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Chapter – 1: Introduction
1.1 Introduction
ACI group is one of the largest conglomerates in Bangladesh with interests and stakes in
varied fields. SHWAPNO, a concern of ACI group established in 2008 is an integral part of
the overall ACI group. It represents and exemplifies ACI’s commitment to bring about a
better Bangladesh and be a catalyst to change the lives of millions of individuals for the
better. SHWAPNO, with its 81 (67 Shwapno and 14 Shwapno Express) retails stores,
situated in strategic positions around Bangladesh is the largest retail chain in the country
with over 35% markets share of the growing 15 Billion taka retail industry (ACI-
Bangladesh, 2018) (Shwapno, 2018).
There is nothing called Full Prove System. Always there will be a room of improvement.
As this is reasonably a new industry which is having a great prospect in Bangladesh, we
will try to find out the current operation system. By this study, we will be trying to give
some recommendations on the basis of existing operation system which may help Shwapno
Retail Chain Shop to proceed in an untouchable height in this industry (Author, 2018).
Theoretical knowledge is not always sufficient because there is a gap between theoretical
knowledge and practical work. This Project has been initiated mainly to minimize the gap.
So this practical experience on various activities and functions of “Shwapno Retail Chain
Store” will help us in future by increasing my knowledge and experience. (Author, 2018)
The core inspiration to selecting this as or affiliation topic is, this will allow us to explore
our area of interests and apply academic knowledge of MBA program side by side. Doing
final project on Shwapno Retail Chain Store is a great opportunity to have an overall idea
about operations management, strategic management, human resource management, supply
chain management and so on. Having practical experience in retail chain industry also
should be proved as helpful for any kind of job. This will help us better understand the
implication of theoretical knowledge in real life situation. By this project, both we and the
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organization will be benefited as after a deliberate analysis we will try to give some fruitful
recommendation which will help them to expand their business arena as well as help them
to maximize their profit. (Author, 2018)
1.3 Methodology
a. Data Collection Method: Assessing and identifying the total operation of Shwapno
is a matter of qualitative judgment. For the purpose of this study, we have collected two
categories of data.
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1.4 Limitations
Though we put our best effort to fulfil our determined objectives, still there were some limitations
we had to go through- (Author, 2018)
a. Very few customers were egger to provide data.
b. The area on this term paper is very big but we had to finish the work within a very short
phase.
c. Some of the data are not exact because of their business policy.
d. As our sample size was small, our findings might not be fully accurate.
e. We have concentrated our effort mostly in Sylhet.
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The Mother Company (ACI Limited) Started its Journey in 1940. In that year, ICI Plc, a UK based
company started its operation in Bangladesh. During that time, their business was mainly import
based. In 1968, they established their first manufacturing plant in Narayanganj. After
independence, in 1973, the company changed its identity as ICI Bangladesh Manufacturers Limited
and started its operation independently. In 1992, ICI Plc divested its shares to local management
and ACI came into existence. In 2008, ACI Logistics Ltd. is launched with the dream to change the
life of Bangladeshi Consumers with the Brand Name “SHWAPNO” in the form of retail chain.
Presently Shwapno is operating 6 outlets in Sylhet Region. (ACI-Bangladesh, 2018) (Shwapno,
2018) (Appendix – B and D)
a. Mission. Shwapno doesn’t have any specific mission. In light of their mother
company ACI’s mission, they are operating their business. Mission of ACI is:
"To enrich the quality of life of the people through responsible application of
knowledge, technology and skills. ACI is committed to the pursuit of excellence
through world-class products, innovative processes and empowered employees, to
provide the highest level of satisfaction to our customers" (ACI Limited, n.d.)
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To deliver success Shwapno has a clear set of values & beliefs (Department, 2018):
a. Impeccable Integrity - We are honest, transparent and ethical in all our dealings.
c. Delightful Experience -We win the hearts and minds of our employees and consumers
by offering relevant quality, value and service.
g. Count Every Paisa - We treat every taka spent as our own for creating value for our
consumers
Shwapno’s Value Tree is a procedure used in multiple criteria decision analysis in which
objectives are arranged hierarchically such that top-level objectives have supplementary objectives
or desired attributes within them, which in turn have other lower-level attributes. (Appendix - C)
A value chain is a set of activities that an organization carries out to create value for its
customers. Shwapno also carry out a set of value chain activities. (Appendix – J)
The organizational structure of Shwapno’s head office and outlets are different. Head
Office run under the supervision of Executive Director. In the outlets of Shwapno, there are two
departments namely Back Store Team and Front Store Team. (Appendix - E)
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Throughout our MBA course we have studied various subject such as Management and
Organization Behaviour, Human Resources Management, Marketing Management, Operation and
Production Management, Research Methodology, Strategic Management etc. We select Shwapno
as our project company which is operated by ACI Logistic. Shwapno is renowned retail shop in
Bangladesh and market leader in Sylhet. In this project, we try to implement our theoretical
knowledge related to practical aspect. To prepare this project, we try fit 3 model such as SWOT
Analysis, Porter’s Five Forces Model and Building Blocks of Competitive Advantage which
we learnt in Strategic Management course. In SWOT analysis we try to find some internal and
external factors affecting Shwapno’s operation. Porter’s Five Forces Model and Building Blocks of
Competitive Advantage has been prepared based on manager and customer review. Apart from
those models, we tried to fit Business Model Canvas which gives a complete view of this
business. Finally, from our analysis on Shwapno, we provided some findings and recommendations
which may strengthen Shwapno’s position in Sylhet region. (Author, 2018)
a. Total area of Sylhet city very small compare to Dhaka. Shwapno has already 5 retail
outlets across the city, those are located in such areas, which almost cover every
residential area of the city. So we can say that super market industry in Sylhet is
almost saturated. But even after that, a lot of Retail Chain Shop is operating across
the country like Agora, Minabazar etc. As Sylhet is a divisional city, they will try to
keep a step in this city. (Shwapno, 2018) (Author, 2018)
b. Shwapno has created a reputed brand image among customers because they are the
market leader and getting first mover advantage which is likely going to make
difficulties to enter new in super market industry in Sylhet city. (Shwapno, 2018)
(Author, 2018)
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c. Since Shwapno operating in Sylhet from last few years, they have already created
loyal customer in the city. (Shwapno, 2018) (Author, 2018)
d. To establish a retail super shop, need huge capital requirement. So, entry in an
established market will not be easier. But, to increase brand value and reputation,
big retail chain shop may invest in this area. (Shwapno, 2018) (Author, 2018)
In Sylhet city rather than Shwapno, there are two other super shops such as Taradin and
Fiza.
a. Taradin, is a much smaller in size and their product range compare to Shwapno,
Taradin has only 1 outlet while Shwapno has 5 outlets in the city. Therefore
considering the number of outlets, size and product range Taradin doesn’t have any
competitive advantage over Shwapno. (Author, 2018)
b. Fiza has opened a super store in the outskirt of Sylhet city, they offer wider range of
product like Shwapno and outlet size is also very large but since it is far away from
city, it increases traveling time and expense for customers. (Author, 2018)
Since the price of products are fixed in Shwapno, bargaining power of buyers are low. For
example, a customer willing to buy beef enter Shwapno but the price displayed seeded high
to him. So he decided not buying beef from Shwapno rather he consider Bengal meat or
local vendor. But they doesn’t have the scope to bargain. (Author, 2018)
a. If Shwapno set price of product especially perishable goods higher than the open
market, then customer likely to switch to open market. (Author, 2018)
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b. Small retail shop in residential areas are substitute of Shwapno. (Author, 2018)
i. If a person want to buy small number of goods he may choose to buy from small
shop near to his house rather than going to Shwapno. (Customer, 2018)
ii. In residential area, small shop also offer all types of daily need product like
ration items, beverage, toiletries, bakery items etc. Many customer buy goods in
large quantities from those shops at the beginning of the month and owner offers
credit for few days since they know each other from long time, while this service
isn’t available on Shwapno. (Customer, 2018)
Giant suppliers have higher bargaining power than Shwapno. For example, Unilever,
Nestle, Square etc. has high influence in the market. So, it’s difficult for Shwapno to
bargain with this type of giant suppliers. On the other hand, small suppliers like BD Foods,
Globe etc. has less bargaining power as Shwapno has more influential power then them.
(Author, 2018)
Shwapno has efficient supply chain network. They collect perishable product from farmers
and local vendors. This help them to ensure fresh quality of goods and make them available
to customers. Moreover, they doesn’t compromise with the quality of the products. A
representative ensure the quality of the LPP from the root level of the production. For
example; Supplier of Fish has to maintain the specified fish foods, maintenance of ponds
etc. A representative also remain present when the products are collected from the field.
Even after that, if any anomalies found after coming to the outlet, products will be RTV.
(Supplier, 2018) (Department, 2018) (Hasan, 2018)
On the other hand, for purchasing non-perishable products, Shwapno gives priority to
reputed brand. When any supply of central order come to outlets, BSM first check the
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quality of the products. If there is any problem with the product, by informing Procurement
Department, products are returned back to vendor (RTV). If everything remain all right,
BSM receive the products. They also follow up the Vendor Managed Products so that they
maintain appropriate quality of those products. (Supplier, 2018) (Department, 2018)
(Hasan, 2018)
In store, to ensure the quality of products, Floor-in-Charge and quality audit team always
swap their eyes on the racks. (ACI Limited, n.d.) (Hasan, 2018) (Shwapno, 2018)
Shwapno treats customer as a King, therefore Shwapno is very responsive towards full
filling customer demand. For example, if a particular product isn’t available in Shwapno
outlet, then its manager informs the loyal customer about its availability in any other
Shwapno outlet. If the customer has time, then they manage it from another outlet. Even if
it is not available in Sylhet, they try to bring it from their Central Warehouse as quickly as
possible. (Hasan, 2018) (Shwapno, 2018) (Author, 2018)
Shwapno can quickly deliver bulk amount of product ordered by customer. With efficient
inventory management system, Shwapno can keep track of its inventory level. Considering
lead time when the inventory level of a product comes down to a certain quantity,
immediate replenishment is to be done. To be efficient on their business, they made their
supply chain management very effective and efficient. Always they keep stocks of 15 days
to ensure that no customers are going empty handed. (Hasan, 2018) (Shwapno, 2018)
(Author, 2018)
Shwapno always try to innovate some new marketing strategy which sometime give them a
hyper break through. Sometime by passion they do some disruptive activities by which they
gather some new ideas and sometime it comes from creativity of loyal employees. For
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example; innovation of their activation plan made customer to a loyal customer. (Hasan,
2018) (Shwapno, 2018) (Author, 2018)
3.4.1 Strengths. According to our analysis, we could find out the following Strengths
Shwapno Retail Chain Stores are possessing with (Author, 2018):
3.4.2. Weaknesses
a. Pricing. As Shwapno doesn’t compromise with the standard of the products for
which their procurement cost become high. In ratio with that, their retail price also
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goes high which doesn’t want to take into consideration thus it became a weakness
for them. (Author, 2018)
b. Shortage of Space. Shwapno has a huge amount of SKU. But equating the amount
of products of them, they could manage very less amount of space. For that reason,
their products overfilled in the outlets which creates problem for customers
movement. (Author, 2018)
c. Dependency on Supplier. They are highly dependent on suppliers. Even, they are
importing foreign products using media. Though, their mother company has gone
for limited scale of production, it is not sufficient to fulfil the market demand.
(Department, 2018)
3.4.3 Opportunities
a. Changing Customers Mind-set. Now a days, people are searching for convenience
rather than economic. Earlier, people use to go around to shop from wet market and
get their daily needs. In modern era, one stop shopping concept has change the
human nature. Shwapno is offering everything which a family or any person is
requiring under a single roof. For this, people feel comfortable to shop with in a
short time which is a strength of Shwapno. (Author, 2018) (Customer, 2018)
Earlier, men use to work for the family. So, women use to look after the shopping
aspect. But, presently women involved them in corporate world as well. So, they
face time constrain for shopping and look for comfort as well after a hectic work
hours. So, they try to get everything under a single roof to save time and also
maintain the standard. As Shwapno is such kind of shop, it is a great opportune
aspect for them. (Author, 2018) (Customer, 2018)
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c. Incising Per Capita Income. Each year, per capita income is rising. When income
of any person is increasing, people want to lead a better life and comfort as well.
This will be working as an opportunity for Shwapno. (Tribune, 2017)
3.4.4 Threats
b. Under Pricing through Grocery Shop. Normal grocery shops doesn’t think for
their reputation. They mix low category products with high category products and
thus reducing price in the market. It’s a threat for Shwapno as price of them are
higher than those groceries. So, unknowing fully customers are going to think that
pricing of Shwapno is high. (Author, 2018)
c. Political Unrest. Political unrest is a big threat for Shwapno. As this organization is
operating all over the country and supply chain activities are operated mostly from
Dhaka, so due to political unrest, transportation of their products from Dhaka to
other outlets will be uncertain. (Author, 2018)
Again, there are some products which is having a different type of expiry date. As an
example, under some cosmetic box, a sign is to given that shows an open box and
written 12M. Actually for this products, the expiry date starts from the opening date
up to 12 months. But when government inspection team come for inspection, they
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search for expiry dates on those products which creates lots of confusion.
(Department, 2018) (Hasan, 2018) (Author, 2018)
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from financial institutions as they are “Z” category business organization. (Author,
2018) (Hasan, 2018)
d. Competitive Pricing: Shwapno tries to provide fresh and fault free product
to customer. To maintain that compliance, their MTP goes higher than the normal
groceries. Even after that, they try to keep a competitive price to satisfy customers.
(Shwapno, 2018)
e. Ensure 100% Valid Product: Shwapno tries to ensure provide 100% fault
free product to customer. They have huge number of product line, so it is not
possible to ensure every single product is fault free, but if any customer get faulty
product and identify by Shwapno then exchange this product. (Shwapno, 2018)
(Author, 2018)
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e. Becoming Strong PLB for Own Product: Recently Shwapno has started
their own PLB. When they will do the production in full scale, they can ensure
superior profit margin. (Shwapno, 2018) (Author, 2018)
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a. Operation Cost: This is the cost incurred for day to day activities of the
business. For example delivery charges, travelling expense, salaries, outlet operation
etc. (Shwapno, 2018) (Author, 2018)
c. Fixed Asset Investment: Investment on assets that are purchased for long
term use. For example; warehouse construction, delivery van, fridges, air condition
etc. (Shwapno, 2018) (Author, 2018)
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b. Surprise Offer: This includes discounts and offers that are given all of a
sudden in any particular day, customers are not informed beforehand via mobile
SMS in this case, they walk into a Shwapno outlet and see that there is special
discount or offer given on a particular item. (Shwapno, 2018)
c. Activation: On special days like mothers’ day, women’s day Shwapno gives
special offer like; if a customer purchases minimum ten thousand taka worth of
goods then they receive a gift bag which contains products for that special day. For
example on mothers’ day this goody bag will only contain goods that are for
mothers’ use. (Shwapno, 2018)
3.5.7. Channels
Shwapno does advertising through its two channels; traditional retailers and celebrities.
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a. Sales: The only revenue stream is the Sale of products in various form and
in various places. They sale third party product with profit margin and own products
from output of their production line. (Author, 2018)
b. Rent: In their outlets, they give space for rent to various vendors to sell their
products. For Example: in Shwapno Upashahar Branch, they gave space rent to
Rajmahal Sweets which give them a handsome amount of revenue. (Author, 2018)
c. Profit Sharing: For VMI products, they earn their revenue by profit sharing.
(Shwapno, 2018)
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a. Shwapno is the largest retail chain shop operating in Bangladesh in regards to Outlets (81),
SKU’s (30,000) and Revenue. They ensured wide range of coverage in regards to customer
and outlets. They are holding over 35% share of retail chain industry as on today. (1.1)
b. To deliver success Shwapno has a clear set of values & beliefs. (2.4)
c. Shwapno groups their outlets in three categories ie: Convenient, Super and Hyper Stores.
As per their categories till today, they are yet to lunch any Hyper Store. They have scope to
increase their outlets. (Appendix - D)
d. They have 6 outlets in Sylhet area. Amongst those, 4 are of Super Category and rest 2 of
Convenient Category. (Appendix - D)
e. According to Porter’s Five Forces model analysis, rivalry among established companies and
bargaining power of their customers is low, risk of entry by their potential competitors and
their bargaining power is moderate, but threat of substitute is high. (3.2)
f. To ensure quality, they have 4 layers of quality checking system. It also lead them towards
higher pricing in regards to general groceries which became a weakness for them. (3.3.1)
g. In regards to their large number of SKU’s, space of their outlets are limited. For that, to
facilitate customers, they have gone for geographical segmentation thus minimized the
number of SKU’s in their outlets. (3.4.2 (b), 3.5.8)
h. Due to some government policies, they are facing obstacle for changing over in modern
trading system. Lack of fostering by the government is not giving this industry to flourish.
Presently, contribution of this industry in economy of Bangladesh is only 1.5%. (3.4.4 (d))
i. Their marketing expenditure is going very high and it is not giving them prolific return on
their revenue. (3.5.1 (b &c))
j. They are very much dependent on their suppliers. They are becoming strong in own
production which may lead them to earn higher revenue. (3.4.2 (c))
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k. Customer’s mind-set is changing in present era as more number of people are involving
themselves in corporate world. To bringing this population under their banner, they can take
some innovative ideas by which customers will be benefitted and convenient. (3.4.3 (a))
l. In a very limited scale, the have started online shopping service in some of the areas of
Dhaka. (3.5.5 (e))
4.2. Recommendations.
There is no end of perfection. To become more perfect, on the findings, our recommendations are
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c. Convenient shopping place for mass people can increase customers in outlets which will
increase sells followed by profitability. In Sylhet, no shopping place give any mother to
shop freely. Moreover, no shopping place accommodate disable to shop. Simply, by
keeping a play zone with for children and 3-4 Caroline's Cart in all outlets will increase
their loyal customer base. (4.1 (k))
d. Online based shopping is very popular in this days. As already Shwapno is having the
platform of online shopping and Sylhet is having a very metropolitan area, with a limited
budget they can start online service in Sylhet. (4.1 (l))
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