BUS 489.3 Final Case Submission Submitted To: DR Sadrul Islam Submitted By: Name ID

BUS 489.
3
Final Case Submission
Submitted to: Dr Sadrul Islam
Submitted by:
NAME ID
Afsana Zarreen 121666030

Zahid Hassan Ratul 1530490630
Sharif Mohammad 1510059030
Mohiuddin Chowdhury 1510348030
Md Hasin Abrar 1511581030
United Group Ltd.
United Group, one of the leading group of industries in the country. Throughout the success of
the company as a business lies the story of genuine friendship. The story began suddenly in
1978. The business began without owner’s capital, but loan. The owners used their endless
courage, bond of friendship and power of tireless work as owner’s capital. The company, which
started without owner’s capital, now becomes a large industrial Group of around Tk 30,000
crore.
There are very few people who don't know the United Group. For those who do not know, here
are two facts. People must have heard the names of United Hospitals and United International
University. Again, many are familiar with the recent chain super shop Unimart.Along with two
well-known organizations in the medical and education sector, United Group established super
shop Unimart. Apart from education and medical sector, United Groups involved in various
sectors like electricity, energy, restaurants, housing, hotels, and private ports, logistics.
Let's go back to the beginning of the Group's story from which transformed from zero to huge.
Four friends started the business in 1978. They are the chairman of the Group Hasan Mahmud
Raza, current directors Ahmed Ismail Hossain, Aktar Mahmood Rana and Khondakar Mainul
Ahsan Shamim.Later, two of their friends, Abul Kalam Azad and Faridur Rahman Khan, joined
the Group. Among these two, Abul Kalam Azad is currently the vice chairman of the Group and
Faridur Rahman Khan is the director. So, today's United Group is the result of the united efforts
of the six friends. The unwavering faith in each other and the hard work helped them to reach
their goal. The friendship that suddenly made them businessman form student without any
experience.Second generation has already joined United Group recently and learning leadership
form first generation. The children have taken up the business which was started by their parent
Expansion Strategy:
Expansion is a corporate level strategy used to expand the business. Expansion can be horizontal
integration, vertical integration or conglomerate integration. Horizontal integration is acquiring
or merging with industry competitor who does the same type of business to achieve competitive
advantage. Vertical integration is when a company acquires or merges with businesses that are in
either backward or forward in supply chain of core business. Conglomerate business is acquiring
or merging with unrelated business.
United Group started their business in contracting business. After the contracting business, they
started delivering radio transmitter from 1981. They imported transmitter from Bulgaria and sold
them to radio companies. They also got handsome amount of commission from transmitter
manufacturing company. After that they also started making radio station. It was a forward
integration of transmitter importing business. According to director of United Group,
KhandakarMainul Ahsan Shamim, United Group had built 70% of stations of Bangladesh radio.
Relating this business to their first business, this was conglomerate integration. They were in this
business for 30 years.
In 1983 they started chemical supply business. United Group took dealership of Coopers, a world
renowned company for supplying chemicals used in electric poles by Bangladesh Rural
Electrification Board (REB). At that time, REBs needed huge chemicals. The company used to
ship chemicals from the United States and supply them against the commission. According to
their director, There is a huge cost to pay for bringing the goods. They suggested to the coopers
that they wil rent the ship on their own initiative and bring the goods to that ship. At first,
Coopers did not agree to the proposal, but later United Group told them that they would be
responsible for any damage to the ship. Later they signed a contract with Bangladesh Shipping
Corporation (BSC) and started bringing in low cost chemicals. Relating this business with their
previous businesses, this business is also unrelated to previous ones. So this business is also a
conglomerate integration.
United Group started electricity business with Summit Group in 1997. Khulna Power Company
Limited (KPCL) was established by United Group and Summit Mill. The company listed on the
stock market is the country's first IPP (Independent Power Producer) company in the power
sector. The company started commercial production in 5 years. There are currently five power
projects under United Group that are involved in the electricity business through KPCL. Of these
projects, 5,700 MW of electricity is being supplied to the national grid. Apart from this, two
separate power plants at Karnafuli EPZ and Patuakhali in Anwar, Chittagong, are being
constructed. If we relate this business with previous businesses, this one too is conglomerate
integration.
Today, United Group have businesses in 7 industries. The numbers of businesses in 7 industries
are listed below:
1. Power Division: 7 companies in different divisions of Bangladesh.
2. Real Estate & Construction Division: 6 companies in different divisions of Bangladesh
3. Healthcare Division: United Hospital LTD & United Nursing College
4. Education Division: United International University & Sir John Wilson School
5. Manufacturing Division: 5 companies including 1 joint venture with Japanese Company
6. Port, Terminal & Shipping Division: 3 companies
7. Retail & Services Division: 6 companies

Expansion strategy of United Group is very simple. They entered one industry after another and
expanded their business horizontally. They own multiple companies in every single industry they
have entered. They performed both conglomerate and horizontal integration to expand their
company. Conglomerate integration to enter new industries and horizontal integration to achieve
competitive advantage. Corporate strategies with integration made the United Group successful.
Diversification Strategy
United Group used implemented both related and unrelated diversification. Profitability and
profit growth of companies suggest that top manager of company use their superior management
skill to improve competitive advantage of their business unites and keeps bureaucratic cost under
control. Beside that managers are good at coordination and sharing its competency among all the
companies.
United Group’s Web Corporate-Level Strategy
Related
Diversification
1. Real Estate &
Construction Division
Core Industry
Backward Vertical Forward Vertical
Contractor
Integration Integration
1. Port, Terminal & 1. Retail & Services
Shipping Division Division
Unrelated
Diversification
1.Education Division
2. Healthcare Division
3. Power Division
4. Manufacturing
Division
Benefits of Diversification
The decision of diversification can increase the progression of the company by leading it towards
extraordinary rewards and wealth maximization or it can be a challenging decision which can
lead it towards costly failure. But this corporate strategy of diversification gave United Group a
huge boost up and success and created values in their business. It effectively succeeded to
establish numerous diversified business entities under the umbrella of United Group.
United Group is benefitted by their diversification strategy in several ways. Those are:
 Increased Sales and Revenue:

One of the main advantages that United Group earned from diversification is increased
sales and revenue. Entering into a new market segment or offering a new product line
gives the opportunity for exponential growth. This is exactly what happened with United
Group when they entered into new industry.
 Minimizing Risks:
Investing in different segment is less risky than investing in one segment. United Group
invested in variety of segments rather than concentrating on one type of segment to
minimize risk.
 Focusing on a broad range of product gave them the chances of having infinite number of
new and existing customers.
The company names which are under United Group are given bellow:
Divisions Company names
Power Division 1. United power generation & distribution

company ltd.
2. United ashuganj energy ltd.
3. Khulna power company ltd.
4. United energy ltd.
5. United mymensingh power ltd.
6. United jamalpur power ltd.
7. United anwara power ltd.
Real Estate & Construction Division 1. IPCO developments.

2. Neptune land development ltd.
3. Gulshancentre point.
4. IPCO hotels limited.
5. Neptune commercial ltd.
6. United property solutions ltd.
Healthcare Division 1. United hospital ltd.
2. United nursing college
Education Division 1. United nursing college.
2. United international university.
3. Sir john wilson school.
Manufacturing Division 1. Comilla spinning mills ltd.
2. Gunze united ltd.
3. United lube oil ltd.
4. United polymers ltd.
5. Moulvi tea estate.
Port, Terminal & Shipping Division 1. United shipping & logistics services ltd.
2. United land port teknaf ltd.
3. United tank terminal ltd.
Retail & Services Division 1. United engineering & power services ltd.
2. United makkahmadina travel assistance
co. Ltd.
3. United energy trading pte ltd. (UETPL).
4. Chef's table.
5. Unimart.
6. United securities limited.
Merging companies with United Group

Company name Country origin Merging division
IPCO DEVELOPMENTS Hong Kong Real estate and Contract

division
Gunze Ltd Japan Manufacturing division
These are the companies which whom united Group has merged with. One the other hand they
have acquired Moulavi Tea garden in Shylhet and others are their won subsidieries or sister
concerns.
Answer the following questions reading this case.
a) According to you, what were the main key factors behind United Group’s success?
b) Discusses different diversification and expansion strategies. Which diversification and
expansion strategy they used? Justify your answer.
c) What are the benefits that United Group is enjoying for their diversification and expansion
policy?
References:
Newspaper:
“অকৃ ত্রিম বন্ধু ত্ব অনন্য সাফল্য” Prathamalo, retrieved from
https://www.prothomalo.com/economy/article/1627332/%E0%A6%85%E0%A6%95%E0%A7%83%E0%A
6%A4%E0%A7%8D%E0%A6%B0%E0%A6%BF%E0%A6%AE-%E0%A6%AC%E0%A6%A8%E0%A7%8D
%E0%A6%A7%E0%A7%81%E0%A6%A4%E0%A7%8D%E0%A6%AC-
%E0%A6%85%E0%A6%A8%E0%A6%A8%E0%A7%8D%E0%A6%AF-%E0%A6%B8%E0%A6%BE
%E0%A6%AB%E0%A6%B2%E0%A7%8D%E0%A6%AF?
fbclid=IwAR243twseho0C_X6u7YO7qPL2FRQ6T5mIy3cLXh7kqgrOfxDmys4EgCpeYg
Website:
http://www.united.com.bd/

BUS 489.3 Final Case Submission Submitted To: DR Sadrul Islam Submitted By: Name ID

Uploaded by

Copyright:

Available Formats

BUS 489.3 Final Case Submission Submitted To: DR Sadrul Islam Submitted By: Name ID

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

BUS 489.3 Final Case Submission Submitted To: DR Sadrul Islam Submitted By: Name ID

Uploaded by

Copyright:

Available Formats

BUS 489.

Afsana Zarreen 121666030

2. Real Estate & Construction Division: 6 companies in different divisions of Bangladesh

3. Healthcare Division: United Hospital LTD & United Nursing College

5. Manufacturing Division: 5 companies including 1 joint venture with Japanese Company

6. Port, Terminal & Shipping Division: 3 companies

7. Retail & Services Division: 6 companies

United Group’s Web Corporate-Level Strategy

 Increased Sales and Revenue:

Power Division 1. United power generation & distribution

Real Estate & Construction Division 1. IPCO developments.

Merging companies with United Group

IPCO DEVELOPMENTS Hong Kong Real estate and Contract

Gunze Ltd Japan Manufacturing division

You might also like