KURL ON

CHAPTER-1

INTRODUCTION TO INDUSTRY AND COMPANY

1.1 INTRODUCTION TO KURL ON

Kurl-On Ltd., founded by Late T Ramesh U Pai, was

incorporated under the name of Karnataka Coir Products Ltd
more than half a century back in October, 1962. The name of
the company was changed to Karnataka Consumer Products
Ltd.with effect from October, 1980. It was in December, 1995
the name was changed to KURL-ON LTD. to fully reflect all its
business activities in diverse areas such as Rubberized Coir,
Latex Foam and Polyurethane Foam. Besides mattress KL
manufactures and markets an entire range of home comfort
solutions and wide range of high-end soft furnishings such as
Pillows, cushions, bed linen/sofa to ergonomically designed
Furniture, Furnishing, etc. Kurl-on has become synonymous
with mattress industry in India and being the pioneer has
become a household name across the length and breadth of
India.
Currently the company exports its products to various asian
countries. For the past sixteen years the company has won
the Coir Board of India’s awards for Outstanding
Performance in Export of Rubberized Coir Products, the
Development of the Domestic Market for Rubberized Coir
and the award for being consistently the country’s largest
manufacturer. KL is the holding company, which promoted a
subsidiary company in the name and style of Kurlon
Enterprise Ltd. (KEL) in the year 2011. Consequent upon the
Business Transfer Agreement between KL and its subsidiary,
the business of Rubberized Coir, Latex Foam, Polyurethane
Foam, Pillows, Spring Mattresses, Furniture, Furnishing, sofa
and entire home comforts and related products were
transferred to the subsidiary company effective 1st April,
2014. Headquartered in Bengaluru, KEL is now the operating
company. Both the companies are closely held, unlisted
public Ltd.

1.2 HISTORY
During 1965, KL introduced, for the first time in the country,
the concept of rubberized coir mattress under its renowned
brand name “Kurl-On” using the know- how from Austria KL
is the innovator of coir mattresses in India and offers a wide
range of comfort solutions for retail consumers and a wide
range of institutional clients such as Hotels, Hospitals and
Hostels who prefer high performance, high quality branded
mattresses with flame retardant, anti-bacterial fabrics. The
company is the sole manufacturer of hospital approved
mattress. KL markets its products under the flagship brand
“Kurl-On”, with approximately 35% of market share with a
sales of over 1.2 Million mattress a year.

1.3 PRODUCT INDUSTRY

THE MATTRESS INDUSTRY Nationally, the mattress industry is
predominantly an unorganized market with many small
regional players and just a handful of organized national
mattress makers such as Kurl-On. The organized mattress
market has been dominated by Kurl-on which is currently the
number one brand in mattress and the second largest
producer of PU foams in India. The Indian mattress market is
estimated approximately ` 10,000 Crs., of which
approximately 75% has been dominated by cotton
mattresses, which is majorly a low value unorganized market.
Just about 20% of the total market for mattresses comprises
the rubberized coir mattress segment. With remaining
market comprising high end foam based mattress. The
industry has grown at an estimated CAGR of 8-10% over the
past 5 years, primarily on account of rising urbanization,
increase in disposable income, increase in health related
issues of the Indian population and increasing awareness
about sleep products.

1.4 PRODUCT RANGE

KEL markets its products under the flagship brand “Kurl-On”
with Bounty, Luxurino, Angelica Box TOP, Klassic, Mermaid,
Kurlo bond, Convenio, Ortho, Relish, SpineKare, etc. as sub
brands.

1.5 ORGANIZATION STRUCTURE OF

KURL ON
 CHAPTER 2
MARKET SHARE OF KURL ON

1.5 MARKET SHARE OF KURL ON

Kurlon targets 25-30% revenue growth in FY19
Mattress maker Kurlon today said it is targeting a revenue
growth of 25-30 per cent in the current fiscal year, on the
back of healthy demand.
The company had reported over Rs 1,000 crore revenues last
year, according to Kurlon managing director Sudhakar Pai.
"This year we should be able to grow anywhere between 25
and 30 per cent," Pai told PTI
The Bengaluru-based company claims to enjoy over 40 per
cent market share in the organised mattress industry.
The total mattress industry is pegged at Rs 6,000 crore,of
which the organised segment accounts for 25 per cent.
Pai said the company has the ability to grow at 40-50 per
cent in this segment.
Kurlon, which introduced sofas two to three years ago in its
own stores, is embarking on a pan-India rollout for the same
and expects the segment to capture at least 5 per cent
market share in the Rs 12,000-crore industry in two years.
"Our revenue (from sofas) is less than 1 per cent of the
turnover, but we feel this is a very strong growing area. We
should be able to grow anywhere between 60 and 70 per
cent in this segment in days to come," he said.
The company, which has invested Rs 20 crore in the sofa
business so far, and has a facility in Bengaluru, is also
planning to add two to three manufacturing plants for sofas.
"In a couple of years when the demand picks up, we should
be able to open two more factories. One would be in Gujarat
and the other could be in Assam or Bhubaneshwar," he said
adding that the factories' locations are not finalised.
Kurlon, which retails sofas in the price range of Rs 25,000 to
Rs 1,75,000, has 31 owned-stores under the brand Home
Komfort and plans to take this tally to 200 by FY19-end.
"At present (it is) company owned, but we will soon go to the
franchisee model as well," Pai said adding that each store
entails an investment between Rs 10 lakh and Rs 50 lakh.
He said the company is also scouting for opportunities to
grow inorganically in the home comfort category and is
"seriously" pursuing it as the firm is debt-free.

1.6 MAJOR COMPETITORS

1.6.1 COIRFIT
Coirfit is the top competitor of Kurlon. Coirfit was founded in
1989, and its headquarters is in Meerut, Uttar Pradesh. Like
Kurlon, Coirfit also operates in the Home Furnishing Retail
field. Coirfit has 6,450 fewer employees than Kurlon.

1.6.2 DUROFLEX
Duroflex is seen as one of Kurlon's top competitors. Duroflex
was founded in Bengaluru, Karnataka} in 1963. Like Kurlon,
Duroflex also works within the Home Furnishing Retail field.
Compared to Kurlon, Duroflex generates $125.3M less
revenue.

1.6.3 SLEEPWELL
Sleepwell is Kurlon's #3 rival. Sleepwell's headquarters is in
Ghaziabad, Uttar Pradesh, and was founded in 1971.
Sleepwell is in the Home Improvement Retail field. Sleepwell
generates 3,562% of Kurlon's revenue

The top 10 competitors in Kurlon's competitive set are

Coirfit, Duroflex, Sleepwell, Springwel, Sunday, Spring Fit,
Tempur Sealy, Select Number, Centuary and Hush. Together
they have raised over 397.8M between their estimated 16.8K
employees. Kurlon's revenue is the ranked 4th among it's top
10 competitors. The top 10 competitors average 1.2B. Kurlon
has 6,500 employees and is ranked 2nd among it's top 10
competitors. The top 10 competitors average 3,046.

CHAPTER-3
1.7 PESTLE ANALYSIS
The PESTEL analysis is a tool devised by Harvard professor
Francis Aguilar to conduct a thorough external analysis of the
business environment of any industry for which data is
available. This is an important step for eventually devising a
strategy that can effectively manoeuvre the competition to
maximize a firm's chances of sustainability and profitability.
PESTEL is an amalgam of initials of various factors that not
only affect Mattress Firm Holding but the entire industry as a
whole- these factors are namely Political, Economic, Social,
Technological, Environmental and Legal.
PESTEL analysis provides valuable insight into the operating
challenges that any company in the industry appears to face,
and so the company in question may face as well. An
understanding of the overall competitive landscape will
prevent investors and entrepreneurs from partaking in any
risky ventures if the risk arises out of, say, an unstable
political regime or a sudden economic recession. This may be
best exemplified by the recent exit of the United Kingdom
from the European Union. The sudden fallout was political
and caused many investors to pull out of new ventures and
halt their expansions, as the future became uncertain in the
wake of this decision.

1.7.1 Political Factors that Impact

Mattress Firm Holding
The political factors that may impact the profitability or
chances of survival of the company are quite diverse. The
political risks vary from sudden changes in existing political
regimes to civil unrest to major decisions taken by the
government. In cases of possible multinationals, one may
also include political factors that take place/ affect not only
the host country but also all countries that contain business
operations, or that may engage in trade with Mattress Firm
Holding
To properly appraise the extent of the overall systematic
political risk that KURL ON may be exposed to, the following
factors should be considered before taking part in any
investments:
 The level of political stability that the country has in
recent years.
 The integrity of the politicians and their likelihood to
take part in acts of corruption, as the resulting
repercussions may lead to possible impeachments or
resignations of high level government employees.
 The laws that the country enforces, especially with
regards to business, such as contract law, as they dictate
what Mattress Firm Holding is and is not allowed to do.
Some countries, for example, prohibit alcohol or have
certain conditions that must be fulfilled, while some
government systems have inefficient amounts of red
tape that discourage business.
 Whether or not a company’s intellectual property (IP) is
protected. For example, a country that has no policies
for IP protection would mean that entrepreneurs may
find it too risky to invest in Mattress Firm Holding
 The trade barriers that the host country has would
protect Mattress Firm Holding; however, trade barriers
that countries with potential trade partners would harm
companies by preventing potential exports.
  A high level of taxation would demotivate companies
like Mattress Firm Holding from maximizing their profits.
 The risk of military invasion by hostile countries may
cause divestment from ventures.

1.7.2 Economic Factors that Impact

Mattress Firm Holding
Economic factors are all
those that pertain to the economy of the country that
Mattress Firm Holding, such as changes in the inflation rate,
the foreign exchange rate, the interest rate, the gross
domestic product, and the current stage of the economic
cycle. These factors, and their resulting impact on aggregate
demand, aggregate investment and the business climate, in
general, have the potential to make a company highly
profitable, or extremely likely to incur a loss. The economic
factors in the PESTEL analysis are macroeconomic.
The economic factors that Mattress Firm Holding may be
sensitive to, and in turn should consider before investing may
include the following:
 The economic system that is currently operational in the
sector in question- whether it is a monopoly, an
oligopoly, or something similar to a perfect competition
economic system.
  The rate of GDP growth in the country will affect how
fast Mattress Firm Holding is expected to grow in the
near future.
 The interest rates in the country would affect how much
individuals are willing to borrow and invest. Higher rates
would result in greater investments that would mean
more growth for Mattress Firm Holding
 However efficiently the financial markets operate also
impact how well Mattress Firm Holding can raise capital
at a fair price, keeping in mind the demand and supply.
 The exchange rate of the country kurl on operates in
would impact the profitability of Mattress Firm Holding,
particularly if kurl on engages in international trade. The
stability of the currency is also important- an unstable
currency discourages international investors.
 A high level of unemployment in the country would
mean there is a greater supply of jobs than demand,
meaning people would be willing to work for a lower
wage, which would lower the costs of kurl on.

1.7.3 Social Factors that Impact Mattress

Firm Holding
The social factors that impact Mattress Firm Holding are a
direct reflection of the society that Mattress Firm Holding
operates in, and encompasses culture, belief, attitudes and
values that the majority of the population may hold as a
community. The impact of social factors is not only important
for the operational aspect of Mattress Firm Holding, but also
on the marketing aspect of the organization. A thorough
understanding of the customers, their lifestyle, level of
education and beliefs in a society, or segment of society,
would help design both the products and marketing
messages that would lead to a venture becoming a success.
The social factors that affect Mattress Firm Holding and
should be included in the social aspect of the PESTEL analysis
include the following:
 The demographics of the population, meaning their
respective ages and genders, vastly impact whether or
not a certain product may be marketed to them.
Makeup is mostly catered to women, so targeting a
majority male population would be less population than
targeting a population that is mostly female.
 The class distribution among the population is of
paramount importance: Mattress Firm Holding would be
unable to promote a premium product to the general
public if the majority of the population was a lower
class; rather, they would have to rely on very niche
marketing.
 To some extent, the differences in educational
background between the marketers and the target
market may make it difficult to relate to and draw in the
 target market effectively. Mattress Firm Holding should
be very careful not to lose the connection to the target
market's interests and priorities.
 Mattress Firm Holding needs to be fully aware of what
level of health standards, reactions to harassment
claims and importance of environmental protection
prevail in the industry as a whole, and thus are expected
from any company as they are seen as the norm.

1.7.4 Technological Factors that Impact

Mattress Firm Holding
Technology can rapidly dismantle the price structure and
competitive landscape of an industry in a very short amount
of time. It thus becomes extremely important to constantly
and consistently innovate, not only for the sake of
maximizing possible profits and becoming a market leader,
but also to prevent obsolescence in the near future. There
are multiple instances of innovative products completely
redesigning the norm for an entire industry: Uber and Lyft
dominate the taxi cab industry; smartphones have left other
phones an unviable option for most et cetera.
The technological factors that may influence Mattress Firm
Holding may include the following:
 The recent technological developments and
breakthroughs made by competitors, as mentioned
 above. If Mattress Firm Holding encounters a new
technology that is gaining popularity in the industry in
question, it is important to monitor the level of
popularity and how quickly it is growing and disrupting
its competitors’ revenues. This would translate to the
level of urgency required to adequately respond to the
innovation, either by matching the technology or finding
an innovative alternative.
 How easy, and thus quickly, will the technology be
diffused to other firms in the industry, leading to other
firms copying the technological processes/ features of
Mattress Firm Holding
 How much an improvement of technology would
improve/ transform what the product initially offers. If
this improvement is drastic, then other firms in the
industry suffer more heavily.
 The impact of the technology on the costs that most
companies in the industry are subject to have the
potential to increase or reduce the resulting profits
greatly. If these profits are great in number, they may be
reinvested into the research and development
department, where future technological innovations
would further raise the level of profits, and so on,
ensuring sustainable profits over a long period of time.
1.7.5 Legal Factors that Impact Mattress
Firm Holding
The government institutions and frameworks in a country,
while technically also political and thus subject to whichever
political party holds the majority in a government body, are
also legal and thus should be considered in a PESTEL analysis.
Often Mattress Firm Holding policies on their own are not
enough to efficiently protect Mattress Firm Holding and its
workers, making Mattress Firm Holding appear an
undesirable place of employment that may repel skilled,
talented workers.
The legal factors that deserve consideration include the
following:
 Intellectual property laws and other data protection
laws are, as mentioned earlier, in place to protect the
ideas and patents of companies who are only profiting
because of that information. If there is a likelihood that
the data is stolen, then Mattress Firm Holding will lose
its competitive edge and have a high chance of failure.
 Discrimination laws are placed by the government to
protect the employees and ensure that everyone in
Mattress Firm Holding is treated fairly and given the
same opportunities, regardless of gender, age, disability,
ethnicity, religion or sexual orientation.
  Health and safety laws were created after witnessing
the horrible conditions that employees were forced to
work in during and directly after the industrial
revolution. Implementing the proper regulations may be
expensive, but Mattress Firm Holding has to engage in
it, not only due to the law but also out of Mattress Firm
Holding's personal feeling of ethical and social
responsibility to other human beings.
 Laws are also placed to ensure a certain level of quality
or reasonable price for certain products to keep the
customer safe and prevent them for being provided. The
industries this applies to find often their costs elevated.

1.7.6 Environmental Factors that Impact

Mattress Firm Holding
Different industries hold different standards of
environmental protection in their head as the norm. This
norm then dictates what every company should aim for, in
the least, to prevent becoming the target of pressure groups
and boycotts due to a lack of environmental
conscientiousness. A company in the textile industry, for
example, is not expected to incur the same level of pollution
and environmental degradation as an oil company. The new
consumer, armed with the interest and the knowledge it
carries, prefers to give its business to companies it views as
more ethical, particularly about the environment in the wake
of global warming.
The environmental factors that may significantly impact
Mattress Firm Holding include:
 The current weather conditions may significantly impact
the ability of Mattress Firm Holding to manage the
transportation of both the resources and the finished
product. This, in turn, would affect the delivery dates of
the final product in the case of, say, an unexpected
monsoon.
 Climate change would also render some products
useless. For example, in the case of textiles, in countries
where the winter has become very mild due to Global
Warming, warm winter clothes have much less of a
market.
 Those companies that produce extremely large amounts
of waste may be required by law to manage their
environmental habits. This may include pollution fines
and quotas, which may place a financial strain on
Mattress Firm Holding
 If Mattress Firm Holding should (knowingly or
unknowingly) contribute to the further endangerment
of an already endangered species may face not only the
consequences from the law but also face a backlash
 from the general public who may then boycott Mattress
Firm Holding in retaliation.
 While relying, in any percentage, on renewable energy
may be expensive, it often receives support not only
from the government but also from its customer base,
who may be willing to pay a premium price for the
products that Mattress Firm Holding may produce.
 CHAPTER-4
SWOT ANALYSIS