Feasibility Study of Mmultinational Company to ...

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I am going to investigate the feasibility of Avon as a multi-national manufacturing company which is going to set up a new plant in Bangladesh in which it has not been operated before. Abstract: Business environment is competitive and complicated by the several demographical, social, cultural political even loyal factors which determine its longevity, expansion and existence through the perpetual goal. Running a business is easier than to establish a new business or even to set up a new branch. It is not as simple to make bread wrap with the butter. The core rms future can be concerned with the process as nance is invested and manpower is involved. So an intensive feasibility study is needed for the hard nut to crack. The aim of this feasibility is to assess the economic viability of the future business. The study can give us a detail pictures about the opportunities, possible road blocks or precautions what we need to reach towards success. If the results seem to be positive, then organisation can proceed and set a strategy thereby. If the result is negative then they may not proceed further or can take a dierent approach towards the goal. Whatever it is, the main perspective would be to acquire the money return by the sound investment otherwise money would be invested in a lost project. In this research both Qualitative and Quantitative method should apply to get the best result from the participants. For the social survey we need to set the questionnaire of unstructured, semi-structured and structured format. Unstructured or in-depth interviews are best to opt out the details atmosphere of the business project especially holistic understanding form the interviewees. In that particular format we can adopt closed ended, open-ended or a combination of both to get the various proportional answer. Introduction: This paper will assess the whole process and theme of the research area. We will briey discuss that process step by step and will see how strategy can be tted with the process. This study will carry out not only supporting with the literature review but also will link it with the outcome where close observation, critical analysis is done to give the strong support with the literature review. At the end of the study some suggestions have been given to carry out further study as researcher may over look or miss some points or may bias by emotional, educational superstitions. Background In the 20th century people are more body conscious than before. They love to stretch their tness of juvenile up to the end of their lives as much as possible and want their body be praised as glamorous by others. Technically they want their body attractive in guise of health and beauty. So, Toiletries products are

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getting popular day by day from cradle to crutch, young to old. These toiletries have a lot of emotional inuence on people especially on women. Thus there is a fastest growing market for the toiletries companies around the globe. However most of the companies are adopting the same technique and using the same tools in a dierent angle to win over the market. Sometimes it helps them to keep well in the market as they follow the others rms strategy without spending money to gain control over the same market. But following the concept and strategy of others blindly without having a thorough research can lead a company quit from the market without notice. So, most of the renowned rms engage much of their ability to understand the movement of the market. It is essential for the existence and expansion for a company in a long run. Our selected company Avon is one of them. Once Robert Frost told, ..... miles to go... before I sleep.... Like that poem Avon has a long history to walk along the customer to serve relentless over the century and still serving with vanity as a cuddle of nature. Avon established in 1891in U.S.A by Mr. David McConnell. Since establishment they set their values Trust, Respect, Belief, Humility and Integrity. They believe that everything they do or produce is infused with these values. They have 6.5 million active representatives in over 100 countries. They are the world largest direct seller earning over $10 billion of annual revenue. In the UK, there are nearly six million women who keep an eye on Avon brochure every three weeks, in an average one in three. The picture and image among the customer makes the company condent to step up for new market. But they are pretty much aware of their opponents. In the business sector no opponent is considered as minor. So, before leaping into a new market condition they want to look around the situation for the necessary strategy they might take, thus research have been done to get data from the targeted market (Bangladesh). Aims and Objectives: The main purpose of this study is to go thorough examination about the factors which are most important for the setting up a strategy of a manufacture company to start new branch in a new place where they did not operate before. So they need to know-Is there any demand of my product? -Why they choose my product? -Who is your opponent? -Do I need to set up a new price plan? -Who is my targeted market? -What is the volume and frequency of use of my market? -What will be the expenses to start this company? -Will the company aect by political, Economical, social, environmental, technological and loyal or any other factors? - What will be the risk factor that I may consider? -How essential is qualitative and quantitative Market Research to the success of
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the plan? To execute the above questions we need to carryout Feasibility Study. To do the feasibility study we have to take some general step that can link up our questions and answers. Those are The Project Scope: It determines the strength and ability to solve the problem and target for the future opportunity. There is a proverb in business sector, says If the problem is identied then it is half solved. So, Avon should dene its scope to the point. Any obscure or contradictory explanation can confuse project participants. Avon should also dene its probable risk factors which may aect directly or indirectly to the business, including participants, who are ultimately the end-users, by the project. They can also verify the project sponsor, particularly if he/she is bearing the cost of the project. An undened project seems to be a boat without a rudder. It will cause them to produce beyond their imagination either it may too much or too little than the real gure. 2. The Current Analysis: This is for the assessment of present method of the business. To understand the current method of implementation it should be properly dened. It is common that most of the time company would not able to nd any wrong with the current system or product. Sometimes they feel needs of some simple modications rather than a major overhaul. They also point out some strengths and weaknesses of the current approach. In addition, fundamentals of current system or product should be explained for the successor to save time and money to open up new branch. These analyses are caution for Avon avoiding the risk of discontinuation and amend problems encountered by the current system. 3. Requirements It depends on the projects aims and objective and prole. For example, local rms requirements are dierent than the requirements of foreign rm. Even IT rms requirements are dierent than edice or maintenance rms. Basically the rms fundamental requirements are sucient money, proper manpower and suitable property to sustain a potential development for the project. In that context Avon can get the decision what strategy they would take to full the requirements from Bangladesh. 4. The Approach Project approach is the key components that drive each and every project towards successful completion. It is an elaborated method about how to perform that project. It may contain several phases and steps with the alternatives. Regardless the size of a project steps are necessary to ensure the eectiveness in ecient way. As 49.42 percent (according to World Bank) of total population are women. So, women play a vital role in shopping spree. Avon is a company especially for women who produces and support women globally has a bright future in Bangladesh. 5. Evaluation It is all about the review of cost eectiveness of the selected approach. This explains and analyse the estimated total cost of a project. Moreover, other alternatives are estimated for the recommended solution to oer an economic comparison. After calculating the total cost, a cost and
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evaluation summary is prepared, which shows eectiveness/benet analysis, return on investment, etc. After doing the right evaluation Avon can take decision to set up a new plant in Bangladesh. 6. Review The most vital part of the feasibility study is a formal review conducted with all parties involved regarding the project. All of the preceding elements are statistically assembled. There are two reasons to do the review: 1. To make sure about the accuracy of the Feasibility Study 2. To take the nal decision about the project. Whether policy maker will approve it or reject it. If they reject the feasibility Study, they should attach a document with explanation. Literature Review: Avon is a leading global company with 6.5 million active independent sales representatives. They plan to set up a branch in Bangladesh which is under proposal and assessed by the feasibility study. It has a wide range of products especially for women. Products line includes beauty products as well as extensive range of wellbeing products, fashion and gift home products. As they want to enter into the Bangladeshi market they should take some factors under consideration. These factors are described below: Cultural feasibility: Culture is another important element for the deciding factors about the market entrant. Anthropologists and sociologists have oered scores of dierent denitions of culture. Culture can be dened as living style or format, built up by a group of people that passes on generation to generation (Warren J. Keegan et.al. 2003) Each culture contains by the same clusters or groups of people with shared value systems based on Source: Usunier and Lee (2005) Marketing Across Culture, 4th edition, p.11 common life experiences and situations. (Pierre Bourdieu, 1984.) Wood and Robertson (2000) draw the conclusion in a research study that, what is acceptable in one culture can be judge quite unacceptable in another culture reecting the need and values of that cultural atmosphere. As Bangladeshi culture is mostly dominated by religious culture, so Avon needs to nd out which products line they would choose to capture the market. Economic Feasibility: Economic analysis is essential for the part of feasibility study. Analysing the economy will help to align the business plan with the current economical situation. Economic feasibility comprises with the analysis of governmental monetary policies, ination rate, import and export rate, currency exchange rate and so on. In the context of this analysis we can say that Bangladesh is a emerging economical market. Bangladesh is a developing country. Most of the people are lower to middle income group, so Avon should nd out the product price plan which suits for most of the customers.

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Political and legal environment: Warren J. Keegan et al.( 2003) told in his book Global Marketing that every country sets some unique legal regulatory system for the global enterprise to operate and handle their activities which can aect the rms operation directly or indirectly. It can hinder the ability to address local market opportunities and threats. Laws and regulations constrain the cross-border movement of products, services, people, money, and know-how. So any company doing business outside its home country should carefully study the political culture in the target country and analyse salient issues arising from the political environment. Cateora & Graham, 2002 ask entrepreneur to consider these as a preliminary screening factor. Bangladesh is emerging democratic country; there are so many ups and downs in the political situations. Avon should take into consideration that any turmoil political situation can change the law and order situation which can aect their production. Technological Analysis: It complies the technological requirements for the strategic needs of a company to sustain or development of a new rm. Technological analysis determine the method of technology use in the production, whether it will procure from locally or will import from mother country. As Bangladesh is developing country so the technological infrastructure has not been developed. But it is working hard to develop its IT and industry sectors. Location Analysis: Nancy Loman told that suitable storage facilities, expansion possibilities, access to major transportation routes can be the same terminology to dene a nice location for a company to analyse the placing of that rm. (Nancy loman Scanlon,2006). Bangladesh is a country in bay of Bengal. So, there are lot of opportunities to use its port to import and export the products in cheap expenses. Market Analysis: The goal of market analysis is to determine the demographical and psychographical size of a market. It also helps to determine the level of competitions, opportunities and threats, strengths and weakness of a rm. David A. Aaker outlined the following dimensions of a market analysis: - Market size (current and future) - Market growth rate - Market protability - Industry cost structure - Distribution channels - Market trends - Key success factors The outcome of market analysis may drive an organisation to change various aspects of its investment strategy. Sensitivity and Risk Analysis: This is the most important part of feasibility analysis for the business entrepreneur. Even if all the feasibilities show the positive signs, but still risk factor should be properly analysed for the future prospects of a business.
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This is the last part of a feasibility study and probably the most important. After all other factors have been analyzed and proven viable, sensitivity and risk analysis can come in. Building a business without properly conducting a risk analysis is like ying a plane without regards to weather condition. So Avon should nally analyse all the factors and assess carefully to nd the risk factor. Research strategy As a business student encounters the entire hurdle that I had face during my research, best option was to use Mix Method. In Mix Method research I could use both Quantitative and Qualitative data collection techniques and analysis. Advantage of using method is that I can collect the data and at the same time analyse the procedures. Its mean that I can use Quantitative data and qualities it, and then convert it into narrative that can be analysed qualitatively. In other way I can quantities my qualitative data, converting into to statistical form. Quantitative data: I used this form of method to calculate the percentages of population uses cosmetics. What percentage of income spends on cosmetics and which income group are spending on cosmetics? (As we are going to establish a cosmetic company) In quantitative method we can explore the individual variable and their components, like specic values, highest values and lowest values, trend over time, proportion and distributions. This approach highlights the use of diagram and graph to understand and explore the data. Qualitative data: Its a nonnumeric-data or the data cannot be quantied, but can be useful for all research purpose. There are two approaches to analyse qualitative data-Deductive and inductive. Deductive approaches: when the research is focused on one issue and doesnt require discovering other factor. Inductive approaches: In this part we can account for a number of factors to analyse the ground of theories. In my research I select inductive methods, because research may be constrained by theoretical approach, as we not have been done the research before and work further more. And only look consumers perception toward to the cosmetics but also political, social and demographical issues.

Ethical Issue in Research: Ethics are normative or pattern of behaviour that leads choices of relationship towards others. In business research point of view every participants in research should show ethical behaviour. The goal of this object is ensuring that none of the participants are harmed, suer or adverse from the research activities. As we going to do our research, we have to bear in mind that Bangladesh is religiously strict and culturally inuence by Masculinity. As a
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cosmetic Company most of our data (consumer base) will be form women, and there is a restriction of personal communication. By using typical Likert Method scale we will not be bias and can avoided direct question. Interview and questionnaires data will be collected both from city and villages, rich and poor, man and women. Strictly will be followed the local government laws, policies and regulation guidance to regulate the research on human being. All data will be condential and protected. As the company is come from a develop country a fair paid rules will be in place for data collector. Avon will be responsible for protection and safety for their employee. Research Limitation: During the research the researcher are expected to face lots of diculties in process of data collections, distributions and retrieval of questionnaires, contacting & interviewing the people and accessing the source of data Avon market researcher are faced a number of issues to make a research the conclusion, like; Budgetary constraints There was luck of fund to pay proper market researcher .As research been conduct by the MBA students and their fellows. Secondary data have been collected from cheap resources. Time constraints As we know that Bangladesh is tropical country, during this rainy season lots people dont come out from house or can go inside house. Get a full view of consumes behaviour we need whole year. Reliability of the data Most of the data being handling by rst time collector so there are some compromises of accuracy of data. Legal & ethical constraints As we bound by law and regulations, Data Protection Act1998) and there are number of law implication for market researchers collecting and handling data. We had kept secure voice recording data. And in religious ground we could not talk face to with lots of women. Conclusion: We should remember that I depict a basic format of a feasibility study to opt out the viability of a business. But this format is can be restructure on the basis of the type of a companys aim and objectives. As the scope develops, revise feasibility study can be needed not only to compare with similar opponents but also needed for the future development of a company. Thanks

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