Executive Summary

The retail enterprise Aarong is the handicraft marketing arm of BRAC (Bangladesh Rural
Advancement Committee). Established in 1978, Aarong is a fair trade organization dedicated to
bring about positive changes in the lives of disadvantaged artisans and underprivileged rural
women by reviving and promoting their skills and craft. Reaching out to weavers, potters, brass
workers, jewelers, jute workers, basket weavers, wood carvers, leather workers and more,
Aarong embraces and nurtures a diverse representation of 65,000 artisans, 85% of whom are
women. Today, Aarong has become the foundation upon which independent cooperative
groups and family-based artisans market their craft, in an effort to position the nation’s
handicraft industry on a world platform of appreciation and acknowledgement

The Ayesha Abed Foundation (AAF) is an organization that aims to provide avenues for
employment and income generation for underprivileged rural women. It is an enclave for
women, formed to uplift them economically, through their work as producers, and also socially,
through their development into entrepreneurs. The Foundation provides an appropriate
working environment, financial and technical assistance, and training to develop the women’s
skills in various crafts.

Mission Statement:

“To make Aarong the best in the world in providing a unique Bangladeshi lifestyle experience to
empower people and promote Bangladesh while protecting our environment.”

Vision:

Aarong has a vision to establish them as world’s one of the famous fair trade fashion house,
and to remain market leader throughout its business. Aarong expanded its business in
international arena. Aarong has a dream to develop more artisans of Bangladesh and make
them self-dependent and attract more and more international customers towards Bangladeshi
culture.

Goals:

 Empowering destitute rural women by providing opportunities for employment and

income generation.
 Ensuring commercial success of the enterprise of women producers.
 Reviving traditional skills of rural artisans.
 SWOT Analysis of Aarong

SWOT analysis is a powerful technique for understanding organizations Strength & Weakness
and looking for the Opportunities & Threats it may face. Used in a business context it helps
organization carve a sustainable niche in a market. This analysis is mainly based on an imaginary
situation.

Where there is a company in operation it has to work in two kinds of environment

 The external environment and

 The internal environment of the company.

For a company to avail maximum and avoid maximum, it has to know what it has to avail and what it has
to avoid. The external environment has to be scanned by the management for any arising opportunities
or any critical threats. The resources of a company constitute its strengths and weaknesses.

SWOT ANALYSIS INVOLVES THREE CONSEQUTIVE STEPS:

 IDENTIFYING STRENGTHES, WEAKNESSES, OPPORTUNITIES AND THREATS.

 DRAW CONCLUSION CONCERNING THE OVERALL BUSINESS SITUATION.
 ACTIONS FOR IMPROVING COMPANY STRATEGY.

STEP-1:
IDENTIFYING STRENGTHES, WEAKNESSES, OPPORTUNITIES AND THREATS
(SWOT):

1. IDENTIFYING RESOURCE STRENGTHS AND COMPETITIVE CAPABILITIES OF AARONG:

 The organization is a respected employer that values its workforce. It has a group of
young and energetic part time and fulltime worker and employee who are dedicated to
Aarong. It has a large number of artisans all over Bangladesh who produce 100%
Bangladeshi product from local raw materials.

 Valuable physical asset- Aarong has 13 branches all over Bangladesh including one in
London. Its branches are located in prime location of Dhaka (Uttara, Dhanmondi,
 Gulshan, Moghbazar, Wari, Mirpur) Chittagong, (Sholashahar, Halishahar), Sylhet,
Khulna, Moulvibazar, London and Bogra.

 Valuable human asset and intellectual capital- Aarong has got a very highly qualified,
skilled, and energetic management team & work force. It has a strong management
team who are continuously giving their great effort to make it a successful one.

 Valuable intangible asset-Aarong is a very reputed organization. They are now

capturing 68% of total handicraft market share in Bangladesh. It’s a local brand and now
exporting their products outside of the country.

 Market advantage- Aarong has good reputation for fine quality products. It produces
handicraft items from rubbish, wastage, unused straw, jute etc. which are environment
friendly as well as domestic label to attract customer.

 Another important fact is that, Aarong has almost “Zero” production damage rate
which reduces their cost. Being manufacturing cost higher Aarong is capable of
providing products at a reasonable price.

 They are innovative and always bring some new product in the market which meets
customer requirement and expectations.

ASSESSING COMPETENCIES AND CAPABILITIES:

 Competitive alliance- Aarong is owned by BRAC so it has some strategic alliance with
this large NGO.

 Competence- Aarong is good at maintaining aristocracy by providing high quality

domestic products.

 Core competence- the innovation of new and attractive handicraft products is better
than any other activity.

 Distinctive competence- Holding steadfast to its original mission, Aarong today supports
the lives and livelihoods of nearly sixty five thousand rural artisans and handicraft
producers, 85% of whom are women.

Competitive power of resource strength: -

Aarong is competitively superior to its arena, with no major competitor. It is not

possible for rivals to trump Aarong overnight at an ease. Competitors or rivals, if
emerged will not be able to replicate the strategy of Aarong by investing huge capital in
cottage and handicraft industry.

Thus Aarong is superior in its resource strength.

2. IDENTIFYING RESOURCE WEAKNESSES AND COMPETITIVE DEFICIENCIES OF AARONG:

 Aarong has a reputation for new product development and creativity. However, they
remain vulnerable to the possibility that their producer may not be able to produce
product timely due to their inability.

 The collection and distribution channel of the organization is not that much structured
so that they can get the products from the producer on time and it may create problem
for them in future. If any producer is not able to make the product on time due to some
personnel problem then the company will also not be able to deliver their product on
time. This is a big problem and it happens most of the time on delivery.

 Aarong charges higher price relatively than their other competitors as a result some
times customers lose their interest to by product from them. Its sales force or sales girls
within the outlet are not properly trained up. Sometimes they make customers
disappointed by their attitude and customer doesn’t feel good to buy from there.
Sometimes they suffer for financial problem, although it’s a rare situation.

 Aarong has branches only in prime location of major cities and towns inside the
country, but it is yet unable to reach in rural and semi-urban areas.

 Aarong employ part time, temporary, contractual, and project based employees and
worker but most of the time these work force lacks from proper training.

3. IDENTIFYING MARKET OPPORTUNITIES OF AARONG:

 Aarong is very good at capturing the advantage of opportunities. It can go for new
distribution channel like it can make some joint venture with some other small
Boutique and sales its products in more places. Through that it can capture more market
share in the handicraft industry in Bangladesh.

 Aarong can expand its business globally. New market for handicraft such as Europe and
America are beginning to emerge.

 People are now trendier about local events & functions like Pahela Falgun, Pahela
Baisakh, Victory day, Independence Day etc. and they buy new and special products for
these events. Aarong can make new products to sell in those special occasions.
  According to the season change, people are also changing their preference in buying
products and considering this scenario Aarong can produce products on the basis of
seasonal variations.

 Aarong can enter into alliance with many of its small competitors and local rivals so as
to kill future competition.

 Aarong can start its business fully online due to the new structural and infrastructural
change in technology.

 Aarong can capture the opportunity to create and retain new rural customer who are
quadruple than the current market.

 Its experience over the business can help to integrate more supplier and customer so
as to meet the additional and extraordinary demand of customer.

4. IDENTIFYING EXTENAL THREATS TO FUTURE PROFITABILITY OF AARONG:

 Aarong doesn’t have any big competitors right now. But they have some small
competitors like KayKraft, Anjans, Deshal, Jattra, Khubsurti, Rina Latif, OZ, Rang and
some other Boutiques established at Banani 11, who are taking their 32% customer and
increasing in a slow rate.
 Aarong always face price wars with their competitors. Its competitors have some
superior products like OG’s Panjabi shape, Khubsurti’s design of Salwar kamiz Rang’s
Shari’s color, which is decreasing Aarongs market share as well as sales. But now they
are repositioning their Brand to compete with them.
 The emergence of these new competitors may slow growth down the market and
profitability.
 The boom in garments sector has created competitive pressure to Aarong and may
reduce the selling of clothes.
 Customers need and taste in handicraft is reducing and are gradually being replaced by
technology based synthetic and plastic products. Moreover cultural diversity is
increasing due the interference of foreign culture, thus demand of local handicraft
product will deteriorate.
SWOT MATRIX:
STRENGTHS:
1.THE ORGANIZATION IS A RESPECTED
EMPLOYER THAT VALUES ITS WORKFORCE
2.VALUABLE PHYSICAL ASSET
3.VALUABLE HUMAN ASSET AND
INTELLECTUAL CAPITAL
4.VALUABLE INTANGIBLE ASSET
5. MARKET ADVANTAGE
6.“ZERO” PRODUCTION DAMAGE RATE
7. INNOVATIVE AND ALWAYS BRING SOME
NEW PRODUCT
8. COMPETITIVE ALLIANCE
WEAKNESSES:
1. INABILITY TO SUPPLY ON TIME
2. COLLECTION AND DISTRIBUTION CHANNEL
OF THE ORGANIZATION IS NOT THAT MUCH
STRUCTURED
3. AARONG CHARGES HIGHER PRICE
4. BRANCHES ONLY IN PRIME LOCATION
5. WORK FORCE LACKS FROM PROPER
TRAINING.
OPPORTUNITIES:
1. GO FOR NEW DISTRIBUTION CHANNEL
2. CAN EXPAND ITS BUSINESS GLOBALLY
3. SELL NEW PRODUCTS IN SPECIAL
OCCASIONS
4. PRODUCE PRODUCTS ON THE BASIS OF
SEASONAL VARIATIONS.
5. ENTER INTO ALLIANCE
6. START ITS BUSINESS FULLY ONLINE
7. CREATE AND RETAIN NEW RURAL
CUSTOMER
8. TO INTEGRATE MORE SUPPLIER AND
CUSTOMER
THREATS:
1. HAVE SOME SMALL COMPETITORS
2. FACE PRICE WARS WITH THEIR
COMPETITORS
3. NEW COMPETETORS MAY SLOW DOWN
THE MARKET GROWTH
4. COMPETITIVE PRESSURE MAY REDUCE THE
SELLING OF CLOTHES.
5. DEMAND OF LOCAL HANDICRAFT PRODUCT
WILL DETERIORATE.
STRATEGY SWOT MATRIX:

SO STRATEGY: Use strength to STRENGTHS (S): WEAKNESSES(W):

take advantages of opportunities.
1. Valuable physical asset. 1. Inability to supply.
WO STRATEGY: Overcome
2. “Zero” production damage. 2. Higher price.
weakness by taking advantages of
opportunities.
3. Market advantage. 3. Lack of proper training.

ST STRATEGY:
Use strength to reduce threats

WT STRATEGY: Minimize
weaknesses and reduce threats.

OPPORTUNITIES(O): SO STRATEGY(S): WO STRATEGY(S):

1. Expand its business globally. 1. Find potential task force to 1. Improve your workforce to
expand business by setting expand globally.
2. Start online business.
new physical assets.
3. New distribution channel.
2. Reduce price starting online
2. Take order and sell product business.
using internet.
3.Provide training for new
3. Take the advantage by distribution channel
using new distribution
channel.
THREATS(T): ST STRATEGY: WT STRATEGY:
1. Price wars 1.develop and deliver 1.Form partnership and
specialized service on alliance to compete.
2. Slow down the market growth
segmented basis
3. Emergence of new competition.

STEP 2:

STEP 3:
 APPENDIX:
SOME QUESTIONS TO ASK DURING A SWOT ANALYSIS

STRENGTHS:

1) What are your assets?

2) Which asset is strongest?
3) What differentiates you from your competitors?
4) Do you have immensely talented people on your staff?
5) Is your business debt free or have a better debt structure than your competitors?
6) Do you have a broad customer base?
7) What unique resources do you have?
8 Do you have a sustainable competitive advantage?
9) Do you have specific sales or marketing expertise?

WEAKNESSES:

1) What areas do you need to improve on?

2) What necessary expertise/manpower do you currently lack?
3) In what areas do your competitors have an edge?
4) Are you relying on one customer too much?
5) Do you have adequate cash flow to sustain you?
6) Do you have adequate profit levels?
7) Do you have a well of new ideas?
8 Are you over leveraged (too much debt)?

OPPORTUNITIES:

1) What external changes present interesting opportunities?

2) What trends might impact your industry?
3) Is there talent located elsewhere that you might be able to acquire?
4) Is a competitor failing to adequately service the market?
5) Is there an unmet need/want that you can fulfill?
6) Are there trends emerging that you can profitably service?
7) If you package your product differently, can you extract a higher premium for it?
8 Can you take advantage of the historically low interest rates to refinance your debt?

THREATS:

1) Is there a better equipped (funding, talent, mobility, etc) competitor in your market?
2) Is there an entity who may not be a competitor today which could possibly become one
tomorrow?
3) Are your key staff satisfied in their work? Could they be poached by a competitor?
4) Is your intellectual property properly secured (trademarks, copyrights, firewalls, data security
plans, etc) against theft & loss (both from internal & external sources)?
5) Do you have to rely on third parties for critical steps in your development process that could
possibly derail your delivery schedule?
7) What if your supplier runs out of product and you experience an extended stockout or
shortage?
8 What if there is a natural disaster?
9) What if your customers go bankrupt?
10) What if your website is hacked?
11) What if you are sued?