Applying Porter Diamond model on Beximco Textile Ltd.
Applying Porter Diamond model on Beximco
Course title: International Business
Course code: BUS-302
Gouranga Chandra Debnath
Department of Business Administration
Daffodil International University
Group name: light of moon
Roni Kumar Ghosh 112-11-2085
Md .Mashiur Rahman 112-11-2086
Badhon Sarker 112-11-2104
Md.Arshadul Haque 112-11-2110
Date of Submission: 04/07/13
The Garment industry of Bangladesh has emerged as a competent garment producer in global
garment business in recent times. This industry has successfully transformed Bangladesh into an
export-oriented economy. The Garment industry also became the major foreign currency-earning
sector with highest rates of absorption of industrial employment. Bextex Ltd.was incorporated
in Bangladesh as a Public Limited Company with limited liability on 8 March 1994 and
commenced commercial operation in 1995. This company applying porter Diamond theory
to established their business. This analysis is the most important factor of porter diamond.
These are Factor conditions, Demand conditions, Related and supporting industries,
Firm strategy, structure and rivalry, Government, Chance. When they are satisfied then
they are going to establish their business.
Porter’s Diamond Model can be used to access the Clothing industry’s likely competitiveness in
global perspective. The industry is likely to be competitive when the factors mentioned in the
Porter’s Diamond Model are significant in locally than its competitors. The four key factors in
Michael Porter’s Diamond Model are: Factor Conditions, Demand Conditions, Supporting
Industries, and Rivalry, Strategy, Structures.
Applying Porter Diamond in Beximco Textile Ltd:
Bextex Ltd. (the "Company") was incorporated in Bangladesh as a Public Limited
Company with limited liability on 8 March 1994 and commenced commercial operation in
1995. This company applying porter Diamond theory to established their business. This
analysis is the most important factor of porter diamond. These are Factor conditions, Demand
conditions, Related and supporting industries, Firm strategy, structure and rivalry,
Government, Chance. When they are satisfied then they are going to establish their
Factor conditions: There are two tapes of Factor conditions.
1.Basic factor endowments : Human resources, physical resources, climate, geographic
location ,demographics are focus on basic factor .The entrepreneurs of BexTex are saw that in
Bangladesh the main factor of a garment is labor is very low cost and the number of labor are
available. Another main object is land. They established their factory in Gazipur. In Gazipur,
land also very available.
2 Advanced factor endowments: knowledge resources, capital resources and
infrastructure are advanced factor of endowments, The number of capital also available.
Their paid up capital is1,882.50. In this case, Factor conditions are available. For this reason
the entrepreneur of Bextex are established their business in Bangladesh. Communication system
are very good in Gazipur so entrepreneur are invest in Bangladesh.
Another main factor in Porter Diamond is Demand conditions. Because the main aim of
a Business is achieve profit. If the demand of a product is less than the profit is also low.
So the demand condition is also very much important. Entrepreneur of Bextex are
analyst the demand condition of Bangladeshi product. They found that they can export
high quality product with low cost because the labor is very low cost. And the demand is
also very high in Europe, America, Africa and the Muslim country because
Bangladesh is a Muslim country. So the established of Bextex is positive in
Bangladesh. Bextex is most profitable garments in Bangladesh. Bextex main product are
Dominate these markets in high quality : Men's, Women's , Children Shirts( Dress & Casual
),Blouses( formal & casual ) Skirts, JacketJeans & Casual non - denim bottoms, Knitted tops & bottoms.
Related and supporting industries:
There are lots of bank and insurance company in Bangladesh. The entrepreneur of
Bextex can get loan and safety from bank and insurance. And the other
related and supporting industries are also available in Bangladesh. India export
a lot of Hanger, Jipper, Button, Yen etc. And Bangladesh can easily import from India and
the transport cost is also very low. So the establishment of Bextex in Bangladesh is positive.
Firm strategy, structure and rivalry:
Vision of bextex
Gain market leadership in high value added apparel in USA & Europe . Use “Innovation” &
“Speed” as prime drivers, rather than cotton & cheap labor.
Mission of bextex
To provide design and product development support from fiber to garments to leading retailers
and brands using integrated manufacturing resources, powerful CAD tools, technology
collaboration with major suppliers (like CIBA, DuPont etc.) and interface with fashion forward
customers, rapidly develop and bring trendy, innovative differentiated products to our strategic
partners every season. Our Design Studio works to produce entire collections with Inditex
including womens and mens clothing, woven and knit tops, casual and denim bottoms and
jackets. We have now introduced a catalogue which will highlight our concept of complete new
looks, products and fabric swatches and we will be sending one of these to all our key customers
almost every eight weeks.
Management of bextex
The company is operating through a well defined management structure headed by a chief
Executive Officer under whom there are various departmental heads and according to hierarchy,
various senior and mid level management staffs. The chief executives officer and departmental
heads meet at regular interval. Its very helpful to production
BEXTEX Limited by nature operates in the weaving and finishing segment of the complex
structure of the Textile & Clothing industry of Bangladesh. The local textiles producers did
never exert threats to the company. Rather it is the textile giants in Chaina, India, Indonesia,
Pakistan are the major competitors of BTL as the company’s perception, because most of them
operate in the same markets as like as BEXTEX Limited.
Competitor of BexTex
In the local industry BexTex Ltd. is currently grabbing a big volume in terms of the share in the
export-oriented RMG market. Mani competitor are Monno tex , unocom tax,sinhatax,HHtax
,padmatax are main competitor.
Poter’s Diamond Model suggests that competitiveness in the garments sector could erode if
international supports are withdrawn while integrating and coordinating textile clothing pipeline
and supply chain could develop competitive advantages.