This document provides an overview and analysis of Dragon Sweater and Spinning Limited's (DSSL) distribution strategy and channel of distribution. It discusses DSSL's company background, value chain, distribution functions, factors influencing direct distribution, types of channels, channel configuration, and considerations for selecting channel strategies. Key points include DSSL's use of both direct distribution and intermediaries to reach global markets, the importance of maintaining flexibility in the value chain, and how end-user needs, product characteristics, and manufacturer capabilities influence channel design.

1. ASSIGNMENT On Dragon Sweater & Spinning LTD
Fall`21
MKT430
SECTION:01
SUBMITTED TO:
Dr. Salma Akter (FHEA)
Assistant Professor
Department of Business Administration
East West University
SUBMITTED BY:
Sakib Rahman
ID: 2018-3-10-016
Date of Submission: January 3, 2022

2. Table of Contents
Introduction:.................................................................................................................................................3
Company Overview:..................................................................................................................................3
Strategic Role of Value Chain:......................................................................................................................4
Distribution Functions: .............................................................................................................................4
Channels for Services: ..................................................................................................................................6
Direct Distribution by Manufacturers: ....................................................................................................6
Buyer Considerations:...........................................................................................................................6
Competitive Considerations:.................................................................................................................7
Product Characteristics:........................................................................................................................7
Financial and Control Considerations:..................................................................................................7
Types of Channels: .....................................................................................................................................10
Conventional Channel:........................................................................................................................10
Vertical Marketing Systems: ...............................................................................................................10
Horizontal Marketing System: ............................................................................................................10
Distribution Intensity: .........................................................................................................................10
Channel Configuration: ..............................................................................................................................11
End-User Considerations: ...................................................................................................................11
Product Characteristics:......................................................................................................................11
Manufacturer’s Capabilities and Resources: ......................................................................................11
Required Functions:............................................................................................................................11
Availability and Skills of Intermediaries:.............................................................................................12
Channel Maps:............................................................................................................................................12
Selecting the Channel Strategy:.................................................................................................................13
Market Access:....................................................................................................................................13
Value-Added Competencies:...............................................................................................................13
Financial Considerations:....................................................................................................................13
Flexibility and Control Considerations:...............................................................................................13
Channel Strategy Evaluation:..............................................................................................................13
International Channel of Distribution Alternatives: .................................................................................14
Factors Affecting Global Channel Selection: .............................................................................................15
Global Issues Regarding Multichannel Strategies: .............................................................................15
Conclusion: .................................................................................................................................................15

3. Introduction:
Company Overview:
One of the largest integrated sweaters and spinning projects in South Asia is Dragon Sweater and
Spinning Limited. The firm has a lot of goodwill and a lot of market share for its sweaters and
yarns all over the world. DSSL is one of the cornerstone companies of Bangladesh's DRAGON
GROUP, which is the Sweater Industry's Pioneer. The group was a pioneer in Bangladesh's sweater
business, launching the country's first sweater project in the early 1980s with technological
assistance from Hong Kong and China. Since then, the organization has sown the seeds for the
growth of Bangladesh's sweater industry. Bangladesh now exports over $ 1.5 billion in sweaters
and employs about a million people in the sweater business.
On June 16, 1999, Dragon Sweater and Spinning Limited was established as a private limited
company under the Companies Act 1994 at Chandul, Miah Baar, Comilla, Bangladesh, and was
later converted to a public limited company on January 1, 2012. Dragon Sweater and Spinning
Limited is a spinning and sweater manufacturing firm focused solely on export. Having its own
spinning and knitwear production facilities. DSSL manufactures and distributes sweaters to some
of the world's most prestigious buyers. The firm is based in Comilla in its own industrial complex,
and it employs a large number of locals in its manufacturing facilities. The majority of the
machinery was acquired from world-class vendors in Germany, Italy, and other European nations,
and it produces Acrylic and Acrylic mixed yarn of fine quality for the production and export
demands of international standard sweaters all over the world. DSSL is a backward linking and
import substitute industry that creates a sizable quantity of foreign exchange revenues and adds
value to the country's exports. (Ltd, n.d.)
DSSL is a project that involves the spinning of yarns made from acrylic or acrylic combined with
wool, cotton, cashmere, silk, polyester, and other synthetic fibers. Its own yarns are used to
manufacture ready-made sweaters, which are exported to major shops worldwide. The firm exports
its products to a wide range of markets, including the United States, Canada, Mexico, Brazil, Chile,
Japan, Australia, the United Kingdom, and Europe. For quality control, the firm has the ISO
9001:2000 certification. (press, 2021)

4. Strategic Role of Value Chain:
A solid distribution network gives a company a significant competitive edge. The value chain is a
network of distribution routes that connects value chain members to end customers. We look at
the considerations that a corporation must make when designing a channel of distribution plan.
Channels of distribution are a critical problem in value chain management. An effective and
efficient distribution channel offers member firms with a significant strategic advantage over
competitors. Distribution strategy is concerned with how a company achieves its market goals. We
also underline the need of marketing decision makers considering the influence of supply chain
strategy and digital platforms. Maintaining the flexibility of the market-driven organization to
realign its value chain as necessary to suit the changing demands of its customers and markets is
an essential aim.
DSSL provided higher value to clients through a flow model in which customer orders drive
product manufacturing and assembly. The direct business model gives clients additional options
for tailoring items to their specific needs, while reducing stock retained in the value chain to an
absolute minimum. DSSL can run its global operation on five- or six-days’ stock. DSSL has direct
access to the supply base for textiles and components through the customs, as well as linkages to
important clients, which promotes greater learning and responsiveness to customer demands.
(HARTFORT, 2020)
Distribution Functions:
The distribution channel is a network of value chain enterprises that link goods and services with
end customers. The distribution channel is made up of interdependent and interconnected
organizations and agencies that operate together as a system or network to generate and distribute
a product to end customers. Both direct and indirect routes may contain digital or Internet-based
components. Typically, a corporation may employ many channel linkages to reach out to different
categories of clients. In addition to the intermediaries shown, various enabling businesses, such as
financial institutions, transportation firms, advertising agency, and insurance firms, provide
services. Several value-added activities are required in order to move items from manufacturers to
end consumers. Marketing intermediates' buying and selling operations lower the number of
transactions for manufacturers and end-users. Product assembly into inventory aids in meeting
consumers' time-of-purchase and variety preferences. Transportation bridges the geographical
divide between customers and sellers, completing the physical distribution function. Financing
makes the exchange function easier. Breaking down vast amounts of commodities into individual
orders, keeping inventory, and preparing orders for transportation are all part of the processing and
storage of goods. Product availability, location, and characteristics are communicated through
advertising and sales promotion. (David W. CRAVENS)

5. Pricing establishes the groundwork for the exchange of goods and services between buyer and
supplier. Risk is reduced by measures such as insurance, return policies, and futures trading. Sales,
information, and support services are all provided via personal selling. Personal selling
interactions, written orders and confirmations, and other information flows are examples of buyer-
seller communications. Finally, DSSL production and spinning are critical for a wide range of
items. Customs is increasingly providing an enabling and information-sharing function, which is
altering the way these value-added tasks are carried out. (David W. CRAVENS)
Producers of DSSL Producers of DSSL
Supply Chain Supply Chain
Consumers Organizational Consumers
Direct
Channel
Wholesaler
s
Sales Agent
Wholesaler
s
Sales Agent Sales Agent
Retailer
Retailer Retailer
Distributor
Direct
Channel
Distributor Distributor
Resellers

6. Channels for Services:
Distribution channels are frequently used in the delivery of services such as air travel, banking,
entertainment, health care, and insurance. The service provider provides the service to the end-
users rather than producing it as a thing and distributing it to the end-user through marketing
middlemen. As a result, service distribution networks differ slightly from those utilized for
products. Although the tasks done in channels differ slightly from those performed in products, the
aims of channels for services are similar to those for goods. Services are often given as needed
rather than being stored in inventory. Similarly, services cannot be moved, even if the service
provider travels to the user's location to perform the service. Services are often devoid of
processing and storage. Many services may not require servicing or maintenance. Other previously
described roles apply to both commodities and service.
1.Purchasing and selling items
2.Financing, advertising and sales promotion
3.Pricing
4.Risk Reduction (lost luggage insurance of clothes and communications). (HARTFORT, 2020)
Direct Distribution by Manufacturers:
Manufacturers are distinctive in that they have the choice of selling directly to end customers
through their own salesforce or through marketing middlemen. Manufacturers have three options
for distribution.
1) Direct distribution
2) use of intermediaries.
3) situations in which both (1) and (2) are feasible.
Buyer and competitive considerations, product features, and financial and control issues are all elements
that impact the distribution selection.
Buyer Considerations:
Manufacturers consider the volume and frequency of purchases made by customers, as well as the
margins available above manufacturing costs to cover direct selling expenses. Customers' demands
for product knowledge and application help may dictate whether a company's sales force or
independent marketing intermediaries is best suited to meet those needs. (HARTFORT, 2020)

7. Competitive Considerations:
Distribution routes may be a significant part of how a firm differentiates itself and its products from
competitors, prompting decision makers to place more focus on direct channels. The Internet has the
potential to alter distribution economics to favor direct marketing. The DSSL, for example, has seen a
significant increase in customized online ordering, which is a type of mass customization. Clothing BD (a
branch of DSSL) gives users a palette of 21 colors to cover Sweater on its website
http://www.dsslbd.com/. Aarong custom online buying at Aarong.com, on the other hand, was limited
by the necessity for customers to try on the sweaters, so they went to Web Aarong storefronts to
integrate conventional retail with the customized product. (Ltd, n.d.)
Product Characteristics:
When selecting whether to adopt a direct or distribution-channel approach, companies frequently
evaluate product attributes. Customers and producers of complex goods and services are frequently
in close touch, with the manufacturer providing application assistance, service, and other support
operations. Chemical-processing equipment, mainframe computer systems, pollution-control
equipment, and engineering-design services, for example, are frequently sold directly to end-users
by salesforces. Another element to consider is the manufacturer's product line. The cost of direct
sales for a single product may be prohibitive for an entire range, but the cost of distribution via the
manufacturer may be feasible. For a single product, high-volume purchases may make direct
distribution possible. Direct sales tactics are frequently used by companies whose product designs
vary due to quickly changing technology. (David W. CRAVENS)
Financial and Control Considerations:
If resources are available for direct distribution, it must be determined if selling directly to end-
users is the best use of those resources. Both the expenses and the advantages must be assessed.
Because independent organizations cannot be handled in the same way as business workers, direct
distribution offers the producer control over distribution. This might be a crucial consideration for
the producer. By 2008, the DSSL firm has exported its goods to a wide range of countries,
including the United States, Canada, Mexico, Brazil, Chile, Japan, Australia, the United Kingdom,
and Europe. The purpose is to inform customers about the company's high-quality products,
apparel, and other new products. It's a reaction to the threat of commoditization in the garment
industry—the consumer who has no brand loyalty and buys the cheapest item available. Aarong
and Yellow have similar motivations for developing retail locations: they want to strengthen their
brands among affluent consumers and obtain a deeper understanding of fast-changing consumer
electronics trends. These actions highlight the significance of market access and market learning
in maintaining competitive difference. (Business & Heil, 2020)

8. Diagram: Factors Favoring Distribution by the Manufacturer. (David W. CRAVENS)
Distribution
by the
manufacturer
Complete line
of products
Purchases
are large
and
infrequent
Small number of
geographically
concentrated
buyers
Profit
margins
adequate to
support
distribution
organization
Supporting
services
are
required
Extensive
purchasing
process
Complex product/
application
Early stages of
product life
cycle
Rapidly
changing
market
environm
ent
Opportunity
for
competitive
advantage

9. Diagram: Channel Strategy Selection. (David W. CRAVENS)
Type of distribution channel
Intensity of distribution
Channel configuration
Conventional Horizontal
marketing system
Vertical marketing system
Ownership Contractual Administered
Relationship
Selective
Intensive Exclusive

10. The channel of distribution strategy may be used by management to achieve one or more
objectives. While acquiring access to end-user purchasers is the core goal, other associated goals
may be equally significant. These include assisting with promotional and personal selling efforts,
providing customer service, gathering market data, and achieving acceptable revenue/cost results.
Consider DSSL's, Aarong's, and Yellow's forays into retail to establish brand equity with
customers. (Ltd, n.d.)
Types of Channels:
Traditional channels and vertical marketing systems are the most common forms of channels,
however horizontal marketing systems and new digital channels are also significant in some cases.
Conventional Channel:
The conventional distribution channel consists of a collection of vertically connected autonomous
companies, each attempting to look after its own interests while paying little attention to the
channel's overall performance. The traditional channel participants' interactions are generally
casual, and the members are not well-coordinated. Rather than tight coordination across the
distribution channel, channel organizations are focused on buyer-seller interactions.
The struggles of DSSL in competing with Sailor and yellow show some of the issues faced by a
firm utilizing a traditional channel approach in the fast-moving fashion sector when faced with
new competitors using a vertical marketing system strategy. The INNOVATION FEATURE
summarizes this illustration.
Vertical Marketing Systems:
The vertical marketing system is the second sort of distribution channel. A growing number of
marketing executives see the benefits of managing the channel as a coordinated or planned system
of participating enterprises. Later, we'll look at the impact of supply chain management methods
and the Internet on channel operations. Vertical marketing systems are prevalent in Bangladesh's
retail sector, as well as in the commercial and industrial products and services industries.
Horizontal Marketing System:
When two or more unrelated organizations expand their operations or programs to take advantage
of a marketing opportunity, this is known as a horizontal marketing system. Jamuna Future Park,
Bangladesh's largest supermarket, has partnered with Royal Bank of Janata to offer a broader range
of financial services, including house loans, pet insurance, and identity theft protection. The
horizontal marketing system is an important consideration while examining channel Value Chain
Approach strategy, but its features are similar to those of partnering, joint ventures, and strategic
alliances, which are all considered strategic collaborations.
Distribution Intensity:
The selection of distribution intensity is the second phase in channel strategy. The easiest way to
assess distribution intensity is to look at how many retail outlets (or industrial product dealers)
carry a certain brand in a given geographic area. An intense distribution technique is when a

11. corporation decides to distribute its items to a large number of retail shops in a trade region that
may ordinarily sell such a product. A trade area might be a section of a city, a metropolitan region,
or a wider geographic area. If the product is distributed by only one retailer or dealer in the trade
region, management is using an exclusive distribution strategy. Examples include Aarong and
Yellow industrial equipment. Selective distribution falls between the two extremes. Rolex watches
and Louis Vuitton fashion goods are distributed on a selective basis. (HARTFORT, 2020)
Channel Configuration:
End-User Considerations:
It's essential to know where the intended end-users could buy the things, you're interested in. The
intermediaries chosen should provide the producer access to the market segment he or she is
targeting. Buyer attributes and preferences may be used to narrow down the list of companies that
end-users will favor. As a result, judgments on further channel levels, such as intermediaries
selling to retailers that contact market target clients, are guided.
Product Characteristics:
The product's sophistication, particular application requirements, and maintenance requirements
can all help guide the selection of intermediaries. Although following rivals' techniques may not
be the most desirable channel design, looking at how competitors' products are delivered may
indicate various sorts of intermediaries. Because intermediaries may demand whole ranges of
items, the breadth and depth of the products to be supplied are also crucial factors.
Clothing like DSSL and Aarong have very interesting channels of distribution. For example,
Aarong sells Taaga to independent retail shop. They bottle the beverage and sell and distribute to
retailers. DSSL also promotes its brands with retailers and consumers. Strong relationships
between Pepsi and its bottlers are essential to the success of the channel network.
Manufacturer’s Capabilities and Resources:
Large producers with a wide range of competencies and resources have a lot of options when it
comes to selecting intermediaries. These producers also have a lot of negotiating leverage with the
middleman, and they might be able (and willing) to handle some of the distribution duties
themselves. For small producers with limited expertise and resources, such possibilities are more
restricted.
Required Functions:
Various channel operations such as storage, service, and transportation must be conducted in order
to move items from manufacturer to end-user. Studying these roles can help you decide which
sorts of intermediaries are best for a certain product or service. Independent manufacturers' agents,
for example, may be the best middleman to utilize if the maker just requires direct sales. A full-
service wholesaler, on the other hand, may be required if inventory stocking and after-sales
assistance are required. (David W. CRAVENS)

12. Availability and Skills of Intermediaries:
It's also crucial to assess the expertise, competence, and motivation of the intermediates being
considered for channel membership. Within the same industry, companies have a wide range of
talents and expertise. Members of the qualified channel may also be unavailable. Some
intermediaries, for example, will not distribute rival items. Completing various distribution
functions becomes more difficult as the channel network becomes more sophisticated.
Channel Maps:
It's common to create a map of an existing or planned channel strategy in order to compare it to
rivals and spot fresh prospects. Construction businesses installing heating equipment in new
clothes and private consumers improving their homes are the two types of clients. Independent
distributors, local shops, huge retail chains, and direct sales by manufacturers are all used to reach
customers. A well-designed channel map clearly identifies end-user consumers and depicts the
relative responsibilities of distributors, construction subcontractors, retailers, and other marketing
middlemen in reaching them. The focus of channel map analysis should be on end-users.
Picture: Illustrative Channel Map for all Producers of Heating Units (David W. CRAVENS)
Production
of Central
Heating
Units
Commercial
Construction
Companies
(85,000 units
Independent
Distributors
Construction
Sub-
Contractors
Small
Hardware
Retailers
Large
Hardware
Retailers
Domestic
Customers
(15,000 units)
Production =
100,000 units
Direct sales = 10,000 units
42,000
units
84,000 units
42,000
units
40,000
units
7,000
75,000 units
2,000
5,000 units
5,000 units
Direct sales = 1,000 units
Consumption =
100,000 units

13. Selecting the Channel Strategy:
Market Access:
Because the channel connects goods and end-users, the market target choice must be tightly
coordinated with channel strategy, as stated throughout the chapter. The channel strategy is chosen
before the market target choice is made. Information on the market's target customers can aid in
the elimination of inappropriate channel-strategy possibilities. Multiple market goals may
necessitate more than one distribution channel. Intermediaries have the advantage of having a pre-
existing customer base. Market access is accomplished quickly when this client base fits the
producer's chosen market objective.
Value-Added Competencies:
The channel chosen should provide the best combination of value-added capabilities. This
assessment necessitates an examination of each participant's abilities as well as the trade-offs that
must be made in terms of financial, flexibility, and control issues.
Financial Considerations:
The channel approach is influenced by two financial considerations. First, do you have the
resources to implement the specified strategy? A small producer, for example, may not have the
financial resources to establish a distribution network. Second, the impact of different channel
strategies on income and cost must be assessed. Cash flow, income, return on investment, and
operational capital requirements are all part of these assessments.
Flexibility and Control Considerations:
Management should choose how much flexibility in the channel network it wants and how much
control it wants over other channel partners. The ease with which channel members may be added
is an example of flexibility (or eliminated). A traditional channel allows for little management by
a member firm, but it allows for a great deal of flexibility in joining and quitting the channel. The
VMS gives you more control than a standard channel. Legal and regulatory restraints have an
impact on channel strategy in areas including price, exclusive dealing, and market coverage
allocation.
Channel Strategy Evaluation:
The usage of a company's DRSS sales force is more expensive (over a two-year period) than hiring
independent sales agents. Assuming that both alternatives contribute to profit, the trade-off of
increased expenditures must be weighed against the direct sales force option's greater flexibility
and control, as well as the higher quality of its selling efforts. Manufacturers seeking entry to new
markets frequently use manufacturer's representatives at first, with a longer-term goal of
converting to a corporate sales force. This allows you to obtain market information while keeping
your selling costs in line with your real sales.

14. International Channel of Distribution Alternatives:
Picture: International Channel of Distribution Alternatives (David W. CRAVENS)
While the fundamental channel structure agents, wholesalers, retailer is consistent across nations,
there are significant variances in distribution patterns. Examining real distribution patterns reveals
the worldwide distribution's intricacy. It is evident that generalizations concerning distribution
practices over the world are not attainable. It is critical to research distribution patterns in the
nation of interest in order to develop distribution strategies. Satellite communications, the Internet,
regional cooperative foreign organizations, and transportation networks all have an influence on
distribution systems in different ways, reflecting globalization. Global market volatility and
company reorganization have additional implications for distribution strategies and practices.
Channel maps for international markets might be useful. (Business & Heil, 2020)
B
Domestic producer
or marketer sells
to or through
Open distribution
via domestic
wholesale
middlemen
Export management
company or sales force
Exporter
Foreign
consumer
Foreign
retailer
Foreign
agent or
merchant
wholesalers
importer
Bangladesh Foreign Countries
(Foreign marketer or producer sells to or through)

15. Factors Affecting Global Channel Selection:
The chapter's channel strategy analysis and selection procedure may be used to build or evaluate
international channel strategy, noting that numerous situational circumstances influence channel
decisions in specific nations. Cost, capital needs, control, coverage, strategic product-market fit,
and the possibility that the middleman will stay in business over a realistic time horizon are all
variables that influence the choice of international channels. Of course, the country's political and
economic stability is critical. The country's stability must be assessed early in the decision-making
process. Global security issues are becoming increasingly crucial in determining the best path to
market. (Jurevicius, Ovidijus ;, 2021)
Global Issues Regarding Multichannel Strategies:
The Internet's effect and efficient worldwide communications networks underline the need of
considering the interaction between domestic and global channels. The multinational corporation
is naturally multichannel Ing. When there are pricing and product availability disparities between
domestic and worldwide outlets, problems might arise. If a product is cheaper in the local market
than it is in the international market, international clients may attempt to get the lower-priced goods
through online sales. If the product is cheaper through global channels, domestic purchasers may
try to obtain the product online through the global channel, or even import the goods back into the
domestic market if the price disparities are substantial enough. It may be difficult to keep
customers from engaging in these actions. (press, 2021)
Conclusion:
Last but not the least, the value chain is made up of businesses, systems, and procedures that
provide value to customers by delivering products to end users. A strategic value chain approach
seeks to match a company's value chain with evolving consumer and competitive demands. The
route of distribution is at the heart of the value chain. A robust channel network is critical for
gaining a competitive edge. End-user demands and characteristics, product qualities, and financial
and control factors all influence the decision between firm distribution direct end-users and the use
of intermediaries. International distribution channels may be structured similarly to those seen in
Bangladesh and other industrialized nations. Nonetheless, significant differences occur in the
channels of various nations due to economic growth stage, political influence, and industrial
practices. The Internet has had a significant influence on the globalization of distribution channels.

16. Bibliography
Business, R. f., & Heil, K. (2020). Reference for Business. Value Chain Marketing.
David W. CRAVENS. (n.d.). Strategic Marketing. In N. F. David W. CRAVENS, Strategic Marketing. The MC
GrawHill Companies.
HARTFORT, T. (2020). Business Owner Playbook. Retrieved from
https://www.thehartford.com/business-insurance/strategy/first-marketing-plan/vision-
statement
Jurevicius, Ovidijus ;. (2021). Strategic Marketing Insight. Value Chain Analysis, 5.
Ltd, D. S. (n.d.). Dragon Sweater and Spinning Ltd. Retrieved from http://www.dsslbd.com/index.aspx
press, W. (2021). World's Top Exports. World's Top Exports, 5.