Introduction

This case describes the challenges faced by the Bata Management in the wake of changing
market trends in the form of increased competition from the local players as well as the
constantly increasing threat of Chinese imports.
Bata had traditionally targeted the lower middle and middle class segments of the society and
was now considering changes in its strategy to be able to survive in the market. The MD of Bata
was considering the efforts necessary to realign Bata Pakistans manufacturing outsourcing
distribution and brand strategy in the light of increased local competition and Chinese imports.
Strengths
!. Brand "mage
#. $easonable %uality at low or reasonable price
&. Diversity with ranges in running training court basketball football and 'utdoor
(. )ootwear for the entire family
*. )inancialy +trong
,. Conveniently accessible outlets in various parts of the country
-. Targetting all income segments
.. Provide training for managers and employees
/. 0ationwide retail network
Weaknesses
!. 0o continuity of leadership
#. "n #11! *2 decrease in net saless
&. 0o proper planning regarding 3dvertisement
(. 0o variety in )ashionable shoes
Opportunities
!. 45Commerce
#. 3c%uired Partnership with small players
&. 4ntring new segments of Markets
(. Capturing Market where no other potential competitor e6ists
*. "nnovative Products
,. 0ew mediums for advertisements
Threats
!. Customer Dissatisfaction
#. Price wars with competitors
&. Competitors
(. Political "nstability
*. 4conomic Threat
,. Changing in consumer prefernces.
SWOT Matrix
Strengths Weaknesses
!. Brand "mage
#. $easonable %uality
at low or
reasonable price
&. Diversity with
ranges in running
training court
basketball football
and 'utdoor
(. )ootwear for the
entire family
*. )inancialy +trong
,. Conveniently
accessible outlets
in various parts of
the country
-. Targetting all
income segments
.. Provide training for
managers and
employees
/. 0ationwide retail
network
!. 0o continuity of
leadership
#. "n #11! *2 decrease
in net saless
&. 0o proper planning
regarding
3dvertisement
(. 0o variety in
)ashionable shoes
Opportunities SO Strategies WO Strategies
!. 45Commerce
#. 3c%uired
Partnership with
small players
&. 4ntring new
segments of
3c%uisition 7oint 8enture
9+# +* '*:
Product Development
9+# +* '*:
"ntroduce new segments
9;('&:
Market Penetration
9;& ',:
Markets
(. Capturing Market
where no other
potential
competitor e6ists
*. "nnovative
Products
,. 0ew mediums for
advertisements
45Market Development
9+! +* '!:
Threats ST Strategies WT Strategies
!. Customer
Dissatisfaction
#. Price wars with
competitors
&. Competitors
(. Political "nstability
*. 4conomic Threat
,. Changing in consumer
preferences
"ncrease Customi<ation
9+# +. T!:
Customers can be satisfied
with Batas %uality and
reasonable prices.
9+# T!:
$elated Diversification
9;( T!:
"nnovative Products
9;( T,:
Evaluation of Three Strategic Options for Bata
Manufacturing:
Bata can use its regional e6pertise e.g. in Malaysia for rubber based shoes and in China for
artificial leather shoes and use their e6pertise and economies of scale to be able to meet the needs
of the product lines for which they had some sort of a cost disadvantage.
Bata can also stay in its "nternational markets that are benefitial to compete with potential
competitors.
Distribution:
Bata should give more importance to Company5owned stores. "n which it can control and
managae its operations easily. "t should arrange more training programmes for employees to have
better %uality according to consumer preferences.
They can get profits from franshises but with assurance that employees working there are also
trained otherwise it can hurt the image of Bata.
)or wholesale channel they should come out of that and stop having their footwear at the
;holesale shops because having that can damage their chances of maintaining a proper image
for their brand.
Brands:
Bata should target to middle and upper class because lower class now prefer to purchase
Chinese and local shoes. Bata should continue to grow in uuper middle class. +hould provide
better products in terms of %uality as well as price.
Bata should not focus on fashionable footwear because Bata is well known for its functional
footwear for its reliability. "t should focus on their successful brands like Bubble gummers.
espond to co!petition fro! "hinese i!ported shoes and other local shoes
seller
3ccording to my analysis Chinese imported shoes and other local shoes seller are not a ma=or
threat for Bata because now a days people are more %uality consious instead of price consious.
They know very well about the %uality of Bata as compare to these Chinese and local shoes.
Bata should build a strong relationship with its customers so that they come with their families
for the best %uality shoes. "t would enhance its brand e%uity.
People still does not have an idea of %uality difference of Chinese products as compare to
Bata.They =ust prefer to buy because of low price Bata should aware those people.
"o!petitive #rofile Matrix
Bata Service Shafi
$roup
"ritical
Success
%actor
Weight ating Score ating Score ating Score
Product
>uality
1.!1 & 1.& & 1.& & 1.&
'utlets 1.!1 ( 1.( & 1.& # 1.#
Market
+hare
1.1* & 1.!* # 1.! # 1.!
Price 1.!1 ( 1.( & 1.& # 1.#
)inancail
Position
1.!* & 1.(* & 1.(* # 1.&
Customer
?oyality
1.!1 & 1.& & 1.& # 1.#
@lobal
46pansion
1.#1 & 1., # 1.( ! 1.#
3dvertisin
g
1.#1 # 1.( # 1.( ! 1.#
Total &'(( ) *'*+ &',
$rand Strateg- Matrix
Potential strategies areA
Market Development
Market Penetration
Product Development
Backward "ntegration
)orward "ntegration
Bori<ontal "ntegration
$elated Diversification
.uantitative Strategic #lanning Matrix
#roduct Develop!ent Market Develop!ent Market #enetration
/e- %actors Weight 0S T0S 0S T0S 0S T0S
Opportunities
!. 45Commerce
#. 3c%uired
Partnership
with small
players
&. 4ntring new
segments of
Markets
(. Capturing
Market where
no other
potential
competitor
e6ists
*. "nnovative
Products
,. 0ew mediums
for
advertisements
#
5
#
#
(
!
1.!
5
1.#
1.#
1.(
1.1*
#
5
&
&
&
!
1.!
5
1.&
1.&
1.&
1.1*
&
5
#
#
&
&
1.!*
5
1.#
1.#
1.&
1.!*
1.1*
1.1*
1.!1
1.!1
1.!1
1.1*
Threats
!. Customer
Dissatisfaction
#. Price wars with
competitors
&. Competitors
(. Political "nstability
*. 4conomic Threat
,. Changing in
consumer
preferences
&
5
&
5
5
&
1.!*
5
1.&
1./
#
5
&
5
5
#
1.!
5
1.&
1.,
&
5
&
5
5
#
1.!*
5
1.&
1.,
Strengths
!. Brand "mage
#. $easonable
%uality at low
or reasonable
price
&. Diversity with
ranges in
running
training court
basketball
football and
'utdoor
(. )ootwear for
the entire
family
*. )inancialy
+trong
,. Conveniently
accessible
outlets in
various parts
of the country
-. Targetting all
income
segments
.. Provide
&
&
&
5
(
#
5
5
!
1.&
1.&
1.&
5
1.(
1.!
5
5
1.!1
&
&
#
5
(
&
5
5
&
1.&
1.&
1.#
5
1.(
1.!*
5
5
1.&
&
&
#
5
(
!
5
5
#
1.&
1.&
1.#
5
1.(
1.*
5
5
1.#
1.1*
1.!1
1.!1
1.1*
1.1*
1.&
1.!1
1.!1
1.!1
1.1*
1.!1
1.1*
1.1*
1.1*
1.!1
training for
managers and
employees
/. 0ationwide
retail network
Weaknesses
!. 0o continuity of
leadership
#. "n #11! *2
decrease in net
saless
&. 0o proper
planning regarding
3dvertisement
(. 0o variety in
)ashionable shoes
1.1*
1.!*
1.1*
1.1*
5
&
!
(
5
1.(*
1.1*
1.#
5
&
!
#
5
1.(*
1.1*
1.!
5
(
(
&
5
1.,
1.#
1.!*
Total &'(( 1'+ 1') 1'2
3ccording to >+PM Company should more focus on Market Penetration +trategy
%inancial 0nal-sis
"urrent ratio C Current assets3Curretn ?iabilities
#11! C !.!-A!
#111 C !.!*A!
!/// C !.#&A!
Debt to e4uit- atio C Total debts3+hareholder 4%uity
#11! C &.1/A!
#111 C &.((A!
!/// C &.,1A!
That means company is mostly relying on e6ternal resources and the ratios of last three years are
continuously decreasing.
Inventor- Turnover C Cost of goods sold33verage "nventory
#11! C &.*# Times
#111 C &.&! Times
This ratio is increasing it means management is improving its strategies about the inventory and
stock
$ross #rofit Margin C @ross profit3+ales
#11! C &&2
#111 C #/.,2
!/// C #../2
eco!!endations
Company should focus on Product Development Market Development and Market
penetration +trategies
+hould e6it from the lower end segment and focus more on the middle and upper middle
class of the society because of the growth in numbers of people belonging to these
segments and also because of the rising incomes of its target customers.
$enewed brand image will enable Bata to earn premium at the upper middle end of the
market will aid the achievement of the financial goals.
)ootwear industry is highly fashionable industryD hence Bata must improve the efficiency
of product development in order to bring new design and style.
The service standards should be strictly monitored and hence an e6perience fit will be
provided to the customers and these customers for this will be willing to pay a bit of
premium because of Batas brand and hence the competition undercutting Bata on price
would no longer be that big a threat.
"t will need to focus on marketing itself as an outlet meeting all basic needs of the
families in its target market segment
+hould provide consistent %uality service to its customers so that customers can associate
the same e6perience with whichever outlet they visit of Bata.
Bata debt to e%uity ratio is &.*! which means almost -*2 are debts. Management should
reduce its debts to reduce the financial charges.
$educe +elling and 3dministration e6penses to get more 0et income.
"nternet is a broad medium so they should also improve e5business.