Case Analysis - Fabindia

Answer1 Fab India has come a long way from its humble beginnings as an export shop in 1960, with its transition from an export house to a retail store the business model of Fab India has been changing during this period. Initially Fab Fab India operated as a middleman between be tween abitat, a !"#based !"#based retail company and $harat %arpet &anufacturers. abitat became a ma'or customer, ma(ing up 60#6)* of Fab India+s reenue reenue and was a ma'or ma'o r drier of its growth for - years. /he business model was straightforward and simple as $%& was proiding something which was demanded by abitat. /he company only targeted foreign mar(et in its initial years. oweer, in 196 FabIndia FabIndia too( its rst step towards retails by setting up a small shop to chec( out the responses to the company, selling mainly the left oer supplies from export export orders of home furnishing. furnishing. In 19 the retail model expanded and company started collaborations with famous designers to ac2uire uniersity students. 3uring 19 the company decided to expand its operations by setting up a collectie with leather wor(ers, printers and durries weaers which turned out to be a setup for 3A. 4ith its declining relationships with abitat the focus of the company shifted from exports to more of retail oriented. /his also demolished the position of FabIndia as a middleman.  /he new idea was to carry carry out business under their own brand brand name which would consolidate their position in the Indian mar(et. /his plan was bac(ed by setting up stores in 3elhi, $angalore, &adras and $ombay. $ombay. /he home mar(et sales were 5)* with a year on year growth of 0* and the home mar(ets too( oer exports 7)-.* s .*8.  /he ision plans were were made in order to expand company+s operation in the Indian mar(et as the product was widely accepted by Indian consumer. consumer.

Highlights of vision plan 1: • • •

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Adding up a new store a year Increase monthly sales from -0 million to 0 million in four years &ore intensie use of capital 7hiring professional managers, renting stores instead of buying them8 %ustomiing garment range so to be widely w idely accepted by consumers in other cities Adding new organic products to their existing product line 7diersity factor8

Highlights of vision plan 2:

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Increasing turnoer from 0 million to -00 million in four years Actie problem soling to add competitie adantage :(ill based compensation and bonus plans to (eep employees motiated $ecoming lifestyle retailer with strong national presence %onerting companies into number of hubs

Highlights of vision plan 3: •

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:etting up :upplier region companies, &ar(et regions and ;lobal support practices 3ecentraliing the company+s management

The success factors include: • • • • •

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