See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/312629431

National Fans Limited of Bangladesh

Article  in  Asian Case Research Journal · December 2016

DOI: 10.1142/S0218927516500139

CITATION READS

1 3,120

4 authors, including:

Jashim Uddin Ahmed Jasim Uddin

North South University Sunway University Business School
83 PUBLICATIONS   245 CITATIONS    20 PUBLICATIONS   62 CITATIONS   

SEE PROFILE SEE PROFILE

Nahid Farnaz
The University of Manchester
1 PUBLICATION   1 CITATION   

SEE PROFILE

Some of the authors of this publication are also working on these related projects:

Zinda Park: Rural Community Eco-park Complex in Bangladesh View project

InterResearch, Dhaka, Bangladesh View project

All content following this page was uploaded by Jashim Uddin Ahmed on 13 August 2017.

The user has requested enhancement of the downloaded file.

 ASIAN CASE RESEARCH JOURNAL, VOL. 20, ISSUE 2, 351–372 (2016)
ACRJ
This case was prepared by
Professor Jashim Uddin
Ahmed, Mohammad Jasim
Uddin, Nahid Farnaz of
North South University,
Dhaka, Bangladesh and
M. Akbar Ali of Bangladesh
University of Professionals,
Dhaka, Bangladesh, as a
basis for class discussion
rather than to illustrate
either an effective or ineffec-
tive handling of an adminis-
trative or business situation.
Please address all correspond-
ence to Professor Jashim
Uddin Ahmed, School of Busi-
ness and Economics, North
South University, Dhaka-
1229, Bangladesh. E-mail:
jashim.ahmed@northsouth.edu;
jashim.ahmed@hotmail.com
© 2016 by World Scientific Publishing Co. DOI: 10.1142/S0218927516500139
S0218927516500139.indd 351
National Fans Limited of
Bangladesh
Building a brand takes time, patience and resources. In order to evolve,
grow and succeed in the long term, it is imperative for an established
company such as National Fans to effectively manage the success factors
especially in times of economic recession and uncertainty.
— Shafique Ahmed, Managing Director, National Fans Limited
Shafique Ahmed, the Managing Director of National Fans
Limited, sat in his Dhaka head office and deliberated over
the recent developments in the company as well as pros-
pects, given the myriad challenges posed by the unstable
political situation in Bangladesh. He has been a pioneer in
the ceiling fan industry in Bangladesh as the company com-
menced operations in the capital city, Dhaka in 1979, within
a few years of Bangladesh gaining independence after the
Liberation War of 1971.
Over the years, it has continuously expanded its
operations and made its mark as one of the top ceiling fan
manufacturers in Bangladesh. The company adopted several
growth strategies to expand its operations and its capital, and
managed to etch its niche in the market as it gained popu-
larity nationwide with orders pouring in from offices, schools
and local households. However, there were also a number
of setbacks. Apart from the frequent political turmoil and
financial crisis in Bangladesh, the company has been par-
ticularly subjected to a number of forgeries and replications.
Furthermore, as the market continued to expand, which
naturally attracted new rivals and consequently, resulted
in intense competition and a reduction in the market share
that the company previously enjoyed. This had propelled
17-01-17 3:32:36 PM
 352 ACRJ

the company to undertake the implementation of several

company-wide strategies in order to ensure enhanced compet-
itiveness and continued success as a mature company.
Shafique Ahmed had also been concerned about the
direction and future leadership of the company since he had
been contemplating retirement in a few years. His daughter
had just returned to Bangladesh after completing her studies
from a top business school in the U.K. He felt a great deal of
comfort and solace with the thought of being able to train his
offspring to look after the family business and teach her the
tricks of the trade so that she can acquire the skills to cope
with the pressures and challenges of the market.

BACKGROUND

National Fans Limited (NFL) was established in 1979. It is

one of the most successful domestic companies and leading
ceiling fan manufacturers in Bangladesh. The young entre-
preneur, Shafique Ahmed, gained incredible experience in
business and trading from his early age. Throughout his
school and college years, he had been assisting his father
in a small trading business before launching his own busi-
ness. Born with a strong entrepreneurial spirit and a keen
sense of identifying and seizing business opportunities, nec-
essary qualities, skills and competencies of an effective and
successful entrepreneur. The growth of the company from
a small company to one of the biggest ceiling fan manufac-
turers in the country exemplified as an inspirational busi-
ness case. The success of NFL was the manifestation of
the owner’s lifelong aspiration and his drive to achieve
business competitiveness. Over the last thirty years, the
company has earned a strong brand name with huge repu-
tation, which has enabled the company to maintain steady
growth in sales and profit. Although the company manufac-
tured approximately 80% of the total output of the domestic
market, with the increasing competition over the years,
the company now produces only 40% to 50%, still holding
the position of market leader in the ceiling fan industry of
Bangladesh.

S0218927516500139.indd 352 17-01-17 3:32:36 PM

 NATIONAL FANS LIMITED OF BANGLADESH  353

The company rapidly increased its operation in terms

of the number of employees and production capacity. These
changes contributed to the growth of economies of scale
and specialization. Over the years, the number of employees
increased from 300 to nearly 800. From a small-sized
factory, the company expanded its factory size to over 60,000
square feet.
The operational costs increased due to the increased
size of the operation. However, the focus was on effective
planning and cost cutting techniques to minimise through
effective cost minimization strategies. Profits soared due to
the combination of increasing sales and cost minimization.
Even scrap materials were sold off to reduce operational
costs. The management emphasized on increased efficiency,
cost minimization and goodwill of the company.
Behind the success of NFL were persistent hard work,
dedication and vision of the company’s founder, Shafique
Ahmed. He led the company to great success with his
prophecy and perseverance. He also devised successful busi-
ness strategies to position the company as one of the leading
and respectable ceiling fan manufacturers in the country. The
company now relies heavily on the goodwill and positive
brand image that have been acquired over the span of three
decades.
Along with NFL, Shafique Ahmed ventured into other
businesses, such as fisheries, stock exchange and real estate.
However, NFL, as first business venture, earned true success,
good fortune and strong goodwill. Since the inception of the
company, through effective management and competitive
strategies, he has successfully maintained its strong goodwill
and prosperity over the years. Despite various internal weak-
nesses and external threats, the company is maintaining its
growth and market lead.

INDUSTRY GROWTH

The electrical sector in Bangladesh is one of the fastest

growing industries with high potentials for success. In the

S0218927516500139.indd 353 17-01-17 3:32:36 PM

 354  ACRJ

1970s, there were only a very few companies producing

electrical products. Some of the renowned companies were
BRB Cable Industries, Paradise Cables, Transcom Cables,
Poly Cables IND., Supersign Industries (Electrical), Khawaja
Cable Industries, Citizen Cables, Gazi Ware, Ever Shine Cable
Industry, Sunshine Cables, etc. However, during 1978–1986
the industry managed to attract about 1000 investors and at
present there are about 2500 domestic companies producing
75 types of electrical products in Bangladesh1,3. Electrical
manufacturers of Bangladesh are producing import substi-
tute products of BDT 150 billion (USD 1.92 billion) per year
against the local demand of approximately BDT 200 billion
(USD 2.56 billion). Global market for electrical products is
growing, in the last six years’ statistics show that Bangladesh
electrical sector is growing at about 38% to 42% annually. In
2009, the global market of electrical items production rate
increased by 22% in Europe, 21% in North America, 14.5%
in Japan, 24.3% in China, 13.1% in Asia Pacific and 5.1% in
the rest of the world. As a result, few local manufacturers
have started to export Bangladeshi electrical goods to some
other nations such as USA, Hong Kong, Mexico, and UAE.
Here electronics and electrical sector can offer a great oppor-
tunity in Bangladesh. The main advantage of home grown
technology is that it offers affordable products that enhance
the quality of life of local people and provide easy access to
the market. Indeed, there is a large domestic market which
is increasing because of steady increases in income and con-
sumption of electricity.
Most of the items are made through adaptation of
foreign designs. Almost all of local requirements of ceiling
fans are produced by local SMEs. Electrical cables, which are
exported to several countries, are produced by SMEs as well
as a few large industries. Although there is scope to improve
the quality and export to foreign markets, these local indus-
tries have been serving to meet huge local demand. When
such industry grows it creates a network of backward linkage
for supply of component parts. Since the industry relies on
local expertise and raw materials, the technological support is
leveraged through the local network.

S0218927516500139.indd 354 17-01-17 3:32:36 PM

 NATIONAL FANS LIMITED OF BANGLADESH  355

The electrical sector of Bangladesh can be categorized

into two major subsectors which are industrial product sub-
sector and household product subsector. Industrial products
include electrical cables, transformers, sub-station equipment,
switch gear, insulator, industrial fan, magnetic contractor,
heat control system, etc. The household products include
ceiling fan, table fan, different type of lights, table lamps,
bulbs, water heater, etc.; which are being assembled to a large
extent4.
Out of the total 3000 industrial units of electrical goods,
100 are manufacturing fans, mostly ceiling fans. Local manu-
facturers are producing about 9.8 million pieces of ceiling
fan against the demand of 10 million per year. The ceiling
fan manufacturing companies in Bangladesh are situated in
different areas of Dhaka city and a few are in port city of
Chittagong3. In Dhaka city, Mir-Hazaribag and Shyampur
are the places where a majority of the ceiling fan industries
are situated. Every year around 10 ceiling fan manufacturers
enter the market. However, very few manufacturers manage
to sustain in the industry. Moreover, foreign competitors also
make the market more competitive. As a result most suc-
cessful local firms think strategically to expand their products
internationally. Government cooperation such as reducing the
import duty on raw material deserves consideration in order
to allow these local firms to prosper internationally. Some of
the members of Bangladesh Electrical Merchandise Manufac-
tures Association (BEMMA) have suggested increasing import
duty on foreign fans for the sustenance of local companies.

PRODUCTS AND DISTRIBUTION

The key product of NFL is the ceiling fan, which is con-

sidered an essential product in almost every household
in Bangladesh. This is because the weather in Bangladesh
is characterised by high humidity and high temperatures.
The climate is generally extremely warm and humid during
the long summer season. Moreover, ceiling fans are cheaper
than the air conditioning units that make the product more

S0218927516500139.indd 355 17-01-17 3:32:36 PM

 356 ACRJ

easily accessible and affordable by the general public who

fall in the low-income segment. Since Bangladesh is marked
by low income and low standard of living, fancy or expensive
products are not targeted towards the mass majority.
The products of NFL are essentially ceiling fans of
four design types. The first one is the three-blade ceiling fan
(classic model) which is the cheapest and made with steel.
The other classic model, which is a bit more expensive, is
the three-blade ceiling fan made with aluminum. The other
two designs are more luxurious: “gold” and “super deluxe”.
These two are targeted toward luxurious tastes and upscale
households and offices. The designs are also much more
superior and intricate compared to the simple classic model.
Not surprisingly, the prices of the two deluxe models are
also higher than the classic models since it targets the upscale
market. The quality of the products is strictly monitored and
checked thoroughly by the quality control team. This is where
NFL succeeded in becoming a profitable company.
With its simple design that is sophisticated yet not too
lavish, NFL produces the ceiling fans that are preferred by
many people who belong to different income brackets as well
as by factories, schools and other institutions. Therefore, the
target customers are not only small households belonging to
different income brackets but also factories, offices, schools
and colleges. The products are distributed mainly through
wholesalers and large retailers, and sometimes even to large
companies that buy in bulk for their factories and/or offices.

MANAGEMENT

The company structure of NFL is a hierarchical one with the

Managing Director working at the top and subsequent levels
of managers working under him. The managers communicate
directly with their immediate superior and with their subordi-
nates. This allows the top management to have more control
and authority in making important decisions and properly
executing them. Therefore, the levels of leadership, authority
and responsibility within the company are clearly defined so
the employees know who to report to. Even if the company

S0218927516500139.indd 356 17-01-17 3:32:36 PM

 NATIONAL FANS LIMITED OF BANGLADESH  357

structure may inhibit employee involvement and participa-

tive management, it results in more efficiency with decision-
making since the autocratic structure allows it to take more
timely decisions.

COMPETITION

The analysis of competitive issues for National Fan Ltd would

provide a critical understanding about its sustainability in the
challenging emerging market. As the nature of the industry
and competitive dynamics frequently change with the market
conditions, the company is aware of the competitors and
market trend. The ceiling fan industry which is a part of the
electrical sector is still emerging. Thus, the numbers of com-
petitors are continuously increasing. Moreover, there are
more than 100 local ceiling fan manufacturing companies
located in different parts of the country. Some of these local
companies make the market highly competitive and chal-
lenging for NFL. Even though NFL established itself a long
time back, in recent times it has been facing intense compe-
tition from other fan manufacturers. There was a time when
NFL was one of the very few ceiling fan manufacturers in
Bangladesh, but over the years other competitors emerged
to take advantage of the cash cow growth strategy in the
industry9.
Fan Industries Ltd, producing ceiling fans under the
brand name Kashmir Fans, is one of the best-selling compa-
nies in the industry. The company has a production capacity
of manufacturing 1000 ceiling fans per day in a 12-hour shift.
The company produces different varieties of fans ranging
from BDT 1400 to BDT 2500 at current price. Another com-
petitor is BRB whch started manufacturing ceiling fans (brand
name of Lovely Fans) in 2009 and the factory is located at
Bangladesh Small & Cottage Industries Corporation (BSCIC)
Industrial Estate in Kushtia, one of the western districts of
Bangladesh. The factory is operated and managed by a group
of skilled and experienced professionals and also equipped
with modern machinery and equipment. Therefore, BRB has
been successful to produce exclusive range of ceiling fans of

S0218927516500139.indd 357 17-01-17 3:32:36 PM

 358  ACRJ

high quality and durability. Moreover, they provide different

models and designs along with variant colors like white,
green ivory and coffee with modern style.
Super Star Ceiling, launched in 2012, is another com-
petitor which concentrates on the changing taste and lifestyle
of the consumers. It uses different materials such as Japanese
silicon sheet, heat proof grease bearing and copper coil to
reduce heat generation in the fan body, resulting in ultimate
reduction of electricity consumption. They also emphasize
the style of the product. As a result they use powder coated
paint to make the ceiling fans look more attractive. The Super
Star fan is soundless and has two ranges, i.e. “premium” and
“classic”. The fans are tested and certified by Bangladesh
University of Engineering and Technology (BUET) in accor-
dance with the criterion of Energy Star, USA and also certi-
fied by Bangladesh Standards and Testing Institution (BSTI).
Beauty Ceiling Fans, product of Mokhles Metal Indus-
tries Ltd (MMIL), is one of the leading ceiling fan manufac-
turing companies in Bangladesh, operating since 1980. Apart
from manufacturing ceiling fans, the company also made
investments in importing other fans like desk fan, table fan,
stand fan and exhaust fans under the brand name “Beauty”
by their subsidiary company S.S. Trading. Since the incep-
tion of the company in 1980, the company has experienced
important growth positioning as a market leader. MMIL has
an annual turnover of around BDT 150 million and has a pro-
duction capacity of 100,000 ceiling fans per year. However,
the annual sales are around BDT 200 million if they include
all the products that are made and imported under the name
‘Beauty’ by the company. Visibility in terms of brand rec-
ognition varies from place to place. For instance, the brand
“Beauty” group is not readily recognizable by the masses.
However, people in areas like Pabna, Tangail, Bogra and
Narshindi, generally recognize the brand and product to be of
very high standard. As part of the strategic tactic, MMIL does
not recognize itself with the ceiling fan industry but to be a
brand that makes quality products.
On the other hand, imported fans make the market
intensely competitive and expose enormous challenges for
the local producers. Imported fans like GFC Fans, Pak Fans,

S0218927516500139.indd 358 17-01-17 3:32:36 PM

 NATIONAL FANS LIMITED OF BANGLADESH  359

Wahid Fans and Havell’s Fan are also key players in the
market. These globally recognized companies use modern
and sophisticated technology to ensure better quality. Local
companies deliver fans at affordable prices and also capture
a significant percentage of the market share. The small
firms which produce poor quality fans cannot survive in the
industry. Therefore, the big firms who promise to provide
good quality products for a reasonable price survive in the
industry. However, NFL still managed to compete with
all local and international competitors and survive in the
market due to number of reasons. One of the main factors in
the ceiling fan industry is the income segment, that is, most
of the people belonging to the lower income segment prefer
cheap products.
NFL gets price advantages over the foreign competitors,
because those non-Bangladeshi companies have to pay import
tariff. Moreover, the company is also able to compete locally
because of its consistent quality and continuous develop-
ment in modern technology, quality and style. In addition,
NFL has several competitive advantages over its competitors.
Established more than thirty years ago, it is the oldest ceiling
fan company in the country and holds a strong brand image.
It has wider distribution networks compared to that of the
international competitors and new local competitors. Overall,
knowledge, experience and market exposures enable the
company to be the market leader and achieve a sustainable
growth.
The competitive notions of NFL reflect the sustainability
concepts of Porter12,13 that competitive strategy emerges from
sophisticated understanding of the notions and rules of the
competition that determine the industry attractiveness. The
ultimate goal of the competitive advantage is to cope and
change with market conditions and sustain in the market.
Despite facing continuous internal and external challenges,
NFL has been able to successfully thrive and survive in the
market due to its dynamic capability and knowledge of the
industry. Although newer manufacturers have been pro-
ducing and distributing fans locally and some even ven-
tured into the international market, NFL does have an

S0218927516500139.indd 359 17-01-17 3:32:36 PM

 360 ACRJ

edge over the existing competition due to its nation-wide

distribution system, better quality and brand image.

DEMOGRAPHY

Various demographic factors such as income, family size,

and occupation influence the ceiling fan industry of Bangla-
desh. NFL considers demographic segmentation an important
factor for their sustainability and future growth. Moreover,
ceiling fans are the main type of cooling appliance used in
Bangladesh to make atmosphere comfortable at home and
workplaces, therefore people generally rely on ceiling fans.
In addition, as lengthy summer in the country spreads more
than half of the year in Bangladesh, ceiling fan is considered
an essential electronic appliance. Thus, companies make dif-
ferent types of ceiling fans that are attractive, fashionable and
affordable. So, most of the consumers in both rural and urban
areas purchase ceiling fans as their necessary home appliance.
NFL has divided the demographic condition of Bangladesh in
the following segments.

Household Segmentation

Bangladesh is a developing country with a huge population

(156.18 million, July 2016, approximately). In addition to the
consequence of huge population size, the density of popula-
tion (1,045 people per square kilometre; rating eleventh in the
world) is already five times that of any other ‘mega’ country
(>100 million), a very challenging situation for a devel-
oping country5,18,20. Moreover, in recent years, because of the
increase in purchasing power, consumers in city areas prefer
air conditioners over ceiling fans. However, the country has
shortage of electricity, almost every day at least for certain
hours; consumers have to rely on privately managed power
generators which are usually unable to support air condi-
tioners. Although the population is increasing, generation of
electricity, ironically, is not increasing as expected2. Only 49%

S0218927516500139.indd 360 17-01-17 3:32:37 PM

 NATIONAL FANS LIMITED OF BANGLADESH  361

of the country’s population has access to electricity, which

is very low compared to other developing countries in the
world. The per capita generation is 220 KWH10. The electric
fan industry is growing very rapidly with massive increase
of electricity supply and the expansion of its use to rural
areas of the country. As a result even in places with air
conditioners, ceiling fans are still available.
It is obvious that ceiling fans are used to make rooms
cool. As the largest ceiling fan company in the country,
National Ceiling Fan is one of the most preferred brands for
Bangladeshi nationals. During summer, the weather becomes
extremely hot. People seek a cool, soothing place. A ceiling
fan can turn a hot place into a cooler one. It moves the air of
the room and drives out hot air. Besides, cooling the room,
the fans are used for other alternative purposes. The fan can
dry the wet floor within a few minutes. So after mopping the
floor, just switching on the ceiling fan is the solution to the
problem of drying wet floor. The ceiling fans are regularly
used in households to dry clothes especially during the rainy
season when the sun is seldom visible. Housewives are often
seen drying their hair under a ceiling fan instead of using
hair dryers. Ceiling fans are also used to drive bad smells,
mosquitoes, and flies out of a room. A toy fixed with a slow
moving ceiling fan can bring enormous joy to a little baby
lying under it on a bed.
Ceiling fan is an effective natural way to cool with
reduced energy use and can bring significant health benefit
during very hot weather periods14. Unlike air conditioners,
ceiling fans (like any other fans) only move air — they do
not directly change temperature. Therefore, ceiling fans that
have a mechanism for reversing the direction in which the
blades rotate (most commonly an electrical switch on the side
of the unit) can help in cooling. Using ceiling fan is a cost
effective and energy efficient method of cooling instead of
air conditioners or to complement them. In most cases, when
the outdoor temperature is more than 30 degrees Celsius,
a ceiling sweep fan is what all of us need to stay cool and
comfortable. Appearance, power consumption, and price are
the main parameters considered when purchasing cooling

S0218927516500139.indd 361 17-01-17 3:32:37 PM

 362 ACRJ

fans, while cooling capacity and efficiency of energy use are

unknown16. Ceiling fans contribute significantly to residen-
tial electricity consumption, both in an absolute sense and
as a proportion of household consumption in developing
countries11,15.
Moreover, in urban areas most of the consumers live in
rented apartments and relocation is a common practice. Thus,
ceiling fan is preferred over air conditioners. A further factor
for the growth of ceiling fan market is the structural design of
the houses in Bangladesh — all sort of houses are designed in
such a structure that it is easier to install ceiling fans.

Lifestyle Segmentation

In current fashionable world, people are conscious of the inte-

rior appearance of a place. As a result attractive ceiling fans
are also used for decoration. Companies make different types
of ceiling fans that are attractive and fashionable to survive in
the market. For example, outdoor, flush-mount hugger, con-
temporary, traditional, tropical, transitional, fancy Victorian,
sports and kids, large and small ceiling fans are products of
the current market trend. Even some consumers who usually
use air conditioners and do not prefer fans are also pur-
chasing ceiling fans to decorate their houses or work places.

Income Segmentation

National Fan Ltd considers income as the key demographic

factor that influences the ceiling fan industry of Bangla-
desh. NFL mainly targets the people of middle-income level
because Bangladesh has a high population of middle income
households and they have average purchasing power which
allows NFL to ensure a standard quality within an afford-
able price. However, Bangladesh is a developing country and
majority of the population are poor as a result low priced
products are comparatively more demanding. Therefore,
NFL also manufactures low-priced three blade ceiling fan
(classic model) for lower-middle income and rural people. In

S0218927516500139.indd 362 17-01-17 3:32:37 PM

 NATIONAL FANS LIMITED OF BANGLADESH  363

addition, there is also a profitable market for higher middle

income people. For that reason NFL manufactures three blade
ceiling fan made with aluminum for higher middle-income
customers and designs luxurious “gold” and “super deluxe”
for people with high income level.

COMPETITIVE EDGE

The success of NFL as one of the leading domestic fan man-

ufacturers in Bangladesh can be accredited to a combina-
tion of strategies which involved ensuring an effective
production process, creating a solid brand image, sustaining
a competitive edge over other manufacturers, maintaining
a reliable network and good relationship with the buyers
and sellers; combining better customer service, return and
exchange policies, and maintaining overall goodwill. The
competitive advantage in the domestic market has been main-
tained by ensuring better quality products, offering better
terms and conditions of purchase such as a longer war-
ranty for a length of 10 years and flexible payment options.
The sales and personnel team has been carefully selected to
ensure a reliable and efficient team of employees. Moreover,
the company is continually maintaining its good quality
products at competitive prices.

Supply Chain of Raw Materials

The resources, components and raw materials used for the

production of the ceiling fans include aluminum, steel sheet,
ball bearing, capacitor, copper, etc. These are imported from
reliable and resourceful suppliers from different countries
such as China, Thailand and India. The company has estab-
lished a long standing relationship with the suppliers to
ensure smooth and reliable delivery and high quality of
raw materials. It is imperative for the company to ensure
a smooth supply chain management process that facilitates
timely procurement and throughput of raw materials.

S0218927516500139.indd 363 17-01-17 3:32:37 PM

 364  ACRJ

Repair Service and Product Warranty

The company has been following a strict mantra of constant

contact and follow-through with customers, prospects, and
business alliances. Being consistent with quality of prod-
ucts and following up with different channels has enabled
the company to take advantage of opportunities, increase
the value of each sale and buying frequency from existing
customers, and build stronger business relationships with
suppliers and core business team. The company offers after-
sale services and a ten-year warranty to satisfy the existing
customer base. It is often easy to sell one product or service,
but it takes effort and hard work to retain customers and
keep them coming back.

Goodwill and Brand Image

A good reputation  is undoubtedly one of the most tangible

and important assets of any company, small or large. A good
reputation cannot be bought and it has to be earned through
consistency. NFL has earned a rock-solid reputation by main-
taining consistency in terms of product quality and after-sales
service. The company has also built a good and reliable rela-
tionship with its suppliers and wholesalers.

Quality Dimensions of Fans

Following Garvin’s7 eight components of quality, National

Fan’s perceived quality as a brand name was found to be
well known to Bangladeshi customers. Its probability of mal-
function or failure was rare, indicating its reliability. Its per-
formance is excellent. Its customer-friendly after-sales service
and the speed, courtesy, competence, and ease of having
problems fixed fulfill the serviceability of quality dimen-
sion. It is able to meet specifications which fulfill its con-
formance, and well-defined product life-time (10 years)

S0218927516500139.indd 364 17-01-17 3:32:37 PM

 NATIONAL FANS LIMITED OF BANGLADESH  365

durability. However, its product aesthetics appeal to users

is questionable: it does not have new designs to attract cus-
tomers and few colors for variety (white, green). Neverthe-
less, NFL’s other seven quality dimensions are attractive to
the customers, which helps to maintain the reputation of the
company.

STRATEGIES

National Fans Ltd devised and adopted competitive busi-

ness strategies in order to prevent sales volume from being
adversely affected during economic and political turmoil.
The pricing strategy implemented by the company has been
competitive, as lower prices have been offered to maintain an
edge over newer competitors. The company has introduced
new and improved machinery in its production process to
make production faster and easier using better and more
efficient technology.
Moreover, the company has enjoyed the benefits of
internal growth due to the increased factory size and number
of employees. The high quality of products has been strictly
maintained through Quality Control Techniques (QCT). As
mentioned earlier, the company offers free repair service and
a ten-year warranty period to ensure better after sales service.
The company has entered the maturity stage in the market
and it has been adapting its strategies to suit the nature of
the competition and the situation of the economy and the
market. Therefore, the company has successfully gained a
competitive advantage in terms of better quality products, a
longer warranty, more flexible payment options, lower price,
better customer service, better return and exchange policies.
Moreover, NFL has been keenly creating a dynamic environ-
ment and hiring professionals to maintain efficiency within
the company. The managing director of the company also
diligently provides constant follow-up and remains involved
with the entire process of the company.

S0218927516500139.indd 365 17-01-17 3:32:37 PM

 366 ACRJ

Competitiveness and Strategy

NFL has carefully selected its strategy which is neither low-

cost nor differentiated. They fear that following low-cost
strategy may lower the quality of the product, which may
damage the perceived brand image of the company. On
the other hand, the company does not go for much differen-
tiation which may turn the product into a costlier one. The
target market is the mass customer base with a standard
product without compromising the quality. That is the reason
why the company does not produce luxurious fans as well
as cheaper ones. It is also satisfied with the present customer
base. Therefore, it is not concerned about developing new
markets.

Marketing and Pricing Strategy

National Fans Ltd enjoys its market segment. It does not

use ‘push’ strategy in its pricing whereby the producers
have to attract the shoppers with discounts, in-store special
offers, advertising allowances, etc. Rather the shoppers con-
sistently ask for the products of NFL which means it follows
‘pull’ strategy. The shoppers usually buy the products from
the retailers or dealers of the company. Shoppers can also
place orders for goods with the sales representatives of the
company. However, the company has currently started to
sell directly from their own sale-centers in large cities of
Bangladesh like Dhaka, Chittagong, Bogra, and Khulna. The
company is also planning to open new sale-centers in other
areas of the country. NFL’s pricing is dynamic; variable
pricing based on supply and demand. During winter when
the demand of the fan is low, the price is also lowered. The
dealers need to pay only a portion of the price in advance for
the booking of fans, number of which must not be less than
BDT 100. The marketing people approach the shoppers for
placing bookings. Thus, the dealers are taking the chance of
this seasonal lower price book for the fans to be sold in the
summer when the demand and the price would be higher. As
a result the company factory remains busy with production

S0218927516500139.indd 366 17-01-17 3:32:37 PM

 NATIONAL FANS LIMITED OF BANGLADESH  367

of fans even during the winter though sales in the market

remain at a standstill. The scenario in the summer is opposite.
The demand becomes naturally high; so is the price. Now the
dealers have to pay in advance to get the distribution. The
relationship with the marketing people of the company is
very important: the shoppers now ‘fan’ the marketing people
to get the supply on time.

SETBACKS AND CHALLENGES

Over the journey of its operation, the company faced

numerous challenges and setbacks that required the manage-
ment to carefully create and implement effective strategies
to overcome the various trials and tribulations. The adverse
effects of copycats and replicas on the business’s reputation
and goodwill have been growing concerns. One of the main
struggles which have severely hampered the company is the
widespread existence of counterfeit products. Customer may
easily be deceived by the poor counterfeited goods manufac-
tured by companies like ‘National Fans B Tongi’, ‘National
Fans C Tongi’, ‘National Fans New Tongi’, etc. These illegal
companies specifically have been infringing the design, brand
name and trademark of NFL and very blatantly passing off
their goods as if they were of National Fans Ltd. The counter-
feit products are exact replicas of the products produced by
NFL, from the brand name to the product design. However,
the quality between the original product and the counterfeit
product varies greatly as the latter is of much lower quality
and tends to face trouble in service. As a result, the customers
unknowingly purchase the counterfeit product thinking
that it is the original brand and become very dissatisfied,
sometimes even claiming for free repair service from NFL.
The company had to overcome not only the challenges of
economic and political turmoil but also the problems created
by legal issues such as multiple cases of copycats and illegal
replications of the NFL items. Counterfeit products are still
being produced, which illegally use the brand name, trade-
mark and design of NFL and significantly harm the reputa-
tion and goodwill of the company. The company fought a

S0218927516500139.indd 367 17-01-17 3:32:37 PM

 368  ACRJ

lengthy legal battle against these counterfeits and eventually

won the legal case. However, due to the weaknesses of law
enforcements in Bangladesh, the counterfeit producers keep
emerging even though some actions are taken to eliminate the
existing ones. It has even been recorded that an owner of a
factory that engaged in the production of illegal replicas of
NFL, when arrested by local authorities, claimed that there
was absolutely no other way to sell ceiling fans in the market
without copying NFL6. In a country where the law and order
system is widely regarded as unscrupulous and corrupted, it
can often be a test of patience and perseverance to completely
win the battle for copyright and trademark rights. The state-
run watchdog agency Bangladesh Standards and Testing
Institution (BSTI) is responsible for monitoring and over-
seeing the rights of consumers’ interest.
The demand of the ceiling fans is increasing in a huge
scale, but the company cannot keep pace with its growth. As
a result, NFL is losing its market share every year. Previously
it had more than 80% market share. Currently it is about 40%
to 50%. If this trend continues, the company may lose its
market leadership. Lacking the existence of a R&D depart-
ment, the company has been ignoring the changing tastes and
preferences of the new generation customers. Moreover, if the
company’s products become obsolete, it will be hard to regain
market share.
Additionally, the company has faced various economic
and political instability and turmoil. The prices of raw mate-
rials have sometimes been unstable and also increased which
raised the incurred costs and affected the pricing strategy.
According to Haque8 the traders of raw materials of fans
have increased the prices with a hope that they can make
a windfall profit with the increasing demand in the pick
season of business. Therefore, it has become essential that the
company takes smart and effective strategies to tackle and
resolve these problems. Because of the scarcity in domestic
production, consumers in Bangladesh mainly depend on the
imported items for electronic products with high demand.
E-business could be a challenge as well, as the country is
going to be digitalized with the initiative of the government,
people may want to look for the product sitting at their own

S0218927516500139.indd 368 17-01-17 3:32:37 PM

 NATIONAL FANS LIMITED OF BANGLADESH  369

home. They may want the product to be delivered to their

own home and NFL must address this issue.

FUTURE OF NATIONAL FANS LIMITED

Energy efficiency of ceiling fans is an important area to

address in reducing overall energy consumption in Bangla-
desh. Ceiling fan systems are made up of two main compo-
nents (i.e. motors and blades) that affect energy consumption.
Therefore, design process should clearly demonstrate that
higher-efficiency operation can be achieved for the ceiling
fan by making its blades aerodynamic, and that such a
ceiling fan can further reduce electrical use by building air
conditioners significantly if it is operated properly in the
residence14. NFL has a great potential to address these issues
and come up with innovative designs to reduce energy con-
sumption which will have a greater impact in preserving the
resources nationwide.
Although NFL is well known for its brand image and
good quality service, the company is not keeping pace with
the increasing demand of ceiling fans and gradually losing its
market share every year. The company should open an R&D
department immediately and focus on extensive research
to keep up with the latest technology and demands of new
customers before its products become obsolete in the market.
Williams et al.19 suggest that through proper planning and
control system and use of innovative manufacturing process,
its contribution to the business unit’s technology orienta-
tion can be achieved. The company should also emphasize
on e-business to cater to the needs of the technologically
advanced customers (i.e. urban customers).
Nonetheless, NFL does have an edge over the newer
companies in terms of goodwill and longer presence in the
market. With the right business strategy, strong leadership
and enthusiastic management team, the company needs to
adopt new approaches in order to face the recent challenges
in the market. For companies in modern era, the road to
successful venturing is certainly not an easy one, and many
businesses struggle to ensure their on-going performance

S0218927516500139.indd 369 17-01-17 3:32:37 PM

 370  ACRJ

and success. Therefore, it is crucial for NFL to modify its top

management teams, designs, processes and systems to cater
to the changing market and satisfy the need of customer’s
changing demands.

ACKNOWLEDGMENTS

We are grateful to Mr. Shafique Ahmed, the Managing

Director of National Fans Limited for his insights, thoughts
and inputs during the case study preparation, as well as
Mr. Mosharraf Hossain (Sales Manager) and Mr. Ezaz
(Marketing personnel) who provided valuable information on
the workings of the organisation.

REFERENCES

1. Abdin, M. J. and Rahman, M., 2012. Electrical Sector of

Bangladesh: Problems & Prospects. Working paper series, SME
Foundation, Dhaka, Bangladesh.
2. Ahmed, J. U., Uddin, M. J. and Ali, M. A., 2014. Innovation in
power sector in the developing country: A case of electro group
in Bangladesh. Delhi Business Review, 15(1): 107–118.
3. BEMMA, 2014. Bangladesh Electrical Merchandise Manufacturers
Association. Retrieved from: http://www.bemma.org.bd.
4. (The) Board of Investment 2014. The Board of Investment. Retrieve
from:
http://www.boi.gov.bd/index.php/potential-sector/electronics
5. CIA Facts Book, 2016. The World Fact Book, South Asia: Bangladesh.
CIA Facts File.
6. (The) Daily Prothom Alo, 2007. Counterfiet news about National
Fans Ltd. April 30.
7. Garvin, D. A., 1988. Managing Quality: The Strategic and
Competitive Edge. Harvard Business School.
8. Haque, M., 2013. Prices of Fans on the Rise. The New Age, April 9.
9. Higgins, R. C., 1977. How much growth can a firm afford?
Financial Management, 6(3): 7–16.
10. Ministry of Power, Energy, and Mineral Resources, 2011. Power
Division: Ministry of Power, Energy and Mineral Resources,
Government of the People’s Republic of Bangladesh, Accessed
June 14, 2013, http://www.powerdivision.gov.bd.

S0218927516500139.indd 370 17-01-17 3:32:37 PM

 NATIONAL FANS LIMITED OF BANGLADESH  371

11. Murthy, K. N., Sumithra, G. D. and Reddy, A. N., 2001. End-uses

of electricity in households of Karnataka state, India. Energy for
Sustainable Development, 5(3): 81–94.
12. Porter, M. E., 1985. Competitive Advantage: Creating and Sustaining
Superior Performance. New York: Free Press.
13. Porter, M. E., 1980. Competitive Strategy: Techniques for Analyzing
Industries and Competitors. New York: Free Press.
14. Rosen, M. A., 2009. Development of an Enhanced Ceiling Fan: An
Engineering Design Case Study Highlighting Health, Safety and
the Environment. Faculty of Engineering and Applied Science,
University of Ontario Institute of Technology.
15. Sathaye, N., Phadke, A., Shah, N. and Letschert, V., 2012.
Potential Global Benefits of Improved Ceiling Fan Energy Efficiency.
International Energy Studies Group, Lawrence Berkeley National
Laboratory (LBNL-5890E), Berkeley.
16. Schiavon, S. and Melikov, A. K., 2009. Introduction of a cooling-
fan efficiency index. HVAC&R Research, 15(6): 1121–1141.
17. Skinner, W., 1980. Manufacturing and technological strategy.
Journal of Business Strategy, 1(2): 69–72.
18. Streatfield, P. K. and Karar, Z. A., 2008. Population challenges for
Bangladesh in the coming decades. Journal of Health, Population
and Nutrition, 26(3): 261–72.
19. Williams, F. P., D’Souza, D. E., Rosenfeldt, M. E. and Kassaee,
M., 1995. Manufacturing strategy, business strategy and
firm performance in a mature industry. Journal of Operations
Management, 13(1): 19–33.
20. World Bank, 2012. The World Bank Data: Bangladesh. World
Bank.

S0218927516500139.indd 371 17-01-17 3:32:37 PM

 372  ACRJ

Exhibit 1

Organogram of National Fans Ltd.

Managing
Director

Director

Head of
Head of Sales Head of Head of
Finance & Chief Engineer
& Marketing Production Purchase
Accounts

Sales Accounts Production Purchase

Personnel Personnel Supervisor Personnel

Production
Staffs

Source: Internal Documents of NFL, 2014.

S0218927516500139.indd
View publication stats 372 17-01-17 3:32:37 PM