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INTERNATIONAL BUSINESS CASE STUDY Javed Kalangade (P1118) Ashish Khandare

(P1124) Amit Kumar (P1129) Raul Pinto (P1148) Sonal Sherekar (P1155)
2. 1. Bata Company Overview History, Evolution and Positioning 2. Case Study Overview FLOW
OF Batas Journey over the worldPRESENTAION 3. Foreign Political Systems Batas interaction
with foreign systems 4. Road Ahead for Bata International Challenges for Bata Ahead
3. Facts about Bata Founded by Tomas Bata in 1894, riverside town of Zlin , Czechoslovakia
Trusted global company that offers fashionable and affordable footwear to every member of the
BATA familyCOMPANY 5,000 international retail locations in over 70OVERVIEW countries
Services over one million customers per day
4. Facts about Bata Core Principle To know its customers and to create the best possible
products to meet their needs BATA MissionCOMPANY Offering style, comfort and quality at
the best priceOVERVIEW
5. Facts about Bata Innovators and Leaders International and Local Future of footwear
BATACOMPANY Our success is built onOVERVIEW our legacy of values and belief - Thomas
G. Bata
6. Policy at Bata Managed in a decentralized way, which means that the company is able to adapt
to the local environment Bata has a performing business strategy BATA based on economies of
scaleCOMPANY Trying of not exporting; the localOVERVIEW production is basically dedicated
to the internal market
7. FOREIGN The company was founded in 1894 in Zln POLITICAL (Czech Republic) by Tomas
Bata SYSTEMS A large order from the army, military shoesCzechoslovakia and rising demand
for them, during World War I started rapid growth and small manufacture turned into modern
industrial concern, one of the first mass producers of shoes
8. FOREIGN 1918 The Czechoslovak state was conceived POLITICAL as a parliamentary
democracy SYSTEMS 1939 The Company relocates to Canada after the movement of
GermanCzechoslovakia military forces into Eastern Europe 1945 Czechoslovakia business
operations are nationalized by the new communist government following World War II
9. FOREIGN Anticipating the Second WorldPOLITICAL War, Thomas J. Bata, the founders
SYSTEMS son, together with over 100 families from Canada Czechoslovakia, moved to Canada
in 1939 to develop the Bata Shoe Company of Canada, including a shoe factory and engineering
plant, centred in a town that still bears his name, Batawa, Ontario
10. Business in Canada Canada defines Small Businesses as those with fewer than 100
employees (in goods producing firms) and 50 employees (in service firms) FOREIGNPOLITICAL
11. Canadian Provincial Taxes FOREIGNPOLITICAL SYSTEMS Canada
12. FOREIGN The local factories of Bata in UgandaPOLITICAL had been SYSTEMS nationalized
by Milton Obote, Uganda de-nationalized by Idi Amin, re-nationalized by Amin and finally
de-nationalized also by Amin Meanwhile the company had worked as nothing had ever
13. 1962 Uganda gained independence from UK 1966 Following a power struggle between the
Obote-led government and King Muteesa, the UPC-dominated Parliament changed the
constitution and removed the FOREIGN ceremonial president and vice presidentPOLITICAL
1971 After a military coup in 1971, Obote was SYSTEMS deposed from power and the dictator
Idi Uganda Amin seized control of the country 1979 Amins reign was ended after the Uganda
Tanzania War 1986 Museveni has been in power since 1986
14. Economy of Uganda For decades, Ugandas economy suffered from devastating economic
policies and instability, leaving Uganda as one of the worlds poorest countries FOREIGN
Uganda has substantial naturalPOLITICAL resources, including fertile soils, regular SYSTEMS
rainfall, and sizable mineral deposits of copper Uganda and cobalt The country has largely
untapped reserves of both crude oil and natural gas Uganda is rated among countries
perceived as very corrupt by Transparency International
15. Bata had been also criticized for maintaining different types of relationships with totalitarian
regimes, as the one of Chile FOREIGN The company presented in itsPOLITICAL own defence
the argument that SYSTEMS it had been activating in Chile Chile more than 40 years,
meanwhile many political regimes had changed
16. Economy of Chile Chile is one of South Americas most stable and prosperous nations During
the early 1990s, Chiles reputation as a role model for economic reform was FOREIGN
strengthened when the democratic governmentPOLITICAL of Patricio Aylwin, who took over from
the SYSTEMS military in 1990, deepened the economic reform Chile initiated by the military
government The 197390 military government sold many state-owned companies, and the
three democratic governments since 1990 have continued privatization, though at a slower pace
18. Under Communism, produ Under ction is managed by Socialism, the communities of government
has workersUnderCapitalism, the the role ofgovernment has favoring thethe role of easing needs
of societythe class strugglein favor of Capital
19. The case of South Africa was a major challenge Bata in for BataSouth Africa The GDP per
capita in this country is the highest of all nations in the African continent The main attraction of
the country is represented by the incredible high profit rate, mainly generated by low labour costs
and rich deposits of mineral resources The relatively large South African market allows the
companies to obtain economies of scale in production by using cheap labour force
20. The general background deteriorated rapidly at the beginning of 1980s For decades, South
Africa had an apartheid regime that led to political, social and economic segregations between
black and white people Bata in The black Nationalists were fighting for theSouth Africa right to
vote of each and every citizen, but the white Government was refusing them The African
National Congress, led by Nelson Mandela, was fighting against capitalism and was sustaining
the idea of nationalizing the whole industry, no matter if the companies considered were national
or owned by foreign entities
21. The Canadian Government had imposed a very conservative legislation regarding the new
investments in South Africa As a result, Bata decided to leave South Africa in 1986, but the
company did not admit that the apartheid had represented Bata in the cause of its decisionSouth
Africa The selling conditions were clearly stipulating that the name of the company and the
production brand would not be used anymore in South Africa and all the connections with
Canada would be broken off The new buyer of the business operations and the production
facilities had to keep the jobs of all workers, most of them black people
22. Bata inSouth Africa
23. Bata inSouth Africa
24. South African Economy The economy of South Africa is the largest in Africa About a quarter
of the population is unemployed and about the same proportion lives on less than US $1.25 a
Bata in daySouth Africa South Africa has a comparative advantage in the production of
agriculture, mining and manufacturing products relating to these sectors The top income tax
rate in South Africa is 40%, and the top corporate tax rate is 28%
25. Business in South Africa South Africa suffers from relatively heavy overall regulation burden
compared to developed countries Bata in State ownership and interferenceSouth Africa impose
high barriers to entry in many areas the top corporate tax rate is 28%
26. Bata inSouth Africa
27. Bata inSouth Africa
28. Bata inSouth Africa
29. Bata inSouth Africa
30. Since South Africa has evolved into a more favourable investment destination, Bata should re-
enter South Africa Bata in Bata should continue with its strategySouth Africa of using local
production to cater to domestic markets as
31. Batas re-entry Political scenario of the region in Czech & After the collapse of Czechoslovakia,
Czech Slovakia Republic and Slovakia, both were considered free politically Czech Republic
was considered mostly free economically Czech started to encourage privatization of
companies But Slovakia encouraged nationalization of companies
32. Advantages for Bata for getting back operations in Republic of Slovakia Bata will be able to
return to the home country Bata will gain access to large facilities and aBatas re-entry huge
market in Eastern Europe and the former Soviet Union in Czech & Already an established
company there Slovakia Disadvantages for Bata for getting back operations in Republic of
Slovakia Bata will have to face the not so free economic policy of Slovakia as its not promoter
of free trade Bata have to comply with the economic policies which are not desired by a
company which has been operating freely around the globe
33. Advantages for Republic of Slovakia Bata chooses local resources for the production so the
local resources of the Slovakia will be explored and utilized in the proper manner Bata gets its
raw materials from diversified localBatas re-entry suppliers, this will help create strong supply in
Czech & base in the host land and it increase the Slovakia revenues of the raw material
producers Disadvantages for Republic of Slovakia and the reason for not allowing Bata to reenter
The compensation which was promised has to be paid back to Bata It has to handover the
management to Bata itself The relation with the Slovakian government will not be truly positive
and the support from the government will be less to Bata causing mutual conflict
34. Why Czech Republic allowed Bata to re enter The Czech Republic will gain access to Batas
global design, production, and marketing expertise The Czech Republic might be able to get
Bata toBatas re-entry invest significant capital into the plant to get it up in Czech & to world-class
standards Slovakia Bata will create new jobs for Czech workers and the purchasing power of
the Czech will increase The success in the host country comprises of the better knowledge of
economic, political and cultural diversity knowledge Bata having operated in almost 60
countries knows and have dealt with diverse conditions worldwide so, they are in great shape to
deal with things there
35. Political System in Czech Republic Parliamentary republic, democratic state Power is divided
into legislative (CzechBatas re-entry Parliament), executive (Czech Government and in Czech &
the President of the Republic) and judicial Slovakia The President of the Republic and the
Czech Government are representatives of executive power within the country
36. Political System in Slovakia The National Council of The Slovak Republic Countrys sole
constitutional and legislative bodyBatas re-entry It has 150 members elected for 4 year terms
in in Czech & direct elections Slovakia Courts and Judicial Power: Consists of general courts
(district courts, regional courts and the supreme court) and military courts The Constitutional
Court is an independent judicial body and is not part of general courts system Military courts
handle disputes of military personnel
37. Why Tom Bata Sr. cant bear to lose grip on business he started He is the one who took his
ancestral business to a global levelBatas Future He did a lot of hard work to keep the Bata
philosophies alive and also ensured that it grew into a global empire His entrepreneurship
method of keeping the company alive was a success in his time and perhaps he believes that the
same tradition should be carried forward to the future
38. Having grown a business, it is often hard to turn it over to others who may have different ideas
about how the firm should be managedBatas Future Bata is huge, having operations in about
60 countries. Different countries have different political and cultural environment. Having seen
and managed all this so effectively and for so long, its difficult to trust someone else
39. What is the risk, if Bata Sr. cant find a way to retire Tom J. Bata led his firm through a period of
great turbulence and growth but both the world and the company are now very different
thanBatas Future they were in Doing business is changing rapidly and being dynamic to adapt
to those changes is a necessity So Tom Bata should formulate a retirement plan in such a way
that the new CEO or a successor will be able to continue his inheritance in a new way
40. What is the risk, if Bata Sr. cant find a way to retire The training under Tom J. Bata will prove
more effectiveBatas Future Hiring and training the best candidate after he is gone, will be the
challenge for the management Hence, Bata should focus not only in its current strategies but
also have a good succession strategy
41. Thank You