c


  
 
Hand tools are those types of non-powered tools which are designed for use by experts as well as
in Do-It-Yourself (DIY) projects, like home repairs, general maintenance, woodworking,
building, mechanics and gardening. The hand tool industry is facing new challenges related to
worldwide business globalization and the invention and use of electronic business. Every single
manufacturer, irrespective of its size and importance in the market, should watch the movements
in its business environment, in order to adjust activities accordingly.




  
   

p c
      A source of employment to many, hand tools industry is

basically labor intensive in nature, whose development is of great importance for a
competitive as well as a self-reliant industrial structure. The manufacturers of hand tools
produce a comprehensive range of hand tools, right from carpentry and plumbing tools to
striking and cutting tools.

p ï       Apart from being a labor intensive industry, this industry is
also an energy intensive one. It is estimated in a recent study that in most economies
adoption of energy efficient processes and technologies can yield in energy savings of up
to 30 to 50%.

p ï    

  Adding positively to the income of a country,
hand tools industry has contributed to economy in terms of development and technology
up-gradation.


 !cp
 
 



  

India has a competitive advantage in the hand tool industry compared to other countries because
of easy availability of raw materials, entrepreneurship skills and skilled labor at competitive
wages. The hand tool industry as a whole is witnessing a shift of manufacturing base from
traditional manufacturing countries in Europe and Taiwan to the developing world and this is a
good sign for India to benefit. There has been an average growth of 17% per annum of the hand
tool market in India for the last 7 years.


Estimated No. of Unit in India 2500
SSI Units u
pp
Large Unit 7
Estimated number of workers 25000
Major Manufacturing regions Jallandhar/Nagpur
Total Export in 2001-02 $33 billion


There are many companies which already exists in the industry



  

 
ï  


The Small Scale Industry today constitutes a very important segment of the Indian economy. The
development of this sector came about primarily due to the vision of our late Prime Minister
Jawaharlal Nehru who sought to develop core industry and have a supporting sector in the form
of small scale enterprises.

Small Scale Sector has emerged as a dynamic and vibrant sector of the economy.

- Today, it accounts for nearly 35% of the gross value of output in the manufacturing sector and
over 40% of the total exports from the country.

- In terms of value added this sector accounts for about 40% of the value added in the
manufacturing sector.

- The sector's contribution to employment is next only to agriculture in India. It is therefore an

excellent sector of economy for investment.

         

 

     
ÿ

p
 p 

17% annual growth rate
 
 ppp

pp p
p35% of the gross value of output in
  p

 pp
 p   p the manufacturing sector
p
 p
  p
p Growth in demand in the domestic

pp
p
p


p market size due to overall economic

p growth
 p   p  p Increasing Export Potential for

 pp
 p
pp Indian products
  p


 c!c"#

$ï!% ïc"!ï
 
1-p ompetitive Price. 1-p Limitation of product line.
2-p Distribution network. 2-p Large apital oriented.
3-p Innovative design of the products 3-p ash flow, start-up cash-drain?
which can increase efficiency. 4-p Reliability of data, Plan predictability?
4-p Direct delivery capability.

&&$'!ï $ïc
 
1-p Market Development? 1-p Political effect?
2-p Industry trends? 2-p Environmental Effect?
3-p Technology development and innovation? 3-p IT Development?
4-p Global influences:- (%    4-p Market Demand.
() *+
   , 5-p New technologies, services, ideas?
5-p New market, vertical, horizontal? 6-p Insurmountable weakness?
6-p Business Product development.
7-p Partnership agencies and distribution





'' - 

p e offer a diverse and comprehensive products mix to meet the need of the industrial
market. we manufacture tools for automotive and other industrial application.

p Assistance in custom application. we have certified engineers on staff to help you with
your custom required tools.
p e offer variety of services from products assembly custom parts and tooling for your
convenience.




. 

c*

. 

" . 

p Achieve a positive contribution to overhead and meet the break even point with in 3 years
from the commencement of the business.
p Reach the target level of the average of 20% return on investment over the next 4 years.


 . 

* /
 . 0

p Achieve a positive contribution to overhead and sell 20000 kits in the market.
p Increase awareness about our entrance in the market. (It will be measured by no. of sales
in the first three month.

 /
 . 0

p Achieve a sales target 90000 Kits.

p Reach the target level of 5 % of the initial investment.


 .  1  
 
  
   1 -
 

,

2
  . 

p Improve market share and net sales revenue.

p Improve current level of retail distribution coverage.
p ontrol on marketing expenditure sufficiently to achieve profit contribution objective.
p Identify viable objective for future volume and profit expension.


&$3ïï+&4"c5

&c$'"c$ &c$'"c$ c'!

c"ï 2 LAKS * 52 EEKS 104 LAKS

"ï* 40 LAKS 35 LAKS

&$+'!
"ïc+!$c6ï 10 LAKS 8 LAKS

"ïï""!%c!+ 15 LAKS 10 LAKS
+$2'!
ï &ï!ï
"ï+ï&$ïc! ON PLANT AND 5 LAKS
MAHINARY
"ï!$ï&c+ ON DEBT 5 LAKS

c c2"ï&$* =104-35-8-10-5-5 41

c  FLAT 30% OF GROSS 13.8 LAKS

PROFIT = 30% OF LAKS
!ï&$* =41-13.8 27.2 LAKS




&ï$7*6ï*$ï+ï"*c!+"!+'$#



!1ï    $


1-p Expensive to enter the industry 1- Many companies in the

2-p Experience needed, but training market.
easily available. p . 2- Low switching ost.
3-p Some economies of scale. 3- High cost of leaving
4-p Low barriers to entry. Market.
5-p New entry not too easy.

p p
p

 &12 &1

1-p More suppliers in the market. 1- Homogeneous products.

2-p Suppliers large. 2- Average price sensitivity.
3-p Similar products. 3- High buyer power.
4-p Able to substitute. p 4- Large orders.
5-p Able to change. 5- Product life cycle is
6-p Foreign supplier power. large.



   

1-p Some cross-products subst

2-p Ability to import from oversees market.

1

p 


 1  is not easy, if anyone looks as if they¶re making a sustained
profit, then competitors can come in to the industry.
p   
 is extremely is high: because of many companies are already exists.
p 2 1  , again implying strong downward pressure on prices.
p There are some

    .


18

&  + 
  The difference between the physical product is the 

 ,
trademarks, tone,   and  . In the hardware tool, screwdriver, pliers, wrenches
belong to homogeneous products, hardware companies in the packaging and colors are also the
trend of homogenization, only mark is different.

Unless we are able to find some way of changing this situation, this looks like a very tough
industry to survive in. Maybe he'll need to specialize in a sector of the market that's protected
from some of these forces, or find a related business that's in a stronger position.


+   ! 1


Gaining Distribution in the market :-

i
 

 ^

 i




 p
 pp p p
p p

p  p pp
p


pp
 pp p p

 
p

p  

p 
p p 
p
p
 
 
p
 
p 
 p  p p 
p p

p
pp
 
p pp!
p!p"#p  p
p
$ p p p
p
p pp
 p




p
 pp
p

p p p 
p 
p
p   p 
p

p
p p pp p%

pp  
pp p
 pp
p
p 
 p p  p 


p 

p p
 pp
p
p 
p
$ p pp  p pp
p 
  p pp
p
  

p
p

^

 
  




 p pp
p p p
p p p
 
p
  p
p 

p
pp
 p pp

p p p pp  p! p
"  
p# !"$p  p pp p p 
p

p

p pp 
p!    p  p



p
p  p