The Strategies of Bata Shoes Bangladesh Ltd.

1.0 INTRODUCTION
The Bata Shoe Organization was founded in 1894 by Czech businessman
Tomas Bata in the city of Zlin, what was then Czechoslovakia. Coming from a
family of shoemakers with a long heritage of eight generations and over
three hundred years, Tomas Bata capitalized on knowledge, expertise and
skills to propel his newly founded company forward. The introduction of
factory automation, long distance retailing and modernized shoe making
ensured the profitability of the company from the very beginning. It is now
the worlds largest manufacturer and marketer of footwear operating across
the globe.
Today the Bata Shoe Organization is a sprawling geo-centric company
encompassing operations in more than 70 countries around the world and is
managed by 4 regional commercial business units (CBUs) across five
continents. It serves 1 million customers per day, employs more than 50,000
people, operates 5,000 retail outlets, manages a retail presence in over 70
countries and runs 27 production facilities across 20 countries.

2.0 COMPANY PROFILE

Bata Bangladesh is affiliated to the Bata Shoe Organization, the world's
largest footwear manufacturing and marketing organization. It started
operations in 1962 in Bangladesh. Bata incorporated in Bangladesh as a
publicly traded company listed with Dhaka Stock Exchange. They have 60%
of overseas shareholding and 40% local Bangladeshi Shareholders.
Currently

Bata

Shoe

Company

(Bangladesh)

Limited

operates

two

manufacturing facilities one in Tongi and the other in Dhamrai. With a

production capacity of 110,000 pairs of shoes daily, the company also has a

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The Strategies of Bata Shoes Bangladesh Ltd.

modern tannery facility with an output of 5 million square feet of leather
annually. Annual shoe sales currently stand at slightly more than 30 million
pairs with a turnover for the year. It employs 3000 employees and more than
35,000 families are directly or indirectly depending on the company together
with its 650 local suppliers and 72 Associates Business Units. The associates
are mostly Muslim and they contribute regularly towards the building of our
national economy.
The companys marketing network is consolidated through its own retail
outlets, distributors, franchises, agencies, wholesale depots and large
number of registered distributors and dealers.
Today Bata is not only the household name in Bangladesh it is also a very
popular brand name among all ages of customers in Bangladesh and a
symbol of trust and confidence for providing good quality durable footwear
for all segment of customer.
Vision
Should maintain our competitiveness and leadership in the shoe market with
our aesthetic functional standard and cost effectiveness with increased
market participation by ensuring regular return to our shareholders.
Mission
Introduction of a strong shoe line targeted to various market segments to
maintain leadership through increased market share.

3.0 MANAGEMENT OVERVIEW

In Bata Shoe Bangladesh Companys working environments is maintained
through Different Management Levels. These levels are as follows:
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The Strategies of Bata Shoes Bangladesh Ltd.

Top Level Management
These include Decision making and implementation of activities like
Managing Director, Head of Accounts, Human Resources Management and
Chief Finance Officer.

Mid level Management

These

include

Merchandising

Inventory
System,

Management

Online

Sales

System,

System,

Retail

Production

Integrated
department,

Purchasing department activities and decisions.

Low level Management
All the departments employees and supervisors are includes in this level.
They continuously monitor the wholesalers and retailers.

ORGANOGRAM OF BATA SHOES BANGLADESH

Fig 3.1: Organogram of Bata Shoe Bangladesh Ltd.

Managing
Director

Head Of HR

Head Of
Accounts

Chief
Finance
Officer

Head Of
Retail
Marketing

NRSD
Manager

Production
Manager

Purchasing
Manager

Product
developmen
t Manager

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Merchendisi
ng Manager

The Strategies of Bata Shoes Bangladesh Ltd.

4.0 PRODUCT LINE

Bata Bangladesh has various types of Men/Women Shoes, Men/Women
Sandals, Bags, Belts, and Leather Accessories.

Bata shoes have been time tested to be the most reliable in

durability and accessibility. They care for clients across the board with a wide
range of styles at reasonable prices.

Sandles of Sandak brand of Bata serves that very segment of the market. It
produces different types of very good quality plastic and Thongs for women.
From my survey it has found that it is the most popular shoe of Bata. The
pick seasons for Sandak shoes are rainy season when many prefer this shoe,
which are washable and decent in looks.

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.

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 woman who wants

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The Strategies of Bata Shoes Bangladesh Ltd.

reasonably priced, decent design and durable shoes for work
and this brand in many cases serves this segment well.

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.

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 every Bata footwear.

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 North Star
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The Strategies of Bata Shoes Bangladesh Ltd.

which provides hard and soft white sneakers and the leather black Bata
school shoes which are of various designs.

Apart from these Bata has numbers of leather sandals of various designs,
sandal-shoes under Bata brand name that serves different segment of the
market. Bata also manufacture and market popular brands such as
HushPuppy, Dr.Scholes and Nike 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.
Bata also markets sportswear, 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.

Distribution Process of Bata Bangladesh

Tongi Factory
Stores & Agencies
CDC(Central Distribution Own
Center)
Raw Materials
Dhamrai Factory

Depot

Dealers & Wholesalers

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The Strategies of Bata Shoes Bangladesh Ltd.

Fig 4.1: Distribution Process of Bata Shoes Bangladesh ltd.

5.0 STRATEGIES USED BY BATA BANGLADESH

Market-scope strategy choices
1. Single-Market Strategy
2. Multi-market Strategy
3. Total-market Strategy
Among the three choices Bata has chosen and uses Total-Market strategys
they serve all classes of people with their shoes ranging from 30/--2195/-.
The specifics of the strategy is provided belowDefinition: Serving the overall market with one or some other kind of
offerings.
Objective: To diversify the risk of serving only one market.
Requirements:
Carefully selecting all the segments and providing offerings to all.
Avoid confrontation with companies serving the entire market.

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The Strategies of Bata Shoes Bangladesh Ltd.

Expected Results:
Higher Sales.
Higher Market Share.

Market-Geography Strategy choices

1. Local-Market Strategy
2. Regional Market Strategy
3. National Market Strategy
4. International Market Strategy

Among the market-Geography Strategies Bata Bangladesh follows the

'National-Market Strategy in Bangladesh as they distribute their product to
the whole of Bangladesh using their own and Danish's distribution channel.
Though it is a MNC it operates quite freely here in Bangladesh and operates
as National-Market Strategy.
Definition: Operating nationally.
Objective: To seek growth.
Requirements:

Top management commitment.

Capital Resources.

Willingness to take risks.

Expected Results:

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The Strategies of Bata Shoes Bangladesh Ltd.

Increased growth.

Increased market share.

Keep up with competitors

Market-Entry Strategy choices

1. First-In Strategy
2. Early-Entry Strategy
3. Laggard-Entry Strategy
Among the Market-Entry choices, Bata Bangladesh uses First-In strategy
which is characterized by the following:
Definition: Entering market during the introduction stage. Two modes of
entry are feasible:

Conventional marketing strategy

Initiator- Entering market with unconventional marketing strategies

Objectives: To understand the market first and reap the profit at the
beginning and waiting for the competitors and strike them with good
lowering price and improved quality. At the same time it offers variety of
products.
Requirements:

Market research ability.

Production capability.

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The Strategies of Bata Shoes Bangladesh Ltd.

Expected results:

Putting market on a new growth path.

Increased profits.

Some growth opportunities.

Market-Dilution Strategy
1. De-marketing Strategy
2. Pruning-of Marginal Markets Strategy
3. Key Markets Strategy
4. Harvesting Strategy
Among the market-dilution strategies, Bata Bangladesh uses kind of
harvesting strategy in many cases. They also come up with the key markets
strategy.
Definition: Focusing on overall market and take out the invested profit.
Objective: To serve the market well where they are now.
Requirements:

Gain continuous knowledge of the local markets.

Concentrate all energies on these markets.

Develop unique strategies to serve the chosen markets.

Expected results:

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Increased profits.

Increased market share in the selected markets.

Product Strategy choices

1. Product-Positioning Strategy
2. Product Repositioning Strategy
3. Product-Overlap Strategy
4. Product-Scope Strategy
5. Product-Design Strategy
6. Product-Elimination Strategy
7. New-Product Strategy
8. Diversification Strategy
Among the product strategies Bata Bangladesh has used 'ProductPositioning

Strategy'

and

'Diversification

Strategy'

which

is

characterized by the following:

Product-Positioning Strategy:
Definition: Placing a brand in that part of the market where it will have a
favorable reception compared with competing brands.
Objectives:

Position product in market so that it stands apart from competing

brands.

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To position the product so that it tells customers what you stand for,
what you are, how you would like customers to evaluate you.

In the case of positioning multiple brands:

To seek growth by offering varied products in differing segments of the

market.
To avoid competitive threats to a single brand.

Requirements:

Use of marketing mix variables (design and communication efforts).

Successful management of a single brand requires positioning the
brand in the market so that it can stand competition from the toughest
rivals and maintaining its unique position by creating the aura of a

distinctive product.
Successful management of multiple brands requires careful positioning
in

the market so that multiple brands do not compete with nor

cannibalize each other. Thus it is important to be careful in segmenting

the market and to position an individual product as uniquely suited to a
particular segment through design and promotion.
Expected Results:

Meet as much as possible the needs of specific segments of the

market.
Limit sudden change in sales.
Make customers faithful to the brands.

Distribution Strategy:
Definition: Developing unfamiliar products and markets through

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Concentric diversification (products introduced are related to existing

ones in term of marketing or technology),

Horizontal diversification (new products are unrelated to existing ones but

are sold to the same customers), and

Conglomerate diversification (products are entirely new).

Objectives: Diversification strategies response to the desire for

Growth when current products/markets have reached maturity,

Stability by spreading the risks of fluctuations in earnings,

Security when the company may fear backward integration from its
major customers, and

Credibility to have more weight in capital markets.

Requirements: In order to reduce the risk inherent in a diversification

strategy, a business unit should

Diversify activities only if current product/market opportunities are

limited,

Have good knowledge of the area in which it diversifies,

Provide the products introduced with adequate support, and

Forecast the effects of diversification on existing lines of products.

Expected results:

Increase in sales.

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Greater profitability and flexibility.

Pricing Strategy choices:

For new products:

Skimming Pricing

Penetration Pricing
At times Bata Shoe Company in Bangladesh used 'Penetration Strategy'
which is characterized by the following:
Definition: Setting a relatively low price during the initial stages of a
products life.
Objectives: To discourage competition from entering market by quickly
taking large
market share and by gaining cost advantage by realizing
economies of scale.

Requirements:

Products must appeal to a market large enough to support the cost

advantages.

Demand must be highly elastic in order for firm to guard its cost
advantage.

Expected Results:

High sales volume and large market share.

Low margin on sales.

Lower unit costs relative to competition due to economies of scale.

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For established products choices:
1. Maintaining the price
2. Reducing the price
3. Increasing the price
When the products of Bata Bangladesh were established in the market they
used 'Maintaining the price Strategy' which is characterized by the
following:
Objectives:

To maintain position in the market place (i.e. market share, profitability,

etc.).

To enhance public image.

Requirements:

Firm's served market is not significantly affected by changes in the

environment.

Uncertainty exists concerning the need for or results of price change.

Firm's public image could be enhanced by responding to government

requests or public opinion to maintain price.

Expected Results:

Status quo for the firm's market position,

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Enhancement of the firm's public image.

Price-Flexible Strategy choices

1. One-Price Strategy
2. Flexible-pricing Strategy
3. Product-Line Pricing Strategy
4. Leasing Strategy
5. Bundle-Pricing Strategy
6. Price-Leadership Strategy
7. Pricing Strategy to build market Share
Among the price-flexible strategies, Bata Bangladesh uses the 'One-Price
Strategy' and the 'Pricing Strategy to build market Share' which are
characterized by the following:
One-Price Strategy:
Definition: Charging the same price to all customers under similar
conditions and for the same quantities.
Objectives:

To simplify pricing decisions.

To maintain goodwill among customers.

Requirements:

Detailed analysis of the firm's position and cost structure as compared

with the rest of the industry.
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The Strategies of Bata Shoes Bangladesh Ltd.

Information concerning cost variability of offering same price to

everyone.

Knowledge of the economies of scale available to the firm.

Information on competitive prices; information on the price that

customers are ready to pay.

Expected Results:

Decreased administrative and selling costs.

Constant profit margins.

Favorable and fair image among customers.

Stable market.

Pricing Strategy to build market Share:

Definition: Setting the lowest price possible for a new product.
Objectives: To seek such a cost advantage that it cannot ever be profitably
overcome by any competitor.
Requirements:

Enough resources to withstand initial operating losses that will be

recovered later through economies of scale.

Price-sensitive market.

Large market.

High elasticity of demand.

Expected Results:
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Start-up losses to build market share.

Creation of a barrier to entry to the industry.

Ultimately cost leadership within the industry.

Promotional Strategy choices

1. Promotion-Expenditure Strategy
2. Promotion Mix Strategy
3. Media-Selection Strategy
4. Advertising Copy Strategy

Technological
Environment

5. Selling Strategy
6. Sales Motivation and supervision Strategy

Of all the promotional strategies Bata Bangladesh as we observed followed

the selling. At least their lack of advertising in the electronic and print media
and their target of coming up with new stores reflect that. They try to be at
the doorstep of people with their store rather than intense advertising. But
they give some ads to the newspaper on their new arrivals sometimes.
Key Elements
of Marketing
Strategic Formulation
Marketing
Strategy:
Achieving maximum
Political and
Legal
Environment

Positive differentiation

Customer
Over competition in meeting
Customer needs.
Technological
Environment

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Corporation

Competition

Social
Environm
ent

Economic
Environmen
t

Key Elements of Marketing Strategic Formulation

6.0 LESSONS I LEARN FROM BATA SHOES BANGLADESH

Positive Output from Bata Shoes Bangladesh

Image of the company

Quality Product

Differentiated line of products

Competitive Pricing

Strong distribution channel

Modern manufacturing facilities

Brand loyalty at mass level

Negative Impact on Bata Shoes Bangladesh

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Insufficient promotional activities

Bata at present conducts all the store management activity manually.

Inability to catch the present trend in time

Less competitive price due to high cost structure.

VAT & tax barrier

I also found the 5 forces of competition for Bata Shoe Bangladesh

NEW
ENTRANTS
Apex, Reebok,
Puma, Jennys,
Woodland
MAJOR

SUPPLIERS
Rubber from
local source,
leather from

COMPETITORS:

Apex, Jennys,
Reebok, Liberty
Smuggled shoes

BUYERS:
Infant, teen,
young, old.
Lower- middle

to upper

SUBSTITUTE
Bare foot, low
quality
footwear

7.0 RECOMMENDATIONS

Give sales discount and free samples to influence more sales in the
growing shoe market.

Reduce the price level.

More advertisements should be aired.

Should build awareness among the potential users of this type of

footwear product.
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Bring more design, color, and design combination to be competitive.

To merge with the local companies and to expand more segmentation.

8.0 CONCLUSION
From the analysis of Bata Shoe Company Bangladesh Ltd and the shoe
industry i 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 in more growth of Bata shoe company Bangladesh Ltd. in
among the upcoming fierce competition in the shoe industry.

9.0 REFERENCES
www.batabd.com
Annual Report 2010
Various Secondary Sources

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