Business Structure , Current Scenario and Business Process Analysis on OTOBI Ltd Bangladesh

Prepared By Group Name: The Incredible Tarek Mahmud 073 433 030 Reshman Tabassum 091 1118 030 Nilufer Yasmin 093 0386 430 Nasiful Huda Khan 081 105 030

Group Assignment -1 Report Submission Date: 14-06-2012

North South University

EXECUTIVE SUMMURY

OTOBI Bangladesh Ltd is one of the finest furniture solution companies. They are operating business in Bangladesh since 1975. Home and office furniture is there major areas of service. Recently they are introducing new product to the customers. In this report we tried to explain their goals, mission and vision. We have discussed about their corporate level strategy, organizational strategy, operation process. We also analyses OTOBIs SWOT analysis to realize their market competition. We also looked at their major critical business process. In the Report all the above mentioned areas has been described briefly.

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Declaration of Originality
Adeyl Khan ( AyN) Course Lecturer School of business North South University Subject: Declaration of Originality Dear Mr. Khan We are glad to present you with this report on the Business Process analysis and Current scenario Of OTOBI as one of the required course materials. In conducting this report, we have accumulated information from different sources according to OTOBI as well. Not just that, we were successful in relating the topics & issues that were taught in class with this organizations facilities. We hope you would consider our mistakes in preparing this report. If you have any further queries regarding the report, please feel free to contact us. It would be our pleasure to clarify your inquiries. We sincerely hope that this report on OTOBI Co. Bangladesh matches your expectations, and thereby, earn us your full confidence upon our aptitudes. We would like to thank you for being such a wonderful mentor, and will remember you in every success that we achieve in our lives Sincerely yours,

Tarek Mahmud Reshman Tabassum Nilufer Yasmin Nasiful Huda Khan

073 433 030 091 1118 030 093 0386 430 081 105 030

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Table of Contents
A Brief Description about OTOBI LTD .......................................................................................................... 4 Products and Services Offered .................................................................................................................. 4 Critical incidents.................................................................................................................................... 5 Goal Of the Company ................................................................................................................................... 5 Vision................................................................................................................................................ 5 Mission ............................................................................................................................................. 6 Goal .................................................................................................................................................. 6 Corporate Level Strategy.............................................................................................................................. 6 Corporate Portfolio Analysis ........................................................................................................................ 7 Business Level Analysis ................................................................................................................................ 8 Porters Generic Strategy .............................................................................................................................. 9

SWOT analysis .............................................................................................................................................. 9 Organizational Strategies ........................................................................................................................... 12 OTOBIs Operations................................................................................................................................. 12 Three Major Critical Business Process of OTOBI ......................................................................................... 13 Employee rewards ..................................................................................................................................... 15 Other Important issues ............................................................................................................................. 15

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A Brief Description about OTOBI LTD OTOBI OTOBI began its journey in 1975 as a small workshop in Topkhana road set up by Mr. Nitun Kundu. Bangladeshi people traditionally had been using wooden furniture, but due to the limitations of the countrys forest resources, Mr. Kundu anticipated the need for metal furniture in the country instead. He started OTOBI in 1984 as a commercial production where all kinds of metal furniture were manufactured. By 1988, OTOBI started to manufacture metal furniture from a factory at Mirpur and market products using a showroom at Elephant road. Owing to the increasing demand of OTOBI metal furniture in the market, another factory was set up at Shyampur, Dhaka in November 1994. Since people preferred wooden furniture, OTOBI emphasized on furniture made from Laminated Board to give a similar feel. OTOBI, because of its superior quality, gradually gained popularity all over the country. To keep up with the increasing demand for its products, OTOBI increased its production capacities, expanded its product line and product mix, and employed highly skilled industrial designers, engineers, and artisans.

Products and Services Offered Products provided:

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Office Furniture In May 1999, OTOBI started producing furniture from laminated Household Furniture board. This particleboard has a Computer Furniture wood like surface and can be designed to look exactly like Hospital Furniture wooden furniture. It has also Decorative Items introduced innovative knock down shelving and other types of storage Kitchen Cabinets Special Built-in Cabinet systems allowing rearrangement of Work Station the space, when required. Various Engineering Products OTOBI provides furnishings using a whole variety of materials from Interior Project particleboard to metal, from wood to wrought iron and recently it has introduced plastic products. It has products ranging from office, household and hospital furniture to specialized furniture like kitchen cabinets, built in cabinets and workstations. OTOBI handles interior projects and has started selling imported home appliances as well. The foremost products offered by OTOBI are given below

OTOBI

Services provided: In addition to providing a wide range of high quality products, OTOBI provides additional value to its customers through its efficient services. They provide one-year warranty with all the furniture and after sales services. After the warranty period is over, OTOBI repairs any defect of the furniture in return for a service charge. In addition, OTOBI employs skilled sales persons who are very well aware of the furniture and the customers. This enables OTOBI to give quality service to its customers.

Critical incidents Otobi faced a critical situation after the death of the founder Mr. Nitun Kundu on September 15, 2011. He established the company by his own hand and Otobi was standing on his own creativity. So it was a great loss not only for the company but also for Bangladesh. Otobis future was in danger. But after a year, Otobi was able to overcome this situation successfully and got back their same old profitable market position.

Structure of Otobi The structure involves dividing the market into distinct groups of homogeneous consumers who have similar needs and consumer behavior and thus require similar marketing mixes.

Target Customers For Otobi the target market is huge starting from: Industrial organizations Medical organization Corporate offices Individuals

Goal of The Organization Vision The vision of Otobi is to become the most leading furniture manufacturing company in Bangladesh. By following our vision, our company will expand its sale net across Bangladesh. At the same time it will also focus on the foreign markets. The management will be based on a long term partnership with the suppliers.

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The companys activities will aim towards the offer of quality products and efficiencies, and strive to achieve the contentment of the business partners, final consumers and employees. Mission Otobi is a manufacturing company which manufactures and supplies the most qualitative furniture with reasonable pricing across Bangladesh. The company constantly follows the latest trends in the furniture industry and introduces to the Bangladesh market new, interesting and competitively advanced products. The company is trying to guarantee a wide offer of furniture products in different materials, dimensions and colors for almost every room of your home. It offers a variety of product line to attract more customers

It fulfills its social duties by fitting in the local environment as a sponsor and donator and offers to all employees a relaxed working environment.

Otobis Goals:
Otobi is committed to provide excellent service and to exceed the expectations of its customers. It wants the customers to remember Otobi as a memorable experience. Otobi aims to fulfill the objectives of the Company's growth and to meet the expectations of all its employees.

CORPORATE-LEVEL STRATEGY Corporate-level strategies address the entire strategic scope of the enterprise. This is the "big picture" view of the organization and includes deciding in which product or service markets to compete and in which geographic regions to operate. Level Strategy Corporate strategy Business strategy Functional strategy of Definition Market definition Example

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Diversification into new product or geographic markets Market navigation Attempts to secure competitive advantage in existing product or geographic markets Support of corporate Information systems, human resource practices, strategy and business and production processes that facilitate strategy achievement of corporate and business strategy

Corporate strategies deal with plans for the entire organization and change as industry and specific market conditions warrant. Top management has primary decision making responsibility in developing corporate strategies and these managers are directly responsible to shareholders. The role of the board of directors is to ensure that top managers actually represent these shareholder interests. Otobi has developed its mission and vision keeping its business corporate strategies under consideration. Otobi aims to become the leading furniture manufacturing company by introducing a wide variety of products with reasonable pricing all over the country. Otobi wants to spread it name in both home and foreign countries.

CORPORATE PORTFOLIO ANALYSIS One way to think of corporate-level strategy is to compare it to an individual managing a portfolio of investments. Just as the individual investor must evaluate each individual investment in the portfolio to determine whether or not the investment is currently performing to expectations and what the future prospects are for the investment, managers must make similar decisions about the current and future performances of various businesses constituting the firm's portfolio. The Boston Consulting Group (BCG) matrix is a relatively simple technique for assessing the performance of various segments of the business. The BCG matrix classifies business-unit performance on the basis of the unit's relative market share and the rate of market growth as shown in Figure 1. Products and their respective strategies fall into one of four quadrants. The typical starting point for a new business is as a question mark. If the product is new, it has no market share, but the predicted growth rate is good. What typically happens in an organization is that management is faced with a number of these types of products but with too few resources to develop all of them. Thus, the strategic decision-maker must determine which of the products to attempt to develop into commercially viable products and which ones to drop from consideration. Question marks are cash users in the organization. Early in their life, they contribute no revenues and require expenditures for market research, test marketing, and advertising to build consumer awareness. If the correct decision is made and the product selected achieves a high market share, it becomes a BCG matrix star. Stars have high market share in high-growth markets. Stars generate large cash flows for the business, but also require large infusions of money to sustain their growth.

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Stars are often the targets of large expenditures for advertising and research and development to improve the product and to enable it to establish a dominant position in the industry. Despite its simplicity, the BCG matrix suffers from limited variables on which to base resource allocation decisions among the business making up the corporate portfolio. Notice that the only two variables composing the matrix are relative market share and the rate of market growth. Now consider how many other factors contribute to business success or failure. Management talent, employee commitment, industry forces such as buyer and supplier power and the introduction of strategically-equivalent substitute products or services, changes in consumer preferences, and a host of others determine ultimate business viability. Otobis position: According to the BCG matrix Otobi is a cash cow. Otobis products are in the maturity stage of the product life cycle. They are usually well-established products with wide consumer acceptance, so sales revenues are usually high. The strategy for such products is to invest little money into maintaining the product and divert the large profits generated into products with more long-term earnings potential. For all the aforementioned reasons Otobi is considered as a cash cow.

BUSINESS-LEVEL STRATEGIES Business-level strategies are similar to corporate-strategies in that they focus on overall performance. In contrast to corporate-level strategy, however, they focus on only one rather than a portfolio of businesses. Without such crucial information, corporate-level managers are prevented from best managing overall organizational direction. Business-level strategies are thus primarily concerned with: 1. Coordinating and integrating unit activities so they conform to organizational strategies (achieving synergy). 2. Developing distinctive competencies and competitive advantage in each unit. 3. Identifying product or service-market niches and developing strategies for competing in each. 4. Monitoring product or service markets so that strategies conform to the needs of the markets at the current stage of evolution.

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ANALYSIS OF BUSINESS-LEVEL STRATEGIES

PORTER'S GENERIC STRATEGIES Overall low cost leadership Niche (focus) low cost leadership Otobis Position: Otobi follows the overall low cost strategies and policies to become the lowest cost producer and/or distributor of world class furniture in Bangladesh. Otobi concentrates on construction of the efficient-scale facilities, tight cost and overhead control, avoidance of marginal customer accounts that cost more to maintain than they offer in profits, minimization of operating expenses, reduction of input costs, tight control of labor costs, and lower distribution costs etc. This low-cost leadership strategy has earned competitive advantage for Otobi. Current Scenario The SWOT ANALYSIS on Otobis Furniture: Overall differentiation Niche (focus) differentiation

Strengths

Weaknesses

High quality products and services Strong national brand image Market leader in Bangladesh Fully mechanized system Awards

Opportunities

SWOT

The price is high for most of the customers Not much stores in Bangladesh Managing the Inventory Market share has reduced a

Internal Factors

Threats

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Global Expansion Otobi can increase its product line Office interior influences the people working there Otobi can introduce its stores in other districts of Bangladesh
Positive

More competitors are coming day by day Political situation of the country Low priced companies are a big threat Chinese furniture is becoming
Negative

External Factors

Strengths: High quality products and services: The quality of Otobi is much better than its competitors as they use Wood-tex for their products whereas other manufacturers normally use Jute-tex . Nowadays they are producing large quantity wooden product with a large number of designs. They are the only one in the country who are importing Cain furniture. However, the secret behind the fantastic quality of Otobi is they have a separate Quality control department where more than 100 workers are working for maintain the quality of the product. Strong national brand image: Almost all the people of Bangladesh believe that Otobis furniture is fashionable and long lasting. The customers also buy their products because they provide warranty and the best after sales service. Though all the furniture companys provides warranty but Otobis policy is very much committed in providing warranties unlike other companies. Basically, they care about the customers more and have successfully built a positive brand image in the customers mind. Market leader in Bangladesh: The brand equity of Otobis furniture is very good. They are the market leader for the last couple of years in Bangladesh. They are very much popular for making the best office furniture. This is why nowadays corporate office means furniture from Otobi. Fully mechanized system: Otobi uses a fully mechanized system, modern technology for manufacturing services of contemporary designs. The raw materials are imported from Malaysia. Awards: Otobi has won a lot of awards for being the best furniture company unlike other companies.

Weakness: The price is high for most of the customers: Otobi products are highly priced. It makes it difficult for the middle class families of Bangladesh to afford it. Not much stores in Bangladesh: Otobi has showrooms confined to Dhaka and Chittagong mostly. This makes it difficult to serve the customers in other parts of the country. Managing the Inventory: During specials seasons or occasions like Eid and Puja. They get a lot of offers from customers. Their product demand increases. But at times showrooms and dealers are unable to keep up with the heavy orders placed by the customers. Hence, this creates a lot of pressure regarding the management of inventory within the company. Market share has reduced a bit: Since, Otobi is the pioneer of branded furniture industry. It had a market share of 100%. But as time passed by the number of

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competitors for Otobi increased in the market and which eventually lead to a decrease in their market share. Therefore, Otobi was not able to handle the competitors pressure effectively. Opportunities: Otobi can be an international brand by exporting its products in more countries (Global Expansion): Otobi should start thinking of operating in other countries as well. It can start by expanding its international market to the SAARC nations starting with the neighboring countries like Sri Lanka, Nepal and Pakistan. Otobi can increase its product line: Based on the high demand, Otobi has started producing furniture made of wrought iron. It can increase its market share in this sector by further increase in production because of the huge demand. Office interior influences the people working there: These days people are becoming more interested in the office structure. Since, office environment has a strong relation with the office design and the people working there. If the office is designed nicely the employees feel good to work in this kind of environment. And when it comes to Otobi, the interior along with the environment is fantastic. However, these increased consciousnesses for decoration have aroused people interest in stylish furniture designs. Otobi can introduce its stores in other districts of Bangladesh: Due to the increased demand of furniture by the Companies all around the country. Otobi can open outlets in other divisional districts like Sylhet, Khulna and Rajshahi. In this way, they will be able to make profit as well.

Threats: More competitors are coming day by day: Day by day the competition for Otobi is increasing. Their competitors are companies like- Partex, Navana furniture etc. These companies can threaten the market share of Otobi immensely. Political situation of the country: The political situation of the country can create negative image about the company and can cause serious problems in its transaction with foreign countries. Even the political situation can jeopardize the future growth of the company. Low priced companies are a big threat: The low priced companies offers products in a cheaper and reasonable price than Otobi to the middle class society. Since, we know that Bangladesh is filled with middle class people more. Otobi should come up with a reasonable product price range for the majority of the middle class people in Bangladesh. Otherwise, low priced companies might take over Otobi. Chinese furniture is becoming popular for their price and designs: These days Chinese furniture is becoming more popular. They come up with the same design but in a cheaper price. This can be big threat for Otobi.

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Organizational Strategies After setting a long term goal and mission, company immediately decide its organizational strategies. To function according to goal company need some strategy for their different department.

Strategy
Finance statregies Marketing Strategies Operations Strategies

Each of the above mentioned functional areas are working in concert with the other to achieve desired goals. Organizational or corporate strategy requires a close connection among the functional areas. An organization follows some operational strategies to achieve goal successfully. Some distinct function or process can help organization to achieve goal more easily.

Low Cost
Service

Quality

Flexible operation

PRICE

Management

OTOBI Furniture, Bangladesh also follows some unique and distinct operation strategy to compete with their competitors. The strategy OTOBI is following, consistent with the organizational strategy that used to guide the operations function. OTOBIs Operations Strategies

Flexible Manufacturing
Brand Values
Category Management

State of art technology

Customer Order Management

PROMOTION
Customer Relationship Management

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Three Major Critical business processes and analysis of OTOBI Furniture Bd.

Flexible Manufacturing OTOBI manufacturers its furniture using state-of the-art technology, such as computerized numerically controlled machines and solar kilns. OTOBI Limited is a leading crafted furniture manufacturing company of Bangladesh introduced world class furniture through its five well equipped production units in three Factories. Most of the machineries were sourced from China and Germany with high flexibility of modification as required for their verities of design. OTOBI is now the market leader in branded furniture, with almost 70% market share. Its product has also entered into overseas market as a part of the expansion strategy. Overall business performance trend of OTOBI Limited is good. 2 years back Otobi launched Notepad concept which was an innovative range of contemporary office furniture. And they had succeeded also. Analysis: Here, OTOBI is using flexible manufacturing process, to manufacture their product according to customer needs and design ideas. For different customer they introduced different product line or product segment. By using technology, they also have upgraded their production process.

Brand Values Surrounded in day to day affairs is otobi's aspiration to be a creative organization in every sense of the term. It is with teamwork and togetherness that challenges are met and overcome. Creation, perfection and dynamism are the core values of OTOBI. Quality, durability, excellence and neat craftsmanship are not what OTOBI struggles to achieve, but features distinguished in each OTOBI design. The company maintains its belief of setting its own benchmark and breaking it time and time again. Expressing continuous innovation the company is now an inspirational brand in homes and offices, which is explicitly expressed through its products and communication. At the heart of all activities in the company lies a distinctive need

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to constantly surprise; not just the consumers, but their employees too. The company thrives on the unique "keep reinventing" proposition. Analysis: By creating a good brand value OTOBI captured a big amount of market share. Otobi produces good quality furniture with a cheaper price and discounted price round the year. Otobi reaches every district of Bangladesh with eight showrooms and 100 dealers.In 2004 Otobi starts exporting to India on a regular basis, making it the first Bangladeshi company to become global. Otobi builds its flagship 42,000 sq ft retail store in Gulshan, Dhaka. The way they expand themselves it clearly states about OTOBIs Brand value inside and outside the country.

Promotion
The in-house Communication department at OTOBI works around the clock to ensure that all of OTOBI's products, services and promotional campaign receive due attention. OTOBI maintains innovative, year-round promotional excitement to attract its customers and is visually present in print media, television and outdoor billboards. The promotion strategy has evolved over the years, alongside the brand. In the past, OTOBI employed straightforward, product-based adverts in above-the-line channels. It has moved on to discount campaigns since, and has developed further into thematic campaigns. In terms of below-the-line advertising, OTOBI is involved in a number of activities including direct mails, leaflets, catalogues, scratch cards and coupons, PR activation for showroom launches, B2B sales, and follow up of the product condition by the OTOBI Customer Care department. The Business Research department is also involved in BTL activities, by measuring the level of customer satisfaction after sales. A recent campaign which received much acclamation was the Metamorphosis TVC, which illustrates various types of transformations taking place within a jungle. The campaign was launched in August 2009, and is being aired on all Bangladeshi channels. OTOBI depicted seven layers of meaning in this campaign: its outer shell introduced solid wood furniture and its innermost shell appropriated an essence of continuous reinvention. Within the intermediary shells, OTOBI gathers inspiration from nature and considers otobian life as a garden or forest. Life goes on for travellers who gain motivation and enlightenment from their journeys for their own metamorphosis. While advertising and promotions are an integral part of the company's function, OTOBI recognizes the role it can play in furthering the development process in the country. OTOBI is committed to giving back to the society it operates in, with an emphasis on a triple bottom line: people, planet, profit. Analysis: OTOBI is promoting their new product every now and then, they are attends all the trade fare locally or internationally hosted. They also offer discount and sales in particular

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periods of year. Orienting people with new lifestyle and space they have been promoting their product round the year. Employee Rewards To motivate employees OTOBI follows some rewards and motivational factors. An example provided below to illustrate their reward and motivational system towards the employees. OTOBI employs over 5,000 people, including over 200 graduate engineers and business graduates (MBA, BBA). Every year, OTOBI takes 100 to 200 of its employees to a five star hotel to exercise the 'One OTOBI, One World' belief system, where the Chief Executive Officer and the junior-most Executives are equally treated. OTOBI also values its employees, and takes their concerns into consideration with an annual Employee Satisfaction survey. Other Important issues The company has stepped forward to actively respond to the needs of the public on numerous occasions, and CSR policies center on aiding people in need, victims of natural disasters, and supporting the development of meritorious students. A few incidents where OTOBI came to the fore without hesitation include: A contribution worth Tk 5,00,000 as flood relief in 2007 A contribution worth Tk 5,00,000 for victims of Cyclone Sidr in 2008 A contribution worth Tk 9,66,238 to IBA in 2008 A contribution worth Tk 10,05,000 to Shahjalal University of Science and Technology in Sylhet A contribution worth Tk 1,26,000 to the Bangladesh Shishu Kishore Mela

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Marketi

Sales

Administrative Dept.

Logistics HR Admin
Electrician

Deputy General Manager

General Manager

Hardware Manufacturing Dept. Screen Equipmen t

Warehous e
Machine Maintenance

Chairman

Hardware QC Dept. Painting

Lamination

Finished Goods

Fitting

Purchase Dept.

Gluing Cutting

R & D Dept.

Research

Design

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Marketing

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Bibliography

www.otobi.com www.scribd.com http://www.enotes.com/strategy-levels-reference/strategy-levels

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APPENDIX

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Company Profile Template

OTOBI Ltd.
Otobi Center (Head Office) Plot12 Block CWS(C), Gulshan S/A Gulshan-1, Dhaka.

Type of organization

Corporation- Private

Type of Business

Manufacturer

Established in 1975 Otobi Ltd. Is trying to enter into the international market. The start it with India. Current priorities are sustain in the furniture market and make the company established in the clothing industry. Business Model: (e.g. Centralized, Decentralized, retail, home based, office bound) Organizational Structure

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Major business Activities are manufacturing furniture and sell it to both local and international market. Middle class and upper class customers are the primary and prioritised target of the markets. Changes occurred by entering in the clothing industry. Middle class and upper class customers are the major Customers (current)

Vision Statement:
Keep reinventing is Otobis new tagline, working as a constant reminder that we set our own standards only to break them over and over again. The idea is to challenge our own limits in order to surprise consumers consistently in terms of product design and variety, as well as ensure we are motivated ourselves.

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Mission Statement: Grab more shares in the industry and also enter in the new market.

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Maintaining the quality products that the company are providing since 1975. Business Strategy: Diversification Economic Intent: Profit making through providing variety of products.

Value Chain: (break down value) Accreditations (e.g. Standard Operating Procedures, ISO) Markets, products, services Workforce

No. Of full-time employees: 368 people. Contractors : 306 people Casual staff : 3577 people

Average Qualifications/educational Full time: Experienced Graduate background:

Managers: Highly Experienced Line workers: Skilled workers Page

Recruitment processes used:

Full time

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