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Written Analysis and Communication

Individual Assignment No 1

Case Analysis Report

On

SEWA Trade Facilitation Centre: Changing the Spool

Submitted by

Name : Varun Verma

Roll No : 131158

Section : A

Institute of Management, Nirma University

Date of Submission: 23-July-2013

For Office Use:

Grade

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Executive Summary

STFC, the non-profit trade organisation, faces the dilemma of addressing the issues due to lack of

capital funding which in turn is restricting them in carrying out their activities in a better way and

thereby, very limited benefit reaches out to the core of STFC, the rural artisan women.

The current state of STFC with a brief description about its background and inception is discussed.

Further, we state their core problem of lack of capital which is restricting STFC in achieving theobjectives that are the need of the time.

In order to solve the problem, STFC should chalk out ways of inviting more investments and

interested people to help STFC in their trade goals, without changing their legal and social status of

a not-for-profit organization.

Alternative path, of transforming into for-profit entity might be required when our action plan fails

to achieve the desired results.

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Situation Analysis

The case presents the highly motivated story of women empowerment in India. The journey of Ms

Ela Bhatt and SEWA (SELF EMPLOYED WOMENS ASSOCIATION) was succeeded by the

likes of Reema Nanavaty and Mona Dave which continued to STFC formation and presented the

retail brand HANSIBA.

In 1971, SEWA started as trade union under TLA with the prime objective of improving livingconditions of rural and urban poor women by providing them means to earn livelihood. They moved

forward to creation of SEWA bank for providing financial help to the members. Focus moved on to

improving the produce and sale of embroidery work by rural women leading to the creation of

Banskantha and Kutch Associations. Repeated occurrence of natural calamities and erratic

negligible monthly income resulted in significant increase in artisans becoming SEWA member.

As the trade expanded, production became unorganised and a need was felt to create a new

dedicated entity to be carved out and thus STFC (SEWA TRADE FACILITATION CENTER) was

born in 2003 as a not-for-profit organisation. SEWA members handled management, procurement,

supply chain and deliveries. Gaps and challenges started to reduce and benefits were visible.

Subsequently STFC opened various retail stores in Ahmedabad, New Delhi and Mumbai under the

brand name, HANSIBA (named after an embroidery artisan).

Demand increased, and so does the revenue generation. Even international buyers were interested.

But still, performance was not up to the mark. Substantially low margins did not allow the amount

that reached at the root level, the artisans. Members and outside well-wishers reached a consensus

that to improve the trade activities, STFC will have to change the way it does the job. A need was

felt for transformation into a full-fledged for-profit business so as to remove limitations of capital,

expertise, management, cost effectiveness, which stood in path of STFC progress.

Problem Statement

The core problem faced by STFC, with respect to their embroidery trade is absence of financial

resources. This restricts them in 2 aspects which are:

Tapping the huge potential of creativity and production capacity of the artisans.

They are not able to increase the share that reaches to the village artisans: those whose life

enrichment has been the goal of SEWA.

Objectives

Increase profit margins from wholesale and retail sales of STFC.

Streamline the production and supply chain of STFC products so as to cut costs, reduce

wastage and expenses, thereby leading to competitive prices of the products.

Improve artisans skills and quality of their produce.

Promotion of HANSIBA retail brand.

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Options and Alternatives

The Objectives mentioned can be achieved by reorganising the way STFC works. This can be done

by either of following available alternatives:

1. Continue with the non-profit status of STFC and find ways of achieving the objectives.

2. Go for a complete for-profit status so as to invite capital investments and attract efficient

management and experiences from outside people, while keeping the primary goal of STFC

and SEWA intact.

3. Go for a hybrid business model, a mix of the non-profit and for-profit models.

Evaluation of Alternatives

Continuing the not-for-profit status-The safest option available with STFC is to continue with

the not-for-profit model and find out ways to attract investments and process management expertise.

There are a lot of complications when it comes to transformation of STFC into a profit oriented

organisation like:

Legal Issues

Role of SEWA members and village artisans post transformation.

With profit oriented goals, it is very hard to carry along social aspects.

Last and foremost important, improvement of the lives of rural women and their families.

STFC still faces the persistent problems of losses in the sales, poor inventory management, delivery

delays, and supply chain issues. These need to be addressed by attracting philanthropic investments

and expertise from people who are motivated for betterment of the society. While this seems hard to

implement, we do have examples like Reema Nanavaty and others who have gone to the farthest of

all to serve SEWA.

Adopting the for-profit model-If we go by the voices of most of the people in and around STFC,

like Ms Nanavaty, Manali Shah, and Vimal Ambani, for-profit model is the need of the time for

STFC. This will help to fill up the gaps and achieve the stated objectives. But all this needs to be

carried out very cautiously so that STFC does not deters from its primary goal. Decisions making

should not be controlled by outsiders. Interests of the SEWA members must always be placed at

top.

The balanced way: the hybrid model- Not compromising with the organisational goals and the

decision making authority, outside investments can be invited from various sources, dividends and

income returns could be paid while still maintaining the same goals. This will include few trade-offs

against others which are to be chosen wisely.

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Decision

After careful study of all the available options and alternatives, STFC should continue as a not-for-

profit organisation. Issues with capital investments, process and product delivery streamlining,

expertise at various stages of functioning, brand promotion for retail stores can be addressed while

remaining inside the boundaries of a not-for-profit entity to safeguard the core concepts on which

SEWA was built.

Action Plan

Reach out to all possible organisations and people, national and if necessary at international

level, which either believe in the motives of SEWA, or might be interested in the embroidery

business carried out by STFC. This will ensure that STFC has the required capital to proceed

with other objectives.

The capital acquired now has to be channelized for various activities and optimizations of

processes involved. Foremost requirement is skill improvement of artisans.

Product Quality improvement so as to ensure embroidery work in garments, home furnishings

and accessories so that products are preferred by customers over other available options in

market.

Arranging training for active members to improve efficiency, reduce wastage and ensure timely

delivery of orders and retail supply.

Ensure that the retail brand HANSIBA is being promoted adequately by means of trade fares,

exhibitions, promotional distributions and advertisements if necessary. This is very crucial to

gain market share amongst the tough competition in retail sector.

Contingency Plan

If the not-for-profit model fails or seems like not working the way it is expected to work, STFC will

have to switch to the profit way. This will ease investments and market, process expertise to higher

level of precision required. Outside talent will help to achieve measurable targets and timelines in a

very efficient way. SEWA and STFC members need to ensure, all this is carried out in a way

without threatening their underlying objectives and motives.

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Annexure C

To Whom It May Concern:

I, Varun Verma hereby declare that this assignment is my original work and is not copied from

anyone/anywhere. If found similar with sources, I shall take complete responsibility of action taken

thereof by WAC Team.

Signature

Name: Varun Verma

Roll No.: 131158

Section: A