INSTITUTE OF MANAGEMENT SCIENCES

(IMS)
LUCKNOW UNIVERSITY

A BUSINESS PLAN
ON

PIC CARPET

Submitted to:DR. RITU NARANG

Submitted By :MERAJ AHMAD

MBA-[RM] SEMESTER 4
ROLL NO. 11001122015

INDEX
Preface
Acknowledgement
Brief History Of Carpet Industry
Industry Overview
Production Centers
UNDP Carpet Project
Company Profile
Features & Business Policy
Organizational practice
Types of Carpets
Manufacturing Process
Hand-made V/s Machine-made Carpets
Key Market Players
Export Data & Statistics
SWOT Analysis
Present & Future Growth Drivers of the Industry
Conclusion

PREFACE
The project provides the most natural condition under which
students can learn and get success in solving the problems of
their day to day activities.
It helps a student to learn, to improvise, to intent, to experiment,
to find knowledge in all possible ways and to translate that
knowledge into action. It is a scientific method of imparting
knowledge based on Principles of Practical experiences and
creative activities.
With the rapid industrialization, the need of management is felt
everywhere. Management, in the modern times primarily means
handling men, machine, money, and material in the most
optimum manner.
To introduce this practical aspect of management education A
Summer Internship Project is an obligatory requirement for the
partial fulfillment of M.B.A. (Master of Business Administration) at
I.M.S. University of Lucknow, Lucknow.

ACKNOWLEDGEMENT

I hereby take the opportunity to express my profound sense of

great reverence, awe and gratitude to all of them who have
helped me in the success completion of this discretion project.
I wish to express my sincere gratitude to Mrs. Ritu Narang and
Miss Smita Singh, Institute of Management Sciences, University of
Lucknow, for their guidance and support rendered to me in
solving my problems and difficulties that I faced in completing this
task on such a varied and vast subject.
Last but not the least I take this opportunity to express my
heartfelt appreciation for my colleagues for their support and
encouragement.

Meraj
Ahmad

A BRIEF HISTORY OF INDIAS CARPET INDUSTRY

Indian carpets are considered to be one of the most traditional

and technically accomplished. The carpet industry of India has
grown with time and has gradually reached its height of fame,
such that Indian rugs are renowned for their exquisite design,
elegant craftsmanship, beautiful designs and impressive color
matching.
Area Rugs were known to be weaved in India since 500B.C. and
woven mats and floor coverings have been found from the
ancient times of Indian civilization.
But the real carpet industry of India started in 1500 A.D. during
the reign of Akbar. During this period, he brought Persian
craftsmen from their homeland and established them here.
Initially carpet weaving started in the Persian tradition and
design. Gradually it blended with the mughal as well as Indian art.
Thus the carpets produced at that time became typical of the
Indian origin and gradually the industry began to diversify and
spread all over the subcontinent.
From the beginning, silk has been the basic material to produce
area rugs. The type of silk depended on the quality of the carpet
produced. The silk carpets had floral patterns, animal or bird
figures.
The are rugs produced during Akbars reign were generally made
of cotton and silk, and used shades of blue, green and several
other colors on a red base. The carpets were initially made
according to the Persian style but later adopted the Indian style.
Carpet means one type of thick fabric equipped with extra yarn
on its surface-fabric which is termed as 'Pile'. This pile is produced
by the support of warp yarn or support of weft yarn. The term was
also used for table and wall coverings.

Carpets are used in households, offices, hotels, functions,

occasions, public gatherings and many more places to list. Apart
from beautifying the surroundings they are prominently used to
pronounce the theme. To satisfy an immensely varied target
market, there exists a huge range of carpets encircling all kinds of
classifications in carpet manufacturing. Be it according to type of
fabrics or according to design or weaving techniques, carpets are
available in various ranges to fulfill the market demands.

Most commonly used fabrics to make carpets are wool (warm and
durable), silk (most exotic), jute and some synthetic fibers like
nylon, polyester, olefin and acrylic; out of which polyester is
durable of all. Bamboo carpets and Coir carpets form a different
range of eco-friendly carpets.

One can select out of almost twice a dozen designing patterns of

carpets. Ranging from the oldest and plushiest Turkish and
Persian carpet to colorful Kashmiri carpets, they encircle a variety
of cultural influences inscribed in designs.

Only a broad and vague classification can be done according to

the weavers skill. Generally hand knotted, hand tufted and hand
woven carpets with some more types constitute this category.

INDUSTRY OVERVIEW

Though floor coverings in India are one of the most

ancient crafts followed till date the typical pilled carpet
more commonly known as the Kashmiri carpet in India
and oriental carpet internationally reached here in the
14th century. Since then the carpet industry has
developed leaps and bound in terms of production, styles
and patterns and so in the markets.

PRODUCTION CENTER

BHADOHI,
PRADESH)

MIRZAPUR,

VARANASI

REGION

(UTTAR

This region boasts maximum carpet production. The country owes

90% of its carpet production to this region. The quality was
medium with 60 to 80 knots per square inch with certain
improvements in past few years. The belt is known for Fashion
Oriented, Hand- tufted, Indo-Tibetan carpets and has a major
influence of Buddhist arts and patterns. The place also specializes
in traditional woolen carpets and durries. The carpets here are
known for their unmatched style and elegance.

UNDP CARPET PROJECT

UNITED NATIONS DEVELOPMENT PROGRAM (UNDP) : Hand

knotted carpet project was launched in 2011 to establish a
distinctive Indian character in carpet designs and simultaneously
upgrade the technology. This enabled better quality carpets
combining the fresh designing skills with the age-old traditions.
Many partners including NIFT and CEPC came forward to make the
task possible.

OBJECTIVES
The main objective of the project was to accelerate exports and
establishing a brand name.

Develop and market new designs based on Indian ethnic

themes.

 Involve importers in us markets and enhance the scope

through road shows and participation in fairs & exhibitions.

Introduce new tools and looms developed by Indian Institute

of Technology, Delhi to improve productivity and quality.

Encourage production of carpets based on vegetable dyes.

INITIAL PROJECT PARTNERS

NIFT & Designers
IIT, Delhi
WRA, Mumbai
IICT, Bhadohi
CEPC & Exporters

DESIGN, CONCEPT & DEVELOPMENT

The hand knotted carpets produced till now were based on
traditional Persian patterns. The Indian carpets, they did not have
any uniqueness accept the variety in prices and quality. The
designs and patterns followed were the ones passed for
generations with hardly any artistic changes in them.
Further more the market trends were changing and the changes
had to be brought into the craft for its sustenance and upliftment.
All these aspects were dealt with in a professional way involving
all partner associations. New designs received very encouraging
response in international market.

This has led to investment towards professional design experts by

Indian exporters Indian More and more exporters have started
developing and marketing carpets having Indian identity.
After improving on these basic aspects regarding quality, variety,
technology and patterns, a strategy was developed for the
marketing of the products. First, establishing a brand name was
important. For the purpose the task of promotion in India.
The finished carpets were displayed in various shows and fairs in
India and then in U.S. and Europe. For the project, IIT-Delhi
developed improved looms, hand tools, washing, squeezing and
drying chambers.
The Wool Research Association worked on the standardization of
the extraction process of dyes, making the venture eco-friendly
and promoting awareness of the potential of natural dyes. The
Indian Institute of Carpet Technology has set up design studios
and the Carpet Export Promotion Council is into showcasing the
collection worldwide.

COMPANY PROFILE

Its THE PiCARPET, which means pictured carpets. Normally the

Carpets are the main elements that are desirably used as the
home decorative.
The carpets are mainly used to cover the floor with the matching
hues & colors of the wall. Therefore, with due respect to the facts
that are associated with the floor coverings as well as the wall
combination, this firm has a better approach to make which is a
unique one in its own way.
The firm deals with the carpets that are handmade, i.e. Handknotted and Hand-tufted. Hence, the research & development,
innovations , introductions , re-introductions , adaptations , etc.
are carried on , on a regular basis.
The firm prefers long term programme business but generally , it
maintains bulks & bulks of ready stocks . These ready stocks are
kept in the various warehouses that are designed in order to store
the products in various sizes and quantities so that the customers
requirements can be fulfilled timely and efficiently .

OUTSTANDING FEATURES & BUSINESS POLICY

The firm has well trained and experienced staff which
performs their activities in their best possible manner.
The Management vests in the hands of the owners
themselves , who are well qualified and experienced enough
to carry on the business , interact with the clients and
customers and perform the day to day activities
effectively and efficiently .

Originators of New Designs in Latest Modern as well as

Traditional Color Combinations.
Successful in making Qualities from 5/40 to 18/90, even
Durries.
Foresightedly produce Persian, Tibetan, Aubusson, Modern,
Chinese as well as Super Nepal Designs, Shaggy, Tiffted,

Handlooms & Dhurries as well in any color and size upto 14

feet wide.

Have Dyeing, Spinning, Weaving, Washing, Finishing units,

etc. all under one roof.
Always use High Quality New-Zealand, Indian as well as NewZealand blended wool for their Qualitative Carpets.
Prefer long term Program Business.
Generally, maintain a Ready Stock worth Indian Rupees 20
million and even more at times.
After Sales Service Business Policy.
Honesty is the main weapon

Selection of Designs: The designs are selected as to

which design is in demand or which has a demand in the
market

by the customer.

 Issuing Orders: The selected designs are issued to the

various contractors that are present and the orders are
placed according to the capacity of each contractor as
well as requirements.
Receiving of finished goods: The after they are
made are brought in by the contractors to whom the
orders are placed and are received in a very systematic
manner.
Color Check-up: The colors are taken care off, as to
avoid any kind of a fraud that may occur in the entire
process. The exact required colors are checked.
Quality check: The quality is checked as per the
traditional method, i.e. by counting the knots as per the
desired proportion.

Measurement: After the quality is checked, the next

process is Measurement. The size is measured as to
ensure whether the actual required size is maintained
or not.
Washing: The next step after the measurement is
washing. The Carpets are sent for washing so that the

exact picture can be analysed, such as color, size,

shape, etc.
Finishing: The finishing touch is given to the carpets
such as cutting, coloring, shaping, cleaning, etc. The
carpets are given the final touch in the way it is
demanded by the customers.
Inspection: After finishing, the carpets are inspected
by the top management or Production Manager who is
given the responsibility of Production.
Ready Stock : After meeting all the above procedures ,
the goods are kept as the ready stock into the godowns or show rooms as and when needed .

ORGANISATIONAL PRACTICE

Selection of Design.
Issuing orders.
Receiving of finished goods.
Color check up.
Quality check.
Measurement.
Washing.
Finishing.

 Inspection.
Ready Stock.

TYPES OF CARPETS
There are various kinds of carpets available in India. These are as
follows :
Hand-knotted Woolen Carpets
Tufted Woolen Carpets
GABBE Woolen Carpets
Handmade Woolen Dhurries
Pure Silk Carpets
Staple or Synthetic Carpets
Chainstich Rugs

Each kind of carpets has its own tradition, design and significance
catering to different needs of customers. They have developed
unique competitiveness in the respective categories.

MANUFACTURING PROCESS

Hand-made carpets are technically very different from machinemade carpets. As it is quite relevant from their names, handmade carpets are woven by hands while machine-made carpets
undergo treatments by various machines
Process of hand-made carpets
Process of machine-made carpets

HAND-MADE V/s MACHINE-MADE CARPETS

Carpet is a textile floor covering that is fixed to the floor surface

and extends wall to wall. Such a textile floor covering is
manufactured in two ways: hand-made or machine-made.

One of the most prominent differences between hand-made and

machine-made carpets is that the former holds a valuable
impression.
The other main difference between these two types of rugs is the
actual manner of construction. Machine-made rugs consist of
plastic derived fibers being glued onto a strong plastic base which
makes them initially very durable, but over time the adhesive
degrades and the fibers detach easily from the base.
It is said that for rooms with modern designs or active areas with
high traffic or children, machine-made rugs with contemporary
designs are excellent.
On the other hand, there is a common misconception that handmade oriental rugs are delicate and not durable. Their ornate
designs and soft feel often deceive many.
More clarity on the differences can be explained in terms of:

Knots used
Sides and Ends sewn
Back of the carpets
Materials used
Touch
Manufacturing process

Knots
Machine-made rugs and carpets are not woven by hand but are
loomed by a computer generated system or apparatus. There
are no knots in machine-made rugs. Whereas in a hand-made rug,
each knot is hand knotted and tied. In machine-made carpets,
threads are glued or looped onto a hot latex (plastic) backing

which cools and hardens. They show a complete and rigid

uniformity in manufacture which transforms into a static design.
Machine-made rugs generally lack spontaneity and human touch
Sides and Ends
In a hand-made or hand-knotted rug, the fringe is part of the
rug. The fringe is not sewn on as an extension, as is the case in
machine-made rugs. Machine-made rugs always have serged
sides or machine stitching on both sides of the rug, as opposed to
a hand-knotted which will be irregular and imperfect.

Back
In power loomed or machine-made rugs the stitching on the back
is very consistent. They have extremely regular knots and even
structure remains identical in all parts of the carpet. On the other
hand, in hand-knotted rugs the stitching varies slightly due to
different tensions on the wool as people hand-tie the knots.
Most hand-made rugs and carpets are covered with a cotton or
canvas backing.
Materials
Acrylics and other chemically processed materials are usually
used to make machine-made carpets. Hand-knotted rugs and
carpets use pure organic wools.
Touch
You can also differentiate a machine-made and hand-made rug
simply by touching. If you place one finger on the front of a
machine-made rug and your thumb on the back and pinch tightly,
the rug will compress greatly and you will feel a sensation going
right through one side to the other side. On the other hand, while
pinching hand-made rugs you will feel much more body and

substance.

KEY MARKET PLAYERS

Following are the major importers in the industry
1. Nourison
2. V. Heinrich
3. Theo Keller
4. Wissenbach
5. Abeth
6. Roubeni
7. Feizy
8. Capel
9. ABC
10. Obittee
11. Kalaty
12. Noonoo

13. Trans-Ocean
14. Beneleve
15. IKEA

EXPORT DATA
Initially Indian carpets were considered poor manifestations of
Persian rugs and carpets. Gradually and steadily they have been
accepted as original works of art.
They have been accepted in the international markets and come
under the good carpets category. The trends in ewxport growth
are clear indicators of the change.
For a time involvement of child labour caused a set back to the
industry , it's growth and export, it was covered up soon with the
mutual hard work and inputs both from the government and the
manufacturers.

EXPORT STATISTICS
PRODUCTS

VALUE OF EXPORTS
April-March
April- March
Value
Crores

in

Value in
Rupees Million

2009Percent
10
2010- age
11
increase
(+)
/decreas
e(-)

U.S.

20122011- 13
12
@40.2
@45.4 513
810

Handmade
2234. 2076. (-) 7.07 491.3 515.9
Woollen
63
57
3
0
Carpets,Rugs,Dr
uggets,
Durries,etc.
including Cotton
Carpets
excludings
Handmade
Woollen
Tufted
Carpets

Dollar

Percenta
ge
increase(
+)
/decreas
e(-)

(+) 5.00

1156.
255.2
Handmade
1161. 70
(-) 0.38 5
287.4 (+) 8.68
woollen
tufted
10
0
carpets
Handmade
Carpets
Handmade
Staple/
Synthetic
Carpets
Total

(+)
Silk 212.4 221.8 (+) 4.42 46.71 55.12 18.00
7
7
66.66

69.59

(+) 4.40

14.65

3674 3524 (-) 4.09 807.

.86
.73
94

17.29 (+)
18.02

875.
71

(+)
8.39

SWOT ANALYSIS OF CARPET INDUSTRY

Indian Carpet industry is a unique kind of industry. Its highly
unorganized with lack of proper channels. Still, it has managed to show
impressive performance in the past. What is behind this industry which
drives the Exports?
One can not forget that it had significant share in Indian exports
till early 1990s. SWOT analysis will bring forth the value drivers
and stumbling blocks in this industry.

STRENGTHS
Artistic skills: Over the period, major carpet centers have built
huge network of artistic weavers. The industry currently is employing
millions of people directly and indirectly. They are highly skilled in this
areas.
Costs : India has an advantage in terms of costs. The labor costs in
India are comparatively low. Also, total cost of producing a carpet is
low compared to countries like Turkey, Iran with out compromising on
quality fronts heavily.
Innovations: Innovations is one of the major criteria for selling
carpets. As carpets are considered as luxury items and consumer
trends re-changing continuously, innovation is a key for the success.

The countries like China which produce low cost carpets lack in
innovations.
Flexibility: Indian carpet industry can manufacture all kinds of
carpets. Other countries have specialized in particular carpets. Also,
the carpets of any size can be manufactured in hand knotted
categories. This is not possible in machine made carpets. There are
several kinds of manufacturers which can take small orders or big
orders. Hence, Indian industry can offer wide options to a customer for
carpet purchases.

WEAKNESS

Un-organized: Indian carpet industry is highly unorganized.

Therefore, a lot of activities are duplicated. Hence, it increases the cost
of production. Also, it increases the time of delivery of carpets.
Marketing Channels: The carpet manufacturers lack the
proper marketing channels. They find it very difficult to access the
customers is increase the market. Therefore, they are heavily
dependent upon the buying agents.
Infrastructure: The infrastructure is very poor leading to
higher time for production and costs. Also, buyers find it difficult
to visit places like Bhadohi for looking designs. Most of the

manufacturers do not have showrooms in the cities to showcase

their creations. There is only one institute which provides courses
related to carpet industry.
Professional Approach: Majority of players lack professional
approach for doing the business. They do not respect delivery time and
quality issues. Therefore, buyers like to deal only through buying
agents to control them.
Internal Competition: Many players have entered the industry
increasing the competition. There is a tremendous competition among
players on price front and are willing to offer very low prices even
though some one has already taken order.

Intellectual Property Rights: Many players in the industry copy

designs from each others. There is a lack of respect for intellectual
property rights.
OPPORTUNITIES

Globally, Home furnishing market is moving towards Carpet industry.

Hence, this movement offers a new market for Hand tufted Carpets
which are comparatively cheaper to hand-knotted carpets.
Traditionally, the carpets were purchased by old people. The
evolution of modern design has attracted youth market as well. This
segment
can be further expanded.
After dealing with China for some time, many players think that India
provide better option and flexibility. This kind feeling can further be
tapped.

 Carpets are generally considered to be expensive. With use of

modern technology, prices can further be reduced. Also, cutting
middlemen will directly benefit the consumers thereby increasing the
demand.
Organized operations can enhance the image of Indian Carpet
industry.
The companies like IKEA, Wal-Mart, etc can offer new and larger
market to the manufacturers provided this market is properly tapped.

Designing skills of India are being acknowledged at global level

mainly in garments. Similar skill set can be developed in the Carpet
Industry and
used as a marketing tool.
THREATS

If not handled properly, current rebound in the industry may not be

sustainable.
Unhealthy competition in the industry kills each other.
Indian Carpet industry has not completely got rid off of issues like
Child labor. Hence, risk of possible backlash on the industry is a going
to be there for considerable time in the future although some action is
being taken on this front.

PRESENT & FUTURE GROWTH DRIVERS OF THE INDUSTRY

Low End Carpets

Low end carpets like hand-tufted carpets are currently driving the
growth of industry. These carpets have expanded the market as
they are cheaper and affordable for many consumer segments.
These segments are going to drive future growth for a
considerable time.
Modern Designs
As in the case of low end carpets, modern designs are expanding
the market. Modern design is attracting young consumers. Also,
there are a significant number of consumers who prefer modern

designs compared to traditional designs. These are prominent in

countries like Germany, Scandinavia, etc.
New Markets
Traditionally, carpets industry is dominated by buyers from USA &
Germany. However, new markets are emerging for carpets and
they are growing fast. These are basically developing countries or
lesser developed countries like Spain, etc. Growth in income level
is the major driver for this.
Big Retailers
Big retailers like Wal-Mart, Ikea can drive the growth in the carpet
industry. These players have huge network with a large customer
base. Low-end carpets can be a major product that can be
targeted by these players.
Cost Management
In Todays competitive market, price has become an important
factor. Hence, better price can be offered through better costs
management. Effective costs management will always be a
competitive advantage to any player. The trend is common in
every industry. Carpet industry is no exception. Better cost
management will reduce the price which can lead to increase in
volume of sales.
Business Process Up gradation
As said earlier, the carpet industry is going through a major
change. Timely delivery, better price and high quality products
can only help carpet manufacturers for survival. Business Process
Up gradation is the tool for achieving this. All these factors will
definitely improve the present market as well as expand in to new

markets. Otherwise, its going to be difficult for the carpet

industry to grow.

CONCLUSION
It can be said that the carpet industry is presently going through a
major change. Traditional markets are saturated while new
markets are officering opportunities for growth. Modern designs
and low end carpets like Hand-tufted carpets are attracting new
customer base.
However, the total sales in the carpet industry have been
stagnant in terms of value. Hence, traditional model of carpet
business is no longer relevant. There is no single kind of customer.
Market can easily be segmented now.
Product mapping with the consumer preferences is necessary for
the future growth in the industry. Indian carpet industry will find it

difficult to compete with Chinese industry in terms of volumes and

prices.
Innovative range of products with lower volume is going to be
mantra for success in Indian Carpet industry. Hence, efficient
coordination and management of activities is a key for success for
any Indian carpet business.
This offers an opportunity for consolidation of activities for
reduction in costs, improvements in quality standards, better
product development and timely delivery of products thereby
driving the growth.