The Electronics Industry in Bangladesh

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The Electronics Industry in Bangladesh

Introduction

The electronics industry in Bangladesh mostly produces consumer items. Home appliances includes televisions, radios, DVDs and CD players, refrigerators, air conditioners, ovens, electronic fans, blenders etc. are being assembled to a large extent. To ensure the performance reliability, the key challenges in this sector are technical assistance and proper technology orientation of the industry. At present, 48.5% of the total population of Bangladesh is enjoying the electric facilities. As of April 2010, the total numbers of transmission and distribution lines are recorded to 8,359 km and 266,460 km respectively. However, 53,281 villages have been electrified so far. In Bangladesh per capita generation is 220 KW hr which is comparatively lower than other developed countries in the world.

Number of the main competitors

Competitors can be defined as two ways-

1) Direct competitors

2) Indirect competitors.

In Bangladesh Walton basically do not have any competitors who can compete directly with them according to their brand and price. They are the only one manufacturer in Bangladesh market and so that they have lots of advantage but they have many indirect competitors who are exporting from international market, competing with them indirectly by having not the similar quality product in the market but they are offering attractive price with new features. Some renowned companies are the main competitors of WALTON. They are- HITACHI, SHARP, LG, DAEWOO, TCL, SIEMENS, Samsung , Toshiba, Unitech, Panasonic, Hyundai, Toshin, My One, Senator, Singer, General, Cooline, Transtec, Haier, Chigo. Gree, Apollo etc.

Market share

The market share of the company diagram is given below:-

Figure 1: Market share of the WALTON

Growth industry

Electronics one of the main parts of science that deals with the emission of electrons from conductors and semiconductors .The first electronic device was the thermionic valve, or vacuum tube, in which electrons moved in a vacuum, and led to such inventions as radio, television, radar, and computer. The invention of the transistor, around 1948, and the subsequent development of integrated circuits (IC) have brought about revolutionary changes in electronics, which was previously based on the technology of the electron tube. Modern electronic devices are based on minute ICs (silicon chips) which are wafer-thin crystal slices holding tens of thousands of electronic components. The minimization in power brought about by these developments have allowed electronic circuits to be packaged more densely, making possible compact computers, advanced radar and navigation systems, and other devices that use a very large number of components. It has also brought to the consumer such items as smaller and more reliable radio and television receivers, advanced sound and VIDEO-recording and reproducing systems, microwave ovens, cellular telephones, and personal computers (PC).
Application of electronics in Bangladesh started in the 1930s in the field of communication with the setting up of radio stations, telephone exchanges and wireless communication. During World War II, the technology of wireless communication was upgraded to satisfy military needs and the up-to-date technology was introduced in India. In East Pakistan VHF (very high frequency) telephone was installed in 1960.The first television station was established in 1964. A digital telephone system was introduced in 1983 and mobile phones came in 1992. Domestic electronic appliances and equipment used in Bangladesh include radio, television, VIDEO recorder and player, audio cassette player, microwave oven and cordless telephone. Before 1980 most of these items were imported, except the one-band radio, but after 1980 many assembly plants for radio, television, audio and VIDEO cassette recorders and players were established.
Since 1990 sophisticated equipment like computers, cordless telephones, satellite TV signal receiving equipment etc are being assembled and some spare parts are also being manufactured. A number of multinational companies have set up assembly and manufacturing plants in the country. Local companies in joint collaboration with foreign companies have established assembly and manufacturing plants. At present the total number of such companies is more than sixty. Since 1994, when Bangladesh signed the open market agreement, all kinds of commodities including electronic products are being imported freely, which have created a competitive environment and the people, are getting good quality products at a reasonable price.

Electronic industry In Bangladesh the consumer electronics industry is still in its infancy. It made a start in the private sector in 1950 with the setting up of a few assembly plants for producing a limited range of radio sets. In the 1960s more assembly plants were added. With the establishment of a television station in Dhaka in 1964, some of these plants started assembling television sets.

At present, about one dozen companies including many international ones are manufacturing black and white TV sets of different sizes. They are also manufacturing printed circuit boards (PCB) and different types of transformers for use in electronic circuits. Telephone Shilpa Sangstha is doing some bonding, packaging and testing operations on components used in telecommunication in a limited way. Electronic equipment is not yet produced on a commercial basis and at present the electronic industry in Bangladesh is still limited to mainly assembly operations.
Electronics in industries in control and processing in modern industries, electronics is playing a vital role. The nucleonic control system (NCS) is unique in modern control technology, applied in various manufacturing and processing industries all over the world. In Bangladesh the first NCS was installed in October 1999 in karnafuli paper mills at Chandraghona in kaptai upazila with the assistance of the International Atomic Energy Agency. Other industries like cosmetics, leather, cement, textile, etc also use the electronic process control system.

Porters 5 forces

Michael Porter provided a framework that models an industry as being influenced by five forces. The strategic business manager seeking to develop an edge over rival firms can use this model to better understand the industry context in which the firm operates. These five forces are given below:

1) Rivalry 2) Threat of Substitutes 3) Buyer Power 4) Supplier Power 5) Threat of New Entrants and Entry Barriers.

WALTON also influenced by Porters five forces. WALTON can use this model to better understand the industry context in which the company operates.

Figure 2:Porters five Forces of WALTON

Rivalry

In pursuing an advantage over its rivals, WALTON can choose from several competitive moves:

· Changing prices – raising or lowering prices to gain a temporary advantage.

· Improving product differentiation – improving features, implementing innovations in the manufacturing process and in the product itself.

· Creatively using channels of distribution – using vertical integration or using a distribution channel that is novel to the industry.

· Exploiting relationships with suppliers.

· WALTON Bargaining power of Rivalry is high.

Threat of Substitutes

A threat of substitutes exists when a WALTON product’s demand is affected by the price change of a substitute product. A WALTON product’s price elasticity is affected by substitute products – as more substitutes become available, the demand becomes more elastic since customers have more alternatives. A close substitute product constrains the ability of firms in an industry to raise prices and WALTON bargaining power of Threat of substitutes is moderate.

Buyer Power

The power of buyers is the impact that customers have on a producing industry. In general, when buyer power is strong, the relationship to the producing industry is near to what an economist terms a monopsony – a market in which there are many suppliers and one buyer. Under such market conditions, the buyer sets the price. In reality few pure monopsonies exist, but frequently there is some asymmetry between a producing industry and buyers. The following tables outline some factors that determine buyer power and Walton bargaining power of buyer power is moderate.

Supplier power

A producing industry requires raw materials – labor, components, and other supplies. This requirement leads to buyer-supplier relationships between the industry and the firms that provide it the raw materials used to create products. Suppliers, if powerful, can exert an influence on the producing industry, such as selling raw materials at a high price to capture some of the industry’s profits. The following tables outline some factors that determine supplier power and WALTON bargaining power of supplier power is moderate

Threat of new entrants and entry barriers

It is not only incumbent rivals that pose a threat to firms in an industry. The possibility that new firms may enter the industry also affects competition. In theory, any firm should be able to enter and exit a market, and if free entry and exit exists, then profits always should be nominal. In reality, however, industries possess characteristics that protect the high profit levels of firms in the market and inhibit additional rivals from entering the market. These are barriers to entry.

Barriers to entry arise from several sources: 1) Government creates barriers. 2) Patents and proprietary knowledge serve to restrict entry into an industry. 3) Asset specificity inhibits entry into an industry. 4) Organizational (Internal) Economies of Scale.

WALTON bargaining power of Threat of new entrants and entry barriers is low.

OVERVIEW OF THE COMPANY

Company profile

R. B. Group of Companies Ltd. is one of the largest registered Limited Company in the electrical and electronics, automobiles sector in Bangladesh using the brand name WALTON and MARCEL. Walton a sister concern of R.B Group is providing latest technology based products with innovative design, excellent quality and different models & capacities. WALTON brand’s main products are different types of Televisions (CRT, LCD, and LED), DVD Players, Motorcycles, Refrigerators & Freezers, Microwave Ovens, Steam Ovens, Domestic and Industrial Generators, Air conditioners, Mobile Phone, Iron, Washing machine and various types of home appliances. In Bangladesh establishment of Walton HIL & other sister concerns to manufacture refrigerator, freezer, air conditioner, motorcycle, LCD, LED & CRT TV etc. is a milestone in the path of glorious success & reputation of the brand WALTON. All the manufacturing industries have introduced first advanced research and manufacturing technologies and equipments for the manufacturing & development of the products. It has a large sales & after sales service network in home & abroad. With a proud commitment to quality control, Walton consistently surpasses all the rigorous quality requirements of international markets. Walton has achieved various standard quality certificates including ISO 9001:2008 & ISO 14001:2004. Walton service network is only ISO 9001:2008 standards certified after sales service network in Bangladesh. Now Walton has vehemently proved that Made in Bangladesh is the mark of ultimate confidence.

Company overview

Company overview is given below.

Company Name Walton
Country of Origin & Year Established Bangladesh (2006)
Business Type: Manufacturer, Trading Company
Product/Service Television, Refrigerator, Freezer, Motorcycle etc
Registered Capital: US$10 Million – US$50 Million
Ownership Type: Corporation/Limited Liability Company
Head Office Jiban Bima Bhaban (Level-3), 10 Dilkusha C/A, Dhaka-1000.
Factory Holding No. 1-25/1, Ward No. 07, Chandra, Kaliakoir, Gazipur.
Factory Size: 50,000-100,000 square meters
Product line Above 10
Slogan Walton Products at Every Home.
Total Manpower 3,000
Total No. of Distributor Own sales center 300 and Dealers 1200
Customer Service 25 Service Centers & more than 95 Engineers and Technicians
Export Markets Europe, Africa, South Asia, Mid East etc

Mission: “Walton product at every home”

Vision: Walton pursuers its 21st Century vision of becoming a true universal digital brand through innovation design, latest technology and proper customer solution.”

Goal: “To achieve market leadership, profitability, good corporate citizenship and a sustainable growth.”

Product range

Products of WALTON: Television (CRT, LCD, LED),Refrigerator & Freezer, Domestic and Industrial Generator , Air conditioner , Motorcycle, Microwave & Steam Oven , Mobile Phone, DVD Player, LED Light, Charger Light , Washing Machine etc.

Fan, Computer LCD, LED Monitor, Laptop, Notebook, Car, Pickup Van etc are Upcoming Product.

Television

Walton Television ensures home cinema entertainment. Full high definition digital LCD television delivers digital cinema color and crystal clear picture.

Refrigerator

Walton Refrigerator & Freezer ensures highest quality compressor, Condenser is made by 100% copper which lasting for 20-30 years.

Generator

Walton Generator scientifically developed technology that deliveries of Clean Power that means much more reliability but interruptions are very low.

Air conditioner

Walton Air Conditioners cooling standards are so high that even the experts recommend us. You’ll find much expertise in cooling area of our Split Air Conditioners as well as new exciting features.

Motorcycle

Walton motorcycle produced with modern innovative technology, elegant shape & design with different models of 80cc to 140cc motorcycle maintaining international standard quality as per requirements of its customers of different countries or regions.

Walton Microwave Ovens

Walton Mobile Phone

Target market & market strategy

Walton target market is given below:

Upper class 2) Upper middle class 3) Middle class 4) Lower middle class 5) Lower class people.

Marketing Strategy

In Bangladesh it is targeting the mass market for their home appliance products commencing their marketing strategy as of their high quality and reasonable products. They do not do their marketing for a particular group of people. They do their marketing those who has the ability to buy their product. For that they are offering free installment and after sales service. For example Walton refrigerator has 5 years sales service without payment

Customers’ perception to products of Walton: WALTON HIL is emphasis on the Electric & Electronics and Automobiles and Telecommunication industry in Bangladesh. Customers’ are also want to products of Walton better quality, long lasting, nice looking, brand reputation and after sales services.

Customers’ perception to price of Walton: WALTON Hi-Tech Industries Ltd. – A sister concern of R.B Group is the pioneer of Refrigerator, Freezer, Air Conditioner and Motorcycle Manufacturing Technology in Bangladesh. Customers’ are thinking also price of Walton price is reasonable, price of body kit is low, price should be less than other electronics product price and they also provide discount price to corporate customer

Promotional Activity of Walton: As for promotional campaign Walton

Distribute the brochures to the customer by going door to door.

Give their advertisements on the TV, Newspaper, and Billboard and Give cash discount while purchasing Walton product and Give sponsor of different types of event also.

Participate in DITF every year.

Sometimes give mobile phones while purchasing their product.

Arrange many fair in different time period.

Sales & distribution

Walton is one of the leading companies electric and electronic industries of Bangladesh, I am fortunate to complete my internship in such a big Company. Through my internship period I have learned so many things from the organization which I have not learned before. I was placed in Walton Corporate sales and marketing division to complete my internship. A brief description is given below about my internship experience.

Types of Execution: Walton HIL has different types of Sales channels. These sales channels are 1) Corporate sales 2) Direct sales 3) Tele sales 4) Distribution/Dealers

Corporate sales

Corporate Sales team works with the corporate clients. Corporate sales team tries to deal with corporate clients. Some renowned companies are our corporate clients. They are-Grameenphone, Unilever, Partex Group, Aristopharma, Eastern Bank Ltd, BRAC Bank Ltd

Direct sales

Walton HILL has above 300 outlets which is called Walton Plaza. These place are sales and display center. These are companies own outlets where directly sale the Walton product.

Tele sales

Tele team sales Walton products by making call to the potential customers. They have some customer group from the business corporate world. For selling to those people they adopt telemarketing approach. Walton is distributing their product through their own outlet.

Distributor/Dealers

Walton has 1200 distributor. They sells Walton product at their local area. They get commission for every product selling. It has a sales network of 1200 dealers in the major and minor towns all over the Country.

Corporate sales plan:Corporate sales operation through area wise-Gulshan, Mirpur, Uttra, Dhanmondi, Motijheel, Mogbazar, Azimpur etc. of Dhaka city.

Marketing mix

This is a traditional approach to marketing planning which is based on the four Ps:

Product policy

Product is, in fact, the range of the products (goods or services) that WALTON offers to the marketplace. Decisions have to be made about quantities, timing, product variations, associated services, quality, style and even the packaging and branding.

Price policy

Price is a vitally important decision area because although it is a promotional tool in many respects, it is the main income source of WALTON. If prices are lowered for promotional purposes, the case flow within the company, and its long-term profitability, could be seriously affected. As with products, there is normally a range of prices. These can vary according to the quantities bought, the importance of the customer, and the market segment. Pricing can be long-term and short-term. Pricing can involve discounts, special offers, allowances, credit, and ‘trade-ins’. It is vitally important to get price decisions right.

Place policy

A business when planning its marketing will ask a number of questions relating to place i.e. ‘through which outlets should WALTON sell the product? How does WALTON physically move the product to these chosen outlets? How far afield does WALTON wish to operate (locally, nationally, or internationally)? Place, or distribution policy, is a massive, complex decision area.

Promotion policy

Advertising is an evolving business function. It was traditionally used to announce the availability of WALTON products in customer, brand building, positioning conveying the USP (Unique Selling Proposition) and so on. In recent years, advertising has undergone a number of significant changes in both strategy and execution.

The Marketing mix gives a plan by which to operate to influence and satisfy the buyer/customers. The four Ps approach is not perfect, and is certainly not intended to cover all the marketing activities, e.g. Marketing research, research, of course, is the provider of information for the decisions in all of the four Ps areas.

Figure 3: Four Ps of marketing mix

The BCG growth share matrix

The BCG growth share matrix of WALTON products is given below

Dogs – WALTON Television (CRT), WALTON DVD Player, WALTON Charger Light.

Question marks – WALTON Microwave & Steam Oven, WALTON Mobile Phone. Washing Machine, LED Light

Stars – WALTON Motorcycle, WALTON Air conditioner , WALTON Domestic and Industrial Generator

Cash cows – WALTON Television (LCD, LED), WALTON Refrigerator & Freezer

The growth-share matrix can be displayed in a single diagram.

Figure 4: The growth-share matrix

SWOT Analysis of WALTON

The overall evaluation of a company’s strengths, weakness, opportunities and threats is called SWOT analysis. SWOT Analysis is an important planning tool that helps a person or organization to identify and understand its internal strengths and weaknesses. It also match this strengths/weaknesses with the opportunities/threats in the environment

Table 1: SWOT analysis

Strengths Opportunities
1.Wider product range

2.Strong local presence

3.Quality products at low price and top quality of products with solution

4.Comprehensive knowledge of the total market and client

5..Using advance high-tech technology Because of long term experience, customers reliability and loyalty

6. Efficient after sales service.

Achievement of sales growth through introduction of new products.

Increase of sales in major cities.

Competitors’ weaknesses offer extra opportunities to increase sales further.

Introduction of new products every year.

Weaknesses Threats
Lack of skills men power and after seals service Transportation problem

Proper monitoring problem facing in marketing activities

Week distribution Channel

Less organized distribution & compliance to market demand.

Unethical competition prevailing in the market

Political unrest hamper sales

Entry of more competitors in the market

Change of customer’s demand

Problem found

Walton is the only one Manufacturer in Bangladesh market but most of the people want to buy foreign product because they believe that foreign product is better than local product.

The overall corporate culture of the company is conservative and they follow it in their recruiting and promotion in the management sector. This conservative corporate culture has a great influence on the product image.

People think that the price of the products are as equal as quality.

Customer do not visit website before purchasing Walton product.

The Branch (Walton Plaza) has limited power for decision making only Head Office takes almost all decisions.

CONCLUSION & RECOMMENDATION

Recommendation

As WALTON is one of the reputed companies in Bangladesh, there are very few to recommendations about their product sales or services.

Most of the people like to purchase product with a reasonable price and expecting to last long. So, WALTON should make very durable and long-lasting product for increasing their sales.

WALTON should provide quick delivery and sales service after selling the product in case of home appliance or auto products and special offers for the corporate customer to popularize its product. In order to capture this lucrative market segments.

DITF is one of the important places where people come together to product at a concession price. So, WALTON can motivate their customer by giving discount price considering expectation and demand of consumers.

WALTON has a good possibility to get a leading position in the home appliance or auto products market in Bangladesh because of its brand reputation. But they have a threat of start entering the new electronics company in the national market.

WALTON can create a large corporate team to increase their sale and develop their own brand image.

To keep WALTON as leading company in the electrical industry and to compete with others they have to make it well known and available toward all the people that whenever anybody would like to buy home appliance or auto products they will only think about WALTON brand. And if they can use the right promotional strategy they would be able to increase their market share.

Conclusion

WALTON Bangladesh Limited has a great potential growth in the country as a leading national brand with a national image. The consumers’ behavior towards WALTON is very positive and their satisfaction level is very high. The consumers believe that WALTON provides high quality product with reasonable prices in case of WALTON home appliance or auto products. Consumers mainly get information from the TV commercial.

WALTON sales team has a good relationship with the customer. Other hand WALTON has a hard working corporate sales team. This sales team tries to give their best for dealing with corporate client. For their hard working and honesty Walton now achieving and increasing their market shares day by day.

To achieve the leading position, success, lot of improvement is required for every divisions of it. As home appliance or auto products became essential for the consumer day by day, many marketers are coming with these products in this electronic industry. So that it has also become a competitive market for WALTON in spite of having a good brand image and local presence in Bangladesh. They should also take much more attention and careful action to establish its product line in the market. Also should be identify their customer’s behavior and keep the commitment with them strongly. To build a positive perception and awareness among the consumers about their product they have to be stronger in their promotional activities and should maintain a good relationship both internally and externally in their corporate life.