Planning the future strategy for retail brand Mother Earth.

1. STRATEGIC MANAGEMENT
Strategy for Mother Earth
Deepak Sharma
Harbinder Singh
Pavan S K
Praveen P.
Pushkar Choudhary
Siddhardha Pendyala
Snigdha Smitahasini
Vikas Sharma
Presenting
Team

2. VISION, MISSION & GOALS
 VISION: Connecting rural livelihood skills to
urban markets in an equitable way.
 MISSION: To enhance and create rural
artisanal livelihoods through marketing of
contemporary designed artisanal produce, such as
food, apparel and home products, for urban
markets, wherein producers own equity, in the
production and retail brands.
 CORE VALUES: Transform the lives of rural
producer communities, by integrating them
sustainably into the larger consumption economy
through a for profit institutional model of ownership
integrated with design, production and marketing

3. BUSINESS OVERVIEW

4. FOUNDATION
 A social brand, Mother Earth offers consumers the best of
the Indian natural hand crafted products while
simultaneously providing livelihoods to the rural artisans
and laborers of India.
 Mother Earth is a brand with a deeper essence. To the
customer it is not just about merchandise, but a promise
that the brand offerings are natural and healthy and hence
safe and good for customer, society as well as for the
planet Earth.
 Under the personal mentorship of Future Group
Chairperson, Kishore Biyani, the brand saw its true
potential, which in-turn reflected in customer
appreciation.

5. EXPANSION & SUCCESS
 Mother Earth is an organization which is responsible
for the design, production and sales of products.
 Products including furniture, gift items ,garments
(woven, embellished or stitched by rural artisans),
food (organic and natural), natural fiber products,
handicraft decor.
 Currently we have 7 stores which are company
owned.

6. IDEA BEHIND MOTHER EARTH
 India has a big institution of traditional
occupation, expert in the production of
everyday use products.
 It is only natural that this talent base needs
to be explored further to produce modern
day products such as food, fashion and
home.
 Mother Earth creates an ecosystem to make
this possible

7. MARKET PLACE TODAY…

8. MARKET FOCUS
Markets
Mainstream
High Volume
Mostly global
players
Tourism sector
High Value
Designer /
High fashion
market
Fair Trade
Western
concept
FOCU
S
AREA
S

9. PLANET, PEOPLE AND PROFIT
 The franchisee route - is the best medium to
reach out to a wider customer base which is
why we wish to take it up for expansion.
 We need a business partner who shares the
same vision and passion for retail and social
cause like we do.
 And who also believes in triple bottom-line
concept ‘Planet, People and Profit’, not just
profit alone.
 Our USP is that we have a right amalgamation
of „social retailing‟ and „main stream retailing‟.
 Target Market - our presence was mainly in
metros; with a store in Mysore, we are entering
Tier II cities. With franchising, we expect to
expand our reach in Tier II towns.
Mother Earth is planning for expansion in
India

10. FRANCHISEE MODEL
 Start-up investment cost
varies between ₹30-45 lakhs
 Store size would be preferably
around 1,500-2,000 sq. ft
(carpet), either in a mall or in
main market places
 Break even period is between
2.5 to 3 years and expected
ROI is between 30 to 35 per
Profitability with Sustainability

11. ORGANIZATION STRUCTURE
The organization consists of three entities
Industree Crafts
foundation
• Which supports
artisans in rural areas
with design and skill
development
Industree Crafts
Pvt. Ltd.
• They handle all
commercial activities
and have their own
production centers.
Industree
transform Pvt. Ltd.
• This entity takes care
of all back end
functions such as
sourcing,
procurement, sorting,
ware housing etc.

12. BUSINESS MODEL

13. BUSINESS OVERVIEW
 Home Décor
 Personal accessories
 Natural Fiber
 Furniture
 Organic Food
 Clothing

14. INDUSTREE TODAY
 Mother Earth – retail brand of Industree (2009)
 Future Group investments (2010) close to USD 1.5M
(43%)
 Grown to 10,000 artisans , 15 states, 8 stores, 16 Cr
revenue
 Augment income through market linkages
 Industree BIG‟s (Business Interest Groups)
 Provide support (arrange loans @ 13-18% interest, PO, skill
trainings)
 30% merchandise from BIG‟s, aim to grow to 50-60%
 USD 1M – Grassroots Business Fund (initiative of World Bank
& IMF)
 Distribution through e-commerce (myntra.com), plans to
enter wholesale market
 Handicrafts contribute only 2% of global creative industry
 Make craftsman part of the value chain
 Net profit margins close to only 2% - To promote high
quality products at lower prices. SOURCE: MONEYCONTROL.COM,

15. SWOT ANALYSIS
Strengths
• Favourable trends - Approx. 85% of the
consumers willing to switch their brands. Also, 55%
of the consumers are also willing promote its
product, if it supports a good cause.
• Successful in getting foreign investments
• Tie-up with government agencies – NSDC,
JCI
• Strong backing of existing BIG‟s
• Apt positioning of brand in consumers
• Export of creative goods
Weaknesses
• Interruption in supply
• Quality control – meeting international
specifications
• Geographical hassles – lack of
coordination
• Organic farmers, higher costs for
organic foods
• Capacity and skills
• Poor technological upgrade
Opportunities
• Tap the „conscious customers‟
• Scale up stores, growth in volume (organic
food)
• Stringent government regulations –
environment
• International markets – enhance greater
share
• New products – diversification, bring more
BIG‟s under the umbrella
Threats
• Labor migration – losing skill
• Certification cost for organic farms
very high
• Natural calamities
• Cheap duplicates from China
• Import of natural fiber goods from
SEA
• Competition - FabIndia / Anokhi /
Craftsville / In The Pink

16. ‘PLAN-DO-CHECK-ACT’ CYCLE
 Consumer feedback – VOC
 Build trends to project future demand areas
 Strategize to create a roadmap
 Invest & develop into the profitable segments
PLAN
DO
CHEC
K
ACT

17. CUSTOMER PREFERENCE & PERCEPTION
 Survey with 1000 customers through mail, 28 responses received
 75% feedback at store & 25% by email
 A formal internal monitoring system to gather information - needed
 “For a change feel proud after shopping and not guilty” – customer comment
Natural fibre
products
Craft
products
Organic food Apparel
54%
50%
46%
50%
Natural fibre products Craft products
Organic food Apparel
15%
58%
27%
Exceptional Satisfactory Could be better
Train staff on products
Visual merchandising
Media coverage
Reduce prices
Better customer service
Reach to middle class
23%
8%
15%
31%
8%
15%
9%
20%
7%
15%
8%

18. PROPOSED STRUCTURAL CHANGES
 More autonomy at the operating level
 Leadership can focus on broader issues of
setting up retail stores, support
producers, enhance market links etc
 Performance unit model can be adopted – key
growth areas (clothing, crafts, food)

19. CRAFTS AND ACCESSORIES
 Development of strategy:
 Upgradation – Product, Process, Function, New
markets
• Short term (< 3 yrs) –
• Strengthen „earth home‟- existing product line (jute
products)
• Medium term (3 – 5 yrs.) –
• Product variety - connect more artisans to market –
glass ware, stone sculptors, brass
works, gemstone, pottery etc
• Long term (> 5 yrs) –
• Interior decoration, office space design, eco living
etc

20. CRAFTS AND ACCESSORIES
 Implementation of Strategy
 Short term (< 3 yrs.) –
• Raw material de-bottlenecking – post harvest facilities, increased
availability of quality seeds, financial support
• North-east Development Finance Corporation (NEDFi)
• Jute Enterprise Development Scheme (soft loans-25% @ 1%, cost
< 10lacs)
• Scheme for North east Handloom & Handicrafts (soft loans-25% @
1%, cost < 20lacs)
• New source (1.87 Cr): NEDFi – Haat, participants with no marketing
outlet
• Oju Craft Centre, Arunachal Pradesh (experts in weaving)
• Mishing Weave, Assam
• Industree contribution – 20 day training @ R&D centre, Khetri on
water hyacinth development program, support mechanization
projects,
• Strengthen exports – Pier Europe, Ikea, Crate & Barrel
• Quality control
• Ownership by producrers

21. CRAFTS AND ACCESSORIES
 Implementation of Strategy
• Medium term (3 – 5 yrs.)
• Social workshops - awareness, motivation
• Reduce dependence on captive market, move up the value
chain, producer owned brand (shop-in-shop)
• E.g. Glassware:
• Focused funding - micro credit
• Set up collection center, logistics - Firozabad, UP
• ID cards, toll free numbers, insurance, basic training (packing, designs)
• Long term (> 5 yrs.) –
• Collaborate with National Skill Development Corporation to set
up skill development company – 2 lac producers to benefit in
10 years
• Grow to 25 stores, target Rs 160 Cr through expanded
product offering
• Concept of eco-sensitive living – help build self-sustaining
homes (solar, ventilation, water conservation), resorts

22. ORGANIC FOODS
 Development of strategy:
 Short term (< 3 yrs.) –
• Mother earth brand for organic foods, organic dairy
products
• Help increasing awareness about organic food, organic
dairy products
 Medium term (3 – 5 yrs.) –
• Independent organic food stores
• Help increasing the production of organic foods, organic
dairy products
 Long term (> 5 yrs.) –
• Supply organic food to restaurants
• Grow organic food consumption beyond the Metro cities
• Help the transition from non-organic to organic foods for
masses

23. ORGANIC FOODS
 Implementation of Strategy
 Short term (< 3 yrs.) –
• Contract farming
• Sell organic food with the Mother Earth brand
• Tie-up with big retailers (e.g. HyperCity) to sell
organic food
• Tie-up with Future Supply Chains for logistics.
 Medium term (3 – 5 yrs.) –
• Work with OFAI to raise awareness about
organic food
• Contract / Co-operative farming
• Help farmers in the certification process for
organic farms
• Set up independent organic food stores (own
stores)

24. ORGANIC FOODS
 Implementation of Strategy
 Long term (> 5 yrs.) –
• Set up air-conditioned warehouses, boost up own
logistics
• About 20 per cent of all foods produced in India (₹ 500 B)
are wasted due to the lack of cold chain infrastructure.
• Government of India allows foreign equity participation of
51% for cold chain projects
• More organic food stores through franchisee model
• Open organic food stores in Tier-II cities
• Help increasing production of organic dairy
products
• Demand for milk expected to rise to 180M tonnes by 2021-22
• Tie-up with restaurants to supply them organic food
• Increasing exports (with APEDA)
• Indian Organic Food exports grew by 33% YoY (2010 to
2011) to USD 157M
• Global Organic Food market expected to be worth USD
105 B by 2015

25. FURNITURE PRODUCTS
 Solid Wood furniture products are
preferred by home buyers in India.
 85% of all furniture production in India is in
unorganized sector
 No clear records of the number of artisans
– reports vary from 100,000 registered
wood ware units and more than 200,000
artisans
 India is net importer of timber, typically
from East Asia / Africa and organized
sector also imports finished furniture
products from West.

26. FURNITURE PRODUCTS
 Implementation of Strategy
• Set up the Short term (< 3 yrs.) –
• Create a Mother earth „Green‟ Brand for furniture
• Ensure immediate supply by creation of SHG‟s in
tribal areas.
• Medium term (3 – 5 yrs.) –
• Ensuring supply – promoting local agro forestry
plantations.
• Introduction of non-traditional wood sources to
artisans – e.g. Rubber wood
• Tie up with Tourism resorts promoting „ethnic‟
experiences
• Long term (> 5 yrs.) –
• Scale up supply , possible expansion of Indus Tree
Craft foundation model to countries where timber is
available.
• Training workshops for new designs – office /
corporate furniture products

27. NEW VENTURE
ORGANIC BEAUTY PRODUCTS

28. ORGANIC BEAUTY PRODUCTS
NEW VENTURE…….
Strengths
• Visible shift in universal trend from synthetic to herbal Products
• Nature has bestowed our country with an enormous wealth of
medicinal plants
• India has often been referred to as the Medicinal Garden of the
world.
• Increasing realization of the side effects of allopathic medicines
Weakness
• Get the raw material
• Funding from multiple source
• Strong back end support

29. ORGANIC BEAUTY PRODUCTS
NEW VENTURE…….
Opportunities
• India has a vast and rich resource of herbal raw materials and it can create a
niche for itself in the global herbal market if the domestic industry produced
quality products of international standards
• Annual turnover of the Indian herbal industry about Rs. 7,500 cr.
• Current Growth rate is more than 15%
• Small-scale players in the sector are likely to witness brighter times ahead
Threats
• Existing Players in the Industry like Shahnaz Husain , VLCC, Himalayan
, Lotus etc
• Customer Acceptance to a new brand
• Natural Calamity may hamper production & Transportation

30. ORGANIC BEAUTY PRODUCTS
 Development of strategy:
• Short term (< 3 yrs.) –
• Skin care products
• Hair care products
• Medium term (3 – 5 yrs.) –
• Health care Products
• Long term (> 5 yrs.) –
• Beauty Salons
• Spa

31. PERSONAL CARE
 Development of strategy:
• Short term (< 3 yrs.) –
• Skin care products
• Hair care products
• Medium term (3 – 5 yrs.) –
• Health care Products
• Long term (> 5 yrs.) –
• Beauty Salons
• Spa

32. PERSONAL CARE
 Implementation of Strategy
• Short term (< 3 yrs.) –
• Get a team of experts to prepare the formulas from natural resources
• Blend natural ingredients with the science of dermaceuticals for
clean, non-toxic products that offer visible results.
• Get the raw materials from multiple sources
• Set up the workshop for production
• Medium term (3 – 5 yrs.) –
• Tie up with suppliers for health care material
• Set up production plant
• Long term (> 5 yrs.) –
• Set up for beauty Salons & Spa
• Tie up with suppliers, strengthen the production capacity
• Funding from bank & foreign investors

33. PRODUCT LINE
 Aloevera Gel and Powder
 Herbal Natural Essential Oil (Super Critical Liquid
Carbon Dioxide Process)
 Essential Oil from Rose Flowers
 Herbal Cosmetics
 Herbal Extracts
 Sennosides from Senna Leaf

34. DETAILED PROJECT PLAN
Product
Plant
capacity
Plant &
Machinary
Working
Capital
T C I
Aloe Vera Gel and Powder 50 Kg/day Rs 55 Lakhs Rs 17 Lakhs Rs 120 Lakhs
Herbal Natural Essential Oil
(Super Critical Liquid Carbon
Dioxide Process)
52 Kg/day Rs 76 Lakhs Rs 67 Lakhs Rs 190 Lakhs
Essential Oil from Rose Flowers 400 ml/Day Rs 8 Lakhs Rs 4 Lakhs Rs 29 Lakhs
Herbal Cosmetics
1.83
Tonnes/Day
Rs 11 Lakhs Rs 10 Lakhs Rs 26 Lakhs
Herbal Extracts 1000 Kgs/Day Rs 45 Lakhs Rs 93 Lakhs Rs 186 Lakhs
Sennosides from Senna Leaf
1500
Kgs/Annum
Rs 7.2 Lakhs Rs 5 Lakhs Rs 35 Lakhs
Rs 202.2 Lakhs Rs 196 Lakhs
Rs 586
Lakhs
Total Capital Investment of Rs 5.86 Cr.
Break even in 2 years

35. STRATEGIC CONTROL
 Monitor fund utilization – social
audit – volunteers – grass root
level
 Incremental analysis –
surveillance, ROI, market demand
– fund managers, cost accounting
 Trial of new initiatives with pilot
projects
 Alter plans – unexpected events –
change in socio political
conditions, natural calamities

36. SOCIAL AUDIT
 The artisan gets ₹58 (US$ 1.38) of every ₹100 (US$
2.37) from the sales.
 The median monthly income per producer has
increased by ₹1000 (US$ 23.78)
 Since its inception the number of artisans that the
organization has been involved in have tripled.
 Profits increased 4 times since inception
 A large proportion of these profits are ploughed back
into the business as capital advances to artisans.
 A conscious effort to have a broad based and
geographical diverse producer base that is
economically viable.
SOURCE: MONEYCONTROL.COM,

37. EVALUATION OF STRATEGY
 Surveys
 Pilot project evaluation
 Customer connect
 Channel partner evaluation

38. THANK YOU!

39. Backup Slides

40. INDUSTREE CRAFTS / MOTHER EARTH
 Introduce 20 shops in next 3 years.
 Currently there are 4 shops of 10,000 Sq. ft. each
 Need to expand to 12 similar stores and 25 stores of
1000 Sq. ft. size.
 Current revenue per square feet is Rs. 800
 Revenue split up in order is Big shops (60%), Small
shops (20%) , SIS (10%) , Rest (export etc.) (10%)
 Total Cost split up – Mother earth( 70% retail stores
(rent etc.) , 8% head office) , Transform ( 6.5% head
office , production center (machines etc.) 7.5% ,
Foundation ( 2.5% group enterprise, 3.5% consultancy
firm expenditure)
 Sales target currently Rs. 5 crores. Future plans for
Rs. 160 crores
SOURCE: MONEYCONTROL.COM,