Contents

1 lndusLry Cvervlew 1
2 MarkeL SLrucLure 2
3 8A1A 8angladesh LLd 2
CrganlzaLlonal SLrucLure 3
4 1argeL 3
3 roducL Llne 4
6 1he Clobal value chaln of Lhe looLwear lndusLry 4
7 Where ls 8A1A ln Lhe value chaln? 3
8 roducLlon rocess 3
9 MarkeLlng Mlx 6
ulsLrlbuLlon and 8eLall CuLleLs 6
rlclng 7
romoLlon 7
10 CompeLlLlon 7
11 Lmerglng 1rends CrowLh 1ra[ecLory of Lhe lndusLry 8
8aLa's response Lo lndusLry Changes 8
12 LnLrepreneurlal challenges 9
orLer's 3 forces analysls Crganlzed secLor dlsorganlzed secLor 9
Challenges Lo lace 10
SuggesLed SLraLegy for new LnLranLs 11
13 8eferences 12








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Industry Uverview
lookloq bock ot tlme

1he fooLwear lndusLry ln 8angladesh has been flourlshlng slnce Lhe colonlal era Powever lLs
modernlzaLlon Look place only ln Lhe laLe 1980sWhen 8aLa Shoe Company esLabllshed lLs
manufacLurlng planL aL 1ongl ln 1962 lL was Lhe flrsL manufacLurlng planL Lo produce shoes on a
large scale ln LasL aklsLan LasLern rogresslve Shoe lndusLrles (LSl) esLabllshed lLs producLlon
planL ln 1967 and sLarLed exporLlng fooLwear Lo uSS8 Czechoslovakla and Lngland 8aLa and LSl
held a ma[or share ln Lhe local fooLwear markeL also
1
1he lndusLry suffered a ma[or seLback durlng
Lhe LlberaLlon War buL was rehablllLaLed afLer lndependence
New ployets
Many new fooLwear manufacLurlng unlLs have been esLabllshed recenLly noLable among Lhem are
Apex looLwear Lxcelslor Shoes and aragon LeaLher and looLwear lndusLrles 1he number of
producLlon unlLs ln Lhe lndusLry now exceeds 2000 MosL unlLs are however small and medlum ln
slze and only 23 are relaLlvely large and have mechanlzed and semlmechanlzed producLlon
Lechnology 1he annual producLlon capaclLy of Lhe lndusLry ls abouL 32 mllllon palrs of leaLher and
nonleaLher fooLwear roducLlon capaclLy of lndlvldual manufacLurlng concerns varles from 730 Lo
3000 palrs a day
Motkets
1he shoes produced flnd Lhelr way malnly Lo Lhe local markeL only a few flrms produce shoes for
exporL 1he lndusLry provldes dlrecL employmenL Lo abouL 23000 people nearly 30 of Lhem are
engaged ln mechanlzed and semlmechanlzed unlLs Women workers are predomlnanL (3360) ln
Lhe mechanlzed secLor
AbouL 80 of all fooLwear unlLs are locaLed ln uhaka and ChlLLagong roducLlon ln small unlLs ls
processed manually looLwear unlLs vary ln producL llne producLlon capaclLy and exposure Lo
domesLlc and forelgn markeLs 1he relaLlvely large ones manufacLure mulLlple lLems such as leaLher
shoes sporLs and Lralner shoes canvas and leaLher sandals [uLe shoes cboppols (sllppers) and shoe
uppers
1hese unlLs consLlLuLe Lhe largesL share of Lhe exporL markeL MarkeLlng of fooLwear manufacLurlng
unlLs aL home ls done Lhrough a neLwork of wholesale and reLall shops MarkeLlng of lmporLed
fooLwear ls done Lhrough lmporLers/local agenLs Local manufacLurers use a neLwork of uhaka
based dlsLrlcL level and 1hana level wholesalers Lo sell Lo reLallers and flnally Lo consumers LxporLs
are organlzed Lhrough sales Lo forelgn reglonal wholesalers and Lhrough Lhem Lo forelgn reLall
Lraders and consumers
8angladesh ls gradually movlng from a fooLwear lmporL orlenLed counLry Lo an exporL orlenLed one
1he llsL of exporL markeLs of fooLwear from 8angladesh lncludes !apan Lhe volume leader wlLh a
markeL share of 34 followed by uk (11) Spaln (9) Cermany (8) 8ussla (7) lLaly (3) and
uSA (2)
Aotbotlty
1he maln auLhorlLy LhaL conLrols Lhe fooLwear buslness ln 8angladesh ls Lhe mlnlsLry of commerce
and lndusLry key organlsaLlons LhaL proLecL and serve Lhe lnLeresL of Lhe lndusLry are fooLwear

1
5ootce hLLp//wwwbaLabdcom/
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assoclaLlons promlnenL among whlch are Lhe 8angladesh 9oJoko 9tostotkotok 5omlty (8S) and
Lhe 8angladesh 9oJoko 8yobosboyee 5omltl (88S) 8S ls an assoclaLlon of fooLwear
manufacLurlng concerns whlle 88S represenLs fooLwear Lraders Powever 8aLa and Apex are noL
afflllaLed wlLh Lhls 8S

Market Structure
1he fooLwear lndusLry ln 8angladesh can be flrsL dlvlded lnLo Lwo ma[or secLors Lhe d|sorgan|zed
sector and Lhe organ|zed sector 1he dlsorganlzed secLor whlch ls largely consLlLuLed of lmporLers
and local lndependenL shoe manufacLurers conLrols a llon's share of Lhe markeL 1hese local
manufacLurers may or may noL have brand names and sells lLs producLs Lo Lhe local reLallers and
wholesalers 1he organlzed secLor whlch ls comprlsed of Lhe ma[or manufacLurers such as 8aLa
Apex and 8ay caLers Lo Lhe needs of Lhe resL of Lhe markeL ln Lerms of markeL share Lhe
dlsorganlzed secLor ls clearly ahead wlLh a 70 markeL share whlle Lhe organlzed secLor occuples
[usL abouL 30 of Lhe enLlre fooLwear lndusLry
tqoolzeJ sectot
1he organlzed secLor ls comprlsed of Lwo ma[or players 8oto and Apex and several oLher
companles such as 8oy mpotlom Ieooys and 9eqosos Some franchlses such as 8eebok and uma
also exlsL whlch serve nlche markeLs and Lherefore Lhelr sales volumes do noL slgnlflcanLly affecL Lhe
enLlre lndusLry 1helr LargeL segmenL conslsLs of hlgh end Lo upper mlddle class cusLomers as well as
forelgners 8y LargeLlng Lhese nlches 8eebok and uma do noL achleve large sales volume buL
achleve large marglns
ulsotqoolzeJ sectot
1he dlsorganlzed secLor lncludes local manufacLurers who may operaLe ln facLorles wlLh as few as
Lwo workers Lhe reLallers and wholesalers of Lhe goods produced by Lhese local manufacLurers and
some lmporLers brlnglng ln shoes from Chlna 1he LargeL markeL of Lhls secLor ls Lhe counLry's ma[or
secLlon low Lo lower mlddle lncome groups 1hus lL ls noL surprlslng LhaL Lhe dlsorganlzed secLor
conLrols 70 per cenL of Lhe LoLal markeL share of Lhe fooLwear lndusLry
ln general consumers of Lhe dlsorganlzed secLor are prlce senslLlve Powever wlLh Lhe growlng
llLeracy level and awareness Lhls segmenL ls geLLlng more aware of Lhe organlzed secLor
A slow LranslLlon ls Lhus occurrlng for consumers from Lhe dlsorganlzed secLor Lo Lhe organlzed
secLor
1he producLs remaln undlfferenLlaLed and prlce compeLlLlon ls Lhe only form of compeLlLlon
Companles have [usL enough dlfferenLlaLlon Lo allow Lhe companles Lo charge sllghLly hlgh process
BATA Bangladesb Ltd
8aLa was founded ln 1894 by a Czech man called 1omas 8aLa ln 1939 8aLa's cenLral offlce was
moved from Czechoslovakla Lo 1oronLo Canada 8aLa has a worldwlde reach operaLlng across 3
conLlnenLs and managed by 4 reglonal ,ean|ngfu| 8us|ness Un|ts (,8Us) Lach unlL beneflLs from
synergles speclflc Lo lLs envlronmenL such as producL developmenL sourclng or markeLlng supporL
Lach M8u ls enLrepreneurlal ln naLure and ls very flexlble Lo changes ln Lhe markeL place Pence lL
ls able Lo selze Lhese poLenLlal growLh opporLunlLles
1oday 8aLa serves 1 mllllon cusLomers per day employs more Lhan 40000 people operaLes 4600
reLall sLores and manages a reLall presence ln over 30 counLrles and runs 40 producLlon faclllLles
3 | a g e

across 26 counLrles 8aLa sLarLed lLs operaLlon ln 8angladesh ln 1962 and was lncorporaLed ln 1972
CurrenLly 8aLa 8angladesh operaLes 2 manufacLurlng planLs ln 1ongl and uhamral
ln 1ongl Lhe sole and ln sole of all shoes are produced Also Lhe school shoes vC shoes sandals
Lhongs and LexLlle based shoes are produced 1he oLher klnd of shoes leaLher shoes ls compleLed
ln Lhe uhamral manufacLurlng unlL 1here are nearly 240 sLores of 8aLa ln 8angladesh lncludlng Lhe
ones ln dlsLrlcL and subdlsLrlcL levels 8aLa 8angladesh ls produclng around 110000 palrs of shoes
dally
Urganizational Structure
1he organlzaLlon sLrucLure of 8aLa ls flaLLened
ellmlnaLlng any posL for dlrecLors and general
managers 1hls ls Lo ensure unobsLrucLed flow of
lnformaLlon wlLhln Lhe levels 1here are 10
deparLmenLs ln LoLal wlLh an average of 30 employees
per deparLmenL Ma[or deparLmenLs lnclude
producLlon merchandlse reLall human resource
markeLlng and flnance
Target
8aLa 8angladesh LargeLs male and female cusLomers of all age groups lL has someLhlng Lo offer Lo
each lncome class and Lhe producLs are carefully deslgned Lo maLch consumers' preferences and
llfesLyle looLwear producLs can be broadly caLegorlzed lnLo 4 ma[or llnes baslc fooLwear (men
women) deslgner fooLwear (men women) sporLs/aLhleLlc and klds fooLwear 1he LargeL and
concepL behlnd Lhese classes are shown ln Lhe Lables below
Basic footwear Designer
footwear
SportsJatbletic
footwear
Kids
Concept CompleLe llne of baslc
fooLwear LhaL
descrlbes valuefor
money
SLyllsh llghL
welghL leaLher/
synLheLlc and fabrlc
upper shoes
followlng laLesL
fashlon Lrends
valueformoney
fooLwear wlLh Lop
noLch
Lechnologlcal
feaLure and a
rugged ouLdoor
look
lun lnnovaLlve
and fashlonable
fooLwear wlLh
speclal aLLenLlon
Lo requlremenLs
for growlng feeL
Target
Market
Consumers of all ages
wanLlng fashlonable
fooLwear LhaL meeL
Lhelr demands for
quallLy and value
rofesslonals
housewlves and
execuLlves who has
preference for
brands comforL
Lrends and sLyles
AcLlve sporLlve
consumers who
value
performance
comforL and
aLhleLlc sLyle aL
affordable prlces
MoLhers and
chlldren who look
for dependable flL
and Lhe rlghL
comblnaLlon of
color and fun"
Age All ages 1943 years 1333 years Chlldren 18 years
Income Low medlum Lo
medlum hlgh
Medlum Lo hlgh Medlum Lo hlgh arenLs' medlum
Lo hlgh
Lifestyle 1yplcal famlly under
urban lnfluence(
emulaLors)
urban upwardly
moblle and sllghLly
conservaLlve
urban fashlonable
wlLh aLhleLlc
lnLeresLs
urban fashlon
consclous
Pead
Managlng
ulrecLor
ueparLmenL
Pead
Managers
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Product Line
8aLa has a producL llne show caslng several Lypes of dress summer casual and canvas shoes 1he
currenL producL llne of 8aLa 8angladesh ls made up of









All Lhe producLs ln Lhe producL llne are boLh manufacLured and reLalled by 8aLa 8angladesh wlLh Lhe
excepLlon of Push upples whlch are 30 flnlshed ln 8aLa lndla LLd and Lhe resL ln Lhe 8angladesh
facLory Also 8aLa ls only Lhe markeLeer for Lhe brand nlke whlch ls manufacLured ln lndla
Tbe Clobal Value cbain of tbe Footwear Industry

1he fooLwear lndusLry has several dlvlslons WlLh Lhe prlmary dlvlslon beLween organlzed and
dlsorganlzed secLor Lhere are also secondary dlvlslons among Lhose who are exporLers lmporLers
and reLallers and manufacLurers and reLallers
Conslderlng exporL dynamlcs Lhe lndusLry ls buyer drlven 1he exporLers here could noL esLabllsh a
sLrong bargalnlng power over Lhe buyers wlLh lLs one apparenL compeLlLlve advanLage cheap labor
1he CvC consLlLuLe of value chaln parLners llke lnLernaLlonal raw maLerlal suppllers Lechnlcal
alllance provlders and several oLher lndlvldual ouLsourclng manufacLurers and LransporL faclllLy
provlders
8aw maLerlals especlally Lhe core chemlcal dlocLylpLhalaLe(uC)are lmporLed from lndla Chlna
8razll llnland Slngapore and 1halland Local raw maLerlals lnclude leaLher and rubber LhaL are
avallable ln local markeL and ln Lhe rubber gardens ln Chokorla respecLlvely
roducL developmenL and Lechnology sharlng ofLen wlLh lLallan llrms ls common wlLhln Lhe local
flrms ln Lhe organlzed secLor ApexAdelchl looLwear LLd ls an example LhaL merged wlLh Adelchl
lLaly Lo share producL deslgns and Lechnlcal lnnovaLlons Lo enhance producLlvlLy and sales
1he process of shoemaklng ls a complex one and lnvolves crlLlcal machlnerles 1he machlnes
generally are lmporLed from lndla Chlna Cermany llnland eLc
lor dlsLrlbuLlon Lhe flrms elLher use Lhelr own fleeL for local coverage or ouLsource Lo LransporL
companles for naLlonwlde coverage lnformaLlon sysLem such olnL Cf sale (CS) and 8Su sofLware
ls used Lo malnLaln dlsLrlbuLlon channel and manage lnvenLory 1he flnal goods reach Lhe local
cusLomers from reLallers or ouLleLs LxporLlng flrms can hlre cargo servlces Lo send Lhelr dellverles
from Lhe Mongla and ChlLLagong porLs Lo counLrles llke lLaly Cermany uSA and !apan 1helr
producLs reach Lhe buyers who are generally forelgn blg reLallers and Lhen Lhe flnal consumers
CerLaln franchlses such as 8eebok and uma are manufacLured ln dlfferenL parLs of SouLhLasL Asla
buL are assembled ln a cenLral dlsLrlbuLlon cenLre ln lndla lrom LhaL hub Lhe lLems are lmporLed Lo
Lhe brand reLallers ln 8angladesh
1here are also reLallers and wholesalers ln Lhe dlsorganlzed secLor who lmporL flnlshed shoes from
Chlna and lndla and sell Lhem aL a margln Some brlng parLs of Lhe fooLwear and assemble Lhem ln
Lhelr own or ouLsourced manufacLurlng faclllLles Such goods are for sale ln Lhe huge CullsLhan and
O 8aLa
O 8 flrsL
O Sandak
O Marle Clalre (women)
O Welnbrenner (young generaLlon)
O norLh SLar
O ower (sporLs/aLhleLlc)

O Scholl
O 8ubblegummers (klds)
O Push upples
O nlke
O 8aLa comflL
O aLapaLa

3 | a g e

lulbarla reLall shops whose end consumers are Lhe lower and upper lower mlddle class of
8angladesh
Wbere is BATA in tbe value cbain?
8aLa operaLes as boLh Lhe reLaller and manufacLurer ln Lhe Clobal value chaln SLarLlng wlLh Lhe
baslc 8aLa producLs Lhe flrm moved Lowards verLlcal lnLegraLlon ln Lhe chaln manufacLurlng several
brand fooLwear (eg norLh SLar) LhaL lL flrsL only reLalled resenLly lL ls fully manufacLurlng all lLs
reLalled producLs (brand and under 8aLa label) excepL LhaL of Push upples Palf flnlshed Push
upples are Lransferred from Lhe lndla 8aLa LLd Lo be compleLed ln 8angladesh
8aLa 8angladesh plans Lo be a compleLe manufacLurer for Push upples ln 8angladesh by Lhe nexL
few years 1hen 8aLa wlll be a full fledged manufacLurer for all of lLs fooLwear producLs
8aLa 8angladesh exhlblLs backward verLlcal lnLegraLlon as lL Lrles Lo have conLrol over one of Lhe
ma[or facLors of producLlon elecLrlclLy lL has lLs own gas generaLor LhaL has a capaclLy of 22 MW
agalnsL requlremenL of 13 MW 8aLa uses uLSCC's gas llne as a backup 1hls backward llnkage has
glven 8aLa a sLrong compeLlLlve advanLage agalnsL Lhe oLher markeL players
8 Production Process
8aLa has Lwo manufacLurlng faclllLles one ln 1ongl and Lhe oLher ln uhamral 1he company has lLs
own leaLher processlng unlL ln uhamral where Lhe anlmal skln/hldes collecLed from local markeLs
and cooperaLlves geL processed for shoemaklng 1he sLaLe of Lhe arL Lannery can process abouL 3
mllllon square feeL of leaLher annually 1he oLher core raw maLerlal rubber comes from local rubber
developers ln Chokorla led by sLaLe owned 8angladesh loresL lndusLrles uevelopmenL CooperaLlon
ln Lhe very ltst sLep of shoemaklng leaLher sorLers recelve Lhe leaLher from Lhe Lannery ln uhamral
1hen Lhey sorL Lhe baLch by quallLy Lhlckness color and graln whlle also marklng Lhe leaLher for
any defecLs nexL Lhe cuLLers lay Lhe leaLher on Lhe flaL surface of a cuLLlng machlne 1hey arrange a
dle (a paLLern ln Lhe shape of Lhe plece Lo be cuL) on Lhe leaLher Lo make shoe parLs LhaL wlll maLch
ln color LexLure and Lhlckness Machlnes sLamp ouL Lhe parLs one by one Slnce no Lwo hldes are
allke cuLLers cuL one hlde aL a Llme Cn Lhe oLher hand when Lhey work wlLh plasLlc or fabrlc Lhey
do noL have Lo maLch parLs for color LexLure and Lhlckness 1hey can sLack Lhese maLerlals ln layers
and make one cuL Lo geL many parLs
1hen Lhe sLock flLLers produce Lhe upper parLs of Lhe shoes 1hey assemble and mark parLs Lrlm
llnlngs Laper edges and cemenL parLs LogeLher 1hese workers punch holes ln Lhe uppers and puL ln
eyeleLs and buckles uslng sophlsLlcaLed machlnes AfLer Lhls Lhe sLock handlers move baLches of cuL
parLs Lo Lhe flLLlng deparLmenL Pere Lhe sewlng machlne operaLors use Lhe dlfferenL klnds of
sLlLchlng machlnes Lo sew parLs LogeLher do decoraLlve Lop sLlLchlng relnforce Lop llnes and aLLach
bows or oLher accessorles

When Lhe uppers are flnlshed workers Lake Lhem along wlLh soles lnsoles heels and oLher shoe
parLs Lo lasLlng rooms A lasL ls baslcally a dummy fooL When Lhe upper parL of Lhe shoes ls flLLed on
a lasL many machlnes llke Lhe LoeLlghLenlng machlne and heelLlghLenlng machlne operaLe on lL
auLomaLlcally llnally workers use hand sLlLchlng Lo glve Lhe speclal flnlsh Lo Lhe shoes 1he palrs are
sparayed and pollshed and checked under ulLra vloleL llghL
lnspecLors check flnlshed and parLlally flnlshed shoes for defecLs such as uneven sLlLchlng wrlnkles
ln Lhe llnlngs or Loo much cemenL 1he damaged unlLs are senL back for repalrs
llnally Lhe shoes are packed for sLorage or shlpmenL
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Spec|f|cat|ons Imported] Co||ected ] appo|nted from
,a[or raw
mater|a|s
Skln/hlde
8ubber
ulocLyl phLhalaLe(uC)
Accessorles eLc
Locally
Locally Chokorla
Lurope Chlna lndla 1halland 8razll llnland
key mach|ner|es 1annlng SpllLLlng Shavlng
Spraylng PeelLlghLenlng
1oeLlghLenlng
llnland korea lndla Cermany
Labor Skllled semlskllled
unskllled
Locally appolnLed for Lasks ranglng from quallLy
check Lo sewlng and assembllng shoe parLs
% Marketing Mix
Distribution and Retail Uutlets
AfLer producLlon Lhe producLs are Lransferred from Lhe facLory Lo Lhe cenLral dlsLrlbuLlon cenLers
(CuCs) ln boLh @ong| and Dhamra| 1hen Lhe baLches go Lo depoLs and subdepoLs 8aLa has 13
depoLs aL sLraLeglc locaLlon such as khulna ChlLLagong 8arlsal eLc 1he supply deparLmenL decldes
on Lhe allocaLlon of dlfferenL fooLwear Lypes ln dlfferenL ouLleLs based on Lhe CS sofLware Supply
lnvolces are creaLed for each ouLleL lnLer Lransfer of sLock may also be arranged for Lhose arLlcles
LhaL are noL avallable ln Lhe CuCs and have hlgher demand ln one ouLleL Lhan ln anoLher ln Lhe
dlsLrlbuLlon llsL prlorlLy ls glven Lo Lop performers
1he dlfferenL ouLleLs form Lhe flnal llnk Lo Lhe dlsLrlbuLlon chaln 1hey sell Lhe arLlcles Lo Lhe flnal
consumers and keep record of Lhelr LransacLlons and lnvenLory 1hey also send requlslLlon Lo Lhe
head offlce regardlng Lhe arLlcles LhaL are ln hlgh demand SomeLlmes Lhe reLall ouLleLs reLurn Lhe
arLlcles whlch fall Lo geL sold Lo Lhe cenLral dlsLrlbuLlon ln such cases Lhe cenLral dlsLrlbuLlon works
as a dlscounL cenLre

When lL comes Lo reLall ouLleLs 8aLa has a sLaggerlng 240 sLores spread across Lhe counLry lncludlng
Lhose LhaL are presenL ln Lhe dlsLrlcL and subdlsLrlcL level Where exacLly Lhese sLores are locaLed
depends on whlch concepL of buslness ls belng followed ln reLall buslness 8aLa follows 3 concepLs of
buslness

a) city concept SLores LhaL follow Lhls concepL are LargeLed Lowards hlgh end consumers
So naLurally Lhese sLores are locaLed ln posh areas such as Culshan 8ananl uhanmondl and
8ashundhara ClLy
b) 8otoor/5uper concept 1hese sLores are noL excluslvely locaLed ln Lhe posh areas slnce Lhey
conLaln sllghLly less expenslve shoes as well and are LargeLed Lowards Lhe upper as well as Lhe upper
mlddle class people
c) lomi/y concept 1hese are wldely spread across Lhe counLry 1hese sLores conLaln shoes for all
members of Lhe famlly
d) 4qency concept 1hese sLores are also more or less evenly spread ouL along Lhe counLry
e) Liquidotion/ c/eoronce Out/et ln Lhese sLores Lhose shoes are sold whlch are elLher faulLy ln
some way or whlch have gone ouL of fashlon afLer remalnlng unsold ln Lhe sLock for Loo long 1hese
sLores are usually noL found ln Lhe posh areas 1hey are found ln kawran 8azaar CullsLan 1ongl and
such areas
7 | a g e

Pricing

8aLa Shoes LlmlLed has been able Lo creaLe such a wldespread neLwork of reLall ouLleLs across Lhe
counLry wlLh such success only because lL caLers Lo a wlde range of people sLarLlng from Lhe upper
lower lncome group up Llll Lhe ellLe class lLems under Lhe 8aLa Sandak brands are noL expenslve
alLhough lnLernaLlonal brand lLems such as Marle Clalre nlke and Push upples are prlced aL a
hlgher range

8aLa has a loyal cusLomer base because of Lhe very good quallLy and durablllLy of lLs producLs
So mlnor changes ln prlce do noL affecL Lhe demand much and demand can be sald Lo be lnelasLlc
Promotion
Cne of Lhe reasons LhaL 8aLa ls aL Lhe Lop of Lhe lndusLry Loday ls lLs brand lmage 1o uphold Lhls
lmage 8aLa conLlnues Lo promoLe lLself exLenslvely uslng 1hrough Lhe Llne(11L) Lechnlques

a) 8aLa underLakes many above Lhe llne Lechnlques such as 1v ads prlnL ads eLc Lo promoLe lLs new
range of shoes
b) 1he leadlng dallles of Lhe counLry are ofLen seen Lo promoLe 8aLa for example Lhe lnLroducLlon
of lLs new llne of Push upples fooLwear was made wldely known Lhrough newspapers
c)8aLa uses below Lhe llne markeLlng such as sponsorlng Lhe Women's Pandball LournamenL for
wlder exposure wlLh currenL and poLenLlal consumers
Competition
8aLa does noL face much of a compeLlLlon rlghL now because ln Lhe organlzed secLor lL ls Lhe player
wlLh Lhe hlghesL markeL share and LhaL Loo by a hlgh margln lLs sales keep rlslng meLeorlcally 8aLa
has 1013 sales growLh each year and lL plans Lo conLlnue Lhe fasL Lrack by several expanslon plan
Slnce 8aLa holds a ma[or share of a markeL whlch ls worLh around 1k 1700 crore per year lL does
noL face much of a compeLlLlon
neverLheless fuLure compeLlLors could lnclude
9egasus when conslderlng Lhe sporLswear
Apex when conslderlng Lhe closed shoes llne
kupsha when conslderlng sandals and Lhongs
CerLaln |mported brands ln case of Lhe klds' llne
8aLa clalms LhaL lL can easlly keep lLs compeLlLors aL bay because lL always focuses on
- CusLomer SaLlsfacLlon
- Soclal conLrlbuLlon
- CuallLy producL wlLh no healLh hazards such as excess uC
- rlce beneflL
uslng Lhls lnLeracLlve mlx 8aLa belleves lL can always be able Lo creaLe Lhe mosL superlor value for
lLs cusLomers
Items 9r|ce range(8D@)
,en's product ||ne( casua| summer canvas
dress)
140 8S00
Lad|es' casua| wear 200400
Dress shoes 8rand 6008000
Ch||dren's shoes(under 8ata) 300900
Ch||dren's shoes(8ubb|egummers) 7002000
8 | a g e

Emerging Trends: Crowtb Tra|ectory of tbe Industry
1o ldenLlfy emerglng Lrends and Lhe growLh paLh of Lhe fooLwear lndusLry Lhe LS1LL framework ls
used
9o||t|ca| Lconom|c
CovernmenL sLablllLy can affecL exporL alds and
1Ax sLrucLure
Lrade regulaLlon/ deregulaLlon Lrend can puL
barrlers ln raw maLerlal lmporL rules and exporL
faclllLaLlon
lnflaLlon have reduced consumer's purchaslng
power
labor cosL has lncreased due Lo lncreased cosL
of food lLems
cosL of oLher facLors of producLlon has also
lncreased
globallzaLlon puLs pressure on fooLwear
exporLers Lo lncur low cosL of operaLlon
Soc|ocu|tura| @echno|og|ca|
Men are more fashlon consclous ma[orlLy of
Lhem are lncllnlng Lowards a cosmopollLan
llfesLyle wlLh emphasls on sLyle and Lrends

pracLlce of sharlng Lechnology wlLh developed
and esLabllshed flrms abroad has lncreased
drasLlcally
8esearch and developmenL deparLmenL has
been lnLroduced by some flrms ln order Lo be
ahead ln producL dlfferenLlaLlon compeLlLlon
no slgnlflcanL use of ecommerce ln Lerms of
selllng flnlshed goods Lo local consumers
Lnv|ronmenta| Lega|
hlgher level of soclal awareness abouL polluLlon
due Lo Lannerles and wasLe dlscharge
Lendency for envlronmenLal agencles Lo become
suddenly acLlve
lengLhy LransacLlon processlng Llme afLer
openlng L/C for lmporLlng of flnlshed goods
AdvanLage of mulLlple buslnesses colludlng Lo
form one L/C 1hls helps small lmporLer Lo
beneflL from bulk buylng and avold exLra cosL for
openlng separaLe accounLs
exporL asslsLance as lndusLry declared as a
LhrusL secLor
1he fooLwear lndusLry ln 8angladesh ls one of Lhe fasLesL growlng lndusLrles wlLh rapld expanslon ln
Lhe exporL secLor Clobal lmporLers are Laklng new lnLeresLs ln sourclng from 8angladesh 1he
growLh ls enhanced as exporLers of all scale are geLLlng asslsLance from Lhe 8angladesh governmenL
ln Lerms of 1Ax rebaLe slnce Lhe leaLher lndusLry has been declared as a LhrusL secLor
looLwear offers hlgh value addlLlon whlch has aLLracLed many new players ln Lhe markeL as
exporLers manufacLurers and reLallers looLwear shlpmenLs earned $197 mllllon ln elghL monLhs of
Lhe currenL 20102011 flscal year growlng more Lhan 48 percenL over Lhe correspondlng perlod of
Lhe lasL flscal year
2
1he lndusLry has become more exporL orlenLed buL sLlll lL has an lmmense local
markeL Lo caLer Lo
Bata's response to Industry Cbanges:
WlLh a change ln fashlon concepL of men 8aLa flnds lL proflLable Lo concenLraLe on men's shoe llne
of all sorLs offlce casual sporLs and summer lor smooLh producLlon and greaLer avallablllLy 8aLa
plans Lo manufacLure Push upples compleLely ln 8angladesh 8aLa has currenLly offered a new
range of rubber/vC shoes aLapaLa LhaL LargeLs Lhe lower and lowermlddle classes Such producL

2
5ootce bttp//booqloJesbecooomywotJptesscom/2011/0J/19/lolsbeJleotbetqooJsexpottootlse/
9 | a g e

dlfferenLlaLlon aL dlfferenL prlce levels allows 8aLa Lo respond Lo several lnflaLlonary Lrends ln Lhe
economy
8aLa also has aLLempLed for human resource developmenL as a parL of Lhe 8u program 8aLa has
appolnLed several flne arLs and leaLher Lechnology graduaLes recenLly Lo render beLLer producL
deslgns
As an answer Lo Lhe envlronmenLal lssue 8aLa's Lannery ls equlpped wlLh hlghLech effluenL
LreaLmenL planL ensurlng polluLlon free envlronmenL for boLh Lhe workers and Lhe locallLy where
Lhey operaLe Such an effluenL LreaLmenL planL ls qulLe rare ln 8angladesh Pere Lhe llquld wasLe
and waLer ls separaLed from solld wasLe 1he LreaLed waLer ls used for planLs and Lrees ln Lhe
premlses 1he solld Loo ls recycled and used agaln 8aLa ls very much soclally responslble and
consclous of Lhe envlronmenL

Entrepreneurial cballenges
Porter's forces analysis: Urganized sector & disorganized sector
Porter's forces
dimensions
Urganized sector Disorganized sector
Tbreat of New
Entrants
Low Cwlng Lo hlgh lnvesLmenL cosLs
new enLranLs are noL frequenL 1he
dlfflculLles of breaklng cusLomer brand
loyalLles keeplng cosLs low enough Lo
compare wlLh esLabllshed compeLlLors
and managlng reLall space (lf enLranL
ls a reLaller) form barrlers Lo enLry
whlch only flrms wlLh large caplLal can
flnd posslble WlLh no subsldles from
governmenL lL wlll be dlfflculL for new
enLranLs Lo aLLaln economles of scale
n|gh new enLranLs are very
common ln Lhls secLor 1he low
lnLerdependence beLween
lndlvldual players means LhaL one
or Lwo new enLranLs wlll noL affecL
Lhe markeL as a whole Also
generally Lhese new enLranLs have
very small scale of operaLlons
Tbreat of
Substitutes
*

,ed|um ulfferenLlaLlon belng Lhe
baslc form of compeLlLlon ln Lhls
secLor dlfferenL varleLles and quallLy
of fooLwear are presenL aL Lhe markeL
So each form of dlfferenLlaLed
producL may be subsLlLuLed by a
producL wlLh slmllar or beLLer
feaLures
n|gh WlLhln Lhls secLor dlfferenL
deslgn varleLles are enLerlng and
leavlng Lhe markeL every week or
Lwo unless any parLlcular deslgn
becomes very popular
Bargaining power
of suppliers
,ed|um Large slze of Lhe flrm glves
leverage over lLs suppllers as lL
purchases ln bulk Moreover large
flrms LhreaLen vert|ca| |ntegrat|on by
produclng some of Lhe raw maLerlals
Lhemselves
n|gh Small/ medlum slzed flrms
have a few suppllers for
chemlcals So suppllers can exerL
pressure on manufacLurers ln
Lerms of cosL dellvery eLc
Bargaining power
of buyers
Iar|es accord|ng to product type
CusLomers puL lmporLance on quallLy
and durablllLy along wlLh sLyle 8rand
loyalLy ls sLrong for some brands and
people are ready Lo parL wlLh a
slgnlflcanL amounL for Lhelr deslred
brand Powever for some of Lhe less
fashlonable producLs ln Lhe sandals
and summer llnes people are less
n|gh As Lhere ls llLLle producL
developmenL and promoLlon ln
Lhls secLor prlce compeLlLlon ls
Lhe maln form of compeLlLlon
CusLomer may search from
markeL Lo markeL Lo flnd Lhe
lowesL posslble prlce Large
number of players provldes buyers
mulLlple opLlons
10 | a g e

concerned abouL Lhe quallLy and are
more prepared Lo LesL oLher cholces
Competition witbin
Industry
,oderate 1here ls a clear markeL
leader Powever wlLh Llme and more
producL dlfferenLlaLlon on Lhe parL of
oLher companles llke Apex Lhe sheer
markeL power of 8aLa ls gradually
wanlng 1he compeLlLlon beLween Lhe
ma[or companles ls non prlce
compeLlLlon
roducL developmenL adverLlsemenLs
and awareness bulldlng are much
more lmporLanL facLors
n|gh Lach flrm ls Lrylng Lo Lake a
small share of Lhe markeL rlce
compeLlLlon and servlce
dlfferenLlaLlon are Lhe ma[or
dlfferenLlaLlng facLors
rlclng ls a ma[or force ln Lhls
lndusLry as Lhe lower and lower
mlddle class LargeLs are prlce
senslLlve and Lhus concerned wlLh
savlngs
*
@be ootweot loJostty os o wbole ls oot ot tbteot bowevet eocb JleteotloteJ ptoJoct moy oce tbe tbteot o
sobstltotes
Cballenges to Face
AfLer sLudylng Lhe porLer's flve forces model Lhe LS1LL framework and also how a ma[or player
8aLa operaLes lnLo Lhe dynamlcally changlng fooLwear lndusLry cerLaln challenges for new
enLrepreneurlal venLures can be ldenLlfled 1he challenges come as facLors affecLlng Lhe flrm's
compeLlLlveness as well as opporLunlLles LhaL need Lo be recognlzed and lmmedlaLely acLed upon
l Cost of bus|ness CperaLlon ln Lhe organlzed secLor requlres masslve lnlLlal lnvesLmenL
rocuremenL of land equlpmenLs eLc are cosLly as well as Llmely ln Lerms of Lhe
leLharglc legal proceedlngs accompanylng Lhe reglsLraLlon
ll Import cost of raw mater|a| Ma[or chemlcal raw maLerlals need Lo be lmporLed and Lhls
adds up Lo Lhe operaLlonal cosL CerLaln chemlcals need Lo be replenlshed over a perlod
of Lwo weeks and unavallablllLy of approprlaLe sLorage capaclLy requlres frequenL
lmporL of such raw maLerlals 1hls ralses chances for producLlon sLoppage anyLlme when
Lhe maLerlals are unavallable
lll Supp||er power lew manufacLurers for chemlcals lncrease Lhe bargalnlng power of
suppllers for Lhe small/medlum enLrepreneurs lL may become dlfflculL for Lhe new
enLranLs Lo comply Lo Lhe cosL demands of suppllers wlLh less of a say on dellvery daLes
lv 9ower outage LlecLrlclLy/ power shorLage ls a ma[or challenge for any lndusLry player
8aLa has lLs own power producLlon faclllLy LhaL allows lL a compeLlLlve edge over Lhe
oLher players Lhus ensurlng undlsLurbed producLlon wlLh m|n|mum system |oss
Powever such lnvesLmenLs are caplLal lnLenslve and alLernaLlve power/fuel cosLs
generally consLlLuLe a slgnlflcanL porLlon of Lhe flrm's cosL sLrucLure Such power ouLage
lmpend producLlon for exporLorlenLed flrms LhaL laLer fall Lo meeL dellvery orders Lhus
barrlng Lhe lndusLry's growLh as well
v Customer vo|at|||ty 1he dlsorganlzed secLor ls emerglng and Lhere ls a LargeL segmenL
where boLh of Lhe secLors overlap lL ls normal pracLlce for cusLomers Lo move beLween
Lhe dlsorganlzed and organlzed secLors 1herefore Lhe dlsorganlzed secLors are
encroachlng fasLer lnLo a cerLaln parL of Lhe organlzed secLor's LargeL base acceleraLed
by Lhe prlce lnflaLlon
vl 9roduct d|fferent|at|on |dent|fy|ng N|che 1he consumers are becomlng more
consclous abouL healLh Lhus puLLlng lmporLance on comforL flL quallLy as well as sLyle
11 | a g e

and durablllLy 1he dlsorganlzed secLor has now also moved lnLo offerlng moderaLe
quallLy shoes and a good value for money Powever Lhelr offerlngs are noL as effecLlve
as Lhe organlzed secLors
roducL dlfferenLlaLlon efforLs are aL full swlng ln Lhe organlzed secLor wlLh each player
Lrylng Lo bulld a cerLaln nlche markeL excluslvely for Lhem Some franchlsees such as
uma 8eebok are LargeL low sale volume buL hlgher marglns Pere Lhe challenge lles ln
ldenLlfylng a parLlcular markeL segmenL and Lhen caLer Lo Lhelr needs wlLh Lhe perfecL
seL of value offerlngs
vll k|d's footwear as untapped market 1he lndusLry ls growlng moderaLely fasL especlally
Lhe exporL flrms and Lhe Lrend ln local markeL ls showlng rlslng demand of all klnds of
men's shoes (casual dress sporLs summer) 8aLa ls Lrylng Lo caplLallze on Lhls Lrend by
lnvesLlng ln producL deslgnlng and markeLlng Powever a hlghly unLapped secLor ls Lhe
kld's fooLwear whlch ls noL yeL a speclallzaLlon by any flrms
vlll ,anufacture and reta|| performlng only reLall or manufacLurlng funcLlons ln Lhe
buslness may noL be proflLable Lo small/medlum scale buslnesses MovemenL Lo such
backward and forward llnkages can allow flrms Lo cuL back sysLem loss lnLermedlary
malnLenance cosL and moreover may provlde a greaLer conLrol over suppllers and oLher
value chaln parLners llrms can be compeLlLlve ln Lhe long run by ensurlng beLLer quallLy
and fasLer replacemenL of any defecLlve arLlcles 1herefore lL ls a cruclal challenge for an
enLrepreneur Lo declde on where Lo perform ln Lhe value chaln

Suggested Strategy for New Entrants
AL presenL many of Lhe chlldren's school fooLwear ls provlded by 8aLa Powever 8aLa does noL
acLually speclallze ln Lhls segmenL lL has been observed LhaL demand for chlldren's fooLwear ls less
prlce elasLlc as parenLs prlorlLlze quallLy before prlce when chooslng for Lhelr chlldren 1hls means
LhaL lf a company speclallzlng ln chlldren's fooLwear could esLabllsh lLs lmage lL could make large
marglns
1he prlce lnelasLlc demand can be furLher sLrengLhened by sLaLlng Lhe sclenLlflcally proven facL LhaL
chlldren should be exposed Lo sulLable fooLwear durlng varlous age levels use of lmproper poorly
deslgned shoes ofLen leads Lo varlous deformaLlons of feeL ln laLer ages of llfe
When enLerlng Lhe organlzed secLor enLranL may
O Pave a large caplLal
O 1ry Lo LargeL nlches whlch are noL already covered by Lhe ma[or players such as Lhe kld's
fooLwear
lf Lhe lnvesLors come wlLh small caplLal Lhan Lhey can lnvesL ln Lhe dlsorganlzed secLor by LargeLlng
Lhe kld's fooLwear for example and bulldup a loyal cusLomer base wlLh aspecL Lo good quallLy and
reasonable prlce 1o curLall operaLlonal cosLs lL ls beLLer Lo perform boLh reLalllng and
manufacLurlng and Lo flnd low cosL raw maLerlal suppllers



12 | a g e

References
1 lnLervlew wlLh
8ana kalser Ahmed
Lmployee 8elaLlons Manager 8aLa Shoe Co (8angladesh) LLd
1elephone no +880298003013 LxL 290
Moblle no 01713333187
2 hLLp//wwwbaLabdcom/
3 hLLp//wwwapexadelchlcom/AssoclaLed20companyhLml
4 hLLp//bangladesheconomywordpresscom/2011/03/19/flnlshedleaLhergoodsexporLonrlse/