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The Strategies of Bata Shoes Bangladesh LTD
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 world’s 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.
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 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
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The Strategies of Bata Shoes Bangladesh Ltd.
Business Units. The associates are mostly Muslim and they contribute regularly towards the
building of our national economy.
The company’s 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.
These include Decision making and implementation of activities like Managing Director, Head of
Accounts, Human Resources Management and Chief Finance Officer.
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The Strategies of Bata Shoes Bangladesh Ltd.
Mid level Management
These include Inventory Management System, Retail Integrated Merchandising System, Online
Sales System, Production department, Purchasing department activities and decisions.
All the department’s employees and supervisors are includes in this level. They continuously
monitor the wholesalers and retailers.
Managing
Director
Product
Production Purchasing Merchendising
NRSD Manager development
Manager Manager Manager
Manager
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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 reasonably priced, decent design and durable shoes for work
and this brand in many cases serves this segment well.
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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 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.Schole’s and Nike in this region of south Asia.
Bata also have quite new brands for male and female like Bata Comfit, Bata Flexible. According
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The Strategies of Bata Shoes Bangladesh Ltd.
to the Bata officials in Bangladesh Bata have more than 1000 lines of footwear’s 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.
Tongi
Factory CDC(Central Own
Distribution Stores &
Raw
Center) Agencies
Materials
Dhamrai
Factory
Depot
Dealers &
Wholesalers
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The Strategies of Bata Shoes Bangladesh Ltd.
5.0 STRATEGIES USED BY BATA BANGLADESH
1. Single-Market Strategy
2. Multi-market Strategy
3. Total-market Strategy
Among the three choices Bata has chosen and uses ‘Total-Market strategy’s they serve all
classes of people with their shoes ranging from 30/--2195/-. The specifics of the strategy is
provided below-
Definition: Serving the overall market with one or some other kind of offerings.
Requirements:
Expected Results:
Higher Sales.
Higher Market Share.
1. Local-Market Strategy
2. Regional Market Strategy
3. National Market Strategy
4. International Market Strategy
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The Strategies of Bata Shoes Bangladesh Ltd.
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’.
Requirements:
Expected Results:
Increased growth.
Increased market share.
Keep up with competitors
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:
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The Strategies of Bata Shoes Bangladesh Ltd.
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:
Expected results:
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.
Requirements:
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The Strategies of Bata Shoes Bangladesh Ltd.
Expected results:
Increased profits.
Increased market share in the selected markets.
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 'Product-Positioning 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:
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In the case of positioning multiple brands:
Requirements:
Expected Results:
Distribution Strategy:
Definition: Developing unfamiliar products and markets through
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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.
Expected results:
Increase in sales.
Greater profitability and flexibility.
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.
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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:
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:
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Expected Results:
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:
Requirements:
Detailed analysis of the firm's position and cost structure as compared with the rest
of the industry.
Information concerning cost variability of offering same price to everyone.
Knowledge of the economies of scale available to the firm.
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Information on competitive prices; information on the price that customers are
ready to pay.
Expected Results:
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:
1. Promotion-Expenditure Strategy
2. Promotion Mix Strategy
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3. Media-Selection Strategy
4. Advertising Copy Strategy
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.
Customer
Marketing Strategy:
Achieving maximum
Positive differentiation
Corporation Competition
NEW ENTRANTS
Apex, Reebok,
Puma, Jennys,
Woodland
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.
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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