W. Geislingen Rosenthal AG.eu/). Erbach Barti GmbH. A few well-established German manufacturers of giftware and handicrafts items are: Koziol GmbH. Taiwan. Garching Duni GmbH & Co. Insiders believe that this specific market segment still offers some potential for new products. Easter. Goebel Porzellanfabrik. but in at least three or four EU member states of the European Union. Philippines and India. Christmas items are usually imported from China. including Christmas. at DM 7. In 1997. Bramsche Rastal. The Community Trademark offers financial advantages in addition to other significant advantages. The present market volume of hobby and art supplies in Germany is estimated at about DM 3 billion. Christmas floristic items and Christmas trees only.
24 But even then the GERMANS show good response towards imported products. the companies take advantage of the distributor's expertise. Usually these are small companies looking for items new to the market and handling small orders only.000 giftware and handicrafts retailers. Several retailers import directly from the United States and sell to the German customer. purchasing groups and supermarkets. If we will get success in giving competitive offerings. They maintain high quality standards and but have a narrower and in-depth range of arts and crafts. The distributors' mark-up varies depending on the giftware and handicrafts item. While the mark-ups vary according to the distributor. Commission agents: . this channel also supplies large quantities of individual articles. Thus. Wholesalers: Besides offering wide range of goods to retailers for direct sales. Distributors call on giftware and handicrafts retailers. One of the distinguishing features of wholesalers is to provide distribution and storage facilities. our product will have huge potential for getting success. Germany hosts more than 45. Importers/distributors: Most Indian giftware and handicrafts companies use importers/distributors to market and sell their giftware and handicrafts lines. giftware and handicrafts is distributed through five major channels: Wholesalers Importers/distributors Commission agents/sales representatives Department stores Mail-order Internet sales Tele-shopping The individual channels are described in detail in the following. they usually also depend on the exclusivity of a product and on its competitiveness in the overall giftware and handicrafts market. They buy and sell on their own account. Specialised wholesalers deal in sales to retailers as well as to final consumers. They are very particular in maintaining consistency in the kind of products and their quality. his sales force and his existing distribution channels. Major Distribution Channels in GERMANY In Germany. but at least 50 percent.
. They operate all over Germany and offer various types of giftware and handicrafts. household consumer goods. Commission agent contracts are based on stringent EU and German regulations. jewellery. Department stores in particular. The total European market volume for mail order products is estimated at approximately DM 90 billion. A typical German Internet user and a major German mail-order publication is between 2039 years old. purchasing groups and department stores. as well. These additional payments are to reimburse the agent for substantial advertising and any special efforts facilitating the new product's market entry. prefer to deal directly with manufacturers. Mail Order: On an average. 12 have their headquarters located in Germany. it places bulk rather than small orders. several German mail order companies operate in other European countries. fashion. In addition. Independent commercial agents are normally working on a 15 percent commission and operate on a regional basis. the Internet is a major sales channel for German mail-order houses. There are about 200 mail order companies in Germany. They concentrate on specialist retailers. If a department store decides to import a particular giftware and handicrafts item. As an Indian firm wishing to appoint an agent.5 million Germans. 70% of these consumers are male. beauty. Germany is the largest mail order market. followed by Great Britain and France. is highly educated and earns more money than the average German consumer. Teleshopping: QVC and HOT are the two tele-shopping channels in Germany. in Fuerth. Quite often they have their own buyers as well as a few agents that usually work with them and who know their assortments. In Europe. collectibles and home accessories. health. Already today. Department Stores: As an Indian company interested in establishing business contacts with major department stores. each German consumer buys products totaling to DM 500 each year from mail-order houses. Internet Sales: Germany has become market leader among the EU countries with regard to sales. mail-order houses and retailers may also choose the direct approach. Among them are the world's largest mail order companies: Otto Versand in Hamburg and Quelle Schickedanz AG & Co. Of the 20 major mail order companies in Europe.25 Commission agents provide Indian companies with direct access to the German market and direct control. . In order to facilitate market entry efforts by the agents their initial commission is often a few percent higher than the "usual" commission. Their buyers are very specialized and only handle a limited range of products. we should make sure that such standard contracts meet its expectations. This age group consists of about 4. At some occasions department stores also buy through independent commercial agents.
We have uploaded all the designs. it is not very tough to gat a export license for Germany (German antitrust law does not. MARKETING STRATEGY As we are entering the market for he first time. We have enough potential to deliver the products on time. the toy regulation and the electronic standards have to be observed because of safety considerations. in the absence of a dominant . It is essential that CE-labelling be observed where required.com) the customers can see the product. While the quality regulations for candles are obligatory assuring a certain level of quality. If they want their own designed product. We will try to give the exact design in a very competitive rate. we will fulfill all these requirements. Regulations • Competitive Behavior • Sourcing Regarding terms of sale. we will provide each and every service within a reasonable time. we will have literature in language other than English.indianartandcraft. there is no need of keeping theses thins in mind. we will use Penetration Pricing. by charging a low price in order to penetrate market quickly and it will be appropriate to saturate market prior to imitation by competitors. If required.He will help us in communicating with the customers. We are using the local agent as our representative in GERMANY.26 8. even if there is some assistance required. In case of handicrafts warranty and servicing is not required. SUPPORT FUNCTIONS On our website ( www. they can send their quotations along with the design. but we will keep these things in our mind:• Currency Fluctuations • Inflationary Environment • Government Controls. We will have it in GERMAN also so that it can have a proper appeal. But. Only few product groups in the giftware and handicrafts field that have to follow standards. Subsidies. we will try to do several things:• Obtain export license for exporting. 9. so he will forward all the customer disputes to us (if there is any). Customers can see each and every product. The CE-mark (including conformity statement and technical documentation) is mainly required for toys (88/378/EEC standard). Our pricing will be based on flexible cost plus pricing.
exclusive to Indian handicrafts items or new-to-market products. so we don’t think. including the exploitation of a patented innovation). • Packaging of goods for export. expectations for additional growth are not very high. for example. For eg:5% discount for -------5-10% discount for----10-15% for ---------Competitive Situation German giftware and handicrafts consumption is growing more or less in line with the relatively slow growth rate of income during the last years.5-2 percent are forecast for the next few years for the overall giftware and handicrafts market. Promotional strategies We are not a big company which needs huge promotion in other countries. In general the market shows good business opportunities if prices and quality are competitive and delivery schedules are fulfilled.27 market position. Thus. • Obtain the insurance and certificate of policy. France and Switzerland. • Obtain currency permit. Annual growth rates of between 1. • Prepare all the custom export papers. China and Portugal. candles from Poland. German firms often import specific product groups from a particular country. restrict the owner’s freedom to use her/his industrial property rights. • Transport goods to place of departure. We are exporting handicraft and art items. Major suppliers of pottery are. We will use this opportunity as a mean of penetrating the market. • Prepare a land bill for landing. Fierce price competition in Germany is intensified by the increasing quantity of Chinese and Asian made products on the market. Discount policies: We will use a slab for discounting to the customers. we need an intensive promotional .. Germany is supplied by giftware and handicrafts from nearly all of the European countries. Spain and Portugal. Apart from its own producers. For India this situation coupled with the relatively strong Indian rupee which means that firms proving to be most successful in the recent past have offered niche market giftware and handicrafts. fine exclusive stationery comes from Italy.e. dried flowers from the Netherlands etc. i.
But if it is necessary according to the market conditions. To ascertain the costs associated with the different terms of sale. These costs are in addition to the material and labor used in the manufacture of your product. insurance and freight (CIF) port of destination. a typical term of sale offered by a U. we have estimated that in the first year we can export atleast 20-30 crores (based on the values shown by the data published by IT dept. Our price includes all the costs to move product to the port of destination. As we are entering into exporting for the first time. we don’t have any data for forecasting. it will be necessary to consult an international freight forwarder. exporter is cost.28 strategy. The sales forecast is extremely important. SALES ESTIMATES Forecasting sales of our product is the starting point for our financial projections. There are 58 Indian companies in the handicraft 14 in the giftware in the export market. we will our agent’s advice in it. By looking at the sales figure of each and every segment of the product category. 10. of INDIA). For example. The cost of goods sold internationally is partially determined by pricing strategies and terms of sale. We can have the print ads in newspapers and some popular magazines.S. We will have to the data of other companies. so it is important to use realistic estimates. export packing container loading inland freight truck/rail unloading wharfage handling terminal charges ocean freight courier mail telex forwarding documentation consular legalization bank documentation dispatch bank collection fees cargo insurance bunker surcharge other misc .
because without completing one.Mr. So it took some time to gather these data.indiacatalog. AMITY UNIVERSITY.gov . we passed a lot of hurdles.iitfonweb. tariff barriers and the rule which is to be followed. There were huge data available to us. We have already done our homework to 10th step. We are preparing this plan for competition of our internal assessment in AMITY BUSINESS SCHOOL. Our swot analysis. STEP 2: Identify the business plan audience.com • www. We have finished all the other sections before continuing any further.com • www.india-crafts. All the sections are equally important. Actually we have been dealing with so many products that it is quite impossible to draw out only a few best from them. we took the help of official website of GERMANY. industry and company analysis is the most interesting part of this plan.com • www. This very section will make him read the whole plan. We have tried to give the best data available regarding the custom duties. we can’t move further.buyusa. Actually there are so many sights which provide useful information. but getting the useful data and then choosing the best to attach with our plan was the biggest deal. We searched all the possible sources. STEP 3: Writing a brief summary of the previous sections. Till now we have completed 10 steps. This page will probably be the first read by our PL. ASHOK SHARMA.primaryinfo. When we were trying to measure the probability of success. but our study should have to reveal the recent data. It is extremely important the summary be brief yet contains the information most important for him. Choosing the products for export was extremely crucial. Overall we want to give the links of the websites form which we have taken the data: • www. When we were doing the market factor assessment. INTERNATIONAL BUSINESS PLAN SUMMARY STEP 1: Verification of the completion of previous steps.com • www. For forecasting the sale estimate we have used the same data which we have given in the industry analysis. NOIDA.29 11.
30 • www.giftsnaccessories.com .
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