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CASE STUDY

On
EXPORTING BEADS PRODUCTS

Course name: GLOBAL BUSINESS AND POLICY


Course Code: 310

Submitted To:
TANVIR MOHAMMAD HAYDER ARIF
Associate Professor
Department of Finance
University of Chittagong

Submitted By:
GROUP NAME: MACAW

NAME OF MEMBERS ID

MOSTAFA AL HOSSAINI 13303032

GOLAM SAROWAR 13303059

PARVEZ ALAM 13303091

SADDAM HOSSAIN 13303025

MD. MAMUNUR RASHID 13303023

Date of submission: 22th April 2017


A case on Entering into the global market through exporting
beads products.

The global handicrafts market has been developing world wide due to the increasing interest of people in art and
culture. A number of micro and small enterprises are coming in Handicraft business, where artisans from poor
communities are involved in the creation of handicrafts. Their artworks are also valued on humanitarian grounds.
Handicrafts are artistic representation of a particular culture or ethnic tradition. Handicraft products include objects
of utility and decoration. Most of rural women of Bangladesh are underprivileged and they are yet to have
employment opportunities. If they are trained well they can be asset for the country and contribute to national
economy. Among various types of handicrafts, the demand of beads products is increasing day by day in the global
market. If rural women are trained and engaged in making beads products, Bangladesh has an opportunity to
improve their standard of living as well as to boost up its export earnings. China is the leading exporter of such
products. Competing China and India is not an easy task but with competitive labor cost and culture based design
Bangladesh has the potential in this sector.

To ensure that scarce resources are optimized, the full benefit of initiatives is realized, the risks are mitigated and the
business functions are supported, a business case approach to managing entering into global market through
exporting beads products is being undertaken. The purposes of this business case are the followings:

1. To show how beads products are promising in the global market.


2. To provide an objective assessment.
3. To identify the risk factors to be faced.
4. To provide projected costs and revenues.
5. To provide an optimal direction.

The business idea is to enter into the global market through exporting beads products to those countries where there
is a huge demand for these products. The target markets primarily are Germany, Italy, and France. As an economic
power as well as an important member of the European Union (EU), Germany is a reliable partner of Bangladesh in
development co-operation. In trade with Germany, Bangladesh has for years recorded a large surplus. Germany is
the second largest export market of Bangladesh after the US. Bilateral trade is with about 4.5 billion euros in 2012.
A German-Bangladeshi investment promotion and protection agreement has been in force since 1986 and a bilateral
double taxation accord since 1993. The bilateral trade between Bangladesh and France stood at $1.647 billion in
2012, of which Bangladesh's export to France amounts to $1.513 billion. Bangladesh mainly exports knitwear,
woven garments, frozen food, Agri products, leather, jute and jute products. With healthy and stable trade relations
Germany and France could be the best markets for Bangladeshi beads products. The key resources in functioning
this business are beads, labor and nylon. Arranging training program, producing beads products by them, Promoting
products through Banglacraft and Contacting foreign buyers online are the major activities. The beads products can
be of different size, color and design. The products to offer are hand bags, purse, ornaments, fruits of beads,
showpiece etc.

The global handicraft market size is $100 billion. The largest importers of handicrafts products are USA, Germany,
Italy, U.A.E, France etc. and the largest exporters are China, India, Mexico, Vietnam etc. Last year Bangladesh
exported Handicrafts worth $10 million to the global market. Which is very negligible compared to global market
size. Technavios market research analyst predicts the global handicrafts market to grow at a tremendous rate of 12 %
during the 2015-2019. The global handicrafts market is highly fragmented due to the presence of several small and
medium providers. Handicrafts are a dynamic industry, and its development is underpinned by factors such as
economic conditions, technology, skilled workforce, and innovative use of raw materials. The Americas dominated
the handicrafts market during 2014 with a market share of 38%. China and Nepal are known for their attractive
architecture made up of carved wooden struts while Thailand is the key manufacturer of lacquer ware, made up of
wood or woven bamboo. The African region is also popular for its wood carving and sculptures with Kenya being
the key revenue contributing country. Bangladesh with high market potential can go for producing and exporting
beads products. Labor is one of the crucial production factors. Labor cost can give us competitive advantage over
China and India as labor cost in these countries is quite higher than in Bangladesh. Hence, Critical success factors
for this business are competitive labor costs, culture based design, Government incentives, Low capital requirement
etc.

Almost every business of the world faces some kind of risks. Accordingly this handicraft business is not also
without risks. The crucial risk Factors that may affect this business are competing with giant exporters with huge
resources like China, India and Vietnam, volatile diplomatic relationship with importing countries, lack of skilled
workers etc. Flexibility in production of goods as per market demand and Low barriers to the entry of new players
can also help Bangladesh in this business. But at the same time Lack of co-ordination between government and
private bodies, lack of promotion of products can hamper the business as well. The major costs associated with this
business are costs of raw materials, labor cost, transportation cost, promotion cost, startup cost and operating costs.
The benefits that this business can avail us are women empowerment, increase in export earning etc.

Finally, it is found that this business of exporting beads products is quite promising. With high potential market if
can manage to mitigate the risks and hold timely strategies, Bangladesh can capture a huge foreign market and uplift
the standard of living of rural women as well.