Industry Analysis: Tea Industry

Topics: Tea, Oolong, Tea culture Pages: 26 (6667 words) Published: November 5, 2010

1. Introduction:

Situation analysis involves evaluating the situation and trends in a particular industry or company's market. We have to consider two things while situation analysis 1. Company’s external or macro-environment • Industry and competitive conditions

1. Company’s internal or micro-environment
• Competencies, capabilities, resource strengths and weaknesses, and competitiveness. Industry and competitive analysis uses a tool kit of concepts and techniques to get a clear fix on key industry traits, the strength of competition, the drivers of industry, change, the market positions and industries profit outlook. This tool kit provides a way of thinking strategically, about any industry’s overall situation and drawing conclusions about whether the industry represents an attractive investment for company funds. The analysis examines a company’s business in he context of much wider environment. Industry and competitive analysis aims at developing insightful answers to seven questions:

← 1. Industry’s dominant economic traits

← 2. Nature of competition & strength of competitive forces

← 3. Drivers of industry change

← 4. Competitive position of rivals

← 5. Strategic moves of rivals

← 6. Key success factors

← 7. Conclusions about industry attractiveness

Here, we have evaluated the industry analysis of the Tea Industry in Bangladesh. By analyzing the Tea market we have tried to find out answers of the seven questions and the present situation of this industry.

2. Background of Tea Industry:
Tea drinking in Bangladesh which started during the last century is now getting momentum with the pace of urbanization and improvement in the standard of living. Now it’s became very popular as a non-alcoholic drink and we cannot pass our day without taking tea. Bangladesh Tea Board is a statutory body constituted under the Tea Ordinance 1977 to regulate, control and promote the cultivation and sale of Tea in Bangladesh. Tea industry in this part of the sub-continent was controlled by the Indian Tea Cess Act, 1903 till partition in 1947. An eleven member Pakistan Tea Board with a five member Pakistan Tea Licensing Committee was constituted in 1951 under the Pakistan Tea Act, 1950. This Act was repealed by the Tea Ordinance 1959 and an eleven member Tea Board with the provision of a five member Tea Development Committee was constituted. After the independence of Bangladesh, Tea Ordinance, 1977 was promulgate- ed constituting Bangladesh Tea Board of three whole time members with the provision of an Advisory Committee to be formed by the Government with not more than twenty five members. Later the members of the Board were raised to eleven by the Tea (Amendment) Ordinance, 1986.The Head Office of the Board was in Dhaka till it had been transferred to Chittagong in 1984. |  |

Tea is also one of the major exportable commodities of the country. In the form of employment generation, earning foreign exchange and balancing trade deficit it plays an important role in the economy. The total export earning is around 20 million US dollars. While the share of total foreign currency earnings from tea has dropped substantially in recent years, the demand for tea in the local market has gone up significantly in the same time period. In last 10 years demand of tea had been increased quite sharply in local market taking the tea consumption to 48 million kg per year.

1. Industry’s dominant economic traits

← Market size and growth rate

← Scope of competitive rivalry

← Number of competitors and their relative sizes

← Prevalence of backward/forward integration

← Entry/exit barriers

← Nature and pace of technological change

← Product and...
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