Microenvironment Analysis of Bangladesh for Business Expansion

This report analyses the microenvironment of Bangladesh for business expansion of Student Flight Centre. It includes factors like political, legal, ethical, social responsibility, cultural and economic.

[INTERNATIONAL MANAGEMENT]

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Executive summery
To generate more profits for the business most of the companies adopt the business
plan of expanding the business internationally. Student Flight Centre has also decided to
expand their business in other part of world. For the business expansion the company ahs
selected a Bangladesh Market. Bangladesh is the country situated at South Asia. The
company deals in the flights booking travel package and hotel booking, for this kind of
business environment of Bangladesh is very suitable. This report is designed to analysis the
microenvironment of Bangladesh by including factors like Political, legal, ethical, social
responsibility, cultural and economic.

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Contents
Introduction................................................................................................................................2
Company Background................................................................................................................2
Introduction of /chosen country.................................................................................................2
Political and legal Analysis........................................................................................................3
Political Analysis....................................................................................................................3
Legal Analysis........................................................................................................................3
Economic Analysis.....................................................................................................................4
Cultural Analysis........................................................................................................................4
Ethics and social Responsibility.................................................................................................4
Conclusion..................................................................................................................................5
References..................................................................................................................................6

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Introduction
Student Flight Centre is a company that deals in providing cheap international flight
deals and discounts to the students they also provide deals for hotel and travel reservations. In
present, the company is operating its business in countries like Australia, UK, South Africa
and New Zealand (Student Flight, 2018). Now the company want to expand its business to
some other country for that the company has chosen a South Asia country Bangladesh. This
report is developed to analysis the microenvironment of the selected country
Company Background
Student Flight Centre is travelling retail company, FCTG has opened its very first
Student flight store in 1995 the main aim behind the establishment of Student Flight stores is
to provide gain access to student airfare discounts. After a long period of steady growth the
company has re-launched its brand in 2006, with the re-launch the company has established
50 shops within 12 months. Student Flight centre is the most leading student flights and
adventures travel business company that has been expand its business in Australia, New
Zealand, South Africa and the UK (Student Flight, 2018). The main target market of Student
Flight Centre is Youth airfare and adventure market. In present, the company is operating
around 72+ stores in Australia only and few more stores in other countries. The company
offers a wide range of discount to the student on various facilities like best airfare, providing
budgeted 5 star hotels, passes of bus, festivals and events. The company provide other
various facilities such as online booking, 24/7 customer service, widest range of travel, travel
money options, youth travel insurance, excusive festival package, staff picks, best guarantee
and many more (Student Flight, 2018).

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Introduction of /chosen country
Bangladesh is a country in South Asia, it share its terrestrial border with Myanmar
and India. The countries like china, Nepal and Bhutan are located near Bangladesh but they
are not sharing their borders with each other. The maritime territory of Bangladesh is Bay of
Bengal that is equal to the extent of its land area. Bangladesh is the world’s eighth most
populous country. The capital of Bangladesh is Dhaka moreover it is the largest city of the
country followed by Chittagong that is the largest port of the country. The people who live in
Bangladesh are known as Bangladeshis that include the individuals from variety of cultural
groups and convictions (Morshed, 2017). In Bangladesh 98% people speaks Bengalis that is
why it is consider to be the official language of Bangladesh. The politically dominant Bengali
Muslims developed Bangladesh as a world’s third largest Muslim majority country.
Bangladesh is covered by the Bengal Delta that is largest delta on Earth in addition the
country covers 700 rivers and 8046 km of inland waterways. Bangladesh is a middle power
developing nation and its economy, it is ranked 43rd in terms of nominal GDP (Abdullah,
Monsoor, Johari & Mohd Radzi, (2015). The country is an vital sponsor of regional
cooperation and connectivity and it is the largest contributor to the UN peacekeeping forces.
Political and legal Analysis
Political Analysis
The politics of Bangladesh is the dominant by two Political parties these are
Bangladesh Awami League and Bangladesh National Party BNP. The country has a
parliamentary democracy. The legislation of Bangladesh includes 300 seats. The political
members are chosen for tenure of 5 years. In 2004 the Parliament of Bangladesh has passed a
bill that include a provision of reserving 45 legislature seats for females that is to be
disseminated among the political parties in fraction to their arithmetical forte in leading body

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(Islam & Pattak, 2017). The process of parliament and the political discourse at the
nationwide level are currently not conductive to broad socioeconomic expansion. The
democracy of Bangladesh is fragile and young and state parties’ positions are feeble. The
insufficient state structure, corruption are the hinder for development (Islam & Pattak, 2017).
The transparency and accountability in the country is limited and that is enhancing the ground
of corruption, and increasing mistrust among the community. The public government also
lacks in monetary and satisfactory humanoid resources to accomplish its duties. It is
important for the government of Bangladesh that to remove the obstacles for development
such as ineffective state structure and corruption they has to provide their attention on the
issues. In present to help the country the UNDP, Asian Development Bank and the World
Bank arrived as survival donors within the area. In Bangladesh, the government has levied
15% of Corporate Income Tax, Value-added tax, Personal Income Tax, and Principal Direct
Taxes on all significant customer products. The corporate tax rates for public companies are
27.5% and for all other companies is 37.5%.
Legal Analysis
The legal system of Bangladesh is primarily created on the common law and the chief
sources of the laws are the acts of Parliament. There are many basic laws of Bangladesh such
as company laws, contract laws, criminal procedural codes, civil procedural codes, penal
code that are influenced by the English common laws. The major laws that can be affect
foreign investment in the country are the companies Act of 1994, Overseas Private
investment Act of 1980, the industrial policy act of 2005, the Bangladesh economic zones act
of 2010, the industrial policy act of 2010, Bangladesh Export dispensation zones expert act of
1980. The Bangladesh Cabinet in 2016 that has replaced the Industrial policy act of 2010
approved the new Industrial policy act. the new act provide a facility to the foreign investors
that if they are investing $ 1 million or has transfer $ 2 million to a recognised financial

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institution can apply for the citizenship of Bangladesh. The Government of Bangladesh will
provide a facility of finance and policy support for high priority industries and creative
industries. The legal policies of the government will provide specific importance to food
processing, jute and jute good, leather and leather good, pharmaceuticals, information and
communication technology, ready-made garments and agriculture (Export.gov, 2018). To
settle the dispute with the forigen investors the Government of Bangladesh has signed the
International Convention in May 1992 and all the disputes will be entertain there only.
Economic Analysis
Bangladesh is falls under a category of a developing countries and the market of the
country is based on the mixed economy and it is the one the next eleven emerging markets. In
2018, the nominal Gross Domestic Product was $ 285 with the per capita income of $ 1754.
After India and Pakistan, Bangladesh stood as a third largest economy in South Asia and
second uppermost overseas conversation reserves after India. In 2015, the Bangladeshi
Migration donated $ 15.31 billion in transfers. The private sector in Bangladesh has expanded
rapidly with the conglomerated driving company (Goncharuk, 2016). The major companies
operates in the economy are leather goods, food processing, ceramics, chemicals,
construction materials, energy, electronics, steel, shipbuilding, pharmaceuticals and textiles.
In fiscal year 2014-2015 the export oriented industrialization has increased, in which export
increased by 3.3%. However, the one obstacle the economy of Bangladesh faces is an
insufficient power supply. According to the World Bank the major challenges of Bangladesh
are weak public institution, corruption and poor governance. The agriculture sector of
Bangladesh is the largest sector that has contributes 18.6% to the GDP of the country. the
country is the seventh biggest producer of natural gas in Asia (Xenos, Vromen, & Loader,
2014). The service sector of Bangladesh contributes around 51% to the GDP. Bangladesh is

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the place that attracts the tourist, the main attractions of the country are historical monuments,
sea bathing, yachting, rowing, hiking, river cruising, water skiing, angling, wildlife, tribal
people, forests, beaches and resorts. The travel and tourism industry has generated 1281500
jobs in the country.
Cultural Analysis
The culture of Bangladesh can be analyses by the way the people of Bangladesh live
their lives. Bangladesh has a diverse and rich culture, the heritage of the country was 2500
years old and the refection of the heritage can be seen on its clothing, painting, music,
literature, dance and architecture. The three chief religions that influence the culture of the
country are Buddhism, Islam and Hinduism. The 19th and 20th residents of Bangladesh were
involved in the arts for the development of Bengali culture like filmmaking, painting, music
composing, thinkers, researchers, scientist, authors, saints and writing (Abdin, 2015). There
is several music instruments were played in the country among which the aboriginals of the
country such as bamboo flute, drams, dotara etc develop some of them. The tribal dances are
very popular among the Bangladeshis the countryside women and girls are very indulge in
dancing and folk music. The clothing of Bangladesh is very traditional the women used to
wear Saris marie that is expensive and famous. The celebration and Festival are the very
important part of the culture of Bangladesh. Main events and festivals of the country are
Durga pooja, Muharram, Eid-ul-Azha, Eid-ul-Fitr, Pohela Baishakh etc.
Ethics and social Responsibility
The ethics and social responsibility in Bangladesh is governed by its corporate social
responsibility policy that is mention in the Company Law 1994. The concept of the corporate
social responsibility integrated with the environment and social concerns of the business

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operation. Social responsibility is not only about fulfilling the legal requirement of the
country it also involves the companies responsibility toward human capital, environment and
building brand value in front of its stakeholders (Khatoon, Chokroborty & Doulah, 2018). In
Bangladesh, first peer group owns most of the family business and they are involved in the
communal development work by providing charity. The most of the SME’s in the country
falls under the informal sectors that are having low administration structure and resources to
address the communal and moral issues. These boundaries drive the top organisation of local
government to think only about the profit expansion rather than doing work for planet and
people.
Conclusion
To conclude, while analysing the microenvironment conditions of the Bangladesh few
factors was been considered such as political, legal, economic, cultural and ethics and social
responsibility. After analysing these factors is been found out that Bangladesh is a developing
country and due to this reason the company can face many issues and the establishment of the
biasness will get effect. The system of the country is corrupt and the resources available are
very limited. However, the company deals in travel and hotel booking for that Bangladesh is
the good option because the country is full of tourist attractions, rich in culture and people out
there in country are helpful. For the Student flight centre can expand their business in
Bangladesh.

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References
Abdin, M.J. (2015). Foreign Direct Investment in Bangladesh: Trends, Challenges and
Recommendatios. International Journal of Economics & Management Sciences,
4(27). 21-23
Abdullah, R., Monsoor, T., Johari, F., & Mohd Radzi, W. (2015). Financial support for
women under Islamic family law in Bangladesh and Malaysia. Asian Journal of
Women's Studies, 21(4), 363-383.
Afroj, A. (2013). Business Ethics and corporate social responsibilities. Asian Journal of
Business and Management, 1(1), 28-34.
Ashraf, M. A. (2016). Econometric analysis of the impact of domestic rice procurement
policy on producer price: the case of rice in Bangladesh. Jurnal Agro Ekonomi, 26(1),
80-89.
Export.gov. (2018). Laws and Regulations on Foreign Direct Investment. Retrieved From:
https://www.export.gov/article?id=Bangladesh-Legal-Regime
Goncharuk, A. G. (2016). Banking sector challenges in research. Journal of Applied
Management and Investments, 5(1), 34-39.
Islam, M., & Pattak, D. C. (2017). Impact of Macro Environmental Factors on Garments
Industry That Drives Export in Bangladesh. Studies in Business and
Economics, 12(2), 100-111.
Khatoon, A., Chokroborty, A., & Doulah, M. (2018). Doing Business in Bangladesh
Retrieved From: https://uk.practicallaw.thomsonreuters.com/1-504-7011?

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Morshed, T. (2017). People Repubilc of Bangladesh. Retrieved From:
https://www.nationsonline.org/oneworld/bangladesh.htm
Student Flight. (2018). About Us. Retrieved From: https://www.studentflights.com.au/about-
us
Xenos, M., Vromen, A., & Loader, B. D. (2014). The great equalizer? Patterns of social
media use and youth political engagement in three advanced
democracies. Information, Communication & Society, 17(2), 151-167.