Abstract
Case Analysis I
The Sadakalo case study is a good initiative from an emerging economy’s context, realizing a missing link of studies from the same. It is consistently observed that, especially in garments sector, Bangladesh has attained a significant success supplying its product to the developed countries’ fashion markets. Sadakalo presents the products on major cities by itself where the other competitors usually export the products. However, regardless, the journey of the associated firms is not ‘a bed of roses’; rather, the firms need to struggle with internal as well as external constraints. The rivals may feel envy seeing the presence of Sadakalo in some big cities; similarly, the lesson can be shared by the competitors overcoming the hurdles (experienced by Sadakalo). This case study lessens the competitors’ effort learning some relevant lessons. In this context, Sadakalo presents that personal, professional and social network may commensurate to the access to financial resources; opening a new store in Sears Tower, for example, either may take a huge resource-base or alternatively might use the existing networks. However, finding out and selecting a right partner is not always straightforward—Sadakalo experienced the both extremes. Therefore, this vibrant case study is about learning from the success as well as from the failure.
Second, this case proves that innovativeness is a key to success; the success we can measure with the growth rate of Sadakalo with its other competitors such as Nipun or Prabartana—it is well ahead of them in terms of the number of stores. Moreover, when the other competitors have been producing almost similar products ‘with vibrant colours’, Sadakalo adopted only two colours (namely, white and black) colouring its products—a very risky thought though. However, Sadakalo proved that two simple colours do have the ability to colour a society, regardless of age—if the designs are innovative and contemporary. The case also presented how and why Sadakalo pulled-out one of its outlets (Pink City, Dhaka, Bangladesh) realizing different customer-base and interest. This is a significant contribution to existing management knowledge: flexible management that revises its decision regularly suits better than a rigid or stiff management, especially for fashion-based firms. However, closing the Designers’ Corner because of the high ‘administrative costs … in Gulshan’ area conveys the message to conduct proper cost–benefit analysis beforehand. This type of hiccup, possibly and potentially, conveys a misleading message to the customers suspecting the business ineffectiveness or inefficiency of the firms.
The third significant finding, and hence the lesson for the others, is the inter-outlets distribution mechanism. Sadakalo circulates the products that do not sell well in a particular store. This mechanism ensures entertaining larger customers as well as increases the likelihood of selling items. Implicitly, this does challenge the traditional ‘promotion’ through ‘sale’ concept of fashion and retail stores. However, in a soothing manner (in Conclusion), the current case study worries about this strategy of Sadakalo. Hence, this study opens the debate on the efficient use/mix of business—promotion versus redistribution mechanism.
The fourth interesting finding of this study is the segmentation of the customer-base. Sadakalo’s products target ‘10 per cent of the total market share’ of males which is around 80 per cent for females—this is reflected too by their floor design in an outlet, while the rest is occupied by household and decorative items. For the male customers, as the case study claims, Sadakalo produces Fatua and Panjabi only. However, some business analysts argue why Sadakalo does not penetrate the male segment with Western dresses such as t-shirts, blazers, ties, cuff-links and so on—with its ‘black and white’ feature. Similarly, female customers are increasingly showing their interest towards Western dresses; but, Sadakalo does not entertain them with shirts or skirts—again with monochrome appeal. Hence, the current study opens the need and prospect of further research.
The journey Tahsina began in 2002 took 12 years to catch attention of the academic researchers; however, readers can capture the lessons from Sadakalo from the stated case study. Therefore, this case offers significant contributions for managers. Similarly, the ‘why’ and ‘why not’ questions prominent in its practices have significant values to offer to the practitioners. Furthermore, it offers a practical implementation of the general management theories while creates a number of potential debates on prior theories. Overall, it is a good reflection on business concepts.
Case Analysis II
Introduction
The case is based on traditional fashion industry of Bangladesh with a particular focus on Sadakalo. Sadakalo, founded by Ms. Tahsina Shahin, is a retail chain making traditional clothing for men, women and children and selling the clothing to people who mostly belong to the middle income group. Sadakalo has been established based on a unique business concept of making clothing using only two colours—white and black (‘sada’ and ‘kalo’ in Bengali); that is how its name came into being.
Two major market segments of Bangladeshi fashion industry are traditional and Western. Traditional clothing demand by men mainly includes panjabi-payjama, kurta, fatua and lungi; whereas women commonly choose between saree and shalwar-kamiz. As for Western clothing, typically men wear shirt-pant, t-shirt, suit, etc. and women wear tops-skirts, t-shirts and leggings.
Traditionally, Bangladeshi people used to prefer tailor-made stitched clothing for years. But this perception has been changing due to increasing tailoring cost, on one hand, and availability of fashionable ready-made clothing by local brands at reasonably cheaper prices, on the other hand.
Brief SWOT Analysis
Demand for traditional clothing rises typically during national, religious and cultural occasions, such as, Eid festivals, Puja festivals, Bengali New Year, International Mother Language Day, Independence Day and Victory Day. Among them some occasions demand presence or prominence of specific colours in clothing, for example, black and white in International Mother Language Day, white and red in Bengali New Year, and red and green in both the occasions of Independence and Victory Day. As such, Sadakalo has a natural disadvantage of not being able to use so many colours to take advantage of various occasional demands.
However, in spite of the built-in weakness, Sadakalo was able to succeed to establish itself as a unique brand portraying style, sophistication and beauty using only two colours—white and black. This apparently impossible feat was possible because of strong determination and ingenious design concepts by the founder Ms Shahin and her design team. Sadakalo went ahead going beyond from mere two colours to more theme-based concepts and sometimes blending Western fashion aspects with traditional one using creative shades of black and white. This is the core strength of Sadakalo.
Budget allocation for promotional activities (only 3–4 per cent of annual revenue) seemed inadequate. If Sadakalo increased its promotional activities may be more people would be attracted towards its products, especially those people whose favourite colours are black, white or both. In that sense, Sadakalo may not be utilizing its full potential and thereby losing opportunity to capture more market share. Moreover, Sadakalo can expand its business to other divisional cities, such as, Chittagong, Sylhet, Rajshahi, Khulna and Barishal, by opening outlets at appropriate locations.
Bangladesh is surrounded by India (more specifically the Indian state West Bengal) on three sides. Due to this geographical proximity, many of the cultural aspects of Bangladesh are pretty similar to those of West Bengal. Thus, some clothing styles are very similar as well and there is a demand for Indian clothing in the local market. That is why imported Indian clothes may always be a threat to the business of Sadakalo. In fact, this is a major reason why Sadakalo had to close its outlet in the Pink City of Gulshan, Dhaka.
Right Moves
Sadakalo first introduced identical design concept for family members by coming up with dresses with similar design theme for both parents and children, and also for couples. The team of designers always makes reasonable effort to collect design ideas from various sources and brings constant variations in design.
In 2004, Sadakalo used renowned media personalities Ali Zaker and Sara Zaker for the opening of its third outlet in Bailey Road and that shop experienced immediate success. Bailey Road is famous for its theatres, boutiques and restaurants attracting numerous media personalities and people in general who love culture and value our tradition the most. This location was so appropriate for Sadakalo that it opened another outlet (sixth one) at the Navana Bailey Star Market in Bailey Road in 2008. This outlet has been the most popular so far.
There is a popular saying ‘Keep your friends close, and your enemies closer’. Sadakalo exactly did that when it joined with Deshi Dosh. Deshi Dosh is a flagship outlet of 10 major domestic brands selling similar kinds of products with similar price ranges. So, this will help Sadakalo observe the moves of nine major competitors from a close distance.
In 2009, it was first time for Sadakalo and also for any Bangladeshi fashion house to open an outlet in a foreign land, at Jackson Heights of New York, USA. Jackson Heights is a popular area for Bangladeshi people living in New York to shop and hang out. Sadakalo opened another outlet in Florida, USA next year. In the hope of opening more outlets in USA, Sadakalo came to an arrangement with Bangla Trading, a company that participates in fairs year-round throughout USA.
Wrong Moves
It is very important to identify a good match between the demand of the locality and the traditional value or philosophy of Sadakalo before opening an outlet. Sadakalo failed to do that when it became too ambitious and decided to open an exclusive outlet in Gulshan, called ‘Designer’s Corner’, the first of its kind in Dhaka, showcasing clothes of 10 eminent designers of Bangladesh and abroad and selling dresses at exorbitantly high prices. Sadakalo made a similar mistake opening an outlet in Gulshan at the Pink City shopping mall which is a popular market for imported clothing. Eventually, those two outlets were shut down due to continuous bad performance.
Recommendations
According to the data given in the case, 85 per cent of the local men demand Western clothing and rest 15 per cent traditional clothing. In contrast, 80 per cent of the women’s wear demand is covered by traditional clothing and only 20 per cent by Western. It is also mentioned in the case that 70 per cent of the Sadakalo customers are women and 30 per cent are men which is obvious from the traditional clothing demand by these two genders mentioned above. Moreover, as majority of Sadakalo customers belong to the age group of 30–49 years, focus on children’s wear should be less. Considering above facts, Sadakalo should think about changing its product range focus as recommended in Table 1.
Recommended Change in Product Range
Sadakalo depends on over 100 suppliers for 50 per cent of its production requirements. It should make an active effort to reduce its dependence on outside suppliers for two reasons. First, there is a higher chance that a competitor may get hold of a design idea and imitate that design before Sadakalo launches its product in the market. Second, the in-house production facility will give Sadakalo management better control and more efficiency ensuring improved quality.
Now a days, online stores are becoming more and more common, especially using social networking sites such as Facebook, in addition to having personal websites. Some are only present online without having any physical showroom. Sadakalo may utilize the information technology to be present in the online community going beyond geographic limitations and virtually reach out to any place in the world.
Case Analysis III
From a (female) entrepreneurial perspective, the founder of Sadakalo, Tahsina Shahin creates an example in Bangladesh. Starting from one outlet, Sadakalo has now extended its presence outside Bangladesh. Hence, Sadakalo represents the footprint of Bangladeshi fashion styles in world market, competing with other big brands. Similarly, exposing this case to the researchers and practitioners is a great effort. Moreover, examining a firm from overall management and marketing perspectives as well as with presenting both achievements and challenges of the company is comparatively exceptional and worthwhile to discuss. The significance of this novel case study to managerial practice is enormous. The case clearly outlines the purpose of Sadakalo. The key issues for this case are as follows:
Following the law of diminishing marginal effort, starting a business takes more effort than that for the next one. First of all, Sadakalo was unique and innovative selecting its first store; they chose a location where midrange earners do live and university-going people do visit; not a financially rich or poor locality. As a result, Sadakalo to be accepted by the huge middle income customer groups of Bangladesh. Hence, Sadakalo is smart selecting and then targeting its customers. It has been observed in retail fashion that many firms just had to leave the market because of the poor choice of business location; the selection of a store is largely dependent on the environment where it operates, as well as on the other factors including demographic and existing competition. Sadakalo was the only brand in this market-segment in Rifles Square; therefore, it enjoyed a huge competitive advantage initially which would have driven them for the future stores. This case study is expressive telling us the Sadakalo story.
The current case study put a good effort explaining the products and the rationale for those products; readers from any range can easily grasp the story and the moral. It is complimentary to the case study that Sadakalo considered making not only gorgeous but also fashionable clothing and gift-items, and more importantly, which would create a completely different sense of brand image with only black and white colours. Hence, it can entertain customers with simplicity; simplicity is a not-so-practiced business advice to the entrepreneurs, Sadakalo is one of the rare. Moreover, it produces its products from cotton, not using silk or so. Therefore, consumers use the product for daily use which in turn develop a sense of ownership among the customers to this brand; that eventually positively affects the loyalty of the customers. Moreover, the products for parents or friends are simple but touchy, and are different (or sometimes unique) to the competitors. Hence, some products from Sadakalo are the obvious choice for specific customers in some occasions. For instance, Sadakalo produces mugs with your date of birth and horoscope; hence, it leaves you, as a customer, no choice but to pick one for your friend—it creates a sense that the mug is designed and manufactured only for your friend! Once again, the case study is comprehensive in this regard.
This case study presents another weapon to the success of Sadakalo—its continuous effort on promotional strategy. Some companies rely on advertising as the only aspect of promotional activity. However, Sadakalo spends only 3–4 per cent of its annual revenue as the promotional expense (which includes advertisement and newspaper features), but Ms. Tahsina Shahin also introduces ‘summer clearance sale’ during mid of the year which attracts many potential customers, resulting with a good amount of revenue as well. This strategy is a proven practice in developed countries; let us see how it works in Bangladesh.
The public relation and networking aspect: Ms Shahin developed and utilized a good relationship with two famous celebrities of the country, Mr Ali Zaker and Mrs Sara Zaker; they have participated in her ‘promotional photo session’ which worked as the turning point for Sadakalo. As Ms Tahsina has good business network, her business expanded to international market; for instance, Sadakalo exports its products to New York and Florida. Hence, the case presents a very good example of promotional aspects of an entrepreneur.
This case study also presented a significant lesson for the practitioners. Prior studies found that e-commerce reduces ‘market entry costs’ for firms and ‘search costs’ for customers. Likewise, current entrepreneurs including Sadakalo adopt ‘click and mortar’ style of business model. When Aarong (the biggest in this market segment) sleeps Sadakalo still remains in the business because of its e-commerce presence (limited scale). Tahsina’s higher academic qualifications also helped her in this regard; she learnt the information system (IS) use in retail business while she applied flexible management styles with quick reflection from theories. This is the learning process we always expect and appreciate. I would say Sadakalo and this case study are complimentary; Tahsina applied academic theories in her business while this case study presents a real-life success story to the future students. In conclusion, though Ms Tahsina attracted significant attention in fashion market the spirit of the case, I believe, predicts qualitative market-research in future from Sadakalo so that it comes up with more innovative designs according to its customer need, in order to sustain in the competitive retail fashion market.
Case Analysis IV
This case demonstrates the image of a successful Bangladeshi fashion house ‘Sadakalo’ by focusing on its plans, challenges and strategies. The case emphasizes on the activities that allow Sadakalo to continue to build its reputation in Bangladeshi fashion market. Moreover, the case also shows some challenges faced by Sadakalo for its sustenance in the fashion market of Bangladesh.
The case illustrates Sadakalo as one of the successful fashion houses of Bangladesh which relies on some competitive and absolute advantages. First of all, Sadakalo focuses on being different and unique, the exceptionality and combination of the two colour products keep them different from all other traditional local brands. The idea of creating black and white clothes, at a time when everyone else was focusing on vibrant colours allowed Sadakalo to attract significant number of consumers who are culture, tradition and fashion conscious people. Sadakalo’s innovative designs and continuous development of products is one of the key factors for their sustenance. Moreover, cultural and festive events play important role for Sadakalo, as a significant amount of revenue is earned from the festivals such as Eid, International Mother Language Day, Durgapuja, Victory Day, Independence Day, Bengali New Year (Pohela Boishakh), Birthday and Wedding anniversaries. Sadakalo has implemented strategies and proactive plans for these occasions as a result it enables it to maximize sales. One of the important reasons behind the success of Sadakalo is the location of its sales outlets. Most of the stores are situated in prime and populous locations, such as, Dhanmondi, Gulshan, Uttara and Banani. These places are convenient and well known to the customers; as a result in a short time Sadakalo became famous and successful. Sadakalo’s reputation and brand value increased after the formation of Deshi Dosh which reflected an image of top 10 local brands of the country.
Closer observation of the case shows a few reasons behind the continuous growth of Sadakalo. The first reason is the team dynamics and coordination among the various sectors of production, development and retail. Sadakalo as a fashion house has keen and organized structure which enables it to focus on products and introduces new market strategies such as introducing identical dresses for parents, children and couples. In addition, continuous survey and observation enables Sadakalo to be aware of the change in trends and taste of people. To be competitive and efficient often senior designers attend international garment fairs to learn and collect new ideas from the global market and designers are also responsible to visit the retail stores to predict the demand for designed products. Secondly, the brand produces only traditional clothes which reflect the culture and tradition of the country. Due to such vibrant and specific product segmentation, Sadakalo is considered to be one of the first choices of Bangladeshi people for occasions such as Bengali New Year (Pohela Boishakh). Products that are required in these kinds of occasion are not imported from abroad and local competition is relatively low as a result local people rely on brand like Sadakalo. Lastly, sustainability of quality and innovative traditional products in the fashion industry makes Sadakalo reputed and well known to people.
Challenges of Sadakalo
Further study of the case illustrates various issues which can act as barriers for the growth of Sadakalo. These issues are as follows:
At present, Sadakalo only focuses on traditional products in the line with different cultural festivals. Therefore, it is unable to sell an appropriate volume of clothes throughout the year. Secondly, its poor marketing strategies and low budget make them unable to increase expected sales.
A successful fashion house like Sadakalo should provide at least two discount sales throughout the year to show brand loyalty to the regular customers and attract more customers. However, Sadakalo offers only one summer sale throughout the year, which allows them to collect a good amount of revenue. Therefore, it can be believed that more promotional or discount sales would allow Sadakalo to be famous and earn more revenue in future. Moreover, Sadakalo has very poor budget for promotion and advertisement purposes which is 3–4 per cent of the yearly revenue. It has no strategies to create website or provide advertisements on social networking websites. As a result, Sadakalo has flat sale all over the year except the major festivals such as Eid-ul Fitar and Eid-ul Azha. Another reason for the poor sale is due to climate change. Sadakalo has no strategies to make different clothing products according to diverse seasons; climate plays an important role in the demand of clothing products. The case also states that Sadakalo is relatively immobile in the country. They are only concentrating in Dhaka city (recently started also in port city of Chittagong), the capital of the country. However, there are large numbers of potential customers in other cities as well. Lastly, due to globalization significant changes influenced the fashion industry and turned the market more challenging and competitive for Sadakalo. However, Sadakalo has not adapted these global changes as they are only focusing on traditional products which can reduce the market share of Sadakalo in the long run.
Suggestions
The challenges identified in the case can create critical issues for the continuous success and growth of Sadakalo; therefore, necessary steps should be taken to solve these issues. Some suggestions are provided below to address the above issues.
Emphasizing on producing diversified clothing products which are required throughout the year instead of focusing only on few occasions and festivals.
It could offer more promotional sales and provide facilities like loyalty card to be famous and attract more customers. As a result, the brand value and market reputation will increase.
Sadakalo could specially increase the budget of advertisements which will allow them to promote in different social networking websites, newspapers and magazines. Currently, Internet advertising on social networking website is considered to be the most effective way of advertisement as a large number of audiences can be informed with relatively low cost.
It could also concentrate on the seasonal climate changes and produce products accordingly. Thus, this will enable it to have balanced sales all over the year.
It could emphasize to be more geographically mobile in the country and avail its products in the potential cities which carry more prospective customers.
Lastly, it could adapt with the global changes in fashion market. As a result, it will be able to increase the variety and choices to attract more customers by opening different sections for traditional and global products with the key concept of black and white clothing products.
Conclusion
This case states the positive factors that are the reasons behind the success of Sadakalo and also shows some challenges. The suggestions indicated above could be helpful for Sadakalo to make strategies to achieve future goals, objectives and improve current condition. Overall, the case provides important implication for the entre-preneurs, marketing practitioner and policy makers.
Case Analysis V
This case depicts the wonderful picture of a renowned Bangladeshi fashion house ‘Sadakalo’ by highlighting its major activities and strategic plans. The case highlights major strategic plans taken by Sadakalo for becoming one of the most famous and prestigious brand names in Bangladeshi fashion industry. The case also brings out positive and negative challenges faced by Sadakalo in the competitive market.
The case clearly outlines the purposes of Sadakalo. It was established in 2002 by a young and innovative entrepreneur with a spirit of creating a local brand, which will make traditional Bangladeshi dress only. Over the years, the brand has made its own reputation in the Bangladeshi fashion industry. The brand has successfully produced many unique and innovative designs that attract customers’ attention and take place in customers mind as a symbol of authentic design and quality. The institute, on a regular basis, is working hard to bring new and innovative design in the market to attract new customers and at the same time analyze internal and external environment to achieve its objectives. Such strategic plans have made the brand name renowned not only in Bangladesh but also in the fashion industry of the USA. The case clearly establishes this in a way the overall operation process is followed in Sadakalo, the quality of the products, establishing the brand value by holding the core colour theme of the brand in the heart of every design, the flat ladder, and coordination between formal and informal teams which stimulate competitiveness of the brand.
Deeper analysis of the case gives us two underlying factors for the success of the brand, thereby making the brand more renowned and famous to its customers can be attributed to the following: The first one is the brand’s strong sense of its own created identity and the product line up of the brand. The identity lies in the name of the brand ‘SADAKALO’ which means white and black. The brand has never produced any dress that has more than the two colours, white and black. Secondly, the brand makes only traditional dress. These two underlying factors are not only visible in the products of Sadakalo but also the employees of the brand strictly respect these two factors and count them as an obligatory rule to follow values in their everyday work. Thus, it is very clear from the case study that organizational success depends on the core value and more importantly if the organization keeps its core work value in the heart of its every day work. These two underlying factors behind the success of Sadakalo also points out the difference between Sadakalo and other fashion houses that are operating in the Bangladeshi market and other countries around the world.
Problems Identified in the Case
Short-term problems: In the short term, the first problem is the decision whether to increase the budget allocated for promotions. Currently, Sadakalo spends only 3–4 per cent of its yearly revenue for promotional purposes. The second problem is that Sadakalo earns most of its revenue from two religious festivals instead of generating revenue throughout the year. Sadakalo earns most of its revenue (which is around 45 per cent) from the two major religious festivals: Eid-ul Fitar and Eid-ul Azha.
Long-term problems: Further analysis on the case gives us another scenario that clearly depicts the problems Sadakalo might have to face in the near future. The case states that despite continuous success of Sadakalo as a well-known brand name in Bangladeshi market, the brand may lose its market share. The Bangladeshi fashion market is becoming competitive day by day as new brands are coming into the market. In addition, the over saturated market of Dhaka city might impose a problem for Sadakalo.
The case clearly illustrates the purpose of creating the brand and its brand value. Due its brand value, the company is very reputed in the Bangladeshi market. Reputed companies like Sadakalo are trend-setters in their own areas, and leaders in their own field themselves face difficulties to make changes in the current systems and mind set. Such resistance to change might affect the overall business activity in the long run.
Decision Criteria
The decision criteria for both long and short run are primarily focused on increasing the current sale and increasing the brand image through innovative marketing media.
Options and Evaluations
If Sadakalo does not increase the allocated budget for marketing and runs other promotional activities, other competitors can grab customers’ attention through innovative marketing. In addition, this decision could fade out the brand name from the customers’ mind, as the marketing media Sadakalo is using at the current moment is unable to grab the attention of mass customers.
Further expansion within the Dhaka city might be a good strategy for a short period of time, but in the long run when the market becomes more saturated, market share of Sadakalo could decrease significantly. Similarly, if Sadakalo decided not to expand its operation throughout the country, the decision may cause a decrease in the overall revenue for the same reason.
To improve overall operational activities into a new standard, Sadakalo has to change its operational process in some areas. To name an important one, dependency only on the physical stores and not developing an online store of its own when the number of Internet users is increasing continuously in Bangladesh. Like the first and second option, the third option will help Sadakalo to increase its market share and to generate more revenue than before.
My proposed solutions to the problems identified in the case analysis are limited to the following:
Increasing the budget allocated for promotion and marketing purposes. Currently, major promotions for Sadakalo include advertisements, discounts and newspaper. Most importantly, Sadakalo does not advertise its product on TV channel since it is expensive. But Sadakalo has never tried other less expensive media such as Internet marketing, e-mail marketing and marketing through Facebook, SMS marketing, etc. for running its different promotional activities. The above-mentioned media are less expensive than TV channels but those media have the ability to reach target customers more effectively than TV advertisements. In addition, Sadakalo can introduce loyalty card for the frequent customers and offer discounts, this will help Sadakalo with customer retention. Opening an online market area of its own with a strong delivery network is another solution through which the brand can promote its products to custo-mers. Opening a physical store will take a lot of time and at the same time, huge cost is involved with such activities. Opening an online market area in shortest possible time will not only help Sadakalo reach its customers in the short term but it will also help the brand fulfil its long-term goals. People of this era like to shop online as it is hassle free and less time consuming; therefore, there is no doubt that people of Dhaka city will love to use the online facility. In addition, people who live outside Dhaka city can also purchase products from the online market and can receive the product at home without travelling to Dhaka.
The points discussed above regarding different marketing concepts, dedicated online market, and strong delivery system require additional investment. In the short run, the financial perspective might be a factor that Sadakalo needs to consider. But if Sadakalo looks upon the above options considering the company’s long-term objectives, future growth and long-term sustainability those options might give Sadakalo the expected outcome.