Exporting Femina Antibacterial Sanitary Napkins to Bhutan:

Increase SQUARE TOILETRIES LTD’S international activity

Submitted To:
Najmul A. Sheikh
BRAC Business School
BRAC University

Course Code: BUS 510

Course Title: International Business
Section: 02

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 Exporting Femina Antibacterial Sanitary Napkins to Bhutan:
Increase SQUARE TOILETRIES LTD’S international activity

Submitted By:

Name ID

Nishat Nabila 17264014

Maria Tasnim 17264090

Mahia Ashraf 17264016

Kaiser Alam 17264037

Humyra Sharmind Alam 17364021

Sadiya Shahnaz 17364064

Submission Date:
16th February 2019

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 Executive Summary
Femina Antibacterial Sanitary Napkin (Segmented product of SENORA) product made by
SQUARE Toiletries Ltd. was for the driven women workforce who falls under lower to low-
income generated segment.

Based on the national competitiveness, it is possible to assess the international success of the
firm; indicating that countries should be exporting products from those industries where all
four components of the diamond are promising. According to Michael Porter‘s Diamond
model factors of production are available in our country. In Bangladesh STL observed, due to
the monthly cycle, many of the female workers tend to stay back home – missing
approximately 6 working days per month. Also keeping their extensive working hour nature
and hygiene limitations in mind, the product was specifically cater to keep bacterial infection
at bay. At the same time, STL made sure to keep the product price within their range of
income so that they can actively participate for self-hygiene. Even though market holds wide
range of locally produced Sanitary wears – Femina Antibacterial Sanitary Napkin stands out
from others in comparison to price and product uniqueness. In Bangladesh people‘s income
level, socio-economic strata, the concern for maintaining health within the budget are the
primary chances that may increase the demand even further in future. Bangladeshi
government‘s policies and acts are also favorable for this industry, and national level
curriculum as well as initiatives is being taken which is creating demand and promotional
possibilities. This analysis indicates that Femina is a very attractive and promising product to
increase the international activity with.

Bhutan‘s economy is one of the smallest but fastest growing economies in the world. Bhutan
maintains good diplomatic relations with Bangladesh makes it very lucrative and promising
market to tap. Socio Economic and Cultural concerns are more or less similar to our nations
on-going scenario which also makes this International expansion very promising. Bhutan‘s
people are peace loving people. They always try to keep friendly relation with every country.
They have a view to keep their country ever-green and try to follow rules and orders. To
starting an international business with Bhutan we chose Direct Export mode with small
amount of products. Through selecting Distributors who will represent in our product in local
markets in return of lucrative incentive package and long term business growth. After a short
period, we will be able to assess and take further decisions about our future business steps.

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Table of Contents
1 Introduction ........................................................................................................................ 1
1.1 Objectives: ................................................................................................................... 4
1.2 Methodology: .............................................................................................................. 4
1.3 Company Brief: ........................................................................................................... 5
1.4 Product Brief ............................................................................................................... 5
2 Porter‘s Diamond Analysis on SQUARE Toiletries Ltd. (STL) ........................................ 6
2.1 Firm Strategy, Structure and Rivalry: ......................................................................... 7
2.1.1 Company Strategy:............................................................................................... 7
2.1.2 Company Structure: ............................................................................................. 8
2.1.3 Company Rivalry: ................................................................................................ 8
2.2 Demand Conditions:.................................................................................................... 8
2.3 Factor Conditions: ....................................................................................................... 9
2.4 Related and Supporting Industries: ........................................................................... 10
2.5 Chance: ...................................................................................................................... 10
2.6 Government: .............................................................................................................. 11
3 Entry Mode ....................................................................................................................... 11
3.1 The Country of Future Prospect: The Kingdom of Bhutan: ..................................... 11
3.2 Scope: ........................................................................................................................ 12
3.3 Product: ..................................................................................................................... 13
3.3.1 Product Name: ................................................................................................... 13
3.3.2 Product Feature: ................................................................................................. 14
3.3.3 Product Price: ..................................................................................................... 14
3.3.4 Purpose of Product Selection: ............................................................................ 14
3.4 Entry Strategy:........................................................................................................... 15
3.4.1 Export Strategy: ................................................................................................. 18
Exporting .............................................................................................................................. 18
4 Environmental Challenges ................................................................................................ 19
4.1 The Economic Environment: .................................................................................... 20
4.1.1 The Economic System: ...................................................................................... 20
4.1.2 Natural Resources: ............................................................................................. 20
4.1.3 Infrastructure: ..................................................................................................... 21
4.1.4 Observation: ....................................................................................................... 21
4.2 Political or Legal Environment: ................................................................................ 22
4.2.1 Government Stability: ........................................................................................ 22

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 4.2.2 Incentive for International Trade: ...................................................................... 22
4.2.3 Control of International Trade: .......................................................................... 23
4.2.4 Economic Communities:.................................................................................... 23
4.2.5 Observation: ....................................................................................................... 24
4.3 Cultural Environment: ............................................................................................... 24
4.3.1 Values, Beliefs, Symbol and Language: ............................................................ 24
4.3.2 Individual Behavior across Culture: .................................................................. 24
4.3.3 Overall Observation: .......................................................................................... 25
5 Conclusion ........................................................................................................................ 25
6 References ........................................................................................................................ 26

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1 Introduction
Foreign trade holds vital importance to the economic development of Bangladesh. The
country's import needs are large and the imperative to increase exports is immediate. In order
to finance those imports and to reduce the country's dependence on foreign aid grants, the
government, since liberation, has been trying to enhance foreign exchange earnings through
planned and increased exports.

At present major Export goods are Pharmaceutical Products, Agricultural Products, Leather
Based Goods, Spices, Ready-Made Garments etc. while major Import goods are Capital
Goods, Food Grains, Petroleum And Oil, Yarn and Textiles etc. When it emerged as an
independent country, Bangladesh was relatively a Closed Economy with the trade ratio at less
than one-seventh. Since then, merchandise exports and imports of Bangladesh have increased
greatly in quantity and variety.

Figure: Export of Bangladesh from January-2018 to November-2018

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 Figure: Bangladesh Export Data – 9 Fiscal Year Comparison

Bangladesh export earnings rose by 5.8% to 3400 crore (approx.) in the last fiscal year. The
Bangladesh government is going to set the export target to 3600 crore (approx.) and rise
earnings to 6.36% growth for the current fiscal year.1

Strategies, which increased the Export percentage:

 Simplification of export procedures and strengthening export co-operation through

reducing regulatory role of the government
 Rationalization of the value of Taka to make the export trade more attractive
 Creation of an Export Promotion Fund (EPF) for strengthening the export activities
 Participation in international trade fairs
 Organizing commodity wise trade fairs of international standard in the country
 Developing and expanding infrastructural facilities for export trade

1
Bangladesh to set export target of $39 billion for FY19. (2019). Retrieved from
https://www.dhakatribune.com/business/2018/08/08/bangladesh-to-set-export-target-of-39-billion-for-fy19

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A sanitary napkin (also known as sanitary towel, sanitary pad, menstrual pad, or pad) is an
absorbent item worn in the underwear by women and girls who are menstruating, bleeding
after giving birth, recovering from gynecologic surgery, experiencing a miscarriage or
abortion, or in any other situation where it is necessary to absorb a flow of blood from the
vagina. It is a type of feminine hygiene product that is worn externally for a significant period
of days - depending on whether menstrual flow is heavy or light.

In the past 15 years, Bangladesh‘s local Sanitary Napkin industry has grown faster. Thus,
consumers are able to get the products that are locally produced at very competitive prices.
According to the Industry experts, currently there are around 20 local brands exists in the
market with the total market size of 250 crore, approximately. The home brands that currently
seizes more than 80% of the total market share include Senora, Monalisa, Savlon Freedom,
Smile, Cottex, Rose, Nirapad, Modex, Softe, Joya and many more. Industry insiders credited
the growth to the awareness of hygiene issue, reproductive health, and the improved number
of working women in the recent years (The daily Star, 2008).

Many manufacturers are originating various Sanitary napkins. Product features, type, quality
and price vary from producer to producer. The major players of this market are:

 Senora
 Savlon Freedom Sanitary Napkin
 Whisper
 Monalisa
 Joya
 Smile
 Cottex
 Rose
 Stayfree
 Nirapad
 Modex and Softex
 Grameen Softy

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Present market price varies from Taka 40 – Taka 350 per pack. Market size is around 250
Crore (Approx.) A huge scope still lies to promote this product at mass level specifically
targeting sub-urban and rural area. Huge scope also lies to capture the foreign market - the
price per pack is almost double with comparison to local market (Source: Competition
Scenario in Bangladesh ((Draft) Bangladesh Enterprise Institute July 2005)

1.1 Objectives:

The Primary Objective of this assignment is to assist Square Toiletries Limited (STL) in
terms of planning to increase the level of International penetration

In order to support and fulfill the primary objective, our Secondary Objectives are:

• To conduct Porter‘s Diamond Analysis on Square Toiletries Limited (STL) to gain a better
understanding of exactly how home nation impacts what STL can do as a company

• To select suitable product/s from the existing product line for increasing global market
infiltration by choosing certain region

• To choose best possible Entry Mode/S as per selected country and product/s

• To analyze Environmental Challenge based factors in order to assess and justify the market
saturation assessment

1.2 Methodology:
This paper is prepared with the help of Secondary research based data. Information was
collected from relevant websites, journal, assigned course book and other relevant materials.

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1.3 Company Brief:

Square Toiletries Limited (STL) is the leading Bangladeshi manufacturer of Toiletries and
Consumer good products operating with over 50 international quality products. It is a part of
the highly renowned local conglomerate in Bangladesh - Square Group. STL is one of the
few Bangladeshi companies that successfully exporting its products in foreign countries,
besides serving the people of Bangladesh. STL is exporting its products in some of the
countries i.e. Asia, Middle East Asia, Europe, North America, Africa and Australia.2

1.4 Product Brief

Square Toiletries Limited is producing twenty brands in two different segments and those
segments are, Health & Hygiene and Toiletries. We have chosen a product from the Health &
Hygiene segment and the name of the product is Femina Antibacterial Sanitary Napkins -
a segmented product under brand named SENORA. Senora was first launched in
Bangladesh in 1989 (Square Toiletries Limited) and since then Senora is the market leader in
Sanitary Napkin category in Bangladesh.3 Senora is devoted to ensure health and hygiene for
women- once they are free from worrying about their health, they can manage all other things
in life. Senora sanitary napkins are made with quality-imported pulps, which absorb moisture
and provide a constant feeling of dryness. This sterilized sanitary napkin has air laid paper
and PPF (Perforated PE Film) top sheet that gives liberty to women to move freely without
being worried about leakage. Senora currently producing Five types of napkin:4

 Regular
 Confidence
 Confidence Ultra
 Confidence Super Long
 Antibacterial

2
Business & Values - SQUARE. (2019). Retrieved from http://squaretoiletries.com/business-and-values/
3
SQUARE. (2019). Retrieved February 2019, from Square Toiletries Limited:
http://squaretoiletries.com/product/senora/
4
SQUARE. (2019). Retrieved February 2019, from Square Toiletries Limited:
http://squaretoiletries.com/product/senora/

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2 Porter’s Diamond Analysis on SQUARE Toiletries Ltd. (STL)

The Porter Diamond model offers an effective way for analyzing the national
competitiveness. Based on the characteristics of the home country, it is possible to assess the
international success of the firm. Porter‘s Diamond model explains the reasons why
industries within the country or in a different country are more competitive than the other
worldwide. The discussion is about the specific factors that an organization, within a nation
provides to other organizations. This analysis emphasizes the quality of the home country
environmental influence how successful the company can become in other markets.

Figure: Porter‘s Diamond Model

The Porter‘s diamond model bases it evaluation based on Six elements:5

 Firm strategy, structure and rivalry

 Demand conditions

5
Claessens, M. (2016). Marketing Insider. Retrieved from https://marketing-insider.eu/porter-diamond-model/

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  Factor conditions
 Related and supporting industries
 Chance
 Government

2.1 Firm Strategy, Structure and Rivalry:

In Bangladesh, there are many local as well as multinational toiletries industries who are
dominating the local market. At present, STL is the country‘s leading manufacturer of
international quality cosmetics and toiletries with 18 brands and more than 49 products
covering a wide range of categories like health & hygiene, skin care, hair care, oral care, baby
care, fabric care, utensil care and male grooming.

2.1.1 Company Strategy:

For years, our company‘s strategy is to capture the maximum share through customer
satisfaction by quality product. In word, we put their strategies in this way:

i. In STL, they value top quality health care products at the least cost reaching the lowest
rungs of the economic class of people in the country.

ii. They are obliged to their shareholders and strive for protection of their capital as well as
ensure highest return and growth of their assets.

iii. They try hard for the best compensation to all the employees who constitute the back-
bone of the management and operational strength of the company

iv. STL endeavor for best co-operation of the creditors & debtors the banks & financial
institutions, the suppliers of raw material, the providers of utilities-power, gas & water
etc. and the customers

v. STL fulfill their responsibility to the Government through payment of entire range of due
taxes, duties, and claim to various public agencies.

vi. They strive, as responsible citizen, for a social order devoid of malpractices, anti-
environmental behaviors, unethical and corruptive dealings.

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 2.1.2 Company Structure:

Square gives the highest importance to the principles of Corporate Governance and its
implementation within the organization. In STL they follow some rules like:

i. All new recruits at Square undergo a mandatory training on Company‘s Code of Conduct.

ii. From the very inception, STL like the other Strategic Business Units (SBU) of the Group
maintains and upholds HR policies that are consistent with the Labor Laws of the
country.

iii. The Company follows laws and encourages a work environment that welcomes diversity
and fair treatment in the recruiting process and the workplace.

iv. STL encourages diversity and equal employment opportunity in the recruiting process
and the workplace.

v. The Company pursues policies that proactively address all forms of discriminations in
terms of minority, gender and cultural issues.

2.1.3 Company Rivalry:

STL is the sister concern of Square Group, producing SENORA are well organized and
managed which is the result of experience of the top management. The domestic rivalry is
also healthy because lots of different brands are competing in the same market. For example,
Freedom, Monalisa, Stayfree, Whisper, and many more are competing in the same market.

2.2 Demand Conditions:

Refer to the nature and size of the customers of the products in the home market. The strong
demand conditions in the home country persuade the domestic organizations to constantly
improving the product. If the demand of a product is more in the domestic market then it can
influence the demand of customers in the foreign market.

Bangladesh is a developing country and has a huge population of more than 163 million,
which indicates a great demand for the sanitary products. Demand arises from population of
different age, groups and income levels and from the locations concerning both rural and

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urban areas of this country. Diversified customers and different kinds of tracts within the
country demands more durable and quality product, which creates pressure to innovate and
develop further.

The demand of local market has helped us to build a strong customer base and gave us the
strength to go for international market. Therefore, we can say that the demand condition is
very much promising for Senora brand products. The huge demand of our market leaded by
STL to produce large volume of product. The types of sanitary napkins they are producing
now are given below:

i. Senora Regular
ii. Senora Confidence
iii. Senora Confidence Ultra
iv. Senora Confidence Super Long
v. Femina Antibacterial
By maintaining the quality, STL set the price conveniently for the mass population of
Bangladesh. They never compromise about their products quality. Thus, they acquire the trust
of local customers. STL attempt to understand the different needs of the customers and
convert the needs into products, which satisfies them in the form of quality products with
high level of service and affordable price range.

2.3 Factor Conditions:

Factors conditions include the inputs necessary for producing goods and services. The basic
factors to carry out a business include natural resources and labor; whereas, advanced factors
include infrastructure, such as communication systems. The skilled personnel form the part of
specialized factors. If a country were endowing with all these factors of production, it would
be successful in the global market.

Many of the natural resources required during the production process like fuel, gas, water,
steel, etc. are available in our country. Capital resources also can acquire from various
sources. For example, by issuing equity shares, debt instruments, etc. Our country has a
massive skilled labor force trained and certified by the various polytechnic institutes. And
most of the required infrastructures relating roads and highways, resource supply,
communication, etc. are there for the production and distribution system to run smoothly. So,

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our nation has favorable Factor conditions for toiletries industry and thus STL‘s SENORA
Sanitary Napkin.

2.4 Related and Supporting Industries:

This refers to the presence or absence of supplier and related industries, which are
internationally competitive. Presence of these industries promotes specialization through
innovation and flow of knowledge and creates competitive advantage. All of the materials for
making senora are internally produced within different sections of the two fully automated
plants at Rupshi and Pabna which owned by Square group. With their state-of-the-art
production facilities, most advanced equipment, and high quality raw materials they ensure
the absolute best for their customers. They import quality raw materials from various foreign
suppliers for all toiletries products and especially for senora. Square Toiletries Ltd. has a
strong R&D department, which is committed towards developing new products and
improving existing products. The international standard products of Square Toiletries Ltd.
meet the needs of Bangladeshi people as well as the people abroad. These create a very
strong foundation and competitive advantage for senora through cost reduction, quality and
benefits of innovation.

2.5 Chance:

Chance refers to the situations providing opportunities or events such as major improvements
for one nation‘s firms to replace another‘s. In Bangladesh, people are becoming more
conscious then before and started using sanitary napkins instead of using cloths to maintain
hygiene. In earlier days, old menstrual cloths are buried in the ground for fear that evil spirits
will be attracted to the blood. During their periods, some women do not leave their homes for
seven days each month. While many of these practices are not harmful, the widespread
beliefs that menstrual blood is polluting and dangerous, and that the menstruating body is
weak and shameful, lead to behaviors that expose women to health risks. When senora
launched the urban upper class, women were the only consumers of this product, which was
all imported then. Also, sanitary napkins were bit expensive and the usage was limited too as
the middle class women were not used to the item at that time. Most Bangladeshi families
cannot afford to buy sanitary pads and for that they use rags torn from old saris and other
clothing. Along with that, there was hardly any awareness among them of diseases and
difficulties that can arise out of traditional use of cloths or other things during menstruation.

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Low standards of menstrual hygiene lead to wide-spread vaginal and urinary infections. The
sales of local napkin have grown up in recent years, as the product quality is quite good and
price is reasonable compared to that of imported ones from India, China and Thailand. Here
Senora can play a good role by their product called Femina (most affordable antibacterial
sanitary napkin) for those who cannot afford expensive napkins and they want to maintain
proper hygiene to avoid any infections. Also, in Cox's Bazar the world's largest refugee camp,
thousands of Rohingya women and girls are living there and by affiliation with the
INGO/NGO‘s working simultaneously with the camps can be a good source for STL by
promoting Senora and its products to the donors and also can educate them the benefits of
using sanitary napkins.

2.6 Government:

Government by its choice and policies can play a powerful role in encouraging or
discouraging the development of industries both at home and abroad. The government has
come up with a host of incentives including low-interest loans under the new export policy to
facilitate receipts of 6000 crore by fiscal 2020-21 and governments construct invest in many
sectors to support domestic industries. Bangladesh government encourages toiletry industries
to export more in other countries and this is one of the priority sectors for the government.
This will create more business opportunities for this industry. At the same time, government
increased the supplementary duty on toiletries and similar items from 10 percent to 15
percent to discourage import from other countries. Square toiletries has a good chance to
expand their business outside the country as governments policies are flexible for this sector
and also can create more employment opportunities for both inside and out the country.

3 Entry Mode

3.1 The Country of Future Prospect: The Kingdom of Bhutan:

The Kingdom of Bhutan, which can also be referred as Bhutan - is one of the smallest
(38,394 sq km), but one of the fastest growing economies in the world. Its annual average
economic growth of 7.6 percent between 2007 and 2017 far exceeds the average global
growth rate of 3.2 percent, which made it a lucrative FDI destination around the globe. Even
though, previous year growth of Bhutan has reduced to 5.8%; this did not reduce the
destination lucrativeness at all. Seeing the utmost potentiality of Bhutanese market-

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Bangladesh has been exporting significant range of goods i.e. agricultural products, consumer
goods, merchandising products, woven garment, plastic articles, chemical products,
healthcare goods etc. In the fiscal year 2016-17, Bangladesh single handedly exported
approximately more than 260 crore worth of goods to this particular country and has
continuing doing so.

3.2 Scope:

Even though Bhutan seems to be moving forward with all the progression, certain factors are
playing very crucial part that is holding countries overall progress in a regressive position.
Overall, economic growth of Bhutan does show huge improvement in terms of global
purchasing power perspective but scenario within the nations tells different story – a scenario
not so uncommon compare to Bangladesh. Similar to Bangladesh, Bhutan is also moving
forward with Education, Healthcare services, Workforce equality etc. that are holding as
remarkable examples in front of the global reformism. However, till this day both country
holds one regressive thing similar – Menstruation Hygiene Awareness. Even though
Bangladesh came forward more advanced in terms of Menstruation Hygiene Product
Availability, Affordability, Awareness Raising Initiatives to Implementing Menstrual Health
Management Programs (National Legislative Level) – Bhutan is still falling a lot behind in
terms of ―Breaking the Silence‖:

1. The taboo around menstrual health is still as prevalent in the society as it was for many
years despite the issue concerning half of the population. International NGO‘s and Local
NGO‘s6 are working relentlessly to educate and aware about - proper usage of sanitary
napkins or clean clothes, how the cloth in use, how to wash the cloth regularly and drying
it in the sunlight, hours of wearibility for not to form infections or bacteria, cleanliness
during menstruation, eating healthy and nutritious food during menstruation as it is
directly linked to sexuality and reproduction etc. These taboos emerge from an absence of
proper awareness and management of menstrual hygiene, causing more complications to
the already sensitive and painful occurrence.7

6
Network, K. (2019). 44.7% of Bhutanese girls skip school during menstruation. Retrieved from
https://newsinfo.inquirer.net/995816/44-7-of-bhutanese-girls-skip-school-during-menstruation
7
Bhutanese Girls Believe Menstruation Is A 'Disease': Here Are Some Period Myths That Need To End. (2019).
Retrieved from https://www.dailybhutan.com/article/bhutanese-girls-believe-menstruation-is-a-disease-here-are-
some-period-myths-that-need-to-end

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2. The country itself does not produce any local Sanitary Wearable Products. Rather they
import it from nations such as India, Nepal, Thailand etc. Importing the products does not
solve the problem all together in terms of Availability as Price plays a crucial role in
terms of purchasing and consuming. As for that – many women and young girls are using
old rags, old clothes or even mud during Menstruation period. Wearing such elements for
longer period and unable to change in a timely manner is making them suffer with
bacterial diseases.
3. Being the ―Hush – Hush‖ theme – women and girls feel uncomfortable to buy the
products from the local Medicine Shops.8 They would highly prefer other alternatives
such as receiving monthly pack from Hostel/Educational Premise, Monthly Community
Meetings etc. Even producing ―local handmade alternatives‖ via few NGO‘s are not
adequately accepted by the locals due to product usage difficulty, maintenance trouble
(not leakage proof) and limited number of products per head. Hence, such premises and
program holders are looking for cheaper, healthier and widely available sanitary wear
product that they can buy on behalf of the women and girls for distribution purpose.

3.3 Product:

Keeping the entire above-mentioned scenario as our backdrop - the product that we have
chosen from SQUARE Toiletries Ltd.‘s wide range of SENORA Sanitary Pad is:

3.3.1 Product Name:

Femina Antibacterial Sanitary Napkins (8 Pcs)

Figure: Femina Antibacterial Sanitary Napkins

8
Bhutanese Girls Believe Menstruation Is A 'Disease': Here Are Some Period Myths That Need To End. (2019).
Retrieved from https://www.dailybhutan.com/article/bhutanese-girls-believe-menstruation-is-a-disease-here-are-
some-period-myths-that-need-to-end

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3.3.2 Product Feature:

- 100% Antibacterial Protection (For Long Usage)

- 3 times more absorbent
- Zero Leakage

3.3.3 Product Price:

Bangladesh (BDT) Bhutan (BTN)

BDT 40 BTN: 34

3.3.4 Purpose of Product Selection:

This product made by SQUARE Toiletries Ltd. was for the driven women workforce who
falls under lower to low-income generated segment. STL observed, due to the monthly cycle,
many of the female workers tend to stay back home – missing approximately 6 working days
per month. Also keeping their extensive working hour nature and hygiene limitations in
mind, the product was specifically cater to keep bacterial infection at bay. At the same time,
STL made sure to keep the product price within their range of income so that they can
actively participate for self-hygiene. Even though market holds wide range of locally
produced Sanitary wears – Femina Antibacterial Sanitary Napkin stands out from others in
comparison to price and product uniqueness.

The imported Sanitary wears from countries like India, Nepal, Thailand etc. at Bhutan –
majority are above the price range compare to our targeted Product. Being the major
competitor - Whisper‘s 8 pc pads cost around 36 BTN. Seems very less fraction amount of
money but those who comes from Economically Challenged Strata of society and the
percentage is high compare to the ones who are able to use high-end sanitary napkins – this
particular fraction amount of money actually matters a lot. Even both being ―basic
requirement met‖ based product – Femina Antibacterial Sanitary Napkin stands out amongst
other products due to its long hour hygiene protection, which is very crucial role to play
during heavy flow (triple absorption rate and leakage almost nil compare to ―cloth based

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reusable sanitary wears‖) and compare to the pricing factor. Overall – we believe our product
can stand out as the product that target customers of Bhutan exactly are looking for.9

3.4 Entry Strategy:

When any organization makes the decision to increase its level of international activity,
several alternative strategies can be adopted:

1. Importing and Exporting: Doing Export/Import.

2. Licensing: A company may prefer to arrange for a foreign company to manufacture or

market its products under a licensing agreement. Singer, KFC.

3. Strategic Alliances: In a strategic alliance, two or more firms jointly cooperate for mutual
gain. A joint venture is a special type of strategic alliance in which the partners actually share
ownership of a new company.

4. Foreign Direct Investment: Another level of commitment to internationalization is direct

investment. Samsung is doing FDI in Bangladesh.

As per the Trade Agreement between Bangladesh and Bhutan – both countries are enjoying
several facilities in terms of Export and Import. This also shows the lucrativeness and ease of
Exporting product of ours to Bhutan‘s Market. Also very recently, several MoU
(Memoranda of Understanding) has signed between two countries, which also reflect
several factors for increasing trade relation between both countries. Here are few key points
to note:

1. As per the Trade Agreement‘s Article I, II, III: 10

- Both Bhutan and Bangladesh shall explore and undertake all measures necessary to
promote, facilitate, expand and diversify trade between the two countries.

9
hygiene, F. (2019). Free sanitary pads to improve hygiene - The Bhutanese. Retrieved from
https://thebhutanese.bt/free-sanitary-pads-to-improve-hygiene/
10
Protocol To The Agreement On Trade Between The Royal Government Of Bhutan And The Government Of
The Peoples Republic Of Bangladesh (2015).

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 - Both Bhutan and Bangladesh shall accord each other the most favored nation treatment
in respect of issue of licenses, customs formalities, customs duties and other taxes,
storage and handling charges, fees and charges of any kind levied on export and import
of goods to be exchanged between the two countries.
- With a view to promoting and expanding trade further, the two countries may accord
tariff concessions to each other through mutual consultations.

The Agreement on the clarification of the taxing rights on the income flows between the
two countries was signed via MoU very recently. This agreement aims to minimize
Double Taxation on the income generated through cross border business activities. It is
expected to increase cross border investments and the trade.11

2. As per the Trade Agreement‘s Article VIII and IX:12

- The exchange of goods between the two countries shall take place by means of
transportation and through the routes as may be mutually agreed upon.
- For facilitating the movement of goods, both Bhutan and Bangladesh agree to provide
necessary number and means of transportation, warehousing and handling facilities at
point or points of entry, exit or breakpoints, on such terms as may be mutually agreed
upon, for the storage and speedy movement of trade cargo.

Pursuant to Article - VIII of the Trade Agreement, which provide for conducting trade by
agreed means of transportation and agreed routes:

i. it is agreed that Bhutan shall designate the following points of entry and exit in Bhutan for
conducting trade between Bhutan and Bangladesh

(a) Samdrupjongkhar

(b) Gaylegphug

(c) Sarbhang

11
Bhutan-Bangladesh signs 6 MoUs - BBS. (2019). Retrieved from http://www.bbs.bt/news/?p=70513
12
Protocol To The Agreement On Trade Between The Royal Government Of Bhutan And The Government Of
The Peoples Republic Of Bangladesh (2015).

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(d) Phuntsholing

(e) Samchi

(f) Paro Airport

ii. It is agreed that Bangladesh shall designate the following points of entry and exit in
Bangladesh for conducting trade between Bhutan and Bangladesh:

(a) Moghalhat

(b) Noonkhawa

(c) Nakugaon

(d) Haluaghat

(e) Banglabandha

(f) Burimari

(g) Dhaka Airport

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(h) Chittagong Airport

iii. Additional points of entry and exit – including seaports and river ports, may be added or
discontinued through mutual agreement in due course of time.

iv. "Transportation" shall mean all agreed means of transport.

In addition, we also cannot forget to keep in mind The South Asia Free Trade Agreement
(SAFTA) possibility in mind to get a hold onto extensive international market territory with
wider range of products in near future. Both countries being the member of South Asian
Association for Regional Cooperation (SAARC) holds future potentiality of utilizing SAFTA
agreement, however due to some existing disputes between member countries i.e. India and
Pakistan and some pending approval for certain projects i.e. Bangladesh-Bhutan-India-Nepal
currently this agreement seems distant plan to catch up. 13

3.4.1 Export Strategy:

Exporting is the process of selling of goods and services produced in one country to other
countries. Exporting could be indirect and direct.

In indirect exporting, a manufacturer turns international sales over to a third party, while in
direct exporting, a manufacturer handles the export process itself. Manufacturers that engage
in indirect exporting hire export management companies, distributors and commissioned
agents or brokers to work as intermediaries with the end-users, retailers and distributors in the
foreign markets. Direct exporting requires the manufacturers to deal with these foreign
entities themselves.

To capture and brand our Feminine Hygiene Product, our initial mode of entry will be Direct
Exporting but using small volume initially. Using intermediaries i.e. Distributors – our
product will enter the Bhutanese market. As local Distributors already knows the market
condition, has necessary linkage and connections – utilizing them initially will help us
penetrate the market effectively. Few things to keep in mind during Distributor linkage:

13
South Asia :: Bhutan — The World Factbook - Central Intelligence Agency. (2019). Retrieved from
https://www.cia.gov/library/publications/the-world-factbook/geos/bt.html

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 1. Distributors are going to be our ―channel partner‖ who is, in effect, our teammate in
making sure the needs and expectations of the ―true‖ customer are meeting. Key is to
build distributors‘ commitment to our company. We can do that by taking steps to
make our products more important to the financial success of the distributor.
2. Specific goals and target should be given to Distributors to make a win/win scenario
out of it.
3. Incentives i.e. Sales Commissions should be designed in such a way, which helps both
parties in long run. Well-crafted incentive program can be instrumental in helping a
manufacturer boost sales, expand market share, and increase advantage with
distributors. They have to be supported with customer-oriented marketing efforts,
training programs, and other support programs (if required)
4. Provide distributors support services regarding local advertising, local sales
presentations, customs clearance formalities, legal requirements etc. This process will
keep a track of control over the market and in future, it will provide valuable
information‘s i.e. feedback from target market that will help us developing better
product quality and serve wider range products near future.

At the same time, along with the small volume products – some sample items will also be
provided to the distributors for making certain personnels familiar with the upcoming brand
of ours i.e. Local INGO/NGO representatives, Community Meeting Coordinator,
Hostel/School healthcare product purchaser, Local Purchaser of Hospital Product Supply etc.
We will also contact with active platforms who are working in remote areas for Menstruation
Hygiene Practices in Bhutan. Via our selected distributors – sample products will be sent to
those regions. Being our representatives, they will not only deliver the product but as per the
training, they will also make sure right information has passed and market is aware about
product features and unique attributes. We will gather customer perception and the demand
conditions through our representative in a regular manner. After a successful market research,
further decisions about our future business step will be taken- whether to expand the current
mode (i.e. Distributors) or pursue some other modes i.e. Strategic Alliances, Acquisition etc.

4 Environmental Challenges

There are three parts of environmental challenges:

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  Economic Environment
 The Political/Legal Environment
 The Cultural Environment

4.1 The Economic Environment:

Bhutan‘s economic environment consists of three parts:

4.1.1 The Economic System:

Bhutan‘s small economy is mainly based upon hydropower, agriculture and forestry, which
provide for the livelihood of at least 60% of its population. Bhutan‘s GDP growth rate for the
year 2018 was 5.78% and it is expected to grow to 7.21% by 2022. It has a GDP per capita of
3110.23 USD, which is higher than that of Bangladesh‘s 1516.51 USD. Bhutan has very
strong trade and monetary links with India and depends on India for financial assistance as
well as migrant laborers for development projects. In December of 2014, Bhutan signed a
pact with Bangladesh for duty-free trade between the two countries.

Bhutan mainly imports oil and fuels, base metals, machinery, electrical appliances and
vehicles. Their main import partner is India and due to large amount of imports of fuel and
machinery to build hydropower plants, Bhutan currently has a large trade deficit.

The main export of Bhutan is electricity and its main export partner is again India. Around
50% of all of Bhutan‘s exports consist mostly of hydropower electricity. Other export goods
include metals, chemical products, food, wood and rubber. In July of 2017 Bhutan signed a
memorandum of understanding with India and Bangladesh to jointly construct a new
hydropower plant to export electricity to Bangladesh.

4.1.2 Natural Resources:

The population of Bhutan is around 807,610 (2017), 44% of this population is employed in
various industrial and service sectors, including the agriculture sector, which accounts for
15.18% of its GDP. It has one of the richest biodiversity in the world with 72.7% of its land
area being under forest cover. The most abundant of natural resources in Bhutan are timber,
water resources and non-wood forest products. Geologists predict that there are rich deposits
of valuable minerals in Bhutan, though the mining of these minerals are yet to gain

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momentum. Some of the mining products, which are exported by Bhutan, include Calcium
Carbide, limestone, dolomite, gypsum, coal, marble and quartzite.

4.1.3 Infrastructure:

Bhutan is a landlocked country between China and India and is located from 100 to 7550
meters above the sea level. It obtains between 500 to 5000 millimeters of rain per year, a
geographic feature that grants it the ability to harness abundant hydropower to generate
electricity. Indian investment, in the form of a mixture of grants and loans facilitated the
development of hydroelectricity, which Bhutan can now export to other countries and
advance the electrification of its rural areas. By the year 2020, Bhutan plans to develop new
hydropower projects that would result in a combined power capacity of 10 000 MW, seven
times more than their current capacity.

Due to its landlocked geography, Bhutan suffers from a lack of quality port infrastructure. It
relies on maritime trade through Kolkata port in India and Chittagong and Mongla ports in
Bangladesh. The political state of these countries influences the export and import conditions
of Bhutan.

Bhutan‘s mountainous terrain makes it difficult and expensive to build a proper road network.
Despite the difficulties, the government of Bhutan is determined to build a high standard road
system so that even the most isolated regions of Bhutan can easily be accessible. ‗The Road
and Surface Transport Authority‘ was established in 1997 to enforce transport regulations and
to improve the quality and efficiency of the roads. There are no railways in Bhutan and the
national airline, Druk Air has only four aircrafts in service.

Bhutan had been cut off from the rest of the world for centuries. The state-run Bhutan
Broadcasting Service Corporation was established in 1999 and the internet also was
introduced to the country in that same year.

4.1.4 Observation:

Bhutan has a small but a rapidly growing economy. Their good economic relation with
Bangladesh makes it a good destination for the injection of our product. The competitive
prices, which our product will provide by satisfying bare necessities to lead a healthy and
hygienic daily life - makes Bhutan an attractive new market for our target product.

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4.2 Political or Legal Environment:
The political or legal environment consists of 4 elements. These elements are discussed
below:

4.2.1 Government Stability:

Bhutan‘s political environment has been stable and economic conditions have improved in
recent years. Since Bhutan shifted to a democratic constitutional monarchy in 2008, the
country has developed a solid development management system founded on the principle of
Gross National Happiness (GNH). The third parliamentary election of Bhutan was held in
2018. The Gross National Happiness Commission (GNHC) is leading the preparation of the
12th Five-Year Plan (FYP) for 2018-2023. Bhutan maintains strong economic and strategic
relationships with India, particularly as the major trading partner, as a source of foreign aid
and as a financier and buyer of hydropower. Bhutan is vulnerable to natural disasters and
climate-related risks.

Bhutan has been successful in reducing poverty. Extreme poverty has been almost eradicated,
with the rate falling to 2 percent in 2012 using the international poverty line of $1.90 per
person a day.

4.2.2 Incentive for International Trade:

Trade can act as a powerful engine for economic growth and development, especially in Asia
and the Pacific region. Developing countries have long strived for a development strategy
that will sustain high economic growth, create employment opportunities, and eliminate
poverty. Developing countries are using trade policy as a tool to attain these development
objectives. It is possible to draw two extreme assessments on Bhutanese trade policy. First, it
can be said that the country has an open trade policy; representing 83% of its GDP (2016). Its
overall effective tariff rate is very low; Bhutan freely trades with India, the dominant trading
partner representing almost 80% of Bhutan‘s total imports. Second, it can also be said that
Bhutan heavily depends on a single country in trade; this makes Bhutan pay extra social costs
to Indian exporters. The challenge is how to diversify the country‘s trade partners by
reducing import tariffs and non-tariff barriers. Bhutan has made modest efforts to promote
trade liberalization. It enjoys observer status in the WTO and has engaged in negotiations for
full membership. The country is a member of several regional organizations

22 | P a g e
(SAPTA/SAARC). Bhutan has been trying to develop its exports of products from organic
farming; in 2013, the country announced that it wanted to become the first country in the
world to use only ecological agricultural methods.

Since 2008, Bhutan has registered a trade deficit; a trend expected to continue in the years to
come. Bhutan has the second largest trade deficit among the South-Asian countries, after
Nepal. Imports increased drastically while exports remained generally stable, which
consequently widened the trade deficit over 2015-2016. In 2016, the deficit was around USD
660 million. Without electricity that the country produces and exports, the trade deficit would
be even higher. Additionally, two-thirds of Bhutan‘s foreign trade is with India.

The country exports essentially electricity (whose production should increase), railway
products, cardamom, gypsum, timber, craft goods, cement, fruit and precious stones and
spices, which go mostly to India. Other partners are Bangladesh, Italy Japan and Nepal.
Bhutan imports raw materials, food products and finished products (mainly from the transport
industry) essentially from India. Other suppliers are Thailand, South Korea, China, Japan,
Austria and Singapore.

4.2.3 Control of International Trade:

Bhutan maintains diplomatic relations with the nations that are seen as non-intruding. Due to
past border territory issue, China is the only nation to have an embargo with Bhutan.

4.2.4 Economic Communities:

European Union-Bhutan cooperation started with a development project in 1982, and the
Royal Government of Bhutan and the EU established diplomatic relations in 1985. Contacts
have intensified since 2004 when the EU and Bhutan started to hold biennial consultations
covering all aspects of bilateral relations and regional and international developments, as well
as on issues of mutual interest. The World Bank Group's investment portfolio in Bhutan is
focused on rural access, rural development, urban development, wildlife conservation, and
private sector development. There are five ongoing specific investment operations for a net
commitment of $82 million of IDA resources. In addition, there is one Global Environment
Facility grant-financed project, one Global Facility for Disaster Recovery and Reduction-
financed project, and three Institutional Development Fund-financed activities.

23 | P a g e
4.2.5 Observation:
Bhutan has a very stable political and legal environment. Bangladesh is the second largest
trading partner and export market for Bhutan. On this note, we can say that our product will
get a great advantage in terms of entering and doing business in Bhutan.

4.3 Cultural Environment:

Bhutan‘s cultural endearment is consist of two individual elements, firstly values, symbol,
beliefs and language and secondly individual behavior across culture. We have discussed
about cultural environment different element which needs to be consider before entering in
the market briefly below;

4.3.1 Values, Beliefs, Symbol and Language:

Bhutan inherits one of the most colorful and enriched culture named Bhutanese. Bhutan is a
small county with great values and believes. It can easily be understand that, they are very
health conscious and can take strong decision based on their beliefs; as they are the first
country in the world how have band all tobacco consummations and trading under it is
Tobacco Act 2010. Bhutan one quarter is Hinduism and three quarter is Buddhism, which
makes this county a Buddhist county. Buddhism has a dip impact on the culture of Bhutan,
which we can find in symbol representing this county. If we look at national emblem of
Bhutan we will see, a circle with two double diamond thunderbolts placed above a lotus,
topped by a jewel, and framed by two dragons. At the same time, national flag of Bhutan
have thunder dragon on it. In Bhutan 19 different languages are spoken excluding English.
Dzongkha is Bhutan‘s national language. English and Dzongkha are use as official and
education language all over the country.

4.3.2 Individual Behavior across Culture:

Bhutanese people are very health conscious, believes green environment, where rules are
maintain strict and stringent. Even being health conscious, this country still does not take
Menstrual Hygiene practice seriously. On the other hand, it is a man-dominating county.
Here woman have more unemployment than man does. Women mostly contribute in family-
based agriculture and housework.

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4.3.3 Overall Observation:

We have seen Bhutanese people are health conscious but social structure still puts a huge
binding over Female Health practices. Scenario is slowly changing but things will take some
time to fall into places. As they are health conscious, the reflection of moving forward with
the Sanitary Napkin consumption is importance is coming slowly and gradually. Therefore,
sanitary napkin or we may say Femina Antibacterial Sanitary Napkin (Sub product of
Senora) will easily be listed in the consumption for Bhutan. However, we have to ensure to
make them understand that disposal of our product will not do any harm to the environment
of Bhutan.

We also need to consider about the symbol of Bhutan. Most of the symbols come from their
religion practice and belief on Buddhism, so it will be wiser for us not to use any of such
symbols during any of the promotional phases of our product without having local expert
opinion. It can create a major barrier for propel to except our product, or even create huge
conflict. In Bhutan, two languages are used officially and for educational purpose - English
and Dzongkha. So during entering in the market, we may use these two languages to
communicate verbally and in written from.

Femina is a product for women, and as we can see in Bhutan women income mainly comes
from their family or Male Counterpart, as they are fewer jobs oriented. Therefore, our
product will be presented more for promoting health of woman within their budget who are
willing to invest in ―Healthy Generation of Bhutan.‖

5 Conclusion

At the end, we will like to say, Femina has a great potential in Bhutan. There are some
positive and some barrier, which we need to overcome during entering in the Bhutanese
market. We all have done Porter‘s Diamond Analysis, which has proven high potential of our
home nation, we have also decided on exporting our product in Bhutan after considering all
positive and negative side. We have also find this market have very less competitors compare
to our product uniqueness, which give us a huge entry level advantage. Moreover, most
impotently we have evaluated all spaces of Economic Environment, Political and Legal
Environment, and Cultural Environment. These have given us full pitcher of what element
will affect possible steps and us we can take to be successful. We also believe with reputation

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of Square Toiletries Ltd. and our product evolution on Femina Antibacterial Sanitary
Napkins will have a success in Bhutan.

6 References

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 BTI 2018 | Bhutan Country Report. (n.d.). Retrieved from https://www.bti-
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