Free Essay

Small Scale Industries of Bangladesh

In: Business and Management

Submitted By dibakar
Words 5794
Pages 24
Submitted to

Md. Shakhawat Hossain
Lecturer,
Department of Management Studies,
Faculty of Business Administration and Management

Submission date: 15/12/2011

Course code: MST326
Course title: Entrepreneurship development and Business Environment

Submitted by

GROUP: INNOVATION
Level-3, Semester-II
Session: 2008-2009
Faculty of Business Administration and Management

Patuakhali Science and Technology University
Dumki, Patuakhali-8602

Small Scale Industries of Bangladesh:
A Case study of some small scale industries

A report
On

ATTENDANCE SHEET
Level: 3, Semester: II
Course code: MST326
Course title: Entrepreneurship development and Business Environment
Report title: Small Scale Industries of Bangladesh: A Case study of some small scale industries

Roll. No. | Reg. No. | Name | Signature | 0803019 | 01881 | Dibakar Chandra Das(GL) | | 0803001 | 01862 | Farjana Khanom | | 0803003 | 01864 | Kazi Riasat Muntahi | | 0803011 | 01873 | Kamrun Nnahar Sila | | 0803018 | 01880 | Md.Nazmul Haque | | 0803021 | 01883 | Hasnain Ahamed Asif | | 0803023 | 01885 | Md. Ali Marjan | | 0803026 | 01893 | Md. Saidur Rahman Sajib | | 0803027 | 01894 | Atia Jahan Siddiqa | | 0803037 | 01906 | Tania akter | | 0803042 | 01912 | MD.Mahbub Alam | | | | | |

Accepted by: …………………..…………

EVALUATION SHEET
Level: 3, Semester: II
Course code: MST326
Course title: Entrepreneurship development and Business Environment Roll. No. | Reg. No. | Name | Signature | Report Preparation(10) | Presentation(5) | Question Answering(5) | Total Marks(20) | 0803019 | 01881 | Dibakar Chandra Das(GL) | | | | | | 0803001 | 01862 | Farjana Khanom | | | | | | 0803003 | 01864 | Kazi Riasat Muntahi | | | | | | 0803011 | 01873 | Kamrun Nnahar Sila | | | | | | 0803018 | 01880 | Md.Nazmul Haque | | | | | | 0803021 | 01883 | Hasnain Ahamed Asif | | | | | | 0803023 | 01885 | Md. Ali Marjan | | | | | | 0803026 | 01893 | Md. Saidur Rahman Sajib | | | | | | 0803027 | 01894 | Atia Jahan Siddiqa | | | | | | 0803037 | 01906 | Tania akter | | | | | | 0803042 | 01912 | MD.Mahbub Alam | | | | | |
Report title: Small Scale Industries of Bangladesh: A Case study of some small scale industries

Evaluated by………………………………

Acknowledgement:

We are thankful to almighty Allah who gave us the strength and potential to complete that task which was assigned to us at our present semester. Then we are thankful to our course teacher Md. Shakhawat Hossain, Lecturer,Department of Management Studies, who’s kind behavior and guidance makes it easy to complete this task. And we are also thankful to all of our group mates. Especially we are grateful to all of the three entrepreneurs: Md. Moniruzzaman, Md.Abdul hai, Md. Nannu. They spent long hours preparing this document.

Serial no | Topics | Page no | 1. | Chapter-1: Introductory part | | 1.1. | Abstract | 07 | 1.2. | Introduction | 08 | 1.3. | Objectives | 09 | 1.4. | Methodology of the report | 10 | 2. | Chapter-2: Small scale industries | | 2.1. | Small Scale Industries | 12 | 2.2. | Characteristics of small-scale industries | 13 | 2.3. | Importance of the SSI sector for the Bangladesh economy | 14 | 2.4. | SWOT analysis for the SME sector | 15-16 | 3. | Chapter-3: Case analysis on SSI | | 3.1 | Case-1: Panza biri factory | | 3.1.1. | Profile of Panza biri factory | 18 | 3.1.2. | History of Panza biri | 19 | 3.1.3. | Present status of Panza biri | 19 | 3.1.4. | Key Competitive Advantages | 19 | 3.1.5. | Entrepreneurship development aspects | 20 | 3.1.6 | Production | 21-22 | 3.1.7. | Business environment analysis (SWOT analysis of Panza biri, PEST analysis of Panza biri, Competitor Analysis) | 23-24 | 3.2 | Case-2: Fahim bricks | | 3.2.1. | Profile of Fahim bricks | 25 | 3.2.2. | History of Fahim Brick Field | 26 | 3.2.3. | Conditions for brick industry | 26 | 3.2.4. | Process of brick making | 27 | 3.2.5. | Entrepreneurship development aspects | 28 | 3.2.6. | Business environment analysis (SWOT analysis of Fahim brick, PEST analysis of Fahim brick) | 29-30 | 3.3. | Case-3: Suveccha bakery | | 3.3.1. | Profile of Suveccha bakery | 31 | 3.3.2. | History of Suveccha bakery | 32 | 3.3.3. | Present situation of Suveccha bakery | 32 | 3.3.4. | Competitive advantage | 32 | 3.3.5. | Keys to Success | 32 | 3.3.6. | Entrepreneurship development aspects | 33 | 3.3.7. | Business environment (SWOT analysis of Suveccha bakery, PEST analysis of Suveccha bakery) | 33-34 | 4 | Chapter-4: Findings and Recommendation | | 4.1 | Findings | 36 | 4.2 | Recommendations | 36 | 5 | Chapter-5: Conclusions | | 5.1. | Conclusions | 38 | 5.2. | References | 39 |

Chapter-1: Introductory part

1.1. Abstract:
There has emerged a greater interest in understanding firms’ access to external environment and the financing of small scale industries (SSIs) in particular. Various studies have indicated that one of the major obstacles for the formation and development of SSI is related with the SSI’s favorable business environment and low efficiency due to lack of entrepreneurship knowledge. Therefore, in Bangladesh, the SSIs face difficulties having access to financial facilities and typically rely on their own savings and loans from friends and relatives, especially during the start-up phase. This paper examines the issues involved and the options related to the operation of SSIs in the country. The first part of the paper aims to provide an understanding of the present situation of SSIs, its environment, and progress in the country. Subsequent to this, practical situation of three small scale firms are presented by analyzing business environment and entrepreneurship nature. This paper intently focuses on the SSIs of Bangladesh, in general, entrepreneurship development, their startup, problems, SWOT analysis and PEST analysis.

1.2. Introduction:
Most growth theories imply that industrialization is a carrier of economic growth. Nonetheless, for a developing country such as Bangladesh, whose economy is still very much agrarian, the emphasis on development should not be stressed by undermining the role of small scale industries in the economy. It is now recognized that the small scale industries (SMEs) are playing an increasingly important role as engines for economic growth and employment in many regions of the world. Therefore, policies and initiatives to develop small scale industries and to increase their competitiveness are a priority for these developing countries.SSI development, as instruments of employment and income generation, human development and poverty alleviation, export promotion, stimulation of private ownership, competition and entrepreneurship and hence the driving forces behind the growth of a vibrant industrial market economy, has generated considerable interest among the policymakers, academics, business circle and the international donor agencies in recent times. Nevertheless, the small scale industries (SSIs) serve the domestic market. In addition, the strategy for development of SSIs merits special attention of the policymakers in accelerating industrial development in countries such as Bangladesh.

1. 3. Objectives of the report:

Beside the partial course requirement, this report has fulfilled the following objectives: A. To highlight the role of SSIs in economy in Bangladesh. B. To identify the nature of small scale industries of Patuakhali. C. Analysis the business environment of small scale industries. D. Explore the nature of entrepreneurship development. E. Analysis the problems and prospects of SSIs.

1. 4. Methodology of the report:

It is very much relevant that a partial job is done by following methods. As we tried to make a rational report we have followed the proper methods to perform our job. Our presented report is related with primary data and secondary data. At first we assigned a topic for report “Small Scale Industries of Bangladesh: A Case study of some small scale industries”. Then we had taken a guide line. Basically, we have tried to make this report by collecting the information from field survey. We had analyzed our data. And lastly we had prepared our report. The total procedure of report is as follow:

Fixation of report topic

Take advice from the teacher

Collect Information from field survey

Analyze these data

Make an outline of the report

Generating Final Report

Chapter-2: Small scale industries

2.1. Small Scale Industries:
A small scale business can be an enterprise engaging in small scale industries like R&D, manufacturing or cottage industries. The number of employees or workers varies from one country to another. Most of these are privately owned and operated, where sales turnover are low. Small Scale Industries is a term which has been recently used by scholars to describe the phenomena of the creation of small industries and other income generating projects all around the developing world. A small enterprise, where the investment in equipment is more than 1million but does not exceed tk. 15 million is called small scale industry.

2.2. Characteristics of small-scale industries:
Following are the characteristics of small-scale industries:
1. Labor intensive:
Small-scale industries are fairly labor-intensive. They provide an economic solution by creating employment opportunities in urban and rural areas at a relatively low cost of capital investment.

2. Flexibility:
Small-scale industries are flexible in their operation. They adopt quickly to various factors that play a large part in daily management. Their flexibility makes them best suited to constantly changing environment.

3. One-man show:
A small-scale unit is generally a one-man show. It is mostly set up by individuals. Even some small units are run by partnership firm or company, the activities are mainly carried out by one of the partners or directors. Therefore,' they provide an outlet for expression of the entrepreneurial spirit. As they are their own boss, the decision making process is fast and at times more innovative.

4. Use of indigenous raw materials:
Small-scale industries use indigenous raw materials and promote intermediate and capital goods. They contribute to faster balanced economic growth in a transitional economy through decentralization and dispersal of industries in the local areas.

5. Localized operation:
Small-scale industries generally restrict their operation to local areas in order to meet the local and regional demands of the people. They cannot enlarge their business activities due to limited resources.

6. Lesser gestation period:
Gestation period is the period after which the return on investment starts. It is the time period between setting the units and commencement of production. Small-scale industries usually have a lesser gestation period than large industries. This helps the entrepreneur to earn after a short period of time. Capital will not be blocked for a longer period.

7. Educational level:
The educational level of the employees of small industries is normally low or moderate. Hardly there is any need of specialized knowledge and skill to operate and manage the SSI.

8. Profit motive:
The owners of small industries are too much profit conscious. They always try to keep high margins in their pricing. This is one of the reason for which the unit may lead to closure.
2.3. Importance of the SSI sector for the Bangladesh economy:

The environment of Bangladesh's economy has been steadily improving since the mid 1990's. The vigorous campaign of privatization and tax reform undertaken by the government is believed to lead to an expanding economic foundation and accelerating the growth of industrialization. Although the economy of Bangladesh is agrarian in nature, the contribution of the industry sector to the country's gross domestic product (GDP) is continuously increasing. However, the contribution of the SSIs to the GDP is between 4%-6%.

Table 1: Contribution of Industry Sector to GDP (in %) | FY00 | FY01 | FY02 | FY03 | FY04 | FY05 | FY06 | FY07 | FY08 | FY09 | Industry | 25.69 | 25.70 | 26.20 | 26.75 | 27.23 | 27.69 | 28.32 | 29.03 | 29.45 | 29.67 | MLI | 11.20 | 11.01 | 11.13 | 11.16 | 11.29 | 11.41 | 11.66 | 12.14 | 12.47 | 12.60 | SSI | 4.40 | 4.39 | 4.46 | 4.60 | 4.68 | 4.76 | 4.85 | 4.94 | 5.08 | 5.16 |
Source: Bangladesh Economic Review, 2009
Note: MLI – medium and large industries; SSI – small and cottage industries

In Bangladesh, the importance of SSIs in the economic development process has been recognized in all official documents relating to policy prescriptions for the industry sector. The development of SSIs can be rationalized in terms of a numerous reasons including (i) labour intensity (ii) use of indigenous raw-materials, (iii) lower capital-output ratio (iv) generation of employment at minimum investment cost (v) equitable distribution of income, (vi) regional distribution of industrial investment, (vii) reduction in fixed investment costs through sub-contracting tie-ups, (viii) foreign exchange earnings through exports, (ix) foreign exchange retention through imports substitution, (x) building up entrepreneurial base through trial and error at low cost, (xi) introduction of innovations or appropriate technology at low cost and so on. Though the contribution of SSIs to GDP has remained almost static for more than a decade, the growth rate witnessed a rise over the period [Table 2].
Table 2: Growth of Industry Sector (in %) | FY99 | FY00 | FY01 | FY02 | FY03 | FY04 | FY05 | FY06 | FY07 | FY08 | Industry | 3.19 | 4.76 | 6.68 | 5.48 | 6.75 | 7.10 | 8.19 | 10.77 | 11.19 | 11.23 | MLI | 4.19 | 4.35 | 6.55 | 4.60 | 6.56 | 6.95 | 8.30 | 11.41 | 11.56 | 12.01 | SCI | 0.75 | 5.80 | 7.02 | 7.69 | 7.21 | 7.45 | 7.93 | 9.21 | 10.28 | 10.56 | Source: Bangladesh Economic Review, 2008 2.4. SWOT analysis for the SME sector:

Center for Economic Development [2001] revealed a SWOT analysis for the SSI sector to highlight its importance in the national economy. On this basis, the SWOT matrices to SSI sector in Bangladesh economy are presented below.

Some of the well-recognized strengths of the SSIs are:

a. Source of new employment opportunities. b. More flexible in terms of internal organizational structure. c. In some cases, generator of higher competitiveness on the market. d. Primarily focused on domestic demand and the local market. e. Comparatively flexible in adopting, more rapidly and readily, innovations and new technologies. f. Able to provide favorable environment for development of entrepreneurial skills and business culture. g. Closer to the ultimate consumers and can respond to their demands more rapidly and efficiently. h. In recent times receiving all-out support from the government and, accordingly, to create favorable conditions for the development of the SSI sector is among the priorities in the policy of the government.

At the same time, some of the SSI weaknesses need to be pointed out, for instance a. due to difficult access to financing, a great part of the SSIs are engaged with activities which are characterized by higher labor intensity than invested capital and, thus, leading to sub-optimal use of resources. b. a substantial part of the entrepreneurs do not have sufficient marketing, financial, accounting and legal knowledge, which hinders smooth-running of their business and reduces the efficiency of the enterprises low access level and disregard of the real needs for information and consultation. c. Underestimating of the quality requirements and lack of knowledge on standard specifications. d. Some entrepreneurs are not well acquainted with the current effective international agreements and requirements.

Opportunities for further strengthening and development of the SSI:

a. reduction of the unemployment rate b. increase of economic competition c. development of new high-technology industries d. reduction of regional economic discrepancies e. possibility to loop the production cycle and achieve higher efficiency by setting up clusters (related production) on regional or branch principle f. increase of the welfare of the nation

The potential threats for the successful development of the SSI sector are mainly in the following directions:

a. Impossibility to extend an individual enterprise by modernization, expansion of activities and employment of new workers because of the adverse external (macroeconomic) environment - high taxation and insurance liability, difficult access to financing, administrative barriers etc. - and also due to the inability of the entrepreneurs to deal with its challenges b. Insufficient managerial skills of the entrepreneurs, inability to react adequately to liberalized markets and reshaping the manufactured produce and provided services in compliance with the international standard requirements

Case analysis on SSI

3.1.1. Profile of Panza biri factory

Basic Information
Company Name : Panza Biri Factory
Business Type : Manufacturer
Product/Service (We Sell) : Hand Made biri (Bidi)
(We Buy): :Newsprint Paper, Tobacco Leaf,
: Gammed Tape
Number of Employees : 40-50
Address :Nutun bazaar, patuakhali
Ownership & Capital
Year Established : 1990
Beginning capita : 25, 00, 000
Present capital : 1, 50, 00, 000
Legal Representative/Business Owner: Md.Moniruzzaman
Market
a. Patuakhali b. Galachipa c. Kgepupara d. Amtoli e. Borguna f. Shakharia

Total Annual Sales Volume: Tk. 1, 50, 00, 000-Tk. 2, 00, 00, 000

3.1.2. History of Panza biri:
Late Ashmat ali khan was the founder of panza biri. The history of his life is very struggling. He was an ordinary worker of a hotel at the beginning of his life. Then he worked as a worker of local biri factory. And from that he was familiar to business. After few years of working the factory was closed and the time of Aahmat ali came. In 1990 he established the Panza biri factory. Panza biri is one of largest and famous biri factory in patuakhali district. It is a family oriented business.. It is now one of the most successful local biri factories in terms of quality and distribution excellences. The main business objectives are to provide quality products, fair and competitive price total customer satisfaction. The product is distributed under strong distribution system. For that reason, the company has a large number of satisfied and loyal customers with strong image.

3.1.3. Present status of Panza biri:
Panza biri made its biri beginning with just 10 employees, and today it has a total of 45 permanent worker working in the factory. Two managers are also working. Panza biri distribute their product up to 200 retailers in the local area. Though the growth is not high but it is performing always better than previous. But gradually this factory is shifting to other business.

3.1.4. Key Competitive Advantages:
1. Extensively Experienced Marketing Set-up.
2. Unique Exclusive Products.
3. Prompt, Reliable Communication & Service.
4. Comparative Reasonable Price of the Product.

3.1.5. Entrepreneurship development aspects:

The founder of the Panza biri factory was an educated man. He was no theoretical concept about the entrepreneurship development. But he was a self educated man and hard worker. The present owner is not exception of it. Here we have identified some major Entrepreneurial Competencies: * Takes repeated action to overcome obstacle that get in the way of reaching goals. * Acts to do things that meet or beat existing standards of excellence. * Places the highest priority on getting a job completed. * Has a strong belief in self and own abilities. * Ensure that work is completed or that work gets standards or quality. Personally supervises all aspects of a project. * Concern for Employee Welfare

3.1.6. Production process:
The production process of Panza biri is purely labor based. Almost every steps of production is done by human hands. They use three different machines for drying, cutting, crashing and mixing and rest of the process is done by manually. The basic steps in manufacturing of Pnaza Biri are generally as follows- a. Sun cure b. Washing c. Re dry d. Crashing e. Mixing of different ingredients f. Making paper tube g. Packaging

Sun cure: After collecting the tobacco from the suppliers, the tobacco is dried in sun. It is the natural process of drying tobacco. When the farmers collect the tobacco, the tobacco is full of dirt. The purpose of drying tobaccos in sun light is to ensure that raw tobaccos become dust free. Labors carry those tobaccos and spread it in the clean space. This process is called sun cure. But now they buy the dry tobacco.
Washing: After sun cure, they wash the tobacco in water so that tobaccos get divest of dust.
Re dry: When the tobacco are cleaned tobaccos than again re dried under the sun. The objective behind this step is to make sure that the tobaccos contain possibly least percentage of moisture. The process of re dry is the same process of sun cure.
Crashing: In crashing part the tobaccos are cut into small pieces which are done by a machine
Mixing: When the tobaccos are into pieces it is mix with some ingredients. This process is called blending. They add chemicals to give a taste of sweetness.
Paper Tube: After adding together different ingredients the mixture is ready to put into the paper tube. They purchase the paper from different suppliers. Workers make the paper tube behind and use a belt to wrap it around the bundle of 1000 tubes. They spread the tobacco over the tubes and jerk the whole set of bundle. They jerk the bundle for 2-3 times and when the tubes are filled with tobacco, they close the end of the tube. Then it is send to the factories.

Tobacco drying
Tobacco cutting into pieces
Crashing and mixing
Putting the mixture into paper tube
Closing the end of the tube
Putting 25 bidi sticks in a plastic packet
Closing the packet with heat
Wrapping the plastic with paper
Tied up the packet with a ribbon
Flow chart of Production process

3.1.7. Business environment analysis:
Environmental analysis for a business looks at the factors inherent in a business's environment that may have some impact thereof. This type of analysis is relatively qualitative and involves the identifying, scanning, analyzing and forecasting of the environmental variables. Some frameworks of environmental analysis have received large amounts of attention in the world of business management literature, such as SWOT analysis and PEST analysis. So to identify the business environment of Panza biri we will forecast on the basis of SWOT analysis and PEST analysis:

a. SWOT analysis of Panza biri: | Positive | Negative | Internal | Strength: a. Financial solvency b. Loyal employees c. Unique decision making power d. High quality product

Weakness: a. Absence of long-term goal b. Family oriented business c. Other holding firms are in different industries

| | External | Opportunity: a. Popularity in local area b. Low cost of labor

Threat: a. High cost of raw material b. Huge competitors are coming into the market c. More popularity of cigarette d. Government restrictions

| |

b. PEST analysis of Panza biri:

Political: a. In election the demand increase b. Sometimes political bribes are needed c. Restrictions impose by government.

Economical: a. Economic policy is disfaborable to tobacco business b. Inflation increase the operation cost

| | Social: a. Socially it is unapproved because society does not welcome this business | Technological: a. Less technological development in this sector b. High cost in technological equipment

|

c. Competitor Analysis:
Bidi is a large industry in Bangladesh. There are many brands who are manufacturing bidis like Aziz Biri, karikor Biri, Ful Biri, pastara biri etc in patuakhali district. Panza Biri is the market leader and they have the 45% share of the market of patualhali district. So it means that the other bidi brands are not that position to compete with them. Their dominant regions are golachipa, mirzagong, dumki, amtoli, many of the village near patuakhali.

3.2.1. Profile of Fahim bricks

Basic Information
Company Name : Fahim bricks
Business Type : Manufacturer
Product/Service (We Sell) : Bricks
(We Buy) : soil, wood, coal
Address : Itbaria, patuakhali

Ownership & Capital
Year Established: 1990
Legal Representative/Business Owner: Md, Abdul hai
Market
a. Patuakhali b. Mirgagong c. Loalia d. Shakaria

3.2.2. History of Fahim Brick Field:
Fahim brick field, a renowned brickfield in patuakhali. Fahim Brick Field is located in Itbaria, patuakhali and is owned by Md.Abdul hai. His brick kiln unit has a production capacity of about 3, 00, 000 bricks per month, with the brick production season usually extending from December to July each year.
Shift from moving chimney to fixed chimney design
Till 2005, MD. Abdul hai had a moving chimney brick kiln. With environmental regulations being enforced on the brick industry by the Ministry of Environment and Forests (MoEF), he switched over to a fixed chimney kiln.

3.2.3. Conditions for brick industry: 1. Materials: a. Clay b. Water c. Sand d. Fuel 2. Site Characteristics and Access: a. Space b. Transport c. Tools and Equipment

3.2.4. Process of brick making:
Water is added to the clay soil in order to make it more workable. Too much water added to the clay mix will decrease quality, though. Again the repeated drying and moistening of clay will bring clay to plasticity and workability appropriate for brick making. Then mixing is done to make the clay soil homogeneous and smooth. Different admixtures such as coal or sawdust can be added to the clay for two beneficial reasons: 1) reduce cracking during drying and 2) reduce fuel usage during firing.
There is a predetermined the size of a mold for brick making. Bricks will shrink when drying, so the mold size must be larger than the intended finished brick. After the molding mud brick should then be let to dry. After a period of several days this being dependent on climate and weather conditions the bricks should be turned on to their edges. Once the process of turning and drying is complete the firing of mud bricks should follow. The firing should also be done with either the mud bricks laid on their edges or flats. When transporting they should always be laid on their edges, this prevents breakage.
Clay Preparation
Molding the Clay

Drying the Bricks

Distribution
Firing the Bricks

Flowchart: Brick making process
3.2.5. Entrepreneurship development aspects:

Md.Abdul hai , the owner of Fahim brick is an educated man. He was aboard for a long time. He generated a huge knowledge. Then in Bangladesh he starts his business. This whole business is controlled by himself. There was only one manager in his factory. He follow some unique characteristics I of entrepreneurship in his business. These are: a. He is self motivated person b. Always try to continue good product quality c. He believes truthfulness and honesty are the main reason for his success d. In this industry he has a huge experience and knowledge e. Always try to cope with change, not to avoid change

3.2.6. Business environment:
Brickfield is a unit working to manufacture bricks from mudsoil or clay. Dependence on mud bricks as construction material in Bangladesh is excessive since the country is covered with alluvial soil and stone materials are scarce. That bricks had been used for construction since ancient time
As mentioned by the owner it is difficult to identify a well structured business environment but on the basis of his interview we have identified a surrounding business environment. Here the internal business environment is totally unidentifiable fact because it is a sole proprietorship business. Now we will use two analyses as previous. These are SWOT analysis, PEST analysis.

a. SWOT analysis of Fahim brick

| Positive | Negative | Internal | Weakness: a. No centralized management b. Manual brick making process c. Dependency on weather condition

Strength: a. Huge experience b. Favorable location c. Involvement in construction project

| | External | Opportunity: a. Market is always expanding b. Huge number of permanent and loyal customer

Threat: a. Government restricted regulation due to environment pollution b. Unavailability of labor c. Material cost is increasing d. Crisis in soil

| |

Table: SWOT Analysis of Fahim Bricks

b. PEST analysis of Fahim brick

Political: a. Firewood in brickfields is banned by law b. Political unrest can hamper the market demand

Economical: a. Decrease in Market demand b. Nature of Economic policy c. Fluctuations in prices of inputs

| | Social: a. Workers unwillingness to this work b. Environmental pollution prohibit its operation

Technological: a. Manual process is shifted to automatic process b. Technological improvement increases the competitor’s advantage

| |

Table: PEST Analysis of Fahim Bricks

3.3.1. Profile of Suveccha bakery:

Basic Information
Company Name : Suveccha bakery
Business Type : Manufacturing
Product/Service (We Sell) : Cake, biscuits, toast, bread
(We Buy) : Sugar, Flour, baking powder,
Mustard oil, egg, oil etc
Address : Puran bazar, patuakhali

Ownership & Capital
Year Established : 1995
Beginning capital : 15, 00, 000
Present capital : 80, 00, 000
Legal Representative/Business Owner: Md, Nannu Mia
Market
a. Patuakhali b. Mirgagong c. Loalaia d. Ghoinkhati e. Itbaria f. Lawkhati g. Shakaria

3.3.2. History of Suveccha bakery:
The journey of suveccha bakery started from 1995 when there were only three bakeries in patuakhali. From the very beginning of this bakery it gained popularity because the owner, Md. Nannu Mia was an established person and a popular person. Beside this bakery he is still involved in construction and the politics.

3.3.3. Present situation of Suveccha bakery:
Though in present days there are huge competitors in market,but this bakery is still keep up its performing. It is now sell its products in 200 retailers. The numbers of the workers are 40. Now it sells biscuits, cake, bread, toast.A number of types are exist in every product line.

3.3.4. Competitive advantage:

a. Higher production capacity b. High quality product c. Better image in market d. Strong channel of distribution e.
3.3.5. Keys to Success:
Keys to success for JJB will include: 1. Providing the highest quality product with personal customer service. 2. Competitive pricing.

3.3.6. Entrepreneurship development aspects:
From the beginning he was a clear vision coupled with a sincere commitment and conviction to his idea. He has the skills and insights of the market, how to satisfy the needs of the people, and how to turn an idea into a reachable goal. He follows some non theoretical but practical actions in his business. a. Always try to supply desirable quantity of product to retailers b. Always provide quality full product c. Sees and Acts on Opportunities

3.3.7. Business environment:

The basic task of situation analysis of the business environment is to find what is happening in a firm’s environment now and in the future and how these factors will influence the activities and existence of the company. In this respect my paper involved two basic analyses. Opportunities and threats are variable in time, one situation can be an opportunity now but it becomes a threat later and vice versa. To explain this we have prepare two analysis: SWOT and PEST.

a. SWOT analysis of Suveccha bakery

| Positive | Negative | Internal | Weakness: a. No management practices b. Manual brick making process c. Product nature

Strength: a. Large amount of capital b. Favorable location c. Historical background

| | External | Opportunity: a. Favorable public image b. Raw materials are available in local market c. Labor cost is comparatively low
Threat:
a. New competitors b. Technological change c. Material cost is increasing d. Weather condition: rainy season

| |

b. PEST analysis of Suveccha bakery:

Economical: d. Recession e. High interest rate in loan f. Inflation increase the input cist

Political: a. Political strike decrease the demand b. Political instability increase the material cost | | Social: a. Social development change the customer preference b. Assistance in social activities
Technological:
a. Technological development reduces the communication cost b. Manual processing system is now decrease the competitiveness | |

Chapter-4: Finding and Recommendation

4.1. Findings:

In this report we have present the theoretical aspects of small scale industries in respects of its business environment and also the entrepreneurship development nature. In our survey we don’t get any better implication of the theoretical knowledge. We get it but in different form. This may be express as below:

a. In Bangladesh industrialization is mainly depend on the SSIs development. b. Most of the SSIs are running with their own capital. c. SME loan is not effective in real sense due to availability, interest rate etc. d. In every industry the price of input material cost is increasing. e. In most of SSI there is no future long run goals f. The growth in business is not satisfactory due to disfaborable economic condition. g. The entrepreneurship development is still traditional. h. No theoretical implication in SSI sectors.

4.2. Recommendations:

After analysis the situation, we recommend the following actions: a. Ensure the SME loan for new entrepreneur. b. Educated entrepreneur should come to the SSI sector. c. Government should ensure a favorable economic policy. d. Management practices should be introduced in SSI; this will increase the profitability of the firm. e. Every entrepreneur should set up the future goal otherwise improvement will not come. f. Hence, a well-structured business environment and financial mechanism supported by government should be given to SSI sectors.

Chapter-5: Conclusion

5.1. Conclusions: The performance of small enterprises in general and small manufacturing enterprises in particular has had a significant impact on major government policy objectives such as economic growth, employment generation and poverty alleviation in Bangladesh. Small manufacturing enterprises’ contribution to GDP showed a year to year variation but on average they contributed 30 percent to manufacturing output but employed about half of the labor force in the manufacturing sector . Small manufacturing enterprises are also facing structural readjustment in a relatively more open economic environment causing fluctuations in their output and employment levels.
In such an economic environment, it is important that small manufacturing enterprises need to be competitive so that they can contribute to not only to export expansion but also can effectively compete with imports in the domestic market. This is only possible where a dynamic self sustaining process of innovation is at work. This can happen where adequate incentives are provided for entrepreneurial drive and initiatives. The government has taken a number of policy initiatives to foster small manufacturing enterprises. But the emphasis should be more on entrepreneurship rather than simply on enterprises. Despite the government’s active promotion of small business in general and small manufacturing enterprises in particular, institutional capacity constraints in policy implementation, inadequate progress in structural and institutional reforms and continued bad governance will seriously impede in achieving its stated small business policy objectives.

5.2. References: a. Bangladesh Bureau of Statistics (BBS) (200 7) , Statistical Year book of Bangladesh, 2005, Dhaka. b. Bangladesh Small and Cottage Industries Corporation (BSCIC) (2006), BSCIC News (in Bengali ), October- December, 2006, Dhaka. c. Birch, D (1979), The Job Generation Process, MIT Program on Neighborhood and Regional Change , MA d. Elkan, W (1995), An Introduction to Development Economics (revised 2nd Edition), New York: Prentice Hall. e. Ahmed, M. U. (1999). "Small and Cottage Industries Development Policies in Bangladesh: An Analysis of Effectiveness in the Context of Industrial Policy-1991." Bank Parikrama, Volume XXIV, No 1 f. Information on business environment available at http://www.preservearticles.com. g. Asian Development Bank, various publications h. Bangladesh Bank (various years). Annual Report, Dhaka i. Bangladesh Bank (various issues). Financial Sector Review j. Bangladesh Bureau of Statistics (various issues). Statistical Pocketbook of Bangladesh k. Bangladesh Bureau of Statistics (various years). Statistical Yearbook of Bangladesh l. Bangladesh Institute of Development Studies (1997). A Study of the Informal Sector in Bangladesh, Dhaka m. Bangladesh Small and Cottage Industries Corporation, various publications n. Choudhuri, A. H. M. N. I. and Shahid, A. T. M. A. (1993). "Banks in Financing Small Scale Industries in Bangladesh." Bank Parikrama, Volume XVIII, No 3 and 4 o. Dhaka Chamber of Commerce and Industries (2004). "Sick Industries: Causes, Remedies and Prevention."

…………………………….….*****…………………………………………. *****

Similar Documents

Premium Essay

Problems in Developing Small Scale Industries in Bangladesh

...Deterioration of Morality: Public moral is getting down means most of our people are loosing their moral and for this reason developing small scale enterprises in Bangladesh is not so easy like the other country of the world. Security reason: Security reason is a strong reason which is effecting the developing of small scale enterprises in Bangladesh. Government are not being able the proper and adequate security to the citizen of the country this is directly effecting the developing speed of the small scale enterprises in Bangladesh. Inadequate support from govt. & non-govt. organizations:...

Words: 3349 - Pages: 14

Free Essay

Bscic

...During the period 1957-65, small scale industry in Bangladesh (the then East Pakistan) stood for an industrial establishment or unit run mainly with hired labor not exceeding 50 workers when power was used; and whose investment in land, building and machinery’s did not exceed Tk. 0.25 million in value, in either case. In the Third Five Year Plan of Pakistan (1965-70), small scale industries were defined as those industrial units which employed...

Words: 2760 - Pages: 12

Premium Essay

Term Paper

...Introduction The Small and Medium scale Enterprise (SME) are recognized worldwide as engines of economic growth. The commonly perceived merits often emphasized for their promotion especially in the developing countries like Bangladesh include their relatively high labor intensity, dependence on indigenous skills and technology, contributions to entrepreneurship development and innovativeness and growth of industrial linkages. The case for fostering SME growth in Bangladesh is irrefutable as these industries offer bright prospects for creating large-scale employment and income earning opportunities at relatively low cost for the unemployed especially in the rural areas strengthening the efforts towards achieving high and sustained economic growth which are critically important prerequisites for triggering an exit from endemic poverty and socio-economic deprivation. These promotional arguments for the SMEs, while universally emphasized are often put forward by their ardent advocates in a small versus large context and thus arouse serious debates concerning their economic viability. Much of such controversies may, however breakdown if the intrinsic virtues specific to SMEs and unavailable to large-scale industries are correctly identified and carefully exploited....

Words: 7518 - Pages: 31

Premium Essay

Asif Is Here

...Government of Bangladesh (2010), The Industrial Policy, Ministry of Industries, Dhaka. 8. Government of Bangladesh (1998), Fifth Five year Plan, Ministry of Planning,...

Words: 1780 - Pages: 8

Free Essay

Overview of Sme in Bangladesh

...THE SMALL AND MEDIUM ENTERPRISES (SME) IN BANGLADESH: AN OVERVIEW OF THE CURRENT STATUS DR. MOMTAZ UDDIN AHMED VICE CHANCELLOR STATE UNIVERSITY OF BANGLADESH 1.0 The Case for the SMEs The SMEs1 worldwide are recognized as engines of economic growth. The commonly perceived merits often emphasized for their promotion especially in the developing countries like Bangladesh include their relatively high labour intensity, dependence on indigenous skills and technology, contributions to entrepreneurship development and innovativeness and growth of industrial linkages. The case for fostering SME growth in Bangladesh is irrefutable as these industries offer bright prospects for creating large-scale employment and income earning opportunities at relatively low cost for the un-and unemployed especially in the rural areas strengthening the efforts towards achieving high and sustained economic growth which are critically important prerequisites for triggering an exit from endemic poverty and socio-economic deprivation. These promotional arguments for the SMEs, while universally emphasized are often put forward by their ardent advocates in a small versus large context and thus arouse serious debates concerning their economic viability. Much of such controversies may, however breakdown if the intrinsic virtues specific to SMEs and unavailable to large-scale industries are correctly identified and carefully exploited....

Words: 3109 - Pages: 13

Free Essay

Smes in Bd

...Submitted by: Farzana Rubaya Id: 1230580 MGT (405) Sec: 01 Introduction : Small and medium-sized enterprises sometimes also called small and medium enterprises (SMEs) or small and medium-sized businesses (SMBs) are businesses whose personnel numbers fall below certain limits. These are the most common businesses found across most of the world’s economies. The World Bank Review on Small Business Activities establishes the commitment of the World Bank Group to the development of the small and medium enterprise (SME) sector as a core element in its strategy to foster economic growth, employment and poverty alleviation. In the context of Bangladesh, the development of Small and Medium Enterprises (SMEs) can be considered as a vital instrument for poverty alleviation and ensure the rapid industrialization. So we can say that the role of Small and Medium Enterprises (SMEs) is indispensable for overall economic development of a country particularly for developing countries like Bangladesh. It has drawn a lot of interest among policy makers, academics, businessmen and people in general. Government of Bangladesh has highlighted the importance of SME in the Industrial Policy-2005. SMEs have been identified by the Ministry of Industries as a ‘thrust sector’. As the SME sector is labor intensive, it can create more employment opportunities. For this reason government of Bangladesh has recognized SME as a poverty alleviation tool....

Words: 6439 - Pages: 26

Free Essay

Sme in Bangladesh

...The outcomes of this research process could help Industry Canada and its partners to provide Canadian SMEs with substantial competitive advantage through policy measures that are yet more precisely targeted, effective, and efficient. It is therefore essential that this valuable resource be used with appropriate and careful study. Analysis of these data may allow for the resolution of several long-standing contentious issues with which policy makers, researchers, lobby groups, and, indeed, SME owners have had to...

Words: 5814 - Pages: 24

Premium Essay

Entrepreneurship

...They diversified their risks in different types of industries, trade, building houses etc. after...

Words: 11869 - Pages: 48

Premium Essay

Constraints of Manufacture Based Small and Medium Enterprise.Pdf Uploaded Successfully

...Journal of Social and Development Sciences Vol. 1, No. 3, pp. 91-100, Apr 2011 Constraints of Manufacture based Small and Medium Enterprise (SME) Development in Bangladesh 1Business Feroz Ahmed1, *Md. Mizanur Rahman1, Monimul Haque2 Administration Discipline, Khulna University, Bangladesh 2Department of Finance and Banking, University of Rajshahi *mizanurku03@yahoo.com Abstract: Small and medium enterprises (henceforth, SMEs) play a key role in economic growth and industrial development of a country. They make vital contributions in improving economic and social sectors of a country through stimulating large scale employment, investment, development of indigenous skill and technology, promotion of entrepreneurship and innovativeness, enhancing exports, and also building an industrial base at different scales. SMEs worldwide have been benefited from the combined interactions of forces of product mix, location factors, and market advantages. However, evidences also suggest that there are cases of SME failures. Growth of SMEs is constrained by many factors. Many SMEs occasionally go on growing into large firms. This paper looks for identifying such constraints of manufacture based SME Development in Bangladesh....

Words: 6844 - Pages: 28

Premium Essay

Walton Bd

...15 WALTON BANGLADESH Role of Walton Hi-Tech Industry in the Economy of Bangladesh By Group Five An assignment on “Role of Walton Hi-Tech Industry in the Economy of Bangladesh” Prepared to: Professor Dr. Farah Hasin Faculty of School of Business BUS-525 North South University (NSU) Prepared by: Group: Five (Section – 03) SL NO | NAME | ID | 1. | Md. Easir Arafat | 1512679660 | 2. | Md. Asif Morshed Azad | 1513028660 | 3. | Md Owahiduzzaman Bhuiyan | 1512678660 | 4. | Md....

Words: 5712 - Pages: 23

Free Essay

Problems and Prospects of Small Business

...In Bangladesh, capital is scarce, but cheap labour is abundantly available. Unemployment and seasonal unemployment are rampant on a mass scale. The employment capacity of small industries, being at least eight times that of large industries in capitalist or mixed economies, promotes monopolistic trends and leads to the concentration of economic power and wealth in a few hands. But small enterprises tend to create a situation in which a more equitable...

Words: 825 - Pages: 4

Premium Essay

Financial Support for Msme in Bangladesh

...Financial support for MSME in Bangladesh The SMEs worldwide are recognized as the most effective vehicle for sustainable economic growth. In Bangladesh , a sustainable level of development of small and medium enterprises (SMEs ) is highly needed to reach the targets set by The United Nations (UN) in the millennium Development Goals (MDGs) to alleviate poverty . This urgency is reflected in the Government’s pro-poor policies, especially in the poverty reduction strategy paper (PRSP) . Small and Medium Enterprises in Bangladesh have recently been considered as an important vehicles of poverty reduction strategy. For the first time, the comprehensive Industrial Policy 2005 highlighted SME development as a flagship policy area for balanced and sustainable industrial development in Bangladesh. Availability of finance is thought to be a major constraint to formation and growth of SMEs in Bangladesh. Banks are reluctant to expand their SME credit portfolio because they do not consider SME lending an attractive and profitable undertaking. This is so because SMEs are regarded as high risk borrowers because of their low capitalization, insufficient assets and their inability to comply with collateral requirements of the banks. Administrative costs are also higher because close monitoring and supervision the SME operation becomes necessary....

Words: 4586 - Pages: 19

Premium Essay

Contribution of Banks on Sme Sector in Bangladesh

...Report On Contribution of Banks on SME Sector in Bangladesh 1 LETTER OF TRANSMITTAL 2 ACKNOWLEDGEMENT 3 Table of contents No: Page: Chapter One Introduction 1.1 Introduction 1 1.2 Background of the study 2 1.3 Problem statement 3 1.4 Objectives of the study 3 1.5 Scope of the study 4 Chapter Two Methodology 2.1 Data requirement 5 2.2 Study area 6 2.3 Sample size selection 6 2.4 Questionnaire development 7 2.5 Literature review 8 2.6 Small enterprise 10 2.7 Medium enterprise 10 2.8 SME financing by Banks in Bangladesh 11 Chapter Three Results 3.1 Contribution of SMEs in the economy 13 3.2 Current status of SME financing by Bangladesh Bank 14 4 3.3 Loan documents needed for SME financing by banks 14 3.4 About the sample banks 15 3.5 Portfolio size of different banks in SME sector 17 3.6 Target given by Bangladesh Bank 19 3.7 Survey analysis 24 3.8 Findings 27 Chapter Four 29 Limitation Chapter Five 30 Conclusions and recommendation Appended Parts Data collection instruments Details of entrepreneurs Bibliography List of Tables 3.1 Portfolio size of Different Banks in SME sector 17 3.2 Distribution of entrepreneurs whether or not they take bank loan 24 to operate their SME business. 3.3 Distribution of......

Words: 10459 - Pages: 42

Premium Essay

Bangladesh: Development Outcomes and Challenges in the Context of Globalization

...Introduction Bangladesh faces the challenge of achieving accelerated economic growth and alleviating the massive poverty that afflicts nearly two-fifths of its 135 million population. Strategies for meeting this challenge have included a shift away from state-bureaucratic controls and industrial autarky towards economic liberalization and integration with the global economy. These policy reforms were initiated in the mid-1980s against the backdrop of serious macroeconomic imbalances, caused in part by the declining level of foreign aid and in part by a preceding episode of severe deterioration in the country’s terms of trade. The policy reforms in the 1980s included the withdrawal of food and agricultural subsidies, privatization of state-owned enterprises, financial liberalization, and withdrawal of quantitative import restrictions. The beginning of the 1990s saw the launching of a more comprehensive reform program, which coincided with a transition to parliamentary democracy from a semi-autocratic rule. These later reforms were particularly aimed at moving towards an open economy – such as making the currency convertible on the current account, reducing import duties generally to much lower levels, and removing virtually all controls on the movements of foreign private capital. Besides, fiscal reforms were undertaken including the introduction of the value-added tax. During the 1990s, notable progress was made in economic performance....

Words: 7698 - Pages: 31

Premium Essay

Mehedi

...Industrial Banks / Development Banks Industrial / Development banks collect cash by issuing shares & debentures and providing long-term loans to industries. The main objective of these banks is to provide long-term loans for expansion and modernisation of industries. In India such banks are established on a large scale after independence. They are Industrial Finance Corporation of India (IFCI), Industrial Credit and Investment Corporation of India (ICICI) and Industrial Development Bank of India (IDBI). Type 4. Land Mortgage / Land Development Banks Land Mortgage or Land Development banks are also known as Agricultural Banks because these are formed to finance agricultural sector. They also help in land development. In India, Government has come forward to assist these banks. The Government has guaranteed the debentures issued by such banks. There is a great risk...

Words: 1609 - Pages: 7