A Brief Report on

Environmental Scanning Of RelianceTextiles

Submitted by:

Group 1 (Renuka, Sanjukta, Akriti, Ayush, Sunil, Zishan)

Group 10 (Monica, Ritesh, Apoorv, Ashutosh, Sahil, Bhawik)

Introduction - Reliance Textile Industries is a leading manufacturer and exporter of home

textiles.The company design, manufacture and market a coordinated line of value-added home

textile products. It consists of packaged bedroom furnishings such as comforters, bed sheets,

pillowcases, shams, bed skirts, curtains quilt covers and draperies.

Government Intervention - I n t h e p a s t , I n d i a h a s b e e n o n e o f t h e m o s t

i m p o r t a n t players in the global textile market. ―It is estimated that about t h r ee cen t u r i es

ago i t p r od u ced c l os e t o 25 % o f t he wo r ld ‘ s cloth‖. But, the international

competitiveness of Indian textile industry went through a sharp decline in the era during Second

World War. The British manufacturers penetrated so much into Indian economy that there was

influx of foreign goods into the Indian markets. As Ox-ford History of India puts it, 'the machine

go o ds o f Lan cas h i re t o ge t he r wi t h t h e f r e e t r ad e p o l i c y h ad killed the Indian

cotton industry‘. In the mid 1960's the government of India introduced an export promotion

scheme under which the earnings from the export of rayon fabrics could be used for the import of

nylon fiber. Another program the High Unit Value Scheme introduced by GoI in 1971 gave

tremendous boost to reliance textiles. The scheme allowed the import of polyester filament yarn

against the export of nylon fabrics. RCC was benefited the most from this scheme and its export

contributed more than 60% of the exports under this scheme. Like many other countries, the textile

sector then became one of the most significant sectors for the economy of India. Soon

after abolition of quotas in 2005 India strengthen itself in i n t e rn a t io na l t ex t i l e ma r k e t . I t

i s t od ay In d i a ‘ s m os t r oo t ed sector which provides direct employment (formal and

informal) to an estimated 38 million people nationwide.

Role of Textile Industry in Indian Economy - The textile industry in India is one of the major and

most important sectors in the economy especially in terms of foreign exchange earnings, employment

and production in the country. It is presently growing at 20% and accounts for 4% of India‘s

GDP. It also contributes 14% to the Industrial Production and employs about 35 million people.

The entire size of the textile sector is worth $ 47 billion in w h i c h d o m e s t i c m a r k e t i s a t

$ 3 0 b i l l i o n a n d t h e o v e r s e a s market at $17 billion. This industry attracted Rs. 33000 crore of

investment during the fiscal year, which was up by 51percent from Rs. 21850 crore in the

former year.

Core Competencies - Core competency is a buzz phrase generally employed as a post-facto

rationalisation for strategic decisions. The core competency of this industry is the scale at which the

production and distribution is carried out.

Technology - Vimal, the flagship textile brand of Reliance Industries Ltd. (RIL) uses a

‗pioneering innovation' in the textile industry of treating fabrics with a chemical that would

arrest the growth of fungi and bacteria keeping it fresh and anti-odour even after day-long

wearing in humid and warm climates like India.

Low cost manufacturing capabilities.

Assets - Reliance strategy is to step out of the businesses that contribute less than 12% to the

company's annual revenues. The textiles business accounts for around 2% of RIL's total turnover of

around Rs 850 billion.

Intellectual Capital – In the mid 1960's Dhirubai Ambani decided to switch from the spice industry

to textiles. In 1966, he set up a spinning mill at naroda, 20 kms from Ahmedabad, with borrowed

funds of Rs. 280000 and registered it (reliance textile industries) as a powerloom unit with a paid up

capital of Rs.150000.

Competitors – The main competitors of reliance textiles was Bombay dyeing. After the relaunch

however, Grasim also came up as a strong competitor. Other brands that posed as a competition to

Vimal throughout its life span were Raymonds, Reid & Taylor, Mayur Suitings, Siyarams, Donear,

OCM, Arvind Suitings, Bombay Suitings, Peter England, etc.

Growth of Vimal Textiles - Reliance Industries Ltd. (Textile Division) is India‘s largest

manufacturer-exporter of suiting fabrics and has expanded its production capacity to over 20

million meters per year.

Large volume is exported to over 58 countries to some of the biggest international brands

across the globe involved in the business of Suits, Pants and Coats.

Largest vertically integrated fabric production facilities in India, to convert wool tops to

finished fabrics through different processes of Dyeing, Spinning, Weaving and Processing /

Finishing using state-of-the-art plant and machinery.

Formalized stringent quality checks at each stage and process (with ISO 9001 & ISO 14001

Certification) which enables the superior quality and consistent fabrics at par with global

standards consistently.

Company manufactures over 20,000 design-shade combinations each year in Light Wool,

Polyester Wool and Woolen, Polyester Viscose and Polyester Cotton fabrics under the

VIMAL brand.

Constant and continuous research on products/ designs to ensure creation of innovative

future trends.

DISTRIBUTION CHANNEL: Ready to wear range is sold in the company‘s exclusive stores and

franchisees, it is also counting on Reliance Retail‘s own stores to help promote the men‘s wear

brand, especially Vimal Red. Already, fabric sales have been initiated at Reliance Trendz and

Reliance Mart stores.

Reliance‘s vimal done its homework very well in every aspects i.e. advertising, promotion and

distribution channel but it was very difficult for vimal to establish its brand as it was in late 80s and

early 90s.

ADVERTISING & PROMOTION: A 60 second commercial by Grey Worldwide shows the root

values of company, ―Ad shows- a father readying his son to take over his business empire. He picks

his own brand — Vimal, of course and ends with original theme tune and tagline. First time any

textile company showed its machinery etc in ads to boast that Vimal fabrics were made in the most

modern plant in India.

Company spent Rs 40 crore on promotion through television, radio spots and print ads, apart from

extensive point-of-sale promotions for high visibility.

REASONS FOR RELAUNCH OF VIMAL:

Indian textile or garment market is expected to grow by 100% in next five years from Rs

95,000 crore to Rs 190,000 crore.

Men‘s wear market is booming and having Rs 22,000 crore market of which nearly 60 per

cent was accounted for by branded apparel.

According to Images Technopak, Men‘s apparel (the largest segment with a 44.9 per cent

share) shows a value growth of 12.7 per cent and a volume growth of 4.6 per cent, while the

industry as a whole grew by 14.7 and 5.3 per cent, respectively, in 2006.

High end technology set up and project management skill of Mukesh dhirubhai Ambani.

There is very tough competition for vimal in relaunch because of various well established players

and no. of international brands. Indian brands like Park Avenue from Raymond, Madura Garments

(Louis Phillipe, Allen Solly, Van Heusen), Arvind Brands (Arrow), Zodiac and Reid &

Taylor.Meanwhile, premium international brands like Brioni, Alfred Dunhill and Ermenegildo

Zegna have also entered the Indian market.

REASONS FOR DEATH OF BRAND VIMAL:

In late 90‘s reliance focus was changed from textiles to petrochemicals and they were less

concerned about their textile division.

Marketing myopia, company hasn‘t foreseen the shift in consumer‘s preferences from

suitings to readymade garments.

Lack of marketing support

Vimal was known for its quality and style. Still people remember its simple baseline "Only Vimal".

Lack of marketing support had virtually killed the brand. Now the position that Vimal occupied is

now owned by Raymonds and Reid & Taylor.