7 Domains e2938

THE SEVEN DOMAINS OF ATTRACTIVE OPPORTUNITIES

This model given by JOHN MULLER offers a tool kit for assessing and shaping market opportunities and a better way for entrepreneurs to assess the adequacy of what they bring to the table as individuals and as a team. These seven domains address the central elements in the assessment of any market opportunity.

This model was created for entrepreneurs interested in starting new businesses. However, one can also use it within your organization to decide whether to pursue a new product, or launch a new project. The model separates a proposed new venture into seven "domains": four that look at the small-scale (micro) and large-scale (macro) aspects of your market and industry, and three that focus on your team.

THE SEVEN DOMAINS

The model contains seven domains to consider: 1. Target Segment Benefits and Attractiveness (Market Domain/Micro Level). 2. Market Attractiveness (Market Domain/Macro Level). 3. Industry Attractiveness (Industry Domain/Macro Level). 4. Sustainable Advantage (Industry Domain/Micro Level). 5. Mission, Aspirations, Propensity for Risk (Team Domain). 6. Ability to Execute on CSFs (Team Domain). 7. Connectedness Up, Down, Across Value Chain (Team Domain).

IDEA 1: EXPORT SURPLUS GARMENT STORE: Overview: Export quality (international brands) garments with low prices are on demand now-adays. In metros everyone wants to look trendy and wear branded clothes but they don’t want to spend much money in Brand’s retail shops. So they look for export surplus garments. So, opening an outlet for export rejected and surplus garments is a good and profitable business idea. If you are working or worked in past in garment manufacturing you know that garment manufacturers make extra garments than the order quantity they get from buyers. Sometimes whole order get rejected due quality issue or shipment delay. Purchase stock of surplus garments from factories and sale at attractive prices. (Source: http://www.onlineclothingstudy.com/2013/05/10-small-business-ideas-in-garment.html)

Demographic coverage- 16-30 Gender- Male & Female Geographical- West Delhi Segment size- Huge Nature of market- Solid Competitor: Factory outlet A Factory Outlet is a manufacturer-owned store selling that firm's stock directly to the public. The stock can either be first-quality merchandise or discontinued, irregulars, cancelled orders at a very low price. Recently these outlets have transformed into Shopping center that groups more retailers in one location and mega companies that own many labels sell via these Factory Outlets. The discounts can range anywhere from 25 % to 75 %.all the year round. The main advantages include 1. An opportunity to sell surplus stock direct to the public via a branded shop 2. Increase in market share and brand awareness



Market Attractiveness (Macro): India's retail sector is estimated to touch by US$ 1.3 trillion by 2018, with a compound annual growth rate (CAGR) of 10% - which is quite lucrative. All these estimations are due to the fact that the consumer spending has seen a

rise of around 75%, in the past four years. The organized Indian retail market is slated to grow at a CAGR of 40%, touching US$ 107 billion by 2013. 5% of the Indian retail market is occupied by the organized retail sector, which is all slated to witness the majority number of large format malls and branded retail stores. The increase in the number of such malls would be first seen in South India, followed by North, West and the East over the coming two years. Another latest research shows that more than 100 malls spanning a space of over 30 million sq. feet is estimated to open in India between 2009 and 2010 end. Investment in the organized retail market would be around US$ 503.2 million in 2009. This could go further up to US$ 1.26 billion in the next four to five years, at a CAGR of 40%. India has emerged as the third most attractive market destination for apparel retailers over the years. In India, apparel is the second largest retail category and will have a 12-15% growth rate every year. Apparel, food and grocery is expected to lead the organized retail sector in India. The Indian retail market has been witnessing exponential growth with developments taking place not only in major cities and metros but tier-II and tier-III cities in India are also on the focus. The market of this product will come under late majority group in technology adaption lifecycle (TALC). The demographic coverage will be 16-30 age in the geographic region of west and north Delhi. Therefore huge segment size. The nature of market is solid. As the demand is higher than the supply. (Source: http://business.mapsofindia.com/india-market/retail.html)



Target segment benefits & attractiveness (micro): Targeting the income group of lower middle class and middle class. The benefit to the customer are various in this field. They will get self-satisfaction, as in today’s world everyone want to wear the brands which is out of their reach. It becomes their desire but unable to afford it. So catering to that desire makes our business most beneficial to customer. As they will get high quality branded merchandise at cheap rate. The nature of the customer being college and School students, basically the younger generation. This business idea will help in the entry to other segment. In future the store can starts its own label and various chain store once it’s successful.



Industry attractiveness (macro):

• •



Entry: Entry to the market is restricted, means the market is competitive. Competitors: Factory outlet & Brand factory has already made the known existence in the market. So the competition is quite tough to go national.

Sustainable advantage (micro): It’s FOR the customer who love to wear branded apparel at low rate. WHO don’t want to feel out of the peer group. THE branded product category is a need for the youngster THAT they can buy at cheap rate UNLIKE the authorized brand retail store. OUR PRODUCT will satisfy those, who are not been satisfied by the big retail store. Therefore the USP of our retail store will be high quality and branded merchandise at low rate. • Bargaining power of supplier: Bargaining power is high, as the extra merchandise or rejected merchandise is a burden for the manufactures. He has to clear out the stock, therefore he has the lower point in barging. •

Bargaining power of the buyer’s: As it will be the first store in west Delhi the bargaining power will be relatively low. So it’s a relative advantage.

•

Threat of substitute: Minimum threat being the first store.

•

Threat of new potential entrant: There is a risk of competition in future as it’s the market of early adopter. But till then there will be a monopoly and gained customer believe.



Team (mission, aspirations, propensity for risk): Mission: To be trust worthy businesswomen catering to 15% of Indian market. Aspiration: To take most out of the market and expanding it. Propensity of risk: risk of investment $ growinh competition.



Team(ability to executive on CSF’s): Good quality at low price and maintain it will be the critical success path.



Team (connectedness up and down the value chain): fabric knowledge and familiar to the industry. Studying in NIFT Hyderabad helped in making s in industry.

IDEA 2: GARMENT WHOLE SALE BUSINESS Overview We can start garment whole sale business in our spare time. Source garments from manufacturing hubs and distribute those garments to shops in small cities. As we purchase goods in bulk quantity and from manufacturing hubs, we will have good margin in this business.

Demographic coverage- 16-40 Gender- Male & Female Geographical- West UP Segment size- Medium Nature of market- Solid Competitor: local retailers



Market attractiveness (macro) : The Indian garment industry had an estimated 1.50 lakh units each with a minimum capacity of 15 sewing machines. The total installed capacity in the industry is estimated to be of the order of 22.5 lakh sewing machines and around 9 lakh ancillary machines. The industry produced around 10,000 million pieces of garments worth about $ 38.5 billion. Out of this production, about 2,500 million pieces were exported and the rest consumed in the domestic market. The size of the domestic market is an estimated $ 30 billion during the year or about Rs 1.35 trillion (i.e., 1,000 billion) at the wholesale level. Foreign Direct Investment (FDI) in the industry is permitted up to 49% for manufacture. Several international brands have taken advantage of this to set up t ventures with Indian manufacturers almost all of which have been running successful. However, FDI has not yet been permitted in the retail sector of the industry. A beginning has been made recently by permitting FDI in retail for a single brand only. (Source: http://www.indiantextilejournal.com/articles/FAdetails.asp?id=301)



Target segment benefits & attractiveness (micro): The targeting market of our whole sale garment business will be the region containing districts like Hathras, Mathura, Agra and Aligarh. Under these small districts there are several small towns. Whose income level will be in the

category of lower and lower-medium class? Who don’t prefer brand as they are unknown to it. So we will be targeting small retailers in these towns. Benefit to the customer will be low cost good quality garment in quantity they demand with lot of variety. As we will be buying from various manufacturer in big cities in bulk. 

Industry attractiveness (macro): Entry in the market is free and also restricted, means the market is less competitive is some region and highly competitive in other. Competitors will be Khatami Retail in hathras, Bagal fashion store in agra, Krishna store in Mathura and sardarji in Aligarh. At macro level competitors depends on region we are planning as its unorganized market, it don’t have reliable secondary data.



 

Sustainable advantage (micro): It’s FOR the customer who want to keep good quality apparel at low rate. WHO want earn profit. THE product variation is a need for the youngster THAT they can buy at cheap rate UNLIKE the other local store. OUR PRODUCT will satisfy those, who are not been satisfied by the existing quality and design of garment in retail store. Therefore the USP of our garments will be high quality and designer merchandise at low rate. • Bargaining power of supplier: Bargaining power is high, as the bulk merchandise is a burden for the manufactures. He has to clear out the stock, therefore he has the lower point in barging. •

Bargaining power of the buyer’s: As we will be the first to give quality and design at low cost the bargaining power will be relatively higher. So it’s a relative advantage.

•

Threat of substitute: Minimum threat as less informational flow is the character of targeted segment.

•

Threat of new potential entrant: There is a risk of competition in future as it’s the market of early adopter. But till then there will be a monopoly and gained customer believe.

Team (mission, aspirations, propensity for risk): Mission: To be trust worthy businesswomen catering to 15% of Indian market.

 

Aspiration: To take most out of the market and expanding it. Propensity of risk: risk of investment $ growinh competition.



Team(ability to executive on CSF’s): Good quality at low price and maintain it will be the critical success path.



Team (connectedness up and down the value chain): fabric knowledge and familiar to the industry. Studying in NIFT Hyderabad helped in making s in industry.

IDEA 3: MANUFACTURING UNIT OF HOSIERY Overview: Geographical- India Segment size- Huge Nature of market- Highly Competitive Competitor: existing manufacturers



Market attractiveness (macro): According to ing firm Ernst & Young, the Indian lingerie and nightwear market was valued at about $2 billion in 2011 and is expected to grow at CAGR of about 15 percent till 2015. The market is largely unorganized, with organized players ing for less than a third of the market. Bansal informed, "At present, the lingerie and hosiery market in India comes under the home industry. There are mostly unorganized players. For instance, in Old Delhi, families keep three to four sewing machines and stitch lingerie." He added that undergarments are worn by all rich and poor, hence, this market has a huge potential." A Mc Kinsey report suggests that consumers worldwide typically spend an average of five-six percent of total income on apparels; but the figure is significantly higher in emerging markets. Reports say that over the next 20 years, population in Indian cities will grow by 300 million. Urban dwelling will give rise to aspirations and need for new fashions and styles to meet their lifestyle.



Target segment benefits & attractiveness (micro): This business will target huge export house (like magnolia in greater Noida) where due to the bulk in order they need various suppliers of fabric. Being customer nature as exporter the benefit to them will be good quality at requested price and customization of product and variety of fabric. In fact the large garment manufacturing is also the target market. Small manufacturing unit who sometimes have order in bulk means out of its production capacity outsource it form other manufactures.

Through this sector and making with the exporter we can enter into other segment called Sub-contracting business. As we will become reliable customer to them. USP for our unit will be customized fabric at demanded quality.



Industry attractiveness (macro): Entry in the market is restricted, means the market is highly competitive and



Sustainable advantage (micro): It’s FOR the customer who want different quality and different type (qualitydomestic & export / type- cotton, cotton Lycra according to GSM required). WHO want bulk quantity of product in pre-determined period of time. THE product variation is a need for the exporter THAT they can buy at reasonable rate. Therefore the USP of our fabric will be high quality at demanded variety. •

Bargaining power of supplier: Bargaining power is nominal.

•

Bargaining power of the buyer’s: Nominal bargaining power.

   

Team (mission, aspirations, propensity for risk): Mission: To be trust worthy businesswomen catering to 15% of Indian market. Aspiration: To take most out of the market and expanding it. Propensity of risk: risk of investment $ growing competition.



Team(ability to executive on CFS’s): Good Quality with variety of product



Team (connectedness up and down the value chain): fabric knowledge and familiar to the industry. Studying in NIFT Hyderabad helped in making s in industry.

IDEA 4: HOSIERY-FABRIC TRADING Overview: Geographical- India Segment size- Huge Nature of market- Highly Competitive Competitor: Existing traders Fabric trading is business to business. It deals with buying the fabric from Fabric in India is divided according to regions due to the availability of raw material. Ludhiana and Delhi are the hub of hosiery due to which trader have no boundary restriction. So the product can be supplied from south to north and East to west. Therefore the market segment is huge. Nature of the market is solid. Trading business have lots of advantages like: 1. 2. 3. 4. 5.

Minimum funds of approx. 10 lakhs. No warehouse required. As directly supplied by the manufacture. Low/ minimum labor cost. No wastage Margin 10% average

Market attractiveness (macro): According to ing firm Ernst & Young, the Indian lingerie and nightwear market was valued at about $2 billion in 2011 and is expected to grow at CAGR of about 15 percent till 2015. The market is largely unorganized, with organized players ing for less than a third of the market. Bansal informed, "At present, the lingerie and hosiery market in India comes under the home industry. There are mostly unorganized players. For instance, in Old Delhi, families keep three to four sewing machines and stitch lingerie." He added that undergarments are worn by all - rich and poor, hence, this market has a huge potential." A Mc Kinsey report suggests that consumers worldwide typically spend an average of five-six percent of total income on apparels; but the figure is significantly higher in emerging markets. Reports say that over the next 20 years, population in Indian cities will grow by 300 million. Urban dwelling will give rise to aspirations and need for new fashions and styles to meet their lifestyle.

Target segment benefits & attractiveness (micro): This business will target huge export house (like magnolia in greater Noida) where due to the bulk in order they need various suppliers of fabric. Being customer nature as

exporter the benefit to them will be good quality at requested price when and where needed and variety of fabric (huge selection from single trader). In fact the large manufacturing (like rupa) who don’t buy in bulk quantity as compared to export house will also be our target. Small manufacturing unit who don’t have order in bulk so trader is ready to give whatever quantity demanded. Plus they get advantage of flexible payment. Through this sector and making with the exporter we can enter into other segment called Sub-contracting business. As we will become reliable customer to them. USP for our trading unit will be payment flexibility of quantity of the product.



Industry attractiveness (macro): Entry in the market is restricted, means the market is more competitive because suppliers are more than demand. At macro level competitors depends on region as there is high cost manufacturing unit in south so it becomes the advantage for the north traders. To be attractive than other traders we will provide them the no compromise in quality condition.





Sustainable advantage (micro): It’s FOR the customer who want to different quality and different type (qualitydomestic & export / type- cotton, cotton Lycra). WHO want small quantity of product in short period of time. THE product variation is a need for the exporter THAT they can buy at reasonable rate UNLIKE the manufacturing units. Therefore the USP of our garments will be high quality and variety at feasible time. •

Bargaining power of supplier: Bargaining power is high when you have liquid assets.

•

Bargaining power of the buyer’s: High bargaining power as the buyer has relatively no choice when he come to trader.

•

Threat of substitute: There are many substitute available in market.

Team (mission, aspirations, propensity for risk):

Mission: To be trust worthy businesswomen catering to 15% of Indian market. Aspiration: To take most out of the market and expanding it. Propensity of risk: risk of investment $ growinh competition. 

Team(ability to executive on CSF’s): Good quality at feasible period of time will be the critical success path.



Team (connectedness up and down the value chain): fabric knowledge and familiar to the industry. Studying in NIFT Hyderabad helped in making s in industry.

Final idea selection

Interpretation (3&4): By above the reliable business plan of hosiery for startup business will be trading of hosiery. As the risk factor is too high in manufacturing unit and there is huge rate of competition. So the survival will be the biggest challenge. And the initial investment is huge. And it’s not economically viable plan. Interpretation (1&2): By the above reliable business plan is export surplus garment store as in other the risk of investment is more as we catering to lower income group who may not prefer good quality at the marginal increase of price. Risk of investment is high and return on it can’t be estimate it can be negative rate of return. Final idea selection: Interpretation (1&4): By the above reliable business plan for startup business is trading of hosiery as in starting we have less of investment and less risk level. In other idea the risk of investment is much higher than the rate of return. And it’s highly competitive with powerful competitor.