ACKNOWLEDGEMENT

In any comprehensive work, like this, credit must go to the multitude of people. We are still students and just novice. Hence, we have taken help from different people for preparing our report. Now here is a petite effort to show our deep graduate to those helpful people. First, we commit ourselves grateful to Allah for his unlimited kindness and maximum helpful hand in continuing our report preparation. We express our sincere gratitude to our honorable course teacher, Chowdhury Shegufta Arfin, Asst. Professor, Dept. of Business Administration, Stamford University for their guidance and valuable remark about the convention of the report. Moreover, we are also very much obliged to Rejoan Alam (Shiplu), Principal Officer (Marketing), Bangladesh Online Division office; Mr. Shoaib Ahmed, Recruitment officer, Head-office; Bangladesh online limited (BOL), Dhaka; P.Q. Ahmed, Media & Contract; for their openhearted closeness and helpful co-operation for collecting our necessary information to prepare our required report. Finally, I express my sincerest gratefulness to the faculty members and management of student for their honest effort in designing the course that we believe to be extremely meaningful in practical business environment of the country. My heart-felt thanks to all the Stamford family members.

EXECUTIVE SUMMARY
Bangladesh Online Ltd. (BOL) is one of largest networking business firm in the Bangladesh. Over the last two decades, BOL has been constantly bringing new and world-class services for the Bangladeshi people to remove the daily drudgery of digital life. Over 15% of the city peoples use one or more of their services. BOL Operations in Bangladesh provide employment to over 750 people directly and through its dedicated suppliers, distributors and service providers. BOL wants to attract the best graduates to join in their leadership actions. This report enlightens what type of marketing opportunities offered by Bangladesh Online Ltd. (BOL) for people and how they manage their business through value chain. This report also includes the Porters five force model of the service. All the model for the service has been discussed and explained to reveal the significance of its segment rivalry, potential entries, substitute products, buyers growing bargaining power, and suppliers bargaining power activities along with the threats of the organization. The report shows an internal architecture of the working of the BOL confectionary business. It gives a detail about the supporting department that has helped the business in their daily working. Also it discusses the objectives, policies of the organization along with their competitors at national level. There are also some suggestions/recommendations for the business. In the end, there is a briefing about the project that was assigned during the required report to me.

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COMPANY PROFILE
Bangladesh Export Import Company Ltd., Bangladesh Online Division is the leading Internet Service Provider in the country. Since its lunch from August 1998, BOL has been able to set an example of excellence with its subscribers with the help of updated technology and dedicated support service.
Corporate Background

Responding to the information needs of the country, Bangladesh Online was established with the sole aim of keeping the customers in the information super highway with the fastest access to the net. BOL has succeeded as the best Internet Service provider of the country, by using the latest technology available. They are dedicated to provide their customers with fast and easy access to the Internet. BOL is committed to constantly improve and upgrade its services to the highest international standard. Part of BOL's success can be attributed to the management's commitment that every customer should be 100% satisfied with BOL's service quality.
Mission

Each of their activities must benefit and add value to the common wealth of their society. They firmly believe that, in the final analysis they are accountable to each of the constituents with whom they interact; namely: their employees, their customers and their fellow citizens.
Vision

BOL is the leader in providing internet services, software & systems integration services. They ensure that their customers are successful by understanding and being responsive to their needs, as well as working collaboratively with them to provide one-stop faster, costcompetitive and scalable services that create competitive advantages in the world of electronic communication.
Objectives/Goal

Their goal is to make internet services available to everyone in Bangladesh. Additionally they aim to be internationally renowned as a high quality software developer.
Values

At BOL, they believe that how they do business is paramount to their success. Their commitment is exemplified by "The Beximco Way" a core values statement which highlights the importance of Customer and Market Focus, High Performance, Integrity and Respect, Spirit, Collaboration and People Development. BOL's employees are the key to living these values and BOL is committed to providing a work environment for their employees that fosters The Beximco way. They are extremely proud of their employees, who take seriously their responsibility to embody these values in their relationships with each other, and with their customers, suppliers and community.

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Table of Contents
1 SHORT INFORMATION ABOUT VALUE CHAIN ............................................................................................... V WHAT IS VALUE CHAIN ............................................................................................................................................VI UNDER VALUE CHAIN THERE HAVE TWO TYPES OF PROCESSES ...........................................................................................VI Core processes .............................................................................................................................................. vi Support process ............................................................................................................................................. vi 2 VALUE CHAIN ANALYSIS OF BANGLADESH ONLINE LIMITED (BOL) ............................................................. VII VALUE CHAIN ANALYSIS.......................................................................................................................................... VIII Core Processes of Bangladesh online limited (BOL) .......................................................................................ix Inbound Logistics ...........................................................................................................................................ix Operations .....................................................................................................................................................ix Outbound Logistics.........................................................................................................................................ix Marketing and Sales ......................................................................................................................................ix Service ............................................................................................................................................................ x Supporting Processes of Bangladesh online limited (BOL) .............................................................................xi Procurement ..................................................................................................................................................xi Technology Development...............................................................................................................................xi Human Resource Management .....................................................................................................................xi Firm Infrastructure .........................................................................................................................................xi 3 CREATING A COST ADVANTAGE BASED ON THE VALUE CHAIN & PORTERS FIVE FORCE MODEL ....................................................................................................................XII CREATING A COST ADVANTAGE BASED ON THE VALUE CHAIN ........................................................................................ XIII BOL creates cost advantage......................................................................................................................... xiii PORTERS FIVE FORCE MODEL .................................................................................................................................. XIV Threats of intense segment rivalry............................................................................................................... xiv Threats of potential entries ........................................................................................................................... xv Threats of substitute products ...................................................................................................................... xv Threats of buyers growing bargaining power .............................................................................................. xvi Threats of suppliers bargaining power ...................................................................................................... xvii Barriers and profitability ............................................................................................................................ xviii CONCLUSION ................................................................................................................................................XIX BIBLIOGRAPHY ...............................................................................................................................................XX

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SHORT INFORMATION ABOUT VALUE CHAIN

Chapter 1

What is Value Chain

Value chain is the set of linked value creating activities the company performs to design produce, market deliver, and support a product. Value change analysis helps the manager understand the behavior of costs and the existing and potential sources of differentiation. Creating value is a powerful idea in the business world. Managers often use the value chain to focus on activities that the must be performed to convert their plans into actions.

Under value chain there have two types of processes

Core processes
Core business function is a key activity or cluster of activities which must be performed in an exemplary manner to ensure a firm's continued "main" or "essential" activities because it adds primary value to an output.

Support process
A process that provides vital resources and inputs to the core processes and therefore is essential to the management of the business.

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VALUE CHAIN ANALYSIS OF BANGLADESH ONLINE LIMITED (BOL)

Chapter 2

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Value Chain Analysis

One model help us to understand this network of processes and services of Bangladesh online limited (BOL) calls the Value Chain. Porters work on competitive strategy suggests that organizations should reconsider their value chain and focus on the operations that they can do best. Other processes should out-sourced by specialists. BOL offered a simplified product offering with orders taken by mail/fax/telephone a simplified service with wide reach.

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Core Processes of Bangladesh online limited (BOL)

Inbound Logistics:

Includes receiving, storing, inventory control, transportation planning. They have their own skilled purchase department. If any input is required, they place orders to the suppliers. They receive and store raw materials in the warehouse. If any transportation is needed to place to any branch or to customer, they have their own transportation facility. Sometimes they also outsource the facility to meet unexpected high demand.

Operations:

Includes machining, packaging, assembly, equipment maintenance, testing and all other value-creating activities that transform the inputs into the final product. They have good marching facilities to produce better products or services. The machine they use to add value contains top quality and high longevity. They have packaging system that have imprinted trademark to reflect their brand image. They have good assembly line at several SBU (BEXIMCO Textiles Ltd, BEXIMCO Pharmaceuticals Ltd, Padma Textile Mills Ltd, BEXIMCO Knitting Ltd.). They have quality control department in almost every SBU who simultaneously test the performance of their product and services.
Outbound Logistics:

The activities required to get the finished product to the customers warehousing, order fulfillment, transportation, distribution management. After the completion of their product, they warehouse them in different store where only finished product. They have sufficient customer relationship logistics where they receive orders through many different interfaces (Web based, Telecommunication, face to face etc.). They have their own distribution channels with transportation system to reach dealers, wholesalers, retailers.
Marketing and Sales:

The activities associated with getting buyers to purchase the product, including channel selection, advertising, promotion, selling, pricing, retail management etc. They analyze target markets in order to select specific and appropriate channel. According to that they do all kinds of marketing activities and initiatives they take. They have skilled marketing executive specialized in retail management to handle excessive supply or demand.

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Service:

The activities that maintain and enhance the products value, including customer support, repair services, installation, training, spare parts management, upgrading, etc. They employ many employees who work day and night to feedback various customers query and give sustainable solutions to them. They also provide efficient repaired service to their valued customers. They install many things before customer starts using their products or services for the sake of their convenience. They maintain big stock of spare parts to supplement customers additional need. They also give training both to the employees and also customers in order to make them user friendly with their product and services. There are four main areas of support activities: procurement, technology development (including R&D), human resource management, and infrastructure (systems for planning, finance, quality, information management etc.). The chain consists of a series of activities that create and build value. They culminate in the total value delivered by an organization. The margin depicted in the diagram is the same as added value which expresses the way a business differentiates itself through configuration of its value chain.

Supporting Processes of Bangladesh online limited (BOL)

Procurement:

Procurement of buildings, servicing, machines etc. BOL uses these staffs for obtain its operations. As a service providing company, its main instrument is server. I also do gateway contract and installment of net connection for its customers. It also conducts setting up tower.
Technology Development:

Includes technology development to support the value chain activities. Such as: Research and Development, Process automation, design, redesign. BOL do its research on marketing and develop its findings in to implication to serve better. It also revises its design and process of operations, so that they can be more automated and effective and efficient.
Human Resource Management:

The activities associated with recruiting, development (education), retention and compensation of employees and managers. To maintain a good and sound environment in BOL, the firm recruits best possible employees for performing the task and meet organizations goal. This department also maintains its retention of the better man for them and keeps motivating them by providing compensation for their extra and sound work.
Firm Infrastructure:

BOLs firm infrastructure Includes general management. This management actually takes care of general activities like maintain relationship with other departments. It also provides instructions about possible new business steps to other departments. Planning management- does the plan foe BOL to gain advantage over other competitors by structuring unique plan. Its finance and accounting department usually performs BOLs transaction activities and sanctions for new project. Public affairs and quality management are two interrelated departments. Because BOL inquires about customer satisfaction by public affair dept. and implement those findings by quality management. The drivers for product differentiation and value creation are policy choices (what activities to perform and how), linkages (within the value chain or with suppliers and channels), timing (of activities), location, sharing of activities amongst business units learning, integration, scale and institutional factors. Porter and Millar (1985) argue that information technology creates value by supporting differentiation strategies.

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CREATING A COST ADVANTAGE BASED ON THE VALUE CHAIN & PORTERS FIVE FORCE MODEL
Chapter 3

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Creating a Cost Advantage Based On the Value Chain

BOL creates cost advantage:

By reducing the cost of individual value chain activities, or By reconfiguring the value chain. Cost advantage can be created by reducing the costs of the primary activities, but also by reducing the costs of the support activities. Once the value chain has been defined, a cost analysis can be performed by assigning costs to the value chain activities which are given in following: 1. Economies of scale. 2. Learning. 3. Capacity utilization. 4. Linkages among activities. 5. Interrelationships among business units. 6. Degree of vertical integration. 7. Timing of market entry. 8. Firm's policy of cost or differentiation. 9. Geographic location. 10. Institutional factors (regulation, union activity, taxes, etc.). Porters Five Force Model Introduction Porter's five force model is used to analyze the attractiveness of a market segment. The determinants of the market attractiveness are: 1) The competitors operating in the same industry, 2) Potential new entrants, 3) Attractiveness of substitute products, 4) bargain power of buyers, 5) Bargain power of suppliers. This model is used to decide what strategy a firm should apply to meet its objectives of long run.

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Porters five force model

Threats of intense segment rivalry:

BOL face a huge problem in the dial-up service. It is not the case of any competitors strength of market share but the declining market of the dial-up service. People trends to ignore the hazards of using dial-up internet service. So this segment of customer and the service is disappearing from the scene. This makes a big problem for BOL regarding their investment and high exit barrier of the market. Another segment BOL concentrate is the broadband service. BOL is not performing as well as dial-up service. But the criterion is different here. Dial-up service is mostly in its exit part but broadband is still doing well. So, why BOL is not doing here? The answer is the better performance of competitors. BOL simply can't catch the attraction of the market, because the competitors have higher stakes than BOL. So BOL has to fight with others price and advertising constantly. So, both of the segments are not in a good shape for BOL.

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Recommendation: For dial-up service BOL simply should operate in small portion. Because they just can't leave the segment because of high exit barriers. As they have to do little operation for dial-up they have to perform rest of their resource for broadband service, because this segment got a good future in hand. So BOL should concentrate on it. They should offer good service at a low rate from its competitors to the market. In doing this they can invest more in upgrading their technology and in their advertising.
Threats of potential entries:

BOL's business profit is low, risky in type because the market entry barrier is low due to the pure market competition. This business needs a good investment with high fixed cost. As a result it is also a problem to quit easily that means the entry barriers is low where exit barriers are high. It creates another problem, the small competitors has to stay because of the high exit barriers to cause a problem for big ones like BOL. So that BOL has to face extra competition in the market. Recommendation: To face this thing BOL has to be large to its competitors, in the same time they have to be good in their offerings and capturing market share. This will make sure that the profit will still high though poorer competitors are still in the frame.
Threats of substitute products:

If there is any potential substitute product exists parallel with the actual product, then the respected market segment becomes unattractive. The profit margins and prices become limited by the substitute products. Sometime technological advancements yield convergences of new substitute products industry. If substitute products industry is more attractive than the actual product regarding to the aspect of competition, price and profits, the growth in the main product segment is likely to fall. The market of main product may not grow more. In the context of Bangladesh ISP (Internet Service Provider) and BOL online limited of Beximco group the market of dial-up internet becoming unattractive day by day. It contributes a substantial decline in the growth of dial-up internet service market in Bangladesh. There might be some probable reasons for this consequences happening in the industry. Internet service is one kind of market segment where differentiation is almost impossible. In addition, technological advancement is used as a leapfrog strategic tool by the substitute industry that outperforms dial-up internet service industry. Explaining the technological leapfrog, the customers prefer faster internet at comparatively low cost. But dial up service provides attractive low cost but its speed is not good enough

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to serve almost no purpose of customers expected demand. But substitute products such as GPRS, EDGE, Zip (High speed wireless connection) meet the expected need for high speed internet at comparatively lower cost. For the past five years, dial-up internet service industry is severely threatened by the local broadband service. Then the industry started a new trend that is price dumping. As there was technological backwardness involved, the speed was not sufficient till then. No competitors exiting the industry but dumping price to attract customers. On the other hand, the service quality was so poor that customer percept spending any money to the industry is a total loss. There was mass switching to the substitute service occurred as there was opportunity and customers switching cost is low. Afterwards, for the past three years, telecommunication and other large ISP developed their product and introduced wireless internet that is faster substantially at lower cost. Those ensure the emergence of abundance of backward technology and adopt new technology. Recommendation: There are low barriers to enter in the market for internet service because telecommunication companies already have capital requirements, licensing and patents, other networks. On the other hand, the struggling ISP companies face high exit barrier because there is pure competition, increasing customer expectations do not expect low cost but better quality, and low salvage value yields a chance of high capital loss. In this situation, profitability is low and risky. Moreover, if the market growth is declining, the dial-up ISP should exit slowly.
Threats of buyers growing bargaining power:

The internet connection service is mostly undifferentiated in many ways. because lot of competitors are doing their business in this sector so to provide customer a good package every service provider tries to extend the service to the minimum profit limit . This makes the products quality relatively undifferentiated. Its only the types of service offering that might be bit different. But that is not any more a big case to say the product or service is differentiated. There also a negative thing for BOL is that the switching cost of buyer's is not enormous. Because it only cost them somewhere round about 1000tk or less to switch to other service. So it is an advantage for buyer's creating concern for BOL. Buyers who are opted to use internet seems to a standard class people in terms of their earnings and spending. These people are trends to be price sensitive because there is many service providers in the market, from whom they can chose their one.

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So this is another problem or challenge for BOL to negotiate the buyers price sensitivity. There is another thing that may bother BOL is that the service is associated with significant fraction of buyers cost because to take an internet connection a buyer pays some or whole amount of the cost of hub and ware cost. So here buyers also refer some power from the service provider. Recommendation: It is very important for BOL to work out these problems associated with buyers power. To do that BOL can chose the segment of buyer's who are not that powerful in terms of bargaining power and less price sensitive. BOL also can offer superior offerings to get buyers even though they are price sensitive.

Threats of suppliers bargaining power:

BOLs business instruments are mainly from United States. So it appears that the cost is very high. The suppliers are organized and strong. As BOL is not a huge company from a huge country it is not much of a concern for the suppliers to be price cautious when it is set. As a small company it is difficult for BOL to be dominant for the suppliers. So BOL also has to negotiate the challenge. Another problem is that the switching of suppliers is also expensive because the foreign suppliers always demand a big deal to start. So might be it is not needed for BOL to subscribe the large quantity of products. Recommendation: As the market share is declining for BOL is has to be cautious steps to be taken by BOL. In this specific problem BOL should made the suppliers not one but multi. That means they should take different suppliers for different products but concentrate only on major or one supplier. This will enables them to switches easily and with less cost.

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Barriers and profitability:

Above diagram is associated with the following three factors of Porter generic five forces. Those are: 1. Industry competitors 2. Potential entrants 3. Threat of substitute products

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Conclusion
As a sum we can easily recon that Beximco is not in a very good situation to be on. They have to think fast and effective as two of their SBUs ( Shinepukur Holdings Limited and Beximco Pharmaceuticals Limited) are clearly struggling and other one (Padma Textile Mills Limited) is quiet likely to accept the fate of the previous two. Analyzing porters five force model is very important for every company in every industry regardless to their market position. Before entering into any industry companies must analyze the attractiveness of intended industries. The attractiveness of substitute products must be considered before starting any new business. Companies which are already operating in the industry they must be concerned about the strengths of entry barriers to anticipate entrance of new company. For profitability, companies must pay attention to the bargain powers of buyers. If the key input is vital to add value to customers and the market expectation is low cost then firms should focus on bargain power of supplier.

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BIBLIOGRAPHY
References Book: KRAJEWSKI, LEE J.; RITZMAN, LARRY P.; & MALHOTRA, MONOJ K.: Operations Management (8th edition) Porter, M(1985): Competitive Advantage: Creating and Sustaining superior Performance N.Y. Free Press Porter M, Millar VE(1985): How information gives you competitive advantage Harvard Business Review Vol 63 Issue 4 Jun/July 1985 pp 149-160 Internet: http://www.bol-online.com/about.php http://www.12manage.com/methods_porter_value_chain.html http://www.beximco.org/home/Home.asp

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