Professional Documents
Culture Documents
ON
ACADEMIC SESSION
2019-2020
SUBMITTED TO SUBMITTED BY
Mrs. MEENAKSHI
Lect. BBA Dept. ANKIT
Roll no. 1360710008
1
ACKNOWLEDGEMENT
This project comes out to be a great source of learning and experiences. A lot of efforts have been
put by various people to make this project a success. This has greatly enhanced my knowledge
about Bata. I gratefully acknowledge my indebtedness to Mrs. Anshu Aggarwal for her time and
valuable efforts. She is constantly encouraged me right from the selection of the project to final
preparation of my report. She has been a constant source of knowledge, information, help and
motivation for me through her in-depth knowledge and reflection.
I express my sincere thanks to Bata for giving me an opportunity to work with through this project.
With Regards,
ANKIT
2
Bata India limited
Saima enterprises
Gurgaon 122001
Company Certificate
This is to certify that MR.ANKIT has visited our organisation
And has collected relevant information for her project “strategy analysis”
of Bata footwear in gurgaon.
We hereby certified that the information given in this project is relevant.
3
TABLE OF CONTENTS
1 INTRODUCTION
1.1 Industry Profile
1.2 Company Profile
1.3 Conceptual Framework of the Study
2 JOB PROFILE
2.1 Job Title
2.2 Job Duties and Responsibilities
3 RESEARCH METHODOLOGIES
3.1 Objectives of the Study
3.2 Scope of Study
3.3 Data Collection Methods
3.4 Sampling Design
REFERENCES
ANNEXURE
4
CHAPTER1: INTRODUCTION
The major production centers India are Chennai, Ranipet, Ambur in Tamil Nadu, , Mumbai in
Maharashtra, Kanpur in U.P. , Jalandhar in Punjab, Agra and Delhi.
Tamil 64 31 7
Nadu
Delhi& up 4 8 2
North
5
Agra, 34 14
Kanpur
Calcutta 1 3 19
Bangalore 6 3 4
Mumbai 3 11
Others 13 10 3
The estimated annual footwear production capacity in 1999 is nearly 1736 million pairs (776 million
pairs of leather footwear and 960 million pairs of non-leather footwear).
Percentage
Tamil Nadu 26 5 54 1 0
Delhi& up North 10 77 4 1 60
Agra, Kanpur 45 0 32 62 0
6
Calcutta 12 0 2 3 0
Bangalore 3 3 4 0 0
Mumbai 4 2 1 32 0
Others 0 13 3 1 40
Shoes manufactured in India wear brand names like Florham, Gabor, Clarks, Salamander and St.
Michael’s. As part of its effort to play a lead role in the global trade, the Indian leather industry is
focusing on key deliverables of innovative design, consistently superior quality and unfailing delivery
schedules.
The Indian footwear industry is provided with institutional infrastructure support through premier
institutions like Central Leather Research Institute, Chennai, Footwear Design & Development
Institute, Noida, National Institute of Fashion Technology, New Delhi, etc in the areas of
technological development, design and product development and human resource development.
The availability of abundant raw material base, large domestic market and the opportunity to cater to
world markets makes India an attractive destination for technology and investments.
The leather industry is spread in different segments, namely, tanning & finishing, footwear &
footwear components, leather garments, leather goods including saddler & harness, etc.
The major production centers for leather and leather products are located at Chennai, Amber, Ran
pet, Vaniyambadi, Trihi, and Dindigul in Tamil Nadu, Calcutta in West Bengal, Kanpur in Uttar
Pradesh, Jalandhar in Punjab, Bangalore in Karnataka, Delhi and Hyderabad in Andhra Pradesh.
The annual availability of 166 million pieces of hides and skins is the main strength of the industry.
This is expected to go up to 218 million pieces by the end of year 2000. Some of the goat/calf/sheep
skins available in India are regarded as specialty products commanding a good market. Abundance
of traditional skills in training, finishing and manufacturing downstream products and relatively low
wage rates are the two other factors of comparative advantage for India.
8
Export and Import overview
Footwear is the engine of growth for the entire Indian leather industry and India is the second largest
global producer of footwear after China, accounting for 14% of global footwear production. Of 14.52
billion Pairs.
India produces 2065 million pairs of Different Categories of Footwear (Leather Footwear 909 million
pairs, Leather Shoe uppers 100 million pairs and Non-leather footwear 1056 million pairs)
India exports about 115 million pairs. Thus, nearly 95% of its production goes to meet its own
domestic demand.
Footwear exported from India are Dress Shoes, Casuals, Moccasins, Sport Shoes, Hierarchies,
Sandals, Ballerinas, Boots, Sandals and Chap pals made of rubber, plastic, P.V.C. and other materials.
MNC Brands sourced : from Acme, Clarks, Coleman, Deichmann, Ecco, Elefanten, Florsheim, India
Gabor, Haley, Hush Puppies, Double H, Justin, Marks & Spencer,
Nautica, Nike, Nunn.
9
MNC Brands Sold in India: Bally, Clarks, Hush Puppies, Lee cooper, Lloyd,
Marks Spencer, Nike, Nine West, New Balance, Reebok, Stacy Adams
Indian Brands sold in India: Red Tape, Bata, Liberty, Khakis, Lakhani, and Action
• Nearly 75% of India’s Export of Footwear is to the European Countries and the USA.
• The Indian Footwear Industry provides employment opportunities to a total of 1.1 million
people, mostly from the weaker sections of the society. Out of this, about 0.2 million are
employed in the organized sector, 40% of who are women. Remaining 0.9 million people are
engaged in unorganized footwear sector like rural artisans, cottage and household units etc.
• The Footwear Sector is now de-licensed and de-reserved, paving the way for expansion of
capacities on modern lines with state-of-the-art machinery. To further assist this process, the
Government has permitted 100% Foreign Direct Investment through the automatic route for
the Footwear Sector.
Footwear export has increased from US$40.15 million in 1977-78 to US$ 1475.83
million in 200708
10
India’s Exports of Footwear – Country-wise Share in Total Exports (2007-08) Source: DGCI& S
The European Union and the USA are the major markets for Indian Footwear accounting for 79.95%
and 9.22% share respectively in India’s total footwear export. The major markets for Indian Footwear
are Germany 16.66%, UK 16.31%, Italy 15.32%, USA 9.22%, France 7.81%, Spain 5.10%,
Netherlands 4.91%, Portugal 2.50%, UAE 2.48% and Denmark 1.18%. These 10 countries together
accounts for nearly 81.49% of India’s total leather products export.
NOTE:- 20% of total Indian shoe production come from Bata. i.e about 8crorte pairs.
11
ROLE OF GOVERNMENT IN SHOE INDUSTRY IN INDIA
Jairam Ramesh Minister of state for Commerce has announced Rs.1.6-billion (Rs.160-crore) package
to boost the local shoe industry, but the state government, chief minister opposed this. Ramesh made
the announcement on Saturday when he was inaugurating an international fair on leather, footwear
components and technology at the Kalakriti Grounds near the TajMahal.
The package comprises of Rs.600-million Leather Park, Rs.200-million footwear design development
centre, Rs.100-million design studio, a testing laboratory and a permanent exhibition ground to be
developed on investment of Rs.500-600 million, on similar to PragatiMaidan exhibition in New
Delhi.
Local shoe manufacturers have been asked to look for land. But there’s a problem the land for the
projects has to be released by the state’s ruling party (which is the Congress’s opposition party).
Agra’s old shoe industry directly and indirectly supports 100,000 families, mostly from the dalit
community. Mayawati of BSP opposed to Ramesh of Congress Party that heads the United
Progressive Alliance (UPA).
According to shoe industry sources, Mayawati won’t be in a hurry to release land for any of the
projects announced.
But the industry believes once the schemes starts, exports could reach Rs.30 billion (Rs.3000 crore)
from the present level of around Rs.8 billion (Rs.800 crore).
More than 200 national and international components and raw materials manufacturers have put up
their stalls at the exhibition.
• Synthetic leather
• Shoe leather
• PU leather
• Air blown PVC soles
• PU welted sole
• TPR soles for men
• PU sleeper sole
• PVC gents sole
• PU shoe sole
• Emulsion polymers (latexes)
• Pell ethane thermoplastic polyurethane elastomers
• Polyurethanes
• Vocalist polyurethane system
• Microfiber leath
HISTORY
Bata India is the largest retailer and leading manufacturer of footwear in India and is a part of the
Bata Shoe Organization.
13
Incorporated as Bata Shoe Company Private Limited in 1931, the company was set up initially as a
small operation in Konnagar (near Calcutta) in 1932. In January 1934, the foundation stone for the
first building of Bata's operation - now called the Bata. In the years that followed, the overall site was
doubled in area. This township is popularly known as Batanagar. It was also the first manufacturing
facility in the Indian shoe industry to receive the ISO: 9001 certification.
The Company went public in 1973 when it changed its name to Bata India Limited. Today, Bata India
has established itself as India's largest footwear retailer. Its retail network of 1250 stores gives it a
reach/ coverage that no other footwear company can match. The stores are present in good locations
and can be found in all the metros, mini-metros and towns
Bata's smart looking new stores supported by a range of better quality products are aimed at
offering a superior shopping experience to its customers. And the new face of Bata India is now
visible to the industry as well as its customers. Today, backed by a brand perception of experience,
the company is working towards positioning itself as a vibrant and contemporary young brand. It
has significantly transformed its retail formats to become more lifestyle-oriented, which has helped
change consumer perceptions to a large extent.
Key Milestones:
14
Date/Year Event
1894 The Bata Shoe Organization was founded by Tomas J. Bata, a ninth
generation shoe maker
October 28, The foundation stone was laid on land purchased from the Port
1934 Commissioners and small landowners in the outskirts of Kolkata and the first
manufacturing unit were set up, at a place now known at Batanagar. The
factory shifted from Konnagar to Batanagar
1936 The construction work at the Batanagar factory was completed, and factory
operation shifted from Konnagar to Batanagar. Towards the end of 1936, the
factory produced leather footwear for the first time
1939 The Batanagar factory was complete in terms of every activity related to
Footwear. The Batanagar township grew to become self-sufficient with the
acquisition of more land and the erection of schools, places of worship,
Hospitals, entertainment and recreational centers.
15
1940-45. During the World War II the factory’s production was geared to meet war
Requirements.
1993 Batanagar factory became the first Indian shoe-manufacturing unit to receive
the ISO 9001 certification.
Our Values
Our commitments
• Wide collection
With more than 1000 different designs to choose from, we have one of the widest selection
shoes, handbags and accessories.
• Assured Quality
Strict quality measure are followed during and often the production of all our products. We
have our own factories and warehouse that are supervised by trained and experience personas.
• Personalized Attention
In all our stores, our trained professional sales staff is at your service. In case you have any
query about Bata products or services, please feel free to ask for any assistance.
17
• Product Detail
We ensure that you get complete detail of all our products in the most convenient way. Each
item carries tags that clearly mention type, price, size or other necessary information. It not
only saves your time but also helps you in your selection.
18
Bata
Global
19
Products Profile
PRODUCTS
Bata India Ltd. has a large variety of shoes for all the sections. They also make accessory for men’s
and women’s.
1.) Men`s Wear: They make products of preferably for service men and also have
Segment of sports shoes for young men under a different company name POWER . they have a large
Variety of products such as:-
• Closed dress
• Closed casual
• Sandals
• Chapels
• Sports wear
20
2.) Women’s wear: They make products of preferably missy and have large variety of
products such as:-
• Chappals
• Closed
• Sandals
3.) Kid`s wear: they make products of the age group 6-17 years
• Infants
• Closed
• Sandals
21
1.3 CONCETUAL FRAMEWORK OF THE STUDY
Richard L. Prime(2004) states that as a potential theory, the elemental resource-based view
(RBV) is not currently a theoretical structure. Moreover, RBV proponents have assumed stability in
product markets and eschewed determining resources' values. As a perspective for strategic
management, imprecise definitions hinder prescription and static approaches relegate causality to a
22
“black box.” We outline conceptual challenges for improving this situation, including rigorously
formalizing the RBV, answering the causal “how” questions, incorporating the temporal component,
and integrating the RBV with demand heterogeneity models.
John E. Butler (1991) states that how attitude affects an entrepreneur strategy selection at
organizational level. It also attempts to discover its contingencies exist in these relationships that may
account for difference in firm performance. The model developed based on the existing literature is
tested using the sample of 60 wineries, still operated by their binding entrepreneurs. The results
indicate that an entrepreneur used different approaches to impart their values and beliefs to their
firms. While we show that this affects the eventual strategy choice, data indicates that firms can
eventually be profitable with multiple set of attitudes and strategy combinations.
Saikatbanerjee (2008) Globe has become a small village from the point of view of
communication and market access, but till today country-specific culture plays a deciding role behind
the success of any marketer. To ignore country-specific culture and to move on the assumption of
presence of global culture may well offer a bumpy road to a brand marketer. A close match between
country-culture and brand-culture adds significantly to effectiveness of strategy execution. Marketers
face a tough time to
integrate brand-culture in different countries of operation. This paper has offered a conceptual
framework to manage the integration of brand-culture with the culture of the country of operation. A
matrix framework is proposed for position identification and possible branding strategies, which is
applicable regardless of the type of product or service provided and country of operation.
23
26 previously published studies. Results suggest that strategic planning positively influences firm
performance and those methods factors are primarily responsible for the inconsistencies reported in
the literature. The substantive contingency factors that we examined, some of which have been
frequently cited as important by previous researchers, did not have a large impact.
Michael W. Lawless Technology and Strategy presents models that help put technology and its
market impacts into perspective. It addresses the broad questions of how technology and markets
evolve, how technology can re-order the "rules" of competition, and how it can shift the balance of
individual firms' competitive advantage. It also blends topics currently capturing attention in business
circles--such as Total Quality Management and the resource-based view of the firm--into a clear view
of technology.
Technology and Strategy also describes methods to develop specific strategies to cope with
challenges facing executives--like evaluating promising, but untried, new technologies. Using actual
case studies from the electronics and bio-tech industries, Goodman and Lawless demonstrate the use
of new techniques to formulate strategy, including Technology Mapping and the Innovation Audit.
Both were created to help executives choose the approach to technology best suited to their firms ‘.
Offering clear, practical guidance through a complex, fast-changing world of competition, this new
analysis of technology and strategy is a valuable guide for general managers, R&D and manufacturing
managers, strategic planners, and academics.
P. Christopher Early (1987) Only a few studies that have examined the effects of participation
on an individual's goal acceptance and performance have been conducted within a cross-cultural
context. In the present study, we tested for the contingency between the effectiveness of goal-setting
strategies and cultural values. We examined three goal-setting strategies within three different
cultural groups—assigned goals, goals participative set by a group representative and the
experimenter, and goals participative set by a group. The three cultural groups studied were U.S.
students (n60), individualistic and having a high power distance; Israeli students from urban areas (
24
= n60), collectivistic and having a low power distance; and Israeli students from kibbutzim ( = n 60),
highly collectivistic and having a low power distance. Results = indicated that participative strategies
led to higher levels of goal acceptance and performance than the assigned strategy. Culture did not
moderate the effect of goal-setting strategies on goal acceptance, but it appeared to moderate the
strategy on performance for extremely difficult goals.
Robert Jacobson (1987) Determine the strategic role of product quality. American firms losing
markets to Japanese Prior research focused on Study by Phillips, Chang &and European brands other
strategic variables like Buzzel (1983) on the impact thanks to their market share, price or of quality
on ROI, market(perceived) higher advertising. Share, price and cost.qualityproducts.Seminar
„Essential Models and Theories in Marketing” Fall Term 2010
25
JOB PROFILE
2.1 Job title
Where I have to perform job to increase the growth and sales of Bata. Strategies were to be made to
achieve organizational goal
The strategies that the company has adopted from past few years and what all are the future prospects
and the strategies that the company can follow
The strategies that the company is following from past few years to increase their sales, increase
their profit margin and shareholder’s wealth. Here we learnt how the company is getting their funds
and how they can increase their investors to invest more in the company.
Here we will study the financial position of the company for past few years and make analysis and
future studies by taking out the ratios of the financial account of the company. We will also analyze
26
the marketing strategies through graphs and make future strategies to improve marketing strategies
of the company
RESEARCH METHODOLOGY
Meaning:
Methodology is the systematic, theoretical analysis of the methods applied to a field of study. It
comprises the theoretical analysis of the body of methods and principles associated with a branch of
knowledge. Typically, it encompasses concepts such as paradigm, theoretical model, phases and
quantitative or qualitative techniques.
A methodology does not set out to provide solutions - it is, therefore, not the same thing as a method.
Instead, it offers the theoretical underpinning for understanding which method, set of methods or so
called “best practices” can be applied to specific case, for example, to calculate a specific result.
OBJECTIVES OF STUDY :-
1. "the analysis of the principles of methods, rules, and postulates employed by a discipline"
2. "the systematic study of methods that are, can be, or have been applied within a discipline" 3.
A research design is a systematic plan to study a scientific problem. The design of a study defines
the study type (descriptive, correlation, semi-experimental, experimental, review, meta-analytic)
and sub-type (e.g., descriptive-
longitudinal casestudy), researchquestion, hypotheses, independent and dependent variables,
experimental design, and, if applicable, data collection methods and a statistical analysis plan.
Research design is the framework that has been created to seek answers to research questions.
27
Types of research design:
Hence, research cannot describe what caused a situation. Thus, Descriptive research cannot be used
to as the basis of a causal relationship, where one variable affects another. In other words, descriptive
research can be said to have a low requirement for internal validity.
28
The description is used for frequencies, averages and other statistical calculations. Often the best
approach, prior to writing descriptive research, is to conduct a survey investigation. Qualitative
research often has the aim of description and researchers may follow-up with examinations of why
the observations exist and what the implications of the findings are.
• Secondary data
Secondary data, is data collected by someone other than the user. Common sources of secondary data
for social science include censuses, organizational records and data collected through qualitative
methodologies or qualitative research. Primary data, by contrast, are collected by the investigator
conducting the research.
Secondary data analysis saves time that would otherwise be spent collecting data and, particularly in
the case of quantitative data, provides larger and higher-quality databases that would be unfeasible
for any individual researcher to collect on their own. In addition, analysts of social and economic
change consider secondary data essential, since it is impossible to conduct a new survey that can
adequately capture past change and/or developments
• Quantitative: Census, housing, social security as well as electoral statistics and other related
databases.
• Qualitative: Semi-structured and structured interviews, focus groups transcripts, field
notes, observation records and other personal, research-related documents.
A clear benefit of using secondary data is that much of the background work needed has already been
carried out, for example: literature reviews, case studies might have been carried out, published texts
and statistics could have been already used elsewhere, media promotion and personal contacts have
also been utilized.
29
This wealth of background work means that secondary data generally have a pre-established degree
of validity and reliability which need not be re-examined by the researcher who is re-using such data.
Furthermore, secondary data can also be helpful in the research design of subsequent primary research
and can provide a baseline with which the collected primary data results can be compared to.
Therefore, it is always wise to begin any research activity with a review of the secondary data.
• GRAPHS
• OBSERVATION
• PERFORMANCE EVALUATION
3.3.3 Limitations
30
Sample size -- the number of the units of analysis you use in your study is dictated by the type of
research problem you are investigating. Note that, if your sample size is too small, it will be difficult
to find significant relationships from the data, as statistical tests normally require a larger sample
size to ensure a representative distribution of the population and to be considered representative of
groups of people to whom results will be generalized or transferred.
• Lack of available and/or reliable data -- a lack of data or of reliable data will likely require you
to limit the scope of your analysis, the size of your sample, or it can be a significant obstacle in
finding a trend and a meaningful relationship. You need to not only describe these limitations but
to offer reasons why you believe data is missing or is unreliable. However, don’t just throw up
your hands in frustration; use this as an opportunity to describe the need for future research.
• Lack of prior research studies on the topic -- citing prior research studies forms the basis of your
literature review and helps lay a foundation for understanding the research problem you are
investigating. Depending on the currency or scope of your research topic, there may be little, if
any, prior research on your topic.
Measure used to collect the data -- sometimes it is the case that, after completing your
interpretation of the findings, you discover that the way in which you gathered data inhibited your
ability to conduct a thorough analysis of the results. For example, you regret not including a specific
question in a survey that, in retrospect, could have helped address a particular issue that emerged
later in the study. Acknowledge the deficiency by stating a need in future research to revise the
specific method for gathering data.
31
• Self-reported data -- whether you are relying on pre-existing self-reported data or you are
conducting a qualitative research study and gathering the data yourself, self-reported data is limited
by the fact that it rarely can be independently verified. In other words, you have to take what people
say, whether in interviews, focus groups, or on questionnaires, at face value. However, selfreported
data contain several potential sources of bias that should be noted as limitations: (1) selective
memory (remembering or not remembering experiences or events that occurred at some point in
the past); (2) telescoping [recalling events that occurred at one time as if they occurred at another
time]; (3) attribution [the act of attributing positive events and outcomes to one's own
agency but attributing negative events and outcomes to external forces]; and, (4) exaggeration [the
act of representing outcomes or embellishing events as more significant than is actually suggested
from other data]
value creation
growth parameter
net sales (cr) 1092 1258 1543 1842 2065
32
Y-o-Y Gr.Rt. 10.60 15.30 22.60 19.40 12.10
% % % % %
adjusted EPS 10.47 14.72 22.91 26.66 31.11
book value per share 46.15 56.57 84.76 104.12 126.53
adjusted net profit 67.3 94.6 147 171 200
net op. cash flow (cr) 110 82.9 69.8 185 182
CAGR (compounded annual growth rate)
33
entity percentage
holding
promoter 52.96%
institution 30.45%
non-institution 16.59%
5 year analysis:
The financial performance of the company was below satisfactory in the early part of the decade i.e.
from FY 03 - FY 05; thereafter the company restructured its business and improved its financial
performance over the last six years. The consolidated 10 Year X-Ray of Bata India Ltd. has been
considered for analysis owing to the significant contribution of its subsidiaries.
Since 2007, Bata India Ltd. has reported improved performance. The Value Creation Index has been
above our benchmark of 0.25. ROCE and ROE figures have been very good with 6 year average
figures of 26% and 27%, respectively.
The recent years’ considerable improvements in manufacturing, supply chain management; retail
expansion program have boosted the margins. Moreover in last 2 years, selling & distribution
expenses and employee cost as a percentage of sales have declined causing expenditure in sales term
to drop on Y-O-Y basis. In addition to this, sudden fall in tax expenses has resulted in steep rise in
margins. The improving margins along with increasing turnover ratio have resulted in increasing
returns.
Bata India Ltd. has continued its strategy of large scale expansion of retail stores, renovation of
existing stores & improvement in customer service and introduction of new value oriented products.
This has enabled the company to report 16% CAGR growth in sales during last 6 years. The rise in
EPS has been in proportion to rise in net sales as company recorded higher net profits in last 4 years.
Over the last 7 years, the company has reduced its debtor and inventory days, which helped the
company to post positive cash flow over the period indicating efficient working capital management.
34
35
* Without considering Prior Period Items
36
37
** Without considering Gains from Surplus Property Development
38
39
MARKETING ANALYSIS
Macro Analysis
It is very important for an organization to consider its environment before initiating a marketing
process. This must be a continuous process and should help in the positioning the organization in
the market. The factors that are considered are Political, Economical, Social and Technology.
40
POLITICAL FACTORS
• Rules and regulations for tannery wastes.
• Government stability.
• Fewer sports events apart from cricket to attract the customers.
• Merging of Adidas and Reebok
• Market pressure on sales.
ECONOMICAL FACTORS
• Seasonal Issues: Sports is more encouraged in summer.
• Increasing buyer power makes the customers to look at branded shoes.
• Lack in targeting the women and kid segments.
• Huge consumer market.
SOCIAL FACTORS
• Change in the lifestyle of the people (buyer).
• Increasing fashion trends.
• Advertising, publicity and media.
• Change in buyer behavior.
TECHNOLGICAL FACTOR
• Increase in competing technology development.
• Up-ward shift in innovation and manufacturing maturity.
Micro Analysis:
Customers – The products of Bata targets a wide range of customers which also includes Army,
Police Force and Mining industries in all locations. This is mainly due to the wide range of products
41
made available in market by the company. The company has two types of customers they are the
final users and the It offers good quality products with best price in market, which means that the
price-quality ratio is excellent for the Bata products.
Competitors – The competitors for Bata India in the market are Puma, Nike, Reebok, Adidas,
Woodlands, Liberty and Action. The arrival of local and international brands in the Indian market
has created a highly competitive environment in the footwear industry market. The products from
the competitors serve as substitutes to the customers.
Suppliers – The raw materials for the company is PVC soles and the animal skin, the people or
organization which supplies these raw material are known as the suppliers. Bata’s suppliers are
Chinese raw material holders and the local cottage industries that supplies raw materials to the
company.
SWOT ANALYSIS
Strength
• Availability of raw materials and other inputs for the company’s operations.
• Manufacturing units in various places helps in distribution.
• Subsidiaries and Tax incentives on machineries.
• Established links with buyers from Europe and US.
• Friendly government policies for export.
• The brand name is immediately identified with footwear by the consumers.
Weakness
• Facing challenges to move to new production technology, because of its existence for more
than seven decades.
• High labour costs, as the company has large number of employees.
Opportunities
• There is a good scope for diversification into other products like leather wallets, seat covers
and other types of leather garments.
• Growing National and International market.
42
• Developing fashion consciousness globally.
• Being in a large developing market which offers a demand for footwear, the company finds
its potential in leveraging the Bata brand for marketing other merchandise consumer
products.
Threats
• Changing fashion trends is hard to adopt for the Indian Leather Industries.
• Entry of global competitors into National market brings heavy competition in the market.
43
sex and occupation. Personal Activities like hobby, social events (marathon), sports, shopping and
Personal interests like fashion, styles were considered in psychographic factors and buyer
behaviour which includes the changing trend in buying pattern for the segmentation of market
[refmodule book]. The foot wear industry market falls under the ideal type market, as it covers all
segments of customers. The customers share their needs in this market. The target segments are
classified into three categories namely Display Buyers, Knowledge Buyers and Fashion/Stylish
Buyers. The customers who come under these buyer categories are children, students, adults,
elderly people and sports people.
Positioning
Positioning is done in-order to locate the brand in the minds of the customers, which in-turn
increases the benefits of the company. Positioning results in customer-focused value proposition.
The positioning is done with respect to the brand and product portfolio. Positioning strategy is
done by identifying the possible competitive advantages through which a company can attain
sustainable position in the market. Bata always aims to be sustainable in the market and it has
proved it over years. The company has taken various steps to increase its market share, some of
them are renovating its already existing stores, opening new stores in sub-urban places and the
main strategy which is followed by the company is high quality and low price. This has made the
company sustainable for more than seven decades in India. The company will follow the same
strategy for the new product Power-Lite. On the other hand when looking into the market for the
products from Nike, Puma, Adidas and Reebok, they charge a huge amount for their sports
products. The cost of shoes from Bata is relatively low, when compared to others.
44
relation with the competing product. The low price and high quality strategy works well in the
Indian market as it is a developing market.
Product
A product/service is anything that a firm or an individual cells, which satisfies the customer needs.
The new product will replace an existing product named Life-Line under the same brand Power.
45
Product Life Cycle of Shoe
Pricing
The company operates with low price market penetration strategy. The main advantages of this
strategy is increased sales growth, builds strong market position and high product awareness in the
market. The price of the Power-Lite is determined to be Rs 2799 (Indian Rupee - INR) considering
variable, fixed costs and the market floor, ceiling price. The company gets its contribution (profit)
after selling 20,000 units of Power-Lite.
46
Physical Evidence
The company has taken steps to change the buying experience of the customers by renovating and
expanding its stores in all the location, initially in Tier 1 location and it has started slowly to
continue in Tier 2 location which makes the customers to have good shopping experience.
Timing
The product will be launched during the Indian Premier League, this is done because of the because
of the influence of cricket among the people. The product’s result will be known in six weeks of
time from the date of launch.
Contingency
Few sports shoes of Bata are already available in the market; however most of the customers were
unsatisfied with the medium quality and comfortless products. Hence Bata has decided to launch
the Power-Lite, with low price and good quality feature which is well suited for the developing
Indian market. This would replace many global brands’ product with its high quality, new style,
comforts, latest design and technology used in the sole of the shoe. The product Power-Lite would
be big success, if no competitors are providing such a good quality product at low price.
48
FUTURE PROSPECTS:
The Indian Leather Industry occupies a place of great prominence in the Indian economy in view
of its substantial export earnings, employment generation and growth potential. The leather
industry is an employment intensive sector, providing jobs to about 2.5 million people, mostly
from the weaker sections of our society.
The Indian footwear industry is the world’s second largest footwear producing country, second to
china and the third largest market. In the last five years, the leather footwear and footwear
component production increased by 60%. Today, about 220 Cr. pairs of shoes are made in the
organized and unorganized sector. The Indian footwear market, as of FY 2012, is estimated to be
Rs. 20-22,000 Cr., growing at 12% per year. Of this, 40% is organized; with rural India accounting
for 75% of the consumption. The retail footwear segment in India is extremely price sensitive and
has been steadily growing over the years. Major part of the demand is met by the unorganized
sector. The branded shoes market only accounts for 20 per cent of the entire market. While
International Brands mainly dominate the higher end of the consumers, the lower and middle end
is dominated by home grown players like Bata India as well as unorganized players.
The focus of the company would be to shift the consumers who buy footwear from the unorganized
sector to buy from the company's branded footwear range at price points which will be affordable
and competitive with the unorganized sector.
Key concern:
49
Key learning’s and Recommendations
5.1 Findings/Learning’s:
• The financial performance of the company was below satisfactory in the early part of the
decade i.e. from FY 03 - FY 05; thereafter the company restructured its business and
improved its financial performance over the last six years.
• The consolidated 10 Year X-Ray of Bata India Ltd. has been considered for analysis owing
to the significant contribution of its subsidiaries.
• Since 2007, Bata India Ltd. has reported improved performance. The Value Creation Index
has been above our benchmark of 0.25. ROCE and ROE figures have been very good with
6 year average figures of 26% and 27%, respectively.
• The considerable improvements in manufacturing, supply chain management; retail
expansion program have boosted the margins. Moreover in last 2 years, selling &
distribution expenses and employee cost as a percentage of sales have declined causing
expenditure in sales term to drop on Y-O-Y basis.
• In addition to this, sudden fall in tax expenses has resulted in steep rise in margins. The
improving margins along with increasing turnover ratio have resulted in increasing returns.
• Bata India Ltd. has continued its strategy of large scale expansion of retail stores,
renovation of existing stores & improvement in customer service and introduction of new
value oriented products. This has enabled the company to report 16% CAGR growth in
sales during last 6 years.
• The rise in EPS has been in proportion to rise in net sales as company recorded higher net
profits in last 4 years.
• The company has also reduced its debt over the last 6 years, which helped the company to
maintain the Debt to Net Profit ratio below our benchmark of 3. Moreover, in the last 2
years it has been able to be debt free company.
50
• The company is continuously increasing its presence in the premium footwear segment
5.2 Suggestions:
• Company should continues to open approx. 100 new retail stores every year across India
and shut down or relocate unviable stores.
• Company should increase rate of dividend for dividend holder to attract more investors to
invest in company.
• Company should start accepting fixed deposits from investors to increase their funds.
• Company should open more retail stores in the market to capture more market share than
its competitors.
• Company should provide more variety of products to customers to attract new and retain
old.
• Company should perform regular CSR to improve the goodwill and build trust amongst
people.
• Company should take into consideration their micro and macro factors while continuing
and making future strategies for expansion.
• Company should adopt price sensitive techniques against competitors.
• Company can provide large employment opportunities to weaker section people.
• The focus of the company should be to shift the consumers who buy footwear from the
unorganized sector to buy from the company's branded footwear range at price points
which will be affordable and competitive with the unorganized sector.
• Company should adopt aggressive expansion plan which is considered to be key factor for
revenue growth
• Company can adopt online business expansion plan.
• Company should provide operational efficiency amongst peer group.
• Company should open Foot in stores with a new range of footwear focusing on affordable
fashion and trendy styles to attract young crowd.
51
Conclusion
The financial performance of the company was below satisfactory in the early part of the decade i.e. from
FY 03 - FY 05; thereafter the company restructured its business and improved its financial performance
over the last six years. The consolidated 10 Year X-Ray of Bata India Ltd. has been considered for analysis
owing to the significant contribution of its subsidiaries
.Since 2007, Bata India Ltd. has reported improved performance. The Value Creation Index has
been above our benchmark of 0.25. ROCE and ROE figures have been very good with 6 year
average figures of 26% and 27%, respectively. The considerable improvements in manufacturing,
supply chain management; retail expansion program have boosted the margins. Moreover in last 2
years, selling & distribution expenses and employee cost as a percentage of sales have declined
causing expenditure in sales term to drop on Y-O-Y basis. In addition to this, sudden fall in tax
expenses has resulted in steep rise in margins. The improving margins along with increasing
turnover ratio have resulted in increasing returns.
Bata India Ltd. has continued its strategy of large scale expansion of retail stores, renovation of
existing stores & improvement in customer service and introduction of new value oriented
products. This has enabled the company to report 16% CAGR growth in sales during last 6 years.
The rise in EPS has been in proportion to rise in net sales as company recorded higher net profits
in last 4 years. The company has also reduced its debt over the last 6 years, which helped the
company to maintain the Debt to Net Profit ratio below our benchmark of 3. Moreover, in the last
2 years it has been able to be debt free company.
Therefore Company should continues to open new retail stores every year across India and shut
down or relocate unviable stores. They should increase rate of dividend for dividend holder to
attract more investors to invest in company. Company should start accepting fixed deposits from
investors to increase their funds. Company should perform regular CSR to improve the goodwill
and build trust amongst people. Company should take into consideration their micro and macro
factors while continuing and making future strategies for expansion. Company should adopt price
sensitive techniques against competitors. Company can provide large employment opportunities
to weaker section people. The focus of the company should be to shift the consumers who buy
52
footwear from the unorganized sector to buy from the company's branded footwear range at price
points which will be affordable and competitive with the unorganized sector.
REFERENCE
53
https://www.scribd.com/doc/19538378/Strategic-Analysis-of-Case-study-Bata-Strategic-
• Choices
• (http://www.indianshoebazaar.com/ind_india.asp)
• http://leather.indiabizclub.com/info/indian_leather_industry_overview
• http://footwearsinfoline.tripod.com/export_import.htm)
• http://www.thaindian.com/newsportal/politics/big-boost-for-agras-shoe-industry-if-
stategovernment-helps_100116975.html#ixzz0XAkn7VPx)
• (jammu.gov.in/departments/.../Central-Policy%20and%20Procedures.pdf)
• www.tradeindia.com/seller...38/shoes-materials-accessories. html)
• (www.dow.com/products-services/division/textiles.html)
• (http://www.sharekhan.com/MarketCorner/DetailedReport.aspx?Type=COMP-
HIS&SSKICode=BATA)
• (http://www.sebi.gov.in/dp/bata.pdf)
• (http://www.bataindia.com/page.php?kon=5_2_1)
• (http://www.bataindia.com/page.php?kon=4_0)
• (http://www.bata.in/catlist.php?catItem=11)
• http://indmin.nic.in
55
56