Contemporary Complexities of Business Environment of Bangladesh: a Critical Analysis of Using Different Model

Contemporary Complexities of Business Environment of Bangladesh: A critical Analysis of Using Different Model

Assignment on

Contemporary Complexities of Business Environment of Bangladesh: A critical Analysis of Using Different Model

Course Name: Business Analysis in National & International Context
Course Code: IB-407

Prepared for:
Mohammad Shahin Miah,
Lecturer,
Department of International Business,
University of Dhaka

Prepared By:
Md. Mizanur Rahman,
Roll No. 51,
Fourth Year, First Semester,
Session: 2008-2009,
BBA (15 th batch),
Department of International Business,
University of Dhaka

Submission Date: April 15, 2013 April 15, 2013
Mohammad Shahin Miah,
Lecturer,
Department of International Business,
University of Dhaka

Subject: Submission of an assignment.

Honorable Sir;
I am pleased to submit assignment on “Contemporary Complexities of Business Environment of Bangladesh: A critical Analysis of Using Different Model” the course Business Analysis in National & International Context (IB: 407). I have prepared the paper based on learning and your instructions.

I am confident that the presentation of this term paper has enhanced both my practical experience and theoretical knowledge to a great extent. It would be helpful for me if this term paper serve the purpose and fulfill your Requirements.

Thanking you,
Sincerely yours,

Md. Mizanur Rahman,
Roll No. 51, BBA (15th batch),
Fourth Year, First Semester,
Department of International Business,
University of Dhaka

Table of Contents

Sl. No. Contents Page No.
01. Introduction 5
02. Overview of Bangladesh 6
03. Business Environment of Bangladesh 8
04. SWOT Analysis of Bangladeshi Industry 9
05. PEST/ STEEP Analysis 14
06. Porter’s Five Forces Model 21
07. The Nine Forces Model 27
08. Applying the FAROUT Model 32
09. Conclusion 35
10. Bibliography 36

Introduction:
Bangladesh emerged as an independent and sovereign country in 1971 following a nine month war of liberation. It is one of the largest deltas of the world with a total area of 147,570 sq. km. With a unique communal harmony, Bangladesh has a population of about 152.51 million, making it one of the densely populated countries of the world. The majority (over 88%) of the people are Muslim. Over 98% of the people speak in Bangla. English, however, is widely spoken. The country is covered with a network of rivers and canals forming a maze of interconnecting channels. Being an active partner, Bangladesh plays vital role in the international and regional forum, particularly in the UN, Commonwealth and South Asian Association of Regional Cooperation (SAARC).

Doing business in Bangladesh has become harder than before, notwithstanding what the government leaders have been claiming it to be otherwise. Entrepreneurs, old and new, are already experiencing the difficulty. The latest global survey of the International Finance Corporation (IFC) on the same issue has only re-confirmed it. Bangladesh 's ranking has slipped five notches down - from the 124th to the 129th among 185 countries - when that of its neighbors has either improved or remained unchanged. The IFC 's 'Doing Business-2013 ' report highlights how troublesome or easy it is to open or run a medium or a small-scale enterprise, in terms of availability of funds and compliance with relevant laws and regulations, in the countries surveyed under the study report.

Easy access to credit and ensured supply of gas and power are considered key to starting and operating any business enterprise, commercial or industrial. But the situation with both the factors remains very uncomfortable in Bangladesh. The IFC report reveals only a part of the problem. Getting an electricity connection, the report said, takes 404 days and involves nine procedures. But in addition to these hassles, any enterprise willing to get power connection has to grease the palms of officials of the state-owned distribution power entities. Moreover, the power shortage has made the situation worse.

Geography:
Location: Between 200 34 ' and 260 38 ' north latitude and between 880 01 '
And 920 41 ' east longitude.
Boundary: North: India
West: India
South: Bay of Bengal
East: India and Myanmar
Area: 56,977 sq. miles or 147,570 sq. km.
Territorial water: 12 nautical miles
Main seasons: Summer (March-May), rainy season (June-September) and winter (December-February)
Climate variations: Season Temperature Rainfall Relative humidity maximum minimum Pre monsoon 32.60C 22.40C 453 mm 74% Monsoon 31.50C 25.50C 1,733 mm 86% Post monsoon 30.50C 21.40C 210 mm 80% Winter 26.50C 13.90C 44 mm 73% Annual 30.40C 21.20C 203 mm 78%
Principal seasonal crops and fruits: Paddy, jute, wheat, tobacco, pulses, oil seeds, spices, vegetables, jack-fruit, banana, mango, coconut, pineapple etc.
Natural resources: Natural gas, coal, lime, white clay, granite, glass sand.

National Demographics:

Total population (m*) 152.51
Male (m) 76.35
Female (m) 76.16
Annual growth rate 1.37%
Sex ratio (males per 100 females) 100.3
Density (per sq km) 1015
** number shown in million

Economy:

GDP total: $112.00 bn (at current prices 2011-12)
GDP per capita: $772 (at current prices 2011-12)
GDP growth rate (%): 6.32 (at constant prices 2011-12)
Total exports: $24.287 bn (2011-12)
Total imports: $35.44 bn (2011-12)
Total FDI: $1.136 bn (2011), $462.77 m (Jan-June,2012)
Forex reserves: $12.35 bn (Nov, 2012)
Currency: BDT (1 BDT=$0.0121) (avg 2011-12)

Business Environment of Bangladesh:
The country 's economy is based on agriculture. Rice, jute, tea, sugarcane, tobacco, and wheat are the major crops. Bangladesh is the world 's largest producer of jute. Fishing is also an important economic activity, and beef, dairy products, and poultry are also produced. Except for natural gas (found along its eastern border), limited quantities of oil (in the Bay of Bengal), coal, and Bangladesh possesses few minerals.

Dhaka and Chittagong (the country 's main sea port) are the principal industrial centers; clothing and cotton textiles, jute products, processed food, pharmaceuticals products, steel, and chemical fertilizers are manufactured. In addition to clothing, textiles, jute, and jute products, exports including tea, leather, fish, and shrimp. Remittances from several million Bangladeshis working abroad are the second largest source of foreign income. It has been now normal practice from few years back to present, Bangladesh Government have been sending our Defense Troops to all over the world for United Nation Peace Keeping operation mission. At present moment Bangladesh is the largest troops contributing country for United Nation Peace keeping/enforcement operation in all over the world. Our Bangladeshi Troops members are now become very renowned and highly appreciated at all levels for there honesty, sincerity and professionalism.

Since the country is unable to feed itself, the most important of Bangladesh 's imports are food. Capital goods, petroleum, are other major imports. Western Europe, the United States, India, and China are the main trading partners.

SWOT Analysis for Bangladeshi Industry:
Over the last few decades, Bangladesh has been following a development path that was blazed by the fast growing Asian economies with export led growth fuelling higher living standards and falling poverty. Despite this, it is not too difficult to posit that Bangladesh today has more in common with the laggards in Asia. Slow growth, rising inequality, and a deprived countryside deny the vast majority of the Bangladeshi people the opportunity to enjoy happier, healthier, and more prosperous lives.

For moving forward, Bangladesh needs to identify the opportunities and the key weaknesses that the country faces and adopt appropriate measures. There are many ways of doing this analysis. One popular method is to list the Strengths, Weaknesses, Opportunities, and Threats (SWOT) facing the economy and society at large. Although the SWOT analysis is more often applied to evaluate the competitive position of a company this can also be applied to a country. In particular, SWOT analysis is forward looking; it is less for the past than for the future. The exercise identifies areas that need attention or might emerge as problem areas in future. There may be success in some areas. But does that mean we should continue to do the same or shift gears and put more emphasis on other issues? The main purpose of conducting a SWOT is to get a sense of the relevant issues of taking strategic decisions-- of priorities, of possibilities, and of dangers. This is important to begin a thoughtful discussion; a serious conversation about the priorities that we should focus on. The SWOT analysis: From a strategic perspective, what can be said about Bangladesh in terms of its strengths and weaknesses? We shall try to briefly identify some of the major ones.

Strengths and weaknesses:
In terms of strengths, there is no doubt Bangladesh is in a good geographic location. It provides an important link between the economies of South Asia and the dynamic Southeast Asian region. Bangladesh sits on strategic trade lanes and Chittagong can emerge as a major port to service the regional economies. Although Bangladesh is a new nation, it represents an old and flexible civilization. Both its ecology and history point to the people 's hidden resilience in the face of adversities, with capacity to produce unexpected social renewals and economic recovery. Another source of its strength is the rapid advance made by the nongovernmental organizations (NGOs) and other grassroots bodies, creating alternative delivery mechanisms and acting as vocal civic institutions especially for the poor. This is an important source of 'social entrepreneurialism ' and a channel of vibrant development of many elements in society. The ongoing process of mainstreaming women into development is a strategic strength to bring wider and deeper social and economic changes. Gains in increasing political and electoral participation of women, enhancing press freedom, and creating a vibrant civil society are important for strengthening democratic institutions and consolidating human rights.

The country 's vulnerability to natural disasters has significantly declined that used to inhibit greater investment flow and reduce its productivity and return in the past. Several important structural changes have taken place, such as agriculture becoming more resilient with the spread of dry season irrigated crop production and rapid expansion of non-crop agriculture; non-agricultural sectors assuming greater importance; infrastructure and market developments contributing to greater spatial integration and lower price effect of exogenous shocks; and higher mitigation capacity in responding to natural disasters.

Bangladesh has a fairly good and expanding stock of both physical and human capital, and with favorable policies, the upgrading potential of both capital is bright. The remittances from overseas workers have already become a great source of strength and this can be increased manifold with right policies. Relative stability of the country 's economic fundamentals has created a fairly good macroeconomic environment. As one can see, all the above elements represent significant strengths of the Bangladesh economy.

Against this, one can set some obvious weaknesses. One uncomfortable feature is that Bangladesh is one of the few countries where income poverty is falling slowly even though economic growth has picked up. Even after three decades, most of the economic sectors (especially agriculture) are still weak; health and education indicators are low. Infrastructure, while improving, is still poor especially in electricity, having a per capita use which is among the lowest in the world. Corruption is certainly high. The economic and administrative cost of securing business is high as well. A feature of both a weakness and a threat is the rapidly rising inequality in income and wealth, which neither supports economic efficiency nor social equity. This is socially destabilizing as underemployed urban masses and a swelling rural landless people are much more volatile than a well-rooted community of employed non-farm workers and landed farmers.

The absolute size of the population, despite success in lowering the growth rate, is increasing fast that creates tremendous pressure on resources as well as on provision of essential services.
Looking forward, what advantages or opportunities does Bangladesh have? In a sense, many of the weaknesses that can be remedied are opportunities. If agricultural productivity is low, investments in irrigation, improved agricultural systems, markets, and infrastructure can raise production and productivity. If foreign direct investment (FDI) is low, then improvements in governance, infrastructure, and investment climate can attract more investments. A higher demand for skilled workers can create an incentive for better training and education. Services sector development including export of skilled manpower is a real possibility. There is a promising private sector and the dynamism of this sector, especially in information communication technology (ICT), can be an important opportunity.

Corruption and waste: A great deal of attention has been placed on corruption in Bangladesh. This is entirely justified since corruption is a serious problem in the country. Much less attention, however, has been placed on a related but equally serious problem which is the issue of waste. Waste occurs when an unnecessary and inappropriate investment is made.

One important difference between corruption and waste is that with waste, there may or may not be a transfer of resources to a corrupt person but there is certainly a loss to everyone! If a high- cost factory were built or equipment procured for its proper cost, with nothing added in improperly padded costs or commissions, it would still create a loss for Bangladesh and its people. Higher prices have to be paid to cover the costs of the factory or the services of the equipment, or it is to be shut down. If it is shut down, there is a huge loss. If it operates, the price of the product or the service would be higher than it need be. Thus nobody benefits.

When waste and corruption are combined, those who profit from a bad project derive benefit but society still loses. Corruption must be fought, but we must remember that it exists in all societies. Waste is easier to avoid if there is a serious review of public investments and limited protection, subsidies, or guarantees to private projects. As there are large losses from bad project selection, a nation genuinely concerned with growth and stability will try to ensure that public investments are well chosen.

For selecting appropriate project, an effective review of the economic feasibility of the project is essential. While this no doubt may involve some extra cost, it is much less costly than the 'free ' feasibility studies provided by potential contractors or financiers who stand to benefit if the project is built. Such free feasibility studies examine what kind of project should be built rather than if it is sensible to build the project. These studies are often a rich source of technical data but a poor and weak guide to underlying economics of the project. Bangladesh must manage to insulate investment choices from corruption; we should build what should be built at about the right cost, rather than what should not be built at a wildly inflated cost. We must also avoid wildly inflated costs even on well-chosen projects.

Opportunities and threats:
Ironically enough, opportunities can turn into potential threats. In the past, Bangladesh achieved a slow progress in poverty reduction. In the future, improper management of development may accentuate poverty and inequality leading to social instability. The threat is that governance would become worse and economic decisions would further concentrate wealth, fund capital flight, and increase social tensions. The efficiency in use of resources, and a political strategy for stability, equity, and growth is of greater priority in the coming years than it is now. Several other developments also threaten to undermine the socio-political stability and future economic progress, such as the challenge to ensuring good governance and stable law and order situation, reducing corruption and ensuring political stability, and adverse global developments including terrorism and sharp increase in commodity prices in the global market.

What of other threats? The loss or reduction in garment exports is one such possibility. Building up a real competitive advantage by lowering port and other transport costs and informal charges and bringing in more efficiency in garments production is the best and only response. Similarly, any development that adversely affects the healthy growth of remittances will create a serious threat to economic and social progress.

It is very hard to improve the quality of education and skills within a short time, just as it is hard to provide good health services. The failure to enhance the supply of quality education and good health is likely to create another threat. For the majority with poor education, the prospects for earning a decent income to move and stay out of poverty are not good. For them, indeed jobs will remain insecure and low paying. To help the growing number of young workers find decent jobs, to increase competitiveness, and to improve poverty situation, finding a way to improve critical services, including quality education and health services, is necessary. Perhaps, at this stage, we can put these general points together into a comprehensive format as in Table 1 and Table II various elements; but it is a beginning to visualizing the overall situation.

Policy implications and interactions: As we have done, it is useful to list all elements but like a good recipe a well-functioning economy or society requires the proper mixture and sequencing of policies to be just right. Furthermore, the outcomes (e.g. high poverty) are distinct from and rely upon the causes (e.g. lack of decent employment, poor health and education, high corruption) that contribute to them. Of course, poor health and education and rising corruption create many other ills in society. Thus getting the causality clear, which can and often does flow in both directions, helps to understand the importance of combination of different policies. Rather than trying to do everything equally all at once, it helps to have a sense of priority. Putting the prioritized elements together in a mutually supportive and logical package creates a strategy. The desirable outcome of a SWOT should be a strategic plan to address the challenges.

Moreover, there is also the question of feasibility and timing. Lowering corruption is an excellent idea, but this requires a complicated set of policies and building institutions that take effect only over time. Raising educational quality (as opposed to coverage) requires training of teachers, developing curricula that fit current circumstances, providing better incentives, improving supervision and management, and other measures that can take several years.

A further element concerns the urgency or pace of change of negative or positive developments. Is income inequality rising very fast? That would suggest moving aggressively to deal with it. Is the garment industry in need of sizeable cost reductions in transport and port charges? This too could be dealt quickly through increasing efficiency and improving management, so that more of the existing base can be preserved and expanded in future. Thus, by identifying the key issues and establishing their relation with each other, a degree of clarity is possible that helps to make one clear about priorities and the time a policy will take to bring the outcomes.

PEST/ STEEP analysis: Figure: PEST analysis

1) Political and Legal Environment:
Currently, the political environment is not so good in Bangladesh. As a democratic country, obviously the political environment of Bangladesh should be dressed of democratic form. But, in most of the cases political environment of Bangladesh would become so pollute that we cannot imagine that what type of political system has been following by our political parties. Without political unity, amity, true exercise of democracy; the political environment of Bangladesh can never be healthy. The greatest leader Abraham Lincoln stated that, democracy is of the people, by the people, for the people. To me, all of Bangladeshi politician must have to follow the statement so that the real political environment shall be pervaded in Bangladesh. Perhaps the most important considerations for global business firms are the political and legal forces operative in the countries in which they plan to conduct business. Some foreign governments are unstable, that is, there may be frequent, dramatic and unpredictable regime changes and/or political unrest. When this occurs industries may be nationalized; private property may be seized or destroyed; normal business operations may be suspended, the workforce may go on strike. For example, during the recent unrest in Venezuela banks were shut down for months, workers were on strike, rioting broke out, food stuffs were seized from private companies. Even within relatively stable governments, as different administrations come to power different business regulations and attitudes may be adopted.

2) Economic Environment:
In real terms Bangladesh 's economy has grown 5.8% per year since 1996 despite political instability, poor infrastructure, corruption, insufficient power supplies, and slow implementation of economic reforms. Bangladesh remains a poor, overpopulated, and inefficiently-governed nation. Although more than half of GDP is generated through the service sector, 45% of Bangladeshis are employed in the agriculture sector with rice as the single-most-important product. Bangladesh 's growth was resilient during the 2008-09 global financial crisis and recession. Garment exports, totaling $12.3 billion in FY09 and remittances from overseas Bangladeshis, totaling $11 billion in FY10, accounted for almost 12% of GDP.

GDP (purchasing power parity):
$305.5 billion (2012 est.)
$288.1 billion (2011 est.)
$270.5 billion (2010 est.) note: data are in 2012 US dollars
GDP - real growth rate
6.1% (2012 est.)
6.5% (2011 est.)
6.4% (2010 est.)
Unemployment rate
5% (2012 est.)
5% (2011 est.) note: about 40% of the population is underemployed; many participants in the labor force work only a few hours a week, at low wages
Unemployment, youth ages 15-24
Inflation rate (consumer prices)
8.8% (2012 est.)
10.7% (2011 est.)

3) Social Environment:
Socio-cultural factors are deeply rooted elements of a particular society and encompass the values, attitudes, norms, practices, institutions, stratifications, and related ways of a society. Socio-cultural events either force a person or make it desirable to choose entrepreneurship as a career option. From a sociological perspective, a factor such as societal upheaval is considered to have extensive impact on the making of new entrepreneurs. Societal disruptions which affect family life may influence the choice of non-traditional career paths (Hagen 1962). If the family of the entrepreneur does not seem to ‘fit in’ society or is seen to be different, then their children may feel the need to create a new niche for themselves (Kets de Vries 1996). Some studies indicate that entrepreneurs are more likely to come from ethnic, religious or minority groups (Weber 1958; Hirschmeyer 1964). It is widely believed that some society/culture is more conducive to entrepreneurship than others.

Bangladesh is noted for the remarkable ethnic and cultural homogeneity of its population. Over 98 percent of its people are Bengalis; the remainder is Biharis, or non-Bengali Muslims, and indigenous tribal peoples. Bangladeshis are particularly proud of their rich cultural and linguistic heritage because their independent nation is partially the result of a powerful movement to uphold and preserve their language and culture. Bangladeshis identify themselves closely with Bangla, their national language.

One of the world 's most densely populated nations, Bangladesh in the 1980s was caught in the vicious cycle of population expansion and poverty. Although the rate of growth had declined marginally in recent years, the rapid expansion of the population continued to be a tremendous burden on the nation. With 82 percent of its people living in the countryside, Bangladesh was also one of the most rural nations in the Third World. The pace of urbanization in the late 1980s was slow, and urban areas lacked adequate amenities and services to absorb even those migrants who trekked from rural areas to the urban centers for food and employment. Frequent natural disasters, such as coastal cyclones and floods, killed thousands, and widespread malnutrition and poor sanitation resulted in high mortality rates from a variety of diseases.

In the late 1980s, poverty remained the most salient aspect of Bangladeshi society. Although the disparity in income between different segments of the society was not great, the incidence of poverty was widespread; the proportion of the population in extreme poverty--those unable to afford even enough food to live a reasonably active life--rose from 43 percent in 1974 to 50 percent in the mid-1980s. The emerging political elite, which constituted a very narrow social class compared with the mass of peasants and urban poor, held the key to political power, controlled all institutions, and enjoyed the greatest economic gains. Urban in residence, fluent in English, and comfortable with Western culture, they were perceived by many observers as socially and culturally alienated from the masses. At the end of the 1980s, Bangladeshi society continued to be in transition--not only from the early days of independence but also from the colonial and Pakistani periods as well--as new values gradually replaced traditional ones.

Nearly 83 percent Muslim, Bangladesh ranked third in Islamic population worldwide, following Indonesia and Pakistan. Sunni Islam was the dominant religion among Bangladeshis. Although loyalty to Islam was deeply rooted, in many cases beliefs and observances in rural areas tended to conflict with orthodox Islam. However, the country was remarkably free of sectarian strife. For most believers Islam was largely a matter of customary practice and mores. In the late twentieth century fundamentalists were showing some organizational strength, but in the late 1980s their numbers and influence were believed to be limited. Promulgated in June 1988, the Eighth Amendment to the Constitution recognizes Islam as the state religion, but the full implications of this measure were not apparent in the months following its adoption. Hindus constituted the largest religious minority at 16 percent; other minorities included Buddhists and Christians.

Since its birth in 1971, Bangladesh has suffered through both natural calamities and political upheavals. In July-September 1987, for example, the country experienced its worst floods in more than thirty years, and floods during the same period in 1988 were even more devastating. In 1987 more than US$250 million of the economic infrastructure was destroyed, the main rice crop was severely damaged, and an estimated 1,800 lives were lost. The 1988 floods covered more than two-thirds of the country, and more than 2,100 died from flooding and subsequent disease. The country also underwent a period of political unrest fomented by major opposition political parties. Enduring uncertainties as the 1990s approached were bound to have an impact on social development, especially in the areas of education, development of the labor force, nutrition, and the building of infrastructure for adequate health care and population control.

4) Technological Environment:
The need for faster technological development is increasingly felt in Bangladesh. Development plans of Bangladesh have emphasized science and technological research to develop technologies through adoption of imported technology as well as development of indigenous technologies. As the country is heavily dependent on imported technologies, proper planning is required for its effective transfer through acquisition, assimilation and adoption.

A National Science and Technology Policy has been formulated and adopted by the Government. It has laid down the directions for S and T activities and research, institutional and manpower development. Dissemination and documentation facilities. The National Council for Science and Technology (NCST) determines S and T policies, reviews the activities of different institutions and provides direction towards S and T research and activities.

Bangladesh was once an epitome of rich cultural identity during when science and technology was also a thriving field in the region. The cultivation of modern science started during the British rule when the first modern educational institutions, focused on scientific fields, were established in Bangladesh. The University of Dhaka, established in 1921, acted as the driving force in producing many renowned scientists in Bangladesh.
Since its independence in 1971, Bangladesh has been plagued with many social issues like poverty, illiteracy etc. Hence, science and technology have lagged behind in the priority list of the successive governments of Bangladesh. However, induced by the recent economic progress, science and technology in Bangladesh has been witnessing intense growth after a period of stagnation, most notably in the information technology and biotechnology sectors. The national policies for science and technology is planned and developed by the National Council for Science and Technology which is controlled by the ministry of science and technology, Bangladesh.

Figure: STEEP/ PEST Factors.

5) Ecological Environment:
Natural environment is valuable resource for activities of creature life. Therefore, the appropriate exploitation and natural environment protection will help stable and sustainable social development. During the course of urbanization, intensive farming, the environmental pollution is serious, reducing the quality of environment. Ecology is usually considered from the perspective of the specific geographic environment that is being studied at the moment: tropical rain forest, temperate grassland, arctic tundra, benthic marine, the entire biosphere, and so on. Thus you might study the population ecology of lions in an African savanna, an ecosystems study of a marine benthic environment, global nutrient budgets, and so on. The subject matter of ecology is the entire natural world, including both the living and the non living parts. Biogeography focuses on the observed distribution of plants and animals and the reasons behind it. More recently ecology has included increasingly the human-dominated world of agriculture, grazing lands for domestic animals, cities, and even industrial parks. ecology is a discipline that has recently been developed, especially in Europe, where the objective is to follow the energy and material use throughout the process of, e.g., making an automobile with the objective of attempting to improve the material and energy efficiency of manufacturing. For any of these levels or approaches there are some scientists that focus on theoretical ecology, which attempts to derive or apply theoretical or sometimes mathematical reasons and generalities for what is observed in nature, and empirical ecology, which is concerned principally with measurement. Applied ecology takes what is found from one or both of these approaches and uses it to protect or manage nature in some way. Related to this discipline is conservation biology. Plant ecology, animal ecology, and microbial ecology have obvious foci. There are usually four basic reasons given to study and as to why we might want to understand ecology: first, since all of us live to some degree in a natural or at least partly natural ecosystem, then considerable pleasure can be derived by studying the environment around us. Just as one might learn to appreciate art better through an art history course so too might one appreciate more the nature around us with a better understanding of ecology. Second, human economies are in large part based on the exploitation and management of nature. Applied ecology is used every day inforestry, fisheries, range management, agriculture, and so on to provide us with the food and fiber we need. For example, in Argentina in many circles there is no difference between ecology and agriculture, which is essentially the ecology of crops and pastures. Third, human societies can often be understood very clearly from ecological perspectives as we study, for example, the population dynamics (demography) of our own species, the food and fossil energy flowing through our society. Fourth, humans appear to be changing aspects of the global environment in many ways. Ecology can be very useful to help us understand what these changes are, what the implications might be for various ecosystems, and how we might intervene in either human economies or in nature to try to mitigate or otherwise alter these changes. There are many professional ecologists, who believe that these apparent changes from human activities have the potential to generate enormous harm to both natural ecosystems and human economies. Understanding, predicting and adapting to these issues could be the most important of all possible issue for humans to deal with. In this case ecology and environmentalism can be the same.

PORTER’S FIVE FORCES MODEL

Figure: Porter’s five forces analysis.

1) Threat of New Entry:
A major force shaping competition within an industry is the threat of new entrants. The threat of new entrants is a function of both barriers to entry and the reaction from existing competitors. There are several types of entry barriers:

Economies of scale: Economies of scale act as barrier to entry by requiring the entrant to come on large scale, risking strong reaction from existing competitors, or alternatively to come in on a small scale accepting a cost disadvantage. Economies of scale refer to the decline in unit costs of a product or service (or an operation, or a function that goes into producing a product or service).
Product differentiation: Product differentiation creates a barrier to entry by forcing entrants to incur expenditure to overcome existing customer loyalties. New entrants must spend a great deal of money and time to overcome this barrier.
Capital requirements. The capital costs of getting established in an industry can be so large as to discourage all but the largest companies.

Cost advantages independent of scale. Existing firms may have cost advantages not available to potential entrants regardless of the entrant 's size. These advantages can include access to the best and cheapest raw materials, possession of patents and proprietary technological know-how, the benefits of learning and experience curve effects, having built and equipped plants years earlier at lower costs, favorable locations, and lower borrowing costs.

Switching costs: Switching costs refer to the one-time costs that buyers of the industry 's outputs incur if they switch from one company 's products to another 's. To overcome the switching cost barrier, new entrants may have to offer buyers a bigger price cut or extra quality or service. All this can mean lower profit margins for new entrants.

Access to distribution channels: Access to distribution channels can be a barrier to entry because of the new entrants’ need to obtain distribution for its product. A new entrant may have to persuade the distribution channels to accept its product by providing extra incentives which reduce profits.

Governmental and legal barriers: Government agencies can limit or even bar entry by requiring licenses and permits. National governments commonly use tariffs and trade restrictions (antidumping rules, local content requirements, and quotas) to raise entry barriers for foreign firms.

The effectiveness of all these barriers to entry in excluding potential entrants depends upon the entrants ' expectation as to possible retaliation by established firms. Retaliation against a new entrant may take the form of aggressive price-cutting, increased advertising, or a variety of legal man oeuvres.

2) Bargaining Power of Suppliers:
The more powerful a seller is relative to the buyer, the more influence the seller has. This influence can be used to reduce the profits of the buyer through more advantageous pricing, limiting quality of the product or service, or shifting some costs onto the buyer (e.g. shipping costs). Suppliers are powerful if:

 Suppliers are concentrated or differentiated: If there are only a few suppliers (or one) in the market, the suppliers will have more leverage because of the lack of available alternatives.

 Significant costs involved in switching suppliers: Customers are less likely to switch suppliers if there are large costs associated with switching. For example, professional video editors are less likely switch from one system (Final Cut Pro) to another (Adobe Premier Pro) because of the costs associated with purchasing new hardware.

 Suppliers can forward integrate: If a supplier has the power to or threatens to forward integrate, the buyer may be forced to accept influence from the supplier.

3) Bargaining Power of Buyers:
The more powerful a buyer is relative to the seller, the more influence the buyer has. This influence can be used reduce the profits of the seller through a reduction of prices, increased favor in customer service or order delivery, or influence over who the seller supplies to. Customers are powerful if:

 Customers are concentrated: If there are only a few customers (or one) in the market, the customers will have more leverage because of the increased reliance on the income stream. A diversified customer base allows more leeway for a supplier to ignore a difficult customer requests.
 One customer consumes a significant amount of output: If one customer buys a significant amount of the output from a seller, the seller will do more for the buyer to keep them as a customer. Because of Wal-Mart’s buying power, it holds the upper hand over suppliers and is able to influence the suppliers’ prices. A fragmented customer base allows more leeway for a supplier to ignore difficult customer requests.

 Customers possess the power to buy seller or rival- If a customer is so large that it may choose backward integrate, the seller loses influence.

4) Threats of Substitutes:
A substitute is a product that performs the same or similar function as another product. Microeconomics teaches that the more substitutes a product has, the demand for the product becomes more elastic. Elastic demand means increased consumer price sensitivity which equates to less certainty of profits. For example, public-transportation is a substitute for driving a car, and e-mail is a substitute for writing letters. Conditions that increase the threat of substitutes are:
 An attractive price of substitutes: The price of substitutes acts as a ceiling to the price of the subject product. An attractive price of a substitute acts inhibits an industry from reaching its profit potential.

 Increased quality of substitutes: If the quality of a substitute is high, there is increased pressure to increase the quality of the subject product. For example, products such as Netflix and Hulu have introduced video on demand services offered through the internet. Cable and internet companies have answered back by introducing fiber optic networks to not only compete in the video on demand space, but offer incredible picture quality not yet available to the new technologies.

 Low switching costs to consumers: Switching costs to consumers can come in the form of monetary costs (transferring cell phone service: termination and initiation fees) or lifestyle switching costs (switching from driving a car to public transportation). Monetary costs effectively increase the price of the substitute products whereas lifestyle costs are more subjective and difficult to identify. In case, the easier and less costly it is to switch to a substitute, the higher threat of that substitute.

5) Competitive Rivalry among Existing Firms:
Rivalry among industry players can affect industry profits through (a) downward pressure on prices, (b) increased innovation, (c) increased advertising, (d) increased service/ product improvements, among others. In economics, a monopoly industry structure earns the most profit while the “perfect competition” industry structure earns the least. An increase in competitive rivalry among existing firms brings an industry closer to the theoretical “perfect competition” state. Factors that increase competitive rivalry among existing firms include:

 Large Number of Firms: If there are more firms within an industry, there is an increased competition for the same customers and product resources. There is even greater competition if industry players are equal in size and power, as rivals compete for market dominance.

 Slowed Industry Growth: When an industry is growing rapidly, firms are able to increase profits because of the expanding industry. When growth slows and industries reach the maturity stage of the industry lifecycle, competition increases to gain market share (and continue the profit growth that investors require).

 High Fixed Costs or High Storage Costs: In industries where the fixed costs are high, firms will compete to gain the largest amount of market share possible to cover the fixed costs.

 High Exit Barriers: When high exit barriers exist, firms will stay and compete in an industry longer than they would if no exit barriers existed

In addition, price competition is more likely to exist when:
 Products or services are identical and/or low switching costs: This encourages price competition to gain market share.

 Fixed costs high and/or marginal costs low: This encourages competitors to cut prices below their average costs (but not below marginal costs) to recoup some of their fixed costs.

 Capacity must be expanded in large increments to be efficient:

 The products are perishable: When a product is perishable, at a certain time it loses its value completely. This creates pressure on a competing firm to sell its product at a price while it still has value. This is true not only for food but for many industries where technology is consistently being improved (e.g. cars, computers, etc).

The Nine Forces Model:

Government:
Governments control the business activities is many ways both direct and indirect. We have already covered government’s economic policies. However, government can control business activities in a more direct way. These are as follows:

In order to safeguard the interest of the community government may ban or limit the production of certain goods and services. For example, selling of guns, explosive and dangerous drugs are illegal in many countries. Moreover, Goods which harm the environment are also totally banned or strictly controlled in many countries, e.g. aerosol cans that use CFCs which has been banned because of their damaging effect on the ozone layer.

Government may pass laws to protect the interest of employees such as Laws against unfair discrimination at work and when applying for jobs. There is no unfair discrimination on the basis of Race, religion, sex, age, or color.

Suppliers:
Suppliers are individuals or businesses that provide goods or services to vendors in return for the agreed upon compensation. As such, suppliers do not generally interact with consumers directly, leaving that task to vendors or shop owners. It is not unusual for a supplier to provide volume discounts to vendors when they agree to sign long-term contracts or place orders for large quantities.
There are suppliers found in just about any type of profession that can be imagined. Wholesale suppliers are very common in the retail industry, where they are likely to manufacture and deliver large quantities of products to their client. Supply companies also work in niche markets as well, such as importing and exporting packaged foods, ethnic or cultural goods, or any other range of products that have a small but reliable demand. In general, exporters of this type will handle all the details for shipment and delivery to the vendor, and include the associated costs in the final charges issued to the client.

Social Attitude:
Social factors relate to changes in the behavior, tastes and lifestyles of communities on a local, national and international scale. Social factors Syngenta needs to take account of include:
 Growth of the global population: By 2020 about 93% of the increase in world population will occur in the developing world
 changing diets - for example, more people worldwide eating meat
 competition for land for growing crops
 the rapid growth of the Chinese and Indian economies requiring large increases in food, feed and fuel
 rising demand for more fuel in developed countries
Consumers drive the demand for food, feed and fuel. People across the world are changing their diets, for example, in Asia by eating more meat. However, 8 kilograms of plant food (e.g. corn or soya) fed to cattle will result in only 1 kilogram of beef. Farmers must increase their crop yields for feedstock to satisfy this increased demand for meat.

Potential Entrants:
In Porters five forces, threat of new entrants refers to the threat new competitors pose to existing competitors in an industry. A profitable industry will attract more competitors looking to achieve profits. If it is easy for these new entrants to enter the market – if entry barriers are low – this poses a threat to the firms already competing in that market. More competition – or increased production capacity without concurrent increase in consumer demand – means less profit to go around. According to Porter’s 5 forces, threat of new entrants is one of the forces that shape the competitive structure of an industry. Porters threat of new entrants definition revolutionized the way people look at competition in an industry. The threat of new entrants porter created affects the competitive environment for the existing competitors and influences the ability of existing firms to achieve profitability. A high threat of entry means new competitors are likely to be attracted to the profits of the industry and can enter the industry with ease. New competitors entering the marketplace can threaten or decrease the market share and profitability of existing competitors and may result in changes to exist.

Industry Competitors:
When analyzing an industry, it is important to determine what competitive forces affect the industry. Michael Porter discussed the concept of industry competition in numerous books and articles. He believes that there are 5 main competitive forces that drive industry competition:

Porter believes that competition among existing firms must be analyzed with respect to (1) the intensity of competition and (2) whether the competition among existing firms is growing.

Substitutes:
A product or service that satisfies the need of a consumer that another product or service fulfills, a substitute can be perfect or imperfect depending on whether the substitute completely or partially satisfies the consumer. A consumer might consider Pepsi to be a perfect substitute for Coke, or Land O 'Lakes butter to be a perfect substitute for Kerrygold Irish Butter. However, if a consumer sees a difference in these brands, he may see Pepsi and Land O 'Lakes as imperfect substitutes, even if economists might consider them perfect substitutes.

For a product to be a substitute of another good, it must share a particular relationship with that good. When a good 's price increases, the demand for its substitute will increase because consumers will go looking for a cheaper alternative. Conversely, when a good 's price decreases, the demand for its substitute will decrease. For example, margarine is a substitute for butter because a consumer can meet similar needs by using margarine. So, when the price of butter raises, the demand for margarine will likely increase.

Technological Shifts:
Technology has profoundly changed human life and behavior, “altering the landscape of possibility in places where possibilities used to be scarce” (Rockefeller Foundation 2010). Does South Africa have the capacity or capability to fully maximize the offerings of this sector, to creatively improve quality of life, the national economy and prospects for environmental sustainability? This requires foresight abilities, and skills to implement and adapt global trends to meet local needs. Technologies are likely to unfold in unpredicted ways but there are a series of trends that are increasingly apparent and that hold significant potential for South Africa. These include the convergence of new-age technologies, the global shift towards a dematerialized economy and the decarburization of energy sources

Economic Shifts:
These are some of the economic environment factors which affect business:
If the economy is going through a recession it is obvious that businesses generally will not be doing well due to low aggregate demand in the economy. On the other hand, a boom period will lead to higher business profits and revenue for most of the businesses in the economy.
Higher Interest rates will lead to a fall in the aggregate demand in the economy thus leading to difficulty for business to find customers willing to buy its product. Lower interest rates will lead to a increase in demand in the economy.
High level of unemployment in the country can also adversely affect a business. People will not have enough money to purchase a firm’s product.
High labor cost will result higher production costs. This will make a firm’s product more expensive as compared to other firms affecting its sales and profit margin.
High level of disposable income is good for business producing luxury goods. A large disparity in income distribution will promote businesses dealing in luxury goods as well as inferior goods.

Customers:
A customer (sometimes known as a client, buyer, or purchaser) is the recipient of a good, service, product, or idea, obtained from a seller, vendor, or supplier for a monetary or other valuable consideration. Customers are generally categorized into two types:
An intermediate customer or trade customer (more informally: "the trade") who is a dealer that purchases goods for re-sale.
An ultimate customer who does not in turn re-sell the things bought but either passes them to the consumer or actually is the consumer.
A customer may or may not also be a consumer, but the two notions are distinct, even though the terms are commonly confused. A customer purchases goods; a consumer uses them. An ultimate customer may be a consumer as well, but just as equally may have purchased items for someone else to consume. An intermediate customer is not a consumer at all. The situation is somewhat complicated in that ultimate customers of so-called industrial goods and services (who are entities such as government bodies, manufacturers, and educational and medical institutions) either themselves use up the goods and services that they buy, or incorporate them into other finished products, and so are technically consumers, too. However, they are rarely called that, but are rather called industrial customers or business-to-business customers. Similarly, customers who buy services rather than goods are rarely called consumers.

Applying FAROUT Method:

 Future Oriented:
Bangladesh has a once-in-a-lifetime opportunity to achieve economic growth of 8-10%." Gus Papanek, President, Boston Institute for Developing Economies. One of the preconditions to achieve this is 'prudent ' decision making by the government, and that can only happen with private sector participation.

IFC in Bangladesh is helping do just that. The Business Initiative Leading Development (BUILD) is the private sector 's response to this challenge. This is a joint initiative of the IFC-managed and DFID and EU-funded Bangladesh Investment Climate Fund, Dhaka Chamber of Commerce and Industry (DCCI), Metropolitan Chamber of Commerce and Industry and SME Foundation.
The absence of a formal system for dialogue between the public and private sector has been felt widely and for a while. The private sector is a recipient of policies and information, rather than an equal partner. BUILD is Bangladesh 's private sector-led business reform champion. It has been designed as a sustainable platform for action-oriented business reforms that simplify the process of doing business in Bangladesh, by working closely with the government.
BUILD will feature public private dialogue on four thematic areas – Tax, SMEs, Financial Sector and Trade and Investment, backed by rigorous analysis and advocacy. The initiative has received commitment from the Bangladesh Bank, National Board of Revenue, and Ministries of Commerce and Industries to co-chair these Working Committees. It will be supported by a strong independent Secretariat that will undertake much of the analysis and advocacy to support the dialogue process, and assist in ensuring that BUILD develops specific, measurable and results-based recommendations for the Government to implement.
The past can be a dangerous predictor of the future. This is especially important if the present and/or the future have little in common with the past, as is increasingly the case in the business marketplace today. Intelligence must be prospective-oriented, looking both deeply and broadly at an indeterminate and uncertain future, and willing to take risks by being both predictive and inventive. Foresight is not gained by looking in the rear-view mirror or by using data pointing toward the past. The better analytical methods for CI will be future, as opposed to historically, oriented. They will be predictive in addition to being descriptive and explanatory.

 Accuracy:
The analyst should develop analytical products that aim for high levels of accuracy and credibility. Accuracy requires the analyst to give careful consideration to both the natures of the inputs being analyzed and the actual application of the analytical techniques themselves. Analysts need to consider the GIGO (i.e., “garbage in garbage out”) problem whereby poor inputs frequently produce poor outputs. High levels of accuracy are difficult to attain under a number of common conditions, such as when the data underlying the analysis:

 Resource Efficiency:

Improving resource efficiency is among the top priorities in today’s world, as governments, businesses and civil society are increasingly concerned about natural resource use, environmental impacts, material prices and supply security.
On the 23-25 April 2008, the OECD and UNEP held a conference in Paris on resource efficiency. This multi-stakeholder conference brought together governments, businesses, international organisations and civil society to review how improved resource efficiency can reduce the negative environmental impacts of natural resource extraction, materials processing, use and disposal, while securing adequate supplies of materials to sustain economic activity.

 Objectivity:
This relates to the presence of biases held by the analyst and/or company. Too many good analyses are clouded by cognitive or social biases, from "prior-hypothesis bias" to "groupthink." To minimize the potentially destructive nature of these common biases, the data should be viewed and analyzed using a rational and systematic approach. In other words, successful analysis minimizes the destructive potential of analytical and decisionoriented biases. This criterion also requires the analyst not only to avoid selectively choosing facts to provide support for pre-ordained conclusions but also to comprehensively consider all available data that might bear on the decision.

 Usefulness:
Almost by definition, valuable outputs must meet the critical intelligence needs of a decision-maker in a particular decision-making context. Valuable analytical output must be appropriate to the decision-maker 's responsibilities and organizational context. The key for the analyst is to develop outputs that are "need to know" and not "nice to know" and that meet or surpass the client 's critical intelligence needs. This criterion also suggests that the analytical outputs and process must be clearly communicated in a language that can be easily explained and understood by the recipient.

 Timeliness:
How long it takes the analyst to undertake the analysis will either hinder or assist the company 's use of intelligence. Much business information or competitive data has a limited shelf life and loses its value the longer it remains excluded from decisions underlying action. Certain methods of analysis may provide the intelligence required, but take far too long to develop. On the other hand, other methods of analysis may require little time but do not deliver the required features of objectivity, accuracy, utility, and resource efficiencies. Valuable analysis will provide decision-makers enough time to allow the company to implement the course of action recommended by the analysis. Conclusion:
Bangladesh is a wonderful country in South Asia with a population of over 163 million people. In recent years, foreign investment has increased dramatically in Bangladesh. The Dhaka stock exchange is thriving and the democratic government is actively seeking those who wish to invest in the many business opportunities within the country. For those with the resources to navigate the business and political climate in Bangladesh, there are tremendous business opportunities to be had. Opportunities exist in IT, telecommunications, city infrastructure, transportation, power, garments and textiles, real estate, natural resources, frozen foods, agribusiness and many other industries. Doing business in a third world country can sound intimidating. However, doing business in Bangladesh is similar to doing business in any other country, even the United States.
There are many economic incentives to invest or partner in Bangladesh. It is possible to make millions of dollars while dramatically aiding the economy in Bangladesh.

Bibliography:
1. http://www.businessinbangladesh.com/
2. www.en.wikipedia.org
3. www.prothom-alo.com
4. www.daily-star.net
5. www.doingbusiness.org
6. www.businessbangladesh.com/

7. Aliakbari, F. and H. S. Tousi. n.d. Using Porters Five Forces Model for Analyzing theEnvironment of Environmental Media-owner Companies. (Case Study: An Ad promotion Fatemeh. Aliakbari. AR. pdf.

8. Bangladesh Bank. http://www.bangladesh-bank.org. Bhuiyan. M. M.2009, July 5. X-Ceramics to Go for Trial Production by end of Next Month.

9. The Financial Express. Board of Investment “Bangladesh. Ceramics Sector Highlights.”

Bibliography: 1. http://www.businessinbangladesh.com/ 2. www.en.wikipedia.org 3. www.prothom-alo.com 4. www.daily-star.net 5. www.doingbusiness.org 6. www.businessbangladesh.com/ 7. Aliakbari, F. and H. S. Tousi. n.d. Using Porters Five Forces Model for Analyzing theEnvironment of Environmental Media-owner Companies. (Case Study: An Ad promotion Fatemeh. Aliakbari. AR. pdf. 8. Bangladesh Bank. http://www.bangladesh-bank.org. Bhuiyan. M. M.2009, July 5. X-Ceramics to Go for Trial Production by end of Next Month. 9. The Financial Express. Board of Investment “Bangladesh. Ceramics Sector Highlights.”