Started in 1987 in the current form, Joyalukkas Jewellery is now grossing more than one Billion US$ in sales, operating in about 100 sales outlets in nine countries employing about 5,000 people. Amongst many awards won by the company in its 25 years operation, the distinction of being recognised as a super brand stands out. Its ambitious vision of ornamenting the world is being steadily realized via its business model, details of which are sketched below:
Business Model
1. Business Concept: Enhancing lifestyle with joy of confidence is the theme of business concept that has resulted in Joyalukkas becoming world’s number one 22 karat gold jewellery retailer. Valuing customers and ensuring that they get quality product and personalised service is the guiding concept built on five limbs: choice, design, service, convenience and innovation, all of them reflecting customer-centred approach
2. Value Proposition: A wide range of contemporary and traditional gold jewellery tinged with varying ethnic orientation of people of Indian origin in the form of earrings, necklaces, pendants and multi-item bridal sets is sold. Most of these products are embellished with diamonds, precious stones and pearls. In addition diamonds, precious stones and pearls are sold as collections. Value-addition is incorporated by number of brands including Aamira, Akshaya, Bakiamore, Ebru, Entice, Florentina, Madhubani, Mayuri, Mermaid, Perfekt, Resham, Sparx, Spring, teen & twenties, tre'stelle, Trisha, Veda and Zenina.
3. Key Activities: Procurement of bullion is the key activity followed by acquisition of diamonds, precious stones and pearls. Manufacturing takes place both in-house and via contracting out with craftsmen and jewellery makers conforming to stringent quality standards to check specifications, design parameters and weight not to forget lustre, glitter and richness that go with hand-crafted jewellery. Yet another activity is inventory management of gold ensuring high degree of purity along with hall-marking
4. Key Resources: Management team led by Mr Joy Alukkas remains the topmost resource supplemented with physical storing of bullion, diamonds, precious stones and pearls as well as manufacturing facilities. Financial resource is availed as term loans from banks
5. Key Partners: Suppliers of gold form the bulwark of key partners. Gold being the critical resource, the company suffers from the theory of resource dependence as pronounced by Clayton Christensen. However, Joyalukkas is making every step to minimise risk of resource dependency. It does so, choosing both re-active and pro-active approaches. It continues to re-act with meaningful steps as regards to gold price fluctuations. As a pro-active measure it has planned hedging instruments through banks and commodity exchanges to offset vagaries of gold supply
6. Market Segment: Joyalukkas serves the Indian ethnic markets within India and outside in countries such as UK, Singapore and in the Middle-East. In the latter region, it has presence in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and UAE.
7. Channels: Premier stores in selected cities in India along with format stores in many centres within and outside India form the main channels of sale. A useful addition is the wedding centres that cater to both men and women in their seasonal requirements. A web sale portal has turned out to be a virtual one as the shop never closes. Format stores have become super-efficient as these can stock large number of jewellery pieces with fewer staff to manage sales and admin. Besides, after-sales service and repair is entrusted to the format stores. Joyalukkas continue to reach out to the customers through marketing initiatives such as brand building and selective advertisements
8. Customer Relationship: Personal attention and customer care are frequently stressed in delivering quality goods at competitive prices to the satisfaction of customers
9. Cost Structure: Cost driven policy dictates that major part of manufacturing is contracted out to craftsmen and jewellery makers to curtail production cost whereas value-driven policy is put into works by ensuring design, quality, purity, quantity and matters concerned with fashion & aesthetics. Major minus is that, Joyalukkas is still unable to optimize working capital as per theory formulated by John Mullins & Randy Komisar. Few pointers of weaknesses: working capital turnover is 2.6 times; 90 % of working capital is in inventory; cash level is negligible
10. Revenue Stream: A Billion US $ is garnered form sales resulting in gross margin of 15% , operating margin of 8% and profit before tax of 6% over net revenue signalling success of the business model of Joyalukkas Jewellery.
Muthu Ashraff
Business Adviser
Mobile: +94 777 265677
E-mail: cosmicgems@gmail.com
Web: http://www.cosmicgemslanka.com
Blog: http://cosmicgemslanka.com/blog/
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