Assignment on Swot Analysis of Aarong Bangladesh

About Arong

Today, few urban consumers will argue that Aarong is the local Mecca for deshi handicraft. Aarong’s product designs has brought consumer attention back to the products and styles that are indigenous to Bangladesh, its designers blending the traditional with the contemporary in a manner that has won instant consumer appeal, starting a revolution in trends that has now been taken up by countless other boutiques and stores. Aarong’s product designs focus on the diverse types and textures of crafts and patterns that have been passed along from generation to generation among weavers and artisans in craft hubs around the country.

Aarong also plays the role of protector and promoter of traditional Bangladeshi products and designs. It houses an extensive design library where remnants of our rich craft heritage, such as Nakshikantha art and Jamdani patterns, have been widely researched and archived for present as well as future use.

History

Aarong began as a cause – a means to an end for a quiet organisation fighting to uphold the dignity of the marginalised. In 1976, when BRAC- a Bangladeshi NGO dedicated to alleviating poverty and empowering the poor, first began encouraging sericulture for women in Manikganj, their only buyers were a few scattered retailers in Dhaka. Weeks, even months would pass between supply and payment, until BRAC intervened. Aarong was born out of a need to ensure that the penniless silk farmers of Manikganj were paid for their goods upon delivery, so that they could feed their families.

Today, Aarong’s reach has spread beyond Manikganj to the rest of the country. It has grown into a thriving international enterprise showcasing ethnic wear to beautiful crafts from silks, handloom cotton, endi to terracotta, bamboo, jute and much more. From a single shop, Aarong has grown into one of Bangladesh’s biggest retail chains, with eight stores spread across the major metropolitan areas of the country – in Dhaka, Chittagong, Khulna and Sylhet and one in London, UK.

A Fair Trade Organization

Aarong symbolizes fairness in the global village. The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas: lack of working capital, marketing support and opportunity for skills development. In order to bridge these gaps, Aarong provides a wide range of services to its workers and suppliers:

Spot payment on product delivery to encourage efficiency and productivity
Reach out to producers in remote areas to ensure fair value for their efforts
Marketing communication and information for artisans
Advances against purchase orders where necessary
Training & Education in skills development to raise product quality and marketability
Product Design and Support in Product Development
Quality Control to increase producer awareness of the importance of quality

These values reflect fair trade principles which have been developed by registered Fair Trade Organisations. Fair Trade is a trading partnership, based on dialogue, transparency and respect, that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers – especially in the South (IFAT).

Importance of strategic Management in a company

Why do we need to lay so much stress on strategic management?

Strategic management becomes important due to the following reasons:

Globalization: The survival for business

First, global considerations impact virtually all strategic decisions! The boundaries of countries no longer can define

the limits of our imaginations. To see and appreciate the world from the perspective of others has become a matter of survival for businesses. The underpinnings of strategic management hinge upon managers’ gaining an understanding of competitors, markets, prices, suppliers, distributors, governments, creditors, shareholders, and customers worldwide. The price and quality of a firm’s products and services must be competitive on a worldwide basis, not just a local basis.

The distance between the business sectors are becoming less due to the provisions of certain facilities. Although political boundaries are there but in order to become successful in business it is essential to laid stress on globalization.

E-Commerce: A business tool

A second theme is that electric commerce (e-commerce) has become a vital strategic-management tool. An increasing number of companies are gaining competitive advantage by using the Internet for direct selling and for communication with suppliers, customers, creditors, partners, shareholders, clients, and competitors who may be dispersed globally. E-commerce allows firms to sell products, advertise, purchase supplies, bypass intermediaries, track inventory, eliminate paperwork, and share information. In total, electronic commerce is minimizing the expense and cumbersomeness of time, distance and space in doing business, which yields better customer service, greater efficiency, improved products and higher profitability.

The Internet and personal computers are changing the way we organize our lives; inhabit our homes; and relate to and interact with family, friends, neighbors, and even ourselves. The Internet promotes endless comparison shopping which enables consumers worldwide to band together to demand discounts. The Internet has transferred power from businesses to individuals so swiftly that in another decade there may be “regulations” imposed on groups of consumers. Politicians may one day debate the need for “regulation on consumers” rather than “regulation on big business” because of the Internet’s empowerment of individuals. Buyers used to face big obstacles to getting the best price and service, such as limited time and data to compare, but now consumers can quickly scan hundreds of vendors’ offerings. Or they can go to Web sites such as CompareNet.com that offers detailed information on more than 100,000 consumer products.

The Internet has changed the very nature and core of buying and selling in nearly all industries. It has

fundamentally changed the economics of business in every single industry worldwide

Earth environment has become a major strategic issue

A third theme is that the natural environment has become an important strategic issue. With the demise of

communism and the end of the Cold War, perhaps there is now no greater threat to business and society

than the continuous exploitation and decimation of our natural environment.
The resources are scarce but the wants are unlimited. In order to meet the wants of the world, the resources should be efficiently utilized. For example, the use of oil resources or energy resources will make the people
to use these resources for a long time.

Strategic management – A route to success:

The study of strategic management integrates different topics. Different courses are integrated due to the

study of this course so that businesses become successful in every sector. It integrates the following:

Marketing
Management
Fina nce

Research and development

The management and marketing are essential part of a business sectors. They should be integrated. Just like other sections of the business are integrated under this study. This term is mostly used by academia but this is also used in media.

BRAC and Aarong

The women Aarong employs are among the country’s most disadvantaged. Through Aarong they have been offered a way out of destitution and degradation where before they had none. And the benefits that they receive extend well beyond simply the wages they earn for their products, since every single woman who works in Aarong-owned production facilities is also a beneficiary of BRAC’s multifaceted development programmes.

As a support entity of BRAC, a significant portion of Aarongs earnings go directly into financing the NGO’s development programmes in healthcare, education as well as economic and social development.

Artisans

Holding steadfast to its original mission, Aarong today supports the lives and livelihoods of nearly sixty five thousand rural artisans and handicraft producers, 85% of whom are women. More than forty thousand of these women work directly for Aarong in its 13 production centers in Baniachong, Gorpara, Jamalpur, Jessore, Kushtia, Manikganj, Rajbari, Sherpur, and Pabna, Pollobi, Kurigram, Nilphamary, Jhenaidah and 653 subcentres spread across Bangladesh.

Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong. Potters, Brass Workers, Jewellers, Jute workers, Basket Weavers, Handloom Weavers, Silk Weavers, Wood Carvers, Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services

Aarong Production Centre

The Ayesha Abed Foundation (AAF) is an organisation that aims to provide avenues for employment and income generation for underprivileged rural women. It is an enclave for women, formed to uplift them economically, through their work as producers, and also socially, through their development into entrepreneurs. The Foundation provides an appropriate working environment, financial and technical assistance, and training to develop the women’s skills in various crafts. The Foundation was established to commemorate the memory and work of late Mrs. Ayesha Abed, a co-worker and wife of the Founder and Chairperson of BRAC. The work that is done in the Foundation is a testament to her commitment to the issues of education, training and employment opportunities for disadvantaged women. It was she who in 1976 initiated all the present major activities of AAF in Manikgonj.

The AAF aims to work with the most underprivileged women in the society. These women are often the most neglected and are in need of much assistance and support. The AAF plays the role of a facilitator. The women are placed in an enabling environment, with other women of similar socio-economic backgrounds. They are trained and then given the opportunity to generate income. One of the major challenges that these women have to face is that they are marginalised and they, on their own, have no way of becoming part of the economic system. This is where the AAF steps in, helping such marginalized women out of their peripheral existence in society, and giving them the opportunity to become involved in sustainable enterprise.

The AAF is closely interrelated with other programs, especially BRAC Development Program (BDP) and Aarong. The women workers of the AAF come from the BDP organized Village Organizations. Working at the AAF thus gives the women access to other BRAC programs. All of the AAF’s finished products are sold through Aarong, which additionally provides designs, raw materials and financial support to the AAF. Since AAF supplies exclusively to Aarong, it is treated as Aarong Production Centres.

Goals

Empowering destitute rural women by providing opportunities for employment and income generation.
Ensuring commercial success of the enterprise of women producers.
Reviving traditional skills of rural artisans.

Services

Free Medical check-up including free eye treatment, eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workers retirement fund

WOMEN’S PRODUCTS

Traditional
Western
Nightwear
Shawls/Scarves
Shoes
Bags
Fabrics

MEN’S PRODUCTS

Traditional
Executive Shirts
Maanja
Fotua
Short Kurta
T-shirts
Stoles/Shawls
Sandals

CHILDREN’S PRODUCTS

Clothes
Toys
Books
Shoes

TEXTILE PRODUCTS

Bed
Table
Living
Kitchen
Kids
Rugs
Fabrics

JEWELRY PRODUCTS

Gold (see Gold)
Silver
Pearl
Other

LEATHER PRODUCTS

Shoes
Bags/Wallets
Belts
Boxes
Photo Frames
Office

BAMBOO/LEAF PRODUCTS

Living

Boxes
Photo Frames
Dry Decorative
CD Racks
Floor Mats

Dining

Mats
Napkin Holder
Trays
Place Mats
Coasters

TERRACOTTA PRODUCTS

Decorative

Dining

Bowls and Platters
Diningware
Glasses/Mugs
Hot Plates
Pitchers

Lamps

Plant Accessories

SWOT analysis is a powerful technique for understanding organizations Strength & Weakness and looking for the Opportunities & Threats it may face. Used in a business context it helps organization carve a sustainable niche in a market. This analysis is mainly based on an imaginary situation.SWOT Analysis of Aarong

Strength

Aarong is a very reputed organization. They are now capturing 68% of total handicraft market share in Bangladesh. It’s a local brand and now exporting their products outside of the country. Aarong has good reputation for fine quality products. It has a strong management team who are continuously giving their great effort to make it a successful one. Another important fact is that, Aarong has almost “Zero” production damage rate which reduces their cost. They are innovative and always bring some new product in the market which meets customer requirement and expectations. The organization is a respected employer that values its workforce.

Weakness

Aarong has a reputation for new product development and creativity. However, they remain vulnerable to the possibility that their producer may not be able to produce product timely due to their inability. The collection channel of the organization is not that much structured so that they can get the products from the producer on time and it may create problem for them in future. If any producer is not able to make the product on time due to some personnel problem then the company will also not be able to deliver their product on time. This is a big problem and it happens most of the time on delivery. Aarong charges higher price relatively than their other competitors as a result some times customers lose their interest to by product from them. Its sales force or sales girls within the outlet are not properly trained up. Sometimes they make customers disappointed by their attitude and customer doesn’t feel good to buy from there. Sometimes they suffer for financial problem, although it’s a rare situation.

Opportunities

Aarong is very good at capturing the advantage of opportunities. It can go for new distribution channel like it can make some joint venture with some other small Boutique and sales its products in more places. Through that it can capture more market share in the handicraft industry in Bangladesh. Aarong can expand its business globally. New market for handicraft such as Europe and America are beginning to emerge. People are now trendier about local events & functions like Pahela Falgun, Pahela Baisakh, Victory day, Independence Day etc and they buy new and special products for these events. Aarong can make new products to sell in those special occasions. According to the season change, people are also changing their preference in buying products and considering this scenario Aarong can produce products on the basis of seasonal variations.

Threats

Aarong doesn’t have any big competitors right now. But they have some small competitors like KayKraft, Anjans, Deshal, Jattra, Khubsurti, Rina Latif, OZ, Rang and some other Boutiques established at Banani 11, who are taking their 32% customer and increasing in a slow rate. Aarong always face price wars with their competitors. Its competitors have some superior products like OG’s Panjabi shape, Khubsurti’s design of Salwar kamiz Rang’s Shari’s color, which is decreasing Aarongs market share as well as sales. But now they are repositioning their Brand to compete with them.

Competitors Analysis of Arong

Competitor analysis in marketing is an assessment of the strengths and weaknesses of current and potential competitors. This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats. Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation, implementation, monitoring and adjustment.

Aarong has its own version of the competitive analysis and its function is clear: to line up your product with other products and show where yours falls short and where yours is superior. Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors.

From the above diagram it is seen that Aarong has competitive advantage over it’s competitors on almost every factors. Only few companies have ability to chase some sort of advantage like Aarong. Such as Rina Latif’s product features, qualities and innovativeness, Kay-Kraft and Anjan’s supplier, Rang’s color and Khubsoorti’s cost.

Conclusion & Recommendations

Established in 1978, Aarong is a fair trade organisation dedicated to bring about positive changes in the lives of disadvantaged artisans and underprivileged rural women by reviving and promoting their skills and craft. Reaching out to weavers, potters, brass workers, jewellers, jute workers, basket weavers, wood carvers, leather workers and more, Aarong embraces and nurtures a diverse representation of 65,000 artisans, 85% of whom are women. Today, Aarong has become the foundation upon which independent cooperative groups and family-based artisans market their craft, in an effort to position the nation’s handicraft industry on a world platform of appreciation and acknowledgement.

In these situation I recommend some to go ahead in fashion sector: