m


 m


Aarti Dhanrajani Amit Chaturvedi

Lecturer, BPIT Sushant Kaushik
Prayag Anand
Vinay Kundra
Sumit Kumar
Pooja bagri
p India is a leading player in the global gems and jewellery market
p The gems and jewellery industry occupies an important position in the Indian
economy. It is a leading foreign exchange earner, as well as one of the fastest
growing industries in the country
p The two major segments of the sector in India are gold jewellery and diamonds.
Gold jewellery forms around 80 per cent of the Indian jewellery market, with
the balance comprising fabricated studded jewellery that includes diamond
studded as well as gemstone studded jewellery
p The Indian gems and jewellery industry is competitive in the world market due
to its low cost of production and the availability of skilled labor. In addition, the
industry has set up a worldwide distribution network, of more than 3,000 offices
for the promotion and marketing of Indian diamonds
— „iamond distribution was dominated by a few major diamond mining companies
worldwide among which „iamond Trading Corporation („TC) was the largest
diamond distributor. It accounted for approximately 50 % of worldwide diamond
distribution
— Though Indian exports in cut and polished diamonds was growing, it was restricted
to lower-sized and lower-valued diamond market. European manufacturers
dominated the higher-valued diamond market
— India was among the largest importer of gold in the world and its sale was sensitive to
income level and price level. Also it was dependent on the purchases based on faith in
the retailer
— Tanishq and Gili were among the earliest jewellery brands in India and later there
came a shift in consumer preferences towards diamond jewellery as it was positioned
as affordable and contemporary
°   

_nbranded Branded

Silver & Gold jewellery Gold & „iamond jewellery

Investment Investment + Fashion

Traditional design Fashionable & innovative design

Marriage & festival is peak season Wearability and gifts

Jewellery sold on commodity basis Jewellery being sold on a per piece basis
with labor charges
V  

p Tanishq Jewellery
p Vaibhav Gems Ltd.
p Classic Diamond (India) Ltd.
p Shrenuj & Company Ltd.
p Goldiam international Ltd.
p Su-raj Diamonds & Jewellery Ltd.
p Rajesh Exports Pvt. Ltd
p Gitanjali Gems Ltd
Ä 
   
p The company is one of India¶s largest integrated diamond and jewellery
companies Established in 1986.
p Sophisticated and scalable diamond and jewellery manufacturing facilities

p Approximately 1,246 retail outlets in India and 143 outlets in the U.S.

Ô


 Ä 
 

 
—ÿamping up the retail chain
—Expanding stores in India
—Acquisitions including Samuels, ÿogers
and Tri-Star
—Plans to make further inorganic growth
in the _.S. & Far-east
—Expanding manufacturing capabilities to
address increasing demand
— Further integration within the jewellery
value chain
— Higher margins in retail business
— Higher value addition
—Gitanjali Lifestyles to focus on
Manufacture and distribution
Of luxury and lifestyle products
—„eveloping 200 acres gems & Jewellery
SEZ in Hyderabad
—Plans to develop more SEZs focused on
gems & jewellery across India
—To partner for developing real estate
infrastructure
—Leverage its key strengths
—Large opportunity for incremental
revenue
—„iversify business model
GENERIC BUSINESS LEVEL STRATEGY
V
RTERS FIVE FRCE VEL FR
JEWELLERY INUSTRY
O

I
 


I„_S
 C MO
I
S

S_OOIR B_RS

RIV R M G IS
IG
FIRMS

S_BS
I
_
S
INTER-FIRV RIVALRY : HIGH
   

  
— Large presence of unorganized sector. 0.2 Million Gold jewelers and over
8,000 Diamond jewelers

±   
— International rivals Such as, China

— Threat from producing nation like S.A. & Russia

BARGAINING
WER F SU

LIERS:
VEIUV
— In jewellery industry the suppliers are S.A., _AE, Australia, _S,
Congo, Botswana, ÿussia, „TC.

— Few Alternatives of cutting & polishing.

— Skilled labor

— Bargaining power of India is enhanced because India is largest

consumer of gold jewellery.
BARGAINING
WER F BUYERS: LW
   

— 1. Domestic buyers &

2. Foreign buyers

— As investment (Demand increase)

— Bargaining power of Indian exporter is high because Majority of the world's

rough diamond production is cut and polished in India
THREAT F SUBSTITUTES: LW
— Substitutes are ÿeal assets, Stock market, & Bank deposits & mutual
fund investment and Other types of jewellery like imitation jewellery,
bagasra jewellery, stone jewellery etc.
— Second preferred investment behind bank deposits
— Status and standard of living increase so demand is increasing at high
rate
BARRIERS T ENTRY : LW T VEIUV
— Low capital requirement
— Government subsidy
— EIM policy & government¶s rules-regulations are high
— Skilled manpower is essential
— Advanced technology required
SWT ANALYSIS F GITANJALI
JEWELLERY LT
m

— Large integrated diamond & jewellery player and having an international presence.
— Pioneers of branded jewellery in India
— Strong marketing & distribution network. Strong retail presence in India and in U.S.
112 distributors and 1246 outlets in India and 143 outlets in U.S
— Strong brand equity and broad product range Such as, Gili, Asmi, Nakshatra,
Sangini, D¶damas, Vivaaha, Maya, Giantti, Desire, Samuels etc.
— Visionary leadership (Acquiring Nakshatra, Samuels, Rogers etc.)
— Expanding manufacturing capabilities in Mumbai and at special economic zone in
Surat to address increasing demand
— Net Worth is 3,460.37 million Rs. So we can say that it is financially very strong
company
— Sight holder status with DTC through a promoter group company
— Highly skilled, qualified and motivated employee
SWT ANALYSIS F GITANJALI
JEWELLERY LT
 

— There may be conflicts of interest between them and certain of their Promoter group
companies.
— As the major raw material requirements need to be imported, companies normally
stock huge quantities of inventory resulting high inventory carrying costs.
— Technology is less improved compared to China and Thailand¶s company.

±  

— New markets in Europe & Latin America.

— Growing demand in South Asian & Far East countries.
— Industry moving from a phase of consolidation.
— Expansion possibilities in lifestyle and luxury products in India like watches, leather
goods, Platinum jewellery because increasing disposable income of people.
SWT ANALYSIS F GITANJALI
JEWELLERY LT


— 2
 
  


 -China, Sri Lanka and Thailand's entry in small
diamond jewellery
— Increase in the price of Gold & Diamonds
— Other local competitors. According to the data 97% jewellery sales are by family
jewelers
— Threat from producing nation like S.A. & Russia

RIRITY ­ IV
ACT VATRIX
 
    
  
    
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VALUE CHAIN
m Ä 
      
 

  
   

V  

 V  m 

VALUE CHAIN (CNTu)


— The company¶s operations running across the whole value chain so finance is the
very much important factor. Working capital requirement is much more. The
company is having finance from various sources like shares, bank loan, and credit
line
   

— The company is having latest technological manufacturing plants. Its branded

showrooms & other outlets are having good infrastructure. It is also having plants
in special economic zone at various places
—   

— The company procures its raw materials, machinery & other ancillary things from
recognized sources. The company is having good creditability with supplier. It has to
maintain its relations with different sight holder for procurement of diamond for
jewellery making
VALUE CHAIN (CNTu)
  

— The company is using latest technology in processing means jewellery

manufacturing & also in designing. The company is having business in so many
countries so that it has to pay attention over the designing, manufacturing etc. with
the high technology to satisfy buyer¶s needs
    

— As of September 30, 2005, the Company had 410 full-time employees, of which
approximately 117 employees were employed at its corporate offices in Mumbai. In
addition, as of September 30, 2005, its subsidiaries, joint ventures and associate
companies employed in the aggregate more than 740 employees, including 250
employees in its retail operations.
@EY SUCCESS FACTR S
V !  
    

Strong retail presence in India and the _.S.: The company is occupying good position in
retail jewellery provider in both India as well as U.S. Gitanjali has a strong network of
distribution. Here Strong retail presence in India and in US. It has 112 distributors and
1246 outlets in India and 143 outlets in US.
Strong brand equity and broad product range It is the pioneer of branded jewellery in
India. It brand equity is too high.
Significant focus on retail and distribution network to drive growth It also keeps in
mind distribution network which provide the product to end users. The company is
having its retail outlets also.
@EY SUCCESS FACTR S
V     

Sophisticated manufacturing facilities including upcoming Hyderabad SEZ:

The company is having good infrastructure facility in various special economic zones.
Gitanjali has been achieved economies of scale and learning curve effects which is
benefited in low cost production because in India skilled labor is available at cheaper
rate.
@EY SUCCESS FACTR S (CNTu)
     

— Gitanjali has expertise in cutting, polishing the diamonds and in designing the
jewellery (specifically in small design).
— Presence across the whole value chain  The first & foremost success factor for the
company is of its presence across the entire value chain

        V   

— Visionary leadership and a deep management team

— Strategic Acquisition of Tri-Star  Manufacturer and global distributor of Canadia®
brand diamonds and diamond jewellery in various countries, such as Australia,
Canada, England, Ireland, Northern Ireland, New Zealand, Scotland, and the
United States
CURRENT SCENARI F GEVS AN
JEWELLERY INUSTRY (CNTu)
— The industry registered exports worth _S$ 15 billion in April-„ecember 2008
(Provisional), compared to _S$ 14.9 billion in the corresponding period of 2007,
registering a growth of .59 per cent.
— Export of cut and polished diamonds grew from _S$ 10.9 billion in 2006-07 to _S$
14.2 billion in 2007-08, witnessing a growth of nearly 68 per cent.
— The total gems and jewellery exports from India stood at _S$ 20.8 billion in the
financial year 2007-08, against _S$ 17.1 billion in the previous year, witnessing a
growth of 22.27 percent. The sector accounted for 13.41 per cent of India's total
merchandise exports.
— More than 100,000 skilled and unskilled labors being laid-off due to poor demand
from the _S market. In fact, India¶s jewellery sales to the _S declined over 20 per
cent even during the holiday season, i.e. Christmas and New Year.
— The domestic jewellery demand has also decreased by over 20 per cent.
— Positive government policies such as 100 per cent Foreign „irect Investment (F„I)
in gems and jewellery through the automatic route, has further provided an impetus
to the booming gems and jewellery industry.
CURRENT
SITIN F GITANJALI
JEWELERS
— Gitanjali Gems reported that consolidated net profits fell 42 percent to INÿ 291.52
million ($5.97 million) in the third fiscal quarter ending „ecember 31, 2008 as a
result of the company¶s diamond and jewelry segments contracting during the period
— Gitanjali¶s third quarter net sales fell 11 percent to INÿ 11.109 billion ($227.55
million), as diamond revenues declined 19 percent to INÿ 5.366 billion ($109.98
million)
— The company noted a 17 percent decline in revenues at its India operations during
the quarter and a 7.8 percent drop in revenues from the rest of the world.
— For the first nine months of the fiscal year, Gitanjali¶s net profit fell 6 percent to INÿ
1.195 billion ($24.48 million). The company¶s diamond business saw pre-tax profits
fall 16 percent during the period, while its jewelry unit profits grew 27 percent.
Group net sales rose 8.3 percent to INÿ 36.207 billion ($741.56 million)
FUTURE
ERS
ECTIVES

— As per ÿesearch and Markets, the gold processing industry in India although, has
around 15,000 players, Only 80 players generate revenues over _S$ 5 million.
Therefore, there is high growth potential for Indian gems and jewellery in the global
market.

— Furthermore, in spite of the fact that India is not a major miner of precious metals
and stones, the country¶s inexpensive and skilled workforce are one of the best in the
world for processing of diamonds, which makes the country a favored destination
with the exporters.

— Additionally, there is a huge potential in promoting traditional Indian designs and

styles. There is a massive demand for hand-made jewellery, especially in ethnic
Indian designs, from the sizeable Indian emigrant population in the Middle-East,
South-East Asian countries, the _S and Canada among others.
THAN@ YUu