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Bata Shoe Companys Operations

in
Bangladesh













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I IN NT TR RO OD DU UC CT TI IO ON N
Bata Shoe Company is one of the largest companies not only in Bangladesh but also in
many other countries. Bata Shoes is a large, family owned shoe company based in
Bermuda but currently headquartered in Lausanne, Switzerland, and operates 4
business units worldwide Bata Europe, Bata Emerging Markets, Bata Branded
Business and Bata North America. It has a retail presence in over 50 countries and
production facilities in 26 countries. In its history the company has sold more than 14
billion pairs of shoes. In 1985 Bata Shoe listed in Dhaka Stock Exchange. At this
moment, its shares are traded in our two stock exchanges (DSE& CSE)


O OB BJ JE EC CT TI IV VE E O OF F T TH HE E S ST TU UD DY Y: :
Objectives of the study are given below
To know about Batas products.
To get idea about their current business condition.
To analyze its market position with its competitors.
To take an over view of their market strategies.


A AN N O OV VE ER R V VI IE EW W O OF F T TH HE E C CO OM MP PA AN NY Y: :
The business that became the Bata Shoe Organization was established on August 24,
1894 in Zlin, Czechoslovakia by Tomas Bata, and included his brother Antonin and
sister Anna. Although this business was new, the Bata name had been part of a
tradition of shoemaking for eight generations, spanning three hundred years. It was one
of the first modern-day shoe 'manufacturers', a team of stitchers and shoemakers
creating footwear not just for the local town, but also for distant retail merchants. This
departure from the centuries-old tradition of the one-man cobbler's workshop was a
brand new concept, creating an entirely new industry. The Bata enterprise
revolutionized the treatment of employees and labor conditions. Tomas consistently
maintained a human focus, creating opportunities for development and advancement,
and added compensation for employees based on achievement. As the enterprise
prospered, so did the communities where it operated. Tomas believed that a focus on
people and public service was critical for business success. The enterprise built
housing, schools and a hospital near the shoemaking plant in Zlin. It provided food and
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inexpensive rent during very difficult times. Bata companies later provided rail services,
construction, insurance, publishing and a tannery in Zlin.

"The Bata System" devised by the Zlin team, and later applied in other Bata Shoe
Organization companies, organized operations into autonomous workshops and
departments ("profit centre"), allowing employees to contribute ideas and stimulate
production, and contributed significant breakthroughs in footwear technology. By 1938
Bata Shoe Organization had established a unique and widespread presence,
designing, producing and marketing footwear in more than 30 countries. The Bata Shoe
Organization regarded itself as a 'Multi-Domestic' rather than multinational enterprise,
making it a priority to contribute to the economy in any new markets it entered.

During the 50s, 60s and 70s the Organization redoubled its focus on retailing
excellence, international footwear branding, advanced manufacturing techniques and
extensive employee training, another Bata tradition that dated back to the
Organization's earliest years. The Organization continued to expand its retail
operations, production facilities and moved into new countries of operation. Thomas J.
Bata, and son Thomas G. Bata, continued to lead the Organization with the traditional
philosophy ensuring that each operation focused on customer satisfaction. As the
world-manufacturing base for footwear shifted to developing countries. New business
strategies have been guided by the founding principles of focusing on customers,
marketing and employees. Branded products, innovative retail store concepts, lifestyle
merchandising, non-footwear products and participative retailing have been introduced.
In 1992, the Organization and family were invited to return to the Czech Republic,
where Bata had remained a symbol of national pride and achievement.


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B BA AT TA A T TO OD DA AY Y: :
Serves 1 million customers per day
Employs more than 50,000 people
Operates 5000 retail stores
Manages a retail presence in over 70 countries
Runs 27 production facilities across 20 countries


Bata International serves customers in much of Asia, the Pacific and Africa through its
3,000 stores and many dealers. It is supervised from Singapore. Bata International
operates shoe innovation centers in several countries as well as 30 factories to serve
individual markets.

Bata Europe is based in Paris and operates 500 stores offering fashionable footwear.
The world-class shoe innovation center just outside of Venice supplies many of the
exclusive lines found in Bata stores throughout Europe.

Bata Latin America is based in Mexico City. Bata is the leading retailer of shoes in
Latin America and the leading marketer of children's branded footwear.

Bata Canada is based in Toronto from where 250 stores serve the Canadian market.
Its chain of Athletes Worlds and Nike Shops is the leading fashion source in Canada
for young urban customers.

Bata Shoe organization (B.S.O.) is the largest manufacturer and marketer of footwear
in the world. Its global business comprises of shoe factories, tanneries, engineering
plants, quality control laboratories, product development and research centers. Bata
distributes its products through approximately 6,300 retail outlets, 10,000 franchises
and thousands of wholesale depots and dealers. More than 50,000 people are
employed in producing and selling over 300 million pairs of shoes each year, primarily
for the domestic markets in which B.S.O companies operate.

Approximately 400,000 additional people and their families are engaged in the support
services required by B.S.O. operations. Bata International Centre is located in Toronto,
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Canada. Mr. Tomas Bata, the founder of Bata Shoe Organization, initiated this
worldwide operation in Zlin, Czechoslovakia, now known as the Czech Republic. The
year 1994 marked the 100th founding anniversary of BATA. Over the years B.S.O.s
operation expanded across the entire globe and established itself as the worlds largest
organization in footwear manufacturing and marketing Today Bata operates in 68
countries.

B BA AT TA A L LE EA AD DE ER RS SH HI IP P P PO OI IN NT TS S: :
Bata operates in many different economic and cultural environments around the world,
dictating very different types of operations. Although Bata does not sell the same shoes
nor does it have identical stores in each country, customers will recognize common
elements to the Bata experience everywhere in the world. These common elements are
the Bata Leadership Points.

The best product

Bata companies offer our customers fresh, fashionable footwear and accessories,
designed specifically for the needs of the local market. Our shoes are always well made
from quality materials.
The best service

Whether in India or Italy, our sales associates offer consistently first-class service. They
are well trained to ensure a proper fit, and we pledge customer satisfaction.
The best value and quality

Through the efficient sourcing and distribution of Bata products, we can control the cost
and quality at every step to ensure value to our customers.
The best locations

Bata stores are modern, attractive and located conveniently to our customers. Bata
companies utilize innovative promotions and displays to display our products in
attractive manner.

B BA AT TA A B BA AN NG GL LA AD DE ES SH H: :
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Bata Shoe Company established by G. Bata in 1874 at Zing in former Czechoslovakia.
From a very modest beginning it has come a long way since, mainly by the vision of its
founding father and sheer commitment of its employee around the world. At first it only
made and sold good high quality shoes in and around Europe but as time goes by it
crosses the boundary to Europe and enter in many countries around the world. At the
Pakistan period Bata was first came to this country. After independence Bata continue
their commitment to provide good quality shoes at an affordable price. Many of the
elderly people still remember the Naughty Boy shoe of Bata that was known for its
durability among the kids of that time. But since then Bata Bangladesh has changed a
lot. Now they are not only providing durable shoes but have brought new designs too
according to the taste of the people. Bata expands its operation all through the country.
It has now huge number of stores, agencies, dealers and wholesalers around the
country. And undoubtedly it has the biggest shoe manufacturing and marketing
organization here in Bangladesh. There are hardly any places in the country where one
will not found Bata store, which signals its expansion, success and popularity here.

Bata Bangladesh is a public limited company, which has 51- 49% share with the
government of Bangladesh. Though it has established in Czechoslovakia but at present
Bata is a Canadian company because of the migration and mergers of the family and
now J. Bata who happens to be the grandson of founder G. Bata has his operation and
headquarter in Canada and operates as a Canadian company. In Bangladesh it is
operating as a Canada-Bangladesh company.
Bata has two factories in Bangladesh from where it produces all kinds of shoes. One of
which is at Tongi and other one at Dhamrai. The second factory at Dhamrai has state of
the art technology and facility with leather treatment to leather processing to waste
treatment plants, which is the only one of its kind in the country. Bata Bangladesh
produces daily around 80,000 pairs of shoes of various descriptions in its two
manufacturing units located at Tongi and Dhamrai. It has a modern Tannery with the
latest technological facilities to process approximately 19,000 square feet of leather
daily, which comprise a wide range of products and finishes. The Tannery is also
equipped with a modern effluent treatment plant to ensure a pollution free environment.
The Companys marketing network is consolidated through its own retail outlets,
distributors, franchises, agencies, wholesale depots and a large number of registered
distributors and dealers.

B BA AT TA A B BD D. . B BA AS SI IC C F FA AC CT TS S

YEAR OF ESTABLISMENT AS BRANCH OFFICE : 1962
YEAR OF INCORPORATION AS FULL FLEDGED COMPANY` : 1972
TOTAL MANPOWER : 4300
NUMBER OF BROAD CATEGORIES OF SHOES : 4
TOTAL NUMBER OF CATEGORIES OF SHOES :40
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BATAS ANNUAL SALE PAIRS(2009) :35 M PAIRS
BATAS ANNUAL TURNOVER IN 2009 :70M US $
AVERAGE RETAIL PRICE :4 US $
NO. OF BRAND :20

C CH HA AN NN NE EL LS S O OF F S SA AL LE ES S: :

RETAIL AREAS : 30
NUMBER OF RETAIL OUTLETS : 350
WHOLESALE DEPOTS : 20
TOTAL NUMBER OF DEALERS : 1200



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C CO OM MP PA AN NY Y P PR RO OF FI IL LE E O OF F B BA AT TA A S SH HO OE E C CO OM MP PA AN NY Y ( (B BD D) ) L LT TD D. .
Mission:
Introduction of a strong shoe line targeted to various market segments to maintain
leadership through increased market share.

Vision:
To provide good quality shoes at an affordable price. By keeping in mind the comfort
that needs to be there and providing new designs with it.

Objectives:
Achievement of 100% estimated business in each category
Maintain a shoe line with 700 lines of which 200, 300, 150 & 50 lines for Men, Women
Children & Plastic respectively.
Introduction of a shoe line as per life style as well as fashion trend.
Achieve an average 55% margin in each category
Innovate ideas or system for better management of merchandise distribution by
maintaining 4 times stock turn.

Strategies:
Penetration to new & targeted market segments through introduction of shoe lines as
per life styles with supportive promotion activities
Defined number of lines, assortment & quantity for each store according to
merchandise classification & store profile in order to increase efficiency in distribution.
Identification of loopholes in cost structure to increase production efficiency.
Detail analysis of price points of entire shoe line in order to achieve maximum margin.
Detail analysis of departmental work flow & bringing necessary changes for efficiency
better coordination with other departments.

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B BA AT TA A S S B BU US SI IN NE ES SS S: :
Bata manufactures and sells a wide range of footwear made from leather, canvas,
plastic and rubber. The company sells over 59 mn pairs per year throughout the country
and in overseas markets such as USA, UK, Europe, Middle East, etc. The company
also markets a range of sports shoes, garments and accessories manufactured by
others.
Footwear sales account for more than 97% of the total revenue. Rubber and canvas
footwear contributes 48% of volumes, leather footwear contributes to 30% and plastic
footwear accounts for 22% of volumes. In value terms, leather footwear contributes to
58% to turnover, Rubber and canvas footwear contributes 27%, plastic footwear
accounts for 12% of total turnover. Accessories, garments, etc account for 3% of
turnover. Bata manufactures around 50% of its footwear in its own units, while the rest
is outsourced. from small-scale manufacturers. While all the plastic footwear is
outsourced, in leather company manufactures 63% of the footwear in-house and in
rubber and canvas footwear, 61% is manufactured in-house.

S SO OU UR RC CE ES S O OF F P PR RO OD DU UC CT TI IO ON N: :
Bata Bangladesh has four different sources of production:
Own:
Bata Bangladesh has two factories in Tongi and Dhamrai. All the rubber and related
production has been done in Tongi factory. Every type of leather products are been
manufactured in the Dhamrai factory. About 92% of all Bata products are produced in
these two factories.
Satellite:
There are some satellite production factories which produces solely for Bata with the
production facility, which has been, step up by Bata Bangladesh. 4% of Bata production
is from satellite sources.
Outsourcing:
As related and supporting industries are growing in shades of the massive structure of
Bata Bangladesh. It also does outsourcing with different small shoe industries mainly
from the Dhaka region. The quality and the specification has been ensured by the Bata
people. The participation of outsourcing in the companies business is 4%.

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Import:
With high import duty it is hard for Bata to import a substantial amount from different
subsidiaries and other outside suppliers. It can be mentioned that the duty for importing
complete shoe here in Bangladesh is 101%. Even though Bata Bangladesh import
shoes to keep up with the market trend, which is around 1% in every year.

P PR RO OD DU UC CT TS S: :
S Sc ch ho oo ol l s sh ho oe es s o of f B Ba at ta a: :
Bata first earn its name as the most durable shoe manufacturer for school going
children. When it first comes to this country it has realized that there is a huge market
opportunity for school shoes. Quickly they introduced the Naughty Boy shoes. Which
quickly earn recognition among the parents of that time, as they need a durable shoe
that really can last even after lots of rough treatment. From there on Bata gone on to
make Canvas shoes, other black leather shoes, hard top white sneakers for school
goers. The most popular brand of school shoes that are now in the market are
NorthStar which provides hard and soft white sneakers and the leather black Bata
school shoes which are of various designs.

B Bu ub bb bl le eg gu um mm me er rs s: :
The Bubblegummers brand of Bata serves the infant to children, according to them 0-
13 years of age group. Bubblegummer brand has provided Varity of design and type of
shoes for above-mentioned age group of children.

M Ma ar ri ie e C Cl la ai ir re e: :
The Mari Clare brand of Bata is for women. It has more than 100 designs and has
different price range of shoes. The price range here starts from Taka 450. In recent
times Bata has targeted the young working women who wants reasonably priced,
decent design and durable shoes for work and this brand in many cases serves this
segment well.


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P Po ow we er r: :
This is a reasonable priced good quality sports shoes and sandle shoes for young male
and female. The target segment of Power is teenagers and some parts of the elderly
people who need sneaker for walking purpose. The price range starts from 695/- and in
many cases not exceed more than thousand taka. According to the buying power this
price range is very popular with the general public as durability comes with it as with
every Bata footwear.

K Ki in ng gs sS St tr re ee et t: :
The most famous dress shoes of Bata come under the brand name of KingsStreet. It
has been nice to know that this brand of shoes has been solely made in Bangladesh.
The Dhamrai factory of Bata has the machinery to make these shoes, which they
established in 1999 at a cost of 1 core taka. These shoes have different price range for
different segments of people.

W We ei in nb br re en nn ne er r: :
This brand of Bata provides trendy, outdoor, rough use footwear for men. This is also a
popular brand with the youth of the country. Though the brand is not that cheap but the
quality of it is very good. Apart from these Bata has numbers of leather sandles of
various designs, sandle-shoes under Bata brand name that serves different segment of
the market. Bata also manufacture and market popular brands such as HushPuppy,
Dr.Scholes in this region of south Asia. Bata also have quite new brands for male and
female like Bata Comfit, Bata Flexible. According to the Bata officials in Bangladesh
Bata have more than 1000 lines of footwears here in Bangladesh at present.
Thus Bata's well known brands include Power, Bubble-Gummers, Marie-Claire, Hawai,
Naughty boy, Sandak, North-Star etc. International brands such as Hush Puppies,
Nike, Lotto, and Dr Scholl are sold under manufacturing and licensing agreements. The
company has more than 1000 shoe designs and caters to all the segments. Over 60%
of sales come from the men's range, while children's and womens range account for
about 20% each. In women's segment the Sun-drop range of casual ladies wear in the
popular range has done well in the market and registered a strong growth of 500% in
F12/2000. The brand is being endorsed by filmstar Rani Mukherjee. Bata also markets
sports wear, readymade garments, hosiery, and other footwear accessories like socks,
shoe polish, etc. The company also exports its products to countries like Germany,
Australia, USA, UK, Holland, Denmark, New Zealand, France and Canada. It exports
about 4mn pairs of shoes in a year.

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A AN NA AL LY YS SI IS S A AN ND D F FI IN ND DI IN NG GS S: :
T Ta ar rg ge et t M Ma ar rk ke et t: : lower to middle income group as well as the upper segment.

B Ba as si is s o of f S Se eg gm me en nt ta at ti io on n: : There are two different criteria used in order to segment
the market. Thus Bata Shoe Organization divides the market geographically as
well as on the basis of product type.

R Re et ta ai il l m ma ar rk ke et ti in ng g m ma an na ag ge er r: : As retail is the highest contributor of the companies
business. Retail marketing manager is responsible for planning, advertising as well
as the whole of the retail operation around the country. He also deals with the
governmental regulation in respect of price, stability, license, fees etc. for launching
new products. It is his responsibility to take initiative to pass all the necessary
documents from the regulation board of government. For this reason this post-
ranked third in the hierarchy of the companies organ gram in Bangladesh.

W Wh ho ol le es sa al le e m ma ar rk ke et ti in ng g m ma an na ag ge er r: : The functional objective of the wholesale
marketing manager is to monitor and planning of wholesale market operation of
Bata Bangladesh, which also is a very important sales channel of the company.

M Me er rc ch ha an nd di is si in ng g m ma an na ag ge er r: : In charge of the heart of the company the Merchandising
department. Who reports to the CFO and managing director directly and to some
instance to the sales channels especially to Retail. All the categories of shoes are
headed by the Merchandising officer/Category Merchandiser/Buyer who is in charge
of every detail of his/her category. He/she is responsible for his category business,
choosing the right merchandise according to the market need, distribute it properly
and getting the feedback of the performance of his/her merchandise in the market
and plan accordingly. He/she on the other hand repots to the Merchandising
manager. There are basically four categories in Bata Bangladesh of which a
merchandiser who is basically the head of the category has a distributor, who is
responsible of distribution of the merchandise to the right place at the right time and
the right amount. A designer also under the category merchandiser who is
responsible for designing new shoes according to the market needs and the advise
of the merchandising officer.

P Pr ro od du uc ct ti io on n D De ep pa ar rt tm me en nt t: : Production division is aimed to increase productivity and
quality as much as required without spending more. There are two plant managers
on in Tongi and other in Dhamrai. They are controlled by the director of production.
They are responsible for directing, coordinating and controlling the overall
production activities means from the purchasing raw materials to transferring those
into complete shoes. The function of production manager is to assist the director of
production in achieving the production target for a specified period. The function of
planning and supply manager is material planning, production planning etc.
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Finance Department:

To maximize the interest of the shareholders of Bata Shoe Co. (BD) Ltd.
To allocate the fund in a proper way that minimizes its cost and maximizes its
profit.
To ensure conductive financial climate of the company.
To ensure sound management of the administrative staff and financial matters of
administrative staff and selection grade employees.

Investigation: Conduct thorough review in any specific area of audit universe as
desired by the authority of the concerned audit entity.
Development of procedure manuals.

Q Qu ua al li it ty y A As ss su ur ra an nc ce e: :

To ensure that the end users receive medicines those are safe, effective and
quality consistent with leadership position in the health care industry throughout
the country.
To apply the principles of customer-focused quality, service and excellence to all
processes and system, from product design, development through production,
distribution and marketing.
To maintain the standard of quality in order to protect the patients, prevent errors
and optimize value provided to the consumer and company.

M MA AR RK KE ET T A AN NA AL LY YS SI IS S: :
Within a given environment, marketing strategy deals with the interplay of three forces
known as the strategic three C's: the customer, the competition and the corporation.
Based on interplay of the strategic three Cs, formation of marketing strategy requires
the following three decisions:
Where to compete: It requires a definition of the market (e.g. competition across an
entire market or in one or more segments).
How to compete: It requires a means for competing (e.g. introducing a new product
to meet a customer need or establishing a new position for an existing product).
When to compete: It requires timing of market entry (e.g. being first in the market or
waiting until primary demand is established).
Thus Marketing strategy, in terms of these three key constituents, is defined as an
endeavor by a corporation to differentiate itself positively from its competitors, using its
relative strengths to better satisfy customer needs in a given environmental setting.
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A AN NA AL LY YS SI IS S O OF F T TH HE E C CO OR RP PO OR RA AT TI IO ON N: :






















F Fi ig gu ur re e: : 2 2 K Ke ey y e el le em me en nt ts s o of f m ma ar rk ke et ti in ng g s st tr ra at te eg gi ic c f fo or rm mu ul la at ti io on n

3 3. .2 2 M MA AR RK KE ET T P PO OS SI IT TI IO ON N: :
Bata Bangladesh is the largest player in the footwear industry with around 9-10%
volume share and a 60% market-share in the organized segment. BB (Bata
Bangladesh) has a market share of 70% in canvas shoes segment while it has a share
of 60% in leather shoes. BB manufactures about 10% of the total Hawaiis sold in the
country. BB competes in manufacturing low priced Hawaiis with the unorganized sector
with its price ranging from Taka35-Taka110 with unorganized sector's pricing in the
range of Taka25-Taka50.
Leading competitor in the popular segment of the organized market Apex Shoes. Other
organized sector players are liberty shoes, Baly Shoes, Woodland, Pagasus. Most






Marketing Strategy:
Achieving maximum
Positive differentiation
Over competition in meeting
Customer needs.



C Cu us st to om me er r
C Co om mp pe et ti it ti io on n C Co or rp po or ra at ti io on n
S So oc ci ia al l
E En nv vi ir ro on nm me en nt t

P Po ol li it ti ic ca al l a an nd d L Le eg ga al l
E En nv vi ir ro on nm me en nt t
E Ec co on no om mi ic c
E En nv vi ir ro on nm me en nt t
T Te ec ch hn no ol lo og gi ic ca al l
E En nv vi ir ro on nm me en nt t
K Ke ey y E El le em me en nt ts s o of f M Ma ar rk ke et ti in ng g S St tr ra at te eg gi ic c F Fo or rm mu ul la at ti io on n
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global players like Adidas India, Reebok, Nike, etc are operating through their
Bangladeshi subsidiaries with main focus on premium sports shoes segment, which
has an insignificant volume share. Competition is hotting up in the domestic market due
to popular brands such as Gaitonde, Red Tape, Lotus Bawa in the illegal and
smuggling of these shoes. These brands are gaining market share especially in the
premium segment.

3 3. .2 2. .1 1 M MA AR RK KE ET TI IN NG G M MI IX X O OF F B BA AT TA A S SH HO OE E C CO OM MP PA AY Y ( (B BD D) ) L LT TD D. .
P PR RO OD DU UC CT T: :

Bata shoe Bangladesh Ltd. has more than 900 lines of shoes in different categories.
They distribute all of these lines of shoes in different parts of Bangladesh through
wholesalers, dealers and through their own stores. In the following chart some of the
shoes, its average price, size and other dominating features are mentioned.

BATA Best Price Range (TK)
Men's 995-1695
Women's 250-550
School 200-330
Children 130-195
Sport 695-995
Non Shoes 50-100
Dominating Color
Men's Black
Women's Black, Chocolate
School Black, White
Children Multicolor
Sport White, Gray
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T Ta ab bl le e 1 1: : D Di if ff fe er re en nt t
P Pr ro od du uc ct t C Ca at te eg go or ry y
a an nd d B Be es st t S Se el ll li in ng g
S Si iz ze es s







P PR RO OM MO OT TI IO ON N: :

Promotion strategies are concerned with the planning, implementation, and control of
persuasive communication with customers. Clear-cut objectives and a sharp focus on
target customers are necessary for an effective promotional program. As Bata is a
established brand here in Bangladesh they think that they should go on with more and
more retail outlets rather than intense advertising. So they limit their advertising into
following places:

Billboards
Adds on local newspaper
Some promotion together with other established brands

Non Shoes Black, Chocolate
Best selling sizes
Men's 41,42
Women's 4,5
School 4,5
Children 11,12
Sport 7,8
Non Shoes Depends on the product
Opening Days 6 days
Opening Hours (AM-PM) 9:00 am-8:00 pm
Implementation of new designs Weekly
Effective sales campaigns 15-20% discount
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D Di is st tr ri ib bu ut ti io on n p pr ro oc ce es ss s o of f B Ba at ta a B Ba an ng gl la ad de es sh h: :







F Fi ig gu ur re e: : 3 3 D Di is st tr ri ib bu ut ti io on n p pr ro oc ce es ss s o of f B Ba at ta a s sh ho oe e C Co o. . ( (B Bd d. .) ) L Lt td d. .

3 3. .3 3 F FU UT TU UR RE E P PL LA AN NS S: :
To improve the sales and profits, BB is planning to increase penetration by setting up
more retail outlets and taking space in shopping malls across the country. Existing retail
stores would be upgraded even as wholesale depots would be set up in smaller towns
and semi-urban areas. BB's main efforts will be to streamline the wholesale business.
BB's thrust is on becoming marketing driven firm from a manufacturing oriented
company. Steps are also being taken to reduce costs, improve distribution logistics and
focus on launch of new products in order to improve the performance of the company.

I IN ND DU US ST TR RY Y A AN NA AL LY YS SI IS S: :
Products tend to go through different stages, each stage being affected by different
competitive conditions. These stages require different marketing strategies at different
times if sales and profits are to be efficiently realized. The length of a product life cycle
is in no way a fixed period of time. It can last from weeks to years, depending on the
type of product. In case of shoe industry in Bangladesh it is presently going through the
growth stages which are characterized by many new consumers entry in the market, by
fall in price as experience and economies of scale have been attained, by developed
distribution channel and by increasing intensity of competition.


Raw
Materials
Tongi
Factory
Dhamrai
Factory
CDC
(Central
Distribution
Center)
Depot


Own Stores
&
Agencies
Dealers
&
Wholesalers
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Introduction Growth Maturity Decline
F Fi ig gu ur re e: : 4 4 P Pr ro od du uc ct t L Li if fe e C Cy yc cl le e o of f s sh ho oe e i in nd du us st tr ry y i in n B Ba an ng gl la ad de es sh h




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I IN NT TE EN NS SI IT TY Y O OF F C CO OM MP PE ET TI IT TI IO ON N I IN N S SH HO OE E I IN ND DU US ST TR RY Y: :
Conceptual framework for industry analysis has been provided by Porter. He developed
a five-factor model for industry analysis, as shown in the exhibit. The model identifies
five key structural features that determine the strength of the competitive forces within
an industry and hence industry profitability. Analysis of shoe Industry of Bangladesh in
respect to Bata shoes with Porters Model of Industry Competition has been
summarized as followed.













F Fi ig gu ur re e: : 5 5 F Fi iv ve e f fo or rc ce es s o of f c co om mp pe et ti it ti io on n f fo or r B Ba at ta a S Sh ho oe e C Co o. . B Bd d. . L Lt td d. .


NEW ENTRANTS

Apex
Nike, Reebok, Woodland
Sun crest



MAJOR COMPETITORS

Apex, Independent
sellers,
Reebok, Liberty
Smuggled shoes
SUPPLIERS

Rubber from local source,
leather from local source.
Some sole from other
subsidiaries of Bata like
India and China Bata
BUYERS
Infant, teen, young, old.
Lower- middle to upper
class

SUBSTITUTE
Bare foot, low quality
footwear
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3 3. .4 4. .2 2 S SW WO OT T A AN NA AL LY YS SI IS S: :
S St tr re en ng gt th hs s: :

Image of the company
Quality Product
Differentiated line of products
Competitive Pricing
Strong distribution channel
Modern manufacturing facilities
Brand loyalty at mass level

W We ea ak kn ne es ss se es s: :

Insufficient promotional activities
Bata at present conducts all the store management activity manually. This
results lots of lengthy paper works, errors & waste of time.
Inability to catch the present trend in time
Less competitive price due to high cost structure.
VAT & tax barrier

O Op pp po or rt tu un ni it ti ie es s: :

Despite political turbulence a segment of our middle-class is coming up with
reasonable buying power. Many of them are women who are decision maker so
the city store concept of Bata can attract them as whole of the family footwear
can be available there.
Consumer like differentiated products. They like to shop in a store where they
serve the whole family.
More competition results in more campaign for products.
Business Expansion in Shoe care products
Utilize outsourcing especially the synergy sources to achieve competitive pricing
Franchisee opportunity with global brands like Nike, Reebok, Hush Puppy
Market expansion opportunity in high fashion & value for money footwear
market for all categories of shoes through Retail & WCSM channels



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T Th hr re ea at t: :
Political instability affects the supply of raw materials and distribution of finished
products.
Uncontrolled counterfeit of Bata products
New companies like Apex, Homeland, Pagasus of Bangladesh and the foreign
companies like Nike, Reebok, Addidas are already in the market with good
quality product. Have to keep up with them respect of quality.
Smuggelling of shoes and many stores in the city like the ones in elephant road
are the major market leaders. As they dont have to pay for large amount of
money for establishment, production, quality and advertising so they can sell at a
much lower price than established brands like Bata.
Rapid market expansion program by organized competitors like APEX.

E ET TH HI IC CA AL L C CO ON ND DU UC CT T A AN ND D C CO OR RP PO OR RA AT TE E R RE ES SP PO ON NS SI IB BI IL LI IT TY Y: :
Bata companies have a tradition of being good corporate citizens and seek to
contribute to the well being of the countries and communities where they operate. Bata
companies conduct themselves as positive and contributing members of any
community in which they operate, and seek to provide employees with a safe and
healthy working environment. Bata companies are committed to ensuring that
operations are conducted ethically, and in compliance with applicable local laws and
regulations. Bata Bangladesh is also concern about the environmental safety related
issues. So it has established of its own an Effluent Treatment Plant (ETP) in its
organization premise with a huge investment.
The Bata Environmental Mission Statement is: To protect our people, customers
and communities and to protect our natural environment in order to help sustain human
development globally.

C CO ON NC CL LU US SI IO ON N: :
From the analysis of Bata Shoe Company Bangladesh Ltd and the shoe industry we
have identified that the shoe industry is growing and identified their main weakness is
insufficient lack of development with the rapid changing market needs, insufficient
promotional activities, and downward trend of quality. On the other hand, distribution
system and vertical integration are the strengths of Bata From strategic marketing
viewpoint; we see that Bata is taking corrective steps in almost all the way. In very few
sides Bata has lacking. Based upon these facts recommended strategies would assist
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in more growth of Bata shoe company Bangladesh Ltd. in among the upcoming fierce
competition in the shoe industry.