BCG Matrix of Agro Industry in Bangladesh- What is the Next Most

Demanded Product?

BCG Matrix is a 2 dimensional analysis on management strategic business units and a growthshare matrix. It has four components. It is important for two reasons

decisions on the desirable market share positions, and

the assigning of the strategic funds among the business units.

BCG of agro industry in BangladeshStars- Stars are defined by having large market share in a fast growing market/industry. They
represent the entitys best long run opportunities for growth and profitability. There are several
agro products in Bangladesh that have high market share and also growth.
According to present situation, spices of different flavors have the most market demand in the
country and outside. For example, the highest exported agro processed product is spices 21.46
million US$ (25%) followed by drinks 12.64 million US$ and puffed rice 9.77million US$ in
2011-2012. Another data reveals that average per capita expenditure in urban areas is the highest
for rice products which is 29%. That means 29% of a persons budget in urban areas is spent on
rice products. In Rural areas it is 40%. Pran is the premium agro based production company in
Bangladesh. The BCG of Pran suggests that the Star product for Pran is pure drinking water or
bottled water; it will also be on the list.

So, spices, rice and rice related products and pure drinking water are the Star products for
Bangladesh agro industry.
Cash Cows: Cash cows are in a position of large market share in a mature, slow growing
industry. They are called Cash Cows because they generate cash in excess of their needs, they
often are milked (milk these products as much as possible without killing the cow!). Cash cows
require little investment and generate substantial cash that can be utilized for investment in other
business units.
Bangladesh agro industry has huge prospects. There are a number of subsectors where if
investment is done, they can generate huge contribution in the prospect of the industry. Processed
food has a good future in the industry. Edible oil had the major market share back in 2001-2002,
but the rate declined due to lack of investment. As Bangladesh people are fond of fried foods,
edible oil is still demanded. Another option is the beverage sector which includes fruit drinks,
juices, jam, jelly etc. The beverage industry more than doubled during 2005-2011 to US $29
million, showing an average growth rate exceeding 8 % per annum. Chips and crackers are also
demandable as there are surplus production of rice and potato. Products of wheat also have
market demands. Extensive production and government support for wheat production has created
an open opportunity for wheat related products such as biscuits and cerelac in Bangladesh.
Question Marks- Question marks (also known as problem children or wild cats) represent a
business unit that has a small market share in a high growth market and they do not generate
much cash These businesses are called Question Marks because the organization must decide
whether to strengthen them by pursuing an intensive strategy (market penetration, market
development, or product development) or to sell them.
Flavored milk or packed milk is a major headache for a lot of companies like Pran, Aarong etc.
These products are expensive compared to raw milk. Though there is a huge demand for milk
(12.8 million metric tons), most of it is because companies need them to produce dairy products.

As they have higher price than raw milk, the producers of packed or flavored milk need to think
it around though there is a slow growth of these products in the market. Another problem child
for the agro industry in this country is the jute industry. Though Jute was the golden fiber of
Bangladesh and earned most from it, those glory days are long gone. With most of the jute mills
being shut for a long time and poly products used for packing goods, confusion arises as to
whether this should be cut off from the product line or not.
Dogs- Dogs represent businesses having weak market shares in low-growth or no market growth
mature industries. So that they can neither generate nor consume a large amount of cash. They
are called Dogs because of their weak internal and external position; these businesses often are
liquidated, divested, or trimmed down through retrenchment.
For Bangladesh agro industry, Dogs would be the cold chain products or frozen products.
Though they have a very little popularity in the urban areas, but most people are not aware of it.
Frozen foods are only found in super shops and big departmental stores. As most cold chains in
Bangladesh can only store potato and cannot store vegetables and fruits, it is good to cut off the
process as it wastes money. Another product that is non-profitable is food produced from fruits
that have small seasonal presence. Like, jelly produced from lichi. Lichi is only present in
Bangladesh for merely 2months and it is difficult to store it for the whole year. So lichi drinks
and jellies should be cut off from the product lines of the producers.

SWOT Analysis of Agro Industry in Bangladesh: Prospects and

Challenges
A SWOT analysis is a structured planning method used to evaluate the strengths, weaknesses,
opportunities, and threats involved in an organization. Strength is some functionality that can
help the business be profitable and sustaining. It ought to be something that the business would
share with other businesses operating. Weakness is something that is a drawback to the business.
Opportunity is something the business may additionally be able to do to assist be greater
competitive or improve sustainability. Threat is something that poses a chance to the team and
the potential of the crew to preserve itself. The strengths and weaknesses are internal elements
and the opportunities and threats are the environment exterior of an organization.
Strengths:
Bangladesh is a net agricultural importer, it has also been profitable in exporting high-value
products such as shrimp, sea fish, fruit, vegetables, and processed foods as there is excessive
demand for such objects from non-resident Bangladeshis as properly as foreigners. We can
capitalize on the opportunity to increase export of agricultural products through low production
cost, which is made feasible by way of availability of less costly labor.
Bangladesh also has a beneficial agro-climatic zone, which is perfect for producing many types
of horticultural and agro-products. Bangladesh enjoys a large comparative gain compared to
many other nations in producing and exporting a extensive range of agro based totally
merchandise to the world's markets where there is a huge and growing demand for the same.
Fertile soil, beneficial weather and low-cost labor give the local producers a big edge in

producing for export markets. Agro industry is also the conceivable growing industry for
Bangladesh due to the country having massive home market.
Government help is also there. The authorities in latest years declared export-oriented agroindustries as a thrust place although this has now not been backed up by using ample support.
The regular progression of exports in this sector is encouraging however a greater progress can
be carried out both in areas of increasing export volumes and earnings.

Weather is additionally a large driver in the success of this industry. Huge provider of raw
materials exists for the agribusiness industry. A tropical climate for all 12 months growing, a lot
of fresh water, indeed a land interspersed with numerous rivers, on hand land with fertile soil.
Wide range of biodiversity exists for distinctive crops. A number of export-oriented agro-

industries have been doing ground breaking work in this direction. They have reduced in size
with farmers to produce spherical the 12 months with guaranteed steady expenses for their
yields. Thus, the motivation of the farmers has remained strong as their earnings have grown to
be regular and ensured. More significantly, the farmers have been trained to produce to produce
quality products observing the latest health and safety factors.
Then, the agro-industries have acquired good technologies in the areas of processing and
packaging which capability no longer only big value-addition to the produces from the fields
however produces not only substantial value-addition to the produces from the fields but also the
creation of appeal for the processed and packaged foods among not only Bangladeshi expatriates
but also overseas consumers. Thus, from the growing to the consumption stages, some producing
and exporting businesses here have been profitable in ideally building up a value-chain that
meets the pursuits of all the parties involved at one-of-a-kind phases.
Export Promotion Bureau (EPB) data says, Bangladesh earned 570 million dollars by exporting
agro based products in FY 2012-13. This had risen to 610 million dollars in FY 2013-14. In
2008-09 export of agro based products was worth only 120 million dollars.
Presence of most fine land and water with the existence of a favorable natural surroundings
throughout the 12 months for grains, fisheries, poultry, horticulture, livestock production; a large
range of bio-diversity exists for extraordinary productions to provide ecosystem services.
Agro-processing has huge affects on poverty alleviation by developing rural employment,
improving women empowerment and increased farm income. A vibrant agro-processing industry
will encourage farmers to produce higher top-rate farm products that will bring greater profits for
raising the high-quality life and living standards. Agro-processing by using lowering post harvest
loss may bring environmental benefits by lowering garbage disposal and pollution problems
particularly in the city areas.
Higher value addition proposition is also a strength. This area possesses great potentiality of
development through developing forward and backward linkage through alliance, partnership
and investments. There has been tremendous development in the production of varieties of
processed food via usage of progressive technology. Emphasis is laid now not only on reaching a
better appreciation to developed new products but also enhancing the methods of production
through modernization of technology, improving the quality, life, safety and packaging as
properly as advertising of the processed products. As the industry is growing rapidly, the food
processing industry is opening up new possibilities in phases of investment, technological knowhow and export. The agro meals processing enterprise in Bangladesh represents one of the
foremost achievable sectors inside the industrial segments in terms of its contribution to fee
addition and employment.

There are also incentives for running business in this sector. Special loan services are there to set
up an agribusiness. Agribusiness industry enjoys tax holidays. Any funding in this sector will
enjoy similar tax amnesty as handy in other sectors. Imposition of supplementary duty on mango,
orange, grape, apples, dates and others to make use of utilize the high quality and cheaper local
resources. Cash incentives to the exporters ranges from 15% to 20% in a number of sub sectors.
Investment interests in agro-based industries are noticeably encouraged.

Progressive agricultural practices increased advertising method and modern-day processing

amenities would allow the agro-processing industry to enhance its best and enlarge
manufacturing ranges significantly.

WeaknessesThe first most important problem is that that the agro processing industry is heavily based on
agricultural manufacturing (nature dependency) as most of its raw materials is specifically agro
products. In a country where seasonal adjustments are very common, most of the raw materials
or agricultural products are seasonal. So, for some subsectors that involve seasonal resources, it
is quite difficult and costly for the businesses to sustain and decrease cost.
In agro-processing industries in-house R&D capability is nearly non-existent. Again, the
applicability of new technology is very restricted due to required human assets and the agro
industries depend heavily on the import of science &technology from abroad. The owners do not
intend to invest for the improvement of human and physical capital, research like product,
process, innovation in this country has now not attained momentum nevertheless now in the
country, and the agro processing industries have little opportunity to create/generate knowledge.
Therefore, the firms have no ability to flip knowledge into profitable goods and services.
It is found that there is absence of linkage/network(s) of marketers such as academician or
researcher and entrepreneur to interact for generating, diffusing, utilizing agricultural science and
the agro-firms use out of date and worn-out tools & technology and carry out inferior great
merchandise or production cost remains high.
Bangladesh is missing efficient and good agribusiness managers. They do no longer have the
farsightedness how to increase future capability building. Managerial competencies are lacking.
Women who are concerned in the agribusiness are mainly not noted in the Gross domestic
product accounting procedure. Middlemen in the system of production to sell have varieties of
stages. As such producers are not getting honest sum of money and client has to purchase the
product at a good deal greater prices, the middlemen suck the profit. Actually missing of
distribution channel i.e. supply chain management in the agriculture region of Bangladesh is very

weak.
There is almost non-availability of contract-farming arrangement and farmers very frequently
face barriers in promoting their product directly to agro-enterprises. Again, there is absence of
crop insurance for farmers. Therefore, right time production, cost discount and nice preservation
is tough for the farmers and agro industries have no control of the entire price chain and have
failure in the long-term competitiveness.
Regarding Quality Control System of agro-processed food products, it is noted that though these
products are consumed by human, however these merchandise are contaminated with poisonous
and harmful substance like residue of chemical fertilizer, arsenic, pesticides, bacteria which are
damaging for the biodiversity, eco-system and human health. Government Quality Control
System is no longer effective or applied here. In a way, the businesses are harming themselves by
using the usage of toxics as these substances once more contaminate the lands that produce their
natural resources.
Hossain and Bayes (2009) discovered that business activities in rural areas are broadly financed
by own sources, and the position of the credit score institutions-be it formal or informal is
minimal. Households own financial savings meet about three-fourths every for the required
preliminary and investment capital. Commercial banks provide only 10 percent of the
preliminary capital and nine percent of investment capital. The role of NGOs in this case has not
been significant either only three and 4 percent, respectively.
Under-developed physical infrastructure is a issue to hinder sustainable agro-industrial
development of the country. In the World Economic Forum's Global Competitiveness Report
2009-10, the country's infrastructure competitiveness was once ranked 126th out of 133
countries, the lowest ranking among its South Asian neighbors. Transport amenities are severely
lacking in Bangladesh, causing traffic bottlenecks that force up the fee of business and goods.
Power shortages are additionally a predominant drawback, the country's power stations are
unable to meet the rising demand for electrical energy from increasing industrialization, and its
fossil fuel reserves are expected to be finished by the subsequent decade.
Then, beginning a commercial enterprise on agro based products is highly-priced in this country.
Starting a commercial enterprise with 1,000,000 BDT capital and 50 employees needs more than
13000 BDT of licensing, registration etc. It is also time consuming. A listing o startup is given
below-

OpportunitiesBangladesh has huge possibilities in agro-based industries due to numerous factors. Agro
industry is the viable growing enterprise for Bangladesh due to the country having giant
domestic market; the enterprise sector has a very large domestic and neighboring overseas
market. Bangladesh is the 53rd largest consumer market with a market size of US$66692
million. Due to growth of the middle class and self sufficiency in food, there is now an
accelerated demand for a variety of processed meals items and a supply-demand gap, currently
exploited by way of foreign suppliers. Neighboring India is the eleventh largest client market
with a market measurement of US$737936 million. Capturing nearby and neighboring markets
alone can create massive leverage in Bangladesh economy. However, further market scope exists
as the market is no longer necessarily restrained to Bangladesh and India.

The shifting of domestic demand -- away from food grains and in the direction of high-value
agricultural products, inclusive of fruit, vegetables, fish, meat, and dairy products is perhaps the
singles most essential source of agricultural diversification, cost addition, and agri-business.
Using demand projections based on realistic growth rates in incomes and population, it is
estimated that Bangladesh would need an extra $8 billion of these high-value products by 2020,
according to World Bank 2008.

About 25% of land is unused or used in unproductive purposes. This misuse be stopped, and the
land can be used for productive functions like developing agricultural products. the land is very
fertile and the weather is frost-free ensuring yearly production. Natural water supply and

temperature is additionally suitable. Overall, the climate is good for a vast variety of crops,
fruits, vegetables, fishes and animals.

Currently around 75% of the economys export profits come from Textile area alone. So plenty
of dependency on one region is risky. Then, Agro based industry sector has the capability to go
through a revolutionary expansion, saving the economy from market risks.

While Bangladesh is a net agricultural importer, it has also been profitable in exporting highvalue products such as shrimp, sea fish, fruit, vegetables, and processed foods as there is high
demand for such products from non-resident Bangladeshis as well as foreigners. We can
capitalize on the probability to increase export of agricultural merchandise thru low
manufacturing cost, which is made possible with the help of availability of low-cost labor.
Bangladesh additionally has a beneficial agro-climatic zone, which is perfect for producing many
types of horticultural and agro-products.

The emerging agri-business opportunities invite more investors. The new source of educated
people, with interests in villages and rural areas, can make a distinction by means of engaging in
agro-based industry. Agro based industry development is labor intensive no longer capital
intensive, making it suitable for Bangladesh where SMEs are oiling the financial engine.

Vibrant Agro based industry is seen to generate many jobs in upstream and downstream sectors
(UNIDO, IFAD, FAO, 2008). Agro based enterprise can play a strategic function in Bangladesh
in a pro-poor growth coverage as 72% of the population stay in rural areas and around 50% of
labor force is employed in agriculture. As probabilities for money generation are limited in rural
areas, agro processing, manufacturing and marketing and service activities of agro based
enterprise can play a vital role in increasing monetary efficiency and lowering disparity.
The establishment of agro-export and processing zones along with higher vertical linkages
between the farmers and customers (such as contract farming and vertical integration) can help to
overcome some of the risks inherent in the marketing of high cost products. For example,
contract farmers in Bangladesh gain from such contracts.
According to the Bangladesh Board of Investment (BOI 2010), over 90 sorts of
vegetables are grown in Bangladesh, yet for such a fertile land, there are massive gaps in local
resources and under-utilization of the countrys agricultural capacity. According to the BOI,
these gaps present many possibilities for investors seeking to develop agricultural products to
meet the unexpectedly growing nearby demand and for exports.

Here are some statistics about the sectors of opportunity in the agro industry.
Food Parks A Food Park is a large cluster based facility to provide modern infrastructure for the food
processing sector along the value chain from the farm to the market.
Includes cold storages, creation of processing facility near the farm, transportation, logistics
and centralized processing centers.
Such facility will provide food processors with cheaper, assured and better quality services, in
turn reducing the post-harvest losses and creation of efficient supply chain.

Opportunity for food processing

The demand for processed foods and beverages is growing with growing middle class
population of over 30 million.
30-35% of wastage in agriculture produce, fruits and vegetables.
Rice and Potato has surplus production.

Dairy Processing
Bangladesh requires approx. 12.8 million metric tons of milk; about 1 million ton of this demand
is fulfilled domestically
The demand for milk and dairy products is growing by 10% per annum whereas the local
production is expected to grow little over 7%.
ThreatsOne foremost threat for agro based enterprise in Bangladesh is loss of arable land. Major reasons
responsible for land loss are urbanization, human settlement, constructing of infrastructure, and
river erosion. The loss indeed is very alarming and therefore, needs to be addressed immediately.
Another most important issue to agriculture is the increase of population. Growth rate of
population at existing stands at 1.2% (2013). Population is growing @ 2 million per year and the
whole population would be round 233 million by 2050. if the growth continues like this. Such a
growth rate of a land of 1,43,000 sq. km is considered as a huge challenge no longer only to
different economic development activities however also as problem to accommodation,
surroundings and meeting other basic needs (food, education, and health).
Atmospheric CO2, CH4, SO2, N2O, etc. are main accountable for temperature rise resulting in
the rise of sea level. Temperature rise by 1.00 C would flood 18% region of Bangladesh as
indicated by different studies. At the same time, the country is affected frequently by flood,
drought, cyclone, and salinity due to climate change. As a result, soil fertility, crop productivity,
and food security would be certainly threatened. Climate change has also accelerated hunger,
poverty, malnutrition and incidence of diseases. It is essentially the poor that would be worst
victims of climate change. Profit driven mentality of production of the companies and their
extraction and consumption of fossil fuels (coal, oil) has additionally accelerated global
warming. River erosion impacts about a hundred and fifty upazilas of 50 out of sixty four
districts of the country. About one million people are affected by this calamity annually who lose
everything. Farmers lose land their home making them beggars.
Water use efficiency in Bangladesh is extremely low. Conservation of rain water during monsoon
is certainly non-existent that should be utilized for irrigating crops throughout dry season.
Studies exhibit that irrigation with surface water instead of underground water might decrease
the vulnerability to dangers of climate change. Irrigation cost in Bangladesh is very excessive
due to excessive charge of diesel. It is to be mentioned that greater than 80% irrigation pumps in
the country are diesel operated.
The use of fertilizers, quality seeds, and irrigation collectively cannot ensure sustainable
production unless timely and necessary measures for the management of pests are
simultaneously pursued. It is important to take into account that the incidence of pests has lately
emerged as very extreme due to the disastrous results of climate change, especially increase in
temperature.
Another issue is that the quality control of resources and is very scarce in Bangladesh. It is an

important point that taking opportunity of the open market economy, some businessmen are
importing substandard or low quality imported product (e.g. infested with mites) influences the
domestic market with lower cost and put barrier to grow the local agro-based industry.
Inadequate core infrastructure like high-tech based production facilities, grading, packaging,
logistics, warehousing, built-in processing units, transportation and power supply are also there.
Especially the transportation cost is very high and some rural areas have very underdeveloped
communication system. So, the communication cost adds an extra burden.
There is uncertainty of getting fair price of agricultural commodity due to underdeveloped
marketing system. If the producers do not get the deserved price they will not be influenced to do
agri-business and which will have an effect on the groups related to it. Moreover, the providing
of raw materials is also inadequate.
The hazard of substitutes coming into the market is any other issue. If chemical compounds take
the region of natural resources in the market, then the market of agro primarily businesses will
shrink. For example, jute products, bags have nearly disappeared from the Bangladeshi market
due to the fact of the significant use of poly products.

Reference Agro- Bcg matrix- M. A. Latif

Agro- BCG Matrix- High Value
Agro- BCG Mtrix- Pran Rfl
Agro- Bcg Matrix- Food Processing
Agro- BCG Matrix- Doing Agribusiness
Agro- SWOT analysis- AIUB
Agro- SWOT Analysis- Poultry
Agro- SWOT Analysis- Regulatory Hindrance
Agro- SWOT Analysis- Bangladesh Agricultural University
Agro- SWOT Analysis-Investment Opportunities
Agro- SWOT Analysis- UNIDO
Agro- SWOT Analysis- Challenges Ahead
Agro- SWOT Analysis- Financial Express

Agro- SWOT Analysis- Mahboob Ali

Agro- SWOT Analysis- Crop Agriculture
Agro- SWOT Analysis- M. A. Latif
Agro- SWOT Analysis- Golden Harvest
Agro- SWOT Analysis- Pran Rfl
Agro- SWOT Analysis- Role of Agro Industry
Agro- SWOT Analysis- USAID
Agro- SWOT Analysis- Doing Agri-business
Agro- SWOT Analysis- Investment Opportunity
Agro- SWOT Analysis- High Value
Agro- SWOT Analysis- Optimizing Agro- based