Group 3
Abhishek 29NMP03
Chandan 29NMP22
Gaurav 29NMP28
Harshwardhan -29NMP48
Iti shree -29NMP34
Anurag -29NMP14
Arvind Limited (formerly Arvind Mills) is a
textile and readymade garments manufacturer and the
flagship company of the Arvind Group.
Its headquarters is in Naroda, Gujarat.
It manufactures cotton shirting, denim, knits and
bottomweights (Khakis) fabrics. It has recently ventured
into technical textiles when it started Advanced Materials
Division in 2011.
It is India's largest denim manufacturerapart
from being the worlds fourth-largest
producer and exporter of denim.
Today it retails its own brands like Flying
Machine, Newport and Excalibur and
licensed international brands like Arrow, US
Polo, GAP,CK and Tommy Hilfiger,etc through
its nationwide retail network.
Arvind also runs a value retail chain,
Megamart & TAS, which stocks company
brands.
Indian Market:
Aditya Birla Novo Ltd.
Raymond Apparels Ltd.
Reliance Retail Ltd.
Indus League Clothing
International Market:
ISKO
ITG Global
External Challenges
Globalization & Change in Government
Policy
Indian economy opened up to globalization in
1991 thus allowing foreign denim manufacturers
to start operations and Sale in India. This led to
two fold challenges for Arvind.
Foreign players offered better compensation
packages and facilities
Foreign players from China and Italy had a
technological and low manpower cost advantages
Advent of globalization in India provided
attractive choices in readymade garments to
Indian customers.
This trend was accelerated with the entry of
global players who influenced the customer
behaviour through high profile advertising.
Emergence of Brand
Customers started taking intrinsic value of product
much higher than earlier as they were getting
associated to Brand .
Dissatisfaction among employees
With the advent of global players, better
employment opportunities were available
for employees. Company had reinvested
heavily in technological up gradation that
already put pressure on its profit margin.
Hence, salaries and other compensations
were not at par with other global players.
Limited R&D on new products
Arvind mills focussed majorly on low cost
leadership strategy and focus was mainly on the
increasing efficiency and producing denim fabric
at lowest possible cost.
Paternalistic Organization Culture
Less challenging environment for employee and
performance of individual was not checked.
Financial Crisis
Huge debt burden for modernization led to
financial crisis and debt restructuring in 2001.
Function
al
Structur
e
Functional
Divisional
Structure
Revised Goal Sheet
Change in Strategy
Arvind Ltd was following a strategy of Low
cost leadership before the restructuring of
2001
After restructuring, company created two
fold strategy for factory division and brand
divisions
For factory low cost leadership was still the
strategy but for brand divisions
differentiation was the strategy.
Change in Process
Arvind moved from Simple-Stable environment to
complex-unstable environment.
Integration was needed at two levels Divisional level
Organisational level
At divisional level, PLM (Product Lifecycle
Management) softwares were introduced. It
improved the turn around of various brands.
At organizational level, SAP software was
introduced to coordinate various resource planning
activities
VISOR intergrated the billing systems and order
placements directly to brand divisions.It helped in
auto replenishments of stocks with correct product
mix
Earlier reward system
Uniform reward system for increasing operating
efficiency to achieve low costs.
Rewards were distributed at organizational level
New Reward system-2 Types
For factory, Reward system for increasing
efficiency
For Brand Divisions, Reward system for new
product launches and maximizing profits.
Rewards now were distributed at individual and
organization level.
ESOPs were introduced to increase employee
engagement with the organization.
Change in culture
Earlier
Paternalistic Approach towards employees
High centralization
Internal promotions at higher positions
After Restructuring
Responsibility and accountability fixed
Perform or resign policy
Decentralization-16 Brand CEOs
Lateral entry at higher positions
Arvind Ltd. has undergone a dramatic change in
terms of its structure, strategy, processes and
reward systems
Current revised structure meets the current goals of
the organization.
The future vision of company encompasses making
a strong position in e-commerce segment.
The company is integrating its online business with
existing internal softwares like VISOR and SAP
Company is readying itself to capture a good
market market share on e-commerce space for
textile industry.
