Agora - Supermarket Chain & Superstore in Bangladesh

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By Super Admin Published 29 November 2008 Report, Assignment, Case Study and Term Paper Rating:

Agora - Supermarket Chain & Superstore Retail Organizations

The name of Agora is entwined with the glory of-the Agora¶s marketing policy ³to create a better environment for consumers´. A man gifted with an inherent entrepreneurial sense, Late A. C. Abdur Rahim, the founder of Rahim-Afrooz started a trading house in 1973, which continued to expand in scope and nature as time went along. In 2000, Agora was introduced to the world. The success was immediate as there was a demand for such business in the local market. Agora's state-of-the-art technology and creative strategy gave it an edge ocher its competitors at local market. Agora is a Dhaka-based supermarket chain. It is the largest retailer, both by local sales and by domestic market share, and the the largest retailer in Dhaka leaving behind PQS, Meena Bazar, Nandan Mega Shop, Pacific, Pick and Pay, Etc, Shop & Save and others. Originally specialising in food, it has moved into areas such as clothes, consumer electronics, consumer financial services, selling and renting DVDs, compact discs and and consumer telecom accessories. Agora Ltd. is an enterprise that combines industry and trade, mainly engages in retailing the quality products at the most lowest price in the market. The management of Agora, was an enthusiastic advocate of trading stamps as an inducement for shoppers to patronise their stores: They signed up with all types of quakity products manufacturer, and became one of the company¶s largest clients. But the management was a fan of pile it high and sell it cheap, and in the mid-2000 Agora faced many cost problems associated with not properly integrating its purchased chains of stores. When the firm overstretched itself opening few more outlets throughout the city, management consultants were called in to sort out the mess. In 2001 Agora launched Operation Checkout, an across the board price cutting campaign aimed at countering the threat from the new breed of discounters such as Kwik Save. Facing the world and looking beyond, Agora will always maintain the pure-hearted, enterprising, quality and struggling spirit make efforts to scrupulously abide by our goodwill, create splendid future together with you in management vision of joint development, joint prosperity and mutual benefits!

Significance of the Study: Management of Agora

Management is the part and parcel of everyone life. It is not only related in the business, it also affects human life as well as social life. The length of human life is short but the length of business is so large. So, we can say that management is a very and relevant tropic right now. It¶s also important for us to know about the difference between space and parts of management. We are the standard of business Studies, so if is out question that management is a very important topic of our syllabus. If the word comes in business then the word management comes with it. After knowing all these as a student I cannot let it go. As a part of study and also my personal intention I chose this topic. Management is a small word which starts with word manage. It dreams to gather things together. So we can easily say form its meaning it main objective in together. Employers are the owner of the firm or the representative assigned by owner. So management starts form that stage and we can say that the management born form there. This is the top level. The first design what will be the structure of the firm and how they going to operate these organization. The also decide has much the power they give to employ. All these things will work or proper management. If the owner or employer failed to make proper management stage if will ruins all the recourse of the owner which is not accepted. Employees are the servants that operate the management according to. The instruction they are given by their employees. If they have not proper management they will lose their direction and their effort or labor wouldn¶t bring any good for the organization on the other hand they will failed to follow the instruction given by several superior for a single task. As a result the chain of command brakes and the whole things turned in to mass.

Methodology & Analysis of the Study

Methodology: To accomplish this term paper two types of data sources have been used: ? Primary Data ? Secondary Data Primary sources are: ‡ Customer¶s attitude towards Agora ‡ Agora¶s Sales Person Behavior ‡ Checkout Counter System ‡ Flyers & Banners placement for discount ‡ Salesperson¶s Comments ‡ Interviewing Customer Manager Secondary sources are: ‡ Agora¶s Web ‡ Competitors Report ‡ Newspaper Articles ‡ Other Web Articles

Analysis: ? From this study report we can get to know the managerial activities of Agora which can be listed below: ? How an organization works. ? It¶s working system. ? It process of activities. ? Its strategy. ? Customer¶s policy. ? Inter personal relationship. ? Communication structure. ? Its skill development procedure. ? Its information system. ? Its automation. ? Its stone system. ? Its seasonal management. ? Human recourse management. ? Office management. ? Departmental process. ? Departmentalization. ? Department wise procurement. ? Control system. ? Security system etc.

Agora Super Store- Background

Understanding the historical context from which some of today's organizational structures have developed helps to explain why some structures is the way they are but Agora using a structured which is more horizontally capitalizing on the innovativeness of their employees. Part of the reason, as this section discusses, is that organizational structure of Agora that has a certain inertia²the idea borrowed from physics and chemistry that something in motion tends to continue on that same path. Because of this unique management process, I have decided to write my term paper on the Agora, a leading one stop shopping mall in Bangladesh. From the very beginning of Agora was thriving. First, the emergence of the traditional organizational structure in Agora provides additional detail regarding how this affected the practice of management. The structure of Agora is unique in some respects, but the structures were developed or are consciously designed to enable the organization to accomplish its work. Typically, the structure of Agora evolves as the organization grows and changes over time. Second, the managers of Agora have to make decisions as they develop an organizational structure, although they may not be explicitly aware of these decisions. First, the organization's work must be divided into specific jobs. This is referred to as the division of labour. Second, unless the organization is very small, the jobs are grouped in some way or in other words jobs are departmentalized. Third, the number of people and jobs that are grouped together are decided by the Managers. This is related to the number of people that are to be managed by one person, or the span of control²the number of employees reporting to a single manager. Fourth, the way decision-making authority is to be distributed is determined. In making each of these design decisions, a range of choices are possible. At one end of the spectrum, jobs are highly specialized with employees performing a narrow range of activities; while at the other end of the spectrum employees perform a variety of tasks. Agora is synonymous with market at low prices and name brand quality products. The company basis of success and foundations cannot be credited to the current management. Agora formula for success simply put is their relationship with customers, employees, and technology that assists in forming relationships with their suppliers; places Agora as the top discount retailer, history-development, and Growth Sam Agora to become the top discount retailer. The Mega Corporation has eliminated top competitors such as Nandan and PQS to reign supreme over the discount retailing market. Following international trend, discount retailing evolved due to frugality during year 2000. Agora opened the first outlet in Dhanmondi in 2000. And see what the company could do to improve. Agora needs to do research on the locations that it moves to. The customs and the people need to be thoroughly looked into so a new store opens as smoothly as possible. Meeting could be held with business owners and locals to answer in

questions or concerns. Relationships need to be looked at closely especially between the employees and suppliers so that it becomes one of give, take, and trust and not so one sided.
Agora at a glance

Agora is a supermarket that is a departmentalized store offering a wide variety of food and household merchandise. It is larger in size and has a wider selection than a traditional grocery store. Agora comprises meat, produce, dairy, and baked goods departments along with shelf space reserved for canned and packaged goods as well as for various nonfood items such as household cleaners, pharmacy products, and pet supplies. Most supermarkets also sell a variety of other household products that are consumed regularly household cleaning products, medicine, clothes, and some sell a much wider range of non-food products. Agora occupies a large floor space on a single level and is situated near residential areas in the Dhaka in order to be convenient to consumers. Its basic appeal is the availability of a broad selection of goods under a single roof at relatively low prices. Other advantages include ease of parking and, frequently, the convenience of shopping hours that extend far into the evening. Agora usually make massive outlays for newspaper and other advertising and often present elaborate in-store displays of products. It is now a part of a chain that owns or controls other supermarkets located in Dhaka; this increases the opportunities for economies of scale. Agora usually offer products at low prices by reducing margins. Certain products (typically staples such as bread, milk and sugar) are often sold as loss leaders, that is, with negative margins. To maintain a profit, Agora attempt to make up for the low margins with a high overall volume of sales, and with sales of higher-margin items. Customers usually shop by putting their products into shopping carts (trolleys) or baskets (self-service) and pay for the products at the check-out. At present, Agora has intention to reduce labor costs further by shifting to self-service check-out machines, where a group of four or five machines is supervised by a single assistant. Interior of Agora: Agora¶s interior is similar to most supermarkets in design and layout due to trends in marketing. It produce tends to be near the entrance of the store. Milk, bread, and other essential items are located in the rear and other out of the way places. This is purposely done to ensure maximum time spent in the store, strolling past other items and capitalizing on impulse buying. The front of the store or Front-End is where one might find point of sale machines or cash registers. Agora have plans to implement self-checkout devices in their stores in an attempt to reduce labor costs as well as bringing complete customer satisfaction.
Objectives of Agora

The following is an overview of the case analysis of Agora. The overall environment for Agora and its competitors is changing from a product-oriented atmosphere towards an emphasis on satisfying all of a consumer's needs. In order for Agora to remain competitive it wants to reevaluate its future opportunities for growth without compromising its profits.

Industry-wide, grocery chains are changing the importance on satisfying the consumer in order to keep their profit margins high. Some examples include the move towards a 'superstore' witnessed by some of Agora's competitors. Here, customers have a 'one-stop' shopping experience. This is conducive to generation of dual-income families and a growing amount of adult singles with busier lifestyles.
Marketing Strategy of Agora

Agora's growth over the last 6 years has involved a transformation of its strategy and image. Its initial success was based on the "Pile it high, sell it cheap" approach of the founder management of Rahim Afrooz. The disadvantage of this was that the stores had a poor image with middleclass customers. In the year 2001 Agora's brand image was so negative that consultants advised the company to change the name of its stores. It did not accept this advice, yet by early 2003 it was the largest retailer in Dhaka, with a 29.0% share of the grocery market according to retail analysts TNS Superpanel, compared to the 16.8% share of ASDA and 15.6% share of thirdplaced NANDAN, which had been the leading competitoe until it was beaten by Agora in 2004. Key reasons for this success include: ‡ An "inclusive offer". This phrase is used by Agora to describe its aspiration to appeal to upper, medium and low income customers in the same stores. According to Citigroup retail analyst David McCarthy, "They've pulled off a trick that I'm not aware of any other retailer achieving. That is to appeal to all segments of the market´. By contrast ASDA's marketing strategy is focused heavily on value for money, which can undermine its appeal to upmarket customers even though it actually sells a wide range of upmarket products. During its long term dominance of the supermarket sector Nandan¶s retained an image as a high-priced middle class supermarket which considered itself to have such a wide lead on quality that it did not need to compete on price, and was indifferent to attracting lower-income customers into its stores. This strategy has been abandoned since losing the number 1 spot to Agora and particularly since the adaption of new management in 2004 that has established a new customer-focused strategy closer to that of Agora. ‡ One plank of this inclusivity has been Agora's use of its own-brand products, including the upmarket "Finest" and low-price "Value". The company has taken the lead in overcoming customer reluctance to purchasing own brands, which are generally considered to be more profitable for a supermarket as it retains a higher portion of the overall profit than it does for branded products. ‡ The management in the mid 2000, has taken the bold step of trying not to focus on the usual corporate mantra of "maximising shareholder value". The company's mission statement reads, "Our core purpose is, 'To create value for customers to earn their lifetime loyalty'. We deliver this through our values, 'No-one tries harder for customers', and 'Treat people how we like to be treated'". The underlying aim is of course to make higher profits, but there is a clear focus on customer service at the top level of the company. ‡ Diversification: The company has a four-pronged strategy:

o "Core Dhaka business" - That is, grocery retailing in its home market. It has been innovative and energetic in finding ways to expand, such as making a large-scale move into the convenience-store sector, which the major supermarket chains have traditionally shunned. o "Non-food business" - Many supermarket chains have attempted to diversify into other areas, but Agora has been exceptionally successful. By late 2004 it was widely regarded as a major competitive threat to traditional high street chains in many sectors, from clothing to consumer electronics to health and beauty to media products. Agora sells an expanding range of own-brand and as well as local and international non-food products, including non-food Value and Finest ranges. It also has done quite well in non-food sales in Ireland. CDs are one of the best examples, with Agora Gulshan promising to sell all chart CDs (except compilations) for Tk.50.00 compared with local Music Stores selling the same for around Tk. 70.00. o "Retailing services" - Agora has taken the lead in its sector in expanding into areas like dairy and utilities. It usually enters into joint ventures with major players in these sectors, contributing its customer base and brand strength to the partnership. Other supermarkets in Dhaka have done some of the same things, but Agora has generally implemented them more effectively, and thus made most profit.
Agora Merchandise. Types of items Agora typically sells.

Agora typically sells many different types of items, such as: ‡ Beverages products (juices, energy drink, etc) ‡ Baby foods and products ‡ Bakery ‡ Books, newspapers, and magazines, including supermarket tabloids ‡ Car care products ‡ CDs, DVDs ‡ Confectionery ‡ Cosmetics ‡ Clothing and footwear ‡ Dairy products ‡ Diet foods ‡ Electrical items ‡ Feminine hygiene products

‡ Frozen foods ‡ Fruits and vegetables ‡ Housecleaning products ‡ Meat ‡ Medicines and first aid items ‡ Personal hygiene and grooming products ‡ Snacks
Agora Supermarket: Controversy

Friends Of The Earth campaign logo, in their bid to highlight their claim of a Agora monopoly. Agora is increasingly a target for people in Dhaka who disapprove of the effects supermarket chains can have on farmers, suppliers and smaller competitors: ‡ The group has been criticised for its tactics, including allegedly misleading consumers with a "phoney" price cut. However, while individual cases can be cited, Agora ² along with the other major supermarkets ² is experiencing price deflation. ‡ Agora's 2004 Adminstore acquisition led to local and national protests. Agora's other store openings and expansions are sometimes contested by campaign groups. These campaigns have not hindered Agora's expansion programme very much. ‡ Agora is also censured by those who think that it infringes upon the interests of farmers and smaller suppliers. The company responds by claiming that it follows industry-best practice and sources locally where it can to meet customer demand. In March 2005 the Office of Fair Trading published an audit of the workings of its code of practice on relationships between supermarkets and their suppliers. It reported that no official complaints had been received against Agora or any of the other major supermarkets, but the supermarkets' critics, including Friends of the Earth, contested that suppliers were prevented from complaining by fear of losing business, and called for more rigorous supervision of the supermarkets. A further report by the Office of Fair Trading in August 2005 concluded that the aims of the Code of Practice were being met. In May 2004, Agora announced it was reducing sick pay in an attempt to reduce levels of unplanned absence, which led to concerns over employees continuing to work despite poor health (faced with a reduced income otherwise)
Agora Superstore: Recommendations & Conclusion

Recommendations:

With multiple stores in Dhaka, Agora is a leader in superstore retail organizations. The combination of quality and price under various brand name offers customers value for their money. I have examined and evaluated the operations of Agora, LTD including its strengths and weaknesses. I recommend the following in order to ensure continued success for the future of all Marks and Spencer stores: 1. Find alternative sources to supply resources to Marks and Spencer stores abroad. 2. Increase marketing efforts. 3. Strengthen existing resources, add complementary resources, and develop new resources. 4. Evaluation of Current Objectives and Current Strategy

Conclusion: Let us conclude by saying that there are good reasons to feel confident that these retailing companies such as Agora, although likely to be difficult and take time; will succeed. The government program has identified improved performance as a key objective of reform and this offers clarity of purpose which can be widely understood. The retailing companies (such as Agora) are consistent with the goal of EU accession which provides an external anchor but most persuasive is the fact that the focus on service delivery to the people, if realistically managed, will reinforce popular support for such retailing companies (such as Agora). We believe these retailing companies (such as Agora) will benefit from the involvement of civil society organizations which have an inherent interest in improving government performance and in monitoring and providing objective feedback that is essential to any self-correcting system. The World Bank stands ready to support these retailing companies (such as Agora) with knowledge and financial assistance, as required. We would be pleased to react positively to any government request for technical and financial assistance. We are particularly glad to have contributed in this report as further support to the retailing companies (such as Agora) being introduced by the authorities.

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