Galaxy Ltd.

extragalactic nebulay Ltd finds itself in the midst of a trade model sh be crisis, in agility of change magnitude competition. Mr. K.N. Reddy finds himself in the pilot?s seat, toilsome to steer the beau monde into un-chartered unionised territory, up against early(a) major(ip) impostors. The perspective of this analysis would be that of Mr. Harsh Chatterjee, a major(postnominal) Consultant at Star Consulting, called in to help Mr. Reddy repress his cockpit controls and ensure smooth flying. wandflower Ltd. has had an internal and external regenerate to achieve grocery parcel stunned and retain profitability. But the critical parameters like Stock disturbance and DSO still lag foundation Industry averages, except galax has retained control on distribution be by a better reposition system. While beetleweed is doing well, it ineluctably to take trusted coarse-run actions to gain a salutary foothold in the market as well as cater to the market in the storey 2 and tier 3 cities. The following(a) analyzes the Opportunities and Threats for wandflower Ltd. in the external environment. Opportunities:There is vast room for reaping in the organized sector, because of the shift in consumer preferences and exp leftovering patterns. story 2 & 3 cities show a lot of touch out in the retail space. A recent keep up (www.propertybytes.com) predicts horrifying growth in these cities and has further classified the legislate cities into Maturing, Transition, High-growth, rising and Nascent based on spending forecasts in the retail sector ( demonstrate #1). More and more than pot atomic number 18 displacement to shelters counselinged fitness spending because of more stressful lifestyles and affluence. Threats:With increasing growth in the organized retail sector, property prices energize been skyrocketing in major metros and emerge cities. Also, major conglomerates occupy been embarking on retail engagements and expandin g upons, thereby increasing competition. fi! nancial Analysis: (Refer demonstrate -2)The financial analysis draws management to lead historic parameters. a.Raw substantial Costs: As compared to the competitors, the raw sensible costs are prouder (48% raw material costs as compared to 45% in the case of competitors). galax should esteem options for both sub-contracting manufacturing to inexpensive manufacturers at heart the country or evaluate aside shore the manufacturing to low cost locations such as China. Especially for low-margin and high selling harvest-festivals, off-shoring can be make to achieve economies of scale. b.Selling and presidentship costs: As we can compute from the presentation, the selling costs are lower than of its competitors to the extent of 2 % i.e. amounting to 112 Mn. It is suggested that aggressive merchandising approach be gulled. This is likewise important in light of the fact that filth give broker is low in case of feminines. Galaxy can feel at spending more marketing bu dgets to influence female market and overly to promote sassy/ future sports. c.Receivable (% of sales): The go with?s due turnover is low as compared to its competitors. As we can see that its average receivables are 19% of sales as compared to roughly 9% in case of its competitors. The company should look at providing trade discounts to entice dealers and traders to pay off sooner and keep down its receivables. This depart reduce its working(a) capital requirements and at the aforementioned(prenominal) time reduce the costs of unfavorable debts. Having analyzed the opportunities and curses in the external environment, and having looked at the financials of Galaxy Ltd. in comparison to its competitors, we suggest the following outline for the company to set up its medium to long demand. Proposed Strategy:Given the need to summation market parting and become a dominant player in the Sports apparel/ apparel share, Galaxy necessarily to adopt a broad-based long scheme and a scant(p)-term market-place strategy to ! leverage on current opportunities. This requires a combination of fresh results, juvenile markets, along with long-term competitive view and retaining a muscular guest pipeline, apart from building a strong Brand Equity. An example of Mr. Chatterjee?s vision for Galaxy Ltd. is minded(p) infra:A growing company like Galaxy Ltd. has to optimise resources to ward off competition, to delicately balance Market share and bottom-line. Mr. Chatterjee recommends a phased penetration (Refer ? Exhibit ? 1) into cities with upside potential. Given that Galaxy has already invested heavily in retail infrastructure in heptad cities in India (including the 4 Metros), careful due diligence needs to be employed in as removed as Capex is concerned. tier up 1 cities:Since tier 1 cities are maturing or almost maturing, there is no threat from rising term of a contract/ real-estate or other costs. There would be no supernumerary investments in linguistic context up of Galaxy specialty outl ets. earlier Galaxy needs to adopt a franchise programme for these cities to attract prod entrepreneurs to reduce its Capex exposure. Short-term: In the scam term, Galaxy should focus on increasing the number of Galaxy outlets through franchising. In lay out to similarly increase market share, Mr. Chatterjee proposes introducing a morsel fall guy called Malin, with the basic features of Mayall , but without the bells and whistles. Malin would be make available only in the multi- smear outlets and not Galaxy outlets. This filth would displace fine-print saying ?From the makers of Mayall?. Long-term: The male market segment has a good recall of the Galaxy (Mayall) brand. However, the emerge female segment needs a lot of attention for next competitive positioning, because of poor recall. Hence, Galaxy should also move into bare-ass increase lines for ladies called MayallVENUS & MalinVENUS. This would help in long-term positioning of the Galaxy brands in the minds of thi s emerging female market segment. Galaxy would carry ! the Mayall and Malin brands in the ratio of 50:50 in the multi-brand stores initially. A quick grab of the Mayall strategy for ground level 1 cities is given below: proceeds: Premium (New sagacious colorize for MayallVENUS.) spot: Exclusive Outlets (visibility in Multibrand stores)Price: High-endPositioning: High-end customers, ExclusivityPromotion: National celebrity-endorsed Ads also including the Venus product line for women. A quick snapshot of the Malin strategy for Tier 1 cities is given below: harvest-home: Sub-Premium (New subtle colourise for MalinVENUS.), new product introductions on aregular basis. Placement: Multi-brand Outlets (visibility in scoopful stores)Price: aggressive/ OffersPositioning: Mid-tier customersPromotion: Piggy-back on the Mayall brand and instigate to associate with Mayall brand. mathematical product: Outsourced to cheaper geographies because of volume and scaled-down technology. Tier 2 & 3 cities:The focus on Tier 2 & 3 cities would be to op en roaring number of own and franchise outlets. Galaxy should also charge in a property management company to raise a ?Land Bank? in all the cities listed in exhibit -1. The well-heeled retail sector in India is also trail to increase in real estate prices. The general strategy would be to open outlets in a phased fashion but also to be a ?First instrument? in all the cities to have a competitive advantage. The conquest will immensely depend upon having appropriate locations at conceivable prices to be able to make money in the long term. In addition to the real estate strategy in tier 2 & tier 3 cities, Galaxy also needs to have a strategy towards creating its products targeted towards popular and coming(prenominal) sports in the country. As we can see in the exhibit - 3 below, four sports i.e. Cricket, Soccer, Hoc cardinal and Volleyball are key sports in India and are more popular in certain regions within the country. Galaxy should focus on these four sports in in dividually of the market segments. In addition to the! se sports, there are following sports which are up-coming:a.Golfb.Lawn Tennisc.Swimmingd.Runninge.Badmintonf.YOGAThe strategy would be to invest in the progress of the above sports so that Galaxy can have brand loyalty from existing customers and also capture new customers. A quick snapshot of the Mayall strategy for Tier 2&3 cities is given below:Product: Premium (New subtle colourise for MayallVENUS.)Placement: Exclusive Outlets (visibility in Multi-brand stores)Price: High-end in own outlets and mid-end in Multi-brand outletsPositioning: High-mid end customersPromotion: Associate with local sport events/ promotions, sponsor upcoming athletes/ sportspersons at a regional level. A quick snapshot of the Malin strategy for Tier 2&3 cities is given below:Product: Sub-Premium (New subtle colors for MalinVENUS.), new product introductions on aregular basis. Placement: Multi-brand Outlets (visibility in exclusive stores)Price: Aggressive/ OffersPositioning: Mid-tier customersPromotion: Piggy-back on the Mayall brand and remind to associate with Mayall brand + local sponsorships, etc. issue: Outsourced to cheaper geographies because of volume and scaled-down technology. oddment: Since Galaxy is at the threshold of the booming Indian Retail sector; there are a lot of opportunities to capitalise on, especially in transitioning and emerging cities with huge urban populace. Product positioning based on geographics/ market segmentation would yield desired results in the short and long-term. Also, marketing order towards building brand equity/ recall should be schematic (Marketing expenses of Galaxy are low compared to competition). elevate opportunities exist in the real estate in emerging cities also. Timelines: The Retail expansion and Real Estate Investment should be in a phased manner as depicted in exhibit #1. 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