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Dear Sir,
After analyzing Walton Dhaka and doing a thorough online research on Walton
Bangladesh, I have been quite successful in collecting strategic information about
Walton Bangladesh. A survey among the existing and prospective Walton also
helped me to understand the market trend and the consumer behavior. The
following report is the result of my findings and efforts.
Sincerely,
Mohammad Rasel Mahmud
ID No: 151 2698 090
School of Business
North South University
Executive Summary
This report was custom-made to analyze and evaluate performance and future
prospects of Walton in a growing domestic electronic market.
The researches reveal that in a continuously growing market, Walton has become
a reliable name for customers. Countrywide network, inclination towards quality
and dedicated team of employees are the main concern of its success. Though it
had started business with home appliances, yet it has always been committed to
satisfying customer demand by introducing new products. Recent production and
selling of motorcycle and air-conditioner testifies that position of Walton.
Walton has an aspiration to double overall market share in the next 5 years. It has
successfully positioned itself as a customer friendly and eco-friendly Company. It’s
after sales service has contributed tremendously in building this image in
customers’ minds.
Since its target market is middle-income people, the price of their products is
comparatively lower than those of competitors’. This strategy helps the company
greatly in a price sensitive consumers market. In recent years Walton has
increased promotional activities through organizing various national sports
events.
Further investigations have revealed that to achieve the role of market leader, it
will face challenge from foreign brands. Moreover, rapidly growing demand from
customers for electronic products may put pressure on Walton.
The prospect of Walton promising in its current position is the mainstream of this
research. Favorable government policy will help it expand domestic and
international markets in the future.
Table of Contents
Particulars Page No.
Executive Summary
1.Introduction 01
1.1.Origin of Report 01
1.2.Objective 01
1.3.Methodology 01
1.4.Limitations 02
2.Company and Market Background 03
2.1.Electronics market in Bangladesh 03
2.2.Walton HIL 04
2.3.Competitor Analysis 05
2.4.Market Share 06
3.Strategic Situational Analysis 07
3.1.Market Analysis 07
3.2.Market Segmentation 07
3.2.1.Demographic 08
3.2.2.Geographic 08
3.2.3.Psychographic 09
3.3.PEST Analysis 10
3.4.SWOT analysis 11
4.Marketing Strategy 12
4.1.Market positioning 12
4.2.Marketing Mix 12
4.2.1.Product 12
4.2.2.Price 14-15
4.2.3.Place 15
4.2.4.Promotion 15
5.Financial Analysis 16
6.Future Growth and Challenges 16
6.1.Current Market Status 16
6.2.Challenges 17
6.3.Future Growth 17- 18
7.Recommendation 18
8.Conclusion 18
9.Appendix 19-20
10.References 21
List of Table
Particulars Page No.
Table 01: Import of home appliances in Bangladesh 04
Table 02: Price comparison of Refrigerator 14
Table 03: Price comparison of TV 14
Table 04: Price comparison of Motorcycle 14
Table 05: Financial analysis of Walton 16
Table 06: Market comparison 16
Table 07: Future growth of Walton HIL 18
List of Figures
1. Introduction
This report was assigned by Professor Dr. Jashim Uddin Faculty of Strategic
management, School of Business, North South University.
1.2. Objectives:
1.3. Methodology:
The methodologies used in the research process for this report, Ire:
Data Collection
Primary data is the information that I collect first-hand and secondary data is the
information collected by others and used by me. For data collection, I used three
approaches:
a. First, I conducted some field research. I went to some Walton retail outlets and
asked the customers about their valuable suggestion and opinions.
c. I went to Walton head office and collected the annual reports for Walton
Bangladesh for the year 2010.
1.4. Limitations
Though I tried I best to make a perfect report, a few limitations held me back. The
main limitations that I faced, were –
a. As many of the common products were barred, I had to choose one from a
limited number of options.
b. When I went to collect information from the Walton outlets, they were not
fully able to cooperate with me, as I required information was confidential.
Semiconductor Market
Electronics Appliances Market
Raw Materials and Spare Parts Market
IT Market
Walton is one of the major players in the electronic appliances market. They are
also manufacturing motorcycles alongside home appliances such as television,
refrigerators, air-condition etc.
The market of these products relies heavily on the average household income. For
most people in Bangladesh home appliances had been luxuries they, which they
cannot afford, but recently the situation have been changing. Over the last 10
years, there has been massive economic growth in the country, which has
increased the income of lower-middle and middle class people. So the demand
for home appliances has increased substantially.
If I look at the annual GDP growth of the country in the last 10 years, I can see
that there has been a steady increase.
One of the main reasons of this growth has been because of the increased
investment in the fast growing sectors of the economy, which has reduced the
rate of unemployment drastically over the years.
It is evident that the increase in earning of the population has also had an impact
on the buying behavior. Middle and upper middle classes have emerged and
reached a certain level that is attractive for the importers and manufacturers.
Bangladesh Bank has the records of imports of Home Appliances over the years.
At first there was a huge growth to the numbers of Home Appliances imported in
the country, but the numbers have declined in recent years, as tax holidays on
imported parts and high import tax on electronic products have made companies
focus on assembling and manufacturing their products in Bangladesh.
Walton Hi-Tech Industries Ltd (Walton HIL) is one of the best companies in the electronic sector
of Bangladesh. Walton is one of those few Bangladeshi companies that export electronic
products since most of the companies in Bangladesh import products of various famous brands.
The company was established in 1977. Since then, it has been setting new benchmarks in
production of electronic goods in Bangladesh.
The company has a yearly production capacity of 1.4 million pieces of fridge, 300,000 pieces of
air conditioner and 300,000 pieces of motorbike. In its early stage, the company used to
produce home appliances. Today their product mix includes Mobile Phone, Generators, and
Motorbikes.
In 2009 the company signed an agreement with the Malaysian auto manufacturer Agatha to set
up an automobile plant in its factory premises. After meeting the local demand the company is
exporting its products to Qatar, Dubai, Abu Dhabi and Kuwait of Middle East, Ghana of Africa
and India, Nepal and Bhutan of South Asia and U.S.A It also wants to export its products to
France, Italy, Germany, Spain and other European countries. Walton has been successful in
capturing this large international market because of its high quality products. To ensure this
high quality of products all the members of the Walton family, both factory and administrative
members, work very hard round the year.
The factory of Walton is situated in Saver and the corporate office is at Dilkusha C/A, Dhaka.
There are 120 outlets of Walton throughout the country so that customers everywhere can buy
Walton products. Walton has a dedicated team of skilled engineers and technical personnel
from home and abroad who ensure quality products for the customer. Because of this highly
skilled team Walton can offer the customers a wide range of products.
Most of these brands have been in this market for a long time. But none of them
were able to match the market growth of Walton in the last 3 years. Although LG-
Butterfly is the No.1 home appliances brand in the country, Walton is catching up
fast.
Walton has started manufacturing major parts for the assembly of motorcycles.
Right now they hold nearly 8% of the market share. Its competitors are:
Bajaj
Hero Honda
Dayun
TVS
Singer
Butterfly
2.3. Competitor Analysis
LG LG LG
Panasonic Whirlpools
Bangladesh, with its growing population and economic growth, has huge demand
for household products. The fact that only about 60% of the country has
electricity available proves that when electricity will be available throughout the
country, demand will increase further.
As the people of this country are mainly price sensitive, Walton, being the sole
manufacturer of refrigerator, freezer and motorcycle, is very keen to meet the
demand of this large market by providing competitive prices.
Walton’s primary goal is to capture the local market, as they are still behind
market leader LG-Butterfly. But they are also exporting their products. Already
they have customers in Myanmar, Bhutan and planning to expand their market to
Africa.
Walton segments the whole country in eleven zones for marketing purpose &
they are:
Maintaining the sales in high demand zones like Dhaka, Camilla, Bogra the
marketing department is trying to increase their sales in low demand zones.
Currently, Walton has either their retail shops or dealer shop in all of the 65
districts of Bangladesh. They have multiple shops in Dhaka and Chittagong in
order to provide maximum convenience.
Political Factor:
Economic Factor:
Technological Factor:
Strengths
Weakness
Limited items.
It has management problem.
Too much inside out thinking in the company.
Different departments not working together.
Sometimes a tendency to be ignores.
High employee turnover.
Opportunities
Threats
(1) Motorcycle
(2) Refrigerators & Freezer
(3) Air conditioner
(4) Mobile phone
(5) Television etc.
Walton has its own mold & Die making sections, VMC,CNC wire-cut,EDM
machines. It has 08 poly urethane forming plants, 15 thermoforming (vacuum
forming) units highly equipped metal forming units with poIr coating, 2d scanner
& printers, nickel-chrome plants and die ; casting section.
Walton also has robot operated .Injection plastic molding plants, highly equipped
test labs, printing & packaging section, alloy wheel marketing & Ed plants. Walton
has very strong & right quality control policy and ill equipped division consists of
all types of testing device as required including worlds latest CMM.
Financial Situation
Walton strategy is to continue to exercise strong discipline over their operating
costs and capital expenditure to achieve improves efficiency and productivity in
their operations and leverages their existing capacity. They have also plan to
reduce their operation and maintenances expense by, among other things, using
solar power, controlling service agreement pricing and lobbying to reduce the
other tax. That’s why they are using as
Walton has created huge enthusiasm among the consumers of its target market
with its slogan “Aamader Ponnyo”. They accepted Walton’s endeavor of
manufacturing some electronic items like, refrigerator & Freezer and motorcycle
for the first time in Bangladesh, and are more than willing to buy a product of
high quality made in I own country. On the other hand, as a local manufacturer
Walton can sell quality products at comparatively lower price than other
competitors.
It also makes its product available at the nearest possible places in each areas of
Bangladesh through Walton Plazas (own showroom) and countrywide dealers.
New Walton Plazas are being opened frequently in different places of the country
for getting closer to the customers.
Another strategy of Walton for creating a concrete place in the customer mind is
it’s after sales service in order to providing the quickest possible after sales
service to the customers. Walton has already established 39 Service Centers and
opening more service centers is under process. Walton equally values its sales and
after sales service for maintaining a long and positive relation with its customer
and thus retain and increase the customer.
Strategy
Bangladesh with its growing population and economic growth has huge demand
for household products. The fact that only about 60% of the country has
electricity available proves that when electricity will be available throughout the
country, demand will increase further. As the people of this country are mainly
price sensitive, Walton, being the sole manufacturer of refrigerator, freezer and
motorcycle, is very keen to meet the demand of this large market by providing
competitive prices. Walton’s primary goal is to capture the local market, as they
are still behind market leader LG-Butterfly. But they are also exporting their
products. Already they have customers in Myanmar, Bhutan and to expand their
market to Africa.
Walton always tries to make the best possible services. Moreover, it does not
promise any specific quality standards in service. Walton now try to give service
all side in I country. Walton tries hard to offer the best service quality, though, the
quality, consistency and accessibility of service is not guaranteed as the same are
dependent on various technical, physical, topographical, distinctive, environment,
regulatory, legal, and such other factors. Walton has the right to change /vary /
reduce the extra charges, prices, validity period, product/service feature and any
other offers etc at any time in its sole carefulness for any reason subject to official
notification of such offers prior to giving effect to such changes.
4.2.1. Product:
Walton has a good number of products available in the market. The company
produces home appliances, mobile, generator and motorbike. A brief description
of its major products is given below:
➢ Refrigerator
Walton mainly produces home appliances. In fact in its Ibsite the company is
introduced as the pioneer in refrigerator production in Bangladesh. Walton
Refrigerator & Freezer ensures highest quality compressor, Condenser is made by
100% copper, which lasts for 20-30 years. The most important thing is that every
spare parts including door with different color are changeable and available
everywhere over the country.
➢ Television
Walton produces LED, LCD, and CRT televisions. Walton Television ensures home
cinema entertainment. Walton Television’s d4ta Digital Technology is one of the
most innovative technological solutions that automatically reduces video noise,
Selects the best picture and performs fine-tuning by auto frequency tracking
technology.
➢ Motorcycle
Walton motorcycles are now competing with the Indian Hero-Honda and TVS
brand. The motorcycles have become famome becamee of the special
specification like mobile phone indicator, Digital gear display, Fuel location meter,
Air shock absorber, Remote control, Hydraulic Brake, Anti-Theft lock and Alloy rim
etc. Walton motorcycles are also fuel-efficient.
Other than these products Walton also produces Mobile handsets, generators, air
conditioners, DVD players, and microwave ovens.
Walton Product
4.2.2. Price
Walton’s main target market has always been middle-income group. SO they have
been very careful in setting their price of product. Also the fact that they
manufacture their products, it allows them to set a loIr price than their
competitors, as they don’t have to pay heavy import duty. Below is a comparison
of the prices of different products of different brands-
In all three products in which I have done market research, it is evident that
Walton is providing the consumers with the least expensive product. It is vital for
Walton as price is the only tool where they have a superior advantage
over other brands. But it must be noted that consumers in higher
income level also look for quality products. So Walton n e e d s t o f i n d a
f i n e b a l a n c e b e t we e n p r i c e a n d q u a l i t y a s t h e y m o v e f o r w a r d i n
t h e coming years.
4.2.3. Place
For making the product available to its target customers Walton use its
distribution channel. Walton generally uses its own transport facilities for
reaching the product to its 120 Walton Plazas and about 700 dealers. If any dealer
wants to use his own transport for transporting Walton products from factory to
his shop, he gets 1% reduction on dealer price.
4.2.4. Promotion
Ever since Walton started its production in its manufacturing plant, they have
started a wide promotional campaign on its product. Their tagline “Amader
Ponnyo” reflects the pride they take by being able to sell home appliances
manufactured in Bangladesh. Right now Walton has TVCs running in all major
satellite channels of Bangladesh in peak hours targeting their core target
customers. Also they have numerous billboards and advertisements in print
media. Also their 120 Walton Plazas across the country also works as a major
advertising tool. Walton has recently started sponsoring different major sports
event in the country. Recently they sponsored their first International Cricket
Tournament and thus it allowed their brand to be viewed by millions of people
across the world.
5. Financial Analysis
I can see from the above table that clearly overall LG leads and have a significant
lead when it comes to these values. They have been in the market for 20 years
and have done remarkably to capture nearly one-fourth of the total home
appliance market. But coming second right now is Walton. By providing the same
quality in much lower price, Walton has created an excellent brand following.
They have a very good distribution system, without lets all over the country. But
their main problem has been variety. They are still way of the benchmark at the
moment when it comes to product variety. But Walton will put more emphasis in
this sector and plan to catch the lights of LG and Sony in the next 5 years.
6.2. Challenges:
Walton has decided to penetrate market, develop both market and product to
achieve profitable growth in future.
Market penetration
Through extensive promotion campaign Walton has set goals to make more sales
in future. Countrywide distribution system helps it achieve its goals.
Market Development
Walton is exporting its products in Middle East, Latin America and Africa. It has
plans to explore European markets also.
Product Development
7. Recommendations
To establish Walton as the brand for home appliances & other electronic
accessories, some changes are needed in its strategies-
8. Conclusion
Walton HIL is the first company to introduce advanced research and
manufacturing technologies and equipment for household & commercial
Refrigerator & Freezer, Motorcycle and Air Conditioner etc. in Bangladesh. For
Bangladesh, Walton has become a company to be proud of in the export arena. It
has truly redefined Bangladesh from being a consumer country to a producer
country for home appliances.
The company has been running its business with good reputation since 1977.
Establishment of Walton HIL to manufacture Refrigerator & Freezer, Air
Conditioner, and Motorcycle etc. In Bangladesh it is a milestone in the path of
success and reputation of the brand WALTON, I believe.
9. References
www.walton.com.bd
Arif Ahmed: Marketing Officer LG-Butterfly
Annual reports for Walton Bangladesh for the year 2010.
“ITALTEL’S new chief gets what she wants” bmeiness Iek, april
30. 1984, p.51; Robert ball, “italy’s most talked-about executive,”
fortune, april 2, 1984, pp. 99-102; marisa bellisario “the turnaround at
ITALTEL,” LONG RANGE PLANNING, VOL. 18, NO. 6(1985), pp.21-24.
Zachary schiller, “a model incentive plan gets caught in a vise,”
bmeiness Iek,January 22,1996,pp.89-90;caroiyn wiley, “incentive plan
pmehes production” in Arthur A.thompson,jr,a.j.
Smean scherreik, “yI performance review: make it
perform,”bmeiness Iek,December 12,2001,pp.139-40.
http://walton Bangladeshlimited.edu/cahrswp/414,accessed
November 13,2008
Michale totty, “the dreaded performance review,” the
wa;bdllstreetjInal,November27,2006;http//www.halogenoftware.comirl.
cornell.edu/cah...