A Gem in India's Crown: Group No. 03
A Gem in India's Crown: Group No. 03
Group No. 03
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Company Overview
Founded as a single company cutting and polishing diamonds for
the Jewellery trade at Surat, Gujarat, in 1966 headed by Mr. Mehul
Choksi .
Incorporated on August 21, 1986 as a private limited company and
subsequently converted into Gitanjali Gems Limited.
One of largest manufacturer and retailer of diamonds and Jewellery
in India.
Operations included sourcing of rough diamonds from primary and
secondary source suppliers in the international market, cutting and
polishing the rough diamonds for exports to international markets
and the manufacture and sale of diamond and other Jewellery
through retail operations in India as well as in international markets.
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Approach Used For Case Study Analysis
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Industry Overview - India
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External Factors
The Diamond Manufacturing Industry
Gold Jewellery
Demand Conditions
Supply Conditions
Competition
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Industry Overview Worldwide (1/2)
The diamond manufacturing industry is dependent on the supply of
rough diamonds.
CAGR grew at the rate of 15.6% for exports in India. Major export destination
were USA, Hong Kong, Belgium and UAE for cut and polished diamonds.
A bulk of Indias diamond processing sector was unorganized and employed about
2 million workers in approx. 1,00,000 diamond manufacturing units.
Indian players was largely restricted to the lower-sized and lower-valued market.
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Retailing of Diamond Jewellery
USA, the largest consumer of retail diamond Jewellery,
accounting for 48% of worlds diamond Jewellery
consumption.
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Government Initiatives and Regulations
Duty free imports of rough diamonds.
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Demand Conditions
Demand depends on various factors such as
Economic growth
Employment levels
Income levels
Tax rates
Credit availability
Styles offered by various gems and Jewellery producers also
effects market demand.
Promotion is the key success factor for various brands.
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Supply Conditions
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Competition (2/3)
Primary Competitors:
Mehrasons Jewellers (Delhi)
Human Resources
Technology
Procurement
Manufacturing
Marketing
Distribution
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Human Resource
2,300 employees as on 2005
Out of which 1,800 employees at manufacturing facilities
More than 250 employees in retail operations
410 full time employees
Out of which 117 employees at Corporate office
Senior Management with significant Industry experience was instrumental in
the consistent growth in revenues and operations.
Employee motivation and empowerment were the key to competitive
advantage.
Regular Staff Training Programs
Leadership Programs
Performance Enhancement Programs
Benefits to employees included medical expenses, housing or rent assistance,
annual leave and travel allowance, PF, healthcare, schooling, pension and
group gratuity .
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Technology
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Procurement (1/2)
Operations and revenues were dependent upon availability of
rough diamonds.
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Manufacturing
Diamond Manufacturing was a Labor Intensive process
requiring specialized knowledge and skills.
Cutting Polishing
Sawing
Cleaving
Marking
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Marketing (1/2)
Offering a comprehensive range of diamonds and other
Jewellery products aimed at:
Various Jewellery categories.
Different customers and price segments.
During various festive and social occasions by offering
custom made Jewellery.
Branded Jewellery enjoyed significant brand equity which
gave Gitanjali a competitive edge.
The sub collection D Damas was particularly noted for
Wedding and general collection.
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Marketing (2/2)
The company was under the process of registering 24 trademarks in India in
connection with braded Jewellery lines. Innovative designs and product lines
enabled Getanjali to develop brand and increase retail sales.
Gili brand was introduced in 1994 and was among the first branded Jewellery
introduced in India.
DTC permitted Gitanjali another three site holders and this paved way for
launching the new products under the Nakshatra brand.
In 2004, Gili was selected as the Super Brand by the Indian Consumer
Super brand Council.
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Customer Relationship Management
Gitanjali identified specific customer requirements
and delivered on such requirements effectively
within the shortest time frame.
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Acquisitions & Alliances
The Company had strategic alliance with World Gold Council.
Collection g
Gitanjali was a DTC sight holder since 1967.
In 2001, the firm entered into a 50% joint venture in the form of
DDamas Jewellery Private Ltd with Damas Jewellery LLC
(Dubai).
The company acquired 99.04% equity interest in Fantasy
diamond cuts private ltd in 2005.
Hyderabad gems SEZ was incorporated in 2005.
Gitanjali gems has 2 associate companies Gili India (60% equity
interest) and Brightest Circle (33.34%).
In 2005, Gemplus, Prism, Giantti were amalgamated into the
company.
Gitanjali has five subsadries namely, mehul impex, hyderabad
gems. Gitanjali expots, fantasy diamonds, CRIA Jewellery.
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Initiatives taken by Gitanjali Gems Ltd.
Increased market share in the diamonds and Jewellery business in
India. (70% Increased)
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Learning from the Case
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Indian Retail - Jewellery
Yesterday Today
Unbranded Branded
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Some Advantages
Forward Integration
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Value Chain
Shopping Experience
Diamond Polishing Diamond Distribution
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Strategies Gitanjali Gems Ltd.
Various distribution channels.