Growth Strategies of Sangam (India) Ltd.*

Details

Case Code : CLINDM009
Publication date : 2006
Subject : Industrial Marketing
Industry : Textiles and Garments
Teaching Note : Not Available
Length : 04 Pages
Price : Rs. 100

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Key words:

Sangam (India) Limited, Grasim Industries, Siyaram's, Raymond, Reid & Taylor, Strategic decision, Polyester/viscose (P/V) dyed yarn, Textile industry, Economies of scale, Installed capacity, Value chain, Operational efficiency, Brand, WTO, Technology Up gradation Fund Scheme, High value cotton yarn, Innovative strategies, Stock Exchange, quota regime, Integrating backwards, Yarn, Bulk purchaser, Labor, ISO 9002, Spindles, Weaving.

Note

* This caselet is intended for use only in class discussions.
** More comprehensive case studies are priced at Rs.200 to Rs.700 (US $5 to US $16) per copy.

 

Abstract:

The caselet focuses on the company's success story in the polyester/viscose (P/V) dyed yarn market in India. It highlights the various growth strategies adopted by the company that led to economies of scale, increase in market share and profitability. The caselet also focuses on the measures adopted by the company to manage the changes in the economic and legal environment and become a leader in the textile industry in India

Issues:   » Developing a marketing strategy for a long run competitive advantage   » Backward integration strategy to control costs and gain economies of scale   » Growth through phased capacity expansion and introduction of higher value products   » Importance of selecting a proper manufacturing location   » Systematic financing for the company's growth   » The Polyester/Viscose dyed yarn market in India Introduction Sangam (India) Limited (SIL), the flagship company of the Sangam group was established in 1985 in Bhilwara, a town of Rajasthan. The company was primarily into weaving operations.

The Polyester/viscose (P/V) dyed yarn market in India was around 5 percent of the total textile industry in 2005 and SIL, which had operations only in this segment, was the market leader with a 20 percent market share and the largest manufacturer of P/V dyed yarn in the country.

The company has achieved this position in a short span of ten years. As of November 2005, SIL produced 21,000 MT of yarn per annum and 10 million meters of fabric per day through its weaving operations with an installed capacity of 125 looms or weaving machines...

Questions for Discussion:

1. Analyze the performance of SIL and relate it to the BCG matrix. Indicate the current and future positions of the company in the matrix and give reasons for the same.

2. Discuss the changes in the export environment of the Indian textile industry in general and that of SIL in particular. What strategies can SIL adopt to overcome the Chinese competition in the global textile export market?