HANDICRAFT PESTE OF BUSINESS ENVIRONMENT

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TERM PAPER SUBJECT-BUSINESS ENVIORNMENT TOPIC- HANDICRAFT SUBMITTED TO: MISS PALWINDER KAUR SUBMMITTED BY: ARUN KUMAR SAINI ROLL NO: RT1903A25 CLASS: MBA 1 ST SEM SECTION: T1903(c) REG NO: 10907007

Transcript of HANDICRAFT PESTE OF BUSINESS ENVIRONMENT

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TERM PAPER

SUBJECT-BUSINESS ENVIORNMENT

TOPIC- HANDICRAFT

SUBMITTED TO: MISS PALWINDER KAUR

SUBMMITTED BY: ARUN KUMAR SAINI

ROLL NO: RT1903A25

CLASS: MBA 1ST SEM

SECTION: T1903(c)

REG NO: 10907007

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INTRODUCTION OF THE CONCEPT PESTLE ANALYSIS:--

PESTLE stands for political, economical, sociological, technological, legal, environment.PESTLE analysis is in effect an audit of organizations environmental influences with the purpose of using this information to guide strategic decision-making. A PESTLE analysis is a useful tool to understand the big picture of the environment in which an organization is operating. After understanding these environments this is possible to take advantage of maximize the opportunities and minimize the threats of an organization. Now we will discuss all the factors of PESTLE analysis briefly and we will know that how they are effecting our environment:--

Political:-- What is happening politically in the environment in which we are operate, in which we include tax policy, employment laws, environmental regulations, trade restrictions and reform, tariffs and political stability etc.

Economic:-- In this we include that what is happening in our economy such as economic growth/ decline, interest rates, exchange rates and inflation rate, wage rates, minimum wage, working hours, unemployment (local and national), credit availability, cost of living, etc.

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Sociological:-- What is occurring socially in the markets in which we expect to operate, cultural norms and expectations, health consciousness, population growth rate, age distribution, career attitudes, emphasis on safety, global warming.

Technological: -- We know that technology is changing daily in which we are operating our business. What is happening technology-wise which can impact what you do, technology is leaping every two years, how will this impact our products or services, things that were not possible five years ago are now mainstream, e.g. mobile phone technology, web 2.0, blogs, social networking websites. New technologies are continually being developed and the rate of change itself is increasing. There are also changes to barriers to entry in given markets, and changes to financial decisions like outsourcing and in sourcing.

Legal: -- What is happening with changes to legislation. This may impact employment to access to materials, quotas, resources, imports/ exports, taxation etc

Environmental: -- In environment we include that factors which are impacting within the environment. These factors are either internal or may be external.

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THE PESTLE PROCESS

(1) To decide how the information is to be collected and by whom.

(2) To identify appropriate sources of information.

(3) To gather the information

(4) To analyze the gathered information

(5) To identifies the most important issues.

(6) To identify strategic option.

(7) To write report.

(8) Disseminates the finding.

(9) To decide which trend should be monitored on an ongoing basis.

HANDICRAFT

Handicraft is known as a type of work where useful and decorative procedure are made completely by hand and using simple tools. In the handicraft we include cultural and religious items. Items made by group production or machines are not handicrafts. There is difference between handicraft and art and craft. Handicraft items are intended to be used, worn, etc. its purpose clear of simple decoration. We generally consider in handicraft more traditional work. This work is daily part of life, while art and craft implies more of a hobby pursuit and an expression or perfection of creative techniques.

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Different Items of Handicrafts-

(1) Bamboo and Cane Craft - Arunachal Pradesh is famous for its cane and bamboo. Arunachal is only a state where the traditional handicrafts are made since ages and are the product which is much within the country as well as abroad. In the abroad they gained popularity. Bamboo and cane are crafted dexterously into colorful basket mats, cane belts, attractive smoking pipes, combs, and household tools. Tribal women wearing rings and headbands made of cane are popular.

(2) Decorative Arts- The decorative art means that a number of arts and crafts for the making of handmade and functional work in a great range of materials. It includes ceramic, wood, glass, metal, textiles, and many others. The field includes ceramic, glassware, furniture, furnishings, but not usually architecture. The decorative arts are categorized in opposition to the fine art. Its name is painting, drawings, photography, and large-scale sculpture, which generally have no function other than to be looked at. There is a between decorative and fine art based on functionality, intended purpose, importance, status as a unique creation, or single-artist production. Decorative arts, or furnishings, may be fixed for example, wallpaper, or moveable for example, lamps. Applied art includes the decorative art.

(3) Crochet – Crochet is a process of creating fabric from yarn or thread using a crochet hook. Crochet is same as knitting, it consist of pulling loops of yarn through other loops. The difference between knitting and crochet is one loop is active at one time and a crochet hook is used instead of knitting needles.

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(4) Embossing- Embossing is also a type of handicraft. It is a process of creating a three-dimensional image or design in paper and other materials. It is typically accomplish with a combination of heat and presser on the paper.

(5) Wood Carving- Wood carving is a form of working wood by mean of a cutting. In the hand this may be a power tool resulting in a wooden figure this may be abstract in nature or in sculptural.

(6) Woodturning- It is a form of woodworking that is used to wooden object on lather. Woodturning is different from other form of wood working. In the woodworking, wood is moving while a stationery tool is used to cut and shape it. Many intricate shapes and designs can be made by turning wood.

(7) Tooth and Horn Carving- Tooth and horn carving refer to objects carved out of animal teeth and horns, and in the circle of collectors, it refers specially to works carved out of ivory and rhinoceros horns. Ivory is naturally beautiful, white, and soft, and is therefore very exquisite and fall of artistic charm; Rhinoceros horn carving is famous for it.

(8) Spinning- Spinning is an ancient textile art in which plant, animals or synthetic fibers are twisted together to form yarn. For thousands of years, fiber was spun by hand using simple tools, the spindle, and distaff. Only in the High Middle Ages did the spinning wheel increase the output of individual spinners, and mass-production only arose in the 18th century with the beginnings of the Industrial Revolution. Hand-spinning remains a popular handicraft.

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(9) Stained Glass- Stained glass refers to the material of colored glass or the craft of working with it. Stained glass is that glass that has been colored by adding metallic salts during its manufacture. The colored glass windows in which small pieces of glass are arranged to form pattern or picture, held together by strips of lead and supported by a rigid frame.

(10) Shoemaking- Shoemaking is a traditional handicraft profession, which has been largely superseded by industrial manufacture of footwear. Shoemakers or cordwainers cobblers being, historically, those that repair shoes may produce a range of footwear items, including shoes, boots, sandals, clogs, and moccasins. Such items are generally made of leather, wood, rubber, plastic, jute, or other plant material, and often consist of multiple parts for better durability of the sole, stitched to leather upper

As to see above items of handicraft, we can say that there are many items of handicraft. They look like very attractive. Most items are made with lather, wood, horns, and teeth of animals, paper, glass, metal etc. The demand of handicraft items is very high in the home country and other countries.

First of all we are doing SWOT analysis of Handicraft in India-

STREANTHES OF HANDICRAFT-

Large, diversified and potential market. There is large product variety and range is available because of

diversified culture. It has strong, diversified and supportive retail infrastructure. Diversified product range that service different market. Cheap labor rates that result to competitive price.

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Need low capital investment. There is flexible production flexibility. Low barriers of new entry

WEAKNESSES OF HANDICRAFT-

-Lack of infrastructure and communication facilities.

-Unawareness about international requirements and market.

-Lack of co-ordination between government bodies and private players.

-Inadequate information of new technology.

-Inadequate information of current market trends.

-Less interest of young people in craft industry.

-Lack of skilled labor.

-Still confined to rural areas and small cities and untapped market.

-Lack of promotion of products

OPPORTUNITIES OF HANDICRAFT

-Rising demand for handicraft products in developed countries such as USA, Canada, Britain, France, Germany, Italy etc.

-Developing fashion industry requires handicrafts products.

-Development of sectors like Retail, Real Estate that offers great requirements of handicrafts products.

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-Development of domestic and international tourism sector.

E-Commerce and Internet are emerged as promissory distribution channels to market and sell the craft products.

THREATS OF HANDICRAFT

- Competition in domestic market.

-Balance between high demand and supply.

- Quality products produced by competing countries like China, South Africa.

- Better Trade terms offered by competing countries.

- Increased and better technological support and Rend facility in competing countries.

The PESTLE analysis of handicraft is very necessary; we can do the PESTLE analysis as following –

PESTLE ANALYSIS OF HANDICRAFT-

ECONOMIC ANALYSIS OF HANDICRFT- The role of Handicraft Industries in Rural India Economy is very important and its contribution in the rural economy of India is increasing progressively. The Ministry of Rural Development and the Ministry of Rural Economy, under Government of India are the two main governing authorities, which drafts and implements policies for the handicraft industries in rural India economy. The handicrafts industry of India comes under the unorganized sector of village economy of India. India is basically an agriculture-based country and the development

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of rural economy of India depends upon the development on 70 crore rural population. The rural economic policies of India is drafted according to the needs of rural India since, majority of the population that is about 70% lives in about 600,000 small villages. The rural India is almost wholly agriculture based and a small part of the rural Indian population is engaged with small industries like handlooms, handicrafts and other traditional produce. The role of Handicraft Industries in Rural India Economy became important, since today the organized sector of Indian industry is ready to absorb the products from these industries. Moreover, with liberal trade and export policy, the export of the Indian handicrafts industry is on an all time high.

The main products that are manufactured by the rural handicrafts industry of India are as follows -

-Art metal wares

-Wood wares

-Hand printed & textiles & scarves

-Embroidered & crocheted goods

-Shawls as art wares

-Zari and zari goods

-Limitation jewelry

-Miscellaneous handicrafts

The major importers of rural Indian handicrafts are as follows -

-Art metal wares - USA, Germany, UK & Italy

-Wood wares - USA, UK, Germany and France

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-Hand printed & textiles & scarves - USA, UK, Germany & Canada

-Embroidered & crocheted goods - USA, Saudi Arabia, UK, Germany

-Shawls as art wares - Saudi Arabia, USA, Japan & UK

-Zari and zari goods - UK, USA, Japan & Saudi Arabia

Imitation jewelry - USA, UK, Saudi Arabia & Germany

Miscellaneous handicrafts - USA, Germany, UK, & France

Presently, the global market of handicraft is valued at US$ 400 billion and India's share in the global market stands at 2% only. However, the handicraft industries in rural India economy registered an annual growth rate of 15% consistently over the last decade and it is estimated to grow at the rate of 42% over the next five years annually.

Although, the Handicraft Industries in Rural India Economy is witnessing steady growth over the last five years but its growth is snowed under by certain bottlenecks, like the following -

The manufacturing process does not compliments with orders of such products

Use of primitive techniques

High manufacturing cost

Poor quality of products

Product design and development to be aligned with the background and history of the craft, the producer, and the market requirements

Poor standard of raw materials

Lack of standardized vendor and suppliers

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Lack of standardized raw materials

Improper pricing of finished products

Absence of proper incentives and schemes by the Government of India

Unorganized investment patterns and lack of regular investors

Lack of proper marketing channels

Poor access to urban markets

The Government of India has announced a Comprehensive Policy Package for SSI & Tiny Sector. Besides, there are other policies in existence to support the SSI sector. These are as follows: 

1) Enhancing the excise exemption limit for SSIs - The limit has been enhanced from Rs.50 lakhs to Rs.1 crore with effect to improve the competitiveness of Small Scale Sector.  

2) Credit Linked Capital Subsidy Scheme for Technology Up gradation - The Government has approved the scheme; wherein 12% back ended capital subsidy would be admissible on loan advanced to SSI by the scheduled Commercial Banks, designated SFIs for Technology Up gradation in certain sub-sectors.  

3) Enhancement of Investment Ceilings for Small Scale Service & Business Enterprises- The limit has been enhanced from Rs.5 lakhs to Rs.10 lakhs. 

4) Grants for ISO-9000 to continue - The ongoing scheme of granting of Rs.75, 000 to each small scale enterprise for obtaining the ISO-9000 certification will continue.

5) SSI Association to develop and operate Testing Laboratories - A onetime capital grant of 50% will be given on

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reimbursement basis to the SSI Association who is interested to develop and operate Testing Laboratories. 

6)  Working Capital to SSIs - The Nayak Committee’s recommendations regarding provision of 20% of the projected turnover as working capital is being recommended to the financial institutions and banks. 

SOCIAL ANALYSIS OF HANDICRAFT- The problem of child labor is not a related feature of modern society only. In fact, the problem has been there since the very dawn of human civilization. The reasons responsible for this phenomenon are varied and have been changing as the years rolled on. Avenues of child labor over the years have broadened. As a matter of fact, the problem is vexed and wide spread and is not a characteristic of any particular type of economy. Any work, whether manual or mental, which is undertaken by a child, who is below 14 years of age. Includes children prematurely leading adult lives, working long hours for low wages under conditions damaging toothier health and to their physical and mental development, sometimes separated from their families.Agriculture, handicrafts work and traditional occupations in this part of the country have engaged a large chunk of the child workers. The working conditions of the children in the handicraft sector are dreadful, inhuman, and uncongenial for the proper growth and development of the children. Various socio-economic, geographical, and demographic factors are responsible for such a high proportion of child labor in India. Cheapness of the child labor in the agricultural and handicraft sector in India has led to the availability of the child labor in abundance. This has also resulted in their low level of schooling and a greater number of dropouts.

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So at last we can say that in India most of the child labour is working in the handicraft. Handicraft is a very good source of the income of rural peoples of India.

LEGLE ANALYSIS OF HANDICRAFT-

The legal environment of the country is very favorable to the sector of handicraft. Government of the India made many acts or restrictions on the large scale industries so that we can save the handicraft in the country. Government of India also makes the rules that the certain percentage of the product of Indian industries may export. So that the handicraft industry of the country is save. These programs adopted by the government of India for the balanced development of rural areas in the country. India's handicraft exports increased by a whopping 177 per cent in September, raising hopes of a turnaround in the country's overseas trade that has been battling global recession for the last 11 months.

Exports of handicrafts, 71 per cent of which are picked up by customers in the US and EU, increased to $46.87 million in September this fiscal, against a mere $16.88 million a year ago.

This increase came after a 21 per cent decline reported in the previous month of August, according to the data given by the Handicrafts Export Promotion Council (EPCH).

There are signs of improvements in the traditional markets. Christmas and New Year orders are better.

The EPCH is organizing its annual flagship Indian Handicrafts and Gifts Fair from October 10 at Greater Naiad. Around 3,500 global buyers have confirmed participation in the fair, Amphora said, adding the fair would boost business feeling.

Though a low-value portfolio in the country's exports basket of $170 billion, handicrafts exports employ seven million people. Lakhs of

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artisans have been facing tough times due to a demand slump in major international markets.

In fact, the handicrafts exports started declining much before the global financial crisis erupted in the middle of 2008. Exports have been declining for the last two years from $3.8 billion in 2006-07 to $1.79 billion in 2008-09

POLITICAL ANALYSIS OF HANDICRAFT IN THE COUNTRY-

The political environment of the country is not the favored of the sector of handicraft. The politician of the country do not takes interest on these products of the country because they want to develop the industrial development in the country. They do not attend the basic strength that is in the rural development in the country. Most of the population of the country lives in the villages of the country. About 70 percent out of the total population lives in the villages. If we do not develop the villages of the country then could not become the powerful. At last we can say that politician has to take part in the development in the country.

TECHNOLOGICAL ENVIORNMENT OF THE HANDICRAFT IN THE COUNTRY-

Last about 50 years our technology is growing rapidly. Today technology reaches on a high peak. Industries are using high-tech machineries for its production. Its result is directly on our handicraft sector. The cost of the production of the industries may very low as compare to the product of handicraft. Its effect goes directly on the sale of handicraft in the country. The product that is makes by the industries are more attractive. For example textile industries adopt new machinery with new designs the customers of the product attractive to the product of industries. Technology is the

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main cause to finish the name of handicraft in the India. Today most of the businessman of handicraft closes their business due to new technology in the country.

CONCLUSION- At last we can say that some external environment of the handicraft is in the favor of handicraft while other is not the favored of handicraft. Economic environment is in the favor of the handicraft. Most of the countries are the buyer of the handicraft of India. India is basically an agriculture-based country and the development of rural economy of India depends upon the development on 70 crore rural population. Some of the countries of exporter of handicraft are as follows-Germany, UK, & Italy, Wood wares - USA, UK, Germany, and France

-Hand printed & textiles & scarves - USA, UK, Germany, & Canada

-Embroidered & crocheted goods - USA, Saudi Arabia, UK, Germany

-Shawls as art wares – Saudi.Political environment is not the favor of handicraft in India. Legal environment is in the favor of handicraft. Government is restricting industries to produce of handicraft goods. Social environment of the handicraft is free for country of India. India has child labor in the country. At last we can say that technological and political environment is not the favor of handicraft in the country.

THANKS……………………………………………………….