1.

Introduction:
Tourism industry is one of the immerging sectors in recent world business. It has a huge potential. Many countries economy is depend on this tourism sector. We believe we can exploit this opportunity by investing its various components. Here mainly we want to invest in hotel industry because we believe this is the most important components of this sector where we can achieve our objective. We have a previous experience in this sector and we believe if we can invest the right location then our investment will be fruitful. We want to build a three star standard hotel in Coxs bazar and franchise or joint venture it in other potential location like Cent Martins.
Bangladesh: A New Horizon for Investment

Bangladesh is now trying to establish itself as the next rising star in South Asia for foreign investment. The government has implemented a number of policy reforms designed to create a more open and competitive climate for private investment, both foreign and local. Its current development strategy is based on the premise that the creation and distribution of wealth occurs through the acceleration of growth driven by competitive market forces, with the government facilitating growth and making a clean break from the practices of a controlled economy where private investment is constrained. Significant progress has been achieved in reducing non-tariff restrictions on trade, rationalizing tariff rates and improving export incentives. The introduction of VAT has helped rationalization of the import tariff and domestic tax structures. The tariff structure and the import policy are kept under constant review to identify areas where further improvements are called for. With growing international interest in traveling through Asia tourism is taking roots in Bangladesh. Bangladesh offers a variety of

historically significant and culturally unique sites for tourists. Sylhet's tea gardens, Cox's Bazar sea-beach, the Royal Bengal Tiger, Deer and the Sundarbans, the largest mangrove forest in the world with unique bio-diversity offer tourist attractions. Ancient mosques, Buddhist monasteries, Hindu temples, monuments and other landmarks dot the countryside. Additional hotel and resort facilities could be created for attracting tourists from home and abroad. Dhaka and Chittagong also have an unmet demand for additional hotel rooms, restaurants, entertainment and recreational facilities. . Content: To attract foreign investor, our main motto is to give them detail information in such a way that they feel positive in this investment. For this purpose we will do gradually PEST analyses, Porters model, SWOT analyses, perfect entry mode etc to give them some idea about this project. 2. PEST Analysis 2.1. Political Analysis: 2.1.1. System of government: Bangladesh has a genuinely democratic system of government. The attractiveness of a country as a potential market depends a lot on its government system. Democracy allows both economic and political freedom. Bangladesh, as a democratic country is attractive for tourism business. Though Bangladesh politically democratic, but its different government organizations are structurally bureaucratic. For example if we release your imported goods from our ports it needs to thirty signatures to disclose it. 2.1.2. Government Policy: Bangladesh is now trying to establish itself as the next rising star in South Asia for foreign investment. Bangladesh has opened up our economy. It has removed all barriers to investment and business. Government is offering unparalleled facilities to investors. 100% foreign investment is allowed, excepting four reserved items/areas: i.e. (a) Production of arms and ammunition and other defense equipment, and machinery, (b) Forest plantation and mechanized extraction within the bounds of reserved forests, (c) Production of nuclear energy and (d) Security printing (currency notes) and minting.

The government has implemented a number of policy reforms designed to create a more open and competitive climate for private investment, both foreign and local. Major incentives are as follows:
No ceiling on investment. Residency permits for foreign nationals. TAX-holidays. Capital, profit and dividend repatriation facilities. 100% foreign equity allowed. Double-taxation avoidance, as per bilateral agreements already concluded. Tax exemption on the interest payable on foreign loans and on royalties and technical know-how fees. Open exchange controls. multiple-entry visas for foreign investors Taka is convertible for current account transactions. Some of the foreign private investment opportunities are:

Direct (100%) foreign investment or joint venture investment in the Export Processing Zones (EPZs) or outside EPZs. Portfolio investment by purchasing shares in publicly listed companies through the stock exchange Outright purchase or purchase of shares of state-owned enterprises, which are under process of privatization Investment in private EPZ (Private EPZ Act recently passed).

Board of Investment (BOI), the government's investment promotion agency, is at the forefront of the country's efforts to attract and facilitate investment. As a result of reformed policy measures undertaken by the government, private investments especially foreign investments in the country have increased manifold. It would be beneficial for our hotel business. 2.1.3 Political stability: Though, the meaning of politics in our country is usually full of aggression. The politicians always think about their own interest before they think about us. But the situation is entirely changed now. At present caretaker government is in power in our country and military force declared emergency all over the country. Current government

is more cautious about the development of countrys economy. Thats why they are trying their best to remove the corruption from different level of government organizations. As a result political condition is totally stable and it is suitable for foreign investment. 2.2. Economic Analysis 2.2.1 Economic Indicators: GDP growth: According to the Asian Development Bank (ADB) Bangladesh GDP will likely grow by 6.5% in 2006. Growth averaged 5.4% per year over the FY01-05 period, which has been the highest 5-year average since the countrys independence

If we see closely here, we see that our countries economy is increasing 1999 to 2001, after 2001 it is decreasing because of 9/11 but still we can sustain a moderate growth. This is really good news from our countrys point of view. But in 2004 because of political unrest we cannot sustain our growth but again in 2006 its go to 6.5 which is really good for our economy. . This is encouraging news, because in last few couple of years specifically after the liberation war our countrys economical condition was very poor. The encouraging economic sign brings hope of increased foreign investment and more business from international customer

FDI inflow and outflow:

Source Country Projects

India USA UK Germany Malaysia

14 8 7 4 3

Because of political unrest we see that FDI inflow is gradually decreasing. This is really alarming for our economy. If we want to shift our countrys economical status from LDC to developed country, we have to give more emphasize on raising the inflow of FDI. If we look on other countries like China, India, South Korea etc. all of them able to boost their economy because of more and more FDI inflow into their country. Position of country in worlds competitiveness ranking Bangladesh has got the 120th position among the124 countries around the world. This ranking is based on the Travel & Tourism Competitiveness Index on the World Economic Forum's (WEF) maiden Travel and Tourism Competitiveness Report 2007. Bangladesh lags behind neighbors India (65th), Sri Lanka (79th), Pakistan (103rd) and Nepal (106th) in the tourism sector. Based on this report Bangladesh is in poor position compare to other neighbor country. 2.2.2 Purchasing parity:

This is the overall purchasing parity in our country. If we see this graph we can understand that though is not very good growth rate but its moderate as well as it increasing which is also a good sign because ours people capability of purchasing is increased gradually.

Bangladesh one of the poorest countries with per capita income of $250. Since per capita income is low people doesnt have enough money to bear the high expenditure of traveling cost. Living cost in our country is relatively low compare to other neighbor country. Its understandable because if we see our per capita income; GDP growth then we see that they are not capable of maintaining high living standard.

2.2.3 Human Development Employment Rate

Here we see that our Unemployment rate is stable for last few years and its stable in 40%. It indicates that our government cant create enough job opportunity to cope up with the emerging job seekers. Though its high percentage but government can still manage it to sustain this percentage. Here government has to manage two things; one is their existing unemployment percentage and year by year emerging unemployment rate. Life expectancy rate at birth

By analyzing that graph we can say that the growth rate is very low in fact it s not increasing at all. This is not good sign because it indicates countries poor health infrastructure as well as low willingness to survive in this wonderful world. This also indicates our poor economic condition of the people.

Death rate: In 2005 statistics, death rate is 8.4death/1000 people. We can analyze it from two points of view first of all its good in the sense that its not a very high rate but problem is it indicate that our population is increasing which is now a burden in our country. So it has a duel effect. 2.3. Social/ culture Analysis 2.3.1 Language Bengali is the national language of our county but to deal with our international visitors we need good command of English language because foreigner doesnt know Bengali. Our countrys people dont know English very well. In our country most of the Guides, Waiters, and Taxi drivers do not have any idea about English language. So they can not provide proper service to the tourists. To some extent, guides need knowledge about tribal language, to make the foreigners understand the custom, culture and lifestyle of the regional people. But it is difficult for the outside guide to understand local language as well. So this is the problem we can face in language. 2.3.2 Religion Bangladesh is a non-communal and religiously unbiased country. The majority of Bangladeshis (about 88%) are Muslims, with small number of Hindus, Buddhists and Christians.. People of different religions perform there religious rituals with festivity in Bangladesh.for this most often visitors dont face any problem for their foodstuff, religious activities etc. Since Bangladesh is a Muslim country, there are some restrictions like- drinking Alcohol in public places, wearing unusual cloths, smoking by females etc. In some situation, they face some problems with their food habits because all types of foods are not available in everywhere. 2.3.3 Education Most of the people of our country have very little idea about hotel business because of lack of proper education. To recruit qualified peoples at first we need to train them through expertise in some field. The rates of literacy of our country have major impact on recruiting proper person, because our literacy rate is very low. For hotel business, minimum qualification is intermediate pass but it is hard to find out a person who has qualities like smartness, good looking, and general knowledge etc.

2.3.4 Social strata

Upper class

Middle Class

Lower Class

Social strata are very important for any business because it helps to determine your target customer. Generally our country has three different classes. This is upper, middle and low level class. This class is depending on income based. Usually our countries upper class prefers go to abroad. But they also go to our local tourist spot seasonally. Here our main focus customer is upper middle class. 2.4. Infrastructure of Bangladesh Any countrys infrastructure plays a great in developing its economy. Tourism sector is no exception to that. For attracting more tourists the country has to have a sophisticated infrastructure. Because except this tourist will not be able to travel different location of the country. Bangladesh is a developing country. So our infrastructure is not that well developed. But the government is expending a huge amount of money every year to develop our countrys infrastructure so that the tourist will be interested to visit this country. Our transportation system basically consists of three basic components. 1) Land Transportation system 2) Water transportation system. 3) Air transportation system. 2.4.1 Land transportation system: Our land transportation system is also consisting of two basic parts. They are: A) Railway transportation system: Bangladesh has a wide railway network to reach the different location of the country. It is one of popular medium for the domestic traveler because rail transportation cost is comparatively cheap than road transportation cost. But

its service is bad and inside environment is dirty as well. Tourists also face hassle in collecting the ticket of train. But there is also little exception like Subarno express. But if we can provide a good train service lot of tourist will be attracted and government can make more revenue from railway sector. B) Road transportation system: This is the widest network of the countrys transportation system. Because of development now we can go almost everywhere of the country throw vehicles. Since the different company are providing highly luxurious bus service this medium has become already popular to both domestic and foreign tourist. And the facility of this medium is that buses are available at different time toward different destination. People also does not home face any hassle in collecting ticket at normal time. 2.4.2 Water transportation system: Bangladesh is a land of river. But this medium is not enough suitable for the tourist. There are several reasons behind that. We dont have good water vehicle in maximum route. This medium is also time-consuming. For example; on average it takes 6-8 hours to reach Khulna from Dhaka by bus. But in steamer it takes more than 24 hours. But in spite of that tourist want to travel through steamer because they can observe the natural beauty of the country which is laid on the both sides of the river. 2.4.3 Air transportation system: The air transportation system is very weak in our country. There are only two airlines are operating their flights. One is Biman Bangladesh Airline and the other is GMG Airline. Biman Bangladesh Airline is operating their flight to only seven destinations which are Dhaka, Chittagong, Rajshahi, Jessor, Saidpur,Sylhet & Coxs bazaar.On the other hand GMG Airline is operating their flight to three destinations which are Chittagong, Jessor & Sylhet. So the air transportation system of

our country is not at all suitable for the tourists. If any one want to go to Sundarban there is no any direct flight to near Sundarban since there is no any Airport in Khulna. Firstly people have to go to jessor by flight and from there they can reach Khulna by road.This is also a irradiating and time consuming. 3. Analysis of national competitiveness using Porters model 3.1 Factors Endowment Land is a very important factor if anyone wants to build hotel in tourism area especially in Coxs bazaar .We divided it into three categories. First category is near the seashore from where tourist can see the Bay of Bengal by standing in the balcony of the hotel. Second category is on the side of main road. From here tourist will not be able to see the Bay of Bengal directly by standing in the hotel balcony but the distance is not so much thats why people can reach the beach by walking. Third category is Coxs bazar city. It is far away from the beach. Since we want to build a three star standard hotel our focus is on first category. Compare to this three category first category is little bit expensive but all reputed hotels like Seagull, Paradise, Soibal, Probal are located here. Near the Seashore Coxs Bazar On the Side of Main road City

Figure: Division of land

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Labor: We have divided the labor in three categories. They are top level, middle level and lower level staffs. Middle level and lower level worker are available in our country. But it is difficult to find top level managers whose are graduate in hotel management and have vast experience. Thats why we want to import higher level employee from abroad. In middle and lower level we will prefer Bangladeshi worker because they are very cheap compare to other countries.

Labor

Top Level

Middle and lower Level

Unavailable Figure: Division of Labor

Available

Power: Bangladesh has not achieved self sufficiency in the power sector like electricity, IT sector etc. But Coxs bazar is the major tourist zone so they have got some advantages. For example though Bangladesh can produce 3500 MW against demand of 5000 MW but usually in Coxs Bazar load shedding is not more then one hour. If it occurs more then one hour then electricity supplies authority informs the tourist hotel before it happen. Again our all the leading telecom companys are covering this area with their full network. Recently sub marine cable came into Bangladesh through Coxs bazar area. This will also help to facilitate the tourist to use the internet. But in Cent Martins there is no electricity facility so this can create little bit problem because they use generator which is expensive.

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Dhaka Coxs Bazar, Dhaka Teknaf high way is very good. All the lading bus services like Sohag, Green line, Silk line etc. conduct their bus service in this area. Most expensive is Sohag exclusive whose ticket price is 675tk; recently Silk Line and Green Line introduce new bus name Scania which ticket price is more then others. Coxs Bazar also has one Airport. One important problem is regarding Dhaka-Coxs bazar route is flight scheduling. Though huge number of tourist move towards Coxs bazaar every day from different locations of our country but Biman Bangladesh Airline is operating only two flight in a week from Dhaka to Coxs bazaar via Chittagong Which is very trifling in compare to tourist demand, same situation to GMG Airline also. In Cent Martins two ship Keary Sindbad and Eagle conduct their ship only in tourist season. Because this time Bay of Bengal is relatively quite. 3.2 Demand Condition Market size: If we look our economy then it will indicate that market size is small. But things are different here. In the tourist season tourist doesnt get any room if he/ she dont book room earlier. On the other hand in off season tourist rate are moderate. For example our main competitor Seagull has 400 rooms and lowest room cost is 2700tk, if we multiply it by 400 then we get approximately 10, 80,000tk. Then we again multiply it by 30 days from which we get 324, 00,000tk, if we multiply it by 4 month then the result will be 129600000tk, Which is a huge no. here few things are noticeable First of all not all room cost are 2700tk, Segull also provide food, we excluded off season etc. this example give us some idea about the profit we can get from this investment.

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Sophisticacy of Consumers: Its true that our domestic tourists are not so much sophisticate compare to international tourists, but they are quite willing to pass their vacation into the attractive tourist places. We have found two main reasons behind this situation. First rich is become rich in our country. They have so much money that they can afford to bear any cost, another thing is that though our peoples per capita income is low but when they decide to go somewhere for recreation they start to save money so they can afford it. We think this two influencing factor really create the difference here. Because foreign tourist is so much sophisticated so their demand is high For example wine is very important component for their recreation if they dont get it then it causes a huge problem for them but for our local customer it doesnt create any difference. 3.3. Related and supporting industries: Suppliers bargaining power Bangladesh tourist industry is not very well structured. People usually go to the tourist place by depending on themselves not any traveling organization. Here traveling organizations are not very well established. Though they arrange some package tour but its percentage is so low. Hotels are mainly dominated here. They have more bargaining power over the traveling agents. Another interesting think is local Rickshaw puller has some bargaining power also. Its not appropriate for three star standard hotels like Segull, but it is an interesting thing because if Rickshaw puller can influence the tourist when they arrive and can bring to their selective hotels then they get some percentage from the hotel

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3.4 Firm Strategy, structure and rivalry: Our competitor mainly implement differentiate strategy. They try to build an image here. There intention is convince the tourist so that they can understand reason behind there high price with providing some kind of esteem feeling. For example, Seagull has own beach with a 24 hour security. This really helps the seagull customer to feel some kind of satisfaction. Most of the main hotel here follows the bureaucratic culture. Top management al- in-all here. Reason behind is most of this hotel are own by individual and they usually got higher position here. So they dont care about employees suggestion. Our main competitor is seagull, paradise, ocean-blue and some porjotan hotel like soibal, probal etc. Among them seagull is the three star standard hotel. They are our main competitor. 4 SWOT analyses:
Strength 1. Suppliers less bargaining power. 2. Huge capital. 3. Efficient work force. 4. Can create entry barrier. 5. More control on business. Threat 1. Political restless 2. Natural disasters 3. Cultural Clash 4. Language Problem 5. Lack of Education 6. Organizational bureaucracy

Weakness 1. Has to bear the full capital cost. 2. Possibility of cultural clash. 3. Less flexible because of high commitment. 4. Isnt affordable to all class of tourist. Opportunity 1. Democratic country. 2. Steady growth of GDP. 3. Low interest rate.
4. Tax Holiday

5.Gradual technological Advancement

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We prefer wholly own enterprise in Coxs bazar and joint venture in cent martin. Several reasons are behind this decision. We can gain location curve economics because here labor cost, raw material etc are cheap. So we can exploit this advantage. Secondly we can gain some first mover advantage as well. Because here no foreign investment is exist. Though Seagull exists but it is not foreign investment. Thirdly if we can establish wholly won enterprise then we have full control over our company. As a result we can gain some strategic advantage as well. Then we prefer joint venture in Cent martin because its a seasonal business as a result its cost is high so we think its not appropriate for us to establish wholly own company there. 6. Recommendation 1. Try to attract the foreign tourist. 2. Political situation should be closely observed. 3. Should have clear idea about countrys culture. 4. Should provide some training among the local employees. 5. Should implement aggressive strategy. 7. Conclusion Our main goal is to give our investor a complete idea so that they can take a correct decision in their investment. Here whatever we did is based on pure research. For doing this research we have to go some of our project related office like porjotan office, seagull office in Santinagar etc. Not only this we also relate our personnel experience here. Our intention is not to provide fake information but provide the investor actual scenario based on our findings. We believe we can make this project in such a way that our investor can rely on us and if they follow our suggestion then they can exploit this wonderful business opportunity. Thats why we think our decision regarding this topic is worthwhile.

Bibliography WEB Site 1. http://www.discoverybangladesh.com/

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2. http://www.locomonitor.com/ 3. http://www.indexmundi.com/bangladesh/life_expectency_at_birth.html 4. http://www.indexmundi.com/bangladesh/purchasing_power_parity.html 5. http://www.indexmundi.com/bangladesh/unemployment_rate.html 6. Transportation 7.

Book 1. C. W. L. Hill, International business, 5th Ed, New Delhi, Tata McGraw Hill publishing Company, 2007 Personal contract 1. Mr Shuvo Rahaman Front Desk officer, Segull Hotel White House Hotel, Shantinagor Dhaka

Article: 1. World Economic Forum's (WEF), Monday, March 05, 2007

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