The fashion

Industry in
Bangladesh:

A Strategic
Managemen
t Coliseum
Welcome
!
Group 3

2
1 Outline
Overview
 Multibillion-dollar global
enterprise - Business of
making and selling
clothes.
 Fashion Industry (which
makes “high fashion”),
Apparel Industry (which
makes ordinary clothes 4
Overview
 Prior to the Mid-19th
century, virtually all
clothing was handmade
for individuals.
 Beginning of the 20th
Century —New
technologies —clothing
had increasingly come to 5
BD
Perspective
▸ World’s second
largest RMG
exporter.
Country’s 81%
of exports.
 Textile and
Apparel sector
contribute 20%
to BD’s GDP. It 6
Why apparel in BD is attractive
 Only sector returns in 3 to 5
years. Also, huge growth
opportunities .
 Labor Availability
Why apparel in BD is attractive
 BD ranked 6th on the list of
top apparel exporting
countries back in 2006,
share was just 2.8% .

Share of Global Apparel Exporters (2016)

 The Duty-free Advantage
– LDC Status
 Technology Adoption-
vertical capacities, which
only China could offer
before, ensure transparency
and coord in supply chains.
 BD FASHION
INDUSTRY
 Begins- Nipun in 1973.
 Aarong, founded in 1978 as a project of the Mennonite
Central Committee (MCC).
 1980 BRAC took Aarong under its wing.
 Mid-eighties Cat’s Eye marched - for western-style men’s
wear.
 Pearson’s appeared prominently but did not last long.
 End of the eighties- Tangail Saree Kutir, Kaniska, revived
the lost glory of the local saris.
 Things accelerated in Nineties - when Kay Kraft, Anjan’s,
OG and Rang entered into the scene .
 STRATEGIC GROUP MAP

Aa

High
Ra
KK
A
D
Y
C
E
Price

B
R
Aa-Aarong KK- Kay Kraft
A-Anjan’s Ra- Rang
B-Bibiana R- Richman
C- Cats Eye Y- Yellow
Low

D- Darjibari
E- Ecstasy

Low High

Trends/Design
 Why we chose Aarong
▸ One of the leading lifestyle brands,
▸ Top competitors:
▹ Yellow,
▹ Sailor,
▹ Ecstasy
▹ Cats Eye etc.
▸ Competitive advantages over competitors:
▹ product innovation, features & quality,
▹ supplier,
▹ Distribution and costing.
 Aarong’s Goal
▸ Poverty alleviation by economic development
& human capacity building,
▸ Empowering rural women
▸ As a platform for rural women to sell products
to urban market;
▸ A linkage between the rural poor artisans &
urban retailers.
 Aarong’s Objectives
 Creating job opportunities
 Generating surplus for BRAC in order to minimize donor
dependency
 Ensuring long-term support and contribution toward
the sustainability of BRAC’s development interventions
such as microfinance, education and skills
development etc.
 Swot Analysis of Aarong

 Traditional  Higher price.

 Good brand image  Decentralized production
 Strong financial foundation  Inability to supply.
 Handmade & unique products  Lack of proper training
 Market advantages.  Less appeal to the youngsters
 Swot Analysis of Aarong

  High price.
Globally expanding business.
 New competitors.
 Exploring online business.
 Lower quality & less uniqueness of
 New distribution channel. products.
 Franchise ventures  Economic crisis
 Lowering the price  Smuggled goods
 Porter’s five
models at
Aarong:
Threat of new entry Bargaining Power of
 Entry Cost(+) Buyer
 Economies of scale in  Buyer volume(+)
place(+)  Buyer Class(+)
 Protection for key  Buyer’s ability to substitute(-)
technology(0)  Buyer’s information
 Barriers to entry(-) availability(+)
 Experience needed(0)  Price sensitivity(-)
 Porter’s five
models at Aarong:
Bargaining Power of Threat of
Supplier
Substitution
 Number of available fashion
Industry(-)  Price of Substitution(-)
 Location(+)  Quality of Substitution(+)
 Route of supply to the market(-)
 Demand for similar
 Price comparison to other
players(-)
products(+)
 Capacity (+)  Availability of substitutes(-)
Porter’s five
models at
Aarong:
Competitive Rivalry
 Number of
Competitors(+)
 Quality Differences(+)
 Other Differences(+)
 Switching Cost(-)
 Customer Loyalty (-)
 Strategic group &
market positioning of
▸Aarong
High-Price Image
Strategy differentiation
▸ Aarong prices its strategy
products or ▸ As a leading
services higher brand of
than its Bangladesh,
competition to Aarong
create a certainly
perceived value. desires its 20
Strategic group &
market positioning of
Aarong
▹ Channel differentiation
strategy
▸ Since Aarong is a fashion
brand, placing
advertisements on
Magazines, Fashion
supplements etc. was
expected to be more effective 21
 5 Key Strategic success
factors of Aarong
 Engagement
 all levels of staff throughout the organization
 Communication
 a communication to all levels .
 Employees’ input through surveys, FGD, meetings, etc.
 Innovation
 innovation of new products/new service/re-structure a department.
 E.g.
 Women’s maternity wear.
 Online shopping.
5 Key Strategic success
factors of Aarong (Contd.)
 Project management
 Prioritization of projects
 To ensure success in execution of strategy.
 Culture
 Unique and diverse organizational culture.
Recommendatio
 Aarong needs n
to improve their CRM section.
Recovery sections have to be fast and should
take clear information about the customer.
 Aarong should increase their product.
 Aarong need to increase their membership card
holder
 Aarong need to increase direct Marketing.
 Aarong have very strong backup power from
government so they can use those powers
 Conclusion
▸ Aarong is not only a fashion house it is more than that. With
times Aarong has evolved itself as one of the most successful
lifestyle stores in our country maintaining the tradition and
the trends.
▸ Besides becoming the leading lifestyle chain store in
Bangladesh, they have cherished the traditional crafts of
Bangladesh through Ayesha Abed Foundation and have been
able to create employment of thousands of people.
▸ As a result Aarong is a fair trade organization reaching global
market by representing folklore tradition of Bangladesh.
Aarong plays the role of protector and promoter of traditional
THANKS!
Any questions?

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