aarong part 2
TRANSCRIPT
ldquoSupplier Selection and Relation of aarongrdquo
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01 IntroductionldquoTo provide a stable and gainful source of employment for the under privileged rural
artisans lift up the traditional identity and the commitment of quality servicerdquo On the basis of these principal Aarong started its journey in Bangladesh Aarong is an
organization that is dedicated to change the lives of disadvantages promoting traditional products from Bangladesh and opening the doors so their products can be exported The designer and the creators of the product range offered by Aarong have not only established the organization as leaders in deshi handicraft but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is the gracious blend of contemporary and customary that ensures that each product is original and saleable in modern society Today few urban consumers will argue that Aarong is the local Mecca for deshi handicraft
The name of the organization Aarong is a Bangla word It means ldquoa village fair or marketrdquo The village fair provides craftsmen of all trades a marketplace to display and sell their traditional handicrafts The naming of Aarong as such upholds the organizations commitment to promote the indigenous goods of our country which are a part of our rich cultural and artistic heritage
It is the handicraft marketing arm of BRAC (Bangladesh Rural Advancement committee) the largest NGO in Bangladesh Aarong has created a village fair for the craftsmen of all trades come together to exhibit and sale their traditional handicrafts It helps vitalize the traditional craftsmanship and find a wider market for their products nationally and internationally
Established in 1978 Aarong is a fair trade organization dedicated to bring about positive changes in the lives of disadvantaged artisans and underprivileged rural women by reviving and promoting their skills and craft Reaching out to weavers potters brass workers jewelers jute workers basket weavers wood carvers leather workers and more Aarong embraces and nurtures a diverse representation of 65000 artisans 85 of whom are women Today Aarong has become the foundation upon which independent cooperative groups and family-based artisans market their craft in an effort to position the nationrsquos handicraft industry on a world platform of appreciation and acknowledgement
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011 Objective of the study
The core objective of this report is to illustrate the present practice of the supplier selection in Aarong amp AAF But the specific objective of this report isa) To have a clear view about what is actually happening in the Aarongb) To collect information and insight about the supplier selection method of the organizationc) Full information about their suppliersd) To relate the theoretical knowledge with the practicese) Their traditional factors of quality delivery cost and services
02 Background of the Organization
Aarong began as a cause ndash a means to an end for a quiet organization fighting to uphold the dignity of the marginalized In 1976 when BRAC- a Bangladeshi NGO dedicated to alleviating poverty and empowering the poor first began encouraging sericulture for women in Manikganj their only buyers were a few scattered retailers in Dhaka Weeks even months would pass between supply and payment until BRAC intervened Aarong was born out of a need to ensure that the penniless silk farmers of Manikganj were paid for their goods upon delivery so that they could feed their families
Today Aarongs reach has spread beyond Manikganj to the rest of the country It has grown into a thriving international enterprise showcasing ethnic wear to beautiful crafts from silks handloom cotton endi to terracotta bamboo jute and much more From a single shop Aarong has grown into one of Bangladeshs biggest retail chains with eight stores spread across the major metropolitan areas of the country - in Dhaka Chittagong Khulna and Sylhet and one in London UK
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021 History
1978-Aarong opened its first retail outlet in Dhaka
1982-Established the Ayesha Abed Foundation a network of production centers aimed at
supporting rural artisans
1983 -Opened its first retail outlet in Chittagong
1985-Opened its first retail outlet in Sylhet
1987-Entered into the export market
1995-Opened its first retail outlet in Khulna
1999-Participated in its first international fashion show
2001-Launched a retail franchise in London
2003-Launched its sub-brand Taaga range of womens western wear fused with traditional
elements of Bangladesh
2008-Celebrated Aarongs 30th Anniversary with an Exhibition Series and gala Fashion Show
2010-Opened its flagship outlet in Dhaka
2011-They opened the biggest showrooms at Uttara in Bangladesh (25th march 2011)
022 Logo
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The logo of Aarong is an image of peacock It is spectacularly beautiful because of the brilliant iridescent diversified colorful pattern in its tail The color of the peacock in the logo is orange because it represents energy By this logo Aarong communicates that its products are as stunning and as unique as a peacock Moreover it wants to emphasize its natural eco-friendly products through the emblem
023 Aarongrsquos Mission StatementldquoTo make Aarong the best in the world in providing a unique
Bangladeshi lifestyle experience to empower people and promote Bangladesh while protecting our environmentrdquo
024 Vision of the organizationAarong has a vision to establish them as worldrsquos one of the famous fair trade fashion
house and to remain market leader throughout its business Aarong expanded its business in international area Aarong has a dream to develop more artisans of Bangladesh and make them self-dependent and attract more and more international customers towards Bangladeshi culture
025 Purpose of aarongAarong is a fair trade organization dedicated to bringing about positive changes in the lives
of disadvantaged artisans and underprivileged rural women by reviving and promoting their skills and crafts Among the artisans Aarong reaches out to be weavers potters brass workers jewelers jute workers basket weavers wood carvers leather workers and more
026 Goals of AarongAarongs goals include
Empowering destitute rural women by providing opportunities for employment and income generation
Ensuring the commercial success of the enterprise of women producers
Reviving the traditional skills of rural artisans
027 Achievements
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From its inception as a small initiative protecting livelihoods in one rural community Aarong has transformed into Bangladeshs biggest retail chain with 10 stores spread across the major metropolitan cities - Dhaka Chittagong Sylhet and Khulna
While Aarongs trendsetting designs and attention to quality continues to win the loyalty of millions of satisfied customers each year - it has experienced unprecedented sales growth averaging 20 per year over the last eight years - its greatest achievement has been the transformation in the lives of the hundreds of thousands of poor artisans and their families it supports In addition as the most successful social enterprise of development organization BRAC one of the worlds largest development organizations Aarong has contributed more than one billion TK to BRACs various poverty alleviation initiatives since 1984
It was Aarong that institutionalized large-scale female participation in the Bangladeshi retail industry - sales as a career choice for women was popularized by the female Aarong store sales associates
Aarongs contribution to Bangladeshi craft heritage goes beyond its retail functions It is a proactive protector and promoter of traditional craft and designs housing an extensive design and craft library that preserves age old patterns and motifs It single-handedly revived the traditional art of Nakshi Kantha by establishing it as a sustainable livelihood for rural women and also brought back many traditional Jamdani patterns
Aarongs consumption sustains numerous artisan communities in Bangladesh - 75 of cotton produced in Madhabdi the core cotton production area and over 70 of silk produced in Maldaha is consumed by Aarong
In 2009 Aarong received the Best Brand Award in the boutique category and Most Effective Outdoor Communication Award from Brand Forum one of the countries leading authorities on branding and communication A number of Aarong products have also received the UNESCO Seal of Excellence for Handicrafts
028 ServicesbullFree Medical check-up including free eye treatment eye-glasses and treatment costs for
severe illnesses bullAdvance wage payments for employees in need bullDay care services bullWorkers retirement fund
Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong Potters Brass Workers Jewelers Jute workers Basket Weavers Handloom Weavers Silk Weavers Wood Carvers Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services
029 Ayesha Abed Foundation- AAF (Aarong production Centre)
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The Ayesha Abed Foundation (AAF) is an organization that aims to provide avenues for employment and income generation for underprivileged rural women The Foundation provides an appropriate working environment financial and technical assistance and training to develop the womenrsquos skills in various crafts The Foundation was established to commemorate the memory and work of late Mrs Ayesha Abed a co-worker and wife of the Founder and Chairperson of BRAC The work that is done in the Foundation is a testament to her commitment to the issues of education training and employment opportunities for disadvantaged women It was she who in 1976 initiated all the present major activities of AAF in Manikgonj
The AAF aims to work with the most underprivileged women in the society These women are often the most neglected and are in need of much assistance and support The AAF plays the role of a facilitator To support these women Aarong has created 13 production centers in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah and 653 sub Centre spread across in 2000 villages of Bangladesh Today More than 40000 women work directly for Aarong in its production centers The women are placed in an enabling environment with other women of similar socio-economic backgrounds They are trained and then given the opportunity to generate income This is where the AAF steps in helping such marginalized women out of their peripheral existence in society and giving them the opportunity to become involved in sustainable enterprise
The AAF is closely interrelated with other programs especially BRAC Development Program (BDP) and Aarong The women workers of the AAF come from the BDP organized Village Organizations Working at the AAF thus gives the women access to other BRAC programs All of the AAFrsquos finished products are sold through Aarong which additionally provides designs raw materials and financial support to the AAF Since AAF supplies exclusively to Aarong it is treated as Aarong Production Centers
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0210 Organizationrsquos Profile
Organization Name Aarong
Country Territory Bangladesh (London)
Organizationrsquos Head Quarter Aarong Centre (Head Office)
346 Tejgaon IA Dhaka-1208 Tel +880 2 8832139 Fax +880 2 9898267
Email exportaarongbracnet
Year of establishment 1978
Business line A fair trade organization
Produce traditional Bangladeshi products
Number of artisans Over 65000 (85 women)
A fashion show for celebrating 30 years of Aarong
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03 BRAC amp Aarong
The Aarong export and marketing project was jointly organized by MCC and BRAC in 1978 It is now directly handled by BRAC The Bangladesh Rural Advancement Committee is managed entirely by Bangladeshis It is the largest non-governmental development organization in the country BRAC has initiated education projects in one fifth of the countryrsquos 80000 villages and in 2001 they started a university It is also responsible for thousands of health programs numerous agriculture and food production businesses and micro-credit initiatives
Aarong works to empower the poor and strengthen traditional craftsmanship The organization involves over 30000 artisans (85 of whom are women) employed through small community groups They produce an impressive range of products terra cotta silk and cotton textiles clothes leather work brass wood candles basketry and jewellery Aarong operates eight retail stores in Bangladesh which sell about 80 of the crafted items the remainders of products are exported
The women Aarong employs are among the countries most disadvantaged Through Aarong they have been offered a way out of destitution and degradation where before they had none And the benefits that they receive extend well beyond simply the wages they earn for their products since every single woman who works in Aarong-owned production facilities is also a beneficiary of BRACs multifaceted development programs
As a support entity of BRAC a significant portion of Aarongrsquos earnings go directly into financing the NGOrsquos development programs in healthcare education as well as economic and social development
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031 A fair trade organization
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
Spot payment on product delivery to encourage efficiency and productivity Reach out to producers in remote areas to ensure fair value for their efforts
Marketing communication and information for artisans
Advances against purchase orders where necessary
Training amp Education in skills development to raise product quality and marketability
Product Design and Support in Product Development
Quality Control to increase producer awareness of the importance of quality
A fair showroom for Aarong
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations Fair Trade is a trading partnership based on dialogue transparency and respect that seek greater equity in international trade It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers ndash especially in the South (IFAT)
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032 Products and services of AarongHolding the steadfast to its original Mission Aarong today supports the lives and
livelihoods of thousands of rural artisans and handicraft producers These producers and artisans create wide range of products for the different types of consumers in home and abroad The products are unique and traditional and appealing to the modern consumers staring from clothes accessories to home wares Aarong designs and creates clothes for women men and children There are designers and more than 3000 weavers across the country are involved with the production of Aarong clothing lines And for the fashionable accessories there is one special department called jewelry department where jeweler creates elegant jewelries that are contemporary yet traditional using gold silver and jewels like pearl emerald and diamonds The other accessories like bag sandals and produced in AAF centers using leather jute bamboo etc In home ware and decorative Aarong produces pottery vases and sculpture of wood bamboo brass and clay etc
For exporting the products Aarong has a separate department in head office and very selective artisans work here to produce fine quality products and these are sent to the production centers as sample of the exporting products Here is the list of some products Aarong produces
Clothes amp Accessories MENrsquoS PRODUCTS
1 Traditional 2 Executive Shirts 3 Maanja 4 Fotua 5 Short Kurta 6 T‐shirts 7 StolesShawls 8 Sandals
WOMENS PRODUCTS
1 Traditional 2 Western 3 Nightwear 4 ShawlsScarves 5 Shoes 6 Bags
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7 Fabrics
CHILDRENS PRODUCTS
1 Clothes 2 Toys 3 Books 4 Shoes
Jewelry Products
1 Gold 2 Silver 3 Pearl 4 Other
LEATHER PRODUCTS
1 Shoes 2 BagsWallets 3 Belts 4 Boxes 5 Photo Frames
NAKSHI KANTHA PRODUCTS
1 Decorative 2 Wall hangings 3 Christmas decorations
Along with the clothes accessories and home ware Aarong also produces food products like milk flavored milk (mango amp chocolate) juices (mango amp tamarind) yogurt drinks (orange strawberry) curd (sweet amp sour) butter and honey And herbal skincare products like soaps shampoo oil and face pack etc
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Home Wares amp Furniture1 Curtain 2 Bed cover amp cushions 3 Rugs 4 Table Lamps 5 Photo
Frames 6 Coasters
7 Napkin Rings
8 Mats 9 Trays
10 Cutlery 11 Bowls and Platters
12 Photo Frames 13 Bookends 14 Boxes 15 Hammocks 16 Plant Accessories 17 Candles
033 Aarong Retail OutletsAarong sales its products through its own outlets Aarong follow zero distribution
channel Around the country Aarong has ten outlets six outlets in Dhaka in six major parts (Dhanmondi Gulshan Uttara Maghbazar Wari and Mirpur) and outside Dhaka Aarong has two
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outlets in Chittagong one in Sylhet and one in Khulna And outside Bangladesh Aarong has one shop in London United Kingdom
Aarong Centre (Head Office ) 346 Tejgaon IA Dhaka-1208 Tel +880 2 8832139 Fax +880 2 9898267Email exportaarongbracnet
Aarong at Gulshan Gulshan ndash Tejgaon Link RoadDhaka 1208Tel 8821052 8825986 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong at Maghbazar Aarong Plaza61 Shahid Shangbadik Selina Parveen Sharak MaghbazarDhaka 1217Tel 9334766 9360260 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong at Dhanmondi Aarong Dhanmondi11 Block-A LalmatiaManik Miah AvenueMirpur RoadDhaka-1207 Tel +88-02-8111607Fax +880 2 8828576Email exportaarongbracnet Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong at Uttara Aarong Uttara Jasim Uddin Sector 4Uttara Model TownDhaka 1230Tel 8916097 8914125 ext 501 Operating Hours 1000am ndash 800pmOpen 7 days a week
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Aarong at Wari 361 Rankin Street (1st Floor) WariDhaka 1203Tel 7114244 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong in Halishahar Chittagong House 1 Lane 1 Block LHalishahar ChittagongTel 031-2515644-45 Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong in Sylhet 413 Naya SharakSylhetTel 6017 0821-815988 0821-713150 Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong in Nasirabad Chittagong Golden Plaza (1st Floor)1692 CDA AvenueChittagongTel 031-654030 06074485325 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong in Khulna Plot A43-A44Majeed Sharani AvenueShib BariKhulnaTel 6016 041-730547
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Aarong in London
Aarong sell an assortment of own brand formal and casual wear for both men and women in London Although Aarong sell its own products but the show room which in London is little bit different from our local shop Because the demand of the customers of London
69 Vallance RdLondon E1 5BS United Kingdom+44 20 72477727
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034 PromotionAs it is in other avenues Aarong is a trendsetter in promotional activities as well Having
been one of the first Bangladeshi brands to use professional models and create sophisticated ad campaigns Aarong continues to set the style and quality standard for promotion by achieving greater levels of class and elegance with each campaign Aarong also selects its promotional mediums carefully to ensure accurate reflection of the brands values Aarongs promotional events - such as its carefully orchestrated fashion shows unique and detailed exhibitions and highly popular sales events ndash have become a significant part of popular culture in urban Bangladesh Aarong also focuses on in-store promotional activities such as its My Aarong Rewards programmed to enhance customer experience
035 Export Terms and Conditions
Beneficiary BRAC66 Mohakhali CA Dhaka 1212BangladeshTel 880-2-9885424 880-2-8824180Fax 880-2-8828576 880-2-8823614
Payment to LC at sight or 50 Advance with order amp 50 before shipment by TT to BRAC Bank Limited1 Gulshan Avenue Gulshan-1 Dhaka-1212 BangladeshTel 880-2-8824501 Fax 880-2-8813543Account 150180010606 Account Name BRAC - Aarong
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Delivery Between 60 to 120 days depending on volume of order on receipt of LC
Port of Dispatch By Air Zia International Airport DhakaBy Sea ICD Dhaka for Full Container Load (FCL) Chittagong for Loose Container Load (LCL)
Packing Fragile items are packed individually in 3 ply carton boxes and master packing in 5 or 7 ply carton boxes Other non-breakable items are packed individually in a ploy bag and master packing in 5 ply carton boxes (2025 kgs in a box)
Freight and Insurance Freight and Insurance to be covered by the importer which varies from port to port
Advance If 50 is paid in advance against the ordered value then the documents will be sent to the importers directly Otherwise the documents will be sent to the bank for collection against Bill of Exchange
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036 MarketA pioneer in the countrys craft industry Aarongs unique product designs have brought
consumer attention back to crafts and materials indigenous to Bangladesh as its designers blend the traditional with the contemporary in a way that continues to win consumer appeal Its success revolutionized trends and virtually created the market that has now been taken up by countless other boutiques and brands Aarong caters to this growing urban consumer base through outlets in every major city in the country Their discerning style and high-quality craftsmanship make every Aarong product unique and demand for them has been consistently rising due to Aarongs focus on innovation quality value-based pricing and superior in-store customer service All these elements backed by a robust distribution network and strong supply chain have made Aarong a true household brand in Bangladesh Just as Bangladeshis living abroad look to Aarong for products that connect them to their heritage the Aarong experience is an essential part of any trip to Bangladesh by foreign visitors ndash a phenomenon chronicled in the Lonely Planet guide to Bangladesh Aarong products are not only the gift items of choice for every occasion for local and expatriate Bangladeshis but also the quintessential cultural mementos for these visitors Aarongs growing presence outside Bangladesh - through fair-trade networks in Europe as well as a retail franchise in London - continues to broaden the market for Bangladeshi craft globally
037 Producers or suppliers Aarong embraces and nurtures a diverse representation of 65000 artisans 85 of whom
are women More than forty thousand of these women work directly for Aarong in its 13 production centrersquos (Foundations) in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah including 653 sub-centers spread across Bangladesh Twenty-five thousand independent co-operative groups and traditional family-based artisans also market their crafts through Aarong Potters brass workers jewelers jute workers basket weavers handloom weavers silk weavers wood carvers leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services The leather workers are various artisans with specialized skills from all over the country
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038 Brand valueAarong stands for a unique mix of design quality and convenience of the traditional and
the contemporary Aarong is one of a kind ndash globally positioned as a highly successful Bangladeshi craft based retail chain and brand of pride It also carries the distinction of being BRACs most successful social enterprise Aarongs responsibility is therefore two fold delivering unique products with the highest level of quality and service to its customers and the strongest level of support and protection of artisans and their craft To its consumers Aarong is a household name - a one-stop shop and a trusted brand that inspires pride promises quality and sophistication and helps to keep cultural roots alive in everyday life For the artisans Aarong represents the endurance of both their age-old art as well as their livelihoods For consumers and artisans alike Aarong has become a part of the cultural fabric of their lives
Those things we didnt know-1 In Bengali Aarong means village fair and Taaga means thread2 Half of the profit from every purchase you make at Aarong goes towards supporting
schools health services and specific interventions targeted to the ultra poor segment by BRAC
3 3 people enter an Aarong outlet every second4 The amount of fabric consumed by Aarong in a year can wrap around Bangladesh 8
times
039 Aarongrsquos Production Centers
1 At Aarong has 8 domestic outlets (5 in Dhaka 1 in Chittagong 1 in Sylhet and 1 in Khulna) 1 franchise in London)
2 Aarong has 13 center and (Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur Pabna Pollobi Kurigram Nilphamary and Jhenaidah)
3 653 sub-centers spread across Bangladesh
4 As well as considerable export operation in many European North American and Asian countries
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0310 Artisans Karim Mias Story
Karim Mia is a bamboo tray and basket producer of Aarong Due to extreme poverty at home Karim Mia stopped his schooling when he was in class 3 and began assisting his father in bamboo crafts weaving Struck by the untimely death of his father Karim Mia at the age of 16 had to find an immediate source of income to run his family of five brothers five sisters and his mother Initially Karim Mia commuted from his home district Tangail (approx 120 km away from Dhaka city) to sell bamboo products at small crafts shops in Dhaka At that time with his meager monthly income of almost $25 he could barely support his family After struggling for almost three years Karim Mia came to Aarong in 1988 to show some of his samples His self-designed samples were immediately chosen and an order was placed for 60 pieces Since then Karim Mia has received constant orders from Aarong for its local as well as export market
As part of its mission to assist producers in product development and technical training Aarong sponsored Karim Mia to attend a bamboo crafts workshop in New Delhi in 2003 The one-week training has helped him to gain better knowledge about bamboo craft His workmanship has also shown remarkable improvement in quality Today Karim Mia supplies exclusively to Aarong and has a steady monthly income of $100-130 On an average he has ten workers working under him During the busy season he employs more than fifty workers
Karim Mia is now married with two sons and a daughter all of whom attend school He hopes that his children will be able to complete their education which he could not because of financial need About two years ago Karim Mia bought 20 decimal lands in Tangail where he constructed his tin-shed home Very recently he has built an extension room that is being used as working space and storage for the bamboo products
Karim Mia feels that Aarongrsquos support during his needy times the continued assistance in product development and design and a steady flow of orders has helped him carve out a dignified existence for himself and his family
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0311 Others Artisans
Holding steadfast to its original mission Aarong today supports the lives and livelihoods of nearly sixty five thousand rural artisans and handicraft producers 85 of who are women More than forty thousand of these women work directly for Aarong in its 13 production centers in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah and 653 subcentres spread across Bangladesh
Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong Potters Brass Workers Jewellers Jute workers Basket Weavers Handloom Weavers Silk Weavers Wood Carvers Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services
04
Make or buy of aarongTraditionally Aarong prefers the make option tended to be favored by ownership of a
large range of manufacturing and subassembly facilities They were largely depends on raw materials which were processed in house Specially buy canrsquot give full perfection Thatrsquos why Aarong prefer make option
Reason for Make Instead of Buy
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There are many special reasons in Aarong to prefer make option instead of buy These include
The quantities are too small Quality requirements may be so exacting or so unusual as to require special processing
methods that suppliers canrsquot be expected to provide Closer coordination of supply with the demand To preserve technological secrets To obtain a lower cost To advantage of or avoid idle equipment or labor To avoid sole source dependency The management of Aarong appears to take pride in size
Dangers Involved in Decision to Manufacture
To manufacture the various types of product of Aarong dangers involve in decision include
They may have lack administrative or technical experience in the production The challenges of maintaining ling term technological and economic viability for a
noncore activity Difficult to determine the costs of the make decision A lack of flexibility in selecting possible sources and substitute items is likely to result
041 Sub contractionThe use of subcontract is perfect when placing orders for work which is difficult to
define take a long time and extremely costly Managing the subcontract is a complex activity which requires knowledge about performance to date as well as ability to anticipate actions needed to ensure the desired end results Thatrsquos why Aarong donrsquot have the subcontracting policy
042 Sources of information about suppliersKnowledge of information source is primary task for this kind of manufacturing agency
Aarong relay solely on their whole experience and past memory The normal principal sources of information consist of catalogs trade journals advertisements suppliers and commodity directories sales interviews annual report etc These are given bellow in brief
Catalogs Aarong have the proper catalog and have the advantage of being a permanent record of whole organization always in the office of the buyer Salespeople are not always
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available advertisements are frequently forgotten but the catalog is an ever present reminder Two types of catalog are here
Jobbers catalog Contains a variety of manufacturing sources an offer to a certain extent Equipment and machinery catalog Provide information of Specification of location of
supply for replacement parts as well as new equipments of Aarong
Trade journals Trade journals are also valuable sources of information of Aarong as to potential suppliers It is used in two ways
Firstly use is a study of the text adds to the buyerrsquos general information suggests new products and substitute materials
Secondly use has to do with advertising
Trade Directories Trade directories are volumes which list leading manufactures addresses number of branches products supplies equipment and other items offered for sale
Sales Representation In Aarong it is essential to develop good supplier relations which begin with a friendly courteous sympathetic and frank attitude toward the supplier salesperson Aarong have the policies and procedures guidelines concerning the relations between the purchasing office and suppliersrsquo representatives
Suppliers and Commodity file Such files contain information concerning the address of the Aarongrsquos supplier past orders placed with the company data concerning its general fitness reliability suppliers willingness to meet particular requirements of them which product has been purchased in the past price paid point of shipment and cross reference of the supplier file
043 Aarongrsquos Supplier evaluation We know that Aarong is an organization which fully depends on domestic ruler raw
product So the supplier of Aarong will be the ruler people Aarongrsquos supplier evaluation depends on some important factors Those are given below
Existing and Potential Sources The evaluation of suppliers is a continuing purchasing task Aarong does this very carefully They monitored to see if expected performance
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materializes with current suppliers New sources need to be screened to see if their potential warrants serous future consideration
Informal and Formal Evaluation Aarongrsquos current supplier is one which has passed through earlier supplier efforts and subsequently received at a minimum one order Most buyer of Aarong tends to separate current suppliers into at least two categories
Informal Evaluation Informal evolution includes assessments of personal contract between Aarong and its supplier in the purchaser section in all function where such contract takes place
044 Aarongrsquos Additional sources and selection consideration
Aarongrsquos additional sources and selection consideration system causes if supplier had been found who could meet all the requirements the search would be over Such it not the case Shall the buyer in buying a given item rely on a single supplier or utilize several Shall the buyer directly buy from manufacturers or through distributors Aarong need quick supply because customer demand is very high and fast Aarong need the product as their expectation In doing so it shall be assumed that adequate investigation for fairness and capacity to meet the requirements as to quality quantity delivery and service and that prices are not unreasonable The product of Aarong is much reasonable then other So Aarong need to maintain this for customer
045 Aarongrsquos supplier rating systemSupplier rating system is very important function for an organization Aarong evaluate
their supplier rating system through some steps Most formal supplier rating schemes attempt to track actual performance over time Thus corrective action can be taken as needed Formal supplier rating schemes track vendor performance on quality price delivery and service It is
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normal to track a supplierrsquos quality performance very closely and in sufficient deal to enable the pinpointing of corrective action Delivery performance of a current supplier is fairly easily tracked if good records exist of delivery promises and actual recipients and few modifications have been made on an informal basis There is a most effective evaluation system of rating that Aarong follows is weighted point evaluation system
Aarong has different types of supplier that is why this system is successful Particularly in cases where several sources supply the same item Outstanding performance of a supplier can then be rewarded with additional business while poor performance will at the least result in less business or possibly dropping a supplier altogether For different product classes different factors weight and measure should be used to reflect varying impact on the organization
Factor Weight How MeasuredSupplier
Performance past 12 Months
Rating
Quality30 1 defective subtracts
605 defective (30(100-(05 X
6)100=291
Delivery 40 1 day late subtracts 2
Average 5 days late (40(100-(5X2)100=36
Price 20 Lowest price paidPrice charged
$50$55
(20(5055)X100)100=1818
Service10 Goods=100
Fair=70Poor=40
Fair=75 (10X75)100=75
Total Points
100 9078
Aarongrsquos supplier weighted point rating system
046 The Supplier selection decisionThe purchaserrsquos Perception of the supplierrsquos ability in Aarong to meet satisfactory
quality quantity delivery and price and service objectives will govern the selection decision Itrsquos also included their past history facilities and technical strength financial status organization and management reputation systems communication of rural people labor relations and location The nature and the amount of the purchase will influence the selection decision
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Aarongrsquos supplier selection decision can be seen as decision making under uncertainty and can be represented by a decision tree There are three stage decision trees for supplier selection also In the given figure shows a decision tree of one stage situation with only two suppliers considered and two possible outcomes To use decision tree effectively and assess the probabilities of success and failure This simple tree could apply to a special onetime purchase without expectation of follow on business for some time to come
SolutionSupplier A Supplier BHigh 100 X 30 =3000 High 100 X 28 =2800Medium 70 X 35 =2450 Medium 70 X 40 =2800Low 40 X 40 =1600 Low 40 X 30 =1200
=7000 =6800So Aarong will choose supplier B
047 Consumer buyer behavior CONSUMER DECISION PROCESS MODEL
Aarong is the most leading fashionable organization in Bangladesh Aarong is always looking towards its consumer perceptions It always creates a different look and patterns in their product This is the main reason to attract consumer The process component of the consumer decision making process deals with how consumers make decisions The product consumer have
Price $30 per unit
Price $35 per unit
Price $40 per unit
Price $28 per unit
Price $40 per unit
Price $30 per unit
On demand high 100 units
On demand medium 70 units
On demand low 40 units
On demand high 100 units
On demand medium 70 units
On demand low 40 units
Supplier
A
Supplier
B
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36(P
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selected to buy and in order to understand how a consumer makes these decisions in the process component we need to look at the psychological field of the process model which are the internal influences of motivation perception learning personality amp attitude and how these influences affect the decision making process Aarong the act of making a consumer decision consists of three stages which are need recognition pre-purchase search amp evaluation of alternatives
Need Recognition Need recognition occurs when a consumer is faced with a problem There are many different reasons why someone would decide that they need to buy the product from Aarong It might be necessary of any product as well as fashionable one
Pre-purchase Search Pre-purchase search is very important for consumer At first they search their desirable product in the market After that they decide from where they buy their product When they think about perfection and fissionable thing they must go through Aarong
Evaluation of Alternative This means to evaluate the alternative brands of that product From that evaluation consumer select their product according their perception Aarong have the ability to fulfill their perception That is the quality of Aarong
048 Purchase-supplier relationsWhen one organization supplies another with goods or services the nature of the
relationship between the two organizations is a major influence on the ultimate value and customer satisfaction achievable Aarong maintain a good relationship with their supplier They maintain the relationship very sincerely Aarong deals with their supplier several times All times they maintain their formalities Good relations with supplier are very important for their supply system If the relation is well the supplier supply product as their requirement In this section the nature of supplier goodwill will be discussed along with the framework for buyer-seller satisfaction the qualifications of good and preferred suppliers partnerships and strategic alliances
049 Aarongrsquos Purchase-supplier satisfaction modelAarong is a fair trade organization Aarong always try to satisfy their selected supplier
One of the major assessments a purchaser must make is whether the current relationship with a supplier is satisfactory or not This relationship is highly complex and different people inside the
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36(P
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purchasing organization may have different perceptions of it Aarong follow a supplier satisfaction model This model includes some assumptions Those are
I That satisfaction with a current supplier relationship can be assessed however crudely at least in macro terms whether it is satisfactory or not
II That an unsatisfied party will attempt to move to a more satisfactory situationIII That attempts to move may fall in the win and lose as well as the lose and lose lose and
win and win and win categoryIV That attempts to move may affect the stability of the relationshipV That purchaser and seller may well have different perceptions of the same relationship
VI That many tools techniques and approaches exists which will assist either party in moving position and improving stability
0410 Aarongrsquos Reverse supplier developmentIn supplier selection it has so far been assured that at least one suitable and willing
supplier already exists and that the purchaserrsquos problems are primarily one of determining who
C
D B
A
Purchaser dissatisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier dissatisfied
Purchaser satisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier satisfied
Total Dissatisfaction
Marginal satisfaction
Complete satisfaction
Marginal satisfaction
Complete satisfaction
Supplierrsquos Satisfaction
Purchaserrsquos Satisfaction
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36(P
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the best supplier is In this case Aarong is very serious about their supplierrsquos development After selecting the best supplier they give better training for their future development We know that Aarong highly depends on rural suppliers Reverse marketing supplier development implies a degree of aggressive procurement involvement not normally encountered in supplier selection
Reverse supplier development should take a broader point of view It defines the need for developing new or existing suppliers as follows The purchase is aware that benefits will accrue to both the supplier and the purchaser benefits of which the supplier may not be aware
Aarongrsquos Supplier Development Context
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
bull Spot payment on product delivery to encourage efficiency and productivity bull Reach out to producers in remote areas to ensure fair value for their efforts bull Marketing communication and information for artisans bull Advances against purchase orders where necessary bull Training amp Education in skills development to raise product quality and marketability bull Product Design and Support in Product Development bull Quality Control to increase producer awareness of the importance of quality
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers in Bangladesh
0411 Aarongrsquos Management and Financial Evaluation
Aarongrsquos management and financial evaluation tends toward greater reliance on single sources for a longer time continuous along with great interest in material requirement and just in
Supplier Purchaser
Purchasing initiative
Sales response
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36(P
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time production potential suppliers management strength takes on added significance This will require a detailed examination of Aarongrsquos structure qualifications of managers management control the reward-punishment system training and development system and policies and procedures It is also useful to have an explanation as to why the supplierrsquos manager believes it is managing well and an indication of its most notable successes and failures An evaluation of this supplierrsquos procurement system organization procedures and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract
0412 BenefitsEvery single woman who works in Aarong-owned production facilities is also a beneficiary
of BRACs (Bangladesh Rural Advancement Committee) multifaceted development programs As a support entity of BRAC a significant portion of Aarongs earnings go directly into financing the NGOs (non-governmental organization) development programs in healthcare and education as well as economic and social development Specific benefits for producers include
Free medical check-ups including free eye treatment eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workerrsquos retirement fund
Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible
Further AARONG also assists with design and development market information and quality control and provides advances against purchase orders as well as spot payment on product delivery to encourage further production
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36(P
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0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
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36(P
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05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
Page
36(P
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052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
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36(P
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Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
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36(P
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053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
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36(P
OP
302)
054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
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36(P
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36(P
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055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
36(P
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056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
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01 IntroductionldquoTo provide a stable and gainful source of employment for the under privileged rural
artisans lift up the traditional identity and the commitment of quality servicerdquo On the basis of these principal Aarong started its journey in Bangladesh Aarong is an
organization that is dedicated to change the lives of disadvantages promoting traditional products from Bangladesh and opening the doors so their products can be exported The designer and the creators of the product range offered by Aarong have not only established the organization as leaders in deshi handicraft but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is the gracious blend of contemporary and customary that ensures that each product is original and saleable in modern society Today few urban consumers will argue that Aarong is the local Mecca for deshi handicraft
The name of the organization Aarong is a Bangla word It means ldquoa village fair or marketrdquo The village fair provides craftsmen of all trades a marketplace to display and sell their traditional handicrafts The naming of Aarong as such upholds the organizations commitment to promote the indigenous goods of our country which are a part of our rich cultural and artistic heritage
It is the handicraft marketing arm of BRAC (Bangladesh Rural Advancement committee) the largest NGO in Bangladesh Aarong has created a village fair for the craftsmen of all trades come together to exhibit and sale their traditional handicrafts It helps vitalize the traditional craftsmanship and find a wider market for their products nationally and internationally
Established in 1978 Aarong is a fair trade organization dedicated to bring about positive changes in the lives of disadvantaged artisans and underprivileged rural women by reviving and promoting their skills and craft Reaching out to weavers potters brass workers jewelers jute workers basket weavers wood carvers leather workers and more Aarong embraces and nurtures a diverse representation of 65000 artisans 85 of whom are women Today Aarong has become the foundation upon which independent cooperative groups and family-based artisans market their craft in an effort to position the nationrsquos handicraft industry on a world platform of appreciation and acknowledgement
Page
36(P
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011 Objective of the study
The core objective of this report is to illustrate the present practice of the supplier selection in Aarong amp AAF But the specific objective of this report isa) To have a clear view about what is actually happening in the Aarongb) To collect information and insight about the supplier selection method of the organizationc) Full information about their suppliersd) To relate the theoretical knowledge with the practicese) Their traditional factors of quality delivery cost and services
02 Background of the Organization
Aarong began as a cause ndash a means to an end for a quiet organization fighting to uphold the dignity of the marginalized In 1976 when BRAC- a Bangladeshi NGO dedicated to alleviating poverty and empowering the poor first began encouraging sericulture for women in Manikganj their only buyers were a few scattered retailers in Dhaka Weeks even months would pass between supply and payment until BRAC intervened Aarong was born out of a need to ensure that the penniless silk farmers of Manikganj were paid for their goods upon delivery so that they could feed their families
Today Aarongs reach has spread beyond Manikganj to the rest of the country It has grown into a thriving international enterprise showcasing ethnic wear to beautiful crafts from silks handloom cotton endi to terracotta bamboo jute and much more From a single shop Aarong has grown into one of Bangladeshs biggest retail chains with eight stores spread across the major metropolitan areas of the country - in Dhaka Chittagong Khulna and Sylhet and one in London UK
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36(P
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021 History
1978-Aarong opened its first retail outlet in Dhaka
1982-Established the Ayesha Abed Foundation a network of production centers aimed at
supporting rural artisans
1983 -Opened its first retail outlet in Chittagong
1985-Opened its first retail outlet in Sylhet
1987-Entered into the export market
1995-Opened its first retail outlet in Khulna
1999-Participated in its first international fashion show
2001-Launched a retail franchise in London
2003-Launched its sub-brand Taaga range of womens western wear fused with traditional
elements of Bangladesh
2008-Celebrated Aarongs 30th Anniversary with an Exhibition Series and gala Fashion Show
2010-Opened its flagship outlet in Dhaka
2011-They opened the biggest showrooms at Uttara in Bangladesh (25th march 2011)
022 Logo
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36(P
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The logo of Aarong is an image of peacock It is spectacularly beautiful because of the brilliant iridescent diversified colorful pattern in its tail The color of the peacock in the logo is orange because it represents energy By this logo Aarong communicates that its products are as stunning and as unique as a peacock Moreover it wants to emphasize its natural eco-friendly products through the emblem
023 Aarongrsquos Mission StatementldquoTo make Aarong the best in the world in providing a unique
Bangladeshi lifestyle experience to empower people and promote Bangladesh while protecting our environmentrdquo
024 Vision of the organizationAarong has a vision to establish them as worldrsquos one of the famous fair trade fashion
house and to remain market leader throughout its business Aarong expanded its business in international area Aarong has a dream to develop more artisans of Bangladesh and make them self-dependent and attract more and more international customers towards Bangladeshi culture
025 Purpose of aarongAarong is a fair trade organization dedicated to bringing about positive changes in the lives
of disadvantaged artisans and underprivileged rural women by reviving and promoting their skills and crafts Among the artisans Aarong reaches out to be weavers potters brass workers jewelers jute workers basket weavers wood carvers leather workers and more
026 Goals of AarongAarongs goals include
Empowering destitute rural women by providing opportunities for employment and income generation
Ensuring the commercial success of the enterprise of women producers
Reviving the traditional skills of rural artisans
027 Achievements
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36(P
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From its inception as a small initiative protecting livelihoods in one rural community Aarong has transformed into Bangladeshs biggest retail chain with 10 stores spread across the major metropolitan cities - Dhaka Chittagong Sylhet and Khulna
While Aarongs trendsetting designs and attention to quality continues to win the loyalty of millions of satisfied customers each year - it has experienced unprecedented sales growth averaging 20 per year over the last eight years - its greatest achievement has been the transformation in the lives of the hundreds of thousands of poor artisans and their families it supports In addition as the most successful social enterprise of development organization BRAC one of the worlds largest development organizations Aarong has contributed more than one billion TK to BRACs various poverty alleviation initiatives since 1984
It was Aarong that institutionalized large-scale female participation in the Bangladeshi retail industry - sales as a career choice for women was popularized by the female Aarong store sales associates
Aarongs contribution to Bangladeshi craft heritage goes beyond its retail functions It is a proactive protector and promoter of traditional craft and designs housing an extensive design and craft library that preserves age old patterns and motifs It single-handedly revived the traditional art of Nakshi Kantha by establishing it as a sustainable livelihood for rural women and also brought back many traditional Jamdani patterns
Aarongs consumption sustains numerous artisan communities in Bangladesh - 75 of cotton produced in Madhabdi the core cotton production area and over 70 of silk produced in Maldaha is consumed by Aarong
In 2009 Aarong received the Best Brand Award in the boutique category and Most Effective Outdoor Communication Award from Brand Forum one of the countries leading authorities on branding and communication A number of Aarong products have also received the UNESCO Seal of Excellence for Handicrafts
028 ServicesbullFree Medical check-up including free eye treatment eye-glasses and treatment costs for
severe illnesses bullAdvance wage payments for employees in need bullDay care services bullWorkers retirement fund
Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong Potters Brass Workers Jewelers Jute workers Basket Weavers Handloom Weavers Silk Weavers Wood Carvers Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services
029 Ayesha Abed Foundation- AAF (Aarong production Centre)
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36(P
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The Ayesha Abed Foundation (AAF) is an organization that aims to provide avenues for employment and income generation for underprivileged rural women The Foundation provides an appropriate working environment financial and technical assistance and training to develop the womenrsquos skills in various crafts The Foundation was established to commemorate the memory and work of late Mrs Ayesha Abed a co-worker and wife of the Founder and Chairperson of BRAC The work that is done in the Foundation is a testament to her commitment to the issues of education training and employment opportunities for disadvantaged women It was she who in 1976 initiated all the present major activities of AAF in Manikgonj
The AAF aims to work with the most underprivileged women in the society These women are often the most neglected and are in need of much assistance and support The AAF plays the role of a facilitator To support these women Aarong has created 13 production centers in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah and 653 sub Centre spread across in 2000 villages of Bangladesh Today More than 40000 women work directly for Aarong in its production centers The women are placed in an enabling environment with other women of similar socio-economic backgrounds They are trained and then given the opportunity to generate income This is where the AAF steps in helping such marginalized women out of their peripheral existence in society and giving them the opportunity to become involved in sustainable enterprise
The AAF is closely interrelated with other programs especially BRAC Development Program (BDP) and Aarong The women workers of the AAF come from the BDP organized Village Organizations Working at the AAF thus gives the women access to other BRAC programs All of the AAFrsquos finished products are sold through Aarong which additionally provides designs raw materials and financial support to the AAF Since AAF supplies exclusively to Aarong it is treated as Aarong Production Centers
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36(P
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0210 Organizationrsquos Profile
Organization Name Aarong
Country Territory Bangladesh (London)
Organizationrsquos Head Quarter Aarong Centre (Head Office)
346 Tejgaon IA Dhaka-1208 Tel +880 2 8832139 Fax +880 2 9898267
Email exportaarongbracnet
Year of establishment 1978
Business line A fair trade organization
Produce traditional Bangladeshi products
Number of artisans Over 65000 (85 women)
A fashion show for celebrating 30 years of Aarong
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36(P
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03 BRAC amp Aarong
The Aarong export and marketing project was jointly organized by MCC and BRAC in 1978 It is now directly handled by BRAC The Bangladesh Rural Advancement Committee is managed entirely by Bangladeshis It is the largest non-governmental development organization in the country BRAC has initiated education projects in one fifth of the countryrsquos 80000 villages and in 2001 they started a university It is also responsible for thousands of health programs numerous agriculture and food production businesses and micro-credit initiatives
Aarong works to empower the poor and strengthen traditional craftsmanship The organization involves over 30000 artisans (85 of whom are women) employed through small community groups They produce an impressive range of products terra cotta silk and cotton textiles clothes leather work brass wood candles basketry and jewellery Aarong operates eight retail stores in Bangladesh which sell about 80 of the crafted items the remainders of products are exported
The women Aarong employs are among the countries most disadvantaged Through Aarong they have been offered a way out of destitution and degradation where before they had none And the benefits that they receive extend well beyond simply the wages they earn for their products since every single woman who works in Aarong-owned production facilities is also a beneficiary of BRACs multifaceted development programs
As a support entity of BRAC a significant portion of Aarongrsquos earnings go directly into financing the NGOrsquos development programs in healthcare education as well as economic and social development
Page
36(P
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031 A fair trade organization
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
Spot payment on product delivery to encourage efficiency and productivity Reach out to producers in remote areas to ensure fair value for their efforts
Marketing communication and information for artisans
Advances against purchase orders where necessary
Training amp Education in skills development to raise product quality and marketability
Product Design and Support in Product Development
Quality Control to increase producer awareness of the importance of quality
A fair showroom for Aarong
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations Fair Trade is a trading partnership based on dialogue transparency and respect that seek greater equity in international trade It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers ndash especially in the South (IFAT)
Page
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032 Products and services of AarongHolding the steadfast to its original Mission Aarong today supports the lives and
livelihoods of thousands of rural artisans and handicraft producers These producers and artisans create wide range of products for the different types of consumers in home and abroad The products are unique and traditional and appealing to the modern consumers staring from clothes accessories to home wares Aarong designs and creates clothes for women men and children There are designers and more than 3000 weavers across the country are involved with the production of Aarong clothing lines And for the fashionable accessories there is one special department called jewelry department where jeweler creates elegant jewelries that are contemporary yet traditional using gold silver and jewels like pearl emerald and diamonds The other accessories like bag sandals and produced in AAF centers using leather jute bamboo etc In home ware and decorative Aarong produces pottery vases and sculpture of wood bamboo brass and clay etc
For exporting the products Aarong has a separate department in head office and very selective artisans work here to produce fine quality products and these are sent to the production centers as sample of the exporting products Here is the list of some products Aarong produces
Clothes amp Accessories MENrsquoS PRODUCTS
1 Traditional 2 Executive Shirts 3 Maanja 4 Fotua 5 Short Kurta 6 T‐shirts 7 StolesShawls 8 Sandals
WOMENS PRODUCTS
1 Traditional 2 Western 3 Nightwear 4 ShawlsScarves 5 Shoes 6 Bags
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7 Fabrics
CHILDRENS PRODUCTS
1 Clothes 2 Toys 3 Books 4 Shoes
Jewelry Products
1 Gold 2 Silver 3 Pearl 4 Other
LEATHER PRODUCTS
1 Shoes 2 BagsWallets 3 Belts 4 Boxes 5 Photo Frames
NAKSHI KANTHA PRODUCTS
1 Decorative 2 Wall hangings 3 Christmas decorations
Along with the clothes accessories and home ware Aarong also produces food products like milk flavored milk (mango amp chocolate) juices (mango amp tamarind) yogurt drinks (orange strawberry) curd (sweet amp sour) butter and honey And herbal skincare products like soaps shampoo oil and face pack etc
Page
36(P
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Home Wares amp Furniture1 Curtain 2 Bed cover amp cushions 3 Rugs 4 Table Lamps 5 Photo
Frames 6 Coasters
7 Napkin Rings
8 Mats 9 Trays
10 Cutlery 11 Bowls and Platters
12 Photo Frames 13 Bookends 14 Boxes 15 Hammocks 16 Plant Accessories 17 Candles
033 Aarong Retail OutletsAarong sales its products through its own outlets Aarong follow zero distribution
channel Around the country Aarong has ten outlets six outlets in Dhaka in six major parts (Dhanmondi Gulshan Uttara Maghbazar Wari and Mirpur) and outside Dhaka Aarong has two
Page
36(P
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outlets in Chittagong one in Sylhet and one in Khulna And outside Bangladesh Aarong has one shop in London United Kingdom
Aarong Centre (Head Office ) 346 Tejgaon IA Dhaka-1208 Tel +880 2 8832139 Fax +880 2 9898267Email exportaarongbracnet
Aarong at Gulshan Gulshan ndash Tejgaon Link RoadDhaka 1208Tel 8821052 8825986 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong at Maghbazar Aarong Plaza61 Shahid Shangbadik Selina Parveen Sharak MaghbazarDhaka 1217Tel 9334766 9360260 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong at Dhanmondi Aarong Dhanmondi11 Block-A LalmatiaManik Miah AvenueMirpur RoadDhaka-1207 Tel +88-02-8111607Fax +880 2 8828576Email exportaarongbracnet Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong at Uttara Aarong Uttara Jasim Uddin Sector 4Uttara Model TownDhaka 1230Tel 8916097 8914125 ext 501 Operating Hours 1000am ndash 800pmOpen 7 days a week
Page
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Aarong at Wari 361 Rankin Street (1st Floor) WariDhaka 1203Tel 7114244 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong in Halishahar Chittagong House 1 Lane 1 Block LHalishahar ChittagongTel 031-2515644-45 Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong in Sylhet 413 Naya SharakSylhetTel 6017 0821-815988 0821-713150 Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong in Nasirabad Chittagong Golden Plaza (1st Floor)1692 CDA AvenueChittagongTel 031-654030 06074485325 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong in Khulna Plot A43-A44Majeed Sharani AvenueShib BariKhulnaTel 6016 041-730547
Page
36(P
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Aarong in London
Aarong sell an assortment of own brand formal and casual wear for both men and women in London Although Aarong sell its own products but the show room which in London is little bit different from our local shop Because the demand of the customers of London
69 Vallance RdLondon E1 5BS United Kingdom+44 20 72477727
Page
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302)
034 PromotionAs it is in other avenues Aarong is a trendsetter in promotional activities as well Having
been one of the first Bangladeshi brands to use professional models and create sophisticated ad campaigns Aarong continues to set the style and quality standard for promotion by achieving greater levels of class and elegance with each campaign Aarong also selects its promotional mediums carefully to ensure accurate reflection of the brands values Aarongs promotional events - such as its carefully orchestrated fashion shows unique and detailed exhibitions and highly popular sales events ndash have become a significant part of popular culture in urban Bangladesh Aarong also focuses on in-store promotional activities such as its My Aarong Rewards programmed to enhance customer experience
035 Export Terms and Conditions
Beneficiary BRAC66 Mohakhali CA Dhaka 1212BangladeshTel 880-2-9885424 880-2-8824180Fax 880-2-8828576 880-2-8823614
Payment to LC at sight or 50 Advance with order amp 50 before shipment by TT to BRAC Bank Limited1 Gulshan Avenue Gulshan-1 Dhaka-1212 BangladeshTel 880-2-8824501 Fax 880-2-8813543Account 150180010606 Account Name BRAC - Aarong
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Delivery Between 60 to 120 days depending on volume of order on receipt of LC
Port of Dispatch By Air Zia International Airport DhakaBy Sea ICD Dhaka for Full Container Load (FCL) Chittagong for Loose Container Load (LCL)
Packing Fragile items are packed individually in 3 ply carton boxes and master packing in 5 or 7 ply carton boxes Other non-breakable items are packed individually in a ploy bag and master packing in 5 ply carton boxes (2025 kgs in a box)
Freight and Insurance Freight and Insurance to be covered by the importer which varies from port to port
Advance If 50 is paid in advance against the ordered value then the documents will be sent to the importers directly Otherwise the documents will be sent to the bank for collection against Bill of Exchange
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036 MarketA pioneer in the countrys craft industry Aarongs unique product designs have brought
consumer attention back to crafts and materials indigenous to Bangladesh as its designers blend the traditional with the contemporary in a way that continues to win consumer appeal Its success revolutionized trends and virtually created the market that has now been taken up by countless other boutiques and brands Aarong caters to this growing urban consumer base through outlets in every major city in the country Their discerning style and high-quality craftsmanship make every Aarong product unique and demand for them has been consistently rising due to Aarongs focus on innovation quality value-based pricing and superior in-store customer service All these elements backed by a robust distribution network and strong supply chain have made Aarong a true household brand in Bangladesh Just as Bangladeshis living abroad look to Aarong for products that connect them to their heritage the Aarong experience is an essential part of any trip to Bangladesh by foreign visitors ndash a phenomenon chronicled in the Lonely Planet guide to Bangladesh Aarong products are not only the gift items of choice for every occasion for local and expatriate Bangladeshis but also the quintessential cultural mementos for these visitors Aarongs growing presence outside Bangladesh - through fair-trade networks in Europe as well as a retail franchise in London - continues to broaden the market for Bangladeshi craft globally
037 Producers or suppliers Aarong embraces and nurtures a diverse representation of 65000 artisans 85 of whom
are women More than forty thousand of these women work directly for Aarong in its 13 production centrersquos (Foundations) in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah including 653 sub-centers spread across Bangladesh Twenty-five thousand independent co-operative groups and traditional family-based artisans also market their crafts through Aarong Potters brass workers jewelers jute workers basket weavers handloom weavers silk weavers wood carvers leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services The leather workers are various artisans with specialized skills from all over the country
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038 Brand valueAarong stands for a unique mix of design quality and convenience of the traditional and
the contemporary Aarong is one of a kind ndash globally positioned as a highly successful Bangladeshi craft based retail chain and brand of pride It also carries the distinction of being BRACs most successful social enterprise Aarongs responsibility is therefore two fold delivering unique products with the highest level of quality and service to its customers and the strongest level of support and protection of artisans and their craft To its consumers Aarong is a household name - a one-stop shop and a trusted brand that inspires pride promises quality and sophistication and helps to keep cultural roots alive in everyday life For the artisans Aarong represents the endurance of both their age-old art as well as their livelihoods For consumers and artisans alike Aarong has become a part of the cultural fabric of their lives
Those things we didnt know-1 In Bengali Aarong means village fair and Taaga means thread2 Half of the profit from every purchase you make at Aarong goes towards supporting
schools health services and specific interventions targeted to the ultra poor segment by BRAC
3 3 people enter an Aarong outlet every second4 The amount of fabric consumed by Aarong in a year can wrap around Bangladesh 8
times
039 Aarongrsquos Production Centers
1 At Aarong has 8 domestic outlets (5 in Dhaka 1 in Chittagong 1 in Sylhet and 1 in Khulna) 1 franchise in London)
2 Aarong has 13 center and (Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur Pabna Pollobi Kurigram Nilphamary and Jhenaidah)
3 653 sub-centers spread across Bangladesh
4 As well as considerable export operation in many European North American and Asian countries
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0310 Artisans Karim Mias Story
Karim Mia is a bamboo tray and basket producer of Aarong Due to extreme poverty at home Karim Mia stopped his schooling when he was in class 3 and began assisting his father in bamboo crafts weaving Struck by the untimely death of his father Karim Mia at the age of 16 had to find an immediate source of income to run his family of five brothers five sisters and his mother Initially Karim Mia commuted from his home district Tangail (approx 120 km away from Dhaka city) to sell bamboo products at small crafts shops in Dhaka At that time with his meager monthly income of almost $25 he could barely support his family After struggling for almost three years Karim Mia came to Aarong in 1988 to show some of his samples His self-designed samples were immediately chosen and an order was placed for 60 pieces Since then Karim Mia has received constant orders from Aarong for its local as well as export market
As part of its mission to assist producers in product development and technical training Aarong sponsored Karim Mia to attend a bamboo crafts workshop in New Delhi in 2003 The one-week training has helped him to gain better knowledge about bamboo craft His workmanship has also shown remarkable improvement in quality Today Karim Mia supplies exclusively to Aarong and has a steady monthly income of $100-130 On an average he has ten workers working under him During the busy season he employs more than fifty workers
Karim Mia is now married with two sons and a daughter all of whom attend school He hopes that his children will be able to complete their education which he could not because of financial need About two years ago Karim Mia bought 20 decimal lands in Tangail where he constructed his tin-shed home Very recently he has built an extension room that is being used as working space and storage for the bamboo products
Karim Mia feels that Aarongrsquos support during his needy times the continued assistance in product development and design and a steady flow of orders has helped him carve out a dignified existence for himself and his family
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0311 Others Artisans
Holding steadfast to its original mission Aarong today supports the lives and livelihoods of nearly sixty five thousand rural artisans and handicraft producers 85 of who are women More than forty thousand of these women work directly for Aarong in its 13 production centers in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah and 653 subcentres spread across Bangladesh
Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong Potters Brass Workers Jewellers Jute workers Basket Weavers Handloom Weavers Silk Weavers Wood Carvers Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services
04
Make or buy of aarongTraditionally Aarong prefers the make option tended to be favored by ownership of a
large range of manufacturing and subassembly facilities They were largely depends on raw materials which were processed in house Specially buy canrsquot give full perfection Thatrsquos why Aarong prefer make option
Reason for Make Instead of Buy
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36(P
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There are many special reasons in Aarong to prefer make option instead of buy These include
The quantities are too small Quality requirements may be so exacting or so unusual as to require special processing
methods that suppliers canrsquot be expected to provide Closer coordination of supply with the demand To preserve technological secrets To obtain a lower cost To advantage of or avoid idle equipment or labor To avoid sole source dependency The management of Aarong appears to take pride in size
Dangers Involved in Decision to Manufacture
To manufacture the various types of product of Aarong dangers involve in decision include
They may have lack administrative or technical experience in the production The challenges of maintaining ling term technological and economic viability for a
noncore activity Difficult to determine the costs of the make decision A lack of flexibility in selecting possible sources and substitute items is likely to result
041 Sub contractionThe use of subcontract is perfect when placing orders for work which is difficult to
define take a long time and extremely costly Managing the subcontract is a complex activity which requires knowledge about performance to date as well as ability to anticipate actions needed to ensure the desired end results Thatrsquos why Aarong donrsquot have the subcontracting policy
042 Sources of information about suppliersKnowledge of information source is primary task for this kind of manufacturing agency
Aarong relay solely on their whole experience and past memory The normal principal sources of information consist of catalogs trade journals advertisements suppliers and commodity directories sales interviews annual report etc These are given bellow in brief
Catalogs Aarong have the proper catalog and have the advantage of being a permanent record of whole organization always in the office of the buyer Salespeople are not always
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36(P
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available advertisements are frequently forgotten but the catalog is an ever present reminder Two types of catalog are here
Jobbers catalog Contains a variety of manufacturing sources an offer to a certain extent Equipment and machinery catalog Provide information of Specification of location of
supply for replacement parts as well as new equipments of Aarong
Trade journals Trade journals are also valuable sources of information of Aarong as to potential suppliers It is used in two ways
Firstly use is a study of the text adds to the buyerrsquos general information suggests new products and substitute materials
Secondly use has to do with advertising
Trade Directories Trade directories are volumes which list leading manufactures addresses number of branches products supplies equipment and other items offered for sale
Sales Representation In Aarong it is essential to develop good supplier relations which begin with a friendly courteous sympathetic and frank attitude toward the supplier salesperson Aarong have the policies and procedures guidelines concerning the relations between the purchasing office and suppliersrsquo representatives
Suppliers and Commodity file Such files contain information concerning the address of the Aarongrsquos supplier past orders placed with the company data concerning its general fitness reliability suppliers willingness to meet particular requirements of them which product has been purchased in the past price paid point of shipment and cross reference of the supplier file
043 Aarongrsquos Supplier evaluation We know that Aarong is an organization which fully depends on domestic ruler raw
product So the supplier of Aarong will be the ruler people Aarongrsquos supplier evaluation depends on some important factors Those are given below
Existing and Potential Sources The evaluation of suppliers is a continuing purchasing task Aarong does this very carefully They monitored to see if expected performance
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36(P
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materializes with current suppliers New sources need to be screened to see if their potential warrants serous future consideration
Informal and Formal Evaluation Aarongrsquos current supplier is one which has passed through earlier supplier efforts and subsequently received at a minimum one order Most buyer of Aarong tends to separate current suppliers into at least two categories
Informal Evaluation Informal evolution includes assessments of personal contract between Aarong and its supplier in the purchaser section in all function where such contract takes place
044 Aarongrsquos Additional sources and selection consideration
Aarongrsquos additional sources and selection consideration system causes if supplier had been found who could meet all the requirements the search would be over Such it not the case Shall the buyer in buying a given item rely on a single supplier or utilize several Shall the buyer directly buy from manufacturers or through distributors Aarong need quick supply because customer demand is very high and fast Aarong need the product as their expectation In doing so it shall be assumed that adequate investigation for fairness and capacity to meet the requirements as to quality quantity delivery and service and that prices are not unreasonable The product of Aarong is much reasonable then other So Aarong need to maintain this for customer
045 Aarongrsquos supplier rating systemSupplier rating system is very important function for an organization Aarong evaluate
their supplier rating system through some steps Most formal supplier rating schemes attempt to track actual performance over time Thus corrective action can be taken as needed Formal supplier rating schemes track vendor performance on quality price delivery and service It is
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36(P
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normal to track a supplierrsquos quality performance very closely and in sufficient deal to enable the pinpointing of corrective action Delivery performance of a current supplier is fairly easily tracked if good records exist of delivery promises and actual recipients and few modifications have been made on an informal basis There is a most effective evaluation system of rating that Aarong follows is weighted point evaluation system
Aarong has different types of supplier that is why this system is successful Particularly in cases where several sources supply the same item Outstanding performance of a supplier can then be rewarded with additional business while poor performance will at the least result in less business or possibly dropping a supplier altogether For different product classes different factors weight and measure should be used to reflect varying impact on the organization
Factor Weight How MeasuredSupplier
Performance past 12 Months
Rating
Quality30 1 defective subtracts
605 defective (30(100-(05 X
6)100=291
Delivery 40 1 day late subtracts 2
Average 5 days late (40(100-(5X2)100=36
Price 20 Lowest price paidPrice charged
$50$55
(20(5055)X100)100=1818
Service10 Goods=100
Fair=70Poor=40
Fair=75 (10X75)100=75
Total Points
100 9078
Aarongrsquos supplier weighted point rating system
046 The Supplier selection decisionThe purchaserrsquos Perception of the supplierrsquos ability in Aarong to meet satisfactory
quality quantity delivery and price and service objectives will govern the selection decision Itrsquos also included their past history facilities and technical strength financial status organization and management reputation systems communication of rural people labor relations and location The nature and the amount of the purchase will influence the selection decision
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36(P
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Aarongrsquos supplier selection decision can be seen as decision making under uncertainty and can be represented by a decision tree There are three stage decision trees for supplier selection also In the given figure shows a decision tree of one stage situation with only two suppliers considered and two possible outcomes To use decision tree effectively and assess the probabilities of success and failure This simple tree could apply to a special onetime purchase without expectation of follow on business for some time to come
SolutionSupplier A Supplier BHigh 100 X 30 =3000 High 100 X 28 =2800Medium 70 X 35 =2450 Medium 70 X 40 =2800Low 40 X 40 =1600 Low 40 X 30 =1200
=7000 =6800So Aarong will choose supplier B
047 Consumer buyer behavior CONSUMER DECISION PROCESS MODEL
Aarong is the most leading fashionable organization in Bangladesh Aarong is always looking towards its consumer perceptions It always creates a different look and patterns in their product This is the main reason to attract consumer The process component of the consumer decision making process deals with how consumers make decisions The product consumer have
Price $30 per unit
Price $35 per unit
Price $40 per unit
Price $28 per unit
Price $40 per unit
Price $30 per unit
On demand high 100 units
On demand medium 70 units
On demand low 40 units
On demand high 100 units
On demand medium 70 units
On demand low 40 units
Supplier
A
Supplier
B
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36(P
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selected to buy and in order to understand how a consumer makes these decisions in the process component we need to look at the psychological field of the process model which are the internal influences of motivation perception learning personality amp attitude and how these influences affect the decision making process Aarong the act of making a consumer decision consists of three stages which are need recognition pre-purchase search amp evaluation of alternatives
Need Recognition Need recognition occurs when a consumer is faced with a problem There are many different reasons why someone would decide that they need to buy the product from Aarong It might be necessary of any product as well as fashionable one
Pre-purchase Search Pre-purchase search is very important for consumer At first they search their desirable product in the market After that they decide from where they buy their product When they think about perfection and fissionable thing they must go through Aarong
Evaluation of Alternative This means to evaluate the alternative brands of that product From that evaluation consumer select their product according their perception Aarong have the ability to fulfill their perception That is the quality of Aarong
048 Purchase-supplier relationsWhen one organization supplies another with goods or services the nature of the
relationship between the two organizations is a major influence on the ultimate value and customer satisfaction achievable Aarong maintain a good relationship with their supplier They maintain the relationship very sincerely Aarong deals with their supplier several times All times they maintain their formalities Good relations with supplier are very important for their supply system If the relation is well the supplier supply product as their requirement In this section the nature of supplier goodwill will be discussed along with the framework for buyer-seller satisfaction the qualifications of good and preferred suppliers partnerships and strategic alliances
049 Aarongrsquos Purchase-supplier satisfaction modelAarong is a fair trade organization Aarong always try to satisfy their selected supplier
One of the major assessments a purchaser must make is whether the current relationship with a supplier is satisfactory or not This relationship is highly complex and different people inside the
Page
36(P
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purchasing organization may have different perceptions of it Aarong follow a supplier satisfaction model This model includes some assumptions Those are
I That satisfaction with a current supplier relationship can be assessed however crudely at least in macro terms whether it is satisfactory or not
II That an unsatisfied party will attempt to move to a more satisfactory situationIII That attempts to move may fall in the win and lose as well as the lose and lose lose and
win and win and win categoryIV That attempts to move may affect the stability of the relationshipV That purchaser and seller may well have different perceptions of the same relationship
VI That many tools techniques and approaches exists which will assist either party in moving position and improving stability
0410 Aarongrsquos Reverse supplier developmentIn supplier selection it has so far been assured that at least one suitable and willing
supplier already exists and that the purchaserrsquos problems are primarily one of determining who
C
D B
A
Purchaser dissatisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier dissatisfied
Purchaser satisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier satisfied
Total Dissatisfaction
Marginal satisfaction
Complete satisfaction
Marginal satisfaction
Complete satisfaction
Supplierrsquos Satisfaction
Purchaserrsquos Satisfaction
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36(P
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the best supplier is In this case Aarong is very serious about their supplierrsquos development After selecting the best supplier they give better training for their future development We know that Aarong highly depends on rural suppliers Reverse marketing supplier development implies a degree of aggressive procurement involvement not normally encountered in supplier selection
Reverse supplier development should take a broader point of view It defines the need for developing new or existing suppliers as follows The purchase is aware that benefits will accrue to both the supplier and the purchaser benefits of which the supplier may not be aware
Aarongrsquos Supplier Development Context
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
bull Spot payment on product delivery to encourage efficiency and productivity bull Reach out to producers in remote areas to ensure fair value for their efforts bull Marketing communication and information for artisans bull Advances against purchase orders where necessary bull Training amp Education in skills development to raise product quality and marketability bull Product Design and Support in Product Development bull Quality Control to increase producer awareness of the importance of quality
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers in Bangladesh
0411 Aarongrsquos Management and Financial Evaluation
Aarongrsquos management and financial evaluation tends toward greater reliance on single sources for a longer time continuous along with great interest in material requirement and just in
Supplier Purchaser
Purchasing initiative
Sales response
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36(P
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time production potential suppliers management strength takes on added significance This will require a detailed examination of Aarongrsquos structure qualifications of managers management control the reward-punishment system training and development system and policies and procedures It is also useful to have an explanation as to why the supplierrsquos manager believes it is managing well and an indication of its most notable successes and failures An evaluation of this supplierrsquos procurement system organization procedures and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract
0412 BenefitsEvery single woman who works in Aarong-owned production facilities is also a beneficiary
of BRACs (Bangladesh Rural Advancement Committee) multifaceted development programs As a support entity of BRAC a significant portion of Aarongs earnings go directly into financing the NGOs (non-governmental organization) development programs in healthcare and education as well as economic and social development Specific benefits for producers include
Free medical check-ups including free eye treatment eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workerrsquos retirement fund
Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible
Further AARONG also assists with design and development market information and quality control and provides advances against purchase orders as well as spot payment on product delivery to encourage further production
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0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
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36(P
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05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
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052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
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Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
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053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
Page
36(P
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054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
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36(P
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36(P
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055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
36(P
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056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
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36(P
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011 Objective of the study
The core objective of this report is to illustrate the present practice of the supplier selection in Aarong amp AAF But the specific objective of this report isa) To have a clear view about what is actually happening in the Aarongb) To collect information and insight about the supplier selection method of the organizationc) Full information about their suppliersd) To relate the theoretical knowledge with the practicese) Their traditional factors of quality delivery cost and services
02 Background of the Organization
Aarong began as a cause ndash a means to an end for a quiet organization fighting to uphold the dignity of the marginalized In 1976 when BRAC- a Bangladeshi NGO dedicated to alleviating poverty and empowering the poor first began encouraging sericulture for women in Manikganj their only buyers were a few scattered retailers in Dhaka Weeks even months would pass between supply and payment until BRAC intervened Aarong was born out of a need to ensure that the penniless silk farmers of Manikganj were paid for their goods upon delivery so that they could feed their families
Today Aarongs reach has spread beyond Manikganj to the rest of the country It has grown into a thriving international enterprise showcasing ethnic wear to beautiful crafts from silks handloom cotton endi to terracotta bamboo jute and much more From a single shop Aarong has grown into one of Bangladeshs biggest retail chains with eight stores spread across the major metropolitan areas of the country - in Dhaka Chittagong Khulna and Sylhet and one in London UK
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021 History
1978-Aarong opened its first retail outlet in Dhaka
1982-Established the Ayesha Abed Foundation a network of production centers aimed at
supporting rural artisans
1983 -Opened its first retail outlet in Chittagong
1985-Opened its first retail outlet in Sylhet
1987-Entered into the export market
1995-Opened its first retail outlet in Khulna
1999-Participated in its first international fashion show
2001-Launched a retail franchise in London
2003-Launched its sub-brand Taaga range of womens western wear fused with traditional
elements of Bangladesh
2008-Celebrated Aarongs 30th Anniversary with an Exhibition Series and gala Fashion Show
2010-Opened its flagship outlet in Dhaka
2011-They opened the biggest showrooms at Uttara in Bangladesh (25th march 2011)
022 Logo
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36(P
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The logo of Aarong is an image of peacock It is spectacularly beautiful because of the brilliant iridescent diversified colorful pattern in its tail The color of the peacock in the logo is orange because it represents energy By this logo Aarong communicates that its products are as stunning and as unique as a peacock Moreover it wants to emphasize its natural eco-friendly products through the emblem
023 Aarongrsquos Mission StatementldquoTo make Aarong the best in the world in providing a unique
Bangladeshi lifestyle experience to empower people and promote Bangladesh while protecting our environmentrdquo
024 Vision of the organizationAarong has a vision to establish them as worldrsquos one of the famous fair trade fashion
house and to remain market leader throughout its business Aarong expanded its business in international area Aarong has a dream to develop more artisans of Bangladesh and make them self-dependent and attract more and more international customers towards Bangladeshi culture
025 Purpose of aarongAarong is a fair trade organization dedicated to bringing about positive changes in the lives
of disadvantaged artisans and underprivileged rural women by reviving and promoting their skills and crafts Among the artisans Aarong reaches out to be weavers potters brass workers jewelers jute workers basket weavers wood carvers leather workers and more
026 Goals of AarongAarongs goals include
Empowering destitute rural women by providing opportunities for employment and income generation
Ensuring the commercial success of the enterprise of women producers
Reviving the traditional skills of rural artisans
027 Achievements
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From its inception as a small initiative protecting livelihoods in one rural community Aarong has transformed into Bangladeshs biggest retail chain with 10 stores spread across the major metropolitan cities - Dhaka Chittagong Sylhet and Khulna
While Aarongs trendsetting designs and attention to quality continues to win the loyalty of millions of satisfied customers each year - it has experienced unprecedented sales growth averaging 20 per year over the last eight years - its greatest achievement has been the transformation in the lives of the hundreds of thousands of poor artisans and their families it supports In addition as the most successful social enterprise of development organization BRAC one of the worlds largest development organizations Aarong has contributed more than one billion TK to BRACs various poverty alleviation initiatives since 1984
It was Aarong that institutionalized large-scale female participation in the Bangladeshi retail industry - sales as a career choice for women was popularized by the female Aarong store sales associates
Aarongs contribution to Bangladeshi craft heritage goes beyond its retail functions It is a proactive protector and promoter of traditional craft and designs housing an extensive design and craft library that preserves age old patterns and motifs It single-handedly revived the traditional art of Nakshi Kantha by establishing it as a sustainable livelihood for rural women and also brought back many traditional Jamdani patterns
Aarongs consumption sustains numerous artisan communities in Bangladesh - 75 of cotton produced in Madhabdi the core cotton production area and over 70 of silk produced in Maldaha is consumed by Aarong
In 2009 Aarong received the Best Brand Award in the boutique category and Most Effective Outdoor Communication Award from Brand Forum one of the countries leading authorities on branding and communication A number of Aarong products have also received the UNESCO Seal of Excellence for Handicrafts
028 ServicesbullFree Medical check-up including free eye treatment eye-glasses and treatment costs for
severe illnesses bullAdvance wage payments for employees in need bullDay care services bullWorkers retirement fund
Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong Potters Brass Workers Jewelers Jute workers Basket Weavers Handloom Weavers Silk Weavers Wood Carvers Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services
029 Ayesha Abed Foundation- AAF (Aarong production Centre)
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The Ayesha Abed Foundation (AAF) is an organization that aims to provide avenues for employment and income generation for underprivileged rural women The Foundation provides an appropriate working environment financial and technical assistance and training to develop the womenrsquos skills in various crafts The Foundation was established to commemorate the memory and work of late Mrs Ayesha Abed a co-worker and wife of the Founder and Chairperson of BRAC The work that is done in the Foundation is a testament to her commitment to the issues of education training and employment opportunities for disadvantaged women It was she who in 1976 initiated all the present major activities of AAF in Manikgonj
The AAF aims to work with the most underprivileged women in the society These women are often the most neglected and are in need of much assistance and support The AAF plays the role of a facilitator To support these women Aarong has created 13 production centers in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah and 653 sub Centre spread across in 2000 villages of Bangladesh Today More than 40000 women work directly for Aarong in its production centers The women are placed in an enabling environment with other women of similar socio-economic backgrounds They are trained and then given the opportunity to generate income This is where the AAF steps in helping such marginalized women out of their peripheral existence in society and giving them the opportunity to become involved in sustainable enterprise
The AAF is closely interrelated with other programs especially BRAC Development Program (BDP) and Aarong The women workers of the AAF come from the BDP organized Village Organizations Working at the AAF thus gives the women access to other BRAC programs All of the AAFrsquos finished products are sold through Aarong which additionally provides designs raw materials and financial support to the AAF Since AAF supplies exclusively to Aarong it is treated as Aarong Production Centers
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0210 Organizationrsquos Profile
Organization Name Aarong
Country Territory Bangladesh (London)
Organizationrsquos Head Quarter Aarong Centre (Head Office)
346 Tejgaon IA Dhaka-1208 Tel +880 2 8832139 Fax +880 2 9898267
Email exportaarongbracnet
Year of establishment 1978
Business line A fair trade organization
Produce traditional Bangladeshi products
Number of artisans Over 65000 (85 women)
A fashion show for celebrating 30 years of Aarong
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03 BRAC amp Aarong
The Aarong export and marketing project was jointly organized by MCC and BRAC in 1978 It is now directly handled by BRAC The Bangladesh Rural Advancement Committee is managed entirely by Bangladeshis It is the largest non-governmental development organization in the country BRAC has initiated education projects in one fifth of the countryrsquos 80000 villages and in 2001 they started a university It is also responsible for thousands of health programs numerous agriculture and food production businesses and micro-credit initiatives
Aarong works to empower the poor and strengthen traditional craftsmanship The organization involves over 30000 artisans (85 of whom are women) employed through small community groups They produce an impressive range of products terra cotta silk and cotton textiles clothes leather work brass wood candles basketry and jewellery Aarong operates eight retail stores in Bangladesh which sell about 80 of the crafted items the remainders of products are exported
The women Aarong employs are among the countries most disadvantaged Through Aarong they have been offered a way out of destitution and degradation where before they had none And the benefits that they receive extend well beyond simply the wages they earn for their products since every single woman who works in Aarong-owned production facilities is also a beneficiary of BRACs multifaceted development programs
As a support entity of BRAC a significant portion of Aarongrsquos earnings go directly into financing the NGOrsquos development programs in healthcare education as well as economic and social development
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031 A fair trade organization
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
Spot payment on product delivery to encourage efficiency and productivity Reach out to producers in remote areas to ensure fair value for their efforts
Marketing communication and information for artisans
Advances against purchase orders where necessary
Training amp Education in skills development to raise product quality and marketability
Product Design and Support in Product Development
Quality Control to increase producer awareness of the importance of quality
A fair showroom for Aarong
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations Fair Trade is a trading partnership based on dialogue transparency and respect that seek greater equity in international trade It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers ndash especially in the South (IFAT)
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032 Products and services of AarongHolding the steadfast to its original Mission Aarong today supports the lives and
livelihoods of thousands of rural artisans and handicraft producers These producers and artisans create wide range of products for the different types of consumers in home and abroad The products are unique and traditional and appealing to the modern consumers staring from clothes accessories to home wares Aarong designs and creates clothes for women men and children There are designers and more than 3000 weavers across the country are involved with the production of Aarong clothing lines And for the fashionable accessories there is one special department called jewelry department where jeweler creates elegant jewelries that are contemporary yet traditional using gold silver and jewels like pearl emerald and diamonds The other accessories like bag sandals and produced in AAF centers using leather jute bamboo etc In home ware and decorative Aarong produces pottery vases and sculpture of wood bamboo brass and clay etc
For exporting the products Aarong has a separate department in head office and very selective artisans work here to produce fine quality products and these are sent to the production centers as sample of the exporting products Here is the list of some products Aarong produces
Clothes amp Accessories MENrsquoS PRODUCTS
1 Traditional 2 Executive Shirts 3 Maanja 4 Fotua 5 Short Kurta 6 T‐shirts 7 StolesShawls 8 Sandals
WOMENS PRODUCTS
1 Traditional 2 Western 3 Nightwear 4 ShawlsScarves 5 Shoes 6 Bags
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7 Fabrics
CHILDRENS PRODUCTS
1 Clothes 2 Toys 3 Books 4 Shoes
Jewelry Products
1 Gold 2 Silver 3 Pearl 4 Other
LEATHER PRODUCTS
1 Shoes 2 BagsWallets 3 Belts 4 Boxes 5 Photo Frames
NAKSHI KANTHA PRODUCTS
1 Decorative 2 Wall hangings 3 Christmas decorations
Along with the clothes accessories and home ware Aarong also produces food products like milk flavored milk (mango amp chocolate) juices (mango amp tamarind) yogurt drinks (orange strawberry) curd (sweet amp sour) butter and honey And herbal skincare products like soaps shampoo oil and face pack etc
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36(P
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Home Wares amp Furniture1 Curtain 2 Bed cover amp cushions 3 Rugs 4 Table Lamps 5 Photo
Frames 6 Coasters
7 Napkin Rings
8 Mats 9 Trays
10 Cutlery 11 Bowls and Platters
12 Photo Frames 13 Bookends 14 Boxes 15 Hammocks 16 Plant Accessories 17 Candles
033 Aarong Retail OutletsAarong sales its products through its own outlets Aarong follow zero distribution
channel Around the country Aarong has ten outlets six outlets in Dhaka in six major parts (Dhanmondi Gulshan Uttara Maghbazar Wari and Mirpur) and outside Dhaka Aarong has two
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36(P
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outlets in Chittagong one in Sylhet and one in Khulna And outside Bangladesh Aarong has one shop in London United Kingdom
Aarong Centre (Head Office ) 346 Tejgaon IA Dhaka-1208 Tel +880 2 8832139 Fax +880 2 9898267Email exportaarongbracnet
Aarong at Gulshan Gulshan ndash Tejgaon Link RoadDhaka 1208Tel 8821052 8825986 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong at Maghbazar Aarong Plaza61 Shahid Shangbadik Selina Parveen Sharak MaghbazarDhaka 1217Tel 9334766 9360260 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong at Dhanmondi Aarong Dhanmondi11 Block-A LalmatiaManik Miah AvenueMirpur RoadDhaka-1207 Tel +88-02-8111607Fax +880 2 8828576Email exportaarongbracnet Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong at Uttara Aarong Uttara Jasim Uddin Sector 4Uttara Model TownDhaka 1230Tel 8916097 8914125 ext 501 Operating Hours 1000am ndash 800pmOpen 7 days a week
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Aarong at Wari 361 Rankin Street (1st Floor) WariDhaka 1203Tel 7114244 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong in Halishahar Chittagong House 1 Lane 1 Block LHalishahar ChittagongTel 031-2515644-45 Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong in Sylhet 413 Naya SharakSylhetTel 6017 0821-815988 0821-713150 Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong in Nasirabad Chittagong Golden Plaza (1st Floor)1692 CDA AvenueChittagongTel 031-654030 06074485325 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong in Khulna Plot A43-A44Majeed Sharani AvenueShib BariKhulnaTel 6016 041-730547
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36(P
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Aarong in London
Aarong sell an assortment of own brand formal and casual wear for both men and women in London Although Aarong sell its own products but the show room which in London is little bit different from our local shop Because the demand of the customers of London
69 Vallance RdLondon E1 5BS United Kingdom+44 20 72477727
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36(P
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034 PromotionAs it is in other avenues Aarong is a trendsetter in promotional activities as well Having
been one of the first Bangladeshi brands to use professional models and create sophisticated ad campaigns Aarong continues to set the style and quality standard for promotion by achieving greater levels of class and elegance with each campaign Aarong also selects its promotional mediums carefully to ensure accurate reflection of the brands values Aarongs promotional events - such as its carefully orchestrated fashion shows unique and detailed exhibitions and highly popular sales events ndash have become a significant part of popular culture in urban Bangladesh Aarong also focuses on in-store promotional activities such as its My Aarong Rewards programmed to enhance customer experience
035 Export Terms and Conditions
Beneficiary BRAC66 Mohakhali CA Dhaka 1212BangladeshTel 880-2-9885424 880-2-8824180Fax 880-2-8828576 880-2-8823614
Payment to LC at sight or 50 Advance with order amp 50 before shipment by TT to BRAC Bank Limited1 Gulshan Avenue Gulshan-1 Dhaka-1212 BangladeshTel 880-2-8824501 Fax 880-2-8813543Account 150180010606 Account Name BRAC - Aarong
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Delivery Between 60 to 120 days depending on volume of order on receipt of LC
Port of Dispatch By Air Zia International Airport DhakaBy Sea ICD Dhaka for Full Container Load (FCL) Chittagong for Loose Container Load (LCL)
Packing Fragile items are packed individually in 3 ply carton boxes and master packing in 5 or 7 ply carton boxes Other non-breakable items are packed individually in a ploy bag and master packing in 5 ply carton boxes (2025 kgs in a box)
Freight and Insurance Freight and Insurance to be covered by the importer which varies from port to port
Advance If 50 is paid in advance against the ordered value then the documents will be sent to the importers directly Otherwise the documents will be sent to the bank for collection against Bill of Exchange
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036 MarketA pioneer in the countrys craft industry Aarongs unique product designs have brought
consumer attention back to crafts and materials indigenous to Bangladesh as its designers blend the traditional with the contemporary in a way that continues to win consumer appeal Its success revolutionized trends and virtually created the market that has now been taken up by countless other boutiques and brands Aarong caters to this growing urban consumer base through outlets in every major city in the country Their discerning style and high-quality craftsmanship make every Aarong product unique and demand for them has been consistently rising due to Aarongs focus on innovation quality value-based pricing and superior in-store customer service All these elements backed by a robust distribution network and strong supply chain have made Aarong a true household brand in Bangladesh Just as Bangladeshis living abroad look to Aarong for products that connect them to their heritage the Aarong experience is an essential part of any trip to Bangladesh by foreign visitors ndash a phenomenon chronicled in the Lonely Planet guide to Bangladesh Aarong products are not only the gift items of choice for every occasion for local and expatriate Bangladeshis but also the quintessential cultural mementos for these visitors Aarongs growing presence outside Bangladesh - through fair-trade networks in Europe as well as a retail franchise in London - continues to broaden the market for Bangladeshi craft globally
037 Producers or suppliers Aarong embraces and nurtures a diverse representation of 65000 artisans 85 of whom
are women More than forty thousand of these women work directly for Aarong in its 13 production centrersquos (Foundations) in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah including 653 sub-centers spread across Bangladesh Twenty-five thousand independent co-operative groups and traditional family-based artisans also market their crafts through Aarong Potters brass workers jewelers jute workers basket weavers handloom weavers silk weavers wood carvers leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services The leather workers are various artisans with specialized skills from all over the country
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038 Brand valueAarong stands for a unique mix of design quality and convenience of the traditional and
the contemporary Aarong is one of a kind ndash globally positioned as a highly successful Bangladeshi craft based retail chain and brand of pride It also carries the distinction of being BRACs most successful social enterprise Aarongs responsibility is therefore two fold delivering unique products with the highest level of quality and service to its customers and the strongest level of support and protection of artisans and their craft To its consumers Aarong is a household name - a one-stop shop and a trusted brand that inspires pride promises quality and sophistication and helps to keep cultural roots alive in everyday life For the artisans Aarong represents the endurance of both their age-old art as well as their livelihoods For consumers and artisans alike Aarong has become a part of the cultural fabric of their lives
Those things we didnt know-1 In Bengali Aarong means village fair and Taaga means thread2 Half of the profit from every purchase you make at Aarong goes towards supporting
schools health services and specific interventions targeted to the ultra poor segment by BRAC
3 3 people enter an Aarong outlet every second4 The amount of fabric consumed by Aarong in a year can wrap around Bangladesh 8
times
039 Aarongrsquos Production Centers
1 At Aarong has 8 domestic outlets (5 in Dhaka 1 in Chittagong 1 in Sylhet and 1 in Khulna) 1 franchise in London)
2 Aarong has 13 center and (Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur Pabna Pollobi Kurigram Nilphamary and Jhenaidah)
3 653 sub-centers spread across Bangladesh
4 As well as considerable export operation in many European North American and Asian countries
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0310 Artisans Karim Mias Story
Karim Mia is a bamboo tray and basket producer of Aarong Due to extreme poverty at home Karim Mia stopped his schooling when he was in class 3 and began assisting his father in bamboo crafts weaving Struck by the untimely death of his father Karim Mia at the age of 16 had to find an immediate source of income to run his family of five brothers five sisters and his mother Initially Karim Mia commuted from his home district Tangail (approx 120 km away from Dhaka city) to sell bamboo products at small crafts shops in Dhaka At that time with his meager monthly income of almost $25 he could barely support his family After struggling for almost three years Karim Mia came to Aarong in 1988 to show some of his samples His self-designed samples were immediately chosen and an order was placed for 60 pieces Since then Karim Mia has received constant orders from Aarong for its local as well as export market
As part of its mission to assist producers in product development and technical training Aarong sponsored Karim Mia to attend a bamboo crafts workshop in New Delhi in 2003 The one-week training has helped him to gain better knowledge about bamboo craft His workmanship has also shown remarkable improvement in quality Today Karim Mia supplies exclusively to Aarong and has a steady monthly income of $100-130 On an average he has ten workers working under him During the busy season he employs more than fifty workers
Karim Mia is now married with two sons and a daughter all of whom attend school He hopes that his children will be able to complete their education which he could not because of financial need About two years ago Karim Mia bought 20 decimal lands in Tangail where he constructed his tin-shed home Very recently he has built an extension room that is being used as working space and storage for the bamboo products
Karim Mia feels that Aarongrsquos support during his needy times the continued assistance in product development and design and a steady flow of orders has helped him carve out a dignified existence for himself and his family
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0311 Others Artisans
Holding steadfast to its original mission Aarong today supports the lives and livelihoods of nearly sixty five thousand rural artisans and handicraft producers 85 of who are women More than forty thousand of these women work directly for Aarong in its 13 production centers in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah and 653 subcentres spread across Bangladesh
Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong Potters Brass Workers Jewellers Jute workers Basket Weavers Handloom Weavers Silk Weavers Wood Carvers Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services
04
Make or buy of aarongTraditionally Aarong prefers the make option tended to be favored by ownership of a
large range of manufacturing and subassembly facilities They were largely depends on raw materials which were processed in house Specially buy canrsquot give full perfection Thatrsquos why Aarong prefer make option
Reason for Make Instead of Buy
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There are many special reasons in Aarong to prefer make option instead of buy These include
The quantities are too small Quality requirements may be so exacting or so unusual as to require special processing
methods that suppliers canrsquot be expected to provide Closer coordination of supply with the demand To preserve technological secrets To obtain a lower cost To advantage of or avoid idle equipment or labor To avoid sole source dependency The management of Aarong appears to take pride in size
Dangers Involved in Decision to Manufacture
To manufacture the various types of product of Aarong dangers involve in decision include
They may have lack administrative or technical experience in the production The challenges of maintaining ling term technological and economic viability for a
noncore activity Difficult to determine the costs of the make decision A lack of flexibility in selecting possible sources and substitute items is likely to result
041 Sub contractionThe use of subcontract is perfect when placing orders for work which is difficult to
define take a long time and extremely costly Managing the subcontract is a complex activity which requires knowledge about performance to date as well as ability to anticipate actions needed to ensure the desired end results Thatrsquos why Aarong donrsquot have the subcontracting policy
042 Sources of information about suppliersKnowledge of information source is primary task for this kind of manufacturing agency
Aarong relay solely on their whole experience and past memory The normal principal sources of information consist of catalogs trade journals advertisements suppliers and commodity directories sales interviews annual report etc These are given bellow in brief
Catalogs Aarong have the proper catalog and have the advantage of being a permanent record of whole organization always in the office of the buyer Salespeople are not always
Page
36(P
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available advertisements are frequently forgotten but the catalog is an ever present reminder Two types of catalog are here
Jobbers catalog Contains a variety of manufacturing sources an offer to a certain extent Equipment and machinery catalog Provide information of Specification of location of
supply for replacement parts as well as new equipments of Aarong
Trade journals Trade journals are also valuable sources of information of Aarong as to potential suppliers It is used in two ways
Firstly use is a study of the text adds to the buyerrsquos general information suggests new products and substitute materials
Secondly use has to do with advertising
Trade Directories Trade directories are volumes which list leading manufactures addresses number of branches products supplies equipment and other items offered for sale
Sales Representation In Aarong it is essential to develop good supplier relations which begin with a friendly courteous sympathetic and frank attitude toward the supplier salesperson Aarong have the policies and procedures guidelines concerning the relations between the purchasing office and suppliersrsquo representatives
Suppliers and Commodity file Such files contain information concerning the address of the Aarongrsquos supplier past orders placed with the company data concerning its general fitness reliability suppliers willingness to meet particular requirements of them which product has been purchased in the past price paid point of shipment and cross reference of the supplier file
043 Aarongrsquos Supplier evaluation We know that Aarong is an organization which fully depends on domestic ruler raw
product So the supplier of Aarong will be the ruler people Aarongrsquos supplier evaluation depends on some important factors Those are given below
Existing and Potential Sources The evaluation of suppliers is a continuing purchasing task Aarong does this very carefully They monitored to see if expected performance
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36(P
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materializes with current suppliers New sources need to be screened to see if their potential warrants serous future consideration
Informal and Formal Evaluation Aarongrsquos current supplier is one which has passed through earlier supplier efforts and subsequently received at a minimum one order Most buyer of Aarong tends to separate current suppliers into at least two categories
Informal Evaluation Informal evolution includes assessments of personal contract between Aarong and its supplier in the purchaser section in all function where such contract takes place
044 Aarongrsquos Additional sources and selection consideration
Aarongrsquos additional sources and selection consideration system causes if supplier had been found who could meet all the requirements the search would be over Such it not the case Shall the buyer in buying a given item rely on a single supplier or utilize several Shall the buyer directly buy from manufacturers or through distributors Aarong need quick supply because customer demand is very high and fast Aarong need the product as their expectation In doing so it shall be assumed that adequate investigation for fairness and capacity to meet the requirements as to quality quantity delivery and service and that prices are not unreasonable The product of Aarong is much reasonable then other So Aarong need to maintain this for customer
045 Aarongrsquos supplier rating systemSupplier rating system is very important function for an organization Aarong evaluate
their supplier rating system through some steps Most formal supplier rating schemes attempt to track actual performance over time Thus corrective action can be taken as needed Formal supplier rating schemes track vendor performance on quality price delivery and service It is
Page
36(P
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normal to track a supplierrsquos quality performance very closely and in sufficient deal to enable the pinpointing of corrective action Delivery performance of a current supplier is fairly easily tracked if good records exist of delivery promises and actual recipients and few modifications have been made on an informal basis There is a most effective evaluation system of rating that Aarong follows is weighted point evaluation system
Aarong has different types of supplier that is why this system is successful Particularly in cases where several sources supply the same item Outstanding performance of a supplier can then be rewarded with additional business while poor performance will at the least result in less business or possibly dropping a supplier altogether For different product classes different factors weight and measure should be used to reflect varying impact on the organization
Factor Weight How MeasuredSupplier
Performance past 12 Months
Rating
Quality30 1 defective subtracts
605 defective (30(100-(05 X
6)100=291
Delivery 40 1 day late subtracts 2
Average 5 days late (40(100-(5X2)100=36
Price 20 Lowest price paidPrice charged
$50$55
(20(5055)X100)100=1818
Service10 Goods=100
Fair=70Poor=40
Fair=75 (10X75)100=75
Total Points
100 9078
Aarongrsquos supplier weighted point rating system
046 The Supplier selection decisionThe purchaserrsquos Perception of the supplierrsquos ability in Aarong to meet satisfactory
quality quantity delivery and price and service objectives will govern the selection decision Itrsquos also included their past history facilities and technical strength financial status organization and management reputation systems communication of rural people labor relations and location The nature and the amount of the purchase will influence the selection decision
Page
36(P
OP
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Aarongrsquos supplier selection decision can be seen as decision making under uncertainty and can be represented by a decision tree There are three stage decision trees for supplier selection also In the given figure shows a decision tree of one stage situation with only two suppliers considered and two possible outcomes To use decision tree effectively and assess the probabilities of success and failure This simple tree could apply to a special onetime purchase without expectation of follow on business for some time to come
SolutionSupplier A Supplier BHigh 100 X 30 =3000 High 100 X 28 =2800Medium 70 X 35 =2450 Medium 70 X 40 =2800Low 40 X 40 =1600 Low 40 X 30 =1200
=7000 =6800So Aarong will choose supplier B
047 Consumer buyer behavior CONSUMER DECISION PROCESS MODEL
Aarong is the most leading fashionable organization in Bangladesh Aarong is always looking towards its consumer perceptions It always creates a different look and patterns in their product This is the main reason to attract consumer The process component of the consumer decision making process deals with how consumers make decisions The product consumer have
Price $30 per unit
Price $35 per unit
Price $40 per unit
Price $28 per unit
Price $40 per unit
Price $30 per unit
On demand high 100 units
On demand medium 70 units
On demand low 40 units
On demand high 100 units
On demand medium 70 units
On demand low 40 units
Supplier
A
Supplier
B
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36(P
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selected to buy and in order to understand how a consumer makes these decisions in the process component we need to look at the psychological field of the process model which are the internal influences of motivation perception learning personality amp attitude and how these influences affect the decision making process Aarong the act of making a consumer decision consists of three stages which are need recognition pre-purchase search amp evaluation of alternatives
Need Recognition Need recognition occurs when a consumer is faced with a problem There are many different reasons why someone would decide that they need to buy the product from Aarong It might be necessary of any product as well as fashionable one
Pre-purchase Search Pre-purchase search is very important for consumer At first they search their desirable product in the market After that they decide from where they buy their product When they think about perfection and fissionable thing they must go through Aarong
Evaluation of Alternative This means to evaluate the alternative brands of that product From that evaluation consumer select their product according their perception Aarong have the ability to fulfill their perception That is the quality of Aarong
048 Purchase-supplier relationsWhen one organization supplies another with goods or services the nature of the
relationship between the two organizations is a major influence on the ultimate value and customer satisfaction achievable Aarong maintain a good relationship with their supplier They maintain the relationship very sincerely Aarong deals with their supplier several times All times they maintain their formalities Good relations with supplier are very important for their supply system If the relation is well the supplier supply product as their requirement In this section the nature of supplier goodwill will be discussed along with the framework for buyer-seller satisfaction the qualifications of good and preferred suppliers partnerships and strategic alliances
049 Aarongrsquos Purchase-supplier satisfaction modelAarong is a fair trade organization Aarong always try to satisfy their selected supplier
One of the major assessments a purchaser must make is whether the current relationship with a supplier is satisfactory or not This relationship is highly complex and different people inside the
Page
36(P
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purchasing organization may have different perceptions of it Aarong follow a supplier satisfaction model This model includes some assumptions Those are
I That satisfaction with a current supplier relationship can be assessed however crudely at least in macro terms whether it is satisfactory or not
II That an unsatisfied party will attempt to move to a more satisfactory situationIII That attempts to move may fall in the win and lose as well as the lose and lose lose and
win and win and win categoryIV That attempts to move may affect the stability of the relationshipV That purchaser and seller may well have different perceptions of the same relationship
VI That many tools techniques and approaches exists which will assist either party in moving position and improving stability
0410 Aarongrsquos Reverse supplier developmentIn supplier selection it has so far been assured that at least one suitable and willing
supplier already exists and that the purchaserrsquos problems are primarily one of determining who
C
D B
A
Purchaser dissatisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier dissatisfied
Purchaser satisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier satisfied
Total Dissatisfaction
Marginal satisfaction
Complete satisfaction
Marginal satisfaction
Complete satisfaction
Supplierrsquos Satisfaction
Purchaserrsquos Satisfaction
Page
36(P
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the best supplier is In this case Aarong is very serious about their supplierrsquos development After selecting the best supplier they give better training for their future development We know that Aarong highly depends on rural suppliers Reverse marketing supplier development implies a degree of aggressive procurement involvement not normally encountered in supplier selection
Reverse supplier development should take a broader point of view It defines the need for developing new or existing suppliers as follows The purchase is aware that benefits will accrue to both the supplier and the purchaser benefits of which the supplier may not be aware
Aarongrsquos Supplier Development Context
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
bull Spot payment on product delivery to encourage efficiency and productivity bull Reach out to producers in remote areas to ensure fair value for their efforts bull Marketing communication and information for artisans bull Advances against purchase orders where necessary bull Training amp Education in skills development to raise product quality and marketability bull Product Design and Support in Product Development bull Quality Control to increase producer awareness of the importance of quality
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers in Bangladesh
0411 Aarongrsquos Management and Financial Evaluation
Aarongrsquos management and financial evaluation tends toward greater reliance on single sources for a longer time continuous along with great interest in material requirement and just in
Supplier Purchaser
Purchasing initiative
Sales response
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time production potential suppliers management strength takes on added significance This will require a detailed examination of Aarongrsquos structure qualifications of managers management control the reward-punishment system training and development system and policies and procedures It is also useful to have an explanation as to why the supplierrsquos manager believes it is managing well and an indication of its most notable successes and failures An evaluation of this supplierrsquos procurement system organization procedures and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract
0412 BenefitsEvery single woman who works in Aarong-owned production facilities is also a beneficiary
of BRACs (Bangladesh Rural Advancement Committee) multifaceted development programs As a support entity of BRAC a significant portion of Aarongs earnings go directly into financing the NGOs (non-governmental organization) development programs in healthcare and education as well as economic and social development Specific benefits for producers include
Free medical check-ups including free eye treatment eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workerrsquos retirement fund
Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible
Further AARONG also assists with design and development market information and quality control and provides advances against purchase orders as well as spot payment on product delivery to encourage further production
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0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
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05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
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052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
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36(P
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Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
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36(P
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053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
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36(P
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054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
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36(P
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055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
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36(P
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056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
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021 History
1978-Aarong opened its first retail outlet in Dhaka
1982-Established the Ayesha Abed Foundation a network of production centers aimed at
supporting rural artisans
1983 -Opened its first retail outlet in Chittagong
1985-Opened its first retail outlet in Sylhet
1987-Entered into the export market
1995-Opened its first retail outlet in Khulna
1999-Participated in its first international fashion show
2001-Launched a retail franchise in London
2003-Launched its sub-brand Taaga range of womens western wear fused with traditional
elements of Bangladesh
2008-Celebrated Aarongs 30th Anniversary with an Exhibition Series and gala Fashion Show
2010-Opened its flagship outlet in Dhaka
2011-They opened the biggest showrooms at Uttara in Bangladesh (25th march 2011)
022 Logo
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36(P
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The logo of Aarong is an image of peacock It is spectacularly beautiful because of the brilliant iridescent diversified colorful pattern in its tail The color of the peacock in the logo is orange because it represents energy By this logo Aarong communicates that its products are as stunning and as unique as a peacock Moreover it wants to emphasize its natural eco-friendly products through the emblem
023 Aarongrsquos Mission StatementldquoTo make Aarong the best in the world in providing a unique
Bangladeshi lifestyle experience to empower people and promote Bangladesh while protecting our environmentrdquo
024 Vision of the organizationAarong has a vision to establish them as worldrsquos one of the famous fair trade fashion
house and to remain market leader throughout its business Aarong expanded its business in international area Aarong has a dream to develop more artisans of Bangladesh and make them self-dependent and attract more and more international customers towards Bangladeshi culture
025 Purpose of aarongAarong is a fair trade organization dedicated to bringing about positive changes in the lives
of disadvantaged artisans and underprivileged rural women by reviving and promoting their skills and crafts Among the artisans Aarong reaches out to be weavers potters brass workers jewelers jute workers basket weavers wood carvers leather workers and more
026 Goals of AarongAarongs goals include
Empowering destitute rural women by providing opportunities for employment and income generation
Ensuring the commercial success of the enterprise of women producers
Reviving the traditional skills of rural artisans
027 Achievements
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36(P
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From its inception as a small initiative protecting livelihoods in one rural community Aarong has transformed into Bangladeshs biggest retail chain with 10 stores spread across the major metropolitan cities - Dhaka Chittagong Sylhet and Khulna
While Aarongs trendsetting designs and attention to quality continues to win the loyalty of millions of satisfied customers each year - it has experienced unprecedented sales growth averaging 20 per year over the last eight years - its greatest achievement has been the transformation in the lives of the hundreds of thousands of poor artisans and their families it supports In addition as the most successful social enterprise of development organization BRAC one of the worlds largest development organizations Aarong has contributed more than one billion TK to BRACs various poverty alleviation initiatives since 1984
It was Aarong that institutionalized large-scale female participation in the Bangladeshi retail industry - sales as a career choice for women was popularized by the female Aarong store sales associates
Aarongs contribution to Bangladeshi craft heritage goes beyond its retail functions It is a proactive protector and promoter of traditional craft and designs housing an extensive design and craft library that preserves age old patterns and motifs It single-handedly revived the traditional art of Nakshi Kantha by establishing it as a sustainable livelihood for rural women and also brought back many traditional Jamdani patterns
Aarongs consumption sustains numerous artisan communities in Bangladesh - 75 of cotton produced in Madhabdi the core cotton production area and over 70 of silk produced in Maldaha is consumed by Aarong
In 2009 Aarong received the Best Brand Award in the boutique category and Most Effective Outdoor Communication Award from Brand Forum one of the countries leading authorities on branding and communication A number of Aarong products have also received the UNESCO Seal of Excellence for Handicrafts
028 ServicesbullFree Medical check-up including free eye treatment eye-glasses and treatment costs for
severe illnesses bullAdvance wage payments for employees in need bullDay care services bullWorkers retirement fund
Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong Potters Brass Workers Jewelers Jute workers Basket Weavers Handloom Weavers Silk Weavers Wood Carvers Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services
029 Ayesha Abed Foundation- AAF (Aarong production Centre)
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36(P
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The Ayesha Abed Foundation (AAF) is an organization that aims to provide avenues for employment and income generation for underprivileged rural women The Foundation provides an appropriate working environment financial and technical assistance and training to develop the womenrsquos skills in various crafts The Foundation was established to commemorate the memory and work of late Mrs Ayesha Abed a co-worker and wife of the Founder and Chairperson of BRAC The work that is done in the Foundation is a testament to her commitment to the issues of education training and employment opportunities for disadvantaged women It was she who in 1976 initiated all the present major activities of AAF in Manikgonj
The AAF aims to work with the most underprivileged women in the society These women are often the most neglected and are in need of much assistance and support The AAF plays the role of a facilitator To support these women Aarong has created 13 production centers in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah and 653 sub Centre spread across in 2000 villages of Bangladesh Today More than 40000 women work directly for Aarong in its production centers The women are placed in an enabling environment with other women of similar socio-economic backgrounds They are trained and then given the opportunity to generate income This is where the AAF steps in helping such marginalized women out of their peripheral existence in society and giving them the opportunity to become involved in sustainable enterprise
The AAF is closely interrelated with other programs especially BRAC Development Program (BDP) and Aarong The women workers of the AAF come from the BDP organized Village Organizations Working at the AAF thus gives the women access to other BRAC programs All of the AAFrsquos finished products are sold through Aarong which additionally provides designs raw materials and financial support to the AAF Since AAF supplies exclusively to Aarong it is treated as Aarong Production Centers
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36(P
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0210 Organizationrsquos Profile
Organization Name Aarong
Country Territory Bangladesh (London)
Organizationrsquos Head Quarter Aarong Centre (Head Office)
346 Tejgaon IA Dhaka-1208 Tel +880 2 8832139 Fax +880 2 9898267
Email exportaarongbracnet
Year of establishment 1978
Business line A fair trade organization
Produce traditional Bangladeshi products
Number of artisans Over 65000 (85 women)
A fashion show for celebrating 30 years of Aarong
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36(P
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03 BRAC amp Aarong
The Aarong export and marketing project was jointly organized by MCC and BRAC in 1978 It is now directly handled by BRAC The Bangladesh Rural Advancement Committee is managed entirely by Bangladeshis It is the largest non-governmental development organization in the country BRAC has initiated education projects in one fifth of the countryrsquos 80000 villages and in 2001 they started a university It is also responsible for thousands of health programs numerous agriculture and food production businesses and micro-credit initiatives
Aarong works to empower the poor and strengthen traditional craftsmanship The organization involves over 30000 artisans (85 of whom are women) employed through small community groups They produce an impressive range of products terra cotta silk and cotton textiles clothes leather work brass wood candles basketry and jewellery Aarong operates eight retail stores in Bangladesh which sell about 80 of the crafted items the remainders of products are exported
The women Aarong employs are among the countries most disadvantaged Through Aarong they have been offered a way out of destitution and degradation where before they had none And the benefits that they receive extend well beyond simply the wages they earn for their products since every single woman who works in Aarong-owned production facilities is also a beneficiary of BRACs multifaceted development programs
As a support entity of BRAC a significant portion of Aarongrsquos earnings go directly into financing the NGOrsquos development programs in healthcare education as well as economic and social development
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36(P
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031 A fair trade organization
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
Spot payment on product delivery to encourage efficiency and productivity Reach out to producers in remote areas to ensure fair value for their efforts
Marketing communication and information for artisans
Advances against purchase orders where necessary
Training amp Education in skills development to raise product quality and marketability
Product Design and Support in Product Development
Quality Control to increase producer awareness of the importance of quality
A fair showroom for Aarong
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations Fair Trade is a trading partnership based on dialogue transparency and respect that seek greater equity in international trade It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers ndash especially in the South (IFAT)
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36(P
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032 Products and services of AarongHolding the steadfast to its original Mission Aarong today supports the lives and
livelihoods of thousands of rural artisans and handicraft producers These producers and artisans create wide range of products for the different types of consumers in home and abroad The products are unique and traditional and appealing to the modern consumers staring from clothes accessories to home wares Aarong designs and creates clothes for women men and children There are designers and more than 3000 weavers across the country are involved with the production of Aarong clothing lines And for the fashionable accessories there is one special department called jewelry department where jeweler creates elegant jewelries that are contemporary yet traditional using gold silver and jewels like pearl emerald and diamonds The other accessories like bag sandals and produced in AAF centers using leather jute bamboo etc In home ware and decorative Aarong produces pottery vases and sculpture of wood bamboo brass and clay etc
For exporting the products Aarong has a separate department in head office and very selective artisans work here to produce fine quality products and these are sent to the production centers as sample of the exporting products Here is the list of some products Aarong produces
Clothes amp Accessories MENrsquoS PRODUCTS
1 Traditional 2 Executive Shirts 3 Maanja 4 Fotua 5 Short Kurta 6 T‐shirts 7 StolesShawls 8 Sandals
WOMENS PRODUCTS
1 Traditional 2 Western 3 Nightwear 4 ShawlsScarves 5 Shoes 6 Bags
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36(P
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7 Fabrics
CHILDRENS PRODUCTS
1 Clothes 2 Toys 3 Books 4 Shoes
Jewelry Products
1 Gold 2 Silver 3 Pearl 4 Other
LEATHER PRODUCTS
1 Shoes 2 BagsWallets 3 Belts 4 Boxes 5 Photo Frames
NAKSHI KANTHA PRODUCTS
1 Decorative 2 Wall hangings 3 Christmas decorations
Along with the clothes accessories and home ware Aarong also produces food products like milk flavored milk (mango amp chocolate) juices (mango amp tamarind) yogurt drinks (orange strawberry) curd (sweet amp sour) butter and honey And herbal skincare products like soaps shampoo oil and face pack etc
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36(P
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Home Wares amp Furniture1 Curtain 2 Bed cover amp cushions 3 Rugs 4 Table Lamps 5 Photo
Frames 6 Coasters
7 Napkin Rings
8 Mats 9 Trays
10 Cutlery 11 Bowls and Platters
12 Photo Frames 13 Bookends 14 Boxes 15 Hammocks 16 Plant Accessories 17 Candles
033 Aarong Retail OutletsAarong sales its products through its own outlets Aarong follow zero distribution
channel Around the country Aarong has ten outlets six outlets in Dhaka in six major parts (Dhanmondi Gulshan Uttara Maghbazar Wari and Mirpur) and outside Dhaka Aarong has two
Page
36(P
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outlets in Chittagong one in Sylhet and one in Khulna And outside Bangladesh Aarong has one shop in London United Kingdom
Aarong Centre (Head Office ) 346 Tejgaon IA Dhaka-1208 Tel +880 2 8832139 Fax +880 2 9898267Email exportaarongbracnet
Aarong at Gulshan Gulshan ndash Tejgaon Link RoadDhaka 1208Tel 8821052 8825986 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong at Maghbazar Aarong Plaza61 Shahid Shangbadik Selina Parveen Sharak MaghbazarDhaka 1217Tel 9334766 9360260 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong at Dhanmondi Aarong Dhanmondi11 Block-A LalmatiaManik Miah AvenueMirpur RoadDhaka-1207 Tel +88-02-8111607Fax +880 2 8828576Email exportaarongbracnet Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong at Uttara Aarong Uttara Jasim Uddin Sector 4Uttara Model TownDhaka 1230Tel 8916097 8914125 ext 501 Operating Hours 1000am ndash 800pmOpen 7 days a week
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Aarong at Wari 361 Rankin Street (1st Floor) WariDhaka 1203Tel 7114244 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong in Halishahar Chittagong House 1 Lane 1 Block LHalishahar ChittagongTel 031-2515644-45 Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong in Sylhet 413 Naya SharakSylhetTel 6017 0821-815988 0821-713150 Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong in Nasirabad Chittagong Golden Plaza (1st Floor)1692 CDA AvenueChittagongTel 031-654030 06074485325 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong in Khulna Plot A43-A44Majeed Sharani AvenueShib BariKhulnaTel 6016 041-730547
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36(P
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Aarong in London
Aarong sell an assortment of own brand formal and casual wear for both men and women in London Although Aarong sell its own products but the show room which in London is little bit different from our local shop Because the demand of the customers of London
69 Vallance RdLondon E1 5BS United Kingdom+44 20 72477727
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034 PromotionAs it is in other avenues Aarong is a trendsetter in promotional activities as well Having
been one of the first Bangladeshi brands to use professional models and create sophisticated ad campaigns Aarong continues to set the style and quality standard for promotion by achieving greater levels of class and elegance with each campaign Aarong also selects its promotional mediums carefully to ensure accurate reflection of the brands values Aarongs promotional events - such as its carefully orchestrated fashion shows unique and detailed exhibitions and highly popular sales events ndash have become a significant part of popular culture in urban Bangladesh Aarong also focuses on in-store promotional activities such as its My Aarong Rewards programmed to enhance customer experience
035 Export Terms and Conditions
Beneficiary BRAC66 Mohakhali CA Dhaka 1212BangladeshTel 880-2-9885424 880-2-8824180Fax 880-2-8828576 880-2-8823614
Payment to LC at sight or 50 Advance with order amp 50 before shipment by TT to BRAC Bank Limited1 Gulshan Avenue Gulshan-1 Dhaka-1212 BangladeshTel 880-2-8824501 Fax 880-2-8813543Account 150180010606 Account Name BRAC - Aarong
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Delivery Between 60 to 120 days depending on volume of order on receipt of LC
Port of Dispatch By Air Zia International Airport DhakaBy Sea ICD Dhaka for Full Container Load (FCL) Chittagong for Loose Container Load (LCL)
Packing Fragile items are packed individually in 3 ply carton boxes and master packing in 5 or 7 ply carton boxes Other non-breakable items are packed individually in a ploy bag and master packing in 5 ply carton boxes (2025 kgs in a box)
Freight and Insurance Freight and Insurance to be covered by the importer which varies from port to port
Advance If 50 is paid in advance against the ordered value then the documents will be sent to the importers directly Otherwise the documents will be sent to the bank for collection against Bill of Exchange
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036 MarketA pioneer in the countrys craft industry Aarongs unique product designs have brought
consumer attention back to crafts and materials indigenous to Bangladesh as its designers blend the traditional with the contemporary in a way that continues to win consumer appeal Its success revolutionized trends and virtually created the market that has now been taken up by countless other boutiques and brands Aarong caters to this growing urban consumer base through outlets in every major city in the country Their discerning style and high-quality craftsmanship make every Aarong product unique and demand for them has been consistently rising due to Aarongs focus on innovation quality value-based pricing and superior in-store customer service All these elements backed by a robust distribution network and strong supply chain have made Aarong a true household brand in Bangladesh Just as Bangladeshis living abroad look to Aarong for products that connect them to their heritage the Aarong experience is an essential part of any trip to Bangladesh by foreign visitors ndash a phenomenon chronicled in the Lonely Planet guide to Bangladesh Aarong products are not only the gift items of choice for every occasion for local and expatriate Bangladeshis but also the quintessential cultural mementos for these visitors Aarongs growing presence outside Bangladesh - through fair-trade networks in Europe as well as a retail franchise in London - continues to broaden the market for Bangladeshi craft globally
037 Producers or suppliers Aarong embraces and nurtures a diverse representation of 65000 artisans 85 of whom
are women More than forty thousand of these women work directly for Aarong in its 13 production centrersquos (Foundations) in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah including 653 sub-centers spread across Bangladesh Twenty-five thousand independent co-operative groups and traditional family-based artisans also market their crafts through Aarong Potters brass workers jewelers jute workers basket weavers handloom weavers silk weavers wood carvers leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services The leather workers are various artisans with specialized skills from all over the country
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038 Brand valueAarong stands for a unique mix of design quality and convenience of the traditional and
the contemporary Aarong is one of a kind ndash globally positioned as a highly successful Bangladeshi craft based retail chain and brand of pride It also carries the distinction of being BRACs most successful social enterprise Aarongs responsibility is therefore two fold delivering unique products with the highest level of quality and service to its customers and the strongest level of support and protection of artisans and their craft To its consumers Aarong is a household name - a one-stop shop and a trusted brand that inspires pride promises quality and sophistication and helps to keep cultural roots alive in everyday life For the artisans Aarong represents the endurance of both their age-old art as well as their livelihoods For consumers and artisans alike Aarong has become a part of the cultural fabric of their lives
Those things we didnt know-1 In Bengali Aarong means village fair and Taaga means thread2 Half of the profit from every purchase you make at Aarong goes towards supporting
schools health services and specific interventions targeted to the ultra poor segment by BRAC
3 3 people enter an Aarong outlet every second4 The amount of fabric consumed by Aarong in a year can wrap around Bangladesh 8
times
039 Aarongrsquos Production Centers
1 At Aarong has 8 domestic outlets (5 in Dhaka 1 in Chittagong 1 in Sylhet and 1 in Khulna) 1 franchise in London)
2 Aarong has 13 center and (Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur Pabna Pollobi Kurigram Nilphamary and Jhenaidah)
3 653 sub-centers spread across Bangladesh
4 As well as considerable export operation in many European North American and Asian countries
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0310 Artisans Karim Mias Story
Karim Mia is a bamboo tray and basket producer of Aarong Due to extreme poverty at home Karim Mia stopped his schooling when he was in class 3 and began assisting his father in bamboo crafts weaving Struck by the untimely death of his father Karim Mia at the age of 16 had to find an immediate source of income to run his family of five brothers five sisters and his mother Initially Karim Mia commuted from his home district Tangail (approx 120 km away from Dhaka city) to sell bamboo products at small crafts shops in Dhaka At that time with his meager monthly income of almost $25 he could barely support his family After struggling for almost three years Karim Mia came to Aarong in 1988 to show some of his samples His self-designed samples were immediately chosen and an order was placed for 60 pieces Since then Karim Mia has received constant orders from Aarong for its local as well as export market
As part of its mission to assist producers in product development and technical training Aarong sponsored Karim Mia to attend a bamboo crafts workshop in New Delhi in 2003 The one-week training has helped him to gain better knowledge about bamboo craft His workmanship has also shown remarkable improvement in quality Today Karim Mia supplies exclusively to Aarong and has a steady monthly income of $100-130 On an average he has ten workers working under him During the busy season he employs more than fifty workers
Karim Mia is now married with two sons and a daughter all of whom attend school He hopes that his children will be able to complete their education which he could not because of financial need About two years ago Karim Mia bought 20 decimal lands in Tangail where he constructed his tin-shed home Very recently he has built an extension room that is being used as working space and storage for the bamboo products
Karim Mia feels that Aarongrsquos support during his needy times the continued assistance in product development and design and a steady flow of orders has helped him carve out a dignified existence for himself and his family
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36(P
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0311 Others Artisans
Holding steadfast to its original mission Aarong today supports the lives and livelihoods of nearly sixty five thousand rural artisans and handicraft producers 85 of who are women More than forty thousand of these women work directly for Aarong in its 13 production centers in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah and 653 subcentres spread across Bangladesh
Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong Potters Brass Workers Jewellers Jute workers Basket Weavers Handloom Weavers Silk Weavers Wood Carvers Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services
04
Make or buy of aarongTraditionally Aarong prefers the make option tended to be favored by ownership of a
large range of manufacturing and subassembly facilities They were largely depends on raw materials which were processed in house Specially buy canrsquot give full perfection Thatrsquos why Aarong prefer make option
Reason for Make Instead of Buy
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36(P
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There are many special reasons in Aarong to prefer make option instead of buy These include
The quantities are too small Quality requirements may be so exacting or so unusual as to require special processing
methods that suppliers canrsquot be expected to provide Closer coordination of supply with the demand To preserve technological secrets To obtain a lower cost To advantage of or avoid idle equipment or labor To avoid sole source dependency The management of Aarong appears to take pride in size
Dangers Involved in Decision to Manufacture
To manufacture the various types of product of Aarong dangers involve in decision include
They may have lack administrative or technical experience in the production The challenges of maintaining ling term technological and economic viability for a
noncore activity Difficult to determine the costs of the make decision A lack of flexibility in selecting possible sources and substitute items is likely to result
041 Sub contractionThe use of subcontract is perfect when placing orders for work which is difficult to
define take a long time and extremely costly Managing the subcontract is a complex activity which requires knowledge about performance to date as well as ability to anticipate actions needed to ensure the desired end results Thatrsquos why Aarong donrsquot have the subcontracting policy
042 Sources of information about suppliersKnowledge of information source is primary task for this kind of manufacturing agency
Aarong relay solely on their whole experience and past memory The normal principal sources of information consist of catalogs trade journals advertisements suppliers and commodity directories sales interviews annual report etc These are given bellow in brief
Catalogs Aarong have the proper catalog and have the advantage of being a permanent record of whole organization always in the office of the buyer Salespeople are not always
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36(P
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available advertisements are frequently forgotten but the catalog is an ever present reminder Two types of catalog are here
Jobbers catalog Contains a variety of manufacturing sources an offer to a certain extent Equipment and machinery catalog Provide information of Specification of location of
supply for replacement parts as well as new equipments of Aarong
Trade journals Trade journals are also valuable sources of information of Aarong as to potential suppliers It is used in two ways
Firstly use is a study of the text adds to the buyerrsquos general information suggests new products and substitute materials
Secondly use has to do with advertising
Trade Directories Trade directories are volumes which list leading manufactures addresses number of branches products supplies equipment and other items offered for sale
Sales Representation In Aarong it is essential to develop good supplier relations which begin with a friendly courteous sympathetic and frank attitude toward the supplier salesperson Aarong have the policies and procedures guidelines concerning the relations between the purchasing office and suppliersrsquo representatives
Suppliers and Commodity file Such files contain information concerning the address of the Aarongrsquos supplier past orders placed with the company data concerning its general fitness reliability suppliers willingness to meet particular requirements of them which product has been purchased in the past price paid point of shipment and cross reference of the supplier file
043 Aarongrsquos Supplier evaluation We know that Aarong is an organization which fully depends on domestic ruler raw
product So the supplier of Aarong will be the ruler people Aarongrsquos supplier evaluation depends on some important factors Those are given below
Existing and Potential Sources The evaluation of suppliers is a continuing purchasing task Aarong does this very carefully They monitored to see if expected performance
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36(P
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materializes with current suppliers New sources need to be screened to see if their potential warrants serous future consideration
Informal and Formal Evaluation Aarongrsquos current supplier is one which has passed through earlier supplier efforts and subsequently received at a minimum one order Most buyer of Aarong tends to separate current suppliers into at least two categories
Informal Evaluation Informal evolution includes assessments of personal contract between Aarong and its supplier in the purchaser section in all function where such contract takes place
044 Aarongrsquos Additional sources and selection consideration
Aarongrsquos additional sources and selection consideration system causes if supplier had been found who could meet all the requirements the search would be over Such it not the case Shall the buyer in buying a given item rely on a single supplier or utilize several Shall the buyer directly buy from manufacturers or through distributors Aarong need quick supply because customer demand is very high and fast Aarong need the product as their expectation In doing so it shall be assumed that adequate investigation for fairness and capacity to meet the requirements as to quality quantity delivery and service and that prices are not unreasonable The product of Aarong is much reasonable then other So Aarong need to maintain this for customer
045 Aarongrsquos supplier rating systemSupplier rating system is very important function for an organization Aarong evaluate
their supplier rating system through some steps Most formal supplier rating schemes attempt to track actual performance over time Thus corrective action can be taken as needed Formal supplier rating schemes track vendor performance on quality price delivery and service It is
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36(P
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normal to track a supplierrsquos quality performance very closely and in sufficient deal to enable the pinpointing of corrective action Delivery performance of a current supplier is fairly easily tracked if good records exist of delivery promises and actual recipients and few modifications have been made on an informal basis There is a most effective evaluation system of rating that Aarong follows is weighted point evaluation system
Aarong has different types of supplier that is why this system is successful Particularly in cases where several sources supply the same item Outstanding performance of a supplier can then be rewarded with additional business while poor performance will at the least result in less business or possibly dropping a supplier altogether For different product classes different factors weight and measure should be used to reflect varying impact on the organization
Factor Weight How MeasuredSupplier
Performance past 12 Months
Rating
Quality30 1 defective subtracts
605 defective (30(100-(05 X
6)100=291
Delivery 40 1 day late subtracts 2
Average 5 days late (40(100-(5X2)100=36
Price 20 Lowest price paidPrice charged
$50$55
(20(5055)X100)100=1818
Service10 Goods=100
Fair=70Poor=40
Fair=75 (10X75)100=75
Total Points
100 9078
Aarongrsquos supplier weighted point rating system
046 The Supplier selection decisionThe purchaserrsquos Perception of the supplierrsquos ability in Aarong to meet satisfactory
quality quantity delivery and price and service objectives will govern the selection decision Itrsquos also included their past history facilities and technical strength financial status organization and management reputation systems communication of rural people labor relations and location The nature and the amount of the purchase will influence the selection decision
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36(P
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Aarongrsquos supplier selection decision can be seen as decision making under uncertainty and can be represented by a decision tree There are three stage decision trees for supplier selection also In the given figure shows a decision tree of one stage situation with only two suppliers considered and two possible outcomes To use decision tree effectively and assess the probabilities of success and failure This simple tree could apply to a special onetime purchase without expectation of follow on business for some time to come
SolutionSupplier A Supplier BHigh 100 X 30 =3000 High 100 X 28 =2800Medium 70 X 35 =2450 Medium 70 X 40 =2800Low 40 X 40 =1600 Low 40 X 30 =1200
=7000 =6800So Aarong will choose supplier B
047 Consumer buyer behavior CONSUMER DECISION PROCESS MODEL
Aarong is the most leading fashionable organization in Bangladesh Aarong is always looking towards its consumer perceptions It always creates a different look and patterns in their product This is the main reason to attract consumer The process component of the consumer decision making process deals with how consumers make decisions The product consumer have
Price $30 per unit
Price $35 per unit
Price $40 per unit
Price $28 per unit
Price $40 per unit
Price $30 per unit
On demand high 100 units
On demand medium 70 units
On demand low 40 units
On demand high 100 units
On demand medium 70 units
On demand low 40 units
Supplier
A
Supplier
B
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36(P
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selected to buy and in order to understand how a consumer makes these decisions in the process component we need to look at the psychological field of the process model which are the internal influences of motivation perception learning personality amp attitude and how these influences affect the decision making process Aarong the act of making a consumer decision consists of three stages which are need recognition pre-purchase search amp evaluation of alternatives
Need Recognition Need recognition occurs when a consumer is faced with a problem There are many different reasons why someone would decide that they need to buy the product from Aarong It might be necessary of any product as well as fashionable one
Pre-purchase Search Pre-purchase search is very important for consumer At first they search their desirable product in the market After that they decide from where they buy their product When they think about perfection and fissionable thing they must go through Aarong
Evaluation of Alternative This means to evaluate the alternative brands of that product From that evaluation consumer select their product according their perception Aarong have the ability to fulfill their perception That is the quality of Aarong
048 Purchase-supplier relationsWhen one organization supplies another with goods or services the nature of the
relationship between the two organizations is a major influence on the ultimate value and customer satisfaction achievable Aarong maintain a good relationship with their supplier They maintain the relationship very sincerely Aarong deals with their supplier several times All times they maintain their formalities Good relations with supplier are very important for their supply system If the relation is well the supplier supply product as their requirement In this section the nature of supplier goodwill will be discussed along with the framework for buyer-seller satisfaction the qualifications of good and preferred suppliers partnerships and strategic alliances
049 Aarongrsquos Purchase-supplier satisfaction modelAarong is a fair trade organization Aarong always try to satisfy their selected supplier
One of the major assessments a purchaser must make is whether the current relationship with a supplier is satisfactory or not This relationship is highly complex and different people inside the
Page
36(P
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purchasing organization may have different perceptions of it Aarong follow a supplier satisfaction model This model includes some assumptions Those are
I That satisfaction with a current supplier relationship can be assessed however crudely at least in macro terms whether it is satisfactory or not
II That an unsatisfied party will attempt to move to a more satisfactory situationIII That attempts to move may fall in the win and lose as well as the lose and lose lose and
win and win and win categoryIV That attempts to move may affect the stability of the relationshipV That purchaser and seller may well have different perceptions of the same relationship
VI That many tools techniques and approaches exists which will assist either party in moving position and improving stability
0410 Aarongrsquos Reverse supplier developmentIn supplier selection it has so far been assured that at least one suitable and willing
supplier already exists and that the purchaserrsquos problems are primarily one of determining who
C
D B
A
Purchaser dissatisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier dissatisfied
Purchaser satisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier satisfied
Total Dissatisfaction
Marginal satisfaction
Complete satisfaction
Marginal satisfaction
Complete satisfaction
Supplierrsquos Satisfaction
Purchaserrsquos Satisfaction
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36(P
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the best supplier is In this case Aarong is very serious about their supplierrsquos development After selecting the best supplier they give better training for their future development We know that Aarong highly depends on rural suppliers Reverse marketing supplier development implies a degree of aggressive procurement involvement not normally encountered in supplier selection
Reverse supplier development should take a broader point of view It defines the need for developing new or existing suppliers as follows The purchase is aware that benefits will accrue to both the supplier and the purchaser benefits of which the supplier may not be aware
Aarongrsquos Supplier Development Context
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
bull Spot payment on product delivery to encourage efficiency and productivity bull Reach out to producers in remote areas to ensure fair value for their efforts bull Marketing communication and information for artisans bull Advances against purchase orders where necessary bull Training amp Education in skills development to raise product quality and marketability bull Product Design and Support in Product Development bull Quality Control to increase producer awareness of the importance of quality
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers in Bangladesh
0411 Aarongrsquos Management and Financial Evaluation
Aarongrsquos management and financial evaluation tends toward greater reliance on single sources for a longer time continuous along with great interest in material requirement and just in
Supplier Purchaser
Purchasing initiative
Sales response
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36(P
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time production potential suppliers management strength takes on added significance This will require a detailed examination of Aarongrsquos structure qualifications of managers management control the reward-punishment system training and development system and policies and procedures It is also useful to have an explanation as to why the supplierrsquos manager believes it is managing well and an indication of its most notable successes and failures An evaluation of this supplierrsquos procurement system organization procedures and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract
0412 BenefitsEvery single woman who works in Aarong-owned production facilities is also a beneficiary
of BRACs (Bangladesh Rural Advancement Committee) multifaceted development programs As a support entity of BRAC a significant portion of Aarongs earnings go directly into financing the NGOs (non-governmental organization) development programs in healthcare and education as well as economic and social development Specific benefits for producers include
Free medical check-ups including free eye treatment eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workerrsquos retirement fund
Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible
Further AARONG also assists with design and development market information and quality control and provides advances against purchase orders as well as spot payment on product delivery to encourage further production
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36(P
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0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
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36(P
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05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
Page
36(P
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052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
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Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
Page
36(P
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053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
Page
36(P
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054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
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36(P
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36(P
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055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
36(P
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056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
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The logo of Aarong is an image of peacock It is spectacularly beautiful because of the brilliant iridescent diversified colorful pattern in its tail The color of the peacock in the logo is orange because it represents energy By this logo Aarong communicates that its products are as stunning and as unique as a peacock Moreover it wants to emphasize its natural eco-friendly products through the emblem
023 Aarongrsquos Mission StatementldquoTo make Aarong the best in the world in providing a unique
Bangladeshi lifestyle experience to empower people and promote Bangladesh while protecting our environmentrdquo
024 Vision of the organizationAarong has a vision to establish them as worldrsquos one of the famous fair trade fashion
house and to remain market leader throughout its business Aarong expanded its business in international area Aarong has a dream to develop more artisans of Bangladesh and make them self-dependent and attract more and more international customers towards Bangladeshi culture
025 Purpose of aarongAarong is a fair trade organization dedicated to bringing about positive changes in the lives
of disadvantaged artisans and underprivileged rural women by reviving and promoting their skills and crafts Among the artisans Aarong reaches out to be weavers potters brass workers jewelers jute workers basket weavers wood carvers leather workers and more
026 Goals of AarongAarongs goals include
Empowering destitute rural women by providing opportunities for employment and income generation
Ensuring the commercial success of the enterprise of women producers
Reviving the traditional skills of rural artisans
027 Achievements
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From its inception as a small initiative protecting livelihoods in one rural community Aarong has transformed into Bangladeshs biggest retail chain with 10 stores spread across the major metropolitan cities - Dhaka Chittagong Sylhet and Khulna
While Aarongs trendsetting designs and attention to quality continues to win the loyalty of millions of satisfied customers each year - it has experienced unprecedented sales growth averaging 20 per year over the last eight years - its greatest achievement has been the transformation in the lives of the hundreds of thousands of poor artisans and their families it supports In addition as the most successful social enterprise of development organization BRAC one of the worlds largest development organizations Aarong has contributed more than one billion TK to BRACs various poverty alleviation initiatives since 1984
It was Aarong that institutionalized large-scale female participation in the Bangladeshi retail industry - sales as a career choice for women was popularized by the female Aarong store sales associates
Aarongs contribution to Bangladeshi craft heritage goes beyond its retail functions It is a proactive protector and promoter of traditional craft and designs housing an extensive design and craft library that preserves age old patterns and motifs It single-handedly revived the traditional art of Nakshi Kantha by establishing it as a sustainable livelihood for rural women and also brought back many traditional Jamdani patterns
Aarongs consumption sustains numerous artisan communities in Bangladesh - 75 of cotton produced in Madhabdi the core cotton production area and over 70 of silk produced in Maldaha is consumed by Aarong
In 2009 Aarong received the Best Brand Award in the boutique category and Most Effective Outdoor Communication Award from Brand Forum one of the countries leading authorities on branding and communication A number of Aarong products have also received the UNESCO Seal of Excellence for Handicrafts
028 ServicesbullFree Medical check-up including free eye treatment eye-glasses and treatment costs for
severe illnesses bullAdvance wage payments for employees in need bullDay care services bullWorkers retirement fund
Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong Potters Brass Workers Jewelers Jute workers Basket Weavers Handloom Weavers Silk Weavers Wood Carvers Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services
029 Ayesha Abed Foundation- AAF (Aarong production Centre)
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36(P
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The Ayesha Abed Foundation (AAF) is an organization that aims to provide avenues for employment and income generation for underprivileged rural women The Foundation provides an appropriate working environment financial and technical assistance and training to develop the womenrsquos skills in various crafts The Foundation was established to commemorate the memory and work of late Mrs Ayesha Abed a co-worker and wife of the Founder and Chairperson of BRAC The work that is done in the Foundation is a testament to her commitment to the issues of education training and employment opportunities for disadvantaged women It was she who in 1976 initiated all the present major activities of AAF in Manikgonj
The AAF aims to work with the most underprivileged women in the society These women are often the most neglected and are in need of much assistance and support The AAF plays the role of a facilitator To support these women Aarong has created 13 production centers in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah and 653 sub Centre spread across in 2000 villages of Bangladesh Today More than 40000 women work directly for Aarong in its production centers The women are placed in an enabling environment with other women of similar socio-economic backgrounds They are trained and then given the opportunity to generate income This is where the AAF steps in helping such marginalized women out of their peripheral existence in society and giving them the opportunity to become involved in sustainable enterprise
The AAF is closely interrelated with other programs especially BRAC Development Program (BDP) and Aarong The women workers of the AAF come from the BDP organized Village Organizations Working at the AAF thus gives the women access to other BRAC programs All of the AAFrsquos finished products are sold through Aarong which additionally provides designs raw materials and financial support to the AAF Since AAF supplies exclusively to Aarong it is treated as Aarong Production Centers
Page
36(P
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0210 Organizationrsquos Profile
Organization Name Aarong
Country Territory Bangladesh (London)
Organizationrsquos Head Quarter Aarong Centre (Head Office)
346 Tejgaon IA Dhaka-1208 Tel +880 2 8832139 Fax +880 2 9898267
Email exportaarongbracnet
Year of establishment 1978
Business line A fair trade organization
Produce traditional Bangladeshi products
Number of artisans Over 65000 (85 women)
A fashion show for celebrating 30 years of Aarong
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36(P
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03 BRAC amp Aarong
The Aarong export and marketing project was jointly organized by MCC and BRAC in 1978 It is now directly handled by BRAC The Bangladesh Rural Advancement Committee is managed entirely by Bangladeshis It is the largest non-governmental development organization in the country BRAC has initiated education projects in one fifth of the countryrsquos 80000 villages and in 2001 they started a university It is also responsible for thousands of health programs numerous agriculture and food production businesses and micro-credit initiatives
Aarong works to empower the poor and strengthen traditional craftsmanship The organization involves over 30000 artisans (85 of whom are women) employed through small community groups They produce an impressive range of products terra cotta silk and cotton textiles clothes leather work brass wood candles basketry and jewellery Aarong operates eight retail stores in Bangladesh which sell about 80 of the crafted items the remainders of products are exported
The women Aarong employs are among the countries most disadvantaged Through Aarong they have been offered a way out of destitution and degradation where before they had none And the benefits that they receive extend well beyond simply the wages they earn for their products since every single woman who works in Aarong-owned production facilities is also a beneficiary of BRACs multifaceted development programs
As a support entity of BRAC a significant portion of Aarongrsquos earnings go directly into financing the NGOrsquos development programs in healthcare education as well as economic and social development
Page
36(P
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031 A fair trade organization
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
Spot payment on product delivery to encourage efficiency and productivity Reach out to producers in remote areas to ensure fair value for their efforts
Marketing communication and information for artisans
Advances against purchase orders where necessary
Training amp Education in skills development to raise product quality and marketability
Product Design and Support in Product Development
Quality Control to increase producer awareness of the importance of quality
A fair showroom for Aarong
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations Fair Trade is a trading partnership based on dialogue transparency and respect that seek greater equity in international trade It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers ndash especially in the South (IFAT)
Page
36(P
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032 Products and services of AarongHolding the steadfast to its original Mission Aarong today supports the lives and
livelihoods of thousands of rural artisans and handicraft producers These producers and artisans create wide range of products for the different types of consumers in home and abroad The products are unique and traditional and appealing to the modern consumers staring from clothes accessories to home wares Aarong designs and creates clothes for women men and children There are designers and more than 3000 weavers across the country are involved with the production of Aarong clothing lines And for the fashionable accessories there is one special department called jewelry department where jeweler creates elegant jewelries that are contemporary yet traditional using gold silver and jewels like pearl emerald and diamonds The other accessories like bag sandals and produced in AAF centers using leather jute bamboo etc In home ware and decorative Aarong produces pottery vases and sculpture of wood bamboo brass and clay etc
For exporting the products Aarong has a separate department in head office and very selective artisans work here to produce fine quality products and these are sent to the production centers as sample of the exporting products Here is the list of some products Aarong produces
Clothes amp Accessories MENrsquoS PRODUCTS
1 Traditional 2 Executive Shirts 3 Maanja 4 Fotua 5 Short Kurta 6 T‐shirts 7 StolesShawls 8 Sandals
WOMENS PRODUCTS
1 Traditional 2 Western 3 Nightwear 4 ShawlsScarves 5 Shoes 6 Bags
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36(P
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7 Fabrics
CHILDRENS PRODUCTS
1 Clothes 2 Toys 3 Books 4 Shoes
Jewelry Products
1 Gold 2 Silver 3 Pearl 4 Other
LEATHER PRODUCTS
1 Shoes 2 BagsWallets 3 Belts 4 Boxes 5 Photo Frames
NAKSHI KANTHA PRODUCTS
1 Decorative 2 Wall hangings 3 Christmas decorations
Along with the clothes accessories and home ware Aarong also produces food products like milk flavored milk (mango amp chocolate) juices (mango amp tamarind) yogurt drinks (orange strawberry) curd (sweet amp sour) butter and honey And herbal skincare products like soaps shampoo oil and face pack etc
Page
36(P
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Home Wares amp Furniture1 Curtain 2 Bed cover amp cushions 3 Rugs 4 Table Lamps 5 Photo
Frames 6 Coasters
7 Napkin Rings
8 Mats 9 Trays
10 Cutlery 11 Bowls and Platters
12 Photo Frames 13 Bookends 14 Boxes 15 Hammocks 16 Plant Accessories 17 Candles
033 Aarong Retail OutletsAarong sales its products through its own outlets Aarong follow zero distribution
channel Around the country Aarong has ten outlets six outlets in Dhaka in six major parts (Dhanmondi Gulshan Uttara Maghbazar Wari and Mirpur) and outside Dhaka Aarong has two
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outlets in Chittagong one in Sylhet and one in Khulna And outside Bangladesh Aarong has one shop in London United Kingdom
Aarong Centre (Head Office ) 346 Tejgaon IA Dhaka-1208 Tel +880 2 8832139 Fax +880 2 9898267Email exportaarongbracnet
Aarong at Gulshan Gulshan ndash Tejgaon Link RoadDhaka 1208Tel 8821052 8825986 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong at Maghbazar Aarong Plaza61 Shahid Shangbadik Selina Parveen Sharak MaghbazarDhaka 1217Tel 9334766 9360260 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong at Dhanmondi Aarong Dhanmondi11 Block-A LalmatiaManik Miah AvenueMirpur RoadDhaka-1207 Tel +88-02-8111607Fax +880 2 8828576Email exportaarongbracnet Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong at Uttara Aarong Uttara Jasim Uddin Sector 4Uttara Model TownDhaka 1230Tel 8916097 8914125 ext 501 Operating Hours 1000am ndash 800pmOpen 7 days a week
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Aarong at Wari 361 Rankin Street (1st Floor) WariDhaka 1203Tel 7114244 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong in Halishahar Chittagong House 1 Lane 1 Block LHalishahar ChittagongTel 031-2515644-45 Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong in Sylhet 413 Naya SharakSylhetTel 6017 0821-815988 0821-713150 Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong in Nasirabad Chittagong Golden Plaza (1st Floor)1692 CDA AvenueChittagongTel 031-654030 06074485325 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong in Khulna Plot A43-A44Majeed Sharani AvenueShib BariKhulnaTel 6016 041-730547
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Aarong in London
Aarong sell an assortment of own brand formal and casual wear for both men and women in London Although Aarong sell its own products but the show room which in London is little bit different from our local shop Because the demand of the customers of London
69 Vallance RdLondon E1 5BS United Kingdom+44 20 72477727
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034 PromotionAs it is in other avenues Aarong is a trendsetter in promotional activities as well Having
been one of the first Bangladeshi brands to use professional models and create sophisticated ad campaigns Aarong continues to set the style and quality standard for promotion by achieving greater levels of class and elegance with each campaign Aarong also selects its promotional mediums carefully to ensure accurate reflection of the brands values Aarongs promotional events - such as its carefully orchestrated fashion shows unique and detailed exhibitions and highly popular sales events ndash have become a significant part of popular culture in urban Bangladesh Aarong also focuses on in-store promotional activities such as its My Aarong Rewards programmed to enhance customer experience
035 Export Terms and Conditions
Beneficiary BRAC66 Mohakhali CA Dhaka 1212BangladeshTel 880-2-9885424 880-2-8824180Fax 880-2-8828576 880-2-8823614
Payment to LC at sight or 50 Advance with order amp 50 before shipment by TT to BRAC Bank Limited1 Gulshan Avenue Gulshan-1 Dhaka-1212 BangladeshTel 880-2-8824501 Fax 880-2-8813543Account 150180010606 Account Name BRAC - Aarong
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Delivery Between 60 to 120 days depending on volume of order on receipt of LC
Port of Dispatch By Air Zia International Airport DhakaBy Sea ICD Dhaka for Full Container Load (FCL) Chittagong for Loose Container Load (LCL)
Packing Fragile items are packed individually in 3 ply carton boxes and master packing in 5 or 7 ply carton boxes Other non-breakable items are packed individually in a ploy bag and master packing in 5 ply carton boxes (2025 kgs in a box)
Freight and Insurance Freight and Insurance to be covered by the importer which varies from port to port
Advance If 50 is paid in advance against the ordered value then the documents will be sent to the importers directly Otherwise the documents will be sent to the bank for collection against Bill of Exchange
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036 MarketA pioneer in the countrys craft industry Aarongs unique product designs have brought
consumer attention back to crafts and materials indigenous to Bangladesh as its designers blend the traditional with the contemporary in a way that continues to win consumer appeal Its success revolutionized trends and virtually created the market that has now been taken up by countless other boutiques and brands Aarong caters to this growing urban consumer base through outlets in every major city in the country Their discerning style and high-quality craftsmanship make every Aarong product unique and demand for them has been consistently rising due to Aarongs focus on innovation quality value-based pricing and superior in-store customer service All these elements backed by a robust distribution network and strong supply chain have made Aarong a true household brand in Bangladesh Just as Bangladeshis living abroad look to Aarong for products that connect them to their heritage the Aarong experience is an essential part of any trip to Bangladesh by foreign visitors ndash a phenomenon chronicled in the Lonely Planet guide to Bangladesh Aarong products are not only the gift items of choice for every occasion for local and expatriate Bangladeshis but also the quintessential cultural mementos for these visitors Aarongs growing presence outside Bangladesh - through fair-trade networks in Europe as well as a retail franchise in London - continues to broaden the market for Bangladeshi craft globally
037 Producers or suppliers Aarong embraces and nurtures a diverse representation of 65000 artisans 85 of whom
are women More than forty thousand of these women work directly for Aarong in its 13 production centrersquos (Foundations) in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah including 653 sub-centers spread across Bangladesh Twenty-five thousand independent co-operative groups and traditional family-based artisans also market their crafts through Aarong Potters brass workers jewelers jute workers basket weavers handloom weavers silk weavers wood carvers leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services The leather workers are various artisans with specialized skills from all over the country
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038 Brand valueAarong stands for a unique mix of design quality and convenience of the traditional and
the contemporary Aarong is one of a kind ndash globally positioned as a highly successful Bangladeshi craft based retail chain and brand of pride It also carries the distinction of being BRACs most successful social enterprise Aarongs responsibility is therefore two fold delivering unique products with the highest level of quality and service to its customers and the strongest level of support and protection of artisans and their craft To its consumers Aarong is a household name - a one-stop shop and a trusted brand that inspires pride promises quality and sophistication and helps to keep cultural roots alive in everyday life For the artisans Aarong represents the endurance of both their age-old art as well as their livelihoods For consumers and artisans alike Aarong has become a part of the cultural fabric of their lives
Those things we didnt know-1 In Bengali Aarong means village fair and Taaga means thread2 Half of the profit from every purchase you make at Aarong goes towards supporting
schools health services and specific interventions targeted to the ultra poor segment by BRAC
3 3 people enter an Aarong outlet every second4 The amount of fabric consumed by Aarong in a year can wrap around Bangladesh 8
times
039 Aarongrsquos Production Centers
1 At Aarong has 8 domestic outlets (5 in Dhaka 1 in Chittagong 1 in Sylhet and 1 in Khulna) 1 franchise in London)
2 Aarong has 13 center and (Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur Pabna Pollobi Kurigram Nilphamary and Jhenaidah)
3 653 sub-centers spread across Bangladesh
4 As well as considerable export operation in many European North American and Asian countries
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0310 Artisans Karim Mias Story
Karim Mia is a bamboo tray and basket producer of Aarong Due to extreme poverty at home Karim Mia stopped his schooling when he was in class 3 and began assisting his father in bamboo crafts weaving Struck by the untimely death of his father Karim Mia at the age of 16 had to find an immediate source of income to run his family of five brothers five sisters and his mother Initially Karim Mia commuted from his home district Tangail (approx 120 km away from Dhaka city) to sell bamboo products at small crafts shops in Dhaka At that time with his meager monthly income of almost $25 he could barely support his family After struggling for almost three years Karim Mia came to Aarong in 1988 to show some of his samples His self-designed samples were immediately chosen and an order was placed for 60 pieces Since then Karim Mia has received constant orders from Aarong for its local as well as export market
As part of its mission to assist producers in product development and technical training Aarong sponsored Karim Mia to attend a bamboo crafts workshop in New Delhi in 2003 The one-week training has helped him to gain better knowledge about bamboo craft His workmanship has also shown remarkable improvement in quality Today Karim Mia supplies exclusively to Aarong and has a steady monthly income of $100-130 On an average he has ten workers working under him During the busy season he employs more than fifty workers
Karim Mia is now married with two sons and a daughter all of whom attend school He hopes that his children will be able to complete their education which he could not because of financial need About two years ago Karim Mia bought 20 decimal lands in Tangail where he constructed his tin-shed home Very recently he has built an extension room that is being used as working space and storage for the bamboo products
Karim Mia feels that Aarongrsquos support during his needy times the continued assistance in product development and design and a steady flow of orders has helped him carve out a dignified existence for himself and his family
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0311 Others Artisans
Holding steadfast to its original mission Aarong today supports the lives and livelihoods of nearly sixty five thousand rural artisans and handicraft producers 85 of who are women More than forty thousand of these women work directly for Aarong in its 13 production centers in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah and 653 subcentres spread across Bangladesh
Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong Potters Brass Workers Jewellers Jute workers Basket Weavers Handloom Weavers Silk Weavers Wood Carvers Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services
04
Make or buy of aarongTraditionally Aarong prefers the make option tended to be favored by ownership of a
large range of manufacturing and subassembly facilities They were largely depends on raw materials which were processed in house Specially buy canrsquot give full perfection Thatrsquos why Aarong prefer make option
Reason for Make Instead of Buy
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36(P
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There are many special reasons in Aarong to prefer make option instead of buy These include
The quantities are too small Quality requirements may be so exacting or so unusual as to require special processing
methods that suppliers canrsquot be expected to provide Closer coordination of supply with the demand To preserve technological secrets To obtain a lower cost To advantage of or avoid idle equipment or labor To avoid sole source dependency The management of Aarong appears to take pride in size
Dangers Involved in Decision to Manufacture
To manufacture the various types of product of Aarong dangers involve in decision include
They may have lack administrative or technical experience in the production The challenges of maintaining ling term technological and economic viability for a
noncore activity Difficult to determine the costs of the make decision A lack of flexibility in selecting possible sources and substitute items is likely to result
041 Sub contractionThe use of subcontract is perfect when placing orders for work which is difficult to
define take a long time and extremely costly Managing the subcontract is a complex activity which requires knowledge about performance to date as well as ability to anticipate actions needed to ensure the desired end results Thatrsquos why Aarong donrsquot have the subcontracting policy
042 Sources of information about suppliersKnowledge of information source is primary task for this kind of manufacturing agency
Aarong relay solely on their whole experience and past memory The normal principal sources of information consist of catalogs trade journals advertisements suppliers and commodity directories sales interviews annual report etc These are given bellow in brief
Catalogs Aarong have the proper catalog and have the advantage of being a permanent record of whole organization always in the office of the buyer Salespeople are not always
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36(P
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available advertisements are frequently forgotten but the catalog is an ever present reminder Two types of catalog are here
Jobbers catalog Contains a variety of manufacturing sources an offer to a certain extent Equipment and machinery catalog Provide information of Specification of location of
supply for replacement parts as well as new equipments of Aarong
Trade journals Trade journals are also valuable sources of information of Aarong as to potential suppliers It is used in two ways
Firstly use is a study of the text adds to the buyerrsquos general information suggests new products and substitute materials
Secondly use has to do with advertising
Trade Directories Trade directories are volumes which list leading manufactures addresses number of branches products supplies equipment and other items offered for sale
Sales Representation In Aarong it is essential to develop good supplier relations which begin with a friendly courteous sympathetic and frank attitude toward the supplier salesperson Aarong have the policies and procedures guidelines concerning the relations between the purchasing office and suppliersrsquo representatives
Suppliers and Commodity file Such files contain information concerning the address of the Aarongrsquos supplier past orders placed with the company data concerning its general fitness reliability suppliers willingness to meet particular requirements of them which product has been purchased in the past price paid point of shipment and cross reference of the supplier file
043 Aarongrsquos Supplier evaluation We know that Aarong is an organization which fully depends on domestic ruler raw
product So the supplier of Aarong will be the ruler people Aarongrsquos supplier evaluation depends on some important factors Those are given below
Existing and Potential Sources The evaluation of suppliers is a continuing purchasing task Aarong does this very carefully They monitored to see if expected performance
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36(P
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materializes with current suppliers New sources need to be screened to see if their potential warrants serous future consideration
Informal and Formal Evaluation Aarongrsquos current supplier is one which has passed through earlier supplier efforts and subsequently received at a minimum one order Most buyer of Aarong tends to separate current suppliers into at least two categories
Informal Evaluation Informal evolution includes assessments of personal contract between Aarong and its supplier in the purchaser section in all function where such contract takes place
044 Aarongrsquos Additional sources and selection consideration
Aarongrsquos additional sources and selection consideration system causes if supplier had been found who could meet all the requirements the search would be over Such it not the case Shall the buyer in buying a given item rely on a single supplier or utilize several Shall the buyer directly buy from manufacturers or through distributors Aarong need quick supply because customer demand is very high and fast Aarong need the product as their expectation In doing so it shall be assumed that adequate investigation for fairness and capacity to meet the requirements as to quality quantity delivery and service and that prices are not unreasonable The product of Aarong is much reasonable then other So Aarong need to maintain this for customer
045 Aarongrsquos supplier rating systemSupplier rating system is very important function for an organization Aarong evaluate
their supplier rating system through some steps Most formal supplier rating schemes attempt to track actual performance over time Thus corrective action can be taken as needed Formal supplier rating schemes track vendor performance on quality price delivery and service It is
Page
36(P
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normal to track a supplierrsquos quality performance very closely and in sufficient deal to enable the pinpointing of corrective action Delivery performance of a current supplier is fairly easily tracked if good records exist of delivery promises and actual recipients and few modifications have been made on an informal basis There is a most effective evaluation system of rating that Aarong follows is weighted point evaluation system
Aarong has different types of supplier that is why this system is successful Particularly in cases where several sources supply the same item Outstanding performance of a supplier can then be rewarded with additional business while poor performance will at the least result in less business or possibly dropping a supplier altogether For different product classes different factors weight and measure should be used to reflect varying impact on the organization
Factor Weight How MeasuredSupplier
Performance past 12 Months
Rating
Quality30 1 defective subtracts
605 defective (30(100-(05 X
6)100=291
Delivery 40 1 day late subtracts 2
Average 5 days late (40(100-(5X2)100=36
Price 20 Lowest price paidPrice charged
$50$55
(20(5055)X100)100=1818
Service10 Goods=100
Fair=70Poor=40
Fair=75 (10X75)100=75
Total Points
100 9078
Aarongrsquos supplier weighted point rating system
046 The Supplier selection decisionThe purchaserrsquos Perception of the supplierrsquos ability in Aarong to meet satisfactory
quality quantity delivery and price and service objectives will govern the selection decision Itrsquos also included their past history facilities and technical strength financial status organization and management reputation systems communication of rural people labor relations and location The nature and the amount of the purchase will influence the selection decision
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36(P
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Aarongrsquos supplier selection decision can be seen as decision making under uncertainty and can be represented by a decision tree There are three stage decision trees for supplier selection also In the given figure shows a decision tree of one stage situation with only two suppliers considered and two possible outcomes To use decision tree effectively and assess the probabilities of success and failure This simple tree could apply to a special onetime purchase without expectation of follow on business for some time to come
SolutionSupplier A Supplier BHigh 100 X 30 =3000 High 100 X 28 =2800Medium 70 X 35 =2450 Medium 70 X 40 =2800Low 40 X 40 =1600 Low 40 X 30 =1200
=7000 =6800So Aarong will choose supplier B
047 Consumer buyer behavior CONSUMER DECISION PROCESS MODEL
Aarong is the most leading fashionable organization in Bangladesh Aarong is always looking towards its consumer perceptions It always creates a different look and patterns in their product This is the main reason to attract consumer The process component of the consumer decision making process deals with how consumers make decisions The product consumer have
Price $30 per unit
Price $35 per unit
Price $40 per unit
Price $28 per unit
Price $40 per unit
Price $30 per unit
On demand high 100 units
On demand medium 70 units
On demand low 40 units
On demand high 100 units
On demand medium 70 units
On demand low 40 units
Supplier
A
Supplier
B
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36(P
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selected to buy and in order to understand how a consumer makes these decisions in the process component we need to look at the psychological field of the process model which are the internal influences of motivation perception learning personality amp attitude and how these influences affect the decision making process Aarong the act of making a consumer decision consists of three stages which are need recognition pre-purchase search amp evaluation of alternatives
Need Recognition Need recognition occurs when a consumer is faced with a problem There are many different reasons why someone would decide that they need to buy the product from Aarong It might be necessary of any product as well as fashionable one
Pre-purchase Search Pre-purchase search is very important for consumer At first they search their desirable product in the market After that they decide from where they buy their product When they think about perfection and fissionable thing they must go through Aarong
Evaluation of Alternative This means to evaluate the alternative brands of that product From that evaluation consumer select their product according their perception Aarong have the ability to fulfill their perception That is the quality of Aarong
048 Purchase-supplier relationsWhen one organization supplies another with goods or services the nature of the
relationship between the two organizations is a major influence on the ultimate value and customer satisfaction achievable Aarong maintain a good relationship with their supplier They maintain the relationship very sincerely Aarong deals with their supplier several times All times they maintain their formalities Good relations with supplier are very important for their supply system If the relation is well the supplier supply product as their requirement In this section the nature of supplier goodwill will be discussed along with the framework for buyer-seller satisfaction the qualifications of good and preferred suppliers partnerships and strategic alliances
049 Aarongrsquos Purchase-supplier satisfaction modelAarong is a fair trade organization Aarong always try to satisfy their selected supplier
One of the major assessments a purchaser must make is whether the current relationship with a supplier is satisfactory or not This relationship is highly complex and different people inside the
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36(P
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purchasing organization may have different perceptions of it Aarong follow a supplier satisfaction model This model includes some assumptions Those are
I That satisfaction with a current supplier relationship can be assessed however crudely at least in macro terms whether it is satisfactory or not
II That an unsatisfied party will attempt to move to a more satisfactory situationIII That attempts to move may fall in the win and lose as well as the lose and lose lose and
win and win and win categoryIV That attempts to move may affect the stability of the relationshipV That purchaser and seller may well have different perceptions of the same relationship
VI That many tools techniques and approaches exists which will assist either party in moving position and improving stability
0410 Aarongrsquos Reverse supplier developmentIn supplier selection it has so far been assured that at least one suitable and willing
supplier already exists and that the purchaserrsquos problems are primarily one of determining who
C
D B
A
Purchaser dissatisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier dissatisfied
Purchaser satisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier satisfied
Total Dissatisfaction
Marginal satisfaction
Complete satisfaction
Marginal satisfaction
Complete satisfaction
Supplierrsquos Satisfaction
Purchaserrsquos Satisfaction
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the best supplier is In this case Aarong is very serious about their supplierrsquos development After selecting the best supplier they give better training for their future development We know that Aarong highly depends on rural suppliers Reverse marketing supplier development implies a degree of aggressive procurement involvement not normally encountered in supplier selection
Reverse supplier development should take a broader point of view It defines the need for developing new or existing suppliers as follows The purchase is aware that benefits will accrue to both the supplier and the purchaser benefits of which the supplier may not be aware
Aarongrsquos Supplier Development Context
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
bull Spot payment on product delivery to encourage efficiency and productivity bull Reach out to producers in remote areas to ensure fair value for their efforts bull Marketing communication and information for artisans bull Advances against purchase orders where necessary bull Training amp Education in skills development to raise product quality and marketability bull Product Design and Support in Product Development bull Quality Control to increase producer awareness of the importance of quality
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers in Bangladesh
0411 Aarongrsquos Management and Financial Evaluation
Aarongrsquos management and financial evaluation tends toward greater reliance on single sources for a longer time continuous along with great interest in material requirement and just in
Supplier Purchaser
Purchasing initiative
Sales response
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36(P
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time production potential suppliers management strength takes on added significance This will require a detailed examination of Aarongrsquos structure qualifications of managers management control the reward-punishment system training and development system and policies and procedures It is also useful to have an explanation as to why the supplierrsquos manager believes it is managing well and an indication of its most notable successes and failures An evaluation of this supplierrsquos procurement system organization procedures and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract
0412 BenefitsEvery single woman who works in Aarong-owned production facilities is also a beneficiary
of BRACs (Bangladesh Rural Advancement Committee) multifaceted development programs As a support entity of BRAC a significant portion of Aarongs earnings go directly into financing the NGOs (non-governmental organization) development programs in healthcare and education as well as economic and social development Specific benefits for producers include
Free medical check-ups including free eye treatment eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workerrsquos retirement fund
Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible
Further AARONG also assists with design and development market information and quality control and provides advances against purchase orders as well as spot payment on product delivery to encourage further production
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0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
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05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
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052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
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Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
Page
36(P
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053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
Page
36(P
OP
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054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
Page
36(P
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36(P
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055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
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056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
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36(P
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302)
From its inception as a small initiative protecting livelihoods in one rural community Aarong has transformed into Bangladeshs biggest retail chain with 10 stores spread across the major metropolitan cities - Dhaka Chittagong Sylhet and Khulna
While Aarongs trendsetting designs and attention to quality continues to win the loyalty of millions of satisfied customers each year - it has experienced unprecedented sales growth averaging 20 per year over the last eight years - its greatest achievement has been the transformation in the lives of the hundreds of thousands of poor artisans and their families it supports In addition as the most successful social enterprise of development organization BRAC one of the worlds largest development organizations Aarong has contributed more than one billion TK to BRACs various poverty alleviation initiatives since 1984
It was Aarong that institutionalized large-scale female participation in the Bangladeshi retail industry - sales as a career choice for women was popularized by the female Aarong store sales associates
Aarongs contribution to Bangladeshi craft heritage goes beyond its retail functions It is a proactive protector and promoter of traditional craft and designs housing an extensive design and craft library that preserves age old patterns and motifs It single-handedly revived the traditional art of Nakshi Kantha by establishing it as a sustainable livelihood for rural women and also brought back many traditional Jamdani patterns
Aarongs consumption sustains numerous artisan communities in Bangladesh - 75 of cotton produced in Madhabdi the core cotton production area and over 70 of silk produced in Maldaha is consumed by Aarong
In 2009 Aarong received the Best Brand Award in the boutique category and Most Effective Outdoor Communication Award from Brand Forum one of the countries leading authorities on branding and communication A number of Aarong products have also received the UNESCO Seal of Excellence for Handicrafts
028 ServicesbullFree Medical check-up including free eye treatment eye-glasses and treatment costs for
severe illnesses bullAdvance wage payments for employees in need bullDay care services bullWorkers retirement fund
Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong Potters Brass Workers Jewelers Jute workers Basket Weavers Handloom Weavers Silk Weavers Wood Carvers Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services
029 Ayesha Abed Foundation- AAF (Aarong production Centre)
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The Ayesha Abed Foundation (AAF) is an organization that aims to provide avenues for employment and income generation for underprivileged rural women The Foundation provides an appropriate working environment financial and technical assistance and training to develop the womenrsquos skills in various crafts The Foundation was established to commemorate the memory and work of late Mrs Ayesha Abed a co-worker and wife of the Founder and Chairperson of BRAC The work that is done in the Foundation is a testament to her commitment to the issues of education training and employment opportunities for disadvantaged women It was she who in 1976 initiated all the present major activities of AAF in Manikgonj
The AAF aims to work with the most underprivileged women in the society These women are often the most neglected and are in need of much assistance and support The AAF plays the role of a facilitator To support these women Aarong has created 13 production centers in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah and 653 sub Centre spread across in 2000 villages of Bangladesh Today More than 40000 women work directly for Aarong in its production centers The women are placed in an enabling environment with other women of similar socio-economic backgrounds They are trained and then given the opportunity to generate income This is where the AAF steps in helping such marginalized women out of their peripheral existence in society and giving them the opportunity to become involved in sustainable enterprise
The AAF is closely interrelated with other programs especially BRAC Development Program (BDP) and Aarong The women workers of the AAF come from the BDP organized Village Organizations Working at the AAF thus gives the women access to other BRAC programs All of the AAFrsquos finished products are sold through Aarong which additionally provides designs raw materials and financial support to the AAF Since AAF supplies exclusively to Aarong it is treated as Aarong Production Centers
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0210 Organizationrsquos Profile
Organization Name Aarong
Country Territory Bangladesh (London)
Organizationrsquos Head Quarter Aarong Centre (Head Office)
346 Tejgaon IA Dhaka-1208 Tel +880 2 8832139 Fax +880 2 9898267
Email exportaarongbracnet
Year of establishment 1978
Business line A fair trade organization
Produce traditional Bangladeshi products
Number of artisans Over 65000 (85 women)
A fashion show for celebrating 30 years of Aarong
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03 BRAC amp Aarong
The Aarong export and marketing project was jointly organized by MCC and BRAC in 1978 It is now directly handled by BRAC The Bangladesh Rural Advancement Committee is managed entirely by Bangladeshis It is the largest non-governmental development organization in the country BRAC has initiated education projects in one fifth of the countryrsquos 80000 villages and in 2001 they started a university It is also responsible for thousands of health programs numerous agriculture and food production businesses and micro-credit initiatives
Aarong works to empower the poor and strengthen traditional craftsmanship The organization involves over 30000 artisans (85 of whom are women) employed through small community groups They produce an impressive range of products terra cotta silk and cotton textiles clothes leather work brass wood candles basketry and jewellery Aarong operates eight retail stores in Bangladesh which sell about 80 of the crafted items the remainders of products are exported
The women Aarong employs are among the countries most disadvantaged Through Aarong they have been offered a way out of destitution and degradation where before they had none And the benefits that they receive extend well beyond simply the wages they earn for their products since every single woman who works in Aarong-owned production facilities is also a beneficiary of BRACs multifaceted development programs
As a support entity of BRAC a significant portion of Aarongrsquos earnings go directly into financing the NGOrsquos development programs in healthcare education as well as economic and social development
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031 A fair trade organization
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
Spot payment on product delivery to encourage efficiency and productivity Reach out to producers in remote areas to ensure fair value for their efforts
Marketing communication and information for artisans
Advances against purchase orders where necessary
Training amp Education in skills development to raise product quality and marketability
Product Design and Support in Product Development
Quality Control to increase producer awareness of the importance of quality
A fair showroom for Aarong
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations Fair Trade is a trading partnership based on dialogue transparency and respect that seek greater equity in international trade It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers ndash especially in the South (IFAT)
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032 Products and services of AarongHolding the steadfast to its original Mission Aarong today supports the lives and
livelihoods of thousands of rural artisans and handicraft producers These producers and artisans create wide range of products for the different types of consumers in home and abroad The products are unique and traditional and appealing to the modern consumers staring from clothes accessories to home wares Aarong designs and creates clothes for women men and children There are designers and more than 3000 weavers across the country are involved with the production of Aarong clothing lines And for the fashionable accessories there is one special department called jewelry department where jeweler creates elegant jewelries that are contemporary yet traditional using gold silver and jewels like pearl emerald and diamonds The other accessories like bag sandals and produced in AAF centers using leather jute bamboo etc In home ware and decorative Aarong produces pottery vases and sculpture of wood bamboo brass and clay etc
For exporting the products Aarong has a separate department in head office and very selective artisans work here to produce fine quality products and these are sent to the production centers as sample of the exporting products Here is the list of some products Aarong produces
Clothes amp Accessories MENrsquoS PRODUCTS
1 Traditional 2 Executive Shirts 3 Maanja 4 Fotua 5 Short Kurta 6 T‐shirts 7 StolesShawls 8 Sandals
WOMENS PRODUCTS
1 Traditional 2 Western 3 Nightwear 4 ShawlsScarves 5 Shoes 6 Bags
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7 Fabrics
CHILDRENS PRODUCTS
1 Clothes 2 Toys 3 Books 4 Shoes
Jewelry Products
1 Gold 2 Silver 3 Pearl 4 Other
LEATHER PRODUCTS
1 Shoes 2 BagsWallets 3 Belts 4 Boxes 5 Photo Frames
NAKSHI KANTHA PRODUCTS
1 Decorative 2 Wall hangings 3 Christmas decorations
Along with the clothes accessories and home ware Aarong also produces food products like milk flavored milk (mango amp chocolate) juices (mango amp tamarind) yogurt drinks (orange strawberry) curd (sweet amp sour) butter and honey And herbal skincare products like soaps shampoo oil and face pack etc
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36(P
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Home Wares amp Furniture1 Curtain 2 Bed cover amp cushions 3 Rugs 4 Table Lamps 5 Photo
Frames 6 Coasters
7 Napkin Rings
8 Mats 9 Trays
10 Cutlery 11 Bowls and Platters
12 Photo Frames 13 Bookends 14 Boxes 15 Hammocks 16 Plant Accessories 17 Candles
033 Aarong Retail OutletsAarong sales its products through its own outlets Aarong follow zero distribution
channel Around the country Aarong has ten outlets six outlets in Dhaka in six major parts (Dhanmondi Gulshan Uttara Maghbazar Wari and Mirpur) and outside Dhaka Aarong has two
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36(P
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outlets in Chittagong one in Sylhet and one in Khulna And outside Bangladesh Aarong has one shop in London United Kingdom
Aarong Centre (Head Office ) 346 Tejgaon IA Dhaka-1208 Tel +880 2 8832139 Fax +880 2 9898267Email exportaarongbracnet
Aarong at Gulshan Gulshan ndash Tejgaon Link RoadDhaka 1208Tel 8821052 8825986 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong at Maghbazar Aarong Plaza61 Shahid Shangbadik Selina Parveen Sharak MaghbazarDhaka 1217Tel 9334766 9360260 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong at Dhanmondi Aarong Dhanmondi11 Block-A LalmatiaManik Miah AvenueMirpur RoadDhaka-1207 Tel +88-02-8111607Fax +880 2 8828576Email exportaarongbracnet Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong at Uttara Aarong Uttara Jasim Uddin Sector 4Uttara Model TownDhaka 1230Tel 8916097 8914125 ext 501 Operating Hours 1000am ndash 800pmOpen 7 days a week
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Aarong at Wari 361 Rankin Street (1st Floor) WariDhaka 1203Tel 7114244 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong in Halishahar Chittagong House 1 Lane 1 Block LHalishahar ChittagongTel 031-2515644-45 Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong in Sylhet 413 Naya SharakSylhetTel 6017 0821-815988 0821-713150 Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong in Nasirabad Chittagong Golden Plaza (1st Floor)1692 CDA AvenueChittagongTel 031-654030 06074485325 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong in Khulna Plot A43-A44Majeed Sharani AvenueShib BariKhulnaTel 6016 041-730547
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36(P
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Aarong in London
Aarong sell an assortment of own brand formal and casual wear for both men and women in London Although Aarong sell its own products but the show room which in London is little bit different from our local shop Because the demand of the customers of London
69 Vallance RdLondon E1 5BS United Kingdom+44 20 72477727
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36(P
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034 PromotionAs it is in other avenues Aarong is a trendsetter in promotional activities as well Having
been one of the first Bangladeshi brands to use professional models and create sophisticated ad campaigns Aarong continues to set the style and quality standard for promotion by achieving greater levels of class and elegance with each campaign Aarong also selects its promotional mediums carefully to ensure accurate reflection of the brands values Aarongs promotional events - such as its carefully orchestrated fashion shows unique and detailed exhibitions and highly popular sales events ndash have become a significant part of popular culture in urban Bangladesh Aarong also focuses on in-store promotional activities such as its My Aarong Rewards programmed to enhance customer experience
035 Export Terms and Conditions
Beneficiary BRAC66 Mohakhali CA Dhaka 1212BangladeshTel 880-2-9885424 880-2-8824180Fax 880-2-8828576 880-2-8823614
Payment to LC at sight or 50 Advance with order amp 50 before shipment by TT to BRAC Bank Limited1 Gulshan Avenue Gulshan-1 Dhaka-1212 BangladeshTel 880-2-8824501 Fax 880-2-8813543Account 150180010606 Account Name BRAC - Aarong
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36(P
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Delivery Between 60 to 120 days depending on volume of order on receipt of LC
Port of Dispatch By Air Zia International Airport DhakaBy Sea ICD Dhaka for Full Container Load (FCL) Chittagong for Loose Container Load (LCL)
Packing Fragile items are packed individually in 3 ply carton boxes and master packing in 5 or 7 ply carton boxes Other non-breakable items are packed individually in a ploy bag and master packing in 5 ply carton boxes (2025 kgs in a box)
Freight and Insurance Freight and Insurance to be covered by the importer which varies from port to port
Advance If 50 is paid in advance against the ordered value then the documents will be sent to the importers directly Otherwise the documents will be sent to the bank for collection against Bill of Exchange
Page
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036 MarketA pioneer in the countrys craft industry Aarongs unique product designs have brought
consumer attention back to crafts and materials indigenous to Bangladesh as its designers blend the traditional with the contemporary in a way that continues to win consumer appeal Its success revolutionized trends and virtually created the market that has now been taken up by countless other boutiques and brands Aarong caters to this growing urban consumer base through outlets in every major city in the country Their discerning style and high-quality craftsmanship make every Aarong product unique and demand for them has been consistently rising due to Aarongs focus on innovation quality value-based pricing and superior in-store customer service All these elements backed by a robust distribution network and strong supply chain have made Aarong a true household brand in Bangladesh Just as Bangladeshis living abroad look to Aarong for products that connect them to their heritage the Aarong experience is an essential part of any trip to Bangladesh by foreign visitors ndash a phenomenon chronicled in the Lonely Planet guide to Bangladesh Aarong products are not only the gift items of choice for every occasion for local and expatriate Bangladeshis but also the quintessential cultural mementos for these visitors Aarongs growing presence outside Bangladesh - through fair-trade networks in Europe as well as a retail franchise in London - continues to broaden the market for Bangladeshi craft globally
037 Producers or suppliers Aarong embraces and nurtures a diverse representation of 65000 artisans 85 of whom
are women More than forty thousand of these women work directly for Aarong in its 13 production centrersquos (Foundations) in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah including 653 sub-centers spread across Bangladesh Twenty-five thousand independent co-operative groups and traditional family-based artisans also market their crafts through Aarong Potters brass workers jewelers jute workers basket weavers handloom weavers silk weavers wood carvers leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services The leather workers are various artisans with specialized skills from all over the country
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038 Brand valueAarong stands for a unique mix of design quality and convenience of the traditional and
the contemporary Aarong is one of a kind ndash globally positioned as a highly successful Bangladeshi craft based retail chain and brand of pride It also carries the distinction of being BRACs most successful social enterprise Aarongs responsibility is therefore two fold delivering unique products with the highest level of quality and service to its customers and the strongest level of support and protection of artisans and their craft To its consumers Aarong is a household name - a one-stop shop and a trusted brand that inspires pride promises quality and sophistication and helps to keep cultural roots alive in everyday life For the artisans Aarong represents the endurance of both their age-old art as well as their livelihoods For consumers and artisans alike Aarong has become a part of the cultural fabric of their lives
Those things we didnt know-1 In Bengali Aarong means village fair and Taaga means thread2 Half of the profit from every purchase you make at Aarong goes towards supporting
schools health services and specific interventions targeted to the ultra poor segment by BRAC
3 3 people enter an Aarong outlet every second4 The amount of fabric consumed by Aarong in a year can wrap around Bangladesh 8
times
039 Aarongrsquos Production Centers
1 At Aarong has 8 domestic outlets (5 in Dhaka 1 in Chittagong 1 in Sylhet and 1 in Khulna) 1 franchise in London)
2 Aarong has 13 center and (Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur Pabna Pollobi Kurigram Nilphamary and Jhenaidah)
3 653 sub-centers spread across Bangladesh
4 As well as considerable export operation in many European North American and Asian countries
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0310 Artisans Karim Mias Story
Karim Mia is a bamboo tray and basket producer of Aarong Due to extreme poverty at home Karim Mia stopped his schooling when he was in class 3 and began assisting his father in bamboo crafts weaving Struck by the untimely death of his father Karim Mia at the age of 16 had to find an immediate source of income to run his family of five brothers five sisters and his mother Initially Karim Mia commuted from his home district Tangail (approx 120 km away from Dhaka city) to sell bamboo products at small crafts shops in Dhaka At that time with his meager monthly income of almost $25 he could barely support his family After struggling for almost three years Karim Mia came to Aarong in 1988 to show some of his samples His self-designed samples were immediately chosen and an order was placed for 60 pieces Since then Karim Mia has received constant orders from Aarong for its local as well as export market
As part of its mission to assist producers in product development and technical training Aarong sponsored Karim Mia to attend a bamboo crafts workshop in New Delhi in 2003 The one-week training has helped him to gain better knowledge about bamboo craft His workmanship has also shown remarkable improvement in quality Today Karim Mia supplies exclusively to Aarong and has a steady monthly income of $100-130 On an average he has ten workers working under him During the busy season he employs more than fifty workers
Karim Mia is now married with two sons and a daughter all of whom attend school He hopes that his children will be able to complete their education which he could not because of financial need About two years ago Karim Mia bought 20 decimal lands in Tangail where he constructed his tin-shed home Very recently he has built an extension room that is being used as working space and storage for the bamboo products
Karim Mia feels that Aarongrsquos support during his needy times the continued assistance in product development and design and a steady flow of orders has helped him carve out a dignified existence for himself and his family
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0311 Others Artisans
Holding steadfast to its original mission Aarong today supports the lives and livelihoods of nearly sixty five thousand rural artisans and handicraft producers 85 of who are women More than forty thousand of these women work directly for Aarong in its 13 production centers in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah and 653 subcentres spread across Bangladesh
Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong Potters Brass Workers Jewellers Jute workers Basket Weavers Handloom Weavers Silk Weavers Wood Carvers Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services
04
Make or buy of aarongTraditionally Aarong prefers the make option tended to be favored by ownership of a
large range of manufacturing and subassembly facilities They were largely depends on raw materials which were processed in house Specially buy canrsquot give full perfection Thatrsquos why Aarong prefer make option
Reason for Make Instead of Buy
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There are many special reasons in Aarong to prefer make option instead of buy These include
The quantities are too small Quality requirements may be so exacting or so unusual as to require special processing
methods that suppliers canrsquot be expected to provide Closer coordination of supply with the demand To preserve technological secrets To obtain a lower cost To advantage of or avoid idle equipment or labor To avoid sole source dependency The management of Aarong appears to take pride in size
Dangers Involved in Decision to Manufacture
To manufacture the various types of product of Aarong dangers involve in decision include
They may have lack administrative or technical experience in the production The challenges of maintaining ling term technological and economic viability for a
noncore activity Difficult to determine the costs of the make decision A lack of flexibility in selecting possible sources and substitute items is likely to result
041 Sub contractionThe use of subcontract is perfect when placing orders for work which is difficult to
define take a long time and extremely costly Managing the subcontract is a complex activity which requires knowledge about performance to date as well as ability to anticipate actions needed to ensure the desired end results Thatrsquos why Aarong donrsquot have the subcontracting policy
042 Sources of information about suppliersKnowledge of information source is primary task for this kind of manufacturing agency
Aarong relay solely on their whole experience and past memory The normal principal sources of information consist of catalogs trade journals advertisements suppliers and commodity directories sales interviews annual report etc These are given bellow in brief
Catalogs Aarong have the proper catalog and have the advantage of being a permanent record of whole organization always in the office of the buyer Salespeople are not always
Page
36(P
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available advertisements are frequently forgotten but the catalog is an ever present reminder Two types of catalog are here
Jobbers catalog Contains a variety of manufacturing sources an offer to a certain extent Equipment and machinery catalog Provide information of Specification of location of
supply for replacement parts as well as new equipments of Aarong
Trade journals Trade journals are also valuable sources of information of Aarong as to potential suppliers It is used in two ways
Firstly use is a study of the text adds to the buyerrsquos general information suggests new products and substitute materials
Secondly use has to do with advertising
Trade Directories Trade directories are volumes which list leading manufactures addresses number of branches products supplies equipment and other items offered for sale
Sales Representation In Aarong it is essential to develop good supplier relations which begin with a friendly courteous sympathetic and frank attitude toward the supplier salesperson Aarong have the policies and procedures guidelines concerning the relations between the purchasing office and suppliersrsquo representatives
Suppliers and Commodity file Such files contain information concerning the address of the Aarongrsquos supplier past orders placed with the company data concerning its general fitness reliability suppliers willingness to meet particular requirements of them which product has been purchased in the past price paid point of shipment and cross reference of the supplier file
043 Aarongrsquos Supplier evaluation We know that Aarong is an organization which fully depends on domestic ruler raw
product So the supplier of Aarong will be the ruler people Aarongrsquos supplier evaluation depends on some important factors Those are given below
Existing and Potential Sources The evaluation of suppliers is a continuing purchasing task Aarong does this very carefully They monitored to see if expected performance
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36(P
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materializes with current suppliers New sources need to be screened to see if their potential warrants serous future consideration
Informal and Formal Evaluation Aarongrsquos current supplier is one which has passed through earlier supplier efforts and subsequently received at a minimum one order Most buyer of Aarong tends to separate current suppliers into at least two categories
Informal Evaluation Informal evolution includes assessments of personal contract between Aarong and its supplier in the purchaser section in all function where such contract takes place
044 Aarongrsquos Additional sources and selection consideration
Aarongrsquos additional sources and selection consideration system causes if supplier had been found who could meet all the requirements the search would be over Such it not the case Shall the buyer in buying a given item rely on a single supplier or utilize several Shall the buyer directly buy from manufacturers or through distributors Aarong need quick supply because customer demand is very high and fast Aarong need the product as their expectation In doing so it shall be assumed that adequate investigation for fairness and capacity to meet the requirements as to quality quantity delivery and service and that prices are not unreasonable The product of Aarong is much reasonable then other So Aarong need to maintain this for customer
045 Aarongrsquos supplier rating systemSupplier rating system is very important function for an organization Aarong evaluate
their supplier rating system through some steps Most formal supplier rating schemes attempt to track actual performance over time Thus corrective action can be taken as needed Formal supplier rating schemes track vendor performance on quality price delivery and service It is
Page
36(P
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normal to track a supplierrsquos quality performance very closely and in sufficient deal to enable the pinpointing of corrective action Delivery performance of a current supplier is fairly easily tracked if good records exist of delivery promises and actual recipients and few modifications have been made on an informal basis There is a most effective evaluation system of rating that Aarong follows is weighted point evaluation system
Aarong has different types of supplier that is why this system is successful Particularly in cases where several sources supply the same item Outstanding performance of a supplier can then be rewarded with additional business while poor performance will at the least result in less business or possibly dropping a supplier altogether For different product classes different factors weight and measure should be used to reflect varying impact on the organization
Factor Weight How MeasuredSupplier
Performance past 12 Months
Rating
Quality30 1 defective subtracts
605 defective (30(100-(05 X
6)100=291
Delivery 40 1 day late subtracts 2
Average 5 days late (40(100-(5X2)100=36
Price 20 Lowest price paidPrice charged
$50$55
(20(5055)X100)100=1818
Service10 Goods=100
Fair=70Poor=40
Fair=75 (10X75)100=75
Total Points
100 9078
Aarongrsquos supplier weighted point rating system
046 The Supplier selection decisionThe purchaserrsquos Perception of the supplierrsquos ability in Aarong to meet satisfactory
quality quantity delivery and price and service objectives will govern the selection decision Itrsquos also included their past history facilities and technical strength financial status organization and management reputation systems communication of rural people labor relations and location The nature and the amount of the purchase will influence the selection decision
Page
36(P
OP
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Aarongrsquos supplier selection decision can be seen as decision making under uncertainty and can be represented by a decision tree There are three stage decision trees for supplier selection also In the given figure shows a decision tree of one stage situation with only two suppliers considered and two possible outcomes To use decision tree effectively and assess the probabilities of success and failure This simple tree could apply to a special onetime purchase without expectation of follow on business for some time to come
SolutionSupplier A Supplier BHigh 100 X 30 =3000 High 100 X 28 =2800Medium 70 X 35 =2450 Medium 70 X 40 =2800Low 40 X 40 =1600 Low 40 X 30 =1200
=7000 =6800So Aarong will choose supplier B
047 Consumer buyer behavior CONSUMER DECISION PROCESS MODEL
Aarong is the most leading fashionable organization in Bangladesh Aarong is always looking towards its consumer perceptions It always creates a different look and patterns in their product This is the main reason to attract consumer The process component of the consumer decision making process deals with how consumers make decisions The product consumer have
Price $30 per unit
Price $35 per unit
Price $40 per unit
Price $28 per unit
Price $40 per unit
Price $30 per unit
On demand high 100 units
On demand medium 70 units
On demand low 40 units
On demand high 100 units
On demand medium 70 units
On demand low 40 units
Supplier
A
Supplier
B
Page
36(P
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selected to buy and in order to understand how a consumer makes these decisions in the process component we need to look at the psychological field of the process model which are the internal influences of motivation perception learning personality amp attitude and how these influences affect the decision making process Aarong the act of making a consumer decision consists of three stages which are need recognition pre-purchase search amp evaluation of alternatives
Need Recognition Need recognition occurs when a consumer is faced with a problem There are many different reasons why someone would decide that they need to buy the product from Aarong It might be necessary of any product as well as fashionable one
Pre-purchase Search Pre-purchase search is very important for consumer At first they search their desirable product in the market After that they decide from where they buy their product When they think about perfection and fissionable thing they must go through Aarong
Evaluation of Alternative This means to evaluate the alternative brands of that product From that evaluation consumer select their product according their perception Aarong have the ability to fulfill their perception That is the quality of Aarong
048 Purchase-supplier relationsWhen one organization supplies another with goods or services the nature of the
relationship between the two organizations is a major influence on the ultimate value and customer satisfaction achievable Aarong maintain a good relationship with their supplier They maintain the relationship very sincerely Aarong deals with their supplier several times All times they maintain their formalities Good relations with supplier are very important for their supply system If the relation is well the supplier supply product as their requirement In this section the nature of supplier goodwill will be discussed along with the framework for buyer-seller satisfaction the qualifications of good and preferred suppliers partnerships and strategic alliances
049 Aarongrsquos Purchase-supplier satisfaction modelAarong is a fair trade organization Aarong always try to satisfy their selected supplier
One of the major assessments a purchaser must make is whether the current relationship with a supplier is satisfactory or not This relationship is highly complex and different people inside the
Page
36(P
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purchasing organization may have different perceptions of it Aarong follow a supplier satisfaction model This model includes some assumptions Those are
I That satisfaction with a current supplier relationship can be assessed however crudely at least in macro terms whether it is satisfactory or not
II That an unsatisfied party will attempt to move to a more satisfactory situationIII That attempts to move may fall in the win and lose as well as the lose and lose lose and
win and win and win categoryIV That attempts to move may affect the stability of the relationshipV That purchaser and seller may well have different perceptions of the same relationship
VI That many tools techniques and approaches exists which will assist either party in moving position and improving stability
0410 Aarongrsquos Reverse supplier developmentIn supplier selection it has so far been assured that at least one suitable and willing
supplier already exists and that the purchaserrsquos problems are primarily one of determining who
C
D B
A
Purchaser dissatisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier dissatisfied
Purchaser satisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier satisfied
Total Dissatisfaction
Marginal satisfaction
Complete satisfaction
Marginal satisfaction
Complete satisfaction
Supplierrsquos Satisfaction
Purchaserrsquos Satisfaction
Page
36(P
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the best supplier is In this case Aarong is very serious about their supplierrsquos development After selecting the best supplier they give better training for their future development We know that Aarong highly depends on rural suppliers Reverse marketing supplier development implies a degree of aggressive procurement involvement not normally encountered in supplier selection
Reverse supplier development should take a broader point of view It defines the need for developing new or existing suppliers as follows The purchase is aware that benefits will accrue to both the supplier and the purchaser benefits of which the supplier may not be aware
Aarongrsquos Supplier Development Context
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
bull Spot payment on product delivery to encourage efficiency and productivity bull Reach out to producers in remote areas to ensure fair value for their efforts bull Marketing communication and information for artisans bull Advances against purchase orders where necessary bull Training amp Education in skills development to raise product quality and marketability bull Product Design and Support in Product Development bull Quality Control to increase producer awareness of the importance of quality
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers in Bangladesh
0411 Aarongrsquos Management and Financial Evaluation
Aarongrsquos management and financial evaluation tends toward greater reliance on single sources for a longer time continuous along with great interest in material requirement and just in
Supplier Purchaser
Purchasing initiative
Sales response
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time production potential suppliers management strength takes on added significance This will require a detailed examination of Aarongrsquos structure qualifications of managers management control the reward-punishment system training and development system and policies and procedures It is also useful to have an explanation as to why the supplierrsquos manager believes it is managing well and an indication of its most notable successes and failures An evaluation of this supplierrsquos procurement system organization procedures and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract
0412 BenefitsEvery single woman who works in Aarong-owned production facilities is also a beneficiary
of BRACs (Bangladesh Rural Advancement Committee) multifaceted development programs As a support entity of BRAC a significant portion of Aarongs earnings go directly into financing the NGOs (non-governmental organization) development programs in healthcare and education as well as economic and social development Specific benefits for producers include
Free medical check-ups including free eye treatment eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workerrsquos retirement fund
Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible
Further AARONG also assists with design and development market information and quality control and provides advances against purchase orders as well as spot payment on product delivery to encourage further production
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0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
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05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
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052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
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Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
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36(P
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053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
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36(P
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054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
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36(P
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36(P
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055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
36(P
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056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
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The Ayesha Abed Foundation (AAF) is an organization that aims to provide avenues for employment and income generation for underprivileged rural women The Foundation provides an appropriate working environment financial and technical assistance and training to develop the womenrsquos skills in various crafts The Foundation was established to commemorate the memory and work of late Mrs Ayesha Abed a co-worker and wife of the Founder and Chairperson of BRAC The work that is done in the Foundation is a testament to her commitment to the issues of education training and employment opportunities for disadvantaged women It was she who in 1976 initiated all the present major activities of AAF in Manikgonj
The AAF aims to work with the most underprivileged women in the society These women are often the most neglected and are in need of much assistance and support The AAF plays the role of a facilitator To support these women Aarong has created 13 production centers in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah and 653 sub Centre spread across in 2000 villages of Bangladesh Today More than 40000 women work directly for Aarong in its production centers The women are placed in an enabling environment with other women of similar socio-economic backgrounds They are trained and then given the opportunity to generate income This is where the AAF steps in helping such marginalized women out of their peripheral existence in society and giving them the opportunity to become involved in sustainable enterprise
The AAF is closely interrelated with other programs especially BRAC Development Program (BDP) and Aarong The women workers of the AAF come from the BDP organized Village Organizations Working at the AAF thus gives the women access to other BRAC programs All of the AAFrsquos finished products are sold through Aarong which additionally provides designs raw materials and financial support to the AAF Since AAF supplies exclusively to Aarong it is treated as Aarong Production Centers
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0210 Organizationrsquos Profile
Organization Name Aarong
Country Territory Bangladesh (London)
Organizationrsquos Head Quarter Aarong Centre (Head Office)
346 Tejgaon IA Dhaka-1208 Tel +880 2 8832139 Fax +880 2 9898267
Email exportaarongbracnet
Year of establishment 1978
Business line A fair trade organization
Produce traditional Bangladeshi products
Number of artisans Over 65000 (85 women)
A fashion show for celebrating 30 years of Aarong
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36(P
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03 BRAC amp Aarong
The Aarong export and marketing project was jointly organized by MCC and BRAC in 1978 It is now directly handled by BRAC The Bangladesh Rural Advancement Committee is managed entirely by Bangladeshis It is the largest non-governmental development organization in the country BRAC has initiated education projects in one fifth of the countryrsquos 80000 villages and in 2001 they started a university It is also responsible for thousands of health programs numerous agriculture and food production businesses and micro-credit initiatives
Aarong works to empower the poor and strengthen traditional craftsmanship The organization involves over 30000 artisans (85 of whom are women) employed through small community groups They produce an impressive range of products terra cotta silk and cotton textiles clothes leather work brass wood candles basketry and jewellery Aarong operates eight retail stores in Bangladesh which sell about 80 of the crafted items the remainders of products are exported
The women Aarong employs are among the countries most disadvantaged Through Aarong they have been offered a way out of destitution and degradation where before they had none And the benefits that they receive extend well beyond simply the wages they earn for their products since every single woman who works in Aarong-owned production facilities is also a beneficiary of BRACs multifaceted development programs
As a support entity of BRAC a significant portion of Aarongrsquos earnings go directly into financing the NGOrsquos development programs in healthcare education as well as economic and social development
Page
36(P
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031 A fair trade organization
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
Spot payment on product delivery to encourage efficiency and productivity Reach out to producers in remote areas to ensure fair value for their efforts
Marketing communication and information for artisans
Advances against purchase orders where necessary
Training amp Education in skills development to raise product quality and marketability
Product Design and Support in Product Development
Quality Control to increase producer awareness of the importance of quality
A fair showroom for Aarong
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations Fair Trade is a trading partnership based on dialogue transparency and respect that seek greater equity in international trade It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers ndash especially in the South (IFAT)
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032 Products and services of AarongHolding the steadfast to its original Mission Aarong today supports the lives and
livelihoods of thousands of rural artisans and handicraft producers These producers and artisans create wide range of products for the different types of consumers in home and abroad The products are unique and traditional and appealing to the modern consumers staring from clothes accessories to home wares Aarong designs and creates clothes for women men and children There are designers and more than 3000 weavers across the country are involved with the production of Aarong clothing lines And for the fashionable accessories there is one special department called jewelry department where jeweler creates elegant jewelries that are contemporary yet traditional using gold silver and jewels like pearl emerald and diamonds The other accessories like bag sandals and produced in AAF centers using leather jute bamboo etc In home ware and decorative Aarong produces pottery vases and sculpture of wood bamboo brass and clay etc
For exporting the products Aarong has a separate department in head office and very selective artisans work here to produce fine quality products and these are sent to the production centers as sample of the exporting products Here is the list of some products Aarong produces
Clothes amp Accessories MENrsquoS PRODUCTS
1 Traditional 2 Executive Shirts 3 Maanja 4 Fotua 5 Short Kurta 6 T‐shirts 7 StolesShawls 8 Sandals
WOMENS PRODUCTS
1 Traditional 2 Western 3 Nightwear 4 ShawlsScarves 5 Shoes 6 Bags
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7 Fabrics
CHILDRENS PRODUCTS
1 Clothes 2 Toys 3 Books 4 Shoes
Jewelry Products
1 Gold 2 Silver 3 Pearl 4 Other
LEATHER PRODUCTS
1 Shoes 2 BagsWallets 3 Belts 4 Boxes 5 Photo Frames
NAKSHI KANTHA PRODUCTS
1 Decorative 2 Wall hangings 3 Christmas decorations
Along with the clothes accessories and home ware Aarong also produces food products like milk flavored milk (mango amp chocolate) juices (mango amp tamarind) yogurt drinks (orange strawberry) curd (sweet amp sour) butter and honey And herbal skincare products like soaps shampoo oil and face pack etc
Page
36(P
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Home Wares amp Furniture1 Curtain 2 Bed cover amp cushions 3 Rugs 4 Table Lamps 5 Photo
Frames 6 Coasters
7 Napkin Rings
8 Mats 9 Trays
10 Cutlery 11 Bowls and Platters
12 Photo Frames 13 Bookends 14 Boxes 15 Hammocks 16 Plant Accessories 17 Candles
033 Aarong Retail OutletsAarong sales its products through its own outlets Aarong follow zero distribution
channel Around the country Aarong has ten outlets six outlets in Dhaka in six major parts (Dhanmondi Gulshan Uttara Maghbazar Wari and Mirpur) and outside Dhaka Aarong has two
Page
36(P
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outlets in Chittagong one in Sylhet and one in Khulna And outside Bangladesh Aarong has one shop in London United Kingdom
Aarong Centre (Head Office ) 346 Tejgaon IA Dhaka-1208 Tel +880 2 8832139 Fax +880 2 9898267Email exportaarongbracnet
Aarong at Gulshan Gulshan ndash Tejgaon Link RoadDhaka 1208Tel 8821052 8825986 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong at Maghbazar Aarong Plaza61 Shahid Shangbadik Selina Parveen Sharak MaghbazarDhaka 1217Tel 9334766 9360260 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong at Dhanmondi Aarong Dhanmondi11 Block-A LalmatiaManik Miah AvenueMirpur RoadDhaka-1207 Tel +88-02-8111607Fax +880 2 8828576Email exportaarongbracnet Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong at Uttara Aarong Uttara Jasim Uddin Sector 4Uttara Model TownDhaka 1230Tel 8916097 8914125 ext 501 Operating Hours 1000am ndash 800pmOpen 7 days a week
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Aarong at Wari 361 Rankin Street (1st Floor) WariDhaka 1203Tel 7114244 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong in Halishahar Chittagong House 1 Lane 1 Block LHalishahar ChittagongTel 031-2515644-45 Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong in Sylhet 413 Naya SharakSylhetTel 6017 0821-815988 0821-713150 Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong in Nasirabad Chittagong Golden Plaza (1st Floor)1692 CDA AvenueChittagongTel 031-654030 06074485325 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong in Khulna Plot A43-A44Majeed Sharani AvenueShib BariKhulnaTel 6016 041-730547
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36(P
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Aarong in London
Aarong sell an assortment of own brand formal and casual wear for both men and women in London Although Aarong sell its own products but the show room which in London is little bit different from our local shop Because the demand of the customers of London
69 Vallance RdLondon E1 5BS United Kingdom+44 20 72477727
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36(P
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034 PromotionAs it is in other avenues Aarong is a trendsetter in promotional activities as well Having
been one of the first Bangladeshi brands to use professional models and create sophisticated ad campaigns Aarong continues to set the style and quality standard for promotion by achieving greater levels of class and elegance with each campaign Aarong also selects its promotional mediums carefully to ensure accurate reflection of the brands values Aarongs promotional events - such as its carefully orchestrated fashion shows unique and detailed exhibitions and highly popular sales events ndash have become a significant part of popular culture in urban Bangladesh Aarong also focuses on in-store promotional activities such as its My Aarong Rewards programmed to enhance customer experience
035 Export Terms and Conditions
Beneficiary BRAC66 Mohakhali CA Dhaka 1212BangladeshTel 880-2-9885424 880-2-8824180Fax 880-2-8828576 880-2-8823614
Payment to LC at sight or 50 Advance with order amp 50 before shipment by TT to BRAC Bank Limited1 Gulshan Avenue Gulshan-1 Dhaka-1212 BangladeshTel 880-2-8824501 Fax 880-2-8813543Account 150180010606 Account Name BRAC - Aarong
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36(P
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Delivery Between 60 to 120 days depending on volume of order on receipt of LC
Port of Dispatch By Air Zia International Airport DhakaBy Sea ICD Dhaka for Full Container Load (FCL) Chittagong for Loose Container Load (LCL)
Packing Fragile items are packed individually in 3 ply carton boxes and master packing in 5 or 7 ply carton boxes Other non-breakable items are packed individually in a ploy bag and master packing in 5 ply carton boxes (2025 kgs in a box)
Freight and Insurance Freight and Insurance to be covered by the importer which varies from port to port
Advance If 50 is paid in advance against the ordered value then the documents will be sent to the importers directly Otherwise the documents will be sent to the bank for collection against Bill of Exchange
Page
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036 MarketA pioneer in the countrys craft industry Aarongs unique product designs have brought
consumer attention back to crafts and materials indigenous to Bangladesh as its designers blend the traditional with the contemporary in a way that continues to win consumer appeal Its success revolutionized trends and virtually created the market that has now been taken up by countless other boutiques and brands Aarong caters to this growing urban consumer base through outlets in every major city in the country Their discerning style and high-quality craftsmanship make every Aarong product unique and demand for them has been consistently rising due to Aarongs focus on innovation quality value-based pricing and superior in-store customer service All these elements backed by a robust distribution network and strong supply chain have made Aarong a true household brand in Bangladesh Just as Bangladeshis living abroad look to Aarong for products that connect them to their heritage the Aarong experience is an essential part of any trip to Bangladesh by foreign visitors ndash a phenomenon chronicled in the Lonely Planet guide to Bangladesh Aarong products are not only the gift items of choice for every occasion for local and expatriate Bangladeshis but also the quintessential cultural mementos for these visitors Aarongs growing presence outside Bangladesh - through fair-trade networks in Europe as well as a retail franchise in London - continues to broaden the market for Bangladeshi craft globally
037 Producers or suppliers Aarong embraces and nurtures a diverse representation of 65000 artisans 85 of whom
are women More than forty thousand of these women work directly for Aarong in its 13 production centrersquos (Foundations) in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah including 653 sub-centers spread across Bangladesh Twenty-five thousand independent co-operative groups and traditional family-based artisans also market their crafts through Aarong Potters brass workers jewelers jute workers basket weavers handloom weavers silk weavers wood carvers leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services The leather workers are various artisans with specialized skills from all over the country
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038 Brand valueAarong stands for a unique mix of design quality and convenience of the traditional and
the contemporary Aarong is one of a kind ndash globally positioned as a highly successful Bangladeshi craft based retail chain and brand of pride It also carries the distinction of being BRACs most successful social enterprise Aarongs responsibility is therefore two fold delivering unique products with the highest level of quality and service to its customers and the strongest level of support and protection of artisans and their craft To its consumers Aarong is a household name - a one-stop shop and a trusted brand that inspires pride promises quality and sophistication and helps to keep cultural roots alive in everyday life For the artisans Aarong represents the endurance of both their age-old art as well as their livelihoods For consumers and artisans alike Aarong has become a part of the cultural fabric of their lives
Those things we didnt know-1 In Bengali Aarong means village fair and Taaga means thread2 Half of the profit from every purchase you make at Aarong goes towards supporting
schools health services and specific interventions targeted to the ultra poor segment by BRAC
3 3 people enter an Aarong outlet every second4 The amount of fabric consumed by Aarong in a year can wrap around Bangladesh 8
times
039 Aarongrsquos Production Centers
1 At Aarong has 8 domestic outlets (5 in Dhaka 1 in Chittagong 1 in Sylhet and 1 in Khulna) 1 franchise in London)
2 Aarong has 13 center and (Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur Pabna Pollobi Kurigram Nilphamary and Jhenaidah)
3 653 sub-centers spread across Bangladesh
4 As well as considerable export operation in many European North American and Asian countries
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0310 Artisans Karim Mias Story
Karim Mia is a bamboo tray and basket producer of Aarong Due to extreme poverty at home Karim Mia stopped his schooling when he was in class 3 and began assisting his father in bamboo crafts weaving Struck by the untimely death of his father Karim Mia at the age of 16 had to find an immediate source of income to run his family of five brothers five sisters and his mother Initially Karim Mia commuted from his home district Tangail (approx 120 km away from Dhaka city) to sell bamboo products at small crafts shops in Dhaka At that time with his meager monthly income of almost $25 he could barely support his family After struggling for almost three years Karim Mia came to Aarong in 1988 to show some of his samples His self-designed samples were immediately chosen and an order was placed for 60 pieces Since then Karim Mia has received constant orders from Aarong for its local as well as export market
As part of its mission to assist producers in product development and technical training Aarong sponsored Karim Mia to attend a bamboo crafts workshop in New Delhi in 2003 The one-week training has helped him to gain better knowledge about bamboo craft His workmanship has also shown remarkable improvement in quality Today Karim Mia supplies exclusively to Aarong and has a steady monthly income of $100-130 On an average he has ten workers working under him During the busy season he employs more than fifty workers
Karim Mia is now married with two sons and a daughter all of whom attend school He hopes that his children will be able to complete their education which he could not because of financial need About two years ago Karim Mia bought 20 decimal lands in Tangail where he constructed his tin-shed home Very recently he has built an extension room that is being used as working space and storage for the bamboo products
Karim Mia feels that Aarongrsquos support during his needy times the continued assistance in product development and design and a steady flow of orders has helped him carve out a dignified existence for himself and his family
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0311 Others Artisans
Holding steadfast to its original mission Aarong today supports the lives and livelihoods of nearly sixty five thousand rural artisans and handicraft producers 85 of who are women More than forty thousand of these women work directly for Aarong in its 13 production centers in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah and 653 subcentres spread across Bangladesh
Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong Potters Brass Workers Jewellers Jute workers Basket Weavers Handloom Weavers Silk Weavers Wood Carvers Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services
04
Make or buy of aarongTraditionally Aarong prefers the make option tended to be favored by ownership of a
large range of manufacturing and subassembly facilities They were largely depends on raw materials which were processed in house Specially buy canrsquot give full perfection Thatrsquos why Aarong prefer make option
Reason for Make Instead of Buy
Page
36(P
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There are many special reasons in Aarong to prefer make option instead of buy These include
The quantities are too small Quality requirements may be so exacting or so unusual as to require special processing
methods that suppliers canrsquot be expected to provide Closer coordination of supply with the demand To preserve technological secrets To obtain a lower cost To advantage of or avoid idle equipment or labor To avoid sole source dependency The management of Aarong appears to take pride in size
Dangers Involved in Decision to Manufacture
To manufacture the various types of product of Aarong dangers involve in decision include
They may have lack administrative or technical experience in the production The challenges of maintaining ling term technological and economic viability for a
noncore activity Difficult to determine the costs of the make decision A lack of flexibility in selecting possible sources and substitute items is likely to result
041 Sub contractionThe use of subcontract is perfect when placing orders for work which is difficult to
define take a long time and extremely costly Managing the subcontract is a complex activity which requires knowledge about performance to date as well as ability to anticipate actions needed to ensure the desired end results Thatrsquos why Aarong donrsquot have the subcontracting policy
042 Sources of information about suppliersKnowledge of information source is primary task for this kind of manufacturing agency
Aarong relay solely on their whole experience and past memory The normal principal sources of information consist of catalogs trade journals advertisements suppliers and commodity directories sales interviews annual report etc These are given bellow in brief
Catalogs Aarong have the proper catalog and have the advantage of being a permanent record of whole organization always in the office of the buyer Salespeople are not always
Page
36(P
OP
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available advertisements are frequently forgotten but the catalog is an ever present reminder Two types of catalog are here
Jobbers catalog Contains a variety of manufacturing sources an offer to a certain extent Equipment and machinery catalog Provide information of Specification of location of
supply for replacement parts as well as new equipments of Aarong
Trade journals Trade journals are also valuable sources of information of Aarong as to potential suppliers It is used in two ways
Firstly use is a study of the text adds to the buyerrsquos general information suggests new products and substitute materials
Secondly use has to do with advertising
Trade Directories Trade directories are volumes which list leading manufactures addresses number of branches products supplies equipment and other items offered for sale
Sales Representation In Aarong it is essential to develop good supplier relations which begin with a friendly courteous sympathetic and frank attitude toward the supplier salesperson Aarong have the policies and procedures guidelines concerning the relations between the purchasing office and suppliersrsquo representatives
Suppliers and Commodity file Such files contain information concerning the address of the Aarongrsquos supplier past orders placed with the company data concerning its general fitness reliability suppliers willingness to meet particular requirements of them which product has been purchased in the past price paid point of shipment and cross reference of the supplier file
043 Aarongrsquos Supplier evaluation We know that Aarong is an organization which fully depends on domestic ruler raw
product So the supplier of Aarong will be the ruler people Aarongrsquos supplier evaluation depends on some important factors Those are given below
Existing and Potential Sources The evaluation of suppliers is a continuing purchasing task Aarong does this very carefully They monitored to see if expected performance
Page
36(P
OP
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materializes with current suppliers New sources need to be screened to see if their potential warrants serous future consideration
Informal and Formal Evaluation Aarongrsquos current supplier is one which has passed through earlier supplier efforts and subsequently received at a minimum one order Most buyer of Aarong tends to separate current suppliers into at least two categories
Informal Evaluation Informal evolution includes assessments of personal contract between Aarong and its supplier in the purchaser section in all function where such contract takes place
044 Aarongrsquos Additional sources and selection consideration
Aarongrsquos additional sources and selection consideration system causes if supplier had been found who could meet all the requirements the search would be over Such it not the case Shall the buyer in buying a given item rely on a single supplier or utilize several Shall the buyer directly buy from manufacturers or through distributors Aarong need quick supply because customer demand is very high and fast Aarong need the product as their expectation In doing so it shall be assumed that adequate investigation for fairness and capacity to meet the requirements as to quality quantity delivery and service and that prices are not unreasonable The product of Aarong is much reasonable then other So Aarong need to maintain this for customer
045 Aarongrsquos supplier rating systemSupplier rating system is very important function for an organization Aarong evaluate
their supplier rating system through some steps Most formal supplier rating schemes attempt to track actual performance over time Thus corrective action can be taken as needed Formal supplier rating schemes track vendor performance on quality price delivery and service It is
Page
36(P
OP
302)
normal to track a supplierrsquos quality performance very closely and in sufficient deal to enable the pinpointing of corrective action Delivery performance of a current supplier is fairly easily tracked if good records exist of delivery promises and actual recipients and few modifications have been made on an informal basis There is a most effective evaluation system of rating that Aarong follows is weighted point evaluation system
Aarong has different types of supplier that is why this system is successful Particularly in cases where several sources supply the same item Outstanding performance of a supplier can then be rewarded with additional business while poor performance will at the least result in less business or possibly dropping a supplier altogether For different product classes different factors weight and measure should be used to reflect varying impact on the organization
Factor Weight How MeasuredSupplier
Performance past 12 Months
Rating
Quality30 1 defective subtracts
605 defective (30(100-(05 X
6)100=291
Delivery 40 1 day late subtracts 2
Average 5 days late (40(100-(5X2)100=36
Price 20 Lowest price paidPrice charged
$50$55
(20(5055)X100)100=1818
Service10 Goods=100
Fair=70Poor=40
Fair=75 (10X75)100=75
Total Points
100 9078
Aarongrsquos supplier weighted point rating system
046 The Supplier selection decisionThe purchaserrsquos Perception of the supplierrsquos ability in Aarong to meet satisfactory
quality quantity delivery and price and service objectives will govern the selection decision Itrsquos also included their past history facilities and technical strength financial status organization and management reputation systems communication of rural people labor relations and location The nature and the amount of the purchase will influence the selection decision
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36(P
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Aarongrsquos supplier selection decision can be seen as decision making under uncertainty and can be represented by a decision tree There are three stage decision trees for supplier selection also In the given figure shows a decision tree of one stage situation with only two suppliers considered and two possible outcomes To use decision tree effectively and assess the probabilities of success and failure This simple tree could apply to a special onetime purchase without expectation of follow on business for some time to come
SolutionSupplier A Supplier BHigh 100 X 30 =3000 High 100 X 28 =2800Medium 70 X 35 =2450 Medium 70 X 40 =2800Low 40 X 40 =1600 Low 40 X 30 =1200
=7000 =6800So Aarong will choose supplier B
047 Consumer buyer behavior CONSUMER DECISION PROCESS MODEL
Aarong is the most leading fashionable organization in Bangladesh Aarong is always looking towards its consumer perceptions It always creates a different look and patterns in their product This is the main reason to attract consumer The process component of the consumer decision making process deals with how consumers make decisions The product consumer have
Price $30 per unit
Price $35 per unit
Price $40 per unit
Price $28 per unit
Price $40 per unit
Price $30 per unit
On demand high 100 units
On demand medium 70 units
On demand low 40 units
On demand high 100 units
On demand medium 70 units
On demand low 40 units
Supplier
A
Supplier
B
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36(P
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selected to buy and in order to understand how a consumer makes these decisions in the process component we need to look at the psychological field of the process model which are the internal influences of motivation perception learning personality amp attitude and how these influences affect the decision making process Aarong the act of making a consumer decision consists of three stages which are need recognition pre-purchase search amp evaluation of alternatives
Need Recognition Need recognition occurs when a consumer is faced with a problem There are many different reasons why someone would decide that they need to buy the product from Aarong It might be necessary of any product as well as fashionable one
Pre-purchase Search Pre-purchase search is very important for consumer At first they search their desirable product in the market After that they decide from where they buy their product When they think about perfection and fissionable thing they must go through Aarong
Evaluation of Alternative This means to evaluate the alternative brands of that product From that evaluation consumer select their product according their perception Aarong have the ability to fulfill their perception That is the quality of Aarong
048 Purchase-supplier relationsWhen one organization supplies another with goods or services the nature of the
relationship between the two organizations is a major influence on the ultimate value and customer satisfaction achievable Aarong maintain a good relationship with their supplier They maintain the relationship very sincerely Aarong deals with their supplier several times All times they maintain their formalities Good relations with supplier are very important for their supply system If the relation is well the supplier supply product as their requirement In this section the nature of supplier goodwill will be discussed along with the framework for buyer-seller satisfaction the qualifications of good and preferred suppliers partnerships and strategic alliances
049 Aarongrsquos Purchase-supplier satisfaction modelAarong is a fair trade organization Aarong always try to satisfy their selected supplier
One of the major assessments a purchaser must make is whether the current relationship with a supplier is satisfactory or not This relationship is highly complex and different people inside the
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36(P
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purchasing organization may have different perceptions of it Aarong follow a supplier satisfaction model This model includes some assumptions Those are
I That satisfaction with a current supplier relationship can be assessed however crudely at least in macro terms whether it is satisfactory or not
II That an unsatisfied party will attempt to move to a more satisfactory situationIII That attempts to move may fall in the win and lose as well as the lose and lose lose and
win and win and win categoryIV That attempts to move may affect the stability of the relationshipV That purchaser and seller may well have different perceptions of the same relationship
VI That many tools techniques and approaches exists which will assist either party in moving position and improving stability
0410 Aarongrsquos Reverse supplier developmentIn supplier selection it has so far been assured that at least one suitable and willing
supplier already exists and that the purchaserrsquos problems are primarily one of determining who
C
D B
A
Purchaser dissatisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier dissatisfied
Purchaser satisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier satisfied
Total Dissatisfaction
Marginal satisfaction
Complete satisfaction
Marginal satisfaction
Complete satisfaction
Supplierrsquos Satisfaction
Purchaserrsquos Satisfaction
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36(P
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the best supplier is In this case Aarong is very serious about their supplierrsquos development After selecting the best supplier they give better training for their future development We know that Aarong highly depends on rural suppliers Reverse marketing supplier development implies a degree of aggressive procurement involvement not normally encountered in supplier selection
Reverse supplier development should take a broader point of view It defines the need for developing new or existing suppliers as follows The purchase is aware that benefits will accrue to both the supplier and the purchaser benefits of which the supplier may not be aware
Aarongrsquos Supplier Development Context
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
bull Spot payment on product delivery to encourage efficiency and productivity bull Reach out to producers in remote areas to ensure fair value for their efforts bull Marketing communication and information for artisans bull Advances against purchase orders where necessary bull Training amp Education in skills development to raise product quality and marketability bull Product Design and Support in Product Development bull Quality Control to increase producer awareness of the importance of quality
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers in Bangladesh
0411 Aarongrsquos Management and Financial Evaluation
Aarongrsquos management and financial evaluation tends toward greater reliance on single sources for a longer time continuous along with great interest in material requirement and just in
Supplier Purchaser
Purchasing initiative
Sales response
Page
36(P
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time production potential suppliers management strength takes on added significance This will require a detailed examination of Aarongrsquos structure qualifications of managers management control the reward-punishment system training and development system and policies and procedures It is also useful to have an explanation as to why the supplierrsquos manager believes it is managing well and an indication of its most notable successes and failures An evaluation of this supplierrsquos procurement system organization procedures and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract
0412 BenefitsEvery single woman who works in Aarong-owned production facilities is also a beneficiary
of BRACs (Bangladesh Rural Advancement Committee) multifaceted development programs As a support entity of BRAC a significant portion of Aarongs earnings go directly into financing the NGOs (non-governmental organization) development programs in healthcare and education as well as economic and social development Specific benefits for producers include
Free medical check-ups including free eye treatment eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workerrsquos retirement fund
Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible
Further AARONG also assists with design and development market information and quality control and provides advances against purchase orders as well as spot payment on product delivery to encourage further production
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36(P
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0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
Page
36(P
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05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
Page
36(P
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052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
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Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
Page
36(P
OP
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053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
Page
36(P
OP
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054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
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36(P
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36(P
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055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
36(P
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056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
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36(P
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0210 Organizationrsquos Profile
Organization Name Aarong
Country Territory Bangladesh (London)
Organizationrsquos Head Quarter Aarong Centre (Head Office)
346 Tejgaon IA Dhaka-1208 Tel +880 2 8832139 Fax +880 2 9898267
Email exportaarongbracnet
Year of establishment 1978
Business line A fair trade organization
Produce traditional Bangladeshi products
Number of artisans Over 65000 (85 women)
A fashion show for celebrating 30 years of Aarong
Page
36(P
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03 BRAC amp Aarong
The Aarong export and marketing project was jointly organized by MCC and BRAC in 1978 It is now directly handled by BRAC The Bangladesh Rural Advancement Committee is managed entirely by Bangladeshis It is the largest non-governmental development organization in the country BRAC has initiated education projects in one fifth of the countryrsquos 80000 villages and in 2001 they started a university It is also responsible for thousands of health programs numerous agriculture and food production businesses and micro-credit initiatives
Aarong works to empower the poor and strengthen traditional craftsmanship The organization involves over 30000 artisans (85 of whom are women) employed through small community groups They produce an impressive range of products terra cotta silk and cotton textiles clothes leather work brass wood candles basketry and jewellery Aarong operates eight retail stores in Bangladesh which sell about 80 of the crafted items the remainders of products are exported
The women Aarong employs are among the countries most disadvantaged Through Aarong they have been offered a way out of destitution and degradation where before they had none And the benefits that they receive extend well beyond simply the wages they earn for their products since every single woman who works in Aarong-owned production facilities is also a beneficiary of BRACs multifaceted development programs
As a support entity of BRAC a significant portion of Aarongrsquos earnings go directly into financing the NGOrsquos development programs in healthcare education as well as economic and social development
Page
36(P
OP
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031 A fair trade organization
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
Spot payment on product delivery to encourage efficiency and productivity Reach out to producers in remote areas to ensure fair value for their efforts
Marketing communication and information for artisans
Advances against purchase orders where necessary
Training amp Education in skills development to raise product quality and marketability
Product Design and Support in Product Development
Quality Control to increase producer awareness of the importance of quality
A fair showroom for Aarong
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations Fair Trade is a trading partnership based on dialogue transparency and respect that seek greater equity in international trade It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers ndash especially in the South (IFAT)
Page
36(P
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032 Products and services of AarongHolding the steadfast to its original Mission Aarong today supports the lives and
livelihoods of thousands of rural artisans and handicraft producers These producers and artisans create wide range of products for the different types of consumers in home and abroad The products are unique and traditional and appealing to the modern consumers staring from clothes accessories to home wares Aarong designs and creates clothes for women men and children There are designers and more than 3000 weavers across the country are involved with the production of Aarong clothing lines And for the fashionable accessories there is one special department called jewelry department where jeweler creates elegant jewelries that are contemporary yet traditional using gold silver and jewels like pearl emerald and diamonds The other accessories like bag sandals and produced in AAF centers using leather jute bamboo etc In home ware and decorative Aarong produces pottery vases and sculpture of wood bamboo brass and clay etc
For exporting the products Aarong has a separate department in head office and very selective artisans work here to produce fine quality products and these are sent to the production centers as sample of the exporting products Here is the list of some products Aarong produces
Clothes amp Accessories MENrsquoS PRODUCTS
1 Traditional 2 Executive Shirts 3 Maanja 4 Fotua 5 Short Kurta 6 T‐shirts 7 StolesShawls 8 Sandals
WOMENS PRODUCTS
1 Traditional 2 Western 3 Nightwear 4 ShawlsScarves 5 Shoes 6 Bags
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36(P
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7 Fabrics
CHILDRENS PRODUCTS
1 Clothes 2 Toys 3 Books 4 Shoes
Jewelry Products
1 Gold 2 Silver 3 Pearl 4 Other
LEATHER PRODUCTS
1 Shoes 2 BagsWallets 3 Belts 4 Boxes 5 Photo Frames
NAKSHI KANTHA PRODUCTS
1 Decorative 2 Wall hangings 3 Christmas decorations
Along with the clothes accessories and home ware Aarong also produces food products like milk flavored milk (mango amp chocolate) juices (mango amp tamarind) yogurt drinks (orange strawberry) curd (sweet amp sour) butter and honey And herbal skincare products like soaps shampoo oil and face pack etc
Page
36(P
OP
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Home Wares amp Furniture1 Curtain 2 Bed cover amp cushions 3 Rugs 4 Table Lamps 5 Photo
Frames 6 Coasters
7 Napkin Rings
8 Mats 9 Trays
10 Cutlery 11 Bowls and Platters
12 Photo Frames 13 Bookends 14 Boxes 15 Hammocks 16 Plant Accessories 17 Candles
033 Aarong Retail OutletsAarong sales its products through its own outlets Aarong follow zero distribution
channel Around the country Aarong has ten outlets six outlets in Dhaka in six major parts (Dhanmondi Gulshan Uttara Maghbazar Wari and Mirpur) and outside Dhaka Aarong has two
Page
36(P
OP
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outlets in Chittagong one in Sylhet and one in Khulna And outside Bangladesh Aarong has one shop in London United Kingdom
Aarong Centre (Head Office ) 346 Tejgaon IA Dhaka-1208 Tel +880 2 8832139 Fax +880 2 9898267Email exportaarongbracnet
Aarong at Gulshan Gulshan ndash Tejgaon Link RoadDhaka 1208Tel 8821052 8825986 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong at Maghbazar Aarong Plaza61 Shahid Shangbadik Selina Parveen Sharak MaghbazarDhaka 1217Tel 9334766 9360260 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong at Dhanmondi Aarong Dhanmondi11 Block-A LalmatiaManik Miah AvenueMirpur RoadDhaka-1207 Tel +88-02-8111607Fax +880 2 8828576Email exportaarongbracnet Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong at Uttara Aarong Uttara Jasim Uddin Sector 4Uttara Model TownDhaka 1230Tel 8916097 8914125 ext 501 Operating Hours 1000am ndash 800pmOpen 7 days a week
Page
36(P
OP
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Aarong at Wari 361 Rankin Street (1st Floor) WariDhaka 1203Tel 7114244 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong in Halishahar Chittagong House 1 Lane 1 Block LHalishahar ChittagongTel 031-2515644-45 Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong in Sylhet 413 Naya SharakSylhetTel 6017 0821-815988 0821-713150 Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong in Nasirabad Chittagong Golden Plaza (1st Floor)1692 CDA AvenueChittagongTel 031-654030 06074485325 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong in Khulna Plot A43-A44Majeed Sharani AvenueShib BariKhulnaTel 6016 041-730547
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36(P
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Aarong in London
Aarong sell an assortment of own brand formal and casual wear for both men and women in London Although Aarong sell its own products but the show room which in London is little bit different from our local shop Because the demand of the customers of London
69 Vallance RdLondon E1 5BS United Kingdom+44 20 72477727
Page
36(P
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034 PromotionAs it is in other avenues Aarong is a trendsetter in promotional activities as well Having
been one of the first Bangladeshi brands to use professional models and create sophisticated ad campaigns Aarong continues to set the style and quality standard for promotion by achieving greater levels of class and elegance with each campaign Aarong also selects its promotional mediums carefully to ensure accurate reflection of the brands values Aarongs promotional events - such as its carefully orchestrated fashion shows unique and detailed exhibitions and highly popular sales events ndash have become a significant part of popular culture in urban Bangladesh Aarong also focuses on in-store promotional activities such as its My Aarong Rewards programmed to enhance customer experience
035 Export Terms and Conditions
Beneficiary BRAC66 Mohakhali CA Dhaka 1212BangladeshTel 880-2-9885424 880-2-8824180Fax 880-2-8828576 880-2-8823614
Payment to LC at sight or 50 Advance with order amp 50 before shipment by TT to BRAC Bank Limited1 Gulshan Avenue Gulshan-1 Dhaka-1212 BangladeshTel 880-2-8824501 Fax 880-2-8813543Account 150180010606 Account Name BRAC - Aarong
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36(P
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Delivery Between 60 to 120 days depending on volume of order on receipt of LC
Port of Dispatch By Air Zia International Airport DhakaBy Sea ICD Dhaka for Full Container Load (FCL) Chittagong for Loose Container Load (LCL)
Packing Fragile items are packed individually in 3 ply carton boxes and master packing in 5 or 7 ply carton boxes Other non-breakable items are packed individually in a ploy bag and master packing in 5 ply carton boxes (2025 kgs in a box)
Freight and Insurance Freight and Insurance to be covered by the importer which varies from port to port
Advance If 50 is paid in advance against the ordered value then the documents will be sent to the importers directly Otherwise the documents will be sent to the bank for collection against Bill of Exchange
Page
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036 MarketA pioneer in the countrys craft industry Aarongs unique product designs have brought
consumer attention back to crafts and materials indigenous to Bangladesh as its designers blend the traditional with the contemporary in a way that continues to win consumer appeal Its success revolutionized trends and virtually created the market that has now been taken up by countless other boutiques and brands Aarong caters to this growing urban consumer base through outlets in every major city in the country Their discerning style and high-quality craftsmanship make every Aarong product unique and demand for them has been consistently rising due to Aarongs focus on innovation quality value-based pricing and superior in-store customer service All these elements backed by a robust distribution network and strong supply chain have made Aarong a true household brand in Bangladesh Just as Bangladeshis living abroad look to Aarong for products that connect them to their heritage the Aarong experience is an essential part of any trip to Bangladesh by foreign visitors ndash a phenomenon chronicled in the Lonely Planet guide to Bangladesh Aarong products are not only the gift items of choice for every occasion for local and expatriate Bangladeshis but also the quintessential cultural mementos for these visitors Aarongs growing presence outside Bangladesh - through fair-trade networks in Europe as well as a retail franchise in London - continues to broaden the market for Bangladeshi craft globally
037 Producers or suppliers Aarong embraces and nurtures a diverse representation of 65000 artisans 85 of whom
are women More than forty thousand of these women work directly for Aarong in its 13 production centrersquos (Foundations) in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah including 653 sub-centers spread across Bangladesh Twenty-five thousand independent co-operative groups and traditional family-based artisans also market their crafts through Aarong Potters brass workers jewelers jute workers basket weavers handloom weavers silk weavers wood carvers leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services The leather workers are various artisans with specialized skills from all over the country
Page
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038 Brand valueAarong stands for a unique mix of design quality and convenience of the traditional and
the contemporary Aarong is one of a kind ndash globally positioned as a highly successful Bangladeshi craft based retail chain and brand of pride It also carries the distinction of being BRACs most successful social enterprise Aarongs responsibility is therefore two fold delivering unique products with the highest level of quality and service to its customers and the strongest level of support and protection of artisans and their craft To its consumers Aarong is a household name - a one-stop shop and a trusted brand that inspires pride promises quality and sophistication and helps to keep cultural roots alive in everyday life For the artisans Aarong represents the endurance of both their age-old art as well as their livelihoods For consumers and artisans alike Aarong has become a part of the cultural fabric of their lives
Those things we didnt know-1 In Bengali Aarong means village fair and Taaga means thread2 Half of the profit from every purchase you make at Aarong goes towards supporting
schools health services and specific interventions targeted to the ultra poor segment by BRAC
3 3 people enter an Aarong outlet every second4 The amount of fabric consumed by Aarong in a year can wrap around Bangladesh 8
times
039 Aarongrsquos Production Centers
1 At Aarong has 8 domestic outlets (5 in Dhaka 1 in Chittagong 1 in Sylhet and 1 in Khulna) 1 franchise in London)
2 Aarong has 13 center and (Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur Pabna Pollobi Kurigram Nilphamary and Jhenaidah)
3 653 sub-centers spread across Bangladesh
4 As well as considerable export operation in many European North American and Asian countries
Page
36(P
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0310 Artisans Karim Mias Story
Karim Mia is a bamboo tray and basket producer of Aarong Due to extreme poverty at home Karim Mia stopped his schooling when he was in class 3 and began assisting his father in bamboo crafts weaving Struck by the untimely death of his father Karim Mia at the age of 16 had to find an immediate source of income to run his family of five brothers five sisters and his mother Initially Karim Mia commuted from his home district Tangail (approx 120 km away from Dhaka city) to sell bamboo products at small crafts shops in Dhaka At that time with his meager monthly income of almost $25 he could barely support his family After struggling for almost three years Karim Mia came to Aarong in 1988 to show some of his samples His self-designed samples were immediately chosen and an order was placed for 60 pieces Since then Karim Mia has received constant orders from Aarong for its local as well as export market
As part of its mission to assist producers in product development and technical training Aarong sponsored Karim Mia to attend a bamboo crafts workshop in New Delhi in 2003 The one-week training has helped him to gain better knowledge about bamboo craft His workmanship has also shown remarkable improvement in quality Today Karim Mia supplies exclusively to Aarong and has a steady monthly income of $100-130 On an average he has ten workers working under him During the busy season he employs more than fifty workers
Karim Mia is now married with two sons and a daughter all of whom attend school He hopes that his children will be able to complete their education which he could not because of financial need About two years ago Karim Mia bought 20 decimal lands in Tangail where he constructed his tin-shed home Very recently he has built an extension room that is being used as working space and storage for the bamboo products
Karim Mia feels that Aarongrsquos support during his needy times the continued assistance in product development and design and a steady flow of orders has helped him carve out a dignified existence for himself and his family
Page
36(P
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0311 Others Artisans
Holding steadfast to its original mission Aarong today supports the lives and livelihoods of nearly sixty five thousand rural artisans and handicraft producers 85 of who are women More than forty thousand of these women work directly for Aarong in its 13 production centers in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah and 653 subcentres spread across Bangladesh
Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong Potters Brass Workers Jewellers Jute workers Basket Weavers Handloom Weavers Silk Weavers Wood Carvers Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services
04
Make or buy of aarongTraditionally Aarong prefers the make option tended to be favored by ownership of a
large range of manufacturing and subassembly facilities They were largely depends on raw materials which were processed in house Specially buy canrsquot give full perfection Thatrsquos why Aarong prefer make option
Reason for Make Instead of Buy
Page
36(P
OP
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There are many special reasons in Aarong to prefer make option instead of buy These include
The quantities are too small Quality requirements may be so exacting or so unusual as to require special processing
methods that suppliers canrsquot be expected to provide Closer coordination of supply with the demand To preserve technological secrets To obtain a lower cost To advantage of or avoid idle equipment or labor To avoid sole source dependency The management of Aarong appears to take pride in size
Dangers Involved in Decision to Manufacture
To manufacture the various types of product of Aarong dangers involve in decision include
They may have lack administrative or technical experience in the production The challenges of maintaining ling term technological and economic viability for a
noncore activity Difficult to determine the costs of the make decision A lack of flexibility in selecting possible sources and substitute items is likely to result
041 Sub contractionThe use of subcontract is perfect when placing orders for work which is difficult to
define take a long time and extremely costly Managing the subcontract is a complex activity which requires knowledge about performance to date as well as ability to anticipate actions needed to ensure the desired end results Thatrsquos why Aarong donrsquot have the subcontracting policy
042 Sources of information about suppliersKnowledge of information source is primary task for this kind of manufacturing agency
Aarong relay solely on their whole experience and past memory The normal principal sources of information consist of catalogs trade journals advertisements suppliers and commodity directories sales interviews annual report etc These are given bellow in brief
Catalogs Aarong have the proper catalog and have the advantage of being a permanent record of whole organization always in the office of the buyer Salespeople are not always
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available advertisements are frequently forgotten but the catalog is an ever present reminder Two types of catalog are here
Jobbers catalog Contains a variety of manufacturing sources an offer to a certain extent Equipment and machinery catalog Provide information of Specification of location of
supply for replacement parts as well as new equipments of Aarong
Trade journals Trade journals are also valuable sources of information of Aarong as to potential suppliers It is used in two ways
Firstly use is a study of the text adds to the buyerrsquos general information suggests new products and substitute materials
Secondly use has to do with advertising
Trade Directories Trade directories are volumes which list leading manufactures addresses number of branches products supplies equipment and other items offered for sale
Sales Representation In Aarong it is essential to develop good supplier relations which begin with a friendly courteous sympathetic and frank attitude toward the supplier salesperson Aarong have the policies and procedures guidelines concerning the relations between the purchasing office and suppliersrsquo representatives
Suppliers and Commodity file Such files contain information concerning the address of the Aarongrsquos supplier past orders placed with the company data concerning its general fitness reliability suppliers willingness to meet particular requirements of them which product has been purchased in the past price paid point of shipment and cross reference of the supplier file
043 Aarongrsquos Supplier evaluation We know that Aarong is an organization which fully depends on domestic ruler raw
product So the supplier of Aarong will be the ruler people Aarongrsquos supplier evaluation depends on some important factors Those are given below
Existing and Potential Sources The evaluation of suppliers is a continuing purchasing task Aarong does this very carefully They monitored to see if expected performance
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36(P
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materializes with current suppliers New sources need to be screened to see if their potential warrants serous future consideration
Informal and Formal Evaluation Aarongrsquos current supplier is one which has passed through earlier supplier efforts and subsequently received at a minimum one order Most buyer of Aarong tends to separate current suppliers into at least two categories
Informal Evaluation Informal evolution includes assessments of personal contract between Aarong and its supplier in the purchaser section in all function where such contract takes place
044 Aarongrsquos Additional sources and selection consideration
Aarongrsquos additional sources and selection consideration system causes if supplier had been found who could meet all the requirements the search would be over Such it not the case Shall the buyer in buying a given item rely on a single supplier or utilize several Shall the buyer directly buy from manufacturers or through distributors Aarong need quick supply because customer demand is very high and fast Aarong need the product as their expectation In doing so it shall be assumed that adequate investigation for fairness and capacity to meet the requirements as to quality quantity delivery and service and that prices are not unreasonable The product of Aarong is much reasonable then other So Aarong need to maintain this for customer
045 Aarongrsquos supplier rating systemSupplier rating system is very important function for an organization Aarong evaluate
their supplier rating system through some steps Most formal supplier rating schemes attempt to track actual performance over time Thus corrective action can be taken as needed Formal supplier rating schemes track vendor performance on quality price delivery and service It is
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36(P
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normal to track a supplierrsquos quality performance very closely and in sufficient deal to enable the pinpointing of corrective action Delivery performance of a current supplier is fairly easily tracked if good records exist of delivery promises and actual recipients and few modifications have been made on an informal basis There is a most effective evaluation system of rating that Aarong follows is weighted point evaluation system
Aarong has different types of supplier that is why this system is successful Particularly in cases where several sources supply the same item Outstanding performance of a supplier can then be rewarded with additional business while poor performance will at the least result in less business or possibly dropping a supplier altogether For different product classes different factors weight and measure should be used to reflect varying impact on the organization
Factor Weight How MeasuredSupplier
Performance past 12 Months
Rating
Quality30 1 defective subtracts
605 defective (30(100-(05 X
6)100=291
Delivery 40 1 day late subtracts 2
Average 5 days late (40(100-(5X2)100=36
Price 20 Lowest price paidPrice charged
$50$55
(20(5055)X100)100=1818
Service10 Goods=100
Fair=70Poor=40
Fair=75 (10X75)100=75
Total Points
100 9078
Aarongrsquos supplier weighted point rating system
046 The Supplier selection decisionThe purchaserrsquos Perception of the supplierrsquos ability in Aarong to meet satisfactory
quality quantity delivery and price and service objectives will govern the selection decision Itrsquos also included their past history facilities and technical strength financial status organization and management reputation systems communication of rural people labor relations and location The nature and the amount of the purchase will influence the selection decision
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36(P
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Aarongrsquos supplier selection decision can be seen as decision making under uncertainty and can be represented by a decision tree There are three stage decision trees for supplier selection also In the given figure shows a decision tree of one stage situation with only two suppliers considered and two possible outcomes To use decision tree effectively and assess the probabilities of success and failure This simple tree could apply to a special onetime purchase without expectation of follow on business for some time to come
SolutionSupplier A Supplier BHigh 100 X 30 =3000 High 100 X 28 =2800Medium 70 X 35 =2450 Medium 70 X 40 =2800Low 40 X 40 =1600 Low 40 X 30 =1200
=7000 =6800So Aarong will choose supplier B
047 Consumer buyer behavior CONSUMER DECISION PROCESS MODEL
Aarong is the most leading fashionable organization in Bangladesh Aarong is always looking towards its consumer perceptions It always creates a different look and patterns in their product This is the main reason to attract consumer The process component of the consumer decision making process deals with how consumers make decisions The product consumer have
Price $30 per unit
Price $35 per unit
Price $40 per unit
Price $28 per unit
Price $40 per unit
Price $30 per unit
On demand high 100 units
On demand medium 70 units
On demand low 40 units
On demand high 100 units
On demand medium 70 units
On demand low 40 units
Supplier
A
Supplier
B
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36(P
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selected to buy and in order to understand how a consumer makes these decisions in the process component we need to look at the psychological field of the process model which are the internal influences of motivation perception learning personality amp attitude and how these influences affect the decision making process Aarong the act of making a consumer decision consists of three stages which are need recognition pre-purchase search amp evaluation of alternatives
Need Recognition Need recognition occurs when a consumer is faced with a problem There are many different reasons why someone would decide that they need to buy the product from Aarong It might be necessary of any product as well as fashionable one
Pre-purchase Search Pre-purchase search is very important for consumer At first they search their desirable product in the market After that they decide from where they buy their product When they think about perfection and fissionable thing they must go through Aarong
Evaluation of Alternative This means to evaluate the alternative brands of that product From that evaluation consumer select their product according their perception Aarong have the ability to fulfill their perception That is the quality of Aarong
048 Purchase-supplier relationsWhen one organization supplies another with goods or services the nature of the
relationship between the two organizations is a major influence on the ultimate value and customer satisfaction achievable Aarong maintain a good relationship with their supplier They maintain the relationship very sincerely Aarong deals with their supplier several times All times they maintain their formalities Good relations with supplier are very important for their supply system If the relation is well the supplier supply product as their requirement In this section the nature of supplier goodwill will be discussed along with the framework for buyer-seller satisfaction the qualifications of good and preferred suppliers partnerships and strategic alliances
049 Aarongrsquos Purchase-supplier satisfaction modelAarong is a fair trade organization Aarong always try to satisfy their selected supplier
One of the major assessments a purchaser must make is whether the current relationship with a supplier is satisfactory or not This relationship is highly complex and different people inside the
Page
36(P
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purchasing organization may have different perceptions of it Aarong follow a supplier satisfaction model This model includes some assumptions Those are
I That satisfaction with a current supplier relationship can be assessed however crudely at least in macro terms whether it is satisfactory or not
II That an unsatisfied party will attempt to move to a more satisfactory situationIII That attempts to move may fall in the win and lose as well as the lose and lose lose and
win and win and win categoryIV That attempts to move may affect the stability of the relationshipV That purchaser and seller may well have different perceptions of the same relationship
VI That many tools techniques and approaches exists which will assist either party in moving position and improving stability
0410 Aarongrsquos Reverse supplier developmentIn supplier selection it has so far been assured that at least one suitable and willing
supplier already exists and that the purchaserrsquos problems are primarily one of determining who
C
D B
A
Purchaser dissatisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier dissatisfied
Purchaser satisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier satisfied
Total Dissatisfaction
Marginal satisfaction
Complete satisfaction
Marginal satisfaction
Complete satisfaction
Supplierrsquos Satisfaction
Purchaserrsquos Satisfaction
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36(P
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the best supplier is In this case Aarong is very serious about their supplierrsquos development After selecting the best supplier they give better training for their future development We know that Aarong highly depends on rural suppliers Reverse marketing supplier development implies a degree of aggressive procurement involvement not normally encountered in supplier selection
Reverse supplier development should take a broader point of view It defines the need for developing new or existing suppliers as follows The purchase is aware that benefits will accrue to both the supplier and the purchaser benefits of which the supplier may not be aware
Aarongrsquos Supplier Development Context
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
bull Spot payment on product delivery to encourage efficiency and productivity bull Reach out to producers in remote areas to ensure fair value for their efforts bull Marketing communication and information for artisans bull Advances against purchase orders where necessary bull Training amp Education in skills development to raise product quality and marketability bull Product Design and Support in Product Development bull Quality Control to increase producer awareness of the importance of quality
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers in Bangladesh
0411 Aarongrsquos Management and Financial Evaluation
Aarongrsquos management and financial evaluation tends toward greater reliance on single sources for a longer time continuous along with great interest in material requirement and just in
Supplier Purchaser
Purchasing initiative
Sales response
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36(P
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time production potential suppliers management strength takes on added significance This will require a detailed examination of Aarongrsquos structure qualifications of managers management control the reward-punishment system training and development system and policies and procedures It is also useful to have an explanation as to why the supplierrsquos manager believes it is managing well and an indication of its most notable successes and failures An evaluation of this supplierrsquos procurement system organization procedures and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract
0412 BenefitsEvery single woman who works in Aarong-owned production facilities is also a beneficiary
of BRACs (Bangladesh Rural Advancement Committee) multifaceted development programs As a support entity of BRAC a significant portion of Aarongs earnings go directly into financing the NGOs (non-governmental organization) development programs in healthcare and education as well as economic and social development Specific benefits for producers include
Free medical check-ups including free eye treatment eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workerrsquos retirement fund
Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible
Further AARONG also assists with design and development market information and quality control and provides advances against purchase orders as well as spot payment on product delivery to encourage further production
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0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
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36(P
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05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
Page
36(P
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052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
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Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
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36(P
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053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
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36(P
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054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
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36(P
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36(P
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055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
36(P
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056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
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36(P
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03 BRAC amp Aarong
The Aarong export and marketing project was jointly organized by MCC and BRAC in 1978 It is now directly handled by BRAC The Bangladesh Rural Advancement Committee is managed entirely by Bangladeshis It is the largest non-governmental development organization in the country BRAC has initiated education projects in one fifth of the countryrsquos 80000 villages and in 2001 they started a university It is also responsible for thousands of health programs numerous agriculture and food production businesses and micro-credit initiatives
Aarong works to empower the poor and strengthen traditional craftsmanship The organization involves over 30000 artisans (85 of whom are women) employed through small community groups They produce an impressive range of products terra cotta silk and cotton textiles clothes leather work brass wood candles basketry and jewellery Aarong operates eight retail stores in Bangladesh which sell about 80 of the crafted items the remainders of products are exported
The women Aarong employs are among the countries most disadvantaged Through Aarong they have been offered a way out of destitution and degradation where before they had none And the benefits that they receive extend well beyond simply the wages they earn for their products since every single woman who works in Aarong-owned production facilities is also a beneficiary of BRACs multifaceted development programs
As a support entity of BRAC a significant portion of Aarongrsquos earnings go directly into financing the NGOrsquos development programs in healthcare education as well as economic and social development
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36(P
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031 A fair trade organization
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
Spot payment on product delivery to encourage efficiency and productivity Reach out to producers in remote areas to ensure fair value for their efforts
Marketing communication and information for artisans
Advances against purchase orders where necessary
Training amp Education in skills development to raise product quality and marketability
Product Design and Support in Product Development
Quality Control to increase producer awareness of the importance of quality
A fair showroom for Aarong
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations Fair Trade is a trading partnership based on dialogue transparency and respect that seek greater equity in international trade It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers ndash especially in the South (IFAT)
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032 Products and services of AarongHolding the steadfast to its original Mission Aarong today supports the lives and
livelihoods of thousands of rural artisans and handicraft producers These producers and artisans create wide range of products for the different types of consumers in home and abroad The products are unique and traditional and appealing to the modern consumers staring from clothes accessories to home wares Aarong designs and creates clothes for women men and children There are designers and more than 3000 weavers across the country are involved with the production of Aarong clothing lines And for the fashionable accessories there is one special department called jewelry department where jeweler creates elegant jewelries that are contemporary yet traditional using gold silver and jewels like pearl emerald and diamonds The other accessories like bag sandals and produced in AAF centers using leather jute bamboo etc In home ware and decorative Aarong produces pottery vases and sculpture of wood bamboo brass and clay etc
For exporting the products Aarong has a separate department in head office and very selective artisans work here to produce fine quality products and these are sent to the production centers as sample of the exporting products Here is the list of some products Aarong produces
Clothes amp Accessories MENrsquoS PRODUCTS
1 Traditional 2 Executive Shirts 3 Maanja 4 Fotua 5 Short Kurta 6 T‐shirts 7 StolesShawls 8 Sandals
WOMENS PRODUCTS
1 Traditional 2 Western 3 Nightwear 4 ShawlsScarves 5 Shoes 6 Bags
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36(P
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7 Fabrics
CHILDRENS PRODUCTS
1 Clothes 2 Toys 3 Books 4 Shoes
Jewelry Products
1 Gold 2 Silver 3 Pearl 4 Other
LEATHER PRODUCTS
1 Shoes 2 BagsWallets 3 Belts 4 Boxes 5 Photo Frames
NAKSHI KANTHA PRODUCTS
1 Decorative 2 Wall hangings 3 Christmas decorations
Along with the clothes accessories and home ware Aarong also produces food products like milk flavored milk (mango amp chocolate) juices (mango amp tamarind) yogurt drinks (orange strawberry) curd (sweet amp sour) butter and honey And herbal skincare products like soaps shampoo oil and face pack etc
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36(P
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Home Wares amp Furniture1 Curtain 2 Bed cover amp cushions 3 Rugs 4 Table Lamps 5 Photo
Frames 6 Coasters
7 Napkin Rings
8 Mats 9 Trays
10 Cutlery 11 Bowls and Platters
12 Photo Frames 13 Bookends 14 Boxes 15 Hammocks 16 Plant Accessories 17 Candles
033 Aarong Retail OutletsAarong sales its products through its own outlets Aarong follow zero distribution
channel Around the country Aarong has ten outlets six outlets in Dhaka in six major parts (Dhanmondi Gulshan Uttara Maghbazar Wari and Mirpur) and outside Dhaka Aarong has two
Page
36(P
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outlets in Chittagong one in Sylhet and one in Khulna And outside Bangladesh Aarong has one shop in London United Kingdom
Aarong Centre (Head Office ) 346 Tejgaon IA Dhaka-1208 Tel +880 2 8832139 Fax +880 2 9898267Email exportaarongbracnet
Aarong at Gulshan Gulshan ndash Tejgaon Link RoadDhaka 1208Tel 8821052 8825986 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong at Maghbazar Aarong Plaza61 Shahid Shangbadik Selina Parveen Sharak MaghbazarDhaka 1217Tel 9334766 9360260 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong at Dhanmondi Aarong Dhanmondi11 Block-A LalmatiaManik Miah AvenueMirpur RoadDhaka-1207 Tel +88-02-8111607Fax +880 2 8828576Email exportaarongbracnet Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong at Uttara Aarong Uttara Jasim Uddin Sector 4Uttara Model TownDhaka 1230Tel 8916097 8914125 ext 501 Operating Hours 1000am ndash 800pmOpen 7 days a week
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Aarong at Wari 361 Rankin Street (1st Floor) WariDhaka 1203Tel 7114244 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong in Halishahar Chittagong House 1 Lane 1 Block LHalishahar ChittagongTel 031-2515644-45 Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong in Sylhet 413 Naya SharakSylhetTel 6017 0821-815988 0821-713150 Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong in Nasirabad Chittagong Golden Plaza (1st Floor)1692 CDA AvenueChittagongTel 031-654030 06074485325 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong in Khulna Plot A43-A44Majeed Sharani AvenueShib BariKhulnaTel 6016 041-730547
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36(P
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Aarong in London
Aarong sell an assortment of own brand formal and casual wear for both men and women in London Although Aarong sell its own products but the show room which in London is little bit different from our local shop Because the demand of the customers of London
69 Vallance RdLondon E1 5BS United Kingdom+44 20 72477727
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034 PromotionAs it is in other avenues Aarong is a trendsetter in promotional activities as well Having
been one of the first Bangladeshi brands to use professional models and create sophisticated ad campaigns Aarong continues to set the style and quality standard for promotion by achieving greater levels of class and elegance with each campaign Aarong also selects its promotional mediums carefully to ensure accurate reflection of the brands values Aarongs promotional events - such as its carefully orchestrated fashion shows unique and detailed exhibitions and highly popular sales events ndash have become a significant part of popular culture in urban Bangladesh Aarong also focuses on in-store promotional activities such as its My Aarong Rewards programmed to enhance customer experience
035 Export Terms and Conditions
Beneficiary BRAC66 Mohakhali CA Dhaka 1212BangladeshTel 880-2-9885424 880-2-8824180Fax 880-2-8828576 880-2-8823614
Payment to LC at sight or 50 Advance with order amp 50 before shipment by TT to BRAC Bank Limited1 Gulshan Avenue Gulshan-1 Dhaka-1212 BangladeshTel 880-2-8824501 Fax 880-2-8813543Account 150180010606 Account Name BRAC - Aarong
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36(P
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Delivery Between 60 to 120 days depending on volume of order on receipt of LC
Port of Dispatch By Air Zia International Airport DhakaBy Sea ICD Dhaka for Full Container Load (FCL) Chittagong for Loose Container Load (LCL)
Packing Fragile items are packed individually in 3 ply carton boxes and master packing in 5 or 7 ply carton boxes Other non-breakable items are packed individually in a ploy bag and master packing in 5 ply carton boxes (2025 kgs in a box)
Freight and Insurance Freight and Insurance to be covered by the importer which varies from port to port
Advance If 50 is paid in advance against the ordered value then the documents will be sent to the importers directly Otherwise the documents will be sent to the bank for collection against Bill of Exchange
Page
36(P
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036 MarketA pioneer in the countrys craft industry Aarongs unique product designs have brought
consumer attention back to crafts and materials indigenous to Bangladesh as its designers blend the traditional with the contemporary in a way that continues to win consumer appeal Its success revolutionized trends and virtually created the market that has now been taken up by countless other boutiques and brands Aarong caters to this growing urban consumer base through outlets in every major city in the country Their discerning style and high-quality craftsmanship make every Aarong product unique and demand for them has been consistently rising due to Aarongs focus on innovation quality value-based pricing and superior in-store customer service All these elements backed by a robust distribution network and strong supply chain have made Aarong a true household brand in Bangladesh Just as Bangladeshis living abroad look to Aarong for products that connect them to their heritage the Aarong experience is an essential part of any trip to Bangladesh by foreign visitors ndash a phenomenon chronicled in the Lonely Planet guide to Bangladesh Aarong products are not only the gift items of choice for every occasion for local and expatriate Bangladeshis but also the quintessential cultural mementos for these visitors Aarongs growing presence outside Bangladesh - through fair-trade networks in Europe as well as a retail franchise in London - continues to broaden the market for Bangladeshi craft globally
037 Producers or suppliers Aarong embraces and nurtures a diverse representation of 65000 artisans 85 of whom
are women More than forty thousand of these women work directly for Aarong in its 13 production centrersquos (Foundations) in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah including 653 sub-centers spread across Bangladesh Twenty-five thousand independent co-operative groups and traditional family-based artisans also market their crafts through Aarong Potters brass workers jewelers jute workers basket weavers handloom weavers silk weavers wood carvers leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services The leather workers are various artisans with specialized skills from all over the country
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038 Brand valueAarong stands for a unique mix of design quality and convenience of the traditional and
the contemporary Aarong is one of a kind ndash globally positioned as a highly successful Bangladeshi craft based retail chain and brand of pride It also carries the distinction of being BRACs most successful social enterprise Aarongs responsibility is therefore two fold delivering unique products with the highest level of quality and service to its customers and the strongest level of support and protection of artisans and their craft To its consumers Aarong is a household name - a one-stop shop and a trusted brand that inspires pride promises quality and sophistication and helps to keep cultural roots alive in everyday life For the artisans Aarong represents the endurance of both their age-old art as well as their livelihoods For consumers and artisans alike Aarong has become a part of the cultural fabric of their lives
Those things we didnt know-1 In Bengali Aarong means village fair and Taaga means thread2 Half of the profit from every purchase you make at Aarong goes towards supporting
schools health services and specific interventions targeted to the ultra poor segment by BRAC
3 3 people enter an Aarong outlet every second4 The amount of fabric consumed by Aarong in a year can wrap around Bangladesh 8
times
039 Aarongrsquos Production Centers
1 At Aarong has 8 domestic outlets (5 in Dhaka 1 in Chittagong 1 in Sylhet and 1 in Khulna) 1 franchise in London)
2 Aarong has 13 center and (Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur Pabna Pollobi Kurigram Nilphamary and Jhenaidah)
3 653 sub-centers spread across Bangladesh
4 As well as considerable export operation in many European North American and Asian countries
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0310 Artisans Karim Mias Story
Karim Mia is a bamboo tray and basket producer of Aarong Due to extreme poverty at home Karim Mia stopped his schooling when he was in class 3 and began assisting his father in bamboo crafts weaving Struck by the untimely death of his father Karim Mia at the age of 16 had to find an immediate source of income to run his family of five brothers five sisters and his mother Initially Karim Mia commuted from his home district Tangail (approx 120 km away from Dhaka city) to sell bamboo products at small crafts shops in Dhaka At that time with his meager monthly income of almost $25 he could barely support his family After struggling for almost three years Karim Mia came to Aarong in 1988 to show some of his samples His self-designed samples were immediately chosen and an order was placed for 60 pieces Since then Karim Mia has received constant orders from Aarong for its local as well as export market
As part of its mission to assist producers in product development and technical training Aarong sponsored Karim Mia to attend a bamboo crafts workshop in New Delhi in 2003 The one-week training has helped him to gain better knowledge about bamboo craft His workmanship has also shown remarkable improvement in quality Today Karim Mia supplies exclusively to Aarong and has a steady monthly income of $100-130 On an average he has ten workers working under him During the busy season he employs more than fifty workers
Karim Mia is now married with two sons and a daughter all of whom attend school He hopes that his children will be able to complete their education which he could not because of financial need About two years ago Karim Mia bought 20 decimal lands in Tangail where he constructed his tin-shed home Very recently he has built an extension room that is being used as working space and storage for the bamboo products
Karim Mia feels that Aarongrsquos support during his needy times the continued assistance in product development and design and a steady flow of orders has helped him carve out a dignified existence for himself and his family
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0311 Others Artisans
Holding steadfast to its original mission Aarong today supports the lives and livelihoods of nearly sixty five thousand rural artisans and handicraft producers 85 of who are women More than forty thousand of these women work directly for Aarong in its 13 production centers in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah and 653 subcentres spread across Bangladesh
Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong Potters Brass Workers Jewellers Jute workers Basket Weavers Handloom Weavers Silk Weavers Wood Carvers Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services
04
Make or buy of aarongTraditionally Aarong prefers the make option tended to be favored by ownership of a
large range of manufacturing and subassembly facilities They were largely depends on raw materials which were processed in house Specially buy canrsquot give full perfection Thatrsquos why Aarong prefer make option
Reason for Make Instead of Buy
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36(P
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There are many special reasons in Aarong to prefer make option instead of buy These include
The quantities are too small Quality requirements may be so exacting or so unusual as to require special processing
methods that suppliers canrsquot be expected to provide Closer coordination of supply with the demand To preserve technological secrets To obtain a lower cost To advantage of or avoid idle equipment or labor To avoid sole source dependency The management of Aarong appears to take pride in size
Dangers Involved in Decision to Manufacture
To manufacture the various types of product of Aarong dangers involve in decision include
They may have lack administrative or technical experience in the production The challenges of maintaining ling term technological and economic viability for a
noncore activity Difficult to determine the costs of the make decision A lack of flexibility in selecting possible sources and substitute items is likely to result
041 Sub contractionThe use of subcontract is perfect when placing orders for work which is difficult to
define take a long time and extremely costly Managing the subcontract is a complex activity which requires knowledge about performance to date as well as ability to anticipate actions needed to ensure the desired end results Thatrsquos why Aarong donrsquot have the subcontracting policy
042 Sources of information about suppliersKnowledge of information source is primary task for this kind of manufacturing agency
Aarong relay solely on their whole experience and past memory The normal principal sources of information consist of catalogs trade journals advertisements suppliers and commodity directories sales interviews annual report etc These are given bellow in brief
Catalogs Aarong have the proper catalog and have the advantage of being a permanent record of whole organization always in the office of the buyer Salespeople are not always
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36(P
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available advertisements are frequently forgotten but the catalog is an ever present reminder Two types of catalog are here
Jobbers catalog Contains a variety of manufacturing sources an offer to a certain extent Equipment and machinery catalog Provide information of Specification of location of
supply for replacement parts as well as new equipments of Aarong
Trade journals Trade journals are also valuable sources of information of Aarong as to potential suppliers It is used in two ways
Firstly use is a study of the text adds to the buyerrsquos general information suggests new products and substitute materials
Secondly use has to do with advertising
Trade Directories Trade directories are volumes which list leading manufactures addresses number of branches products supplies equipment and other items offered for sale
Sales Representation In Aarong it is essential to develop good supplier relations which begin with a friendly courteous sympathetic and frank attitude toward the supplier salesperson Aarong have the policies and procedures guidelines concerning the relations between the purchasing office and suppliersrsquo representatives
Suppliers and Commodity file Such files contain information concerning the address of the Aarongrsquos supplier past orders placed with the company data concerning its general fitness reliability suppliers willingness to meet particular requirements of them which product has been purchased in the past price paid point of shipment and cross reference of the supplier file
043 Aarongrsquos Supplier evaluation We know that Aarong is an organization which fully depends on domestic ruler raw
product So the supplier of Aarong will be the ruler people Aarongrsquos supplier evaluation depends on some important factors Those are given below
Existing and Potential Sources The evaluation of suppliers is a continuing purchasing task Aarong does this very carefully They monitored to see if expected performance
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36(P
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materializes with current suppliers New sources need to be screened to see if their potential warrants serous future consideration
Informal and Formal Evaluation Aarongrsquos current supplier is one which has passed through earlier supplier efforts and subsequently received at a minimum one order Most buyer of Aarong tends to separate current suppliers into at least two categories
Informal Evaluation Informal evolution includes assessments of personal contract between Aarong and its supplier in the purchaser section in all function where such contract takes place
044 Aarongrsquos Additional sources and selection consideration
Aarongrsquos additional sources and selection consideration system causes if supplier had been found who could meet all the requirements the search would be over Such it not the case Shall the buyer in buying a given item rely on a single supplier or utilize several Shall the buyer directly buy from manufacturers or through distributors Aarong need quick supply because customer demand is very high and fast Aarong need the product as their expectation In doing so it shall be assumed that adequate investigation for fairness and capacity to meet the requirements as to quality quantity delivery and service and that prices are not unreasonable The product of Aarong is much reasonable then other So Aarong need to maintain this for customer
045 Aarongrsquos supplier rating systemSupplier rating system is very important function for an organization Aarong evaluate
their supplier rating system through some steps Most formal supplier rating schemes attempt to track actual performance over time Thus corrective action can be taken as needed Formal supplier rating schemes track vendor performance on quality price delivery and service It is
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36(P
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normal to track a supplierrsquos quality performance very closely and in sufficient deal to enable the pinpointing of corrective action Delivery performance of a current supplier is fairly easily tracked if good records exist of delivery promises and actual recipients and few modifications have been made on an informal basis There is a most effective evaluation system of rating that Aarong follows is weighted point evaluation system
Aarong has different types of supplier that is why this system is successful Particularly in cases where several sources supply the same item Outstanding performance of a supplier can then be rewarded with additional business while poor performance will at the least result in less business or possibly dropping a supplier altogether For different product classes different factors weight and measure should be used to reflect varying impact on the organization
Factor Weight How MeasuredSupplier
Performance past 12 Months
Rating
Quality30 1 defective subtracts
605 defective (30(100-(05 X
6)100=291
Delivery 40 1 day late subtracts 2
Average 5 days late (40(100-(5X2)100=36
Price 20 Lowest price paidPrice charged
$50$55
(20(5055)X100)100=1818
Service10 Goods=100
Fair=70Poor=40
Fair=75 (10X75)100=75
Total Points
100 9078
Aarongrsquos supplier weighted point rating system
046 The Supplier selection decisionThe purchaserrsquos Perception of the supplierrsquos ability in Aarong to meet satisfactory
quality quantity delivery and price and service objectives will govern the selection decision Itrsquos also included their past history facilities and technical strength financial status organization and management reputation systems communication of rural people labor relations and location The nature and the amount of the purchase will influence the selection decision
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36(P
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Aarongrsquos supplier selection decision can be seen as decision making under uncertainty and can be represented by a decision tree There are three stage decision trees for supplier selection also In the given figure shows a decision tree of one stage situation with only two suppliers considered and two possible outcomes To use decision tree effectively and assess the probabilities of success and failure This simple tree could apply to a special onetime purchase without expectation of follow on business for some time to come
SolutionSupplier A Supplier BHigh 100 X 30 =3000 High 100 X 28 =2800Medium 70 X 35 =2450 Medium 70 X 40 =2800Low 40 X 40 =1600 Low 40 X 30 =1200
=7000 =6800So Aarong will choose supplier B
047 Consumer buyer behavior CONSUMER DECISION PROCESS MODEL
Aarong is the most leading fashionable organization in Bangladesh Aarong is always looking towards its consumer perceptions It always creates a different look and patterns in their product This is the main reason to attract consumer The process component of the consumer decision making process deals with how consumers make decisions The product consumer have
Price $30 per unit
Price $35 per unit
Price $40 per unit
Price $28 per unit
Price $40 per unit
Price $30 per unit
On demand high 100 units
On demand medium 70 units
On demand low 40 units
On demand high 100 units
On demand medium 70 units
On demand low 40 units
Supplier
A
Supplier
B
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36(P
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selected to buy and in order to understand how a consumer makes these decisions in the process component we need to look at the psychological field of the process model which are the internal influences of motivation perception learning personality amp attitude and how these influences affect the decision making process Aarong the act of making a consumer decision consists of three stages which are need recognition pre-purchase search amp evaluation of alternatives
Need Recognition Need recognition occurs when a consumer is faced with a problem There are many different reasons why someone would decide that they need to buy the product from Aarong It might be necessary of any product as well as fashionable one
Pre-purchase Search Pre-purchase search is very important for consumer At first they search their desirable product in the market After that they decide from where they buy their product When they think about perfection and fissionable thing they must go through Aarong
Evaluation of Alternative This means to evaluate the alternative brands of that product From that evaluation consumer select their product according their perception Aarong have the ability to fulfill their perception That is the quality of Aarong
048 Purchase-supplier relationsWhen one organization supplies another with goods or services the nature of the
relationship between the two organizations is a major influence on the ultimate value and customer satisfaction achievable Aarong maintain a good relationship with their supplier They maintain the relationship very sincerely Aarong deals with their supplier several times All times they maintain their formalities Good relations with supplier are very important for their supply system If the relation is well the supplier supply product as their requirement In this section the nature of supplier goodwill will be discussed along with the framework for buyer-seller satisfaction the qualifications of good and preferred suppliers partnerships and strategic alliances
049 Aarongrsquos Purchase-supplier satisfaction modelAarong is a fair trade organization Aarong always try to satisfy their selected supplier
One of the major assessments a purchaser must make is whether the current relationship with a supplier is satisfactory or not This relationship is highly complex and different people inside the
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36(P
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purchasing organization may have different perceptions of it Aarong follow a supplier satisfaction model This model includes some assumptions Those are
I That satisfaction with a current supplier relationship can be assessed however crudely at least in macro terms whether it is satisfactory or not
II That an unsatisfied party will attempt to move to a more satisfactory situationIII That attempts to move may fall in the win and lose as well as the lose and lose lose and
win and win and win categoryIV That attempts to move may affect the stability of the relationshipV That purchaser and seller may well have different perceptions of the same relationship
VI That many tools techniques and approaches exists which will assist either party in moving position and improving stability
0410 Aarongrsquos Reverse supplier developmentIn supplier selection it has so far been assured that at least one suitable and willing
supplier already exists and that the purchaserrsquos problems are primarily one of determining who
C
D B
A
Purchaser dissatisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier dissatisfied
Purchaser satisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier satisfied
Total Dissatisfaction
Marginal satisfaction
Complete satisfaction
Marginal satisfaction
Complete satisfaction
Supplierrsquos Satisfaction
Purchaserrsquos Satisfaction
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36(P
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the best supplier is In this case Aarong is very serious about their supplierrsquos development After selecting the best supplier they give better training for their future development We know that Aarong highly depends on rural suppliers Reverse marketing supplier development implies a degree of aggressive procurement involvement not normally encountered in supplier selection
Reverse supplier development should take a broader point of view It defines the need for developing new or existing suppliers as follows The purchase is aware that benefits will accrue to both the supplier and the purchaser benefits of which the supplier may not be aware
Aarongrsquos Supplier Development Context
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
bull Spot payment on product delivery to encourage efficiency and productivity bull Reach out to producers in remote areas to ensure fair value for their efforts bull Marketing communication and information for artisans bull Advances against purchase orders where necessary bull Training amp Education in skills development to raise product quality and marketability bull Product Design and Support in Product Development bull Quality Control to increase producer awareness of the importance of quality
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers in Bangladesh
0411 Aarongrsquos Management and Financial Evaluation
Aarongrsquos management and financial evaluation tends toward greater reliance on single sources for a longer time continuous along with great interest in material requirement and just in
Supplier Purchaser
Purchasing initiative
Sales response
Page
36(P
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time production potential suppliers management strength takes on added significance This will require a detailed examination of Aarongrsquos structure qualifications of managers management control the reward-punishment system training and development system and policies and procedures It is also useful to have an explanation as to why the supplierrsquos manager believes it is managing well and an indication of its most notable successes and failures An evaluation of this supplierrsquos procurement system organization procedures and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract
0412 BenefitsEvery single woman who works in Aarong-owned production facilities is also a beneficiary
of BRACs (Bangladesh Rural Advancement Committee) multifaceted development programs As a support entity of BRAC a significant portion of Aarongs earnings go directly into financing the NGOs (non-governmental organization) development programs in healthcare and education as well as economic and social development Specific benefits for producers include
Free medical check-ups including free eye treatment eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workerrsquos retirement fund
Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible
Further AARONG also assists with design and development market information and quality control and provides advances against purchase orders as well as spot payment on product delivery to encourage further production
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36(P
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0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
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36(P
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05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
Page
36(P
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052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
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Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
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36(P
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053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
Page
36(P
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054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
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36(P
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36(P
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055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
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056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
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36(P
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031 A fair trade organization
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
Spot payment on product delivery to encourage efficiency and productivity Reach out to producers in remote areas to ensure fair value for their efforts
Marketing communication and information for artisans
Advances against purchase orders where necessary
Training amp Education in skills development to raise product quality and marketability
Product Design and Support in Product Development
Quality Control to increase producer awareness of the importance of quality
A fair showroom for Aarong
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations Fair Trade is a trading partnership based on dialogue transparency and respect that seek greater equity in international trade It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers ndash especially in the South (IFAT)
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36(P
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032 Products and services of AarongHolding the steadfast to its original Mission Aarong today supports the lives and
livelihoods of thousands of rural artisans and handicraft producers These producers and artisans create wide range of products for the different types of consumers in home and abroad The products are unique and traditional and appealing to the modern consumers staring from clothes accessories to home wares Aarong designs and creates clothes for women men and children There are designers and more than 3000 weavers across the country are involved with the production of Aarong clothing lines And for the fashionable accessories there is one special department called jewelry department where jeweler creates elegant jewelries that are contemporary yet traditional using gold silver and jewels like pearl emerald and diamonds The other accessories like bag sandals and produced in AAF centers using leather jute bamboo etc In home ware and decorative Aarong produces pottery vases and sculpture of wood bamboo brass and clay etc
For exporting the products Aarong has a separate department in head office and very selective artisans work here to produce fine quality products and these are sent to the production centers as sample of the exporting products Here is the list of some products Aarong produces
Clothes amp Accessories MENrsquoS PRODUCTS
1 Traditional 2 Executive Shirts 3 Maanja 4 Fotua 5 Short Kurta 6 T‐shirts 7 StolesShawls 8 Sandals
WOMENS PRODUCTS
1 Traditional 2 Western 3 Nightwear 4 ShawlsScarves 5 Shoes 6 Bags
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36(P
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7 Fabrics
CHILDRENS PRODUCTS
1 Clothes 2 Toys 3 Books 4 Shoes
Jewelry Products
1 Gold 2 Silver 3 Pearl 4 Other
LEATHER PRODUCTS
1 Shoes 2 BagsWallets 3 Belts 4 Boxes 5 Photo Frames
NAKSHI KANTHA PRODUCTS
1 Decorative 2 Wall hangings 3 Christmas decorations
Along with the clothes accessories and home ware Aarong also produces food products like milk flavored milk (mango amp chocolate) juices (mango amp tamarind) yogurt drinks (orange strawberry) curd (sweet amp sour) butter and honey And herbal skincare products like soaps shampoo oil and face pack etc
Page
36(P
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Home Wares amp Furniture1 Curtain 2 Bed cover amp cushions 3 Rugs 4 Table Lamps 5 Photo
Frames 6 Coasters
7 Napkin Rings
8 Mats 9 Trays
10 Cutlery 11 Bowls and Platters
12 Photo Frames 13 Bookends 14 Boxes 15 Hammocks 16 Plant Accessories 17 Candles
033 Aarong Retail OutletsAarong sales its products through its own outlets Aarong follow zero distribution
channel Around the country Aarong has ten outlets six outlets in Dhaka in six major parts (Dhanmondi Gulshan Uttara Maghbazar Wari and Mirpur) and outside Dhaka Aarong has two
Page
36(P
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outlets in Chittagong one in Sylhet and one in Khulna And outside Bangladesh Aarong has one shop in London United Kingdom
Aarong Centre (Head Office ) 346 Tejgaon IA Dhaka-1208 Tel +880 2 8832139 Fax +880 2 9898267Email exportaarongbracnet
Aarong at Gulshan Gulshan ndash Tejgaon Link RoadDhaka 1208Tel 8821052 8825986 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong at Maghbazar Aarong Plaza61 Shahid Shangbadik Selina Parveen Sharak MaghbazarDhaka 1217Tel 9334766 9360260 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong at Dhanmondi Aarong Dhanmondi11 Block-A LalmatiaManik Miah AvenueMirpur RoadDhaka-1207 Tel +88-02-8111607Fax +880 2 8828576Email exportaarongbracnet Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong at Uttara Aarong Uttara Jasim Uddin Sector 4Uttara Model TownDhaka 1230Tel 8916097 8914125 ext 501 Operating Hours 1000am ndash 800pmOpen 7 days a week
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Aarong at Wari 361 Rankin Street (1st Floor) WariDhaka 1203Tel 7114244 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong in Halishahar Chittagong House 1 Lane 1 Block LHalishahar ChittagongTel 031-2515644-45 Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong in Sylhet 413 Naya SharakSylhetTel 6017 0821-815988 0821-713150 Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong in Nasirabad Chittagong Golden Plaza (1st Floor)1692 CDA AvenueChittagongTel 031-654030 06074485325 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong in Khulna Plot A43-A44Majeed Sharani AvenueShib BariKhulnaTel 6016 041-730547
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36(P
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Aarong in London
Aarong sell an assortment of own brand formal and casual wear for both men and women in London Although Aarong sell its own products but the show room which in London is little bit different from our local shop Because the demand of the customers of London
69 Vallance RdLondon E1 5BS United Kingdom+44 20 72477727
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034 PromotionAs it is in other avenues Aarong is a trendsetter in promotional activities as well Having
been one of the first Bangladeshi brands to use professional models and create sophisticated ad campaigns Aarong continues to set the style and quality standard for promotion by achieving greater levels of class and elegance with each campaign Aarong also selects its promotional mediums carefully to ensure accurate reflection of the brands values Aarongs promotional events - such as its carefully orchestrated fashion shows unique and detailed exhibitions and highly popular sales events ndash have become a significant part of popular culture in urban Bangladesh Aarong also focuses on in-store promotional activities such as its My Aarong Rewards programmed to enhance customer experience
035 Export Terms and Conditions
Beneficiary BRAC66 Mohakhali CA Dhaka 1212BangladeshTel 880-2-9885424 880-2-8824180Fax 880-2-8828576 880-2-8823614
Payment to LC at sight or 50 Advance with order amp 50 before shipment by TT to BRAC Bank Limited1 Gulshan Avenue Gulshan-1 Dhaka-1212 BangladeshTel 880-2-8824501 Fax 880-2-8813543Account 150180010606 Account Name BRAC - Aarong
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Delivery Between 60 to 120 days depending on volume of order on receipt of LC
Port of Dispatch By Air Zia International Airport DhakaBy Sea ICD Dhaka for Full Container Load (FCL) Chittagong for Loose Container Load (LCL)
Packing Fragile items are packed individually in 3 ply carton boxes and master packing in 5 or 7 ply carton boxes Other non-breakable items are packed individually in a ploy bag and master packing in 5 ply carton boxes (2025 kgs in a box)
Freight and Insurance Freight and Insurance to be covered by the importer which varies from port to port
Advance If 50 is paid in advance against the ordered value then the documents will be sent to the importers directly Otherwise the documents will be sent to the bank for collection against Bill of Exchange
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036 MarketA pioneer in the countrys craft industry Aarongs unique product designs have brought
consumer attention back to crafts and materials indigenous to Bangladesh as its designers blend the traditional with the contemporary in a way that continues to win consumer appeal Its success revolutionized trends and virtually created the market that has now been taken up by countless other boutiques and brands Aarong caters to this growing urban consumer base through outlets in every major city in the country Their discerning style and high-quality craftsmanship make every Aarong product unique and demand for them has been consistently rising due to Aarongs focus on innovation quality value-based pricing and superior in-store customer service All these elements backed by a robust distribution network and strong supply chain have made Aarong a true household brand in Bangladesh Just as Bangladeshis living abroad look to Aarong for products that connect them to their heritage the Aarong experience is an essential part of any trip to Bangladesh by foreign visitors ndash a phenomenon chronicled in the Lonely Planet guide to Bangladesh Aarong products are not only the gift items of choice for every occasion for local and expatriate Bangladeshis but also the quintessential cultural mementos for these visitors Aarongs growing presence outside Bangladesh - through fair-trade networks in Europe as well as a retail franchise in London - continues to broaden the market for Bangladeshi craft globally
037 Producers or suppliers Aarong embraces and nurtures a diverse representation of 65000 artisans 85 of whom
are women More than forty thousand of these women work directly for Aarong in its 13 production centrersquos (Foundations) in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah including 653 sub-centers spread across Bangladesh Twenty-five thousand independent co-operative groups and traditional family-based artisans also market their crafts through Aarong Potters brass workers jewelers jute workers basket weavers handloom weavers silk weavers wood carvers leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services The leather workers are various artisans with specialized skills from all over the country
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038 Brand valueAarong stands for a unique mix of design quality and convenience of the traditional and
the contemporary Aarong is one of a kind ndash globally positioned as a highly successful Bangladeshi craft based retail chain and brand of pride It also carries the distinction of being BRACs most successful social enterprise Aarongs responsibility is therefore two fold delivering unique products with the highest level of quality and service to its customers and the strongest level of support and protection of artisans and their craft To its consumers Aarong is a household name - a one-stop shop and a trusted brand that inspires pride promises quality and sophistication and helps to keep cultural roots alive in everyday life For the artisans Aarong represents the endurance of both their age-old art as well as their livelihoods For consumers and artisans alike Aarong has become a part of the cultural fabric of their lives
Those things we didnt know-1 In Bengali Aarong means village fair and Taaga means thread2 Half of the profit from every purchase you make at Aarong goes towards supporting
schools health services and specific interventions targeted to the ultra poor segment by BRAC
3 3 people enter an Aarong outlet every second4 The amount of fabric consumed by Aarong in a year can wrap around Bangladesh 8
times
039 Aarongrsquos Production Centers
1 At Aarong has 8 domestic outlets (5 in Dhaka 1 in Chittagong 1 in Sylhet and 1 in Khulna) 1 franchise in London)
2 Aarong has 13 center and (Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur Pabna Pollobi Kurigram Nilphamary and Jhenaidah)
3 653 sub-centers spread across Bangladesh
4 As well as considerable export operation in many European North American and Asian countries
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0310 Artisans Karim Mias Story
Karim Mia is a bamboo tray and basket producer of Aarong Due to extreme poverty at home Karim Mia stopped his schooling when he was in class 3 and began assisting his father in bamboo crafts weaving Struck by the untimely death of his father Karim Mia at the age of 16 had to find an immediate source of income to run his family of five brothers five sisters and his mother Initially Karim Mia commuted from his home district Tangail (approx 120 km away from Dhaka city) to sell bamboo products at small crafts shops in Dhaka At that time with his meager monthly income of almost $25 he could barely support his family After struggling for almost three years Karim Mia came to Aarong in 1988 to show some of his samples His self-designed samples were immediately chosen and an order was placed for 60 pieces Since then Karim Mia has received constant orders from Aarong for its local as well as export market
As part of its mission to assist producers in product development and technical training Aarong sponsored Karim Mia to attend a bamboo crafts workshop in New Delhi in 2003 The one-week training has helped him to gain better knowledge about bamboo craft His workmanship has also shown remarkable improvement in quality Today Karim Mia supplies exclusively to Aarong and has a steady monthly income of $100-130 On an average he has ten workers working under him During the busy season he employs more than fifty workers
Karim Mia is now married with two sons and a daughter all of whom attend school He hopes that his children will be able to complete their education which he could not because of financial need About two years ago Karim Mia bought 20 decimal lands in Tangail where he constructed his tin-shed home Very recently he has built an extension room that is being used as working space and storage for the bamboo products
Karim Mia feels that Aarongrsquos support during his needy times the continued assistance in product development and design and a steady flow of orders has helped him carve out a dignified existence for himself and his family
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0311 Others Artisans
Holding steadfast to its original mission Aarong today supports the lives and livelihoods of nearly sixty five thousand rural artisans and handicraft producers 85 of who are women More than forty thousand of these women work directly for Aarong in its 13 production centers in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah and 653 subcentres spread across Bangladesh
Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong Potters Brass Workers Jewellers Jute workers Basket Weavers Handloom Weavers Silk Weavers Wood Carvers Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services
04
Make or buy of aarongTraditionally Aarong prefers the make option tended to be favored by ownership of a
large range of manufacturing and subassembly facilities They were largely depends on raw materials which were processed in house Specially buy canrsquot give full perfection Thatrsquos why Aarong prefer make option
Reason for Make Instead of Buy
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There are many special reasons in Aarong to prefer make option instead of buy These include
The quantities are too small Quality requirements may be so exacting or so unusual as to require special processing
methods that suppliers canrsquot be expected to provide Closer coordination of supply with the demand To preserve technological secrets To obtain a lower cost To advantage of or avoid idle equipment or labor To avoid sole source dependency The management of Aarong appears to take pride in size
Dangers Involved in Decision to Manufacture
To manufacture the various types of product of Aarong dangers involve in decision include
They may have lack administrative or technical experience in the production The challenges of maintaining ling term technological and economic viability for a
noncore activity Difficult to determine the costs of the make decision A lack of flexibility in selecting possible sources and substitute items is likely to result
041 Sub contractionThe use of subcontract is perfect when placing orders for work which is difficult to
define take a long time and extremely costly Managing the subcontract is a complex activity which requires knowledge about performance to date as well as ability to anticipate actions needed to ensure the desired end results Thatrsquos why Aarong donrsquot have the subcontracting policy
042 Sources of information about suppliersKnowledge of information source is primary task for this kind of manufacturing agency
Aarong relay solely on their whole experience and past memory The normal principal sources of information consist of catalogs trade journals advertisements suppliers and commodity directories sales interviews annual report etc These are given bellow in brief
Catalogs Aarong have the proper catalog and have the advantage of being a permanent record of whole organization always in the office of the buyer Salespeople are not always
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36(P
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available advertisements are frequently forgotten but the catalog is an ever present reminder Two types of catalog are here
Jobbers catalog Contains a variety of manufacturing sources an offer to a certain extent Equipment and machinery catalog Provide information of Specification of location of
supply for replacement parts as well as new equipments of Aarong
Trade journals Trade journals are also valuable sources of information of Aarong as to potential suppliers It is used in two ways
Firstly use is a study of the text adds to the buyerrsquos general information suggests new products and substitute materials
Secondly use has to do with advertising
Trade Directories Trade directories are volumes which list leading manufactures addresses number of branches products supplies equipment and other items offered for sale
Sales Representation In Aarong it is essential to develop good supplier relations which begin with a friendly courteous sympathetic and frank attitude toward the supplier salesperson Aarong have the policies and procedures guidelines concerning the relations between the purchasing office and suppliersrsquo representatives
Suppliers and Commodity file Such files contain information concerning the address of the Aarongrsquos supplier past orders placed with the company data concerning its general fitness reliability suppliers willingness to meet particular requirements of them which product has been purchased in the past price paid point of shipment and cross reference of the supplier file
043 Aarongrsquos Supplier evaluation We know that Aarong is an organization which fully depends on domestic ruler raw
product So the supplier of Aarong will be the ruler people Aarongrsquos supplier evaluation depends on some important factors Those are given below
Existing and Potential Sources The evaluation of suppliers is a continuing purchasing task Aarong does this very carefully They monitored to see if expected performance
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36(P
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materializes with current suppliers New sources need to be screened to see if their potential warrants serous future consideration
Informal and Formal Evaluation Aarongrsquos current supplier is one which has passed through earlier supplier efforts and subsequently received at a minimum one order Most buyer of Aarong tends to separate current suppliers into at least two categories
Informal Evaluation Informal evolution includes assessments of personal contract between Aarong and its supplier in the purchaser section in all function where such contract takes place
044 Aarongrsquos Additional sources and selection consideration
Aarongrsquos additional sources and selection consideration system causes if supplier had been found who could meet all the requirements the search would be over Such it not the case Shall the buyer in buying a given item rely on a single supplier or utilize several Shall the buyer directly buy from manufacturers or through distributors Aarong need quick supply because customer demand is very high and fast Aarong need the product as their expectation In doing so it shall be assumed that adequate investigation for fairness and capacity to meet the requirements as to quality quantity delivery and service and that prices are not unreasonable The product of Aarong is much reasonable then other So Aarong need to maintain this for customer
045 Aarongrsquos supplier rating systemSupplier rating system is very important function for an organization Aarong evaluate
their supplier rating system through some steps Most formal supplier rating schemes attempt to track actual performance over time Thus corrective action can be taken as needed Formal supplier rating schemes track vendor performance on quality price delivery and service It is
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36(P
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normal to track a supplierrsquos quality performance very closely and in sufficient deal to enable the pinpointing of corrective action Delivery performance of a current supplier is fairly easily tracked if good records exist of delivery promises and actual recipients and few modifications have been made on an informal basis There is a most effective evaluation system of rating that Aarong follows is weighted point evaluation system
Aarong has different types of supplier that is why this system is successful Particularly in cases where several sources supply the same item Outstanding performance of a supplier can then be rewarded with additional business while poor performance will at the least result in less business or possibly dropping a supplier altogether For different product classes different factors weight and measure should be used to reflect varying impact on the organization
Factor Weight How MeasuredSupplier
Performance past 12 Months
Rating
Quality30 1 defective subtracts
605 defective (30(100-(05 X
6)100=291
Delivery 40 1 day late subtracts 2
Average 5 days late (40(100-(5X2)100=36
Price 20 Lowest price paidPrice charged
$50$55
(20(5055)X100)100=1818
Service10 Goods=100
Fair=70Poor=40
Fair=75 (10X75)100=75
Total Points
100 9078
Aarongrsquos supplier weighted point rating system
046 The Supplier selection decisionThe purchaserrsquos Perception of the supplierrsquos ability in Aarong to meet satisfactory
quality quantity delivery and price and service objectives will govern the selection decision Itrsquos also included their past history facilities and technical strength financial status organization and management reputation systems communication of rural people labor relations and location The nature and the amount of the purchase will influence the selection decision
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36(P
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Aarongrsquos supplier selection decision can be seen as decision making under uncertainty and can be represented by a decision tree There are three stage decision trees for supplier selection also In the given figure shows a decision tree of one stage situation with only two suppliers considered and two possible outcomes To use decision tree effectively and assess the probabilities of success and failure This simple tree could apply to a special onetime purchase without expectation of follow on business for some time to come
SolutionSupplier A Supplier BHigh 100 X 30 =3000 High 100 X 28 =2800Medium 70 X 35 =2450 Medium 70 X 40 =2800Low 40 X 40 =1600 Low 40 X 30 =1200
=7000 =6800So Aarong will choose supplier B
047 Consumer buyer behavior CONSUMER DECISION PROCESS MODEL
Aarong is the most leading fashionable organization in Bangladesh Aarong is always looking towards its consumer perceptions It always creates a different look and patterns in their product This is the main reason to attract consumer The process component of the consumer decision making process deals with how consumers make decisions The product consumer have
Price $30 per unit
Price $35 per unit
Price $40 per unit
Price $28 per unit
Price $40 per unit
Price $30 per unit
On demand high 100 units
On demand medium 70 units
On demand low 40 units
On demand high 100 units
On demand medium 70 units
On demand low 40 units
Supplier
A
Supplier
B
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36(P
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selected to buy and in order to understand how a consumer makes these decisions in the process component we need to look at the psychological field of the process model which are the internal influences of motivation perception learning personality amp attitude and how these influences affect the decision making process Aarong the act of making a consumer decision consists of three stages which are need recognition pre-purchase search amp evaluation of alternatives
Need Recognition Need recognition occurs when a consumer is faced with a problem There are many different reasons why someone would decide that they need to buy the product from Aarong It might be necessary of any product as well as fashionable one
Pre-purchase Search Pre-purchase search is very important for consumer At first they search their desirable product in the market After that they decide from where they buy their product When they think about perfection and fissionable thing they must go through Aarong
Evaluation of Alternative This means to evaluate the alternative brands of that product From that evaluation consumer select their product according their perception Aarong have the ability to fulfill their perception That is the quality of Aarong
048 Purchase-supplier relationsWhen one organization supplies another with goods or services the nature of the
relationship between the two organizations is a major influence on the ultimate value and customer satisfaction achievable Aarong maintain a good relationship with their supplier They maintain the relationship very sincerely Aarong deals with their supplier several times All times they maintain their formalities Good relations with supplier are very important for their supply system If the relation is well the supplier supply product as their requirement In this section the nature of supplier goodwill will be discussed along with the framework for buyer-seller satisfaction the qualifications of good and preferred suppliers partnerships and strategic alliances
049 Aarongrsquos Purchase-supplier satisfaction modelAarong is a fair trade organization Aarong always try to satisfy their selected supplier
One of the major assessments a purchaser must make is whether the current relationship with a supplier is satisfactory or not This relationship is highly complex and different people inside the
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36(P
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purchasing organization may have different perceptions of it Aarong follow a supplier satisfaction model This model includes some assumptions Those are
I That satisfaction with a current supplier relationship can be assessed however crudely at least in macro terms whether it is satisfactory or not
II That an unsatisfied party will attempt to move to a more satisfactory situationIII That attempts to move may fall in the win and lose as well as the lose and lose lose and
win and win and win categoryIV That attempts to move may affect the stability of the relationshipV That purchaser and seller may well have different perceptions of the same relationship
VI That many tools techniques and approaches exists which will assist either party in moving position and improving stability
0410 Aarongrsquos Reverse supplier developmentIn supplier selection it has so far been assured that at least one suitable and willing
supplier already exists and that the purchaserrsquos problems are primarily one of determining who
C
D B
A
Purchaser dissatisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier dissatisfied
Purchaser satisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier satisfied
Total Dissatisfaction
Marginal satisfaction
Complete satisfaction
Marginal satisfaction
Complete satisfaction
Supplierrsquos Satisfaction
Purchaserrsquos Satisfaction
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the best supplier is In this case Aarong is very serious about their supplierrsquos development After selecting the best supplier they give better training for their future development We know that Aarong highly depends on rural suppliers Reverse marketing supplier development implies a degree of aggressive procurement involvement not normally encountered in supplier selection
Reverse supplier development should take a broader point of view It defines the need for developing new or existing suppliers as follows The purchase is aware that benefits will accrue to both the supplier and the purchaser benefits of which the supplier may not be aware
Aarongrsquos Supplier Development Context
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
bull Spot payment on product delivery to encourage efficiency and productivity bull Reach out to producers in remote areas to ensure fair value for their efforts bull Marketing communication and information for artisans bull Advances against purchase orders where necessary bull Training amp Education in skills development to raise product quality and marketability bull Product Design and Support in Product Development bull Quality Control to increase producer awareness of the importance of quality
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers in Bangladesh
0411 Aarongrsquos Management and Financial Evaluation
Aarongrsquos management and financial evaluation tends toward greater reliance on single sources for a longer time continuous along with great interest in material requirement and just in
Supplier Purchaser
Purchasing initiative
Sales response
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36(P
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time production potential suppliers management strength takes on added significance This will require a detailed examination of Aarongrsquos structure qualifications of managers management control the reward-punishment system training and development system and policies and procedures It is also useful to have an explanation as to why the supplierrsquos manager believes it is managing well and an indication of its most notable successes and failures An evaluation of this supplierrsquos procurement system organization procedures and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract
0412 BenefitsEvery single woman who works in Aarong-owned production facilities is also a beneficiary
of BRACs (Bangladesh Rural Advancement Committee) multifaceted development programs As a support entity of BRAC a significant portion of Aarongs earnings go directly into financing the NGOs (non-governmental organization) development programs in healthcare and education as well as economic and social development Specific benefits for producers include
Free medical check-ups including free eye treatment eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workerrsquos retirement fund
Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible
Further AARONG also assists with design and development market information and quality control and provides advances against purchase orders as well as spot payment on product delivery to encourage further production
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0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
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36(P
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05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
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052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
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Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
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053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
Page
36(P
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054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
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36(P
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055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
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056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
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36(P
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032 Products and services of AarongHolding the steadfast to its original Mission Aarong today supports the lives and
livelihoods of thousands of rural artisans and handicraft producers These producers and artisans create wide range of products for the different types of consumers in home and abroad The products are unique and traditional and appealing to the modern consumers staring from clothes accessories to home wares Aarong designs and creates clothes for women men and children There are designers and more than 3000 weavers across the country are involved with the production of Aarong clothing lines And for the fashionable accessories there is one special department called jewelry department where jeweler creates elegant jewelries that are contemporary yet traditional using gold silver and jewels like pearl emerald and diamonds The other accessories like bag sandals and produced in AAF centers using leather jute bamboo etc In home ware and decorative Aarong produces pottery vases and sculpture of wood bamboo brass and clay etc
For exporting the products Aarong has a separate department in head office and very selective artisans work here to produce fine quality products and these are sent to the production centers as sample of the exporting products Here is the list of some products Aarong produces
Clothes amp Accessories MENrsquoS PRODUCTS
1 Traditional 2 Executive Shirts 3 Maanja 4 Fotua 5 Short Kurta 6 T‐shirts 7 StolesShawls 8 Sandals
WOMENS PRODUCTS
1 Traditional 2 Western 3 Nightwear 4 ShawlsScarves 5 Shoes 6 Bags
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7 Fabrics
CHILDRENS PRODUCTS
1 Clothes 2 Toys 3 Books 4 Shoes
Jewelry Products
1 Gold 2 Silver 3 Pearl 4 Other
LEATHER PRODUCTS
1 Shoes 2 BagsWallets 3 Belts 4 Boxes 5 Photo Frames
NAKSHI KANTHA PRODUCTS
1 Decorative 2 Wall hangings 3 Christmas decorations
Along with the clothes accessories and home ware Aarong also produces food products like milk flavored milk (mango amp chocolate) juices (mango amp tamarind) yogurt drinks (orange strawberry) curd (sweet amp sour) butter and honey And herbal skincare products like soaps shampoo oil and face pack etc
Page
36(P
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Home Wares amp Furniture1 Curtain 2 Bed cover amp cushions 3 Rugs 4 Table Lamps 5 Photo
Frames 6 Coasters
7 Napkin Rings
8 Mats 9 Trays
10 Cutlery 11 Bowls and Platters
12 Photo Frames 13 Bookends 14 Boxes 15 Hammocks 16 Plant Accessories 17 Candles
033 Aarong Retail OutletsAarong sales its products through its own outlets Aarong follow zero distribution
channel Around the country Aarong has ten outlets six outlets in Dhaka in six major parts (Dhanmondi Gulshan Uttara Maghbazar Wari and Mirpur) and outside Dhaka Aarong has two
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outlets in Chittagong one in Sylhet and one in Khulna And outside Bangladesh Aarong has one shop in London United Kingdom
Aarong Centre (Head Office ) 346 Tejgaon IA Dhaka-1208 Tel +880 2 8832139 Fax +880 2 9898267Email exportaarongbracnet
Aarong at Gulshan Gulshan ndash Tejgaon Link RoadDhaka 1208Tel 8821052 8825986 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong at Maghbazar Aarong Plaza61 Shahid Shangbadik Selina Parveen Sharak MaghbazarDhaka 1217Tel 9334766 9360260 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong at Dhanmondi Aarong Dhanmondi11 Block-A LalmatiaManik Miah AvenueMirpur RoadDhaka-1207 Tel +88-02-8111607Fax +880 2 8828576Email exportaarongbracnet Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong at Uttara Aarong Uttara Jasim Uddin Sector 4Uttara Model TownDhaka 1230Tel 8916097 8914125 ext 501 Operating Hours 1000am ndash 800pmOpen 7 days a week
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Aarong at Wari 361 Rankin Street (1st Floor) WariDhaka 1203Tel 7114244 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong in Halishahar Chittagong House 1 Lane 1 Block LHalishahar ChittagongTel 031-2515644-45 Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong in Sylhet 413 Naya SharakSylhetTel 6017 0821-815988 0821-713150 Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong in Nasirabad Chittagong Golden Plaza (1st Floor)1692 CDA AvenueChittagongTel 031-654030 06074485325 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong in Khulna Plot A43-A44Majeed Sharani AvenueShib BariKhulnaTel 6016 041-730547
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Aarong in London
Aarong sell an assortment of own brand formal and casual wear for both men and women in London Although Aarong sell its own products but the show room which in London is little bit different from our local shop Because the demand of the customers of London
69 Vallance RdLondon E1 5BS United Kingdom+44 20 72477727
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034 PromotionAs it is in other avenues Aarong is a trendsetter in promotional activities as well Having
been one of the first Bangladeshi brands to use professional models and create sophisticated ad campaigns Aarong continues to set the style and quality standard for promotion by achieving greater levels of class and elegance with each campaign Aarong also selects its promotional mediums carefully to ensure accurate reflection of the brands values Aarongs promotional events - such as its carefully orchestrated fashion shows unique and detailed exhibitions and highly popular sales events ndash have become a significant part of popular culture in urban Bangladesh Aarong also focuses on in-store promotional activities such as its My Aarong Rewards programmed to enhance customer experience
035 Export Terms and Conditions
Beneficiary BRAC66 Mohakhali CA Dhaka 1212BangladeshTel 880-2-9885424 880-2-8824180Fax 880-2-8828576 880-2-8823614
Payment to LC at sight or 50 Advance with order amp 50 before shipment by TT to BRAC Bank Limited1 Gulshan Avenue Gulshan-1 Dhaka-1212 BangladeshTel 880-2-8824501 Fax 880-2-8813543Account 150180010606 Account Name BRAC - Aarong
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Delivery Between 60 to 120 days depending on volume of order on receipt of LC
Port of Dispatch By Air Zia International Airport DhakaBy Sea ICD Dhaka for Full Container Load (FCL) Chittagong for Loose Container Load (LCL)
Packing Fragile items are packed individually in 3 ply carton boxes and master packing in 5 or 7 ply carton boxes Other non-breakable items are packed individually in a ploy bag and master packing in 5 ply carton boxes (2025 kgs in a box)
Freight and Insurance Freight and Insurance to be covered by the importer which varies from port to port
Advance If 50 is paid in advance against the ordered value then the documents will be sent to the importers directly Otherwise the documents will be sent to the bank for collection against Bill of Exchange
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036 MarketA pioneer in the countrys craft industry Aarongs unique product designs have brought
consumer attention back to crafts and materials indigenous to Bangladesh as its designers blend the traditional with the contemporary in a way that continues to win consumer appeal Its success revolutionized trends and virtually created the market that has now been taken up by countless other boutiques and brands Aarong caters to this growing urban consumer base through outlets in every major city in the country Their discerning style and high-quality craftsmanship make every Aarong product unique and demand for them has been consistently rising due to Aarongs focus on innovation quality value-based pricing and superior in-store customer service All these elements backed by a robust distribution network and strong supply chain have made Aarong a true household brand in Bangladesh Just as Bangladeshis living abroad look to Aarong for products that connect them to their heritage the Aarong experience is an essential part of any trip to Bangladesh by foreign visitors ndash a phenomenon chronicled in the Lonely Planet guide to Bangladesh Aarong products are not only the gift items of choice for every occasion for local and expatriate Bangladeshis but also the quintessential cultural mementos for these visitors Aarongs growing presence outside Bangladesh - through fair-trade networks in Europe as well as a retail franchise in London - continues to broaden the market for Bangladeshi craft globally
037 Producers or suppliers Aarong embraces and nurtures a diverse representation of 65000 artisans 85 of whom
are women More than forty thousand of these women work directly for Aarong in its 13 production centrersquos (Foundations) in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah including 653 sub-centers spread across Bangladesh Twenty-five thousand independent co-operative groups and traditional family-based artisans also market their crafts through Aarong Potters brass workers jewelers jute workers basket weavers handloom weavers silk weavers wood carvers leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services The leather workers are various artisans with specialized skills from all over the country
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038 Brand valueAarong stands for a unique mix of design quality and convenience of the traditional and
the contemporary Aarong is one of a kind ndash globally positioned as a highly successful Bangladeshi craft based retail chain and brand of pride It also carries the distinction of being BRACs most successful social enterprise Aarongs responsibility is therefore two fold delivering unique products with the highest level of quality and service to its customers and the strongest level of support and protection of artisans and their craft To its consumers Aarong is a household name - a one-stop shop and a trusted brand that inspires pride promises quality and sophistication and helps to keep cultural roots alive in everyday life For the artisans Aarong represents the endurance of both their age-old art as well as their livelihoods For consumers and artisans alike Aarong has become a part of the cultural fabric of their lives
Those things we didnt know-1 In Bengali Aarong means village fair and Taaga means thread2 Half of the profit from every purchase you make at Aarong goes towards supporting
schools health services and specific interventions targeted to the ultra poor segment by BRAC
3 3 people enter an Aarong outlet every second4 The amount of fabric consumed by Aarong in a year can wrap around Bangladesh 8
times
039 Aarongrsquos Production Centers
1 At Aarong has 8 domestic outlets (5 in Dhaka 1 in Chittagong 1 in Sylhet and 1 in Khulna) 1 franchise in London)
2 Aarong has 13 center and (Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur Pabna Pollobi Kurigram Nilphamary and Jhenaidah)
3 653 sub-centers spread across Bangladesh
4 As well as considerable export operation in many European North American and Asian countries
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0310 Artisans Karim Mias Story
Karim Mia is a bamboo tray and basket producer of Aarong Due to extreme poverty at home Karim Mia stopped his schooling when he was in class 3 and began assisting his father in bamboo crafts weaving Struck by the untimely death of his father Karim Mia at the age of 16 had to find an immediate source of income to run his family of five brothers five sisters and his mother Initially Karim Mia commuted from his home district Tangail (approx 120 km away from Dhaka city) to sell bamboo products at small crafts shops in Dhaka At that time with his meager monthly income of almost $25 he could barely support his family After struggling for almost three years Karim Mia came to Aarong in 1988 to show some of his samples His self-designed samples were immediately chosen and an order was placed for 60 pieces Since then Karim Mia has received constant orders from Aarong for its local as well as export market
As part of its mission to assist producers in product development and technical training Aarong sponsored Karim Mia to attend a bamboo crafts workshop in New Delhi in 2003 The one-week training has helped him to gain better knowledge about bamboo craft His workmanship has also shown remarkable improvement in quality Today Karim Mia supplies exclusively to Aarong and has a steady monthly income of $100-130 On an average he has ten workers working under him During the busy season he employs more than fifty workers
Karim Mia is now married with two sons and a daughter all of whom attend school He hopes that his children will be able to complete their education which he could not because of financial need About two years ago Karim Mia bought 20 decimal lands in Tangail where he constructed his tin-shed home Very recently he has built an extension room that is being used as working space and storage for the bamboo products
Karim Mia feels that Aarongrsquos support during his needy times the continued assistance in product development and design and a steady flow of orders has helped him carve out a dignified existence for himself and his family
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0311 Others Artisans
Holding steadfast to its original mission Aarong today supports the lives and livelihoods of nearly sixty five thousand rural artisans and handicraft producers 85 of who are women More than forty thousand of these women work directly for Aarong in its 13 production centers in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah and 653 subcentres spread across Bangladesh
Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong Potters Brass Workers Jewellers Jute workers Basket Weavers Handloom Weavers Silk Weavers Wood Carvers Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services
04
Make or buy of aarongTraditionally Aarong prefers the make option tended to be favored by ownership of a
large range of manufacturing and subassembly facilities They were largely depends on raw materials which were processed in house Specially buy canrsquot give full perfection Thatrsquos why Aarong prefer make option
Reason for Make Instead of Buy
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36(P
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There are many special reasons in Aarong to prefer make option instead of buy These include
The quantities are too small Quality requirements may be so exacting or so unusual as to require special processing
methods that suppliers canrsquot be expected to provide Closer coordination of supply with the demand To preserve technological secrets To obtain a lower cost To advantage of or avoid idle equipment or labor To avoid sole source dependency The management of Aarong appears to take pride in size
Dangers Involved in Decision to Manufacture
To manufacture the various types of product of Aarong dangers involve in decision include
They may have lack administrative or technical experience in the production The challenges of maintaining ling term technological and economic viability for a
noncore activity Difficult to determine the costs of the make decision A lack of flexibility in selecting possible sources and substitute items is likely to result
041 Sub contractionThe use of subcontract is perfect when placing orders for work which is difficult to
define take a long time and extremely costly Managing the subcontract is a complex activity which requires knowledge about performance to date as well as ability to anticipate actions needed to ensure the desired end results Thatrsquos why Aarong donrsquot have the subcontracting policy
042 Sources of information about suppliersKnowledge of information source is primary task for this kind of manufacturing agency
Aarong relay solely on their whole experience and past memory The normal principal sources of information consist of catalogs trade journals advertisements suppliers and commodity directories sales interviews annual report etc These are given bellow in brief
Catalogs Aarong have the proper catalog and have the advantage of being a permanent record of whole organization always in the office of the buyer Salespeople are not always
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36(P
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available advertisements are frequently forgotten but the catalog is an ever present reminder Two types of catalog are here
Jobbers catalog Contains a variety of manufacturing sources an offer to a certain extent Equipment and machinery catalog Provide information of Specification of location of
supply for replacement parts as well as new equipments of Aarong
Trade journals Trade journals are also valuable sources of information of Aarong as to potential suppliers It is used in two ways
Firstly use is a study of the text adds to the buyerrsquos general information suggests new products and substitute materials
Secondly use has to do with advertising
Trade Directories Trade directories are volumes which list leading manufactures addresses number of branches products supplies equipment and other items offered for sale
Sales Representation In Aarong it is essential to develop good supplier relations which begin with a friendly courteous sympathetic and frank attitude toward the supplier salesperson Aarong have the policies and procedures guidelines concerning the relations between the purchasing office and suppliersrsquo representatives
Suppliers and Commodity file Such files contain information concerning the address of the Aarongrsquos supplier past orders placed with the company data concerning its general fitness reliability suppliers willingness to meet particular requirements of them which product has been purchased in the past price paid point of shipment and cross reference of the supplier file
043 Aarongrsquos Supplier evaluation We know that Aarong is an organization which fully depends on domestic ruler raw
product So the supplier of Aarong will be the ruler people Aarongrsquos supplier evaluation depends on some important factors Those are given below
Existing and Potential Sources The evaluation of suppliers is a continuing purchasing task Aarong does this very carefully They monitored to see if expected performance
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36(P
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materializes with current suppliers New sources need to be screened to see if their potential warrants serous future consideration
Informal and Formal Evaluation Aarongrsquos current supplier is one which has passed through earlier supplier efforts and subsequently received at a minimum one order Most buyer of Aarong tends to separate current suppliers into at least two categories
Informal Evaluation Informal evolution includes assessments of personal contract between Aarong and its supplier in the purchaser section in all function where such contract takes place
044 Aarongrsquos Additional sources and selection consideration
Aarongrsquos additional sources and selection consideration system causes if supplier had been found who could meet all the requirements the search would be over Such it not the case Shall the buyer in buying a given item rely on a single supplier or utilize several Shall the buyer directly buy from manufacturers or through distributors Aarong need quick supply because customer demand is very high and fast Aarong need the product as their expectation In doing so it shall be assumed that adequate investigation for fairness and capacity to meet the requirements as to quality quantity delivery and service and that prices are not unreasonable The product of Aarong is much reasonable then other So Aarong need to maintain this for customer
045 Aarongrsquos supplier rating systemSupplier rating system is very important function for an organization Aarong evaluate
their supplier rating system through some steps Most formal supplier rating schemes attempt to track actual performance over time Thus corrective action can be taken as needed Formal supplier rating schemes track vendor performance on quality price delivery and service It is
Page
36(P
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normal to track a supplierrsquos quality performance very closely and in sufficient deal to enable the pinpointing of corrective action Delivery performance of a current supplier is fairly easily tracked if good records exist of delivery promises and actual recipients and few modifications have been made on an informal basis There is a most effective evaluation system of rating that Aarong follows is weighted point evaluation system
Aarong has different types of supplier that is why this system is successful Particularly in cases where several sources supply the same item Outstanding performance of a supplier can then be rewarded with additional business while poor performance will at the least result in less business or possibly dropping a supplier altogether For different product classes different factors weight and measure should be used to reflect varying impact on the organization
Factor Weight How MeasuredSupplier
Performance past 12 Months
Rating
Quality30 1 defective subtracts
605 defective (30(100-(05 X
6)100=291
Delivery 40 1 day late subtracts 2
Average 5 days late (40(100-(5X2)100=36
Price 20 Lowest price paidPrice charged
$50$55
(20(5055)X100)100=1818
Service10 Goods=100
Fair=70Poor=40
Fair=75 (10X75)100=75
Total Points
100 9078
Aarongrsquos supplier weighted point rating system
046 The Supplier selection decisionThe purchaserrsquos Perception of the supplierrsquos ability in Aarong to meet satisfactory
quality quantity delivery and price and service objectives will govern the selection decision Itrsquos also included their past history facilities and technical strength financial status organization and management reputation systems communication of rural people labor relations and location The nature and the amount of the purchase will influence the selection decision
Page
36(P
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Aarongrsquos supplier selection decision can be seen as decision making under uncertainty and can be represented by a decision tree There are three stage decision trees for supplier selection also In the given figure shows a decision tree of one stage situation with only two suppliers considered and two possible outcomes To use decision tree effectively and assess the probabilities of success and failure This simple tree could apply to a special onetime purchase without expectation of follow on business for some time to come
SolutionSupplier A Supplier BHigh 100 X 30 =3000 High 100 X 28 =2800Medium 70 X 35 =2450 Medium 70 X 40 =2800Low 40 X 40 =1600 Low 40 X 30 =1200
=7000 =6800So Aarong will choose supplier B
047 Consumer buyer behavior CONSUMER DECISION PROCESS MODEL
Aarong is the most leading fashionable organization in Bangladesh Aarong is always looking towards its consumer perceptions It always creates a different look and patterns in their product This is the main reason to attract consumer The process component of the consumer decision making process deals with how consumers make decisions The product consumer have
Price $30 per unit
Price $35 per unit
Price $40 per unit
Price $28 per unit
Price $40 per unit
Price $30 per unit
On demand high 100 units
On demand medium 70 units
On demand low 40 units
On demand high 100 units
On demand medium 70 units
On demand low 40 units
Supplier
A
Supplier
B
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36(P
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selected to buy and in order to understand how a consumer makes these decisions in the process component we need to look at the psychological field of the process model which are the internal influences of motivation perception learning personality amp attitude and how these influences affect the decision making process Aarong the act of making a consumer decision consists of three stages which are need recognition pre-purchase search amp evaluation of alternatives
Need Recognition Need recognition occurs when a consumer is faced with a problem There are many different reasons why someone would decide that they need to buy the product from Aarong It might be necessary of any product as well as fashionable one
Pre-purchase Search Pre-purchase search is very important for consumer At first they search their desirable product in the market After that they decide from where they buy their product When they think about perfection and fissionable thing they must go through Aarong
Evaluation of Alternative This means to evaluate the alternative brands of that product From that evaluation consumer select their product according their perception Aarong have the ability to fulfill their perception That is the quality of Aarong
048 Purchase-supplier relationsWhen one organization supplies another with goods or services the nature of the
relationship between the two organizations is a major influence on the ultimate value and customer satisfaction achievable Aarong maintain a good relationship with their supplier They maintain the relationship very sincerely Aarong deals with their supplier several times All times they maintain their formalities Good relations with supplier are very important for their supply system If the relation is well the supplier supply product as their requirement In this section the nature of supplier goodwill will be discussed along with the framework for buyer-seller satisfaction the qualifications of good and preferred suppliers partnerships and strategic alliances
049 Aarongrsquos Purchase-supplier satisfaction modelAarong is a fair trade organization Aarong always try to satisfy their selected supplier
One of the major assessments a purchaser must make is whether the current relationship with a supplier is satisfactory or not This relationship is highly complex and different people inside the
Page
36(P
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purchasing organization may have different perceptions of it Aarong follow a supplier satisfaction model This model includes some assumptions Those are
I That satisfaction with a current supplier relationship can be assessed however crudely at least in macro terms whether it is satisfactory or not
II That an unsatisfied party will attempt to move to a more satisfactory situationIII That attempts to move may fall in the win and lose as well as the lose and lose lose and
win and win and win categoryIV That attempts to move may affect the stability of the relationshipV That purchaser and seller may well have different perceptions of the same relationship
VI That many tools techniques and approaches exists which will assist either party in moving position and improving stability
0410 Aarongrsquos Reverse supplier developmentIn supplier selection it has so far been assured that at least one suitable and willing
supplier already exists and that the purchaserrsquos problems are primarily one of determining who
C
D B
A
Purchaser dissatisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier dissatisfied
Purchaser satisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier satisfied
Total Dissatisfaction
Marginal satisfaction
Complete satisfaction
Marginal satisfaction
Complete satisfaction
Supplierrsquos Satisfaction
Purchaserrsquos Satisfaction
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the best supplier is In this case Aarong is very serious about their supplierrsquos development After selecting the best supplier they give better training for their future development We know that Aarong highly depends on rural suppliers Reverse marketing supplier development implies a degree of aggressive procurement involvement not normally encountered in supplier selection
Reverse supplier development should take a broader point of view It defines the need for developing new or existing suppliers as follows The purchase is aware that benefits will accrue to both the supplier and the purchaser benefits of which the supplier may not be aware
Aarongrsquos Supplier Development Context
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
bull Spot payment on product delivery to encourage efficiency and productivity bull Reach out to producers in remote areas to ensure fair value for their efforts bull Marketing communication and information for artisans bull Advances against purchase orders where necessary bull Training amp Education in skills development to raise product quality and marketability bull Product Design and Support in Product Development bull Quality Control to increase producer awareness of the importance of quality
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers in Bangladesh
0411 Aarongrsquos Management and Financial Evaluation
Aarongrsquos management and financial evaluation tends toward greater reliance on single sources for a longer time continuous along with great interest in material requirement and just in
Supplier Purchaser
Purchasing initiative
Sales response
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36(P
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time production potential suppliers management strength takes on added significance This will require a detailed examination of Aarongrsquos structure qualifications of managers management control the reward-punishment system training and development system and policies and procedures It is also useful to have an explanation as to why the supplierrsquos manager believes it is managing well and an indication of its most notable successes and failures An evaluation of this supplierrsquos procurement system organization procedures and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract
0412 BenefitsEvery single woman who works in Aarong-owned production facilities is also a beneficiary
of BRACs (Bangladesh Rural Advancement Committee) multifaceted development programs As a support entity of BRAC a significant portion of Aarongs earnings go directly into financing the NGOs (non-governmental organization) development programs in healthcare and education as well as economic and social development Specific benefits for producers include
Free medical check-ups including free eye treatment eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workerrsquos retirement fund
Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible
Further AARONG also assists with design and development market information and quality control and provides advances against purchase orders as well as spot payment on product delivery to encourage further production
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0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
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36(P
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05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
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052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
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Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
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053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
Page
36(P
OP
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054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
Page
36(P
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36(P
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055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
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056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
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7 Fabrics
CHILDRENS PRODUCTS
1 Clothes 2 Toys 3 Books 4 Shoes
Jewelry Products
1 Gold 2 Silver 3 Pearl 4 Other
LEATHER PRODUCTS
1 Shoes 2 BagsWallets 3 Belts 4 Boxes 5 Photo Frames
NAKSHI KANTHA PRODUCTS
1 Decorative 2 Wall hangings 3 Christmas decorations
Along with the clothes accessories and home ware Aarong also produces food products like milk flavored milk (mango amp chocolate) juices (mango amp tamarind) yogurt drinks (orange strawberry) curd (sweet amp sour) butter and honey And herbal skincare products like soaps shampoo oil and face pack etc
Page
36(P
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Home Wares amp Furniture1 Curtain 2 Bed cover amp cushions 3 Rugs 4 Table Lamps 5 Photo
Frames 6 Coasters
7 Napkin Rings
8 Mats 9 Trays
10 Cutlery 11 Bowls and Platters
12 Photo Frames 13 Bookends 14 Boxes 15 Hammocks 16 Plant Accessories 17 Candles
033 Aarong Retail OutletsAarong sales its products through its own outlets Aarong follow zero distribution
channel Around the country Aarong has ten outlets six outlets in Dhaka in six major parts (Dhanmondi Gulshan Uttara Maghbazar Wari and Mirpur) and outside Dhaka Aarong has two
Page
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outlets in Chittagong one in Sylhet and one in Khulna And outside Bangladesh Aarong has one shop in London United Kingdom
Aarong Centre (Head Office ) 346 Tejgaon IA Dhaka-1208 Tel +880 2 8832139 Fax +880 2 9898267Email exportaarongbracnet
Aarong at Gulshan Gulshan ndash Tejgaon Link RoadDhaka 1208Tel 8821052 8825986 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong at Maghbazar Aarong Plaza61 Shahid Shangbadik Selina Parveen Sharak MaghbazarDhaka 1217Tel 9334766 9360260 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong at Dhanmondi Aarong Dhanmondi11 Block-A LalmatiaManik Miah AvenueMirpur RoadDhaka-1207 Tel +88-02-8111607Fax +880 2 8828576Email exportaarongbracnet Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong at Uttara Aarong Uttara Jasim Uddin Sector 4Uttara Model TownDhaka 1230Tel 8916097 8914125 ext 501 Operating Hours 1000am ndash 800pmOpen 7 days a week
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Aarong at Wari 361 Rankin Street (1st Floor) WariDhaka 1203Tel 7114244 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong in Halishahar Chittagong House 1 Lane 1 Block LHalishahar ChittagongTel 031-2515644-45 Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong in Sylhet 413 Naya SharakSylhetTel 6017 0821-815988 0821-713150 Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong in Nasirabad Chittagong Golden Plaza (1st Floor)1692 CDA AvenueChittagongTel 031-654030 06074485325 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong in Khulna Plot A43-A44Majeed Sharani AvenueShib BariKhulnaTel 6016 041-730547
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Aarong in London
Aarong sell an assortment of own brand formal and casual wear for both men and women in London Although Aarong sell its own products but the show room which in London is little bit different from our local shop Because the demand of the customers of London
69 Vallance RdLondon E1 5BS United Kingdom+44 20 72477727
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034 PromotionAs it is in other avenues Aarong is a trendsetter in promotional activities as well Having
been one of the first Bangladeshi brands to use professional models and create sophisticated ad campaigns Aarong continues to set the style and quality standard for promotion by achieving greater levels of class and elegance with each campaign Aarong also selects its promotional mediums carefully to ensure accurate reflection of the brands values Aarongs promotional events - such as its carefully orchestrated fashion shows unique and detailed exhibitions and highly popular sales events ndash have become a significant part of popular culture in urban Bangladesh Aarong also focuses on in-store promotional activities such as its My Aarong Rewards programmed to enhance customer experience
035 Export Terms and Conditions
Beneficiary BRAC66 Mohakhali CA Dhaka 1212BangladeshTel 880-2-9885424 880-2-8824180Fax 880-2-8828576 880-2-8823614
Payment to LC at sight or 50 Advance with order amp 50 before shipment by TT to BRAC Bank Limited1 Gulshan Avenue Gulshan-1 Dhaka-1212 BangladeshTel 880-2-8824501 Fax 880-2-8813543Account 150180010606 Account Name BRAC - Aarong
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Delivery Between 60 to 120 days depending on volume of order on receipt of LC
Port of Dispatch By Air Zia International Airport DhakaBy Sea ICD Dhaka for Full Container Load (FCL) Chittagong for Loose Container Load (LCL)
Packing Fragile items are packed individually in 3 ply carton boxes and master packing in 5 or 7 ply carton boxes Other non-breakable items are packed individually in a ploy bag and master packing in 5 ply carton boxes (2025 kgs in a box)
Freight and Insurance Freight and Insurance to be covered by the importer which varies from port to port
Advance If 50 is paid in advance against the ordered value then the documents will be sent to the importers directly Otherwise the documents will be sent to the bank for collection against Bill of Exchange
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036 MarketA pioneer in the countrys craft industry Aarongs unique product designs have brought
consumer attention back to crafts and materials indigenous to Bangladesh as its designers blend the traditional with the contemporary in a way that continues to win consumer appeal Its success revolutionized trends and virtually created the market that has now been taken up by countless other boutiques and brands Aarong caters to this growing urban consumer base through outlets in every major city in the country Their discerning style and high-quality craftsmanship make every Aarong product unique and demand for them has been consistently rising due to Aarongs focus on innovation quality value-based pricing and superior in-store customer service All these elements backed by a robust distribution network and strong supply chain have made Aarong a true household brand in Bangladesh Just as Bangladeshis living abroad look to Aarong for products that connect them to their heritage the Aarong experience is an essential part of any trip to Bangladesh by foreign visitors ndash a phenomenon chronicled in the Lonely Planet guide to Bangladesh Aarong products are not only the gift items of choice for every occasion for local and expatriate Bangladeshis but also the quintessential cultural mementos for these visitors Aarongs growing presence outside Bangladesh - through fair-trade networks in Europe as well as a retail franchise in London - continues to broaden the market for Bangladeshi craft globally
037 Producers or suppliers Aarong embraces and nurtures a diverse representation of 65000 artisans 85 of whom
are women More than forty thousand of these women work directly for Aarong in its 13 production centrersquos (Foundations) in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah including 653 sub-centers spread across Bangladesh Twenty-five thousand independent co-operative groups and traditional family-based artisans also market their crafts through Aarong Potters brass workers jewelers jute workers basket weavers handloom weavers silk weavers wood carvers leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services The leather workers are various artisans with specialized skills from all over the country
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038 Brand valueAarong stands for a unique mix of design quality and convenience of the traditional and
the contemporary Aarong is one of a kind ndash globally positioned as a highly successful Bangladeshi craft based retail chain and brand of pride It also carries the distinction of being BRACs most successful social enterprise Aarongs responsibility is therefore two fold delivering unique products with the highest level of quality and service to its customers and the strongest level of support and protection of artisans and their craft To its consumers Aarong is a household name - a one-stop shop and a trusted brand that inspires pride promises quality and sophistication and helps to keep cultural roots alive in everyday life For the artisans Aarong represents the endurance of both their age-old art as well as their livelihoods For consumers and artisans alike Aarong has become a part of the cultural fabric of their lives
Those things we didnt know-1 In Bengali Aarong means village fair and Taaga means thread2 Half of the profit from every purchase you make at Aarong goes towards supporting
schools health services and specific interventions targeted to the ultra poor segment by BRAC
3 3 people enter an Aarong outlet every second4 The amount of fabric consumed by Aarong in a year can wrap around Bangladesh 8
times
039 Aarongrsquos Production Centers
1 At Aarong has 8 domestic outlets (5 in Dhaka 1 in Chittagong 1 in Sylhet and 1 in Khulna) 1 franchise in London)
2 Aarong has 13 center and (Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur Pabna Pollobi Kurigram Nilphamary and Jhenaidah)
3 653 sub-centers spread across Bangladesh
4 As well as considerable export operation in many European North American and Asian countries
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0310 Artisans Karim Mias Story
Karim Mia is a bamboo tray and basket producer of Aarong Due to extreme poverty at home Karim Mia stopped his schooling when he was in class 3 and began assisting his father in bamboo crafts weaving Struck by the untimely death of his father Karim Mia at the age of 16 had to find an immediate source of income to run his family of five brothers five sisters and his mother Initially Karim Mia commuted from his home district Tangail (approx 120 km away from Dhaka city) to sell bamboo products at small crafts shops in Dhaka At that time with his meager monthly income of almost $25 he could barely support his family After struggling for almost three years Karim Mia came to Aarong in 1988 to show some of his samples His self-designed samples were immediately chosen and an order was placed for 60 pieces Since then Karim Mia has received constant orders from Aarong for its local as well as export market
As part of its mission to assist producers in product development and technical training Aarong sponsored Karim Mia to attend a bamboo crafts workshop in New Delhi in 2003 The one-week training has helped him to gain better knowledge about bamboo craft His workmanship has also shown remarkable improvement in quality Today Karim Mia supplies exclusively to Aarong and has a steady monthly income of $100-130 On an average he has ten workers working under him During the busy season he employs more than fifty workers
Karim Mia is now married with two sons and a daughter all of whom attend school He hopes that his children will be able to complete their education which he could not because of financial need About two years ago Karim Mia bought 20 decimal lands in Tangail where he constructed his tin-shed home Very recently he has built an extension room that is being used as working space and storage for the bamboo products
Karim Mia feels that Aarongrsquos support during his needy times the continued assistance in product development and design and a steady flow of orders has helped him carve out a dignified existence for himself and his family
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0311 Others Artisans
Holding steadfast to its original mission Aarong today supports the lives and livelihoods of nearly sixty five thousand rural artisans and handicraft producers 85 of who are women More than forty thousand of these women work directly for Aarong in its 13 production centers in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah and 653 subcentres spread across Bangladesh
Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong Potters Brass Workers Jewellers Jute workers Basket Weavers Handloom Weavers Silk Weavers Wood Carvers Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services
04
Make or buy of aarongTraditionally Aarong prefers the make option tended to be favored by ownership of a
large range of manufacturing and subassembly facilities They were largely depends on raw materials which were processed in house Specially buy canrsquot give full perfection Thatrsquos why Aarong prefer make option
Reason for Make Instead of Buy
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There are many special reasons in Aarong to prefer make option instead of buy These include
The quantities are too small Quality requirements may be so exacting or so unusual as to require special processing
methods that suppliers canrsquot be expected to provide Closer coordination of supply with the demand To preserve technological secrets To obtain a lower cost To advantage of or avoid idle equipment or labor To avoid sole source dependency The management of Aarong appears to take pride in size
Dangers Involved in Decision to Manufacture
To manufacture the various types of product of Aarong dangers involve in decision include
They may have lack administrative or technical experience in the production The challenges of maintaining ling term technological and economic viability for a
noncore activity Difficult to determine the costs of the make decision A lack of flexibility in selecting possible sources and substitute items is likely to result
041 Sub contractionThe use of subcontract is perfect when placing orders for work which is difficult to
define take a long time and extremely costly Managing the subcontract is a complex activity which requires knowledge about performance to date as well as ability to anticipate actions needed to ensure the desired end results Thatrsquos why Aarong donrsquot have the subcontracting policy
042 Sources of information about suppliersKnowledge of information source is primary task for this kind of manufacturing agency
Aarong relay solely on their whole experience and past memory The normal principal sources of information consist of catalogs trade journals advertisements suppliers and commodity directories sales interviews annual report etc These are given bellow in brief
Catalogs Aarong have the proper catalog and have the advantage of being a permanent record of whole organization always in the office of the buyer Salespeople are not always
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36(P
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available advertisements are frequently forgotten but the catalog is an ever present reminder Two types of catalog are here
Jobbers catalog Contains a variety of manufacturing sources an offer to a certain extent Equipment and machinery catalog Provide information of Specification of location of
supply for replacement parts as well as new equipments of Aarong
Trade journals Trade journals are also valuable sources of information of Aarong as to potential suppliers It is used in two ways
Firstly use is a study of the text adds to the buyerrsquos general information suggests new products and substitute materials
Secondly use has to do with advertising
Trade Directories Trade directories are volumes which list leading manufactures addresses number of branches products supplies equipment and other items offered for sale
Sales Representation In Aarong it is essential to develop good supplier relations which begin with a friendly courteous sympathetic and frank attitude toward the supplier salesperson Aarong have the policies and procedures guidelines concerning the relations between the purchasing office and suppliersrsquo representatives
Suppliers and Commodity file Such files contain information concerning the address of the Aarongrsquos supplier past orders placed with the company data concerning its general fitness reliability suppliers willingness to meet particular requirements of them which product has been purchased in the past price paid point of shipment and cross reference of the supplier file
043 Aarongrsquos Supplier evaluation We know that Aarong is an organization which fully depends on domestic ruler raw
product So the supplier of Aarong will be the ruler people Aarongrsquos supplier evaluation depends on some important factors Those are given below
Existing and Potential Sources The evaluation of suppliers is a continuing purchasing task Aarong does this very carefully They monitored to see if expected performance
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36(P
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materializes with current suppliers New sources need to be screened to see if their potential warrants serous future consideration
Informal and Formal Evaluation Aarongrsquos current supplier is one which has passed through earlier supplier efforts and subsequently received at a minimum one order Most buyer of Aarong tends to separate current suppliers into at least two categories
Informal Evaluation Informal evolution includes assessments of personal contract between Aarong and its supplier in the purchaser section in all function where such contract takes place
044 Aarongrsquos Additional sources and selection consideration
Aarongrsquos additional sources and selection consideration system causes if supplier had been found who could meet all the requirements the search would be over Such it not the case Shall the buyer in buying a given item rely on a single supplier or utilize several Shall the buyer directly buy from manufacturers or through distributors Aarong need quick supply because customer demand is very high and fast Aarong need the product as their expectation In doing so it shall be assumed that adequate investigation for fairness and capacity to meet the requirements as to quality quantity delivery and service and that prices are not unreasonable The product of Aarong is much reasonable then other So Aarong need to maintain this for customer
045 Aarongrsquos supplier rating systemSupplier rating system is very important function for an organization Aarong evaluate
their supplier rating system through some steps Most formal supplier rating schemes attempt to track actual performance over time Thus corrective action can be taken as needed Formal supplier rating schemes track vendor performance on quality price delivery and service It is
Page
36(P
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normal to track a supplierrsquos quality performance very closely and in sufficient deal to enable the pinpointing of corrective action Delivery performance of a current supplier is fairly easily tracked if good records exist of delivery promises and actual recipients and few modifications have been made on an informal basis There is a most effective evaluation system of rating that Aarong follows is weighted point evaluation system
Aarong has different types of supplier that is why this system is successful Particularly in cases where several sources supply the same item Outstanding performance of a supplier can then be rewarded with additional business while poor performance will at the least result in less business or possibly dropping a supplier altogether For different product classes different factors weight and measure should be used to reflect varying impact on the organization
Factor Weight How MeasuredSupplier
Performance past 12 Months
Rating
Quality30 1 defective subtracts
605 defective (30(100-(05 X
6)100=291
Delivery 40 1 day late subtracts 2
Average 5 days late (40(100-(5X2)100=36
Price 20 Lowest price paidPrice charged
$50$55
(20(5055)X100)100=1818
Service10 Goods=100
Fair=70Poor=40
Fair=75 (10X75)100=75
Total Points
100 9078
Aarongrsquos supplier weighted point rating system
046 The Supplier selection decisionThe purchaserrsquos Perception of the supplierrsquos ability in Aarong to meet satisfactory
quality quantity delivery and price and service objectives will govern the selection decision Itrsquos also included their past history facilities and technical strength financial status organization and management reputation systems communication of rural people labor relations and location The nature and the amount of the purchase will influence the selection decision
Page
36(P
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Aarongrsquos supplier selection decision can be seen as decision making under uncertainty and can be represented by a decision tree There are three stage decision trees for supplier selection also In the given figure shows a decision tree of one stage situation with only two suppliers considered and two possible outcomes To use decision tree effectively and assess the probabilities of success and failure This simple tree could apply to a special onetime purchase without expectation of follow on business for some time to come
SolutionSupplier A Supplier BHigh 100 X 30 =3000 High 100 X 28 =2800Medium 70 X 35 =2450 Medium 70 X 40 =2800Low 40 X 40 =1600 Low 40 X 30 =1200
=7000 =6800So Aarong will choose supplier B
047 Consumer buyer behavior CONSUMER DECISION PROCESS MODEL
Aarong is the most leading fashionable organization in Bangladesh Aarong is always looking towards its consumer perceptions It always creates a different look and patterns in their product This is the main reason to attract consumer The process component of the consumer decision making process deals with how consumers make decisions The product consumer have
Price $30 per unit
Price $35 per unit
Price $40 per unit
Price $28 per unit
Price $40 per unit
Price $30 per unit
On demand high 100 units
On demand medium 70 units
On demand low 40 units
On demand high 100 units
On demand medium 70 units
On demand low 40 units
Supplier
A
Supplier
B
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36(P
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selected to buy and in order to understand how a consumer makes these decisions in the process component we need to look at the psychological field of the process model which are the internal influences of motivation perception learning personality amp attitude and how these influences affect the decision making process Aarong the act of making a consumer decision consists of three stages which are need recognition pre-purchase search amp evaluation of alternatives
Need Recognition Need recognition occurs when a consumer is faced with a problem There are many different reasons why someone would decide that they need to buy the product from Aarong It might be necessary of any product as well as fashionable one
Pre-purchase Search Pre-purchase search is very important for consumer At first they search their desirable product in the market After that they decide from where they buy their product When they think about perfection and fissionable thing they must go through Aarong
Evaluation of Alternative This means to evaluate the alternative brands of that product From that evaluation consumer select their product according their perception Aarong have the ability to fulfill their perception That is the quality of Aarong
048 Purchase-supplier relationsWhen one organization supplies another with goods or services the nature of the
relationship between the two organizations is a major influence on the ultimate value and customer satisfaction achievable Aarong maintain a good relationship with their supplier They maintain the relationship very sincerely Aarong deals with their supplier several times All times they maintain their formalities Good relations with supplier are very important for their supply system If the relation is well the supplier supply product as their requirement In this section the nature of supplier goodwill will be discussed along with the framework for buyer-seller satisfaction the qualifications of good and preferred suppliers partnerships and strategic alliances
049 Aarongrsquos Purchase-supplier satisfaction modelAarong is a fair trade organization Aarong always try to satisfy their selected supplier
One of the major assessments a purchaser must make is whether the current relationship with a supplier is satisfactory or not This relationship is highly complex and different people inside the
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36(P
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purchasing organization may have different perceptions of it Aarong follow a supplier satisfaction model This model includes some assumptions Those are
I That satisfaction with a current supplier relationship can be assessed however crudely at least in macro terms whether it is satisfactory or not
II That an unsatisfied party will attempt to move to a more satisfactory situationIII That attempts to move may fall in the win and lose as well as the lose and lose lose and
win and win and win categoryIV That attempts to move may affect the stability of the relationshipV That purchaser and seller may well have different perceptions of the same relationship
VI That many tools techniques and approaches exists which will assist either party in moving position and improving stability
0410 Aarongrsquos Reverse supplier developmentIn supplier selection it has so far been assured that at least one suitable and willing
supplier already exists and that the purchaserrsquos problems are primarily one of determining who
C
D B
A
Purchaser dissatisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier dissatisfied
Purchaser satisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier satisfied
Total Dissatisfaction
Marginal satisfaction
Complete satisfaction
Marginal satisfaction
Complete satisfaction
Supplierrsquos Satisfaction
Purchaserrsquos Satisfaction
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the best supplier is In this case Aarong is very serious about their supplierrsquos development After selecting the best supplier they give better training for their future development We know that Aarong highly depends on rural suppliers Reverse marketing supplier development implies a degree of aggressive procurement involvement not normally encountered in supplier selection
Reverse supplier development should take a broader point of view It defines the need for developing new or existing suppliers as follows The purchase is aware that benefits will accrue to both the supplier and the purchaser benefits of which the supplier may not be aware
Aarongrsquos Supplier Development Context
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
bull Spot payment on product delivery to encourage efficiency and productivity bull Reach out to producers in remote areas to ensure fair value for their efforts bull Marketing communication and information for artisans bull Advances against purchase orders where necessary bull Training amp Education in skills development to raise product quality and marketability bull Product Design and Support in Product Development bull Quality Control to increase producer awareness of the importance of quality
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers in Bangladesh
0411 Aarongrsquos Management and Financial Evaluation
Aarongrsquos management and financial evaluation tends toward greater reliance on single sources for a longer time continuous along with great interest in material requirement and just in
Supplier Purchaser
Purchasing initiative
Sales response
Page
36(P
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time production potential suppliers management strength takes on added significance This will require a detailed examination of Aarongrsquos structure qualifications of managers management control the reward-punishment system training and development system and policies and procedures It is also useful to have an explanation as to why the supplierrsquos manager believes it is managing well and an indication of its most notable successes and failures An evaluation of this supplierrsquos procurement system organization procedures and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract
0412 BenefitsEvery single woman who works in Aarong-owned production facilities is also a beneficiary
of BRACs (Bangladesh Rural Advancement Committee) multifaceted development programs As a support entity of BRAC a significant portion of Aarongs earnings go directly into financing the NGOs (non-governmental organization) development programs in healthcare and education as well as economic and social development Specific benefits for producers include
Free medical check-ups including free eye treatment eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workerrsquos retirement fund
Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible
Further AARONG also assists with design and development market information and quality control and provides advances against purchase orders as well as spot payment on product delivery to encourage further production
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0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
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05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
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052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
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Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
Page
36(P
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053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
Page
36(P
OP
302)
054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
Page
36(P
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36(P
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055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
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056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
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36(P
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Home Wares amp Furniture1 Curtain 2 Bed cover amp cushions 3 Rugs 4 Table Lamps 5 Photo
Frames 6 Coasters
7 Napkin Rings
8 Mats 9 Trays
10 Cutlery 11 Bowls and Platters
12 Photo Frames 13 Bookends 14 Boxes 15 Hammocks 16 Plant Accessories 17 Candles
033 Aarong Retail OutletsAarong sales its products through its own outlets Aarong follow zero distribution
channel Around the country Aarong has ten outlets six outlets in Dhaka in six major parts (Dhanmondi Gulshan Uttara Maghbazar Wari and Mirpur) and outside Dhaka Aarong has two
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36(P
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outlets in Chittagong one in Sylhet and one in Khulna And outside Bangladesh Aarong has one shop in London United Kingdom
Aarong Centre (Head Office ) 346 Tejgaon IA Dhaka-1208 Tel +880 2 8832139 Fax +880 2 9898267Email exportaarongbracnet
Aarong at Gulshan Gulshan ndash Tejgaon Link RoadDhaka 1208Tel 8821052 8825986 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong at Maghbazar Aarong Plaza61 Shahid Shangbadik Selina Parveen Sharak MaghbazarDhaka 1217Tel 9334766 9360260 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong at Dhanmondi Aarong Dhanmondi11 Block-A LalmatiaManik Miah AvenueMirpur RoadDhaka-1207 Tel +88-02-8111607Fax +880 2 8828576Email exportaarongbracnet Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong at Uttara Aarong Uttara Jasim Uddin Sector 4Uttara Model TownDhaka 1230Tel 8916097 8914125 ext 501 Operating Hours 1000am ndash 800pmOpen 7 days a week
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Aarong at Wari 361 Rankin Street (1st Floor) WariDhaka 1203Tel 7114244 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong in Halishahar Chittagong House 1 Lane 1 Block LHalishahar ChittagongTel 031-2515644-45 Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong in Sylhet 413 Naya SharakSylhetTel 6017 0821-815988 0821-713150 Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong in Nasirabad Chittagong Golden Plaza (1st Floor)1692 CDA AvenueChittagongTel 031-654030 06074485325 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong in Khulna Plot A43-A44Majeed Sharani AvenueShib BariKhulnaTel 6016 041-730547
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Aarong in London
Aarong sell an assortment of own brand formal and casual wear for both men and women in London Although Aarong sell its own products but the show room which in London is little bit different from our local shop Because the demand of the customers of London
69 Vallance RdLondon E1 5BS United Kingdom+44 20 72477727
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034 PromotionAs it is in other avenues Aarong is a trendsetter in promotional activities as well Having
been one of the first Bangladeshi brands to use professional models and create sophisticated ad campaigns Aarong continues to set the style and quality standard for promotion by achieving greater levels of class and elegance with each campaign Aarong also selects its promotional mediums carefully to ensure accurate reflection of the brands values Aarongs promotional events - such as its carefully orchestrated fashion shows unique and detailed exhibitions and highly popular sales events ndash have become a significant part of popular culture in urban Bangladesh Aarong also focuses on in-store promotional activities such as its My Aarong Rewards programmed to enhance customer experience
035 Export Terms and Conditions
Beneficiary BRAC66 Mohakhali CA Dhaka 1212BangladeshTel 880-2-9885424 880-2-8824180Fax 880-2-8828576 880-2-8823614
Payment to LC at sight or 50 Advance with order amp 50 before shipment by TT to BRAC Bank Limited1 Gulshan Avenue Gulshan-1 Dhaka-1212 BangladeshTel 880-2-8824501 Fax 880-2-8813543Account 150180010606 Account Name BRAC - Aarong
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Delivery Between 60 to 120 days depending on volume of order on receipt of LC
Port of Dispatch By Air Zia International Airport DhakaBy Sea ICD Dhaka for Full Container Load (FCL) Chittagong for Loose Container Load (LCL)
Packing Fragile items are packed individually in 3 ply carton boxes and master packing in 5 or 7 ply carton boxes Other non-breakable items are packed individually in a ploy bag and master packing in 5 ply carton boxes (2025 kgs in a box)
Freight and Insurance Freight and Insurance to be covered by the importer which varies from port to port
Advance If 50 is paid in advance against the ordered value then the documents will be sent to the importers directly Otherwise the documents will be sent to the bank for collection against Bill of Exchange
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036 MarketA pioneer in the countrys craft industry Aarongs unique product designs have brought
consumer attention back to crafts and materials indigenous to Bangladesh as its designers blend the traditional with the contemporary in a way that continues to win consumer appeal Its success revolutionized trends and virtually created the market that has now been taken up by countless other boutiques and brands Aarong caters to this growing urban consumer base through outlets in every major city in the country Their discerning style and high-quality craftsmanship make every Aarong product unique and demand for them has been consistently rising due to Aarongs focus on innovation quality value-based pricing and superior in-store customer service All these elements backed by a robust distribution network and strong supply chain have made Aarong a true household brand in Bangladesh Just as Bangladeshis living abroad look to Aarong for products that connect them to their heritage the Aarong experience is an essential part of any trip to Bangladesh by foreign visitors ndash a phenomenon chronicled in the Lonely Planet guide to Bangladesh Aarong products are not only the gift items of choice for every occasion for local and expatriate Bangladeshis but also the quintessential cultural mementos for these visitors Aarongs growing presence outside Bangladesh - through fair-trade networks in Europe as well as a retail franchise in London - continues to broaden the market for Bangladeshi craft globally
037 Producers or suppliers Aarong embraces and nurtures a diverse representation of 65000 artisans 85 of whom
are women More than forty thousand of these women work directly for Aarong in its 13 production centrersquos (Foundations) in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah including 653 sub-centers spread across Bangladesh Twenty-five thousand independent co-operative groups and traditional family-based artisans also market their crafts through Aarong Potters brass workers jewelers jute workers basket weavers handloom weavers silk weavers wood carvers leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services The leather workers are various artisans with specialized skills from all over the country
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038 Brand valueAarong stands for a unique mix of design quality and convenience of the traditional and
the contemporary Aarong is one of a kind ndash globally positioned as a highly successful Bangladeshi craft based retail chain and brand of pride It also carries the distinction of being BRACs most successful social enterprise Aarongs responsibility is therefore two fold delivering unique products with the highest level of quality and service to its customers and the strongest level of support and protection of artisans and their craft To its consumers Aarong is a household name - a one-stop shop and a trusted brand that inspires pride promises quality and sophistication and helps to keep cultural roots alive in everyday life For the artisans Aarong represents the endurance of both their age-old art as well as their livelihoods For consumers and artisans alike Aarong has become a part of the cultural fabric of their lives
Those things we didnt know-1 In Bengali Aarong means village fair and Taaga means thread2 Half of the profit from every purchase you make at Aarong goes towards supporting
schools health services and specific interventions targeted to the ultra poor segment by BRAC
3 3 people enter an Aarong outlet every second4 The amount of fabric consumed by Aarong in a year can wrap around Bangladesh 8
times
039 Aarongrsquos Production Centers
1 At Aarong has 8 domestic outlets (5 in Dhaka 1 in Chittagong 1 in Sylhet and 1 in Khulna) 1 franchise in London)
2 Aarong has 13 center and (Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur Pabna Pollobi Kurigram Nilphamary and Jhenaidah)
3 653 sub-centers spread across Bangladesh
4 As well as considerable export operation in many European North American and Asian countries
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0310 Artisans Karim Mias Story
Karim Mia is a bamboo tray and basket producer of Aarong Due to extreme poverty at home Karim Mia stopped his schooling when he was in class 3 and began assisting his father in bamboo crafts weaving Struck by the untimely death of his father Karim Mia at the age of 16 had to find an immediate source of income to run his family of five brothers five sisters and his mother Initially Karim Mia commuted from his home district Tangail (approx 120 km away from Dhaka city) to sell bamboo products at small crafts shops in Dhaka At that time with his meager monthly income of almost $25 he could barely support his family After struggling for almost three years Karim Mia came to Aarong in 1988 to show some of his samples His self-designed samples were immediately chosen and an order was placed for 60 pieces Since then Karim Mia has received constant orders from Aarong for its local as well as export market
As part of its mission to assist producers in product development and technical training Aarong sponsored Karim Mia to attend a bamboo crafts workshop in New Delhi in 2003 The one-week training has helped him to gain better knowledge about bamboo craft His workmanship has also shown remarkable improvement in quality Today Karim Mia supplies exclusively to Aarong and has a steady monthly income of $100-130 On an average he has ten workers working under him During the busy season he employs more than fifty workers
Karim Mia is now married with two sons and a daughter all of whom attend school He hopes that his children will be able to complete their education which he could not because of financial need About two years ago Karim Mia bought 20 decimal lands in Tangail where he constructed his tin-shed home Very recently he has built an extension room that is being used as working space and storage for the bamboo products
Karim Mia feels that Aarongrsquos support during his needy times the continued assistance in product development and design and a steady flow of orders has helped him carve out a dignified existence for himself and his family
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0311 Others Artisans
Holding steadfast to its original mission Aarong today supports the lives and livelihoods of nearly sixty five thousand rural artisans and handicraft producers 85 of who are women More than forty thousand of these women work directly for Aarong in its 13 production centers in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah and 653 subcentres spread across Bangladesh
Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong Potters Brass Workers Jewellers Jute workers Basket Weavers Handloom Weavers Silk Weavers Wood Carvers Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services
04
Make or buy of aarongTraditionally Aarong prefers the make option tended to be favored by ownership of a
large range of manufacturing and subassembly facilities They were largely depends on raw materials which were processed in house Specially buy canrsquot give full perfection Thatrsquos why Aarong prefer make option
Reason for Make Instead of Buy
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There are many special reasons in Aarong to prefer make option instead of buy These include
The quantities are too small Quality requirements may be so exacting or so unusual as to require special processing
methods that suppliers canrsquot be expected to provide Closer coordination of supply with the demand To preserve technological secrets To obtain a lower cost To advantage of or avoid idle equipment or labor To avoid sole source dependency The management of Aarong appears to take pride in size
Dangers Involved in Decision to Manufacture
To manufacture the various types of product of Aarong dangers involve in decision include
They may have lack administrative or technical experience in the production The challenges of maintaining ling term technological and economic viability for a
noncore activity Difficult to determine the costs of the make decision A lack of flexibility in selecting possible sources and substitute items is likely to result
041 Sub contractionThe use of subcontract is perfect when placing orders for work which is difficult to
define take a long time and extremely costly Managing the subcontract is a complex activity which requires knowledge about performance to date as well as ability to anticipate actions needed to ensure the desired end results Thatrsquos why Aarong donrsquot have the subcontracting policy
042 Sources of information about suppliersKnowledge of information source is primary task for this kind of manufacturing agency
Aarong relay solely on their whole experience and past memory The normal principal sources of information consist of catalogs trade journals advertisements suppliers and commodity directories sales interviews annual report etc These are given bellow in brief
Catalogs Aarong have the proper catalog and have the advantage of being a permanent record of whole organization always in the office of the buyer Salespeople are not always
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36(P
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available advertisements are frequently forgotten but the catalog is an ever present reminder Two types of catalog are here
Jobbers catalog Contains a variety of manufacturing sources an offer to a certain extent Equipment and machinery catalog Provide information of Specification of location of
supply for replacement parts as well as new equipments of Aarong
Trade journals Trade journals are also valuable sources of information of Aarong as to potential suppliers It is used in two ways
Firstly use is a study of the text adds to the buyerrsquos general information suggests new products and substitute materials
Secondly use has to do with advertising
Trade Directories Trade directories are volumes which list leading manufactures addresses number of branches products supplies equipment and other items offered for sale
Sales Representation In Aarong it is essential to develop good supplier relations which begin with a friendly courteous sympathetic and frank attitude toward the supplier salesperson Aarong have the policies and procedures guidelines concerning the relations between the purchasing office and suppliersrsquo representatives
Suppliers and Commodity file Such files contain information concerning the address of the Aarongrsquos supplier past orders placed with the company data concerning its general fitness reliability suppliers willingness to meet particular requirements of them which product has been purchased in the past price paid point of shipment and cross reference of the supplier file
043 Aarongrsquos Supplier evaluation We know that Aarong is an organization which fully depends on domestic ruler raw
product So the supplier of Aarong will be the ruler people Aarongrsquos supplier evaluation depends on some important factors Those are given below
Existing and Potential Sources The evaluation of suppliers is a continuing purchasing task Aarong does this very carefully They monitored to see if expected performance
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36(P
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materializes with current suppliers New sources need to be screened to see if their potential warrants serous future consideration
Informal and Formal Evaluation Aarongrsquos current supplier is one which has passed through earlier supplier efforts and subsequently received at a minimum one order Most buyer of Aarong tends to separate current suppliers into at least two categories
Informal Evaluation Informal evolution includes assessments of personal contract between Aarong and its supplier in the purchaser section in all function where such contract takes place
044 Aarongrsquos Additional sources and selection consideration
Aarongrsquos additional sources and selection consideration system causes if supplier had been found who could meet all the requirements the search would be over Such it not the case Shall the buyer in buying a given item rely on a single supplier or utilize several Shall the buyer directly buy from manufacturers or through distributors Aarong need quick supply because customer demand is very high and fast Aarong need the product as their expectation In doing so it shall be assumed that adequate investigation for fairness and capacity to meet the requirements as to quality quantity delivery and service and that prices are not unreasonable The product of Aarong is much reasonable then other So Aarong need to maintain this for customer
045 Aarongrsquos supplier rating systemSupplier rating system is very important function for an organization Aarong evaluate
their supplier rating system through some steps Most formal supplier rating schemes attempt to track actual performance over time Thus corrective action can be taken as needed Formal supplier rating schemes track vendor performance on quality price delivery and service It is
Page
36(P
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normal to track a supplierrsquos quality performance very closely and in sufficient deal to enable the pinpointing of corrective action Delivery performance of a current supplier is fairly easily tracked if good records exist of delivery promises and actual recipients and few modifications have been made on an informal basis There is a most effective evaluation system of rating that Aarong follows is weighted point evaluation system
Aarong has different types of supplier that is why this system is successful Particularly in cases where several sources supply the same item Outstanding performance of a supplier can then be rewarded with additional business while poor performance will at the least result in less business or possibly dropping a supplier altogether For different product classes different factors weight and measure should be used to reflect varying impact on the organization
Factor Weight How MeasuredSupplier
Performance past 12 Months
Rating
Quality30 1 defective subtracts
605 defective (30(100-(05 X
6)100=291
Delivery 40 1 day late subtracts 2
Average 5 days late (40(100-(5X2)100=36
Price 20 Lowest price paidPrice charged
$50$55
(20(5055)X100)100=1818
Service10 Goods=100
Fair=70Poor=40
Fair=75 (10X75)100=75
Total Points
100 9078
Aarongrsquos supplier weighted point rating system
046 The Supplier selection decisionThe purchaserrsquos Perception of the supplierrsquos ability in Aarong to meet satisfactory
quality quantity delivery and price and service objectives will govern the selection decision Itrsquos also included their past history facilities and technical strength financial status organization and management reputation systems communication of rural people labor relations and location The nature and the amount of the purchase will influence the selection decision
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36(P
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Aarongrsquos supplier selection decision can be seen as decision making under uncertainty and can be represented by a decision tree There are three stage decision trees for supplier selection also In the given figure shows a decision tree of one stage situation with only two suppliers considered and two possible outcomes To use decision tree effectively and assess the probabilities of success and failure This simple tree could apply to a special onetime purchase without expectation of follow on business for some time to come
SolutionSupplier A Supplier BHigh 100 X 30 =3000 High 100 X 28 =2800Medium 70 X 35 =2450 Medium 70 X 40 =2800Low 40 X 40 =1600 Low 40 X 30 =1200
=7000 =6800So Aarong will choose supplier B
047 Consumer buyer behavior CONSUMER DECISION PROCESS MODEL
Aarong is the most leading fashionable organization in Bangladesh Aarong is always looking towards its consumer perceptions It always creates a different look and patterns in their product This is the main reason to attract consumer The process component of the consumer decision making process deals with how consumers make decisions The product consumer have
Price $30 per unit
Price $35 per unit
Price $40 per unit
Price $28 per unit
Price $40 per unit
Price $30 per unit
On demand high 100 units
On demand medium 70 units
On demand low 40 units
On demand high 100 units
On demand medium 70 units
On demand low 40 units
Supplier
A
Supplier
B
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36(P
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selected to buy and in order to understand how a consumer makes these decisions in the process component we need to look at the psychological field of the process model which are the internal influences of motivation perception learning personality amp attitude and how these influences affect the decision making process Aarong the act of making a consumer decision consists of three stages which are need recognition pre-purchase search amp evaluation of alternatives
Need Recognition Need recognition occurs when a consumer is faced with a problem There are many different reasons why someone would decide that they need to buy the product from Aarong It might be necessary of any product as well as fashionable one
Pre-purchase Search Pre-purchase search is very important for consumer At first they search their desirable product in the market After that they decide from where they buy their product When they think about perfection and fissionable thing they must go through Aarong
Evaluation of Alternative This means to evaluate the alternative brands of that product From that evaluation consumer select their product according their perception Aarong have the ability to fulfill their perception That is the quality of Aarong
048 Purchase-supplier relationsWhen one organization supplies another with goods or services the nature of the
relationship between the two organizations is a major influence on the ultimate value and customer satisfaction achievable Aarong maintain a good relationship with their supplier They maintain the relationship very sincerely Aarong deals with their supplier several times All times they maintain their formalities Good relations with supplier are very important for their supply system If the relation is well the supplier supply product as their requirement In this section the nature of supplier goodwill will be discussed along with the framework for buyer-seller satisfaction the qualifications of good and preferred suppliers partnerships and strategic alliances
049 Aarongrsquos Purchase-supplier satisfaction modelAarong is a fair trade organization Aarong always try to satisfy their selected supplier
One of the major assessments a purchaser must make is whether the current relationship with a supplier is satisfactory or not This relationship is highly complex and different people inside the
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36(P
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purchasing organization may have different perceptions of it Aarong follow a supplier satisfaction model This model includes some assumptions Those are
I That satisfaction with a current supplier relationship can be assessed however crudely at least in macro terms whether it is satisfactory or not
II That an unsatisfied party will attempt to move to a more satisfactory situationIII That attempts to move may fall in the win and lose as well as the lose and lose lose and
win and win and win categoryIV That attempts to move may affect the stability of the relationshipV That purchaser and seller may well have different perceptions of the same relationship
VI That many tools techniques and approaches exists which will assist either party in moving position and improving stability
0410 Aarongrsquos Reverse supplier developmentIn supplier selection it has so far been assured that at least one suitable and willing
supplier already exists and that the purchaserrsquos problems are primarily one of determining who
C
D B
A
Purchaser dissatisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier dissatisfied
Purchaser satisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier satisfied
Total Dissatisfaction
Marginal satisfaction
Complete satisfaction
Marginal satisfaction
Complete satisfaction
Supplierrsquos Satisfaction
Purchaserrsquos Satisfaction
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the best supplier is In this case Aarong is very serious about their supplierrsquos development After selecting the best supplier they give better training for their future development We know that Aarong highly depends on rural suppliers Reverse marketing supplier development implies a degree of aggressive procurement involvement not normally encountered in supplier selection
Reverse supplier development should take a broader point of view It defines the need for developing new or existing suppliers as follows The purchase is aware that benefits will accrue to both the supplier and the purchaser benefits of which the supplier may not be aware
Aarongrsquos Supplier Development Context
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
bull Spot payment on product delivery to encourage efficiency and productivity bull Reach out to producers in remote areas to ensure fair value for their efforts bull Marketing communication and information for artisans bull Advances against purchase orders where necessary bull Training amp Education in skills development to raise product quality and marketability bull Product Design and Support in Product Development bull Quality Control to increase producer awareness of the importance of quality
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers in Bangladesh
0411 Aarongrsquos Management and Financial Evaluation
Aarongrsquos management and financial evaluation tends toward greater reliance on single sources for a longer time continuous along with great interest in material requirement and just in
Supplier Purchaser
Purchasing initiative
Sales response
Page
36(P
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time production potential suppliers management strength takes on added significance This will require a detailed examination of Aarongrsquos structure qualifications of managers management control the reward-punishment system training and development system and policies and procedures It is also useful to have an explanation as to why the supplierrsquos manager believes it is managing well and an indication of its most notable successes and failures An evaluation of this supplierrsquos procurement system organization procedures and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract
0412 BenefitsEvery single woman who works in Aarong-owned production facilities is also a beneficiary
of BRACs (Bangladesh Rural Advancement Committee) multifaceted development programs As a support entity of BRAC a significant portion of Aarongs earnings go directly into financing the NGOs (non-governmental organization) development programs in healthcare and education as well as economic and social development Specific benefits for producers include
Free medical check-ups including free eye treatment eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workerrsquos retirement fund
Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible
Further AARONG also assists with design and development market information and quality control and provides advances against purchase orders as well as spot payment on product delivery to encourage further production
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0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
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05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
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052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
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Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
Page
36(P
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053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
Page
36(P
OP
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054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
Page
36(P
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36(P
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055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
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056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
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36(P
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outlets in Chittagong one in Sylhet and one in Khulna And outside Bangladesh Aarong has one shop in London United Kingdom
Aarong Centre (Head Office ) 346 Tejgaon IA Dhaka-1208 Tel +880 2 8832139 Fax +880 2 9898267Email exportaarongbracnet
Aarong at Gulshan Gulshan ndash Tejgaon Link RoadDhaka 1208Tel 8821052 8825986 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong at Maghbazar Aarong Plaza61 Shahid Shangbadik Selina Parveen Sharak MaghbazarDhaka 1217Tel 9334766 9360260 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong at Dhanmondi Aarong Dhanmondi11 Block-A LalmatiaManik Miah AvenueMirpur RoadDhaka-1207 Tel +88-02-8111607Fax +880 2 8828576Email exportaarongbracnet Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong at Uttara Aarong Uttara Jasim Uddin Sector 4Uttara Model TownDhaka 1230Tel 8916097 8914125 ext 501 Operating Hours 1000am ndash 800pmOpen 7 days a week
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Aarong at Wari 361 Rankin Street (1st Floor) WariDhaka 1203Tel 7114244 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong in Halishahar Chittagong House 1 Lane 1 Block LHalishahar ChittagongTel 031-2515644-45 Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong in Sylhet 413 Naya SharakSylhetTel 6017 0821-815988 0821-713150 Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong in Nasirabad Chittagong Golden Plaza (1st Floor)1692 CDA AvenueChittagongTel 031-654030 06074485325 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong in Khulna Plot A43-A44Majeed Sharani AvenueShib BariKhulnaTel 6016 041-730547
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Aarong in London
Aarong sell an assortment of own brand formal and casual wear for both men and women in London Although Aarong sell its own products but the show room which in London is little bit different from our local shop Because the demand of the customers of London
69 Vallance RdLondon E1 5BS United Kingdom+44 20 72477727
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034 PromotionAs it is in other avenues Aarong is a trendsetter in promotional activities as well Having
been one of the first Bangladeshi brands to use professional models and create sophisticated ad campaigns Aarong continues to set the style and quality standard for promotion by achieving greater levels of class and elegance with each campaign Aarong also selects its promotional mediums carefully to ensure accurate reflection of the brands values Aarongs promotional events - such as its carefully orchestrated fashion shows unique and detailed exhibitions and highly popular sales events ndash have become a significant part of popular culture in urban Bangladesh Aarong also focuses on in-store promotional activities such as its My Aarong Rewards programmed to enhance customer experience
035 Export Terms and Conditions
Beneficiary BRAC66 Mohakhali CA Dhaka 1212BangladeshTel 880-2-9885424 880-2-8824180Fax 880-2-8828576 880-2-8823614
Payment to LC at sight or 50 Advance with order amp 50 before shipment by TT to BRAC Bank Limited1 Gulshan Avenue Gulshan-1 Dhaka-1212 BangladeshTel 880-2-8824501 Fax 880-2-8813543Account 150180010606 Account Name BRAC - Aarong
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Delivery Between 60 to 120 days depending on volume of order on receipt of LC
Port of Dispatch By Air Zia International Airport DhakaBy Sea ICD Dhaka for Full Container Load (FCL) Chittagong for Loose Container Load (LCL)
Packing Fragile items are packed individually in 3 ply carton boxes and master packing in 5 or 7 ply carton boxes Other non-breakable items are packed individually in a ploy bag and master packing in 5 ply carton boxes (2025 kgs in a box)
Freight and Insurance Freight and Insurance to be covered by the importer which varies from port to port
Advance If 50 is paid in advance against the ordered value then the documents will be sent to the importers directly Otherwise the documents will be sent to the bank for collection against Bill of Exchange
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036 MarketA pioneer in the countrys craft industry Aarongs unique product designs have brought
consumer attention back to crafts and materials indigenous to Bangladesh as its designers blend the traditional with the contemporary in a way that continues to win consumer appeal Its success revolutionized trends and virtually created the market that has now been taken up by countless other boutiques and brands Aarong caters to this growing urban consumer base through outlets in every major city in the country Their discerning style and high-quality craftsmanship make every Aarong product unique and demand for them has been consistently rising due to Aarongs focus on innovation quality value-based pricing and superior in-store customer service All these elements backed by a robust distribution network and strong supply chain have made Aarong a true household brand in Bangladesh Just as Bangladeshis living abroad look to Aarong for products that connect them to their heritage the Aarong experience is an essential part of any trip to Bangladesh by foreign visitors ndash a phenomenon chronicled in the Lonely Planet guide to Bangladesh Aarong products are not only the gift items of choice for every occasion for local and expatriate Bangladeshis but also the quintessential cultural mementos for these visitors Aarongs growing presence outside Bangladesh - through fair-trade networks in Europe as well as a retail franchise in London - continues to broaden the market for Bangladeshi craft globally
037 Producers or suppliers Aarong embraces and nurtures a diverse representation of 65000 artisans 85 of whom
are women More than forty thousand of these women work directly for Aarong in its 13 production centrersquos (Foundations) in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah including 653 sub-centers spread across Bangladesh Twenty-five thousand independent co-operative groups and traditional family-based artisans also market their crafts through Aarong Potters brass workers jewelers jute workers basket weavers handloom weavers silk weavers wood carvers leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services The leather workers are various artisans with specialized skills from all over the country
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038 Brand valueAarong stands for a unique mix of design quality and convenience of the traditional and
the contemporary Aarong is one of a kind ndash globally positioned as a highly successful Bangladeshi craft based retail chain and brand of pride It also carries the distinction of being BRACs most successful social enterprise Aarongs responsibility is therefore two fold delivering unique products with the highest level of quality and service to its customers and the strongest level of support and protection of artisans and their craft To its consumers Aarong is a household name - a one-stop shop and a trusted brand that inspires pride promises quality and sophistication and helps to keep cultural roots alive in everyday life For the artisans Aarong represents the endurance of both their age-old art as well as their livelihoods For consumers and artisans alike Aarong has become a part of the cultural fabric of their lives
Those things we didnt know-1 In Bengali Aarong means village fair and Taaga means thread2 Half of the profit from every purchase you make at Aarong goes towards supporting
schools health services and specific interventions targeted to the ultra poor segment by BRAC
3 3 people enter an Aarong outlet every second4 The amount of fabric consumed by Aarong in a year can wrap around Bangladesh 8
times
039 Aarongrsquos Production Centers
1 At Aarong has 8 domestic outlets (5 in Dhaka 1 in Chittagong 1 in Sylhet and 1 in Khulna) 1 franchise in London)
2 Aarong has 13 center and (Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur Pabna Pollobi Kurigram Nilphamary and Jhenaidah)
3 653 sub-centers spread across Bangladesh
4 As well as considerable export operation in many European North American and Asian countries
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0310 Artisans Karim Mias Story
Karim Mia is a bamboo tray and basket producer of Aarong Due to extreme poverty at home Karim Mia stopped his schooling when he was in class 3 and began assisting his father in bamboo crafts weaving Struck by the untimely death of his father Karim Mia at the age of 16 had to find an immediate source of income to run his family of five brothers five sisters and his mother Initially Karim Mia commuted from his home district Tangail (approx 120 km away from Dhaka city) to sell bamboo products at small crafts shops in Dhaka At that time with his meager monthly income of almost $25 he could barely support his family After struggling for almost three years Karim Mia came to Aarong in 1988 to show some of his samples His self-designed samples were immediately chosen and an order was placed for 60 pieces Since then Karim Mia has received constant orders from Aarong for its local as well as export market
As part of its mission to assist producers in product development and technical training Aarong sponsored Karim Mia to attend a bamboo crafts workshop in New Delhi in 2003 The one-week training has helped him to gain better knowledge about bamboo craft His workmanship has also shown remarkable improvement in quality Today Karim Mia supplies exclusively to Aarong and has a steady monthly income of $100-130 On an average he has ten workers working under him During the busy season he employs more than fifty workers
Karim Mia is now married with two sons and a daughter all of whom attend school He hopes that his children will be able to complete their education which he could not because of financial need About two years ago Karim Mia bought 20 decimal lands in Tangail where he constructed his tin-shed home Very recently he has built an extension room that is being used as working space and storage for the bamboo products
Karim Mia feels that Aarongrsquos support during his needy times the continued assistance in product development and design and a steady flow of orders has helped him carve out a dignified existence for himself and his family
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0311 Others Artisans
Holding steadfast to its original mission Aarong today supports the lives and livelihoods of nearly sixty five thousand rural artisans and handicraft producers 85 of who are women More than forty thousand of these women work directly for Aarong in its 13 production centers in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah and 653 subcentres spread across Bangladesh
Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong Potters Brass Workers Jewellers Jute workers Basket Weavers Handloom Weavers Silk Weavers Wood Carvers Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services
04
Make or buy of aarongTraditionally Aarong prefers the make option tended to be favored by ownership of a
large range of manufacturing and subassembly facilities They were largely depends on raw materials which were processed in house Specially buy canrsquot give full perfection Thatrsquos why Aarong prefer make option
Reason for Make Instead of Buy
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There are many special reasons in Aarong to prefer make option instead of buy These include
The quantities are too small Quality requirements may be so exacting or so unusual as to require special processing
methods that suppliers canrsquot be expected to provide Closer coordination of supply with the demand To preserve technological secrets To obtain a lower cost To advantage of or avoid idle equipment or labor To avoid sole source dependency The management of Aarong appears to take pride in size
Dangers Involved in Decision to Manufacture
To manufacture the various types of product of Aarong dangers involve in decision include
They may have lack administrative or technical experience in the production The challenges of maintaining ling term technological and economic viability for a
noncore activity Difficult to determine the costs of the make decision A lack of flexibility in selecting possible sources and substitute items is likely to result
041 Sub contractionThe use of subcontract is perfect when placing orders for work which is difficult to
define take a long time and extremely costly Managing the subcontract is a complex activity which requires knowledge about performance to date as well as ability to anticipate actions needed to ensure the desired end results Thatrsquos why Aarong donrsquot have the subcontracting policy
042 Sources of information about suppliersKnowledge of information source is primary task for this kind of manufacturing agency
Aarong relay solely on their whole experience and past memory The normal principal sources of information consist of catalogs trade journals advertisements suppliers and commodity directories sales interviews annual report etc These are given bellow in brief
Catalogs Aarong have the proper catalog and have the advantage of being a permanent record of whole organization always in the office of the buyer Salespeople are not always
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36(P
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available advertisements are frequently forgotten but the catalog is an ever present reminder Two types of catalog are here
Jobbers catalog Contains a variety of manufacturing sources an offer to a certain extent Equipment and machinery catalog Provide information of Specification of location of
supply for replacement parts as well as new equipments of Aarong
Trade journals Trade journals are also valuable sources of information of Aarong as to potential suppliers It is used in two ways
Firstly use is a study of the text adds to the buyerrsquos general information suggests new products and substitute materials
Secondly use has to do with advertising
Trade Directories Trade directories are volumes which list leading manufactures addresses number of branches products supplies equipment and other items offered for sale
Sales Representation In Aarong it is essential to develop good supplier relations which begin with a friendly courteous sympathetic and frank attitude toward the supplier salesperson Aarong have the policies and procedures guidelines concerning the relations between the purchasing office and suppliersrsquo representatives
Suppliers and Commodity file Such files contain information concerning the address of the Aarongrsquos supplier past orders placed with the company data concerning its general fitness reliability suppliers willingness to meet particular requirements of them which product has been purchased in the past price paid point of shipment and cross reference of the supplier file
043 Aarongrsquos Supplier evaluation We know that Aarong is an organization which fully depends on domestic ruler raw
product So the supplier of Aarong will be the ruler people Aarongrsquos supplier evaluation depends on some important factors Those are given below
Existing and Potential Sources The evaluation of suppliers is a continuing purchasing task Aarong does this very carefully They monitored to see if expected performance
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36(P
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materializes with current suppliers New sources need to be screened to see if their potential warrants serous future consideration
Informal and Formal Evaluation Aarongrsquos current supplier is one which has passed through earlier supplier efforts and subsequently received at a minimum one order Most buyer of Aarong tends to separate current suppliers into at least two categories
Informal Evaluation Informal evolution includes assessments of personal contract between Aarong and its supplier in the purchaser section in all function where such contract takes place
044 Aarongrsquos Additional sources and selection consideration
Aarongrsquos additional sources and selection consideration system causes if supplier had been found who could meet all the requirements the search would be over Such it not the case Shall the buyer in buying a given item rely on a single supplier or utilize several Shall the buyer directly buy from manufacturers or through distributors Aarong need quick supply because customer demand is very high and fast Aarong need the product as their expectation In doing so it shall be assumed that adequate investigation for fairness and capacity to meet the requirements as to quality quantity delivery and service and that prices are not unreasonable The product of Aarong is much reasonable then other So Aarong need to maintain this for customer
045 Aarongrsquos supplier rating systemSupplier rating system is very important function for an organization Aarong evaluate
their supplier rating system through some steps Most formal supplier rating schemes attempt to track actual performance over time Thus corrective action can be taken as needed Formal supplier rating schemes track vendor performance on quality price delivery and service It is
Page
36(P
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normal to track a supplierrsquos quality performance very closely and in sufficient deal to enable the pinpointing of corrective action Delivery performance of a current supplier is fairly easily tracked if good records exist of delivery promises and actual recipients and few modifications have been made on an informal basis There is a most effective evaluation system of rating that Aarong follows is weighted point evaluation system
Aarong has different types of supplier that is why this system is successful Particularly in cases where several sources supply the same item Outstanding performance of a supplier can then be rewarded with additional business while poor performance will at the least result in less business or possibly dropping a supplier altogether For different product classes different factors weight and measure should be used to reflect varying impact on the organization
Factor Weight How MeasuredSupplier
Performance past 12 Months
Rating
Quality30 1 defective subtracts
605 defective (30(100-(05 X
6)100=291
Delivery 40 1 day late subtracts 2
Average 5 days late (40(100-(5X2)100=36
Price 20 Lowest price paidPrice charged
$50$55
(20(5055)X100)100=1818
Service10 Goods=100
Fair=70Poor=40
Fair=75 (10X75)100=75
Total Points
100 9078
Aarongrsquos supplier weighted point rating system
046 The Supplier selection decisionThe purchaserrsquos Perception of the supplierrsquos ability in Aarong to meet satisfactory
quality quantity delivery and price and service objectives will govern the selection decision Itrsquos also included their past history facilities and technical strength financial status organization and management reputation systems communication of rural people labor relations and location The nature and the amount of the purchase will influence the selection decision
Page
36(P
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Aarongrsquos supplier selection decision can be seen as decision making under uncertainty and can be represented by a decision tree There are three stage decision trees for supplier selection also In the given figure shows a decision tree of one stage situation with only two suppliers considered and two possible outcomes To use decision tree effectively and assess the probabilities of success and failure This simple tree could apply to a special onetime purchase without expectation of follow on business for some time to come
SolutionSupplier A Supplier BHigh 100 X 30 =3000 High 100 X 28 =2800Medium 70 X 35 =2450 Medium 70 X 40 =2800Low 40 X 40 =1600 Low 40 X 30 =1200
=7000 =6800So Aarong will choose supplier B
047 Consumer buyer behavior CONSUMER DECISION PROCESS MODEL
Aarong is the most leading fashionable organization in Bangladesh Aarong is always looking towards its consumer perceptions It always creates a different look and patterns in their product This is the main reason to attract consumer The process component of the consumer decision making process deals with how consumers make decisions The product consumer have
Price $30 per unit
Price $35 per unit
Price $40 per unit
Price $28 per unit
Price $40 per unit
Price $30 per unit
On demand high 100 units
On demand medium 70 units
On demand low 40 units
On demand high 100 units
On demand medium 70 units
On demand low 40 units
Supplier
A
Supplier
B
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36(P
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selected to buy and in order to understand how a consumer makes these decisions in the process component we need to look at the psychological field of the process model which are the internal influences of motivation perception learning personality amp attitude and how these influences affect the decision making process Aarong the act of making a consumer decision consists of three stages which are need recognition pre-purchase search amp evaluation of alternatives
Need Recognition Need recognition occurs when a consumer is faced with a problem There are many different reasons why someone would decide that they need to buy the product from Aarong It might be necessary of any product as well as fashionable one
Pre-purchase Search Pre-purchase search is very important for consumer At first they search their desirable product in the market After that they decide from where they buy their product When they think about perfection and fissionable thing they must go through Aarong
Evaluation of Alternative This means to evaluate the alternative brands of that product From that evaluation consumer select their product according their perception Aarong have the ability to fulfill their perception That is the quality of Aarong
048 Purchase-supplier relationsWhen one organization supplies another with goods or services the nature of the
relationship between the two organizations is a major influence on the ultimate value and customer satisfaction achievable Aarong maintain a good relationship with their supplier They maintain the relationship very sincerely Aarong deals with their supplier several times All times they maintain their formalities Good relations with supplier are very important for their supply system If the relation is well the supplier supply product as their requirement In this section the nature of supplier goodwill will be discussed along with the framework for buyer-seller satisfaction the qualifications of good and preferred suppliers partnerships and strategic alliances
049 Aarongrsquos Purchase-supplier satisfaction modelAarong is a fair trade organization Aarong always try to satisfy their selected supplier
One of the major assessments a purchaser must make is whether the current relationship with a supplier is satisfactory or not This relationship is highly complex and different people inside the
Page
36(P
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purchasing organization may have different perceptions of it Aarong follow a supplier satisfaction model This model includes some assumptions Those are
I That satisfaction with a current supplier relationship can be assessed however crudely at least in macro terms whether it is satisfactory or not
II That an unsatisfied party will attempt to move to a more satisfactory situationIII That attempts to move may fall in the win and lose as well as the lose and lose lose and
win and win and win categoryIV That attempts to move may affect the stability of the relationshipV That purchaser and seller may well have different perceptions of the same relationship
VI That many tools techniques and approaches exists which will assist either party in moving position and improving stability
0410 Aarongrsquos Reverse supplier developmentIn supplier selection it has so far been assured that at least one suitable and willing
supplier already exists and that the purchaserrsquos problems are primarily one of determining who
C
D B
A
Purchaser dissatisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier dissatisfied
Purchaser satisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier satisfied
Total Dissatisfaction
Marginal satisfaction
Complete satisfaction
Marginal satisfaction
Complete satisfaction
Supplierrsquos Satisfaction
Purchaserrsquos Satisfaction
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the best supplier is In this case Aarong is very serious about their supplierrsquos development After selecting the best supplier they give better training for their future development We know that Aarong highly depends on rural suppliers Reverse marketing supplier development implies a degree of aggressive procurement involvement not normally encountered in supplier selection
Reverse supplier development should take a broader point of view It defines the need for developing new or existing suppliers as follows The purchase is aware that benefits will accrue to both the supplier and the purchaser benefits of which the supplier may not be aware
Aarongrsquos Supplier Development Context
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
bull Spot payment on product delivery to encourage efficiency and productivity bull Reach out to producers in remote areas to ensure fair value for their efforts bull Marketing communication and information for artisans bull Advances against purchase orders where necessary bull Training amp Education in skills development to raise product quality and marketability bull Product Design and Support in Product Development bull Quality Control to increase producer awareness of the importance of quality
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers in Bangladesh
0411 Aarongrsquos Management and Financial Evaluation
Aarongrsquos management and financial evaluation tends toward greater reliance on single sources for a longer time continuous along with great interest in material requirement and just in
Supplier Purchaser
Purchasing initiative
Sales response
Page
36(P
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time production potential suppliers management strength takes on added significance This will require a detailed examination of Aarongrsquos structure qualifications of managers management control the reward-punishment system training and development system and policies and procedures It is also useful to have an explanation as to why the supplierrsquos manager believes it is managing well and an indication of its most notable successes and failures An evaluation of this supplierrsquos procurement system organization procedures and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract
0412 BenefitsEvery single woman who works in Aarong-owned production facilities is also a beneficiary
of BRACs (Bangladesh Rural Advancement Committee) multifaceted development programs As a support entity of BRAC a significant portion of Aarongs earnings go directly into financing the NGOs (non-governmental organization) development programs in healthcare and education as well as economic and social development Specific benefits for producers include
Free medical check-ups including free eye treatment eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workerrsquos retirement fund
Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible
Further AARONG also assists with design and development market information and quality control and provides advances against purchase orders as well as spot payment on product delivery to encourage further production
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0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
Page
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05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
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052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
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Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
Page
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053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
Page
36(P
OP
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054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
Page
36(P
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36(P
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055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
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056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
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36(P
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Aarong at Wari 361 Rankin Street (1st Floor) WariDhaka 1203Tel 7114244 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong in Halishahar Chittagong House 1 Lane 1 Block LHalishahar ChittagongTel 031-2515644-45 Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong in Sylhet 413 Naya SharakSylhetTel 6017 0821-815988 0821-713150 Operating Hours 1000am ndash 800pm Open 7 days a week
Aarong in Nasirabad Chittagong Golden Plaza (1st Floor)1692 CDA AvenueChittagongTel 031-654030 06074485325 Operating Hours 1000am ndash 800pmOpen 7 days a week
Aarong in Khulna Plot A43-A44Majeed Sharani AvenueShib BariKhulnaTel 6016 041-730547
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36(P
OP
302)
Aarong in London
Aarong sell an assortment of own brand formal and casual wear for both men and women in London Although Aarong sell its own products but the show room which in London is little bit different from our local shop Because the demand of the customers of London
69 Vallance RdLondon E1 5BS United Kingdom+44 20 72477727
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034 PromotionAs it is in other avenues Aarong is a trendsetter in promotional activities as well Having
been one of the first Bangladeshi brands to use professional models and create sophisticated ad campaigns Aarong continues to set the style and quality standard for promotion by achieving greater levels of class and elegance with each campaign Aarong also selects its promotional mediums carefully to ensure accurate reflection of the brands values Aarongs promotional events - such as its carefully orchestrated fashion shows unique and detailed exhibitions and highly popular sales events ndash have become a significant part of popular culture in urban Bangladesh Aarong also focuses on in-store promotional activities such as its My Aarong Rewards programmed to enhance customer experience
035 Export Terms and Conditions
Beneficiary BRAC66 Mohakhali CA Dhaka 1212BangladeshTel 880-2-9885424 880-2-8824180Fax 880-2-8828576 880-2-8823614
Payment to LC at sight or 50 Advance with order amp 50 before shipment by TT to BRAC Bank Limited1 Gulshan Avenue Gulshan-1 Dhaka-1212 BangladeshTel 880-2-8824501 Fax 880-2-8813543Account 150180010606 Account Name BRAC - Aarong
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Delivery Between 60 to 120 days depending on volume of order on receipt of LC
Port of Dispatch By Air Zia International Airport DhakaBy Sea ICD Dhaka for Full Container Load (FCL) Chittagong for Loose Container Load (LCL)
Packing Fragile items are packed individually in 3 ply carton boxes and master packing in 5 or 7 ply carton boxes Other non-breakable items are packed individually in a ploy bag and master packing in 5 ply carton boxes (2025 kgs in a box)
Freight and Insurance Freight and Insurance to be covered by the importer which varies from port to port
Advance If 50 is paid in advance against the ordered value then the documents will be sent to the importers directly Otherwise the documents will be sent to the bank for collection against Bill of Exchange
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036 MarketA pioneer in the countrys craft industry Aarongs unique product designs have brought
consumer attention back to crafts and materials indigenous to Bangladesh as its designers blend the traditional with the contemporary in a way that continues to win consumer appeal Its success revolutionized trends and virtually created the market that has now been taken up by countless other boutiques and brands Aarong caters to this growing urban consumer base through outlets in every major city in the country Their discerning style and high-quality craftsmanship make every Aarong product unique and demand for them has been consistently rising due to Aarongs focus on innovation quality value-based pricing and superior in-store customer service All these elements backed by a robust distribution network and strong supply chain have made Aarong a true household brand in Bangladesh Just as Bangladeshis living abroad look to Aarong for products that connect them to their heritage the Aarong experience is an essential part of any trip to Bangladesh by foreign visitors ndash a phenomenon chronicled in the Lonely Planet guide to Bangladesh Aarong products are not only the gift items of choice for every occasion for local and expatriate Bangladeshis but also the quintessential cultural mementos for these visitors Aarongs growing presence outside Bangladesh - through fair-trade networks in Europe as well as a retail franchise in London - continues to broaden the market for Bangladeshi craft globally
037 Producers or suppliers Aarong embraces and nurtures a diverse representation of 65000 artisans 85 of whom
are women More than forty thousand of these women work directly for Aarong in its 13 production centrersquos (Foundations) in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah including 653 sub-centers spread across Bangladesh Twenty-five thousand independent co-operative groups and traditional family-based artisans also market their crafts through Aarong Potters brass workers jewelers jute workers basket weavers handloom weavers silk weavers wood carvers leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services The leather workers are various artisans with specialized skills from all over the country
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038 Brand valueAarong stands for a unique mix of design quality and convenience of the traditional and
the contemporary Aarong is one of a kind ndash globally positioned as a highly successful Bangladeshi craft based retail chain and brand of pride It also carries the distinction of being BRACs most successful social enterprise Aarongs responsibility is therefore two fold delivering unique products with the highest level of quality and service to its customers and the strongest level of support and protection of artisans and their craft To its consumers Aarong is a household name - a one-stop shop and a trusted brand that inspires pride promises quality and sophistication and helps to keep cultural roots alive in everyday life For the artisans Aarong represents the endurance of both their age-old art as well as their livelihoods For consumers and artisans alike Aarong has become a part of the cultural fabric of their lives
Those things we didnt know-1 In Bengali Aarong means village fair and Taaga means thread2 Half of the profit from every purchase you make at Aarong goes towards supporting
schools health services and specific interventions targeted to the ultra poor segment by BRAC
3 3 people enter an Aarong outlet every second4 The amount of fabric consumed by Aarong in a year can wrap around Bangladesh 8
times
039 Aarongrsquos Production Centers
1 At Aarong has 8 domestic outlets (5 in Dhaka 1 in Chittagong 1 in Sylhet and 1 in Khulna) 1 franchise in London)
2 Aarong has 13 center and (Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur Pabna Pollobi Kurigram Nilphamary and Jhenaidah)
3 653 sub-centers spread across Bangladesh
4 As well as considerable export operation in many European North American and Asian countries
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0310 Artisans Karim Mias Story
Karim Mia is a bamboo tray and basket producer of Aarong Due to extreme poverty at home Karim Mia stopped his schooling when he was in class 3 and began assisting his father in bamboo crafts weaving Struck by the untimely death of his father Karim Mia at the age of 16 had to find an immediate source of income to run his family of five brothers five sisters and his mother Initially Karim Mia commuted from his home district Tangail (approx 120 km away from Dhaka city) to sell bamboo products at small crafts shops in Dhaka At that time with his meager monthly income of almost $25 he could barely support his family After struggling for almost three years Karim Mia came to Aarong in 1988 to show some of his samples His self-designed samples were immediately chosen and an order was placed for 60 pieces Since then Karim Mia has received constant orders from Aarong for its local as well as export market
As part of its mission to assist producers in product development and technical training Aarong sponsored Karim Mia to attend a bamboo crafts workshop in New Delhi in 2003 The one-week training has helped him to gain better knowledge about bamboo craft His workmanship has also shown remarkable improvement in quality Today Karim Mia supplies exclusively to Aarong and has a steady monthly income of $100-130 On an average he has ten workers working under him During the busy season he employs more than fifty workers
Karim Mia is now married with two sons and a daughter all of whom attend school He hopes that his children will be able to complete their education which he could not because of financial need About two years ago Karim Mia bought 20 decimal lands in Tangail where he constructed his tin-shed home Very recently he has built an extension room that is being used as working space and storage for the bamboo products
Karim Mia feels that Aarongrsquos support during his needy times the continued assistance in product development and design and a steady flow of orders has helped him carve out a dignified existence for himself and his family
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0311 Others Artisans
Holding steadfast to its original mission Aarong today supports the lives and livelihoods of nearly sixty five thousand rural artisans and handicraft producers 85 of who are women More than forty thousand of these women work directly for Aarong in its 13 production centers in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah and 653 subcentres spread across Bangladesh
Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong Potters Brass Workers Jewellers Jute workers Basket Weavers Handloom Weavers Silk Weavers Wood Carvers Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services
04
Make or buy of aarongTraditionally Aarong prefers the make option tended to be favored by ownership of a
large range of manufacturing and subassembly facilities They were largely depends on raw materials which were processed in house Specially buy canrsquot give full perfection Thatrsquos why Aarong prefer make option
Reason for Make Instead of Buy
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There are many special reasons in Aarong to prefer make option instead of buy These include
The quantities are too small Quality requirements may be so exacting or so unusual as to require special processing
methods that suppliers canrsquot be expected to provide Closer coordination of supply with the demand To preserve technological secrets To obtain a lower cost To advantage of or avoid idle equipment or labor To avoid sole source dependency The management of Aarong appears to take pride in size
Dangers Involved in Decision to Manufacture
To manufacture the various types of product of Aarong dangers involve in decision include
They may have lack administrative or technical experience in the production The challenges of maintaining ling term technological and economic viability for a
noncore activity Difficult to determine the costs of the make decision A lack of flexibility in selecting possible sources and substitute items is likely to result
041 Sub contractionThe use of subcontract is perfect when placing orders for work which is difficult to
define take a long time and extremely costly Managing the subcontract is a complex activity which requires knowledge about performance to date as well as ability to anticipate actions needed to ensure the desired end results Thatrsquos why Aarong donrsquot have the subcontracting policy
042 Sources of information about suppliersKnowledge of information source is primary task for this kind of manufacturing agency
Aarong relay solely on their whole experience and past memory The normal principal sources of information consist of catalogs trade journals advertisements suppliers and commodity directories sales interviews annual report etc These are given bellow in brief
Catalogs Aarong have the proper catalog and have the advantage of being a permanent record of whole organization always in the office of the buyer Salespeople are not always
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36(P
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available advertisements are frequently forgotten but the catalog is an ever present reminder Two types of catalog are here
Jobbers catalog Contains a variety of manufacturing sources an offer to a certain extent Equipment and machinery catalog Provide information of Specification of location of
supply for replacement parts as well as new equipments of Aarong
Trade journals Trade journals are also valuable sources of information of Aarong as to potential suppliers It is used in two ways
Firstly use is a study of the text adds to the buyerrsquos general information suggests new products and substitute materials
Secondly use has to do with advertising
Trade Directories Trade directories are volumes which list leading manufactures addresses number of branches products supplies equipment and other items offered for sale
Sales Representation In Aarong it is essential to develop good supplier relations which begin with a friendly courteous sympathetic and frank attitude toward the supplier salesperson Aarong have the policies and procedures guidelines concerning the relations between the purchasing office and suppliersrsquo representatives
Suppliers and Commodity file Such files contain information concerning the address of the Aarongrsquos supplier past orders placed with the company data concerning its general fitness reliability suppliers willingness to meet particular requirements of them which product has been purchased in the past price paid point of shipment and cross reference of the supplier file
043 Aarongrsquos Supplier evaluation We know that Aarong is an organization which fully depends on domestic ruler raw
product So the supplier of Aarong will be the ruler people Aarongrsquos supplier evaluation depends on some important factors Those are given below
Existing and Potential Sources The evaluation of suppliers is a continuing purchasing task Aarong does this very carefully They monitored to see if expected performance
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36(P
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materializes with current suppliers New sources need to be screened to see if their potential warrants serous future consideration
Informal and Formal Evaluation Aarongrsquos current supplier is one which has passed through earlier supplier efforts and subsequently received at a minimum one order Most buyer of Aarong tends to separate current suppliers into at least two categories
Informal Evaluation Informal evolution includes assessments of personal contract between Aarong and its supplier in the purchaser section in all function where such contract takes place
044 Aarongrsquos Additional sources and selection consideration
Aarongrsquos additional sources and selection consideration system causes if supplier had been found who could meet all the requirements the search would be over Such it not the case Shall the buyer in buying a given item rely on a single supplier or utilize several Shall the buyer directly buy from manufacturers or through distributors Aarong need quick supply because customer demand is very high and fast Aarong need the product as their expectation In doing so it shall be assumed that adequate investigation for fairness and capacity to meet the requirements as to quality quantity delivery and service and that prices are not unreasonable The product of Aarong is much reasonable then other So Aarong need to maintain this for customer
045 Aarongrsquos supplier rating systemSupplier rating system is very important function for an organization Aarong evaluate
their supplier rating system through some steps Most formal supplier rating schemes attempt to track actual performance over time Thus corrective action can be taken as needed Formal supplier rating schemes track vendor performance on quality price delivery and service It is
Page
36(P
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normal to track a supplierrsquos quality performance very closely and in sufficient deal to enable the pinpointing of corrective action Delivery performance of a current supplier is fairly easily tracked if good records exist of delivery promises and actual recipients and few modifications have been made on an informal basis There is a most effective evaluation system of rating that Aarong follows is weighted point evaluation system
Aarong has different types of supplier that is why this system is successful Particularly in cases where several sources supply the same item Outstanding performance of a supplier can then be rewarded with additional business while poor performance will at the least result in less business or possibly dropping a supplier altogether For different product classes different factors weight and measure should be used to reflect varying impact on the organization
Factor Weight How MeasuredSupplier
Performance past 12 Months
Rating
Quality30 1 defective subtracts
605 defective (30(100-(05 X
6)100=291
Delivery 40 1 day late subtracts 2
Average 5 days late (40(100-(5X2)100=36
Price 20 Lowest price paidPrice charged
$50$55
(20(5055)X100)100=1818
Service10 Goods=100
Fair=70Poor=40
Fair=75 (10X75)100=75
Total Points
100 9078
Aarongrsquos supplier weighted point rating system
046 The Supplier selection decisionThe purchaserrsquos Perception of the supplierrsquos ability in Aarong to meet satisfactory
quality quantity delivery and price and service objectives will govern the selection decision Itrsquos also included their past history facilities and technical strength financial status organization and management reputation systems communication of rural people labor relations and location The nature and the amount of the purchase will influence the selection decision
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36(P
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Aarongrsquos supplier selection decision can be seen as decision making under uncertainty and can be represented by a decision tree There are three stage decision trees for supplier selection also In the given figure shows a decision tree of one stage situation with only two suppliers considered and two possible outcomes To use decision tree effectively and assess the probabilities of success and failure This simple tree could apply to a special onetime purchase without expectation of follow on business for some time to come
SolutionSupplier A Supplier BHigh 100 X 30 =3000 High 100 X 28 =2800Medium 70 X 35 =2450 Medium 70 X 40 =2800Low 40 X 40 =1600 Low 40 X 30 =1200
=7000 =6800So Aarong will choose supplier B
047 Consumer buyer behavior CONSUMER DECISION PROCESS MODEL
Aarong is the most leading fashionable organization in Bangladesh Aarong is always looking towards its consumer perceptions It always creates a different look and patterns in their product This is the main reason to attract consumer The process component of the consumer decision making process deals with how consumers make decisions The product consumer have
Price $30 per unit
Price $35 per unit
Price $40 per unit
Price $28 per unit
Price $40 per unit
Price $30 per unit
On demand high 100 units
On demand medium 70 units
On demand low 40 units
On demand high 100 units
On demand medium 70 units
On demand low 40 units
Supplier
A
Supplier
B
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36(P
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selected to buy and in order to understand how a consumer makes these decisions in the process component we need to look at the psychological field of the process model which are the internal influences of motivation perception learning personality amp attitude and how these influences affect the decision making process Aarong the act of making a consumer decision consists of three stages which are need recognition pre-purchase search amp evaluation of alternatives
Need Recognition Need recognition occurs when a consumer is faced with a problem There are many different reasons why someone would decide that they need to buy the product from Aarong It might be necessary of any product as well as fashionable one
Pre-purchase Search Pre-purchase search is very important for consumer At first they search their desirable product in the market After that they decide from where they buy their product When they think about perfection and fissionable thing they must go through Aarong
Evaluation of Alternative This means to evaluate the alternative brands of that product From that evaluation consumer select their product according their perception Aarong have the ability to fulfill their perception That is the quality of Aarong
048 Purchase-supplier relationsWhen one organization supplies another with goods or services the nature of the
relationship between the two organizations is a major influence on the ultimate value and customer satisfaction achievable Aarong maintain a good relationship with their supplier They maintain the relationship very sincerely Aarong deals with their supplier several times All times they maintain their formalities Good relations with supplier are very important for their supply system If the relation is well the supplier supply product as their requirement In this section the nature of supplier goodwill will be discussed along with the framework for buyer-seller satisfaction the qualifications of good and preferred suppliers partnerships and strategic alliances
049 Aarongrsquos Purchase-supplier satisfaction modelAarong is a fair trade organization Aarong always try to satisfy their selected supplier
One of the major assessments a purchaser must make is whether the current relationship with a supplier is satisfactory or not This relationship is highly complex and different people inside the
Page
36(P
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purchasing organization may have different perceptions of it Aarong follow a supplier satisfaction model This model includes some assumptions Those are
I That satisfaction with a current supplier relationship can be assessed however crudely at least in macro terms whether it is satisfactory or not
II That an unsatisfied party will attempt to move to a more satisfactory situationIII That attempts to move may fall in the win and lose as well as the lose and lose lose and
win and win and win categoryIV That attempts to move may affect the stability of the relationshipV That purchaser and seller may well have different perceptions of the same relationship
VI That many tools techniques and approaches exists which will assist either party in moving position and improving stability
0410 Aarongrsquos Reverse supplier developmentIn supplier selection it has so far been assured that at least one suitable and willing
supplier already exists and that the purchaserrsquos problems are primarily one of determining who
C
D B
A
Purchaser dissatisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier dissatisfied
Purchaser satisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier satisfied
Total Dissatisfaction
Marginal satisfaction
Complete satisfaction
Marginal satisfaction
Complete satisfaction
Supplierrsquos Satisfaction
Purchaserrsquos Satisfaction
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the best supplier is In this case Aarong is very serious about their supplierrsquos development After selecting the best supplier they give better training for their future development We know that Aarong highly depends on rural suppliers Reverse marketing supplier development implies a degree of aggressive procurement involvement not normally encountered in supplier selection
Reverse supplier development should take a broader point of view It defines the need for developing new or existing suppliers as follows The purchase is aware that benefits will accrue to both the supplier and the purchaser benefits of which the supplier may not be aware
Aarongrsquos Supplier Development Context
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
bull Spot payment on product delivery to encourage efficiency and productivity bull Reach out to producers in remote areas to ensure fair value for their efforts bull Marketing communication and information for artisans bull Advances against purchase orders where necessary bull Training amp Education in skills development to raise product quality and marketability bull Product Design and Support in Product Development bull Quality Control to increase producer awareness of the importance of quality
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers in Bangladesh
0411 Aarongrsquos Management and Financial Evaluation
Aarongrsquos management and financial evaluation tends toward greater reliance on single sources for a longer time continuous along with great interest in material requirement and just in
Supplier Purchaser
Purchasing initiative
Sales response
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36(P
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time production potential suppliers management strength takes on added significance This will require a detailed examination of Aarongrsquos structure qualifications of managers management control the reward-punishment system training and development system and policies and procedures It is also useful to have an explanation as to why the supplierrsquos manager believes it is managing well and an indication of its most notable successes and failures An evaluation of this supplierrsquos procurement system organization procedures and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract
0412 BenefitsEvery single woman who works in Aarong-owned production facilities is also a beneficiary
of BRACs (Bangladesh Rural Advancement Committee) multifaceted development programs As a support entity of BRAC a significant portion of Aarongs earnings go directly into financing the NGOs (non-governmental organization) development programs in healthcare and education as well as economic and social development Specific benefits for producers include
Free medical check-ups including free eye treatment eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workerrsquos retirement fund
Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible
Further AARONG also assists with design and development market information and quality control and provides advances against purchase orders as well as spot payment on product delivery to encourage further production
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0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
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05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
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052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
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Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
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053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
Page
36(P
OP
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054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
Page
36(P
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055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
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056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
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36(P
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Aarong in London
Aarong sell an assortment of own brand formal and casual wear for both men and women in London Although Aarong sell its own products but the show room which in London is little bit different from our local shop Because the demand of the customers of London
69 Vallance RdLondon E1 5BS United Kingdom+44 20 72477727
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034 PromotionAs it is in other avenues Aarong is a trendsetter in promotional activities as well Having
been one of the first Bangladeshi brands to use professional models and create sophisticated ad campaigns Aarong continues to set the style and quality standard for promotion by achieving greater levels of class and elegance with each campaign Aarong also selects its promotional mediums carefully to ensure accurate reflection of the brands values Aarongs promotional events - such as its carefully orchestrated fashion shows unique and detailed exhibitions and highly popular sales events ndash have become a significant part of popular culture in urban Bangladesh Aarong also focuses on in-store promotional activities such as its My Aarong Rewards programmed to enhance customer experience
035 Export Terms and Conditions
Beneficiary BRAC66 Mohakhali CA Dhaka 1212BangladeshTel 880-2-9885424 880-2-8824180Fax 880-2-8828576 880-2-8823614
Payment to LC at sight or 50 Advance with order amp 50 before shipment by TT to BRAC Bank Limited1 Gulshan Avenue Gulshan-1 Dhaka-1212 BangladeshTel 880-2-8824501 Fax 880-2-8813543Account 150180010606 Account Name BRAC - Aarong
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Delivery Between 60 to 120 days depending on volume of order on receipt of LC
Port of Dispatch By Air Zia International Airport DhakaBy Sea ICD Dhaka for Full Container Load (FCL) Chittagong for Loose Container Load (LCL)
Packing Fragile items are packed individually in 3 ply carton boxes and master packing in 5 or 7 ply carton boxes Other non-breakable items are packed individually in a ploy bag and master packing in 5 ply carton boxes (2025 kgs in a box)
Freight and Insurance Freight and Insurance to be covered by the importer which varies from port to port
Advance If 50 is paid in advance against the ordered value then the documents will be sent to the importers directly Otherwise the documents will be sent to the bank for collection against Bill of Exchange
Page
36(P
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302)
036 MarketA pioneer in the countrys craft industry Aarongs unique product designs have brought
consumer attention back to crafts and materials indigenous to Bangladesh as its designers blend the traditional with the contemporary in a way that continues to win consumer appeal Its success revolutionized trends and virtually created the market that has now been taken up by countless other boutiques and brands Aarong caters to this growing urban consumer base through outlets in every major city in the country Their discerning style and high-quality craftsmanship make every Aarong product unique and demand for them has been consistently rising due to Aarongs focus on innovation quality value-based pricing and superior in-store customer service All these elements backed by a robust distribution network and strong supply chain have made Aarong a true household brand in Bangladesh Just as Bangladeshis living abroad look to Aarong for products that connect them to their heritage the Aarong experience is an essential part of any trip to Bangladesh by foreign visitors ndash a phenomenon chronicled in the Lonely Planet guide to Bangladesh Aarong products are not only the gift items of choice for every occasion for local and expatriate Bangladeshis but also the quintessential cultural mementos for these visitors Aarongs growing presence outside Bangladesh - through fair-trade networks in Europe as well as a retail franchise in London - continues to broaden the market for Bangladeshi craft globally
037 Producers or suppliers Aarong embraces and nurtures a diverse representation of 65000 artisans 85 of whom
are women More than forty thousand of these women work directly for Aarong in its 13 production centrersquos (Foundations) in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah including 653 sub-centers spread across Bangladesh Twenty-five thousand independent co-operative groups and traditional family-based artisans also market their crafts through Aarong Potters brass workers jewelers jute workers basket weavers handloom weavers silk weavers wood carvers leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services The leather workers are various artisans with specialized skills from all over the country
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038 Brand valueAarong stands for a unique mix of design quality and convenience of the traditional and
the contemporary Aarong is one of a kind ndash globally positioned as a highly successful Bangladeshi craft based retail chain and brand of pride It also carries the distinction of being BRACs most successful social enterprise Aarongs responsibility is therefore two fold delivering unique products with the highest level of quality and service to its customers and the strongest level of support and protection of artisans and their craft To its consumers Aarong is a household name - a one-stop shop and a trusted brand that inspires pride promises quality and sophistication and helps to keep cultural roots alive in everyday life For the artisans Aarong represents the endurance of both their age-old art as well as their livelihoods For consumers and artisans alike Aarong has become a part of the cultural fabric of their lives
Those things we didnt know-1 In Bengali Aarong means village fair and Taaga means thread2 Half of the profit from every purchase you make at Aarong goes towards supporting
schools health services and specific interventions targeted to the ultra poor segment by BRAC
3 3 people enter an Aarong outlet every second4 The amount of fabric consumed by Aarong in a year can wrap around Bangladesh 8
times
039 Aarongrsquos Production Centers
1 At Aarong has 8 domestic outlets (5 in Dhaka 1 in Chittagong 1 in Sylhet and 1 in Khulna) 1 franchise in London)
2 Aarong has 13 center and (Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur Pabna Pollobi Kurigram Nilphamary and Jhenaidah)
3 653 sub-centers spread across Bangladesh
4 As well as considerable export operation in many European North American and Asian countries
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0310 Artisans Karim Mias Story
Karim Mia is a bamboo tray and basket producer of Aarong Due to extreme poverty at home Karim Mia stopped his schooling when he was in class 3 and began assisting his father in bamboo crafts weaving Struck by the untimely death of his father Karim Mia at the age of 16 had to find an immediate source of income to run his family of five brothers five sisters and his mother Initially Karim Mia commuted from his home district Tangail (approx 120 km away from Dhaka city) to sell bamboo products at small crafts shops in Dhaka At that time with his meager monthly income of almost $25 he could barely support his family After struggling for almost three years Karim Mia came to Aarong in 1988 to show some of his samples His self-designed samples were immediately chosen and an order was placed for 60 pieces Since then Karim Mia has received constant orders from Aarong for its local as well as export market
As part of its mission to assist producers in product development and technical training Aarong sponsored Karim Mia to attend a bamboo crafts workshop in New Delhi in 2003 The one-week training has helped him to gain better knowledge about bamboo craft His workmanship has also shown remarkable improvement in quality Today Karim Mia supplies exclusively to Aarong and has a steady monthly income of $100-130 On an average he has ten workers working under him During the busy season he employs more than fifty workers
Karim Mia is now married with two sons and a daughter all of whom attend school He hopes that his children will be able to complete their education which he could not because of financial need About two years ago Karim Mia bought 20 decimal lands in Tangail where he constructed his tin-shed home Very recently he has built an extension room that is being used as working space and storage for the bamboo products
Karim Mia feels that Aarongrsquos support during his needy times the continued assistance in product development and design and a steady flow of orders has helped him carve out a dignified existence for himself and his family
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0311 Others Artisans
Holding steadfast to its original mission Aarong today supports the lives and livelihoods of nearly sixty five thousand rural artisans and handicraft producers 85 of who are women More than forty thousand of these women work directly for Aarong in its 13 production centers in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah and 653 subcentres spread across Bangladesh
Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong Potters Brass Workers Jewellers Jute workers Basket Weavers Handloom Weavers Silk Weavers Wood Carvers Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services
04
Make or buy of aarongTraditionally Aarong prefers the make option tended to be favored by ownership of a
large range of manufacturing and subassembly facilities They were largely depends on raw materials which were processed in house Specially buy canrsquot give full perfection Thatrsquos why Aarong prefer make option
Reason for Make Instead of Buy
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36(P
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There are many special reasons in Aarong to prefer make option instead of buy These include
The quantities are too small Quality requirements may be so exacting or so unusual as to require special processing
methods that suppliers canrsquot be expected to provide Closer coordination of supply with the demand To preserve technological secrets To obtain a lower cost To advantage of or avoid idle equipment or labor To avoid sole source dependency The management of Aarong appears to take pride in size
Dangers Involved in Decision to Manufacture
To manufacture the various types of product of Aarong dangers involve in decision include
They may have lack administrative or technical experience in the production The challenges of maintaining ling term technological and economic viability for a
noncore activity Difficult to determine the costs of the make decision A lack of flexibility in selecting possible sources and substitute items is likely to result
041 Sub contractionThe use of subcontract is perfect when placing orders for work which is difficult to
define take a long time and extremely costly Managing the subcontract is a complex activity which requires knowledge about performance to date as well as ability to anticipate actions needed to ensure the desired end results Thatrsquos why Aarong donrsquot have the subcontracting policy
042 Sources of information about suppliersKnowledge of information source is primary task for this kind of manufacturing agency
Aarong relay solely on their whole experience and past memory The normal principal sources of information consist of catalogs trade journals advertisements suppliers and commodity directories sales interviews annual report etc These are given bellow in brief
Catalogs Aarong have the proper catalog and have the advantage of being a permanent record of whole organization always in the office of the buyer Salespeople are not always
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36(P
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available advertisements are frequently forgotten but the catalog is an ever present reminder Two types of catalog are here
Jobbers catalog Contains a variety of manufacturing sources an offer to a certain extent Equipment and machinery catalog Provide information of Specification of location of
supply for replacement parts as well as new equipments of Aarong
Trade journals Trade journals are also valuable sources of information of Aarong as to potential suppliers It is used in two ways
Firstly use is a study of the text adds to the buyerrsquos general information suggests new products and substitute materials
Secondly use has to do with advertising
Trade Directories Trade directories are volumes which list leading manufactures addresses number of branches products supplies equipment and other items offered for sale
Sales Representation In Aarong it is essential to develop good supplier relations which begin with a friendly courteous sympathetic and frank attitude toward the supplier salesperson Aarong have the policies and procedures guidelines concerning the relations between the purchasing office and suppliersrsquo representatives
Suppliers and Commodity file Such files contain information concerning the address of the Aarongrsquos supplier past orders placed with the company data concerning its general fitness reliability suppliers willingness to meet particular requirements of them which product has been purchased in the past price paid point of shipment and cross reference of the supplier file
043 Aarongrsquos Supplier evaluation We know that Aarong is an organization which fully depends on domestic ruler raw
product So the supplier of Aarong will be the ruler people Aarongrsquos supplier evaluation depends on some important factors Those are given below
Existing and Potential Sources The evaluation of suppliers is a continuing purchasing task Aarong does this very carefully They monitored to see if expected performance
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36(P
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materializes with current suppliers New sources need to be screened to see if their potential warrants serous future consideration
Informal and Formal Evaluation Aarongrsquos current supplier is one which has passed through earlier supplier efforts and subsequently received at a minimum one order Most buyer of Aarong tends to separate current suppliers into at least two categories
Informal Evaluation Informal evolution includes assessments of personal contract between Aarong and its supplier in the purchaser section in all function where such contract takes place
044 Aarongrsquos Additional sources and selection consideration
Aarongrsquos additional sources and selection consideration system causes if supplier had been found who could meet all the requirements the search would be over Such it not the case Shall the buyer in buying a given item rely on a single supplier or utilize several Shall the buyer directly buy from manufacturers or through distributors Aarong need quick supply because customer demand is very high and fast Aarong need the product as their expectation In doing so it shall be assumed that adequate investigation for fairness and capacity to meet the requirements as to quality quantity delivery and service and that prices are not unreasonable The product of Aarong is much reasonable then other So Aarong need to maintain this for customer
045 Aarongrsquos supplier rating systemSupplier rating system is very important function for an organization Aarong evaluate
their supplier rating system through some steps Most formal supplier rating schemes attempt to track actual performance over time Thus corrective action can be taken as needed Formal supplier rating schemes track vendor performance on quality price delivery and service It is
Page
36(P
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302)
normal to track a supplierrsquos quality performance very closely and in sufficient deal to enable the pinpointing of corrective action Delivery performance of a current supplier is fairly easily tracked if good records exist of delivery promises and actual recipients and few modifications have been made on an informal basis There is a most effective evaluation system of rating that Aarong follows is weighted point evaluation system
Aarong has different types of supplier that is why this system is successful Particularly in cases where several sources supply the same item Outstanding performance of a supplier can then be rewarded with additional business while poor performance will at the least result in less business or possibly dropping a supplier altogether For different product classes different factors weight and measure should be used to reflect varying impact on the organization
Factor Weight How MeasuredSupplier
Performance past 12 Months
Rating
Quality30 1 defective subtracts
605 defective (30(100-(05 X
6)100=291
Delivery 40 1 day late subtracts 2
Average 5 days late (40(100-(5X2)100=36
Price 20 Lowest price paidPrice charged
$50$55
(20(5055)X100)100=1818
Service10 Goods=100
Fair=70Poor=40
Fair=75 (10X75)100=75
Total Points
100 9078
Aarongrsquos supplier weighted point rating system
046 The Supplier selection decisionThe purchaserrsquos Perception of the supplierrsquos ability in Aarong to meet satisfactory
quality quantity delivery and price and service objectives will govern the selection decision Itrsquos also included their past history facilities and technical strength financial status organization and management reputation systems communication of rural people labor relations and location The nature and the amount of the purchase will influence the selection decision
Page
36(P
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Aarongrsquos supplier selection decision can be seen as decision making under uncertainty and can be represented by a decision tree There are three stage decision trees for supplier selection also In the given figure shows a decision tree of one stage situation with only two suppliers considered and two possible outcomes To use decision tree effectively and assess the probabilities of success and failure This simple tree could apply to a special onetime purchase without expectation of follow on business for some time to come
SolutionSupplier A Supplier BHigh 100 X 30 =3000 High 100 X 28 =2800Medium 70 X 35 =2450 Medium 70 X 40 =2800Low 40 X 40 =1600 Low 40 X 30 =1200
=7000 =6800So Aarong will choose supplier B
047 Consumer buyer behavior CONSUMER DECISION PROCESS MODEL
Aarong is the most leading fashionable organization in Bangladesh Aarong is always looking towards its consumer perceptions It always creates a different look and patterns in their product This is the main reason to attract consumer The process component of the consumer decision making process deals with how consumers make decisions The product consumer have
Price $30 per unit
Price $35 per unit
Price $40 per unit
Price $28 per unit
Price $40 per unit
Price $30 per unit
On demand high 100 units
On demand medium 70 units
On demand low 40 units
On demand high 100 units
On demand medium 70 units
On demand low 40 units
Supplier
A
Supplier
B
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36(P
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selected to buy and in order to understand how a consumer makes these decisions in the process component we need to look at the psychological field of the process model which are the internal influences of motivation perception learning personality amp attitude and how these influences affect the decision making process Aarong the act of making a consumer decision consists of three stages which are need recognition pre-purchase search amp evaluation of alternatives
Need Recognition Need recognition occurs when a consumer is faced with a problem There are many different reasons why someone would decide that they need to buy the product from Aarong It might be necessary of any product as well as fashionable one
Pre-purchase Search Pre-purchase search is very important for consumer At first they search their desirable product in the market After that they decide from where they buy their product When they think about perfection and fissionable thing they must go through Aarong
Evaluation of Alternative This means to evaluate the alternative brands of that product From that evaluation consumer select their product according their perception Aarong have the ability to fulfill their perception That is the quality of Aarong
048 Purchase-supplier relationsWhen one organization supplies another with goods or services the nature of the
relationship between the two organizations is a major influence on the ultimate value and customer satisfaction achievable Aarong maintain a good relationship with their supplier They maintain the relationship very sincerely Aarong deals with their supplier several times All times they maintain their formalities Good relations with supplier are very important for their supply system If the relation is well the supplier supply product as their requirement In this section the nature of supplier goodwill will be discussed along with the framework for buyer-seller satisfaction the qualifications of good and preferred suppliers partnerships and strategic alliances
049 Aarongrsquos Purchase-supplier satisfaction modelAarong is a fair trade organization Aarong always try to satisfy their selected supplier
One of the major assessments a purchaser must make is whether the current relationship with a supplier is satisfactory or not This relationship is highly complex and different people inside the
Page
36(P
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purchasing organization may have different perceptions of it Aarong follow a supplier satisfaction model This model includes some assumptions Those are
I That satisfaction with a current supplier relationship can be assessed however crudely at least in macro terms whether it is satisfactory or not
II That an unsatisfied party will attempt to move to a more satisfactory situationIII That attempts to move may fall in the win and lose as well as the lose and lose lose and
win and win and win categoryIV That attempts to move may affect the stability of the relationshipV That purchaser and seller may well have different perceptions of the same relationship
VI That many tools techniques and approaches exists which will assist either party in moving position and improving stability
0410 Aarongrsquos Reverse supplier developmentIn supplier selection it has so far been assured that at least one suitable and willing
supplier already exists and that the purchaserrsquos problems are primarily one of determining who
C
D B
A
Purchaser dissatisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier dissatisfied
Purchaser satisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier satisfied
Total Dissatisfaction
Marginal satisfaction
Complete satisfaction
Marginal satisfaction
Complete satisfaction
Supplierrsquos Satisfaction
Purchaserrsquos Satisfaction
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36(P
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the best supplier is In this case Aarong is very serious about their supplierrsquos development After selecting the best supplier they give better training for their future development We know that Aarong highly depends on rural suppliers Reverse marketing supplier development implies a degree of aggressive procurement involvement not normally encountered in supplier selection
Reverse supplier development should take a broader point of view It defines the need for developing new or existing suppliers as follows The purchase is aware that benefits will accrue to both the supplier and the purchaser benefits of which the supplier may not be aware
Aarongrsquos Supplier Development Context
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
bull Spot payment on product delivery to encourage efficiency and productivity bull Reach out to producers in remote areas to ensure fair value for their efforts bull Marketing communication and information for artisans bull Advances against purchase orders where necessary bull Training amp Education in skills development to raise product quality and marketability bull Product Design and Support in Product Development bull Quality Control to increase producer awareness of the importance of quality
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers in Bangladesh
0411 Aarongrsquos Management and Financial Evaluation
Aarongrsquos management and financial evaluation tends toward greater reliance on single sources for a longer time continuous along with great interest in material requirement and just in
Supplier Purchaser
Purchasing initiative
Sales response
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36(P
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time production potential suppliers management strength takes on added significance This will require a detailed examination of Aarongrsquos structure qualifications of managers management control the reward-punishment system training and development system and policies and procedures It is also useful to have an explanation as to why the supplierrsquos manager believes it is managing well and an indication of its most notable successes and failures An evaluation of this supplierrsquos procurement system organization procedures and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract
0412 BenefitsEvery single woman who works in Aarong-owned production facilities is also a beneficiary
of BRACs (Bangladesh Rural Advancement Committee) multifaceted development programs As a support entity of BRAC a significant portion of Aarongs earnings go directly into financing the NGOs (non-governmental organization) development programs in healthcare and education as well as economic and social development Specific benefits for producers include
Free medical check-ups including free eye treatment eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workerrsquos retirement fund
Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible
Further AARONG also assists with design and development market information and quality control and provides advances against purchase orders as well as spot payment on product delivery to encourage further production
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0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
Page
36(P
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05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
Page
36(P
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052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
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Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
Page
36(P
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053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
Page
36(P
OP
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054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
Page
36(P
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36(P
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055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
36(P
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056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
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36(P
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034 PromotionAs it is in other avenues Aarong is a trendsetter in promotional activities as well Having
been one of the first Bangladeshi brands to use professional models and create sophisticated ad campaigns Aarong continues to set the style and quality standard for promotion by achieving greater levels of class and elegance with each campaign Aarong also selects its promotional mediums carefully to ensure accurate reflection of the brands values Aarongs promotional events - such as its carefully orchestrated fashion shows unique and detailed exhibitions and highly popular sales events ndash have become a significant part of popular culture in urban Bangladesh Aarong also focuses on in-store promotional activities such as its My Aarong Rewards programmed to enhance customer experience
035 Export Terms and Conditions
Beneficiary BRAC66 Mohakhali CA Dhaka 1212BangladeshTel 880-2-9885424 880-2-8824180Fax 880-2-8828576 880-2-8823614
Payment to LC at sight or 50 Advance with order amp 50 before shipment by TT to BRAC Bank Limited1 Gulshan Avenue Gulshan-1 Dhaka-1212 BangladeshTel 880-2-8824501 Fax 880-2-8813543Account 150180010606 Account Name BRAC - Aarong
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36(P
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Delivery Between 60 to 120 days depending on volume of order on receipt of LC
Port of Dispatch By Air Zia International Airport DhakaBy Sea ICD Dhaka for Full Container Load (FCL) Chittagong for Loose Container Load (LCL)
Packing Fragile items are packed individually in 3 ply carton boxes and master packing in 5 or 7 ply carton boxes Other non-breakable items are packed individually in a ploy bag and master packing in 5 ply carton boxes (2025 kgs in a box)
Freight and Insurance Freight and Insurance to be covered by the importer which varies from port to port
Advance If 50 is paid in advance against the ordered value then the documents will be sent to the importers directly Otherwise the documents will be sent to the bank for collection against Bill of Exchange
Page
36(P
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036 MarketA pioneer in the countrys craft industry Aarongs unique product designs have brought
consumer attention back to crafts and materials indigenous to Bangladesh as its designers blend the traditional with the contemporary in a way that continues to win consumer appeal Its success revolutionized trends and virtually created the market that has now been taken up by countless other boutiques and brands Aarong caters to this growing urban consumer base through outlets in every major city in the country Their discerning style and high-quality craftsmanship make every Aarong product unique and demand for them has been consistently rising due to Aarongs focus on innovation quality value-based pricing and superior in-store customer service All these elements backed by a robust distribution network and strong supply chain have made Aarong a true household brand in Bangladesh Just as Bangladeshis living abroad look to Aarong for products that connect them to their heritage the Aarong experience is an essential part of any trip to Bangladesh by foreign visitors ndash a phenomenon chronicled in the Lonely Planet guide to Bangladesh Aarong products are not only the gift items of choice for every occasion for local and expatriate Bangladeshis but also the quintessential cultural mementos for these visitors Aarongs growing presence outside Bangladesh - through fair-trade networks in Europe as well as a retail franchise in London - continues to broaden the market for Bangladeshi craft globally
037 Producers or suppliers Aarong embraces and nurtures a diverse representation of 65000 artisans 85 of whom
are women More than forty thousand of these women work directly for Aarong in its 13 production centrersquos (Foundations) in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah including 653 sub-centers spread across Bangladesh Twenty-five thousand independent co-operative groups and traditional family-based artisans also market their crafts through Aarong Potters brass workers jewelers jute workers basket weavers handloom weavers silk weavers wood carvers leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services The leather workers are various artisans with specialized skills from all over the country
Page
36(P
OP
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038 Brand valueAarong stands for a unique mix of design quality and convenience of the traditional and
the contemporary Aarong is one of a kind ndash globally positioned as a highly successful Bangladeshi craft based retail chain and brand of pride It also carries the distinction of being BRACs most successful social enterprise Aarongs responsibility is therefore two fold delivering unique products with the highest level of quality and service to its customers and the strongest level of support and protection of artisans and their craft To its consumers Aarong is a household name - a one-stop shop and a trusted brand that inspires pride promises quality and sophistication and helps to keep cultural roots alive in everyday life For the artisans Aarong represents the endurance of both their age-old art as well as their livelihoods For consumers and artisans alike Aarong has become a part of the cultural fabric of their lives
Those things we didnt know-1 In Bengali Aarong means village fair and Taaga means thread2 Half of the profit from every purchase you make at Aarong goes towards supporting
schools health services and specific interventions targeted to the ultra poor segment by BRAC
3 3 people enter an Aarong outlet every second4 The amount of fabric consumed by Aarong in a year can wrap around Bangladesh 8
times
039 Aarongrsquos Production Centers
1 At Aarong has 8 domestic outlets (5 in Dhaka 1 in Chittagong 1 in Sylhet and 1 in Khulna) 1 franchise in London)
2 Aarong has 13 center and (Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur Pabna Pollobi Kurigram Nilphamary and Jhenaidah)
3 653 sub-centers spread across Bangladesh
4 As well as considerable export operation in many European North American and Asian countries
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0310 Artisans Karim Mias Story
Karim Mia is a bamboo tray and basket producer of Aarong Due to extreme poverty at home Karim Mia stopped his schooling when he was in class 3 and began assisting his father in bamboo crafts weaving Struck by the untimely death of his father Karim Mia at the age of 16 had to find an immediate source of income to run his family of five brothers five sisters and his mother Initially Karim Mia commuted from his home district Tangail (approx 120 km away from Dhaka city) to sell bamboo products at small crafts shops in Dhaka At that time with his meager monthly income of almost $25 he could barely support his family After struggling for almost three years Karim Mia came to Aarong in 1988 to show some of his samples His self-designed samples were immediately chosen and an order was placed for 60 pieces Since then Karim Mia has received constant orders from Aarong for its local as well as export market
As part of its mission to assist producers in product development and technical training Aarong sponsored Karim Mia to attend a bamboo crafts workshop in New Delhi in 2003 The one-week training has helped him to gain better knowledge about bamboo craft His workmanship has also shown remarkable improvement in quality Today Karim Mia supplies exclusively to Aarong and has a steady monthly income of $100-130 On an average he has ten workers working under him During the busy season he employs more than fifty workers
Karim Mia is now married with two sons and a daughter all of whom attend school He hopes that his children will be able to complete their education which he could not because of financial need About two years ago Karim Mia bought 20 decimal lands in Tangail where he constructed his tin-shed home Very recently he has built an extension room that is being used as working space and storage for the bamboo products
Karim Mia feels that Aarongrsquos support during his needy times the continued assistance in product development and design and a steady flow of orders has helped him carve out a dignified existence for himself and his family
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0311 Others Artisans
Holding steadfast to its original mission Aarong today supports the lives and livelihoods of nearly sixty five thousand rural artisans and handicraft producers 85 of who are women More than forty thousand of these women work directly for Aarong in its 13 production centers in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah and 653 subcentres spread across Bangladesh
Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong Potters Brass Workers Jewellers Jute workers Basket Weavers Handloom Weavers Silk Weavers Wood Carvers Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services
04
Make or buy of aarongTraditionally Aarong prefers the make option tended to be favored by ownership of a
large range of manufacturing and subassembly facilities They were largely depends on raw materials which were processed in house Specially buy canrsquot give full perfection Thatrsquos why Aarong prefer make option
Reason for Make Instead of Buy
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36(P
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There are many special reasons in Aarong to prefer make option instead of buy These include
The quantities are too small Quality requirements may be so exacting or so unusual as to require special processing
methods that suppliers canrsquot be expected to provide Closer coordination of supply with the demand To preserve technological secrets To obtain a lower cost To advantage of or avoid idle equipment or labor To avoid sole source dependency The management of Aarong appears to take pride in size
Dangers Involved in Decision to Manufacture
To manufacture the various types of product of Aarong dangers involve in decision include
They may have lack administrative or technical experience in the production The challenges of maintaining ling term technological and economic viability for a
noncore activity Difficult to determine the costs of the make decision A lack of flexibility in selecting possible sources and substitute items is likely to result
041 Sub contractionThe use of subcontract is perfect when placing orders for work which is difficult to
define take a long time and extremely costly Managing the subcontract is a complex activity which requires knowledge about performance to date as well as ability to anticipate actions needed to ensure the desired end results Thatrsquos why Aarong donrsquot have the subcontracting policy
042 Sources of information about suppliersKnowledge of information source is primary task for this kind of manufacturing agency
Aarong relay solely on their whole experience and past memory The normal principal sources of information consist of catalogs trade journals advertisements suppliers and commodity directories sales interviews annual report etc These are given bellow in brief
Catalogs Aarong have the proper catalog and have the advantage of being a permanent record of whole organization always in the office of the buyer Salespeople are not always
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36(P
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available advertisements are frequently forgotten but the catalog is an ever present reminder Two types of catalog are here
Jobbers catalog Contains a variety of manufacturing sources an offer to a certain extent Equipment and machinery catalog Provide information of Specification of location of
supply for replacement parts as well as new equipments of Aarong
Trade journals Trade journals are also valuable sources of information of Aarong as to potential suppliers It is used in two ways
Firstly use is a study of the text adds to the buyerrsquos general information suggests new products and substitute materials
Secondly use has to do with advertising
Trade Directories Trade directories are volumes which list leading manufactures addresses number of branches products supplies equipment and other items offered for sale
Sales Representation In Aarong it is essential to develop good supplier relations which begin with a friendly courteous sympathetic and frank attitude toward the supplier salesperson Aarong have the policies and procedures guidelines concerning the relations between the purchasing office and suppliersrsquo representatives
Suppliers and Commodity file Such files contain information concerning the address of the Aarongrsquos supplier past orders placed with the company data concerning its general fitness reliability suppliers willingness to meet particular requirements of them which product has been purchased in the past price paid point of shipment and cross reference of the supplier file
043 Aarongrsquos Supplier evaluation We know that Aarong is an organization which fully depends on domestic ruler raw
product So the supplier of Aarong will be the ruler people Aarongrsquos supplier evaluation depends on some important factors Those are given below
Existing and Potential Sources The evaluation of suppliers is a continuing purchasing task Aarong does this very carefully They monitored to see if expected performance
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36(P
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materializes with current suppliers New sources need to be screened to see if their potential warrants serous future consideration
Informal and Formal Evaluation Aarongrsquos current supplier is one which has passed through earlier supplier efforts and subsequently received at a minimum one order Most buyer of Aarong tends to separate current suppliers into at least two categories
Informal Evaluation Informal evolution includes assessments of personal contract between Aarong and its supplier in the purchaser section in all function where such contract takes place
044 Aarongrsquos Additional sources and selection consideration
Aarongrsquos additional sources and selection consideration system causes if supplier had been found who could meet all the requirements the search would be over Such it not the case Shall the buyer in buying a given item rely on a single supplier or utilize several Shall the buyer directly buy from manufacturers or through distributors Aarong need quick supply because customer demand is very high and fast Aarong need the product as their expectation In doing so it shall be assumed that adequate investigation for fairness and capacity to meet the requirements as to quality quantity delivery and service and that prices are not unreasonable The product of Aarong is much reasonable then other So Aarong need to maintain this for customer
045 Aarongrsquos supplier rating systemSupplier rating system is very important function for an organization Aarong evaluate
their supplier rating system through some steps Most formal supplier rating schemes attempt to track actual performance over time Thus corrective action can be taken as needed Formal supplier rating schemes track vendor performance on quality price delivery and service It is
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36(P
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normal to track a supplierrsquos quality performance very closely and in sufficient deal to enable the pinpointing of corrective action Delivery performance of a current supplier is fairly easily tracked if good records exist of delivery promises and actual recipients and few modifications have been made on an informal basis There is a most effective evaluation system of rating that Aarong follows is weighted point evaluation system
Aarong has different types of supplier that is why this system is successful Particularly in cases where several sources supply the same item Outstanding performance of a supplier can then be rewarded with additional business while poor performance will at the least result in less business or possibly dropping a supplier altogether For different product classes different factors weight and measure should be used to reflect varying impact on the organization
Factor Weight How MeasuredSupplier
Performance past 12 Months
Rating
Quality30 1 defective subtracts
605 defective (30(100-(05 X
6)100=291
Delivery 40 1 day late subtracts 2
Average 5 days late (40(100-(5X2)100=36
Price 20 Lowest price paidPrice charged
$50$55
(20(5055)X100)100=1818
Service10 Goods=100
Fair=70Poor=40
Fair=75 (10X75)100=75
Total Points
100 9078
Aarongrsquos supplier weighted point rating system
046 The Supplier selection decisionThe purchaserrsquos Perception of the supplierrsquos ability in Aarong to meet satisfactory
quality quantity delivery and price and service objectives will govern the selection decision Itrsquos also included their past history facilities and technical strength financial status organization and management reputation systems communication of rural people labor relations and location The nature and the amount of the purchase will influence the selection decision
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36(P
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Aarongrsquos supplier selection decision can be seen as decision making under uncertainty and can be represented by a decision tree There are three stage decision trees for supplier selection also In the given figure shows a decision tree of one stage situation with only two suppliers considered and two possible outcomes To use decision tree effectively and assess the probabilities of success and failure This simple tree could apply to a special onetime purchase without expectation of follow on business for some time to come
SolutionSupplier A Supplier BHigh 100 X 30 =3000 High 100 X 28 =2800Medium 70 X 35 =2450 Medium 70 X 40 =2800Low 40 X 40 =1600 Low 40 X 30 =1200
=7000 =6800So Aarong will choose supplier B
047 Consumer buyer behavior CONSUMER DECISION PROCESS MODEL
Aarong is the most leading fashionable organization in Bangladesh Aarong is always looking towards its consumer perceptions It always creates a different look and patterns in their product This is the main reason to attract consumer The process component of the consumer decision making process deals with how consumers make decisions The product consumer have
Price $30 per unit
Price $35 per unit
Price $40 per unit
Price $28 per unit
Price $40 per unit
Price $30 per unit
On demand high 100 units
On demand medium 70 units
On demand low 40 units
On demand high 100 units
On demand medium 70 units
On demand low 40 units
Supplier
A
Supplier
B
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36(P
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selected to buy and in order to understand how a consumer makes these decisions in the process component we need to look at the psychological field of the process model which are the internal influences of motivation perception learning personality amp attitude and how these influences affect the decision making process Aarong the act of making a consumer decision consists of three stages which are need recognition pre-purchase search amp evaluation of alternatives
Need Recognition Need recognition occurs when a consumer is faced with a problem There are many different reasons why someone would decide that they need to buy the product from Aarong It might be necessary of any product as well as fashionable one
Pre-purchase Search Pre-purchase search is very important for consumer At first they search their desirable product in the market After that they decide from where they buy their product When they think about perfection and fissionable thing they must go through Aarong
Evaluation of Alternative This means to evaluate the alternative brands of that product From that evaluation consumer select their product according their perception Aarong have the ability to fulfill their perception That is the quality of Aarong
048 Purchase-supplier relationsWhen one organization supplies another with goods or services the nature of the
relationship between the two organizations is a major influence on the ultimate value and customer satisfaction achievable Aarong maintain a good relationship with their supplier They maintain the relationship very sincerely Aarong deals with their supplier several times All times they maintain their formalities Good relations with supplier are very important for their supply system If the relation is well the supplier supply product as their requirement In this section the nature of supplier goodwill will be discussed along with the framework for buyer-seller satisfaction the qualifications of good and preferred suppliers partnerships and strategic alliances
049 Aarongrsquos Purchase-supplier satisfaction modelAarong is a fair trade organization Aarong always try to satisfy their selected supplier
One of the major assessments a purchaser must make is whether the current relationship with a supplier is satisfactory or not This relationship is highly complex and different people inside the
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36(P
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302)
purchasing organization may have different perceptions of it Aarong follow a supplier satisfaction model This model includes some assumptions Those are
I That satisfaction with a current supplier relationship can be assessed however crudely at least in macro terms whether it is satisfactory or not
II That an unsatisfied party will attempt to move to a more satisfactory situationIII That attempts to move may fall in the win and lose as well as the lose and lose lose and
win and win and win categoryIV That attempts to move may affect the stability of the relationshipV That purchaser and seller may well have different perceptions of the same relationship
VI That many tools techniques and approaches exists which will assist either party in moving position and improving stability
0410 Aarongrsquos Reverse supplier developmentIn supplier selection it has so far been assured that at least one suitable and willing
supplier already exists and that the purchaserrsquos problems are primarily one of determining who
C
D B
A
Purchaser dissatisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier dissatisfied
Purchaser satisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier satisfied
Total Dissatisfaction
Marginal satisfaction
Complete satisfaction
Marginal satisfaction
Complete satisfaction
Supplierrsquos Satisfaction
Purchaserrsquos Satisfaction
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36(P
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the best supplier is In this case Aarong is very serious about their supplierrsquos development After selecting the best supplier they give better training for their future development We know that Aarong highly depends on rural suppliers Reverse marketing supplier development implies a degree of aggressive procurement involvement not normally encountered in supplier selection
Reverse supplier development should take a broader point of view It defines the need for developing new or existing suppliers as follows The purchase is aware that benefits will accrue to both the supplier and the purchaser benefits of which the supplier may not be aware
Aarongrsquos Supplier Development Context
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
bull Spot payment on product delivery to encourage efficiency and productivity bull Reach out to producers in remote areas to ensure fair value for their efforts bull Marketing communication and information for artisans bull Advances against purchase orders where necessary bull Training amp Education in skills development to raise product quality and marketability bull Product Design and Support in Product Development bull Quality Control to increase producer awareness of the importance of quality
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers in Bangladesh
0411 Aarongrsquos Management and Financial Evaluation
Aarongrsquos management and financial evaluation tends toward greater reliance on single sources for a longer time continuous along with great interest in material requirement and just in
Supplier Purchaser
Purchasing initiative
Sales response
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36(P
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time production potential suppliers management strength takes on added significance This will require a detailed examination of Aarongrsquos structure qualifications of managers management control the reward-punishment system training and development system and policies and procedures It is also useful to have an explanation as to why the supplierrsquos manager believes it is managing well and an indication of its most notable successes and failures An evaluation of this supplierrsquos procurement system organization procedures and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract
0412 BenefitsEvery single woman who works in Aarong-owned production facilities is also a beneficiary
of BRACs (Bangladesh Rural Advancement Committee) multifaceted development programs As a support entity of BRAC a significant portion of Aarongs earnings go directly into financing the NGOs (non-governmental organization) development programs in healthcare and education as well as economic and social development Specific benefits for producers include
Free medical check-ups including free eye treatment eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workerrsquos retirement fund
Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible
Further AARONG also assists with design and development market information and quality control and provides advances against purchase orders as well as spot payment on product delivery to encourage further production
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36(P
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0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
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05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
Page
36(P
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052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
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Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
Page
36(P
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053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
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36(P
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054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
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36(P
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36(P
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055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
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056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
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Delivery Between 60 to 120 days depending on volume of order on receipt of LC
Port of Dispatch By Air Zia International Airport DhakaBy Sea ICD Dhaka for Full Container Load (FCL) Chittagong for Loose Container Load (LCL)
Packing Fragile items are packed individually in 3 ply carton boxes and master packing in 5 or 7 ply carton boxes Other non-breakable items are packed individually in a ploy bag and master packing in 5 ply carton boxes (2025 kgs in a box)
Freight and Insurance Freight and Insurance to be covered by the importer which varies from port to port
Advance If 50 is paid in advance against the ordered value then the documents will be sent to the importers directly Otherwise the documents will be sent to the bank for collection against Bill of Exchange
Page
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036 MarketA pioneer in the countrys craft industry Aarongs unique product designs have brought
consumer attention back to crafts and materials indigenous to Bangladesh as its designers blend the traditional with the contemporary in a way that continues to win consumer appeal Its success revolutionized trends and virtually created the market that has now been taken up by countless other boutiques and brands Aarong caters to this growing urban consumer base through outlets in every major city in the country Their discerning style and high-quality craftsmanship make every Aarong product unique and demand for them has been consistently rising due to Aarongs focus on innovation quality value-based pricing and superior in-store customer service All these elements backed by a robust distribution network and strong supply chain have made Aarong a true household brand in Bangladesh Just as Bangladeshis living abroad look to Aarong for products that connect them to their heritage the Aarong experience is an essential part of any trip to Bangladesh by foreign visitors ndash a phenomenon chronicled in the Lonely Planet guide to Bangladesh Aarong products are not only the gift items of choice for every occasion for local and expatriate Bangladeshis but also the quintessential cultural mementos for these visitors Aarongs growing presence outside Bangladesh - through fair-trade networks in Europe as well as a retail franchise in London - continues to broaden the market for Bangladeshi craft globally
037 Producers or suppliers Aarong embraces and nurtures a diverse representation of 65000 artisans 85 of whom
are women More than forty thousand of these women work directly for Aarong in its 13 production centrersquos (Foundations) in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah including 653 sub-centers spread across Bangladesh Twenty-five thousand independent co-operative groups and traditional family-based artisans also market their crafts through Aarong Potters brass workers jewelers jute workers basket weavers handloom weavers silk weavers wood carvers leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services The leather workers are various artisans with specialized skills from all over the country
Page
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038 Brand valueAarong stands for a unique mix of design quality and convenience of the traditional and
the contemporary Aarong is one of a kind ndash globally positioned as a highly successful Bangladeshi craft based retail chain and brand of pride It also carries the distinction of being BRACs most successful social enterprise Aarongs responsibility is therefore two fold delivering unique products with the highest level of quality and service to its customers and the strongest level of support and protection of artisans and their craft To its consumers Aarong is a household name - a one-stop shop and a trusted brand that inspires pride promises quality and sophistication and helps to keep cultural roots alive in everyday life For the artisans Aarong represents the endurance of both their age-old art as well as their livelihoods For consumers and artisans alike Aarong has become a part of the cultural fabric of their lives
Those things we didnt know-1 In Bengali Aarong means village fair and Taaga means thread2 Half of the profit from every purchase you make at Aarong goes towards supporting
schools health services and specific interventions targeted to the ultra poor segment by BRAC
3 3 people enter an Aarong outlet every second4 The amount of fabric consumed by Aarong in a year can wrap around Bangladesh 8
times
039 Aarongrsquos Production Centers
1 At Aarong has 8 domestic outlets (5 in Dhaka 1 in Chittagong 1 in Sylhet and 1 in Khulna) 1 franchise in London)
2 Aarong has 13 center and (Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur Pabna Pollobi Kurigram Nilphamary and Jhenaidah)
3 653 sub-centers spread across Bangladesh
4 As well as considerable export operation in many European North American and Asian countries
Page
36(P
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0310 Artisans Karim Mias Story
Karim Mia is a bamboo tray and basket producer of Aarong Due to extreme poverty at home Karim Mia stopped his schooling when he was in class 3 and began assisting his father in bamboo crafts weaving Struck by the untimely death of his father Karim Mia at the age of 16 had to find an immediate source of income to run his family of five brothers five sisters and his mother Initially Karim Mia commuted from his home district Tangail (approx 120 km away from Dhaka city) to sell bamboo products at small crafts shops in Dhaka At that time with his meager monthly income of almost $25 he could barely support his family After struggling for almost three years Karim Mia came to Aarong in 1988 to show some of his samples His self-designed samples were immediately chosen and an order was placed for 60 pieces Since then Karim Mia has received constant orders from Aarong for its local as well as export market
As part of its mission to assist producers in product development and technical training Aarong sponsored Karim Mia to attend a bamboo crafts workshop in New Delhi in 2003 The one-week training has helped him to gain better knowledge about bamboo craft His workmanship has also shown remarkable improvement in quality Today Karim Mia supplies exclusively to Aarong and has a steady monthly income of $100-130 On an average he has ten workers working under him During the busy season he employs more than fifty workers
Karim Mia is now married with two sons and a daughter all of whom attend school He hopes that his children will be able to complete their education which he could not because of financial need About two years ago Karim Mia bought 20 decimal lands in Tangail where he constructed his tin-shed home Very recently he has built an extension room that is being used as working space and storage for the bamboo products
Karim Mia feels that Aarongrsquos support during his needy times the continued assistance in product development and design and a steady flow of orders has helped him carve out a dignified existence for himself and his family
Page
36(P
OP
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0311 Others Artisans
Holding steadfast to its original mission Aarong today supports the lives and livelihoods of nearly sixty five thousand rural artisans and handicraft producers 85 of who are women More than forty thousand of these women work directly for Aarong in its 13 production centers in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah and 653 subcentres spread across Bangladesh
Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong Potters Brass Workers Jewellers Jute workers Basket Weavers Handloom Weavers Silk Weavers Wood Carvers Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services
04
Make or buy of aarongTraditionally Aarong prefers the make option tended to be favored by ownership of a
large range of manufacturing and subassembly facilities They were largely depends on raw materials which were processed in house Specially buy canrsquot give full perfection Thatrsquos why Aarong prefer make option
Reason for Make Instead of Buy
Page
36(P
OP
302)
There are many special reasons in Aarong to prefer make option instead of buy These include
The quantities are too small Quality requirements may be so exacting or so unusual as to require special processing
methods that suppliers canrsquot be expected to provide Closer coordination of supply with the demand To preserve technological secrets To obtain a lower cost To advantage of or avoid idle equipment or labor To avoid sole source dependency The management of Aarong appears to take pride in size
Dangers Involved in Decision to Manufacture
To manufacture the various types of product of Aarong dangers involve in decision include
They may have lack administrative or technical experience in the production The challenges of maintaining ling term technological and economic viability for a
noncore activity Difficult to determine the costs of the make decision A lack of flexibility in selecting possible sources and substitute items is likely to result
041 Sub contractionThe use of subcontract is perfect when placing orders for work which is difficult to
define take a long time and extremely costly Managing the subcontract is a complex activity which requires knowledge about performance to date as well as ability to anticipate actions needed to ensure the desired end results Thatrsquos why Aarong donrsquot have the subcontracting policy
042 Sources of information about suppliersKnowledge of information source is primary task for this kind of manufacturing agency
Aarong relay solely on their whole experience and past memory The normal principal sources of information consist of catalogs trade journals advertisements suppliers and commodity directories sales interviews annual report etc These are given bellow in brief
Catalogs Aarong have the proper catalog and have the advantage of being a permanent record of whole organization always in the office of the buyer Salespeople are not always
Page
36(P
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302)
available advertisements are frequently forgotten but the catalog is an ever present reminder Two types of catalog are here
Jobbers catalog Contains a variety of manufacturing sources an offer to a certain extent Equipment and machinery catalog Provide information of Specification of location of
supply for replacement parts as well as new equipments of Aarong
Trade journals Trade journals are also valuable sources of information of Aarong as to potential suppliers It is used in two ways
Firstly use is a study of the text adds to the buyerrsquos general information suggests new products and substitute materials
Secondly use has to do with advertising
Trade Directories Trade directories are volumes which list leading manufactures addresses number of branches products supplies equipment and other items offered for sale
Sales Representation In Aarong it is essential to develop good supplier relations which begin with a friendly courteous sympathetic and frank attitude toward the supplier salesperson Aarong have the policies and procedures guidelines concerning the relations between the purchasing office and suppliersrsquo representatives
Suppliers and Commodity file Such files contain information concerning the address of the Aarongrsquos supplier past orders placed with the company data concerning its general fitness reliability suppliers willingness to meet particular requirements of them which product has been purchased in the past price paid point of shipment and cross reference of the supplier file
043 Aarongrsquos Supplier evaluation We know that Aarong is an organization which fully depends on domestic ruler raw
product So the supplier of Aarong will be the ruler people Aarongrsquos supplier evaluation depends on some important factors Those are given below
Existing and Potential Sources The evaluation of suppliers is a continuing purchasing task Aarong does this very carefully They monitored to see if expected performance
Page
36(P
OP
302)
materializes with current suppliers New sources need to be screened to see if their potential warrants serous future consideration
Informal and Formal Evaluation Aarongrsquos current supplier is one which has passed through earlier supplier efforts and subsequently received at a minimum one order Most buyer of Aarong tends to separate current suppliers into at least two categories
Informal Evaluation Informal evolution includes assessments of personal contract between Aarong and its supplier in the purchaser section in all function where such contract takes place
044 Aarongrsquos Additional sources and selection consideration
Aarongrsquos additional sources and selection consideration system causes if supplier had been found who could meet all the requirements the search would be over Such it not the case Shall the buyer in buying a given item rely on a single supplier or utilize several Shall the buyer directly buy from manufacturers or through distributors Aarong need quick supply because customer demand is very high and fast Aarong need the product as their expectation In doing so it shall be assumed that adequate investigation for fairness and capacity to meet the requirements as to quality quantity delivery and service and that prices are not unreasonable The product of Aarong is much reasonable then other So Aarong need to maintain this for customer
045 Aarongrsquos supplier rating systemSupplier rating system is very important function for an organization Aarong evaluate
their supplier rating system through some steps Most formal supplier rating schemes attempt to track actual performance over time Thus corrective action can be taken as needed Formal supplier rating schemes track vendor performance on quality price delivery and service It is
Page
36(P
OP
302)
normal to track a supplierrsquos quality performance very closely and in sufficient deal to enable the pinpointing of corrective action Delivery performance of a current supplier is fairly easily tracked if good records exist of delivery promises and actual recipients and few modifications have been made on an informal basis There is a most effective evaluation system of rating that Aarong follows is weighted point evaluation system
Aarong has different types of supplier that is why this system is successful Particularly in cases where several sources supply the same item Outstanding performance of a supplier can then be rewarded with additional business while poor performance will at the least result in less business or possibly dropping a supplier altogether For different product classes different factors weight and measure should be used to reflect varying impact on the organization
Factor Weight How MeasuredSupplier
Performance past 12 Months
Rating
Quality30 1 defective subtracts
605 defective (30(100-(05 X
6)100=291
Delivery 40 1 day late subtracts 2
Average 5 days late (40(100-(5X2)100=36
Price 20 Lowest price paidPrice charged
$50$55
(20(5055)X100)100=1818
Service10 Goods=100
Fair=70Poor=40
Fair=75 (10X75)100=75
Total Points
100 9078
Aarongrsquos supplier weighted point rating system
046 The Supplier selection decisionThe purchaserrsquos Perception of the supplierrsquos ability in Aarong to meet satisfactory
quality quantity delivery and price and service objectives will govern the selection decision Itrsquos also included their past history facilities and technical strength financial status organization and management reputation systems communication of rural people labor relations and location The nature and the amount of the purchase will influence the selection decision
Page
36(P
OP
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Aarongrsquos supplier selection decision can be seen as decision making under uncertainty and can be represented by a decision tree There are three stage decision trees for supplier selection also In the given figure shows a decision tree of one stage situation with only two suppliers considered and two possible outcomes To use decision tree effectively and assess the probabilities of success and failure This simple tree could apply to a special onetime purchase without expectation of follow on business for some time to come
SolutionSupplier A Supplier BHigh 100 X 30 =3000 High 100 X 28 =2800Medium 70 X 35 =2450 Medium 70 X 40 =2800Low 40 X 40 =1600 Low 40 X 30 =1200
=7000 =6800So Aarong will choose supplier B
047 Consumer buyer behavior CONSUMER DECISION PROCESS MODEL
Aarong is the most leading fashionable organization in Bangladesh Aarong is always looking towards its consumer perceptions It always creates a different look and patterns in their product This is the main reason to attract consumer The process component of the consumer decision making process deals with how consumers make decisions The product consumer have
Price $30 per unit
Price $35 per unit
Price $40 per unit
Price $28 per unit
Price $40 per unit
Price $30 per unit
On demand high 100 units
On demand medium 70 units
On demand low 40 units
On demand high 100 units
On demand medium 70 units
On demand low 40 units
Supplier
A
Supplier
B
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36(P
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selected to buy and in order to understand how a consumer makes these decisions in the process component we need to look at the psychological field of the process model which are the internal influences of motivation perception learning personality amp attitude and how these influences affect the decision making process Aarong the act of making a consumer decision consists of three stages which are need recognition pre-purchase search amp evaluation of alternatives
Need Recognition Need recognition occurs when a consumer is faced with a problem There are many different reasons why someone would decide that they need to buy the product from Aarong It might be necessary of any product as well as fashionable one
Pre-purchase Search Pre-purchase search is very important for consumer At first they search their desirable product in the market After that they decide from where they buy their product When they think about perfection and fissionable thing they must go through Aarong
Evaluation of Alternative This means to evaluate the alternative brands of that product From that evaluation consumer select their product according their perception Aarong have the ability to fulfill their perception That is the quality of Aarong
048 Purchase-supplier relationsWhen one organization supplies another with goods or services the nature of the
relationship between the two organizations is a major influence on the ultimate value and customer satisfaction achievable Aarong maintain a good relationship with their supplier They maintain the relationship very sincerely Aarong deals with their supplier several times All times they maintain their formalities Good relations with supplier are very important for their supply system If the relation is well the supplier supply product as their requirement In this section the nature of supplier goodwill will be discussed along with the framework for buyer-seller satisfaction the qualifications of good and preferred suppliers partnerships and strategic alliances
049 Aarongrsquos Purchase-supplier satisfaction modelAarong is a fair trade organization Aarong always try to satisfy their selected supplier
One of the major assessments a purchaser must make is whether the current relationship with a supplier is satisfactory or not This relationship is highly complex and different people inside the
Page
36(P
OP
302)
purchasing organization may have different perceptions of it Aarong follow a supplier satisfaction model This model includes some assumptions Those are
I That satisfaction with a current supplier relationship can be assessed however crudely at least in macro terms whether it is satisfactory or not
II That an unsatisfied party will attempt to move to a more satisfactory situationIII That attempts to move may fall in the win and lose as well as the lose and lose lose and
win and win and win categoryIV That attempts to move may affect the stability of the relationshipV That purchaser and seller may well have different perceptions of the same relationship
VI That many tools techniques and approaches exists which will assist either party in moving position and improving stability
0410 Aarongrsquos Reverse supplier developmentIn supplier selection it has so far been assured that at least one suitable and willing
supplier already exists and that the purchaserrsquos problems are primarily one of determining who
C
D B
A
Purchaser dissatisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier dissatisfied
Purchaser satisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier satisfied
Total Dissatisfaction
Marginal satisfaction
Complete satisfaction
Marginal satisfaction
Complete satisfaction
Supplierrsquos Satisfaction
Purchaserrsquos Satisfaction
Page
36(P
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the best supplier is In this case Aarong is very serious about their supplierrsquos development After selecting the best supplier they give better training for their future development We know that Aarong highly depends on rural suppliers Reverse marketing supplier development implies a degree of aggressive procurement involvement not normally encountered in supplier selection
Reverse supplier development should take a broader point of view It defines the need for developing new or existing suppliers as follows The purchase is aware that benefits will accrue to both the supplier and the purchaser benefits of which the supplier may not be aware
Aarongrsquos Supplier Development Context
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
bull Spot payment on product delivery to encourage efficiency and productivity bull Reach out to producers in remote areas to ensure fair value for their efforts bull Marketing communication and information for artisans bull Advances against purchase orders where necessary bull Training amp Education in skills development to raise product quality and marketability bull Product Design and Support in Product Development bull Quality Control to increase producer awareness of the importance of quality
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers in Bangladesh
0411 Aarongrsquos Management and Financial Evaluation
Aarongrsquos management and financial evaluation tends toward greater reliance on single sources for a longer time continuous along with great interest in material requirement and just in
Supplier Purchaser
Purchasing initiative
Sales response
Page
36(P
OP
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time production potential suppliers management strength takes on added significance This will require a detailed examination of Aarongrsquos structure qualifications of managers management control the reward-punishment system training and development system and policies and procedures It is also useful to have an explanation as to why the supplierrsquos manager believes it is managing well and an indication of its most notable successes and failures An evaluation of this supplierrsquos procurement system organization procedures and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract
0412 BenefitsEvery single woman who works in Aarong-owned production facilities is also a beneficiary
of BRACs (Bangladesh Rural Advancement Committee) multifaceted development programs As a support entity of BRAC a significant portion of Aarongs earnings go directly into financing the NGOs (non-governmental organization) development programs in healthcare and education as well as economic and social development Specific benefits for producers include
Free medical check-ups including free eye treatment eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workerrsquos retirement fund
Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible
Further AARONG also assists with design and development market information and quality control and provides advances against purchase orders as well as spot payment on product delivery to encourage further production
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36(P
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0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
Page
36(P
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05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
Page
36(P
OP
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052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
OP
302)
Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
Page
36(P
OP
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053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
Page
36(P
OP
302)
054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
Page
36(P
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36(P
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055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
36(P
OP
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056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
Page
36(P
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036 MarketA pioneer in the countrys craft industry Aarongs unique product designs have brought
consumer attention back to crafts and materials indigenous to Bangladesh as its designers blend the traditional with the contemporary in a way that continues to win consumer appeal Its success revolutionized trends and virtually created the market that has now been taken up by countless other boutiques and brands Aarong caters to this growing urban consumer base through outlets in every major city in the country Their discerning style and high-quality craftsmanship make every Aarong product unique and demand for them has been consistently rising due to Aarongs focus on innovation quality value-based pricing and superior in-store customer service All these elements backed by a robust distribution network and strong supply chain have made Aarong a true household brand in Bangladesh Just as Bangladeshis living abroad look to Aarong for products that connect them to their heritage the Aarong experience is an essential part of any trip to Bangladesh by foreign visitors ndash a phenomenon chronicled in the Lonely Planet guide to Bangladesh Aarong products are not only the gift items of choice for every occasion for local and expatriate Bangladeshis but also the quintessential cultural mementos for these visitors Aarongs growing presence outside Bangladesh - through fair-trade networks in Europe as well as a retail franchise in London - continues to broaden the market for Bangladeshi craft globally
037 Producers or suppliers Aarong embraces and nurtures a diverse representation of 65000 artisans 85 of whom
are women More than forty thousand of these women work directly for Aarong in its 13 production centrersquos (Foundations) in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah including 653 sub-centers spread across Bangladesh Twenty-five thousand independent co-operative groups and traditional family-based artisans also market their crafts through Aarong Potters brass workers jewelers jute workers basket weavers handloom weavers silk weavers wood carvers leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services The leather workers are various artisans with specialized skills from all over the country
Page
36(P
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038 Brand valueAarong stands for a unique mix of design quality and convenience of the traditional and
the contemporary Aarong is one of a kind ndash globally positioned as a highly successful Bangladeshi craft based retail chain and brand of pride It also carries the distinction of being BRACs most successful social enterprise Aarongs responsibility is therefore two fold delivering unique products with the highest level of quality and service to its customers and the strongest level of support and protection of artisans and their craft To its consumers Aarong is a household name - a one-stop shop and a trusted brand that inspires pride promises quality and sophistication and helps to keep cultural roots alive in everyday life For the artisans Aarong represents the endurance of both their age-old art as well as their livelihoods For consumers and artisans alike Aarong has become a part of the cultural fabric of their lives
Those things we didnt know-1 In Bengali Aarong means village fair and Taaga means thread2 Half of the profit from every purchase you make at Aarong goes towards supporting
schools health services and specific interventions targeted to the ultra poor segment by BRAC
3 3 people enter an Aarong outlet every second4 The amount of fabric consumed by Aarong in a year can wrap around Bangladesh 8
times
039 Aarongrsquos Production Centers
1 At Aarong has 8 domestic outlets (5 in Dhaka 1 in Chittagong 1 in Sylhet and 1 in Khulna) 1 franchise in London)
2 Aarong has 13 center and (Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur Pabna Pollobi Kurigram Nilphamary and Jhenaidah)
3 653 sub-centers spread across Bangladesh
4 As well as considerable export operation in many European North American and Asian countries
Page
36(P
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0310 Artisans Karim Mias Story
Karim Mia is a bamboo tray and basket producer of Aarong Due to extreme poverty at home Karim Mia stopped his schooling when he was in class 3 and began assisting his father in bamboo crafts weaving Struck by the untimely death of his father Karim Mia at the age of 16 had to find an immediate source of income to run his family of five brothers five sisters and his mother Initially Karim Mia commuted from his home district Tangail (approx 120 km away from Dhaka city) to sell bamboo products at small crafts shops in Dhaka At that time with his meager monthly income of almost $25 he could barely support his family After struggling for almost three years Karim Mia came to Aarong in 1988 to show some of his samples His self-designed samples were immediately chosen and an order was placed for 60 pieces Since then Karim Mia has received constant orders from Aarong for its local as well as export market
As part of its mission to assist producers in product development and technical training Aarong sponsored Karim Mia to attend a bamboo crafts workshop in New Delhi in 2003 The one-week training has helped him to gain better knowledge about bamboo craft His workmanship has also shown remarkable improvement in quality Today Karim Mia supplies exclusively to Aarong and has a steady monthly income of $100-130 On an average he has ten workers working under him During the busy season he employs more than fifty workers
Karim Mia is now married with two sons and a daughter all of whom attend school He hopes that his children will be able to complete their education which he could not because of financial need About two years ago Karim Mia bought 20 decimal lands in Tangail where he constructed his tin-shed home Very recently he has built an extension room that is being used as working space and storage for the bamboo products
Karim Mia feels that Aarongrsquos support during his needy times the continued assistance in product development and design and a steady flow of orders has helped him carve out a dignified existence for himself and his family
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36(P
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0311 Others Artisans
Holding steadfast to its original mission Aarong today supports the lives and livelihoods of nearly sixty five thousand rural artisans and handicraft producers 85 of who are women More than forty thousand of these women work directly for Aarong in its 13 production centers in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah and 653 subcentres spread across Bangladesh
Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong Potters Brass Workers Jewellers Jute workers Basket Weavers Handloom Weavers Silk Weavers Wood Carvers Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services
04
Make or buy of aarongTraditionally Aarong prefers the make option tended to be favored by ownership of a
large range of manufacturing and subassembly facilities They were largely depends on raw materials which were processed in house Specially buy canrsquot give full perfection Thatrsquos why Aarong prefer make option
Reason for Make Instead of Buy
Page
36(P
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There are many special reasons in Aarong to prefer make option instead of buy These include
The quantities are too small Quality requirements may be so exacting or so unusual as to require special processing
methods that suppliers canrsquot be expected to provide Closer coordination of supply with the demand To preserve technological secrets To obtain a lower cost To advantage of or avoid idle equipment or labor To avoid sole source dependency The management of Aarong appears to take pride in size
Dangers Involved in Decision to Manufacture
To manufacture the various types of product of Aarong dangers involve in decision include
They may have lack administrative or technical experience in the production The challenges of maintaining ling term technological and economic viability for a
noncore activity Difficult to determine the costs of the make decision A lack of flexibility in selecting possible sources and substitute items is likely to result
041 Sub contractionThe use of subcontract is perfect when placing orders for work which is difficult to
define take a long time and extremely costly Managing the subcontract is a complex activity which requires knowledge about performance to date as well as ability to anticipate actions needed to ensure the desired end results Thatrsquos why Aarong donrsquot have the subcontracting policy
042 Sources of information about suppliersKnowledge of information source is primary task for this kind of manufacturing agency
Aarong relay solely on their whole experience and past memory The normal principal sources of information consist of catalogs trade journals advertisements suppliers and commodity directories sales interviews annual report etc These are given bellow in brief
Catalogs Aarong have the proper catalog and have the advantage of being a permanent record of whole organization always in the office of the buyer Salespeople are not always
Page
36(P
OP
302)
available advertisements are frequently forgotten but the catalog is an ever present reminder Two types of catalog are here
Jobbers catalog Contains a variety of manufacturing sources an offer to a certain extent Equipment and machinery catalog Provide information of Specification of location of
supply for replacement parts as well as new equipments of Aarong
Trade journals Trade journals are also valuable sources of information of Aarong as to potential suppliers It is used in two ways
Firstly use is a study of the text adds to the buyerrsquos general information suggests new products and substitute materials
Secondly use has to do with advertising
Trade Directories Trade directories are volumes which list leading manufactures addresses number of branches products supplies equipment and other items offered for sale
Sales Representation In Aarong it is essential to develop good supplier relations which begin with a friendly courteous sympathetic and frank attitude toward the supplier salesperson Aarong have the policies and procedures guidelines concerning the relations between the purchasing office and suppliersrsquo representatives
Suppliers and Commodity file Such files contain information concerning the address of the Aarongrsquos supplier past orders placed with the company data concerning its general fitness reliability suppliers willingness to meet particular requirements of them which product has been purchased in the past price paid point of shipment and cross reference of the supplier file
043 Aarongrsquos Supplier evaluation We know that Aarong is an organization which fully depends on domestic ruler raw
product So the supplier of Aarong will be the ruler people Aarongrsquos supplier evaluation depends on some important factors Those are given below
Existing and Potential Sources The evaluation of suppliers is a continuing purchasing task Aarong does this very carefully They monitored to see if expected performance
Page
36(P
OP
302)
materializes with current suppliers New sources need to be screened to see if their potential warrants serous future consideration
Informal and Formal Evaluation Aarongrsquos current supplier is one which has passed through earlier supplier efforts and subsequently received at a minimum one order Most buyer of Aarong tends to separate current suppliers into at least two categories
Informal Evaluation Informal evolution includes assessments of personal contract between Aarong and its supplier in the purchaser section in all function where such contract takes place
044 Aarongrsquos Additional sources and selection consideration
Aarongrsquos additional sources and selection consideration system causes if supplier had been found who could meet all the requirements the search would be over Such it not the case Shall the buyer in buying a given item rely on a single supplier or utilize several Shall the buyer directly buy from manufacturers or through distributors Aarong need quick supply because customer demand is very high and fast Aarong need the product as their expectation In doing so it shall be assumed that adequate investigation for fairness and capacity to meet the requirements as to quality quantity delivery and service and that prices are not unreasonable The product of Aarong is much reasonable then other So Aarong need to maintain this for customer
045 Aarongrsquos supplier rating systemSupplier rating system is very important function for an organization Aarong evaluate
their supplier rating system through some steps Most formal supplier rating schemes attempt to track actual performance over time Thus corrective action can be taken as needed Formal supplier rating schemes track vendor performance on quality price delivery and service It is
Page
36(P
OP
302)
normal to track a supplierrsquos quality performance very closely and in sufficient deal to enable the pinpointing of corrective action Delivery performance of a current supplier is fairly easily tracked if good records exist of delivery promises and actual recipients and few modifications have been made on an informal basis There is a most effective evaluation system of rating that Aarong follows is weighted point evaluation system
Aarong has different types of supplier that is why this system is successful Particularly in cases where several sources supply the same item Outstanding performance of a supplier can then be rewarded with additional business while poor performance will at the least result in less business or possibly dropping a supplier altogether For different product classes different factors weight and measure should be used to reflect varying impact on the organization
Factor Weight How MeasuredSupplier
Performance past 12 Months
Rating
Quality30 1 defective subtracts
605 defective (30(100-(05 X
6)100=291
Delivery 40 1 day late subtracts 2
Average 5 days late (40(100-(5X2)100=36
Price 20 Lowest price paidPrice charged
$50$55
(20(5055)X100)100=1818
Service10 Goods=100
Fair=70Poor=40
Fair=75 (10X75)100=75
Total Points
100 9078
Aarongrsquos supplier weighted point rating system
046 The Supplier selection decisionThe purchaserrsquos Perception of the supplierrsquos ability in Aarong to meet satisfactory
quality quantity delivery and price and service objectives will govern the selection decision Itrsquos also included their past history facilities and technical strength financial status organization and management reputation systems communication of rural people labor relations and location The nature and the amount of the purchase will influence the selection decision
Page
36(P
OP
302)
Aarongrsquos supplier selection decision can be seen as decision making under uncertainty and can be represented by a decision tree There are three stage decision trees for supplier selection also In the given figure shows a decision tree of one stage situation with only two suppliers considered and two possible outcomes To use decision tree effectively and assess the probabilities of success and failure This simple tree could apply to a special onetime purchase without expectation of follow on business for some time to come
SolutionSupplier A Supplier BHigh 100 X 30 =3000 High 100 X 28 =2800Medium 70 X 35 =2450 Medium 70 X 40 =2800Low 40 X 40 =1600 Low 40 X 30 =1200
=7000 =6800So Aarong will choose supplier B
047 Consumer buyer behavior CONSUMER DECISION PROCESS MODEL
Aarong is the most leading fashionable organization in Bangladesh Aarong is always looking towards its consumer perceptions It always creates a different look and patterns in their product This is the main reason to attract consumer The process component of the consumer decision making process deals with how consumers make decisions The product consumer have
Price $30 per unit
Price $35 per unit
Price $40 per unit
Price $28 per unit
Price $40 per unit
Price $30 per unit
On demand high 100 units
On demand medium 70 units
On demand low 40 units
On demand high 100 units
On demand medium 70 units
On demand low 40 units
Supplier
A
Supplier
B
Page
36(P
OP
302)
selected to buy and in order to understand how a consumer makes these decisions in the process component we need to look at the psychological field of the process model which are the internal influences of motivation perception learning personality amp attitude and how these influences affect the decision making process Aarong the act of making a consumer decision consists of three stages which are need recognition pre-purchase search amp evaluation of alternatives
Need Recognition Need recognition occurs when a consumer is faced with a problem There are many different reasons why someone would decide that they need to buy the product from Aarong It might be necessary of any product as well as fashionable one
Pre-purchase Search Pre-purchase search is very important for consumer At first they search their desirable product in the market After that they decide from where they buy their product When they think about perfection and fissionable thing they must go through Aarong
Evaluation of Alternative This means to evaluate the alternative brands of that product From that evaluation consumer select their product according their perception Aarong have the ability to fulfill their perception That is the quality of Aarong
048 Purchase-supplier relationsWhen one organization supplies another with goods or services the nature of the
relationship between the two organizations is a major influence on the ultimate value and customer satisfaction achievable Aarong maintain a good relationship with their supplier They maintain the relationship very sincerely Aarong deals with their supplier several times All times they maintain their formalities Good relations with supplier are very important for their supply system If the relation is well the supplier supply product as their requirement In this section the nature of supplier goodwill will be discussed along with the framework for buyer-seller satisfaction the qualifications of good and preferred suppliers partnerships and strategic alliances
049 Aarongrsquos Purchase-supplier satisfaction modelAarong is a fair trade organization Aarong always try to satisfy their selected supplier
One of the major assessments a purchaser must make is whether the current relationship with a supplier is satisfactory or not This relationship is highly complex and different people inside the
Page
36(P
OP
302)
purchasing organization may have different perceptions of it Aarong follow a supplier satisfaction model This model includes some assumptions Those are
I That satisfaction with a current supplier relationship can be assessed however crudely at least in macro terms whether it is satisfactory or not
II That an unsatisfied party will attempt to move to a more satisfactory situationIII That attempts to move may fall in the win and lose as well as the lose and lose lose and
win and win and win categoryIV That attempts to move may affect the stability of the relationshipV That purchaser and seller may well have different perceptions of the same relationship
VI That many tools techniques and approaches exists which will assist either party in moving position and improving stability
0410 Aarongrsquos Reverse supplier developmentIn supplier selection it has so far been assured that at least one suitable and willing
supplier already exists and that the purchaserrsquos problems are primarily one of determining who
C
D B
A
Purchaser dissatisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier dissatisfied
Purchaser satisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier satisfied
Total Dissatisfaction
Marginal satisfaction
Complete satisfaction
Marginal satisfaction
Complete satisfaction
Supplierrsquos Satisfaction
Purchaserrsquos Satisfaction
Page
36(P
OP
302)
the best supplier is In this case Aarong is very serious about their supplierrsquos development After selecting the best supplier they give better training for their future development We know that Aarong highly depends on rural suppliers Reverse marketing supplier development implies a degree of aggressive procurement involvement not normally encountered in supplier selection
Reverse supplier development should take a broader point of view It defines the need for developing new or existing suppliers as follows The purchase is aware that benefits will accrue to both the supplier and the purchaser benefits of which the supplier may not be aware
Aarongrsquos Supplier Development Context
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
bull Spot payment on product delivery to encourage efficiency and productivity bull Reach out to producers in remote areas to ensure fair value for their efforts bull Marketing communication and information for artisans bull Advances against purchase orders where necessary bull Training amp Education in skills development to raise product quality and marketability bull Product Design and Support in Product Development bull Quality Control to increase producer awareness of the importance of quality
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers in Bangladesh
0411 Aarongrsquos Management and Financial Evaluation
Aarongrsquos management and financial evaluation tends toward greater reliance on single sources for a longer time continuous along with great interest in material requirement and just in
Supplier Purchaser
Purchasing initiative
Sales response
Page
36(P
OP
302)
time production potential suppliers management strength takes on added significance This will require a detailed examination of Aarongrsquos structure qualifications of managers management control the reward-punishment system training and development system and policies and procedures It is also useful to have an explanation as to why the supplierrsquos manager believes it is managing well and an indication of its most notable successes and failures An evaluation of this supplierrsquos procurement system organization procedures and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract
0412 BenefitsEvery single woman who works in Aarong-owned production facilities is also a beneficiary
of BRACs (Bangladesh Rural Advancement Committee) multifaceted development programs As a support entity of BRAC a significant portion of Aarongs earnings go directly into financing the NGOs (non-governmental organization) development programs in healthcare and education as well as economic and social development Specific benefits for producers include
Free medical check-ups including free eye treatment eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workerrsquos retirement fund
Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible
Further AARONG also assists with design and development market information and quality control and provides advances against purchase orders as well as spot payment on product delivery to encourage further production
Page
36(P
OP
302)
0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
Page
36(P
OP
302)
05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
Page
36(P
OP
302)
052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
OP
302)
Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
Page
36(P
OP
302)
053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
Page
36(P
OP
302)
054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
Page
36(P
OP
302)
Page
36(P
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055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
36(P
OP
302)
056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
Page
36(P
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038 Brand valueAarong stands for a unique mix of design quality and convenience of the traditional and
the contemporary Aarong is one of a kind ndash globally positioned as a highly successful Bangladeshi craft based retail chain and brand of pride It also carries the distinction of being BRACs most successful social enterprise Aarongs responsibility is therefore two fold delivering unique products with the highest level of quality and service to its customers and the strongest level of support and protection of artisans and their craft To its consumers Aarong is a household name - a one-stop shop and a trusted brand that inspires pride promises quality and sophistication and helps to keep cultural roots alive in everyday life For the artisans Aarong represents the endurance of both their age-old art as well as their livelihoods For consumers and artisans alike Aarong has become a part of the cultural fabric of their lives
Those things we didnt know-1 In Bengali Aarong means village fair and Taaga means thread2 Half of the profit from every purchase you make at Aarong goes towards supporting
schools health services and specific interventions targeted to the ultra poor segment by BRAC
3 3 people enter an Aarong outlet every second4 The amount of fabric consumed by Aarong in a year can wrap around Bangladesh 8
times
039 Aarongrsquos Production Centers
1 At Aarong has 8 domestic outlets (5 in Dhaka 1 in Chittagong 1 in Sylhet and 1 in Khulna) 1 franchise in London)
2 Aarong has 13 center and (Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur Pabna Pollobi Kurigram Nilphamary and Jhenaidah)
3 653 sub-centers spread across Bangladesh
4 As well as considerable export operation in many European North American and Asian countries
Page
36(P
OP
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0310 Artisans Karim Mias Story
Karim Mia is a bamboo tray and basket producer of Aarong Due to extreme poverty at home Karim Mia stopped his schooling when he was in class 3 and began assisting his father in bamboo crafts weaving Struck by the untimely death of his father Karim Mia at the age of 16 had to find an immediate source of income to run his family of five brothers five sisters and his mother Initially Karim Mia commuted from his home district Tangail (approx 120 km away from Dhaka city) to sell bamboo products at small crafts shops in Dhaka At that time with his meager monthly income of almost $25 he could barely support his family After struggling for almost three years Karim Mia came to Aarong in 1988 to show some of his samples His self-designed samples were immediately chosen and an order was placed for 60 pieces Since then Karim Mia has received constant orders from Aarong for its local as well as export market
As part of its mission to assist producers in product development and technical training Aarong sponsored Karim Mia to attend a bamboo crafts workshop in New Delhi in 2003 The one-week training has helped him to gain better knowledge about bamboo craft His workmanship has also shown remarkable improvement in quality Today Karim Mia supplies exclusively to Aarong and has a steady monthly income of $100-130 On an average he has ten workers working under him During the busy season he employs more than fifty workers
Karim Mia is now married with two sons and a daughter all of whom attend school He hopes that his children will be able to complete their education which he could not because of financial need About two years ago Karim Mia bought 20 decimal lands in Tangail where he constructed his tin-shed home Very recently he has built an extension room that is being used as working space and storage for the bamboo products
Karim Mia feels that Aarongrsquos support during his needy times the continued assistance in product development and design and a steady flow of orders has helped him carve out a dignified existence for himself and his family
Page
36(P
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0311 Others Artisans
Holding steadfast to its original mission Aarong today supports the lives and livelihoods of nearly sixty five thousand rural artisans and handicraft producers 85 of who are women More than forty thousand of these women work directly for Aarong in its 13 production centers in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah and 653 subcentres spread across Bangladesh
Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong Potters Brass Workers Jewellers Jute workers Basket Weavers Handloom Weavers Silk Weavers Wood Carvers Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services
04
Make or buy of aarongTraditionally Aarong prefers the make option tended to be favored by ownership of a
large range of manufacturing and subassembly facilities They were largely depends on raw materials which were processed in house Specially buy canrsquot give full perfection Thatrsquos why Aarong prefer make option
Reason for Make Instead of Buy
Page
36(P
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There are many special reasons in Aarong to prefer make option instead of buy These include
The quantities are too small Quality requirements may be so exacting or so unusual as to require special processing
methods that suppliers canrsquot be expected to provide Closer coordination of supply with the demand To preserve technological secrets To obtain a lower cost To advantage of or avoid idle equipment or labor To avoid sole source dependency The management of Aarong appears to take pride in size
Dangers Involved in Decision to Manufacture
To manufacture the various types of product of Aarong dangers involve in decision include
They may have lack administrative or technical experience in the production The challenges of maintaining ling term technological and economic viability for a
noncore activity Difficult to determine the costs of the make decision A lack of flexibility in selecting possible sources and substitute items is likely to result
041 Sub contractionThe use of subcontract is perfect when placing orders for work which is difficult to
define take a long time and extremely costly Managing the subcontract is a complex activity which requires knowledge about performance to date as well as ability to anticipate actions needed to ensure the desired end results Thatrsquos why Aarong donrsquot have the subcontracting policy
042 Sources of information about suppliersKnowledge of information source is primary task for this kind of manufacturing agency
Aarong relay solely on their whole experience and past memory The normal principal sources of information consist of catalogs trade journals advertisements suppliers and commodity directories sales interviews annual report etc These are given bellow in brief
Catalogs Aarong have the proper catalog and have the advantage of being a permanent record of whole organization always in the office of the buyer Salespeople are not always
Page
36(P
OP
302)
available advertisements are frequently forgotten but the catalog is an ever present reminder Two types of catalog are here
Jobbers catalog Contains a variety of manufacturing sources an offer to a certain extent Equipment and machinery catalog Provide information of Specification of location of
supply for replacement parts as well as new equipments of Aarong
Trade journals Trade journals are also valuable sources of information of Aarong as to potential suppliers It is used in two ways
Firstly use is a study of the text adds to the buyerrsquos general information suggests new products and substitute materials
Secondly use has to do with advertising
Trade Directories Trade directories are volumes which list leading manufactures addresses number of branches products supplies equipment and other items offered for sale
Sales Representation In Aarong it is essential to develop good supplier relations which begin with a friendly courteous sympathetic and frank attitude toward the supplier salesperson Aarong have the policies and procedures guidelines concerning the relations between the purchasing office and suppliersrsquo representatives
Suppliers and Commodity file Such files contain information concerning the address of the Aarongrsquos supplier past orders placed with the company data concerning its general fitness reliability suppliers willingness to meet particular requirements of them which product has been purchased in the past price paid point of shipment and cross reference of the supplier file
043 Aarongrsquos Supplier evaluation We know that Aarong is an organization which fully depends on domestic ruler raw
product So the supplier of Aarong will be the ruler people Aarongrsquos supplier evaluation depends on some important factors Those are given below
Existing and Potential Sources The evaluation of suppliers is a continuing purchasing task Aarong does this very carefully They monitored to see if expected performance
Page
36(P
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302)
materializes with current suppliers New sources need to be screened to see if their potential warrants serous future consideration
Informal and Formal Evaluation Aarongrsquos current supplier is one which has passed through earlier supplier efforts and subsequently received at a minimum one order Most buyer of Aarong tends to separate current suppliers into at least two categories
Informal Evaluation Informal evolution includes assessments of personal contract between Aarong and its supplier in the purchaser section in all function where such contract takes place
044 Aarongrsquos Additional sources and selection consideration
Aarongrsquos additional sources and selection consideration system causes if supplier had been found who could meet all the requirements the search would be over Such it not the case Shall the buyer in buying a given item rely on a single supplier or utilize several Shall the buyer directly buy from manufacturers or through distributors Aarong need quick supply because customer demand is very high and fast Aarong need the product as their expectation In doing so it shall be assumed that adequate investigation for fairness and capacity to meet the requirements as to quality quantity delivery and service and that prices are not unreasonable The product of Aarong is much reasonable then other So Aarong need to maintain this for customer
045 Aarongrsquos supplier rating systemSupplier rating system is very important function for an organization Aarong evaluate
their supplier rating system through some steps Most formal supplier rating schemes attempt to track actual performance over time Thus corrective action can be taken as needed Formal supplier rating schemes track vendor performance on quality price delivery and service It is
Page
36(P
OP
302)
normal to track a supplierrsquos quality performance very closely and in sufficient deal to enable the pinpointing of corrective action Delivery performance of a current supplier is fairly easily tracked if good records exist of delivery promises and actual recipients and few modifications have been made on an informal basis There is a most effective evaluation system of rating that Aarong follows is weighted point evaluation system
Aarong has different types of supplier that is why this system is successful Particularly in cases where several sources supply the same item Outstanding performance of a supplier can then be rewarded with additional business while poor performance will at the least result in less business or possibly dropping a supplier altogether For different product classes different factors weight and measure should be used to reflect varying impact on the organization
Factor Weight How MeasuredSupplier
Performance past 12 Months
Rating
Quality30 1 defective subtracts
605 defective (30(100-(05 X
6)100=291
Delivery 40 1 day late subtracts 2
Average 5 days late (40(100-(5X2)100=36
Price 20 Lowest price paidPrice charged
$50$55
(20(5055)X100)100=1818
Service10 Goods=100
Fair=70Poor=40
Fair=75 (10X75)100=75
Total Points
100 9078
Aarongrsquos supplier weighted point rating system
046 The Supplier selection decisionThe purchaserrsquos Perception of the supplierrsquos ability in Aarong to meet satisfactory
quality quantity delivery and price and service objectives will govern the selection decision Itrsquos also included their past history facilities and technical strength financial status organization and management reputation systems communication of rural people labor relations and location The nature and the amount of the purchase will influence the selection decision
Page
36(P
OP
302)
Aarongrsquos supplier selection decision can be seen as decision making under uncertainty and can be represented by a decision tree There are three stage decision trees for supplier selection also In the given figure shows a decision tree of one stage situation with only two suppliers considered and two possible outcomes To use decision tree effectively and assess the probabilities of success and failure This simple tree could apply to a special onetime purchase without expectation of follow on business for some time to come
SolutionSupplier A Supplier BHigh 100 X 30 =3000 High 100 X 28 =2800Medium 70 X 35 =2450 Medium 70 X 40 =2800Low 40 X 40 =1600 Low 40 X 30 =1200
=7000 =6800So Aarong will choose supplier B
047 Consumer buyer behavior CONSUMER DECISION PROCESS MODEL
Aarong is the most leading fashionable organization in Bangladesh Aarong is always looking towards its consumer perceptions It always creates a different look and patterns in their product This is the main reason to attract consumer The process component of the consumer decision making process deals with how consumers make decisions The product consumer have
Price $30 per unit
Price $35 per unit
Price $40 per unit
Price $28 per unit
Price $40 per unit
Price $30 per unit
On demand high 100 units
On demand medium 70 units
On demand low 40 units
On demand high 100 units
On demand medium 70 units
On demand low 40 units
Supplier
A
Supplier
B
Page
36(P
OP
302)
selected to buy and in order to understand how a consumer makes these decisions in the process component we need to look at the psychological field of the process model which are the internal influences of motivation perception learning personality amp attitude and how these influences affect the decision making process Aarong the act of making a consumer decision consists of three stages which are need recognition pre-purchase search amp evaluation of alternatives
Need Recognition Need recognition occurs when a consumer is faced with a problem There are many different reasons why someone would decide that they need to buy the product from Aarong It might be necessary of any product as well as fashionable one
Pre-purchase Search Pre-purchase search is very important for consumer At first they search their desirable product in the market After that they decide from where they buy their product When they think about perfection and fissionable thing they must go through Aarong
Evaluation of Alternative This means to evaluate the alternative brands of that product From that evaluation consumer select their product according their perception Aarong have the ability to fulfill their perception That is the quality of Aarong
048 Purchase-supplier relationsWhen one organization supplies another with goods or services the nature of the
relationship between the two organizations is a major influence on the ultimate value and customer satisfaction achievable Aarong maintain a good relationship with their supplier They maintain the relationship very sincerely Aarong deals with their supplier several times All times they maintain their formalities Good relations with supplier are very important for their supply system If the relation is well the supplier supply product as their requirement In this section the nature of supplier goodwill will be discussed along with the framework for buyer-seller satisfaction the qualifications of good and preferred suppliers partnerships and strategic alliances
049 Aarongrsquos Purchase-supplier satisfaction modelAarong is a fair trade organization Aarong always try to satisfy their selected supplier
One of the major assessments a purchaser must make is whether the current relationship with a supplier is satisfactory or not This relationship is highly complex and different people inside the
Page
36(P
OP
302)
purchasing organization may have different perceptions of it Aarong follow a supplier satisfaction model This model includes some assumptions Those are
I That satisfaction with a current supplier relationship can be assessed however crudely at least in macro terms whether it is satisfactory or not
II That an unsatisfied party will attempt to move to a more satisfactory situationIII That attempts to move may fall in the win and lose as well as the lose and lose lose and
win and win and win categoryIV That attempts to move may affect the stability of the relationshipV That purchaser and seller may well have different perceptions of the same relationship
VI That many tools techniques and approaches exists which will assist either party in moving position and improving stability
0410 Aarongrsquos Reverse supplier developmentIn supplier selection it has so far been assured that at least one suitable and willing
supplier already exists and that the purchaserrsquos problems are primarily one of determining who
C
D B
A
Purchaser dissatisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier dissatisfied
Purchaser satisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier satisfied
Total Dissatisfaction
Marginal satisfaction
Complete satisfaction
Marginal satisfaction
Complete satisfaction
Supplierrsquos Satisfaction
Purchaserrsquos Satisfaction
Page
36(P
OP
302)
the best supplier is In this case Aarong is very serious about their supplierrsquos development After selecting the best supplier they give better training for their future development We know that Aarong highly depends on rural suppliers Reverse marketing supplier development implies a degree of aggressive procurement involvement not normally encountered in supplier selection
Reverse supplier development should take a broader point of view It defines the need for developing new or existing suppliers as follows The purchase is aware that benefits will accrue to both the supplier and the purchaser benefits of which the supplier may not be aware
Aarongrsquos Supplier Development Context
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
bull Spot payment on product delivery to encourage efficiency and productivity bull Reach out to producers in remote areas to ensure fair value for their efforts bull Marketing communication and information for artisans bull Advances against purchase orders where necessary bull Training amp Education in skills development to raise product quality and marketability bull Product Design and Support in Product Development bull Quality Control to increase producer awareness of the importance of quality
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers in Bangladesh
0411 Aarongrsquos Management and Financial Evaluation
Aarongrsquos management and financial evaluation tends toward greater reliance on single sources for a longer time continuous along with great interest in material requirement and just in
Supplier Purchaser
Purchasing initiative
Sales response
Page
36(P
OP
302)
time production potential suppliers management strength takes on added significance This will require a detailed examination of Aarongrsquos structure qualifications of managers management control the reward-punishment system training and development system and policies and procedures It is also useful to have an explanation as to why the supplierrsquos manager believes it is managing well and an indication of its most notable successes and failures An evaluation of this supplierrsquos procurement system organization procedures and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract
0412 BenefitsEvery single woman who works in Aarong-owned production facilities is also a beneficiary
of BRACs (Bangladesh Rural Advancement Committee) multifaceted development programs As a support entity of BRAC a significant portion of Aarongs earnings go directly into financing the NGOs (non-governmental organization) development programs in healthcare and education as well as economic and social development Specific benefits for producers include
Free medical check-ups including free eye treatment eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workerrsquos retirement fund
Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible
Further AARONG also assists with design and development market information and quality control and provides advances against purchase orders as well as spot payment on product delivery to encourage further production
Page
36(P
OP
302)
0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
Page
36(P
OP
302)
05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
Page
36(P
OP
302)
052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
OP
302)
Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
Page
36(P
OP
302)
053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
Page
36(P
OP
302)
054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
Page
36(P
OP
302)
Page
36(P
OP
302)
055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
36(P
OP
302)
056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
Page
36(P
OP
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0310 Artisans Karim Mias Story
Karim Mia is a bamboo tray and basket producer of Aarong Due to extreme poverty at home Karim Mia stopped his schooling when he was in class 3 and began assisting his father in bamboo crafts weaving Struck by the untimely death of his father Karim Mia at the age of 16 had to find an immediate source of income to run his family of five brothers five sisters and his mother Initially Karim Mia commuted from his home district Tangail (approx 120 km away from Dhaka city) to sell bamboo products at small crafts shops in Dhaka At that time with his meager monthly income of almost $25 he could barely support his family After struggling for almost three years Karim Mia came to Aarong in 1988 to show some of his samples His self-designed samples were immediately chosen and an order was placed for 60 pieces Since then Karim Mia has received constant orders from Aarong for its local as well as export market
As part of its mission to assist producers in product development and technical training Aarong sponsored Karim Mia to attend a bamboo crafts workshop in New Delhi in 2003 The one-week training has helped him to gain better knowledge about bamboo craft His workmanship has also shown remarkable improvement in quality Today Karim Mia supplies exclusively to Aarong and has a steady monthly income of $100-130 On an average he has ten workers working under him During the busy season he employs more than fifty workers
Karim Mia is now married with two sons and a daughter all of whom attend school He hopes that his children will be able to complete their education which he could not because of financial need About two years ago Karim Mia bought 20 decimal lands in Tangail where he constructed his tin-shed home Very recently he has built an extension room that is being used as working space and storage for the bamboo products
Karim Mia feels that Aarongrsquos support during his needy times the continued assistance in product development and design and a steady flow of orders has helped him carve out a dignified existence for himself and his family
Page
36(P
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0311 Others Artisans
Holding steadfast to its original mission Aarong today supports the lives and livelihoods of nearly sixty five thousand rural artisans and handicraft producers 85 of who are women More than forty thousand of these women work directly for Aarong in its 13 production centers in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah and 653 subcentres spread across Bangladesh
Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong Potters Brass Workers Jewellers Jute workers Basket Weavers Handloom Weavers Silk Weavers Wood Carvers Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services
04
Make or buy of aarongTraditionally Aarong prefers the make option tended to be favored by ownership of a
large range of manufacturing and subassembly facilities They were largely depends on raw materials which were processed in house Specially buy canrsquot give full perfection Thatrsquos why Aarong prefer make option
Reason for Make Instead of Buy
Page
36(P
OP
302)
There are many special reasons in Aarong to prefer make option instead of buy These include
The quantities are too small Quality requirements may be so exacting or so unusual as to require special processing
methods that suppliers canrsquot be expected to provide Closer coordination of supply with the demand To preserve technological secrets To obtain a lower cost To advantage of or avoid idle equipment or labor To avoid sole source dependency The management of Aarong appears to take pride in size
Dangers Involved in Decision to Manufacture
To manufacture the various types of product of Aarong dangers involve in decision include
They may have lack administrative or technical experience in the production The challenges of maintaining ling term technological and economic viability for a
noncore activity Difficult to determine the costs of the make decision A lack of flexibility in selecting possible sources and substitute items is likely to result
041 Sub contractionThe use of subcontract is perfect when placing orders for work which is difficult to
define take a long time and extremely costly Managing the subcontract is a complex activity which requires knowledge about performance to date as well as ability to anticipate actions needed to ensure the desired end results Thatrsquos why Aarong donrsquot have the subcontracting policy
042 Sources of information about suppliersKnowledge of information source is primary task for this kind of manufacturing agency
Aarong relay solely on their whole experience and past memory The normal principal sources of information consist of catalogs trade journals advertisements suppliers and commodity directories sales interviews annual report etc These are given bellow in brief
Catalogs Aarong have the proper catalog and have the advantage of being a permanent record of whole organization always in the office of the buyer Salespeople are not always
Page
36(P
OP
302)
available advertisements are frequently forgotten but the catalog is an ever present reminder Two types of catalog are here
Jobbers catalog Contains a variety of manufacturing sources an offer to a certain extent Equipment and machinery catalog Provide information of Specification of location of
supply for replacement parts as well as new equipments of Aarong
Trade journals Trade journals are also valuable sources of information of Aarong as to potential suppliers It is used in two ways
Firstly use is a study of the text adds to the buyerrsquos general information suggests new products and substitute materials
Secondly use has to do with advertising
Trade Directories Trade directories are volumes which list leading manufactures addresses number of branches products supplies equipment and other items offered for sale
Sales Representation In Aarong it is essential to develop good supplier relations which begin with a friendly courteous sympathetic and frank attitude toward the supplier salesperson Aarong have the policies and procedures guidelines concerning the relations between the purchasing office and suppliersrsquo representatives
Suppliers and Commodity file Such files contain information concerning the address of the Aarongrsquos supplier past orders placed with the company data concerning its general fitness reliability suppliers willingness to meet particular requirements of them which product has been purchased in the past price paid point of shipment and cross reference of the supplier file
043 Aarongrsquos Supplier evaluation We know that Aarong is an organization which fully depends on domestic ruler raw
product So the supplier of Aarong will be the ruler people Aarongrsquos supplier evaluation depends on some important factors Those are given below
Existing and Potential Sources The evaluation of suppliers is a continuing purchasing task Aarong does this very carefully They monitored to see if expected performance
Page
36(P
OP
302)
materializes with current suppliers New sources need to be screened to see if their potential warrants serous future consideration
Informal and Formal Evaluation Aarongrsquos current supplier is one which has passed through earlier supplier efforts and subsequently received at a minimum one order Most buyer of Aarong tends to separate current suppliers into at least two categories
Informal Evaluation Informal evolution includes assessments of personal contract between Aarong and its supplier in the purchaser section in all function where such contract takes place
044 Aarongrsquos Additional sources and selection consideration
Aarongrsquos additional sources and selection consideration system causes if supplier had been found who could meet all the requirements the search would be over Such it not the case Shall the buyer in buying a given item rely on a single supplier or utilize several Shall the buyer directly buy from manufacturers or through distributors Aarong need quick supply because customer demand is very high and fast Aarong need the product as their expectation In doing so it shall be assumed that adequate investigation for fairness and capacity to meet the requirements as to quality quantity delivery and service and that prices are not unreasonable The product of Aarong is much reasonable then other So Aarong need to maintain this for customer
045 Aarongrsquos supplier rating systemSupplier rating system is very important function for an organization Aarong evaluate
their supplier rating system through some steps Most formal supplier rating schemes attempt to track actual performance over time Thus corrective action can be taken as needed Formal supplier rating schemes track vendor performance on quality price delivery and service It is
Page
36(P
OP
302)
normal to track a supplierrsquos quality performance very closely and in sufficient deal to enable the pinpointing of corrective action Delivery performance of a current supplier is fairly easily tracked if good records exist of delivery promises and actual recipients and few modifications have been made on an informal basis There is a most effective evaluation system of rating that Aarong follows is weighted point evaluation system
Aarong has different types of supplier that is why this system is successful Particularly in cases where several sources supply the same item Outstanding performance of a supplier can then be rewarded with additional business while poor performance will at the least result in less business or possibly dropping a supplier altogether For different product classes different factors weight and measure should be used to reflect varying impact on the organization
Factor Weight How MeasuredSupplier
Performance past 12 Months
Rating
Quality30 1 defective subtracts
605 defective (30(100-(05 X
6)100=291
Delivery 40 1 day late subtracts 2
Average 5 days late (40(100-(5X2)100=36
Price 20 Lowest price paidPrice charged
$50$55
(20(5055)X100)100=1818
Service10 Goods=100
Fair=70Poor=40
Fair=75 (10X75)100=75
Total Points
100 9078
Aarongrsquos supplier weighted point rating system
046 The Supplier selection decisionThe purchaserrsquos Perception of the supplierrsquos ability in Aarong to meet satisfactory
quality quantity delivery and price and service objectives will govern the selection decision Itrsquos also included their past history facilities and technical strength financial status organization and management reputation systems communication of rural people labor relations and location The nature and the amount of the purchase will influence the selection decision
Page
36(P
OP
302)
Aarongrsquos supplier selection decision can be seen as decision making under uncertainty and can be represented by a decision tree There are three stage decision trees for supplier selection also In the given figure shows a decision tree of one stage situation with only two suppliers considered and two possible outcomes To use decision tree effectively and assess the probabilities of success and failure This simple tree could apply to a special onetime purchase without expectation of follow on business for some time to come
SolutionSupplier A Supplier BHigh 100 X 30 =3000 High 100 X 28 =2800Medium 70 X 35 =2450 Medium 70 X 40 =2800Low 40 X 40 =1600 Low 40 X 30 =1200
=7000 =6800So Aarong will choose supplier B
047 Consumer buyer behavior CONSUMER DECISION PROCESS MODEL
Aarong is the most leading fashionable organization in Bangladesh Aarong is always looking towards its consumer perceptions It always creates a different look and patterns in their product This is the main reason to attract consumer The process component of the consumer decision making process deals with how consumers make decisions The product consumer have
Price $30 per unit
Price $35 per unit
Price $40 per unit
Price $28 per unit
Price $40 per unit
Price $30 per unit
On demand high 100 units
On demand medium 70 units
On demand low 40 units
On demand high 100 units
On demand medium 70 units
On demand low 40 units
Supplier
A
Supplier
B
Page
36(P
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302)
selected to buy and in order to understand how a consumer makes these decisions in the process component we need to look at the psychological field of the process model which are the internal influences of motivation perception learning personality amp attitude and how these influences affect the decision making process Aarong the act of making a consumer decision consists of three stages which are need recognition pre-purchase search amp evaluation of alternatives
Need Recognition Need recognition occurs when a consumer is faced with a problem There are many different reasons why someone would decide that they need to buy the product from Aarong It might be necessary of any product as well as fashionable one
Pre-purchase Search Pre-purchase search is very important for consumer At first they search their desirable product in the market After that they decide from where they buy their product When they think about perfection and fissionable thing they must go through Aarong
Evaluation of Alternative This means to evaluate the alternative brands of that product From that evaluation consumer select their product according their perception Aarong have the ability to fulfill their perception That is the quality of Aarong
048 Purchase-supplier relationsWhen one organization supplies another with goods or services the nature of the
relationship between the two organizations is a major influence on the ultimate value and customer satisfaction achievable Aarong maintain a good relationship with their supplier They maintain the relationship very sincerely Aarong deals with their supplier several times All times they maintain their formalities Good relations with supplier are very important for their supply system If the relation is well the supplier supply product as their requirement In this section the nature of supplier goodwill will be discussed along with the framework for buyer-seller satisfaction the qualifications of good and preferred suppliers partnerships and strategic alliances
049 Aarongrsquos Purchase-supplier satisfaction modelAarong is a fair trade organization Aarong always try to satisfy their selected supplier
One of the major assessments a purchaser must make is whether the current relationship with a supplier is satisfactory or not This relationship is highly complex and different people inside the
Page
36(P
OP
302)
purchasing organization may have different perceptions of it Aarong follow a supplier satisfaction model This model includes some assumptions Those are
I That satisfaction with a current supplier relationship can be assessed however crudely at least in macro terms whether it is satisfactory or not
II That an unsatisfied party will attempt to move to a more satisfactory situationIII That attempts to move may fall in the win and lose as well as the lose and lose lose and
win and win and win categoryIV That attempts to move may affect the stability of the relationshipV That purchaser and seller may well have different perceptions of the same relationship
VI That many tools techniques and approaches exists which will assist either party in moving position and improving stability
0410 Aarongrsquos Reverse supplier developmentIn supplier selection it has so far been assured that at least one suitable and willing
supplier already exists and that the purchaserrsquos problems are primarily one of determining who
C
D B
A
Purchaser dissatisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier dissatisfied
Purchaser satisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier satisfied
Total Dissatisfaction
Marginal satisfaction
Complete satisfaction
Marginal satisfaction
Complete satisfaction
Supplierrsquos Satisfaction
Purchaserrsquos Satisfaction
Page
36(P
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302)
the best supplier is In this case Aarong is very serious about their supplierrsquos development After selecting the best supplier they give better training for their future development We know that Aarong highly depends on rural suppliers Reverse marketing supplier development implies a degree of aggressive procurement involvement not normally encountered in supplier selection
Reverse supplier development should take a broader point of view It defines the need for developing new or existing suppliers as follows The purchase is aware that benefits will accrue to both the supplier and the purchaser benefits of which the supplier may not be aware
Aarongrsquos Supplier Development Context
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
bull Spot payment on product delivery to encourage efficiency and productivity bull Reach out to producers in remote areas to ensure fair value for their efforts bull Marketing communication and information for artisans bull Advances against purchase orders where necessary bull Training amp Education in skills development to raise product quality and marketability bull Product Design and Support in Product Development bull Quality Control to increase producer awareness of the importance of quality
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers in Bangladesh
0411 Aarongrsquos Management and Financial Evaluation
Aarongrsquos management and financial evaluation tends toward greater reliance on single sources for a longer time continuous along with great interest in material requirement and just in
Supplier Purchaser
Purchasing initiative
Sales response
Page
36(P
OP
302)
time production potential suppliers management strength takes on added significance This will require a detailed examination of Aarongrsquos structure qualifications of managers management control the reward-punishment system training and development system and policies and procedures It is also useful to have an explanation as to why the supplierrsquos manager believes it is managing well and an indication of its most notable successes and failures An evaluation of this supplierrsquos procurement system organization procedures and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract
0412 BenefitsEvery single woman who works in Aarong-owned production facilities is also a beneficiary
of BRACs (Bangladesh Rural Advancement Committee) multifaceted development programs As a support entity of BRAC a significant portion of Aarongs earnings go directly into financing the NGOs (non-governmental organization) development programs in healthcare and education as well as economic and social development Specific benefits for producers include
Free medical check-ups including free eye treatment eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workerrsquos retirement fund
Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible
Further AARONG also assists with design and development market information and quality control and provides advances against purchase orders as well as spot payment on product delivery to encourage further production
Page
36(P
OP
302)
0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
Page
36(P
OP
302)
05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
Page
36(P
OP
302)
052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
OP
302)
Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
Page
36(P
OP
302)
053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
Page
36(P
OP
302)
054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
Page
36(P
OP
302)
Page
36(P
OP
302)
055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
36(P
OP
302)
056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
Page
36(P
OP
302)
0311 Others Artisans
Holding steadfast to its original mission Aarong today supports the lives and livelihoods of nearly sixty five thousand rural artisans and handicraft producers 85 of who are women More than forty thousand of these women work directly for Aarong in its 13 production centers in Baniachong Gorpara Jamalpur Jessore Kushtia Manikganj Rajbari Sherpur and Pabna Pollobi Kurigram Nilphamary Jhenaidah and 653 subcentres spread across Bangladesh
Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong Potters Brass Workers Jewellers Jute workers Basket Weavers Handloom Weavers Silk Weavers Wood Carvers Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services
04
Make or buy of aarongTraditionally Aarong prefers the make option tended to be favored by ownership of a
large range of manufacturing and subassembly facilities They were largely depends on raw materials which were processed in house Specially buy canrsquot give full perfection Thatrsquos why Aarong prefer make option
Reason for Make Instead of Buy
Page
36(P
OP
302)
There are many special reasons in Aarong to prefer make option instead of buy These include
The quantities are too small Quality requirements may be so exacting or so unusual as to require special processing
methods that suppliers canrsquot be expected to provide Closer coordination of supply with the demand To preserve technological secrets To obtain a lower cost To advantage of or avoid idle equipment or labor To avoid sole source dependency The management of Aarong appears to take pride in size
Dangers Involved in Decision to Manufacture
To manufacture the various types of product of Aarong dangers involve in decision include
They may have lack administrative or technical experience in the production The challenges of maintaining ling term technological and economic viability for a
noncore activity Difficult to determine the costs of the make decision A lack of flexibility in selecting possible sources and substitute items is likely to result
041 Sub contractionThe use of subcontract is perfect when placing orders for work which is difficult to
define take a long time and extremely costly Managing the subcontract is a complex activity which requires knowledge about performance to date as well as ability to anticipate actions needed to ensure the desired end results Thatrsquos why Aarong donrsquot have the subcontracting policy
042 Sources of information about suppliersKnowledge of information source is primary task for this kind of manufacturing agency
Aarong relay solely on their whole experience and past memory The normal principal sources of information consist of catalogs trade journals advertisements suppliers and commodity directories sales interviews annual report etc These are given bellow in brief
Catalogs Aarong have the proper catalog and have the advantage of being a permanent record of whole organization always in the office of the buyer Salespeople are not always
Page
36(P
OP
302)
available advertisements are frequently forgotten but the catalog is an ever present reminder Two types of catalog are here
Jobbers catalog Contains a variety of manufacturing sources an offer to a certain extent Equipment and machinery catalog Provide information of Specification of location of
supply for replacement parts as well as new equipments of Aarong
Trade journals Trade journals are also valuable sources of information of Aarong as to potential suppliers It is used in two ways
Firstly use is a study of the text adds to the buyerrsquos general information suggests new products and substitute materials
Secondly use has to do with advertising
Trade Directories Trade directories are volumes which list leading manufactures addresses number of branches products supplies equipment and other items offered for sale
Sales Representation In Aarong it is essential to develop good supplier relations which begin with a friendly courteous sympathetic and frank attitude toward the supplier salesperson Aarong have the policies and procedures guidelines concerning the relations between the purchasing office and suppliersrsquo representatives
Suppliers and Commodity file Such files contain information concerning the address of the Aarongrsquos supplier past orders placed with the company data concerning its general fitness reliability suppliers willingness to meet particular requirements of them which product has been purchased in the past price paid point of shipment and cross reference of the supplier file
043 Aarongrsquos Supplier evaluation We know that Aarong is an organization which fully depends on domestic ruler raw
product So the supplier of Aarong will be the ruler people Aarongrsquos supplier evaluation depends on some important factors Those are given below
Existing and Potential Sources The evaluation of suppliers is a continuing purchasing task Aarong does this very carefully They monitored to see if expected performance
Page
36(P
OP
302)
materializes with current suppliers New sources need to be screened to see if their potential warrants serous future consideration
Informal and Formal Evaluation Aarongrsquos current supplier is one which has passed through earlier supplier efforts and subsequently received at a minimum one order Most buyer of Aarong tends to separate current suppliers into at least two categories
Informal Evaluation Informal evolution includes assessments of personal contract between Aarong and its supplier in the purchaser section in all function where such contract takes place
044 Aarongrsquos Additional sources and selection consideration
Aarongrsquos additional sources and selection consideration system causes if supplier had been found who could meet all the requirements the search would be over Such it not the case Shall the buyer in buying a given item rely on a single supplier or utilize several Shall the buyer directly buy from manufacturers or through distributors Aarong need quick supply because customer demand is very high and fast Aarong need the product as their expectation In doing so it shall be assumed that adequate investigation for fairness and capacity to meet the requirements as to quality quantity delivery and service and that prices are not unreasonable The product of Aarong is much reasonable then other So Aarong need to maintain this for customer
045 Aarongrsquos supplier rating systemSupplier rating system is very important function for an organization Aarong evaluate
their supplier rating system through some steps Most formal supplier rating schemes attempt to track actual performance over time Thus corrective action can be taken as needed Formal supplier rating schemes track vendor performance on quality price delivery and service It is
Page
36(P
OP
302)
normal to track a supplierrsquos quality performance very closely and in sufficient deal to enable the pinpointing of corrective action Delivery performance of a current supplier is fairly easily tracked if good records exist of delivery promises and actual recipients and few modifications have been made on an informal basis There is a most effective evaluation system of rating that Aarong follows is weighted point evaluation system
Aarong has different types of supplier that is why this system is successful Particularly in cases where several sources supply the same item Outstanding performance of a supplier can then be rewarded with additional business while poor performance will at the least result in less business or possibly dropping a supplier altogether For different product classes different factors weight and measure should be used to reflect varying impact on the organization
Factor Weight How MeasuredSupplier
Performance past 12 Months
Rating
Quality30 1 defective subtracts
605 defective (30(100-(05 X
6)100=291
Delivery 40 1 day late subtracts 2
Average 5 days late (40(100-(5X2)100=36
Price 20 Lowest price paidPrice charged
$50$55
(20(5055)X100)100=1818
Service10 Goods=100
Fair=70Poor=40
Fair=75 (10X75)100=75
Total Points
100 9078
Aarongrsquos supplier weighted point rating system
046 The Supplier selection decisionThe purchaserrsquos Perception of the supplierrsquos ability in Aarong to meet satisfactory
quality quantity delivery and price and service objectives will govern the selection decision Itrsquos also included their past history facilities and technical strength financial status organization and management reputation systems communication of rural people labor relations and location The nature and the amount of the purchase will influence the selection decision
Page
36(P
OP
302)
Aarongrsquos supplier selection decision can be seen as decision making under uncertainty and can be represented by a decision tree There are three stage decision trees for supplier selection also In the given figure shows a decision tree of one stage situation with only two suppliers considered and two possible outcomes To use decision tree effectively and assess the probabilities of success and failure This simple tree could apply to a special onetime purchase without expectation of follow on business for some time to come
SolutionSupplier A Supplier BHigh 100 X 30 =3000 High 100 X 28 =2800Medium 70 X 35 =2450 Medium 70 X 40 =2800Low 40 X 40 =1600 Low 40 X 30 =1200
=7000 =6800So Aarong will choose supplier B
047 Consumer buyer behavior CONSUMER DECISION PROCESS MODEL
Aarong is the most leading fashionable organization in Bangladesh Aarong is always looking towards its consumer perceptions It always creates a different look and patterns in their product This is the main reason to attract consumer The process component of the consumer decision making process deals with how consumers make decisions The product consumer have
Price $30 per unit
Price $35 per unit
Price $40 per unit
Price $28 per unit
Price $40 per unit
Price $30 per unit
On demand high 100 units
On demand medium 70 units
On demand low 40 units
On demand high 100 units
On demand medium 70 units
On demand low 40 units
Supplier
A
Supplier
B
Page
36(P
OP
302)
selected to buy and in order to understand how a consumer makes these decisions in the process component we need to look at the psychological field of the process model which are the internal influences of motivation perception learning personality amp attitude and how these influences affect the decision making process Aarong the act of making a consumer decision consists of three stages which are need recognition pre-purchase search amp evaluation of alternatives
Need Recognition Need recognition occurs when a consumer is faced with a problem There are many different reasons why someone would decide that they need to buy the product from Aarong It might be necessary of any product as well as fashionable one
Pre-purchase Search Pre-purchase search is very important for consumer At first they search their desirable product in the market After that they decide from where they buy their product When they think about perfection and fissionable thing they must go through Aarong
Evaluation of Alternative This means to evaluate the alternative brands of that product From that evaluation consumer select their product according their perception Aarong have the ability to fulfill their perception That is the quality of Aarong
048 Purchase-supplier relationsWhen one organization supplies another with goods or services the nature of the
relationship between the two organizations is a major influence on the ultimate value and customer satisfaction achievable Aarong maintain a good relationship with their supplier They maintain the relationship very sincerely Aarong deals with their supplier several times All times they maintain their formalities Good relations with supplier are very important for their supply system If the relation is well the supplier supply product as their requirement In this section the nature of supplier goodwill will be discussed along with the framework for buyer-seller satisfaction the qualifications of good and preferred suppliers partnerships and strategic alliances
049 Aarongrsquos Purchase-supplier satisfaction modelAarong is a fair trade organization Aarong always try to satisfy their selected supplier
One of the major assessments a purchaser must make is whether the current relationship with a supplier is satisfactory or not This relationship is highly complex and different people inside the
Page
36(P
OP
302)
purchasing organization may have different perceptions of it Aarong follow a supplier satisfaction model This model includes some assumptions Those are
I That satisfaction with a current supplier relationship can be assessed however crudely at least in macro terms whether it is satisfactory or not
II That an unsatisfied party will attempt to move to a more satisfactory situationIII That attempts to move may fall in the win and lose as well as the lose and lose lose and
win and win and win categoryIV That attempts to move may affect the stability of the relationshipV That purchaser and seller may well have different perceptions of the same relationship
VI That many tools techniques and approaches exists which will assist either party in moving position and improving stability
0410 Aarongrsquos Reverse supplier developmentIn supplier selection it has so far been assured that at least one suitable and willing
supplier already exists and that the purchaserrsquos problems are primarily one of determining who
C
D B
A
Purchaser dissatisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier dissatisfied
Purchaser satisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier satisfied
Total Dissatisfaction
Marginal satisfaction
Complete satisfaction
Marginal satisfaction
Complete satisfaction
Supplierrsquos Satisfaction
Purchaserrsquos Satisfaction
Page
36(P
OP
302)
the best supplier is In this case Aarong is very serious about their supplierrsquos development After selecting the best supplier they give better training for their future development We know that Aarong highly depends on rural suppliers Reverse marketing supplier development implies a degree of aggressive procurement involvement not normally encountered in supplier selection
Reverse supplier development should take a broader point of view It defines the need for developing new or existing suppliers as follows The purchase is aware that benefits will accrue to both the supplier and the purchaser benefits of which the supplier may not be aware
Aarongrsquos Supplier Development Context
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
bull Spot payment on product delivery to encourage efficiency and productivity bull Reach out to producers in remote areas to ensure fair value for their efforts bull Marketing communication and information for artisans bull Advances against purchase orders where necessary bull Training amp Education in skills development to raise product quality and marketability bull Product Design and Support in Product Development bull Quality Control to increase producer awareness of the importance of quality
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers in Bangladesh
0411 Aarongrsquos Management and Financial Evaluation
Aarongrsquos management and financial evaluation tends toward greater reliance on single sources for a longer time continuous along with great interest in material requirement and just in
Supplier Purchaser
Purchasing initiative
Sales response
Page
36(P
OP
302)
time production potential suppliers management strength takes on added significance This will require a detailed examination of Aarongrsquos structure qualifications of managers management control the reward-punishment system training and development system and policies and procedures It is also useful to have an explanation as to why the supplierrsquos manager believes it is managing well and an indication of its most notable successes and failures An evaluation of this supplierrsquos procurement system organization procedures and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract
0412 BenefitsEvery single woman who works in Aarong-owned production facilities is also a beneficiary
of BRACs (Bangladesh Rural Advancement Committee) multifaceted development programs As a support entity of BRAC a significant portion of Aarongs earnings go directly into financing the NGOs (non-governmental organization) development programs in healthcare and education as well as economic and social development Specific benefits for producers include
Free medical check-ups including free eye treatment eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workerrsquos retirement fund
Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible
Further AARONG also assists with design and development market information and quality control and provides advances against purchase orders as well as spot payment on product delivery to encourage further production
Page
36(P
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302)
0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
Page
36(P
OP
302)
05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
Page
36(P
OP
302)
052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
OP
302)
Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
Page
36(P
OP
302)
053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
Page
36(P
OP
302)
054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
Page
36(P
OP
302)
Page
36(P
OP
302)
055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
36(P
OP
302)
056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
Page
36(P
OP
302)
There are many special reasons in Aarong to prefer make option instead of buy These include
The quantities are too small Quality requirements may be so exacting or so unusual as to require special processing
methods that suppliers canrsquot be expected to provide Closer coordination of supply with the demand To preserve technological secrets To obtain a lower cost To advantage of or avoid idle equipment or labor To avoid sole source dependency The management of Aarong appears to take pride in size
Dangers Involved in Decision to Manufacture
To manufacture the various types of product of Aarong dangers involve in decision include
They may have lack administrative or technical experience in the production The challenges of maintaining ling term technological and economic viability for a
noncore activity Difficult to determine the costs of the make decision A lack of flexibility in selecting possible sources and substitute items is likely to result
041 Sub contractionThe use of subcontract is perfect when placing orders for work which is difficult to
define take a long time and extremely costly Managing the subcontract is a complex activity which requires knowledge about performance to date as well as ability to anticipate actions needed to ensure the desired end results Thatrsquos why Aarong donrsquot have the subcontracting policy
042 Sources of information about suppliersKnowledge of information source is primary task for this kind of manufacturing agency
Aarong relay solely on their whole experience and past memory The normal principal sources of information consist of catalogs trade journals advertisements suppliers and commodity directories sales interviews annual report etc These are given bellow in brief
Catalogs Aarong have the proper catalog and have the advantage of being a permanent record of whole organization always in the office of the buyer Salespeople are not always
Page
36(P
OP
302)
available advertisements are frequently forgotten but the catalog is an ever present reminder Two types of catalog are here
Jobbers catalog Contains a variety of manufacturing sources an offer to a certain extent Equipment and machinery catalog Provide information of Specification of location of
supply for replacement parts as well as new equipments of Aarong
Trade journals Trade journals are also valuable sources of information of Aarong as to potential suppliers It is used in two ways
Firstly use is a study of the text adds to the buyerrsquos general information suggests new products and substitute materials
Secondly use has to do with advertising
Trade Directories Trade directories are volumes which list leading manufactures addresses number of branches products supplies equipment and other items offered for sale
Sales Representation In Aarong it is essential to develop good supplier relations which begin with a friendly courteous sympathetic and frank attitude toward the supplier salesperson Aarong have the policies and procedures guidelines concerning the relations between the purchasing office and suppliersrsquo representatives
Suppliers and Commodity file Such files contain information concerning the address of the Aarongrsquos supplier past orders placed with the company data concerning its general fitness reliability suppliers willingness to meet particular requirements of them which product has been purchased in the past price paid point of shipment and cross reference of the supplier file
043 Aarongrsquos Supplier evaluation We know that Aarong is an organization which fully depends on domestic ruler raw
product So the supplier of Aarong will be the ruler people Aarongrsquos supplier evaluation depends on some important factors Those are given below
Existing and Potential Sources The evaluation of suppliers is a continuing purchasing task Aarong does this very carefully They monitored to see if expected performance
Page
36(P
OP
302)
materializes with current suppliers New sources need to be screened to see if their potential warrants serous future consideration
Informal and Formal Evaluation Aarongrsquos current supplier is one which has passed through earlier supplier efforts and subsequently received at a minimum one order Most buyer of Aarong tends to separate current suppliers into at least two categories
Informal Evaluation Informal evolution includes assessments of personal contract between Aarong and its supplier in the purchaser section in all function where such contract takes place
044 Aarongrsquos Additional sources and selection consideration
Aarongrsquos additional sources and selection consideration system causes if supplier had been found who could meet all the requirements the search would be over Such it not the case Shall the buyer in buying a given item rely on a single supplier or utilize several Shall the buyer directly buy from manufacturers or through distributors Aarong need quick supply because customer demand is very high and fast Aarong need the product as their expectation In doing so it shall be assumed that adequate investigation for fairness and capacity to meet the requirements as to quality quantity delivery and service and that prices are not unreasonable The product of Aarong is much reasonable then other So Aarong need to maintain this for customer
045 Aarongrsquos supplier rating systemSupplier rating system is very important function for an organization Aarong evaluate
their supplier rating system through some steps Most formal supplier rating schemes attempt to track actual performance over time Thus corrective action can be taken as needed Formal supplier rating schemes track vendor performance on quality price delivery and service It is
Page
36(P
OP
302)
normal to track a supplierrsquos quality performance very closely and in sufficient deal to enable the pinpointing of corrective action Delivery performance of a current supplier is fairly easily tracked if good records exist of delivery promises and actual recipients and few modifications have been made on an informal basis There is a most effective evaluation system of rating that Aarong follows is weighted point evaluation system
Aarong has different types of supplier that is why this system is successful Particularly in cases where several sources supply the same item Outstanding performance of a supplier can then be rewarded with additional business while poor performance will at the least result in less business or possibly dropping a supplier altogether For different product classes different factors weight and measure should be used to reflect varying impact on the organization
Factor Weight How MeasuredSupplier
Performance past 12 Months
Rating
Quality30 1 defective subtracts
605 defective (30(100-(05 X
6)100=291
Delivery 40 1 day late subtracts 2
Average 5 days late (40(100-(5X2)100=36
Price 20 Lowest price paidPrice charged
$50$55
(20(5055)X100)100=1818
Service10 Goods=100
Fair=70Poor=40
Fair=75 (10X75)100=75
Total Points
100 9078
Aarongrsquos supplier weighted point rating system
046 The Supplier selection decisionThe purchaserrsquos Perception of the supplierrsquos ability in Aarong to meet satisfactory
quality quantity delivery and price and service objectives will govern the selection decision Itrsquos also included their past history facilities and technical strength financial status organization and management reputation systems communication of rural people labor relations and location The nature and the amount of the purchase will influence the selection decision
Page
36(P
OP
302)
Aarongrsquos supplier selection decision can be seen as decision making under uncertainty and can be represented by a decision tree There are three stage decision trees for supplier selection also In the given figure shows a decision tree of one stage situation with only two suppliers considered and two possible outcomes To use decision tree effectively and assess the probabilities of success and failure This simple tree could apply to a special onetime purchase without expectation of follow on business for some time to come
SolutionSupplier A Supplier BHigh 100 X 30 =3000 High 100 X 28 =2800Medium 70 X 35 =2450 Medium 70 X 40 =2800Low 40 X 40 =1600 Low 40 X 30 =1200
=7000 =6800So Aarong will choose supplier B
047 Consumer buyer behavior CONSUMER DECISION PROCESS MODEL
Aarong is the most leading fashionable organization in Bangladesh Aarong is always looking towards its consumer perceptions It always creates a different look and patterns in their product This is the main reason to attract consumer The process component of the consumer decision making process deals with how consumers make decisions The product consumer have
Price $30 per unit
Price $35 per unit
Price $40 per unit
Price $28 per unit
Price $40 per unit
Price $30 per unit
On demand high 100 units
On demand medium 70 units
On demand low 40 units
On demand high 100 units
On demand medium 70 units
On demand low 40 units
Supplier
A
Supplier
B
Page
36(P
OP
302)
selected to buy and in order to understand how a consumer makes these decisions in the process component we need to look at the psychological field of the process model which are the internal influences of motivation perception learning personality amp attitude and how these influences affect the decision making process Aarong the act of making a consumer decision consists of three stages which are need recognition pre-purchase search amp evaluation of alternatives
Need Recognition Need recognition occurs when a consumer is faced with a problem There are many different reasons why someone would decide that they need to buy the product from Aarong It might be necessary of any product as well as fashionable one
Pre-purchase Search Pre-purchase search is very important for consumer At first they search their desirable product in the market After that they decide from where they buy their product When they think about perfection and fissionable thing they must go through Aarong
Evaluation of Alternative This means to evaluate the alternative brands of that product From that evaluation consumer select their product according their perception Aarong have the ability to fulfill their perception That is the quality of Aarong
048 Purchase-supplier relationsWhen one organization supplies another with goods or services the nature of the
relationship between the two organizations is a major influence on the ultimate value and customer satisfaction achievable Aarong maintain a good relationship with their supplier They maintain the relationship very sincerely Aarong deals with their supplier several times All times they maintain their formalities Good relations with supplier are very important for their supply system If the relation is well the supplier supply product as their requirement In this section the nature of supplier goodwill will be discussed along with the framework for buyer-seller satisfaction the qualifications of good and preferred suppliers partnerships and strategic alliances
049 Aarongrsquos Purchase-supplier satisfaction modelAarong is a fair trade organization Aarong always try to satisfy their selected supplier
One of the major assessments a purchaser must make is whether the current relationship with a supplier is satisfactory or not This relationship is highly complex and different people inside the
Page
36(P
OP
302)
purchasing organization may have different perceptions of it Aarong follow a supplier satisfaction model This model includes some assumptions Those are
I That satisfaction with a current supplier relationship can be assessed however crudely at least in macro terms whether it is satisfactory or not
II That an unsatisfied party will attempt to move to a more satisfactory situationIII That attempts to move may fall in the win and lose as well as the lose and lose lose and
win and win and win categoryIV That attempts to move may affect the stability of the relationshipV That purchaser and seller may well have different perceptions of the same relationship
VI That many tools techniques and approaches exists which will assist either party in moving position and improving stability
0410 Aarongrsquos Reverse supplier developmentIn supplier selection it has so far been assured that at least one suitable and willing
supplier already exists and that the purchaserrsquos problems are primarily one of determining who
C
D B
A
Purchaser dissatisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier dissatisfied
Purchaser satisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier satisfied
Total Dissatisfaction
Marginal satisfaction
Complete satisfaction
Marginal satisfaction
Complete satisfaction
Supplierrsquos Satisfaction
Purchaserrsquos Satisfaction
Page
36(P
OP
302)
the best supplier is In this case Aarong is very serious about their supplierrsquos development After selecting the best supplier they give better training for their future development We know that Aarong highly depends on rural suppliers Reverse marketing supplier development implies a degree of aggressive procurement involvement not normally encountered in supplier selection
Reverse supplier development should take a broader point of view It defines the need for developing new or existing suppliers as follows The purchase is aware that benefits will accrue to both the supplier and the purchaser benefits of which the supplier may not be aware
Aarongrsquos Supplier Development Context
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
bull Spot payment on product delivery to encourage efficiency and productivity bull Reach out to producers in remote areas to ensure fair value for their efforts bull Marketing communication and information for artisans bull Advances against purchase orders where necessary bull Training amp Education in skills development to raise product quality and marketability bull Product Design and Support in Product Development bull Quality Control to increase producer awareness of the importance of quality
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers in Bangladesh
0411 Aarongrsquos Management and Financial Evaluation
Aarongrsquos management and financial evaluation tends toward greater reliance on single sources for a longer time continuous along with great interest in material requirement and just in
Supplier Purchaser
Purchasing initiative
Sales response
Page
36(P
OP
302)
time production potential suppliers management strength takes on added significance This will require a detailed examination of Aarongrsquos structure qualifications of managers management control the reward-punishment system training and development system and policies and procedures It is also useful to have an explanation as to why the supplierrsquos manager believes it is managing well and an indication of its most notable successes and failures An evaluation of this supplierrsquos procurement system organization procedures and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract
0412 BenefitsEvery single woman who works in Aarong-owned production facilities is also a beneficiary
of BRACs (Bangladesh Rural Advancement Committee) multifaceted development programs As a support entity of BRAC a significant portion of Aarongs earnings go directly into financing the NGOs (non-governmental organization) development programs in healthcare and education as well as economic and social development Specific benefits for producers include
Free medical check-ups including free eye treatment eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workerrsquos retirement fund
Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible
Further AARONG also assists with design and development market information and quality control and provides advances against purchase orders as well as spot payment on product delivery to encourage further production
Page
36(P
OP
302)
0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
Page
36(P
OP
302)
05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
Page
36(P
OP
302)
052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
OP
302)
Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
Page
36(P
OP
302)
053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
Page
36(P
OP
302)
054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
Page
36(P
OP
302)
Page
36(P
OP
302)
055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
36(P
OP
302)
056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
Page
36(P
OP
302)
available advertisements are frequently forgotten but the catalog is an ever present reminder Two types of catalog are here
Jobbers catalog Contains a variety of manufacturing sources an offer to a certain extent Equipment and machinery catalog Provide information of Specification of location of
supply for replacement parts as well as new equipments of Aarong
Trade journals Trade journals are also valuable sources of information of Aarong as to potential suppliers It is used in two ways
Firstly use is a study of the text adds to the buyerrsquos general information suggests new products and substitute materials
Secondly use has to do with advertising
Trade Directories Trade directories are volumes which list leading manufactures addresses number of branches products supplies equipment and other items offered for sale
Sales Representation In Aarong it is essential to develop good supplier relations which begin with a friendly courteous sympathetic and frank attitude toward the supplier salesperson Aarong have the policies and procedures guidelines concerning the relations between the purchasing office and suppliersrsquo representatives
Suppliers and Commodity file Such files contain information concerning the address of the Aarongrsquos supplier past orders placed with the company data concerning its general fitness reliability suppliers willingness to meet particular requirements of them which product has been purchased in the past price paid point of shipment and cross reference of the supplier file
043 Aarongrsquos Supplier evaluation We know that Aarong is an organization which fully depends on domestic ruler raw
product So the supplier of Aarong will be the ruler people Aarongrsquos supplier evaluation depends on some important factors Those are given below
Existing and Potential Sources The evaluation of suppliers is a continuing purchasing task Aarong does this very carefully They monitored to see if expected performance
Page
36(P
OP
302)
materializes with current suppliers New sources need to be screened to see if their potential warrants serous future consideration
Informal and Formal Evaluation Aarongrsquos current supplier is one which has passed through earlier supplier efforts and subsequently received at a minimum one order Most buyer of Aarong tends to separate current suppliers into at least two categories
Informal Evaluation Informal evolution includes assessments of personal contract between Aarong and its supplier in the purchaser section in all function where such contract takes place
044 Aarongrsquos Additional sources and selection consideration
Aarongrsquos additional sources and selection consideration system causes if supplier had been found who could meet all the requirements the search would be over Such it not the case Shall the buyer in buying a given item rely on a single supplier or utilize several Shall the buyer directly buy from manufacturers or through distributors Aarong need quick supply because customer demand is very high and fast Aarong need the product as their expectation In doing so it shall be assumed that adequate investigation for fairness and capacity to meet the requirements as to quality quantity delivery and service and that prices are not unreasonable The product of Aarong is much reasonable then other So Aarong need to maintain this for customer
045 Aarongrsquos supplier rating systemSupplier rating system is very important function for an organization Aarong evaluate
their supplier rating system through some steps Most formal supplier rating schemes attempt to track actual performance over time Thus corrective action can be taken as needed Formal supplier rating schemes track vendor performance on quality price delivery and service It is
Page
36(P
OP
302)
normal to track a supplierrsquos quality performance very closely and in sufficient deal to enable the pinpointing of corrective action Delivery performance of a current supplier is fairly easily tracked if good records exist of delivery promises and actual recipients and few modifications have been made on an informal basis There is a most effective evaluation system of rating that Aarong follows is weighted point evaluation system
Aarong has different types of supplier that is why this system is successful Particularly in cases where several sources supply the same item Outstanding performance of a supplier can then be rewarded with additional business while poor performance will at the least result in less business or possibly dropping a supplier altogether For different product classes different factors weight and measure should be used to reflect varying impact on the organization
Factor Weight How MeasuredSupplier
Performance past 12 Months
Rating
Quality30 1 defective subtracts
605 defective (30(100-(05 X
6)100=291
Delivery 40 1 day late subtracts 2
Average 5 days late (40(100-(5X2)100=36
Price 20 Lowest price paidPrice charged
$50$55
(20(5055)X100)100=1818
Service10 Goods=100
Fair=70Poor=40
Fair=75 (10X75)100=75
Total Points
100 9078
Aarongrsquos supplier weighted point rating system
046 The Supplier selection decisionThe purchaserrsquos Perception of the supplierrsquos ability in Aarong to meet satisfactory
quality quantity delivery and price and service objectives will govern the selection decision Itrsquos also included their past history facilities and technical strength financial status organization and management reputation systems communication of rural people labor relations and location The nature and the amount of the purchase will influence the selection decision
Page
36(P
OP
302)
Aarongrsquos supplier selection decision can be seen as decision making under uncertainty and can be represented by a decision tree There are three stage decision trees for supplier selection also In the given figure shows a decision tree of one stage situation with only two suppliers considered and two possible outcomes To use decision tree effectively and assess the probabilities of success and failure This simple tree could apply to a special onetime purchase without expectation of follow on business for some time to come
SolutionSupplier A Supplier BHigh 100 X 30 =3000 High 100 X 28 =2800Medium 70 X 35 =2450 Medium 70 X 40 =2800Low 40 X 40 =1600 Low 40 X 30 =1200
=7000 =6800So Aarong will choose supplier B
047 Consumer buyer behavior CONSUMER DECISION PROCESS MODEL
Aarong is the most leading fashionable organization in Bangladesh Aarong is always looking towards its consumer perceptions It always creates a different look and patterns in their product This is the main reason to attract consumer The process component of the consumer decision making process deals with how consumers make decisions The product consumer have
Price $30 per unit
Price $35 per unit
Price $40 per unit
Price $28 per unit
Price $40 per unit
Price $30 per unit
On demand high 100 units
On demand medium 70 units
On demand low 40 units
On demand high 100 units
On demand medium 70 units
On demand low 40 units
Supplier
A
Supplier
B
Page
36(P
OP
302)
selected to buy and in order to understand how a consumer makes these decisions in the process component we need to look at the psychological field of the process model which are the internal influences of motivation perception learning personality amp attitude and how these influences affect the decision making process Aarong the act of making a consumer decision consists of three stages which are need recognition pre-purchase search amp evaluation of alternatives
Need Recognition Need recognition occurs when a consumer is faced with a problem There are many different reasons why someone would decide that they need to buy the product from Aarong It might be necessary of any product as well as fashionable one
Pre-purchase Search Pre-purchase search is very important for consumer At first they search their desirable product in the market After that they decide from where they buy their product When they think about perfection and fissionable thing they must go through Aarong
Evaluation of Alternative This means to evaluate the alternative brands of that product From that evaluation consumer select their product according their perception Aarong have the ability to fulfill their perception That is the quality of Aarong
048 Purchase-supplier relationsWhen one organization supplies another with goods or services the nature of the
relationship between the two organizations is a major influence on the ultimate value and customer satisfaction achievable Aarong maintain a good relationship with their supplier They maintain the relationship very sincerely Aarong deals with their supplier several times All times they maintain their formalities Good relations with supplier are very important for their supply system If the relation is well the supplier supply product as their requirement In this section the nature of supplier goodwill will be discussed along with the framework for buyer-seller satisfaction the qualifications of good and preferred suppliers partnerships and strategic alliances
049 Aarongrsquos Purchase-supplier satisfaction modelAarong is a fair trade organization Aarong always try to satisfy their selected supplier
One of the major assessments a purchaser must make is whether the current relationship with a supplier is satisfactory or not This relationship is highly complex and different people inside the
Page
36(P
OP
302)
purchasing organization may have different perceptions of it Aarong follow a supplier satisfaction model This model includes some assumptions Those are
I That satisfaction with a current supplier relationship can be assessed however crudely at least in macro terms whether it is satisfactory or not
II That an unsatisfied party will attempt to move to a more satisfactory situationIII That attempts to move may fall in the win and lose as well as the lose and lose lose and
win and win and win categoryIV That attempts to move may affect the stability of the relationshipV That purchaser and seller may well have different perceptions of the same relationship
VI That many tools techniques and approaches exists which will assist either party in moving position and improving stability
0410 Aarongrsquos Reverse supplier developmentIn supplier selection it has so far been assured that at least one suitable and willing
supplier already exists and that the purchaserrsquos problems are primarily one of determining who
C
D B
A
Purchaser dissatisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier dissatisfied
Purchaser satisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier satisfied
Total Dissatisfaction
Marginal satisfaction
Complete satisfaction
Marginal satisfaction
Complete satisfaction
Supplierrsquos Satisfaction
Purchaserrsquos Satisfaction
Page
36(P
OP
302)
the best supplier is In this case Aarong is very serious about their supplierrsquos development After selecting the best supplier they give better training for their future development We know that Aarong highly depends on rural suppliers Reverse marketing supplier development implies a degree of aggressive procurement involvement not normally encountered in supplier selection
Reverse supplier development should take a broader point of view It defines the need for developing new or existing suppliers as follows The purchase is aware that benefits will accrue to both the supplier and the purchaser benefits of which the supplier may not be aware
Aarongrsquos Supplier Development Context
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
bull Spot payment on product delivery to encourage efficiency and productivity bull Reach out to producers in remote areas to ensure fair value for their efforts bull Marketing communication and information for artisans bull Advances against purchase orders where necessary bull Training amp Education in skills development to raise product quality and marketability bull Product Design and Support in Product Development bull Quality Control to increase producer awareness of the importance of quality
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers in Bangladesh
0411 Aarongrsquos Management and Financial Evaluation
Aarongrsquos management and financial evaluation tends toward greater reliance on single sources for a longer time continuous along with great interest in material requirement and just in
Supplier Purchaser
Purchasing initiative
Sales response
Page
36(P
OP
302)
time production potential suppliers management strength takes on added significance This will require a detailed examination of Aarongrsquos structure qualifications of managers management control the reward-punishment system training and development system and policies and procedures It is also useful to have an explanation as to why the supplierrsquos manager believes it is managing well and an indication of its most notable successes and failures An evaluation of this supplierrsquos procurement system organization procedures and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract
0412 BenefitsEvery single woman who works in Aarong-owned production facilities is also a beneficiary
of BRACs (Bangladesh Rural Advancement Committee) multifaceted development programs As a support entity of BRAC a significant portion of Aarongs earnings go directly into financing the NGOs (non-governmental organization) development programs in healthcare and education as well as economic and social development Specific benefits for producers include
Free medical check-ups including free eye treatment eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workerrsquos retirement fund
Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible
Further AARONG also assists with design and development market information and quality control and provides advances against purchase orders as well as spot payment on product delivery to encourage further production
Page
36(P
OP
302)
0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
Page
36(P
OP
302)
05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
Page
36(P
OP
302)
052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
OP
302)
Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
Page
36(P
OP
302)
053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
Page
36(P
OP
302)
054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
Page
36(P
OP
302)
Page
36(P
OP
302)
055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
36(P
OP
302)
056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
Page
36(P
OP
302)
materializes with current suppliers New sources need to be screened to see if their potential warrants serous future consideration
Informal and Formal Evaluation Aarongrsquos current supplier is one which has passed through earlier supplier efforts and subsequently received at a minimum one order Most buyer of Aarong tends to separate current suppliers into at least two categories
Informal Evaluation Informal evolution includes assessments of personal contract between Aarong and its supplier in the purchaser section in all function where such contract takes place
044 Aarongrsquos Additional sources and selection consideration
Aarongrsquos additional sources and selection consideration system causes if supplier had been found who could meet all the requirements the search would be over Such it not the case Shall the buyer in buying a given item rely on a single supplier or utilize several Shall the buyer directly buy from manufacturers or through distributors Aarong need quick supply because customer demand is very high and fast Aarong need the product as their expectation In doing so it shall be assumed that adequate investigation for fairness and capacity to meet the requirements as to quality quantity delivery and service and that prices are not unreasonable The product of Aarong is much reasonable then other So Aarong need to maintain this for customer
045 Aarongrsquos supplier rating systemSupplier rating system is very important function for an organization Aarong evaluate
their supplier rating system through some steps Most formal supplier rating schemes attempt to track actual performance over time Thus corrective action can be taken as needed Formal supplier rating schemes track vendor performance on quality price delivery and service It is
Page
36(P
OP
302)
normal to track a supplierrsquos quality performance very closely and in sufficient deal to enable the pinpointing of corrective action Delivery performance of a current supplier is fairly easily tracked if good records exist of delivery promises and actual recipients and few modifications have been made on an informal basis There is a most effective evaluation system of rating that Aarong follows is weighted point evaluation system
Aarong has different types of supplier that is why this system is successful Particularly in cases where several sources supply the same item Outstanding performance of a supplier can then be rewarded with additional business while poor performance will at the least result in less business or possibly dropping a supplier altogether For different product classes different factors weight and measure should be used to reflect varying impact on the organization
Factor Weight How MeasuredSupplier
Performance past 12 Months
Rating
Quality30 1 defective subtracts
605 defective (30(100-(05 X
6)100=291
Delivery 40 1 day late subtracts 2
Average 5 days late (40(100-(5X2)100=36
Price 20 Lowest price paidPrice charged
$50$55
(20(5055)X100)100=1818
Service10 Goods=100
Fair=70Poor=40
Fair=75 (10X75)100=75
Total Points
100 9078
Aarongrsquos supplier weighted point rating system
046 The Supplier selection decisionThe purchaserrsquos Perception of the supplierrsquos ability in Aarong to meet satisfactory
quality quantity delivery and price and service objectives will govern the selection decision Itrsquos also included their past history facilities and technical strength financial status organization and management reputation systems communication of rural people labor relations and location The nature and the amount of the purchase will influence the selection decision
Page
36(P
OP
302)
Aarongrsquos supplier selection decision can be seen as decision making under uncertainty and can be represented by a decision tree There are three stage decision trees for supplier selection also In the given figure shows a decision tree of one stage situation with only two suppliers considered and two possible outcomes To use decision tree effectively and assess the probabilities of success and failure This simple tree could apply to a special onetime purchase without expectation of follow on business for some time to come
SolutionSupplier A Supplier BHigh 100 X 30 =3000 High 100 X 28 =2800Medium 70 X 35 =2450 Medium 70 X 40 =2800Low 40 X 40 =1600 Low 40 X 30 =1200
=7000 =6800So Aarong will choose supplier B
047 Consumer buyer behavior CONSUMER DECISION PROCESS MODEL
Aarong is the most leading fashionable organization in Bangladesh Aarong is always looking towards its consumer perceptions It always creates a different look and patterns in their product This is the main reason to attract consumer The process component of the consumer decision making process deals with how consumers make decisions The product consumer have
Price $30 per unit
Price $35 per unit
Price $40 per unit
Price $28 per unit
Price $40 per unit
Price $30 per unit
On demand high 100 units
On demand medium 70 units
On demand low 40 units
On demand high 100 units
On demand medium 70 units
On demand low 40 units
Supplier
A
Supplier
B
Page
36(P
OP
302)
selected to buy and in order to understand how a consumer makes these decisions in the process component we need to look at the psychological field of the process model which are the internal influences of motivation perception learning personality amp attitude and how these influences affect the decision making process Aarong the act of making a consumer decision consists of three stages which are need recognition pre-purchase search amp evaluation of alternatives
Need Recognition Need recognition occurs when a consumer is faced with a problem There are many different reasons why someone would decide that they need to buy the product from Aarong It might be necessary of any product as well as fashionable one
Pre-purchase Search Pre-purchase search is very important for consumer At first they search their desirable product in the market After that they decide from where they buy their product When they think about perfection and fissionable thing they must go through Aarong
Evaluation of Alternative This means to evaluate the alternative brands of that product From that evaluation consumer select their product according their perception Aarong have the ability to fulfill their perception That is the quality of Aarong
048 Purchase-supplier relationsWhen one organization supplies another with goods or services the nature of the
relationship between the two organizations is a major influence on the ultimate value and customer satisfaction achievable Aarong maintain a good relationship with their supplier They maintain the relationship very sincerely Aarong deals with their supplier several times All times they maintain their formalities Good relations with supplier are very important for their supply system If the relation is well the supplier supply product as their requirement In this section the nature of supplier goodwill will be discussed along with the framework for buyer-seller satisfaction the qualifications of good and preferred suppliers partnerships and strategic alliances
049 Aarongrsquos Purchase-supplier satisfaction modelAarong is a fair trade organization Aarong always try to satisfy their selected supplier
One of the major assessments a purchaser must make is whether the current relationship with a supplier is satisfactory or not This relationship is highly complex and different people inside the
Page
36(P
OP
302)
purchasing organization may have different perceptions of it Aarong follow a supplier satisfaction model This model includes some assumptions Those are
I That satisfaction with a current supplier relationship can be assessed however crudely at least in macro terms whether it is satisfactory or not
II That an unsatisfied party will attempt to move to a more satisfactory situationIII That attempts to move may fall in the win and lose as well as the lose and lose lose and
win and win and win categoryIV That attempts to move may affect the stability of the relationshipV That purchaser and seller may well have different perceptions of the same relationship
VI That many tools techniques and approaches exists which will assist either party in moving position and improving stability
0410 Aarongrsquos Reverse supplier developmentIn supplier selection it has so far been assured that at least one suitable and willing
supplier already exists and that the purchaserrsquos problems are primarily one of determining who
C
D B
A
Purchaser dissatisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier dissatisfied
Purchaser satisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier satisfied
Total Dissatisfaction
Marginal satisfaction
Complete satisfaction
Marginal satisfaction
Complete satisfaction
Supplierrsquos Satisfaction
Purchaserrsquos Satisfaction
Page
36(P
OP
302)
the best supplier is In this case Aarong is very serious about their supplierrsquos development After selecting the best supplier they give better training for their future development We know that Aarong highly depends on rural suppliers Reverse marketing supplier development implies a degree of aggressive procurement involvement not normally encountered in supplier selection
Reverse supplier development should take a broader point of view It defines the need for developing new or existing suppliers as follows The purchase is aware that benefits will accrue to both the supplier and the purchaser benefits of which the supplier may not be aware
Aarongrsquos Supplier Development Context
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
bull Spot payment on product delivery to encourage efficiency and productivity bull Reach out to producers in remote areas to ensure fair value for their efforts bull Marketing communication and information for artisans bull Advances against purchase orders where necessary bull Training amp Education in skills development to raise product quality and marketability bull Product Design and Support in Product Development bull Quality Control to increase producer awareness of the importance of quality
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers in Bangladesh
0411 Aarongrsquos Management and Financial Evaluation
Aarongrsquos management and financial evaluation tends toward greater reliance on single sources for a longer time continuous along with great interest in material requirement and just in
Supplier Purchaser
Purchasing initiative
Sales response
Page
36(P
OP
302)
time production potential suppliers management strength takes on added significance This will require a detailed examination of Aarongrsquos structure qualifications of managers management control the reward-punishment system training and development system and policies and procedures It is also useful to have an explanation as to why the supplierrsquos manager believes it is managing well and an indication of its most notable successes and failures An evaluation of this supplierrsquos procurement system organization procedures and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract
0412 BenefitsEvery single woman who works in Aarong-owned production facilities is also a beneficiary
of BRACs (Bangladesh Rural Advancement Committee) multifaceted development programs As a support entity of BRAC a significant portion of Aarongs earnings go directly into financing the NGOs (non-governmental organization) development programs in healthcare and education as well as economic and social development Specific benefits for producers include
Free medical check-ups including free eye treatment eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workerrsquos retirement fund
Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible
Further AARONG also assists with design and development market information and quality control and provides advances against purchase orders as well as spot payment on product delivery to encourage further production
Page
36(P
OP
302)
0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
Page
36(P
OP
302)
05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
Page
36(P
OP
302)
052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
OP
302)
Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
Page
36(P
OP
302)
053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
Page
36(P
OP
302)
054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
Page
36(P
OP
302)
Page
36(P
OP
302)
055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
36(P
OP
302)
056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
Page
36(P
OP
302)
normal to track a supplierrsquos quality performance very closely and in sufficient deal to enable the pinpointing of corrective action Delivery performance of a current supplier is fairly easily tracked if good records exist of delivery promises and actual recipients and few modifications have been made on an informal basis There is a most effective evaluation system of rating that Aarong follows is weighted point evaluation system
Aarong has different types of supplier that is why this system is successful Particularly in cases where several sources supply the same item Outstanding performance of a supplier can then be rewarded with additional business while poor performance will at the least result in less business or possibly dropping a supplier altogether For different product classes different factors weight and measure should be used to reflect varying impact on the organization
Factor Weight How MeasuredSupplier
Performance past 12 Months
Rating
Quality30 1 defective subtracts
605 defective (30(100-(05 X
6)100=291
Delivery 40 1 day late subtracts 2
Average 5 days late (40(100-(5X2)100=36
Price 20 Lowest price paidPrice charged
$50$55
(20(5055)X100)100=1818
Service10 Goods=100
Fair=70Poor=40
Fair=75 (10X75)100=75
Total Points
100 9078
Aarongrsquos supplier weighted point rating system
046 The Supplier selection decisionThe purchaserrsquos Perception of the supplierrsquos ability in Aarong to meet satisfactory
quality quantity delivery and price and service objectives will govern the selection decision Itrsquos also included their past history facilities and technical strength financial status organization and management reputation systems communication of rural people labor relations and location The nature and the amount of the purchase will influence the selection decision
Page
36(P
OP
302)
Aarongrsquos supplier selection decision can be seen as decision making under uncertainty and can be represented by a decision tree There are three stage decision trees for supplier selection also In the given figure shows a decision tree of one stage situation with only two suppliers considered and two possible outcomes To use decision tree effectively and assess the probabilities of success and failure This simple tree could apply to a special onetime purchase without expectation of follow on business for some time to come
SolutionSupplier A Supplier BHigh 100 X 30 =3000 High 100 X 28 =2800Medium 70 X 35 =2450 Medium 70 X 40 =2800Low 40 X 40 =1600 Low 40 X 30 =1200
=7000 =6800So Aarong will choose supplier B
047 Consumer buyer behavior CONSUMER DECISION PROCESS MODEL
Aarong is the most leading fashionable organization in Bangladesh Aarong is always looking towards its consumer perceptions It always creates a different look and patterns in their product This is the main reason to attract consumer The process component of the consumer decision making process deals with how consumers make decisions The product consumer have
Price $30 per unit
Price $35 per unit
Price $40 per unit
Price $28 per unit
Price $40 per unit
Price $30 per unit
On demand high 100 units
On demand medium 70 units
On demand low 40 units
On demand high 100 units
On demand medium 70 units
On demand low 40 units
Supplier
A
Supplier
B
Page
36(P
OP
302)
selected to buy and in order to understand how a consumer makes these decisions in the process component we need to look at the psychological field of the process model which are the internal influences of motivation perception learning personality amp attitude and how these influences affect the decision making process Aarong the act of making a consumer decision consists of three stages which are need recognition pre-purchase search amp evaluation of alternatives
Need Recognition Need recognition occurs when a consumer is faced with a problem There are many different reasons why someone would decide that they need to buy the product from Aarong It might be necessary of any product as well as fashionable one
Pre-purchase Search Pre-purchase search is very important for consumer At first they search their desirable product in the market After that they decide from where they buy their product When they think about perfection and fissionable thing they must go through Aarong
Evaluation of Alternative This means to evaluate the alternative brands of that product From that evaluation consumer select their product according their perception Aarong have the ability to fulfill their perception That is the quality of Aarong
048 Purchase-supplier relationsWhen one organization supplies another with goods or services the nature of the
relationship between the two organizations is a major influence on the ultimate value and customer satisfaction achievable Aarong maintain a good relationship with their supplier They maintain the relationship very sincerely Aarong deals with their supplier several times All times they maintain their formalities Good relations with supplier are very important for their supply system If the relation is well the supplier supply product as their requirement In this section the nature of supplier goodwill will be discussed along with the framework for buyer-seller satisfaction the qualifications of good and preferred suppliers partnerships and strategic alliances
049 Aarongrsquos Purchase-supplier satisfaction modelAarong is a fair trade organization Aarong always try to satisfy their selected supplier
One of the major assessments a purchaser must make is whether the current relationship with a supplier is satisfactory or not This relationship is highly complex and different people inside the
Page
36(P
OP
302)
purchasing organization may have different perceptions of it Aarong follow a supplier satisfaction model This model includes some assumptions Those are
I That satisfaction with a current supplier relationship can be assessed however crudely at least in macro terms whether it is satisfactory or not
II That an unsatisfied party will attempt to move to a more satisfactory situationIII That attempts to move may fall in the win and lose as well as the lose and lose lose and
win and win and win categoryIV That attempts to move may affect the stability of the relationshipV That purchaser and seller may well have different perceptions of the same relationship
VI That many tools techniques and approaches exists which will assist either party in moving position and improving stability
0410 Aarongrsquos Reverse supplier developmentIn supplier selection it has so far been assured that at least one suitable and willing
supplier already exists and that the purchaserrsquos problems are primarily one of determining who
C
D B
A
Purchaser dissatisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier dissatisfied
Purchaser satisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier satisfied
Total Dissatisfaction
Marginal satisfaction
Complete satisfaction
Marginal satisfaction
Complete satisfaction
Supplierrsquos Satisfaction
Purchaserrsquos Satisfaction
Page
36(P
OP
302)
the best supplier is In this case Aarong is very serious about their supplierrsquos development After selecting the best supplier they give better training for their future development We know that Aarong highly depends on rural suppliers Reverse marketing supplier development implies a degree of aggressive procurement involvement not normally encountered in supplier selection
Reverse supplier development should take a broader point of view It defines the need for developing new or existing suppliers as follows The purchase is aware that benefits will accrue to both the supplier and the purchaser benefits of which the supplier may not be aware
Aarongrsquos Supplier Development Context
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
bull Spot payment on product delivery to encourage efficiency and productivity bull Reach out to producers in remote areas to ensure fair value for their efforts bull Marketing communication and information for artisans bull Advances against purchase orders where necessary bull Training amp Education in skills development to raise product quality and marketability bull Product Design and Support in Product Development bull Quality Control to increase producer awareness of the importance of quality
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers in Bangladesh
0411 Aarongrsquos Management and Financial Evaluation
Aarongrsquos management and financial evaluation tends toward greater reliance on single sources for a longer time continuous along with great interest in material requirement and just in
Supplier Purchaser
Purchasing initiative
Sales response
Page
36(P
OP
302)
time production potential suppliers management strength takes on added significance This will require a detailed examination of Aarongrsquos structure qualifications of managers management control the reward-punishment system training and development system and policies and procedures It is also useful to have an explanation as to why the supplierrsquos manager believes it is managing well and an indication of its most notable successes and failures An evaluation of this supplierrsquos procurement system organization procedures and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract
0412 BenefitsEvery single woman who works in Aarong-owned production facilities is also a beneficiary
of BRACs (Bangladesh Rural Advancement Committee) multifaceted development programs As a support entity of BRAC a significant portion of Aarongs earnings go directly into financing the NGOs (non-governmental organization) development programs in healthcare and education as well as economic and social development Specific benefits for producers include
Free medical check-ups including free eye treatment eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workerrsquos retirement fund
Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible
Further AARONG also assists with design and development market information and quality control and provides advances against purchase orders as well as spot payment on product delivery to encourage further production
Page
36(P
OP
302)
0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
Page
36(P
OP
302)
05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
Page
36(P
OP
302)
052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
OP
302)
Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
Page
36(P
OP
302)
053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
Page
36(P
OP
302)
054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
Page
36(P
OP
302)
Page
36(P
OP
302)
055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
36(P
OP
302)
056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
Page
36(P
OP
302)
Aarongrsquos supplier selection decision can be seen as decision making under uncertainty and can be represented by a decision tree There are three stage decision trees for supplier selection also In the given figure shows a decision tree of one stage situation with only two suppliers considered and two possible outcomes To use decision tree effectively and assess the probabilities of success and failure This simple tree could apply to a special onetime purchase without expectation of follow on business for some time to come
SolutionSupplier A Supplier BHigh 100 X 30 =3000 High 100 X 28 =2800Medium 70 X 35 =2450 Medium 70 X 40 =2800Low 40 X 40 =1600 Low 40 X 30 =1200
=7000 =6800So Aarong will choose supplier B
047 Consumer buyer behavior CONSUMER DECISION PROCESS MODEL
Aarong is the most leading fashionable organization in Bangladesh Aarong is always looking towards its consumer perceptions It always creates a different look and patterns in their product This is the main reason to attract consumer The process component of the consumer decision making process deals with how consumers make decisions The product consumer have
Price $30 per unit
Price $35 per unit
Price $40 per unit
Price $28 per unit
Price $40 per unit
Price $30 per unit
On demand high 100 units
On demand medium 70 units
On demand low 40 units
On demand high 100 units
On demand medium 70 units
On demand low 40 units
Supplier
A
Supplier
B
Page
36(P
OP
302)
selected to buy and in order to understand how a consumer makes these decisions in the process component we need to look at the psychological field of the process model which are the internal influences of motivation perception learning personality amp attitude and how these influences affect the decision making process Aarong the act of making a consumer decision consists of three stages which are need recognition pre-purchase search amp evaluation of alternatives
Need Recognition Need recognition occurs when a consumer is faced with a problem There are many different reasons why someone would decide that they need to buy the product from Aarong It might be necessary of any product as well as fashionable one
Pre-purchase Search Pre-purchase search is very important for consumer At first they search their desirable product in the market After that they decide from where they buy their product When they think about perfection and fissionable thing they must go through Aarong
Evaluation of Alternative This means to evaluate the alternative brands of that product From that evaluation consumer select their product according their perception Aarong have the ability to fulfill their perception That is the quality of Aarong
048 Purchase-supplier relationsWhen one organization supplies another with goods or services the nature of the
relationship between the two organizations is a major influence on the ultimate value and customer satisfaction achievable Aarong maintain a good relationship with their supplier They maintain the relationship very sincerely Aarong deals with their supplier several times All times they maintain their formalities Good relations with supplier are very important for their supply system If the relation is well the supplier supply product as their requirement In this section the nature of supplier goodwill will be discussed along with the framework for buyer-seller satisfaction the qualifications of good and preferred suppliers partnerships and strategic alliances
049 Aarongrsquos Purchase-supplier satisfaction modelAarong is a fair trade organization Aarong always try to satisfy their selected supplier
One of the major assessments a purchaser must make is whether the current relationship with a supplier is satisfactory or not This relationship is highly complex and different people inside the
Page
36(P
OP
302)
purchasing organization may have different perceptions of it Aarong follow a supplier satisfaction model This model includes some assumptions Those are
I That satisfaction with a current supplier relationship can be assessed however crudely at least in macro terms whether it is satisfactory or not
II That an unsatisfied party will attempt to move to a more satisfactory situationIII That attempts to move may fall in the win and lose as well as the lose and lose lose and
win and win and win categoryIV That attempts to move may affect the stability of the relationshipV That purchaser and seller may well have different perceptions of the same relationship
VI That many tools techniques and approaches exists which will assist either party in moving position and improving stability
0410 Aarongrsquos Reverse supplier developmentIn supplier selection it has so far been assured that at least one suitable and willing
supplier already exists and that the purchaserrsquos problems are primarily one of determining who
C
D B
A
Purchaser dissatisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier dissatisfied
Purchaser satisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier satisfied
Total Dissatisfaction
Marginal satisfaction
Complete satisfaction
Marginal satisfaction
Complete satisfaction
Supplierrsquos Satisfaction
Purchaserrsquos Satisfaction
Page
36(P
OP
302)
the best supplier is In this case Aarong is very serious about their supplierrsquos development After selecting the best supplier they give better training for their future development We know that Aarong highly depends on rural suppliers Reverse marketing supplier development implies a degree of aggressive procurement involvement not normally encountered in supplier selection
Reverse supplier development should take a broader point of view It defines the need for developing new or existing suppliers as follows The purchase is aware that benefits will accrue to both the supplier and the purchaser benefits of which the supplier may not be aware
Aarongrsquos Supplier Development Context
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
bull Spot payment on product delivery to encourage efficiency and productivity bull Reach out to producers in remote areas to ensure fair value for their efforts bull Marketing communication and information for artisans bull Advances against purchase orders where necessary bull Training amp Education in skills development to raise product quality and marketability bull Product Design and Support in Product Development bull Quality Control to increase producer awareness of the importance of quality
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers in Bangladesh
0411 Aarongrsquos Management and Financial Evaluation
Aarongrsquos management and financial evaluation tends toward greater reliance on single sources for a longer time continuous along with great interest in material requirement and just in
Supplier Purchaser
Purchasing initiative
Sales response
Page
36(P
OP
302)
time production potential suppliers management strength takes on added significance This will require a detailed examination of Aarongrsquos structure qualifications of managers management control the reward-punishment system training and development system and policies and procedures It is also useful to have an explanation as to why the supplierrsquos manager believes it is managing well and an indication of its most notable successes and failures An evaluation of this supplierrsquos procurement system organization procedures and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract
0412 BenefitsEvery single woman who works in Aarong-owned production facilities is also a beneficiary
of BRACs (Bangladesh Rural Advancement Committee) multifaceted development programs As a support entity of BRAC a significant portion of Aarongs earnings go directly into financing the NGOs (non-governmental organization) development programs in healthcare and education as well as economic and social development Specific benefits for producers include
Free medical check-ups including free eye treatment eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workerrsquos retirement fund
Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible
Further AARONG also assists with design and development market information and quality control and provides advances against purchase orders as well as spot payment on product delivery to encourage further production
Page
36(P
OP
302)
0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
Page
36(P
OP
302)
05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
Page
36(P
OP
302)
052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
OP
302)
Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
Page
36(P
OP
302)
053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
Page
36(P
OP
302)
054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
Page
36(P
OP
302)
Page
36(P
OP
302)
055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
36(P
OP
302)
056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
Page
36(P
OP
302)
selected to buy and in order to understand how a consumer makes these decisions in the process component we need to look at the psychological field of the process model which are the internal influences of motivation perception learning personality amp attitude and how these influences affect the decision making process Aarong the act of making a consumer decision consists of three stages which are need recognition pre-purchase search amp evaluation of alternatives
Need Recognition Need recognition occurs when a consumer is faced with a problem There are many different reasons why someone would decide that they need to buy the product from Aarong It might be necessary of any product as well as fashionable one
Pre-purchase Search Pre-purchase search is very important for consumer At first they search their desirable product in the market After that they decide from where they buy their product When they think about perfection and fissionable thing they must go through Aarong
Evaluation of Alternative This means to evaluate the alternative brands of that product From that evaluation consumer select their product according their perception Aarong have the ability to fulfill their perception That is the quality of Aarong
048 Purchase-supplier relationsWhen one organization supplies another with goods or services the nature of the
relationship between the two organizations is a major influence on the ultimate value and customer satisfaction achievable Aarong maintain a good relationship with their supplier They maintain the relationship very sincerely Aarong deals with their supplier several times All times they maintain their formalities Good relations with supplier are very important for their supply system If the relation is well the supplier supply product as their requirement In this section the nature of supplier goodwill will be discussed along with the framework for buyer-seller satisfaction the qualifications of good and preferred suppliers partnerships and strategic alliances
049 Aarongrsquos Purchase-supplier satisfaction modelAarong is a fair trade organization Aarong always try to satisfy their selected supplier
One of the major assessments a purchaser must make is whether the current relationship with a supplier is satisfactory or not This relationship is highly complex and different people inside the
Page
36(P
OP
302)
purchasing organization may have different perceptions of it Aarong follow a supplier satisfaction model This model includes some assumptions Those are
I That satisfaction with a current supplier relationship can be assessed however crudely at least in macro terms whether it is satisfactory or not
II That an unsatisfied party will attempt to move to a more satisfactory situationIII That attempts to move may fall in the win and lose as well as the lose and lose lose and
win and win and win categoryIV That attempts to move may affect the stability of the relationshipV That purchaser and seller may well have different perceptions of the same relationship
VI That many tools techniques and approaches exists which will assist either party in moving position and improving stability
0410 Aarongrsquos Reverse supplier developmentIn supplier selection it has so far been assured that at least one suitable and willing
supplier already exists and that the purchaserrsquos problems are primarily one of determining who
C
D B
A
Purchaser dissatisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier dissatisfied
Purchaser satisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier satisfied
Total Dissatisfaction
Marginal satisfaction
Complete satisfaction
Marginal satisfaction
Complete satisfaction
Supplierrsquos Satisfaction
Purchaserrsquos Satisfaction
Page
36(P
OP
302)
the best supplier is In this case Aarong is very serious about their supplierrsquos development After selecting the best supplier they give better training for their future development We know that Aarong highly depends on rural suppliers Reverse marketing supplier development implies a degree of aggressive procurement involvement not normally encountered in supplier selection
Reverse supplier development should take a broader point of view It defines the need for developing new or existing suppliers as follows The purchase is aware that benefits will accrue to both the supplier and the purchaser benefits of which the supplier may not be aware
Aarongrsquos Supplier Development Context
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
bull Spot payment on product delivery to encourage efficiency and productivity bull Reach out to producers in remote areas to ensure fair value for their efforts bull Marketing communication and information for artisans bull Advances against purchase orders where necessary bull Training amp Education in skills development to raise product quality and marketability bull Product Design and Support in Product Development bull Quality Control to increase producer awareness of the importance of quality
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers in Bangladesh
0411 Aarongrsquos Management and Financial Evaluation
Aarongrsquos management and financial evaluation tends toward greater reliance on single sources for a longer time continuous along with great interest in material requirement and just in
Supplier Purchaser
Purchasing initiative
Sales response
Page
36(P
OP
302)
time production potential suppliers management strength takes on added significance This will require a detailed examination of Aarongrsquos structure qualifications of managers management control the reward-punishment system training and development system and policies and procedures It is also useful to have an explanation as to why the supplierrsquos manager believes it is managing well and an indication of its most notable successes and failures An evaluation of this supplierrsquos procurement system organization procedures and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract
0412 BenefitsEvery single woman who works in Aarong-owned production facilities is also a beneficiary
of BRACs (Bangladesh Rural Advancement Committee) multifaceted development programs As a support entity of BRAC a significant portion of Aarongs earnings go directly into financing the NGOs (non-governmental organization) development programs in healthcare and education as well as economic and social development Specific benefits for producers include
Free medical check-ups including free eye treatment eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workerrsquos retirement fund
Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible
Further AARONG also assists with design and development market information and quality control and provides advances against purchase orders as well as spot payment on product delivery to encourage further production
Page
36(P
OP
302)
0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
Page
36(P
OP
302)
05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
Page
36(P
OP
302)
052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
OP
302)
Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
Page
36(P
OP
302)
053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
Page
36(P
OP
302)
054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
Page
36(P
OP
302)
Page
36(P
OP
302)
055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
36(P
OP
302)
056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
Page
36(P
OP
302)
purchasing organization may have different perceptions of it Aarong follow a supplier satisfaction model This model includes some assumptions Those are
I That satisfaction with a current supplier relationship can be assessed however crudely at least in macro terms whether it is satisfactory or not
II That an unsatisfied party will attempt to move to a more satisfactory situationIII That attempts to move may fall in the win and lose as well as the lose and lose lose and
win and win and win categoryIV That attempts to move may affect the stability of the relationshipV That purchaser and seller may well have different perceptions of the same relationship
VI That many tools techniques and approaches exists which will assist either party in moving position and improving stability
0410 Aarongrsquos Reverse supplier developmentIn supplier selection it has so far been assured that at least one suitable and willing
supplier already exists and that the purchaserrsquos problems are primarily one of determining who
C
D B
A
Purchaser dissatisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier dissatisfied
Purchaser satisfied
Supplier dissatisfied
Purchaser dissatisfied
Supplier satisfied
Total Dissatisfaction
Marginal satisfaction
Complete satisfaction
Marginal satisfaction
Complete satisfaction
Supplierrsquos Satisfaction
Purchaserrsquos Satisfaction
Page
36(P
OP
302)
the best supplier is In this case Aarong is very serious about their supplierrsquos development After selecting the best supplier they give better training for their future development We know that Aarong highly depends on rural suppliers Reverse marketing supplier development implies a degree of aggressive procurement involvement not normally encountered in supplier selection
Reverse supplier development should take a broader point of view It defines the need for developing new or existing suppliers as follows The purchase is aware that benefits will accrue to both the supplier and the purchaser benefits of which the supplier may not be aware
Aarongrsquos Supplier Development Context
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
bull Spot payment on product delivery to encourage efficiency and productivity bull Reach out to producers in remote areas to ensure fair value for their efforts bull Marketing communication and information for artisans bull Advances against purchase orders where necessary bull Training amp Education in skills development to raise product quality and marketability bull Product Design and Support in Product Development bull Quality Control to increase producer awareness of the importance of quality
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers in Bangladesh
0411 Aarongrsquos Management and Financial Evaluation
Aarongrsquos management and financial evaluation tends toward greater reliance on single sources for a longer time continuous along with great interest in material requirement and just in
Supplier Purchaser
Purchasing initiative
Sales response
Page
36(P
OP
302)
time production potential suppliers management strength takes on added significance This will require a detailed examination of Aarongrsquos structure qualifications of managers management control the reward-punishment system training and development system and policies and procedures It is also useful to have an explanation as to why the supplierrsquos manager believes it is managing well and an indication of its most notable successes and failures An evaluation of this supplierrsquos procurement system organization procedures and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract
0412 BenefitsEvery single woman who works in Aarong-owned production facilities is also a beneficiary
of BRACs (Bangladesh Rural Advancement Committee) multifaceted development programs As a support entity of BRAC a significant portion of Aarongs earnings go directly into financing the NGOs (non-governmental organization) development programs in healthcare and education as well as economic and social development Specific benefits for producers include
Free medical check-ups including free eye treatment eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workerrsquos retirement fund
Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible
Further AARONG also assists with design and development market information and quality control and provides advances against purchase orders as well as spot payment on product delivery to encourage further production
Page
36(P
OP
302)
0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
Page
36(P
OP
302)
05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
Page
36(P
OP
302)
052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
OP
302)
Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
Page
36(P
OP
302)
053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
Page
36(P
OP
302)
054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
Page
36(P
OP
302)
Page
36(P
OP
302)
055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
36(P
OP
302)
056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
Page
36(P
OP
302)
the best supplier is In this case Aarong is very serious about their supplierrsquos development After selecting the best supplier they give better training for their future development We know that Aarong highly depends on rural suppliers Reverse marketing supplier development implies a degree of aggressive procurement involvement not normally encountered in supplier selection
Reverse supplier development should take a broader point of view It defines the need for developing new or existing suppliers as follows The purchase is aware that benefits will accrue to both the supplier and the purchaser benefits of which the supplier may not be aware
Aarongrsquos Supplier Development Context
Aarong symbolizes fairness in the global village The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas lack of working capital marketing support and opportunity for skills development In order to bridge these gaps Aarong provides a wide range of services to its workers and suppliers
bull Spot payment on product delivery to encourage efficiency and productivity bull Reach out to producers in remote areas to ensure fair value for their efforts bull Marketing communication and information for artisans bull Advances against purchase orders where necessary bull Training amp Education in skills development to raise product quality and marketability bull Product Design and Support in Product Development bull Quality Control to increase producer awareness of the importance of quality
These values reflect fair trade principles which have been developed by registered Fair Trade Organizations It contributes to sustainable development by offering better trading conditions to and securing the rights of marginalized producers and workers in Bangladesh
0411 Aarongrsquos Management and Financial Evaluation
Aarongrsquos management and financial evaluation tends toward greater reliance on single sources for a longer time continuous along with great interest in material requirement and just in
Supplier Purchaser
Purchasing initiative
Sales response
Page
36(P
OP
302)
time production potential suppliers management strength takes on added significance This will require a detailed examination of Aarongrsquos structure qualifications of managers management control the reward-punishment system training and development system and policies and procedures It is also useful to have an explanation as to why the supplierrsquos manager believes it is managing well and an indication of its most notable successes and failures An evaluation of this supplierrsquos procurement system organization procedures and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract
0412 BenefitsEvery single woman who works in Aarong-owned production facilities is also a beneficiary
of BRACs (Bangladesh Rural Advancement Committee) multifaceted development programs As a support entity of BRAC a significant portion of Aarongs earnings go directly into financing the NGOs (non-governmental organization) development programs in healthcare and education as well as economic and social development Specific benefits for producers include
Free medical check-ups including free eye treatment eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workerrsquos retirement fund
Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible
Further AARONG also assists with design and development market information and quality control and provides advances against purchase orders as well as spot payment on product delivery to encourage further production
Page
36(P
OP
302)
0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
Page
36(P
OP
302)
05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
Page
36(P
OP
302)
052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
OP
302)
Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
Page
36(P
OP
302)
053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
Page
36(P
OP
302)
054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
Page
36(P
OP
302)
Page
36(P
OP
302)
055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
36(P
OP
302)
056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
Page
36(P
OP
302)
time production potential suppliers management strength takes on added significance This will require a detailed examination of Aarongrsquos structure qualifications of managers management control the reward-punishment system training and development system and policies and procedures It is also useful to have an explanation as to why the supplierrsquos manager believes it is managing well and an indication of its most notable successes and failures An evaluation of this supplierrsquos procurement system organization procedures and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract
0412 BenefitsEvery single woman who works in Aarong-owned production facilities is also a beneficiary
of BRACs (Bangladesh Rural Advancement Committee) multifaceted development programs As a support entity of BRAC a significant portion of Aarongs earnings go directly into financing the NGOs (non-governmental organization) development programs in healthcare and education as well as economic and social development Specific benefits for producers include
Free medical check-ups including free eye treatment eye-glasses and treatment costs for severe illnesses
Advance wage payments for employees in need
Day care services
Workerrsquos retirement fund
Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible
Further AARONG also assists with design and development market information and quality control and provides advances against purchase orders as well as spot payment on product delivery to encourage further production
Page
36(P
OP
302)
0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
Page
36(P
OP
302)
05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
Page
36(P
OP
302)
052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
OP
302)
Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
Page
36(P
OP
302)
053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
Page
36(P
OP
302)
054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
Page
36(P
OP
302)
Page
36(P
OP
302)
055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
36(P
OP
302)
056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
Page
36(P
OP
302)
0413 Competitors Analysis of AarongCompetitor analysis in marketing is an assessment of the strengths and weaknesses of
current and potential competitors This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation implementation monitoring and adjustment
Aarong has its own version of the competitive analysis and its function is clear to line up your product with other products and show where yours falls short and where yours is superior Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors
Competitors Analysis of Aarong
From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors Only few companies have ability to chase some sort of advantage like Aarong Such as Rina Latifrsquos product features qualities and innovativeness Kay-Kraft and Anjanrsquos
Page
36(P
OP
302)
05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
Page
36(P
OP
302)
052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
OP
302)
Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
Page
36(P
OP
302)
053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
Page
36(P
OP
302)
054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
Page
36(P
OP
302)
Page
36(P
OP
302)
055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
36(P
OP
302)
056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
Page
36(P
OP
302)
05 Methodology of the studyThis report has been prepared based on both primary and secondary data The primary
data was collected through observation and information collected from the books our classes communication and relation with Aarong There are data that we collected from secondary sources from reports publishes documents internet and articles Data collected from the organization and other sources were assembled and put down in different part of the report Based on the collected information analysis and conclusion is performed
051 Limitation of the studyDuring groundwork of this report some obstacles have come across which can be termed
as the limitation of the project these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated Therefore the limitations that were faceda) The internal and sensitive information was not found properly from the organizationb) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeplyc) Unavailability of enough relevant records and informationd) Published information is not up to datee) Employees are not allowed to provide in depth information about their practices as the information is confidential
Page
36(P
OP
302)
052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
OP
302)
Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
Page
36(P
OP
302)
053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
Page
36(P
OP
302)
054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
Page
36(P
OP
302)
Page
36(P
OP
302)
055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
36(P
OP
302)
056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
Page
36(P
OP
302)
052 SWOT analysis of Aarong SWOT analysis is a powerful technique for understanding organizations strength and
weakness and looking for the opportunities and threats it may face Used in a business context it helps organization crave a sustainable niche in a market This analysis is mainly based on a current market situation
Figure SWOT analysis of Aarong amp AAF
Page
36(P
OP
302)
Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
Page
36(P
OP
302)
053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
Page
36(P
OP
302)
054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
Page
36(P
OP
302)
Page
36(P
OP
302)
055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
36(P
OP
302)
056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
Page
36(P
OP
302)
Strength Aarong amp AAF is the pioneer organization in handicraft Aarong has more than 68
market share which makes it the market leader And over these years Aarong has built a strong brand name in home and abroad The products quality maintains a certain standard and it secured Aarong with loyal customers Aarongrsquos one of the biggest strength is its production centers (AAF) The sale of Aarong is so high that it has almost ldquozerordquo production damage rate which reduces producing costs
Weakness Even though Aarong is the market leader it still has its drawbacks one of the weakness is
Aarong charges higher price for their products on the other hand the competitors charges lower price for the products It not only reduces Aarongrsquos sale but also similarity in design as boutiques are coming up with similar designs Aarong has its outlets in Dhaka Chittagong Sylhet and Khulna but they do not have any outlets in Rajshahi Rangpur and Jessore etc
Opportunities Aarong can go for new outlets in different cities They can also start joint venture with
other boutiques so that they can have more coverage in home and abroad Aarong has no seasonal collection they can start seasonal collection for each season it will give them opportunity to attract new markets
Threats Even though Aarong does not have any big competitors now but the number of
completion is ever growing There is always new competitorsrsquo threat And the number of consumer for other boutiques is increasing which will eventually decrease Aarongrsquos market and as well as sales
Page
36(P
OP
302)
053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
Page
36(P
OP
302)
054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
Page
36(P
OP
302)
Page
36(P
OP
302)
055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
36(P
OP
302)
056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
Page
36(P
OP
302)
053 Major Findings of the study
In our report at Aarong we have observer and found different issues these are
1048729 Fair system in recruitment and selection process Aarong believes in fair recruitment and selection process for their employees They try to make the whole process unbiased and fair The transparency in recruitment amp selection process is their first priority
1048729 Hiring the right number of employees in right place the objective of Aarong amp AAF is to make sure that each department has sufficient workforce to get the organization ahead
1048729 They have lack emphasize in research and development means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand
1048729 Competence gap for the employees is noticeable the gap between the standard and actual performance is noticeable in employees
1048729 Compensation and benefits at Aarong amp AAF is not attractive comparing to other organizations
1048729 Employee turnover rate is high because of the salary structure Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies
Page
36(P
OP
302)
054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
Page
36(P
OP
302)
Page
36(P
OP
302)
055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
36(P
OP
302)
056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
Page
36(P
OP
302)
054 Recommendation
After completing this project we have come up with some recommendation which Aarong can use for their advancement These ares-
bull They should upgrade their supplier system bull Supplier relation should be more flexible bull They should give their latest information on websitebull Aarong should introduce online application for their vacancies it will help them
reducing cyber hunting times in bdjobs and other sites bull The compensation package in Aarong is not Attractive they should restructure their
salary and other compensation bull As there is competency gap in employees Aarong should start employee training and
other development programs to develop the employees
Page
36(P
OP
302)
Page
36(P
OP
302)
055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
36(P
OP
302)
056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
Page
36(P
OP
302)
Page
36(P
OP
302)
055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
36(P
OP
302)
056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
Page
36(P
OP
302)
055 Conclusion
Aarong is not only a fashion house it is more than that With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh Aarong amp AAF plays the role of protector and promoter of traditional Bangladeshi products and designs The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country It is this gracious blend of contemporary and customary which ensures that each product is original and saleable in a modern society
Page
36(P
OP
302)
056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-
Page
36(P
OP
302)
056 Bibliography
Ayesha Abed Foundation aafaarongbracnet
Accounts accountsaarongbracnet
Customer Service customerserviceaarongbracnet
Human Resources hraarongbracnet
Export exportaarongbracnet
Marketing marketingaarongbracnet
My Aarong Rewards Program myaarongrewardsbracnet
Textile textileaarongbracnet
- 025 Purpose of aarong
- 037 Producers or suppliers
- 04 Make or buy of aarong
- 041 Sub contraction
- 042 Sources of information about suppliers
- 043 Aarongrsquos Supplier evaluation
- 044 Aarongrsquos Additional sources and selection consideration
- 045 Aarongrsquos supplier rating system
- 046 The Supplier selection decision
- 047 Consumer buyer behavior
- 048 Purchase-supplier relations
- 049 Aarongrsquos Purchase-supplier satisfaction model
- 0410 Aarongrsquos Reverse supplier development
- Aarongrsquos Supplier Development Context
- 0412 Benefits
- 0413 Competitors Analysis of Aarong
-