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2.1 BACKGROUND/HISTORY OF BATA SHOE CO. BD.

LTD (BD) LTD: The business that became the Bata Shoe Organization was established on August 24, 1894 in Zlin, Czechoslovakia by Tomas Bata, and included his brotherAntonin 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 modernday shoe 'manufacturers', a team of stitches 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 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.

2.1.1 BATA TODAY: Bata is one of the worlds widest reaching companies, with operations in 68different countries. Bata companies strive to listen to the customers in their local markets and clearly identify their footwear needs, and then to provide products that exceed their customers expectations in terms of quality, style and value. Bata operating companies are grouped into four business units based on similarities in markets and business issues. Each group benefits from synergies specific to their requirements, such as product development, sourcing and marketing support. Each business unit is entrepreneurial in nature, and can quickly adapt to changes in the marketplace and seize potential growth opportunities. 2.1.3 BATA BANGLADESH: Bata Shoe Company established by G. Bata in 1874 at Zing in formerCzechoslovakia. 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 2.1.5 BATAS BUSINESS: Bata manufactures and sells a wide range of footwear made from leather, canvas, plastic and rubber. The company sells over 59 man 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. Outwear sales account for more than 97% of the total revenue. Rubber and canvas footwear contributes 48% of volumes, leather footwear contributes to30% 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 inhouse and in rubber and canvas footwear, 61% is manufactured in-house

2.2.3 MARKET POSITION OF BATA SHOE CO. (BD) LTD: 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 as hare 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 sectors pricing in the range of Taka25Taka50.Leading competitor in the popular segment of the organized market Apex Shoes. Other organized sector players are liberty shoes, Baly Shoes, Woodland, Pagasus. Most 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 hooting

up in the domestic market due to popular brands such as Giaconda, Red Tape, and LotusBawa in the illegal and smuggling of these shoes. These brands are gaining market share especially in the premium segment.

2.2.4 Product of Bata: 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. School shoes of Bata: 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 NaughtyBoyshoes. Which quickly earn recognition among the parents of that time, asthey 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 is North Star Which provides hard and soft white sneakers and the leather black? Bata school shoes

Which are of various designs. Bubble gummers: The Bubble gummers brand of Bata serves the infant to children, according to them 0-13 years of age group. Bubble gummer brand has provided Varity of design and type of shoes for above-mentioned age group of children. Marie Claire: 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. Indecent 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. Sandak: What we called isSponge Sandleis professionally called asThongs Sandlesof Sandak brand of Bata serves that very segment of the market. It producesdifferent types of very good quality plastic and Thongs for women. From mysurvey it has found that it is the most popular shoe of Bata. The pick seasons forSandak shoes are rainy season when many prefer this shoe, which are washableand decent in looks. Power: This is a reasonable priced good quality sports shoes and sandle shoes for youngmale 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 startsfrom 695/- and in many cases not exceed more than thousand taka. According tothe buying power this price range is very popular with the general public asdurability comes with it as with every Bata footwear. KingsStreet:KingsStreet: 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 solelymade in Bangladesh. The Dhamrai factory of Bata has the machinery

to makethese shoes, which they established in 1999 at a cost of 1 core taka. Theseshoes have different price range for different segments of people.

Weinbrenner: This brand of Bata provides trendy, outdoor, rough use footwear for men. This isalso a popular brand with the youth of the country. Though the brand is not thatcheap 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 themarket. Bata also manufacture and market popular brands such as HushPuppy,Dr.Scholes in this region of south Asia. Bata also have quite new brands formale and female like Bata Comfit, Bata Flexible. According to the Bata 2.1.6 SOURCES OF PRODUCTION Bata Bangladesh has four different sources of production:

Own: Bata Bangladesh has two factories in Tongi and Dhamrai. All the rubber andrelated production has been done in Tongi factory. Every type of leatherproducts are been manufactured in the Dhamrai factory. About 92% of allBata products are produced in these two factories. Satellite:

There are some satellite production factories which produces solely for Batawith 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 massivestructure of Bata Bangladesh. It also does outsourcing with different smallshoe industries mainly from the Dhaka region. The quality and thespecification has been ensured by the Bata people. The participation of outsourcing in the companies business is 4%. Import: With high import duty it is hard for Bata to import a substantial amount fromdifferent subsidiaries and other outside suppliers. It can be mentioned thatthe duty for importing complete shoe here in Bangladesh is 101%. Eventhough Bata Bangladesh import shoes to keep up with the market trend,which is around 1% in every year.

PLACE /DISTRIBUTION:
The physical distribution starts when the raw materials send to the factory andthe manufacturing process starts there in Tongi and Dhamrai factory. From therethe end products send to the CDC (Central Distribution Center) in Tongi factory.After they receiving the end products then and their the packaging has beendone and according to the requirement of different stores, Agencies, dealers andwholesalers the goods has been transferred directly to the distributors throughcompany owned vehicle. There is separate process for own agencies and storesagainst the wholesalers and dealers. The goods for agencies and stores gonestraight to the store headquarter and goods for others gone to the 13 depotsaround the country from where they collect the goods. In retail, BB operatesthrough a chain of exclusive own and franchise stores. BB's stores are located inprime locations countrywide. 70% of Bata's sales are from its own retail outlets.Besides there is a network of about 500 exclusive wholesalers who service about300 retail stores all over the country. Bata has showrooms, wholesale depotsand distribution centres across the country.BB's major

thrust is on middle-class and upper class customers. The concept of `budget stores` has been introduced to remove apprehension in the minds of customers who viewed Bata outlets as being expensive. The company isfocusing on the rural markets for volume growth in the low-priced footwea

PROMOTION:
Promotion strategies are concerned with the planning, i m p l e m e n t a t i o n , a n d control of persuasive communication with customers. Clear-cut objectives and as h a r p f o c u s o n t a r g e t customers are necessary for an effective p r o m o t i o n a l program. As Bata is a established brand here in Bangladesh they think that theyshould 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

Best Price Range (TK) BATA


Men's995-1695Women's250-550School200-330Children130-195Sport695995Non Shoes50-100 Dominating Color Men'sBlackWomen'sBlack, ChocolateSchoolBlack, WhiteChildrenMulticolorSportWhite, GrayNon ShoesBlack, Chocolate Best selling sizes Men's41,42Women's4,5School4,5Children11,12Sport7,8Non ShoesDepends on the productOpening Days6 daysOpening Hours (AM-PM)9:00 am-8:00 pmImplementation of new designsWeeklyEffective sales campaigns15-20% discount.

2.3.2 SWOT ANALYSIS OF BATA SHOE CO. (BD) LTD:


Strengths: Image of the company Quality Product Differentiated line of products Competitive Pricing Strong distribution channel Modern manufacturing facilities Brand loyalty at mass level Weaknesses: 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 Opportunities: Despite political turbulence a segment of our middle-class is coming upwith reasonable buying power. Many of them are women who are decisionmaker 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, Hushpuppy Market expansion opportunity in high fashion & value for money footwear market for all categories of shoes through Retail & WCSM channels Threat: Political instability affects the supply of raw materials and distribution of finished products. Uncontrolled counterfeit of Bata products

2.3.3 ANALYSIS OF COMPETITORS:


APEX: Most of their shoes are expensive. They dont provide any school shoes. The sports shoe they bring into the market are mostly imported Addidas shoes and q u i t e e x p e n s i v e . I n t h e m e n s s e c t i o n t h e m o s t d o m i n a t i n g c o l o r i s b l a c k , i n women section-black and chocolate. They provide sophisticated color shoes for children. The most dominating sizes of the men, women and children are the average sizes that are sold in any Bata store. They remain open on everyday of the week except any government holiday. Opening hour is 9:00AM10:00PM. They generally implemented new design after every 6 months according their employees. The most successful sales campaigns are 60% off on specific design. Their market share is about 1.50% in Bangladesh. LIBERTY: Here in this shoe stores the average price of the shoes are also expensive. Their average retail price is 600+. They also have the same kind of offerings in the irrespective divisions. Usually the normal color and size that are sold elsewhere a r e a l s o s o l d h e r e . T h e y remain open everyday except of any gov ernment h o l i d a y s . They open at 10 in the morning and remain open up t o 1 0 i n t h e evening. After 3-6 months they brought new design

shoes in the market. The most effective sales campaign is 40-60% discount on specific design shoes. The market share of Liberty shoe is about 1%. They are in the market for about 13 years as a franchisee they are from India. REEBOK: They only sale sports shoes and some children shoes who are in their teens. The price of all shoes is high 1200+. The color and design of their shoes are of high quality. Reebok brings different types T-shirts, tracksuits and nonshoes items, which are quite expensive. After every 1-2 months new design of shoes comes in their store. 20-25% discounts on specific design are their most effective sales c a m p a i g n . A b o u t . 1 0 % m a r k e t s h a r e R e e b o k i s q u i c k l y g a i n i n g g r o u n d a n d getting attention of the brand conscious segment of the country. PAGASUS: They made their name as sports shoe manufacturer. After that they come up shoes for both the male and the women. Their best-sold price range is 800-1200for men, 550-750 for women and 300-500 taka shoes for children. Their best s old sports shoes are ranging from 700900 taka. They open their store everyday from 9:00-10:00 in the evening. After 2 months they bring out at least some kind of new design in one of their segments. Most effective sales campaign up to 20%discount. Their market presence in the country is over 25 years but not doing that well. Market share is only .50% mainly the quality of the shoe is moderate. HOMELAND: It is the least known brand among buyers. No non-shoe items. Openeveryday9:00-10:00PM in the evening. On average bring out new design after2-3months. Discount up to 20% on specific design are their most effective sales campaign. It is a Bangladeshi company. Not too many people know them but they are in market for more than 10 years. There main lacking is their poor distribution channel. Only 15-20 stores in the country is the indication of it

2.3.4 CORE COMPETENCIES/STRATEGIES OF BATA BANGLADESH: Be obsessed with customer satisfaction; Build reputation for providing quality product; Be dedicated to continuous growth in the market; Widespread availability of Bata shoes in the market; The prices of Bata shoes are very competitive and in many cases lower than its competitors; Very good distribution channel with dedicated employees all through Bangladesh and established because of Batas experience in the Bangladesh for very long; Taking opportunity of the lower buying power of the people of the country by providing good quality shoe at a competitive price; 2.4 STRATEGIES USED BY BATA SHOE COMPANY (BD) LTD: 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 belowMarket-Entry Strategy choices: 1. First-In Strategy 2. Early-Entry Strategy 3. Laggard-Entry Strategy

Market-Dilution Strategy: 1 . De-marketing Strategy 2. Pruning-of Marginal Markets Strategy 3. Key Markets Strategy 4. Harvesting Strategy Product Strategy: 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 Products Strategy choices 1. Maintaining the price 2. Reducing the price 3. Increasing the price Place/Distribution Strategy: 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). Place/Distribution Strategy Choices 1. Direct 2. Indirect

Pricing Strategy Skimming Pricing Penetration Pricing At times Bata Shoe Company in Bangladesh used 'Penetration Strategy. 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 Promotional Strategy 1. Promotion-Expenditure Strategy 2. Promotion Mix Strategy 3. Media-Selection Strategy 4. Advertising Copy Strategy 5. Selling Strategy 6. Sales Motivation and supervision Strategy

2.5 ETHICAL CONDUCT AND CORPORATE RESPONSIBILITY :


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 incompliance 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.

In the implementation of this mission, international guidelines have been developed in the areas of environment, health and safety. The efforts and achievements of Bata companies have been recognized in many countries, by both local and international bodies. The contribution to environmental conservation includes a role in prevention and education. Bata companies have long standing relationships with groups that have helped several generations of young people become more aware of the need for protection of the natural

CONCLUSION:
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 in more growth of Bata shoe company Bangladesh Ltd. in among the upcoming fierce competition in the shoe industry.

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. Bring more design, color, and design combination to be competitive. To merge with the local companies and to expand more segmentation