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10TH BATCH

SECTION B
DEPARTMENT OF MANAGEMENT STUDIES
JAGANNATH UNIVERSITY
Report On BEXIMCO GROUP
Course Title: Strategic Management
Course Code: MGT- 4237

Submitted By
Group 1
10th Batch
Section B
Department of Management Studies
Jagannath University.

Group List

SL NO NAME ID REMARKS
1. Md. Bilat Ali B 140202115
2. Shahrier Fasal B 140202116
3. Tithy Kar B 140202117
4. Amanullah Aman B 140202118
5. Md. Zilkad Hossain B 140202120
6. Md. Ashikur Islam B 140202121
7. Tarun Kumar Das B 140202122
8. Md. Ramim Ahmed B 140202123
9. Md. Shihab Ul Alam B 140202127
10. Pranob Kumar Modak B 140202128

Supervisor:
Dr. Liza Khanam
Assistant Professor
Department of Management Studies
Jagannath University

Date of Submission: October 09, 2018


EXECUTIVE SUMMARY

The main intension of this report is about the practical analysis and representation of
theoretical topics of the course Strategic Management. The topic of this report is to
implement several theories of the book and relate them with a real organization of our
country. So, we have chosen one of the biggest group of companies of our country
BEXIMCO Group. This is the biggest conglomerate group of companies of our country.
They have enormous business sectors and captures a huge portion of the market
share of Bangladesh.
In this report we focused on some specific theoretical aspects of Strategic
Management. At first, we have included the introduction and history of BEXIMCO
Group. We have mentioned the key people of BEXIMCO group who has great
contribution to bring this Group of companies int6o this position. Thereafter we have
analyzed the SWOT of BEXIMCO Group, Porters’ five forces analysis and generic
studies. We have also mentioned the industry verticals of BEXIMCO Group and
diversification among the companies of this group.
We tried to focus on the basic information available in the official website of BEXIMCO
group and Wikipedia. We have also collected some information from some others
dependable sources. We try our best to put necessary information in the report about
the BEXIMCO group of the specific topics within a short period of time. So, there must
be lacking of data and information as we didn’t visit or talked any officials of the group.
We ended up this report with the references of the name of website we have visited
so far to make this report.
TABLE OF CONTENT

Chapter Particulars Page No

1 Introduction 1

1.1 Company Overview 1

1.2 History 2

1.3 Key officials 2

2 SWOT analysis of BEXIMCO Group 3

3 Porter’s five forces analysis of BEXIMCO group 7

4 Industry Verticals 8

5 Diversity among the companies of BEXIMCO Group 10

6 Business Level Strategy of BEXIMCO Group 10

7 International Entry Mode of BEXIMCO Group 10

References 11
Chapter: 1: Introduction

1.1 Company Overview:


The Bangladesh Export Import Company Limited, commonly known by its trade name
BEXIMCO, is a multinational conglomerate holding company headquartered in Dhaka,
Bangladesh. It was founded in the 1970s. BEXIMCO is Bangladesh's largest
conglomerate, with the largest market capitalization on the country's stock market.
BEXIMCO's subsidiaries export products to 103 countries worldwide. It has retail
outlets in South Asia and Eastern Europe.
BEXIMCO operates one of the largest integrated textile production businesses in Asia.
It is also a major global exporter of Jute yarn. Its chief manufacturing base is the
BEXIMCO Industrial Park in Gazipur, Bangladesh. BEXIMCO Pharma, the group's
pharmaceutical producer, was the first Bangladeshi firm to list on the London Stock
Exchange.
The Overview of BEXIMCO Group is Given Below:

BEXIMCO Group
Type Public Limited Company

Industry Conglomerate

Founded 1972; 46 years ago,

Headquarters Dhaka, Bangladesh

Key people Salman F Rahman (Vice-Chairman)

Owner Bangladesh Export Import Company Limited

Number of employees 65,000 (approximate)

Website BEXIMCO.com

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1.2 History:
The company was founded by brothers A. S. F. Rahman and Salman F Rahman in
1972, soon after the establishment of the Bangladeshi Republic. Their family was
earlier engaged in the jute industry of East Pakistan, which once the world's largest
jute producer and exporter. The family business was affected by a nationalization
program in Bangladesh during the early 1970s. However, with free market reforms in
the late 1970s and 1980s, the family regained many of their businesses.
Since the 1970s, BEXIMCO has been a pioneer in Bangladeshi industry, including the
modern textile sector, pharmaceuticals, ceramics and information and communication
technology.
In 2005, BEXIMCO Pharma became the first Bangladeshi company to list on the
Alternative Investment Market of the London Stock Exchange. It also opened its first
overseas retail outlet with the launch of the Yellow clothing brand in Karachi, Pakistan.
Yellow has since expanded to several Bangladeshi and Pakistani cities. In 2009,
Shinepukur Ceramics opened a showroom in Moscow, Russia. In 2010, the company
acquired stakes in several major Bangladeshi businesses, including IFIC Bank, GMG
Airlines, The Independent newspaper and Unique Hotels and Resorts.
The company is considered to enjoy close connections with the Awami League, with
Salman F Rahman serving as a Private Sector Development Affairs Adviser to Prime
Minister and Bangladesh Awami League President Sheikh Hasina, the current Prime
Minister of Bangladesh.

1.3 Key officials:


i. A. S. F. Rahman, Chairman
ii. Salman F Rahman, Vice-Chairman
iii. Iqbal Ahmed, Group Director
iv. ABS Rahman, Group Director
v. O K Chowdhury, Group Director and CEO (Power & Engineering)
vi. Nazmul Hasan Papon, Group Director and CEO (Pharmaceuticals)
vii. Syed Naved Hussain, Group Director and CEO (Textiles)
viii. Sami Wadood, CEO (IT & Telecom)
ix. Humayun Kabir FCA, CEO (Ceramics)
x. Sumantra Dutta (Sumo), CEO (Satellite TV/DTH)
xi. M Shamsur Rahman, CEO (Media)
xii. Shah A Sarwar, Managing Director and CEO (IFIC Bank)
xiii. M Asad Ullah FCS, Executive Director & Company Secretary

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Chapter: 2: SWOT Analysis of BEXIMCO Group
There must be some main strength, weaknesses, future opportunities and potential
threats of every large and small companies. As BEXIMCO is one of the leading group
of companies in Bangladesh so they must have some Strength, Weaknesses,
Opportunities and Threats of BEXIMCO Group. The Strength, Weakness, Opportunity
and Threats of BEXIMCO Group are given below:

 STRENGTH:

 Largest Conglomerate Group: Today the BEXIMCO Group ("BEXIMCO"


or the "Group") is the largest private Conglomerate group in Bangladesh.
BEXIMCO was founded in the 1970's by two brothers – Ahmed Sohail Fasiur
Rahman and Salman Fazlur Rahman. Since the early days, the Group has
evolved from being primarily a commodities trading company to a leading,
diversified group with a presence in industry sectors that account for nearly
75% of Bangladesh's GDP.

 Strong Brand Image: The BEXIMCO name has now become one of the
most recognizable brand names in Bangladesh. It is synonymous with
innovation, trust and quality.

 Huge Market Share: The Group consists of four publicly traded and
seventeen privately held companies. The publicly traded companies –
Bangladesh Export Import Company Limited, BEXIMCO Pharmaceuticals
Limited, Shinepukur Ceramics Limited and BEXIMCO Synthetics Limited –
have a combined market capitalization of approximately $617.34 million.
The Group had total revenues of $834 million in the year ended December
31, 2010.

 Foreign Market Share: The Group sells its products and services in the
domestic Bangladesh market as well as international markets. BEXIMCO is
the largest exporter of pharmaceuticals in Bangladesh with a presence in 45
countries. The Group is also the largest ceramics exporter in Bangladesh.

 Business Diversity: As BEXIMCO has grown over the years, the flagship
platform now has operations and investments across a wide range of
industries including textiles, trading, marine food, real estate development,
hospitality, construction, information and communication technologies,
media, ceramics, aviation, pharmaceuticals, financial services and energy.

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 Corporate Level Strategy: As BEXIMCO group is one of the biggest
companies in Bangladesh so they must have a strong corporate level
strategy. They have such a good corporate level strategy that can defend
the competitors and similar group of companies like Meghna group,
Bashundhara group, Navana Group, Square group, ACI group, Akij Group,
Abul Khayer group etc.

 Expert Employees: BEXIMCO have a bunch of experienced employees


who have expertise on their specified sectors. BEXIMCO is the largest
employer in the private sector in Bangladesh and employs over 65,000
people worldwide.

 Experienced Regulatory Bodies: BEXIMCO Group have got some extra-


ordinary talented person in business sector who have a knowledgeable and
prudent mind like Ahmed Sohail Fasiur Rahman, Salman Fazlur Rahman.
They also have some personnel on governing body who has a good position
in current government party.

 WEAKNESS:

 Strong Competitors: Every companies have some competitors. BEXIMCO


Group also have some huge competitors’ group of companies. Some of them
are Bashundhara group, Navana Group, Square group, ACI group, Akij
Group, Abul Khayer group, Meghna group, Transcom group, City group etc.
BEXIMCO face a huge competition in the amount of market share with those
companies.

 Environmental Pollution: As like other group of companies this company


also pollute the environment by their activities. Their pharmaceuticals
sector, textile sector pollutes the environment by dumping a lot of chemical
wastes into several rivers. This might be a huge threat for them.

 Debt: According to an article in The International New York Times,


BEXIMCO said that it owed US$800 million to Bangladeshi banks. An
American embassy cable released by WikiLeaks described Salman F Rahman
as "allegedly one of Bangladesh's biggest loan defaulters". He was arrested
for fraud by the military-backed interim government in 2008. Since 2009,
the Bangladesh Bank has allowed BEXIMCO to restructure its loan
repayments. The group has alleged that the previous Bangladesh Nationalist
Party government tried to target it for Salman F Rahman's links with the
Awami League.

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 Stock Manipulation: BEXIMCO faced accusations of being one of the 60
primary parties involved in the 2011 Bangladesh share market scam.
According to the High Court’s judgment, no direct evidence had been found
against any of the individuals or organizations accused in the case. Not only
are the allegations against the accused uncertain, they have not been
defined appropriately.

 Controversial Persons: BEXIMCO group has some controversial person


in the higher position of the company who have some bad reputation among
mass public. Salman F Rahman is one of them. He is known as the highest
loan defaulter in Bangladesh for a long time. That might cause a bad
reputation for the company.

 OPPORTUNITY:

 Enormous Growth: BEXIMCO is well positioned to capitalize on strong


growth across industries in both the domestic and global markets. After the
birth of the group in 1970 the company has made a huge growth in last few
decades. Currently BEXIMCO is Bangladesh's largest conglomerate, with the
largest market capitalization on the country's stock market.

 Strong Goodwill: Despite some controversies BEXIMCO has a strong


influence on the mind of the people of Bangladesh. This might be a great
opportunity for this company to sell its product and get a decent value for
their product in the market.

 Advantage of Social Activities: In recognition of its corporate success


and creation of shareholder value, the BEXIMCO Group has and continues
to make significant contributions to Bangladesh's society. Sponsored
organizations include "Proyash", a specialized institute that works for the
holistic development of children with special educational needs and "Gono
Sahajjo Songstha", an institution that provides education for the
underprivileged. BEXIMCO was also an official sponsor of the Bangladesh
National Cricket team for the ICC Cricket World Cup 2011 and also the
official title sponsor of the FIFA friendly match between Argentina and
Nigeria held in September, 2011.

 Building Strong Brand Value: BEXIMCO Group has created a strong


brand value among the general public of the people of Bangladesh. Any
products of this company are very popular in the market. Despite having
high price their product has a high demand in the local market.

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 THREAT:

 Threats to Environment: Some of the sectors of BEXIMCO group has


making some environmental pollution by dumping their waste materials into
the open place. The pharmaceutical chemical wastes, textile wastes,
petroleum wastes are making a great damage to the local environment. This
might be a huge threat for the environment as well as for the BEXIMCO
also. They might face some restrictions and decrease in their popularity.

 Huge Competition: Now a days the all business is getting diversified.


Different new companies are entering into the market day by days. The
existing companies are bringing new and developed technologies and
strategies in their businesses. BEXIMCO needs to deal with those difficulties
carefully otherwise they might face problems in near future.

 New Entrance: Different types of new companies are entering into the
market which making threat for the big group of companies like BEXIMCO
and similar type of companies. As they are new they offering cheap price
product in the market which capturing some of the customer of these big
companies.

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Chapter: 3: Porters Five Forces Analysis on BEXIMCO Group:

 Threats of New Entrance: Identifying new entrants is important because


they can threaten the market share of existing competitors. One of the main
reasons of threat that they bring additional production capacity. Unless the
demand for a goods or service is increasing, additional capacity makes
customer costs down, resulting in less revenue and lower return for big existing
firms like BEXIMCO group. The new entrance takes a decent amount of market
share of those big companies like BEXIMCO and others.
But big and old firms like BEXIMCO also get some benefits in this matter
because they already have a brand image in the market. The new firms can
face some barriers in entry in a new market. BEXIMCO has a huge amount of
capital and they have the ability of making bigger advertisement for their
product which most of the new companies can’t because of resource
constraints. More over as BEXIMCO running their business for such a long time,
they can get the benefit of economy of scale and strong access in the
distribution channel.

 Bargaining Power of Suppliers: Suppliers of raw materials, components,


labor, and services to the firm can be a source of power over the firm when
there are few substitutes. Increasing prices and reducing the prices of the
products of the supplier’s products means that they try to exert power over the
firms. BEXIMCO group is one of the leading companies having a bunch of
business sectors. They have to collect a huge quantity of raw materials from
different suppliers for their different business sectors. They have to deal with a
bunch of suppliers and maintain a good relationship with them. They also need
long term strategy to gain control over their suppliers so that they(suppliers)
cannot create extra pressure over the companies.

 Bargaining Power of Buyers: Bargaining power of buyers means the ability


of customers to put the firm under pressure, which also affects the customer's
sensitivity to price changes. Firms seek to maximize the return on their invested
capital. On the other hand, buyers or customers want to buy products at the
lowest possible price. BEXIMCO group is one of the oldest and highly reputed
group of companies in Bangladesh. The have earned the trust of mass people
of Bangladesh by investing a huge amount of time and money. So, the
customer has a positive concept to the products of BEXIMCO Group. This nature
of buyers helps them to set a high price on their products. Customer do not
bargain a lot at the time of purchasing their products because of the trust and
goodwill of the firm.

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 Threats of Substitute Products: Substitute products are goods and services
from outside a given industry that perform similar or the same function as a
product that the industry produces. A substitute product uses a different
technology to try to solve the same economic need. For example, BEXIMCO
Pharmaceuticals have to face a huge competition on their one of the popular
medicine Napa Extra. Different competitors have similar types of medicine for
the same uses in the market such as- Ace plus (Square Pharmaceuticals ltd),
Renova Plus (Opsonin Pharma), Cetam Plus (Pacific Pharmaceuticals Ltd.) etc.
They make a huge competition with the Napa Extra which is a potential threat
for the BEXIMCO Pharmaceuticals Ltd.

 Rivalry Among Competitive Firms: For most industries the intensity of


competitive rivalry is the major determinant of the competitiveness of the
industry. Because an industries firms are mutually dependent, actions taken by
one firm influence another firm to make their responses. Competitive rivalry
increases when a firm is challenged by a competitor or when a company
recognizes an opportunity to improve its market positions. As BEXIMCO is the
leading group of companies in Bangladesh, they have to face a huge
competition with similar group of companies but we rarely find any news of big
rival condition as they control the situation effectively and try not to expose the
news of conflict with the competitors as it is harmful for the reputation for both
the companies.

Chapter: 4: Industry Verticals:


The conglomerate compromises four public traded and seventeen privately held
companies. The seventeen companies are divided in four different sectors. One sector
is totally different from another sector. Moreover, these companies are so popular that
they have individual identity in the local market and some of them also run their
business in abroad. The list of all BEXIMCO companies with their specific sectors are
given below:

i. TEXTILE:
 BEXIMCO Textile Division
 Yellow
 BEXIMCO Synthetic (Public Listed)
 BEXIMCO Jute Division

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ii. CERAMICS:
 Shinepukur Ceramics (Public Listed)

iii. ICT & MEDIA:


 BEXIMCO IT Division
 Independent TV Channel
 The daily independent newspaper
 BEXIMCO communication ltd (REALVU)
 BEXIMCO Computers Ltd.

iv. ENERGY:
 BEXIMCO Petroleum Ltd.
 BEXIMCO Power co Ltd.

v. PHARMACEUTICAL:
 BEXIMCO pharmaceuticals (Public Listed)

vi. REAL ESTATE & TRADING:


 BEXIMCO Engineering
 Real Estate Division
 Marine Food Division
 BEXIMCO Export Import Co Ltd. (Public Listed)
 Westin Hotels
 Bextrade Limited

vii. FINANCIAL SERVICE:


 IFIC Bank
 BEXIMCO Securities Ltd.

viii. SPORTS DIVISION


 Dhaka Dynamites
 Shinepukur Cricket Club

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Chapter: 5: Diversity among the companies of BEXIMCO Group:
The company has both Related and Unrelated diversification among different
sectors of the BEXIMCO group. As the companies are large in terms of market share
and size and the revenue earning condition does not relate on any sector over another.
So, the sector wise diversity is very low but interrelations among the firms of similar
sector is very high. As per example in Textile division they use technology, distribution
channels, products and other logistics services are used by every similar companies
but other sectors like IT division or Sports division don’t use their logistic services. So
here Unrelated diversification works among the different sectors of BEXIMCO group.
But the companies of same sector use the logistics and other materials of one another.
They relate on one another on different aspects of market and business activities. So
here the Related diversification works among the companies of same sector.

Chapter: 6: Business Level Strategy of BEXIMCO Group:


Business level strategy mainly focused on a specific product market. As BEXIMCO
group combines a bunch of business sectors so they have different business level
strategy for every single business entity. We already know that BEXIMCO is the biggest
conglomerate of our country. They running their businesses for quite a long time in
Bangladesh also have a huge reputation and popularity over the mind of Bangladeshi
people. They try to provide quality products at an acceptable cost to the consumer
and try to differentiate their products from other small businesses. So, for most of the
products of their companies they use Differentiation strategy. Because they are one
of the leading brands of our country and naturally people have an expectation to get
some special feature on their products. That’s why most of the cases they use the
Differentiation strategy on their products.

Chapter: 7: International Entry Mode of BEXIMCO Group:


BEXIMCO is one of the few companies of Bangladesh that have international business
entities. There are several modes to enter in international business. BEXIMCO Group
entered in international business by exporting their products in different countries.
But only few of their companies have international business participations including
Beximco Pharmaceuticals Ltd. (BPL), Shinepukur Ceramics, BEXIMCO Textile Division
etc. Among them the BPL export a huge verity of drugs into different countries.

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References:

i. https://www.BEXIMCO.com/#about
ii. https://www.BEXIMCO.com/#industry_verticals
iii. https://en.wikipedia.org/wiki/BEXIMCO
iv. https://BEXIMCOpharma.com/
v. Strategic Management- Competitiveness and globalization by Michael A.
Hitt, R. Duane Ireland, Robert E. Hoskisson, 12th edition, South Asian
Perspective

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