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Critical Success Factors for the Entrepreneurs of Food Processing Industry of Bangladesh

Dr. Nazrul Islam
Professor
Canadian University Bangladesh

Syed Abdullah Al Noman
Bangladesh University of Professionals

M Rahat Bin Alam
Bangladesh University of Professionals

Sadia Sultana
Bangladesh University of Professionals

AIM Marjanul Islam Tonmoy
Bangladesh University of Professionals

Zahid Hasan
Bangladesh University of Professionals

Abstract/ Executive Summary:

There is a high potentials of food processing industry in Bangladesh which is primarily derived from the agriculture sector of the country. Food processing industry is divided into two segments such as, production and distribution. Production segment refers to processing of meats and cheeses and the creating of soft drinks, alcoholic beverages, packaged foods, and other modified foods. While the distribution includes transporting the finished food products into the hands of consumers. The food processing industry is the fastest growing industry of Bangladesh since 2000. Due to recent development in food processing industry, a good number of entrepreneurs have been developed in this sector. This development can be attributed by the change of tastes and preferences of Bangladeshi people. Now, people of Bangladesh prefer buying processed food items from the grocery shops and departmental stores and prefer buying packaged food products. Hence, this study aims at identifying the critical factors of food processing entrepreneurs in Bangladesh. This study used both the qualitative and quantitative research methods. Respondent entrepreneurs were selected by simple random sampling method from the food processing industry of Bangladesh. Factor analysis was carried out to find out the critical factors of the entrepreneurs while multiple regression analysis was conducted to identify the relationships between the critical factors and the overall development of food processing industry in Bangladesh. Individual critical factors like use of information technology, family and friends support, and capability to compete in the market are significant critical factors for the food processing entrepreneurs in Bangladesh.

Keywords: Food and Beverage Industry, Adaptation to Locality, Service Itself, Facilities, Food Quality, Sales Incentive Program.

Location: All over Bangladesh

Start Date: 00-00-2014

End Date: 00-00-2017

Program Area: Socio-economic and Policy

Non-commodity: Profitability

Objectives:

In between 2014 and 2017, the food and beverage industry in Bangladesh developed at an average of 7.7 percent for each annum. Economic Census of 2016 from the Bangladesh Bureau of Statistics, revealed that there were roughly 246 medium-sized food and beverage companies are providing employment facilities to 19 percent of the mechanical assembling workforce in Bangladesh or 8 percent of the aggregate workforce of Bangladesh. The food industry utilizes 2.45 percent of the nation's aggregate work power and its impact on the GDP was 2.01 percent in 2017. Also, there are various small industries and local units occupied with food and beverage all through the nation. As per some industry experts, the food and beverage sector in Bangladesh is a 4.5 billion US Dollar industry. In 2017, Bangladesh sent out over $700 million worth of processed foods and beverages, more than 60 percent of them were shrimp and fish items.

Methodology:

This section describes the respondents’ profiles and procedures, questionnaire design and test of reliability, determination of sample size, data collection, analytical tools and test of reliability, etc.

3.1 Respondents Profiles Table 2 shows that majority of the respondents (77%) are male and 23% are female entrepreneurs of Bangladesh who are doing business in food and beverage industry of the country. It was found in the literature that there are about six million business establishments in Bangladesh. If the food processing industry is 1% of the total establishments, then there will be 60,000 establishments operating in this sector. The sample size of this study was determined by using the following formula suggested by Yamane (1967).

3.3 Questionnaire Design The structured questionnaire developed by Dabholkar (1996) was used in this research to collect information from the literature review on the critical factors for food processing industry of Bangladesh. Responses to all the statements in the questionnaire were measured on a five-point scale ranging from 1 to 5 with 1 indicating strongly disagree and 5 indicating strongly agree. One of the relative advantages of using this scale is its suitability for the applications of multifarious statistical tools used in marketing and social research study (Malhotra, 1999). The collected data were statistically processed subsequently to get the useful information. The reliability statistics show that the internal consistency of the questionnaire is under the acceptable limit.

3.4 Data Collection & Analysis Data were collected from both primary and secondary sources. Primary data were used for the identification of the critical factors in food processing industry of Bangladesh. The survey was conducted among the entrepreneurs of food processing industry of Bangladesh. The survey was conducted in 2019. The interviewers were properly trained on the items included in the questionnaire for data collection before commencing the interview. Along with descriptive statistics, inferential statistical10 techniques such as, Factor Analysis and Multiple Regression Analysis were used to analyze the data. A Principal Component Analysis (PCA) with an Orthogonal Rotation (Varimax)11 using the SPSS (Statistical Package for Social Sciences) was performed on the survey data. Multiple Regression Analysis12 such as, Multiple Regression was conducted by using SPSS to identify the relationships between the dependent and independent variables and the significant factors.

Source of Information: International Journal of Business Marketing and Management (IJBMM); Volume 5 Issue 5 May 2020, P.P. 58-69 ISSN: 2456-4559

Article Link (Online Journal):

Funding Source:

Budget:

Total Budget (Tk.) :

Achievement/Findings:

This study identified seven critical factors for food processing entrepreneurs for their success in Bangladesh. The factors are: social contact of the entrepreneur, use of information technology, personal financial need of the entrepreneur, family and friends support, the commitment of the entrepreneur, capability to compete in the market and size of the business are the critical factors for the development of food process industry of Bangladesh. All the seven factors together significantly related to the overall development of food processing enterprises in Bangladesh.Individual critical factors like use of information technology, family and friends' support, and capability to compete in the market are significant critical factors for the food processing entrepreneurs in Bangladesh. The factors such as, social contact of the entrepreneur, personal financial need of the entrepreneur, commitment of the entrepreneur and size of the business are not found significant in this study.

Knowledge Management: Journal