DIBYA PASHMINA

Group 1

22nd August, 2018

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INTRODUCTION

▸ Products : Pashmina and Lenins

▸ Traded nations: UK (most), Germany, US (less)
▸ Peak sale from Bhadra to Falgun
▸ Works on importers specifications
▸ Import of intermediate goods: China India and Maldives mostly
▸ 90% skillful women employees with more than 5 years of
experience
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STATUS OF PASHMINA

• Government introduced hallmark for Chyangra Pashmina

trademark
• Support of Nepal Pashmina Industries association (NPIA)
• 2016/2017 – Rs. 2.5 billion of domestic Market
• Changing duties and customs
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STATUS OF PASHMINA contd..

▸ Middle men work for documentation and processing

▸ Import challenges in intermediate goods
▸ High production cost and low incentives
▸ 11.1% of export reduction by the end of February 2018
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POTENTIAL MARKETS

▸ Exporting only few countries, there is high potential for

business expansion
▸ Divided into two categories:
▸ Emerging markets
▸ Frontier Market
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Source: https://trademap.org/Country_SelProductCountry_Graph.aspx?nvpm=1|524||||621420|||6|1|1|2|1|1|2|1|1
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EMERGING MARKETS
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EMERGING MARKET - CHINA

• No tariff, world Nepal’s Potential
average 21.9%

•5th largest
importer,
10% growth •Neighboring
(13-17) country

Source: http://exportpotential.intracen.org/#/markets/geo-map?fromMarker=i&exporter=524&whatMarker=k&what=621420&toMarker=j
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FRONTIER MARKETS
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FRONTIER MARKET - JAPAN

Nepal’s Potential
• 58% import growth
in 16-17

•Largest importer
of Pashmina items

• No tariff for Nepal,

world average 2.4%

Source: http://exportpotential.intracen.org/#/markets/geo-map?fromMarker=i&exporter=524&whatMarker=k&what=621420&toMarker=j
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BOWMANS STRATEGIC CLOCK (DIVYA PASHMINA)

DIVYA
PASHMINA
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SUSTAINABILITY

▸ Product Differentiation
▹ Quality
▹ Colour and Weaving Varieties
▹ Flexibility in ordering (i.e. custom orders),
▹ Customer service Positive differentiation of the product.
▸ Positive differentiation of the product.
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DIVYA PASHMINA –SWOT ANALYSIS
Strengths
• 7 years of experience
• Skilled employees with experience > 5
years.
• Strong loyalty and relation with clients.
• Adequate infrastructures and resources
Opportunities
• Rise in global demand
• 3rd largest overseas export item. (Source:
T.E.P.C)
• Product under priority export potential
sector list as per NTIS 2016.
• Demand for diversified Pashmina products
• No VAT in exporting.
Weakness
• Expansion of market has not been given
priority
• Minimal branding of the organization.
• Challenging design specification of the
clients.
• Cost of keeping inventory.
Threats
• Around 67 competitors in industry
• Shortage of skilled labor
• Counterfeit products.
• Delay or irregularity in importing raw
materials.
• Changes in custom and clearance
regulations.
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MODE OF ENTRY (Existing)

▸ Direct Export
▹ Exports directly to the importing partners who resell in
their local markets
▸ Outcome
▹ Control over the selection of foreign market
▹ Direct networking with the importing partners
▹ Trade relation building
▹ Potential for greater sales resulting in greater profit
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ORGANIZATIONAL STRUCTURE
Vertical Differentiation
• Centralized

Top-Bottom Bureaucratic

Strong culture
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TRANSNATIONAL STRATEGY

High pressure for cost reduction High pressure for local responsiveness

Stiff Competition Product specification

Quality assurance facilities Quality specification

Bargaining power Seasonal garment preference

Brand standard
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INTERNATIONALIZATION STRATEGY (Potential)

▸ Global Standardization
▹ Brand Visibility
▹ Easier access to new market
▹ Uniform Quality maintenance
▹ Possibility of tapping new market
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MODE OF ENTRY

▸ Strategic Alliance
▹ New Market
▹ Hofstede Cultural Dimension
▹ Cost Efficiency
▹ Resource sharing
▹ Demand Forecast
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CORPORATE LEVEL STRATEGY

Product
Existing New

Existing
Market
Penetration Product
Development
Consolidation

Market
New
Market
Diversification
Development
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INTERNATIONALIZATION DRIVERS

Government Market Cost Competitive

• Language • Top 7 sectors • Zero Tariff • 67

Barrier of FDI • Moderate Per countries
• Business Jets • Export to Japan Unit Cost Value
increased by
exporting
• Consultation
Services 58% same
product.
Source: Japan External Trade Organization
(JETRO)
https://www.jetro.go.jp/en/invest/gov_efforts.ht
ml
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PORTERS DIAMOND

Firm
Strategy,
Structure
& Rivalry

No VAT in export of Porters

Factor Diamond
Demand
Pashmina from Nepal Conditions Model Conditions

NPIA provides working in seminar, market

Related promotion, trade delegation, lobbying and
and advocacy, publicity and information
Supporting dissemination and coordination
Industries
(Source: NPIA)
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TO SUM UP

▸ Following Strategic Plan needs top be adopted by Divya Pashmina if it were

to expand its business to Japan.

Corporate Level
• Differentiation Strategy • Global
• Market Standardization
Development

Business Level Strategy for

Strategy Internationalization