1. Letter of Transmittal
9th
December, 2015.
Dr. Jashim Uddin
Faculty of Strategic Management
School of Business
North South University
Dear Sir,
I am writing to you the following report on Walton Bangladesh according to the
instructions provided by you.
After analyzing Walton Dhaka and doing a thorough online research on Walton
Bangladesh, I have been quite successful in collecting strategic information about
Walton Bangladesh. A survey among the existing and prospective Walton also
helped me to understand the market trend and the consumer behavior. The
following report is the result of my findings and efforts.
I appreciate this opportunity to work under you.
Sincerely,
Mohammad Rasel Mahmud
ID No: 151 2698 090
School of Business
North South University
2. Executive Summary
This report was custom-made to analyze and evaluate performance and future
prospects of Walton in a growing domestic electronic market.
The researches reveal that in a continuously growing market, Walton has become
a reliable name for customers. Countrywide network, inclination towards quality
and dedicated team of employees are the main concern of its success. Though it
had started business with home appliances, yet it has always been committed to
satisfying customer demand by introducing new products. Recent production and
selling of motorcycle and air-conditioner testifies that position of Walton.
Walton has an aspiration to double overall market share in the next 5 years. It has
successfully positioned itself as a customer friendly and eco-friendly Company. It’s
after sales service has contributed tremendously in building this image in
customers’ minds.
Since its target market is middle-income people, the price of their products is
comparatively lower than those of competitors’. This strategy helps the company
greatly in a price sensitive consumers market. In recent years Walton has
increased promotional activities through organizing various national sports
events.
Further investigations have revealed that to achieve the role of market leader, it
will face challenge from foreign brands. Moreover, rapidly growing demand from
customers for electronic products may put pressure on Walton.
It has adopted market penetration, product development and market
development strategy for future growth.
The prospect of Walton promising in its current position is the mainstream of this
research. Favorable government policy will help it expand domestic and
international markets in the future.
4. List of Table
Particulars Page No.
Table 01: Import of home appliances in Bangladesh 04
Table 02: Price comparison of Refrigerator 14
Table 03: Price comparison of TV 14
Table 04: Price comparison of Motorcycle 14
Table 05: Financial analysis of Walton 16
Table 06: Market comparison 16
Table 07: Future growth of Walton HIL 18
List of Figures
Particulars Page No.
Figure 01: Walton’s competitors Analysis 05
5. WALTON, Our Product:
A premier pavilion & flourishing smart zone in the hi-tech industry
1. Introduction
1.1. Origin of Report
This report was assigned by Professor Dr. Jashim Uddin Faculty of Strategic
management, School of Business, North South University.
1.2. Objectives:
Learning a didactic approach to Business Communication.
Incorporating theoretical education with practical experience.
Gaining knowledge about the current market trend of the country.
Getting acquainted with different policies, rules and regulations of
the government on the products concerned.
1.3. Methodology:
The methodologies used in the research process for this report, Ire:
Data Collection
Primary data is the information that I collect first-hand and secondary data is the
information collected by others and used by me. For data collection, I used three
approaches:
a. First, I conducted some field research. I went to some Walton retail outlets and
asked the customers about their valuable suggestion and opinions.
b. I searched about Walton on the Internet and found some important
information regarding their company background, product lines and promotional
programs.
c. I went to Walton head office and collected the annual reports for Walton
Bangladesh for the year 2010.
6. 1.4. Limitations
Though I tried I best to make a perfect report, a few limitations held me back. The
main limitations that I faced, were –
a. As many of the common products were barred, I had to choose one from a
limited number of options.
b. When I went to collect information from the Walton outlets, they were not
fully able to cooperate with me, as I required information was confidential.
c. There was not enough data in the websites.
2. Company and Market Background:
2.1. Electronics Market in Bangladesh
The Electronics Market in Bangladesh is an ever-rising industry. The appropriate
market size has never been determined as it is ever changing. The whole market
can be separated into several segments like:
Semiconductor Market
Electronics Appliances Market
Raw Materials and Spare Parts Market
IT Market
Walton is one of the major players in the electronic appliances market. They are
also manufacturing motorcycles alongside home appliances such as television,
refrigerators, air-condition etc.
The market of these products relies heavily on the average household income. For
most people in Bangladesh home appliances had been luxuries they, which they
cannot afford, but recently the situation have been changing. Over the last 10
years, there has been massive economic growth in the country, which has
increased the income of lower-middle and middle class people. So the demand
for home appliances has increased substantially.
7. If I look at the annual GDP growth of the country in the last 10 years, I can see
that there has been a steady increase.
One of the main reasons of this growth has been because of the increased
investment in the fast growing sectors of the economy, which has reduced the
rate of unemployment drastically over the years.
It is evident that the increase in earning of the population has also had an impact
on the buying behavior. Middle and upper middle classes have emerged and
reached a certain level that is attractive for the importers and manufacturers.
Bangladesh Bank has the records of imports of Home Appliances over the years.
Table 01: Import of Home Appliances (BDT)
Item 2004-05 2005-06 2006-07 2007-08 2008-09
Electrical Home Appliance 150241 204951 243665 236150 190548
At first there was a huge growth to the numbers of Home Appliances imported in
the country, but the numbers have declined in recent years, as tax holidays on
imported parts and high import tax on electronic products have made companies
focus on assembling and manufacturing their products in Bangladesh.
2.2. Walton HIL
Walton Hi-Tech Industries Ltd (Walton HIL) is one of the best companies in the electronic sector
of Bangladesh. Walton is one of those few Bangladeshi companies that export electronic
products since most of the companies in Bangladesh import products of various famous brands.
The company was established in 1977. Since then, it has been setting new benchmarks in
production of electronic goods in Bangladesh.
The company has a yearly production capacity of 1.4 million pieces of fridge, 300,000 pieces of
air conditioner and 300,000 pieces of motorbike. In its early stage, the company used to
produce home appliances. Today their product mix includes Mobile Phone, Generators, and
Motorbikes.
In 2009 the company signed an agreement with the Malaysian auto manufacturer Agatha to set
up an automobile plant in its factory premises. After meeting the local demand the company is
exporting its products to Qatar, Dubai, Abu Dhabi and Kuwait of Middle East, Ghana of Africa
and India, Nepal and Bhutan of South Asia and U.S.A It also wants to export its products to
8. France, Italy, Germany, Spain and other European countries. Walton has been successful in
capturing this large international market because of its high quality products. To ensure this
high quality of products all the members of the Walton family, both factory and administrative
members, work very hard round the year.
The factory of Walton is situated in Saver and the corporate office is at Dilkusha C/A, Dhaka.
There are 120 outlets of Walton throughout the country so that customers everywhere can buy
Walton products. Walton has a dedicated team of skilled engineers and technical personnel
from home and abroad who ensure quality products for the customer. Because of this highly
skilled team Walton can offer the customers a wide range of products.
Most of these brands have been in this market for a long time. But none of them
were able to match the market growth of Walton in the last 3 years. Although LG-
Butterfly is the No.1 home appliances brand in the country, Walton is catching up
fast.
Walton has started manufacturing major parts for the assembly of motorcycles.
Right now they hold nearly 8% of the market share. Its competitors are:
Bajaj
Hero Honda
Dayun
TVS
Singer
Butterfly
9. 2.3. Competitor Analysis
In the field of home appliances such as television, refrigerator, freezer, air-
condition etc. some of Walton’s competitors are:
Figure 01: Walton’s competitors Analysis
Competitor
Television Refrigerator Air-Condition
LG
Sony
Singer
Samsung
Panasonic
LG
Samsung
Panasonic
Whirlpools
Sharp
LG
General
Gree
Samsung
10. 2.4. Market Share:
By conducting a survey among consumers I was able to determine peoples’
preference of brands while buying home appliances and which brand of product
they have bought.
The market demand of different brands of television, refrigerator and
motorcycles has been calculated by survey method. It went be noted that had the
survey been centered on middle class families in rural areas, Walton would have
had a much higher market share since these people are the main target market of
Walton. Also, Since Walton is the sole domestic producer among these brands; it
enjoys some tax reduction that makes it capable of manufacturing and selling its
product at reasonable prices. This facility provides Walton with a competitive
advantage. Hence, Walton plans to target another 15% of the market in the next 5
years and they are confident that they will be able to easily achieve that target.
3. Strategic Situational Analysis:
3.1. Market Analysis
Bangladesh, with its growing population and economic growth, has huge demand
for household products. The fact that only about 60% of the country has
electricity available proves that when electricity will be available throughout the
country, demand will increase further.
As the people of this country are mainly price sensitive, Walton, being the sole
manufacturer of refrigerator, freezer and motorcycle, is very keen to meet the
demand of this large market by providing competitive prices.
Walton’s primary goal is to capture the local market, as they are still behind
market leader LG-Butterfly. But they are also exporting their products. Already
they have customers in Myanmar, Bhutan and planning to expand their market to
Africa.
3.2. Market Segmentation
Segmentation is one of the most important factors of strategic marketing. Market
segmentation is one of the steps that go into defining and targeting specific
11. markets. It is the process of dividing a market into a distinct group of buyers that
require different products or marketing mixes. Markets can be segmented or
targeted using a variety of factor. The bases for segmenting consumer markets
include:
Demographical bases (age, family size, life cycle, occupation)
Geographical bases (states, regions, countries)
Behavior bases (product knowledge, usage, attitudes, responses)
A psychographic base (lifestyle, values, personality) the market in
which Walton is doing its business is consumer market and Walton mainly
segments its market base on Demographic, Geographic and Psychographic
bases.
3.2.1. Demographic Segmentation
In segmenting the market on demographic basis Walton mainly considers
occupation and family size of the consumer. It targets the people of middle-
income level and designs its products for mainly nuclear family.
3.2.2. Geographic Segmentation
Walton segments the whole country in eleven zones for marketing purpose &
they are:
Dhaka North Zone
Dhaka South Zone
Dhaka South-Ist Zone
Chittagong Zone
Camilla Zone
Barisal Zone
Jessore Zone
Sylhet Zone
Bogra Zone
Mymensingh Zone
Rajshahi Zone
12. Area Managers are responsible for these zones and it is their responsibility to
develop market there. Product demand and response of the customer are not
same in all zones.
Maintaining the sales in high demand zones like Dhaka, Camilla, Bogra the
marketing department is trying to increase their sales in low demand zones.
Currently, Walton has either their retail shops or dealer shop in all of the 65
districts of Bangladesh. They have multiple shops in Dhaka and Chittagong in
order to provide maximum convenience.
3.2.3. Psychographic Segmentation
Walton markets its product by using psychographic segmentation. They use
lifestyle to segment their market. For example Walton is marketing relatively
cheaper CRT Television for lower-middle income and rural people and at the same
time LCD Television for higher middle-income people. It also designs the
refrigerators of different size and capacity considering the people of different
lifestyle.
3.3. PEST Analysis
Political Factor:
High Import Duty on Imported Home Appliance Product
Export promotion schemes of Bangladesh Government
Tax Incentives on Import of Plants
Constant Government Support
Economic Factor:
Increase in per capita income
Growing GDP high disposable income
Increase in Spending Power
A huge prospect of a profitable export sector
13. Socio-cultural Factor:
Manufacturing Eco-Friendly product
Changing lifestyle of middle income people
Technological Factor:
Improvement in Technology made electronics cheaper
Increased quality of production
3.4. SWOT Analysis:
Strengths
Largest electronic base in Bangladesh
Strong distribution channels and customer service
Leadership in product development and services
Good Human Resource and Infrastructure Installation all over the
country
First service advantage
Ill-recognized brand name and reputation
Lower Customer Base
High Ethical Standard
Experienced management team
Weakness
Limited items.
It has management problem.
Too much inside out thinking in the company.
Different departments not working together.
Sometimes a tendency to be ignores.
High employee turnover.
14. Opportunities
Its more show rooms.
No long-term Distribution/Channel strategy.
Focus on additional requirement.
Improved technological improvement and network coverage.
Increased socialization.
Demand for new & innovative products.
Provide online buying facilities.
Increase the brand value though initial offering.
New and better interconnection of distributor.
Huge need for electronic services.
Declining prices for Walton handsets.
Economic growth of Bangladesh.
Threats
Aggressive marketing from company.
Price war.
Switching power of customer increased.
More rigid government regulations.
Increased marketing/operating costs.
Increased bargaining power of the consumers.
Sabotage of installation.
Key Success Factor
Walton is the first Bangladeshi company which produce lots of own countries
products, and quality goods at a lower price than any other company product.
Walton works with R.B. groups. It is one of the top business groups in the country
operating with great reputation since 1977. Walton is providing customers the
latest technology based products innovative design and excellent quality with
different models and capacities.
15. Walton brands main products are
(1) Motorcycle
(2) Refrigerators & Freezer
(3) Air conditioner
(4) Mobile phone
(5) Television etc.
Walton has its own mold & Die making sections, VMC,CNC wire-cut,EDM
machines. It has 08 poly urethane forming plants, 15 thermoforming (vacuum
forming) units highly equipped metal forming units with poIr coating, 2d scanner
& printers, nickel-chrome plants and die ; casting section.
Walton also has robot operated .Injection plastic molding plants, highly equipped
test labs, printing & packaging section, alloy wheel marketing & Ed plants. Walton
has very strong & right quality control policy and ill equipped division consists of
all types of testing device as required including worlds latest CMM.
Financial Situation
Walton strategy is to continue to exercise strong discipline over their operating
costs and capital expenditure to achieve improves efficiency and productivity in
their operations and leverages their existing capacity. They have also plan to
reduce their operation and maintenances expense by, among other things, using
solar power, controlling service agreement pricing and lobbying to reduce the
other tax. That’s why they are using as
continuously grow manufacturer base
focusing on high value customer
Achieve capital and operational efficiencies to improve profit margins
and cash flow generation.
Increased Brand Awareness and reinforce brand values.
Increased revenue from news services
Continue to expand their comprehensive distribution product.
16. Standard quality certificates including ISO 9001:2008 & ISO
14001:2004
Walton service network is the country’s only ISO 9001:2008 Standard Certified
after sales service network.
4. Marketing Strategy:
4.1. Positioning Strategy
Walton has created huge enthusiasm among the consumers of its target market
with its slogan “Aamader Ponnyo”. They accepted Walton’s endeavor of
manufacturing some electronic items like, refrigerator & Freezer and motorcycle
for the first time in Bangladesh, and are more than willing to buy a product of
high quality made in I own country. On the other hand, as a local manufacturer
Walton can sell quality products at comparatively lower price than other
competitors.
It also makes its product available at the nearest possible places in each areas of
Bangladesh through Walton Plazas (own showroom) and countrywide dealers.
New Walton Plazas are being opened frequently in different places of the country
for getting closer to the customers.
Another strategy of Walton for creating a concrete place in the customer mind is
it’s after sales service in order to providing the quickest possible after sales
service to the customers. Walton has already established 39 Service Centers and
opening more service centers is under process. Walton equally values its sales and
after sales service for maintaining a long and positive relation with its customer
and thus retain and increase the customer.
Strategy
Bangladesh with its growing population and economic growth has huge demand
for household products. The fact that only about 60% of the country has
electricity available proves that when electricity will be available throughout the
country, demand will increase further. As the people of this country are mainly
price sensitive, Walton, being the sole manufacturer of refrigerator, freezer and
17. motorcycle, is very keen to meet the demand of this large market by providing
competitive prices. Walton’s primary goal is to capture the local market, as they
are still behind market leader LG-Butterfly. But they are also exporting their
products. Already they have customers in Myanmar, Bhutan and to expand their
market to Africa.
Walton always tries to make the best possible services. Moreover, it does not
promise any specific quality standards in service. Walton now try to give service
all side in I country. Walton tries hard to offer the best service quality, though, the
quality, consistency and accessibility of service is not guaranteed as the same are
dependent on various technical, physical, topographical, distinctive, environment,
regulatory, legal, and such other factors. Walton has the right to change /vary /
reduce the extra charges, prices, validity period, product/service feature and any
other offers etc at any time in its sole carefulness for any reason subject to official
notification of such offers prior to giving effect to such changes.
4.2. Marketing Mix
4.2.1. Product:
Walton has a good number of products available in the market. The company
produces home appliances, mobile, generator and motorbike. A brief description
of its major products is given below:
➢ Refrigerator
Walton mainly produces home appliances. In fact in its Ibsite the company is
introduced as the pioneer in refrigerator production in Bangladesh. Walton
Refrigerator & Freezer ensures highest quality compressor, Condenser is made by
100% copper, which lasts for 20-30 years. The most important thing is that every
spare parts including door with different color are changeable and available
everywhere over the country.
18. ➢ Television
Walton produces LED, LCD, and CRT televisions. Walton Television ensures home
cinema entertainment. Walton Television’s d4ta Digital Technology is one of the
most innovative technological solutions that automatically reduces video noise,
Selects the best picture and performs fine-tuning by auto frequency tracking
technology.
➢Motorcycle
Walton motorcycles are now competing with the Indian Hero-Honda and TVS
brand. The motorcycles have become famome becamee of the special
specification like mobile phone indicator, Digital gear display, Fuel location meter,
Air shock absorber, Remote control, Hydraulic Brake, Anti-Theft lock and Alloy rim
etc. Walton motorcycles are also fuel-efficient.
Other than these products Walton also produces Mobile handsets, generators, air
conditioners, DVD players, and microwave ovens.
Walton Product
4.2.2. Price
Walton’s main target market has always been middle-income group. SO they have
been very careful in setting their price of product. Also the fact that they
manufacture their products, it allows them to set a loIr price than their
competitors, as they don’t have to pay heavy import duty. Below is a comparison
of the prices of different products of different brands-
Table 02: Price comparison of Refrigerators
Model Walton LG Transtee Sharp
10 CFT 26,200 35,000 32,000 29,500
10.5 CFT 28,100 38,300 32,500 31,000
11.5 CFT 29,700 ,40,600 ,36,000 3700,0
19. Table 03: Price comparison of TV
Model Walton LG Sony My One
29” Color TV 18,500 28,350 26,350 22,700
37” LCD TV 48,800 65,600 59,500 -
42” LCD TV 75,200 95,000 88,000 -
Table 04: Price comparison of Motorcycle
Model Walton Bajaj Hero Honda TVS
125 CC 103,900 175,000 155,000 160,000
110 CC 96,000 148,500 145,000 140,500
Cruiser 93,300 120,000 110,500 98,000
In all three products in which I have done market research, it is evident that
Walton is providing the consumers with the least expensive product. It is vital for
Walton as price is the only tool where they have a superior advantage
over other brands. But it must be noted that consumers in higher
income level also look for quality products. So Walton needs to find a
fine balance between price and quality as they move forward in
the coming years.
4.2.3. Place
For making the product available to its target customers Walton use its
distribution channel. Walton generally uses its own transport facilities for
reaching the product to its 120 Walton Plazas and about 700 dealers. If any dealer
wants to use his own transport for transporting Walton products from factory to
his shop, he gets 1% reduction on dealer price.
4.2.4. Promotion
Ever since Walton started its production in its manufacturing plant, they have
started a wide promotional campaign on its product. Their tagline “Amader
Ponnyo” reflects the pride they take by being able to sell home appliances
manufactured in Bangladesh. Right now Walton has TVCs running in all major
20. satellite channels of Bangladesh in peak hours targeting their core target
customers. Also they have numerous billboards and advertisements in print
media. Also their 120 Walton Plazas across the country also works as a major
advertising tool. Walton has recently started sponsoring different major sports
event in the country. Recently they sponsored their first International Cricket
Tournament and thus it allowed their brand to be viewed by millions of people
across the world.
5. Financial Analysis
Summary of the Financial Report of Walton for the year 2010:
Table 05: Financial analysis of Walton HIL
Particulars Amount TK.
Total Sales 2,553,024,782.10
Cost of Goods Manufactured 2,414,093,716.05
Gross Profit 305,852,566.6
Operating Profit 99,636,450.2
Net Profit 26,530,733.5
6. Challenges and Future Growth
6.1. Current Market Status:
Although Walton is a growing brand, it is yet to establish itself as the market
leader. In fact it still has a long way to go, especially in capturing the elite
customer bracket.
Table 06: Market Comparison
Price Quality Variety Distribution Scoop For
Growth
Walton **** ** * *** ****
LG *** **** **** **** **
Sony * *** *** * *
Singer *** ** ** ** **
21. Samsung ** *** ** * *
I can see from the above table that clearly overall LG leads and have a significant
lead when it comes to these values. They have been in the market for 20 years
and have done remarkably to capture nearly one-fourth of the total home
appliance market. But coming second right now is Walton. By providing the same
quality in much lower price, Walton has created an excellent brand following.
They have a very good distribution system, without lets all over the country. But
their main problem has been variety. They are still way of the benchmark at the
moment when it comes to product variety. But Walton will put more emphasis in
this sector and plan to catch the lights of LG and Sony in the next 5 years.
6.2. Challenges:
Establish Walton as the No.1 Home Appliance Brand of the Country
Capturing the market share of existing foreign brands
Bringing more variety in their product line
Continue increasing market share at the same rate over the next 5years.
6.3. Future Growth:
Walton has decided to penetrate market, develop both market and product to
achieve profitable growth in future.
Market penetration
Through extensive promotion campaign Walton has set goals to make more sales
in future. Countrywide distribution system helps it achieve its goals.
Market Development
Walton is exporting its products in Middle East, Latin America and Africa. It has
plans to explore European markets also.
Product Development
Recently, Walton brought Air-Condition in market. Though it hasn’t gained
spectacular market share yet, continuous customer attraction reflects future.
22. Expected market growth of Walton in the next five years:
Table 07: Future growth of Walton HIL
Product Line Present Market
Share
Expected Market
Share
Main Competitor
Motorcycle 5% 25% Bajaj, Hero Honda
TV 8% 30% LG, Sony
Refrigerator 13% 25% LG, Samsung
Air-Condition 2% 10% LG, General, Gree
7. Recommendations
To establish Walton as the brand for home appliances & other electronic
accessories, some changes are needed in its strategies-
Control to Market Penetration Pricing without compromising quality.
Establish partnership with local and international OEM (original equipment
manufacturers) for elegant & sophisticated designs & equipment.
Emerge gaming consoles like Game boy, PlayStations, X-box and medical
appliances for caring old people through pioneering approaches.
Launch Customer Loyalty Program.
Incentives and special offers for customer season wise.
8. Conclusion
Walton HIL is the first company to introduce advanced research and
manufacturing technologies and equipment for household & commercial
Refrigerator & Freezer, Motorcycle and Air Conditioner etc. in Bangladesh. For
Bangladesh, Walton has become a company to be proud of in the export arena. It
has truly redefined Bangladesh from being a consumer country to a producer
country for home appliances.
The company has been running its business with good reputation since 1977.
Establishment of Walton HIL to manufacture Refrigerator & Freezer, Air
23. Conditioner, and Motorcycle etc. In Bangladesh it is a milestone in the path of
success and reputation of the brand WALTON, I believe.
9. References
www.walton.com.bd
Arif Ahmed: Marketing Officer LG-Butterfly
Annual reports for Walton Bangladesh for the year 2010.
“ITALTEL’S new chief gets what she wants” bmeiness Iek, april
30. 1984, p.51; Robert ball, “italy’s most talked-about executive,”
fortune, april 2, 1984, pp. 99-102; marisa bellisario “the turnaround at
ITALTEL,” LONG RANGE PLANNING, VOL. 18, NO. 6(1985), pp.21-24.
Zachary schiller, “a model incentive plan gets caught in a vise,”
bmeiness Iek,January 22,1996,pp.89-90;caroiyn wiley, “incentive plan
pmehes production” in Arthur A.thompson,jr,a.j.
Smean scherreik, “yI performance review: make it
perform,”bmeiness Iek,December 12,2001,pp.139-40.
http://walton Bangladeshlimited.edu/cahrswp/414,accessed
November 13,2008
Michale totty, “the dreaded performance review,” the
wa;bdllstreetjInal,November27,2006;http//www.halogenoftware.comirl.
cornell.edu/cah...
