ACKNOWLEDGEMENT

All praise goes to the Almighty Allah, the most merciful and the most gracious!

My heartiest thanks go to the honorable course teacher, Dr. Chowdhury Saima Ferdous,
Chairperson, Department of International Business, University of Dhaka for her guidance and
unparalleled support throughout the course Corporate Governance. This unique experience was
possible for her willingness to add newer dimensions to the class and to introduce the students
with the reality. Her supervision and valuable feedback has helped tremendously to improve the
term paper.

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LETTER OF TRANSMITTAL
Dr. Chowdhury Saima Ferdous

Chairperson

Department of International Business

University of Dhaka

Subject: A Critical Analysis of the Corporate Scandal around the World

Dear Sir,

Here is the term paper on A Critical Analysis of the Corporate Scandal around the World.
which you have assigned us as part of the course curriculum Corporate Governance (IB-409).
This is a group assignment, which was assigned after a series of class lectures and case studies.

Thank you for offering us the opportunity to prepare this report. We appreciate the chance to
apply our theoretical knowledge which will surely stand us in good stead.

We hope that despite of the limitations, this term paper will give a fare idea regarding Situation
of corporate scandal around the world through the use of different corporate governance pillars
to the interested readers. We will be glad to clarify queries if you have any. Finally we thank you
again for providing us the opportunity to carry out such study.

Sincerely yours,

Group members:

Md. Biplob Hossain (21) D.M. Saddam Hossan (93) Md. Nazmul Haque Chowdhury (253)

ABSTRUCT

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This report reveals the linkage between the strategic factors of Ready Made Garments (RMG)
and Bangladesh itself. In order to analyze business and competitive positions of RMG and
Bangladesh, analysis of Bangladeshs situation as whole is being described and analysis of RMG
sector follows that as a supplementary analysis of each other. SWOT analysis, Porters five forces
and porters diamond has given highest priority for the sake of simple analysis of this complex
factor. Also we analyze the causes of recent market demand reduction of Bangladeshi RMG
through the Fishbone Diagram of Ishikawa.

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 1. RMG Readymade Garments
2. BGMEA Bangladesh Garments Manufacturers and Exporters Association
3. BDG Bangladesh Government
4. GDP Gross Domestic Product
5. WTO World Trade Organization
6. B2B Business to Business
7. BTMA Bangladesh Textile Mills Association
8. LDC Least Developed Country
9. LTTE Liberation Tigers of Tamil Eelam
10. LC Letter of Credit
11. PESTL Political Economical Social Technical Legal
12. SWOT Strength Weakness Opportunity Threats
13. NCTS National Council for Science and Technology
14. WRAP Worldwide Responsible Apparel production
15. CEPAA Council on Economic Priorities Accreditation Agency
16. ETI The Ethical Trading Initiative
17. BSR Business for Social Responsibility

Contents
ACKNOWLEDGEMENT................................................................................................. 1
LETTER OF TRANSMITTAL............................................................................................ 2
ABSTRUCT.................................................................................................................. 3

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LIST OF ACRONYM...................................................................................................... 4
INTRODUCTION........................................................................................................... 7
1.1: OBJECTIVES OF THE STUDY..............................................................................7
1.2: METHODOLOGY................................................................................................ 8
1.3: SCOPE OF THE STUDY...................................................................................... 8
1.4: LIMITATIONS OF THE STUDY............................................................................. 8
BANGLADESH'S READYMADE GARMENTS INDUSTRY..................................................9
2.1: A SWOT ANALYSIS ON READYMADE GARMENT INDUSTRY IN BANGLADESH.....9
2.1.1: STRENGTHS...................................................................................................... 9
2.1.2: WEAKNESS..................................................................................................... 10
2.1.3: OPPORTUNITY................................................................................................. 10
2.1.4: THREAT........................................................................................................... 11
2.2: PORTERS FIVE FORCES ANALYSIS...................................................................11
2.2.1: COMPETITIVE RIVALRY BETWEEN EXISTING PLAYERS.....................................11
2.2.2: BARGAINING POWER OF SUPPLIERS...............................................................12
2.2.3: BARGAINING POWER OF CUSTOMERS............................................................12
2.2.4: THREAT OF NEW ENTRANTS...........................................................................13
2.2.5: THREAT OF SUBSTITUTES............................................................................... 13
2.3: PESTL ANALYSIS FOR RMG INDUSTRY OF BANGLADESH.................................14
2.3.1: POLITICAL ANALYSIS....................................................................................... 14
2.3.2: ECONOMIC ANALYSIS...................................................................................... 14
2.3.3: SOCIAL............................................................................................................ 15
2.3.4: TECHNOLOGICAL............................................................................................ 15
2.3.5: LEGAL............................................................................................................. 15
2.4: PROBLEMS IN THE RMG INDUSTRY AND ITS EFFECT...........................................16
2.4.1: LABOR REGIME............................................................................................... 16
2.4.2: LABOR PRODUCTIVITY.................................................................................... 17
2.4.3: POLITICS......................................................................................................... 17
2.4.4: MATERIALS..................................................................................................... 17
2.4.5: ENVIRONMENT................................................................................................ 17
2.4.6: ELECTRICITY................................................................................................... 18
3.1: REMARKS AND RECOMMENDATIONS..............................................................19
3.2: CONCLUSION.................................................................................................. 19

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 3.3: REFERENCES.................................................................................................. 20
REFECTORY ACCOUNT.............................................................................................. 21

CHAPTER 1

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INTRODUCTION
The RMG industry of Bangladesh has emerged as the biggest earner of foreign currency. The
RMG sector has experienced an exponential growth since the 1980s. The sector contributes
significantly to the GDP. It also provides employment to around 4.2 million Bangladeshis. An
overwhelming number of workers in this sector are women. This has affected the social status of
many women coming from low income families. Bangladesh has been witnessing tremendous
industrial growth across its industrial sector; textile and apparel have especially dragged the
focus of government bodies and private investors. Vast availability of lowest manpower, one of
the most competitive energy costs and a proven track record in apparel production and exports
have positioned Bangladesh as a regional apparel industry development hub in the Asian
continent. In context of fast increase in labor wages and raw material prices in other major
regional counterparts, such as China, India, and Thailand etc. Bangladesh is well poised to
remain most preferred destination for international apparel majors for sourcing world class fabric
and finished clothes. According to this report, Bangladesh Apparel Industry Analysis,
Bangladesh apparel industry has grown manifold in the last decade. The country's recognition as
low cost-high quality apparel production base resulted in apparel production boom. Both small-
and large-sized firms are booking huge orders from the US and EU buyers and expanding their
production capacities.

1.1: OBJECTIVES OF THE STUDY

In this report, we have tried to give on overview of the current situation, the challenges and the
prospects of garments industry of Bangladesh. Following are main objectives:

1. To know the current situation of readymade garments of Bangladesh.

2. The future prospects of RMG industry.
3. The macro environment impact on the RMG industry.
4. Another objective of this paper is to analyze the role of supportive government
policies in promoting the growth of the RMG industry in Bangladesh.

1.2: METHODOLOGY
Most of the information we presented in the report is collected through survey the study of
different articles published online. We conduct a research on about 200 people most of them are
students. So we can say that most of the data is collected from primary source.

1.3: SCOPE OF THE STUDY

A major objective of this report is to analyze the current situation of the unregistered SIM use
behavior and mandatory registration in Bangladesh.

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1.4: LIMITATIONS OF THE STUDY
There are some limitations that we faced when preparing the repot. They are

1. Because of limitation of time and resource, this report is prepared mostly based on the
collected primary data from various surveyed on students.

2. More recent news & reasons can be presented if current data is available.

3. One of the major limitations for preparing a report was confidentiality. Collecting
information was particularly difficult because most people do not usually want to provide
correct information.

CHAPTER 2

BANGLADESH'S READYMADE GARMENTS INDUSTRY

Bangladesh became the 2nd largest apparel exporting country in the world. During the fiscal year
2012-2013 RMG export totaled $30 billion. Now Bangladesh RMG is targeting to export around
$50 billion by the year 2021.Recently WTO has ranked Bangladesh as the 4th largest exporter of
readymade garments in the world. Textiles and Readymade Garments sector contributes 13%of
GDP and employs more than 3.6 million people, including 80% of them is women. The industry
has created a platform for 2.8 million women to engage in new productive role in the society and

2
empowering them, RMG is playing a significant role to alleviate poverty through skills
development and employment generation. Around 20 million people are directly and indirectly
depending on this sector for their immediate livelihoods. It has bought benefit and blessings for
millions of people in the country. Along with bringing recognition and positive appraisal for the
nation, textile and RMG industry also hold the record of experiencing some worst industrial
accidents in the country.

2.1: A SWOT ANALYSIS ON READYMADE GARMENT INDUSTRY IN

BANGLADESH

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2.1.1: STRENGTHS
RMG is the leading industry in Bangladesh. It is basically a labor-intensive industry and it needs
limited financial investment and relatively simple technology compared to other high technical
industries. Bangladesh is one of those countries that provides with very low cost labor among the
world so the chances of gaining greater profitability from this sector is possible for Bangladesh.
The success story of Garment Industry in Bangladesh is the story as to how the ready- made
garments starting in the late seventies as an insignificant non-traditional item of export. In 2013-
2014 this sector has earned 30 billion US$ through exporting .The tremendous success of
Readymade Garment (RMG) exports from Bangladesh over last two decades has surpassed the
most optimistic expectations. At present Bangladesh is the 4th largest exporter to USA and in
2014 Bangladesh becomes 2th largest exporter in the world. The remarkable achievement of
RMG sector is now exposed to each and every country. Despite these impressive achievements
and the probable challenges in the near future, if properly managed, the prospects for further
expansion and growth for this sector remain bright. Our duty-free access to world market is
another big advantage over other competitors. As an LDC we have duty-free market access to
most of the developed countries including EU, Norway, Switzerland, Canada, Japan, Australia
and partial market access in India, China, South Korea, Malaysia. This trade privilege also helps
us offer competitive price. The buyers also give priority to Bangladesh as we have been able to
earn their confidence on timely delivery of ordered products of desired quality at very
competitive price. This is one of the major reasons why global brands are choosing Bangladesh.
One of the most important factors that caused the rapid development of RMG industry in
Bangladesh is the population. Whether population is a boon or bane for a country depends
largely on how it is managed and utilized. Besides, the prospect of a countrys economy hugely
depends on the management of its population. The populace has appeared to be the blessing for
Bangladesh as it is the driving force behind success of RMG industry, which requires a good
number of workforces. The demographic profile of Bangladeshs population has helped the
apparel industry to thrive. The vibrant and young population (around 76 percent of the people are
below 40 years of age) of this country is the major strength of our RMG industry.

2.1.2: WEAKNESS
Bangladesh produces mostly basic products- which are low cost items. The share of fashion
products and high value added product is very low. So the net per unit gain from the RMG is
relatively low than that of the other garment producing country. Bangladesh does not produce the
basic raw materials (only a negligible quantity of cotton but no manufactured fiber) and as such
has to depend totally on sensitive global market. This is also a very big problem for Bangladesh
because RMG of Bangladesh has to depend fully to the foreign supplier for the raw materials.
Because of inadequate backward linkage, lead-time happens to be long, nearly 3 months. It is
one of the biggest problems for Bangladeshi RMG because other countries are making sure of
efficient time management. Garment industry demands uninterrupted supply of power but the
public power supply is erratic. This not only just stops the production but also increases the
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production cost. Bank interest rate is still high enough, particularly of private sector bank, for
investment of export oriented high value project. HRD facility, productivity and quality support,
testing and accreditation support, design support and compliances are yet to be enhanced. Cost of
doing business is high because of under table money. Also employee unrest of Bangladeshi RMG
is causing a serious problem.

2.1.3: OPPORTUNITY
Bangladesh has now a scope to go for more fashion oriented products deserving high price in the
global market. As there are high demand for the Bangladeshi RMG products in the world market
Bangladesh can take the opportunity with both hands. With the help of further increase of
productivity & quality and design support, Bangladesh can minimize cost and maximize profit
and export value. It is the demand of the time that our RMG looks for some better process and
produces using new machines. Bangladesh, as a proven experienced RMG & Textile
manufacturer, can expand share in the existing market (USA, EU, Australia, Canada, etc.) and
can also explore opportunity in Japan & CIS countries. In the long run, Bangladesh has a scope
to target huge populated country like China and India- where demand as well as cost of
manufacturing will be wider. The infrastructure of Bangladesh is an issue for many days but
situation is changing and this will create new growth opportunity for our RMG.

2.1.4: THREAT
Unless new strong market is explored in home or abroad, any non-cooperation from USA & EU
may jeopardize the whole Bangladesh RMG export business and consequently the textile
manufacturing. Sudden price hike of cotton and yarn in the global market may push Bangladesh
to a very awkward situation to devastate the business. The type of labor and political anarchies of
the recent days if prevails in the future, Bangladesh may lose the business in the way Sri Lanka
has lost. The poor political culture and violence is one of the most important threats. Bangladesh
is not a stable country politically. Political instability is a great threat for any industry of our
country. Frequent strikes and hartals are great obstacles for the growth of any industry. The
production cost increases and productivity decreases because of frequent hartals and strikes.
Garment producers cannot keep their contract with buyers because of hartals and strikes. Hartals
and strikes have become a common phenomenon of Bangladesh. There is a positive relationship
between law and order situation of any country and export. If the law and order situation
improves, the volume of export increases. Unfortunately, the political stability and law and order
situation is not in favor of the export of our country and becoming a threat to our export trade
day by day. Competition has become intense in the garment industry at present. Garment
industry is emerging rapidly in Taiwan, Hong Kong, Singapore and Korea in Asia. Thailand,
Malaysia, Indonesia, Philippines and Sri Lanka have found the garment industry more attractive
to develop their economy from 70 decade. Vietnam has become a potential entrant in garment
industry throughout the world.

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2.2: PORTERS FIVE FORCES ANALYSIS

2.2.1: COMPETITIVE RIVALRY BETWEEN EXISTING PLAYERS

Bangladesh is now the 4th largest apparel and textile supplier in the world market. It is shaping
itself as a potential market player by providing the most quality with the cheapest price possible.
There is strong rivalry among the existing RMG players. Other players are trying to take the
advantage of the political unrest of our country. Another issue the rivals are putting if front of the
buyers that Bangladeshi RMG does not use proper waste management in the RMG production.
Whilst the market is controlled by the bigger players like China, Hong Kong and Italy the role of
Bangladesh is still important. Among the very few suppliers, Bangladesh imports most of its raw
materials, but utilizes other factors of production to produce in a cheaper manner. It offers
investment friendly atmosphere for the brand names to outsource their production process in
Bangladesh. Bangladesh is putting up a show against other competitors like China and Hong
Kong and Italy by providing available cheap labor. It has been facing tremendous growth even
after the alleviation of the quota from the US market. This is due close customer relationship and
quality production. Bangladesh has this advantage against its rivals. Bangladesh is one of those
countries who cannot fulfill its quota provided by the larger markets. As a result of that, many
foreign companies are merging in to use Bangladesh as a hub to prepare their product by
outsourcing in Bangladesh and then gaining entrance to markets which were previously
unavailable to them. Bangladesh is taking advantage of this and inviting investors, and foreign
companies to place orders to attain this facility. It should focus on placing more orders instead of
making its export rates efficient and strong.

2.2.2: BARGAINING POWER OF SUPPLIERS

The readymade garment industry in Bangladesh which was previously depended on foreign
suppliers for cotton and woven fabric has now started using more local raw materials for the
export industry. The country imported 236 million kg of cotton yarn and 289 million kg of
woven fabric in the last fiscal and the import figures were 240 million kg yarn and 295 million
kg fabric in the previous year according to Bangladesh Textile Mills Association (BTMA).
Bangladesh has always been enjoying the upper hand in ordering its inputs from its suppliers.
Bangladesh has very few input or raw materials of its own. Most of them are imported. Although
this leads to a problem in reducing the opportunity to initiate backward linkage, and thus
increasing the supplier power, Bangladesh still manages to acquire the inputs at world price from
its suppliers.

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But the most importing aspect of Bangladeshs export industry would always be the enthusiasm
and the prospect of growth it provides to the stakeholders in terms of success and prosperity.
Bangladeshs domestic suppliers power is increasing in a slow but steady manner as more and
more local companies are stepping up to the task. They are creating an integrated system of
supply channel management by which the manufacturers work load is reduced. Companies are
more prone to order through local suppliers who themselves apply to the task of importing raw
materials and components necessary for the production process. And the favorable attitude of the
government is also helping this growth. The back to back LC process was approved by the
government to facilitate the growth of the industry.

2.2.3: BARGAINING POWER OF CUSTOMERS

USA and the Europe are the main market of the Bangladeshi RMG products and Bangladeshi
manufactures realize that the buyer possess more power than themselves. Chinas lead and
Indias and other manufacturers march to the top keep the Bangladeshi manufacturers on their
toes. Bangladesh is providing a large space of choice to the provider in terms of quality and cost.
It is offering the lowest possible production price and also work that is best in quality. But
recently buyers are posing much more strict compliance rules and regulations. Buyers even
posing rules on maintaining minimum wage level and safe environment. Due to high switching
opportunities for the customers, Bangladesh has to perform or allow the customers to win in
many cases. Bangladesh plans to use cost-effectiveness to present itself as the best option to the
buyers.

2.2.4: THREAT OF NEW ENTRANTS

Sri Lanka is the next most potential market that may capture the buyers of Bangladeshi RMG.
After the end of regime of the LTTE in Sri Lanka, they are again started growing as a very
lucrative market for the RMG buyers. Also Sri Lanka has a very good low cost base labor.
Bangladesh has yet to reach economies of scale in terms of production. Thus it allows potential
entrants to pose a threat to its growth. But again, if we just analyze the growth of textile and
RMG sector, this threat might seem negligible. Textile in Bangladesh is in a growing stage. Its
growing in a rapid pace and is posing itself as an entrant to the more established players. Thus
the threat of new entrants is quite minimal to its concern.

Moreover, new entrants would have to gain an advantage against Bangladesh whose growth ratio
is almost 20% per year even after the MFA. A newer entrant would thus cause fewer troubles to
Bangladesh. One factor has to be kept in mind that, due to the unstable political scenario in
recent years, investors and foreign firms are reluctant in investing in Bangladesh. Using this
opportunity, countries like Sri Lanka and other small Latin American countries can steal away
potential buyers from Bangladesh.

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2.2.5: THREAT OF SUBSTITUTES
Sri Lanka is growing as a very good location for establishing RMG production facilities. China
and India are growing their customer base at a higher pace than Bangladesh. This is due to poor
country branding, and less power to influence customers. Due to these reasons, customers
sometimes prefer China or India to Bangladesh. More to add, Bangladeshi products are being
substituted due to lack of supplier power and governments reputation. Many firms, buyers,
investors are now hesitating to invest in Bangladesh due to unstable political scenario. Thus the
opportunity for Bangladesh is being substituted to either China or India. Also, the substitute cost
is not that high for buyers to switch to a Chinese producer or even to a Sri Lankan producer. On
the other hand, due to the lower production cost, Bangladesh plays a major role in substituting
the Chinese and Indian manufacturers. This opportunity has to be nurtured by the Bangladeshi
industry to ensure its growth and profitability. Bangladesh possesses the ultimate weapon of
cheap labor and thus at times, it has to use it to substitute opportunities from its competitors.

2.3: PESTL ANALYSIS FOR RMG INDUSTRY OF BANGLADESH

A PESTL Analysis can help us to know about the external environment situation of a particular
industry of a country. The below analysis is the PESTL analysis for the RMG industry of
Bangladesh.

2.3.1: POLITICAL ANALYSIS

Frequent general strikes and political unrest in recent times have taken their toll on the
readymade garments sector, raising cost of production, and due to the rise in the production cost
countrys RMG sector is losing its competitiveness. Among various features of our political
situation, most noticeable and important conditions may be identified as follows

1. Absence of democratic political culture

2. Absence the rule of law
3. Absence of strong civil society
4. Absence of strong political leadership
5. Confrontational politics
6. Corruption and terrorism

Government policies for Foreign Investments: The stated policy of the government of
Bangladesh (BDG) is to pursue foreign investment actively, and it has enacted a number of
policies to this end. There are no distinctions between foreign and domestic private investor
regarding investment incentives or export and import policies. Incentives for investors include:
100% ownership in most sectors; tax holidays; reduced import duties on capital machinery and
spares; duty-free imports for 100% exporters; and tax exemptions.

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2.3.2: ECONOMIC ANALYSIS
The Economy of Bangladesh is a rapidly developing and the country is classified as a next
eleven emerging market and one of the frontier five. According to a recent opinion poll,
Bangladesh has the second most pro-capitalist population in the developing world. Between
2004 and 2014, Bangladesh averaged a GDP growth rate of 6%. The economy is increasingly led
by export-oriented industrialization. The Bangladesh textile industry is the second-largest in the
world. Bangladesh's textile industry, which includes knitwear and ready-made garments along
with specialized textile products, is the nation's number one export earner, accounting for $21.5
billion in 2013 80% of Bangladesh's total exports of $27 billion. Bangladesh is 2nd in world
textile exports, behind China, which exported $120.1 billion worth of textiles in 2009. The
industry employs nearly 3.6 million workers. Current exports have doubled since 2004. Wages in
Bangladesh's textile industry were the lowest in the world as of 2010. The country was
considered the most formidable rival to China where wages were rapidly rising and currency was
appreciating. As of 2012 wages remained low for the 3 million people employed in the industry,
but labor unrest was increasing despite vigorous government action to enforce labor peace.
Owners of textile firms and their political allies were a powerful political influence in
Bangladesh

2.3.3: SOCIAL
Companies are facing the challenges of adapting effectively to the changing environment in the
context of globalization and in particular in the export sector in Bangladesh. Although Consumer
Rights Movement, enforcement of government regulations and a structured view regarding the
economic importance of Social responsibility are not yet so widespread in the corporate world in
Bangladesh, companies have gradually attaching more importance to Social responsibility in the
local market as well. They are increasingly aware that Social responsibility can be of direct
economic value. Companies can contribute to social and environmental objectives, through
integrating Social responsibility as a strategic investment into their core business strategy,
management instruments and operations. This is an investment, not a cost, much like quality
management. So, business organizations can thereby have an inclusive financial, commercial and
social approach, leading to a long term strategy minimizing risks linked to uncertainty.

2.3.4: TECHNOLOGICAL
The need for faster technological development is increasingly felt in Bangladesh. Development
plans of Bangladesh have emphasized science and technological research to develop
technologies through adoption of imported technology as well as development of indigenous
technologies. As the country is heavily dependent on imported technologies, proper planning is
required for its effective transfer through acquisition, assimilation and adoption. A National
Science and Technology Policy has been formulated and adopted by the Government. It has laid
down the directions for S and T activities and research, institutional and manpower development.

2
The National Council for Science and Technology (NCST) determines S and T policies, reviews
the activities of different institutions and provides direction towards S and T research and
activities.

2.3.5: LEGAL
Quality of goods exported from Bangladesh has always been questioned by the foreign buyers
due to lack of experience and awareness of Garment manufacturers associated in the trade. In
order to export readymade garments, it is not only the quality parameters which are important
towards acceptance of the product as per the intended end use, but also the working environment
in which the garments are to be produced, is equally important so that sweatshop concept is
totally taken care of and the code of conduct must be stretched towards achieving the objectives
of social compliance issues. Social Accountability standards have been developed by the
international organizations such as Fair Labor Association (FLA), Worldwide Responsible
Apparel production (WRAP), Council on Economic Priorities Accreditation Agency (CEPAA),
The Ethical Trading Initiative (ETI) and Business for Social Responsibility (BSR).

2.4: PROBLEMS IN THE RMG INDUSTRY AND ITS EFFECT

There are some external and internal problems in the RMG sector that resist the Firstar growth of
this industry. We should take action to remove those problems.

Issues: Issues that we are considered under this cause and effect analysis are-

Cause Effect

Labor
Labor regime Productivity Politics

Loss of
Market

Secondary causes

Materials Electricity
 Primary causes
Environment

Figure: Fishbone Diagram

2.4.1: LABOR REGIME

Unrest in Readymade Garment industry of Bangladesh became a common phenomenon in the
recent years due to conflicts between the employers and the employees which are primarily
concerned with salary and other benefits. There are about 5,100 garment companies operating in
Bangladesh with 3.6 million workers of which 85 percent workers are female who are mostly
from the rural areas of Bangladesh. It has been observed in recent days that the workers are
coming down in the street and making insurgence on their demand and trying to destruct
factories and public properties.

2.4.2: LABOR PRODUCTIVITY

Low labor productivity was one of the hurdles; the trouble is not apparel sector-specific. Rather,
it has been hurting most productive sectors of the economy. But if the wages of readymade
garment (RMG) workers go up, then the productivity of the RMG employees will go up. There is
a correlation between wage rate increase and the level of productivity. (Zahid S. h., 2013)

2.4.3: POLITICS
The ready-made garment sector fetches about $25 billion in foreign exchange every year. But the
ongoing violent in the political practice in our country has had a severe impact on the export-led
sector. Industry owners have been pushing the political parties to find a solution out of the
current impasse. A stable political situation is essential to achieve our $50 billion export target,
BGMEA chief Atiqul Islam.

2.4.4: MATERIALS
The RMG industries in Bangladesh mostly depend on imported raw materials. Bangladesh
imports raw materials for garments like cotton, thread color, Yarn, fiber, etc. This dependence on
raw materials hampers the development of garments industry. Moreover, foreign suppliers often
supply low quality materials, which result in low quality products.

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2.4.5: ENVIRONMENT
Most of the garment factories in our country lack the basic amenities where our garment workers
sweat their brows from morning to evening to earn our countries the major portion of our foreign
exchange. Anybody visiting the factory the first impression he or she will have that these
workers are in a roost. Improper ventilation, stuffy situation, filthy rooms are the characteristics
of the majority of our factories. So the time has come to improve their working environment and
their safety without further delay if we are to expect uninterrupted. The Rana Plaza collapse in
2014 and the Tazreen factory fire in 2012 are two sad episodes of the impressive story of our
readymade garment industry, which has been making outstanding contribution to bringing about
revolutionary socio-economic changes in Bangladesh by earning a huge amount of foreign
currency, alleviating poverty and empowering women. The two tragic incidents brought the
worker safety issue to the fore and at the same time

2.4.6: ELECTRICITY
Bangladesh is suffering from acute power crisis since a quite long time without any respite. If
power is not supplied properly to the garment factories, production will come down drastically. It
will start losing the international market and lastly and most importantly the undesirable cut in
workers which will be an economic disaster for the nation.

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CHAPTER 3

3.1: REMARKS AND RECOMMENDATIONS

In our remark we must say that the SWOT of Bangladesh itself works as a complementary
profile for the SWOT of the readymade garments industry of Bangladesh. After the strategic,
business and competitive analysis of the Readymade Garments industry of Bangladesh, we must
confess that the Competitive strategic factor for Bangladesh, the human capital or cheap labor, is
itself the competitive advantage of the RMG industry. So, the labor cost and human resource is
the main part of formulating the business and competitive analysis RMG industry of Bangladesh.
In recommendation, we must say that-

Manufacturers should look for other strategy like value chain competitiveness rather that only
price competitiveness. Rather than trying to do everything equally all at once, it helps to have a
sense of priority. Putting the prioritized elements together in a mutually supportive and logical
package creates a strategy. The desirable outcome of a SWOT should be a strategic plan to
address the challenges. Thus, by identifying the key issues and establishing their relation with
each other, a degree of clarity is possible that helps to make one clear about priorities and the
time a policy will take to bring the outcomes.

3.2: CONCLUSION
The economy of Bangladesh is largely dependent on agriculture. However the RMG sector has
emerged as the biggest earner of foreign currency. The RMG sector has experienced an
exponential growth. All the parties involved in this industry should come forward to prevent all
the unrest in this industry. This will help our RMG to position itself in the world market strongly.

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3.3: REFERENCES
1. http://www.thefinancialexpress-bd.com. [ assess on 03.05.2015]
2. http://en.wikipedia.org/wiki/Bangladesh_textile_industry [assess on 03.05.2015]
3. http://www.mightystudents.com/search?
q=A+SWOT+Analysis+on+Readymade+Garment+Industry+in+Bangladesh [assess on
04.05.2015]
4. http://www.businesswire.com/news/home/en/Research-Markets-Bangladesh-Apparel-
Industry-Analysis [assess on 04.05.2015]
5. http://www.just-style.com/analysis/bangladesh-garment-industry-aims-for-fast-
growth_id109958.aspx [assess on 04.05.2015]
6. http://moshiur008.blogspot.com/2011/08/swot-analysiss-of-bangladesh-economy.html
[assess on 04.05.2015]
7. http://e.unescap.org/tid/publication/aptir2456_haider.pdf [assess on 05.05.2015]
8. Shamsul Huq Zahid, 09 October 2013; Is low labor productivity in RMG a non-issue;
The Financial Express. [assess on 05.05.2015]
9. http://news.priyo.com/2013/04/16/rmg-be-whipped-badly-due-political-unrest-
72717.html [assess on 06.05.2015]
10. https://nazifahmed.wordpress.com[assess on 07.05.2015]
11. /http://www.bgmea.com.bd/[assess on 11.05.2015]

2
APPENDIX

REFECTORY ACCOUNT
All the group Members contributed equally in data collection and preparation of this report.