The decision which will bring significant changes in our organization
To enhance customer satisfaction, we are pleased to announce the launch of Agora Online Shopping website. With the continued support of our valued customers, Agora is now just a click away. Browse through our website to find your desired products and have them delivered to you at home. By e-commerce, we hope to take the relationship with our customers’ one step further and be nearer to them at all times.
Objectives:
We have some objectives to get introduce the new horizon of E-commerce in our largest retail chain shop of the country. These are:
- To be the first ever online privileged mega shop in Bangladesh,
- To give support to our valued customers, getting there day to day need in more comfortable and reliable way,
- Saving time, money and energy of our customers,
- We want to increase the goodwill of our industry by satisfying customer needs.
- Being the leader of among all the super stores in our country.
Introduction
Rahimafrooz Superstores Ltd. (RSL) made a breakthrough in the urban lifestyles by launching the first retail chain in the country, 'Agora'. The name of Agora is entwined with the glory of the Agora’s marketing policy ‘To create better environment for customer.’ In 2000 Agora was introduced to the world.Currently there are four Agora outlets at Gulshan, Dhanmondi, Moghbazar and Mirpur in Dhaka. With many more coming up at important locations in Dhaka and other major cities, Agora is endeavoring to fulfill the everyday shopping needs of the urbanites through fair price, right assortment, and best quality. Agora is a supermarket that is a departmentalized store offering a wide variety of food and household merchandise. It is larger in size and has a wider selection than a traditional grocery store.
Agora comprises meat, produce, dairy and baked goods departments along with shelf space reserved for canned and packaged goods as well as for various nonfood items such as household cleaners, pharmacy products, and pet supplies. Most supermarkets also sell a variety of other household products that are consumed regularly household cleaning products, medicine, clothes, and some sell a much wider range of non-food products.
Agora occupies a large floor space on a single level and is situated near residential areas in the Dhaka in order to be convenient to consumers. Its basic appeal is the availability of a broad selection of goods under a single roof at relatively low prices. Other advantages include ease of parking and, frequently, the convenience of shopping hours that extend far into the evening.
Agora usually makes massive outlays for newspaper and other advertising and often present elaborate in-store displays of products. It is now a part of a chain that owns or controls other supermarkets located in Dhaka; this increases the opportunities for economies of scale.
Agora usually offers products at low prices by reducing margins. Certain products (typically staples such as bread, milk and sugar) are often sold as loss leaders, that is, with negative margins. To maintain a profit, Agora attempt to make up for the low margins with a high overall volume of sales, and with sales of higher-margin items. Customers usually shop by putting their products into shopping carts (trolleys) or baskets (self-service) and pay for the products at the check-out. At present, Agora has intention to reduce labor costs further by shifting to self-service check-out machines, where a group of four or five machines is supervised by a single assistant.
Agora Merchandise
Agora typically sells many different types of items, such as:
Marketing Strategy of Agora
Agora's growth over the last 6 years has involved a transformation of its strategy and image. Its initial success was based on the "Pile it high, sell it cheap" approach of the founder management of Rahim Afrooz. The disadvantage of this was that the stores had a poor image with middle-class customers. In the year 2001 Agora's brand image was so negative that consultants advised the company to change the name of its stores. It did not accept this advice, yet by early 2003 it was the largest retailer in Dhaka, with a 29.0% share of the grocery market according to retail analysts TNS Superpanel, compared to the 16.8% share of ASDA and 15.6% share of third-placed NANDAN, which had been the leading competitoe until it was beaten by Agora in 2004. Key reasons for this success include:
An "inclusive offer". This phrase is used by Agora to describe its aspiration to appeal to upper, medium and low income customers in the same stores. According to Citigroup retail analyst David McCarthy, "They've pulled off a trick that I'm not aware of any other retailer achieving. That is to appeal to all segments of the market”. By contrast ASDA's marketing strategy is focused heavily on value for money, which can undermine its appeal to upmarket customers even though it actually sells a wide range of upmarket products. During its long term dominance of the supermarket sector Nandan’s retained an image as a high-priced middle class supermarket which considered it to have such a wide lead on quality that it did not need to compete on price, and was indifferent to attracting lower-income customers into its stores. This strategy has been abandoned since losing the number 1 spot to Agora and particularly since the adaption of new management in 2004 that has established a new customer-focused strategy closer to that of Agora.
• One plank of this inclusivity has been Agora's use of its own-brand products, including the up market "Finest" and low-price "Value". The company has taken the lead in overcoming customer reluctance to purchasing own brands, which are generally considered to be more profitable for a supermarket as it retains a higher portion of the overall profit than it does for branded products.
• The management in the mid 2000 has taken the bold step of trying not to focus on the usual corporate mantra of "maximising shareholder value". The company's mission statement reads, "Our core purpose is, 'To create value for customers to earn their lifetime loyalty'. We deliver this through our values, 'No-one tries harder for customers', and 'Treat people how we like to be treated'". The underlying aim is of course to make higher profits, but there is a clear focus on customer service at the top level of the company.
Diversification: The Company has a four-pronged strategy:
"Core Dhaka business" - That is, grocery retailing in its home market. It has been innovative and energetic in finding ways to expand, such as making a large-scale move into the convenience-store sector, which the major supermarket chains have traditionally shunned.
"Non-food business" - Many supermarket chains have attempted to diversify into other areas, but Agora has been exceptionally successful. By late 2004 it was widely regarded as a major competitive threat to traditional high street chains in many sectors, from clothing to consumer electronics to health and beauty to media products. Agora sells an expanding range of own-brand and as well as local and international non-food products, including non-food Value and Finest ranges. It also has done quite well in non-food sales in Ireland. CDs are one of the best examples, with Agora Gulshan promising to sell all chart CDs (except compilations) for Tk.50.00 compared with local Music Stores selling the same for around Tk. 70.00.
"Retailing services" - Agora has taken the lead in its sector in expanding into areas like dairy and utilities. It usually enters into joint ventures with major players in these sectors, contributing its customer base and brand strength to the partnership. Other supermarkets in Dhaka have done some of the same things, but Agora has generally implemented them more effectively, and thus made most profit.
Super Stores in Bangladesh
There have about 30 Super Store in Bangladesh now with 5 largest shops like Shwapno, Agora, Nandan, Meena Bazar, and PQS. The annual turnover of the superstores stands at around Tk 15.0 billion (1500 crore) in 2009, according to Bangladesh Supermarket Owners Association (BSOA). With a strong 15-20 per cent annual sales growth, about 30 companies with more than 200 outlets have already made foray into the industry. Hassle-free shopping environment, hygienic commodities, fresh vegetables, meat and fish at the supermarkets are earning appreciation of the customers. A rise in organized retailing would offer the consumers hygienic foods at competitive prices, compared to those offered by retailers in the kitchen markets, where commodities are sold mostly in unhygienic condition. According to operators, more than 600 chain retail outlets are expected to be set up in the next five years in an attempt to attract more customers.
Reasons & Justification of Online Shopping
It is now easier for business organization to cross borders and compete internationally for globalization and it helps to increase competition in the marketplace. As increasing of competition organizations constantly try to increase their productivity and decrease their costs. One of the ways for them to achieve is using information technology. Internet technology holds the potential to fundamentally change in every production, retail and service sector.
To provide a high accessibility of service we will design the online shopping website, so that potential customers need not go to a physical shop to buy products or services. They just need to online to complete their purchases.
Today’s development of information technology has become major changes in the way services are delivered to the customers. Nowadays, customers are used to self-service options, which are more convenient and fast. In the develop countries the advent and use of the Internet has changed the daily activities of most people, especially in shopping. The popularity of online shopping services is increasing in recent years.
Some of the reasons for customers to prefer online shopping services are: convenience, feeling more in control of the service process and avoiding human contact and saving time. Shopping via internet has come up as a key resource for achieving higher efficiency, control of operations and reduction of cost by replacing paper based and employee depended methods which provides higher productivity and profitability.
IT can be very inconvenient for a consumer not getting a product in his locality when it is available in other places. It happens in Khulna and other areas. For example, Khulna residents need to come to Dhaka to buy rare medicines. Students of Rajshahi University need to come to Dhaka to get their reference books at Nilkhet. It would be convenient for them if they could order online. It would save their time as well as money as consumers.
Here we have some justification to implement online shopping in Bangladesh:
- Dhaka is becoming over and over populated city day by day. It is now very difficult to move one place to another within short time. All streets are faced traffic jam in business hour. No one can able to maintain their daily routine perfectly. One of the most important tasks of our daily life is to purchase our daily commodity from local market. But all the local markets are full of hassle and harmful environment. Though there have some super stores with better environment but people have to spend more valuable time on streets because of traffic jam. So as we have a large chain of retail shop we can easily turn into online shopping to provide customer hassle free shopping by saving their time.
- People do not have to wait in a line or wait till the shop assistant is ready to help you with their purchases. They can do their shopping in minutes even if they are busy apart from saving time and avoiding crowds.
- Online shopping can improve the quality of the services, save customers valuable time, movement from one place to another and receiving the goods accurately.
- This reduces transaction time, boundary less trade, and accuracy. It also creates an opportunity to directly selling of the product to the customer without using any intermediaries.
SWOT analysis
A SWOT Analysis is a strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a business decision. Strengths and weaknesses are internal to the company. Opportunities and threats originate from outside the company. A SWOT analysis is usually performed early in the decision implementation process, and helps organizations evaluate the environmental factors and internal situation to analyze the decision. Here is our SWOT analysis for our new strategies.
Strength
- Agora is a sister concern of Rahimafroz which is a large business organization in Bangladesh.
- Agora is oldest and renowned super shop in Bangladesh and it has a specific target customer.
- As because we have strong retail network it will be easy for us to remain in touch and build relationships with customers.
- Startup costs for an e-commerce retail operation are a fraction of the costs of starting a traditional superstore.
Weakness
- We have no experienced team to establish and run online service.
- It is not possible for us to provide service to all the areas.
- Supply chain management for delivering products to customer house is not much effective.
- Infrastructure for establishing online shopping is not available.
Opportunity
- No other company started online shopping in this sector in Bangladesh yet. So we will be the first in Bangladesh.
- Internet user is increasing day by day and people are also getting more familiar with online shopping.
- Selling on the Internet allows the company to take orders around the clock on every day of the week. Orders can then be filled and processed during set business hours.
- Retail sales on the Internet in Bangladesh still not progressive but it will be developed within short time.
- Environment of local market becoming more crowd and environment is very poor.
- Population is growing day by day in major cities.
Threats
- Other competitors are on the way to establish online shopping service. This increases the level competition and can cause a reduction in prices and profit margins.
- Consume may have reluctance to shop over the internet.
- Fraud and security concerns with payment policy.
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Some consumers are afraid of doing business online out of concerns of fraud and misuse of their financial data.
Feasibility Analysis
Feasibility Study is basically a study that is done to judge the viability of a new business venture. It is actually a preliminary analysis of a project that lets the people know that whether to proceed with a project or not.
The outcome of the feasibility study will indicate whether or not to proceed with the proposed decision or idea. If the results of the feasibility study are positive, then the cooperative can proceed to develop a business plan.
Technical feasibility
In technical feasibility the following issues are taken into consideration.
- Whether the required technology is available or not
- Whether the required resources are available –
- Manpower- programmers, testers & debuggers
- Software and hardware
In term of technical feasibility we have all the resources available and technology like Internet is available in major cities of Bangladesh.
Operational feasibility
A Business Feasibility Study can be defined as a controlled process for identifying problems and opportunities, determining objectives, describing situations, defining successful outcomes and assessing the range of costs and benefits associated with several alternatives for solving a problem. The Business Feasibility Study is used to support the decision-making process based on a cost benefit analysis of the actual business or project viability.
As we are largest retail chain store in Bangladesh our operational experience is much better than others. So we hope that we will operate and implement our new decision through our experienced management and human resources.
Economic feasibility
Business corporations face great uncertainty and risks when making decisions about major investments in new manufacturing facilities, new products, new markets, new technologies, new programs, and when acquiring other companies. Economic feasibility studies provide the facts and analytical rigor to improve these types of strategic decisions.
What are the relevant economic patterns and trends? What are the fundamental economic drivers of demand? Will consumers buy the new product or services? What prices will consumers pay? What’s the slope of the price-demand curve? These are the common question that a management should consider before implementing new decision.
The economic feasibility analysis often includes a comprehensive analysis of competitive firms and competitive threats. Who and what constitutes the competition? What are the capabilities and tendencies of these competitors? How are they likely to respond to a competitive threat?
We already show some reasons in Reasons and Justification part that why we want to implement online shopping service with various prospects and opportunities considering our threats and weaknesses. All the factors are there basically a present scenario of real economic condition of Bangladesh to determine whether online shopping is feasible or not.
Implementation of the Decision
Implementation is one of the most important factors of any decision. Decision doesn’t bring any meaning if it is not perfectly implemented. After decision making each and every organization has to implement that decision making.
To implement our decision the followings are the factors influencing the decision making, those are briefly mentioned below:
Technology
According to our decision we have to develop our business pattern. That means we are going to introduce E- business in our existing business. To do so firstly we have improve our existing technology or to customize our technology. Such as to develop a new software for our new website. As well as we have to maintain our hardware system transparently and efficiently.
Preparation of Budget
Decision-making involves budget allocation i.e., resource allocation to various aspect of decision. Budget may be allocated to various factors of production. As we are the sister concern of Rahimafroz group we can easily collect our required budget for implementing online shopping. Our estimated budget will contain these costs:
Initial Cost
Website Design
Domain Name Registration
Infrastructure Development
Advertising
Purchasing of vehicle to deliver product
Working Capital
Website maintenance
Salary
Action plan
An action plan is a specific series of steps taken to accomplish a specified goal. An action plan generally includes steps, milestones, and measures of progress, responsibilities, assignments and a time line.
Action plans can be used for any endeavor or project.
Open a new website which facilitates online shopping
To start an online store an attractive website is first requirement. We will build up a new online shopping website that will be highly secure and easy to access. It will contain all of our products, services and information.
Choose an underlying infrastructure for online store
Build internal server: To run our website 24/7 we will build our own server so that our website will open 24 hours and customer can make order anytime from anywhere.
Build-out own product inventory software: This is the software that will run our store, from product display to inventory management to checkout.
A Credit Card Merchant Account: To accept credit cards online, you'll need a merchant account, which is an account with a bank or other financial institution that allows you to accept your shoppers' credit card numbers.
Build a reliable source for supply of Products
As Agora is a well establish superstore, it has a strong supply chain procedure. To implement online shopping it is not require any additional supply source, but existing supply chain should be developed so that product will available always to meet the customer order.
Promote our store
Mention site in online forums and blogs
There have lots of active Bangladeshi online forum and blogs in internet where we can make comments or post our product information or write any article about our website.
E-Mail Marketing
We will collect email address from our existing customer and their relatives from our shopping outlet. Then we will send our website address and facilities that we are giving for online shopping.
Advertising
Advertising is a vital way to make known any new business. We will advertise our website by newspaper, billboard, leaflet etc.
Provide discount and Offer free product
Initially we will provide discount on purchase and offer free product like buy two get one free. That will attract customer to visit our website.
Delivery procedure
Recruit employee for deliver: We will recruit employee to ensure deliver within the given time.
Operating own motor vehicle: To deliver product just in time we will use our own vehicle.
Payment Procedure
Payments are usually coursed electronically or through credit cards. In a matter of hours or about a few days at the most, the purchased item would be delivered right to the doorstep of the online buyer.
But in recent time there have a risk of using credit cards for the customer. Credit card may be hacked or information of customer may be risky. So people are less interested to use credit card for online transaction.
So as we are the first online shopping service provider we want to be security concern to minimize the payment risk. That’s why we want to launch our own payment card called “Agora Shopping card”. We provide this card to our customer with no extra charges or yearly fees. Customer can enjoy the freedom of online shopping. They do not have to have a bank account or any type of bank cards to get a Agora Shopping card of their own.
Customer can deposit money to their card through our physical outlet. Once they deposit they can buy products by this card.
Suppose, a customer deposit TK.10000 in his card. So he will be able to buy product amount of TK.10000 at anytime from anywhere through this card. He can recharge his card again and again.
Characteristics of this card will be:
Secure
- Levels of security (Card, Pin and Memorable word)
- Agora Shopping card hologram for anti-piracy
Fast
- Online Payment within minuet’s
- Instant reload
Convenient
- No need to carry any more cash
- Enjoy shopping from home
Conclusion
Though there have some super stores with better environment but people have to spend more valuable time on streets because of traffic jam and also crowd in those super stores.
So there has created an opportunity of online shopping in Bangladesh now. The requirement for online shopping is availability of internet and basic knowledge of computer. Educated people are now more adaptable with internet and they are already connected with online services like online banking and many more.
As Agora has a large chain of retail shop we can easily turn into online shopping to provide customer hassle free shopping by saving their time. Nowadays, customers are used to self-service options, which are more convenient and fast. In the develop countries like Bangladesh the advent and use of the Internet has changed the daily activities of most people, especially in shopping. The popularity of online shopping services is increasing in recent years.
So we think our decision will be able make a market for online shopping in Bangladesh and we will be the first and leading online super shop in Bangladesh.
References