glitter final

8/4/2019 Glitter Final

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Establishing an Indian MNC of Gemsand Jewellery in Belgium, UAE and

Nigeria


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INFRASTRUCTURE CUSTOMER

Core Capabilities:know how of the

jewellerydesigning

Target Customer:Dealers / Retailerswith wellestablished brandnames in the hostcountry

ValueConfiguration:stress on Innovation

Partner Network:Strongcommunicationamong partners

OFFER

Value Proposition:Unique designs ofIndian tradition,fashionable, stylish

FINANCE(to be done by Vineeth)

Cost Structure: Revenue Streams:

DistributionChannel: Effectiveand efficientchannel; viaairways

CustomerRelationship:Steps taken to buildlong-term relations


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Entry Barriers Instability of the government Tough competition existing in the host market Tough competition existing in the home country Tough competition from other nations like China and

Thailand

Segmentation: basis of Brand Name of the Dealer /Retailer, his knowledge about the end consumers,years of experience in the field

Targeting: those brands who in turn targetACHIEVER customers segment according to VALS-2 segmentation

Positioning: Fashionable products with high quality


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Product: Gold Jewellery without studded gems Gold Jewellery with studded gems

Price: according to the prevailing rates of Gold and other studded gems lower than the competitors

Distribution: via airways, up to FOB Promotion:

Displays at trade fairs Buy-back allowances

Dealer loadersCompetition: International: Thailand, China Home Country: Nashik, Mumbai, Bangalore Belgium: Gala Jewellers, RELL Diamonds & Jewels, Classic Diamonds

(India) Ltd., Cartier Joaillerie International, etc UAE: Samra Jewellery, Taiba Gold Jewellery, Damas Jewel, Rejee Jewellery, etc

Competitive Advantage: Cheap labour Unique Indian traditional designs Adaptability to design the local needs of the customers at minimal price Continuous innovation


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Factor EndowmentsLandLabourCapitalEnterprise

Related and supporting industriesManufacturer of Cutting & Polishing equipmentsMiningRetail industry

Demand ConditionsHuge demandTarget customersare very consciousabout fashion

Firm Strategy, Structure, RivalryHigh quality productsStylish, fashionableTarget Belgium & UAE via exportsRivalry from China, Thailand


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OverallAttractiveness

RisksNo Political risksNo Economic risks being it a part ofEuropean unionNo Legal risks as strict rules to safeguardproperty rights

CostsLegal costsCorruption(though very lessbut still exists)

BenefitsSize of economyLikely economicgrowth


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RisksPolitical risks: social unrestNo Economic risksLegal risks: failure to safeguard property rights

CostsCorruptionLegal costsInequality among genders

BenefitsSize of economyLikely economic growth


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Entry Barriers Instability of the government High number of criminal incidents and loots Highly corrupted political parties and civil servants Fear among the suppliers to keep precious and high-valued

items

Segmentation: basis of Brand Name of the Dealer /Retailer, his knowledge about the end consumers,years of experience in the field

Targeting: those brands who in turn targetACHIEVER customers segment according to VALS-2 segmentation

Positioning: Fashionable products with high quality


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Product: Gold Jewellery without studded gems Gold Jewellery with studded gems

Price:

according to the prevailing rates of Gold and other studded gems lower than the competitors

Distribution: via airways, up to FOB Promotion:

Displays at trade fairs Buy-back allowances Dealer loaders Insurance of the products

Competition: No competition Competitive Advantage:

Cheap labour Unique Indian traditional designs Adaptability to design the local needs of the customers at minimal price Continuous innovation


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Factor EndowmentsLandLabourCapitalEnterprise

Related and supporting industriesManufacturer of Cutting & PolishingequipmentsMiningRetail industry in other countries

DemandConditionsHuge demand inother branches ofthe company

Firm Strategy, Structure,

RivalryHigh quality productsStylish, fashionableTarget Nigeria via franchiseRivalry from China, Thailand


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RisksPolitical risks: social unrest/ anti-business trendsEconomic risks: economic mismanagementLegal risks: failure to safeguard property rights

CostsCorruptionLack of infrastructureLegal costs

BenefitsSize of economyUntapped market


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Enthnocentric staffing policy Function as a multiple CEO rather than going

for a single CEO

Later will move on to be polycentric


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Advisory Board

Head Finance Head Marketing Head Human ResourceHeadOperations(Exports)

International Business

Developments Manager

Belgium UAE Nigeria

Design andDevelopment

HR International

Division

Executive(Do

mestic)

Executive(Interna

tional)


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International Business Development

Manager

Belgium UAE Nigeria


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Compliance with labor laws of Belgium ,Nigeria and UAE

Enforce Standardization of work practices

Recruitment would be culturally sensitive

Training for the international businesstraveler who would further train theexecutives of the host countries


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Goal SettingParent company role conception should be communicatedwell to the HCNs. The HCN receives role expectations andenacts role behaviors in his/her cultural environment.

Performance AppraisalsPerformance Appraisal of the HCNs would also be countryspecific and would be customized.


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Compensation would be given on the going ratebasis

This rate is calculated by conducting a salarysurvey and salary benchmarking.

A separate budget would be provided for meetingthe expenses related to the ad-hoc visits by theIBDM to the host countries, Visa processing Fees

and other administrative expenses.


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Belgium Ad Valorem

Applies the EU common external tariff (CET)

Single duty system

UAE Account for 4% of the CIF value (cost, insurance freight) of

the goods or services deposited at the customs.

Reimbursement of the duty deposit is available for 30 days.

Nigeria Import duty varies from 5% to 60%, averaging 12%.

All imports are also subject to a 7% port surcharge and a 5%VAT.

The paperwork necessary for exporting and importing is

lengthy.


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Uncut, polished diamonds, gold are sourcedfrom Surat.

Consultancy for setting up of factorypremises and other areas of work.

TQM policies.

CAD/CAM setup and availabilty.


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Selection of Factory Premises Planning & Layout of Factory

Interior Work of the Factory

Selection of Machinery Manufacturing Process

Selection of Workers

Quality Control

Jewellery Designing & CAD/CAM

Invisible Setting


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52 Rupees/ 65 Rupees/Particulars Rupees Dollar Euro

Gold 50grams Pure 77000at 1540 per gram

Making, Wastage, CraftingCharges

at 5% of pure gold 3850

Ex-Factory 80850

Inland Transportation 500

Clearing and Forwardingcharges 100

Port and Loading Charges 100

F.O.B Price 81550 1568.269 1254.615

M.O.Q - 10 Pieces 815500 15682.69 12546.15


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Particulars 2009-10 2010-11 2011-12 2012-13 2013-14

Total Income

Total Expenditure

Interest

Gross Profit

Depreciation

Income Tax

PAT

102.18

87.33

4.2

10.65

1.31

0.434

8.90

118.7

93.9

6.7

18.10

1.33

0.912

15.85

149.4

108.2

11.6

29.6

1.49

1.66

26.45

193.9

117.5

19.2

57.20

3.23

3.15

50.82

237.22

133.9

23.2

80.10

5.25

4.72

70.13

Projected Exports Income statement in rupee termsIn million

Foreign exchange Figures converted at current exchange rates


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Handling of Foreign exchange inflows and the fluctuations/volatility in theexchange rates.

The payment terms are solely on the basis of Letter of Credit.

The company would in its growth stages utilize the external currency

borrowing mode to minimize currency risks and foreign exchange issues.

The negotiating bank would conduct the entire process of the receipt of theremittance in the foreign exchange dollar/euro terms.

The period of presenting and clearing of L/c would be 2 days after thesuccessful transfer of documents to the exporters opening bank.

The issues of foreign exchange would be dealt in by following a hedge policyof foreign exchange in the local markets.


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The company would adapt the following foreign exchange management policy:-

Due to the volatility and fluctuations in the foreign exchange markets, especiallyin the US Dollar.

The importers from Nigeria and UAE would open an L/C in US Dollar terms, andthe importers from Belgium would open an L/C in Euro terms and the pricing ofthe products would be done in the same way.

The company would adopt a 45 day forward policy by entering into an agreementwith the domestic bank to book the US dollar and EURO at a rate comfortable to usas concerned with the pricing of our products to the importer.

The policy would be more to safeguard the interests of the company rather thanspeculating the movements in the markets.

The remittances arising out of exports would be maintained in EEFC account inorder to fund the possibility of import of raw material in the future.


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Particulars AmountContribution from partners

Domestic Operations

External Currency Borrowing

1.Nigerian Naira loan fromDiamond Commercial Bank,Lagos (Required for setting upstores in the growth phase)

2.Euro loan from Fortis Bank,Brussels for setting up adiamond polishing unit in

Belgium in the 3rd year ofoperations.

20,00,000 Rupees

30,00,000 Rupees

75,00,000 Naira (26,15,000 Rs)

3,00,000 Euro (2,00,00,000 Rs)


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Particulars Amount

Marketing, Export promotion andestablishment expenses

Procurement of raw material for

exports

Use of External Currency Borrowing

1. Nigerian Naira to set up the retailoutlets and franchises in the growthstage

2.Setting up a diamond polishing unitin Belgium in the 3rd year of operations.

10,00,000 Rupees

40,00,000 Rupees

75,00,000 Naira (26,15,000 Rs)

3,00,000 Euro (2,00,00,000 Rs)

Country specific Problems and Issues to be faced and


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Nigeria

Scams/Fraudulent business activities emanating from Benin

The High Commission of India in Nigeria (accredited to Benin ) has informed at late that

there have been several complaints/enquiries from companies overseas regarding cases of

forgery, cheating perpetuated by dummy companies allegedly based in Republic of Benin

(Cotonou ).

The Company would verify the credentials of Nigerian importers by contacting The

Department of International Economic and Trade Relations of Republic of Benin

adopting the measures to safeguard itself and also utilize the opportunity of dealing with

Nigerian Importers

The Indian Government is promoting the gems and jewellery sector by inviting delegates

from various developing countries.

A delegation from Nigeria and other African countries would be invited to visit the various

hubs of jewellery Industry including cities like Mumbai, Surat, Chennai, Kolkata etc.

The company would promote its products and identify clientele in such exposures and also

win their trust by showcasing the wide variety of products and the excellent manufacturing

facility.

Country specific Problems and Issues to be faced andpossible solutions


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