Silk is the queen of all fabrics which is historically one of the most important industries in India. India is the second largest producer of silk, contributing to about 18 percent to the world production.
Silk production in India
In nature, Asia is the major manufacturer of silk in the world and produces in excess of 95% of the entirety global output. Some of the countries which give important for producing silk are China, India, Japan, Brazil and Korea. India is the leading manufacturer of silk and also have largest consumer of silk in the world. India has a well-built tradition and culture bound home market of silk. In India, mulberry silk is produced mainly in the states of Karnataka, Andhra Pradesh, Tamil Nadu, Jammu & Kashmir and west Bengal. The non-mulberry silks are produced in the state like Jharkhand, Chhattisgarh, Orissa and north-eastern states.
Silk produce in Kanchipuram
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The kanchipuram saree holds a special position among the wide range of silk sarees available in India. Kanchipuram sarees are available all around the world. The production of these silk sarees is centred in kanchipuram. The town kanchipuram is fine known as 'silk city' because roundabout of its population is reliant upon the silk industry. In the order of 60,000 silk looms work, filled within town. This town has an annual turnover of more than Rs.200 crores by means of the exports comprising around Rs. 3 crores. The export figures are incomplete due to the inadequacy of weaving on the whole sarees, which has its possess demand, but is moderately lesser over other outfits.
Basic Functioning of the Silk Industry in specific to production
The first silk filament cloth was made in Ancient china. Silk filament is a fine, touch, elastic fibre which is produced from caterpillars name called 'bombyxmori'. After thirty-five days it has hatched from the eggs laid by its parent moth, the caterpillar, normally referred to as silkworm, that silkworm usually spends its time in eating the leaves of a mulberry tree. Within two or three days spinning it surrounds itself in a cocoon which consists of a continuous and very fine filament of silk. Then silkworm turns into a moth, which escapes by making a hole through the cocoon. The first cocoons were placed in very hot water to soften the sticky gum, sericin, which holds the filament together. The ends of the filament are found and it would be unwound. This progression is called reeling. The silk filament is put on to large reels which are known as swifts. Silk is not like cotton or wool, it is not spun but twisted, then term throwing rather than spinning. Throwing includes the revolving of two sets of bobbins at different, carefully adjusted, speeds.
PORTERS FIVE FORCES
Shaping an industry and define its competitors and attractiveness can be determine through porters five forces.
Threats for new entrance - high
The silk industry always has potential threat entrance from developing countries like china in relation to global exports. Through there are lots of barriers like capital requirements and chemical requirements. It is difficult for the other countries to develop the market because of the capital requirement and to gain the confidence of the government. Since there is a government support which results in gaining a new entrance for the competitors with inexpensive labour. That threat for new entrance is relatively high.
Barriers power of the buyers - high
The buyer power is relatively high in the textile industry as they drive the industry as such. There is the best utilization of the resources such that there is a major investment from the buyers. The buyers drive the industry due to price proximity and quality of the product.
Barriers power of the suppliers - low
Suppliers for the textile industry are provided by the chemical industry as they are one of the structural drivers. The supplier is relatively low as compare to the other industries. The suppliers are those who supply the raw material to the textile industry for the production of the textile materials. The pricing of the chemical substances which has been supplied to the textile industry is rising due to economic recession and inflation.
Threats of substitute - high
Always on Time
Marked to Standard
The substitute's product for silk industry is cotton and wool. Normally the demand for the cotton is very high, because it is the one of the cheapest product in textile material. Silk fabric is the one of most costly and luxury material in textile industry. Demand for the wool material is high during winter seasons. While that time silk material is not that much demand while comparing with cotton.
Competitive rivalry - high
The competitive rivalry within the industry is very high and this is justified rivalry within silk industry producers who supply a large variety of silk products to instigate further demand in market also supporting the justification it is clearly noticeable that the product line depth & width of the silk supply is high and portfolio of the product is of a high variety within the silk industry.
PESTLE (Macro environmental analysis for the Silk Industry in India)
The concept of PESTEL analysis provides the framework of macro-environmental factors to scan the external environment. It the basic tool to understand market growth or decline. This framework evaluates the impact of political, economic, social, technology, environment and legal factors on the business environment. This analysis provides opportunities or threats for an organization in external environment.
The political factors in silk textile industry include trade regulations, tax policies. The silk industry add up major growth as it one of the booming sector in India. The government have lots of subsidiary to textile industry as it is the second largest producer of silks. The tax exemption has been provided on the exports done from the industry.
The GDP growth for the silk textile industry in the last two years is declining because of the global economic recession, due to this the labour cost as considerably increase in a gradual pace. This has also decrease customer spending capability. Purchasing power of the consumer is high, because silk sarees shows the prestige status of women in India.
The silk industry has normally changes the customer's living standard and also changes the social cultural factors in the fashion designing industry. Silk is the maximum consumed in south India which has abundant resources of fabrics and raw materials. The silk sarees resemble the social culture of women in India particularly in Tamil Nadu.
India being one of the major exporters of silk, the silk industry in India has gained maximum focus and attention from the government wherein any new technological advancement in production is introduced to this industry adding to the important to this industry. Recently there are lot of new invention and technological developments which are taking place in the textile industry and which will provide the customer and the government to improve the revenue considerably.
There are few critical problems in terms of environment and ecology which are facing the silk industry; these include the chemical wastes and emission from silk producing factories which tend to cause nervous disorders. Another issue which recently is gaining spotlight attention relates to the disruption of the ecological system and imbalance due to the killing of silk worms and this problem was one of the main driver to produce what is called 'harmless silk' (i.e.) silk produced without harming the silk worms.
The health and safety issues are always consider in this type of industry there are committees in international organizations to take care the benefits of the workers. Compensation for the workers is low in silk industry. There are many times the weavers have strike to raise the salary for them.
STRUCTURAL DRIVERS OF CHANGE IN SILK INDUSTRY
In this silk industry there are many structural drivers of change. These drivers of change can be seen in fashion of the people, government and purchasing power of the consumers.
Fashion trends of the people
Indian saris are the habitual clothing of Indian women. Fashion of the people remains changing, so the textile industries also produce the saris according to the people wants. The silk sarees are defensible as that they are easy to carry; light weighted and help in free movement. This silk sarees are softness and crispness which assure the best quality. The reason for the popularity of the silk sarees is suitability to all occasions. There are many varieties of silk saree like jamdani silk saree, pure silk bridal wear, ethnic kanchipuram saree make for purely traditional wear, the art silk sarees, printed silk sarees, khadi silk sarees and kora silk which are more fashionable Indian silk sarees.
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The silk industry is the one of the major sector which developed the Indian economy and it increase the GDP. There are 2000 set of new textile policy reforms in textile sector, which dealing with removal of raw material price distortions, cluster approach for power looms, pragmatic exit of idle mills, modernisation of outdated technology, etc. The Union Budget of 2005-2006 announced economical progressive policies, which includes:
Reduction in corporate tax rate from 35% to 30% with 10% surcharge.
Reduction in depreciation rate on plant and machinery from 25% to 15%.
Initiation of cluster development for handloom sector.
Availability of health insurance package to 0.2mn weavers from 0.02mn initially.
Purchasing power of the customer
Silk sarees make the best among all Indian sarees. The price of the Indian sarees start from few thousand rupees, a good silk saree can cost a lot of rupees. This silk saree shows the prestige status for women. Few years before rich people can only buy the silk sarees, while that time price of the sarees is at high. Middle and lower class people cannot able to buy the silk sarees. But now a day's purchasing power of the middle class is raised. At present the Indian middle class people is where around 351 million. Purchasing power of the customer has been increased.
INDUSTRY LIFE CYCLE OF SILK INDUSTRY
The silk industry is the second largest producer and it has an exclusive pose in India; it plays an important role textile industry and export. It produces 18% of raw silks in total world. The total production of silk during 2005-06 was 16,500 MT and export were Rs. 2,879.56 crores.
Accessed Date: 13-3-2010
Silk industry is one of the most important industries from historical period in India. The sericulture industry employs over 700,000 farm families and is mostly concentrated in Southern India. As in today 56 lakhs people are dependent on this sericulture industry. The potency of this industry defamation in its extensive base, the sustaining market demand pulls particularly from the Indian handloom weaving sector.
Accessed Date: 13-3-2010
The revenue from the textile industry has boosted up the GDP growth in India. The industry magnitude has long-drawn-out from USD 37 billion in 2004-05 to USD 49 billion in 2006-07. In this era, the local market witnessed an escalation of USD 7 billion; this is from USD 23 billion to USD 30 billion. The export market developed from USD 14 billion to USD 19 billion in the same period.
Accessed Date: 13-3-2010
This is a growing industry which mainly depends on GDP growth and the inflation around the globe. Maturity stage is the stage where the industry cannot grow as they have seen a complete product development and review but the silk industry falls on the growing stage. If the silk industry reaches the maturity stages then the industry start to decline.
The Indian silk industry will not see the decline till the year 2020.
CONCLUSION FOR INDUSTRY LIFE CUYCLE
As seen the Indian economy is growing in faster pace than the other developing countries there is a considerable growth for the past two years. The budget is also presented in a diversified manner such that the industry grows as the inflation decrease. The industry falls in between the growth and maturity stage in the industry life cycle diagram.
Recycling the silk sarees
Scenario-1 - Recycling the silk sarees
The old silk sarees are recycled into new silk sarees and it can be sells in the market at better price. There are some manufacturing company which collect damaged and old silk sarees from people and that sarees recycled into new one. This progression saves the manufacture time and that sarees can be produced with new designs. Even though the sarees are recycled the value of the sarees did not reduce, so manufacturer can sell the sarees in fine price. In this process, cost of production is less and it can gain more profit. This process is environment friendly, normally dyeing company produce water pollution but in this recycling process creating pollution is very less while compare to the dyeing company. This process is introduce because, people consuming silk sarees are more in India they can use the silk sarees for maximum five years then they don't use that saree, so that old sarees can be recycled in this process.
Scenario-2 - Chemical wastage
In silk industry, dyeing and finishing sector uses the large amount of water and extensive qualities of compound chemicals. The chemical using in this process can be reduced and the sarees can be produce with less chemical effects. The dyeing companies are facing lot of challenge in this process. These companies are the main reason for the water pollution. The chemical wastage which produces in the dyeing companies is mix with the river water and creates water pollution for the environment. The dyeing companies should have the proper outlet for the waste water. So the chemical usage can be reduce in the production of silk sarees and that dyeing companies should have the proper outlet for that chemical wastage and that chemical wastage should not mix with the river water. This process saves our environment.
Scenario-3- Artificial silk
Now a day's silk is cultivated in Japan, China, Spain, France and Italy are replaced to artificial fibers that has been used of silk in much of the textile industry. The silk industry has a business worth of $200-$500 million annually. A small piece of silk fabric is produced by killing thousands of silkworms. Some of the industries in India are trying to produce silk cloth without killing of silkworms. 'Ahimsa silk' sarees which is produced in Hyderabad, India is without killing silkworms. At the present time people don't like the sarees which is produced by killing silkworms, they are prefer for this ahimsa silk. These ahimsa silk sarees are eco-friendly. In future silk sarees can be produced without killing silkworm.
Commencing from above scenarios 3rd and 2nd can be suggested, because the third scenario tells about the producing of silk cloths without killing silkworm so generation of the silkworm is also saving through this method. Scenario 2 which tells regarding the reducing of chemical wastage in dyeing industry, this process will save the environment pollutions.
In India silk industry is a foremost player in the global scenario and the growth forecast for the industry appear to be optimistic. Method like the support of additional technological and economic research in the different aspects of sericulture, regularity and quality control of silk and silk products and explanation of marketing and stabilization of prices of silk cocoons and raw silk it might increase quickly than yet before.
Accessed Date: 14-3-2010
Accessed Date: 14-3-2010
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Accessed Date: 20-3-2010
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Accessed Date: 28-3-2010
Accessed Date: 28-3-2010