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SUBMITTED BY: HARLEEN KAUR (10BSPHH010264)
SUBMITTED TO: Prof. G.K. SRIKANT
KHUSHBU GUMBER (10BSPHH
Failure to achieve optimum capacity due to shortage of raw materials as a result of production set-backs in the supply industries. Energy crisis arising out of power cuts or shortage of coal or oil. A large order from the army. Failure to modernize the productive apparatus.. It has a retail presence in over 50 countries and production facilities in 26 countries. Situations like market recession. marketing and personnel. and wanted to make the shoes as cheaply as possible so that the greatest number of people could access them . establishing housing. changes in the import conditions. and was often called the "Henry Ford of Eastern Europe". one of the first mass producers of shoes. Bata Emerging Markets and Bata Branded Business. lockouts. Tomá Ba a was recognised for his social consciousness.WHY A COMPANY GETS SICK y y y y y y y y y y Mismanagement in various functional areas of a company like finance. Poor inventory management in respect of finished goods as well as inputs. Bata Shoes is a large. production. etc. during World War I started rapid growth and small manufacture turned into modern industrial concern. military shoes and rising demand for them. Switzerland. change the product mix and other elements of marketing mix to suit the changing environment. excessive overheads. Overestimation of demand and wrong dividend policy. acquisition of unproductive fixed assets. Poor labor-management relationship and associated low workers' morale and low productivity. cinemas and advancement programmes for his employees. family owned shoe company based in Bermuda but currently headquartered in Lausanne. Infrastructural problems like transport bottlenecks. live individually" is one of his sayings. whose family had been cobblers for generations. etc. Poor implementation of projects which may be due to improper planning or managerial inefficiency. went sick or underperforming and how a turnaround of the organization was done and Bata Shoes was restored back to its original place of a leading shoe manufacturer. Credit squeeze. poor agricultural output because of natural reasons. changes in technology. etc. Ba a recognised the potential of large-scale production. y y y y We will discuss how Bata Shoes. operating 3 business units worldwide ± Bata Metro Markets. The phrase "work collectively. International pressures or circumstances. etc. Wrong location of a unit. Unwarranted expansion and diversion of resources such as personal extravagances. etc. He saw technology as a means of progress. a reputed name in the footwear industry. In its history the company has sold more than 14 billion pairs of shoes. The company was founded in 1894 Tomá Ba a . strikes.
Although Bata operates in a wide variety of markets. in 2007. Best.000 people. Two important ones are product concept development and constant improvement of business processes in order to offer customers great value and the best possible service. Singapore Bata Branded Business. Lausanne Bata Emerging Markets. operated 4. Current shoe brands are: Bata (Ba a in former Czechoslovakia) Bata Premium (handcrafted dress shoes) Bata Industrials (safety footwear) Bubblegummers (children) Power (athletic shoes) Marie Claire (women) Hush Puppies (Premium) North Star (youth) Weinbrenner (Premium Outdoor Shoes) According to Bata. Bata companies share the same leadership points. Netherlands The MBU approach provides quality resources and support in key areas to the companies operating in similar markets such as product development. sourcing or marketing support. the company closed a number of its manufacturing factories in developed countries and has focussed its activities on expanding its retail business there.After the global economic changes in 1990s. While local companies are self-governing.600 retail stores. and can quickly adapt to changes in the market place and seize potential growth opportunities. Bata¶s strength lies in its worldwide presence. In developing countries it still has a large number of manufacturing units and still produces a significant number of shoes each year. . product innovations and sourcing. the company served 1 million customers per day. The company is currently headquartered in Lausanne. employed over 40. managed a retail presence in over 50 countries and had 40 production facilities across 26 countries. each one benefits from its link to the international organization for back-office systems. Each MBU is entrepreneurial in nature. Switzerland. with 3 business units Bata Metro Markets.
the sales in the two segments have been more or less equal. and the like. As part of a corporate philosophy followed world-wide. the foundation stone for the first building of Bata¶s operation . These outlets cater mainly to the urban segment. mainly the middle and upper-middle income groups. while the wholesale segment accounts for about 30%. 90% of the company's operating profit is generated from the retail segment. By virtue of a long presence of more than sixty years in the country. Its retail network of over 1200 stores gives it a reach / coverage that no other footwear company can match. It manufactures a wide range of shoes covering leather. while the wholesale segment generates volumes which are necessary in order to utilise capacity and reduce overhead costs per unit. for men women and children. the company was set up initially as a small operation in Konnagar (near Calcutta) in 1932.000 dealers. Its primary strength is that it offers a full family range of shoes. almost 70% by value comes from Bata's retail outlets.INDIA¶S FAVORITE FOOTWEAR BRAND Bata India is the largest retailer and leading manufacturer of footwear in India and is a part of the Bata Shoe Organization. Bata India has established itself as India¶s largest footwear retailer.now called the Bata. . It was also the first manufacturing facility in the Indian shoe industry to receive the ISO: 9001 certification. rubber and plastic footwear. The Company also operates a large non retail distribution network through its urban wholesale division and caters to millions of customers through over 30. Bata maintains and operates its own retail outlets. Today.000 customers every day Sells through over 1200 retail stores Operates 5 manufacturing facilities Employs more than 6800 people OPERATING PERFORMANCE Bata is the largest player in the Indian footwear market. and selling them through a countrywide network of retail outlets. This township is popularly known as Batanagar. having a market share of about 8%. while Bata also sells shoes through wholesalers to enable access to semi urban and rural markets.Today Sells over 45 million pairs of footwear every year Serves over 120. In January 1934. the overall site was doubled in area. The stores are present in good locations and can be found in all the metros. as realisations from the wholesale segment are lower on account of the margin offered to wholesalers. unlike most of its competitors. however. 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. The company follows a strategy of manufacturing shoes in large volumes for the masses. In terms of pairage. casual. In the years that followed. Incorporated as Bata Shoe Company Private Limited in 1931. Out of total sales. Key Facts Bata . sports. The Company went public in 1973 when it changed its name to Bata India Limited.BATA . canvas. for a variety of uses such as formal. it has inherent advantages in terms of brand equity and reach vis-à-vis new entrants in the branded footwear market.
Bata's tangible net worth fell from Rs 970 million as on December 31. Bata's policy of sacrificing volumes and concentrating on the premium segment thus had a direct impact on its bottomline. 5. And company does not take necessary measures to curb the competition. Bata faced a competition from international players. culminating in a huge operating loss of Rs 231. 2. 4. nor the advertising of the company. Neither the promotion. Sales fell from 52. 1994 to Rs 1200 million as on December 31. but the company was still not associated with being µfashionable¶. As a result.5 million in 1995. GLOBALLY COMPETITIVE BUSINESS ENVIRONMENT With the opening of the Indian economy through liberalization. Bata did not announce any new products or business segments even after seeing stiff competition. as its operations are characterised by high fixed costs consisting of employee expenses (both factory and shops) and expenses associated with maintaining a large distribution network.200 and hence price went up by 20% and this led to drop in profits from 20 crore to 95 lakh within an year in BIL.5%. profit margins are highly sensitive to volume sales.6 million. The premium segment competitors seemed to completely overshadow the presence of the company. resulting in a significant drop in the number of pairs sold.2 million. was strong in its times. the result of the employees' union not accepting the management's system of standard productivity norms. DECLINING SALES Bata's sales witnessed a decline in 1994 and 1995. This did not find acceptability in the market. The recovery in 1993 was followed by two years of declining sales. the net loss being Rs 421. the operating margin (OPBDIT/OI) being only 2. POOR FINANCIAL PERFORMANCE In 1992. rather than spending more on advertising. the company made a loss of Rs 85. However. The OPBDIT was low at Rs 97. primarily on account of a 4-month closure at its Batanagar factory. That is.4 million pairs in 1993 to 49. 1995. as a direct result of sales decreasing. the investments on advertising and promotions seemed to be µfollowing¶ rather than µleading¶. privatization and globalization. The company began manufacturing high value added footwear and selling them at high prices. 1994 to Rs 550 million as on December 31. Thus increase in excise duty led to increase in cost of footwear 1993-94 excise exemption was withdrawn from shoe costing below rs. POLITICAL ISSUES When quantitative restriction was lifted from import then footwear industry slowed down from 20% (in 90¶s) to 8-10% (in 2000). LACK OF SUSTAINED ADVERTISING AND PROMOTIONS Bata was continuously introducing new designs of footwear.1 million pairs in 1995. sacrificing volumes in the process. 3.REASONS WHY BATA SHOES WENT SICK 1. 1995. due to the company's strategy of focusing less on its traditional mass market and concentrating on the premium segment. Further. Bata started spending less on advertising. Total debt increased from Rs 870 million as on December 31. which again was mainly due to increase in short term debt.9 million pairs in 1994 and 48. along with existing competition from the national players.7 million. .
The company incurred huge employee expenses (22% of net sales in 1999). under utilisation of production capacity.000 strong workforce comprising just 5% of its turnover. unsustainable employee cost low productivity of the workforce decrease in the export performance over the last 4 year. The company¶s production of Hawai chappals at the Batanagar unit too had come down by 58% from the weekly capacity of 0. y y y y y y y y y y Two of the units situated at Faridabad and Mokameghat making staggeringly huge losses. In 1999 a lockout was declared at Bata¶s Peenya factory in Bangalore. compared to the earlier outsourcing of only assembly and sewing line job. Bata was again headed for a labour dispute when the BMU asked the West Bengal government to intervene in what it perceived to be a downsizing exercise being undertaken by the management.6. Bata management was of the view that though it would have to bear the cost of maintaining an idle plant (Rs. HR ISSUES Throughout its history. In September 2000. The new leadership of the union had refused to abide by the wage agreement.144 million pairs. a lockout was declared in Bata¶s Faridabad unit it lasted for eight months in October 1995 Bata signed a three-year wage agreement. charging of Deferred Tax Assets in compliance with Accounting Standard Interpretation 9. which was to expire in August 2000. Thus the above labor issues kept on troubling the company to focus on its growth strategies. 7. Some of the workers opposed the company¶s move to get an undertaking from the factory employees to resume work. The union said that Bata has started outsourcing the Power range of fully manufactured shoes from China. STRIKES AND LOCKOUTS y y y y In 1992 the workers at Batanagar factory went on strike from 3rd January. and discounts to clear slow moving stocks. In 1992 the factory at Batanagar was closed for four and a half months due to a labor strike which in turn resulted in huge losses in terms of manufacturing and sales to the company. the effect of the closures on sales and production would be very high. the management decided to go for a lock out. . Following the failure of its negotiations with the union. under-performance by the wholesale business. which resulted in a substantial loss of production during the initial 6 months of the year. followed by a strike by its employee union which lasted for 8 months. Bata was plagued by labor problems with frequent strikes and lockouts at its manufacturing facilities. 3 million). OTHER REASONS There were various other reasons why bata india limited suffered from huge losses in the year 2002 -2005. to 23rd May. provision for long term agreements. y 8. provision for unfunded pension liability due to unprecedented rise in cost of annuities by Life Insurance Corporation. In February 1995. Competitors like Liberty Shoes were far more cost-effective with salaries of its 5. resistance of consumers to price rise in popular volume products.
y y y y y 2. and a revamp of operations.5 million by conversion of the interest-free loan into equity.8 million through a 1:1 Rights Issue at a premium of Rs 20 per share. It deputed a new Managing Director and several key members of the top management team. as the turnaround strategy spanned all major functions. Both retail outlets and depots were computerised to improve control over inventory.HOW THE TURNAROUND WAS MADE 1.. and boosted its net worth further by Rs 343.22 as on December 31. The current management team is professional and highly experienced. but did not default on its loan commitments. in 1997. a 51 per cent subsidiary of Canada based Bata Shoe Organization. These measures. Bata (BN) B. y y y . the company raised an additional Rs 427. The scenario improved in 1996. and it expects to sell 58 million pairs in 1997. as well as significant changes in its top management team. it has declared a half-yearly profit of Rs 83. and settle a large amount of creditors' dues. With the change in its strategy consequent to the turnaround programme. with the losses in 1995.5 million. even when its liquidity position had deteriorated.5 million in 1996. 1997. On an average. The company's sales improved from 48.91 as on December 31. 3. the infusion of funds from the parent company in 1996 helped to improve the level of payables outstanding. selecting personnel from group organizations world-wide. In 1997. along with improving profitability. together with the proceeds of the Rights Issue in early 1997. The company was considerably stretched to meet its debt obligations.1 million pairs in 1995 to 51. FINANCES Bata India. involving financial restructuring. The new management team refocused the company's operations back to the traditional. low cost range of shoes. has enabled the company to reach a comfortable liquidity position as on date. OPERATIONS Bata's large and extensive retail network necessitates the maintenance of a high level of finished goods inventory. Bata made a net profit of Rs 41. This could not have taken place without the concerted effort of all key management personnel. The debt-equity ratio (total debt / tangible net worth) had increased from 0. Bata's parent company.1 million pairs in 1996. MANAGEMENT AND SYSTEMS During 1995 and 1996. It has demonstrated its ability in effecting a turnaround. increased Bata's net worth to Rs 1461 million. change in marketing strategy. Bata witnessed a number of changes in its Board of Directors. 1994 to 2. The funds infusion. the gearing to 0. it maintains around three months' inventory.49 as on June 30. had last revalued its buildings in 1969.V. with the parent company extending an interest-free loan of USD 10 million to Bata. This allowed the company to reduce the level of bank borrowings. All these measures resulted in a dramatic improvement in performance. and. responded by implementing a comprehensive turnaround package. While it did stretch its creditors. 1995 as a result of substantial erosion of Bata's net worth. and the latest exercise which will cover all fixed assets is expected to substantially prop up its reserves.
Indians. BSO restructured the entire board and sent in a team headed by Weston. In the six-year period 1993-99. Bata has entered into a marketing tie-up with Nike wherein the latter's products will be offered from select Bata outlets. which stipulated that the management would fill up 248 vacancies in its retail outlets. even its traditionally intransigent workers were motivated to do better.5 mn on revenues of Rs. Many retail stores were renovated. 5. Soon after he stepped in several changes were made in the management. . Mike Middleton was appointed as deputy managing director and R. Senonner headed the marketing division. Weston had failed to strike a deal with the All India Bata Shop Managers Union (AIBSMU) since the third quarter of 1997. y They made several key changes. The management rewarded the workers with a 17% bonus. Bata decided to sell its headquarter building in Calcutta for Rs. for the first time in Bata's 62year-old history. The shop managers were insisting that Bata honor the 1990 agreement. Bata had considerably brought down the staff strength of its Batanagar factory and Calcutta offices to 6. and the commercial department to Batanagar. This agreement was signed without any disruption of work. Bata was back in the black with the company reporting net profits of Rs. 6. the turnaround had made the unions more aggressive and demanding. 5. and improve stocking efficiency at various points in the distribution chain. 19. increase the pace of new design introductions. in a bid to stem losses. In fiscal 1996. Within two months of Weston taking over.90 bn (Rs.5 crores.700. HR PROBLEMS y When the company was in the red in 1995 for the first time. In 1997. were replaced with expatriate Weston taking over as managing director. Bata further consolidated the gains with the company reporting net profits of Rs 166. y A senior HR manager at the company admitted that with an upswing in Bata's fortunes. In fiscal 1997. including a complete overhaul of the company's operations and key departments. Infact. PRODUCT INNOVATIONS The company implemented measures to streamline the range of designs to a more comfortable number. despite opposition from the trade unions.9 mn on revenues of Rs. Bata workers achieved 93% of their production targets. y By the end of 1997. 5.y y y y 4. the company signed a long-term bipartite agreement.70 bn. y The company shifted wholesale. Many renowned designers were roped in to bring out new collections like Malini Ramani introduced a new range in Marie Claire. planning & distribution. In 1996. It also opposed the move to sack all the cashiers in outlets with annual sales of less than Rs 5 mn. Many new products were introduced both in the premium segment and for the masses. which meant elimination of 690 jobs. who held key positions in top management.32 bn in 1995). up from the 15% given in 1996. 41. The management team implemented a massive revamping exercise in which more than 250 managers and their juniors were asked to quit. Bata still faced problems of a high-cost structure and surplus labour. Bata decided to stop further recruitment. y The management offered its staff performance based salary.
The Company concentrated on the top distributors for the growth of the business. RETAIL The focus of the company has shifted more to retailing. The specially designed shoe display systems. The renovated stores are also modeled on these large format stores and promise a great shopping experience.1 The Union had also demanded the introduction of a scheme for workers participation in management. 4. 6. BIL opened new dealerships in unrepresented areas to increase the market coverage. y In Retail.RETAIL The Non Retail business also showed a remarkable growth in business and profits. and existing stores being renovated during the year. reorganizing some departments and extending working days for some essential services.y y Other measures were aimed at increasing productivity.000 per employee. In the list of noneconomic issues was the demand for reinstatement of the four dismissed employees. contemporary styling. and great ambience ensure that these new Bata Stores provide the best retail environment to its customers. The growth of the retail business with penetration in newer markets . the company has decided to invest in new technologies for which substantial budget has been earmarked. the Union had demanded a wage hike of around Rs. BMU was finally able to strike a deal. with an average size of over 3000 sq. The Company has invested its resources in the factory to meet the stringent technical specifications and standards of the safety footwear business to ensure that its products are the best in the market. increase in 'plan bonus' and introduction of attendance bonus for migrant workers. On January 14. All the new stores are in large format. The demands mainly revolved around economic issues. The management agreed to include 10% of the 400 contract laborers at Batanagar in its staff. y y y 7. unique furniture for non-footwear sales. the BMU submitted their charter of demands to the management. It established a country wide distribution network to harness the market potential and to become the market leader in the next coming years. Bata would target all kinds of customers by opening various categories of stores like Flagship Store. 1999.especially Tier 2 / Tier 3 cities and growth in existing metro market is the focus for Bata India. so as to make their footwear shopping experience at Bata a very endearing one. City Store. additional allowances as provident fund over the statutory limit by the management. NON. y y y It launched various new products which resulted in serving many more customers. y . 90 per week.ft and offer an incomparable footwear shopping experience to the customer. Constant incentive programs were offered to existing dealers to ensure growth in wholesale business. BIL improved the strategic positioning of its stores to cater to the masses and compete better in future with over 60 new Bata Stores opened every year. It signed a three-year wage agreement that included a lumpsum payment of arrears of Rs. Family Store and Bazaar Stores. To increase production at its factories. On the economic front. In July 1999.
As the Indian operations are significant to the Bata group. Such support may not be needed in future. and assessing the underlying organizational processes and culture that will either enable or inhibit the change. and the degree of its effectiveness at meeting its objectives and mission. its current strategic orientation. STEP TWO STRATEGY MAKING . specifying the markets to be served. THE STRATEGIC CHANGE PROCESS Strategic change involves not only deciding what to change but how and when to change specific elements of one¶s strategic orientation. as the profitability of the company is likely to grow as a result of its strategic refocus being corrected. it is likely that Bata will continue to enjoy support from the group in future. or perhaps even both. PARENT COMPANY SUPPORT TO IMPROVE FINANCIAL PROBLEMS Financial support from the parent company has helped Bata to reach a comfortable position of leverage and liquidity. However. in case of any operational crisis arising (such as a closure at its works). in terms of pairage sales and employee strength.begins with the decision to change its vision and orientation in the future and includes defining the products and services to be offered. and allocating resources for support. declining organizational performance. Bata India happens to be the largest company on the Bata map world-wide.8. assigning roles and tasks that will guide the process. Its importance to the parent company has been demonstrated in the past and this support is expected to continue in future. developing a position to be competitive in those markets. . STEP FOUR IMPLEMENTATION OF THE PLAN ± transition to the new orientation which includes developing budgets and timetables. even from a global perspective.analysis of an organization¶s external environment. STEP THREE STRATEGIC PLAN DESIGN . The strategic change process encompasses four basic steps as follows: STEP ONE STRATEGIC ANALYSIS . communicating to ease uncertainty.defines how the change process will be logistically accomplished through sequencing and pacing in light of the prevailing culture as well as anticipated resistance. it may have to fall back upon support from the parent company. garnering commitment to ensure that there is a high level of ownership in the process. This change may be driven by dramatic changes within the environment.
In 2010. Competitive pricing is required for any new entrant to capture a market share." Villagran MD and CEO of BIL. . "Turnaround is just a financial word. High capital is required to cater the whole market but as the market is highly segmented catering any one segment is very easy. overhauled product portfolio with the help of Bata's global design centre and refined manufacturing and sourcing strategies. open 70-100 stores of at least 5. The company now plans to increase the average store size to 5000 sq ft.It's an uphill task for a brand known for its sandals and entry-level shoes.000 sq ft or less. its net profit rose 42% year-on-year to 95 crore. Low access to distribution channel by any new entrant. and push its online sales to shed its image as a low-cost functional footwear brand that appeals to the 40-plus age group.STRATEGIC PLAN AND IMPLEMENTATION OF THE PLAN After suffering a 4 year consecutive losses in 1995 due to several reasons BIL decided to adopt a strategic change in its organization. Bata has shut down almost 400 small stores. and opened 270 large-format stores at prime locations. What is more important is how the organisation has been completely able to reinvent itself. A plan was proposed wherein bata will introduce almost 4 designs everyday. to help Bata come out of three years of continuous losses that peaked at 62 crore in 2004 and steadily grow since then. BIL decided to rejuvenate the 80-year-old shoe brand to make the 20-25 olds. and even the teens. The company shut down all unviable stores and ensured the stores remain open every day for 12 hours. COMPARISON OF BATA INDIA AND MAJOR COMPETITORS (PORTER S MODEL) BASIS OF COMPARISON BARRIERS TO ENTRY NIKE ABSENT ADIDAS ABSENT RELAXO ABSENT ACTION ABSENT BATA ABSENT LIBERTY ABSENT BARGANING POWER OF LOW BUYERS BARGANING POWER OF LOW SUPPLIER THREATS SUBSTITUTES OF HIGH LOW HIGH HIGH HIGH HIGH LOW HIGH HIGH HIGH HIGH HIGH HIGH HIGH HIGH HIGH RIVALRY AMONG THE HIGH EXISTING COMPITITORS HIGH HIGH HIGH HIGH HIGH THREATS OF NEW ENTRANTS y y y y BATA enjoys high EOS so any new and small competitor is less likely to affect BATA in any way. BIL closed hundreds of unviable stores and spawned them into large-format outlets.000 sq ft every year. fall for it. which looked more like warehouses with hundreds of pairs of footwear staked in 1.
Large number of competitors like Liberty. Competitive Rivalry: RIVALRY AMONG COMPETITORS y y y BATA has lowest price among all its organized competitors. However the consumers have a great deal of options available to them and the switching cost is also low. Relaxo.BATA enjoys a high EOS and is rarely affected by any new entrant the same is the case with the suppliers who are ineffective in posing any serious threat to BATA. . Adidas etc. The cost incurred in switching to other brand is low. MACRO-ENVIRONMENTAL ANALYSIS POLITICAL-LEGAL ENVIRONMENT y y y Change in India's Economic liberalization and deregulation policies. its market share had increased as well to 35% in organized sector. Threats from unorganized sector.THREAT OF SUBSTITUTE PRODUCT y y y y Consumers switch if substitutes are available and that too on a competitive or low price in the same quality and product range. Reebok. And since BATA has highest market share in organized sector BATA has an edge over its competitors. Having its own tannery helps BATA in reducing the dependency on suppliers. A threat of forward integration exists due to a large number of suppliers. Change in Laws and regulation governing the leather and footwear industry adversely affects the business. Increase in excise duty has affected BATA and hence the shoe BATA produces are poised to get costlier leading to a lowering of revenue. etc. including shoe industry has affected the business of BATA a lot. BARGAINING POWER OF SUPPLIERS y y y y Being a major player BATA gets the raw material in bulk and comparatively cheaper. Lacks in fashionable range of products so consumers generally switch to other brands. Due to lack of proper promotional and advertising strategy consumers switched to other popular brands like Reebok. INFERENCE:. Sells a large number of shoes and targets a profit of 1000 crore. BARGAINING POWER OF CUSTOMERS y y With at least 10 major organized players in the market and a large number of unorganized players competing with each other here the consumer is the king.
Due to availability of low priced products BATA is way ahead of its competitors in rural areas. Due to eight recognized labor unions . DEMOGRAPHIC ENVIRONMENT y y y y Large and growing domestic market Growing middle class & growing buying power has led customers to look for branded shoes. BATA is dependent on various natural products like rubber. TECHNOLOGICAL ENVIRONMENT y y y y Availability of Supporting Institutions. leather. etc. Young and working customers from all segments are growing so it acts as a biggest advantage for BATA. Estimated Growth of 2. per-capita income and increasing working class group footwear sector has a good scope of growth in the Indian Market. SOCIO-CULTURAL ENVIRONMENT y y Consumers attitude and opinion has changed towards branded shoe primarily in the urban youth segment.Due to increased GDP.ECONOMIC ENVIRONMENT y y y y y Availability of low cost skilled labor has fuelled the production capacity of BATA which has increased the production. BATA lags behind most of the companies in the footwear sector thereby it could not utilize its production capacity upto the efficient level. Also BATA has a history of disputes with trade unions and labor unrest. anti-slip sole etc. Incorporates various new and innovative technology in its products such as Tunnel system. The ever stylish youth and their independence also hold a key in the growing footwear segment. India is 3rd largest footwear market in the world which provides ample opportunity for BATA to introduce a wide variety of products. but they alone can't fulfill BATA's demand. the company faces problems of strike and labor unrest. leather etc) readily available the footwear segment is able to keep the cost of production as low as possible. Abundance of Raw Material. The price of raw material increased substantially during the inflation thereby increasing the cost of production hence decreasing the revenue. . since India has raw materials for footwear industry (rubber. INFERENCE: . Although BATA is now largely independent in terms of raw material needs partially due to its owned tanneries.44% of global trade ensures that BATA's export will rise in the upcoming years. NATURAL ENVIRONMENT y y Thinking Green Has been BATA India's endeavors towards minimizing CO2 produced which are done in compliance with the GOI orders. Inflation adversely affected the raw material cost. Research funding in design and requirements.
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