International Business Report: RMG Industry Analysis in Bangladesh

This report provides an in-depth analysis of the Ready-Made Garments (RMG) industry in Bangladesh, examining the external environmental factors that affect the sustainability of companies operating in this sector. It utilizes a PESTEL analysis to assess the political, economic, socio-cultural, technological, legal, and environmental factors influencing the industry. The report also explores the current state and expected trends in the RMG supply chain over the next 2, 5, and 10 years, supported by relevant data and predictions regarding the industry's growth and impact on the Bangladeshi economy. The analysis highlights the RMG sector's significance as a major revenue generator and employment provider, particularly emphasizing its role in the economic development of Bangladesh. The report concludes by emphasizing the industry's role in the country's economy and its potential for future growth. The report includes proper APA citations from reliable sources.

Running head: INTERNATIONAL BUSINESS
International Business
Name of the Student
Name of the University
Author Notes:

1INTERNATIONAL BUSINESS
Table of Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................2
RMG Industry..............................................................................................................................2
PESTEL Analysis........................................................................................................................3
Expected trends............................................................................................................................4
Conclusion.......................................................................................................................................5
REFERENCES................................................................................................................................6

2INTERNATIONAL BUSINESS
Introduction
The global business environment is deemed to be changing at rapid rates. There needs to
be extensive importance that must be invested in the same. Furthermore, it can be said that there
has been importance that has been invested in the emerging markets such as India, Bangladesh,
China and others. The aim of the paper is to identify the external environmental factors that
affect decision regarding sustainability of companies operating in the RMG or Ready Made
Garments industry in Bangladesh (Hasan & Mahmud, 2017). Furthermore, the paper swill also
highlight the trends in the supply chain in the forthcoming years.
Discussion
RMG Industry
The Ready Made Garments or the RMG sector of a country can be deemed to be one of
the most important sectors that exist in a country. The industry has been recognized as one of the
prime industries that help in satiating the needs that are associated to development of the
economy of counties as a whole (Safeer et al., 2019). In emerging counties such as Bangladesh,
the RMG industry has been recognized as one of the prime generators of revenue. The industry
not only help the industry in satiation of the needs that are associated to the development of
employment opportunities in the industry. The generation of employment is likely to help in
boosting up the needs of the economy. Furthermore, there are sustainable nations that have been
carried out in the industry and an honorable highlight is the inclusion of women in the industry.
This is likely to help the country tackle the problems that are associated to lack of income and
standard of living of the people of the country.

3INTERNATIONAL BUSINESS
PESTEL Analysis
An external analysis is required when it comes to the understanding the proceedings that
are carried out in a particular geographic location. Thus, companies must have the ability to carry
out research with the help of which the company can effectively identify the key factors that
could either hinder or bolster the operations of a company. The external factors that can affect
operations can be identified with the help of a PESTLE analysis. Following is the PESTEL of
Bangladesh;
Political environment: There exists a high degree of political turbulence in the country as a
result of which various industries in the country have been suppressed. Thus, the country is
deemed to be politically unstable. There is a high degree of government intervention in all the
industries. While this can be taken as something positive in accordance with the operations of
some industries, it can be deemed to be helpful as it helps the industries in developing solutions
to the problem that are being faced by specific industries.
Economic environment: The economy of Bangladesh is deemed to be developing. Exports in
the textile industry has been responsible for the success that various industries in the company
have been subject to. According to the World Bank, it has been found that the gross domestic
product of the country assimilates to $24,972.39 Crore USD (Islam & Haque, 2018). The rate of
the growth of the GDP of the country has been favorable and hence, economy of the country is
said to be growing.
Socio-cultural environment: Issues such as empowerment of women, equality in pay, education
for children and increase in the purchasing the power parity.

4INTERNATIONAL BUSINESS
Technological environment: The industries in the country rely on imported technology and the
proceedings in the country are carried out with the help of manual labor.
Legal environment: Law enforcement in the country is deemed to be weak as a result of which
workplace safety. Child labor is an issue that the county has been suffering from since ages
(Mustafa, 2019).
Environmental factors: No environmental quality standards however, the county has been able
to establish the highest number of green buildings in the world.
Expected trends in Supply Chain
From the analysis of the supply chain, it can be said that RMG industry is growing
effectively and it is with the help of the same, that the economy of the country is likely to grow.
It is expected that the industry will be able act as a fulcrum of the whole economy of Bangladesh
with the help of which the company is likely to be able to grow the interest of increased numbers
of suppliers in the industry. Following is are expected outcomes in the Supply Chain related to
RMG in the forthcoming 2, 5 and 10 Years;
In Next 2 Years
Bangladesh is a lower-income country and it is the RMG sector is the industry that is
likely to help the economy of the country to recover in a favorable manner. There has been
increase in the GDP of the country by nearly by $80 billion, and it was at $262 billion in 2017
(Sarkar et al., 2018). It is the goal of the industry to be able to achieve the feat of exporting $50
billion worth of readymade garments by the year 2021 (Rab & Hoque, 2017). Hence, it is
expected new establishments in terms of supply chain development in the RMG industry is likely
to take place.

5INTERNATIONAL BUSINESS
In Next 5 Years
The reliance on the FMCG sectors has resulted in high proportion of the economy of the
company being dependent on the RMG sector. The RMG sectors of the country employs around
20 million people of Bangladesh (Anwar et al., 2017). It is expected that the GDP of the country
would rise at a stable rate and the latter can be supported by the example of success that the
country of China was subject to. Bangladesh is likely to be subject to the 5-year effect just as
experienced by China. The Importance of RMG sector in the country is has resulted in 81% of
the exports of the country being contributed by the industry (Rahman, Habibullah & Masum,
2017). Stable RMG supply chains is likely to bolster the competency of the companies in the
RMG industry and the economy of the country as a whole. The industry is likely to grow at the
current rate till 2024.
In Next 10 Years
The proceedings include the nature of operations of the RMG market of the country.
Furthermore, it can be said that the competence of the industry is the outcomes of the issues that
have been carried out in accordance of the interconnected and competent forces that operate
within the said industry. As a result of the success of the RMG industry of the country has been
recognized as the second largest exporter of Ready-Made Garments in the world. The success of
the RMG industry and the rising demand for garments in the industry will help in establishment
of a stable position as one of the most successful economies in the global context.
Conclusion
On a concluding note, it can be said that the RMG industry has been responsible for the
development of the economy of Bangladesh. With the help of favorable proceedings that have

6INTERNATIONAL BUSINESS
been carried out in the economy and as a result of the dependence of the suppliers, it can be said
that the industry has been able to bolster the effectiveness of expected growth of the industry.
REFERENCES
Anwar, M., Ferdous, Z., Sarker, M. A., Hasan, A. K., Akhter, M. B., Zaman, M. A. U., ... &
Ullah, H. (2017). Employment generation, increasing productivity and improving food
security through farming systems technologies in the Monga regions of
Bangladesh. Annual Research & Review in Biology, 1-15.
Hasan, M., & Mahmud, A. (2017). Risks Management of Ready-Made Garments Industry in
Bangladesh. International Research Journal of Business Studies, 10(1), 1-13.
Islam, M. R., & Haque, M. (2018). The Success of Export and Its Impact on GDP of
Bangladesh. International Journal of Investment Management and Financial
Innovations, 4(1), 9-13.
Mustafa, Z. (2019). Poverty in the Center of the Conversation About Child Labor in Bangladesh.
Rab, N. B., & Hoque, R. (2017). Is ‘Greening’the Key to Sustain in Global Market for
Bangladeshi Readymade Garments Industry?. International Journal of Business and
Management, 12(3).
Rahman, M. T., Habibullah, M., & Masum, M. A. (2017). Readymade garment industry in
Bangladesh: growth, contribution and challenges. IOSR Journal of Economics and
Finance (IOSR-JEF), 8(3), 01-07.

7INTERNATIONAL BUSINESS
Safeer, A. A., He, Y., Abrar, M., & Ullah, A. (2019). Diagnostics of the Challenges and Potential
Solutions to Improve Export Competitiveness in International Markets: The Case of
Pakistani Readymade Garments Industry. Journal of Competitiveness, 11(3), 128.
Sarkar, M. S. K., Rahman, M. Z., Islam, M. M., Sikdar, M. M. H., & Khan, A. B. (2018).
Relationship between Remittance and Economic Growth: Evidence from
Bangladesh. American Journal of Trade and Policy, 5(1), 15-20.