LS1 AnAL?

SlS
LS1 AnAL?SlS useful way of summarlzlng Lhe exLernal lnfluences on Lhe envlronmenL ln whlch a
buslness operaLes PEST analysis stands for "Political, Economic, Social, and Technological analysis"
and describes a framework of macro-environmental factors used in the environmental scanning
component of strategic management
Political Economic Social Technological
EnvironmentaI
reguIations and
protection
Economic growth Income distribution Government research
spending
Tax poIicies
(corporate;
consumer)
Interest rates &
monetary poIicies
Labor/ sociaI mobiIity Industry focus on
technoIogicaI effort
InternationaI trade
reguIations and
restrictions
Government
spending
Demographics,
popuIation growth rates,
age distribution
New inventions and
deveIopment
Government
organization/ attitude
UnempIoyment
poIicy
Work/ career and Ieisure
attitudes EntrepreneuriaI
spirit
Life cycIe and speed
of technoIogicaI
obsoIescence
PoIiticaI stabiIity Taxation LifestyIe changes Rate of technoIogy
transfer

Exchange rates Education Energy use and costs

InfIation rates Fashion, hypes (Changes in) Internet

Consumer
confidence
HeaIth consciousness &
weIfare, feeIings on
safety
(Changes in)
Information
TechnoIogy

Stage of the
business cycIe
Living conditions (Changes in) MobiIe
TechnoIogy
CLl1lCAL
While the Indian economy has been relatively insulated Irom the international Iinancial crisis, one
particular sector that has been badly hit by the ongoing worldwide recession is the textiles and garments
manuIacturing industry.CurrenL IndIcuLIons ure LIuL uL IeusL 1.z mIIIIon workers In LIIs IndusLry
ure goIng Lo be wILIouL jobs by LIe end oI MurcI. AssumIng Iour oLIers depend on eucI
IndIvIduuI rendered jobIess, LIe LoLuI number udverseIy ImpucLed In LIIs Iubour-InLensIve secLor
wouId reucI sIx mIIIIon.
TIe LexLIIes und gurmenLs IndusLry Is LIe second-IurgesL empIoyer In ndIu uILer ugrIcuILure us IL
dIrecLIy empIoys mIIIIon peopIe und IndIrecLIy provIdes u IIveIIIood Lo un uddILIonuI 88
mIIIIon. WIeLIer ndIu`s skIIIed LexLIIe IndusLry workers wIII IInd jobs ouLsIde LIe counLry
remuIns Lo be seen.
UnIon commerce und IndusLry mInIsLer KumuI NuLI esLImuLed LIuL In LIe IInuncIuI yeur LIuL
ended In MurcI zoo8, upproxImuLeIy 8oo,ooo gurmenL und LexLIIe empIoyees Iud IosL LIeIr
jobs, uImosL IuII oI LIe Lwo mIIIIon IosL In exporL-orIenLed IndusLrIes.

Lconomlc
1rends |n Lxport Demand
LxporLs of yarns LexLlles and cloLhlng Lo Lhe world markeL are an lncreaslngly lmporLanL source of
derlved demand for lndlan coLLon Slnce 1992 lndlan LexLlle and cloLhlng exporLs have grown 77
percenL annually reachlng $134 bllllon ln 2002 and accounLlng for 4 percenL of global Lrade ln Lhls
secLor ln 2002 lndla was Lhe flfLhlargesL global exporLer and Lhe secondlargesL neL exporLer of LexLlles
and cloLhlng lndla's neL exporLs of $121 bllllon ln 2002 were however far below Lhose of Chlna ($349
bllllon)
1rends |n Domest|c Consumpt|on
uomesLlc flber demand has acceleraLed along wlLh sLronger growLh ln Lhe lndlan economy Ma[or
reforms ln domesLlc and Lrade pollcles durlng 199193 have led Lo fasLer growLh ln per caplLa lncomes ln
lndla helplng boosL annual growLh ln flber consumpLlon Lo 49 percenL slnce 1990 8elaLlvely rapld
growLh ln consumpLlon of manmade flbers parLlcularly slnce 1990 has also been an lmporLanL Lrend ln
lndlan flber demand
1ar|ff and exc|se tax po||c|es LhaL have dlscrlmlnaLed agalnsL manmade flbers have played a key role ln
shaplng relaLlve consumer prlces and consumpLlon paLLerns for coLLon and manmade producLs 8ecenL
Larlff and exclse Lax ad[usLmenLs have reduced dlscrlmlnaLlon agalnsL manmade flbersbuL wlLh
conLlnued hlgh dlfferenLlals ln Laxes on coLLon and manmade goods Lhere ls conslderable scope for
fuLure Larlff and Lax reducLlons Lo furLher reduce prlces for manmade producLs

Soclal lssues
ender |mpact
8ural women ln several smallholder conLexLs provlde 0 subsLanLlal labour lnpuL Lo mosL aspecLs of
coLLon producLlon cycle frequenLly as unpald 'famlly labour' or lowpald daylabourers and
commonly performlng some of Lhe mosL arduous Lasks wlLh overrepresenLaLlon ln manual work
such as plcklng Women ln many reglons face slgnlflcanL dlfflculLles 0 ln galnlng access Lo lnpuL
credlL faclllLles due prlnclpally Lo men's ownershlp of land and oLher asseLs and hence sLruggle
Lo achleve economlc lndependence Lhrough coLLon farmlng
ea|th and safety
lven Lhe naLure of coLLon farmlng work worker/far 0 mer healLh and safeLy ls a crlLlcal lssue ln
coLLon culLlvaLlon Lhe key rlsks are LhaL workers famlly or hlred dependlng on reglonal conLexL
are exposed Lo harmful Loxlns prlmarlly because Lhey are noL provlded wlLh or do noL wear
adequaLe personnel proLecLlve equlpmenL (L) whlle spraylng chemlcal pesLlcldes and
herblcldes 0
Ch||d |abour
ln several reglons chlldren lncludlng young chll 0 dren conLrlbuLe labour Lo coLLon growlng
dependlng on Lhe age of Lhe chlld and Lhe naLure of Lhe acLlvlLy parLlcularly wheLher lL affecL Lhe
chlld's healLh and schoollng Lhls may or may noL be accepLable under lnLernaLlonal sLandards
(lLC convenLlons provlde for llghL work for over12s and make excepLlon for chlldren's work on
famlly smallholdlngs where produce ls for local consumpLlon) 0Chlldren are prlmarlly lnvolved ln
coLLon plcklng and Lo a lesser degree ln weedlng and nuLrlLlonal acLlvlLles 0






LnvlronmenLal lssues
ow |e|ds |n Cotton
1he relaLlvely rapld galns ln producLlvlLy ln Lhe predomlnaLely ralnfed CenLral zone slnce 1990 are
due Lo Lechnologlcal advances LhaL lf comblned wlLh a conLlnuaLlon of recenL modesL growLh ln
Lhe norLh and SouLh zones could lead Lo a subsLanLlal hlke ln naLlonal average ylelds and
producLlon
- Lack of SulLable varleLles CoLLon ylelds are affecLed by lack of varleLles or genoLypes
sulLable for some agronomlc condlLlons lndlan sclenLlsLs clLe Lhree prlorlLles for planL breedlng
efforLs (1) hlgher yleldlng shorLduraLlon and pesLreslsLanL culLlvars for Lhe lrrlgaLed norLh zone
(2) hlgher yleldlng varleLles for Lhe droughLprone CenLral zone










Compet|tor Ana|ys|s Components

Ma[or 1ext||e |ayers (Compet|tors)
ollowlng are some ma[or players ln Lhe fleld of lndlan 1exLlle lndusLry
Arv|nd M|||s Arvlnd Mllls ls one of Lhe ma[or and fully verLlcally lnLegraLed
composlLe mllls player ln lndla lL has large producLlon ln denlm shlrLlng
and knlLLed garmenLs lL ls now addlng value by manufacLurlng denlm
apparel lLs sales are around uS$ 300 mllllon
kaymonds 8aymonds has Lhe large dlverslfled lnLegraLed buslness
model whlch ls spread across Lhe value chaln from yarn Lo reLall lL ls
speclallzed ln ulverslfled woolen LexLlles lL already supplles Lo some uS
reLallers
ke||ance 1ext||es 8ellance 1exLlles ls one of Lhe ma[or 1exLlle Companles
LhaL ls ln Lhe buslness of fully lnLegraLed manmade flber lL has capaclLy of
more Lhan 6 mllllon Lones per year lL has [olnL venLure parLners llke
uuonL SLone WebsLer Slnco (lLaly) eLc

Vardhaman Sp|nn|ng vardhman deals ln splnnlng weavlng and
processlng segmenL of Lhe lndusLry lL ls an approved suppller Lo global
reLallers llke a 1argeL and 1ommy Pllflger lLs sales are llLLle over uS$
120 mllllons