4.

Findings

4.1 PESTEL Analysis for DARAZ

We can Define PESTEL as:

 P = Political
 E = Economic
 S = Social
 T = Technological
 E = Environmental
 L = Legal

PESTLE analysis is important in strategic management. But the analysis must be completed
first before management can truly harness the information. Societal factor is also known as
Exogenous Factor. This factor is beyond our control. Anyone cannot change this factor or
elements. Analysis of PESTLE is a method of strategic planning to reduce the risk of
business. Companies will gain valuable benefits by examining the political, economic, social,
technological, legal and environmental factors. Such advantages help to increase progress
with the process of the concept, product development, product launch, content marketing
techniques, and other factors.

All the societal environmental factors (PESTEL factors)

A PESTEL analysis is a framework or tool used by marketers to analyses and monitor the
macro-environmental (external marketing environment) factors that have an impact on an
organization.

Company using this analysis for determining how political, economic, social, technological,
legal and environmental forces affect their business. Truthfully, not all of these categories
will affect a business equally. But all this factors more or less effect on the business.

Political factors relate how the Government intervenes in the economy. Government and
Govt. institution formulate the policy. Political factors are mainly including tax policy, labor
law, environmental law, trade and tariffs bare, and political stability. Political factors may
also include goods and services that are meant to be offered or provided by the government
does not want.

Economic factors include economic growth, exchange rates, inflation rates, and interest
rates. These factors greatly affect how businesses operate and make decisions. For example,
interest rates affect a firm's cost of capital and therefore to what extent a business grows and
expands. Exchange rates can affect the costs of exporting goods and the supply and price of
imported goods in an economy. Which countries are more economically sound most of the
companies try enter into that country.

Socio-cultural factors include the cultural aspects, population growth level, their age,
occupation and focus on security. High changes in social factors influence the market for the
services of a business and how it works.

In Technological factor there are include two dimensions.

I. Operative

And II. Innovative

Operative technology will increase the uses value and Innovative technology will enhance
productive activity. Environmental factors include environmental and environmental factors
that affect the sector, such as weather, climate and climate change. In addition, increasing
awareness of the possible impacts of climate change has an effect on how businesses operate
and the services they sell, both creating new markets and reducing or eliminating existing
ones.
Legal factors are include three things,

I. Country of origin

II. County of operation

III. Global law.

Country of origin is the root country for the company. For example Bangladesh is the country
of origin for OTOBI, UK is the country of origin for UNILIVERS.

Country of operation is the operation country which country the company operate their
business. If we think OTOBI they also operate their business in India. India is the country of
operation for OTOBI. There are some law which is applicable for world wide. Like ILO,
WTO, IMF. Every company must obey to maintain that rules. In which country they operate
must main their legal rules to continue their business. Otherwise they can’t get legal
permission for their operation.

We select DARAZ Bangladesh for our report. In perspective of DARAZ Bangladesh they
first conduct PESTEL analyses. They analyze political, economic, socio-cultural,
technological, environmental, legal conditions of Bangladesh.

Political Factors:

In political factors Bangladesh is not stable. Policy is created by Bangladeshi Government

and DRAZ must follow this policy. They formulate their strategy by following aspects of
policy. DARAZ is an internet based company and they depend on people ordering through
internet. But due to the terrorist attack, Government is planning to put some restriction over
internet, which in terms might hamper DARAZ Bangladesh. They try focus all kind of
political factors and maintain.

Economic Factors:

Bangladeshi economy is not so much sound. These factors can be further broken down into
macro-economic and micro-economic factors. Macro-economic factors deal with the
management of demand in any given economy. Governments use interest rate control,
taxation policy and government expenditure as their main mechanisms they use for this.
Micro-economic factors are all about the way people spend their incomes. This has a large
impact on B2C organizations in particular. Bangladesh is a developing country, here the per
capita earning is low. So Daraz’s pricing should be done accordingly.

Social-cultural Factors:

Social Factors are the areas that involve the common belief and attitudes of the population.
These factors are of particular interest as they have a direct effect on how marketers
understand customers and what drives them. People in our country has this belief that online
business isn’t trustworthy. But continuously DARAZ can try to achieve customers believe. If
this belief can be changed, then Daraz would capture more market share from new customers.
At the beginning their business, they face lots of problems to gain customers trust. But now
DARAZ is the largest online shopping platform for Bangladeshi people. They expand their
business day by day.

Technological Factors:

We all know how fast the technological landscape changes and how this impacts the way we
market our products. Now most the work they operate by using technology. They try to
improve their innovative technology. This is the age of smartphone, and most of DARAZ’s
target market uses one. So DARAZ is focusing on mobile advertising to capture the market.
They focus their DARAZ apps how to make it customer friendly. They try to improve their
technology to capture large markets. They also provide much technology base training to
their sellers.

Environmental Factors:

DARAZ is an internet base company, so environment doesn’t affect it much. But they must
concern about this factors.

Legal Factors:

Since Bangladesh is a developing country, government are very lenient towards these online
businesses. It’s not being affected by the law in any bad way.

Findings of Pestle Analysis

Positive Findings

After analysis we find that

 Daraz is maintaining all rule rules and regulations of the Political factors
  It is fully giving its fair share value in the economic factors
 Because it is online B2C shop. So it’s basically using technology in the innovative
way.
 Daraz is an internet base company, so environment doesn’t affect it much
 It’s not being affected by the law in any bad way

Negative Findings

 At the beginning it faced a lot of trust issue from the customer

 Although it uses technology to reach its customer there are many part of the country
that Daraz hasn’t give its service because of lack of the technology in those certain
areas.

4.2 Cope analysis For Daraz

Cope analysis is a decision-making tool. Based on this analysis the decisions are taken if they
are going to stay or not. The commercial and competitive conditions of market and the
commercial and competitive performance of products are measured in order to determine the
strategic focus:

Product and Market combination of Daraz

Daraz Online Shopping is a market place where buyers and sellers meet. Daraz gives superior
collection of products to its clients. From Fashion to GM (General Merchandising) all is
available on Daraz. Customers can visit their website www.daraz.com.bd and choose their
preferable products without any hassle and products will be delivered within a few days. The
products lines of Daraz are given below:

Baby section:

Baby diapers, baby feeds, baby clothes, baby toys etc. are included in this category.

Men’s fashion:

Western clothes: T-shirts, Shirts etc. Religious clothes: Panjabi, Dhuti. Formal suits, Casual
clothes, Shoes, wallets, body spay etc. are included in this category

Watches:
All kinds of watches of Different Popular Brands such as Casio, Titans, break watch, Time
Zone etc. are available for the customers. So, a customer can buy these products in an
affordable price.

Women’s fashion:

Sharee, Long kameez, Short kameez, Fatua, Lehenga, Shoes, Shirts/T-shirts, bags perfume
etc. are included in this category.

Cosmetics:

There are a lot of cosmetics for the girls. There is a full of packages for them. On the other
hand, there is special combo offers for them.

Electronic products:

Air coolers, Air conditioners, Televisions, Mp3 players, Hybrid camera, Digital camera,
Laptops, DVDs, Home theater, DSLR camera, Lenses, Power banks, Smart watches etc.

Mobiles & accessories:

Daraz has corporate Deal with Xiaomi, Nokia, Samsung, Oppo, Apple, Micromax,
Symphony, Asus, HTC, Huawei, Infix etc. So, a client can find 100% original and authentic
products from Daraz. On the other hand, the prices of these phones are lowest from the local
markets. Same things are for the mobile accessories. So, customers place orders more and
more to buy these products.

Position of Daraz

Daraz is in market leader position. They use innovative strategy. It is viewed as that
Bangladesh is a developing on the ecommerce industry where famous organizations, for
example, EBay, Amazon, Flipkart has not been presented in Bangladesh and meanwhile,
Daraz accepted the open door to catch this tremendous market. In most recent 5 years, Rocket
Internet presented eleven organizations in Bangladesh and those are in like manner Carmudi,
Wadi, Javago, Printvenue. Vendito.com, Easy Taxi,. Later, it had been launched more
businesses. It has a verified official fb page with 10 million followers (Daraz Online
Shopping, 2018). People who using Facebook, can see the new offers in it. It is just like a
digital marketing policy to get more customers. There is an interesting thing that Daraz is one
of the online marketplaces which keeps their eyes on the SEO.

Instruments to Apply:

Daraz use the technological strategy. These factors consider the rate of technological
innovation and development that could affect a market or industry. Factors could include
changes in digital or mobile technology, automation, research and development. There is
often a tendency to focus on developments only in digital technology, but consideration must
also be given to new methods of distribution, manufacturing and also logistics.

We all know how fast the technological landscape changes and how this impacts the way we
market our products.

This is the age of smartphone, and

most of Daraz’s target market uses
one. So Daraz is focusing on
mobile advertising to capture the
market.

Competence to develop

Champions: Daraz’s now the

champion in the market. They are
leading in the market. Their
competitors are the defiant. Their performance is very high in the market than others. They
need to expand their market.

Defiant: defiant are the competitors of champions. Bagdoom.bd is Daraz's top competitor.
Bagdoom.bd is seen as one of Daraz's top competitors. Pickaboo.com has been one of Daraz's
top competitors.

Laagers: Low performance targeted at the attractive market. Ajkerdeal.com is famous in

India than in Bangladesh. They need to better their product and services to sustain in the
market.
Outcasts: Ekhanei.com is the outcasts now. They are out of the market because of their
performance in the unattractive market. Lack of product and service variety and better
performance in the market city cell High Low.

Findings

Positive Findings

 As it is market leader it has much popularity than others

 It has large proportion of customer
 It has higher sales and service

Negative Findings

 As it is the market leader it has close

none problem in the market

4.3 Internal Analysis:

Internal analysis is an exploration of

organization’s competency, cost position and
competitive viability in the marketplace.
Conducting an internal analysis often
incorporates measures that provide useful
information about organization’s strengths,
weaknesses, opportunities and threats- SWOT
analysis. The data generated by an internal analysis is important because company can use it
to develop strategic planning objectives to sustain and grow business. Internal analysis is
used by managers to identify their internal strategic factors like resources and capabilities
which will collectively determine the company's a significant competitive advantage over
their rivals.

Resources: is a productive input or competitive assets which are owned by the company
(Thompson, 2016). It is the fundamental building block of competitive strategy and the first
step to perform the internal analysis. Resources are of two types, tangible (visible assets) and
intangible (invisible assets). According to Daraz its resources are following-

Technological Resources Mother Company of Daraz Bangladesh Ltd has multiple

technological ventures in Bangladesh like Everjobs, Lamudi, Carmudi, Foodpanda, Daraz.
All of these are web based services. So they have strong technological resources in
Bangladesh which other firm will find difficult to copy. Even the web site of Daraz is pretty
similar in terms of User Interface, functionality in other countries, like Pakistan and
Myanmar. Daraz has attractive web site user interface design. Their Android and IOS app is
also attractive. Besides that, their webs are available in 2 Language (Bangla & English)
which gives customer more options.

Financial Resources: Back in 2015, Daraz group has secured $55 million funding from
CDC, an investment wing of UK government [Mil15]. Daraz have enough financial resources
which helped them to develop smooth operations in Bangladesh.

Brand Reputation: Daraz is established brand name in the field of online shops in
Bangladesh. Daraz is also popular with its vendor, that’s why hundreds of brands are selling
their product through Daraz platform. Daraz Bangladesh has collaboration with hundreds of
brands. No other online shops in Bangladesh have that much collaboration with such scale.
They also have exclusive collaboration with many premium brands.

Capabilities: Organizational capabilities refer to the business routines, processes and the
organizational culture. Identification of core competencies or capabilities can be useful in
identifying what contributes more to customer value and which market segments to target.
Daraz have a strong and effective relationship with their suppliers. Their targeted customers
are worldwide. They are providing products to their customers in everywhere in Bangladesh
within the deadline date which they promised.

Core competency: Core competencies are the resources and capabilities that comprise the
strategic advantages of a business. The website of daraz.com.bd gives them the competitive
advantage from their competitors. Their website is well organized than others. They always
deal with the renewed brands. They also have a strong collaboration among the brands
department.

Findings

Positive Findings
  They have enough resource not like before COVID 19
 They have higher reputation than other brand in this sector
 They have fully capable human resource to operate their business

Negative Findings

 Because of COVID 19 there financial resource are not the same as before
 They have to fire some of the capable employee because of COVID 19

4.3 SWOT Analysis of DARAZ:

Strategic analysis is a process that involves researching an organization’s business

environment within which it operates. Strategic analysis is essential to formulate strategic
planning for decision making and smooth working of the
organization. With the help of strategic planning, the
objectives or goals that are set by the organization can be
fulfilled.

There are two types of business environments-

Internal environment: Refers to the internal strengths and

weaknesses.

External environment: Refers to the threats and

opportunities that comes from the environment outside the
organization.

This environmental analysis is known as the SWOT

analysis:

SWOT analysis of Daraz is:

Strength:

a) High security

b) Feasible modes of payments

c) Offers ubiquity to customers

d) Diverse branded product’s category

Weakness:

a) Low profit margin

b) Insincere employees

c) Lack of proper monitoring

Opportunities:

a) Growing e-commerce sales

b) Rapid growth of internet user base

Threats:

a) Security issue

b) Increase in online retailers

c) Social media business

d) Sellers are not much educated.

4.4 Value Chain Analysis of Daraz:

Value chain refers to the set of activities performed by an organization or an industry to

transform raw materials into final goods or services. It have 5 steps:

Step- 1:

The seller (Basically sellers are the supplier of readymade products in e-commerce platforms)
either packs the product with Daraz packaging materials or directly sends the product to the
drop off and packaging hub when an order comes. If the seller doesn’t pack the product then
the delivery man of Daraz packs the product. Though the products are already packed with
company’s packaging material, yet Daraz makes a heavy packaging so that the products
remain safe while carrying by the delivery man.

Step-2:
Then the delivery man (Distributor) carries the product to the customer (Final buyer) as early
as possible.

In this process three types of values are added:

-The customers are getting safe, intact, and undamaged products.

-They are getting the product in the shortest possible time without any hassle.

-They can save product’s searching cost, conveyance cost, and physical and mental energy
cost

Value Chain of DARAZ

Primary Activities-

Inbound Logistics: When the seller drops the product in the hub.

Operations: When the products are being packed.

Outbound Logistics: Carrying the product for delivery.

Marketing and Sales: When the delivery is made.

Service: Exchange policy within 5 business days.

Support Activities:

Procurement: N/A (As they don’t have their own product)

Technology Department: In Hands of Alibaba (Recent tech change: giving attendance via
Application)

HRM: Hiring and retaining proper employees to make the process effective and efficient.

Infrastructure: Management, Planning, Finance and Quality control mechanism.

4.5 Three Circle analysis of Daraz

An internal analysis technique wherein strategists examine customers’ needs, company
offerings, and competitor’s offerings to more clearly articulate what their company’s
competitive advantage is and how it differs from those of competitors.

We have 3 C’s in the model the Owner Company, its Customers and its Competitors. The
1st circle represents the company’s offerings. What the company has to offer to the customers
to fulfill their needs? The 2nd circle represent the customers’ needs that has to be fulfill by the
company and its competitors. And the 3rd circle represents the competitors’ offerings to the
customer. The ideal position as we can see the 3 circle which represent the three C’s are
overlapping is where in the 1st overlapping, the company has its peak performance or we can
say that the company’s point of difference (A). This is the point where they are making
difference from their competitors to fulfill their customers’ needs. The company needs to
question themselves how big and sustainable their advantages are and are they based on
based distinctive capabilities? If they can fully analyze these questions, they can make
difference from their competitors. The 2nd overlapping position is where the company and
their competitors are both offering and fulfilling their customers’ needs. This point is called
the point of parity (B).in this point the company again needs to confirm that are they
delivering effectively in the area of parity to fulfill their customers’ needs and compete with
the competitors. And the 3rd overlapping position is where the competitors are making
difference from the company to fulfill the customer needs. This is called competitors’ points
of difference (C). Here the company needs to think how they can counter their competitors’
advantages.

The company also needs think about the

company’s competitive advantages and test them
by surveying customers. The process can gain
some effective insights that they didn’t know
earlier. It could be very much surprising. For
example: how much opportunity for growth
exists in the blank space (E). Again another
insight might be value the company or its
competitors to know what products/services they
are creating that customers don’t need (D, F, G).
by these they can reduce their cost more efficiently.
Three Circle analysis of Daraz

As we know that the three circle analysis have 3 C’s in it. Which represents Owner Company
here we are working with Daraz, its Customers and its Competitors like Bagdoom.bd,
Pickaboo.com, and Ajkerdeal.com etc.

If we look in the model, the 1st circle represents the Daraz’s offerings to the customers. It
also explain that what the company has to offer to the customers to fulfill their needs? The
2nd circle represent the customers’ needs that has to be fulfill by the Daraz and its
competitors (Bagdoom.bd, Pickaboo.com, and Ajkerdeal.com etc.). And the 3rd circle
represents the competitors’ offerings to the customer. Which means what the competitors
(Bagdoom.bd, Pickaboo.com, and Ajkerdeal.com etc.) are offering to fulfill the customers’
needs.

The ideal position as we can see the 3 circle which represent the three C’s are overlapping is
where in the 1st overlapping, the Daraz has its peak performance or we can say that the
company’s point of difference (A). This is the point where they are making difference from
their competitors to fulfill their customers’ needs. They competitive advantage as they are the
1st movers in this business sector and customer really trust them. However the company needs
to question themselves how big and sustainable their advantages are and are they based on
based distinctive capabilities? If they can fully analyze these questions, they can make
difference from their competitors. The 2nd overlapping position is where the company and
their competitors are both offering and fulfilling their customers’ needs. This point is called
the point of parity (B). In this point, Daraz again needs to confirm that are they delivering
effectively in the area of parity to fulfill their customers’ needs and compete with the
competitors. And also needs to be up to date to fulfill the customer needs and to have
competitive advantage over the competitors. The 3rd overlapping position is where the
competitors (Bagdoom.bd, Pickaboo.com, and Ajkerdeal.com etc.) are making difference
from the Daraz to fulfill the customer needs. This is called competitors’ points of difference
(C). Here Daraz needs to think how they can counter their competitors’ advantages. For
example they can give more benefits from their competitors, they can convey their contracted
shop owner to reduce their product price etc.

Daraz also needs think about the company’s competitive advantages and test them by
surveying customers. The process can gain some effective insights that they didn’t know
earlier. It could be very much surprising. For example: how much opportunity for growth
exists in the blank space (E). Again another insight might be value Daraz to know what
products/services they are creating that customers don’t need (D, F, G). By these they can
reduce their cost more efficiently.

Findings

Positive Findings

 They can find out where they have opportunity to grow themselves
 They can know how to counter their competitors
 They can reduce their cost by knowing what customer don’t need

Negative Findings

There are no negative findings as Daraz is doing online business.