Professional Documents
Culture Documents
CHAPTER -1
Internship training is an integral part of MBA program, because it gives us the practical
knowledge of what we have learnt during our study period. It is also necessary to have a
practical knowledge along with the theoretical knowledge.
An internship is a period of work experience offered by an organization for a limited
period of time. This internship are typically undertaken by students and graduates looking
to gain relevant skills and experience in a particular field. Employers benefit from these
placements because they often recruit employees from their best interns, who have known
capabilities, thus saving time and money in the long run. Internships are arranged from
the third-party organizations which recruit interns on behalf of industry groups. Rules
vary from country about when interns should be regarded as employees. The system can
be open to exploitation by unscrupulous employers. One can see how the theories and
knowledge are being practically implemented. This report is about HARSHITHA
ELEGANCE located in Bangalore. The report carries the information about all the
department in the organization and necessary information of the company.
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of the internship was to learn the complete production process of textile manufacturing.
This internship has familiarised us with various aspects of Textile processing unit starting
from its organizational hierarchy to the functionality of the various departments. It as also
introduced us to various brands of machineries available for carrying out the different
textile processes to meet global standards. I hope this internship will help me to be a
better manufacturing professional as the knowledge of textile is pivotal in making good
garment manufacturing professional.
Objectives are short term and Medium term goals that organization seeks to accomplish
an Organization objective will play a large part in developing organization policies and
determining the allocation of resources.
To understand the work culture of the organization and apply theoretical concepts in real
life situation at the work place for various functions of the organization.
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INDUSTRY PROFILE
INTRODUCTION.
EMBROIDERY
Embroidery is a handicraft of decorating a fabric or other materials with needle and
thread, experts believe that craft made on cloth lasts lang and make fabric look attractive
HISTORY AND ORIGIN OF EMBROIDERY
Embroidery is the craft of decorating fabric or other materials using a needle to apply
thread or yarn Embroidery may also incorporate other materials such as pearls, beads,
quills, and sequins. In modern days, embroidery is usually seen on caps, hats, coats,
blankets, dress shirts, denim, dresses, stockings, and golf shirts. Embroidery is available
with a wide variety of thread or yarn color.Some of the basic techniques or stitches of the
earliest embroidery are chain stitch, buttonhole or blanket stitch, running stitch, satin
stitch, cross stitch. Those stitches remain the fundamental techniques of hand embroidery
today.
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ORIGIN OF EMBROIDERY
The process used to tailor, patch, mend and reinforce cloth fostered the development of
sewing techniques, and the decorative possibilities of sewing led to the art of embroidery.
Indeed, the remarkable stability of basic embroidery stitches has been noted: It is a
striking fact that in the development of embroidery there are no changes of materials or
techniques which can be felt or interpreted as advances from a primitive to a later, more
refined stage. On the other hand, we often find in early works a technical accomplishment
and high standard of craftsmanship rarely attained in later times. The art of embroidery
has been found worldwide and several early examples have been found. Works in China
have been dated to the Warring States period (5th–3rd century BC).In a garment from
Migration period Sweden, roughly 300–700 AD, the edges of bands of trimming are
reinforced with running stitch, back stitch, stem stitch, tailor's buttonhole stitch, and
whip-stitching, but it is uncertain whether this work simply reinforced the seams or
should be interpreted as decorative embroidery.
Ancient Greek mythology has credited the goddess Athena with passing down the art of
embroidery along with weaving, leading to the famed competition between herself and
the mortal Arachne.
Conversely, embroidery is also a folk art, using materials that were accessible to non
professionals. Examples include Hardanger from Norway, Merezhka from Ukraine,
Mountmellick embroidery from Ireland, Nakshi kantha from Bangladesh and West
Bengal, and Brazilian embroidery. Many techniques had a practical use such as Sashiko
from Japan, which was used as a way to reinforce clothing.
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THREADS
Most popular embroidery threads are made from Viscose (also known as rayon) or
Polyester. Other materials include cotton, wool and metalized.
Thickness
There exist several metrics for thickness and none is really intuitive to understand (like
thickness of threads as for climbing ropes). Thread thickness measures are standardized
weights (standardized in the sense of statistics). For example:
• In the most popular metric numbering system (Nm or No), higher means finer and lower
means thicker. Nm is measured as number of 1000 metre hanks per kilo.
• In the so-called Denier or Textile systems (used for stockings), the opposite is true.
Textile is weight in grams of 1000 metres of yarn and Denier is weight in grams of 9000
meters of yarn.
We use Madeira Rayon 40, a so-called "classic" Viscose (artificial silk) thread type that
is appropriate for beginners. It can be used both on fine fabrics like silk and
rougher/thicker fabrics like jeans or leather.
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Image of embroidery.
Choose regular needle size by fabric weight
When selecting a needle for regular sewing, start with needle size. European needles
range in size from 60 to 120, which refers to the diameter taken on the shaft right above
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the eye. American needles are sized from 8 to 19 in an arbitrary numbering system, and
paired with corresponding European sizes: for example, 60/8 or 70/10; the larger the
number, the larger the needle.
Determine needle size by fabric weight. Choose a size 60/8 needle for lightweight fabrics
similar to georgette or organdie; a 70/10 or 80/12 needle for medium-weight jersey,
Lycra, linen, or calf leather; a 90/14 and 100/16 for heavy fabrics like jeans, vinyl,
upholstery or canvas; and 110/18 or 120/19 for very heavy fabrics. After choosing needle
size, match the needle point to your fabric. The needle type and name is usually
determined by the characteristics of the needle’s point. How smoothly the thread pulls
through the needle’s eye is also a factor in producing even, regular stitches. So if you
have trouble threading the needle and problems with the stitches, the thread and needle
aren’t matched correctly. Lay your thread in the needle’s front groove; it should
“snuggle”.In the end, most sewers just want to get professional looking results. Knowing
more about needles brings you closer to that goal, since needle choice greatly affects your
outcome. For every correctly chosen, new needle you put into your machine, you should
have eight to 12 continuous hours of trouble free sewing.
Embroidery in India
Embroidery in India includes dozens of embroidery styles that vary by region and
clothing styles. Designs in Indian embroidery are formed on the basis of the texture and
the design of the fabric and the stitch..
Aari
Aari work involves a hook, plied from the top but fed by silk thread from below with
the material spread out on a frame. This movement creates loops, and repeats of these
lead to a line of chain stitches. The fabric is stretched on a frame and stitching is done
with a long needle ending with a hook such as a crewel, tambour (a needle similar to a
very fine crochet hook but with a sharp point) or Luneville work..
Banjara embroidery
Practiced by the Lambadi gypsy tribes of Andhra Pradesh, Banjara embroidery is a mix
of applique with mirrors and beadwork. Bright red, yellow, black and white coloured
cloth is laid in bands and joined with a white criss-cross stitch. The Banjaras of Madhya
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Pradesh who are found in the districts of Malwa and Nimar have their own style of
embroidery where designs are created according to the weave of the cloth, and the
textured effect is achieved by varying colours and stitches of the geometric patterns and
designs. Motifs are generally highlighted by cross-stitch.
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CHAPTER-2
ORGANIZATION PROFILE
They are a Bangalore based firm established in the year 2002, promoted by
Mr.Rangaswamy.R. to offer total solutions in the field of COMPUTERISED
EMBRODIERY. We are a technology driven company with progressive
growth every year and having made a strong impact in the relevant field in the
market, we have emerged as a "Dependable Source" in this field.
HARSHITHA ELEGANCE has tie-up with many companies for creation of
textile designs with a niche in the Fashion Industry.
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Organisation profile
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BUYERS
PRODUCT DEVELOPER
MERCHENT
SAMPLING
GG
MARKING PROCESS
SPREADING
CUTTING
EMBROYADARY
WASHING
QUALITY CHECK
FINSHING
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ORGANISATION STRUCTURE
Managing director
Executive manager
Inspecting
Advertising
Designing
packing
Quality test
dispatch
Sewing
Accounts
Human resource
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QUALITY POLICY
QUALITY OBJECTIVES
ORGANISATION PRINCIPLE.
1. Service rules all.
2. Employee-cantered management.
5. Recognition of achievements.
6. Team spirit.
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QUALITY POLICY
QUALITY OBJECTIVES
Increase the customer satisfaction level. To impart knowledge and develop skills to all
categories of employees for improved Operational efficiency. On time delivery of the
products and services. Reduce the cycle time by avoiding errors and improving
productivity.
KURTIS
Indian designer Kurtis are all the way comfortable, stylish and easy to wear. Indian Kurtis
impart elegance to any girl’s wardrobe. It surely gives striking and decent look to a
woman. Designer Kurtis are the newest trend in Indian fashion. Kurtis became a fashion
statement in today’s realm. It is comfortable and the combination of splendour and style.
Kurtis give a decent look which is versatile and modest too.
SAREE DESIGN
India as a country produced spectacular dresses and costumes. The Saree is a fine instance
of Indian brilliance and style sense. It is too graceful and stylish that one can drape it in
different styles. There are almost 80 ways to adorn a saree. It is Ethnic and considered as
the traditional outfit. It is the legacy of our India. It encompasses the everlasting charm
of proud to Indian women. It symbolizes the rich culture of India. It has been the trend
setter and has set a new standard.
India is known for its culture and heritage. And what make India unique is its dresses
because of elegance and ethnicity. Indian fashion is too much influenced by the culture
and tradition of the people. There are distinctive varieties of clothing in India. For
instance Salwar and Kameez is the ethnic wear of woman in Punjab and Punjab is also
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known for its phulkari embroidery in its traditional costumes. Phiran is the popular attire
of woman in Jammu and Kashmir, Rajasthan is famous for its Bandhani rings. Mekhla
Chadar is the traditional outfit of Assamese woman. This all symbolizes the rich culture
of India.
Fabrin essentially important for the textile industries. Textile growth is totally depending
on the supply chain of the fabrics it requires. If quality products have to be manufactured
the first priority is the cautious selection of fabrics. It means the productions of different
goods need different kinds of fabrics. Fabrics includes Bags fabric, Apparel fabrics,
Clothing fabrics, Hosiery fabrics, Industrial fabrics and so on.
Market Share
According to the annual report of 2007-2008 New the market share was 2.99% whereas
as per the latest information harshitha elegance has a market share of 5.13% this will
result in growth over the period of time.
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Green Community
VISION
General Description of the Business
Vision
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MISSION STATEMENT
This is an independently owned business that will provide honest, dependable and quality
embroidery service to businesses and individuals. This business will operate in a clean
well-maintained environment that will welcome its customers. The focus will be on
personal contact with the customer, providing a second-to-none service!
Mission
1. To adopt modern equipment’s in production
2. Quality product,
Objectives
5. To ensure that a number of jobs are erected which have already been specified
in the light or the production requirements.
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Our values
COMPETITOR ANALYSIS
MAJOUR COMPETITORS
1. Mulberry silk pvt. ltd,
3. Zenith Exports
4. Ethnic Exports
5. Shashi Exports
Established in 1995, Mulberry Silks Ltd has made a name for itself in the list of top
suppliers of Silk, Silk Fabric in India. The supplier company is located in Bengaluru,
Karnataka and is one of the leading sellers of listed products.
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Manufacturer and Exporters of Silk Bridal Wear, Evening Wear ad Luxurious Silk Fabric
for Home Furnishing Range of Fabrics including Taffeta, Chiffon, Georgette, Satin
Crepe, Organza's, Jacquard, Embroidered Silk Fabrics, Metallic Tissue Fabrics - Plains
and Crushed, Printed Chiffon, Crepes and lightweight Taffeta, Shantung's, Bed covers,
Pillows and Cushion Covers. (A Government Recognised Export House)
3. Zenith Exports
4. Ethnic Exports
Leading Women Clothing manufacturer in India for wholesale Sarees and designer sarees
based in Surat. Get The latest wholesale price Sarees Wholesaler, Kurtis wholesaler and
supplier, Salwar Kameez Wholesaler, Pakistani Suits Manufacturer, Kids Wear
Wholesaler, Kids Lehenga Choli Wholesaler, Bollywood Dresses.
5. Shashi Exports
Shahi was established in 1974 by Mrs. Sarla Ahuja, who began her journey as a sewing
machine operator in a factory. From its humble origins, the family-owned company has
grown to become India’s largest apparel manufacturer and exporter. We now operate 65
state-of-the-art manufacturing facilities across 9 Indian states with a diverse workforce
of over 100,000 people. Our vertically integrated operations diversified range.
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CHAPTER 3
MC KINNEY’ S 7S FRAME WORK
&
PORTER’S 5 FORCE MODEL
MCKINSEY'S 7-MODEL
McKinsey's & Company, a consulting firm in USA has framed an important model,
which provides help in identifying the issues involved in strategy implementation,
besides, the formulation of strategy itself. The McKinsey 7-S Framework is a useful tool
that can be used to diagnose and solve organisational problems. It depicts an organisation
as a collection of seven interconnected elements: structure, strategy, systems, staff, skills,
style and shared values. By considering how each of these elements impacts on the others,
it is possible to take a holistic approach to organisational change.
The Framework was developed by McKinsey and Co consultants Tom Peters and Robert
Waterman, who later went on to write the international bestseller In Search of Excellence.
In the 1970s, they believed that business leaders were putting too much emphasis on
structure and strategy when it came to organisational change. Hard elements are easy to
identify and describe. They are the foundation of any organisation and can be used to
describe its management structure, processes and objectives.
The purpose of this tool is to emphasise that changing one aspect of an organisation will
impact upon the others. In a truly effective organisation, all seven elements will operate
toward the same goal. If a change leader believes that their organisation could be more
effective, they can use the framework to help identify the element or elements that need
to change.
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Hard Ss
Hard elements are easy to identify and describe. They are the foundation of any
organisation and can be used to describe its management structure, processes and
objectives. They tend to be recorded and referenced in corporate documents like
statements, strategy reports and organisational charts. The hard elements are.
Structure: the way in which an organisation’s activities are managed. In small businesses,
this might be a traditional hierarchy. In larger organisations, this is more likely to be a
divisional or matrix structure, where different managers have varying areas of responsibility.
Strategy: the plan an organisation has to achieve its objectives. This is a dynamic element,
in that it changes all the time in response to outside factors like competition, demand and
technological innovations.
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Systems: the processes an organisation has in place. This includes information systems, as
well as financial procedures, legal policy, risk assessment, health and safety, pay and benefits.
In short, all the systems that direct organisational activity.
Although changing these elements may not be easy, it can be done with a certain degree
of decisiveness. That is to say, a decision could be made at management level and
quickly communicated to the rest of the organisation.
Soft Ss
The four soft Ss are often difficult to identify, and constantly evolve. It can be hard to
put them into words and they sometimes overlap with one another. However, they are
no less important to an organisation undergoing a period of change. They are.
Style: the organisational culture, usually described as ‘the way things are done around
here’. This also includes individual management and leadership styles.
Staff: the people in the organisation, their talents and the way they are developed.
Skills: the competencies and capabilities of the organisation and its people.
Shared Values: the guiding principles that direct the organisation’s behaviour. These
were originally referred to as ‘superordinate goals’ and are often unwritten. Examples
of shared values might include great customer service, constant innovation or honesty.
Changing these elements can be difficult and may take a long time, but the eventual
benefits to the organisation can make this effort worthwhile. For example, developing
leadership skills among junior employees could secure an organisation’s long-term
success.
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MCKINSEY'S 7 S in organisation
Strategy:
this is your organization's plan for building and maintaining a competitive advantage
over its competitors. Strategy is the plan of action an organization prepares in response
to, or anticipation of, changes in its external environment. Strategy is differentiated by
tactics or operational actions by its nature of being premeditated, well thought through
and often practically rehearsed. It deals with essentially three questions: where the
organization is at this moment in time, where the organization wants to be in a particular
length of time and how to get there
structure
this how your company is organized (that is, how departments and teams are
structured, including who reports to whom). Business needs to be organized in
a specific form of shape that is generally referred to as organizational structure.
Organizations are structured in a variety of ways, dependent on their objectives
and culture. The structure of the company often dictates the way it operates and
performs. Traditionally, the businesses have been structured in a hierarchical
way with several divisions and departments, each responsible for a specific task
such as human resources management, production or marketing. Many layers
of management controlled the operations, with each answerable to the upper
layer of management. Although this is still the most widely used organizational
structure, the recent trend is increasingly towards a flat structure where the
work is done in teams of specialists rather than fixed departments.
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• PURCHASE DEPT
• PRODUCTION DEPT
• ADMINISTRATION DEPARTMENT.
• PRODUCTION DEPARTMENT.
• FINANCE DEPARTMENT.
• MARKETING DEPARTMENT.
PURCHASE DEPARTMENT:
The purchase officers and assistance head the purchase department. The clearly take the
requisition from various departments and forward to the purchase offices and then the
purchase officer arranges to the purchase required materials from the best seller available
in the market. The purchase department plays a very important role in the company where
the dealing made between the purchase officers and sellers is convenient then it can be
help in reduction of the price of the materials and their by which will also result in
increase of profit.
ADMINISTRATION DEPARTMENT:
Administration Department takes care of the whole activities happening in and around
the company. The personal manager heads the department and personal managers is
responsible for the man power in the whole factory.
FUNCTIONS:
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FINANCE DEPARTMENT:
Finance is an essential component of the business to maintain its operations effectively.
This dept. is concerned with day-to-day activities like purchases, sales salary etc. and
proper management and maintenance of accounts of concerned year. Since BCM is the
small scale industry it maintains very good accounting system, The whole financial
matter is mainly dealt by the separate dept called finance dept.
The Major sources of finance are,
1. Owners fund
2. Loan from corporation banks.
FUNCTIONS:
• Recording day to day transactions in a systematic manner.
• Maintaining proper accounts of purchases and sales.
• Maintaining profit & loss A/c and Preparing the Balance sheet of BCM systematically.
• Paying the interest on loans at right time.
• Maintain & paying the tax’s & insurance.
• Make use of available finance resources properly.
• Maintain liquidity of assets properly to earn the maximum profit.
4 MARKETING DEPARTMENT
Marketing Department is also a one of the important department in the company. This
department is important because it gives a clear picture of how much to produce? Which
will also help in the investment to he made and to purchase department to purchase raw
materials.
The marketing department has a procedure, by which it is done i.e., fit receives the order
from the buyers and forwards the order to the production department and as per the order
production department produces the required production and it makes the packing of
materials and sends it to the buyers as per the order.
All the staff and workers have a common set of rules and regulations. There is no scope
of any kind of indiscipline at any level. They have to adhere to strict set of rules which is
imposed from time to time as per the Government Factory Act and Wages Act.
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Systems:
the daily activities and procedures that staff use to get the job done. The systems plays
a vital role. As one of the element of 7s Model, It refers to all the Stipulated procedures
that assist the functioning of organization structure. The meetings are conducted at
regular intervals in order to discuss certain issues or to take certain decisions with
regard to sales and marketing heads to improve sales through adopting following
principles :
Shared values:
these are the core values of the organization, as shown in its corporate culture and general
work ethic. They were called "superordinate goals" when the model was first developed.
The shared values are one of the growths of the organization without having any
discrimination. Required delegation, correct required ideas, Commitment and following
it correctly through its execution are the aim of the organization. The values and belief
of the company, ultimately they guide towards valued behaviour. It is also called super
ordinate Goals. The interconnecting centre of McKinsey’s model is shared values. What
does the organisation for and what are its actual beliefs and core values. The following
proves that:
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Style:
the style of leadership adopted. Style is one of the top management initiatives that can be
used to bring about organizational differences from each other in their styles of working.
But here the style is based with relation to family business as all the decisions and the style
followed will be based on the family members but the main authority will be given to the
topmost chairman of the organization.
RULES AND REGULATIONS IN HARSHITHA ELEGANCE
All the staff and workers have a common set of rules and regulations. There is no scope
of any kind of indiscipline at any level. They have to adhere to strict set of rules which is
imposed from time to time as per the Government Factory Act and Wages Act.
Staff:
the employees and their general capabilities. The fab distributors of harshitha elegance
is located in India and is family owned business it does not own any branches but it is a
Group of associated firms working together under one authority. The employees of this
organization is divided based on the requirement of the workers in each department of
the organisation. The organisation consists of around 150 employees overall who is
working directly and indirectly with the organization and the workers are the main
backbone of the organization and the reason behind the success of the organization.
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Skills:
the actual skills and competencies of the organization's employees. An ability and
capacity acquired through deliberate, systematic, and sustained effort to smoothly and
adaptively carryout complex abilities or job functions involving ideas (cognitive skills),
things (technical skills), and people (interpersonal skills).
Organizational Context
Technical Knowledge
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1. Competitive Rivalry.
This looks at the number and strength of your competitors. How many rivals do you have?
Who are they, and how does the quality of their products and services compare with
yours? Where rivalry is intense, companies can attract customers with aggressive price
cuts and high-impact marketing campaigns. Also, in markets with lots of rivals, your
suppliers and buyers can go elsewhere if they feel that they're not getting a good deal
from you.
On the other hand, where competitive rivalry is minimal, and no one else is doing what
you do, then you'll likely have tremendous strength and healthy profits.
Zenith Exports
Pramod International
Ethnic Exports
Shashi Exports
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2. Supplier Power.
This is determined by how easy it is for your suppliers to increase their prices. How
many potential suppliers do you have? How unique is the product or service that they
provide, and how expensive would it be to switch from one supplier to another? The more
you have to choose from, the easier it will be to switch to a cheaper alternative. But the
fewer suppliers there are, and the more you need their help, the stronger their position
and their ability to charge you more. That can impact firm profit.
3. Buyer Power.
Here, you ask yourself how easy it is for buyers to drive your prices down. How many
buyers are there, and how big are their orders? How much would it cost them to switch
from your products and services to those of a rival? Are your buyers strong enough to
dictate terms to you?
When you deal with only a few savvy customers, they have more power, but your power
increases if you have many customers.
Low price
Customer satisfaction
Good quality
4. Threat of Substitution.
This refers to the likelihood of your customers finding a different way of doing what
you do. For example, if you supply a unique software product that automates an
important process, people may substitute it by doing the process manually or by
outsourcing it. A substitution that is easy and cheap to make can weaken your position
and threaten your profitability.
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Rayon design
Oscar Apparels
Sri Rajarajeshwari Embroidery Works
Rich Stitch Designs
Pulse embroidery work
Rajasthan Handicrafts & Embroidery
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Chapter 4
SWOT ANALYSIS
S.W.O.T. is an acronym that stands for Strengths, Weaknesses, Opportunities, and
Threats. A SWOT analysis is an organized list of your business’s greatest strengths,
weaknesses, opportunities, and threats.
Strengths and weaknesses are internal to the company (think: reputation, patents,
location). You can change them over time but not without some work. Opportunities and
threats are external (think: suppliers, competitors, prices)—they are out there in the
market, happening whether you like it or not. You can’t change them.
Existing businesses can use a SWOT analysis, at any time, to assess a changing
environment and respond proactively. In fact, I recommend conducting a strategy review
meeting at least once a year that begins with a SWOT analysis.
New businesses should use a SWOT analysis as a part of their planning process. There is
no “one size fits all” plan for your business, and thinking about your new business in
terms of its unique “SWOTs” will put you on the right track right away, and save you
from a lot of headaches later on.
Strengths
The first element of a SWOT analysis is Strengths. As you’ve probably guessed, this
element addresses things that your company or project does especially well. This could
be something intangible, such as your company’s brand attributes, or something more
easily defined such as the unique selling proposition of a particular product line. It could
also be your people, your literal human resources: strong leadership, or a great
engineering team.
Weaknesses
Once you’ve figured out your strengths, it’s time to turn that critical self-awareness on
your weaknesses. What’s holding your business or project back? This element can
include organizational challenges like a shortage of skilled people and financial or
budgetary limitations.
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This element of a SWOT analysis may also include weaknesses in relation to other
companies in your industry, such as the lack of a clearly defined USP in a crowded
market.
Opportunities
Next up is Opportunities. Can’t keep up with the volume of leads being generated by
your marketing team? That’s an opportunity. Is your company developing an innovative
new idea that will open up new markets or demographics? That’s another opportunity.
In short, this element of a SWOT analysis covers everything you could do to improve
sales, grow as a company, or advance your organization’s mission.
Threats
The final element of a SWOT analysis is Threats – everything that poses a risk to either
your company itself or its likelihood of success or growth. This could include things like
emerging competitors, changes in regulatory law, financial risks, and virtually everything
else that could potentially jeopardize the future of your company or project.
Typically, Strengths and Weaknesses are considered internal factors, in that they are the
result of organizational decisions under the control of your company or team. A high
churn rate, for example, would be categorized as a weakness, but improving a high churn
rate is still within your control, making it an internal factor. Similarly, emerging
competitors would be categorized as a threat in a SWOT analysis, but since there’s very
little you can do about this, this makes it an external factor. This is why you may have
seen SWOT analyses referred to as Internal-External Analyses or IE matrices.
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SWOT analysis
STRENTHS WEAKNESS
Poor technology.
High quality product.
Credit policy
OPPORTUNITIES THREATS
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CHAPTER 5
FINANCIAL ANALYSIS
Various ratios used by me are as follows:
1. LIQUIDITY RATIOS:
Liquidity refers to the ability of a firm to meet its current obligations as and when these
become due. The short-term obligations are met by realizing amounts from current,
floating or circulating assets. Following are the ratios which can help to assess the ability
of a firm to meet its current liabilities.
• Current ratio
2. TURNOVER/ACTIVITY RATIOS:
These are the ratios which indicate the speed with which assets are converted or turned
over into sales.
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An analysis of the net working capital will be very help full for knowing the operational
efficiency of the company.
CURRENT RATIO.
It is a ratio, which express the relationship between the total current Assets and current
liabilities. It measures the firm’s ability to meet its current liabilities. It indicates the
availability of current assets in rupees for every one rupee of current liabilities. A ratio
of greater than one means that the firm has more current assets than current liabilities
claims against them. A standard ratio between them is 2:1.
This ratio establishes a relationship between quick/liquid assets and current liabilities.
It measures the firms’ capacity to pay off current obligations immediately. An asset is
liquid if it can be converted in to cash immediately without a loss of value; Inventories
are considered to be less liquid. Because inventories normally require some time for
realizing into cash. This ratio is also known as acid-test ratio. The standard quick ratio is
1:1. Is considered satisfactory.
Absolute liquid ratio may be defined as the relationship between Absolute liquid assets
and current liabilities. Absolute liquid assets include cash in hand and cash at bank.
Inventory turnover ratio is the ratio, which indicates the number of times the stock is
turned over i.e., sold during the year. This measures the efficiency of the sales and stock
levels of a company. A high ratio means high sales, fast stock turnover and a low stock
level. A low stock turnover ratio means the business is slowing down or with a high stock
level.
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Debtor’s turnover ratio indicates the speed of debt collection of the firm. This ratio
computes the number of times debtors (receivables) has been turned over during the
particular period.
Creditor’s turnover ratio is the ratio, which indicates the number of times the debts are
paid in the year
This ratio indicates the number of times the working capital is turned over in the course
of the year. This ratio measures the efficiency with which the working capital is used by
the firm. A higher ratio indicates efficient utilization of working capital and a low ratio
indicates otherwise. But a very high working capital turnover is not a good situation for
any firm.
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7781007
7113529
6248538
5711881
2521556
Interpretation
The above chart shows that during the year 2014-15 the Company has 2521556.00
N.W.C. In the year 2015-16 huge increase in the N.W.C is 5711881.00 and in the year
2016-17 the company has 6248538.00 N.W.C in the year2017-18 the company has
7113529.00 N.W.C the N.W.C of the company is increasing compared to the previous
years, in the year 2018-19 the company has 7781007.00 N.W.C this means the company
in a positive position & N.W.C has improved vary fast as compared to the previous years
which show liquidity Position of the HARSHITHA ELEGANCE, has always more &
sufficient working capital available to pay off its current liabilities.
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CURRENT RATIO.
current ratio
3.21
2.83 2.87
2.47
2.23
Current Ratio
Interpretation
It is seen from the above chart that during the year2014-15 the current ratio was 2.23,
during the year 2015-16 it was 2.47 and in the year 2016-17 it was 3.21. This shows the
current ratio increases every year but in the year 2017-18 the current ratio was dropped
to 2.83 due to increase in current liabilities. In the year2018-19 the current ratio has
increases 2.87. The current ratio is above the standard ratio i.e., 2:1. Hence it can be said
that there is enough current assets in HARSHITHA ELEGANCE to meet its current
liabilities.
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quick ratio
2.3
2.15
2.03
1.91
1.48
Quick Ratio
Interpretation
During the year 2014-15 the quick ratio was 1.48, in the year 2015-16 it increases to 1.91
This shows the company maintains satisfactory quick ratio, in the year 2016-17 the quick
ratio increases to 2.03, in the year 2017-18 it increases 2.15, in the year 2018-19 it
increases 2.30, due to increase in quick assets. The quick ratio is above the standard ratio
i.e., 1:1. Hence it shows that the liquidity position of the company is adequate.
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0.47
0.44
0.36
0.31
0.24
Interpretation:
During the year 2014-15 the Absolute liquidity ratio was 0.24, during the year
2015-16 it was 0.31 and in the year 2016-17 it was 0.36, in the year 2017-18 it was 0.44
This shows the Absolute liquidity ratio increases every year but it is below the standard
ratio. In the year 2018-19 the Absolute liquidity ratio has increases 0.47.
Hence it shows that the liquidity position of the company is satisfactory.
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17.94
14.49 14.68
12.75
8.36
Interpretation:
It is seen from the above chart that During the year 2014-15 the Inventory to ratio is 12.75
times, in the year 2015-16 it increased to 14.49 times, But in the year 2016-17 it
decreased to 8.36 times . There was a subsequent increase in the year 2017-18 and 2018-
19 to 14.68 times and 17.94 times respectively.
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15.44
10.16 9.72
8.88
6.32
Interpretation:
It is clear that debtor turnover ratio fluctuating over the years. It was 8.88 times in the
year 2014-15. It decreased to 6.32 times in the year 2015-16, It again increased to 15.44
times in the year 2016-17, but it decreased to 10.16 times and 9.72 Times in the year
2017-18 and 2018-19 respectively. This shows the company is not collecting debt rapidly.
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8.88 8.88
6.98 7.13
5.09
Interpretation:
It is clear that creditor turnover ratio changing over the years. It was 6.98 times in the
year 2014-15. It decreased to 5.09 times in the year 2015-16, there was a subsequent
increase in the year 2016-17 and 2017-18 to 7.13 times and 8.88 times respectively. In
the year 2018-19 it is same as compared to 2017-18. It shows that company has making
prompt payment to the creditors.
7.75
WCTR in times
Interpretation:
The working capital to ratio is fluctuating year to year that was high in the year 2014-15,
7.75 times; there was a subsequent decrease in the year 2015-16 and 2016-17 to 5.48
times and 4.46 times. But it increases in the year 2017-18 and 2018-19 to 5.41 and 5.44
times respectively. This shows the company is utilizing working capital effectively
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CURRENT ASSETS
CURRENT LIABILITIES
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CHAPTER 6
LEARNING EXPERIENCE
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BIBLOGRAPHY
https://www.mindtools.com/pages/article/newSTR_91.htm
https://www.investopedia.com/terms/f/finance.asp
REFERENCE BOOK
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