PROJECT REPORT

ON
COMPANY ANALYSIS AND IMPROVEMENT GUIDELINE OF
UNITED POWER GENERATION & DISTRIBUTION COMPANY
LIMITED

Department of Human Resource Management

University of Chittagong
 PROJECT REPORT
ON
COMPANY ANALYSIS AND IMPROVEMENT GUIDELINE OF
UNITED POWER GENERATION & DISTRIBUTION COMPANY
LIMITED

SUBMITTED TO:

Abdullah Al Mamun
Assistant Professor
Department of Human Resource Management
University of Chittagong

SUBMITTED BY:

Tasmin Akter
ID-15305123
MBA
Session: 2018-19
Department of Human Resource Management
University of Chittagong

Date of Submission: March 7, 2022

 LETTER OF SUBMISSION

Date: March 7, 2022

Abdullah Al Mamun
Assistant Professor
Department of Human Resource Management
University of Chittagong

Subject: Submission of MBA Project Report

Dear Sir,
With great pleasure, I am here submitting my project report, which is a part of the MBA
Program curriculum. It is a great achievement to work under your active supervision.
This report is based on, “Company Analysis and Improvement Guideline of United
Power Generation & Distribution Company Limited”. I sincerely believe that this
report will help me to enrich my adaptability quality in the long run when I will involve
myself in practical field. I am grateful for your valuable advices and great cooperation. I
tried my best to go deep into the matters and make full use of my capabilities in making
the project report meaningful, informative and precise.

Thank you for your supervision and now I will be glad if you accept my report and give
me the opportunity to conclude my post-graduation by finishing the project report.

Sincerely yours,

----------------------------
Tasmin Akter
ID- 15305123
MBA
Session: 2018-19
Department of Human Resources Management
University of Chittagong
 ACKNOWLEDGEMENT

The project opportunity I had with “United Power Generation & Distribution
Company Limited” was a great chance for learning and professional development.
Therefore, I consider myself as a very lucky individual as I was provided with an
opportunity to be a part of it.

First of all, I wish to express my gratitude to the almighty ALLAH for giving me the
strength to perform my responsibilities to complete the project report within the
stipulated time.

I would like to take the opportunity to thank honorable course supervisor Abduallah Al
Mamun, Assistant Professor, Department of Human Resource Management, University
of Chittagong for his whole-hearted supervision and providing me detail feedback and
advice on this report. He always gave me his valuable suggestions in making this report. I
also respectful to honorable Shanewaz Mahmood Sohel, Associate Professor and
Chairman, Department of Human Resource Management, University of Chittagong for
inspiring me and gives me guidelines, help in assisting my report.

I perceive this opportunity as a big milestone in my career development. I will strive to

use gained skills and knowledge in the best possible way and I will continue to work on
their improvement in order to achieve desire career objectives.
 SUPERVISOR’S DECLARATION

This is to certify that the project report on “Company Analysis and Improvement
Guideline of United Power Generation & Distribution Company Limited” has been
submitted for the award of MBA with the major in Human Resource Management; from
University of Chittagong carried out by Tasmin Akter, bearing ID: 15305123, under my
guidance and supervision.

I think that the project report will be effective for her to enrich a good career in future. I
wish her successful career and prosper in life.

Supervisor

--------------------------------------------------

Abdullah Al Mamun
Assistant Professor
Department of Human Resource Management
University of Chittagong
 EXECUTIVE SUMMARY

As part of my MBA program, I have completed my project on United Power

Generation & Distribution Company Limited. During my project period I have gained
valuable knowledge. So based on my learning and experience I have completed my
project report on “Company Analysis and Improvement Guideline of United Power
Generation & Distribution Company Limited”.

In the first chapter, introduction described the background of the study, the main
objectives of the report and the methodology of the report as well as the sources from
where the data are collected.

The second chapter represents the overall company profile. In this profile contains
overview of the organization, mission and vision of the organization and the products of
the organization.

Third chapter describes industry analysis which includes the overview of Bangladesh
power generation sector and porter’s five forces analysis.

Fourth chapter discusses the economic analysis of Bangladesh which includes analysis of
various indicators.

Fifth chapter includes external environment analysis using pestle.

In chapter sixth, I have discussed the analysis of the company or internal environment
analysis.

In the seventh chapter, I tried to find the relevant problems of the company.

Finally, in the chapter eight, I have given some recommendation based on the problems.

Finally, the references that I used during the preparation of this report are given in APA
standard format.
 TABLE OF CONTENT

Chapter Chapter Title Page

No No

Introduction 1

1 1.1 Introduction of the Company 2

1.2 Origin of the report 3
1.3 Objectives of the report 3
1.4 Research Methodology 3
1.5 Limitations of the study 4

Company Overview 5

2.1 Company Profile 6

2.2 Corporate Vision 12
2 2.3 Corporate Mission 13
2.4 Objectives of the Company 13
2.5 Core Values 13
2.6 Future Prospect 14
2.7 Corporate Social Responsibility 14
2.8 Company’s Facilities 15

Industry Analysis 16

3 3.1 Overview of the Industry 17

3.2 Major Players in the Market 18
3.3 Porter’s Five –Forces Model in Industry Competition 20

Economic Analysis of Bangladesh 23

4 4.1 Bangladesh Economic Growth 24

4.2 Indicators of Economic Analysis 24
4.3 Global Economy 28
4.4 Microeconomic Situation: Bangladesh 29
5 External Environmental Analysis 31

5.1 PESTLE Analysis 32

Analysis of the Company 41

6.1 VIRO Analysis 42

6.2 Value Chain 43
6
6.3 Ratio Analysis of the Company 46
6.4 Product Life Cycle 49
6.5 BCG Matrix 50
6.6 Balance Scorecard 52

Problem Identification 55
7
7.1 Specific Problems of the Company 56
7.2 SWOT Analysis of the Company 58

Recommendation and Conclusion 60

8
8.1 Recommendation 61
8.2 Conclusion 63

References 64
1
 CHAPTER- 1
INTRODUCTION

1.1 Introduction of the company:

United Power Generation & Distribution Co. Ltd., formerly known as Malancha
Holdings Ltd., was born out of the necessity for uninterrupted, quality power supply to
the industries housed within the Export Processing Zones (EPZs) of Bangladesh.
UPGDCL is a first of its kind company that is not only involved in power generation but
also power distribution, steam generation and supply right up to their customer’s
doorstep.

UPGDCL’S key features include:

• Steam generation facility from engine exhaust, without any combusting any additional,
scarce fossil fuel.
• 50 km long, 11 kV & 33 kV private distribution network.
• 11 km long, 150 psi, 12” dia dedicated gas pipeline for gas supply to the power plant.
In effect, UPGDCL is the only true commercially independent power generation and
distribution Company as well as a multi-utility service provider in true sense of the terms.

2
1.2 Origin of the Report;

This project report is generated under the supervision of Abduallah Al Mamun, Assistant
Professor, Department of Human Resource Management, University of Chittagong. This
report is required to fulfill award of MBA Degree. The topic of the report is “Company
Analysis and Improvement Guideline of United Power Generation & Distribution
Company Limited”.
I have tried my level best to make the report an excellent one by doing correct justice to
the topic.

1.3 Objectives of the Report:

Objectives mean the purpose of the report. The objectives of the project report are:

➢ To learn about the industry.

➢ To learn about the company.
➢ To recognize the external environment.
➢ To recognize the internal environment.
➢ To find the problems and give recommendations.

1.4 Research Methodology:

The study is conducted in a systematic procedure starting from selection of the topic to
final report preparation.

While conducting the report, sources were explored for primary information and data.
But hardly any updated data could be found. In the absence of updated information or
data dependence on secondary has been inevitable. However, wherever possibly primary
data has been used. Data were also collected by interviewing the responsible officers.
Here includes some sources of data collection like: Internet, Factory Discussion,
Managing Director briefing, Class lecture etc.

3
Sources of Data:

❖ Primary Sources:

✓ Practical deskwork
✓ Marketing activities
✓ Face to face conversation with the project supervisor
✓ Direct observations
✓ Face to face conversation with employees.

❖ Secondary Sources:

✓ Organizational profile ( Websites, documents)

✓ Annual report ( 2019-20)
✓ Annual report ( 2020-21)
✓ Internets
✓ Articles
✓ Books

1.5 Limitations of the Study:

Limitation refers to the obstacles I have to face for completing this report and what I
could not cover for this limitation.

✓ Confidentiality is the main problem; as a result some confidential facts were not
sufficiently disclosed by the respective personnel.
✓ Lack of available up-to-date information.
✓ As United Group is a large company, it is very difficult to understand each and
every aspect of its operation within a very short period of time.
✓ Lack of previous practical experience in this concern, as I cannot accumulate all
the relevant facts.
✓ Lack of larger amount of data has been collected.

4
5
 CHAPTER- 2
COMPANY OVERVIEW

This chapter emphasizes on the historical background of the company under study,
overview of the company, vision, mission, purpose, core values, future prospect,
performance, CSR, and market condition etc.

2.1 Company Profile:

In 2007, Malancha Holdings Ltd (Later renamed to United Power Generation &
Distribution Co. Ltd) was born out of the necessity for ensuring uninterrupted, quality
power supply to the industries housed within the Export Processing Zones (EPZ) of
Bangladesh. The company has built and is currently operating a Natural Gas fired 86
MW power plant in Dhaka EPZ, Savar, Dhaka and another Natural Gas fired 72 MW
power plant in Chittagong EPZ at South Halishahar, Chittagong. (United Power, n.d.)

The Dhaka EPZ plant consists of 4 Wärtsilä Finland 20V34SG engines and 5 Rolls-
Royce Norway B35:40V20AG2 engines for a combined output of 86 MW. The
Chattogram EPZ plant consists of 5 Wärtsilä Finland 20V34SG engines and 3 Rolls-
Royce Norway B35:40V20AG2 engines for a combined output of 72 MW. On top of
supplying to the EPZ’s, the surplus energy is being provided to the PBS-1, Savar of Rural
Electrification Board (REB) from Dhaka EPZ power plant and to Bangladesh Power
Development Board from Chattogram EPZ power plant.

Besides power generation, UPGD also produces steam commercially for neighboring
industries within Dhaka EPZ & Chattogram EPZ, by using Exhaust Gas Boilers (EGB),
further improving power plant efficiency. In Dhaka EPZ, 2 Units of Khan SPP EGB and
in Chittagong EPZ 3 Units of the same are installed. Currently, UPGD DEPZ has steam
production capacity of 8 TPH and UPGD CEPZ has steam production capacity of 12
TPH. The entire EPC of the project was done by Neptune Commercial Ltd. (NCL), a
subsidiary of United Group and both the projects enjoyed financing from World Bank’s
IPFF fund. (United Power, n.d.)
6
UPGD, DEPZ

Number of Generators 4 units each of capacity 8.73 MW

5 units each of capacity 9.34 MW

Genset Model Wärtsilä Finland 20V34SG

Rolls-Royce Norway B35 40V20AG2

Capacity 86 Megawatts (Total)

Number of Boilers 2 Units each of capacity 4 TPH

Boiler Model Khan SPP Smoke Tube EGB

Steam Capacity 8 TPH

Commercial Operation Date (COD) 35 MW, December 26th, 2008

6 MW, October 24th, 2010
47 MW, August 2013

Clientele Dhaka Export Processing Zone

Rural Electrification Board
Private Consumers

(Annual Report 2020-21, 2021)

7
UPGD, CEPZ

Number of Generators 5 units each of capacity 8.73 MW

3 units each of capacity 9.34 MW

Genset Model Wärtsilä Finland 20V34SG

Rolls-Royce Norway B35 40V20AG2

Capacity 72 Megawatts (Total)

Number of Boilers 3 Units each of capacity 4 TPH

Boiler Model Khan SPP Smoke Tube EGB

Steam Capacity 12 TPH

Commercial Operation Date (COD) 44 MW August 12th, 2009

28 MW, June 2013

Clientele Chittagong Export Processing Zone

Karnaphuli Export Processing Zone
Bangladesh Power Development Board
Private Consumers.

(Annual Report 2020-21, 2021)

8
Concern Group:

1 United Ashuganj Energy Ltd. 23 United Lube Oil Ltd.

2 United Anwara Power Ltd. 24 United Makkah Madina Travel and
Assistance Co. Ltd -
3 Khulna Power Company Ltd.
25 United Shipping and Logistic Services
4 United Jamalpur Power Ltd.
Ltd.
5 United Mymensingh Power Ltd.
26 United Securities Ltd.
6 United Energy Ltd.
27 UG Security Services Ltd.
7 Leviathan Global BD Ltd.
28 United Pharma & Healthcare Ltd
8 United Chattogram Power Ltd.
29 Gunze United Limited
9 United Payra Power Ltd
30 Comilla Spinning Mills Ltd.
10 United City Twin Tower Developers
31 United Tank Terminal Ltd.
Ltd.
32 Radiant Nutraceuticals Ltd.
11 Neptune Commercial Ltd.
33 Radiant Distribution Ltd.
12 Neptune Land Development Ltd.
34 Pharmacil Ltd.
13 United Purbachal Land Ltd.
35 Radiant Pharmaceuticals Ltd.
14 United Property Solutions Ltd.
36 Moulvi Tea Company (Private) Ltd.
15 United Enterprises & Co. Ltd.
37 Airport Hotels Ltd.
16 United Engineering & Power Services
Ltd. 38 United LPG Ltd.
17 United Hospital Limited. 39 United Sulpho-Chemicals Ltd.
18 United Chattogram Hospital Ltd. 40 United Professional Services Ltd.
19 United International University 41 United Health Care Services Ltd.
20 Unimart Limited 42 Orange Solutions Ltd.
21 United Elevator World Ltd. 43 United Trust
22 United Land Port Teknaf Ltd.

(Annual Report 2020-21, 2021)

9
Corporate Directory

Chairman General Md. Abdul Mubeen, SBP, ndc, psc (Retd.)

Directors Hasan Mahmood Raja

Ahmed Ismail Hossain
Khandaker Moinul Ahsan
Abul Kalam Azad
Faridur Rahman Khan
Akhter Mahmud
Md. Abul Hossain
Malik Talha Ismail Bari
Nasiruddin Akhter Rashid
Wasekul Azad
Fahad Khan
Nizamuddin Hasan Rashid
Khondaker Zayed Ahsan

Independent Directors Lt. Gen. Sina Ibn Jamali, awc, psc (Retd.)
Prof. Mohammad Musa, PhD
Dr. M. Fouzul Kabir Khan

Managing Director Moinuddin Hasan Rashid

Company Secretary & Badrul Haque Khan, FCA

Head of Compliance

(Annual Report 2020-21, 2021)

10
General Information about the Company

United Power Generation & Distribution Company

Name of the Company Limited

Nature of Business Power generation and distribution

Corporate Website www.unitedpowerbd.com

Year of Incorporation 15-Jan-2007

“United House”, United City, Madani Avenue, Dhaka-1212.

PABX: +88 02 5505 2000, +88 09666 700900
Corporate Head Office email: [email protected]
web: www.unitedpowerbd.com

Gulshan Centre Point, Plot 23-26, Road 90, Gulshan 2, Dhaka

1212
Registered Office
PABX: +88 02 5505 2000, +88 09666 700900
Fax: +88 02 5505 1826, +88 02 5505 1827
email: [email protected]
web: www.unitedpowerbd.com

Power Plants UPGDCL DEPZ

Dhaka Export Processing Zone (Extension Area), Ganakbari,
Savar, Dhaka
Tel: +88 02 7788 460, Fax: +88 02 7788 461
Cell no. 01914001300
Email:[email protected]

UPGDCL CEPZ
Chittagong Export Processing Zone, Plot No. 6 & 7, Sector
2/A, South Halishahar, Chittagong

Tel: +88 031 740 449, Fax: +88 031 740 450
Cell no. 01914001500

11
 Email: [email protected]

Banks Dhaka Bank Ltd.

Foreign Exchange Branch, Motijhel C/A, Dhaka-1000

Dutch Bangla Bank Ltd.

Banani Branch, Banani, Dhaka-1213

HSBC Bank Ltd.

Dhaka Main Office, Anchor Tower (5th floor), 108 Bir Uttam
C R Dutta Road, Dhaka 1205.

Insurance Group Insurance with United Self Insurance

Stock Exchanges Dhaka Stock Exchange (DSE): 19-Mar-15

Listing
Chittagong Stock Exchange (CSE): 8-Mar-15

Time keeping system Electronic swift card & Finger punch system

Working hours start & A shift: 7.00 am to 2:30 pm

end B shift: 2.30 pm to 10.00 pm
C shift: 10.00 pm to 7.30 am
General shift: 9.00 am to 5.00 pm

Working Interval One Hour, from 1.00 pm to 2.00 pm.

/break

(United Power, n.d.)

2.2 Corporate Vision;

Be the most efficient and environment friendly power generation company of
Bangladesh.

12
2.3 Corporate Mission;

Energy is Life
❖ Sustainable growth by ensuring quality, availability and efficiency in power
generation.
❖ Achieve excellence in project execution, quality, reliability, safety and operational
efficiency in the power sector.
❖ Become the most reputed and state-of-the-art power generation company of
Bangladesh.
❖ To promote a work culture that fosters learning, individual growth, team spirit and
creativity to overcome challenges and attain goals.

2.4 Objectives of the Company;

❖ Increase the power generation capacity in the country and help fulfill GoB’s
Vision 2021 in a safe, economical and rapid manner and keeping with the growth
of electricity demand in the country.
❖ Establish a culture of safe operation that maintains zero casualty at all times.
❖ Enhance electricity generation capacity in the near future.
❖ Earn the confidence and trust of all stakeholders by performing well above their
expectations.
❖ Utilize capital, machinery, material and human resources efficiently.

2.5 Core Values:

❖ To Our Customer: Provide uninterrupted, quality power.

❖ To Our Employees: Promote well-being, world-class working environment and
encourage innovation and talent.
❖ To Our Shareholders: Ensure fair return on their investment through generating
stable profit.

13
 ❖ To Our Community: Assume the responsibility of a socially corporate entity and
improve the well-being of the local community.

2.6 Future Prospect:

UPGDCL can foresee a load growth inside Dhaka and Chittagong Export Processing
Zones due to an increase in the number of industries as well as capacity development of
the existing industries housed inside. We are also anticipating increased load growth due
to expansion of capacity of our private clients. We are hopeful that in time we will be
successful to acquire more clients in the near future. Keeping all these in mind, to cater to
this increasing demand UPGDCL has plans to undertake further capacity expansion,
DEPZ to 120 MW and CEPZ to 100 MW. As the plants have a modular configuration,
the number of generating units shall be increased. To facilitate the dispatch of increased
power, the substation capacity will also be augmented respectively. Further, to create
shareholders’ value, your company has undertaken initiatives to go for parallel expansion
of generation capacity through acquisitions. Recently, a market disclosure has been made
on two prospective investment options. The matter is now under in-depth review and is
also conditional upon few regulatory clearances and final approval by the shareholders in
due course. (Annual Report 2020-21, 2021)

2.7 Corporate Social Responsibility:

United Power Generation and Distribution Company Ltd (UPGDCL) supports and
contributes towards many social and humanitarian causes as part of its Corporate Social
Responsibility. Corporate Social Responsibility is practiced through its sister
organization United Trust Ltd. to embrace responsibility for the Company’s actions and
encourage a positive impact through its activities on the environment, consumers,
employees, communities, stakeholders and all other members of the public sphere who
are also part of the Company’s stakeholders. Such activities are in favor of Education,
Poverty Alleviation, Health care and so on. ‘United Trust’ (UT), registered on 29
December 2011, is a ‘Social Development’ wing of United Group established by the
Board of Directors of United Group, the parent concern of UPGDCL, from their religious
14
urge of helping the poor and socially disadvantaged people. Islam has made this
responsibility mandatory on anybody who is financially capable in the society. UT
aims to plan, build, establish, maintain and run the charitable Social Welfare projects
financed by the Group in a professional and efficient way.

2.8 Company’s Facilities:

 Casual leave (CL) 10 days

 Sick leave (SL) 14 days
 Festival leave (FL) 13 days
 Maternity leave (ML) 16 weeks
 Earned leave (EL) 1 for 16 working days with cash
 Compensation & service benefit (If required)
 Weekly holiday 1 day (Friday)
 Festival bonus (Twice in a year) for all
 Payment within 1-7 working days
 Working hour 9:00 am to 5:00 pm
 Medical & doctor facility for all
 Canteen facility (voluntary)
 Transport facility (voluntary)
 Lunch & rest interval 1 hour
 Dining facility (voluntary)
 Training facility for all
 Drinking water facility
 Toilet & washing facility
 Prayer room facility
 Cooling pad & air condition system
 Time keeping (Electronic swift card & Fingerprint system)
 Overtime work (voluntary)
 No harassment and discrimination

(Annual Report 2020-21, 2021)

15
16
 CHAPTER- 3
INDUSTRY ANALYSIS

3.1 Overview of the Industry:

The utility electricity sector in Bangladesh has one national grid with an installed
capacity of 21,419 MW as of September 2019. The total installed capacity is 20,000 MW
(combining solar power). Bangladesh's energy sector is booming. Recently Bangladesh
started construction of the 2.4-gigawatt (GW) Rooppur Nuclear Power Plant expected to
go into operation in 2023.[2] According to the Bangladesh Power Development Board in
July 2018, 90 percent of the population had access to electricity. However per capita
energy consumption in Bangladesh is considered low. Electricity was introduced to the
country on 7th December 1901 during British rule.

Electricity Sector of Bangladesh

Data

Electricity coverage 99% (2021)

Installed capacity 24,000 MW

Tariffs and financing

Share of government financing (2018) 56%

Share of private financing (2018) 46%

Institutions

Responsibility for policy-setting Ministry of Power, Energy and Mineral

Resources, Bangladesh Power
Development Board

Electricity sector law Energy Regulatory Commission Act

(Electricity Sector in Bangladesh, n.d.)

17
Electricity is the major source of power for most of the country's economic activities.
Bangladesh's total installed electricity generation capacity (including captive power) was
15,351 megawatts (MW) as of January 2017and 20,000 megawatts in 2018. The largest
energy consumers in Bangladesh are industries and the residential sector, followed by the
commercial and agricultural sectors. As of 2015, 92% of the urban population and 67%
of the rural population had access to electricity. An average of 77.9% of the population
had access to electricity in Bangladesh. Bangladesh will need an estimated 34,000 MW
of power by 2030 to sustain its economic growth of over 7 percent.

Problems in Bangladesh's electric power sector include high system losses, delays in
completion of new plants, low plant efficiency, erratic power supply, electricity theft,
blackouts, and shortages of funds for power plant maintenance. Overall, the country's
generation plants have been unable to meet system demand over the past decade.
(Electricity Sector in Bangladesh, n.d.)

3.2 Major Players in the Market:

Listed Private Power Generation Companies’ EPS

Company Name H1 EPS FY 22 H1 EPS FY 21 Change in %

United Power Tk 11.84 Tk 9.50 24.63

Doreen Power Tk 4.86 Tk 3.85 26.23

Baraka Power Tk 1.69 Tk 1.50 12.67

Energypac Power Tk 1.02 Tk 0.92 10.87

Shahjibazar Power Tk 3.32 Tk 3.02 9.93

Baraka Patenga Tk 1.86 Tk 1.97 -5.58

GBB Power Tk 0.60 Tk 0.77 -22.08

Summit Power Tk 2.02 Tk 2.81 -28.12

Khulna Power Tk 0.18 Tk 1.57 -----

(Babul Barman, February 1, 2022)

18
Power Sector Scenario In Bangladesh:

Bangladesh has made significant progress in developing its power sector, primarily
through increasing the power generation capacity and by increasing the population’s
access to electricity. This progress has been achieved through a strategy that combined
public and private sector investment, engaging in power trade with India and improving
sector efficiency by sharply reducing transmission and distribution losses. It may be
particularly mentioned that the recent years have seen the policy and institutional support
being geared up to help leverage private investments alongside public investments in
energy and power sector. The financing strategy emphasized both public funding as well
as financing based on public-private-partnership (PPP).
(Electricity Sector in Bangladesh, n.d.)

Country/Region Overall Infrastructure Score Electricity

Bangladesh 2.9 2.9

India 4.2 3.5

China 4.7 4.3

Cambodia 3.1 3.4

Myanmar 2.1 2.8

Pakistan 3.0 2.5

Sri Lanka 3.8 3.9

Thailand 4.7 4.8

(7th 5 year Plan, Bangladesh, n.d.)

19
3.3 Porter’s Five –Forces Model in Industry Competition:

The five forces model developed by Michael e Porter has been the most commonly used
analytical tool for examining the competitive environment.

Porter’s Five Forces analysis is a framework that helps analyzing the level of
competition within a certain industry. It is especially useful when starting a new business
or when entering a new industry sector. According to this framework, competitiveness
does not only come from competitors. Rather, the state of competition in an industry
depends on five basic forces: threat of new entrants, bargaining power of suppliers,
bargaining power of buyers, threat of substitute products or services, and existing
industry rivalry. The collective strength of these forces determines the profit potential of
an industry and thus its attractiveness. If the five forces are intense (e.g. airline industry),
almost no company in the industry earns attractive returns on investments. If the forces
are mild however (e.g. soft drink industry), there is room for higher returns.

To begin analyzing different frameworks that we can use to assess solutions for the
growing environmental impact of the cement industry and the market regulations needed,
a better understanding about the forces that critically affect the industry must be distilled.
Porter’s five forces provide a “competitive forces” framework that allows us to better
understand the different dimensions that govern market competition.
(Dess, Lumpkin, Eisner, McNamara, & Kim, 2012)

(Porter, 2008)

20
The bargaining power of customers (buyers):
• Industrial consumers have huge demand for power.
• Their bargaining power is low in India as the number of power companies to buy
from is limited in number. Hence power companies are in better position.
• Retail customers -Government regulates the power sector to ensure supply of
power at reasonable prices but this regulation is limited.
• Peak shortage is much more in every region and it is about 12 % on all India basis
which allow suppliers to dictate terms with the buyers.

Overall, the bargaining power of buyers is Medium.

The bargaining power of suppliers:

• Coal is majorly used as a feed for generating power.
• The supply of coal in India is limited and hence coal players are in dominant
position.
• Power companies are required to import coal if the domestic supply is not
sufficient, which proves to be an expensive affair.
• With companies like Lanco, Adani Power buying coal mines in Indonesia,
Australia etc. to import better grade coal than available in India, market
dominance of Govt. Companies like Coal India will subside gradually.

However looking at the present situation, the power of suppliers is high.

The intensity of competitive rivalry within the Industry:

• Power producing companies – No competitive rivalry as demand for power is
way above its supply and all the power generated is used up. However, with
government encouragement, private participation is expected to increase in the
coming years to take advantage of huge demand for power
• Power equipment market - Market leader like BHEL is facing tough
competition from L&T, Alstom, Doosan and most importantly Chinese
suppliers.Major orders of Boiler, Turbine and Generator grabbed by Chinese
suppliers from most of the private sector clients.

21
So overall the intensity of competitive rivalry is medium.

Threat of New Entrants:

• High capital requirement
• High scale economies
• Favorable government policy
• Low product differentiation as it does not fall into the magnificence or specialty
goods.

So, overall threat of new entrants is medium.

Availability of Substitutes:
It is medium to low due to
➢ Although usage of solar system has been rising continuously in the consumer
durables sectors, it still does not pose any significant threat to power generation as
the latter cannot be replaced completely and the cost differential is also very high.

22
23
 CHAPTER- 4
ECONOMIC ANALYSIS OF BANGLADESH

4.1 Bangladesh Economic Growth

Economic growth is expected to accelerate in FY 2022 as private consumption and

investment gain steam. That said, further stop-start Covid-19 restrictions are a possibility
while the vaccination rate remains fairly low. Vulnerability to extreme weather events
and the high rate of non-performing loans in the banking sector pose further downside
risks. Focus Economics panelists project GDP to expand 6.5% in FY 2022, which is
down 0.2 percentage points from last month’s forecast, and 6.9% in FY 2023.
(Bangladesh Economic Review, 2022)

The Economy of Bangladesh is characterized as a developing market economy. It is the

33rd largest in the world in nominal terms, and 31st largest by purchasing power parity. It
is classified among the Next Eleven emerging market middle income economies and a
frontier market. In the first quarter of 2019, Bangladesh's was the world's seventh fastest-
growing economy with a rate of 8.3% real GDP annual growth. Dhaka and Chittagong is
the principal financial centre of the country, being home to the Dhaka Stock Exchange
and the Chittagong Stock Exchange. The financial sector of Bangladesh is the third
largest in the Indian subcontinent. Bangladesh is one of the fastest growing economies in
the world as well as the fastest growing economy in South Asia.
(Bangladesh Economic Review, 2022)

4.2 Indicators of Economic Analysis:

For economic analysis of Bangladesh I have considered the following indicators:

a) GDP
b) GDP Growth Rate
c) Inflation Rate
d) Per Capita Income
e) Unemployment Rate.

24
a) GDP
The Gross Domestic Product (GDP) in Bangladesh was worth 324.24 billion US dollars
in 2020, according to official data from the World Bank. The GDP value of Bangladesh
represents 0.29 percent of the world economy.

The gross domestic product (GDP) measures of national income and output for a given
country's economy. The gross domestic product (GDP) is equal to the total expenditures
for all final goods and services produced within the country in a stipulated period of time.
(Bangladesh Economic Review, 2022)

(Trading Economics, 2022)

b) GDP Growth Rate

The gross domestic product (GDP) growth rate of Bangladesh reached 6.94% in fiscal
year 2020-2021 while the per capita income increased to $2,591, according to the final
report of Bangladesh Bureau of Statistics (BBS).However, the provisional growth
estimation was 5.43% for the fiscal year. The information was disclosed at the meeting of
the Executive Committee of the National Economic Council (ECNEC) on Tuesday.

"The provisional growth estimation was 5.43 percent, however by the end, it increased by
1.51 percentage points," Planning Minister MA Mannan told media after the ECNEC
meeting. The GDP growth edged down to 30-year-low 3.51% in the fiscal year 2019-20
due to Covid fallout, said BBS final report on 5 August last year. The government's initial

25
estimation was attaining 5.2% growth in that fiscal. Calling the growth "a miracle" amid
the pandemic, the minister said, "It's a miracle that our GDP growth upturned to nearly 7%
while many other countries took a hit." (Bangladesh Economic Review, 2022)

(Trading Economics, 2022)

c) Inflation Rate:
The annual inflation rate in Bangladesh rose for the fifth consecutive month to 6.05
percent in December of 2021 from 5.98 percent in the previous month. It was the highest
inflation rate since October of 2020, as prices advanced faster for both food (5.46 percent
vs 5.43 percent in November) and non-food (7 percent vs 6.87 percent) items. On a
monthly basis, consumer prices fell 0.38 percent, down from a 0.49 percent decline in the
previous month.

In Bangladesh, the most important categories in the consumer price index are food, non-
alcoholic beverages and tobacco (59 percent of the total weight) and gross rent, fuel and
lighting (16.9 percent). The index also includes: clothing and footwear (6.9 percent);
transport and communication (4.2 percent), recreation, entertainment, education &
cultural services (4.1 percent); miscellaneous goods and services (3.6 percent); medical
care and health expenses (2.8 percent) and furnishing (2.7 percent).
(Bangladesh Economic Review, 2021)

26
 (Trading Economics, 2021)

d) Per Capita Income

The GDP per capita is obtained by dividing the country’s gross domestic product,
adjusted by inflation, by the total population.

The Gross Domestic Product per capita in Bangladesh was last recorded at 1625.67 US
dollars in 2020. The GDP per Capita in Bangladesh is equivalent to 13 percent of the
world's average. (Bangladesh Economic Review, 2020)

(Trading Economics, 2020)

27
e) Unemployment Rate
In Bangladesh, the unemployment rate measures the number of people actively looking
for a job as a percentage of the labor force.

Unemployment Rate in Bangladesh increased to 5.30 percent in 2020 from 4.20 percent
in 2019. (Bangladesh Economic Review, 2020)

(Trading Economics, 2020)

4.3 Global Economy

The global economy is recuperating invincibly from the COVID-19 outbreak, but the
recovery process is very different and uneven among countries. In the World Bank
published report titled „Global Economic Prospect, June 2021‟, the economic growth is
projected at 5.6 percent in 2021which was contracted to 3.5 percent in 2020. Substantial
fiscal support for the economy, policy support and vaccine access are the major
determinants of this unstable growth. Global growth is set to reach 4.3 percent and 3.1
percent respectively in 2022, and 2023 in that report.
(Bangladesh Economic Outlook, February 22, 2022)

The report also foresees that the growth of developed economies will reach 5.4 percent in
2021, with 6.8 percent potential economic growth in the United States. More contagious
strains of coronavirus which have recently spread to countries with emerging markets and
28
developing economies, along with vaccine availability are expected to hamper the
country’s recovery process. Growth in emerging markets and developing economies is
projected at 6.0 percent in 2021, with China growing at 8.5 percent and India at 8.3
percent.

In the World Economic Outlook (WEO) April 2021, International Monetary Fund (IMF)
projected that the global economy to grow at 6.0 percent in 2021 which is 0.8 percent
higher than the estimate of October 2020 WEO. For advanced economies, expected
growth rate is 5.1 percent and for emerging markets and developing economies growth is
projected at 6.7 percent in 2021. Initially the report made conservative prediction. After
analyzing the recent resilient trend of global economic growth, the revised forecast has
been made with higher projection.
(Bangladesh Economic Outlook, February 22, 2022)

4.4 Macroeconomic Situation: Bangladesh, 2020-21

Bangladesh economy has been consistently performing well with above 6 percent of GDP
growth since FY 2010-11 to up until COVID-19 outbreak. The growth rate was elevated
to 8.15 percent in FY 2018-19. Unfortunately, country’s economic growth was slowed
due to the negative impact of COVID-19pandemic. According to the provisional
estimates of BBS, growth rate achieved in FY 2019-20 is 3.51percent. In FY 2020-21, the
estimated GDP growth target is 5.47 percent.

According to provisional estimate of BBS, per capita GDP and per capita national income
stood respectively at US$ 2,097 and US$ 2,227 in FY 2020-21. The domestic savings
stood 24.17 percent of GDP, and national savings stood at 30.39 percent of GDP for the
same period. The gross investment stood at 29.92 percent of GDP in FY 2019-20 where
public investment and private investment accounted for 8.67 percent and 21.25 percent of
GDP, respectively. (Bangladesh Economic Outlook, February 22, 2022)

In FY 2019-20, the inflation rate was 5.65 percent. Of this, the food inflation was 5.56
percent and nonfood inflation stood at 5.85 percent. The inflation rate for FY 2020-21
was 5.4 percent. But the actual inflation rate reached at 5.56 percent which was slightly

29
higher than the estimate. The food inflation was 5.73 percent and nonfood inflation
reached at 5.29 percent. Yet the Government’s continuous efforts to keep up the food
supply chain uninterrupted during COVID-19 pandemic worked well and helped to keep
the inflation under control.
(Bangladesh Economic Outlook, February 22, 2022)

30
31
 CHAPTER- 5
EXTERNAL ENVIRONMENTAL ANALYSIS

5.1 PESTLE Analysis:

The PESTLE Analysis is a tool that is used to identify and analyze the key drivers of
change in the strategic or business environment. The tool allows the assessing of the
current environment and potential changes. The idea is, if the project is better placed than
its competitors, it would be able to respond to changes more effectively. The term has
been widely used and the earliest reference can date back to a book by Aguilar in 1967
who discussed ETPS (Economic, Technical, Political, and Social) in his book scanning
the Business Environment. After this publication, came the work of Brown who modified
.the theory and named it STEP (Strategic Trend Evaluation Process). This was further
modified and became known as the STEPE analysis (Social, Economic, Political, and
Ecological factors). Post 1980, the word PESTLE originated along with its variations like
PEST, STEEPLE (includes Ethical factors), PESTLIED (includes Demographic and
International factors), STEEPLED (includes Demographic and Education factors), etc.
(Marketing: PESTLE Analysis, n.d.)

PESTLE analysis, which is sometimes referred as PEST analysis is a concept in

marketing principles. Moreover, this concept is used as a tool by companies the world
over to track the environment they‘re operating in or are planning to launch a new
project/product/service etc. A PESTLE analysis is a method for reviewing the macro
environment (external forces that impact a company‘s ability to plan). It stands for:

a) Political

b) Economic
c) Sociological
d) Technological
e) Legal
f) Environmental.
32
 Political

Environm
Economic
ental

PESTLE
Analysis

Legal Social

Technolo
gical

PESTLE analysis is very important that an organization considers its environment before
beginning the marketing process. There are certain questions that one needs to ask while
conducting this analysis, which give them an idea of what things to keep in mind.

They are:

1. What is the political situation of the country and how can it affect the industry?

2. What are the prevalent economic factors?

3. How much importance does culture has in the market and what are its determinants?

4. What technological innovations are likely to pop up and affect the market structure?

5. Are there any current legislations that regulate the industry or can there be any change
in the legislations for the industry?

6. What are the environmental concerns for the industry?

All the aspects of this technique are crucial for any industry a business might be in. More
than just understanding the market, this framework represents one of the vertebras of the
backbone of strategic management that not only defines what a company should do, but

33
also accounts for an organization‘s goals and the strategies stringed to them. It may be so,
that the importance of each of the factors may be different to different kinds of industries,
but it is imperative to any strategy a company wants to develop that they conduct the
PESTLE analysis as it forms a much more comprehensive version of the SWOT analysis.
(PESTLE Analysis, n.d.)

It is very critical for one to understand the complete depth of each of the letters of the
PESTLE. Below are all the six factors in a graphical presentation and below it a detailed
description of them is provided:

Impact of Political factors on power generation projects:

These factors determine the extent to which a government may influence the economy or
a certain industry. For example a government may impose a new tax or duty due to which
entire revenue generating structures of organizations might change. Political factors
include tax policies, Fiscal policy, trade tariffs etc. that a government may levy around
the fiscal year and it may affect the business environment (economic environment) to a
great extent. Political factors may also include goods and services which the government
wants to provide or be provided (merit goods) and those that the government does not
want to be provided (demerit goods). (Marketing: PESTLE Analysis, n.d.)

Furthermore, governments have great influence on the health, education, and

infrastructure of a nation. Political factors relate to the pressures and opportunities
brought by political institutions and to what degree the government policies impact the
business.
- Government policies
- Government term and change
- Trading policies
- Funding, grants and initiatives
- Lobbying and pressure groups
- Wars, terrorism and conflicts
- Elections and political trends
- Internal political issues

34
- Inter-country relationships
- Local commissioning processes
- Corruption
- Bureaucracy

Bangladesh has undertaken an ambitious plan to augment the energy starved nation
through import of 4500 megawatt of electricity by 2030, subject to setting up of
interconnectivity regional power grid. Bangladesh oil and natural gas fields are quickly
depleting for power hungry export industries. The government is under immense political
pressure from the investors and entrepreneurs‘ apex body to augment power transmission
or provide compensation package for their export losses. The government is
contemplating to import power from neighboring India and Burma. The prime minister‘s
representative held parleys with the two neighboring governments in the last two years.
(PESTLE Analysis, n.d.)

Impact of Economical factors on power plant projects:

These factors are determinants of an economy‘s performance that directly impacts a
company and have resonating long term effects. For example, a rise in the inflation rate
of any economy affect the purchasing power of a consumer and change demand/supply
models for that economy. Economic factors include inflation rate, interest rates, foreign
exchange rates, economic growth patterns etc. It also accounts for the FDI (foreign direct
investment) depending on certain specific industries who‘re undergoing this analysis.
Interest rates affect a firm's cost of capital and therefore to what extent a business grows
and expands. Exchange rates affect the costs of exporting goods and the supply and price
of imported goods in an economy. Economic factors relates to economic policies,
economic structures and to what degree the economy impacts the business.
(Marketing: PESTLE Analysis, n.d.)

- Local economy
- Taxation
- Inflation
- Interest

35
- Economy trends
- Seasonality issues
- Industry growth
- Import/export ratios
- International trade
- International exchange rates

The government has engaged in dialogue with neighboring countries to import power to
reduce energy crisis in Bangladesh. Dhaka has signed an agreement with New Delhi that
day to import 250MW power at tariff of Rs 2.40 per KW hour. The price is equivalent to
Tk 4 per KW hour. This price is feasible compared to that of quick rental power plants.
Similarly electricity from the planned plants in Myanmar will be commercially viable
business for both Bangladesh and Myanmar. Although the price per KW hour is
reasonable the main drawback that the government will face is the construction of the
400KV transmission line and also the substation. It is estimated that the construction of
the grid and the substation will be substantially high. Some experts even mentioned that
the 4500 MW electricity import is possible through regional power exchange agreement
by 2030 but the purchase of electricity would be expensive from neighboring countries,
as it would be costly for construction and maintenance of the grid.
(PESTLE Analysis, n.d.)

Impact of Socio-cultural factors on power plant projects:

These factors scrutinize the social environment of the market, and gauge determinants
like cultural trends, demographics, population analytics etc. An example for this can be
buying trends for Western countries like the US where there is high demand during the
Holiday season. It includes the cultural aspects and includes health consciousness,
population growth rate, age distribution, career attitudes and emphasis on safety. Trends
in social factors affect the demand for a company's products and how that company
operates. For example, an aging population may imply a smaller and less-willing
workforce (thus increasing the cost of labor). Furthermore, companies may change
various management strategies to adapt to these social trends (such as recruiting older

36
workers). Social factors relates to the cultural aspects, attitudes, beliefs, that will affect
the demand for a company's products and how the business operates.
(Marketing: PESTLE Analysis, n.d.)
- Demographics
- Media views of the industry
- Work ethic
- Brand, company, technology image
- Lifestyle trends
- Cultural Taboos
- Consumer attitudes and opinions
- Consumer buying patterns
- Ethical issues
- Consumer role models
- Major events and influences
- Buying access and trends
- Advertising and publicity

Bangladesh has major problems with energy crisis, persisting poverty and environmental
degradation. With only 49% of Bangladeshis having access to electricity, the per capita
energy use is only 180 kWh. Moreover, the people who are connected with the national
grid are experiencing frequent load shedding. At present, the country can generate about
4500 MW electricity. (PESTLE Analysis, n.d.)

Impact of Technological factors on power plant projects:

These factors pertain to innovations in technology that may affect the operations of the
industry and the market favorably or unfavorably. This refers to automation, research and
development and the amount of technological awareness that a market possesses. It also
includes technological aspects such as R&D activity, automation, technology incentives
and the rate of technological change. They can determine barriers to entry, minimum
efficient production level and influence outsourcing decisions.

37
Furthermore, technological shifts can affect costs, quality, and lead to innovation.
Technological factors relates to the technological aspects, innovations, barriers and
incentives, and to what degree these impact the business.
(Marketing: PESTLE Analysis, n.d.)

- Emerging technologies
- Maturity of technology
- Technology legislation
- Research and Innovation
- Information and communications
- Competitor technology development
- Intellectual property issues

Bangladesh currently has 6463 MW installed capacity of fossil-fuel power station. These
power stations comprise of public sector, private sector and quick rental power plants.
Among them QRPP(3yrs), RPP(15yrs) and RPP(3yrs) have derated capacity of
1043MW,BPDB has 3459MW. High prices of petroleum products in international market
have increased electricity generation costs in oil-fired power plants substantially resulting
in halting of generation in oilfired power plants. The government has kept shut most of
the oil fired rental and quick rental power plants set up in the past three years under a
cost-cutting measure aggravating public woes due to frequent power outages.
(PESTLE Analysis, n.d.)

Impact of Legal factors on power plant projects:

These factors have both external and internal sides. There are certain laws that affect the
business environment in a certain country while there are certain policies that companies
maintain for themselves. Legal analysis takes into account both of these angles and then
charts out the strategies in light of these legislations. For example, consumer laws, safety
standards, labor laws etc. Factors include discrimination law, consumer law, antitrust law,
employment law, and health and safety law which can affect how a company operates, its
costs, and the demand for its products. Legal factors relates to the laws, regulation and
legislation that will affect the way the business operates. This factor takes into

38
consideration all legal aspects like employment, quotas, taxation, resources, imports and
exports, etc. (Marketing: PESTLE Analysis, n.d.)

- Current legislation
- Future legislation
- International legislation
- Regulatory bodies and processes
- Employment law
- Consumer protection
- Health and safety regulations
- Money laundering regulations
- Tax regulations
- Competitive regulations
- Industry-specific regulations.

The government agency, Bangladesh Power Development Board conducts most of the
power plant projects. The power plant projects include the Quick rental power plant
project, the IPP projects and also the public power plant projects. The BPDB floats in
tender regarding these power plant projects comprising both local and international
biddings. The tenders which are floated in strictly follow the Public Procurement Act,
2006 and the corresponding Public Procurement Rules, 2008 and their amendments.
(PESTLE Analysis, n.d.)

Impact of Environmental factors on power plant projects:

These factors include all those that influence or are determined by the surrounding
environment. This aspect of the PESTLE is crucial for certain industries particularly for
example tourism, farming, agriculture etc. Factors of a business environmental analysis
include but are not limited to climate, weather, geographical location, global changes in
climate, environmental offsets etc. Furthermore, growing awareness of the potential
impacts of climate change is affecting how companies operate and the products they
offer, both creating new markets and diminishing or destroying existing ones.

39
Environmental factors relate to the ecological and environmental aspects that will affect
the demand for a company's products and how that business operates.
(Marketing: PESTLE Analysis, n.d.)

- Environmental regulations
- Ecological regulations
- Reduction of carbon footprint
- Sustainability
- Impact of adverse weather

This factor takes into consideration ecological and environmental aspects that could be
either economic or social in nature. These include temperature, monsoons, natural
calamities, access by rail, air, and road, ground conditions, ground contamination, nearby
water sources, and so forth. (PESTLE Analysis, n.d.)

40
41
 CHAPTER- 6
ANALYSIS OF THE COMPANY

6.1 VRIO Analysis

VRIO framework is the tool used to analyze firm’s internal resources and capabilities to
find out if they can a source of sustained competitive advantage. (Rothaermel, 2013)

VIRO Model

Valuable? Rare? Imitable ? Organized? Implication for

Competitiveness

No Competitive
disadvantage

Yes No Competitive
Parity

Yes Yes No Temporary

Competitive
Advantage

Yes Yes Yes No Unused

Competitive
Advantage

Yes Yes Yes Yes Sustainable

Competitive
Advantage

United Power Generation & Distribution Company Limited

Valuable: Does UPGDCL offer something valuable? “Yes”

Rare: Is the resources rare? “Yes”
Imitable: Is it imitable? “No”
Competitiveness: So the UPGDCL is in Temporary Competitive Advantage.

42
6.2 Value Chain:
Value chain analysis is a way to visually analyze a company's business activities to see
how the company can create a competitive advantage for itself. Value chain analysis
helps a company understands how it adds value to something and subsequently how it
can sell its product or service for more than the cost of adding the value, thereby
generating a profit margin. In other words, if they are run efficiently the value obtained
should exceed the costs of running them i.e. customers should return to the organization
and transact freely and willingly. (Value Chain Analysis, November 11, 2021)

Secondary Activities

Human
Technological
Procurement Resource Infrastructure
Development
Management

Primary Activities

Inbound Outbound Marketing

Operation Service
Logistics Logistics and Sales

43
Originated in the 1980s by Michael Porter, value chain analysis is the conceptual notion
of value-added in the form of a value chain. He suggested that an organization is split
into 'primary activities' and 'support activities'. (Kate Eby, November 30, 2021)

Below are the activities into primary and support activities as suggested by Porter's Value
Chain Analysis Model:

Primary Activities:

Primary activities consist of five components, and all are essential for adding value and
creating competitive advantage:

Inbound Logistics - involve relationships with suppliers and include all the activities
required to receive, store, and disseminate inputs.
Inbound logistics of UPGDCL- Raw materials handling, receiving, warehousing,
managing inventory.

Operations - Operations include procedures for converting raw materials into a finished
product (products and services).
Operations of UPGDCL- Machining, assumbling, testing products.

Outbound Logistics - include all the activities required to collect, store, and distribute
the output.
Outbound logistics of UPGDCL- Warehousing, distribution of Electricity/ power.

Marketing and Sales - activities inform buyers about products and service, induce
buyers to purchase them, and facilitate their purchase. It includes strategies to enhance
visibility and target appropriate customers.
Marketing and sales activities of UPGDCL- advertising, promotion, and pricing, channel
relations.

Service - includes all the activities required to keep the product or service working
effectively for the buyer after it is sold and delivered.
Service activities of UPGDCL-Installation, maintenance, repair parts, refund, exchange,
customer service.

(Annual Report 2020-21, 2021)

44
Secondary Activities:

The role of support activities is to help make the primary activities more efficient. When
managers increase the efficiency of any of the four support activities, it benefits at least
one of the five primary activities. These support activities are generally denoted as
overhead costs on a company's income statement:

Procurement - is the acquisition of inputs, or resources, for the firm. It concerns how a
company obtains raw materials.
Procurement activities of UPGDCL- Purchasing of raw materials, machines, supplies.

Human Resource Management - Human Resource Management (HRM)involves hiring

and retaining employees who will fulfill the firm's business strategy and help design,
market, and sell the product.
Human Resource Management (HRM) activities of UPGDCL- Recruiting, selection,
training & development, performance appraisal, compensation, employee relations etc.

Technological Development - pertains to the equipment, hardware, software, procedures

and technical knowledge brought to bear in the firm's transformation of inputs into
outputs. Technological development is used at a firm's research and development (R&D)
stage.
Technological Development activities of UPGDCL- R & D, product improvement,
process improvement, designing and developing manufacturing techniques, automating
processes.

Infrastructure - serves the company's needs and ties its various parts together, it consists
of functions or departments such as accounting, legal, finance, planning, public affairs,
government relations, quality assurance and general management.
Infrastructure of UPGDCL- General management, accounting, finance, strategic
planning, quality control.

(Annual Report 2020-21, 2021)

45
6.3 Ratio analysis of the Company:

Ratio analysis is a quantitative method of gaining insight into a company's liquidity,

operational efficiency, and profitability by comparing information contained in its
financial statements.

Four different types of Financial Ratios:

1. Short term solvency or liquidity ratios

a. Current ratio
b. Quick ratio
c. Cash Ratio

2. Long term solvency or financial leverage ratios

a. Total debt ratio

b. Debt equity ratio
c. Equity multiplier
d. Times interest earned ratio
e. Cash coverage ratio

3. Asset utilization or turnover ratio

a. Inventory turnover ratio

b. Day’s sales in inventory
c. Receivable turnover
d. Day’s sales in receivable
e. Total asset turnover
f. Capital intensity

4. Profitability ratios

a. Profit margin
b. Return on asset
c. Return on equity

(Dess et al., 2011)

46
 Ratio analysis of the Company

Ratio analysis 2020-21 2019-20 2018-19 2017-18 2016-17

Current ratio (Times) 0.85 7.14 4.42 58.9 48.99

Debt to equity ratio (Times) 0.11 0.14 0.23 - 0

Debt to asset ratio (Times) 0.06 0.11 0.17 - 0

Return on asset (%) 21.42% 15.56% 26.87% 29.17% 29.73%

Return on equity (%) 33.59% 20.36% 26.11% 28.21% 27.91%

Gross margin ratio (%) 38.63% 57.97% 63.28% 68.66% 70.01%

Net income ratio (%) 36.34% 60.22% 69.80% 74.80% 72.49%

Net income ratio (Taka) 18.8 11.16 16.08 11.51 10.46

Stock dividend (%) - 10% 10% 20% 10%

Cash dividend (%) 170% 145% 130% 90% 90%

(Annual Report 2020-21, 2021)

Comments on Ratio Analysis:

➢ Current ratio: The current ratio is a liquidity ratio that measures a company's
ability to pay short-term obligations or those due within one year. Acceptable
current ratios vary from industry to industry and are generally between 1.5% and
3% for healthy businesses. So UPGDCL has a lower current ratio in the last two
years.

47
➢ Debt to equity ratio: The debt to equity ratio is a financial, liquidity ratio that
compares a company’s total debt to total equity. The debt to equity ratio shows
the percentage of company financing that comes from creditors and investors. A
good debt to equity ratio is around 1 to 1.5. UPGDCL has lower debt equity ratio
which is not a good sing.
➢ Debt to asset ratio: The debt to asset ratio is a financial ratio that measures the
extent of a company's leverage in terms of total debt to total assets. A debt ratio
greater than 1.0 (100%) tells that a company has more debt than assets. UPGDCL
is not in good position in terms of total debt to asset ratio.
➢ Return on asset: The return on assets ratio measures how effectively a company
can earn a return on its investment in assets. ROAs over 5% are generally
considered good. So, the table says that UPGDCL has a increased ROA in last
two years which is a good indicator.
➢ Return on equity: The return on equity ratio or ROE is a profitability ratio that
measures the ability of a firm to generate profits from its shareholders investments
in the company. In other words, the return on equity ratio shows how much profit
each dollar of common stockholders' equity generates. ROEs of 15-20% are
generally considered good. It looks like UPGDCL has a stable ROE.
➢ Gross margin ratio: Gross margin is the difference between revenue and cost of
goods sold (COGS), divided by revenue. Gross margin is expressed as a
percentage. Generally, it is calculated as the selling price of an item, less the cost
of goods sold, then divided by the same selling price. The gross margin ratio of
UPGDCL is decreasing in last two years.
➢ Net income ratio: The net profit margin, or simply net margin, measures how
much net income or profit is generated as a percentage of revenue. It is the ratio
of net profits to revenues for a company or business segment. Net profit margin is
typically expressed as a percentage but can also be represented in decimal form.
The net income ratio of UPGDCL is decreasing in last two years.
➢ Earnings per share (EPS): Earnings per share (EPS) is a company's net profit
divided by the number of common shares it has outstanding. EPS indicates how
much money a company makes for each share of its stock and is a widely used
48
 metric for estimating corporate value. The earnings per share (EPS) of UPGDCL
is increased in last year.
➢ Stock dividend: A stock dividend is a dividend payment to shareholders that
made in shares rather than as cash. For example, a company might issue a stock
dividend of 5%, which will require it to issue 0.05 shares for every share owned
by existing shareholders, so the owner of 100 shares would receive five additional
shares. It looks like UPGDCL has a stable stock dividend.
➢ Cash dividend: A cash dividend is the distribution of funds or money paid to
stockholders generally as part of the corporation's current earnings or
accumulated profits. Cash dividends are paid directly in money, as opposed to
being paid as a stock dividend or other form of value. The cash dividend of
UPGDCL is decreasing in last three years

6.4 Product Life Cycle:

The term product life cycle refers to the length of time a product is introduced to
consumers into the market until it's removed from the shelves. The life cycle of a product
is broken into four stages—introduction, growth, maturity, and decline. This concept is
used by management and by marketing professionals as a factor in deciding when it is
appropriate to increase advertising, reduce prices, expand to new markets, or redesign
packaging. The process of strategizing ways to continuously support and maintain a
product is called product life cycle management.
(CAROL M. KOPP, December 27, 2020)

(ANNE SRADERS, October 29, 2021)

49
As mentioned above, there are four generally accepted stages in the life cycle of a
product—introduction, growth, maturity, and decline.

Introduction: This phase generally includes a substantial investment in advertising and a

marketing campaign focused on making consumers aware of the product and its benefits.

Growth: If the product is successful, it then moves to the growth stage. This is
characterized by growing demand, an increase in production, and expansion in its
availability.

Maturity: This is the most profitable stage, while the costs of producing and marketing
decline.

Decline: A product takes on increased competition as other companies emulate its

success—sometimes with enhancements or lower prices. The product may lose market
share and begin its decline. (CAROL M. KOPP, December 27, 2020)

6.5 BCG Matrix:

Boston Consulting Group’s (BCG’s) growth-share matrix is commonly used for
analyzing portfolios. The BCG made this matrix in the 1970s. This technique is used for
the portfolio management of different business units. Large companies whose business
organization is in SBUs face a major problem of distributing resources between these
units.

The BCG matrix is made up of different business units of a company. These are plotted
on a graph of market growth vs market share relative to the company’s rivals. Resources
are given to business units on the basis of their position on the graph.

Growth-share matrix is a business tool, which uses relative market share and industry
growth rate factors to evaluate the potential of business brand portfolio and suggest
further investment strategies. (Costa, 2012)

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 (BCG Matrix or the Growth Share Matrix in Business Strategy, July 7, 2021)

Stars
Stars are business units that have a large market share in a fast-growing industry. Stars
may generate cash, but due to the rapidly growing market, these business units require
continuous investments.

Cash Cows
Cash cows are business units with a large market share in a mature and slow-growing
industry. Cash cows require little investment and generate cash that can be used to invest
in other business units.

Question Marks
This type of business unit is also known as the problem child. Question marks are
business units with a low market share in a high-growth market. The company needs to
invest in these businesses to grow its market share, but whether the investment will
become a star (enjoy increased relative market share) is unknown.

Dogs
These business units have a small market share in a mature industry. A dog may not
require substantial cash, but it ties up capital that could be invested elsewhere. Unless a
dog has some special strategic purpose, it should be liquidated if there is little potential to
increase its market share.

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6.6 Balance Scorecard:
The balanced scorecard is a strategy planning and performance management tool
created by Kaplan and Norton. In short it allows managers to see how well their
businesses are being run based on whether the objectives of the company are being
met, by the monitoring of staff and the execution of planned activities. In order for a
business to succeed it must set objectives in line with the overall mission and vision of
the organization. The balanced scorecard suggests that it is not only financial
performance that equates to a successful business. (Balanced Scorecard, n.d.)

(Balanced Scorecard, n.d.)

Therefore it takes the perspectives of four different areas of the organization and
monitors their performance based on their individual objectives.

To do this certain conditions must be in place:

➢ Objectives must be set

➢ Data must be collected
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 ➢ A value must be set to measure the data against
➢ Corrective action must be readily available

The Four Perspectives:

a. Learning and Growth:

"To achieve our vision, how will we sustain our ability to change and improve?"
This perspective involves staff learning and training in order to improve the knowledge
resource. Managers should be able to identify where they should be investing their funds
for personnel development, not just through training but through mentor schemes and
improving communication amongst staff.

Considerations for measurement include:

• Job satisfaction
• Employee turnover
• Levels of specialist knowledge and skills
• Training opportunities

b. Internal Business Processes

"To satisfy our shareholders and customers, what business processes must we excel
at?"
This perspective allows managers to see how well their business is performing based on
whether their products and services are meeting the needs of their customers. Carefully
designed metrics will be needed to monitor this area.

Considerations for measurement include:

• Activities per function

• Process alignment
• Process automation

c. Customers

"To achieve our vision, how should we appear to our customers?"

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For those of you aware of the marketing orientated business, opposed to the sales
orientated businesses of the past, will know that customer satisfaction is now more and
more at the forefront of every marketer, and therefore every business's mind. Marketers
know that poor performance in this area leads to customers switching to alterative
suppliers and if this is not addressed a future decline could continue.

Considerations for measurement include:

• Customer satisfaction rate

• Customer retention
• Delivery performance
• Quality performance

d. Financial

"To succeed financially, how should we appear to our shareholders?"

At the start of this post we said that the balanced scorecard was a useful tool as it looks at
areas other than finance to judge the performance of a business. This does not mean
however that traditional financial metrics should be ignored and that is why they make up
the fourth perspective. Financial metrics are still important to see exactly how profitable
the business is.

Considerations for measurement include:

• Revenue
• Expenses
• Net income
• Cash flow
• Asset value

(Balanced Scorecard, n.d.)

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55
 CHAPTER- 7
PROBLEM IDENTIFICATION

7.1 Specific Problems of United Power Generation & Distribution

Company Limited:
A question was served to the respondents that what kind of limitations they find out
during their working operation. All respondents came out many different opinions around
working limitation. Though all departments are playing a major role in the smooth
operation of daily activities of UPGDCL, there are few short comings of this company.
These are mentioned below:

1. Job analysis is not provided to employee: job analysis consists of job description and
job specifications. Any definite job description and job specification is not usually
prepared for the new employee for which he might not understand the specific
responsibilities to be fulfilled.

2. Low Utilization Rates: Low utilization rates have pushed up fixed costs per unit,
while the hike in coal and pet coke prices towards the end of 2016 put further pressure on
margins.

3. Frequency of labor turnover: The success is measured by the rate of labor turnover.
When the labor turnover is little then it says that the organization has a good Human
Resource Management system. When the rate of labor turnover is very high then the
Human Resource Management department may face various problems. Frequent
employee turnover is a major problem of UPGDCL. Compensation system and leave
deduction is very low that increase the turnover rate.

4. Substantial Overcapacity: Utilization 56% of total capacity. Since the turn of the
century, driven in large part by China’s domestic boom, global electric power capacity
has increased exponentially, nearly tripling over the last two decades. This excess
capacity and demand shortage have combined to trigger a race to the bottom among
cement manufacturers, dragging down prices in domestic and international markets.

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5. NO separate training department: Training is a cycle in UPGDCL. A lot of training
activities are done here. Sometimes because of other HR functions, the training activities
are under emphasized. So, it is better for the organization to start a separate training
department.

6. Lack of research department in the company: There is no separate research

department in the company which will work for the development of the product and
product innovation.

7. Environmental Pollution: In addition to low demand in the region, political pressure

to reduce CO2 emissions and CO2 emission allowance programs have helped keep
capacity utilization rates low. The power generation industry is one of two largest
producer of carbon dioxide, creating up to 5% of worldwide man-made emission of this
gas, of which 50% is from the chemical process and 40% from burning fuel. Power
generation industry contributes greenhouse gases both directly through the production of
carbon dioxide when calcium carbonate is thermally decomposed and particularly from
the combustion of fossil fuels.

Moreover some other problems are:

❖ Logistics dependencies on rental trucks

❖ Increase of tax rate both inside and outside the country.

❖ Relatively high land-based transportation and distribution costs.

❖ Price wars with industry competitors

❖ World wide price increase in raw material.

❖ Increase in operating expenses and high production cost.

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7.2 SWOT Analysis of United Power Generation & Distribution
Company Limited:

SWOT analysis is a strategic planning technique used to help a person or organization

identify strengths, weaknesses, opportunities, and threats related to business competition
or project planning.

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Strengths and
weaknesses are internal to your company—things that you have some control over and
can change. Examples include who is on your team, your patents and intellectual
property, and your location.

HR can use SWOT analysis with other planning tools to develop action steps that support
the HR department and the company's mission

A SWOT analysis examines the Strengths, Weaknesses, Opportunities and Threats to

assist human resources (HR) in developing its strategic goals and defining the direction
the organization and the HR department take to achieve those goals. The beauty of this
type of analysis is that it helps in the transition from a reactive mode to a proactive one –
it keeps you at least one step ahead of the game in creating and sustaining a world-class
workforce. (SWOT Analysis for HR Practices, September 6, 2020).

Strengths Weekness

SWOT
Analysis

Opportunities Threats

58
Here I will try to present the SWOT analysis of UPGDCL:

Strengths

• Availability of low cost labor;

• Extensive experience in dealing with foreign parties;
• Effective training and retraining programs to ensure greater productivity,
efficiency and effectiveness of the employees;
• Strict recruitment and selection process of UPGDCL to obtain only the very best
employees.

Weakness

• Dependence on others for raw materials;

• Limited knowledge in international marketing information;
• Low productivity of the workers ;
• Small workforce;
• Limited access to current market intelligence and international trade information.

Opportunities

• Unlimited market outside Bangladesh;

• Probability of producing high value added products through diversification;
• Probability of building better relationship with buyers and achieving worldwide
reputation.

Threats

• Threat from foreign and domestic competitors;

• Environmental issues;
• Poor labor standard;
• Poor infrastructural facilities;
• Pressure to decrease rate of profit.

So, that’s all about the SWOT Analysis of United Power Generation & Distribution
Company Limited.

59
60
 CHAPTER- 8
RECOMMENDATION AND CONCLUSION

After analysis the data the scenario became quite clear and understandable. Although
information collected were not sufficient to comment on the “Company Analysis and
Improvement Guideline of United Power Generation & Distribution Company
Limited”, some useful and essential factors were revealed during study. In this chapter I
tried to explain those facts influencing them with my point of view.

8.1 Recommendation:

UPGDCL is well-established company. Therefore, it is very tough to recommend on any

aspect of the company. Although the HR department of UPGDCL is doing a decent job at
the present, but there is scope to enhance development both internally and externally.
However, as it is the requirement of the report so I have come up with few
recommendations, after conducting the research. They are as follows:

1. Use of modern technology: Through the use of modern technology company can
reduce the emission of carbon dioxide and help to save the environment through
minimizing the environmental pollution. Now environment consciousness is the biggest
issue in the business world.

2. Promotion & advertising: The media advertising (electronic & print media) that
UPGDCL uses is quite seasonal basis and limited, moreover related to only the
promotional campaign during the off-peak season of power sales. So, UPGDCL have to
increase their media advertising and should have to do it throughout the year in order to
increase their sales as well as brand image. As such it will increase their promotion cost
but at the same time it will increases their sales as well.

3. Logistic: The power generation companies together can ask for help from the
Government of Bangladesh for logistical support. As all the big companies are facing a
similar problem and losing out on profitable markets and the chance of exporting cement
to foreign region would also bring an unfavorable effect on the foreign flow of money
into the country, which in the long run is likely to be a concern for the government.
61
4. Utilization of capacity: Through the increase in sales effort company can increase the
utilization rate of the production. Thus they can reduce the product cost through
economic of scale by reducing the per unit fixed cost.

5. Proper job analysis: Maintaining proper job description and job specification for
every post help the employees to understand their responsibility and remove their
confusion about their task which also help the organization to attain their goals and
objective effectively and efficiently.

6. Collaboration with other companies: To reduce the tax rate on import and export
both in inside and outside of the country, companies should make collaboration with
other companies and put pressure on the government. Through collaboration all the
companies can improve each of their performance. If they use collaborative effort in
import and logistic activities, it will help them to reduce their cost too. Through the
collaboration price war between competitors can be avoided.

7. Research and Development: Investment in research and development need to be

extended to initiate a new idea.

8. Proper compensation package: The attendance bonus should be increased to reduce

absenteeism. There should develop a proper HR policy to control high absenteeism and
turnover rate. Besides this, the company should provide adequate salary, bonus,
incentives and non-financial facilities to reduce the turnover rate.

9. Appropriate HR Planning: The Company should follow standard and formal human
resource planning system to ensure the right number of people, right kind of people at the
right place and right time.

10. More Employee Engagement:

There are need more employee engagement for the betterment of the organization. It's
difficult to ensure the employee satisfaction without employee engagement. HR leader
can develop and implement engagement initiative and management strategies.

62
8.2 Conclusion:

UPGDCL is one of the best power generation and distribution companies which have
seen tremendous success since its establishment. It has been possible only because of its
skilled management, well trained, dedicated employees and excellent quality products. It
has earned very impressive operating income over the previous years. The company tries
to hold good corporate governance by maintaining discipline and sincerity all over the
organization through its skilled and dedicated employees.

United group is now one of the most successful industries in our country. They are trying
to increase their business line and their own brand. From this report we will able to know
about "Company Analysis and Improvement Guideline of United Power Generation &
Distribution Company Limited.

UPGDCL has come into the industry with its full strengths but it is facing some
problems. From my close observation I have found some problems as well as some
tremendous prospects. Finally, I have put some recommendations in this regard and
believe that if they put concern on these they can surely compete satisfactorily in the
modern and competitive business arena.

After doing this report I would like to conclude by saying that it had been a great
experience for me. Moreover the survey that I conclude gave me a stronger and more
helpful knowledge about the entire research. This report may contain few flaws yet I have
tried my best to maintain accuracy. I hope this report can be a helpful resource to use in
future.

63
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