A Case Study on Entering Into the Global Market Through

Exporting Beads Products.

Md. Parvez Aalm

Final Year Student
Department of Finance
University OF Chittagong
Email. parvezcu53alam@gamil.com

October 27, 2017

0.1 Introduction
The global handicrafts market has been developing world wide due to the increasing interest of people
in art and culture. A number of micro and small enterprises are coming in Handicraft business, where
artisans from poor communities are involved in the creation of handicrafts. Their artworks are also valued
on humanitarian grounds. Handicrafts are artistic representation of a particular culture or ethnic tradition.
Handicraft products include objects of utility and decoration. Most of rural women of Bangladesh are
underprivileged and they are yet to have employment opportunities. If they are trained well they can be
asset for the country and contribute to national economy. Among various types of handicrafts, the demand
of beads products is increasing day by day in the global market. If rural women are trained and engaged
in making beads products, Bangladesh has an opportunity to improve their standard of living as well as to
boost up its export earnings. China is the leading exporter of such products. Competing China and India
is not an easy task but with competitive labor cost and culture based design Bangladesh has the potential
in this sector

0.2 Purpose of the Study

To ensure that scarce resources are optimized, the full benefit of initiatives is realized, the risks are mitigated
and the business functions are supported, a business case approach to managing entering into global market
through exporting beads products is being undertaken. The purposes of this business case are the followings:

1. To show how beads products are promising in the global market.

2. To provide an objective assessment.

3. To identify the risk factors to be faced.

4. To provide projected costs and revenues.

5. To provide an optimal direction.

0.3 Prospect of Beads Product

The business idea is to enter into the global market through exporting beads products to those countries
where there is a huge demand for these products. The target markets primarily are Germany, Italy, and
France. As an economic power as well as an important member of the European Union (EU), Germany is
a reliable partner of Bangladesh in development co-operation. In trade with Germany, Bangladesh has for
years recorded a large surplus. Germany is the second largest export market of Bangladesh after the US.
Bilateral trade is with about 4.5 billion euros in 2012. A German-Bangladeshi investment promotion and
protection agreement has been in force since 1986 and a bilateral double taxation accord since 1993. The
bilateral trade between Bangladesh and France stood at 1.647 billion in 2012, of which Bangladeshs export
to France amounts to 1.513 billion. Bangladesh mainly exports knitwear, woven garments, frozen food, Agri
products, leather, jute and jute products. With healthy and stable trade relations Germany and France
could be the best markets for Bangladeshi beads products. The key resources in functioning this business
are beads, labor and nylon. Arranging training program, producing beads products by them, Promoting
products through Bangla craft and Contacting foreign buyers online are the major activities. The beads
products can be of different size, color and design. The products to offer are hand bags, purse, ornaments,
fruits of beads, showpiece etc.

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0.4 Scenario Analysis
The global handicraft market size is 100 billion dollar[1]. The largest importers of handicrafts products
are USA, Germany, Italy, U.A.E, France etc. and the largest exporters are China, India, Mexico, Vietnam
etc. Last year Bangladesh exported Handicrafts worth 10 million dollar to the global market. Which is very
negligible compared to global market size. Technavios market research analyst predicts the global handicrafts
market to grow at a tremendous rate of 12 percent during the 2015-2019. The global handicrafts market
is highly fragmented due to the presence of several small and medium providers. Handicrafts is a dynamic
industry, and its development is underpinned by factors such as economic conditions, technology, skilled
workforce, and innovative use of raw materials. The Americas dominated the handicrafts market during
2014 with a market share of 38 percent. China and Nepal are known for their attractive architecture made
up of carved wooden struts while Thailand is the key manufacturer of lacquer ware, made up of wood or
woven bamboo. The African region is also popular for its wood carving and sculptures with Kenya being
the key revenue contributing country.

0.5 SWOT Analysis of Beads Product

Bangladesh with high market potential can go for producing and exporting beads products. Labor is one
of the crucial production factors. Labor cost can give us competitive advantage over China and India as
labor cost in these countries is quite higher than in Bangladesh. Hence, Critical success factors for this busi-
ness are Competitive labor costs, Culture based design, Government incentives, Low capital requirement etc.

Almost every business of the world faces some kind of risks. Accordingly this handicraft business is not
also without risks. The crucial risk Factors that may affect this business are competing with giant exporters
with huge resources like China, India and Vietnam, volatile diplomatic relationship with importing countries,
lack of skilled workers etc. Flexibility in production of goods as per market demand and Low barriers to the
entry of new players can also help Bangladesh in this business. But at the same time Lack of co-ordination
between government and private bodies, lack of promotion of products can hamper the business as well.
The major costs associated with this business are costs of raw materials, labor cost, transportation cost,
promotion cost, start up cost and operating costs. The benefits that this business can avail us are women
empowerment, increase in export earning etc.

0.6 Conclusion
Finally, it is found that this business of exporting beads products is quite promising. With high potential
market if can manage to mitigate the risks and hold timely strategies, Bangladesh can capture a huge foreign
market and uplift the standard of living of rural women as well. Projected cost and revenue: Here market
analysis found that any entrepreneur will be to reach break even point within 1st quarter and will be able
to retain investment that means payback period within 2nd quarter. Projected income statement given in
the appendix