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COMPANY: BATA INDIA Ltd.
Its main competitors and their value chain comparison. In this report we have compared the Value chains of Bata India Ltd and liberty Shoes Ltd which says that Bata has a competitive advantage over Liberty shoes.000 customers every day.S. setting up manufacturi ng base in tax-free locations. Bata earlier concentrated only on manufacturing footwear and selling them anyhow but in recent times it has changed its image of the production oriented company to affordable. Today. Bata has over 15% market share in Organized Retail market and around 6. ensuring there is something in the collection for everyone.EXECUTIVE SUMMARY This report discusses the detail of 1) 2) 3) 4) 5) 6) Bata s main line of business. Bata follows Cost leadership strategy. Current Costing System of the company. Bata follows backward integration and are not dependent on some third party for procurement of raw materials which makes it cost effective. lifestyle brand and hence the decision to reposition. which is really huge distribution network. The Company has been focusing on consumers and market demand which will reduce inventories and improve sales-to-stock turnover. Bata s main competitors are Mirza Intl. Bata reduces its cost by demand based production.5% share in unorganized retail. Also. market driven. The company enjoys the highest market share in India and this is evident from the fact that the total retail presence of the company currently is more than thrice that of its closest competitor (Liberty: 381 stores). To summarise the above points we know that Bata is the fastest growing footwear brand in the country with a presence across 400 cities. using different mix for footwear production with cheaper raw material. Strategy the company is following. quality and design. The brand offers a wide range of comfortable. Bata India is the largest retailer and leading manufa cturer of footwear in India. Liberty Shoes. Bhartiya Inter. The USP of the brand lies in the fact that they have success fully made fashion and durability so affordable and accessible to all. Bata is produces its own raw material to improve its profitability. Bata has also adopted cost cutting strategies without any compromise on style. Apart from this Bata has a huge competitive advantage over Liberty in the area of sales and distribution channel. This explains why Bata India sells over 45 million pairs of footwear every year and serves over 120. fashion conscious. Decisions are being taken using management accounting information. Crew B. stylish and trendy footwear at affordable prices.O. they started cutting some cost through sales and distribution network. . Decision making on the basis of cost and information.
not directly involved in production.S. may increase effectiveness or efficiency. BATA INDIA LTD. Crew B. Bhartiya Inter.g. The following come under support activities: Procurement Technology Development Human Resource management Firm infrastructure It is rare for a business to undertake all primary and support activities.those that are directly concerned with creating and delivering a product (e. component assembly) (2) Support Activities . Bata has the highest market share compared to all its competitors. The activities of a business could be grouped under two headings: (1) Primary Activities .Management Accounting Project: Company selected Bata India Ltd. a. . Try to compare and contrast the value chains of the two companies. Value Chain Analysis describes the activities that take place in a business and relates them to an analysis of the competitive strength of the business. Liberty Shoes. What is the company s main line of business and which sector? Bata India is the largest retailer and leading manufacturer of footwear in India and is a part of the Bata Shoe Organization. b.: Operations (Backward integration)Company s own tanneries located in Batanagar and Mokamehghat insures uninterrupted supply of raw material.O. Now they are not dependant on some third party for procurement of raw material. c. Who are the main competitors? Bata India s main competitors are Mirza Intl.
Using PUF technolog y and Computer Aided Systems this vertically integrated plant produces Industrial Safety Shoes that are made to European standards. The Company has initiated strict control on costs in purchases and outsourcing and is looking at global sourcing for raw materials to improve the net realization. The Company . which is a direct injection moulding used for making sole for the first time in Asia.Sales and distributionBata operated through exclusive chain of executive own and franchise stores located in prime location country wide. B ata installed point of sale management information system (POS). This provides company to plan production and optimize inventory level. Overall it has over 1. for providing sales and inventory information across the company s stores. d. A CAD/CAM design centre is in place at Liberty. 27 wholesale depots and 8 distribution centers across the country. OperationsGharaunda is the first plant of its kind in this part of Asia that is equipped with Desma machines for PU Direct Injection Moulding. Which strategy do the companies follow? . Liberty is also the first company to market PPE products for safety purpose. Bata owns network of 300 exclusive wholesalers who serviced 30. Liberty has also been instrumental in introducing E VA (Ethyl Vinyl Acetate). Liberty also pioneered the PU (Poly Urethane) Technology in India for the footwear industry. Sympatex TEX booties as well as ordinary booties are also made here. Cost optimization and margin improvement: The Company is focusing on margin improvement and cost effectiveness programs which have started yielding results. Besides these Thermo Plastic Elastomer has been developed for the first time in India at Liberty. This material has better properties than PVC or TPR (conventional materials used for footwear). The Sympatex waterproof technology in footwear was pioneered by also Liberty.Cost Leadership. This technology uses very light material & the footwear is made with the direct injection system. Beside these Gharaunda has a design centre where an amb itious team of young designers working in tandem with experienced technologists. for high quality footwear. follows Cost Leadership strategy. Technological resourcesIn 2004.600 showrooms. into the country.: Technology It has introduced a new material called TPU (Thermo Plastic Urethane). LIBERTY SHOES LTD. Differentiation or Focus? Bata India Ltd.000 retail outlets throughout country.
fashion conscious. The reflections about the current costing systems of the company? Currently the company is mainly focusing mainly on cost reducing strategies which are as follows: 1. Cost optimization: Strict control on costs in purchases and outsourcing. So they continued to invest in expanding retail business. It is producing its own raw materials to improve its profitability. which will enable it to focus on improving sales. It also tried to reduce costs through sales and distribution network which is a very huge distribution network. 3.has also been clearing old merchandize through discount sales. Also. 2. write offs. 3. BATA tried to reduce the costs of raw material. f. How do the companies manage cost and use the information for decision making and control? Cost management in BATA : 1. Tax-free zone manufacturing base: After Himachal Pradesh and Uttaranchal the company is looking at and negotiating with the third par ty manufacturing facilities in two other tax-free states of Assam and Jammu and Kashmir. 4. . 4. which is really huge distribution network. Decision to reposition: Bata earlier concentrated only on manufacturing footwear and selling them anyhow but in recent times it has changed its image of the production oriented company to affordable. g. e. They reduced the inventory costs by clearing the existing merchandize by offering discounts. market driven. they started cutting some cost through sales and distribution network. They also tried to generate skilled manpower and cut costs through manpower reduction. Now Bata identified this problem and started using different mix for footwear production with cheaper raw material. lifestyle brand and hence the decision to reposition. Demand based production: The Company is focusing on consumers and market demand which will reduce inventories and improve sales -to-stock turnover. For this it tries to use different mix for footwear production with cheaper raw material. What decisions are being taken using management accounting information? 1. Cost-cutting: Raw material used for used for 33% of total cost. etc. 2.
It has also undertaken a rural marketing thrust wherein its reach is rapidly growing. Bata also adopted the cost cutting strategy through use of different mix of raw materials for footwear production and also through sales and distribution but without any compromise on the style. 4. It has undertaken an intensive training programme for its shop assistants and managers to ensure excellence in service to customers. Training and restructuring the frontline sales force: The Company has reorganized its front line sales force. Thus the Company has been focusing on consumers and market demand which will reduce inventories and improve sales-to-stock turnover. sale figure etc. Decision to produce based on logistics and demand: To optimise the utilisation of production facilities the logistics team focuses on obtaining orders from the market for the best selling designs and sizes and ensures that all raw materials are available in the factories well in time so that the Company can produce and place in shops the products that consumers want. 3. quality and design of the product as it endeavours to break the myth of price factor by producing economy range of good quality and stylish products.2. It is recruiting managers with fresh ideas to inspire and empower the workforce with t he requisite skills. Bata uses technology like installation of point of sale management information system to keep an update about the inventory level. 5. .
To name a few they are Marie Claire. Weinbrenner. market driven. Ambassador.RECOMMENDATIONS: 1) The main recommendation we can give Bata is to repositioning itself. print media and word of mouth. office goers and regular use footwear like slippers and snickers. North Star. 2) According to the survey conducted by Bata in African continent it was observed that people were not wearing shoes at all. Dr. Scholls. Power. This means that there is a high scope of marketing shoes in African continent as no one has shoes. . In India we still believe that Bata is just a company which produces footwear for school goers. lifestyle brand. So Bata must back their campaign through TVC s. fashion conscious. Bubblegummer etc but only a few segment of people know about this. Today they have a huge shoe line with a huge range of new designs on offer. Bata is still trying to change its image of production oriented company to affordable. Hush Puppies.
References: www.moneycontrol.com .com www.com www.inrnews.wikinvest.in www.bata.scribd.com www.
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