The reasons for this less than expected performance fall in two categories– operational issues and theoretical issues. The operational issues are mostly known to people. Issues such as inappropriate site selection, absence of parking facilities, product assortment, inefficient supply chain management, and corrupt management are highly pronounced. This article sheds light on the theoretical aspects of this apparent fiasco.
Most people would agree that organized retailing of FMCGs in Bangladesh is at nascent stage of its industry life-cycle. We can trace back the launching of Agora flagship store in 2001. In the USA and all other developed markets, it’s a matured industry. A USP that works well in a matured industry might not work well for the same industry if the industry is at its introduction phase.
Swapno is an imitation of Walmart model. The USP is centered on low price (a benefit that Swapno management thought customers would value). Does a typical consumer of superstores in Bangladesh look for lower prices? Ask yourself or anyone who patronize(s) superstores somewhat regularly. The benefits most people would mention are convenience (one can get everything under the same roof), quality, and prestige or status. Low price is not on the top of this list!!! I know people feels ‘cheap’ going over there!!!
Nevertheless, low price is important but not as an effective differentiator at this point of industry life-cycle. Innovators and early adopters are not price sensitive. One may argue that Big Bazar and Subikhsha in India are huge successes with the same USP. Despite...