comparative analysis of sales volume between fabian group and lsi group
TRANSCRIPT
Comparative Analysis of Sales Volume between
Fabian Group and LSI Group
Submitted to
Abdus Samad Chowdhury Senior Management Counselor
Bangladesh Institute of Management
Submitted by
1. Mohammad Nazrul Islam Roll: 13DM043
2. Mohammad Enamul Hoque Roll: 13DM003
3. Sayed Amirullah Roll: 13DM 030
4. Mohammad Abidur Rahman Roll: 13DM018
Bangladesh Institute of Management Dhaka
December 21, 2013
Term paper on
Comparative Analysis of Sales Volume between Fabian Group and LSI Group
Submitted to
Abdus Samad Chowdhury Senior Management Counselor
Bangladesh Institute of Management
Submitted by
____________________ Mohammad Nazrul Islam
Roll: 13DM043
______________________ Mohammad Enamul Hoque
Roll: 13DM003
_____________ Sayed Amirullah Roll: 13DM 030
______________________ Mohammad Abidur Rahman
Roll: 13DM018
Date: December 21, 2013 To Abdus Samad Chowdhury Senior Management Counselor Bangladesh Institute of Management Sobhanbagh, Dhaka Subject: Submission of Term Paper Dear Sir, We are the course of students of PGDMM of Session 2013. As a part of our
curriculum, we have to submit a Term Paper on "Comparative Analysis of Sales
Volume between Fabian Group and LSI Group". For this reason we are raising a
Term Paper for your kind acceptance.
We hope, you will be kind enough to accept our term paper and oblige thereby.
Sincerely Yours
____________________ Mohammad Nazrul Islam
Roll: 13DM043
______________________ Mohammad Enamul Hoque
Roll: 13DM003
_____________ Sayed Amirullah Roll: 13DM 030
______________________ Mohammad Abidur Rahman
Roll: 13DM018
EXECUTIVE SUMMERY
For the term paper, our group compared sales volume of two companies, Fabian
Group and LSI Group, and their marketing strategies and taking the information we
compiled their marketing plan and strategies. The objective is to study of
Comparative Analysis of Sales Volume between Fabian Group and LSI Group in
partial fulfillment of the requirements for the award of Post Graduate Diploma in
Marketing Management through sales volume, average sales volume, yearly sales and
through survey among the staffs of two companies.
The paper was completely a conceptual study of Fabian Group and LSI Group, whose
basic foundation came from primary source and various secondary sources like
Fabian Group and LSI Group reports, unpublished scholarly papers, various
international and local speeches, newspapers and websites. The researchers’
intensions to study were the performance of Fabian Group and LSI Group. This is
why the researchers depended on the above source. After collection of data, it was
taken in tabular form. From the table the researcher prepared separate tables with each
variables where the researcher analyzed the values that was derived from the data.
Then calculating values was converted in percentage to know the perception of sales
and marketing staffs. On the basis of these tables, the researcher drew several curves
(figures) to analysis the performance of Fabian Group and LSI Group for different
sales volume. With these table and figures, the researcher drew the concluded analysis
of performance. The research also intended to investigate SWOT analysis applied on
the basis of sales volume with marketing activities.
Sales Volume of Fabian Group is significantly high in zipper but low in button and
Sales Volume of LSI Group is significantly high in button but low in zipper. The
average monthly sales of Fabian Group are $730,371.94 in zipper and $135,010.65 in
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button and of LSI Group are $785,917.00 in button and $342,500.00 in the year of
2013. The growth rate of zipper and button of Fabian Group increases to 25.64% but
decreases 16.4% and that of button and zipper LSI Group increases to 6.73% and
6.98% of in the same year. The yearly sales volume of zipper and button of Fabian
Group are $8,764,463.24 and $1,620,127.81 and that of LSI Group are $9431,000.00
and &4110,000.00 respectively in the year of 2013. From survey, it is clear that
marketing activities are positively correlated with the sales volume except
advertisement.
From primary data, it is clear that marketing activities are positively correlated with
the sales volume except advertisement. In zipper market, Fabian Group is dominating
in the market compare to LSI Group due to quality, skilled labour, brand image,
competitive price and delivery lead time. In button market, LSI is dominating in the
market as a market leader due to quality, skilled labour, brand image, competitive
price and delivery lead time. Fabian Group is far behind in this sector. In both market,
sales volume of LSI is increasing day by day. In zipper market, sales volume of
Fabian has increased tremendously but in button market, sales volume of Fabian is
showing a reverse trend of zipper i.e. its sales volume is decreasing due to the scarcity
of expertise skilled workers in the factory to maintain the quality.
From the survey questionnaire among the staffs of Fabian Group and LSI Group, it is
clear that sales volume mainly depends on the acceptance of buyers, quality of
products, relationship with customers, price of goods, delivery lead time, etc. It is
noted that advertising is an important tools of marketing, but it is not a dominating
attributes in zipper and button especially in garments accessories industries.
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Table Contents
Page No. EXECUTIVE SUMMERY i CHAPTER I- INTRODUCTION 1
1.0. Introduction 1 1.1. Statement of Problem 3 1.2. Problem During Research 3 1.3. Significance of the Study 4 1.4. Objective of the Study 4 1.5. Scope and Limitations 5
CHAPTER II- BACKGROUND 7
2.1. Fabian Group 7 2.1.1. About Fabian Group 7 2.1.2. Marketing Policies and Rules 7 2.1.3. Production Flow Charts 10 2.1.4. Four Guiding Principles 12 2.1.5. Business Principles of Fabian Group 13 2.1.6. Internal Control of Fabian Group 14 2.1.7. “Winning in Our World” 15 2.1.8. Corporate Governance 16
2.2. LSI Group 17 2.2.1. Corporate Status and Background 17 2.2.2. Nature of Business 19 2.2.3. Market of the Products 20 2.2.4. Sources and Availability of Raw Materials and
the Name of the Principal Suppliers 21 2.2.5. Factory of LSI 22
2.2.5.1. The production procedure of metal zipper (Open end) 23 2.2.5.2. The production procedure of metal zipper (Close end) 24
2.2.6. Risk factors and management’s perception regarding risk 26
2.3. Competitive Conditions in the Business 32 CHAPTER III- METHODOLOGY 33
3.1. Variables Covered 3.2. Methods of Data Collection and Data Collection Instruments Used 33 3.3. Data Processing and Analysis 34
iv
CHAPTER IV- RESULTS 35 4.1. Results 35 4.2. Findings and Analysis 36
4.2.1. Fabian Group 36 4.2.1.1. SWOT Analysis 36 4.2.1.2. Sales Volume 40
4.2.2. LSI Group 41 4.2.2.1. SWOT Analysis 41 4.2.2.2. Reason behind the sales volume 44 4.2.2.3. Performance of LSI 47
CHAPTER V- CONCLUSION AND RECOMMENDATIONS 50
5.1. Conclusion 50 5.2. Recommendations 51
APPENDICES 52 Appendix 1: Questionnaires 52 Appendix- II: Tables 53
a. Fabian Group 53 b. LSI Group 54 Appendix-III: Figures 55 a. Fabian Group 55 b. LSI Group 56
REFERENCES 57
CHAPTER I- INTRODUCTION
1.0. Introduction
For the term paper, our group compared two companies, Fabian Group and LSI
Group, and their marketing strategies and taking the information we compiled their
marketing plan and strategies. We analyzed each company’s marketing strategy
individually and then compared them to see which company has the best marketing
strategy. From there, our team then found the actual reason behind their success and
also found the pitfall of the companies.
Both of these companies equally did very well with their marketing strategies in the
past and present. Sustainability had been the main marketing strategy that had made
Fabian Group and LSI Group a highly successful business and continued to do so to
this day. With each company having a highly successful marketing strategy, our team
examined each strategy carefully and designed a new marketing plan for one of the
companies.
The topic we chosen to write about is important because Fabian Group and LSI Group
were well-known companies that are popular amongst consumers. These companies
were focused on heavily in most of the classes, so learning about each marketing
strategy helped to educate us better on where they stood in the apparel industry in
reference to others we know about. Comparing Fabian Group and LSI Group
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hopefully gave us a better understanding about the two companies and how we made
their sales better.
Our team researched for this paper using a full scope of the many resources available
to us, in order to have the most complete research available. We checked the
databases, journals, e-encyclopedias, and used the research and citation guides for this
paper. For this term paper, we specifically searched for materials related to the
consumers and retail, marketing, and primary data collected through a questionnaire
form from the respective staffs.
The most pertinent information located in the form of statistics, company profiles,
consumer data, and trade data. Some examples of research sources our team utilized:
books, journal articles, magazine articles, encyclopedia articles, business databases
and miscellaneous online sources such as websites. Specifically we researched on
consumer, apparel, and retail related subject guides and resources.
In organizing our paper we started out giving a brief overview of the two companies,
what we highlighted within the term paper, and our plan to develop a marketing plan
for one company. In the term paper we gave history about Fabian Group and LSI
Group so the reader had a visual idea of what the companies were all about. Then we
broke down the marketing strategies for each company. After the explanations of each
strategy we went into detail about our new marketing plan for Fabian Group and LSI
Group. Each information about the companies, marketing strategies, and our
developed marketing plan organized according to company name. So, all the Fabian
3
Group information grouped together and all the LSI Group information combined
together so it was easier for the viewer to read.
1.1. Statement of Problem
The research on Fabian Group and LSI Group of its managerial or strategic practices
was none. This research intends to investigate the sales performance on the basis of
few parameters not all parameters or forces. It also intends to investigate SWOT
analysis, Industrial performance analysis, Analysis of Strategy applied on the basis of
Performance with different matrix etc. In present context, this analysis is very
important and helpful to gather knowledge, to analysis performance trends of a
company. This is why the present researcher has taken an initiative to study on
“Comparative Analysis of Sales Volume between Fabian Group and LSI Group”.
1.2. Problem During Research
The researcher faced many problems during his study. One of the major problem is to
collect written documents of company’s confidential planning, strategy, secret data
and information except annual reports. The researcher tried to collect the core
competency, strategy of competitive advantage and supply & value chain strategy.
Though the research would be helpful for the analysis of the company’s long term
strategy, the authority didn’t provide the documents for research due to its highly
confidentiality. Another problem is that there is no complete and authenticated
statistical data from the government sector about the whole industry and about the
farm’s individual production & market share hold, number of smokers etc. So, to
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analysis of market share of a farm & its growth compare to other farms, the researcher
depends on few papers of other researchers only. The last more important problem is
that there was no concrete data on the amount of cigarettes smuggled through borders
and its affect on its market share of total industry.
1.3. Significance of the Study
The significance of the research are given below:
The study would help top management in planning and decision making and
also taking long term & short term vision and mission.
The study would help the management in identifying the key areas of strengths
& weaknesses as an internal environment and opportunities and treats as
external environment.
The study would help the management to take corrective and appropriate
measures timely to remove the problems which ultimately help them to show
better performance.
The study would also help to speculate image to the customers, Board of
Directors, Management body, borrowers especially bankers & shareholders as a
guide to company’s present and future situation.
1.4. Objective of the Study
a) General Objective:
In partial fulfillment of the requirements for the award of Post Graduate Diploma in
Marketing Management, the General objective is to study of Comparative Analysis of
Sales Volume between Fabian Group and LSI Group.
5
b) Specific Objectives:
The following are the specific objectives:
To examine the monthly sales of zipper and button of respected companies
To determine growth rate of zipper and button of respected companies
To estimate their yearly sales volume of respected companies
To find out qualitative relations of sales volume with marketing activities.
1.5. Scope and Limitations
Scope:
This paper will be helpful to gather knowledge of Fabian Group and LSI Group for
the students how to apply a strategic thought so that they can further modify attributes
or they can analysis the performance of these companies or they can use as a basis of
analysis in the same way of any company; i.e. it can work as a guideline for further
study or study of another company. This report will help the management body of
Fabian Group and LSI Group to justify company’s performance, to take corrective
measures to reach it vision. This will help the management body of other company to
take similar action to achieve their vision. This will help to give a guideline for
students to analysis strategic thinking and strategic planning when they will work as
an internship program in a corporation.
Limitations:
There are many limitations of the study. These are:
A detail survey of this industry was necessary to find out market shares of
Fabian Group and LSI Group and other firms.
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The lack of similar studies on performance trends of Fabian Group and LSI
Group to verify this research for reliability.
Finally, relevant research articles, published and unpublished scholarly papers,
various international and local journals, newspapers were not available
sufficiently.
CHAPTER II- BACKGROUND 2.1. Fabian Group
2.1.1. About Fabian Group
Fabian Group started its journey since 1989 is a dynamic and continuously growing
group of companies creating a buoyant economic climate focused on generating
economic prosperity for the stakeholders, while growing harmoniously with the
community and environment. Leveraging businesses from an expanding product
portfolio, Fabian Group is one of the largest towel manufacturers of the world, one of
the world's largest garments accessories manufacturers and one of the largest
producers in Bangladesh.
The concerns of Fabian Group are
a. Fabian Industries Ltd.
b. Fabian Thread Ltd.
c. Fabian Multiplex Ltd.
d. Fabitex Industries Ltd.
2.1.2. Marketing Policies and Rules
The business policies of Fabian Group are given below:
1. Marketing area will be divided in seven areas. Concern group of seven groups
will be responsible for their group.
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2. There must be a complete party list of each group in each area that have to be
approved by the concern Manager of the group. Then it will be submitted to
the concern of Commercial department and Head of Marketing. If any update
must be updated to the concern authority otherwise it will not be acceptable.
a. Any party (company) that is not in the complete list will be considered
as the open area for all.
3. Utilization Declaration (UD) must be collected on and before the first delivery
4. Party Acceptance will be collected on and before the last delivery. Concern
staff will be awarded, if he can collect it before first delivery.
a. A concern must provide a list of part from which he or his manager
can’t collect Party Acceptance on and before the last delivery.
5. L/C will be divided into 60-40 concept, if a concern collect a work order from
his own area but L/C of work order will be from another area of another
concern. In this case, the concern who collected order will get 60% of the L/C
and the concern of L/C area will get 40% of the L/C.
6. A concern didn’t collect any L/C (work order) of a company within last 3
months and don’t have forecast in present month and in the next month, then
this company will be open for all.
a. In this case a concern who gets L/C will continue for 1 year
considering his area.
b. If the concern who got the L/C but didn’t continue, same rule of no. 6
will be followed.
7. A concern must always submit running order list to the concern manager and
to the Head of Marketing.
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8. Each concern must submit promising/ valuable client list to the concern
manager and to the Head of Marketing.
9. Weekly Marketing Plan must be submitted on Saturday
Proposed Area
Area Place
Area-1 : Tangi Bridge to Gazipur Chowrasta
Area-2 : Mirpur, Bari Badth, Saymoli, Kallanpur, Gabtoli Bridge,
Dhanmondi, Mirpur Road, Elephant Road
Area-3 : Kamlapur, Motijheel, Old Dhaka, Jatrabari, Jurain, Kachpur,
Narshindi Road, Narayangong, Adamji EPZ
Area-4 : Abdullapur, Ashulia, Baipal More, Kashimpur
Area-5 : Amin Bazar, Savar, Nabinagar, EPZ, Chandra more
Area-6 : Shibbari, Shimultoli, Gazipur Chowrasta more, Mymenshing Road,
Kotbari (except Kashimpur), Shafipur, Chandra more, Tangail Road
Area-7 : Abdullahpur, Uttara, Mohakhali, Banani, Gulshan, Tejgaon,
Maghbazar, Malibag, Badda, Arambag, Rampura, Farmgate
Achievement of Sales Commission for Marketing and Non-Marketing Staffs/ Workers
Commission on the basis of bank acceptance (Except Business Promotional Cost)
Sl #
Achievement of sales target on the basis of L/C received (Except Business Promotional Cost ) (% of Commission) All Mkt Person All Non- Mkt
1 60 % of Total Sales 0.40% 2 70% of Total Sales 0.70% 3 75% of Total Sales 0.80% 4 80% of Total Sales 0.85% 5 95% of Total Sales 0.90% 6 100% of Total Sales 1% 7 150% of Total Sales 2%
85% of the commission will be
distributed to all Marketing people
including Managers
15% of the commission will be
distributed to all Non-Marketing people
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2.1.3. Production Flow Charts
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2.1.4. Four Guiding Principles:
There are four guiding principles of Fabian Group that was presented in its Social
Report. These are:
Strength from Diversity reflects the working environment where employees'
individual differences are respected and honoured. It also allows for a working
13
environment where the company harness diversity of people, cultures,
viewpoints, brands, markets and ideas to create opportunities and strengthen
performance.
Open Minded reflects openness to opportunities and new ideas, including
ways to address regulatory issues and adopting to changes in expectations of
society. The company seek to be active listeners, genuinely considering others'
point of view and not prejudging.
Freedom through Responsibility reflects the belief that decisions should not
all be made at the highest level but across the company at all levels. Along
with this freedom comes ownership of responsibility for the way the decisions
affect the company’s stakeholders.
Enterprising Spirit is a characteristic of our business. As a result the
company seek out new opportunities for success, strive for innovation and
accept risk-taking as a way of life. This is reflected in growing the business in
diverse cultures and markets and assist in living the company’s values.
2.1.5. Business Principles of Fabian Group
The Statement of Business Principles forms the basis on which the company runs
the business in terms of responsibility. The principles are:
The principle of Mutual Benefit: The principle of Mutual Benefit is the basis
on which the company builds its relationships with its stakeholders. The
company is primarily in business to build long term shareholder value and the
company believe the best way to do this is to seek to understand and take
account of the needs of all of the stakeholders.
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The principle of Responsible Product Stewardship: The principle of
Responsible Product Stewardship is the basis on which the company meets
consumer demand. Therefore, the products and brands should be developed,
manufactured and marketed in a responsible manner. The company also
aspires to develop the products with critical mass appeal that will, over time,
be recognized by scientific and regulatory authorities as posing substantially
reduced risks to health.
The principle of Good Corporate Conduct: The principle of Good
Corporate Conduct is the basis on which all the businesses should be managed.
Business success brings with it an obligation for high standards of behavior
and integrity in everything the company does and wherever it operates. These
standards shall not be compromised for the sake of results.
2.1.6. Internal Control of Fabian Group
The internal control system of Fabian Group is designed to manage risks that may
impede the achievement of the Company's business objectives rather than eliminate
these risks. The ultimate owner of the internal control system is the Board of
Directors as it ensures that the importance of internal controls is understood across the
Company and that adequate resource allocations are available. Internal Control is the
process by which the Company's directors, management and staff obtain reasonable
assurance as to the achievement of specified objectives including:-
efficiency and effectiveness of operations,
safeguarding of assets,
reliability of financial and other management information,
15
the prevention of fraud,
compliance with relevant national laws and company regulations.
2.1.7. “Winning in Our World”
Fabian Group has very good corporate reputation for excellent management
practices base on Trust, Commitment and Achievement, which is the main driver to
develop WOW (Winning in Our World) culture throughout the organization. The
WOW values are clearly defined and employees, management & union all are
continuously striving to achieve these values. Company believes on Achievement,
Commitment & Trust. There are certain guiding principles that center on the
corporate principles of the company. The core asset of the company is a result of the
four philosophies that the company adheres to in every management aspect of the
organization:
Open Minded: It encourages within the organization to be able to maintain an
environment where the managers can have open-minded approach to various
strategic decision-makings.
Enterprising Spirit: The core asset of the organization will come from the
enterprising spirit embedded in the minds of the managers, resulting from
effective strategies.
Freedom through Responsibility: Managers at all levels work with freedom
of responsibility in their areas of functioning.
Strength from Diversity: The Company derives its drive for effective
attainment of goals from the strength of Diversity
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2.1.8. Corporate Governance
The World Bank argues that the frame work of corporate governance should be based
on four pillars- of Responsibility, Accountability, Fairness and Transparency (RAFT).
Corporate governance in a corporate set up leads to maximize the value of the
shareholders legally, ethically and on a sustainable basis, while ensuring equity and
transparency to every stakeholder – the company’s customers, employees, investors,
vendor-partners, the government of the land and the community. It is must for
ensuring the required values to different stakeholder groups. It enhances the
performance of corporations, by creating an environment that motivates managers to
maximize returns on investment, enhance operational efficiency and ensure long–term
productivity growth. Consequently, such corporations attract the best talent on a
global basis. It also ensures the conformance of corporations with the interests of
investors and society, by creating fairness, transparency and accountability in business
activities among employees, management and the board.
Corporate Governance Practice in Fabian Group
Corporate Governance is a blend of law, regulation, enforcement and appropriate
voluntary practices by companies that permit a company to attract capital, perform
efficiently and generate long-term economic value for its shareholders, while
respecting the interests of its stakeholders and society as a whole. The principal
characteristics of effective corporate governance are:
protection of the rights of minority shareholders
transparency (including disclosure of relevant reliable financial and
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operational information, information on ownership and control; and
information on the internal processes of management)
responsible directors capable of independently evaluating and
approving the joint stock company's strategy, business plans and
decisions, independently hiring, monitoring and, when necessary,
replacing management and auditors.
The statement outlines main Corporate Governance practices in Fabian Group under
the following headings:
Board of Directors of Fabian Group and their roles
Relationship with Shareholders
Accountability and Audit
Compliance with Legal Requirements
Employees
Standards of Business Conduct
2.2. LSI Group
2.2.1. Corporate Status and Background
LSI Industries Limited has been incorporated as a company with the Registrar of Joint
Stock Companies & Firms; having head office at Jabbar Tower, 12th Floor, 42
Gulshan Avenue, Gulshan-01, Dhaka-1212 and factory located at Dhaka Export
Processing Zone (DEPZ), Savar, Dhaka. It is engaged in manufacturing, selling and
exporting of Multi types of Garment Accessories. It was incorporated as a Private
Limited Company on 02 September 1998 and started commercial operation since 01
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June 1999. Subsequently, it has been converted into Public Limited Company on 06
July 2008.
Sixteen Years of Dedication and Active Development
History:
1994 LSI was founded with an office of 9 square meters in Bangladesh
1995 The Bangladesh office was expanded to 250 square meters
1996 The Bangladesh office was expanded to 600 square meters
1999 Leased a plant of 900 square meters in Dhaka DEPZ Export Processing Zone
and started production of full garment accessory product lines
2002 Construction of a plant in Dhaka DEPZ commenced, which occupies an area
of 10,000 square meters
2003 Completed construction of the plant in Dhaka DEPZ and started production
2003 LSI started to make donations to disaster regions in Bangladesh
2004 Plant in Dhaka DEPZ was expanded to 13,000 square meters
2004 Passed ISO 9001:2000 certification
2005 Plant in Dhaka DEPZ was expanded to 16,000 square meters
2006 Plant in Dhaka DEPZ was expanded to 19,000 square meters
2007 Plant in Dhaka DEPZ was expanded to 22,000 square meters
2007 Acquired certification of Oeko-Tex Standard 100 International Green
Textiles Label Quality
2008 Plant in Dhaka DEPZ was expanded to 27,435 square meters
2009 LSI entered the heavy metal Industry (copper flat wire, zinc alloy, technical
transfer completed by 2009) and was upgraded to become an international
business group
2009 LSI sister concern - Forever Prosperity Int’l Ltd. established in CTG, and
will start business operation in Jul. 2010.
2010 LSI will invest in heavy metal industry and upgrade to International Groups
of Companies.
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2010 Caring and Sharing LSI Fu-Tien Foundation apply for registration in
Bangladesh in Mar.and actively extend help to the poor people in
Bangladesh.
2010 LSI subsidiary - Lasting Spring Metal Ind.Ltd. start bulk production of
Industrial plastic baskets in DEPZ (Extn.) in Jun.
2010 LSI subsidiary - Su-Jin Ind.Ltd. Purchased land in CTG, and will start
construction by Aug.,and expecting to commence production in 2011.
2010 LSI Groups is expecting to be a listing company in Bangladesh at the 4rd
quarter in 2010.
2012 LSI branched out into heavy industry
2.2.2. Nature of Business
LSI Industries Limited is a 100% export oriented engaged in manufacturing, selling
and exporting of garment accessories like metal button, metal buckle and d-ring,
metal alloy item, plastic item of garment accessories, special yarn-dyed tape, rubber
badges, zipper series and belt & other caps accessories. During the period the
Company added a new product line for manufacturing and selling mould & dices,
brass wire, zinc alloy raw materials and established a marketing network to ensure the
upward trend of business.
Principal Products
The company has been set up to produce garment accessories like metal button, metal
buckle and during, metal alloy item, plastic item of garment accessories, special yarn-
dyed tape, rubber badges, zipper series and belt & other caps accessories. During the
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period the Company added a new product line for manufacturing and selling mould &
dices, brass wire, zinc alloy raw materials.
2.2.3. Market of the Products
LSI Industries Limited is a 100% export oriented garment accessories manufacturing
Company that exports their products to garments industries located in Dhaka &
Chittagong Zone. Around 4,500 listed industries are their potential buyers. About
more than 800 garments factories are importing the accessories from LSI.
Relative Contribution of the Product/Services Contributing More than 10% of Total Revenues
The Company has 6 main products contributing more than 10% of total revenue are as
below:
Sl Producers Percentage (%)
1 Metal Button series 43
2 Metal Zipper 10
3 Belt 10
4 Zinc Alloy series 12
5 Nylon & Vislon Zipper 15
6 Brass wire & Mould 10
Distribution of Products/Services:
The Company supplies its products from its own factory premises at customers’ own
risk against delivery order. The distribution process is as per the following table:
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Step Particulars
1 Issuing of Pro forma Invoice based on Order received from Garments factory /
buying house.
2 Receiving L/C from Buyers & provide Export documents
3 Delivery of the goods to buyer’s CNF agent from own factory premises under
Export documentation procedure of BEPZA & Customs authority.
2.2.4. Sources and Availability of Raw Materials and the Name of the Principal Suppliers:
Basic raw materials like Copper, Zinc, Yarn, Electroplating Chemicals etc. used for
production process are procured from mainly foreign sources as follows:
Sl. No. Name Of Suppliers
1 E-Home Lace Industries Co. Ltd.
2 Zhejiang Sunflow Holding Group Co. Ltd.
3 Tennant Metal Pty
4 Everprosperous International Industries Ltd.
5 Grauer & Weil(India) Ltd.
6 Tianmeng Agricultural Materials Chain Co. Ltd.
7 Tong Horng Metal Industrial Co., Ltd.
Sources of and requirement for power, gas & water:
All required utility facilities are available at the project site and those are stated
below:
Power & Gas: Total requirement of power of the project is about 2,882 KW,
entire consumptions is met up from Rural Electrification Board (REB).There are
6(six) diesel generators made in Japan, Mitsubishi of different capacities like
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Generator # (1) 300 KVA, (2) 250KVA, (3) 250KVA, (4) 250 KVA, (5) 152 KVA
& (6) 65KVA.
Water: Demand of water is met up through BEPZA water supply.
Contract with Principal Suppliers/Customers: There is no contract with
principal suppliers or customers other than the normal course of business.
Material Patents, Trademark, Licenses or Royalty Agreements: The Company
has no Material Patents, Trademark, Licenses or Royalty Agreements.
2.2.5. Factory of LSI
Factory has following:
1. METAL ZIPPER SECTION
2. BELT SECTION
3. COATING SECTION
4. ELECTRO PLATING SECTION
5. BUTTON FINISHING SECTION
6. TOOLING SECTION (TESTING MATCHING)
7. FINISHING GOODS
8. METAL BUTTON SECTION
9. TOOLING SECTION (CNC)
10. ZIPPER PLATING SECTION
11. DIECUSTING SECTION
METAL ZIPPER SECTION: The metal zipper section has 11 sets machines.
12 sets for number #5 34 Machines 12 sets for number #3 10 sets for number #4 The production capacity for open‐end 1,000‐1250 pcs per hour and for close end 4166‐5000 pcs per hour.
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2.2.5.1.The production procedure of metal zipper (Open end): The procedure is given bellow with a flowchart-
Teeth Injection
Single Polish (Two Machines)
Top Part Assemble (Manually 4‐10 Person)
Double Polish (Two Machines)
Plating
Iron (Two Machines)
Sealing Tape (Two Machines, Each machine capacity per hour 833 pcs)
Punch Hole (One Machine, Machine capacity per hour 1750 pcs)
Box Pin Punch (Machine capacity per hour 1250 pcs)
Size Wise Cutting (Two Machine, Machine capacity per hour 1000 pcs)
Slider Insert (Manually)
Size Check (Manually)
Top Stopper (5 sets manual, capacity 875 pcs per hour & 5 sets Auto machine, Capacity 1250 pcs per hour) Q.C
Packing
24
2.2.5.2. The production procedure of metal zipper (Close end): The procedure is given bellow with a flowchart-
Teeth Injection
Single Polish (Two Machine)
Top Part Assemble (Manually 4‐10 Person)
Double Polish (Two Machine)
Plating
Iron (Two Machine)
Bottom Stopper (Four Machines, Each machine capacity per hour 1500 pcs)
Slider Insert (Four Machines, Each machine capacity per hour 1500 pcs)
Size Check (Manually)
Top Stoper (4 Auto Machines & 5 Manual Machines)
Cutting (1 set Auto & 2 Sets Manual, Machine capacity per hour 2000 pcs for Auto & 1750 for Manual)
Q.C
Packing BELT SECTION: The belt section has 47 sets machines.
25 sets for weaving 107 Machines 82 sets for sewing The production capacity for belt 3000‐3200 pcs per hour.
25
COATING SECTION: LSI Industries coating section is highly established now LSI wants
to launch show accessories with high quality.
6 sets spray machine. 8 Machines 2 sets rolling machine.
ELECTRO PLATING SECTION: LSI Industries has 21 sets machine for electroplating with
a specious area. Section also has water passing system.
9 set Electro Plating Machines. 21 Machines 12 set Rolling Machines.
BUTTON FINISHING SECTION: LSI Industries Button finishing section is always busy for
completing Button those are needed to manual setting.
34 Sets Manual Punch Machine. 136 Machines 102 Sets Auto Punch Machine. TOOLING SECTION (TESTING MATCHING): LSI Industries has 12 sets machine for
testing in a specious LAB. Also have Needle detector machine (MACHINE GRADE 1.2).
Needle Detector Machine Zipper Pulling Machine 12 Machines Button Pulling Test Machine Salt Spray Machine METAL BUTTON SECTION: LSI Industries has 156 sets press machine for Button
production. LSI Industries has also 9 sets MOULD machine. LSI Industries also able to
make any kind of MOULD for Button. The lead time 7‐10 working day for brass quality
and 10‐15 working days for alloy quality for making MOULD. The production capacity is
7000‐7500 USD per hour
TOOLING SECTION (CNC): LSI Industries has a computerized tooling section. Any type
of MOULD is possible to develop in that section. The section also so much restricted.
26
ZIPPER PLATING SECTION: LSI Industries has Zipper plating section with a specious
area. The plating section also chemical and machine dependent. Section also has water
passing system.
DIECASTING SECTION: LSI Industries has a Die‐casting section. The section has four D‐
Ring machine and Eight Alloy item machine. The D‐Ring machine production capacity
1666 pcs per hour.
4 Set D‐ Ring Machine 3 Machines 8 Sets Allay Machines
FINISHING GOODS: LSI Industries has a specious room for finishing goods. After
packaging all the product are store there for delivery. That area also restricted area.
Permitted person also has needed to pass there with high security check.
2.2.6. Risk factors and management’s perception regarding risk
Any investment always associates with both internal and external risks factors having
both direct and indirect effect on the investments made by the investors. Among those
risks some can be averted, others are beyond control, which may cause loss. Before
making any investment decision, investors need to consider the associated risk
factors, the risk premium and management perception. If any of the following risks
actually happens in the business, operational results and financial conditions could
suffer and investors could loose their investments partly or fully. The management of
LSI Industries Ltd perceives the following risk factors, both external and internal,
which are enumerated hereunder:
(a) Industry Risk:
The garments industry is the largest industrial sub-sector in Bangladesh. It contributes
largely in the country's export earnings and created over 4 million employment
27
opportunities. LSI is a backward linkage industry producing accessories for garments
products in the Country. Accessories industry in Bangladesh is an emerging sub-
sector with vast local demand for its different product lines. Locally produced
garments accessories products now play a significant role in this sector, which has
been dominated by imports so far. Local competition of accessories industries affects
the price of LSI products that adversely affects the business, its financial conditions
and results of operation. The company has successfully entered into the market by
vertical integration to complete all process inside owned factory. From CNC molding,
automated machinery, coating/electro plating/dyeing, and all the wastage
(copper/brass/zinc/plastic) are recycled inside owned factory to reproduce fresh raw
material like brass wire, zinc alloy, and plastic grain. Accordingly it has helped to
reduce production lead time and cost as well as quality assurance. There is a huge
opportunity to capitalize the demand – supply gap in the accessories industry of the
country. Still 90% local garments exporters import accessories from Hong Kong,
China and Taiwan at a higher price than LSI. The force, which is helping the
company for its strong existence, is emergence of backward linkage. Furthermore, the
Company is implementing the world’s top automated management customized
software SAP ERP , SAP ERP is an integrated enterprise resource planning (ERP)
software cover all corporate and production related management), that reduce at least
30% industry risk from the competitors and already established company’s proactive
management advantage in Bangladesh.
(b) Interest Rate Risk:
Interest/financial charges are paid against any kind of borrowed fund. Volatility in
money market and increased demand for loan presses interest rate structure to be
28
fixed at high. Raising of interest rate increases the cost of fund for a company, which
has borrowed fund, and consequently profit is squeezed. The management of the
Company is always aware of interest rate is higher in Bangladesh which is connected
to the higher cost to reduce profit. Hence, the company is taking measure to control
the financial expense. The Company is not enjoying any long term loan facility which
is mitigating the long term interest rate risk. The Company is availing short term loan
facility with LIBOR + Country Risks which minimized the cost of fund and built the
better capacity to control the fluctuation of interest rates.
(c) Exchange Rate Risk:
If exchange rate is increased against local currency, opportunity is created for getting
more revenue against sale in local currency. On the other hand if exchange rate goes
down margin is squeezed in local currency. The products of the company are sold
against foreign currency and payments for raw materials are also made in foreign
currency. The exchange rate of the country traditionally witnessed upward trends,
which makes ample opportunity of export. It notes that in case of LSI’s earnings is
made only by export in the currency of US Dollars and payment is also made from
earnings US dollars. As the Company is 100% export oriented and in future it will be
the same, volatility of exchange rate will have no material impact on profitability of
the Company.
(d) Market and technology related Risk
(i) Market Risk: In the global market of 21st century, developed technology,
products and services render obsolete the old service and product strategy. So, the
29
existing organization may not be able to cope up with the future needs and
demands.
(ii) Technology related Risk: Technology always plays a vital role for existence
of any industrial concern. Innovation of new and cost effective technology may
obsolete existent technology, which may cause negative impact. LSI enjoys
leadership position in garments accessories due to its huge line products The
Company management know it is difficult to avoid the market and technology
related risk, but the management In Taiwan base, so can make the best of utilizing
the abundant manpower and material resources from Bangladesh, Taiwan, and
China to minimize the market and technology related risk. For example,
technology is very advanced from Taiwan, and raw material is competitive in
China. The company will focus on getting direct nomination from foreign master
buyers especially from European and US master buyers to reduce slow season to
make balance between supply and demand, and the company also already
increased production capacity and stabilize quality development. The company is
continuing modernization program of its machinery and equipments.
(e) Potential or existing government regulations
The Company operates under companies act, taxation policy adopted by NBR,
Security and Exchange Commission (SEC)’s rule and rules adopted by other
regulatory organizations. Any abrupt changes of the policies formed by those bodies
will impact the business of the Company adversely. Unless adverse policies are taken,
which may materially affect the industry as a whole; the business of the Company will
not be affected. LSI management is very keen in investment plan and decisions,
which is expected to produce positive result. It can also be expected that the
30
Government will not create any situation leading to abrupt losses of investments,
especially when industrial output is showing signs of rapid growth. Government is
continuing focus on the growth of accessories Industry to boost up the export of
RMG.
(f) Potential changes in global or national policies
The Company’s product lines consist of metal brass and alloy button series, all kinds
of zippers, belt, tape, elastic, Velcro tape, plastic products and other garment
/cap/shoe accessories which are mostly based on imported raw materials. The scarcity
of raw materials due to changes in international market could affect the production
and profitability. Law and order situation and political unrest may also jeopardize
Company’s operations and adversely affect profitability. The management of the
company is always concerned about the prevailing and future changes in the global
and national policy and shall response appropriately and timely to safeguard the
company's interest. The work force of LSI is well trained, experienced and
remunerated and most of them live in the surrounding areas of the respective plants.
Furthermore the company itself produces main raw material (brass wire/zinc alloy) in
the same premise, and inventory is good for 90 days production demand Therefore,
management believes that political instability will have a less force to hamper the key
operations of the company.
(g) Operational risk
Shortage of power supply, labor unrest, unavailability or price increase of raw
materials, natural calamities like flood, cyclone, earthquake etc. may disrupt the
production of the Company and can adversely impact the profitability of the
31
Company. The Company always provide competitive compensation package to its
employees and maintain a healthy workers management relationship. The project of
the Company is situated at a high land and protected area of BEPZA where there was
no record of flood. The factory building has strong RCC foundation, RCC floor, pre-
fabricated steel structure and RCC buildings to withstand wind, storm, rain etc. along
with good drainage facility. The Company’s products have a good reputation in the
market and always takes pragmatic steps to convince the customers to share a portion
of the increased burden of cost increase and company do not compromise with quality
of the products. Risks from these factors are also covered through Insurance.
(h) History of non operation, if any
Is there any history for the Company to become non-operative from its commercial
operation? The Company is in commercial operation since 01 June 1999 and it has no
history of non operation till now. The Company has an independent body that is
operated by its Memorandum & Articles of Association and other applicable laws
Implemented by the Government. Besides, the Company’s financial strength is
satisfactory. It has very experienced Directors and Management team to make the
Company more efficient and stronger. So, the chance of becoming non-operative for
the Company is minimal.
32
2.3. Competitive Conditions in the Business:
The Company has already earned good name & fame in the manufacturing of 100%
export oriented garment accessories for its quality and large product line. The
following are the major competitors/ players of garment accessories production in
Bangladesh:
1. YKK Bangladesh Ltd.
2. Pacific Zipper (HHH)
3. BHT Industries Ltd.
4. Yester Accessories Ltd.
5. Dekko Accessories
6. Montrims Ltd
7. NAS accessories
CHAPTER III- METHODOLOGY
3.1. Variables Covered
To analysis the comparative analysis of sales volume between Fabian Group and LSI
Group, monthly sales of zipper and button is considered as a variable. Primary data is
used as a qualitative measures to analysis the marketing activities.
3.2. Methods of Data Collection and Data Collection Instruments Used
The study considered two types of data, they are:
a. Primary data and b. Secondary data
a. Primary Data: Primary data collected through structured questionnaire with
easily understandable close ended form (Appendix-I).
b. Secondary Data: These data were collected going through different document
and papers like annual reports, research articles, published and unpublished
scholarly papers and books, various international and local journals, speeches,
newspapers and websites.
Data Gathering Method: This research based on the qualitative research,
which formulate different kinds of interview and questioner on respective areas.
34
Data Collection Method: The data has been collected through questionnaire
survey.
3.3. Data Processing and Analysis
The paper was completely a conceptual study of Fabian Group and LSI Group, whose
basic foundation came from primary source and various secondary sources like
Fabian Group and LSI Group reports, articles, unpublished scholarly papers, various
international and local speeches, newspapers and websites. The researcher intension
to study was the performance of Fabian Group and LSI Group. This is why the
researcher depended on the above source. After collection of data, it was taken in
tabular form. From the table the researcher prepared separate tables with each
variables where the researcher analyzed the values that was derived from the data.
Then calculating values was converted in percentage to know the perception of sales
and marketing staffs. On the basis of these tables, the researcher drew several curves
(figures) to analysis the performance of Fabian Group and LSI Group for different
sales volume. With these table and figures, the researcher drew the concluded analysis
of performance. The research also intended to investigate SWOT analysis, Industrial
performance analysis, Analysis of Strategy applied on the basis of sales volume with
marketing activities.
CHAPTER IV- RESULTS
4.1. Results
The data of the research on the Comparative Analysis of Sales Volume between
Fabian Group and LSI Group have been summarized from Table 2.1.1 to Table 2.1.4
for Fabian Group and from Table 2.2.1 to Table 2.2.4 for LSI Group. The major
results of the study are
For Fabian Group:
1. Sales Volume of Fabian Group is significantly high in zipper but low in
button. The average monthly sales are $730,371.94 in zipper and $135,010.65
in button in the year of 2013.
2. The growth rate of zipper increases to 25.64% but that of button decreases
16.4% in the year of 2013.
3. The yearly sales volume of zipper and button are $8,764,463.24 and
$1,620,127.81 respectively in the year of 2013.
4. From primary data, it is clear that marketing activities are positively
correlated with the sales volume except advertisement.
For LSI Group:
1. Sales Volume of LSI Group is significantly high in button but low in zipper.
The average monthly sales are $785,917.00 in button and $342,500.00 in
zipper in the year of 2013.
2. The growth rate of button and zipper increases to 6.73% and 6.98%
respectively in the year of 2013.
36
3. The yearly sales volume of zipper and button are $9431,000.00 and
&4110,000.00 respectively in the year of 2013.
4. From primary data, it is clear that marketing activities are positively
correlated with the sales volume except advertisement.
4.2. Findings and Analysis
4.2.1. Fabian Group
4.2.1.1. SWOT Analysis
Strengths
1. Wide recognition: Fabian Group is widely recognized as good corporate
national company for its corporate value and ethics.
2. International brand Image – Fabian Group’s manufactured wide range of
zipper of “FBN” brand name are internationally recognized & valued by its
customers. This brand has approved EU trade organization. This is because
these brands are dominating in the world market and giving a competitive
advantage in Bangladesh. Quality of these brands is legendary and consistent,
when it is compared.
3. Competitive Price: Fabian Group offers wide range of price range to capture
the market for zipper.
4. Talented workforces for Zipper- People are Fabian Group’s fundamental
advantage-the sources of all their strength. This include management,
workforces and all other business partners, who are directly involved in the
37
value chain process. People are highly trained and motivated, productive and
team-oriented.
5. Corporate Governance: Fabian Group ensures Corporate Governance at all
level. It increases a trusty relationship with accountability, openness,
transparency among all level of stakeholders.
6. Distinctive Competency: It is one of the main factors of success of Fabian
Group. They maintain committed supply chain system, trained & expert staffs,
modern technology, systematic and well-organized marketing, branding and
distribution channel.
7. Superior technology: Technology used in Fabian Group is superior from the
competition in Bangladesh.
8. Better product quality relative to the rivals: As mentioned earlier Fabian
Group maintains its consistent quality with good blend of materials through
superior technology, thus Fabian Group is always in an advantages position
compare to its competitor.
9. Absorbing economies of scale in producing Fabian Group products: Fabian
Group product has a higher demand in Bangladesh. As the company produces
in a large scale, it possesses economies of scale and hence per unit of cost is
comparatively lower in Bangladesh.
10. Low manufacturing cost: There are many reasons for low manufacturing costs
of Fabian Group. The company has been using the latest technology in
production by which it is able to minimize its production cost.
11. Committed to Stakeholders: Fabian Group is committed to building value for
it’s shareholders, and it believes there is real value embedded not only in how
it runs it’s business but in how a company is put together; in its ability to see
38
the world as it really is; in it's ability to pick and retain talent; to build
relationships of trust with consumers, suppliers, distributors and partners, and
to manage high quality brands.
Weakness
1. Declining Profitability: Due to the payment of high Subsidiary Duty, VAT and
Tax to the Government, the profitability of Fabian Group is decreasing.
2. Missing a large number of consumers due to high price: Fabian Group is
loosing a large number of consumers in Bangladesh due to high price of its
products.
3. Quality of button: quality of button is very poor due to scarcity of expert
technologist in the factory. This scarcity is all over the Bangladesh.
4. Scarcity of Expert Technologist: Scarcity of expert technologist in the factory
is alarming for the future of button factory. This is why company can’t ensure
quality of product; so losing market day by day.
On the basis of the above in depth analysis the following opportunities and threats
have been identified for Fabian Group that need to be considered with due care.
Opportunities
1. The increased number of order in Bangladesh: Fabian Group can grab this
opportunity and can make a consumer forecast for the future. At present, the
market in Bangladesh is growing, because buyers are moving from foreign
39
country to Bangladesh. It is indeed a very good opportunity for Fabian Group
to grow.
2. GSP Benefit from USA: at present GSP benefit is halted due to political
unrest and anti-social activities. A good negotiation and understanding can
back it to Bangladeshi companies.
3. Low Cost Labour: Labour cost is very low in Bangladesh. At present all over
the world price of garments is reducing due to sustain in the market
competition. It is a big opportunity for Bangladesh and also for us.
Threats:
1. International competitors are coming to Bangladesh: SBS, SAB has already
started its business in Bangladesh. This is a significant threat for Fabian
Group. Those companies are planning to establish manufacturing plant in
Bangladesh.
2. Political instability and violation: Political instability, hartal, public
demonstration, anti social activities are the most common phenomenon in
Bangladesh. These external forces hamper sound business environment. So
these factors are big threats for the company.
3. Natural disasters: Natural disasters like flood, cyclone, and tornadoes are very
common in Bangladesh. These natural disasters cause a huge loss of
production and property, which directly influence on sales volume.
4. GSP Benefits: Company may loss GSP benefits from EU countries due to
political unrest.
40
4.2.1.2. Sales Volume
Reason behind the Sales
In the case of zipper, Fabian Industries Ltd, a concern of Fabian Group has about 14
nominated buyers. They are H&M, C&A, Carrefour, DeFacto, Auchan, Kiabi, Koton,
JcPenning, La Halle, Matalan, Orchestra, Regatta, Tema, Tom Tailor. Of them H&M
and C&A is the main buyer. Company gets order about 0.4 millions USD from these
two. So, company was able to maintain constant sales over the year of 2013. It is
important to note that in the year of 2012, sales volume was fallen from September to
December. The main reason was that company was over booked in its previous
months and these two buyers unofficially informed all vendors not to give order to
Fabian. In this year, company expected more sale from September to December.
Company analyzed that they lost 3.0 million USD order due to political situation.
Company did an unofficial contract with them to receive the orders. There was
another reason for expected sales for its highly skilled marketing staffs. They always
maintain good relations with all customers/vendors. Company had a moderate sales
incentive plan that also motivated the marketing staffs to collect orders from the
customers. It as noted previously that Fabian started it journey from 1989. It is first
and only one stable company of Bangladeshi owner in Bangladesh; this creates a
positive sympathy among the customers. Due to product quality, company developed
its brand image. Already its “FBN” brand is registered in EU trade body. This has
created a brand image like YKK in EU. Quality of zipper is acceptable to all buyers;
moreover its quality is more superior to their expectation. So, customer can give
order without free from quality attributes consideration. Price compare to YKK is
lower. This is another reason to capture the competitive market.
41
Company could increase sales of 0.4 million USD per month, if company could
ensure better delivery with shortage lead time of delivery. Another drawback was the
company’s factory is in Chittagong. This could take extra 4 days time to delivery. So,
company could fail to get order for emergency case of order. Another limitation was
the lack of educational knowledge. There was not enough highly educated staffs in
the company. If company engaged highly educated and skilled staffs, this could give
a balance organization in Bangladesh.
In the case of button, company sells their products under Fabian Multiplex Ltd. This
is also is in Chittagong. In 2011, there were skilled factory staffs. Production quality
was acceptable to the buyers. When the skilled staffs switched their jobs, company
was unable to replace these vacancies. Later days, company failed to retain its
quality; its sales volume was decreasing continuously. Now company is trying to
employee skilled staffs from China. If company get success then, its will be able to
recover its image. So, it can be said that without skilled staffs a company can sustain
in long run. At this moment company can sell eyelet button without any questionable
mark from customers. Company gets some replacement order for snap button. Due to
only these two button category, company is trying to retain in button market.
4.2.2. LSI Group
4.2.2.1. SWOT Analysis:
Strength:
1. LSI has Big set up and also has SAP, ERP
2. It has lot of product item in a roof
3. Company ensure low price and fashionable item as per requirement of
buyers or customers
42
4. LSI produces number of fancy metal items (such as BTN, rivet with stone
and glitter) which many companies can’t produce.
5. LSI Metal Zipper section has a very good delivery support system.
6. Company’s price is also cheaper than the others, sometimes competitors
can’t beat us.
7. Production section in all categories and Marketing department has well
trained staffs who are capable to do work efficiently.
8. Company product quality always meets buyer regular requirements; it has
such skillful production staffs.
9. Its sample support system and time also attracts all buyer attraction.
Weakness:
1. Company sometimes fails to ensure commitment of delivery due to over
booked orders
2. Quality is not stable for zipper only
3. Employee turnover is high due to administration problem and also not to
properly use of the chain of command
4. Now-a-days company faces skill workers problem which makes slow our
production, because there is lack of skilled and educated worker in the
country.
5. Zipper tape Lab-Dip and also Velcro Lab-Dip delay submission delay due
to skilled and educated technical staffs.
6. Documents (ex. Bill of Exchange) submission problem which kills many
times this increases overhead cost.
7. Raw materials shortage sometime occurs.
43
8. Dyeing facilities is not up-to-the mark.
9. Information gapping with production and Marketing people.
Opportunity:
1. Quality improve to employ expert technologist
2. Market is big compare to production. It is noted that till now garments
companies import button and zipper from abroad, because combined
production of these don’t fulfill the actual requirement.
3. New buyers are setting their office in Bangladesh. They are shifting their
office to other country. It is a big opportunity to us.
4. Now-a-days our product demands increase day by day which is our
opportunities.
5. Many Master buyers feel comfort work with Young Zhen due to our
quality.
6. Many Jacket and denim factories setup in Chittagong area which is our
opportunities.
7. Sometimes we give support buyer with in short day’s delivery service
which makes good relation with buyer and increase our order.
Threat:
1. Communication gap with Buyer
2. Employee turnover is high
3. Some competitors offer very low price
4. Internal information pass to others
5. For late delivery we lose many buyer orders and their attention.
44
6. Many foreign suppliers now-a-days came to do business in Bangladesh
with good support which is threats for LSI.
7. Leaving present company many Marketing person spread rumors about
LSI.
8. Sometimes buyer did not get over value on time which makes threats to
lose good business relation.
9. For delay document submission and also delay delivery L/C shipment and
expiry date over makes buyer shipment air, which makes also threats.
4.2.2.2. Reason behind the sales volume
LSI Industries in the 100% foreign company & all transaction are made by USD that’s
why LSI industries monthly sales volume calculate in USD. Another reason LSI
Industries has lots of product item for easy calculation & understanding LSI monthly
sales volume is USD.
There is a lot of reason to increase & decrease of sales in USD, some of the reasons
shortly explain in below:
Buying Season: We separate the garments trade in 3 way their buying season also
different
Woven Garments
Garments item Jacket Item
Knit item
45
Based on our product range our main focus is Woven & Jacket item to increase the
monthly sometime we achieve it & sometime we can’t the main reason for this.
Style change : Now a days Main Buyer change the style instead of zipper they
use button for price reduction.
Price factor: Sometime Buyer asking for plastic button & plastic zipper instead of
Metal item for price reduction, so that time sales is decrease.
Fashionable item: Some buyer need very special item for fashionable item, when
LSI receive this kind of order sales volume automatically increase.
On time sample sub mission: Some time LSI fail to submit the sample on time
for that reason sales decrease
On time lab dip submission: For delay lab dip submission sometime we loss
order that rime also decrease sales volume.
Competitive price: Price is the factor to increase & decrease the sales volume.
Quality: If LSI deliver the better quality sometime buyer does not think about
price issue for better quality also affect the sales volume increase & decrease
issue.
Service: Service is the factor to increase & decrease the sale volume, If LSI
give better service automatically sales increase.
Delivery: Sometime LSI fail to keep the delivery date that’s why it will affect
the sale decrease.
Commitment: Commitment is the issue to build the long time business
relation sometime LSI fail to keep the commitment, If fail automatically it
affect the sales volume.
46
Customer Satisfaction:
Those who buy the goods or services provided by companies are customer’s
satisfaction. LSI industries always try to satisfy the customer with better quality,
delivery & service following reason also helps to increase the yearly growth of sales
in percentage.
A survey where customer feedback can be transformed into measurable
quantitative
Focus group where discussions orchestrated by a trained moderator reveal
what customers think.
Informal measures like talking directly to customers. Asking each and
every customer is advantageous in as much as the company will know
everyone’s feelings, quality of service innocently, speed of service,
regarding competitive pricing.
complaints or problems solve within time
trust in our employees and closeness of the relationship with contacts in
our company
Service quality
In order for a company’s offer to reach the customers there is a need for services.
These
Services depend on the type of product. Service can also be defined as an intangible
offer by one party to another in exchange of money for pleasure. LSI Industries
always concentrate about this issue that’s why yearly sales of growth increase.
47
Tangibles: the appearance of physical artifacts and staff members connected
with the service (accommodation, equipment, staff uniforms, and so on).
Reliability: the ability to deliver the promised service.
Competence: the capability of staff members in executing the service.
Courtesy: the respect, thoughtfulness, and politeness exhibited by staff
members who are in contact with the customer.
Security: the absence of doubt, economic risk, and physical danger.
Communication: an understandable manner and use of language by the service.
Understanding the customer: efforts by the service provider to know and
understand the customer.
Tangibility: physical facilities, equipment, and appearance of personnel
Responsiveness: willingness to help customers and provide prompt service
Assurance: knowledge and courtesy of employees and their ability to inspire
trust and Confidence
Empathy: caring individualized attention the firm provides to its customers
4.2.2.3. Performance of LSI
From beginning LSI Industries increase the market share with committed better
Quality, delivery & Service. So we are satisfied for our achievement. Bangladesh
garment exports over the years, the first among the leading ,2007-08 years with a total
amount before the five major export 87%, 90% natural Bangladesh garment
accessories all rely on imports, Bangladesh set up factories in local LSI current value,
market share only 5 ~ 7% of a large number of seller, ten years ago that is the
advantage of vertical integration has been operating, based on the whole of
Bangladesh garment accessories industry leader, now raise the overall productivity
48
and quality, significantly expand their territory, we are pressing, it is LSI's business
management ~ vision.
International Quality Certification
In 2004, LSI passed the ISO 9001:2000 certifications. LSI actively established a
quality management system and workflow, striving to fulfill customers’ expectation
through production of quality products and services. LSI places great emphasis on
performance management and works hard to increase business competitiveness.
In 2007, LSI received quality certification from the most prestigious international
green textile label, Oeko-Tex Standard 100. Our environmental-friendly products
offer a choice for global green product brands
Designated Supplier for International Brands
Providing assurance of high quality production, LSI has become a designated supplier
for world-famous apparel brands such as H&M, C&A, REGATTA, TEMA, etc. We
have the highest diversity in production technology and the most stringent production
management system. We are dedicated to seeking better quality for our customers.
LSI is now actively conducting the internal improvement project and, in May 2009, a
team of industrial management and technological specialists from Taiwan have been
recruited
LSI works under a tightly knitted vertical integration system and technology-intensive
production, taking charge from importation of raw materials, processing, and
production, to finished products. LSI takes full control of quality assurance to ensure
49
prompt delivery and high product quality. International commodities such as copper
and zinc ingots are purchased through future trades directly from London, and LSI
enforces the policy of recycling all metal and other production lines, which
significantly reduces the costs of raw materials and in turn uplifts the company’s
competitiveness to enable sustainable development and create maximum economical
values for our customers.
1. expansion of production capacity
o semi-automatic production equipment will be upgraded to fully
automatic production equipment, increasing capacity
o automatic production equipment, the quality was relatively stable
o automatic production equipment, a high degree of control over
manufacturing costs
o reduce work injuries and enhance safe working environment
2. enhance the production and R & D facilities
o the introduction of sophisticated CNC tooling machines from Taiwan,
the production quality of more sophisticated
o eliminated all new electroplating plant equipment, build green work
environment and quality
o R & D training program, to new product design
3. combination of science and technology
o into ERP systems, the costs really grasp
o With ERP the import, production process transparent
o development of the progress of production systems, real-time production
information to provide the buyer add plating to avoid needle detector and
high precision testing instrument testing machine to ensure the
cooperation of green quality and standards specified.
CHAPTER V- CONCLUSION AND RECOMMENDATIONS 5.1. Conclusion
In zipper market, Fabian Group is dominating in the market compare to LSI Group
due to quality, skilled labour, brand image, competitive price and delivery lead time.
In button market, LSI is dominating in the market as a market leader due to quality,
skilled labour, brand image, competitive price and delivery lead time. Fabian Group is
far behind in this sector. In both market, sales volume of LSI is increasing day by day.
In zipper market, sales volume of Fabian has increased tremendously but in button
market, sales volume of Fabian is showing a reverse trend of zipper i.e. its sales
volume is decreasing due to the scarcity of expertise skilled workers in the factory to
maintain the quality.
From the survey questionnaire among the staffs of Fabian Group and LSI Group, it is
clear that sales volume mainly depends on the acceptance of buyers, quality of
products, relationship with customers, price of goods, delivery lead time, etc. It is
noted that advertising is an important tools of marketing, but it is not a dominating
attributes in zipper and button especially in garments accessories industries.
51
5.2. Recommendations
However, in view of the concluding remarks, the following suggestions are given for
increasing efficiency:
1. To appoint skilled work force in case of zipper of LSI Group and in case of
button of Fabian Group.
2. To reduce rate of turnover, LSI need to give on corporate behavior.
3. To concentrate on reduction of cost from next season, because YKK, SAB,
SBS already announced to reduce the price of zipper and button.
4. To reduce delivery lead time within 7 days because SAB, SBS already
announced to delivery the goods within 7 days.
5. To develop modernize R&D section to innovate new style products.
52
Appendices Appendix 1: Questionnaires
SURVEY QUESTIONNAIRE
Name of Staffs: ...................................................................................................... Designation: ........................................................ Date: .............................. Company: ................................................................................................................ Questionnaires
1. Do you think sales volume depends on buyer’s nomination? Yes No
2. Do you think quality of product is an important issue for sales? Yes No
3. Do you think delivery lead time is important for sales? Yes No
4. Do you think price is important for sales? Yes No
5. Do you think over invoice or commission (any promotional activities) to merchandiser increase sales?
Yes No 6. Do you think skilled workers influences to increase sales volume?
Yes No 7. Do you is there any effect of packaging of products?
Yes No 8. Do you is there any effect of political environment of Bangladesh?
Yes No 9. Do you think production process /machinery influence in increase of sales
volume? Yes No
10. Do you think sales incentives influence to increase in sales volume? Yes No
11. Do you think advertisement is important tools for increasing of sales volume? Advertising
Yes No 12. Do you think personal relation with merchandiser is important to increase
sales? Yes No
13. Do you think brand image is important for increasing sales volume? Yes No
53
Appendix- II: Tables a. Fabian Group Table 2.1.1: Sales Volume of Zipper Month 2011 2012 2013 Diff. 2012-2011 Diff. 2013-2012January $745,232.27 $580,496.19 $744,552.53 -$164,736.08 $164,056.34February $594,499.07 $541,670.62 $812,805.55 -$52,828.45 $271,134.93March $612,945.25 $595,936.49 $1,041,396.44 -$17,008.76 $445,459.95April $859,881.71 $798,470.38 $1,221,886.85 -$61,411.33 $423,416.47May $629,880.23 $597,507.94 $677,967.88 -$32,372.29 $80,459.94June $329,553.39 $295,199.70 $530,541.05 -$34,353.69 $235,341.35July $488,775.09 $621,260.13 $651,393.85 $132,485.04 $30,133.72August $526,139.95 $430,309.44 $562,964.09 -$95,830.51 $132,654.65September $664,390.70 $687,909.53 $829,725.00 $23,518.83 $141,815.47October $603,525.29 $808,021.32 $500,000.00 $204,496.03 -$308,021.32November $342,739.06 $468,489.40 $650,780.00 $125,750.34 $182,290.60December $421,360.52 $550,569.94 $540,450.00 $129,209.42 -$10,119.94Total $6,818,922.53 $6,975,841.08 $8,764,463.24 Average $568,243.54 $581,320.09 $730,371.94 Table 2.1.2: Sales Volume of Button Month 2011 2012 2013 Diff 2012-2011 Diff 2013-2012January $249,375.88 $150,373.54 $138,315.17 -$99,002.34 -$12,058.38February $284,987.49 $106,215.17 $134,261.04 -$178,772.32 $28,045.88March $243,810.91 $138,119.76 $159,423.46 -$105,691.16 $21,303.71April $229,599.80 $153,701.50 $173,608.42 -$75,898.30 $19,906.92May $150,597.69 $186,729.94 $186,045.96 $36,132.25 -$683.98June $211,019.88 $98,102.12 $68,165.35 -$112,917.76 -$29,936.77July $124,346.60 $128,050.50 $117,227.16 $3,703.90 -$10,823.34August $196,794.09 $119,808.46 $104,851.88 -$76,985.64 -$14,956.58September $139,326.43 $205,599.04 $192,302.38 $66,272.61 -$13,296.67October $195,250.47 $205,148.79 $190,270.00 $9,898.32 -$14,878.79November $200,310.22 $224,908.12 $110,330.00 $24,597.90 -$114,578.12December $164,582.37 $222,835.60 $45,327.00 $58,253.23 -$177,508.60Total Sales $2,390,001.80 $1,939,592.51 $1,620,127.81 Average $199,166.82 $161,632.71 $135,010.65 Table 2.1.3: Yearly Sales Growth rate
Items Year 2012 Year 2013 Zipper 2.30% 25.64% Button -18.85% -16.47%
Table 2.1.4: Survey Questionnaire
Position No. of Staffs Yes No Manager 1 92% 8% Deputy Manager 2 92% 8% Assistant Manager 1 92% 8% Sr. Marketing Executive 3 92% 8% Executive 9 92% 8% Total 16 92% 8%
54
b. LSI Group Table 2.2.1: Sales Volume of Zipper Month 2011 2012 2013 Diff. 2012-2011 Diff. 2013-2012January $300,000 $240,000 $360,000 ($60,000) $120,000 February $250,000 $350,000 $330,000 $100,000 ($20,000)March $370,000 $380,000 $510,000 $10,000 $130,000 April $320,000 $410,000 $440,000 $90,000 $30,000 May $325,000 $335,000 $425,000 $10,000 $90,000 June $175,000 $160,000 $267,000 ($15,000) $107,000 July $160,000 $190,000 $326,000 $30,000 $136,000 August $280,000 $387,000 $385,000 $107,000 ($2,000)September $420,000 $390,000 $380,000 ($30,000) ($10,000)October $375,000 $340,000 $290,000 ($35,000) ($50,000)November $210,000 $340,000 $285,000 $130,000 ($55,000)December $268,000 $320,000 $112,000 $52,000 ($208,000)Total $3,453,000 $3,842,000 $4,110,000 Average $287,750 $320,167 $342,500 Table 2.2.2: Sales Volume of Button
Month 2011 2012 2013 Diff. 2012-2011 Diff. 2013-2012January $700,000 $610,000 $790,000 ($90,000) $180,000 February $650,000 $825,000 $680,000 $175,000 ($145,000)March $880,000 $984,000 $1,345,000 $104,000 $361,000 April $820,000 $880,000 $1,122,000 $60,000 $242,000 May $737,000 $787,000 $864,000 $50,000 $77,000 June $578,000 $475,000 $673,000 ($103,000) $198,000 July $475,000 $590,000 $631,000 $115,000 $41,000 August $675,000 $835,000 $896,000 $160,000 $61,000 September $825,000 $765,000 $796,000 ($60,000) $31,000 October $786,000 $680,000 $680,000 ($106,000) $0 November $480,000 $780,000 $563,000 $300,000 ($217,000)December $521,000 $625,000 $391,000 $104,000 ($234,000)Total $8,127,000 $8,836,000 $9,431,000 Average $677,250 $736,333 $785,917 Table 2.2.3: Yearly Sales Growth rate
Items Year 2012 Year 2013Zipper 11.27% 6.98% Button 8.72% 6.73%
Table 2.2.4: Survey Questionnaire
Position No. of Staffs Yes No Manager 2 85% 15% Deputy Manager 4 85% 15% Assistant Manager 4 85% 15% Sr. Marketing Executive 6 85% 15% Executive 9 85% 15% Total 25 85% 15%
55
Appendix-III: Figures a. Fabian Group
Sales Volume- Zipper (2011-2013)
$0.00$200,000.00$400,000.00$600,000.00$800,000.00
$1,000,000.00$1,200,000.00$1,400,000.00
Janu
ary
Febr
uary
March
April
May
June
July
Augus
t
Septembe
r
Octob
er
Novem
ber
Decem
ber
Month
US
D
2011
2012
2013
Figure 2.1.1: Sales Volume- Zipper
SalesVolume-Button (2011-2013)
$0.00$50,000.00
$100,000.00$150,000.00
$200,000.00$250,000.00$300,000.00
Janu
ary
Februa
ry
Mar
chApr
ilM
ayJu
ne July
Augus
t
Septe
mbe
r
Octo
ber
Novem
ber
Decem
ber
Month
US
D
2011
2012
2013
Figure 2.1.2: Sales Volume- Button
56
b. LSI Group
Sales Volume (2011-2013)
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
January
Febru
ary
Marc
h
April
May
June
July
August
Septe
mber
Oct
ober
Nove
mber
Dece
mber
Month
US
D
2011
2012
2013
Figure 2.2.1: Sales Volume- Zipper
Sales Volume - Button (2011-2013)
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
Jan
ua
ry
Fe
bru
ary
Ma
rch
Ap
ril
Ma
y
Jun
e
July
Au
gu
st
Se
pte
mb
er
Oct
ob
er
No
vem
be
r
De
cem
be
r
Month
US
D
2011
2012
2013
Figure 2.2.2: Sales Volume- Button
57
References:
1. Fabian Group and LSI Group Internal Reports, 2. Research articles, 3. Published and unpublished scholarly papers and books, 4. Various international and local speeches, newspapers and 5. www.fabiangrp.com 6. www.lsitwn.net