Accent Industries FZC – Steel And Modular Manufacturing Company For Temporary Site Facilities

About Accent Industries FZC

Discuss about the Global Business in Asian Century.

Accent Industries FZC was founded in the year 2003 as a Manufacturing company as is an expert in Steel and Modular building, Accent Industries is on a mission to serve the unsatiated and the evolving needs of the construction Industry. Accent industries is extremely professional in its conduct and is known across the gulf as a versatile and competent engineering company which never fails to delight the customer by exceeding his requirement on TURNKEY SET UP of Temporary Site Facilities(Ullah 2014, 430-449). The company has over a decade of experience and an impressive track record of executing plethora of projects for blue chip construction and oil and gas companies in and around Middle-East, West-Africa and the Indian Subcontinent (Albaloushi & Martin 2008, 53-71)

At Present, Accent Industries appears in the Top 5 list of players in the Pre-Fabricated accommodation and supplies. The products manufactured are FIRE RATED and are approved by the concerned authorities including Abu Dhabi Civil Defense and Ministry of Interior, the industries is spread across UAE with a 25,000 square metre production facility(Nassar & Ossama 2013, 158-168). The company works on the three pillars of Concept-Solution and commitment; these are the guiding pillars which define the sustainability in the business model of Accent Industries. The company abides by the concept that” Let’s make world a better place to live” and provide quality construction to all irrespective of the magnitude of investment. The company is a market leader in providing temporary site accommodation and steel bunk houses in the Middle East Region and is committed to provide on time production delivery timelines at a reasonable cost by adhering to the Service level agreements and the highly standardized operation practices (Buckley 2012, 250-259).

Bangladesh is a market based economy and stands at 44th number in the world in terms of nominal economies are at 32^nd by purchasing power parity. The country’s economy has been majorly driven by key sectors which include textiles, shipbuilding, fish, sea food, and jute and leather goods (Hodge 2018, 24-48). Bangladesh has a population over 160 million which is as big as France, Germany and the Netherlands combined, despite its size and the skilled workforce the country is easily the poorest of the world’s 10 most populous(Leibowicz 2018, 390-398). As per the reports of Asian development bank, the economy of the country grew by 7.1% in the year 2016; this was the fastest expansion of the country in the last 30 years. Bangladesh economy in order to remain robust in the longer journey the government is focussed on increasing the foreign investment which would give an impetus to the growing economy of Bangladesh (Aziz & Ahmad 2018, 120-145).

The country needs a lot of development in terms of infrastructure facilities and is extremely open to the idea of inclusion of foreign player in the development of its infrastructure facilities (Pritchett 2018, 45-82). Accent Industries which is an expert in steel and modular building can be of great importance to the ailing economy of the country. With the vision of government to increase the self-reliance capacity of the country, sturdy structure is required, which are not expensive but do create value for its customers.

Temporary Site Facilities Production Facility

Accent industries which are a UAE based company specializing in modular building solution for the rural infrastructure development can most certainly provide sustainable, environmental friendly cost effective building to the people of Bangladesh. The purpose here is to create shared values and develop positive synergies between Bangladesh and Accent industries.

Creating shared values was the concept which at first was introduced by Harvard in one of its business review article by the name of Strategy & Society, it is a link which connects competitive advantage with the corporate social responsibility and is an extremely noble concept (Porter & Mark 2018, 327-350). The concept was derived after the business were severely criticized as the major source of social, environmental and economic problems, it was been said that the companies are exploiting the communities for their own good ad also causing serious harm to the environment(Shin & Jinwoo 2018, 168-178).Companies have become short sighted in their approach, instead of focussing on longer success, they are tied their vision on optimizing the short term benefits, hence have completely overlooked the unsatiated demands of the market which would eventually lead to the sustainable development of the company and the country. Thus, the onus lies on the company; they have to create projects which will help in creation of synergies between the businesses and the society by redefining the purpose as “creating shared values” which generates economic value in a way that it also benefits the society (Dora 2018, 392). Companies in the present context can do so by three strategies:

• Re-conceiving Products and Markets (Healey 2018, 65-79).
• Redefining the productivity in the value chain (Tang 2018).
• Building supportive industry clusters at the company location (Larson & John 2018, 4411-4420).

The purpose of the assignment here is to create shared values in Bangladesh by Accent Industries, their decade long experience and their ability to deploy economies of scale and scope can be of tremendous help to the ailing population and strike a chord with the government’s vision towards economic and social sustainability.

Porter 5 force framework is a tool for analysing the competition in a business, the framework through the analysis of the five forces which are drawn from the organizations economics helps to determine the industry attractiveness in terms of profitability (Steiber 2018, 7-14).

Rafi Engineering & Construction, Beximco Engineering Ltd, BD Constructions & BBS are some of the major players in the industry. All these players have a good experience and hold a good amount of power in Bangladesh. The industry concentration is an indicator of the competitive rivalry, which in this case is low. All the players cater to a different industry segments thus leaving space for every other company to create an impact, the industry can thus be seen as a disciplined one. Accent Industries can gain a competitive advantage over the existing competition by:

Changing Prices- Use the disruptive technology to bring down the cost involved in the construction of the temporary sites.

Product Differentiation-Accent industries has over 100 products, skills and expertise which none of the other players have, all its products are certified and follow QHSE protocol.

Channels of Distribution- Accent industries can get into a channel mode with the material providers, different industries requiring the use of the products and provide them the material with the ease of delivery.

In the Porter’s model, substitute refers to the products which can replace the solution provided by the company. In this particular case, the product in itself is a temporary construction, which is movable, customizable, easy to make and break, thus as of now it does not have any threat from substitutes. However, a possible threat can be usage of wood or other alloy in use to create the product, but that is certainly a thing of the future, thus does not have any effect as of now.

Sustainability through Shared Values

This is one force which is pivotal in determining the industry attractiveness in terms of profitability, the power which the buyers exercise over the industry is referred to as the buyer power. If the buyer’s power is extremely strong they are the ones determining the pricing for the industry and such situation is called as Monopsony. Buyers are considered to be powerful in the following scenarios:

In the case of this industry, the buyers are mostly industry players or the industries which require construction sit for the purpose of Labour, site, warehouse, food and many more, hence the buyer power is moderate and relatively low number of players in the market makes the industry quite open.

Manufacturing industries require raw materials, equipment’s, labour and other supplies to carry on with the manufacturing work. This leads to buyer supplier relationship in the industry and the supplier firm. Suppliers are seen to be powerful in the following case:

Credible forward integration threat by the suppliers

High switching cost of the suppliers.

Suppliers are weak in the following case:

Large number of competitive suppliers

A large number of purchasers

Credible backward integration by the purchasers

The latest VAT act 2012 has put brake on the growing steel industry in Bangladesh, and therefore, maximum amount of raw material has to be imported into the country, thus suppliers have a weak power. Moreover labour is readily available in Bangladesh and is cheap due to heavy unemployment, thus reducing the power of suppliers.

Bangladesh is on a growing spree and the government has started putting efforts in increasing its efforts toward the foreign direct investment. The country is looking for international players to come in the market, exercise their power and the expertise and create sustainable development for the country. Hence, the threat to entry can be seen low, but at the same time, a lot of cost is involved in setting up a new business which keeps a check on the threat to entry.

The above analysis clearly indicates that Bangladesh market is favourable for the Temporary site facilities, more so Accent industries is looking forward to create shared values in Bangladesh for a win-win for the company and the country, hence Bangladesh is an apt market for the expansion plan.

Accent Industries is one of the popular names in the UAE market which is known for providing quality steel and modular building solutions. The company has been in the industry for over a decade and has been creating Temporary fabricated structures for a number of industries, primarily Oil and Gas sector, construction industry and marine industry. The company’s business model is based on providing sturdy temporary structures for Bunk houses, Clinics, Mosques, Site office and stores. Its product offering comprise of Aluminium fabrication, Building solutions, Carpentry, cladding solutions, fencing solutions, Fibre glass products, Metal forming and steel products. The company has a stringent quality standard process in place by the name of QHSE (Quality, Health, Security and Environment), through which it takes care of the environment and also the wellbeing of the people. It is an extremely responsible company which did not falter in any of its business conduct in the past and is on the process of sustainability in the business environment. The company can help Bangladesh in improving its infrastructure facilities, providing facilities for construction and place for the needy people. It can also be of help by providing employment opportunities to a large amass of people who are unemployed in the region thus helping in the creation of shared values.

Porter’s 5 Forces Analysis of the Industry

These are the elements which are controllable by the company and are important in taking future strategic steps in the direction of business sustainability. There are six components of micro-environment:

SWOT Analysis is a framework which can be used to conduct a micro environmental study, through this model the company can focus on its strengths, work on the weakness, exploit the opportunities and devise a proactive approach to mitigate any threats in the future (Rosina 2018, 105-113).

The company has been doing exceptionally well in the manufacturing industry of steel and modular building for over 10 years, the company has crafted some great designed products which have tested the waters of natural calamities and proven to be extremely sturdy. Accent industries appear in the top 5 players of UAE when it comes to creating temporary site facilities. The expertise of the company in designing Parking, Labour camp, Dining area, Mess, Site offices and labour accommodation can be used for the 160 million population of Bangladesh. Moreover the solutions of the company cause no harm to the nature thus sticking with its policy of maintaining environmental equilibrium. Company’s expertise in Construction and real estate can be a definite advantage for Bangladesh which ranks poorly in terms of infrastructure development. The team at Accent is extremely professional with engineers holding the credibility of executing end to end projects.

There is a couple of weakness in Accent industries from the view point of creating shared values in Bangladesh. The cost of the procurement of the material is high, moreover the logistics cost in transporting the material is another constrain in creating shared values. At the same time, the company has not been leveraging its marketing department to create shared resources and despite being in the Top 5, it has not been able to create brand awareness in the market. Thus, the weakness is strictly related to the material procurement and the marketing activities.

Bangladesh has a median age of 26 which makes it an extremely young country with millions of workforce sitting idle to create a difference in the world, according to one of the reports published by PWC; Bangladesh has the potential to become the world’s 23^rd largest economy by the end of 2050. The country has shown an average annual growth rate of 5%, which is remarkable in itself, the share of the growth can be given to its youthful and working age population.  Another research pointed that 25% of the population in the age group of 15-29 is inactive, unemployed or is not involved in any of the education programs. Thus, Accent industries have a good opportunity by using the youth, develop their skill sets for employment and further use them for the development of the country.

High unemployment rate, corruption which is rooted at the grass level, fear of the local terrorist organization in the state are some of the factors which are threat to the strategy of Accent industries in creating positive synergies in and around the state. The political instability further fuels the uncertainty and the ingrained corruption in the system masks the economic reform for Bangladesh.

The SWOT analysis brings excellent opportunities for Accent industries to deploy its economies of scale, scope and the experience to ensure the creation of shared values in Bangladesh.

The proposal here is based on the fundamental concept of creating shared values between Accent Industries and Bangladesh. As mentioned earlier in the report, as much as 25% of the population is unemployed, and this is fairly young population. There is a lot of scope for generating job opportunities by building steel and modular structures in and around Bangladesh. The structure will serve purpose not only for infrastructure but will also help the people in getting employment.

Bangladesh under its 6^th five year plan which is the duration of operation between 2010-12105 the government aimed to achieve  8% GDP growth rate, however due to poor infrastructure facilities, including the physical and organizational structure the country suffered and could not reach the expected target set for its GDP. To bolster the efforts further, Asian Development Bank is investing around 20 Billion dollars in the country to push its efforts towards sustainable growth in the economy. This, will further aide in helping the economy and poverty condition of Bangladesh. Accent industries experience of over a decade can be put to good use in the infrastructural development at Bangladesh.

Competitive Advantage Strategies for Accent Industries FZC

A lot of companies in the past have reconceived products and operations process to work with the local players of the country and engage them in the business activities. Nestle in the past redesigned its coffee procurement practices and worked closely with small scale farmers for the procurement who were engulfed into poverty, low productivity, environmental degradation and less income. Deploying this strategy Nestle was able to create shared values for itself and the country. In the similar manner, Accent industries want to create shared values for the Bangladesh economy. As mentioned earlier in the report, a lot of investment is pouring in for the infrastructural development of Bangladesh; Accent Industries can help the country by not outsourcing the raw material required for creation of the temporary fabricated sheets and use the country’s resource for the same. Also, Bangladesh is the biggest exported of Jute; Jute can also be used in creation of some temporary facilities for the benefit of people. Another impact which the company can create in the process is by developing skills in people for constructing temporary site facilities; it can impart training to the native population of Bangladesh and enhance their skill sets, thus creating shared values.

Accessing and utilizing the resources available like energy, suppliers, logistics and employees differently and more productively. Every country has abundant resources which a MNC company should put to good use in order to save its internal cost and also save the time in importing equipment’s from other countries.

Value chain analysis is a strategic tool which is used to analyse the firm’s internal activities.  The goal here is to identify the resources which are important and most valuable, which are the activities causing the source of cost differentiation or product differentiation advantage to the firm and the ones which can be improved to provide competitive advantage to the firm. The value chain of Accent industries is very much in place, and all its internal activities point towards providing quality and low cost solution to its client. However, the company has to tweak its value chain for Bangladesh market.

Creating a new procurement process which will enhance the supplier capabilities and efficiency of the suppliers.

• Accent industries have been using QHSE to ensure the quality, health standards, safety and environmental sustainability for its employees and the environment. In addition to that it also has to improve energy, water and resource efficiency across the activities.
• The company has come up with a new design and technological product to recycle and reduce the waste from its plant.
• The raw material has to be procured from the local industries thus minimizing the logistical intensity in business operations.
• Working towards improving the health and safety of the workforce.
• Enhancing productivity of the employees by increasing their wages and providing more benefits to the lower income class people.
• Local recruitment to reflect the diversity of workforce and create a team rich in culture.

After the implementation of reconceiving needs, products and customers, redefining the productivity of the value chain, the last step is to improve the local business environment. In a bid to improve the local business environment accent industries has to improve the skills of the workforce, consolidate the synergies of the local suppliers for raw materials and supporting institutions in the nearby are where the company will operate. Some of the definitive plan for the company in the direction of improving the local business environment is:

• Engage and train at least 100,000 people and make them equipped with the relevant skills in steel and modular buildings.
• Hiring, retaining and training the people for the growth of the industry and the economy.
• The company will partner with local manufacturers of Pre-fabricated materials and use their expertise in drawing the sheets for the construction.
• Providing assistance by introducing new technologies and standard processes to expedite the construction of the structure.
• Use the profits to plough back in the system to ensure business sustainability.
• As a part of CSR activity, cleaning of the Brahmaputra river by bringing in machinery to clean the river. Also increase the awareness on the benefits of keeping the river clean.
• Introduction of community health program to address the lack of health enhancing behaviour.

Collating all the unique activities as mentioned in the section will give thrust to the efforts of Accent industries in creating shared values across Bangladesh. Bangladesh will be the prime beneficiary of the shared values and the Accent industries will earn a good name in the market for its Noble efforts.

The company wants to enter the market by wholly owned subsidies. In order to do so, the company has two strategies, either to go through the Greenfield investment or Acquisition, each entry mode has its own advantage and disadvantage, but the company wants to move forward with the acquisition strategy. As part of this strategy, the company will have to invest the maximum amount of any other alternative .Acquisition strategy will help Accent industries to achieve greater power in the market, the company will try to acquire some suppliers and small firms which can gain from the experience of the company and also help the company to have a leverage in the market. The acquisition strategy is advantageous as it gives the company leverage to buy out its competitors thus taking competitive edge in the new market. At the same time, Accent industries can use the expertise and knowledge of the local players and use it to its advantage.

Opportunities in Bangladesh’s Economy

As mentioned earlier, although Accent industries comes in the Top 5 list of the players in the middle east, the company still has a very limited brand awareness thus has been limited to the expansion in the middle east countries. Marketing is essential in creating brand awareness and having a competitive edge over its competitors, thus Accent industries will have to invest in pre entering marketing strategies in the Bangladesh market to drive awareness and do employer branding to attract good talent into the company.

The company in order to create shared resources has to manufacture the raw material used in the construction of Temporary fabricated sites in Bangladesh, this will help the economy to gain and Accent industries can lower down its production cost by conducting he production services in the country itself rather than importing the material from outside and using in the Bangladesh market, it will also bring in cost efficiency in the business system.

Accent industries have to ensure that it buys its own fleet services to have a control over the logistic in bringing the material, shipping the material to the client site and many such reasons. The accountability and the responsibility will have Accent to better manage its logistic service and use its experience to optimize the resources at hand.

Bangladesh economy is agricultural based; despite have one of the youngest populations the company has been unable to change the situation of its workforce. The role of Accent industries here would be to create awareness in the minds of the youth about the growing importance of the Temporary fabricated structure, and the benefit if they master the skill. The joint collaboration between the workforce and the company will be able to drive momentum in the business and as a by-product creates industry relevant skill sets in the human resources.

Employees are the biggest strength of the organization and the organizations are solely responsible in working towards their professional development. In order to do so, Accent industries have to come up with industry certification programs for the local resource, provide them with the training to stand on their feet and be dependent. The certification will be valid across the globe and will have the required modules of learning which will help the individual to grow.

India, China and Asian development bank pledged to invest billions of dollars to improve the infrastructure conditions in Bangladesh. The direct implication of this spending is to boast the economic development of the state by creating industries and generating employment. In order to support such vast creation a plethora of resources are required to support the construction, Accent industries can thus fill the lacunae by providing quality support for the development of economic wealth in Bangladesh by Co-creation.

It is expected that every Multinational company should adopt the policy of GLOCAL “Go global and think Local”, this is a strategy which has helped companies in the past to derive benefits from the tie-ups with the local suppliers. The biggest benefit is the usage of the expertise and the knowledge of the local suppliers to get a breakthrough in the market. It considerably reduces the time in production of service and saves a lot of money for the company. Additionally, it also puts trust in the local people about the company and they together work towards business sustainability.

Accent has to invest a considerable size of their investment towards marketing activities; this will help in creating an impression in the minds of the local government, institution and the industry association. By creating a full -fledged marketing strategy using the tools of offline and online promotions will be extremely beneficial for the company, it will also help in getting a good quality of applicants for the job position.

Logistics is a key element in the manufacturing sector; an able logistic process in the company can ensure reduction in cost and timely delivery of the raw materials and finished goods to the company and the clients. It is very important that Accent industries in few years develop its own logistic team to derive the benefit of backward integration and have the complete control over the raw material and the finished goods.

Creating Synergies between Bangladesh and Accent Industries FZC

Bangladesh has a number of companies which are in providing more or less the same services as of Accent industries, but only a few have the capital, resources and capabilities to create an impact in the economy. Accent industries which have an experience of over a decade can get into Joint collaboration and develop synergies by the use of some of these companies and help in co- creation by sharing values and resources.

Leader is a person who is the primarily responsible in driving the entire team to reach the organizational goals and productivity. The key facet here hire is to human resource which can drive the goals of their organization by aligning the organizational goals with their professional goals. Leadership has to ensure that the morale of the entire team is high and everybody is working towards business sustainability. Leadership has to empower its employees in the decision making, in the case of Accent industries it is very much required that apart from getting a person already with Accent industries, they hire somebody from the local market, so that people can develop trust with him and work to enhance the productivity of the organization. The leader also has a responsibility to ensure that he communicates the vision, mission and goals clearly too all the employees in the workplace.

Conclusion

Accent industries is a renowned player in Steel and Modular building in the UAE market, the company has created a name for itself by providing turnkey solutions of  Temporary site facilities. The decade long experience in the industry has pushed the companies to explore other avenues of growth and create shared valued. Bangladesh, which is a relatively poor country does not have infrastructure up to the mark, countries like India & China have pledged billions of bucks to improve the infrastructure development in the country. It is a great opportunity for the company to provide solution in construction and other allied industries and also help in creating shared values. Accent industries by reconceiving needs, products and customers, by reinventing its value chain and by improving the local business environment can create shared values for Bangladesh. The high unemployment rate in Bangladesh can be converted to highly skilled labour by the company, and the sustained policy of the company to ensure the quality of the products, safety and health of its workforce and ensuring environmental sustainability can reap great benefits for the ailing economy of the country.

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