Strategic Analysis for Foreign Investment in Bangladesh

ABSTRACT

ABC Co., a (fictional) well-known animal feed company has been actively involved with international expansion.

ABC BD Ltd. (ABL), the master franchisee for ABC Co. in Bangladesh, wishes to start building production facilities in four major regions (North, South, East and West Bangladesh) by late 2006. From then on, ABL will most probably be experiencing aggressive expansion, which unavoidably will require strong resource management and effective corporate system development.

ABL's challenge will be to form an effective centralized decision-making team. Furthermore, ABL will have to maintain a pool of well-trained managers.

This course assignment paper aims to identify and examine the key successful factors for ABC Co.'s selected franchisee (ABL) to thrive in Bangladesh, and to provide the reasons that may hinder ABL's projected (fast) growth in Bangladesh. By using the Four Facets of the Environment to analyze external and internal factors, this paper will provide several solutions to possible future major problems for ABL.

BACKGROUND - ABC COMPANY

Company History and Culture

For more than 100 years, ABC products and services have been known for their premium quality. Today, ABC has become a global brand. But while strategic brand decisions are made globally, they are always managed locally.

Each business unit executes its business plan locally, with local management leading the way. The tremendous experience gained during 75+ years of ABC's international expansion ensures that the specific market needs of individual business units are always met and fully understood.

Today, key foundations of the ABC brand include comprehensive marketing programs, access to leading-edge technology and research findings, unsurpassed product quality, partnership with industry stakeholders, highly skilled employees, and one of the most comprehensive dealer distribution networks in the industry.

ABC's continuous focus on customers' needs led ABC to develop a multifaceted management initiative that delivers the highest value to their customers' operations. This initiative comprises the "ABC Four Square Program."

FOUR SQUARE PROGRAM

From the beginning, the "ABC Four Square Program", comprising good breeding, sound management, strict sanitation, and quality feeding, kept customers needs a priority. ABC's prime consideration is assuring the safety and value of the consumer's food supply. Technology makes such assurance a possibility. Partnerships make it a reality.

Leveraging ABC's knowledge of breeding, management, sanitation, and feeding, the ABC Four Square program requires an organization committed to continual learning. As a result, ABC sales specialists, managers, and consultants represent the top of the industry.

Their unmatched market knowledge, broad experience and industry-wide relationships are invaluable assets for the customers. ABC's emphasis remains on becoming the very best. And to be the best, we assist our customers to be the best.

ABC Co. uses franchising as an effective way to expand its business locally and internationally. The ABC Co. philosophy is, "Creating an atmosphere that will develop customer loyalty and growth by providing an environment of quality, service and consistency through the development of people, products and attitudes".

In terms of sales philosophy, ABC Co. believes that sales resolve everything. Three major secrets of the success are: location of production facilities, good training for both production quality control and inventory management, and a good distribution network building team.

At ABC Co., everyone is dedicated to the animal feed industry in its entirety. ABC Co.'s slogan is, "Partnerships for Extra Ordinary Success", which shows the premium quality of Animal Feed that ABC Co. provides to each customer.

Founders

The founders of ABC Co. are fascinated by Animal Nutrition. They believe that with a more complicated world on the horizon and the consumption of red meat on the decrease, people have become more health conscious and as a result are looking for 'healthy nutritional sources'. Hence, ABC Co. provides the necessary technology, products and services for the Fish and Shrimp Farming industries of the world.

Mr. Articulate, Mr. Brave and Ms. Confident are the three main founders of ABC Co. They are no longer in the Board and have been succeeded by their family members who now run ABC Co.

Global Expansion

In 1996, ABC Co. started to expand to overseas markets, initially in Japan. Afterwards, it ventured into China and South East Asia. By the end of 2004, there were a total of 69 ABC Co. production and distribution facilities all over the world.

Overall, ABC Co. is a comparatively conservative company, with a high standard of success in business. Its philosophy is to try to ensure every single production center's success before it opens another new facility by carefully selecting the right location, providing the best training to the franchisees, and strictly demanding a high standard production and distribution operation. Hence, in the first part of the last century it only expanded in its home country. However in the latter part of the 20th Century, it expanded much more aggressively, eight to nine times faster than the original pace, especially after breaking into the Asian markets.

The existing situation in Bangladesh is that numerous potential franchisees have shown interest and have made efforts to join ABC Co.'s family; however, sufficient support has not been found to push forward further franchisee development. ABL being the best candidate so far is being seriously considered. Thus, a good and consistent management system has to be built up immediately in order to ensure a proper franchising system can be put in place to ABC Co.'s satisfaction.

EXTERNAL ANALYSIS - FOUR FACET ANALYSIS

The Technological Facet

Opportunities

In 1968, Gordon Moore created a theory, which came to be known as Moore's