REPORT ON MARKET RESEARCH
Domestic market: India
International markets: Brazil and Bangladesh
Bangladesh has also some opportunities and some problems. Recently introduced privatization policy is now become helpful for international business in Bangladesh. It can be expected that in the near future the country will begin to get the fruits of international business in the new open market economy. PESTAL ANALYSIS
1.1: Economic Environment
Bangladesh has suffered the stigma of a disaster -prone drought-ridden country for many years having a developing economy. Since then it has dropped steadily to about 2%. Export earnings have risen by 40 billion in the past three years to US $ 2.7 billion. In the past 20 years Bangladesh’s annual rate of GDP growth has been among the lowest in the region, averaging about 4%. It has the world’s highest population density. One of concern is Bangladesh’s low domestic savings rate. Last year it reached only 7.5% and investment rates have also been sluggish, averaging about 12% of GDP. The government plans to make the taka fully convertible on the capital account over the next year or two (1996, 1997). In recent years it has been stable, depreciating by only about 2%. 1.2: Political and Legal Environment
Bangladesh has a democratic form of government. The principles of absolute trust and faith in the almighty Allah, nationalism, democracy and social justice constitute the fundamental principles of the state policy. The president is the head of the state and the Prime Minister is the head of the government. The Prime Minister is assisted by a council of ministers. From the very beginning of the country the sky of the politics had always been cloudy. After 9 years regime of military government, a general election was held. The Bangladesh nationalist party came in power. To boost the economy the government introduced monetary and fiscal measures aimed at increasing private investment. It liberalized interest rates, introduced new monetary investments, discontinued direct credit and subsidized refinancing facilities, reduces corporate income tax and introduced the value-added tax (VAT), which last year represented 37% of the total tax revenue.
1.3: Technological Environment
There is a paramount importance of technology as it is rooted in the process of social evolution. Now days, it is appeared as a key resource for corporate profitability and sustainable growth of a country. It also carries importance in the free market economy which enables the firms to fulfill the customers’ demands and to face competitors. Technological competitiveness can only face the international economic competition nowadays. But sometimes the use of technology may not be possible by the producers due to the poor financial health of the companies. It is also notable that if the economy of the country is underdeveloped the potentialities of the business remain unused. The economy of Bangladesh is, in fact, underdeveloped. Now, it is developing because of the introduction of new industrial policy of open market economy. 1.4: Social and Cultural Environment
Bangladesh occupies the highest density of the world. The literacy rate is now about 34% for population 5 years and above. The country-wide intensive family planning measure is aimed at reducing the growth rate of population. It is a country of Muslims, Hindus, Buddhists and Christens. Bangladesh occupies an important position among the South Asian Region in education and culture. There are 12 national and 11 private universities in Bangladesh. Muslim and Hindu cultures are dominant in the country. Sometimes cultures are creating barriers in practicing business. These are as follows:
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