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Neerja Modi School

Internal Assessment

“Should S. Goyal International plan to set up a new unit in spite of heavy labour problems in Surat?”

Candidate name: - Vedaant Dhanuka

Candidate number: -

Session: -

Subject: - Business management HL

Supervisor: -

Rationale

S.Goyal international is a cloth manufacturing and selling industry. S. Goyal international has experienced a rise in demand with increased sales and continuous expansion. S. Goyal is facing labour problems which might affect the supply. Their main aim is to expand and increase their turn over.

Theoretical frame work

I will analyze the financial state as well as the non-financial factors affecting the expansion of the business. I will be using charts, SWOT analysis and PEST analysis to understand the threats and opportunities for the expansion of the business and labour efficiency.

Key areas of syllabus

· Organizational placing tools

· Investment appraisal

· Market planning

· Organisation objectives

· Growth and evolutions

· Human resources

Methodology

I have taken in to consideration both primary and secondary research. Primary research would mainly be concentrated on an interview with the managing partner, which would help me unravel the plans about the company’s future expansion labour problem resolution.

Executive summary

The two managing partners of S. Goyal international expressed its interest in the company’s expansion. S. Goyal international plans to address the labour problem. This raises the question-

“Should S. Goyal International plan to set up a new unit in spite of heavy labour problems in Surat?”

The analysis that was carried out acknowledges both the financial and the non-financial tools. The non-financial tools that were used are charts, PEST analysis and the SWOT analysis. The financial tool that would be used would be Appraisal. The information has been derived from an interview and the World Wide Web. S. Goyal international aims to expand their business and resolve the labour problem.

The report helps to conclude that further research, interviews and information is required to aptly understand the future aims of the company.

Contents Page :-

Introduction...................................................................................................... 1

Procedure and Methodology ........................................................................... 2

Main result and findings ..................................................................................... 3

Analysis and Discussion....................................................................................... 4

Non-financial analysis

PEST analyses –

Economic and political ...................................................................................... 5

Social and technological.................................................................................... 6

SWOT analysis .................................................................................................8

Financial analyses-

Recommendations and conclusion ...............................................................13

Bibliography ................................................................................................14

Appendix:Appendix 1- Interview with the director Mr Jai prakash

Appendix:Appendix 2- Questionnaire and Survey findings


Introduction
S. Goyal international was established in 2003 , S. Goyal international is a reckoned name in the clothing industry. Being one of the strongest competitors in the clothing industry, S. Goyal international has achieved hundreds and thousands of satisfied customers throughout the globe. S.Goyal international is led under business masterminds Mr. Jai prakash Dhanuka and Mr. Sanjay Keyal. Consisting of highly skilled work tecnitions and increasing sales.

S. Goyal international produces varied products such as fancy dress material, Export fabric, Banarasi Jamewar fabric, handloom fabric. S. Goyal international makes products which is compatible for all nationalities. S. Goyal uses highly skilled labour and the best machinery to offer the best services. S. Goyal is spread all over India in places like, Surat, Kolkata, Varanasi, Mumbai, and Delhi. S. Goyal is also situated internationally in places like Dubai.

S. Goyal international is situated in a highly competitive market, and being one of the strongest competitors, improves its services every now and then, in order to keep improving its supply. S. Goyal international plans to expand its business throughout India and the globe. S. Goyal is extending its business and improving its name in the international and national market, yet faces a severe problem. The labour problem, one of the most important factors in any industry, S. Goyal faces the same problem, labour restrictions is a major factor that S. Goyal industries are falling back on and fear that this may lead to decreased supply in the future, and so is addressing this problem. S. Goyal approaches the problem working on labour efficiency, to fulfil the demands of its local, national and international clients.

S. Goyal international plans to expand its business on a global scale and to do such, the company will have to fix its cracks. And so address the labour problems. The company is laying out all the possibilities to lift the business to the higher scale.

“Should S. Goyal International plan to set up a new unit in spite of heavy labour problems in Surat?”

Procedure and Methodology

To analyze the research question, different methodologies and various business tools are to be used to appropriately understand the question and analyse the situation. The data used includes both primary and secondary data. Primary data is the interview which I conducted with the Managing director of S. Goyal. The interview I conducted provided me with a lot of information about the company and the company’s background and future plans. The information collected from this interview is reliable and up to date and I also used questionnaire and survey findings for my research.

Secondary data sources that have been used are SWOT analysis, PEST analysis and charts. These are not reliable sources because the data have been collected from the internet and different websites for the economic data, which they not are up to date.

PEST analysis is mainly used to analyse the various areas where S. Goyal is established. To particularly understand the concept of providing to consumers PEST analysis is used to understand the political, economical, social and technological factors. SWOT analysis allowed understanding strength, weakness, opportunities and threats. The other secondary analysis that was used is the force field analysis, force field analysis helps understand the forces that drive the movement towards a goal or away from the goal, and this shows us the forces that influence social situations.

Main Results & findings:

Current market position

The company deals with clothing materials, and supplying them globally. The company is a strong competitor. The company has huge sales and is expanding its business globally. The only problem that arises is the labour intensity. Lack of labour is dropping the sales of the company. The company believes improving the work force, will improving the sales.

Labour intensive force of S. Goyal international

There is a huge drop in labour work force as it can be seen in the pie charts. The company is striving to exceed consumer demands and increase their supply, in order to be one of the very competitive industries in the local, national and international market.


Analysis and Discussion:

Financial analyses-

Even with fall in labour force, S. Goyal international manages to improve their revenue over the years. By fulfilling consumer demands, and utilising the best of their resources. S. Goyal was able to make this achievement by bringing in skilled task force and up to date technology.

As explained from the above graph S Goyal have majority of people engaged in tertiary sector due to high literacy rate people are more engaged in business work then blue collar work. Thus , it faces major problem for labour force.

As explained from the above graph its obviously affect productivity of the firm due to labour problem but adversely it may not affect much on domestic markets as its ratio of distribution is more in domestic than international.

Non-financial analysis:

PEST Analysis – To understand political, economical, social and technological stands for S. Goyal international.

Political: - The ways the government can intervene in the economy, in order to enforce various laws such as environmental, labour, tariffs, trade restrictions and tax policies, showing us the ways that the government can influence the education, health and infrastructure.

Opportunities: - Surat, as a corporate hub in Gujarat, has been growing. Due to the growth in infrastructure and rising companies, Gujarat has issued subsidies to businesses, helping the businesses grow.

Threat: - The Company will not be able to grow and gain a good reputation and trust, if it not considered legal and the political sectors as part of their strategy. The regulations that are set out by the government are supposed to be followed by the businesses in order to be considered legal and authorised by the government.

Economical: - Refers to the exchange rates, inflation rates, interest rates and economic growth, which impacts on a business and how it grows and develops.

Opportunities: -the economic stability of Gujarat is at a rise, making it a strong and competitive place for a business to operate. Between high competition very few industries are recognised and those that are, intake huge amounts of revenue, S. Goyal international being one of them.

Threats: - Competitive market results in slow and struggling growth for a business.

Social : - The factors show hoe the society is affected culturally and how the population rate grows and decreases.

Opportunities: - The literacy rate in Gujarat is high, which gives an educated workforce to work with, and the amount of skilled labour is also high. This gives S. Goyal International an advantage.

Threats: - Due to highly skilled labour and a majority of businesses the competition toughens.

Technological: - How technology can help achieve great results in business.

Opportunities: -Transportation in Gujarat is top-notch. With well connected roads and high end transportation services.

Threats: - Machinery maintenance is high which adds up to a huge cost for S. Goyal international.

The PEST analysis shows that S.Goyal international can expand its business by improving its labour efficiency.


SWOT analysis

Swot analysis is a tool that helps to understand the internal and external factors, internal factors being strengths and weaknesses of the business and the external factors being opportunities and threats.

· Strength

1. Labour: - cheap and highly skilled labour in Gujarat allows the company to emerge strongly.

2. Rich heritage : - the culture diversity allows to experiment with various form of clothes and a diverse amount of clothes are sold in the market

3. Global market: - By supplying various forms of clothes nationally and internationally. Allowing many forms of clothes to be sold in the national as well as the international market.

· Weakness

1. Spinning sector: - lacks modernisation needs to be updated, to allow higher sales.

2. Fabric processing: - what is known to be one of the weakest links in the Indian textile industry, prevents it to compete in the international market

3. Low labour productivity: - Productions a level in Gujarat is low compared to its competitors, this makes the textile industry weak.

· Opportunities

1. Growing Industries: -world textile continues to grow allowing room for the business to grow and thus expand globally.

2. Integration of information technology: - Information technology plays a crucial role in the development of any business, by using technology the development of the business will increase, S. Goyal international has updated its IT department to increase the overall output.

· Threats

1. Lack of labour: - The lack of labour prevents proper utilization of resources, thus preventing the business to grow.

2. Decreasing fashion cycle: - The decrease in fashion cycle does not allow the company to produce large amounts of particular clothing and if it does, the loss in trend forces the cloth to go unused.

SWOT analysis helps to conclude that S. Goyal international has a good reputation with highly skilled workers. S. Goyal has a very strong reputation in the market and thus will emerge as a growing industry. Gujarat allows the company to emerge strongly, allowing room for the business to grow and thus expand globally. But like coin it has two sides, S Goyal have to face threats like lack of labour and decreasing.


Conclusion

The labourers are unsatisfied; they require higher wages, improved benefits and higher appreciation for their work. They require incentives and bonuses as well. One of the workers of whom I took a survey of said that his family also needs to be taken care of, his child’s education, his wife’s medicine and complete insurance of his family. The workers also require recognition; the workers are many a time not appreciated for their hard work. This tends the workers to lose interest in what they do. This dissatisfaction of work tends to make them change their job. They SWOT analysis and the survey with the workers helps to conclude that if the workers are satisfied than there will be increase in supply and S.Goyal international will be on a profitable path.

Recommendation

S.Goyal international needs to provide the workers with higher wages

The company also needs to focus on the non-monetary factors such as life insurance and worker transportation.

The workers want appreciation for their work. The firm’s focus should also be on the non-materialistic wants of the workers. The worker’s should be appreciated for whatever work they do.

Limitations and directions for the future

The firm needs to work towards improving the workers working life. With improved worker lives there will be an increase in labour for the firm which would lead to increased supply. All workers of the firm need to put their heads together in order for the firm’s benefit. The increased supply will match the high demand and will improve S.Goyal international’s marginal profit.

Bibliography

Wikipedia

http://blogs.siliconindia.com/rohitkantprasad/SWOT_analysis_of_Indian_Apparel_Textile_Industry-bid-nMHxN50t11848596.html


Appendix 1:Interview with Jaiprakash Dhanuka Managing Director of S. Goyal industries

Q 1) Can you describe you company?

S. Goyal international was established in 2003, our very first shop that was opened on foreign land was in Dubai, this was a huge step for the firm, and we had our fears. But, the choice we made gives us a turnover in millions.

Q2) what brought your interest in to the clothing industry?

I never thought of working in the service sector, I always planned to establish a business with the best clothes and goodwill in the market. My establishment was brought about with my managing partner, we are very proud upon our establishment.

Q3) on which class and sector do you focus on?

Our company tries to clothe every individual according to their needs. We do not focus on a class or sector, we believe in establishing a secular clothing line.

Q4) how has been your experience in the business so far?

There have been ups and downs, but that is business. Experience has helped me learn and to understand the consumers and competitors. A reasonable price is not the only thing that pulls consumers to buying a product but quality matters as well.

Q5) Why are you facing labour problems?

Gujarat is a state with high literacy rate, where there are skilled workers, and they look for a particular job criterion and are unwilling to do blue collar jobs. Less labour leads to less supply, so pushing the workers we have to full throttle does not work out very well.

Q6) Does the labour problem affect your international supply?

Yes, it does. Infect the labour problem is the only cause to the firm’s decrease in supply.

Q7) how do you plan to resolve this problem?

The company proposes to increase wages, improve working conditions by providing longer breaks, better perks and more paid holidays.

Q8) Do you think that such actions will increase the number of labor in your firm?

Yes, this definitely will. The main objective is to increase the amount of labor in our firm. The firm desperately needs to increase the output, as consumer demands are on the rise.

Q9) what are your plans on business expansion?

We are currently planning to expand the business locally. In order to achieve such, we are establishing outlets throughout India. Global expansion is out next motive.

Q10) What do you eventually expect of the firm?

I expect my firm to be one of the strongest and leading manufacturers in the clothing industry, to be the strongest and the best.

Appendix 2: Questionnaire and Survey Findings

Please answer all the questions.

Do not type in your name or post anywhere in the form.

All the information received will be kept confidential and under no circumstances, will be leaked.

Q1 How has the firm treated you?

o Very well

o Well

o Improper

o

Q2 Do you wish to continue with this firm

o Yes

o No

o Maybe

Q3) What more do you expect from your firm?

o Longer breaks

o Increased wages

o Better facilities

Q4) Why would you leave the firm?

o Improper treatment

o Less wages

o Less perks

Q5) Where do you picture yourself in the firm in the coming 10 years?

o Manager

o Same level at which you are working at right now

o A unit head

Q6) what perks interests you?

o Health benefits

o Family insurance

o Provided transport

Q7) how is the working environment

o Good

o Average

o Bad

Q8) Relationship of employees and employers

o Good

o Average

o Bad

Q9) Are you appreciated for your work?

o Yes

o Occasionally

o Never

Q9) what do you find different between S.Goyal international and other firms?

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Hi, I would highly recommend you edit your post and take out your IA -- posting it online is extremely risky because you don't know who could be reading it (and possibly using bits from it), and because when you put your IA through something like turnitin it might turn up as 'plagiarism'. Along the same lines of this, your bibliography is seriously lacking. Not only should you be avoiding wikipedia at all costs, but you haven't properly referenced the other website you've used. Go check out Harvard or Chicago referencing, or something similar.

From a really quick skim read, it seems that you need to focus more throughout your IA on actually answering your research question, which you don't seem to be doing in the analysis/conclusion section at all. In fact, I'm a bit iffy about your research question because despite reading through your entire IA, I don't understand what "plan to set up a new unit" even actually means - you should definitely be explaining this in the introduction at the very least -- and this term only comes up in your research question, not in the body of your IA at all - so how are you addressing it? So yes, edit your post and remove your IA, and hopefully what I said makes sense/helps :)

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if you've got extra words you can put your SWOT (and in a few IAs i've seen the PEST analysis) in in the appendices, in tabular form.

as bluedino said, you haven't really answered your question. i read your conclusion, and even there, there seems to be no answer. there's no summary of your financial analysis, no proper justification actually. you've kind of explained the problem in detail by saying why labour is dissatisfied.

your recommendations and limitations have little link to the title. you're talking of how to increase the moral or motivation of workers. if that's what you really want to do, maybe change the research question?

Edited by MISHI
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