Tanvir M H Arif
MSc.IBM (UWL, UK); MBA-Finance (CU, BD)
Associate Professor, Department of Finance and Banking
University of Chittagong
TOPICS OF ASSIGNMENT:
Investment opportunities in Bd.
A critical study on-''HANDICRAFT INDUSTRY
OF BANGLADESH."
SUMITTED BY:
GROUP DAFFODIL
MEMBER'S NAME
ID
11303059
11303126
11303125
11303096
11303071
11303045
11303009
Group Leader:
Farhana Ferdous Romana
E-Mail: farhanaromana77@gmail.com
Mobile: 01933757980
Date of Submission: 27-12-2014
The world markets are becoming increasingly integrated due to the advanced
technology, lack of trade barriers, infrastructural development and so on. Today
with the advancement of globalization the artisans are facing difficulties because
of mass production of craft goods, global competitiveness, rapid change of taste
and fashion, shortening of product life cycle. A key characteristic of global home
accessory market is rapid change in trends, fashion, taste, color, resulting in
increasingly shorter product life cycles. Some years ago products could be kept
in stock for one year but now the product cycle is only six months. Market
researchers predict that in the future the cycle could be shortening to as little as
only three months. To keep pace with these changes, producers have to
introduce new technology and design very frequently. This will put more pressure
on all producers to deliver sample and products as early as possible lest they
should out of style. For the developing countries producers it is very challenging.
Here it becomes an urgency to make high investments to comply with these
changes.
EXTERNAL ANALYSIS:
External Analysis
External analysis, particularly of the macro environment, assists in identifying
those industries and markets where the competences can be applied.
Industries are centered on the supply of a product
Markets are concerned with the demand.
Factors in the environment, the industry and market, will drive the enterprise
toward one type of international strategy either one that is fully global or one
that makes concessions to localized customer needs.
that there are numerous and expanding opportunities for artisans in developing
countries to create products for these markets.
Customer needs:
Many buyers and consumers seek unique and handmade products made by
artisan of different cultures. They look on quality of the Products and
authenticity of the Products and products that combine ethnic elements
with contemporary designs.
Customers and channels:
Consumers of the handicraft products are generally upper class local people
and people of developed countries. But in case of day to day usable products
consumers are from all classes.
In case of global trade, in the suppliers country, products go from artisan to
wholesaler or retailer or, marketing organization, then to retailer and then to
exporter. So here is a long channel.
But in case of buyer county, Distribution channels in markets are increasingly
shortening, mid-size retailers are importing, while small (and many of the
mid-size) retailers continue to purchase merchandise principally, or entirely,
from domestic wholesale importers.
Marketing: High international trade is online marketing. International
fair and local fair is another widely used tool used to attract foreign as
well as local buyer.
Leading countries: China, India and some other Asian countries like
Vietnam, Philippine, Pakistan, Indonesia are the leading suppliers.
Developing countries are most successful in this sector because of
their availability of skilled and low cost labor
Environmental:
Environmental factors refer to ecological and environmental aspects such as
weather, climate, and climate change. Climate change is a hot topic these days
and organizations are restructuring their operations thus giving space to
innovation and concept of Green Business. Our environment is congenial to
handicraft industry proportionately. Ours has a fertile land for producing jute
which a most important for handicraft industry. Environmental issues basically
deal with the question whether the business is environment friendly or not. There
is no doubt that handicraft industry produces eco friendly products that are
biodegrable, recyclable and reusable. Our handicrafts are mainly jute based and
it is 100% bio degradable. And natural fiber does not need any dying and color
and does not use any chemicals. Here another crucial point that needs to be
mentioned. There is a negative correlation between technology and environment.
The industry which is mainly technology based is not environment friendly
because this industry pollutes environment deadly. As handicrafts mean
handmade products or using of simple tools, this industry is not technology
based and environment friendly.
Technological:
Technology is a crucial factor of industrial development. Our technology is
growing rapidly. Industries are using high technology which gives the products
different looks with a low cost. For example, textile industry adopts new
technology with new design and creates a high prospect for this industry.
Unfortunately our handicraft industry is very lag behind in this case. There is no
improved technology is used as a result it is so tough to produce sophisticated
design and product within a short time. But worlds fashion and trends are
changing frequently. Thats why our exporters cant fulfill the demand of
international buyers though our handicrafts are highly demandable in the world
market. This is one of the main reasons of falling our handicrafts. We have very
talented artisans but they do not get any sort of technological support eventually
we are losing our tradition.
Social:
We have a diversified culture since this is the place of different cultures people. It
may be a power for our country if we enable to uphold our culture to the world
people. For example, Jamdani one of the finest Muslin textiles of the Bengal is
very demandable from the Mughal emperors. It is a charm for the foreigners and
they are interested to pay high amount for it. UNESCO has been declared the
traditional art of weaving Jamdani as an Intangible Cultural Heritage of Humanity.
Though our handicrafts are highly demandable, there is less career development
opportunity. Most of the artisans are rural people who paid very poor. Thats why
young people do not want to build their career in this industry.
Legal:
The legal factors deal with the legal restrictions and rules by which an industry is
controlled or regulated. If the legal factors work positively the industry remain
safe and developed. For example, a new act was passed in the national
parliament in November 2013, named Geographical Indicative Act (GI) 2013 to
protect our own traditional products. Before that our products were vulnerable to
abuse by other parties. But our govt. has taken the decision recently. In the
meantime India has registered some items with its GI Regime that distinctively
originated in our country. One of the significant items includes Jamdani of Dhaka
is registered by India as Uppada Jamdani. However, the legal environment of our
country is very favorable for handicraft industry. Govt. adopts so many rules,
regulations and incentives to promote industrial development and export. It is a
good sign for handicraft industry. And it is very easy to set up a handicraft
business in our country with a very small capital. There are no hard and fast rules
for it. The rules and regulations are almost same as small and cottage industry.
REFERENCE:
1. The Embassy of Denmark in Vietnam (2014) Report on Sector AnalysisVietnam Handicraft. Available at: http://um.dk/~/media/UM/Markedsinformation
%20Publications/Files/Publikationer/Markeder%20og
%20sektorer/Vietnam/Vietnam%20Sektoranalyse%20Handicraft%202014.pdf
[Downloaded 22 December 2014]
2. Qattan, A. (2009) Report on Handicrafts Market Demand Analysis, pp. 5-6.
Available at: http://pdf.usaid.gov/pdf_docs/PN,AADT033.pdf .
3. Barber, T. and Krivoshlykova, M. (2006) Report on Global Market Assessment
for Handicrafts, 1, pp. 17-22. Available at:
http://pdf.usaid.gov/pdf_docs/PNADN210.pdf [Downloaded 25 December 2014]
4. http://en.wikipedia.org/wiki/Jamdani