Company and environmental analysis of Aarong

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Assignment on

Small Business Enterprise

Unit - 33

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Content Page

  1. Introduction
  2. Aims & objectives of Aarong
  • Strength
  • Weakness
  1. Internal factors
  • Opportunities
  • Threats
  1. External factors
  • Opportunity
  • Threats
  1. Comparison of past and present business in Aarong
  2. Financial factor
  3. Human resource
  4. Marketing
  5. Weakness with recommendation and justification
  6. Existing performance, maintenance and strength
  7. New area of expanding business
  8. Conclusion
  9. Self- evaluation
  1. Select a small business and produce a profile identifying its strength and weakness

INTRODUCTION

Aarong established in 1978. Aarong is a fair trade organization dedicated to bring about positive changes in lives of disadvantages artisans and underprivileged rural women by reviving and promoting their skills and craft. Aarong has one outlet in London and exporting to other countries of North America and European and some Asian countries and they are targeting those activities after fulfillment the consumer demand in domestic market and reaching out the weavers, potters, brass workers, jewelers, jute workers, basket weavers, wood weavers, leather workers and more. Aarong represent of 65000 artisans work with the collaboration of Ayesha Abed Foundation (AAF) and 85% of them are women. Today Aarong has become the foundation upon which independent cooperatives groups and family based artisans market their craft in an effort to position the nation handicraft industry on a world platform of appreciation and acknowledgement.

Aarong production centre (Ayesha Abed Foundation)

AAF is an organization that aims to provide avenues for employment and income generation for underprivileged rural women. It is an endive for women, formed to uplift them economically through their work as producers and socially through their development into entrepreneurs.

Aims and objectives of Aarong

The aim of Aarong is to help sustain rural craftsmanship and find a wider market for their product nationally and internationally.

Objectives

The objectives of Aarong is to -

  • Establish factory in rural area.
  • Train the rural people about the quality product and craftsmanship.
  • Set up a transportation system for the employees.
  • Set up outlets in prime locations of Bangladesh.
  • Focus on international business through franchising.
  • Recruiting more employs at sales outlets
  • Introduce new product in the market and improved their product line.

Internal factors

Strength:

  • Aarong has unique design of its products.
  • Aarong accepts debit and credit cards.
  • Aarong is a leading brand reputation.
  • Aarong has high production quality beside customer’s loyalty.
  • The management system is strong so there is excellent working condition.
  • Wide variety of goods.

Weakness:

  • Prices are so high that products are out of reach for some consumers to buy.
  • Aarong has limited outlets.
  • No direct marketing experience.
  • They do not have enough skilled employees.
  • Aarong do not provide any online shopping so there is no home delivery service.
  • Pay less salary to root level employee.

External factors

Opportunity:

  • Aarong has variety of product to line the customers.
  • Aarong capture/hold more market share.
  • Aarong is/has the top grab into the international market.
  • Day by days Aarong create new distribution channel.
  • Due design product customers will more attracted to the products.

Threats:

  • Competitors have some superior products.
  • Changing technology.
  • Political instability.
  • Rise of the competitors.
  • Economy.
  1. Carry out an analysis of the selected business using comparative measures of performance on the basis of other same type of business.

Comparison of past and present business in Aarong

Aarong had started their business in 1976 when BRAC, a Bangladeshi NGO dedicated to alleviating poverty and empowering the poor. At first, it began to encourage sericulture for women in Manikganj and their only buyers were a few scattered retailers in Dhaka. Many weeks even months passed by between supply and payment unit BRAC interment. Aarong was born out of a need to ensure that penniless silk farmers of Manikganj and they were paid for their goods upon delivery, so that they could feed their family.

Now Aarong has spread their business beyond Manikganj to the rest of the country. Aarong has grown into an international enterprise displaying ethnic wear to beautiful craft from silk, handloom cotton, edi to terracotta, bamboo, jute and much more. From a single shop, Aarong has grown into one of Bangladeshi biggest retail chains with eight stores spread across the major metropolitan areas of the country in Dhaka, Chittagong, Khulna, Sylhet and even one in London, U.K.

Comparison between Aarong and Kaykraft in terms of marketing policy:

Promotional mix

Aarong

Kaykraft

Advertising – Advertising is the non-professional communication of information usually paid for and usually persuasive in nature about products, services or ideas by identified sponsors through various media.

1. Aarong makes sponsorship in various occasions like religious festival, Pohela Boishakh, Pohela Falgun and they offers special sales.

2. Aarong organizes various television programs like fashion shows.

3. Aarong also organizes social campaigning programs in various issues like campaigning in different universities and schools.

1. Kaykraft also makes sponsorship in various occasions.

2. Kaykraft also organizes some television programs like talk show.

3. Kaykraft also participates in social campaigning.

Personal selling – Personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships.

1. Sales people of Aarong identify their customers need and find solution. So that most of the customer are satisfies with their services.

2. Sales people of Aarong focus on getting new customers and obtaining order from them.

3. Aarong sales people are much skilled and efficient on their works. Therefore, they may be able to build a good communication with their customers by solving their problems.

1. Sales man of Kaykraft always tries to keep in touch with their customers by finding solution, customer’s needs and wants.

2. Kaykraft sales people focus on getting new customers and getting new order from them.

3. Sales people of Keykraft are much skilled and efficient and have a good communication skill with their customers.

Direct selling – is the selling by a manufacturer or other producer on his agent to any other than a jobber or middleman selling directly to a consumer.

1. Aarong has their own showrooms where customers can buy goods directly from the stores.

2. Aarong has their own website where their customer can buy their goods by ordering the product through online selling.

3. Every year there is a international fair in the country where Aarong sell their product directly to their customers.

1. Kaykraft has their own showrooms where the customers buy the good directly from the stores.

2. Among the other fashion brand, Kaykraf join international fair in the country, where their customers can buy directly.

3. Kaykraft customers may able to do online shopping by ordering through web site.

Sales promotion – Sales promotion are a diverse collection of incentive tools designed to stimulate faster and larger purchases or services by consumers on the trade.

1. Aarong comes with their new product to attract their customers.

2. Aarong cut their price as a special discount from their product so their customers can buy more.

3. With every product, Aarong use their own shopping bag with their brand name.

1. Every year Kaykraft comes with their product new fashion wear to attract their customers.

2. Kaykraft also do special discount from their product.

3. Kaykraft has their own shopping bag with their logo.

Financial factor

Financial factors of Aarong are financially strong as it is the enterprise of BRAC. Aarong is not a public limited company. Aims of Aarong are to launch new product to generate financial results such as sales, profits and return-on-investment. Aarong earns 70% profit annually. Aarong has invest at least 200,000 taka for developing the recycle bag for those who wants to use as environmental friendly product and 100,000 taka invested as a fixed cost like machineries, industry rent etc, the rest of the money will be used for product development and training the employees to built the product.

Aarong and all marketing cost will be taken from Aarong as total marketing budget. Aarong marketing cost do not directly factor into the cost of production.

Price range of aarong on men and women’s product:

For men 300-2000 Tk. Cost average 700 taka.

For women 300-2000 Tk. Cost average 700 taka.

Human resources

Aarong is the leading organization in the country in producing handicraft and other related products. Aarong has its own department to look after their human resources management. The human resources management of Aarong and Ayesha Abed Foundation (AAF) are as follows:

  • Recruitment and selecting process:

Aarong always tries to select and recruit good employees for an organization. Therefore, each individual has a valuable contribution irrespective of the position and status of the employee in respective organization.

  • Planning for recruitment:

Aarong recruit and select employers with necessary ability, skills, qualification and competencies to contribute effective to delivery of Aarong.

  • Requisition for staff:

For the whole year HR department estimate the requirement of new staff. HR department make yearly plan to recruit staff based on the received approved requisition.

  • Check and verify organizational chart:

Human resources department received an approved job requisition to check and verify the approval with the organizational chart.

  • Training:

Training department of Aarong is a part of human resources department. Training personnel are responsible for all the necessary training sessions for the new employees.

  • Orientation :

Human resources department arranges employee’s orientation or indication that provides new employees with basic background information about the organization.

Marketing

Aarong is a trusted brand. Most young people of 25-35 preferred to buy from Aarong. Aarong provide guarantee of their products, so people can rely on them. Products are sold through the own outlets of Aarong. Around the country, there are 10 outlets of Aarong, 6 outlets are in Dhaka (Dhanmondi, Gulshan, Uttara, Maghbazar, Wari and Mirpur) and others are outside of Dhaka (Chittagaon, Sylhet and khulna).

2.1. To overcome the identified weakness in the business, recommend appropriate actions with justifications.

  1. Weakness: Aarong has limited access to collection.

Recommendation: Aarong should bring new product like shoes, trousers, shirts, jeans etc.

Justification: In Bangladesh, there are many competitors like Catseye, Yellow, Mens club, etc and they used to sale trousers, t-shirts, jeans and already made a brand value and loyal customers. Therefore, there are increase demands of these products in Bangladesh. Aarong should bring these new products to fight with its competitors.

  1. Weakness: Price of the products in Aarong is high.

Recommendation: Aarong should minimize their price if they want to capture market.

Justification: This is because there are many competitors of Aarong in the market who can give good product with reasonable price. So if they reduce their price then more customers will come therefore their profit margin might increase.

  1. Weakness: Sales persons need more training.

Recommendation: Aarong should make their workers more trained and efficient to increase the sales.

Justification: As a fashion house, the workers should be educated and efficient in their work particularly in communicating with the customer and knowing the product well. Therefore, they might provide good customer service.

  1. Weakness: Aarong has limited budget for research and development.

Recommendation: Aarong should increase their budget for research and development to know where the company is standing, what the company need to improve, how the company will fight with the coming competitors.

Justification: Nowadays doing business in this sector is not so easy. So Aarong should look after their weakness to fight with their competitors to expand their business and they might take some initiatives to overcome their weakness.

  1. Weakness: Confined with limited customers.

Recommendation: Aarong has a limited customer because people of all classes cannot afford to buy their product due to high price. So Aarong should minimize their price to increase their customers.

Justification: If Aarong minimize their price, they might be able to fight with their competitors by giving quality good with a reasonable price. So that people from all class can buy.

2.2. Analyze ways in which existing performance could be maintained and strengthen

  1. Existing performance: Aarong is a leading brand in Bangladesh, providing variety of goods.

Maintenance: The employers try their best to provide good and better services to the customers.

Strengthen existing performance: People can buy quality product from Aarong within variety of goods.

  1. Existing performance: Aarong has a high production and make quality goods.

Maintenance: The Company Aarong has their own factory and machinery to make their own product. Aarong also have small sector that look after these quality control of their product.

Strengthen existing performance: Buying a product from Aarong is relyable to customers because of standard of goods and services.

  1. Existing performance: Aarong is expending their business in Bangladesh and out of Bangladesh.

Maintenance: The employers of the management team always try to provide better services to their customers, so that their brand values always be the top around the world.

Strengthen existing performance: In Bangladesh and out of Bangladesh Aarong has their own loyal customers who rely to buy only from Aarong.

2.3. Recommended with justification, new areas in which the business could be expanded.

Aarong can expand the business in the following ways:

  • Western clothing corner
  • Fruit corner
  • Books corner

Recommend

Western clothing, Fruit corner, Books corner.

Aarong already has clothing corner but they can add western clothing corner where foreign buyer can able to buy cloths. Fruits and books are new selling corner where they may represent them as a new product. Aarong can sell deshi fruits and all kind of deshi or storybooks.

Justification:

Most of the customers in Aarong are females. Beside young generation and foreign people, also enjoy coming and buying from Aarong. These new items – western clothing, fresh fruits and books will attract more to customers and help them to know about the culture. Beside Aarong may be able to increase their sales by adding a large amount of profit to the business.

Conclusion

Aarong is not only a fashion house it is more than that. Aarong is one of the most successful lifestyle stores in our country maintaining the tradition and the trends. Aarong always concern about their customers and try to fulfill their demands. As Aarong is one of the big brands in Bangladesh, it always wants to overcome their weakness. Aarong can work with almost more than one thousand people. In future Aarong wants to expand their business around the world, which will bring more comfort to their customers.

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