Five Forces Analysis.
1. Competitive rivalry between existing players.
2. Bargaining power of suppliers.
3. Bargaining power of customers.
4. Threat of new Entrants.
5. Threat of substitutes.
The southern Asian country of Bangladesh, bordered by India and Burma, has a population of approximately 164 million people. The Bangladesh economy has grown an average of six percent a year over the last two decades. The readymade garments (RMG) industry contributes to the Bangladesh economy in a distinctive manner. The last 20 years witnessed remarkable growth in this sector, which is also the largest exporting industry in Bangladesh. The industry plays a significant role in terms of employment. Nearly two million workers are directly and more than ten million workers are indirectly associated with the industry. In addition to its economic contribution, the expansion of RMG industry has caused noticeable changes by bringing more than 1.12 million women into the workforce. Hence it is quite apparent that this sector has played a massive role in the economic development of the country. Evan the GDP of (RMG) are growing up every year, in 1991 to 2005 the GDP was just only about 4 to 5 percent, but in 2013 it has reached 13 percent of GDP which is highly remarkable. The total export of Bangladesh is 22.90 billion US dollars of which 17.90 billion is from RMG sector that is equivalent to 78 percent of the total export earnings of the country. One of the key advantages of the (RMG) industry is its cheap labor cost, Evan though the labors are very hard worker and highly professional. The factory provides a job opportunity for about 4million people about 70 percent are women who are mostly come from rural area. But there are lots of problem going on in the garments factory, in the recent years due to conflicts between the employers and the employees which are primarily concerned with salary and other benefits. Major accidents are also responsible for this unrest. Recent major accidents and the unrest in this sector have been causing a serious negative impact on the export of readymade garment products of Bangladesh in international markets.
First we need to know what is free market is. A free market based on supply and demand with little or no government control. Anyone can participate in the market without any government intervention. When more producers in the market, the price of the products are goes down little bit and it’s good for consumer. A free market based economy where price of goods are set freely forces by supply and demand, suppliers and customers has enough power to bargaining the price and reach their point of equilibrium where the suppliers and customers are happy without government intervention. Bangladeshi economy is totally free market economy because anyone can join the market anytime, and has a possibility to lose their business. There are no any government rolls and low in the market, most of the companies are private and they are fully responsible about them self, if they loss or gain. But there is a problem too in free market, for example if the company lost their business or no longer able to gain the profit, government doesn’t come forward to help them to rebuild their business or help to do something else. Industry Analysis:
The readymade garments (RMG) Industry are lead by private company, private company are controlling the market. The key products of this industry are knit, woven shirts, blouses, trousers, skirts, shorts, jackets, sweaters, sportswear and many more casual and fashion apparels. In 1983 it was started from only 50 garments factory, now it’s become in 4000 garments factory in Bangladesh, and all the garments factory’s are doing very well.
Garments sector’s continual success can be attributed to the following: Quotas under multi fiber Arrangement (MFA) in the North American market....
References: Bangladeshi readymade garments industry. (14, Oct, 2014).
www.helpme.com/ Bangladeshi readymade garments industry.com
Ahamed, F. (2011). Working conditions in the Bangladesh Readymade Garments
Industry. Bangla news, p. 12.
Siddiqi, H. (2004). The readymade garment industry of Bangladesh. The university press limit.
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