SWOT ANALYSIS

AARONG
Spencer Nath
SWOT ANALYSIS OF AARONG

SWOT analysis is a powerful technique for understanding organizations Strength &

Weakness and looking for the Opportunities & Threats it may face. Used in a business

context it helps organization carve a sustainable niche in a market. This analysis is

mainly based on an imaginary situation.

A little bit about Aarong

Established in 1978, Aarong is a fair trade organization dedicated to bring about positive

changes in the lives of disadvantaged artisans and underprivileged rural women by

reviving and promoting their skills and craft. Reaching out to weavers, potters, brass

workers, jewelers, jute workers, basket weavers, wood carvers, leather workers and more,

Aarong embraces and nurtures a diverse representation of 65,000 artisans, 85% of whom

are women. Today, Aarong has become the foundation upon which independent

cooperative groups and family-based artisans market their craft, in an effort to position
the nation’s handicraft industry on a world platform of appreciation and

acknowledgement.

 Strength

Aarong is a very reputed organization. Currently capturing 68% of total handicraft

market share in Bangladesh, they stand as the leading producers of local crafts. It is a

local brand that is now spreading their territory by exporting their products outside of the

country. Aarong maintained a good reputation for fine quality products. It has a strong

management team who are continuously giving their best effort to continue their image a

successful one. Another important fact, which makes them stand out from others, is that,

Aarong has almost “Zero” production damage rate, which allows them to maintain a low

cost. They are innovative and are always bring some new product in the market that

meets customer requirement and expectations. The organization is a respected employer

that values its workforce.

 Weakness

Aarong has a reputation for new product development and creativity. However, they

remain vulnerable to the possibility that their producer may not be able to produce goods

on timely manner due to their inability of high scale production. The collection channel

of the organization is not well structured which leads them to uncertainty of collection of
products from the producer on time, creating hindrances for them in the upcoming

market. Since most of the products of Aarong are handmade, personal calamities also

effects drastically on production, which disables the company to deliver their product on

time to the consumers. This stands as one of the biggest disadvantages for Aarong as

these occurs on most instances on the time of delivery. Aarong charges relatively high

prices for their products than their competitors, resulting loss of consumers whose

financial level fluctuates from time to time. Aarong’s sales force, conservatively consists

of sales girls within their outlet lack appropriate necessary to attain their goals.

Sometimes their unprofessional attitude leads customers to unsatisfaction and switch to

other local brands. This also leads to minor financial problems, but very rarely.

 Opportunities

Aarong proved to have an excellent aptitude at capturing the advantage of opportunities.

They have opportunities to involve them in new distribution channels joint venture with

some other small Boutique and more sales point. This will lead to capturing more market

share of handicraft industry in Bangladesh.  Aarong also has the adequacy to globalize its

business ventures. New market place for handicraft such as Europe and America are

beginning to evolve drastically. Hand made products are now the latest trend in the local

fashion industry. Local events & functions like Pahela Falgun, Pahela Baisakh, Victory

day, Independence Day etc creates a huge demand for handicraft and with proper

marketing skills Aarong can launch new products especially for these occasions.
Alongside the season change, changes in people’s preferences also occur. So does

necessity. Based on this idea, Aarong can increase seasonal products to attract the local

consumers at all season.

 Threats

Though it stands as one of the oldest organization in Bangladesh’s handicraft industry,

even today Aarong does not have any big competitors in the country. Existence of some

small competitors like KayKraft, Anjans, Deshal, Jattra, Khubsurti, OZ, Rang etc are

there alongside other small Boutiques. These brands and stores combined are capturing

32% of the local consumers and are increasing in a slow rate. This growth rate may stand

as a threat for Aarong for the near future. They will always face price wars from their

competitors. Its competitors have some superior products in the fashion field at a much

lower cost. Price along with rising of new advertising and marketing firms in Bangladesh

are increasing the popularity of the smaller brands, decreasing Aarong’s market share as

well as sales. However, repositioning of the Brand as a major weapon, Aarong is ready to

battle.

Aarong has also successfully found a niche in the retail fashion space. Prior to the

establishment of Aarong’s retail outlets, shopping for quality textile products was either

through the backstreets of local markets or in up-market boutiques inside hotels. It is the

closest shopping experience to a department store in Bangladesh, offering a range of

products ranging from clothing, shoes, jewelleries and accessories to furniture and home

wares. So, although the brand’s marketing includes billboard advertising and fashion
shows within the country, it is really the elements of convenience, range and quality of

product, combined with a strong national identity, that have effectively become its

marketing tools.

The value of Aarong to the creative industries in Bangladesh is not only economic. The

success of the retail brand has inspired consumer interest in indigenous Bangladeshi

design through blending the traditional with the contemporary in a manner that has won

instant consumer appeal. Aarong’s product designs focus on the diverse types and

textures of crafts and patterns that have been passed along from generation to generation

among weavers and artisans in craft hubs around the country. Aarong also plays a role in

protecting and promoting traditional Bangladeshi products and designs through its

extensive design library where remnants of the country’s rich craft heritage, such as

Nakshikantha art and Jamdani patterns, have been widely researched and archived.
Strengths Weaknesses
 Specialist Marketing Expertise
 Poor Access to Collection
 Leading Brand Reputation
 Venerable to Producer
 Customer Loyalty / Goodwill
 Financial Support
 Production Quality
 No Direct Market Experience
 Sales
 Limited budget in Research and
 Management
Development
 Innovative
 High Product Price
 Low Production Rate
 Unprofessional Sales team

Opportunities Threats
 New Distribution Channels  More Competitors

 Capture Market Share

 Price Wars among competition

 Vast International Market

 Higher Quality Products in Market

 Local Events

 New Market Segment

 Changing Technology

 Seasonal Fashion Influence

 Political Instability
 Surprising Competition

 Cost Advantage  Economy

Reference:

http://mdshossain.wordpress.com/2009/03/17/swot-analysis-of-aarong/

http://www.oppapers.com/essays/Test/381685

http://www.scribd.com/doc/36275406/Brac-Aarong

http://mdshossain.wordpress.com/2009/03/18/competitors-analysis-aarong

http://dspace.bracu.ac.bd/bitstream/10361/726/1/Internship%20report%20on
%20Aarong.pdf

http://www.aarong.com/index2.php