Tribhovandas Bhimji Zaveri Limited

Tribhovandas Bhimji Zaveri Limited

Business Analysis

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SWOT ANALYSIS

SWOT analysis is a business analysis approach that reviews the strengths, weakness, opportunities and threats that a business is facing internally and externally. This method of analysis has been in use over the years and businesses use it to evaluate their performance over a given time frame. The results of the SWOT analysis are then used to adjust and improve business operations that require being improved. In this section of the paper, a SWOT analysis ofTribhovandas Bhimji Zaveri Limited   between 2010-2013 is given.

STRENGTHS

The Company maintained its brand name over the years.TBZ is a brand name that consumers have been associated with and has won brand salience in the jewelry industry. New companies and business entering the Indian market find it difficult to cope with competition in a company that has been in operation since 1864.The management team has been able to gain experience over the years and cannot be compared to other jewelry companies which have been operating in India. The employees have also been able to cooperate with the management in achieving the business goals.

The advertising approach used by TBZ is an excellent one which has kept it ahead of other market competitors in the Indian market. Brand awareness has been achieved through the advertising and marketing strategies used by the company. During this period there was stiff competition from other emerging firms such as Gitangali Gem Limited; however, brand recall is something that the company has been able to win, and people have trust in its products. With brand recall, awareness and salience, the organization has been able to gain the customers’ favor and trust. Its net fluctuation margins have been able to remain stable which gives confidence in its shareholders and more people have bought shares from the company between 2010-2013.

An increase in the receivable shares ration has resulted to an increase its profit margin from credit sales to its customers.

Weakness

The company has focused more on the Indian market and has failed to expand to the global market. As much as India is a leading market in terms of jewelry and Gold, there is a need to venture in other market. With the emergence of new companies the Indian market might get concentrated with jewelry r which might be a challenge to the business.

Quality improvement in terms of the products offered  has not improved since the company is focusing more on sales and most of the resources are being used in increase the sales. As much as customers love jewelry they require differentiated products which are different from those offered by other companies. Focusing on sales to increase the profit ratio and ignoring other business areas has only got short term solutions.

Opportunity

Entering the global jewelry market is an opportunity that the company can use to increase its sales and handle the increasing market competition. It also needs to increase its sale point so that it can increase the market awareness and deliver the goods closer to the consumers.

Buying shares from other fashion companies, this would increase its opportunity to capture new markets and increase its revenue pool. Diversifying the age of its employees to cater for both the young and old generation especially with the increase in demand for jewelry within the young generation market. Involving celebrities in its advertisement strategies, this will improve consumer awareness in the market.

Opening an IPO (Initial Public Offer) and sell its shares to the public and other interested stakeholders, this will give people a sense of ownership in the company and therefore increasing its revenue and customers.

Setting market standards, with the entry of new companies in the Jewelry industry, the company enjoys the benefit being in the industry for long.It can come up with offers to its customers and reduce the profit margin to win more customers. Not many companies are able to get into the jewelry business which involves Gold and Diamond due to the huge capital involved, the company can control the industry in terms of price and quality of products offered. The company can also sponsor fashion events such as modeling to increase consumer awareness association as well as visibility.

Threats

Increased competition especially from emerging family businesses has been a threat to the company. Entry of cheaper jewelry in the market during this period has resulted to decrease in the number of customer share that the company has on the market.

An increase in the daily payable ration might be a challenge to the payment of debts to its creditors. The company has got bank loans that it needs to pay and with an increase in the ration the financial burden facing the company might increase.

There has been a challenge in securing local stores and showrooms for the company, this is a major threat especially with the increase of competitors in the jewelry market.

PESTEL MODEL OF ANALYSIS

Political Analysis

India has been able to enjoy political stability during this period and  therefore an increase even in the foreign customers visiting India. Import levels on gold and diamond have decreased due to the strategies set by the government to reduce its account deficit. Between 2012-2013, the governments raised the import duty imposed on gold to with a 10% increase. Before importers in the gold and gem industry can import more goods they need to export not less than 20% of their earlier shipments before purchasing more precious metals. This has been a challenge to the company towards market expansion.

Government regulations on the entry of new firms into the market has favored fair competition, the regulations have ensured that there is a reduction in the number of black businesses involved in Gem and Jewelry.

Economic Analysis

The Indian Rupee has been stable when compared to other currencies such as the dollar therefore favoring the trade and profit margins in the sales made. Many investors are entering in the market as shareholders; the company has gained a higher number of shareholders than rival firms due to stable and improving trends in the stock market.

Demand for Gem and Jewelry has increased during this period with India being one of the largest markets globally.

Consumer disposable income has  raised in India in the period between 2011-2013;in the year 2011,the approximated  disposable consumer income was 71787870INR million  this rose to 80663730INR million in 2012,this number increased in 2013  therefore  consumer shave been able to purchase more jewelry and GEM with new consumers emerging in the market. The consumer disposable income was the highest since 1950 favoring the business world.

Credit availability has increased, and banks are offering loans at favorable interest rates, consumers can take loan to purchase expensive Gems and Jewelry and the firm is able to get loans to expand business operations. Many banks offered Gold Loans to businesses thereby promoting business growth.

The   firm has been able to engage in social activities which are part of its marketing strategies. Sponsoring events such as fashion events have it possible for the firm to be engaged in many social events. The population in India is made up of many young people who are the biggest customers in the jewelry and gem market hence creating a suitable market for the firm. India provides a conducive environment for business operations; there are new development areas which are suitable for setting up business stores. Security has been a major threat in the jewelry and gem business but this have improved during this period making it safer to do business. 

References

4-traders.com, (2014). Tribhovandas Bhimji Zaveri Ltd company : Shareholders, managers and business summary | NATIONAL STOCK EXCHANGE OF INDIA: TBZ | 4-Traders. [online] Available at: http://www.4-traders.com/TRIBHOVANDAS-BHIMJI-ZAVER-10752357/company/[Accessed 23 Apr. 2014].Tradingeconomics.com, (2014). India Total Disposable Personal Income | Actual Data | Forecasts. [online] Available at: http://www.tradingeconomics.com/india/disposable-personal-income [Accessed 23 Apr. 2014].Dnb.co.in, (2014). Indian Gems and Jewellery Sector. [online] Available at: https://www.dnb.co.in/IndianGemsandJewellerySector/Overview.asp [Accessed 23 Apr. 2014].