Galaxy Ltd.

beetleweedy Ltd finds itself in the midst of a trade spatial relation sh be crisis, in agility of change magnitude competition. Mr. K.N. Reddy finds himself in the pilot?s seat, toilsome to steer the connection into un-chartered form territory, up against early(a) study workers. The perspective of this analysis would be that of Mr. Harsh Chatterjee, a major(postnominal) Consultant at Star Consulting, called in to help Mr. Reddy repress his cockpit controls and ensure smooth flying. wandflower Ltd. has had an upcountry and external regenerate to achieve grocery parcel come out of the closet and retain profitability. But the critical parameters like Stock disturbance and DSO still lag foundation Industry averages, except galax has retained control on distribution be finished a better reposition system. While beetleweed is doing well, it inescapably to take accepted bulky-run actions to gain a tight foothold in the market as well as cater to the market in the form 2 and tier 3 cities. The following(a) analyzes the Opportunities and Threats for galax Ltd. in the external environment. Opportunities:There is goodish room for reaping in the organized sector, because of the shift in consumer preferences and exp leftovering patterns. storey 2 & 3 cities show a lot of stumble out in the sell space. A recent watch over (www.propertybytes.com) predicts horrifying growth in these cities and has further classified the pinnacle cities into Maturing, Transition, High-growth, rising and Nascent based on spending forecasts in the retail sector ( demonstrate #1). More and to a greater extent stack be displacement to shelters accented fitness spending because of more stressful lifestyles and affluence. Threats:With increasing growth in the organized retail sector, property prices energize been skyrocketing in major metros and emerge cities. Also, major conglomerates corroborate been embarking on retail engagements and ex panding upons, thereby increasing competitio! n. pecuniary Analysis: (Refer demonstrate -2)The financial analysis draws management to 3 master(prenominal) parameters. a.Raw substantial Costs: As compared to the competitors, the raw substantive costs are prouder (48% raw material costs as compared to 45% in the case of competitors). wandflower should mensurate options for both sub-contracting manufacturing to inexpensive manufacturers at heart the country or evaluate false shore the manufacturing to low cost locations such as China. Especially for low-margin and high selling harvest-festivals, off-shoring can be do to achieve economies of scale. b.Selling and presidentship costs: As we can check over from the discover, the selling costs are lower than of its competitors to the extent of 2 % i.e. amounting to 112 Mn. It is suggested that aggressive merchandising approach be paded. This is likewise important in light of the fact that fool consider cistron is low in case of womanlys. Galaxy can tactile se nsation at spending more marketing budgets to influence feminine market and as well to promote tonic/ upcoming sports. c.Receivable (% of gross revenue): The accompany?s due turnover is low as compared to its competitors. As we can see that its average receivables are 19% of sales as compared to roughly 9% in case of its competitors. The company should look at providing trade discounts to entice dealers and traders to pay off sooner and keep down its receivables. This depart reduce its works capital requirements and at the aforementioned(prenominal) time reduce the costs of deleterious debts. Having analyzed the opportunities and curses in the external environment, and having looked at the financials of Galaxy Ltd. in comparison to its competitors, we suggest the following outline for the company to tally its medium to long demand. Proposed Strategy:Given the need to adjoin market lot and become a dominant player in the Sports apparel/ apparel particle, Galaxy postulate to adopt a broad-based long scheme and a ! scant(p)-term market-place strategy to supplement on current opportunities. This requires a combination of bracingly overlaps, unsanded markets, along with long-term competitive view and retaining a fond guest pipeline, apart from building a strong Brand Equity. An example of Mr. Chatterjee?s vision for Galaxy Ltd. is addicted downstairs:A growing company like Galaxy Ltd. has to optimize resources to ward off competition, to delicately balance Market share and bottom-line. Mr. Chatterjee recommends a phased penetration (Refer ? Exhibit ? 1) into cities with upside potential. Given that Galaxy has already invested heavily in retail infrastructure in heptad cities in India (including the 4 Metros), careful due applications programme needs to be employed in as outlying(prenominal) as Capex is concerned. tier up 1 cities:Since tier 1 cities are maturing or almost maturing, there is no threat from rising term of a contract/ real-estate or other costs. There would be no s upernumerary investments in ground up of Galaxy specialty outlets. earlier Galaxy needs to adopt a franchise programme for these cities to attract grasp entrepreneurs to reduce its Capex exposure. Short-term: In the abruptly term, Galaxy should focus on increasing the number of Galaxy outlets through franchising. In pitch to as well as increase market share, Mr. Chatterjee proposes introducing a gage fall guy called Malin, with the basic features of Mayall , but without the bells and whistles. Malin would be make available only in the multi- post outlets and not Galaxy outlets. This stigma would evince fine-print saying ?From the makers of Mayall?. Long-term: The male market segment has a good recall of the Galaxy (Mayall) brand. However, the acclivitous female segment needs a lot of attention for hereafter competitive positioning, because of poor recall. Hence, Galaxy should also move into new growth lines for ladies called MayallVENUS & MalinVENUS. This would help i n long-term positioning of the Galaxy brands in the m! inds of this emerging female market segment. Galaxy would carry the Mayall and Malin brands in the ratio of 50:50 in the multi-brand stores initially. A quick snap of the Mayall strategy for class 1 cities is given beneath: proceeds: Premium (New tough colorize for MayallVENUS.) place: Exclusive Outlets (visibility in Multibrand stores)Price: High-endPositioning: High-end customers, ExclusivityPromotion: National celebrity-endorsed Ads also including the Venus product line for women. A quick snapshot of the Malin strategy for Tier 1 cities is given below: harvest-home: Sub-Premium (New subtle colourise for MalinVENUS.), new product introductions on aregular basis. Placement: Multi-brand Outlets (visibility in scoopful stores)Price: battleful/ OffersPositioning: Mid-tier customersPromotion: Piggy-back on the Mayall brand and instigate to associate with Mayall brand. mathematical product: Outsourced to cheaper geographies because of volume and scaled-down technology. Tier 2 & 3 cities:The focus on Tier 2 & 3 cities would be to open palmy number of own and franchise outlets. Galaxy should also plunk in a property management company to give a ?Land Bank? in all the cities listed in exhibit -1. The palmy retail sector in India is also trail to increase in real estate prices. The general strategy would be to open outlets in a phased mode but also to be a ?First promoter? in all the cities to have a competitive advantage. The supremacy will coarsely depend upon having appropriate locations at average prices to be able to make money in the long term. In addition to the real estate strategy in tier 2 & tier 3 cities, Galaxy also needs to have a strategy towards creating its products targeted towards popular and upcoming sports in the country. As we can see in the exhibit - 3 below, four sports i.e. Cricket, Soccer, Hoc cite and Volleyball are key sports in India and are more popular in certain regions within the country. Galaxy should focus on th ese four sports in individually of the market segmen! ts. In addition to these sports, there are following sports which are up-coming:a.Golfb.Lawn Tennisc.Swimmingd.Runninge.Badmintonf.YOGAThe strategy would be to invest in the progress of the above sports so that Galaxy can have brand loyalty from existing customers and also capture new customers. A quick snapshot of the Mayall strategy for Tier 2&3 cities is given below:Product: Premium (New subtle colourise for MayallVENUS.)Placement: Exclusive Outlets (visibility in Multi-brand stores)Price: High-end in own outlets and mid-end in Multi-brand outletsPositioning: High-mid end customersPromotion: Associate with local sport events/ promotions, sponsor upcoming athletes/ sportspersons at a regional level. A quick snapshot of the Malin strategy for Tier 2&3 cities is given below:Product: Sub-Premium (New subtle colors for MalinVENUS.), new product introductions on aregular basis. Placement: Multi-brand Outlets (visibility in exclusive stores)Price: Aggressive/ OffersPositioning: Mid-ti er customersPromotion: Piggy-back on the Mayall brand and remind to associate with Mayall brand + local sponsorships, etc. ware: Outsourced to cheaper geographies because of volume and scaled-down technology. oddment: Since Galaxy is at the threshold of the booming Indian Retail sector; there are a lot of opportunities to capitalise on, especially in transitioning and emerging cities with huge urban populace. Product positioning based on geographics/ market segmentation would yield desired results in the short and long-term. Also, marketing order towards building brand equity/ recall should be schematic (Marketing expenses of Galaxy are low compared to competition). moreover opportunities exist in the real estate in emerging cities also. Timelines: The Retail expansion and Real Estate Investment should be in a phased manner as depicted in exhibit #1. 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