INDEPENDENT UNIVERSITY, BANGLADESH

TERM PAPER (GROUP ASSIGNMENT)

MGT201 SECTION: 6 SPRING 2021

Submitted To: Afnan Ashfaque

Submission Date: 25-4-2021

Group: Connection

Group Members:

Name ID
Sintia Islam 2020007
Rakib Abdur Rahim 2020248
Shoeb Ahmed 2021242
Minnatun Rifa 2022099
Farhana Akter Joti 2022738

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 Letter of Transmittal
25th April, 2021

Ms. Afnan Ashfaque

Lecturer,

Department of Management,

Independent University, Bangladesh.

Subject: Term paper on Aarong

Dear Ma’am,

We submit herewith the attached term paper on Aarong. The following report was prepared to
overview the insights of the overall strategies of Aarong. In the process of bringing this term
paper, the members of the team have endeavored to their utmost to maintain the highest of
qualities in terms of writing, information collection and data analysis. The members have
furthermore striven to make this term paper as comprehensive and relevant to the course as
possible. The contents of this report are free from plagiarism, although some references have
been taken from different sources to facilitate our report and make it as informative as possible.

We would also like to take this opportunity to put forward our most heartfelt thanks for giving
this opportunity. However, we will be glad to clarify any discrepancies that may arise. We hope
you find this term paper satisfactory.

Thank you again.

Yours sincerely,

Farhana Akter Joti

On behalf of the group “Connection”

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 Acknowledgement
First and foremost, we would like to thank the Almighty for giving us the moral integrity,
devotion, patience and ability to carry out this assignment nicely.

While working on the report we had to take the help and guideline of our respected faculty, who
deserve our greatest gratitude Ms. Afnan Ashfaque, Lecturer, Department of Management,
Independent University, Bangladesh, who has helped us accomplish our project with her solid
guidance and valuable consultations.

We thank you for your contribution to our assignment. We would also like to expand our
heartfelt gratitude to those who have helped us accomplish this directly or indirectly.

We are also genuinely thankful to all of the group members, who have been co-operative in
every aspect. Our each and every member has given all their might to this report. It was indeed a
pleasure working in such friendly environment.

Thank you.

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 Table of Contents
1. Executive summary …………………….…………………………………………...….... 5
2. Company overview ……………………………………………………………………… 6
3. General and specific external factors ……………………………………………………. 7
4. Stakeholders of the Company …………………………………………………………… 9
5. SWOT Analysis……………………….….……………………………………………...10
6. Competitive advantages …………………………………………………………………12
7. Conclusions ……………...………………………………………………………………13
8. Reference………………………………………………………………………………...14
9. Appendix…………………………………………………………………………………15

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 Executive Summary

Aarong is a BRAC organization that was established in 1978 as a CSR-based handicraft

company. Aarong has over 488 items available in their stores. Aarong's influence has now
extended beyond Manikganj to the rest of the world. Aarong currently has nine domestic
locations and one franchised location in London. They've developed into a flourishing
international business that sells everything from ethnic wear to beautiful crafts, including silks,
handloom cotton, endi, terracotta, bamboo, jute, and more. Aarong has expanded from a single
store to become one of Bangladesh's largest retail chains, with eight locations in the country's
major cities – Dhaka, Chittagong, Khulna, and Sylhet and one in London, UK. Aarong supports
and nurtures a diverse community of 65,000 artisans, with 85 percent of them being women.
Aarong also serves as a guardian and promoter of traditional Bangladeshi designs and products.
It contains a large design library where relics of our rich craft heritage, such as Nakshikatha art
and Jamdani patterns, have been extensively researched and archived for current and future use.

In this term paper all data has been collected by second hand data collection method. We use
google to collect this information.

Our Mission

Our mission is to empower people and communities in situations of poverty, illiteracy, disease
and social injustice. Our interventions aim to achieve large scale, positive changes through
economic and social programs that enable women and men to realize their potential.

Our Vision

Aarong has a vision to establish them as world’s one of the famous fare trade fashion house.
Aarong’s vision is to remain market leader throughout its business.

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 Company Overview

Aarong is one of the ways of life corporate store in Bangladesh. "Aarong", in the wake of
watching the name first thing came as a top priority that a ret l chain shop of Bangladesh. In any
case, the foundation history about Aarong is obscure to numerous one. Aarong isn't just a chain
retail location yet additionally a total association. It is a social venture by BRAC (Bangladesh
Advancement Committee) set up in 1978 by holding hand of Ayesha Abed to kill destitution,
upgrade the nature of vocation of provincial ladies by morally made town artworks, materials,
etc. Today this association took a gigantic shape over Bangladesh.

There are 20 retail locations, more than 6000 representatives, more than 100 design and way of
life product offerings; Aarong upholds 65,000 craftsmen with reasonable terms of exchange.
Upsetting the retail business with elevated expectations for quality and creativity, this notorious
brand mixes the customary with the contemporary in manners that never stop to win buyer offer
both at home and abroad.

Aarong is essentially under the Ayesha Abed establishment that is centered around the country
improvement of ladies with handcrafts, materials thus numerous product offerings. Today the
item interest in inside Bangladesh as well as the nation over with solid brand name and notoriety.

Aarong's cycle is very efficient about the retail and enlistment measure. As a matter of first
importance there are more than 65,000 enrolled craftsmen’s over Bangladesh. Items are
requested and brought from them. After that quality control and other authority measure
happened and later on the items are sent straightforwardly to the power source. Aarong is a
finished business measure with the perspective on rustic turn of events. Aarong is a reasonable
exchange association devoted to achieving changes in the existences of impeded craftsmen’s and
oppressed ladies by resuscitating and advancing their abilities and art.

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 General and specific external factors

Our Company is Aarong and it has General and specific external factors affect the company in
many ways. The Specific external environment is: supplies, customers, competitors.

The General environment factors are: political, economic, social culture, legal and
demographic.

Customer: The customer plays the most important role for a company. The up and down of a
company depends on the needs of the customer. So, satisfying the customer is an important
responsibility of a company.

Suppliers: It is important for the company to choose suppliers carefully because they can affect
the business and they deliver their products to. If the suppliers supply a poor-quality product to
the company, it can affect the company’s reputation. Because the company’s product has to be
used or sold to their customers also it needs to be up to their expectations and useful to them. So,
the suppliers play a very important role in the company.

Competitors: Competitors try to win the market by reducing cost, increasing efficiency,
lowering price, and innovating by casting new products and services or improving on the old
ones. Brac-Aarong is a retailer of consumer products. It offers men, women, kids, home decor,
carpets, wedding, gifts and crafts, jute products, beauty, dairy products and so many more. They
newly lounge a huge beauty product which is “Aarong earth”.

Key success factors are:

A PESTEL analysis is the key success factors of any organization. It refers framework or tool
which used by marketers. It analyses and monitor the macro-environmental (external marketing
environment) factors which have an impact on an organization. The result of pastel identify
threats and weaknesses are used in a SWOT analyzing.

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Political, Economic, Legal, Social Culture and Technological factor these are
affected to external environment of Aarong.

Political: It is clear from the beginning that political factors are an impact to the organizations
and their business. It’s included – government strategy, political soundness or insecurity on
abroad business sectors, foreign trade policy, charge strategy, work law, ecological law,
exchange limitations etc. These political factors regularly effect on organization and their work.
As per political arrangement of Bangladesh government Aarong is now export their item in UK
and USA.

Economic: economic factors are an important impact on business and also, it’s needs to know
how profitable they’re. Economic factors have a significant impact on an organization, business
Factors include – economic growth, interest rates, exchange rates, inflation, disposable income of
consumers and businesses and so on.

Legal: Aarong follows legal factors include – health and safety, equal opportunities, advertising
standards, consumer rights, laws, product labelling and product safety and etc. It is clear that
companies need to know what is not legal and what is legal for trade successfully. It is clear from
the observation that the political factors have a little impact on Aarong to export the products,
where economic factors have a huge impact on an organization.

Social culture: Aarong is BRAC’s flagship social enterprise and Bangladesh’s most popular
lifestyle retail brand. It called socio-social components, these components are – popular
development, age conveyance, wellbeing consciousness and profession mentalities etc. These
variables are effective advertising to get the clients attention and drives them. Aarong follows the
social factor and by focusing on them it decide its objective client and organizing systems.

Technological Factors: we all are know that how fast the technological changes environment
and how they impact on the Marketing products. Aarong established online shopping for
encourage their customers and target customers to distributing their product. It follows social
media and electronic media for communicating with their target market and for their promotional
activities tool.

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 Stakeholders of the Company

Stakeholders are the party who has an interest in the business outcomes. They can either effect or
be affected by the business. The primary stakeholders of any corporation are its Investors,
Employees, Customers and Suppliers. As like any other company Aarong has some
stakeholders of their own. For example, Customers, Employees, Investors, Suppliers and
Vendors, Communities, Government and competitors. Among all the stakeholders some of the
stakeholders are very critical for the company as they set a direct impact on the hand crafting
industry. Like the customers, suppliers, vendors, and competitors.

Customer: A customer is someone who pays for the goods or services that they receive. The
reason why we think customers are one of the critical stakeholders is because without their
support a company can't run business. If there’s no buying and selling then there is no business.
Whenever the customers purchase something, and by this purchase the company gets support
from them and for the company’s betterment what to produce, which products and services to
invest in further. It's customers who needs the products and services and so is the company who
also needs their support to maintain their business and make profit out of it.

Supplier: A supplier is someone who provides a particular service or commodity that a company
uses to produce its own products. I think suppliers are the critical stakeholders for our company
because without suppliers bonding, it's difficult for a company to grow in their business and
markets. Suppliers are the one who provides high-quality raw materials or components from a
manufacturer at a good price to a company. A company needs suppliers to provide resources
needed to run the business. Also, the advantage is that a company can gain better value for their
business if there is a strong and healthy relationship with suppliers.

Vendors: A vendor is someone who promotes or exchanges goods or services for money. I think
Vendors are always critical stakeholders for a company. The reason is they’re the one who drive
new growth within an industry and assure that the company can achieve revenue and profit goals.
Without vendors, the company can't sell their products and services to another company or
individual and directly to the customer. In the success of failure of a company, vendors can play
an important role as a business partner.

Investors: Company like Aarong has multiple investors. Investors are people who put their
money or land in a company hoping to achieve profit in return. Investors are named as
Shareholders of the company. Aarong is a chain of Bangladeshi department stores specializing in
Bengali ethnic wear and handicrafts. It is owned by the non-profit development agency BRAC
and employs thousands of rural artisans across the country. To maintain the level of
employments Aarong needs to make more profit, and more profit would attract more investors

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and Aarong will expand and grow its business. The more the profit the more Aarong will attract
investors

SWOT Analysis
SWOT analysis is very useful for determining a company's strengths and weaknesses, as well as
identifying potential opportunities and threats. When applied to industry, it assists organizations
in carving out a long-term market niche. The majority of this study is focused on a hypothetical
scenario.

Strength
Aarong is a well-known organization. They now control 68 percent of Bangladesh's total
handicraft industry. It's a local brand that's started exporting its goods outside of the country.
Aarong is known for its high-quality goods. It has a good management team that is constantly
working hard to make it a success. Another important fact is that Aarong has a nearly "zero" rate
of production damage, lowering their costs. They are creative and constantly introduce new
products to the market that meet consumer needs and expectations. The organization is a well-
known employer that supports its employees.

Weakness
Aarong has a reputation for high quality and creativity when it comes to new product creation.
However, they remain vulnerable to the risk that, due to their inability, their manufacturer would
be unable to deliver product on time. The organization's collection channel isn't well-structured
enough to ensure that they receive items from the manufacturer on time, which may pose an
issue in the future. If a producer is unable to manufacture a product on time due to a staffing
issue, the company would be unable to deliver the product on time as well. This is a major issue
that occurs often during shipment. Aarong charges a higher price than their competitors, and as a
result, consumers can lose interest in purchasing products from them. The outlet's salesperson, or
sales girls, are not fully trained. Customers are often dissatisfied with their attitude, and they are
unlikely to buy from them. They still suffer from financial difficulties, though this is an unusual
occurrence.

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Opportunities
Aarong is an expert at seizing opportunities. It could try a different distribution channel, such as
forming a joint venture with another small boutique and selling its goods in more places. It will
be able to increase its market share in Bangladesh's handicraft industry as a result of this. Aarong
has the ability to grow its business internationally. New markets for handicraft are starting to
arise, such as Europe and America. People are becoming more interested in local events and
functions such as Pohela Falgun, Pohela Baisakhi, Victory Day, Independence Day, and so on,
and they are purchasing new and exclusive items for these occasions. Aarong will create new
items to sell at such special events. People's preferences in purchasing goods change as the
seasons change, and Aarong may produce products based on seasonal variations.

Threats
Right now, Aarong doesn't have any significant competitors. However, small competitors such as
KayKraft, Anjans, Deshal, Jattra, Khubsurti, Rina Latif, SadaKalo, ILLIYEEN, Rang, and other
Boutiques founded at Banani 11 are stealing their 32 percent market share and growing slowly.
Aarong is still in a price fight with their competitors. Its competitors' products, such as
ILLIYEEN's Panjabi shape and Khubsurti's design of Salwar kamiz, Rang's Share's color, are
outperforming Aarongs in terms of market share and revenue. However, they are now
repositioning their brand in order to compete with them.

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 Competitive advantages

As we all know that Aarong is one of the successful lifestyle stores in our country which mainly
maintains our tradition, culture, and trends. Aarong is not only a chain retail store but also a
complete organization that is supported by BRAC NGO. Aarong has its unique version of the
competitive advantage & its function is crystal clear. Like other organizations, this organization
also has some competitive advantages.

So many competitive advantages are pursuing by this organization and these are-

1.Broader Product Selection:

Aarong’s product styles have brought customers attraction back to the merchandise and designs
that are indigenous to Bangladesh, its designers mixing the normal with the modern during a
manner that has won instant customer attraction, beginning a revolution in trends that has
currently been concerned by infinite different boutiques and stores. Aarong’s product designs
target the high categories textures of crafts and patterns that are changing by them from time to
time among weavers and crafters in craft centers all over the country.

Aarong altogether plays the role of defender and promoter of conventional Bangladeshi
merchandise and styles. It’s a huge style library wherever remnants of our wealthy craft heritage,
like Nakshikatha art & Jamdani patterns, are broadly researched and archived for current and
forthcoming use.

2.Brand Management Strategy of Aarong:

Competitions move through Facebook & different social media platforms are the newest method
by which brands hope to win customers love. Now the Aarong is wishing to faucet into the

cultural look of the present period by utilizing coopetition for its fans to become the “face” of the
name of the brand which moves through social media and increases the reality. The absolute
volume of campaign moves in social media competitions suggests the suggestion through social
media which is currently a thought selling gadget for Aarong.

3.Lower Production Cost:

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As Aarong is making a huge revenue so compare to revenue their cost of production is very low
so it’s a great advantage for them.

4.Differentiation:
Aarong always differentiates their market offering to create definitive customer value. Aarong
offers their products for men, women, kid’s boys, girls, household and other products. Aarong
always customized their products for different occasions.

5.Higher Quality Than Any Rivals:

Aarongs product quality is much better than their rivals. It’s a deshi brand product that always
maintains good product quality. Aarong always shows their creativity in their product and also,
they produce export quality products with our homemade materials. Like others, they don’t use
any imported material for their products. Aarong also competing abroad. Aarongs rivals are-
Deshi-Dosh, Kay craft, etc. but they couldn’t afford to compete Aarong by their quality of
products.

6.CSR Activities:
As Aarong is supported by BRAC NGO, so a huge portion of Aarongs revenue goes directly into
financing the NGO’s development programs in healthcare, education also social, and economic
development & this helps to fame their brand name more broadly in our country.

Aarong exploiting its competitive advantage by not paying the employees properly. As Aarong’s
product quality is better than their rivals so Aarong is charging a lot of money for their products.

Their prices of products are too high and as they are not using any imported materials from
abroad so compared with this, they are also charging extra VAT for their any product.

Conclusion
Aarong is the crownless king in the lifestyle fashion house in Bangladesh. Over the year it has
bought positive changes in the lifestyle of people. Aarong is one of the successful lifestyle stores
in our country which mainly maintains our tradition, culture & trends.

From the earliest starting point, Aarong is a reasonable exchange association committed to
achieving positive changes in the lives of craftsmen and underprivileged country ladies by

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restoring and advancing their skills and craft. As it holds and supports an assorted portrayal of
65000 craftsmen. It serves as a forum for independent cooperative groups and family-based
artisans to market their work. So, as a result, Aarong is a fair-trade organization reaching the
global market by representing our Bangladeshi culture.

Reference
 Key Success Factors of Arong. (n.d.). Assignment Point. Retrieved from
https://www.assignmentpoint.com/business/management/key-success-factors-of-
aarong.html

 Handicraft Industry in Bangladesh. (n.d). Assignment Point. Retrieved from

https://www.assignmentpoint.com/business/marketing-business/handicraft-
industry-in-bangladesh-study-on-aarong.html

 Marketing Mix of Arong. (n.d.). Green on the inside. Retrieved from

https://www.greenontheinside.net/marketing-mix-of-aarong-essay-example/

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Appendix

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