INTERGRITY LOGISTICS AND EDUCATIONAL CONSULT

SWOT ANALYSIS OF AARONG BANGLADESH

By









PHIDELIS M. K. EBLEDZI (CILT ACCREDITED LECTURER)









TABLE OF CONTENTS

Contents Page
THE BACKGROUND OF AARONG ...................................................................................... 3
1.0 SWOT ANALYSIS OF AARONG ..................................................................................... 3
1.1 Strengths .............................................................................................................................. 4
1.2 Weaknesses: ......................................................................................................................... 4
1.3 Opportunities........................................................................................................................ 5
1.4 Threats.................................................................................................................................. 5
1.5 Conclusion ........................................................................................................................... 5
REFERENCES .......................................................................................................................... 6









THE BACKGROUND OF AARONG
Aarong is a fair trade organisation established by BRAC in 1978. It is a retail outlet that can be
found in all the major cities of Bangladesh. Its aim was to bring about positive changes in the
lives of disadvantaged artisans and underprivileged rural women by reviving and promoting their
skills and craft. It has reached out to weavers, potters, brass workers, jewellers, jute workers,
basket weavers, wood carvers, leather workers among others. Aarong embraces and nurtures a
diverse representation of 65,000 artisans in 2,000 villages across Bangladesh. Presently, Aarong
is the basis upon which independent cooperative groups and family-based artisans market their
craft, in an effort to position the nations handicraft industry on a world platform of appreciation
and acknowledgement. However, the organisation is faced with some challenges from the
market place.
The SWOT analysis of Aarong is presented below:

1.0 SWOT ANALYSIS OF AARONG
SWOT analysis is an acronym which enquires into strengths (S), weaknesses (W), opportunities
(O), and threats (T) that organisations may face. In other words, it is a traditional means of
searching for insights into ways of realizing the desired alignment (Ansoff 1965; Andrews 1987;
Porter 1991; Mintzberg, Ahlstrand, and Lampel 1998); identifying and assessing what might lie
in store in the form of factors which may pose as threats on one hand, and representing
opportunities to be grabbed at the other hand. Additionally, the SWOT analysis provides
information that is helpful in matching the firms resources and capabilities to the competitive
environment in which it operates. In SWOT analysis, strengths and weaknesses are internal
factors while opportunities and threats are external factors. This is illustrated below:

Fig. 1.0 - Conceptual structure of the SWOT framework, prepared by the student.
The strengths, weaknesses, opportunities and threats of Aarong have been briefly discussed as
follows:
1.1 Strengths: -This is positive, favourable internal positions or conditions enjoyed by Aarong
in business. In other words, the resources and capabilities that Aarong can use as a basis for
developing competitive advantage are its strengths. Examples of such strengths are;
Good reputation/enjoy goodwill.
Large market share of the total handicraft market size.
Recognized brand locally.
Customer loyalty.
Export products outside the country (foreign market).
Strong and dedicated management team.
Low production cost dues to its zero defect rate.
Good knowledge of the market.
Quick response to customers requirement and expectations.
Good reputation for new product development and creativity.
Respected employer that holds its employees in high esteem.

1.2 Weaknesses: This is negative, unfavourable internal positions or conditions militating
against Aarong in business. In other words, the absence of certain strengths may be viewed as a
weakness. The weaknesses identified in the case of Aarong are as follows:
Inability of producers to produce products on time due to personnel problem
(vulnerable to producers).
Late delivery
An inbound logistics operation of the organisation is not well-structured (Poor
access to the collection).
The products are too expensive (charges relatively higher prices) as compared to
their competitors.
Higher prices scare customers away.
Inadequate or lack of proper training given to the sales force/sales girls.
Bad attitude of sales force/sales girls towards customers drive them away.
Sales force/sales girls suffer from financial support.
1.3 Opportunities: This is positive, favourable external advantage to the company in business.
Therefore, the external analysis of Aarong may reveal certain opportunities for profit and growth.
These opportunities are identified below:
Using joint venture as a tool to increase its market share in the handicraft industry.
Cost advantage.
New and unexplored market emerging in Europe and America (new market
segment).
Increased awareness of people about local events and functions.
Make different products to suit various occasions on the calendar.
Seasonal demand for products/seasonal nature of the products.
Repositioning Aarongs brand to enable it to compete favourable in the market.

1.4 Threats: This is negative, unfavourable external forces against the company in business. The
threats identified are enumerated below:
Pockets of smaller competitors.
Decline in customers because competitors are gradually taking them away.
Price wars with competitors.
Competitors offer superior products than Aarong, for example, OGs Panjabi
shape.
Decrease in market share as a result of a decline in sales.

1.5 Conclusion
According to Saunders (1997), the effectiveness and success of this technique largely depend on
the surveillance on identifying the key factors that may be relevant and the ability of
management to interpret the information in the light of future trends and implications.



REFERENCES

Andrews, K.R. (1987). The Concept Of Corporate Strategy, Homewood, IL: Irwin.

Ansoff, H.T. (1965). Corporate Strategy, New York: McGraw-Hill.

Mintzberg, H., Ahstrand, B. W., and Lampel, J. (1998) Strategy Safari: A Guide Through the
Wilds of Strategic Management, NY, Free Press.

Saunders, M., (1997), Strategic Purchasing and Supply Chain Management, 2edn. London,
Financial Times/ Prentice Hall.