Pioneer Institute of Professional

Studies

Presentation
on
Liberty Shoes Ltd.

Presented By:-
Monika references
MBA-3rd Sem (Q)
CONTENT:-

 Define-Liberty Shoes Ltd. Company

 Promoters & Promoter Group
 Vision
 Mission
 Product Mix
 Joint Venture
 Location of Manufacturing Units
 Top Management
 Current Goals & Objectives
 Who are the Stakeholders of Company
 Analysis of Financial aspects of
Company
 SWOT ANALYSIS
 BCG MATRIX
 Porter’s 5 forces
 Company life cycle
Defining The Business And Company
COMPANY- Liberty Shoes Ltd.

Liberty Shoes Ltd. is the only leather footwear manufacturer in India who is
among the top 5 manufacturers of leather footwear in the world with a
turnover exceeding U.S. $100 million.
Company produce more than 50,000 pairs a day and our range in fashion
footwear covers virtually every segment. These are marketed across the globe
through 150 distributors, 350 exclusive showrooms and over 6000 multi-
brand outlets and sold in thousands every day in more than 25 countries
including fashion-driven, quality-obsessed nations like France, Italy, and
Germany.

Group Companies –
1. Liberty Retail Revolutions

2. Liberty Whiteware
Vision and Mission
 VISION-
The Group is committed to achieve the highest performance standards in
each area of its business. It envisages itself as the most trusted name all
over the world.

 MISSION-
It’s the mission of the Liberty Group to continuously improve the quality
of its products using cutting-edge technologies and following the latest
trends. The group emerged with an enthusiasm to offer world-class
products to its countrymen and it will carry forward the same attitude along
with the determination to be the global leader.
“A mission with a cause, A vision with an attitude”
The goal of an organization gets reflected in its mission and vision.
Liberty, feel the pride of having a goal that inspires us to operate for the
advancement of the people.
PRODUCT MIX:-

 PRODUCT RANGE-
The new range from Liberty is all about style, design, and comfort. The range
imbibes the spirit of fun and is trendy to the core. There is a product for every
season and occasion.

PRODUCTS-
 For MEN
 For WOMEN
 For KIDS
 For SAFETY SHOES
BRANDS:-
JOINT VENTURE-

 Foot Mart Retail, the joint venture between Pantaloons’ Retail

(Future Group) and Liberty Shoes, seems to be on shaky grounds due to
a couple of operational issues. The JV did not take off as planned, and
Future Group may pump in more funds and up its stake in the venture.
While Liberty Shoes will continue to be a stakeholder in the business, the
operational control could move to Future Group. Currently, Liberty Shoes
has a 49% stake in the JV.The JV was signed in 2007 and the first value-
for-money format, ‘Shoe Factory’ outlet, was launched across the country.
The size of the format was too large, which impacted the profitability of
the business. Many such stores didn’t get space in the best of malls, and the
kind of locational advantage needed in the footwear business. Future
Group is keen to restructure the business and launch smaller formats to
improve business feasibility. Also, given the growing pressure on
operational costs and thinning margins in organized retail, the group is
keen to strengthen avenues where margins could be higher, especially in
the fashion segment. The branded footwear retail chain was to give the
partners a strong foothold in the retail business.
 Location of Manufacturing Units-

 Liberty group call the manufacturing unit By Humantech Centres.

The locations of the six Humantech Centers are:

 Gharaunda,
 Haryana (approx. 95 k.m. from Delhi )
 Libertypuram,
 Haryana (102 k.m. from Delhi )
 Karnal, Haryana (124 k.m. from Delhi )
 Near Dehradun in Uttaranchal Ponta SahibRoorkee
 TOP MANAGEMENT-

 Adesh Gupta, CEO

 Adarsh Gupta, Executive Director
 S.K. Goel, Executive Director
 Prem Chand Garg, Independent Non Executive Director
 Siddharth Sanghi, Independent Non Executive Director
 Raghu Dayal, Independent Non Executive Director
 Shammi Bansal, Executive Director
 Sunil Bansal, Executive Director
 Amitabh Taneja, Independent Non Executive Director
 S.K.Arya, Independent Non Executive Director
 Vivek Bansal, Independent Non Executive Director

CEO Ex.Directors Ind.Non.Ex.Dir.

 Current Goals & Objectives:-

 Liberty Shoes to open 100 stores this year.

 Over the next six months, the company plans to set up 30-50 company-owned
stores in towns and cities with a population of around 7-10 lakh.
 Tamil Nadu unit of liberty shoes, the units will come up in Coimbatore, Madurai,
Tiruchi, and Puducherry.
 Liberty Shoes will set up three new manufacturing units — one at Roorkee in
Uttaranchal and two at Ponta Sahib in Himachal Pradesh — to double its
production capacity to one lakh pairs of footwear per day in the next three years
and will invest Rs. 160 crore for the expansion plans. "company is coming up with
three plants in. Company is increasing the capacity from 50,000 pairs per day to
75,000 pairs within the year and to one lakh pairs in three years,''
 To improve the HR policies and work for employee satisfaction.
 To improve the profitability ratio of the company. Adding more choices for shades
and effects.
 Enhancing Better Quality
 Demand will be generated through new variety.
 Broadening of Distribution Network.
 Analysis of Financial aspects of Company:-

Ratio Analysis:-

Particulars 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

Operating 13.96 12.80 12.06 8.22 7.01
margin (%)
Gross profit 13.61 10.91 9.25 5.7 6.2
margin (%)
Net profit 9.24 7.74 6.43 3.12 3.53
margin (%)
10.89 10.08 9.37 4.41 5.40
EPS (Rs)Crore

Return on net 23.15 17.37 13.90 6.15 6.99

worth (%)
Dividend payout 38.9 - - - -
ratio (net profit)
PBDIT Rs.in cr. 32.60 33.03 33.33 26.43 25.09
 Analysis of Financial aspects of Company:-

Depreciation  4.0 4.63 6.38 6.59 6.79

Rs.in cr.

PBIT Rs. In cr. 28.4 28.4 29.95 19.84 18.3

PBT Rs. In cr. 23.92 19.58 16.60 7.28 9.31

PAT Rs.in cr. 18.92 17.18 15.96 7.52 9.20

 SWOT ANALYSIS
STRENGTH:-

Strong financial condition-
 Core competency-Liberty Shoes Ltd. is the only leather
footwear manufacturer in India who is among the top 5
manufacturers of leather footwear in the world with a turnover
exceeding U.S. $100 million.
 Owner’s Capital :- 114.50 crore
 No of shareholders :-14802
 Foreign Investment :-2
 Institutional Investment:-5
 Profitability of last 4 Quarters :- In 2010 increased by 13.14%
compare to previous year.
 Continue…
 Market share and standing in market.
 Market Share 27%
 Liberty Shoes is a distributor (150 distributors) network that is
continuously growing
 It includes the fashion-driven, always in with the latest style,
elite at one end and the budget conscious, always seeking the
best value for money, middle class at the other end.
 The third nodal point in this market is the institutional buyer
from a wide range of industries looking for safety shoes.
 350 Exclusive showrooms and over 6000 multi brands
outlets.Liberty has big and burgeoning market that spans a
vast and varied spectrum.
 Continue…
 Liberty declared ‘Franchisor of the Year- 1st Runner- up’ at the
Franchise Plus Awards 2010.
 All trademarks, service marks, and trade names of liberty shoes used
herein (including but not limited to: the word mark "liberty", "the liberty
logo") are trademarks or registered trademarks of liberty shoes.
 Bargaining power of buyer-Liberty is largest player in industry with large
market share in organized segment. It had a market share of 70% in leather
shoe segment. Their dominant market share give them power over buyer.
 Successful New Products launched in last 5 years
 1.Force 10
 2.Perfect
 3.Gliders
 4.Freedom
 5.Tip-Top
 Continue…
 Successful Advertisement Campaigns
 -One need to be healthy to be happy(5.30-9.30am walk campaign)
 FIT RAHE INDIA
 JOINT VENTURE-
 Foot Mart Retail, the joint venture between Pantaloons’ Retail (Future
Group) and Liberty Shoes (49% Shares)
 Managerial Expertise – Experience of CEO, CMO & CFO.
 CEO- Adesh Gupta
 He is mechanical engineer and specialized in the application of
polyurethane in footwear
 Executive Director- Adarsh Gupta
 Mr.Adarsh is widely traveled internationally and the nuances of doing
business on the global stage. . Adarsh has done a diploma in Footwear
design from the globally recognized ARS Sutoria Institute, Milan, Italy.
 Continue…
 Executive Director-Shammi Bansal
 He introduced PV technology in India and responsible for
promoting the use of E.P. Polymers in the Indian footwear
industry. Besides initiating the practice of blending T.P.E.
(Thermo Plastic Electromers) with P.V.C. for the first time in
India in 1997 and the Injection E.V.A. compound for the first
time in Asia, he also pioneered Injection Moulding technology
for sandals. A proud recipient of many prestigious awards
including the coveted ‘Productivity Award' from The
President of India.
 Liberty provides a wide range in foot wear for all group of
customer with the best quality,design and with the durable
material as compare to other brands like relaxo,bata etc.
 Continue…
Human Resource-

 Availability of skilled man power

 Good policies for customer services

 Value for employees

 Footwear industry is labor intensive and concentrated in small and cottage

industry area.

 Availability of human resource is one of important strength of Liberty

Shoes Limited.

 Effective organizational structure

 Continue…
 Cost optimization and margin improvement
The Company is focusing on margin improvement and cost effectiveness
programs which have started yielding results. The Company has initiated
strict control on costs in purchases and outsourcing and is looking at global
sourcing for raw materials to improve the net realization. The Company
has also been clearing old merchandize through discount sales, write offs,
etc. which will enable it to focus on improving sales.
 Logistics and demand based production
To optimize utilization of production facilities a new logistics team focuses
on obtaining specific orders from the market for best selling designs and
sizes and ensures that all raw materials are available in the factories well in
time so that the Company can produce and place in shops the products that
consumers want. Thus the Company has been focusing on consumers and
market demand which will reduce inventories and improve sales-to-stock
turnover.
 Continue…
 The marketing division takes aggressive promotional exercise throughout
the year. Special marketing communication mix are devised for special
occasions like Diwali, ID, Christmas etc. company promotes its products
by adding value to the lifestyle and a part of the ambitions. It aims at
satisfying consumer’s esteem and self-actualization needs so that consumer
can relate themselves with the company. However, for promotion of its
product, the main instrument of the company is its “SHOWROOM
POLICY.This policy aims at reaching more and more customers through
Liberty showrooms.
 Bondage b/n company and employees.
 Infrastructure
 Wide range in product line.
 Leaders in quality
 Continue…
 Liberty’s supply chain provides a clear view of the extent of
the global nature of the company.
 liberty’s supply chain upstream begins with the materials used
in the production of its products. Many of these materials used
in production are available in the locations which the
manufacturing takes place, but some specialised materials
have to be imported to the manufacturing company.
 Capacity for innovation
 Distribution expertise
 Contract manufacturing
 Large portfolio of products
WEAKNESS-
 Rivalry among existing firms-Mostly numbers of competitors

are stable, especially because of high entry barriers. This adds

to the rivalry among existing firm. Manufacturers watch each
other carefully and make appropriate countermove to match
the competitors move. Leading competitor are Lakhani
shoes,Bata shoes, action shoes, woodland, paragon and
relaxo in organized segment.

 Finance-Profitability is decreasing because so some reason

like expenses are more then the profit and because of this
working capital amount is also decreasing.
 Continue…
 Sociocultural-
Over a period of time, as disposable income increases,
consumer preference changed but Liberty failed to recognize
these social changes and they continue with same product over
long period of time.
 Sales and distribution cost is also very high because most of
shops are owned by company itself and staffed employee.
 Liberty focusing on premium segment which account very less
in footwear industry in India.
 After sales service like replacement is very poor.
 Continue…
 Price of product is not satisfactory.

 Sustain growth rate.

 No Technical Expertise of Company/Division by the employees.

 No Control over Raw Material.

 No clear Strategic Direction.

 Competitive Capabilities.

 Weak balance sheet; excess debt.

 Poor Product Design.

 Continue…
 Low level of stocks in times of peak sales.

 Falling behind in R&D.

 Higher overall costs than rivals.

 Missing some key skills/competencies.

 Internal operating problems.

 Weak marketing skills.

 Single Brand(Leather)

 Too many endorsement

 Continue…
 Contract manufacturing

 Spread portfolio of products

 Reliant on retailers

 Reduction of target market

 The organization does have a diversified range of sports products.

 The retail sector is very price sensitive.

 No formal mission statement in between the employees.

 Stock policies is outdated.

 Poor per formance employees remain in their jobs.

 Continue…
 Technological
 Speed of change of product
 Design Ability
 Speed of News reporting
 Legal
 Threaten action by underage workforce
 Poor employment record
 Corporate social responsibility
 Contract manufacturing and copying of product
(intellectual property)
 Trade agreements
Threat:-
 Threats of new entrants.There are many barriers to
entry preventing new entrants from capturing
significant market share. Large footwear producer
enjoy economy of scale that create cost advantage
over any new rival.

 Threat of substitute product:- Consumer switched

from one product to another if alternatives are
available in same quality and performance range and
have competing price or lesser price.
 Continue…
 Demographic- Indian market is highly fragmented
between rural and urban market. Rural market was
large at approximately 70% of the total market but
was dominated by multiple medium size regional
players and serviced through traditional independent
dealers.
 Political/legal environment-
Industry is governed by central by Central Excise and
Custom, Factory act and Labor Law and
Environmental control acts
 Continue…
 Global environment-
India produced more of gent’s footwear while world’s major production
was ladies footwear. India has 10% of world’s raw material and low
tanning cost made it second in footwear production after China.

 The retail sector is very price sensitive. However, most of its income is
derived from selling into retailers. Retailers tend to offer a very similar
experience to the consumer.

 Competition for resources.

 Lack of good design.

 Unforeseen condition.
 Continue…
 The organization does have a diversified range of sports products. However, the
income of the business is still heavily dependent upon its share of the footwear
market. This may leave it vulnerable if for any reason its market share erodes.

 Government Bureaucracy

 Natural Disasters

 Costly New Regulations

 Vulnerability to Business Cycle

 Growing Leverage of customers or suppliers

 Reduced Buyer Needs for product

 Continue…
 Demographic Changes

 Restive Labour Force

 Rising Raw Materials Costs

 Entry of Potential New Competitors

 Loss of Sales to Substitutes

 Slow Market Growth

 Adverse shifts in Exchange Rates & Trade Policies

 Competition

 Fashion Trends

 Bad relation with some suppliers

Opportunity:-

 Tax-free zone manufacturing base.

 Product development offers Liberty many opportunities.

 There is also the opportunity to develop products such as sport wear,

sunglasses and jewellery. Such high value items do tend to have associated
with them, high profits.

 The business could also be developed internationally, building upon its

strong global brand recognition.
 Continue…
 Few and Weak competitors.
 Favourable Government Policy.
 Expanding to New Geographic Areas.
 Expanding Product Line.
 Transferring Skills to New Products.
 Increase market share from Rivals.
 Acquisition of rivals.
 Alliances or JVs to Expand coverage.
 Openings to Exploit new technologies.
 Openings to Extend brand name/image.
 Adequate training opportunities.
 Continue…
 Serving additional customer groups.

 Vertical integration.

 New Markets

 E commerce

 Research and development

 Increase product line

 Product diversification

 Change target market

 New manufacturing countries

Porter’s 5 forces
 Porter’s 5 forces
This model is used to identify the sources of competition, and how to gain
advantage over them.

 Potential Entrants
 Other Footwear manufacturers expanding their portfolio

 Cheap copies from the Far East

 Buyers
 The buyers of footwear have changed in the past decade.

 There has been and increase in women purchasing the shoes,

 New Generation has a different tastes and purchasing methods.

 Substitutes
 When required for professional use there is no substitute goods, but as
a fashion item there are many other goods that could be purchased.
 Continue…
 Suppliers
 Using production facilities in the Far East has give Liberty economies
of scale. Although there are now problems arising from these factories,
they are switching to making there own goods, labour and political
unrest causes delays in manufacturing and shipping of the goods.

 Competitive Rivalry
 Other companies of footwer like Bata ,Action, Addidas, Reebok,
offering more choice of shoe, introducing endorsement by sports
personalities, sponsoring sporting leagues
 Some company have a good product mix, covering a wide range of
footwear market.
 BCG Matrix
BCG:-
 Continue…
Placing products in the BCG matrix results in 4 categories in a
portfolio of a company:-

 BCG STARS (high growth, high market share)

 In Liberty shoes ltd. Windsor and Warrior comes as star because they are
expensive product and market share is also high because its makes high
revenue for the company.

 BCG QUESTION MARKS (high growth, low market share)

 In Liberty shoes ltd. Prefect and Footfun comes in questionmark as
because they are growing product in the market but market share is also
low because competitor provides that kind of product in lower cost rather
then the company.
 BCG CASH COWS (low growth, high market share)
 In Liberty shoes ltd. Force 10 and Freedom comes
under the cash cow because they are good product in
the market but market share is low because the
demand of that kind of particular is low as compare to
other in this basically safety shoes are there.

 BCG DOGS (low growth, low market share).

 In this categoty coolers is came because of low
growth and low market share in the market.
 Maturity
257.89
237.54
247.53 Decline
Sales or

221.12
Liberty
Profits

Growth
RS.cr

Introduction

1954 2006 2007 2008 2009 2010

Origin Time in years

Suggestions:-
INTERNAL STRENGHTS:(S) 1)
Heavy investment in technology
and rawmaterial. 2) Strong R & D
base. 3) High sales. 4) Equipped
human resources. 5) Healthy
relations with suppliers and buyers.
6) Stable strategy
INTERNAL WEAKNESS:(W) 1)
Lack of skilled employee for
production.2) Company is highly
dependent on RM. 4) Lack of
professional for handling
technology. And to use the
substitute.5) Low marketing in
some places
EXTERNAL OPPORTUNITIES:
(O)
Investment by tie ups. 2)
Participating in sport
market.
3 ) Stable government policies. 4)
Technology which prefers
product.
(SO) Platform is present to sale
the products to high end market.
Better understanding within the
company regarding government
policies. Production capacity can
be increased.
(WO) By hiring employees good
in vital areas. Marketing can be
done in rural areas and the other
part of India except west
EXTERNAL THREATS:(T) 1) Cost
price Pressure by other companies.
2) Rising prices of inputs-raw
material 3) Absence of trade
practices with major regional
trading blocks. 4) Problems like
demands low down in export
market. 5) Changing technology and
trends.
(ST) Decreasing the margin by
negotiation. Challenge the new
technology. Purchasing power is
good. Margin pressure can be
reduced through negotiation with
dealers.
(WT) Margin pressure can be
reduced through negotiation with
dealers and price of product can be
adjusted according to the
competitors.
Opinion about the company
Liberty Shoes Limited Company is sound well financially. Liberty Shoes Limited
strives to provide a stimulating workplace environment that effectively enables its
employees to provide outstanding service to customers. Though there was fall in
year 2009 because the expenses was more as compare to profit with that year but
Liberty has outstanding made its path to reach the track of profit and showing it in
the balance sheet of 2010.
 Conclusion

Liberty is a company who believes in adopting new

technology and trends as the ceo and top management is
aware and expert in their department. Liberty is good at a
characteristic that is able to give a very significant
capability such as useful skill, valuable resource of the
organization, competitive capability, Training to the
employees, good relationship and the giving the firm the
market advantage with the achievements.
 References

 www.Libertyshoesltd.com
 www.moneycontrol.com
 www.libertyshoes.com
 http://investing.businessweek.com/research/
stocks/people/people.asp?ticker=881200
 www.shoesindustry.com
 Many old Articles on liberty shoes in
internet.
Thank
You