Business Environment (BUS 404)
BANGLADESH UNIVERSITY OF BUSINESS & TECHNOLOGY (BUBT)
LETTER OF TRANSMITTAL
August 17, 2012 Ms. Nafias Kashem Course Instructor BUS 404 School of Business Bangladesh University of Business & Technology Mirpur, Dhaka.
Subject: Submission of final group report.
Dear Sir,
According to your requirement for BUS 404 course, we the group “RISK DISTRTIBUTOR” have prepared the final group report on the topic, “Competitive Situation of Mirpur Benarashi Polli.” We have chosen 10-sample shope from the total Benaroshi shop of Mirpur Benarashi Polli.
The report is prepared on the primary and secondary data collected from different sources of Mirpur Benarasi Palli.
To prepare this report, we have tried our best to include all necessary information and relevant explanation about environmental condition as well as competitive situation and total scenario of the Benaroshi industry to make the report not only informative but also helpful for those who want to know about Benaroshi Industry in Bangladeshi context.
We have improved our communicating skills, while collecting information. This report also has enriched our writing skills.
Thank You for giving us this wonderful opportunity for preparing this report.
Serial No | Topic | Page No | 01 | Executive Summary | 1 | | Introduction | 2 | | Objectives of the study | 3 | | Limitation | 4 | 2 | History of Mirpur Benaroshi Polli | 5-7 | | All details about the sample shop of Mirpur Benaroshi Polli | 8 | | History and background of the sample shop | 9-12 | | LEPESTC analysis | 13-22 | | Impact Analysis | 23-28 | 3 | Findings | 29-35 | | Problems of Benarasi industry | 36 | | Problems of Benarasi Production | 37 | | Recommendation | 38 | | Conclusion | 39 | | Recommendation | 40 | | References | 41 | TABLE OF CONTENT
Executive summery
In the world of fashion ‘Benarasi Saree’ remains the ‘RISEN SUN’ and has been a subject of great inspiration and appreciation for world-wide costume connoisseurs. It was in the Mughal era Baranasi saree came into popularity and got fashion currency. This art of making Banarasi saree is surviving since olden days by competing with each other’s within and outside the industry.
Through the report, we try to focus and describe the total Benaroshi industry and shop in the view of competitor. We tried to analysis LEPESTC and Impact by which any one can easily measure the total scenario of Mirpur Benaroshi Polli.
We also tried to include the problems and recommendation according to the response and suggestion of the respondents and persons involved with this industry.
We have tried our best to include all necessary information and relevant explanation about environmental condition as well as competitive situation and total scenario of the Benaroshi industry to make the report not only informative but also helpful for those who want to know about Benaroshi Industry in Bangladeshi context.
Introduction
Bangladesh has a rich and ancient tradition of fabric-based cottage industry. Muslim, jamdani , Benaroshi, khadi- these are a few of the highly acclaimed industries in this country. These industries have been bringing name and fame for our country for a very long time. Among them Benaroshi was associated for bridal costume. Presently industry is not getting proper attention but it has great demand in local and international market. Recently it has attracted large number of consumer in our country as a result of campaigning of the boutique houses marketing strategy for for traditional style of clothing which proved that Benaroshi still has great appeal among people. Our neighboring country is exporting Benaroshi product. Bangladesh also have the potentiality to export Benaroshi product. As such, it is important to know the macro environment and competitive situation of the members of Mirpur Benaroshi Polli.
Objectives of the study
* To know about the macroeconomic environment of Mirpur Benaroshi Polli and of total industry. * To know the competitive situation and overall market condition of Mirpur Benaroshi Polli * To know how each competitor creates its market space compete with others. * To know different macroeconomic forces that affects the total business of the industry. * To know how different environmental forces implies different level of impact on this industry and how the organization take initiatives or strategic action to tackle this situation. * To find out the problems of this industry and try to recommend some possible solution for that * To understand respondents’ opinion about the measures that should be taken to develop the industry.
Limitation
The researchers faced the following limitation while conducting the research: * Respondents often felt reluctant to answer some questions which they regard as sensitive. * Sometime it was hard for the respondents to manage time to give in depth interview. * Some of the respondents were reluctant to give interview because of their experience. With previous research works in these area which, according to them, before no benefit for them. * No information of about Mirpur Benaroshi Polli is available in different website.
History of Mirpur Benaroshi Polli
The gorgeous and delicate piece of cloth, which is known as Benarashi, was not indigenous craft of Bangladesh. Its origin can be traced to a northern city in India which is called Banaras. During the Mughal regime, the industry flourished in the subcontinent.
By the 1930s Dhaka set up its own Banaras Silk Industry Centre in Becharam Dewry, in the old town. Sarees were priced at Rs. 150 and a bridal saree fetched a princely price of Rs. 400. The main market outlets were in Sadarghat market, Islampur and old town and by the 1960s the posh newly built New Market near Nilkhet. One significant stimulus was in the 1940’s resulting from political changes, the movement of Independence from the British and finally the desire for a separate homeland for Muslims. The result of these factors brought about the migration of large populations from one region of India to another who packed up their looms in 1946 and came with high hope to Dhaka to start a new life. Their second and third generation families are now residents in Mirpur.
According to the Bangladesh Handloom Board the migrant community set up the banarasi industry in Mirpur and Mohammadpur areas of Dhaka city in 1950. These two areas still remain the hub of Benarasi producing activities in the country. However, the Benarasi industry is no longer limited to the geographical area of Mirpur. Now the villagers in Manikganj, Sirajganj, and tangail etc are also producing Benarasi sarees. Some of the producers are now willingly shifting their looms to impoverished areas of North Bengal like rangpur and Dinajpur where the labor is cheap and abundant.
About 25,000 people are now involved in the benarasi industry, where the number was one lakh, two or three years back. The number of handlooms has been reduced to 5,000 now from 20,000 in 2004. The number of outlets has also dropped to only 100 in Mirpur. ( Research finding of the Study on production of Benarasi in Benarasi Palli: Prospect of Developing Women Entrepreneurs).
The Benarasi loom which has been originally designed some hundred years back is composed of wooden, bamboo and small metal parts. These components are set on the earthen pit floor of the factory. The Benarasi workers still work this age-old piece of tool. The only change that has taken here was the introduction of jacquard (design card) after 1947.
The most commonly used thread for Benarasi saree, the Chinese Silk, is finer in quality and has got a smoother texture than our very own Rajsbabi silk. India is being used as the transit route for the import of Thai, Pakistani and Chinese silk. Some portion of these threads is also smuggled in Bangladesh through boarder areas. Benarasi producers procure these threads from the wholesale market at Chauk Bazar and the local market of Mirpur.
A number of serious problems are threatening the existence of the unsung laborers who go through a tremendous procedure of physical labor and mental patients to produce a single piece of Benarasi in one week. Many of them are now abandoning the craftsmanship which they inherited from their forefathers. In this way an occupation based community is withering away. One of the members of Benarasi Palli Shop Owners Association said that the only factor that is still keeping Benarasiand Mirpur Katan alive is that various fashion houses of the city is still promoting them. They are our major customers.
The Benarasi industry in Bangladesh is still dependent on handloom while the Indian Benarasi industry is power loom based. Newspaper reports claim that our local market is flooded with low cost, low quality Indian Benarasi producers (weaved in power looms) with a design that suits the budget and taste of the customers of all levels of the society. Through the introduction of this technology is itself a threat against the traditional handloom based Benarasi production in India, in terms of export earning it gives Indian exporters an added advantage. This technological advancement gives Indian exporters an added advantage. This technological advancement gives India comparatively lower production cost benefits which the Bangladeshi industry does not enjoy. Moreover, better quality silk is becoming expensive day by day.
There are no publicity efforts to make the customer aware of the difference between genuine hand woven Benarasi and power loom replicas. There is also the problem of lack of awareness and understanding of the changing nature of taste of the customers. In this age of globalization customers have the opportunity to procure the latest and trendy products from any part of the world. Though as a fabric, Benarasi has its appeal, the lack of training and creative indigenous designing is also causing much problem for the industry.
All details about the sample shop of Mirpur Benaroshi Polli
Shops name | Situation date | Ownership | Capital | Profit | Mohammadiee
Silk House | 1960 | single | 3 crore | 50 lak per year | Dia Shari | 1958 | single | 3.5 cror | 60 lak | Efaz Benarioshee Mohol | 1992 | Single | 1 crore | 30 lak | Excellent Sharis | 1978 | Single | 2 crore | 35 lak | Gulshan Sharis | 1995 | Single | 2 crore | 40 lac | Rimjhim Shari Fashion | 2001 | Single | 3 crore | 30 lac | Nupur Benaroshi House | 2007 | Single | 80 lac | 10 lak | Shari Nagar | 1998 | Partnership | 2.5 crore | 40 lak | Mirpur Benaroshee Kuthi | 1999 | Single | 4 cror | 50 lac | Mahmuda Shari House | 1997 | Single | 1.5 | 80 lac |
History and background of the sample shop
Mohammadee Silk House
Mr. Enayet Hazi the proprietor of this shop that he founded at 1960. He was in Pakistan before 1956 and after coming Bangladesh, he identified that there is a huge opportunity of Benaroshi industry in Bangladesh. He then started this business with a small area with his own capital. The cheap and skilled labor and the increasing demand to the local product and product’s unique feature and quality have shaped his business to this large position.
To increase and spread the business he took loan from different organization
Presently there are 4 branches with differentiated product including others types of product such Lehanga, Indian shari, Jamdani, silk, muslin, puti shari, three piece etc as the customer demand. Now it is a large in area and about 20 employee and 50 worker work with his shop.
Dia Shari
In about 1958 Mr. Hazi Harun founded this shop and it is one of the oldest shop in Benaroshi Polli. He with his 3 friends started this business firstly in Shadarghat . because of available skilled human resources supporting environment she shifted his business to the Mirpur in 1962. In 1965 because of some internal problem he took in place of the shop in his own ownership.
He started the business with small capital but now the business spread largely with approximate capital about three cror and have 3 branches in different location
To compete with the others and make his position in the top rank he always working hard and trying to make available the unique product and up to date according to the fashion.
Excellent Shari
One of the oldest shop in Mirpur Benaroshi Polli . It was founded by Mr. Gani Mohajan in about 1978. By following others in this industry he was interested to this and decided to start the business. As there is a skilled worker and supporting environment, he selected Mirpur as his business location and his resident area.
With his innovativeness and successful application of competitive strategy he is now successful to make his position in top level in this industry. Now with the Benaroshi product Indian and various differentiated product in different range of price are available in his shop. It has now 3 branches to and all the branches are successful in their business.
Shari Nogor
In about 1998, four friends start this business with their own capital. They were previously engaged in textile industry and having the previous experience and as a residence of this area they decided to start the business.
Efaz Benarioshee Mohol
Mr. Sakander Ali was in Malaysia since 1992. Staying long time there, he felt to come in his motherland and decided to start a business in Bangladesh. After coming Bangladesh in 2004 he did research about what business he should do and found Benaroshi industry as the perfect to engage in. he did have relatives in this industry who helped him to start this business by providing necessary help. Finally start this business by hiring a shop in 2007. In 2011 he bought the sop. Now his shop is air-conditioned and about 7 employee and 20 workers works in his business.
Gulshan Sharis
Mr. Akter Hssain is the pioneer of this shop that was established in 1995 with a smale scale or area. He did business before in Islampur of long cloth. To diversify his business he found in mind this business through his some customer of this Benaroshi Polli. By taking loan from his relatives he started this business with only some Benaroshi product as a retailer. Day by day he engaged himself as a producer and presently 25 worker work in his business to produce shari.
Coping up with the fashion and demand he entered Indian lehanga, share, muslin, katan, silk shari to his business. Presently he has 3 brunches in different shoping mall like Boshundhara, New market, Pink city.
Rimjhim Shari Fashion
Mo. Iqubal hossain established this shop in 2001 as a retailer. It collect product from different producer and from abroad of Bangladesh. Recently he has bought the shop where he is operating his business. Have a huge collection and take order from customer on various occasions.
Nupur Benaroshi House
In 2007 Md. Alamin hossain as a residence of Mirpur Benaroshi area started this business with the loan from bank and individual capital as a retailer. It is not engaged in production. Collect product from others and sell them to the customer. Try to collect better quality and featured product than the competitors to make its position in the market. It has a strong link with some Indian producer and collect the product comparatively at a lower price.
Mirpur Benaroshee Kuthi
Nor Hussein was the resident of this area and is bihari. By the influence and success of his others friend he started this business in 1998 wit individual capita. Firstly he sell his produced product and day by day he try to make collection of different product. There is a collection of various types of different product besides Benaroshi shai. He offer product of various feature on various special occasion. He has made a beautiful decoration in his shop to attract the customer.
Mahmuda Shari House
In 1997 Md. Asif as a residence of Mirpur Benaroshi area started this business with the loan from bank and individual capital as a retailer. It is not engaged in production. Collect product from others and sell them to the customer. Try to collect better quality and featured product than the competitors to make its position in the market. It has a strong link with some Indian producer and collects the product comparatively at a lower price.
What is LEPESTC analysis?
LEPESTC stands for – Legal, Economic, Political, , Ecological(Environmental), Sociological, Technological, Competitive . The term LEPESTC has been used regularly in the last 10 years and its true history is difficult to establish. Various other similar acronyms have been used including ETPS, STEP, PEST, and STEEPLE. The term PESTLE is particularly popular on HR and introductory marketing courses in the UK.
LEPESTC analysis is in effect an audit of an organization’s environmental influences with the purpose of using this information to guide strategic decision-making. The assumption is that if the organization is able to audit its current environment and assess potential changes, it will be better placed than its competitors to respond to changes.
To help make decisions and to plan for future events, organizations need to understand the wider ‘macro-economic’ and ‘macro-economic’ environments in which they operate. (The macro -economic environment is the one in which we operate and have limited influence or impact, the macro-environment includes all factors that influence an organization but are out of its direct control). An organization on its own cannot affect these factors, nor can these factors directly affect the profitability of an organization. But by understanding these environments, it is possible to take the advantage to maximize the opportunities and minimize the threats to the organization. Conducting a strategic analysis entails scanning these economic environments to detect and understand the broad, long term trends.
LEPESTC analysis for MirpurBenaroshi Polli.
To analyze LEPESTC for MirpurBenaroshi Polli we divide the total analysis into three part as LE for legal and ecological, PEST for the Political, Economic, Social and Technological and C FOR competitive
PEST analysis is concerned with the key external environmental influences on a business.
The acronym stands for the Political, Economic, Social and Technological issues that could affect the strategic development of a business.
Identifying PEST influences is a useful way of summarizing the external environment in which Benaroshi industry operate . However, it must be followed up by consideration of how a Benaroshi industry should respond to these influences.
The table below lists some possible factors that could indicate important environmental influences for Benaroshi industry under the PEST headings: Political / Legal | Economic | Social | Technological | Environmental regulation and protection | Economic growth (overall; by industry sector) | Income distribution (change in distribution of disposable income; | Government spending on research | Taxation (corporate; consumer) | Monetary policy (interest rates) | Demographics (age structure of the population; gender; family size and composition; changing nature of occupations) | Government and industry focus on technological effort | International trade regulation | Government spending (overall level; specific spending priorities) | Labor / social mobility | New discoveries and development | Consumer protection | Policy towards unemployment (minimum wage, unemployment benefits, grants) | Lifestyle changes (e.g. Home working, single households) | Speed of technology transfer | Employment law | Taxation (impact on consumer disposable income, incentives to invest in capital equipment, corporation tax rates) | Attitudes to work and leisure | Rates of technological obsolescence | Government organization / attitude | Exchange rates (effects on demand by overseas customers; effect on cost of imported components) | Education | Energy use and costs | Competition regulation | Inflation (effect on costs and selling prices) | Fashions and fads | Changes in material sciences | | Stage of the business cycle (effect on short-term business performance) | Health & welfare | Impact of changes in Information technology | | Economic "mood" - consumer confidence | Living conditions (housing, amenities, pollution) | Internet! |
Political Factors.
The political environment revolves around the current government in a particular country in which we manufacture or trade, and also laws/legislation operate within home market as well as overseas. If government is socialist then perhaps there is a policy to tax more and to invest in the public sector. On the other hand if have a more conservative or Republican government then the free-market is left to take control, taxation is less and there is often a smaller public sector.
The political arena has a huge influence upon the regulation of businesses, and the spending power of consumers and other businesses.
Here there is high level of political instability and a high level of political clash in Bangladesh and as Mirpur is a large area in Dhaka and so many political groups are available, MirpurBenaroshi Polli is highly affected by this. hortal , strike , meeting, political rally etc affect the industry and business. In the situation of hortal shops cannot be opened because of uncertainty of damages and loss of product and shop and customer usually do not come on those days. 1 day of hortal affect the business at least for three days.
Government is not highly concern about the industry and do not provide any facility to the member of this industry.
Government also does not have any special tax policy for the industry. As most of the shops are private and single ownership based they only have to pay income tax of individual.
The labor law and low of environment have a little impact on this industry. The owner decides the price of labor directly and sometimes labors are not given proper wage in proper time.
Consumer right is not properly maintained. There is no government instruction on the price of the product. so that the seller ask price as his mind and customer have to bargain a lot. Customer have little right to claim against the seller or the shop if the make any fraud.
Economic Factors.
The economic environment is a direct influence on all businesses. Obviously if we study marketing there is a huge element of economics within the topic itself, and we should be no stranger to the principles of economics.
Interest rate highly affects the total business and its environment. High interest rate reduces production because of high cost.
Presently in Bangladesh interest rate is comparatively high than other country.
As Bangladesh is of Command Economy there are full power of consumer to bargain and price and supply of the product is influenced by customer.
Inflation rate and unemployment rate provide the information about the purchasing power of money and the customer that affects the price and demand of the product .Presently the inflation rate of Bangladesh is 7.97% and it is lower than the previous year 2012 when it was 8.56%. Unemployment rate is 4.5% that decrease from the previous and it is increasingly decreasing
Currency fluctuation also affects the industry because some materials and equipment of production have to be imported from the India and other countries. If the price of Bangladeshi currency fall then the sometimes production cost grow high and vise versa.
Some Benaroshi product are presently exported to the foreign country like U.S.A and others and here there is a problem if currency fluctuation is high and not a stability .
The economy of Bangladesh Benaroshi industry environment constituted by that of a developing country. Its per capita income in 2010 was est. US$1,500 (adjusted by purchasing power parity) significantly lower than India, Pakistan, both which are also lower than the world average of $10,497.According to the gradation by the International Monetary Fund, Bangladesh ranked as the 48th largest economy in the world in 2010, with a gross domestic product of US$224.889 billion. The economy has grown at the rate of 6-7% p.a. over the past few years.
From the data and information it can be said that most of the people in Bangladesh is middle class and they are the major portion of the total customer.
Sociocultural Factors.
The socio cultural environment embodies everything which is social and cultural within a nation or society.
In a more general sense consider influences such as the increase in life expectation of Western consumers, and demographics which is the study of populations.
The social and cultural influences on business vary from country to country. It is very important that such factors are considered.
The dominant religion in Bangladesh and the Benaroshi Polli area is Muslim. The industry should highly consider about this.
Presently customers are highly interested on foreign product and fashion. They are mostly interested on Indian product. So the producers have to have the collection of the demanded product to compete with others.
Most of the consumers do not have enough time for leisure so that they can spend more time to purchase and choice. So considering this the producers and the shop owners have to have all type of collection so that the customer chooses the shop for purchase
Bangladesh is male dominated country but this sector is dominated by female customer. The shoppers should consider about the female behavior and their choice.
Income level and the standard of living of the people of the business area also affects the industry. By considering this wage rate for the worker and price of the product is determined.
The shoppers should consider the choice and fashion of the business area and fulfill their demand.
Technological Factors
Technological factors are a multifaceted influencer. Let's just think about the sorts of technology that we come in touch with almost daily. Technology makes revolution in textile that reduces the cost of production and easy to market the product.
Technology also surrounds business processes. As we saw from our lesson on the functions within an organization all departments use information technology or technology in one form or another. Our manufacturing operations will use technology to produce goods and services. Our logistics and warehousing functions use forklifts and lorries as well as order tracking technology and software. The customer service department will use communication technology to talk to customers but will also have access to internal systems, such as technology to simplify credit control and stock control for example. There are many, many more examples of technology.
Technology is vital for competitive advantage, and is a major driver of globalization.
The Benaroshi industry in Bangladesh is still dependent on handloom where Indian Benaroshi is based on power loom based so our local market is flooded with the law cost low quality Indian Benaroshi product weaved in power loom) with a design that suit the budget and test of the customer of all level of the society. But Bangladeshi Benaroshi industry does not use this technology because of maintaining high quality and unique feature of the product. So cost of bd product is high.
Online banking and credit card system allow the shops in preference of customer.
Technology offer companies a new way to communicate with consumers. E commerce affect the distribution channel and expand the market of the product nation and also worldwide. Some shops allow e commerce in sell and here the shoppers advertise their product through e commerce side and collect order through online and give home delivery of product and price is also collected through credit card or other applicable online way.
LE C stand for Legal, Ecological and competitive factors. These factors of Mirpur Benaroshi Polli are following
Legal Factors
Legal factors include - health and safety, equal opportunities, advertising standards, consumer rights and laws, product labeling and product safety. It is clear that companies need to know what is and what is not legal in order to trade successfully. If an organization trades globally this becomes a very tricky area to get right as each country has its own set of rules and regulations.
There is no act especially for the Benaroshi Polli and so that to start the business there is no hard legal barriers. if anyone wants to start the business and want to become a member of the industry he only have be registered under the city corporation to get a trade license and easily can start the business,
Copyright, patents / Intellectual property law is not properly maintained here so that same design and same product is available to different shop. The randomly copy the product. O legal action can be taken against them.
Government have consumer law through which consumer can complain against the seller if they make any fraud to them. But it is not properly maintained.
There is also health and safety law but it is also not properly maintained.
Employment low is also not properly maintained and most of the time they are dominated and not given proper wage.
Ecological
E for Environmental factors: The location of countries influence on the trades that businesses do. Adding to that, many climatic changes alter the trade of industries and the way consumers react towards a certain offering that is launched in the market. The environmental factors include geographical location, the climate, weather and other such factors that are not just limited to climatic conditions.
Weather of the MirpurBenaroshi Polli is totally supportive for the production.
No element used in production that is harmful to the environment so there is no adverse effect of environment law.
The area is becoming more populated and presently it is one of the most populated areas in Dhaka city. A large number of people in this area are not highly literate so that they are not conscious about the pollution. So that the working environment is not hygienic. Worker does not get enough light and air and because of pollution of air and water they get sick often.
They do not use any harmful chemical and product in production that can affect the environment and the consumer health.
World climate is changing and the world is becoming wormer. Producer should produce product that is suitable with the environment.
Competitive Factors
Competitor Analysis is an important part of the environmental analysis and strategic planning process . Some businesses think it is best to get on with their own plans and ignore the competition. Others become obsessed with tracking the actions of competitors (often using underhand or illegal methods). Many businesses are happy simply to track the competition, copying their moves and reacting to changes.
Competitor analysis has several important roles in strategic planning:
• To help management understand their competitive advantages/disadvantages relative to competitors
• To generate understanding of competitors’ past, present (and most importantly) future strategies
• To provide an informed basis to develop strategies to achieve competitive advantage in the future
• To help forecast the returns that may be made from future investments (e.g. how will competitors respond to a new product or pricing strategy? * Market Structure:
To analyze competitive forces at first we have to know about the market structure of MirpurBenaoshi Polli. It is of Monopolistic competition.
A large number of organizations of about more than 100 shops are available in this industry those compete with each other with their differentiated product and there is no high level of entry barrier and everyone has access to enter the market.
Each and every shops try to maintain, improve or make their position by advertising, regular updating of the collection of product and making or innovating new feature of product and new design. But it is not effective to compete with others because they copy or collect the product and make available to their shop within a few times and. * Marketing Strategy
The marketing strategy of the shops of MirpurBenaoshi Polli covers the Price strategy, distribution strategy and promotion strategy.
Pricing Strategy: Most of the organizations use
Markup price (= unit cost/ (1- desired return on sales))
Target-return pricing (unit cost+ desired return* invested capital)/unit sales.
Going rate pricing ( Largely based on the going rate of competitors’ pricing) methods for pricing the products.
They also sometime hike high price if it is unique and not available in the market. * Distribution Strategy: Most of organizations actually distributes their product in 2 ways:
Business 2 Business:
The organizations or the manufacturers of the industry sell its product to different shops, retailer or agent and they sell the product to the final consumer.
Manufacturer
Agent
Wholesaler
Retailer
Customer
Business 2 Consumer:
The organizations or the manufacturers of the industry sell its product through their own shop to the direct customer. Here there is a direct connection between the owner and customer.
Manufacturer
Retailer/manufacturers’ shop
Customer
Promotional Strategy:
In different cultural, religious, and international occasion most of the organization in this industry try to offer different product of different feature.
They offer different types of special share lehanga, and other ladies item in the occasion of Eid of different price.
They also offer mother’s day special shari.
Sometime they give discount for different product in some special occasion.
They also make attractive decoration to their shops, have a large segmentation of the product and offer different technological facilities like credit card system, online order and delivery to attract the customer to their shops.
Impact Analysis
Impact analysis involves with ascertaining a series of potential environmental changes and assessing the probable effect of those on a range of organizations, usually direct competition. The effect of a change firstly assessed as either a positive (+) or negative (-) influence.
Impact analysis enables managers or analyst to assess the effect of environmental change on an organization and upon its competitors. Clearly where such change is likely to adversely affect an organization more than its competitors then contingency planning need to be considered.
Assuming technological, socio cultural and political variable and change due to this changing environment impact that fall on various organization or shop in different way and their steps or activities taken against that chained situation to compete with others in Mirpur Benaroshi Polli industry are given with the following table
Impact Analysis on Mirpur Benaroshi Polli Environmental scenario |
Mohammadiee Silk House | Dia Shari | TechnologicalExploitation of e-commerce in the distribution channel | - Will not affect more because their product is different than others and customer prefers the shop because of its collection. E commerce will help to spread its business area through nation and worldwide.
Should allow e commerce site in their business. Open an official website and advertise their product throw various e commerce site. | - Same as the Mohammadee.Should make available e commerce facility, collect order from online and home delivery. | Socio culturalFashion and demand is diverting to the Indian and others RMG products | -
Fall negative impact to the shop but it is not major. It reduces the demand of Benaroshi product and so their worker will be workless. It should give training to their skilled worker to produce latest model of product to minimize the cost of collection of other products or import.It also use graphics design to produce new design | +Same effect as Mohammadi. But it is trying to make variation in their product and always offer new design of product to make their product as fashion. It is giving high concern to the research and development of new feature and design. It also try to collect the latest fashionable Indian product and Muslin, Jamdani, etc. | Political Government Loan facility to the d those who have own factory. | +It is applicable for the loan as it has its own factory.
No such high positive impact on business. It has its own capital and others source of finance. As it is one of the oldest shop in this industry and now have a better position than others and also have a strong own capital and reserve it do not need the loan. | +It is also an oldest shop in this area. Though have the others source of finance and have a strong capital, it will take the loan to enhance its business area. |
Environmental scenario | Efaz Benaroshi Mohol | Excellent Sharis | TechnologicalExploitation of e-commerce in the distribution channel | - Adversely affect the shop and business. It is not engaged in e commerce and not has any website.Should make product available in e commerce site, open official website and develop the process of collecting order by online to meet the customer’s inline facility demand and cope up with the development of technology. | - Adversely affect the shop and business. It is not engaged in e commerce and not has any website.Should make product available in e commerce site, open official website and develop the process of collecting order by online to meet the customer’s inline facility demand and cope up with the development of technology. | Socio culturalFashion and demand is diverting to the Indian and others types of ladies products | -
It has already have the collection of different Indian product and other products Silk Shari , Jamdani Shari,Lehanga, Moslin, Cotton, and other types of ladis product to cope up with the change. So there is not high chance to hamper in business activity and lost of customer. But cost is growing high. The organization should go for research and development of product according to the demand and fashion of the customer. | -As it is an oldest shop in this in this industry, it has a loyal and fixed skilled worker. Change in fashion increase the demand of muslin, Jamdani, Silk and others ladies item that reduce the demand of Benaroshi so workers will be unemployed and experience curve in the entry barrier. So it will train its present skilled worker to make them skilled on producing that item to reduce the cost of import. | Political Government Loan facility to the d those who have own factory. | +++ it has its own factory and workers.As it is comparatively new in this industry, to compete with the others and the large shops this loan facility will fall a positive impact on its business. It will use the loan to spread its business and try to collect better product and others fancy product s than the competitor. | +It has its own factory and has five brunches this loan facility will help it in their business but not has a high impact because it has already large capital. |
Environmental scenario |
Gulshan Sharis | Rimjhim Share Fashion | TechnologicalExploitation of e-commerce in the distribution channel | -Not have high adverse effect but if another provide this service then it will lost its market . so allow ecommerce site and advertise its product to the site and also open an official website. Make contract with different website to advertise their products and shops and also website. | -Should open e commerce site and official website. And also should provide home delivery and online payment. | Socio culturalFashion and demand is diverting to the Indian and others RMG products | -It has worker at a lower range. As most of the product they collect from different sources they will easily cope up with the change only by change collection type. It will increase import cost. It should invest in R&D to measure the current and up to date change in fashion to attract the customer to their shop te competes with others.Hire designer to design latest product. | + it is totally collection base organization the change will affect positively as the it fall negative impact on others competitors. At this time the shop will take the advantage and make more advertisement to capture the market. | Political Government Loan facility to the d those who have own factory. | ++Has own factory.
It has five branches in different shopping center. It will use the loan to those brunches to to make their strong position it that market place instead of Mirpur brunch. | --
It does not have its own factory and is not allowed for the loan. But it need finance and capital to enhance its business and collection. So it try to search for the others source of financing. |
Environmental scenario |
Nupur Benaroshi House | Share Nagar | TechnologicalExploitation of e-commerce in the distribution channel. | - To spread its business area it should provide e commerce facility and advertise their different type’s op product.Make contract with different website to advertise their products and shops and website. | --Should go to the website developer to open its official website and make them available in e commerce sites. Invest to differentiate their website, make it attractive in graphics, and feature. | Socio culturalFashion and demand is diverting to the Indian and others RMG products | ++
No adverse effect will fall to their business as they do not produce the product but only collect. Here more attractive product should make available in its shop to attract the customer according to their demand. | +It is also not engage with the production only a retailer. So collect the demanded fashionable product and make it available to to the customer. | Political Government Loan facility to the d those who have own factory. | --It is also new in this industry but not his own factory. But need finance to compete with the competitive market by offering better collection and facilities to the customer. It will go for others sources to collect the capital . | -- it also not have factory. Need capital to enhance its business area. Will collect the fund from the partners or go to the financial institutions. | Environmental scenario |
Mirpur Benaroshee Kuthi | Star Plus Shari’s | TechnologicalExploitation of e-commerce in the distribution channel | -No such adverse effect because of popularity and attractive collection. But to spread its business across the area and internationally it should go to the website developer and invest in opening attractive and versatile information contained website. | -- to compete with the others should provide online shopping facility with more attractive website and allow credit card and online payment facility. | Socio culturalFashion and demand is diverting to the Indian and others RMG products | ++As it is engaged in production and have a skilled group of worker .this change will leads to remove the barrier of experience curve.
It should give training to its worker about the latest product. Also should collect more fashionable product like muslin, katan, lehangga, three-piece and other Indian product and make it available to them.
Hire skilled and experienced designer to produce new feature and design product to build new fashion. | No such adverse effect on this shop It has already have the collection of different Indian product and other products Silk Shari , Jamdani Shari,Lehanga, Moslin, Cotton, and other types of ladis product to cope up with the change. So there is no chance to hamper in business activity and loss of customer. The organization soul makes research and development of product according to the demand and fashion of the customer. | Political Government Loan facility to the d those who have own factory. | ++Have factory itself and the loan will help it to open a new branch in this area to meet the demand of the customer and spread its business. | --It collect product from different sources and not have factory. But need financial aid to make and hold its position in the market and will go to the financial institution for SME loan. |
Findings
From the survey on the Mirpur Benaroshi Polli and the sample shop, we find the following situation:
In this Benaroshi industry competition is increasing day by day within the industry and also outside the industry. about more than 100 shop or organizations are available in this industry and day by day this amount is increasing and as there in not any hard barrier to enter this industry new competitor and organization are growing. every shop or organization are trying to get a large portion of the market and make them different and better than other. That is why the try to have the collection of unique product and make variation of different product.
As every shop try to meet the demand of customer and some shop try to increase demand to their customer by the collection of new product and of new design product they all think that the customer prefer their shop than the others . to insist customer they offer different special discount and try to fulfill customer need perfectly as they want.
Every organization tries to have available collection of different differentiated product and latest product to their shop that can attract their customer to the shop.
Most of the shops try to differentiate its product from others and ask price by considering the others competitor so that the customers are not lost and also to attract the customer by offering a standard range of price. Sometimes they offer lower price than the competitors to their loyal customer. Some shops offer the regular market price of the product.
Most of the shops try to have collection of better quality product than the others and have a good collection of different quality of product. They emphasize on quality of product. Some do not have the high collection of product but have a average collection because of availability of fund to be invested.
There is an association named “Benaroshi Polli Shomiti”. All the shoppers are the member of that association. The members need tot to pay any monthly fee or payment to the association. The organization deals with the legal obligations arise from government ant that time they only take fee as the cost of the process.
To fulfill the customer demand according to diversified fashion and attract the customer most of the shop have the collection of others product beside Shari like different types of local and Indian lehanga, three-piece, of different range of price.
Due to technological revolution, customers now demand technological facility from everywhere to get easy process. Here to adopt themselves with the modern demand of the customer shops are trying to make available the facilities to their shops. Most of the shops have credit card facility and another are trying to establish the system.
Most and every shop have more or less loyal group of customer. The shoppers have made a loyal and friendly relationship with that group of customer by giving various types of facility like discount and giving up to date information.
Most and every shop take order from the customer as their design demanded and take order from the retailer or others at a large scale.
Tally of according to the response of sample shops to the questionnaire
| Statements | Level of agreement | | | Fully agree 5 | Agree4 | Neither agree or disagree3 | Disagree2 | Fully disagree1 | | Options survey of the respondents | | | | | | 1 | Competition is increasing day by day | ||||| | |||| | | | | 2 | Consumer prefers our shop then other ones | |||||| | ||| | | | | 3 | Our product are more attractive for the consumers | |||||| | ||| | | | | 4 | Our price is different than the other shops | ||||| | ||| | | | | | 5 | We have better quality product than our competitors | |||||| | ||| | | | | 6 | We have an association | ||||
|||| | | | | | 7 | We sell product besides sari like ……………………………… | ||||
|||| | | | | | 8 | We have loyal group of consumer who purchase regularly | |||||||| | | | | | 9 | We also take order to fulfill consumer demand | |||||||| | | | | | 10 | We offer credit card service for customers | |||| || | | | | |
Problems of Benarasi industry
The Benarasi weaving industry has experienced significant decline since the early 1990s. Policies to promote free trade have harmed the industry. Cheaper textile imports have gained prominence with the advancement of the Negotiations on Non-Agricultural Market Access (NAMA) by the World Trade Organization (WTO), which have lead to freezing or declining of import tariffs including on textiles such as sharees. Further, there is decline in demand of Benarasi sarees due to the global economic slowdown. Often perceived as a luxury wedding dress, Benarasi sarees are not in priority list of an average consumer hard-pressed of money. Due to its high maintenance and high cost, people hardly prefer this spectacular attire. And weavers too are neither getting sufficient means to meet both ends nor the social status, through it. With population growth among weavers, there is more supply of skilled labor and much less matching demand. It leads to unjust price/wages to weavers. Since 1990s labor wages have declined to about half of what they were earlier. Further, fluctuating silk price and artificial shortages created by the suppliers have put weavers in a precarious situation. In addition, the power looms are snatching the work from handloom weavers.
Fashion market is denoted by fast changing fads and styles. Today's fashion is marked by convenience and low cost of production. Time-phase when uniqueness of the creation was appreciated and patronized at a great cost has perhaps lapsed. Now, in this changed scenario, large volumes of sharees with low quality produced that are available at cheaper rates.
In addition, weaving industry is facing crisis due to problems in availability of raw silk. Traders often create this scarcity. For small weavers buying one bundle (5-6 kilogram of raw silk) is economically strained. Not having enough business reduces their purchasing power. Prior to 1990, silk was available for Tk.800/- per Kg and now it is over Tk.6000/-. Ironically, scarcity of raw material exists despite the free-trade policies. Imported Chinese silk is cheaper and is available at Tk.5000/- per kg, and hence it has become the choice of most artisans. While multinational players are being given a free hand to operate, potentially weaver friendly institutions such as cooperatives are being allowed to decay, at the cost of the marginalized weaver.
Problems of Benarasi Production
1. As mentioned before, high cost of raw materials is one of the main problems of Benarasi production.
2. Open market policy pursued by the Government has opened the country to Indian sarees. Indian sarees for their cheaper prices, varied designs& availability usually lure more local buyers. Besides that, the expansion of Benarasi industry in different areas of the country, such as Tangi ,Kaligang, Rupganj, Shirajganj has increased the supply in comparison with the demand. So gradually the sale is declining.
3. The designs of Benarasi sarees are almost traditional. The local designers do not have any institutional training and have no interaction with professional designers. So lack of variation in design is one of the causes of decreasing demand of Benarasi.
4. The wages of the Benarasi workers are not sufficient and not regularly paid.
5. Because of inadequate financial and technical support the entrepreneurs cannot produce standard quality of sarees in large amount.
6. The market of Benarasi is mostly limited within the country. As there is no attempt for exporting Benarasi, so it has no access in international market.
7. The publicity of Benarasi saree is not sufficient
8. Customers taste is changing day by day. Their preference for foreign products is also a cause of declining the sale of Benarasi saree.
Recommendation
Recommendation to improve the current scenario of Benarasi production are-
To address the problem and ensure the promotion of Benaroshi industry the respondents have made a number of recommendations. These are follows:
1. The government should allocate an area for Brnaroshi production in the country rather than spreading the industry all over the country 2. As low ways has previously been identified as the single biggest problem, the government should fix the wage in this sector and it is most important task ahead. 3. Protectionism was identified as the second important factor. It is important to stop the smuggling of Benaroshi product from India to save the local industry.
The government policy and program to export of Benaroshi product will expand their market and increase their market and increase their demand. Government should negotiate with the Indian government to remove tariff barriers imposed upon Bangladeshi Benaroshi product to promote easy access of this product to Indian market. 4. Promotion of marketing of indigenous Benaroshi products in the local market is also necessary to give the industry a necessary boost. 5. Government subsidies would help the help in promoting Benaroshi industry.
The government should provide loans with low interest rate to the workers for the procurement of loom. The interest rate for the loan should be decrease to 5% . they also pointed out that the present amount of loan they get from different banks and financial institution is not enough for the smooth operation of business. 6. Government monitoring on the fare price of raw materials have to be considered another important factor. 7. The price of Benaroshi should fixed by cooperative society. 8. Continuous review and revision on design to meet the varied test of the customer is required for increase demand for the product. 9. Better training is identified to improve the design and entrepreneurship skill. 10. It is also important to improve the relation between owner and worker. 11. The publicity of Benarasi sarees should be increased by arranging Benarasi Fair, Fashion show, giving advertisement in Fashion magazines throughout the year, so that people will know more and become interested about Benarasi sarees. 12. Entrepreneurs should be encouraged to initiate the trend of making not only saree but also other products like scarf, wall-mate, stole etc to meet international demand.
Conclusion
Mirpur Benaroshi polly is one of the most famous place of Dhaka for its quality, brand new designed & beautiful benaroshi shari . Since last 3 decades the shops of mirpur benaroshi polli are dominating the mirpur area’s customers and consumers by selling beneroshi shari & other benaroshi product. Although they are dominating consumers of mirpur, dhaka , in recent decades the popularity or demand of shari neither increasing nor decreasing . We collect this information by surveying some most popular shop of benaroshi polly like mohammodi Shari , Dia shari , Mirpur benaroshi kuthi etc. Because in recent decades women are now prefer western cultural cloth & other Shari than benaroshi shari . Women now only like to wear sharee or purchase shari on some occasion like marriage ceremony, Pohela baishakh , Eid and Puja parbon etc . There was a time when women used to wear shari at normal occasion not at special occasion. So the impact of culture affected shari as well as benaroshi shari . Also competition of other cloth product & other share are increasing day by day. But now the mirpur benasori polly association are taking action or steps to increase benaroshi shari’s sales to compete with other competitors. They are now using e- commerce, media & various services for increasing its demand and try to hold their old customers. Also some popular shops are opening their branches beyond of mirpur benaroshi polly to get new area’s customer. However benaroshi polly still holding its popularity by it’s beautiful & quality benaroshi shari & other benaroshi product
Reference
http://www.online-dhaka.com/english/1_2_451_0-benarashi-palli-mirpur-dhaka-city.html http://www.online-dhaka.com/1_2_451_0-benarashi-palli-mirpur-dhaka-city.html http://bangladeshtextileresidency.wordpress.com/2010/01/11/banarasi-weaving-at-mirpur/ http://www.daily-sun.com/index.php?view=details&archiev=yes&arch_date=26-07-2013&type=Eid-Shopping&pub_no=568&cat_id=4&menu_id=14&news_type_id=1&index=3 Shops of Mirpur Benaroshi Polli area
