Case
Study: Jaipur Rugs

Executive Summary

Jaipur Rugs or Jaipur Living, as
they are now called, is a company that produces handmade area rugs with a
revenue of $21.1 million and annual growth rate of 38 percent from 2005 to
2008. This growth made Jaipur Living one of the world’s leading rug manufacture
not by producing rugs in factories but by reaching out to rural villages to
provide a great hand-crafted rug. Through this the company was able to provide
the people in these villages with education and income.  In the following case analysis, we will be
looking at how they became a leader in rug manufacturing but also a company to
look up to when it comes to social corporate responsibility.

Background

The story of Jaipur Rugs starts
with “two looms and an impressive journey” where the founder Nand Kishore
Chaudhary created a company in 1978 that provided high quality, hand crafted rugs
by talented artisans in India. They were able to become the world’s leaders in
rug manufacturing because they were always looking at how to have process
improvements in sustainability, quality, and artistry.  The company currently employs approximately
40,000 artisans with 7,000 looms. The company’s mission is to not only create
unique carpets but also to service the community that the artisans live in. Jaipur
Living has made a business model that helps train women in rural areas of India
to become skilled weavers to improve their standard of living. They decided to
market themselves as a lifestyle brand one that as they stated, “One that will
continue to revolutionize the home industry with a transformative business
model centered on our passion for people, product and design.” (Business Wire)
They pride themselves on being one of the corporates with the best corporate
social responsibility practices. The company has won many awards such as The
Sankalp 2010 Award for providing sustainable rural livelihoods through weaving
handmade carpets.  

Analysis and Alternatives

“We look upon business not merely
as a source of in come or profit, but as a way of life, as a medium for putting
our talents to good use, while at the same time affording us an opportunity to
be of service to the community then profit will follow.” (Kalagnanam, S.,
Mitra, S., & Parikh, M) One can see in the previous mission statement from
the company that founder Nand Kishore Chaudhary, who also came from a small
village in western India, likes to give opportunity to these villages that was
provided to him. He was referred to as a social entrepreneur because he was
using his startup company in the carpet industry to not only make profit but to
also implement solutions to social, cultural, or environmental issues, which
you can hear in their mission statement mentioned above. He wanted to empower rural
villages for these families to have an additional income instead of just the
husband. His company created what was called the Jaipur Rugs foundation that
worked hard to empower artisans to become their own entrepreneurs by proving
them with direct skills development and education on weaving.

In this case we must look at not
only how they were these corporate social responsibilities take place in their
process but also how their business is being ran and how this could apply to
another company that may or may not be in the same industry. As it was stated
in the case there are times where large companies may state that they have a
corporate social responsibility, but globalization may be resisted by the
villages in these rural villages that may impact them socially and to their
environment. 

We will be looking at three
alternatives that help Jaipur Living in maintaining their foundation of six
core values: empathy, simplicity, honesty, integrity, transparency and
commitment. With these six core values they must also be able to provide a
sustainable and a vertically integrated business model.

Alternative: Specializing in Specific Design

Current
Status

According to the case, the company
designed sheets, know as “Maps,” to show the weaver what type of design to
quickly respond to changing customer preferences and business needs. Once a new
map is created the area commanders provide the weavers with specific
instructions on these maps where they can see where to put the strands of
different colored yarn during the process. These maps are needed because the
artisans are in rural areas and have minimal education they need a map that can
be easy to understand. They currently have a process set in place where if a
weaver is not able to finish another weaver can easily pick up where it was
left off. It currently takes three months for a rug to be complete and up to
thirty people work on this rug until its finished product.

Future

To lower the time it takes to
create a rug, the company should look at having weavers that specialize in
specific designs. After reading an article by David Sarokin on “How the
Specialization of Labor Can Lead to Increased Productivity,” I concluded that
this might help the weavers in India. By having weavers have specific design
map that they specialize in they can finish the product faster as they are
already familiar with the weaving and how the design must be made. Weavers are
also able to recognize if something is “off”, which helps with quality. Being
able to provide specific regions with a specific design is an alternative
instead of having to make maps and distributing it to individuals that may or
may not have done the design before. This would only apply to designs that have
already been created that customers may like to buy from their catalogs not for
special order.

Downside

Although this would increase
production there would be a downside to this method. If this were to be
implemented a major downfall to this would be that if specific rugs were
selling but only one or two villages specialize in this type of rug they may
run into the risk of not being able to provide it in time. They would then not
be able to hand this off to another village with weavers available because this
would be something new to them. The only good thing that would come from
handing it to another village would be since the maps are easy to follow they
will be able to help with demand.

Alternative: Expanding Current Model to include Mexico

Current
Status

Jaipur Living is only manufacturing
their carpets in the rural villages in India and they are producing for
countries such as USA, Australia, Canada, Spain, Greece, Germany and many
others. One of the main reasons that the company is giving back to these rural
village weavers is because they want them to have the same opportunity that the
founder had. They want to make an impact in their lives, one of the ways that
they do this is by then the Jaipur Rugs Foundation. This foundation was created
to give back to the community, providing locals with the opportunity to learn
to weave for a career with Jaipur but this also has an impact on the weaver’s
social life. This opportunity is also complimented by the Non-governmental
organizations that help the weavers by providing them health care and
education. By having these organizations and the Jaipur Rugs foundation they
can impact the lives of these employees.

Future

Jaipur Living can provide this same
opportunity for a country that is close to some of their markets like USA and
Canada. That country is Mexico. They can expand their business model to not
only help rural villages in India but to also help those in Mexico. This same business
layout would not only help the people in these villages but also help the
company be closer to their market and new headquarters in Atlanta, Georgia.  While doing some research I was able to find
in the New York Times article “In Mexico, Weavers Embrace Natural Alternatives
to Toxic Dyes” that places like Teotitlan Del Valle, Oaxaca, Mexico is a small
village of weavers they were embracing alternatives to toxic dyes (Goode, E). Although the weavers
in India did not have to find the material to make the rug, people in Mexico
were finding different ways to weave and create rugs. By providing this
opportunity they would be able to also work with Non-governmental organizations
such as The Modernization of Mayan Woman Weavers in Highland of Chiapas,
Mexico.

Downside

Although this may sound like a
great idea some potential downsides would be having to organize new steps in
the supply chain from raw materials, production and customer delivery. This
would come at a cost to the company since they would not have to look at both
supply chains because not everything would be able to be transferable to Mexico
as they are a different country with different customs. Another downside to
this would be that this will impact their brand because since the company is
well known for making rugs from India it might be a different if they now know
that they were being made in Mexico as they are closer to the USA.

Recommendation

Jaipur Living’s philosophy has
always been “We believe in the transformative power of beauty of the product,
in the importance of relationships, in providing value to customers, in the
role of social responsibility, in developing the full potential and
consciousness of our people, and that there’s always room for improvement,” I
believe that alternative number two would be a great opportunity for the company.
This would be a great opportunity to work with another country that would also
need the same recourses from the company as they did in India. Since this was a
successful model being able to reach out to a country that is close to the
market would benefit Jaipur Living not only by providing them with capacity and
shorter lead times. The company would also be able to benefit from
Non-governmental organizations as mentioned above. While doing a bit more
research I was able to find the Modernization of Mayan Women Weavers program
who support Mayan weavers in remote rural regions. They were formed to provide
the practices of this culturally rich and marketable craft into a competitive
and profitable economic activity that benefits more than 2,000 women artisans. This
would be a great way to show the world that Jaipur Living is reaching out to
other countries that may also be in need in these rural villages. Satisfying
their mission statement by being able to develop full potential in the role of
corporate social responsibilities.

Current Status of Case Initiative

Since this case came out in 2012 they
went through a rebranding of their name to keep their well-known name but to
make it humble so that it would resemble their company. The founder and CEO Nand
Kishore Chaudhary made his eldest daughter, Asha Chaudhary the CEO of the
company. Since then she has been able to make great strides They have now
collaborated with famous brands such as Kate Spade to be a designer for their
products which they are not showing in their catalogs. Not only collaborating
with different designers they have also expanded their reach into different
products not just rugs. They have also started to make and design pillows,
throws and poufs. The company has also made some advances in creating not just
special orders but also Quick Ship Rugs that are on their websites. They can
keep in stock Rugs that are designed and ready to be shipped sot that the
customer does not need to wait very long for a rug. For example, a rug can be
shipped and delivered today you within a few days. 

Conclusion

In conclusion Jaipur Living and
Jaipur Rugs Foundation are still leaders in this market showing that they are
still able to have an impact in peoples lives. This company not only upholds
their mission statement but also wants to share their artistry with the rest of
the world. This is defiantly a company that takes its social corporate
responsibilities to great heights where other big companies should be able to
see this as an example of how to not only improve their company but also
improve the lives of others and their environment.