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SWOT Analysis of Indian Footwear Industry

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STRENGTHS: -

  • Existence of more than sufficient productive capacity in tanning.
  • Easy availability of low cost of labour.
  • Exposure to export markets.
  • Managements with business background become quality and environment conscious.
  • Presence of qualified leather technologists in the field.
  • Comfortable availability of raw materials and other inputs.
  • Massive institutional support for technical services, designing, manpower development and marketing.
  • Exporter-friendly government policies.
  • Tax incentives on machinery by Government.
  • Well-established linkages with buyers in EU and USA.

WEAKNESSES: -

  • Low level of modernisation and upgradation of technology, and the integration of developed technology is very slow.
  • Low level of labour productivity due to inadequate formal training / unskilled labour.
  • Horizontal growth of tanneries.
  • Less number of organised product manufacturers.
  • Lack of modern finishing facilities for leather.
  • Highly unhygienic environment.
  • Unawareness of international standards by many players as maximum number of leather industries are SMEs.
  • Difficulties in accessing to testing, designing and technical services.
  • Environmental problems.
  • Non availability of quality footwear components
  • Lack of fresh investment in the sector.
  • Uneconomical size of manufacturing units.
  • Competition among units vying for export orders leading to undercutting.
  • Little brand image.
  • Poor labour productivity. Lack of awareness about consistent in
    plant training and retraining- Inconsistent quality high rejection rate
  • Low machine and material productivity.
    Lack of quality job work units
  • Delayed deliveries
  • Weak support infra- structure for exports

OPPORTUNITIES: -

  • Abundant scope to supply finished leather to multinationals setting up shop in India.
  • Growing fashion consciousness globally.
  • Use of information technology and decision support software to help eliminate the length of the production cycle for different products
  • Product diversification - There is lot of scope for diversification into other products, namely, leather garments, goods etc.
  • Growing international and domestic markets.
  • Exposure to newer markets through Fairs/ BSMs
  • Retain customers through quality supplies and timely deliveries
  • Aim to present the customer with new designs, infrastructure, country & company profiles.
  • Use of modern technology
  • Exhibit strengths in manufacturing, for example, strengths in classic shoe manufacturing, hand crafting etc.
  • De-reservation of the footwear sector.

THREATS: -

  • Entry of multinationals in domestic market.
  • Stiff competition from other countries.(The performance of global competitors in leather and leather products indicates that there are at least 5 countries viz, China, Indonesia, Thailand, Vietnam and Brazil, which are more competitive than India.)
  • Non- tariff barriers - Developing countries are resorting to more and more non – tariff barriers indirectly.
  • Improving quality to adapt the stricter international standards.
  • Fast changing fashion trends are difficult to adapt for the Indian leather industries.
  • Limited scope for mobilising funds through private placements and public issues, as many businesses are family-owned.

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