Business Plan Of

LE-CHATEAU IN INDIA Submitted to
MOHAWK COLLEGE HAMILTON
In partial fulfillment of the requirements for the award of Diploma in

INTERNATIONAL BUSINESS MANAGEMENT

Under the guidance of

Professor. Alyce Lyne

Amritpal Kaur 000309497
Amritpal Kaur 000313218
David Nmoye 000304076
Chukwuma Nwachukwu 000309201
Karanveer Singh Khaira 000318652

Department of International Business Management
Mohawk College, Hamilton

Table of Contents Executive Summary: 3 Corporate Profile: 4 Nature of Business 4 Product Offering 4 Organizational Chart 6 Human Resources Management 6 External Resources: 8 Company strength 8 Company weakness 8 Target Market & PESTE Analysis 9 Target Market Segmentation: 9 PESTE Analysis: 10 Opportunities 11 Threats: 11 Market Entry Method: 12 Market Strategy: 13 Global Supply Chain 16 Warehousing & Inventory: 17 Legal System 18 Company contracts 18 Free Trade Agreement 19 Risk Management: 21 Internal Risks 21 External Risks 22 SWOT Analysis 23 Summary: 24 Conclusion: 25 References: 26

Executive Summary:

Le Château Inc. is one of Canada’s oldest specialty retailers and manufacturer of contemporary fashion apparel, accessories and footwear’s all at valued pricing for all fashion icons. This is as a result of hard work, intensity and perseverance over time. The brand’s fashion sense is best suited to all times, ever more inspiring and engaging stylish clientele home and abroad. Le Château is presently sold exclusively through its 236 retail locations and has a strong financial base. It has 10 stores under license in the Middle East and has an opportunities open to the Indian market.

India, as a target market, is a country with over 1.24 billion people estimated at the last census conducted in 2011, 59.5% of the population falls under the age of 16 – 54 years which is our target group, this group comprises of the active working class and young urban professionals. There is a growing awareness and demand for fashionable apparels in India and the brand caters to the needs of both men and women. The major foreign competitors in India presently are Wrangler, Nike INC, Puma, Levis and Polo.

People are highly fashionable and they like to keep up with fashion trends. They have a proven record of trying to imitate what celebrities wear. This brand tries to identify and quickly respond to fashion trends through its designs and continues to translate the latest runway fashion and global trends into its must-have looks.

We are planning to become a main manufacturing and retailers in India; therefore, we are seeing launching our presence in New Delhi, Kolkata and Mumbai. These are three major cities within India that offer us the market opportunity as an initiation to expand in other major cities of India.

We have done a detailed research about India that is our target market. We have conducted swot analysis and PESTE analysis for India. Most of our research is based on secondary sources and in our research that we have collected a lot of information about tax structure, modes of transportation, locations of stores and target customers. We are entering into India, by opening our own retail stores that will help us to utilise the brand image and helps us in protecting our intellectual property.

Corporate Profile:

Le Château is a specialty retailer and manufacturer of contemporary fashion apparel, accessories and footwear’s. Our focus is to provide customers with variety of our fashionable apparels at a valued price without compromising quality. Le chateau was earlier known as "le chateau men's wear" which was founded by Herschel segal in 1959.Le chateau began downtown of Montreal along St. Catherine’s street. Herschel, the founder gave his company a French name because of the francophone feeling occurring in Quebec which is the fifteenth largest in North America. Initially, Le Chateau was not a fashion oriented store as it is now rather, it was an overstock from an old store.
In 1962, "Le chateau men's wear" had an addition of women's apparels to their collection and shortened the name to the popular one we all know as Le chateau which switched to selling the latest wears and started doing some importation form Carnaby Street in London. Within a few years Le chateau wiped out all the traditional wears and started selling apparels imported from Europe. In 1972 Le chateau grew to having 10 stores and by 1983 they had over 50 IPO and expansions. In 1990 it raised about $8 million dollars and had about 160 stores to its name. Furthermore they were criticized for producing cheap cloths and their profit dropped down to $1.1 million dollars which was appalling. BY 2003 Herschel stood up and made a change within his management and got affiliations with movie producers and artist which released an explosive collection based on the Renee Zellweger movie down with love and was the exclusive sponsor for the Canadian idol contestants. In 2012 Le chateau went from hungry trend shoppers to start manufacturing grown up quality apparels with variety of designs at an affordable rate.
Le Château generates revenue of approximately US$350million with a net income of over US$82million. We intend to break grounds by being the premier Canadian clothing brand to enter the Indian market

Nature of Business:

Le Chateau will open its own retail stores in India. The reason for this is that the company has got more than 230 retail stores operating in different parts of the world. Moreover opening our own retail stores will give us an opportunity to attract more customers and helps us to protect our trademark and brand name in India.

Product Offering:
Our product comes in different styles, colors, sizes and a variety of trends that caters for both male and female apparels.

Male Apparel

Formal wear: This category comprises of our male dress shirts, vest, blazer and pants. They come in different sizes, fittings, stripes, check prints and colors. They are made from cotton, linen, wool and denim. It caters for the corporate world.

Casual wear: This category provides our customers with trendy casual shirts of different colors, prints, stripes, checks and fits. We also have sweaters, outerwear, T-shirts and Polos made from cotton blend or stretch jersey, which could either, is in V-neck or crew neck. They come in either short or long-sleeves.

Accessories: We have fashionable items that complement our customer’s outfits. This ranges from lovely ties which could either be a bow tie, skinny, pattern, solid and reversible ties of different colors. We also provide matching pocket squares, tie clips and cufflinks of different shapes, belts, scarves & hats, sunglasses, socks and bags.

Female Apparel

Dresses: This category provides our customers with beautiful cocktail dresses that can be worn for dinners and occasions. They are usually fitted and very sexy. We also have formal dresses which comes in different sizes, patterns and style that can be worn for red carpet vents.
We have our very fashionable “wear to work” dresses that cater for the corporate ladies. The brand provides casual dresses that are stylish and easy wears that can be worn to the cinemas, beach and picnics. They usually come in bright colors and flowery designs. They have the “Night out dresses” which caters for younger customers that like to party and go clubbing. The last groups in this category are the “little black dresses” these are those beautiful black dresses that every girl would like to have in her wardrobe.

Tops: These are types of clothes that are really convenient and you can combine it with jeans, skirts, leggings and they are mostly worn during the warm seasons. They include night-out, casual, tunics, long sleeves, short sleeves, camisoles & tanks, prints & patterns, shells.

Sweaters: These are usually in the cold seasons or usually at the middle of spring. They include tunics, long sleeves, and short sleeves, sleeveless.

Jumpsuits: These are overalls which are originally referred to as the utilitarian one-piece garments worn mostly to an occasion and mostly during warm seasons.

Pants: We have a variety of pants and it comes in various colors, trends, materials. Etc. It could be worn in the corporate environment and most times worn as casuals. They include skinny, slim leg, flare, trouser, suit pants, casual & denim

Skirts: We have a variety of skirts; they could be pencil skirt, mini skirt, tailored skirt, A-line skirt, casual skirt.

Blazers: They could be tailored and casual and they could be worn for different occasions. We intend to incorporate native fabrics to capture this niche market. This will be a bridge between the corporate apparels and native as well. This will be both fashionable and suitable for work and occasions.

Organizational Chart:

Chief Executive Officer |
Marketing Manager
Marketing Manager

Human Resource Manager
Human Resource Manager
Vice president
Vice president

Media Advisor
Media Advisor

Human Resources Management:

CEO
Karanveer Singh will be working as a CEO of our company in India. He has got one year experience working as an engineer in an industry. Basically his role in this company is to provide leadership and maintain the proper communication and information flow between office and the production unit. Managing workforce is quite difficult task so we think that by utilizing his past experience we will be able to manage workforce quite well.

He has worked for one year at Panesar Agriculture Industries Ltd. Barnala(Punjab) India. Basically company is well known for manufacturing agriculture equipment’s like harvester machine, laser land leveler, rotavator etc. He held the position of assistant engineer in the company

He has done Bachelors of Technology in Mechanical Engineering from ShaheedBhagat Singh College of Engineering & Technology Ferozepur affiliated to Punjab Technical University Jalandhar (India) in May 2011. Since June 2011, he was working with this company and gives his services till July 2012.

Vice President:
David Nmoye will be best fit to the position of a vice president of the company. Two years of progressive experience in customer service professional offering. He has proven ability to operate effectively in a variety of team roles and take leadership roles when appropriate. He played an active role in the development of new business in his family company by investing in real estate in 2010 and as at today he had one of the biggest shopping complexes in his state. He helped to increase the company income by a 100% .David Nmoye has done Bachelor of science in political science and graduated from Ambrose Alli University, Edo state, Nigeria in 2006,. David Nmoye is taking a diploma program in international business to improve his knowledge in the growing global market

Marketing Manager:
Amritpal Kaur is well-suited to work as a marketing manager of the company. She has worked for eight months in Abhishek Group of Industries Limited in Ludhiana (Punjab) India. Abhishek industries are well known industry in India known for its business in textile, chemical and IT. She started working in the marketing department of the company as marketing executive. She is very hardworking employee and achieved her sales target before the time. She has been rewarded twice for her hard-work. She was awarded with the best new emerging employee of the marketing department.

Amritpal Kaur has earned a degree in Bachelors of commerce from Guru Nanak Dev. University Amritsar, India in April 2012. Letter on she was changed to the account department of the company where she has to work with senior Chartered Accountant. She has to work on different software like tally, quick books and spreadsheets. Her performance in financial matter of the company was quite good. She worked in Abhishek Group of Industries from April 2012 to December 2012

Human Resource Manager:
Chukwuma Nwachukwu is well suited to work at that management position. He will be working in this company as human resource manager. His role in this job is to hire new employee conduct proper training for the new employees. He has worked for about three years at Diamond bank in Nigeria. He worked as a supporting customer service manager and sold the banks products judiciously.
He reduced the number of complaints and helps in increasing the sales by 30%during that job period he had increased the number of happy customers satisfied by the performance of the services.

He has done Bachelor of Science in Geography and graduated from the University of Ilorin, Nigeria in 2011 and presently he is undergoing a diploma program in International Business Management in Mohawk college Ontario. He was with the company from 2011 and gives his services till September 2012.

Media Advisor: Amritpal kaur will be working as a media advisor. She has done bachelors of technology in computer science. She is very good in communicating with different people. She has an experience of working in Wipro industries back in India. There her role is to promote the ongoing procedure that occurs in company through different media. She has done well in that job so we are planning to utilize her skills in order to promote our product in India.
External Resources:

Real Estate Agent: We are going to India and we have to look for a suitable place for our stores so that customers can easily reach our stores. So we will contact some real estate agents to find a location for our stores.

International Lawyers: India is totally a different country in terms of rules and regulations so we will need assistance from lawyers in order to deal with establish there. They will help us in legal issue that our company can face in India.

Certified Chartered Accountants: We will need assistance from chartered accountants that will assist us in understanding tax structure, help in filling our tax returns and can audit our company transaction time to time.

Transportation companies: We are sending our product to our ware house located in Mumbai. For transforming product we do need help from some logistic company. So we will make a tie-up with companies like UPS and Fed Ex to transport our product.

Company strength: Le- Chateau is one the well known internationally brand. We have got well established infrastructure unit that can easily handle to change in demand and full fill the customer expectations. Moreover we have vast variety of the excellent design according to the present trend of market. Le-Chateau has flexible group of people working in a friendly manner so that every member can utilize their skills so helps in achieving company goals. We have people that are specialized in accounting, marketing, human resource and customer’s relations.

Company weakness: One of the major weaknesses of our company is lack of working experience in India. There is no direct market outlet for le-chateau in India. Moreover our price is little bit high as compared with the local manufacturer in India. But, company is already running more than 200 stores so we are confident that we will overcome these weaknesses.

Target Market & PESTE Analysis:

India is second most populous country in the world. Based on the census of 2011 the population of was estimated to be 1,210 billion. This huge population gives us chance to enter in market. India’s climate experience four different seasons winter, spring, summer or autumn. This climatic will definitely affect us because customer preference changes according to the changing environment. Our apparels are well suited to varying weather conditions and we intend to extend as well as adapt some of our apparels to suit the climate.

India is a democratic country and has two arms of government being the central and state government. It has 28 states and seven union territories and New Delhi is the capital of India that is located in the Northern region.

India has become a niche market for clothes because of the increasing youth population as well as the growing number of the middle income class people. Another reason for India being a good market opportunity for this business is that for the past fifteen years, India has seen its GDP increased substantially. Even in the recession that took place in 2008 India was the only country that has suffered a minimum from the impact of the global economic crisis and maintains a GDP at a level of 7.1%.

Lastly government of India has recently passed a resolution in parliament that allows a 51% foreign direct investment.

Target Market Segmentation:

We will focus on population, age, gender and the average income of the middle class. As already mentioned in the aspect of population, India is a country with over 1.21 billion people out of which 59.5% of the population falls under the age of 16 – 54 years which would be our target fashion wise age group. This target group comprises of the active working class and young urban professionals. There is a growing awareness and demand for fashionable apparels in India. Le Chateau caters to the needs of both men and women. In this research, we found out that these target groups have an eye for trends and in every case are fashion wise and since our company is always trying to bring in more innovations, we believe that this target group selected would bring in more profit.

Furthermore we distinguished the different types of consumers in the target group we chose and we differentiated them according to age.

Aged (15 – 24): These are the College/ University students and they would be more interested in the causal wears, accessories for both men and women but the women in this age also buy blazers, tops, dresses, that have a brand name just like our company in order to let their peers know they are conscious with trend.

Aged (25 – 42): These are young urban professionals that are focusing more on formal wears such as shirts and pants for men and also accessories such as flat ties and belts, for the ladies lovely dress suits, shirts and skirts, because they would be on the verge of looking for a job and it is always advisable to dress appropriately for your employer.

Aged (42 – 54): These are the active working class who are mostly in offices which require you to be corporate during the week and at the start of the weekend which is Friday you could dress casual. This group would be focused on formal wears for offices for men and dresses, pants, skirts for women. Casual wear for weekends and accessories to complete their dressing. This group is mostly the backbone of the society so they tend to spend more on the formal wears and accessories.

PESTE Analysis:

Political: For any business organization political decision has huge impact on various areas of the business. India is one the largest democratic country in the world. Currently the political situation in India is quite stable one. Since independence, Indian National Congress ruled the country most of the time. The other major political parties are Bhartiya Janta Party and communist party. From the last 10 years the government is stable. The government of India is taking various steps to boost the economy. A recent example is the approval of the foreign direct investment (FDI) in multi brand retail sector and single brand retail sector.

Economic:Economy of India is the fastest growing economy in the world. So no one can ignore the importance of India as a business opportunity. India will become the fifth largest consumer market in 2025. The GDP figures were approximately $4 billion in 2012 in terms of the purchasing power. The GDP data for the previous financial year, per capita income is projected to have increased 16.9% to Rs 53,331 compared to Rs 46,117 in the year 2011. The income of the government employees has increased a lot and comes in range from Rs 34000/pm to Rs 100000/ per month. Since last year the India rupee has fell more than 30% against US Dollar.

Social:There are varieties of the religions present in India. According to the census figures 81% of the population is Hindu, Islam (13.5%), Christians (2.3%), Sikhism (2%), Buddhism (0.8%) and Jainism (0.4%). Family structure is very important in India. Religious heritage has huge impact on the business cultural in India. India consists of both male and female but the females are more fashion conscious compared to men. The men are considered the head of the family in India and hence are the ones deciding what happens in the family unit. In earlier days it was the man that decides how much money is going to spend by women and even chooses the dress for the women. But now the trend has changed a lot because of the increasing numbers of the educated population. Men and women are treated equally in society nowadays. Women that are working have more control on where they have to spend money or not.

The percentage of the male and females is categorized in the following table:

Age Group | Male | Female | Percentage | 0-14 | 187,386,162 | 165,345,284 | 29.3% | 15-24 | 116,019,042 | 103,660,359 | 18.2% | 25-54 | 249,017,538 | 235,042,251 | 40.2% |

Technology: Technology plays a key role in any business success. In India, approximately 85 million populations have social media audience. Technology reduces the cost, improves quality. There are good service providers in information technology sector. Internet user number is increasing day by day.

Environment: It includes the climate change that occurs at a regular interval of time. This change in temperature will affect our business organization as well because clothes changes according to the weather conditions. India has mainly four climate regions. These are tropical wet, tropical dry, subtropical humid, mountain. According to the meteorological department of India, there are four different seasons. These are as listed below

* Winter * Summer * Rainy * Post Monsoon

Spending Pattern: Spending patterns have changed a lot during last decade. The most important reason behind this change is the increase in annual income of the citizens. Indian are becomes awareabout their presence. A survey was conducted by credit Suisse in 2011 on Indian consumerism and it was found that 17% of the average monthly income was done with food. While 9% of the average income was spend on apparel. It is estimated that by 2020 this apparel sector will see a growth rate of 11%.

Opportunities: There was a huge shift in the trend of clothes in India in last decade. People have shown more interest in the branded cloth. Young people prefer to wear branded cloth rather than the clothes that are made locally. Buying preference has changed has lot. Approximately 48% of the population is below 50. Moreover in December 2011, the government of India has passed a FDI resolution in parliament that provides huge opportunity for the foreign investors to invest in India

Threats:There are couples of threats that our company will face in India. The major one are our business competitors like Levis, Black, etc. that are holding huge market share. Another threat that we will face is the fluctuation of the Indian rupee against dollar. Last but not the least one is competition from local manufacturers.

Market Entry Method:
In this aspect of market entry strategy we would apply two various methods in which we are going to reach out to our customers.

Direct Involvement with our Customers:
In this aspect, we would make sure we have a Le Château retail store in India, in which our products would be previewed for all our customers to make their choices from the variety of clothes shown to them. Moreover le chateau has an experience of running more than 200 retail stores so we think that this is the best way to sell our product. Moreover, we want a situation where we would be selling directly to our final customers with the help of our well trained staff. With the advent of E-commerce, we would make our products accessible on line so that our customers in India can reach out to us easily even if they do not want to come to the store. With this online shopping, we would make it easier for our customers to dictate to us how and when they want their products to be delivered to them, whether they want it immediately or in the next day or so. Online shopping will attract extra charges where applicable. Essentially, we intend to partner with DHL to handle our logistics department and we would make create a return policy incase our products are damaged in between deliveries.

There are couple of options that are available for Le-Chateau like franchising, licensing doing joint venture, merger or green field investment. But among all of them we have chosen to make green field investment as an entry method for our company.

Reason: The most prominent reason for choosing green field investment is the company past experience and resources. We have got good financial resources and maintain a good cash flow till now. Moreover we have an experience of running more than 200 retail stores so no doubt it will be best way to open retail outlet in India as well. There are lots of benefits that are associated with green field investment. The most prominent one is that we will have more design flexibility according to changing trends. Green field investment will help us to build our brand image more in India.

Lastly, creating a strong and trustful image in a customer’s mind leads to a success for any business. So we don’t want any compromise with our brand image as other methods can affect reversely on Le-Chateau. Moreover we want full control over everything.

Reason for not choosing other market entry strategies:

Joint venture:

We are considering this option because we not want to compromise with our brand name. For joint venture one to need to form a new company with other so ultimately there are chances that the venture will not succeed as the other partner is not of your standards. In this venture you have to depend on your partner for any key decision and this can result in some dispute. Moreover we don’t want our profit to be shared.

Merger or Acquisition: This is one of the costly methods for a company to enter in a new country. A huge investment is involved in this. There are lots of hurdles that are involved in this at the time of exit. Buying a company is very risky because you are not sure about the working standards as well as the reputation of the company.

Franchising: it means giving rights to someone to produce product by using the brand name and the manufacturing process of the company. But giving rights to use brand name is quite risky one as it takes years to build brand name but takes second to ruin that. We did not want our brand name suffers because of this .We are manufacturing best design products that are used in many countries. So we did not want any concession on our brand name.
Market Strategy:

1. Product: Le Chateau covers all the segments in apparel that are usually wear by men and women. For men le chateau has got varieties of formal wear, casual wear and for women we have got variations in product starting from tops, skirts, jumpsuits, pants, blazers etc. As we are planning to make our presence in India so we did not feel we need to modify our product. Our product already made according to the environment in India. As India has a variety of seasons for summer we have t-shirts, shirts, shorts and for winter we already have sweaters, blazers. We have different varieties of design that keeps us as distinct identity of our product in this competitive world. The design that is already popular in other parts of the world will be launched in India. Our product will be labeled according to standard set by the government of India. We will be following the bureau of Indian Standards act established in 1986.

2 Price: After carefully studying the Indian market, we have decided to use both the premium pricing strategy for some of our products and also the skimming and market penetration strategy. We would consider a competitive pricing strategy when dealing with distributors and wholesalers where applicable.

2.1. Premium Pricing Strategy
We would use this strategy for the wealthy (elite) customer which happens to be at least 20% of our target market. This particular segment has increased over time in the country as Indian like to identify themselves with esteemed products. This is a way of showing off their social status in the society. The majority of people believe that the more expensive a product is, the higher the quality. Le Chateau is a high quality brand that also provides affordable apparels for both men and women. We intend to attract the attention of the leaders in the Indian market which comprises of celebrities from various industries e.g. entertainment industry (actors/artist, musicians, comedians, footballers, TV presenters/personalities). The Indian movie industry (Bollywood) is highly recognized in the world. Most of the Indian are influenced by this group of people when it comes to fashion.

2.2. Reasons for Premium Pricing Strategy
We want the brand to be recognized for its high quality and unique collections. The premium pricing strategy would ensure quality control as we intend to focus on a particular segment of the market. We do not intend to reach the mass market in the first year of operations. Having considered the psychographic segment, we noted that majority of these segment would prefer a unique collection rather than a brand that provides mass production. We intend to sell limited editions where applicable e.g. red carpet outfits and other occasional apparels. Although this products will eventually be available in the store, but after a certain period of time and at this time the price would have reduced.

2.3. Skimming Pricing Strategy
We considered a skimming pricing strategy for the first 6 months of operation, after which we would introduce a bundle pricing adjustment for loyal customers. We intend to start with a minimum quantity of our products to better understand the market. We would have an edge over our competitors as the Indian market views their products as mass production and of low quality.

2.4. Market Penetration Strategy
We would consider this strategy after observing the market for a period of time, and on special seasons we would use this strategy to reach out to the below average segment that have always wanted to identify with the brand. This could either be Diwali sales, Christmas sales, Valentine’s Day Sales, summer sales, winter break sales, republic day sale, independence sales.

3.Place:
The one of the best way for Le Chateau to reach its customers is through their own stores. Le Chateau has already experience of running 236 retail stores. So by utilizing company’s previous experience we will sell our product through our stores. We will ship the entire products to by sea to the Mumbai Port. Mumbai is also known as business capital of India. Our warehouse will be situated in Mumbai. From warehouse we will transfer our product to the other locations by various transport medium like Indian railways or trucks. We will contact the railway department of India to transfer our product. It is one of the largest mediums used in India to transfer of goods. Once our product reaches the desired destination it will be transferred through small container/trucks to the stores. In India, most of the companies usually follow this system to transfer of goods from one location to the other.

Store locations: Le- Chateau stores will be located in the three metropolitan cities of India. These cities include New Delhi, Mumbai and Kolkata. The reason why we choose these cities is very simply huge population is living in these metropolitan cities approximately 55 million people are living. It means that we have got more opportunity to attract more customers. Secondly more educated people that knows about brands and new products lives in these cities. Firstly, we are focusing on these three cities later on when we establish our company in India. We will open more stores in other parts of the country so that we have large number of customers and can capture the apparel market in India.

4. Promotion:
We intend to use different means to create awareness about Le Château in the Indian market. It is very important to create a very classy and elegant impression as we introduce the brand to people. This would determine the type of people that would easily adopt this new brand.

TV and Radio Advertising: In this category, we would appear in a short advertisement that is focused on fashion. Most of the Indian is found of watching TV so it’s one of the best ways to make presence in front of the people as it has a high record of elite viewers. Our plan is to provide the producer of the different popular show with some of our apparel that would be used to style they would advertise Le Château in-between the show. The second is the radio/ FM that is a becoming a very important feature in India. Most of the Indian population listens to their local radio stations, either while driving, at home and at work.

Company website:
We will create a very attractive Le Château website. Where clients can easily see our products, they would have an opportunity to create personal accounts with Le Château. This is equally a means for Le Château to communicate with customer by adding their email address to our database and sending out our newsletters and promotional sales via email. This is very important because 55% of our target market have access to the smartphone.

Internet, Blogs and Social Media: We will create a Le Château India Facebook, twitter and instagram accounts, where customers can interact and view photos of our collections. We intend to utilize these avenues as they are very affordable and effective in today’s marketing. Number of the Indian users of social networks and all of these would be very important promotional tools.

Newspaper and Magazine: Buying of magazines and newspapers is very popular in India. This is because these newspapers also come with an additional style magazine inside them every Thursday and Sunday. The additional magazine focuses on fashion and life style, as such attracts a high number of readers. We would also consider this as a major tool to promote Le Château.

Brand Ambassadors: As a way of promoting Le Château into the Indian market we have selected many internationally recognized Indian celebrities in the entertainment industry as well as a sportsperson from cricket that we would be styling for the red carpet events and certain appearances for a period of time. For men wear we willcontact Bollywood actor like Amitabh bachchan and Amir Khan. These are the two star icon in India that has huge fan following and people try to purchase those product that are advertised by these personality. For women section we will chose some Bollywood actress like vidya balan, ashwariya rai, or sport person like sainanahiwal.

5. After Sales Services:Our Company will provide two month guarantees on the color of the cloth. We will be having a return policy that if a person buy our product and if he/she does not like the color or design than our company will replace the product within two weeks of purchase date without any additional cost.

Global Supply Chain: Refers to interconnection of different channels, networks that are involved in the establishment of the product and services that are required by the customers. Basically it involves raw material, inventory control processes and lastly the manufactured product to the end customers.
Manufacturing Process: The production of the garments occurs through various stages. These stages are shown in the following chart that gives us the detailed step by step information about the manufacturing of garment.

Design/Sketch | | Pattern Design | | Sample Making | | Production Patterns | | Grading & Marker Maker | | Spreading and Cutting | | Cutting & Sewing | | Inspection & Finishing | | Final Inspection/Sewing Defects/ Color Defects | | Packing |

Our company is going to be doing business in India. We will follow the same process that we are using in Canada because we are producing clothes that are used in the same way in all over the world.

Additional Suppliers: We are not concerned about finding new suppliers as we are a well-known brand and we have got vast experience as well as equipment’s that are used in manufacturing. We don’t want to compromise our quality as it is themost important factor for Le Chateau brand image. So we are not considering any suppliers or modifying our manufacturing process.

Packing and Labeling: We are planning to open our stores in metropolitan cities. In these cities English is the mostly preferred language. So we don’t think so it would be an issue to change the packing and labeling in India. Because our product has the necessary details and description of what kind of material is used in manufacturing i.e. what is the percentage of contents in the product? What are the various ways to wash product etc. All these things are published in English and these things are more or less the same labeling that is used in India. So that is why we are not planning to change the packing and labeling in India

Warehousing & Inventory:

Inventory Control Method: Our warehouse will be located in Mumbai. In our warehouse we will keep a minimum stock for at least one month. We will be using just in time inventory method this is due to the fact that India has a big market and we are expecting that there will be huge a demand for our product once we launched it in India. For our stores we will be following just in time inventory strategy. As in this strategy, a company increases the overall production efficiency as well as decrease waste by receiving goods as when they are required for production process.

The only concern in this method is to have an accurate forecast of demand. We know this strategy is a little bit risky one but we are confident that we will manage it well. Because supplying goods from warehouse to the stores is not a difficult task. As from our warehouse it can be easily transferred to our other location within 15-18 hours with the kind of transportation system in India.

Transportation: We will be shipping our product from manufacturing unit to the warehouse located in Mumbai. We will make contact with some logistics companies to ship our product to the required destinations. As our warehouse will be located in Mumbai it will easy for us to ship our product to warehouse and from ware house to the stores located in different parts of the country. From warehouse it will delivered to our store through various shipping modes like trucks, small containers and trains. For packing purpose during shipment we will carefully fold them. For shirts we will fold them in such a way that customers find them just like packaged in a store and place them in envelope. Shirts will be folded in a small sheets of tissue papers and then it will it will placed inside a plastic bag. Denims and pants will be folded in pair in half then half again and place it in envelope. In this way we will be packing our product so that it will be safely shipped to the required destination

Warehouse: India is a very big country and we are planning to open retail stores in New Delhi, Mumbai and Kolkata. These three cities are known as metropolitan cities in India. Our plan is to have a warehouse in Mumbai. There are lots of factors that influenced why we choose Mumbai as our warehouse location. One of the biggest ports in India is located in Mumbai. So it will be very easy for us deliver the product at port and then move these products to warehouse. Secondly Mumbai is well connected with railways to all other cities in India. So it will be very easy and convenient for us to deliver the product to the other destination.

Customer’s service: In any business customers are the backbone. Language is one of the key differences in India. In India most of people likes to communicate in Hindi that is the national language, so we have to make our customers services in such a way that we can easily communicate, understand and get feedback from our customers. For that we will contact some call center’s that will work on our behalf. We are even planning to open a toll free number that will be available 24 hours so that customers can easily get any information about our product. Moreover we will set up a website for general enquires for our customers where they can just drop a message and our representative will revert back within 24 hours. We will give a special return policy for our customer that is if they don’t like our product they can change it within 14 days of their purchase. In this way we can cross the cultural difference that exists in our target market.
Legal System
There are several different types of legal systems operating in countries around the world.
For India:
The Indian legal system is based on common law. The constitution of India is a mixture of the laws of Ireland, United States, Britain and France and these laws were modified when the constitution of India was written. For foreign investors in 2011 the government of India has passed 100% investment in single brand retail and in 2012 the government of India passed resolution in parliament of an approval of 51% foreign investment in multi-band retail. There are very strong laws that help in protecting the intellectual properties in India.
For Canada:
The Canadian legal system has origin from British common law. Most of the provinces follow common law in Canada except for Quebec. Quebec has a hybrid legal system. Companies can operate in any province under federal law.
Company contracts:
We want to sell our product in our own retail stores and we do not have any plan to have distributor yet or for it till next three years but if there will be possibility of any kind of having a distributor we can think over and there will be certain terms and conditions that need to be fulfilled.
Clauses included in our company's international business contracts. * Company: Le-Chateau959 in Montreal, Quebec, Canada
La generates sales of approximately $303.88 million. With 235 retail stores in Canada Company sells its products right to customers. We are having one retail store in New York, as well as having nine stores in UAE (United Arab Emirates). Le Château manufactures about 35% of the merchandise itself in Canadian factories with the remainder being imported.More than 3000 employees are working in the company and producing around 40% of its superior garments yearly in its own manufacture units in Canada. 1.0 Suppliers or purchasers here agrees that they will-(1.1)Represents and warrants that supplier or purchaser has the enough finance, skills, employees and resources to effectively distribute company’s products in a new territory.(1.2) Distribute the Products in the territory in good faith.(1.3) Undertakes not to take any action which materially damages the good name, reputation, or goodwill of company.(1.4) Any of the company trademarks or any of company’s products or their proprietary formulations will never be revealed.(1.4) Undertakes to maintain the good name, reputation, and goodwill of Company. (1.5) The agreement shall have a fixed initial 3 years term with a thirty six month notice period for termination.(1.6)Modify the Products without the consent of company.(1.7) Distribute the Products in other than company’s original packaging or with other than the company Trademarks without the approval of CompanyAnd if any of the above said terms will break by the contractor than the company has the right to cancel the agreement. Company will have legal rights to take any action according to law of target market. Company can move into courts to take legal.Free Trade Agreement:A free trade agreement is being negotiated between India and Canada. India and Canada have agreed to have a free trade agreement to boost the bilateral trade. Both the prime minister of the country meet last year in November and desire to complete the agreement by the end this year. In 2011-2012 the total trade was near about $5 billon and once the Free trade agreement comes into effect the figures were expected to reach $15 billion by 2015. So it will be very helpful for us if this trade agreement comes into effect as it will reduce more traffic barriers between two countries. India doeshave a free trade agreement with Bangladesh since 2004. In 2011-2012 the total trade was approximately $4.3 billion. Nowadays, there are continuous negotiations going on between India and China to sign a free trade agreement.International Treaties:No doubt protecting a company design is one of the major treaties that a company can have in this competition world. So this is one of the major concerns for our company to protect our design from our competitors that already exist in India.Intellectual property of La Chateau:The use and misuse of trademark or any kind of intellectual property such as logo, design, and product name of company is expressly prohibited and may be in violation of copyright, trademark or privacy law and publicity communication and regulations. So if any other company tries to copy company’s intellectual property we will challenge it in the courts of India.Shipping polices:Shipping is always quick and professional. We guarantee the lowest domestic shipping and lowest international shipping costs. We use the services of companies like Ups and FedEx handling time on all orders is up to three days.Return Policies:All returns are accepted within 14 business days of purchase, and will be given a full refund. If a customer is not happy with his/her purchase just come into our nearest store for return of the goods. He/she will get full refund of the purchased product.Import duties in India:The government of India has put some standard duties on the import products. Standard import duty rates that are put on clothing products are 10% whether its jackets, shirts, blazers or of silk products duty rates are 10%.Export duties in CanadaThe government of Canada does not have export duty on clothing. Le-Chateau does not pay export duty when they are exporting their products to India. If a company do import some clothing items into Canada than 18% import duty will be paid to government. But for exporting, there are no such duties so it would prove to be beneficial for Le-Chateau.Financial Statement: The financial statement of our company clearly identifies that in the first year of our business plan we will be having a profit of approximately $39300. Initial in the first month we will be having only $212 as profit but it will start increasing slowly and steady and by the year we will be more profitable company and will reach at a level of $46000.Risk Management:Every business involves lot of risks. Rick can be of different types. It can of financial matter, natural disasters, accident, credit risk and legal liabilities etcetera. But risk management is an art of identifying, making assessment and arranging these risks according to priority and following some suitable measures in order to cope with these risks so that we can minimize the probability of the unwanted event. Our business plan is not far apart from this. We will surely face some risk when we enter into Indian market. These risks can of internal type or external types. So these will be discussed in the following point:Internal Risks. Internal risks are those that are solved by the company and major involvement to mitigate these risks are done by the company. So here is list of internal risks that le-chateau will face while make its presence in India. 1. Finding locations: We are entering into a new market where we will face the most important risk of finding perfect locations for our retail store as well as for our warehouse. Store accessibility for people is considered as one of the major factor for the success of any business. If a company store is located outside the city than it would be very difficult for customers to reach our location. So this is the most important risk that we will face in India,How to mitigate this: To overcome this we will contact with real estate agents. These agents will help us in finding a good location for our stores as well as for our warehouse. A real estate agent knows the market place better than anyone else. We will clearly instruct them to find a location right in the middle of city so the customers can easily visit our stores. 2. New staff: Once we finished with our first barrier then comes the most important risk that is of recruiting new staff for our stores. As India is entirely different country in-terms of cultural as well for language so it will be an important factor for us to find a good staff that can manage our stores as well as our warehouse. How to mitigate this:As finding a good sales person is a difficult task. For new requirement we will contact some job sites like naukri.com, monsterindia.com and other companies to publish our job advertisement on their websites so that maximum candidate can apply for jobs. 3. Training of new employees: Training is very important for a business success. It is a way to develop potential of an employee. For company’s mission it is very important from an employer point of view to find a wide variety of people that can full fill the companies’ mission.How to mitigate this. Our company will provide two week training for new employees so that they can easily understand the procedure. 4. Continuity insupply: India is huge market and we are expecting that the demand of the clothes will increase in market. So we have to estimate demand properly so that we will not face such a situation when we have lot of inventory storage of our product or lack of supply would not occur.External Risks: There are some external risks for our business plan. These are listed below. 1. Major competitors: There are some major competitors in India for le-chateau like Levis, Black and we have to provide better products on reasonable price so that we can make our presence very well in India. 2. Political system: India has a very good political system. The congress lead UPA government is ruling the country from last nine years provides lot of opportunities for the foreign investors to invest in India. The recent resolution passed by the government for the foreign direct investment is a clearly example of decision making of the central government. So we hope that our business plan will not affect because of political system. 3. Fluctuation of currency: The currency fluctuation is considered as one of most important risk for any business organization. Because it will affect every sectors that involves in running a business. The overall cost of operation increase up due this fluctuation. Transportation, manufacturing cost everything increases up. 4. Change in the import duties: Every year the central government of India change import duties on product during their budget. So our company has to understand with these changes every year. 5. Transportation risk: We are sending our product to our warehouse through shipping and from warehouse to our retail stores so there is always a possibility of damage or the possibility of the goods arrived not in good conditions. So we contact some good companies like ups to deliver our product to the required destination. 6. Change in the market trend: Because of the huge population of India. The market trend changes quite often. Each and every individual has own liking and disliking we have to operate according to the change in the trend. We have to make new design so that we will have maximum number of customers attracted towards our brand.SWOT Analysis: Strength * Brand name * International recognized. * Well established infrastructure unit. * Excellent design of the products. | Opportunities * Shifting of the Indian market towards branded clothes. * Gradual change in the life style has bought tremendous shift in the buying pattern. * Presence of huge young population. * Government’s recent approval of Foreign Direct Investment policy. | Weakness * Lack of working experience in India. * Non presence of the direct market outlet. * Price of the product as compared to local products. | Threats * Regular fluctuation of Rupee with respect to Cad$ * Existing major competitors like levis, black, * Competitiveness from local manufacturer. |
Summary:Le-Chateau is going to start its business in India. Our company will do greenfield investment in India i.e. we will open our own retails stores in three metropolitan cities of India mainly New Delhi, Mumbai and Kolkata. The main reason why we choose India as our target market is that it has huge business opportunities for the foreign investors.We have done a lot of research about India and rules and regulations that helps in running a business in India and we came to know that there are fewer regulations on the apparel business in India as compared with other business like food, automobile sector etc. In our business plan we have done SWOT and PESTE Analysis of our company as well as India and seek a great opportunity in India.Moreover, our company is going to target the young population of India as there is a great demand among youth to have branded clothes. We have got enough sources as well as equipment`s so we are very confident that we will cope with the demand. We hope that Le-Chateau will be a successful brand in India once we make our presence there.Conclusion:Considering all the above factors finally Le-Chateau is ready to enter into Indian Market. In our business plan, we have considered many factors like income, age group, tax structure, government regulation etc. Based on those facts we finally reached at a conclusion to enter into market under the brand name of Le-Chateau Inc.But, we have set our goals into two categories i.e. short term goal and long term goal. Our short term goal is to enter Indian market as quickly as possible to grab the business opportunity. So at the present time we are planning to open three retail stores under the brand name of Le-Chateau The cash flow and financial statements of Le-Chateau shows the present economic condition and estimated forecast of the company. It is clear from the statement that we have enough funds to penetrate into the Indian market. Secondly, there is a huge business opportunity for the foreign investors to invest in market so we would like to capture that opportunity. We have set our price after considering all the expense and still the price is quite reasonable.Once we have achieved our short term goal, then we will take further steps to reach our long term goals. Our long term goal is to open more retail stores in other cities so as to capture the largest market share in apparel sector in India. We need to create a strong brand image in before we can reach our long term goal. We see by five years from now our company will be the biggest foreign company in India and will grab more attention of our target age group by continuous innovations in our designs and quality. To sum up all, our company is quite different from our competitors and we will provide better quality products at reasonable price and with got support services.References:Index Mundi. (2011, January 1). Retrieved from www.indexmundi.com: http://www.indexmundi.com/g/g.aspx?v=21&c=in&l=enclimate of india. (2013, April 29). Retrieved from http://en.wikipedia.org/wiki/Climate_of_IndiaIndian Consumer Market. (2013, May). Retrieved from Indian Brand Equity Foundation: http://www.ibef.org/industry/indian-consumer-market.aspxThe Economics Times. (2013, Febrauary 07). Retrieved from economictimes.indiatimes.com: http://articles.economictimes.indiatimes.com/2013-02-07/news/36972679_1_constant-prices-income-in-real-terms-capita-incomeMarket Entry India. (n.d.). Retrieved from http://marketentryindia.com/: http://marketentryindia.com/indian-consumer-spending-patterns-article-2-of-consumption-inCustom Tarif. (2008). Retrieved from http://www.cbsa-asfc.gc.ca/: http://www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2008/01-99/ch61-eng.pdf
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