AN ASSIGNMENT ON GLOBAL BUSINESS ENVIRONMENT

Submitted By: Joshin John Louis Juvi Lino Lawrence

The Coir Industry The history of Coir and its association with the state of Kerala dates back to the 19th Century. Sandwiched between the Western Ghats on the east and the Arabian Sea on the west, Kerala is one of the most beautiful States in India. One of the most commonly seen tropical trees in Kerala is the Coconut tree. Alleppey (Alappuzha in Malayalam) is the nerve centre of Kerala's famous Coir industry. Here, one can see coconut husks being beaten into fibre for making beautiful mats and other coir products. Coir Industry enjoys the status as the largest Cottage Industry in the State of Kerala, giving employment to over a million people. Currently, the global annual production of coir fiber is about 350,000 metric tons (MT). The world’s top two producers, India and Sri Lanka, accounts for about 90% of global coir fiber production. Kerala earns foreign exchange of over 500 crores per year from this industry with a potential for phenomenal growth.

DC Mills – A Profile Spanning two decades, DC Mills foray in the coir products exports is a magnificent example of growth rooted in determination of a management with a vision seldom seen. Attentiveness to customer tastes and preferences, commitment to quality, dedication to timely delivery and extensive range of products make D.C. Mills the numero uno in floor covering business. D.C. Mills established in the year 1975 and started manufacturing and export of Indian Natural Coco fibre Door mats and Floor coverings with and without latex backing as well as Cocos, Sisal, Jute, Seagrass, and Wall to wall Carpets. It employs around 1000 employees. In the year 1982 D C Mills started exporting. Business Portfolio Type of business. DC Mills (P) Ltd. is a manufacturing company. They are into manufacturing and exporting of coir jute, fibre and bamboo mats. Product Profile They are having a wide range of products. They are:
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Washable rugs Braided rugs Jute rugs Sisal rugs

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Bamboo rugs Coir rugs Coir mats

Market The major markets of D C Mills are North America, Middle East and some European countries. Being an export oriented firm, 60% of the products are exported to USA, 30% to Europe and 10% to the Middle East. They have stiff competition from many of the near by companies. Production The present production capacity of DC Mills is 75 containers of 40 ft. per month i.e.; around 2000 tonnes per month. Production Process: Yarn is sourced directly from mills/dealers and dyed in the unit where they have facilities for manual, machine dyeing and lab testing. The yarn is then issued to the weavers. The stitching and finishing work is done in the units, which is equipped with imported machines. The finished products are thoroughly checked and packed as per international standards.

Marketing Strategies Marketing mix strategies for different product and market Product strategy As the products manufactured are entirely exporting, the company looks for the taste and quality preference of the foreign market. They go on adding new products to their product line. Pricing Strategy The company follows different types of pricing policies. They are competitive pricing, skimmed pricing and tender pricing. Promotion strategy The company does not give much importance to advertisement. They go for trade fairs and exhibition conducted in various parts of the world and also through internet. The sales promotion activities include discount to the dealers, for bulk purchasing beyond a fixed quantity. Distribution Strategy The company’s distribution chain is as, Company  dealer  customer Also the company has a warehouse in U.K. after getting orders from the customers they ship the product within 30 days.

Export procedure On the receipt of order the order sheet is reviewed for quantity and ship date. Once the order is reviewed, the company expresses its acceptance by forwarding proforma invoice, where in all details regarding the item to be produced; price, ship date, etc. This enables the buyer to open letter of credit. Terms of payment There are various types of payment system. They are 1. telegraphic transfer 2. cash against document 3. letter of credit Terms of shipping 1. free on board 2. cost and freight 3. Cost Insurance Freight General observations 1. The company is not utilizing its full production capacity. 2. There is no advertisement in the foreign countries. 3. Company is not focusing on local market.

Impact of current global economic crisis on this company. The export of coir products for this financial year witnessed an increase in export volume in tonnes. However, growth in rupee terms the export for the period was less compared to previous year’s figure. The company had a low unit value realisation and compressed profit margin, cannot absorb the appreciation of the rupee. Actually, the dollar depreciation against the rupee’s appreciation has brought the industry to a standstill. Key Terms CIF (Cost, Insurance and Freight): - A trade term requiring the seller to arrange for the carriage of goods by sea to a port of destination, and provide the buyer with the documents necessary to obtain the goods from the carrier.