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Strategic Management

Assignment # 2
Sec - A

Submitted To:

Prof. Amjad Hussain

Submitted By: Group ID B (Rocks)

1) 2) 3) 4)

Muhammad Afzal Nasir Iqbal Sheikh Mustafa Abdul Qayum

L1F09MBAM2009 (Group Leader) L1S09MBAM0147 L1S10MBAM0116

Industry Company

: :

Foot Wear Industry Bata Shoes

Why we Selected Foot Wear Industry & Bata Shoes as Company?


Respected Sir, I (Muhammad Afzal) currently running my own Bata shoes Franchise located at Sadder Cantt for the last 10 years. My family background is of shoe business. Thats the reason I choose Footwear Industry & Bata as a company. After my B.COM, I properly do all my shop operations myself, means opening & closing the shop, marketing operations selling and buying etc After completing my MBA, I shall apply all my concepts that I have studied and my vision is to enhance my business throughout Lahore. Before MBA, I just simply running my shop, but now I should apply the strategies that relates to my mission & vision. The other reason to choose Bata Shoes Lahore Pakistan because they are using some techniques for finding opportunities and evaluation of new initiatives among their competitors. They are also using a technique for testing its concept before development and launch new product in the market. They are also using a technique for evaluate the organization capabilities before developing product.

As the assignment proceeds to a complete project, we shall discuss all that techniques/strategies which are used by Bata, discuss about the draw backs and give the recommendations on these techniques for improvement at the end.

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Batas Vision & Mission Statement

Bata Vision
To grow as a dynamic, innovative and market driven domestic manufacturer and distributor, with footwear as our core business, while maintaining a commitment to the country, culture and environment in which we operate.

Bata Mission
To be successful as the most dynamic, flexible and market responsive organization, with footwear as its core business.

Analysis of Vision

I think the vision of Bata is long and include few things that must be included in Mission, so I Purposed a one line Clear Vision of Bata

Our Proposed Vision


To become the front ranking multiple shoes company in the world

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Analysis of Mission Statement

According to my analysis, Batas current mission statement is too short and missing major components. Mission Statement must include 9 components. So I proposed a mission statement for Bata. I have bold and underline the main components in my proposed mission statement.

Our Proposed Mission

To provide quality shoes at an affordable price to our valued customers and 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 through increased market share keeping in line with the Nations interest

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STAGE 1 INPUT STAGE

External Factor Evaluation (EFE) Matrix IFE Matrix CPM Matrix

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External Factor Evaluation (EFE) Matrix

Key External Factors Opportunities


Increasing Trends Towards Fashion Shoes Sales of apparel & footwear on the Internet has been growing at a double digit pace Increasing Sports Events in Pakistan Increase in wedding seasons and festivals (average wedding season of 8 months now) Awareness of Quality among customers Increasing population by 10%

Weighted Weight Rating Score

0.13 0.06 0.11 0.08 0.11 0.09

2 1 3 1 4 3

0.26 0.06 0.33 0.08 0.44 0.27

Threats
Stiff competition in the market from local and foreign brands Electricity Shortage Increase in unemployment has impacted the household income which may result in spending less on brand name Decrease in customers purchasing power ( Inflation) Political Instability 0.12 0.08 0.07 0.09 0.06 1 3 3 3 2 3

0 0.36 0.24 0.21 0.18 0.18 2.61

Total

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ANALYSIS OF OPPORTUNITIES

With the rapid growth of middle class in the state, the purchasing power of the average person has increased. The awareness for the quality footwear has created a rise in demand for quality footwear affordable prices.

The fashion conscious customers always look for new styles and designs in favor. The Pakistans footwear market is highly dynamic nature.

Increasing Trends towards Fashion Shoes Bata has an opportunity to move into the casual footwear and apparel business. This area is not totally new for Bata, but represents a very high fraction of their sales. Bata needs to be in tune and quickly test this market with desirable and well built products.

Increasing population by 10% Women represent a huge market. Stylo sells nearly 50% of it shoes to women after its great success with Fancy shoes. Bata should begun to take notice of the female market and started to market to it. We feel the female sector is strong opportunity in both fancy & athletics.

Sales of apparel & footwear on the Internet has been growing at a double digit pace, considerably faster than more traditional sales models such as retail stores The Internet allows footwear companies to pursue a direct to consumer sales channel. Internet sales of apparel, accessories, and footwear could reach 18 percent of category sales by 2012 Companies that added a Web-based sales strategy are able to customize footwear and other merchandise directly to the customer's needs and taste, are enable to achieve considerably better pricing as well as "deepening" the emotional bond consumers have with the brand

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IFE MATRIX
Sr # Key Internal Factors Weight Rating WScore

Strengths
1 Largest retailer network of 1300 outlets, 4000 franchises and another 10000 dealers. Extensive Distribution with 241 retail stores (Forward integration) People associated Bata for quality and real value for money. (Shoe Quality) Brand loyalty Financial Strength Geographical coverage Variety of products Image of durable shoes Largest footwear group in Pakistan 0.09 4 0.36

2 3 4 5 6 7 8

0.11 0.09 0.11 0.09 0.07 0.09 0.08

4 4 4 4 3 4 4

0.44 0.36 0.44 0.36 0.21 0.36 0.32 0

Weaknesses
1 2 Insufficient promotional activities Bata at present conducts all the store management activity manually. This results lots of lengthy paper works, errors & waste of time. Inability to catch the present trend in time (old Fashion & Old Designs) Bata does not present itself as a brand of corporate and sports personalities. Supply chain and Inventory management issues 0.09 0.04 1 1

0 0.09 0.04

3 4 6

0.07 0.03 0.04

2 2 2

0.14 0.06 0.08 0

Total
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Competitive Profile Matrix

Bata Major/Close Competitors are

1. 2. 3. 4. 5.

Servis Local Brands International Brands Shafi Group ( Urban Sole) Chinese Shoe

Bata
Critical Success Factors
Shoe Quality Customer Loyalty Financial position Price Outlets Market Share Advertising R&D

Servis
3 3 4 3 4 2 3 2 0.75 0.27 0.84 0.27 0.36 0.14 0.45 0.1 3.18

Local
2 2 2 4 2 1 1 1 0.5 0.18 0.42 0.36 0.18 0.07 0.15 0.05 1.91

China
1 2 3 4 2 2 1 3 0.25 0.18 0.63 0.36 0.18 0.14 0.15 0.15 2.04

Wei ght
0.25 0.09 0.21 0.09 0.09 0.07 0.15 0.05 1

Rati W- Rati W- Rati WRati Wng Score ng Score ng Score ng Score


4 4 4 3 4 3 3 3 1 0.36 0.84 0.27 0.36 0.21 0.45 0.15 0 3.64

Total

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STAGE 2 MATCHING STAGE

SWOT/TOWS MATRIX SPACE MATRIX IE MATRIX BCG MATRIX GRAND STRATEGY MATRIX

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SPACE MATRIX

Financial Strength (FS) (+1 worst, +6 best) Return on Assets Leverage Net income 6 5 6

Environmental Stability (ES) (-6 worst, -1 best) Rate of inflation Technological changes Price elasticity of Demand Taxation Barriers -5 -3 -3

Income/Employee Inventory Turnover

4 4

-3 -2

FS Average

5.0

ES Average

-3.2

Competitive Advantage (CA) (-6 worst, -1 best) Market Share Product Quality Customer Loyalty Technical know-how -3 -2 -2 -2

Industry Strength (IS) (+1 worst, +6 best) Growth Potential Financial Stability 5 6

Ease of Entry into market 5 Resource Utilization Profit Potential 6 4

Control over Suppliers & Distributors -3

CA Average

-2.4

IS Average

5.2

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Aggressive Strategy
As Bata falls in aggressive, But still we have to see at which angel it lies. If it lies in exactly 45 degree line, then all good strategies will follow. But Bata falls just below the 4f degree line, so we should select these strategies
Forward, Horizontal Integration Market Penetration, Market Development & Product Development Related Diversification

Note: Unrelated Diversification and Backward Integration should not be followed

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Market shares of the marie clarie and weinbrenner shows that these SBUs lies in stars , power and bubble gummers are in cash cows and sandak is in dog.

Note:
Rests of the Calculations regarding BCG Matrix are done in Excel & will be explained during Presentation. The data collected is based on my intuition and past experience.

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ambassad0r BUBBLEGUMMERS NORTH STAR POWER WEINBRENNER Bata COMFIT Marie Claire

Brands of Bata

Marie Claire shoes are for women with an active lifestyle who seek contemporary modern styles

Bubble Gummers

Bubble gummers is the leading childrens footwear brand in Pakistan

Hush Puppies
World's first casual shoe and provided a new alternative in footwear. Hush Puppies emerged as a soft, breathable and very comfortable shoe.

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Other Brands

School shoes of Bata: Bata first earn its name as the most durable shoe manufacturer for school going children. When it first comes to this country it has realized that there is a huge market opportunity for school shoes. Quickly they introduced the 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 NorthStar which provides hard and soft white sneakers and the leather black Bata school shoes which are of various designs.

Bubblegummers:

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 abovementioned age group of children.

Marie Claire: The Mari Clare brand of Bata is for women. It has more than 100 designs and has different price range of shoes. The price range here starts from Taka 450. In recent times Bata has targeted the Assignment # 2, Strategic Management Page 15

young working women who wants reasonably priced, decent design and durable shoes for work and this brand in many cases serves this segment well.

Sandak:

What we called is Sponge Sandle is professionally called as Thongs. 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.

Power:

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 it as with every Bata footwear.

KingsStreet:

The most famous dress shoes of Bata come under the brand name of KingsStreet. It has been nice to know that this brand of shoes has been solely made in Bangladesh. The Dhamrai factory of Bata has the machinery to make these shoes, which they established in 1999 at a cost of 1 core taka. These shoes have different price range for different segments of people.

Weinbrenner:

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.

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Apart from these Bata has numbers of leather sandles of various designs, sandle-shoes under Bata brand name that serves different segment of the market. Bata also manufacture and market popular brands such as HushPuppy, Dr.Scholes in this region of south Asia. Bata also have quite new brands for male and female like Bata Comfit, Bata Flexible. According to the Bata officials in Bangladesh Bata have more than 1000 lines of footwears here in Bangladesh at present. Thus Bata's well known brands include Power, Bubble-Gummers, Marie-Claire, Hawai, Naughty boy, Sandak, North-Star etc. International brands such as Hush Puppies, Nike, Lotto, and Dr Scholl are sold under manufacturing and licensing agreements. The company has more than 1000 shoe designs and caters to all the segments. Over 60% of sales come from the men's range, while children's and womens range account for about 20% each. In women's segment the Sun-drop range of casual ladies wear in the popular range has done well in the market and registered a strong growth of 500% in F12/2000. The brand is being endorsed by filmstar Rani Mukherjee. Bata also markets sports wear, 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. It exports about 4mn pairs of shoes in a year.

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PRODUCT PROFILE

Brands with Bata (Bata India Website) Bata has licensed brands (Hush Puppies and Dr Scholl, licensed respectively from Wolverine Worldwide and Dr Scholls) besides those of its parent (such as Power, Marie Claire and Bubblegummers).

Bubblegummers Bubblegummers is the leading children's footwear brand in India and has an extensive presence in Latin America, Asia and Europe. Bubblegummers offers good quality, comfortable, funny and colourful shoes for kids (0 to 9 years) that assure the healthy growth of a childs foot. Developed to the strictest standards of quality, all shoes are produced with state-of-art technology to ensure healthy foot growth, and parents can be assured that their children will enjoy these shoes in total comfort and safety. Power Power is an internationally acclaimed world class shoe brand with P ZONE technology which keeps one performing all day with comfort and ease. It embodies diversity with ranges in running, training, court, basketball, football and Outdoor that combine functionality with creativity. International pro-skaters signature shoes are designed to meet the demanding needs of skateboarding under the Power-Skate line. POWER is inspired by the same passion to perform that is inherent in the athletes who use our products. POWER as a brand stands for Durability, Trends, Responsiveness, Performance and value. Power offers a Sporty range of basic as well as performance -oriented shoes at unbeatable prices. It is sold across five continents via Bata retail stores and distributors networks. Hush Puppies
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Hush Puppies emerged as a soft, breathable and very comfortable shoe in 1958. It was created by Wolwerine Company. Hush Puppy is known for Relaxed, classic, modern and casual design. Today Hush Puppies continues to innovate bringing technical excellence in genuine style to over 120 countries by application of various types of technologies like: Bounce technology for shock absorption and energy return in every step. Wave Reflex outsoles provide complete freedom of movement for feet. Natural latex rubber and unique reverse action design waves unite to provide ultra flexibility. 100% relax Hush Puppies collection of innovative, authentic casual footwear, mixed textures of soft casual leathers and rich Hush Puppies worry-free suede. Marie Claire

Bata Brands is the trademark owner of Marie Claire for shoes worldwide (except in Japan and Korea). Marie Claire, a fashion lifestyle brand of shoes with a touch of elegance that caters to the young cosmopolitan women. Marie Claire stands for Contemporary and modern styling, adaptive to an active lifestyle yet elegant and feminine. Marie Claire emphasizes on its style, quality and value. North Star

North Star is synonymous with street creed. Stylish, trendy comfortable and durable, the range is ideally suited to the urban environment. The designs are based on retro styles, including designs from the late 80s as well as contemporary interpretations. It is a casual yet fashionable street-style shoes

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that caters to the young at heart. North Star Shoes have graphics and prints and are shoes of style and edge. They are available in all types of materials.

Scholl

The name Scholl today is synonymous with feet and foot care in over 70 countries throughout the world. Dr Scholl's from Bata aims at providing maximum comfort whole daylong. The unique Anatomic Insole gives feet extra cushioning and provides support from all sides. The ribbed surface of the insole gently massages the feet while walking and its soft sole absorbs all the shocks while walking.

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Bata

Sandak

Marie Claire

Weinbrenner

Power

Bubblegummers

B First

North Star

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Marie Claire Hush Puppies Power Bubble Gummers North Star Scholl Weinbrenner Bata Comfort
Bata is a multinational company which has various brand lines in order to satisfy the various segments of market. All the above mentioned brands are devoted to make best quality of shoes for the particular segments they are assigned. Below is a brief introduction to the various brands of Bata pvt Limited.

Marie Claire shoes are for women with an active lifestyle who seek contemporary modern styles, Marie Claire shoe stores successfully opened in Latin America and Asia. Bata Brands is the trademark owner of Marie Claire for shoes worldwide (except in Japan and Korea).

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Bubble gummers is the leading children's footwear brand in Pakistan and has an extensive presence in Latin America, Asia and Europe. Bubble gummers offers good quality, comfortable, funny and colorful shoes for kids. Developed to the strictest standards of quality, all shoes are produced with state-of-art technology to ensure healthy foot growth, and parents can be assured that their children will enjoy these shoes in total comfort and safety. Bubble gummers also carry a wide range of accessories: - e.g.: Full range of casual bag, school bag, stationary and others. Also complimented with non BBG BRAND accessories. Namely featuring latest cartoon theme accessories.

Hush Puppies
In 1958, during the exciting atmosphere of change the Wolwerine Company created the world's first casual shoe and provided a new alternative in footwear. Hush Puppies emerged as a soft, breathable and very comfortable shoe. A truly modern creation that was immediately embraced for its authentic style and casual flair. This unique invention would not only change the kind of shoes we wear, it would also herald the beginning of today's relaxed style. Today Hush Puppies continues to innovate bringing technical excellence in genuine style to over 120 countries by application of various types of technologies like:
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Power is a Bata International Brand, which continues to spark an emotional connection with the masses by providing athletic footwear at very affordable prices. First launched in 1972, it has created a niche for itself in the sports segment. Power embodies diversity with ranges in running, training, court, basketball, football and Outdoor that combines function with creativity.To enhance the different categories there is also a range of young, casual and trendy collection of shoes. The range that has technical features and functions to boast the Power image is the badminton and court collections.
Power Slogan: Be Smart

A new terminology replacing Value, The Power customer is a Smart consumer, not just a value consumer.

Scholl
The name Scholl today is synonymous with feet and foot care in over 70 countries throughout the world. This heart-felt fascination with feet, this dedication and drive, formed the foundation of the company and the Dr Scholl spirit and legacy are as much a part of the brand today - 100 years on. Dr Scholl's from Bata provides you with maximum comfort whole daylong. The unique Anatomic Insole will give your feet that extra cushioning needed to keep all stresses at bay from your feet while providing support from all sides.

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The Weinbrenner line is made up of leather shoes and boots, low, mid and high cut. Cuts or design are dictated by fashion, but can include Goodyear welt construction, rugged moccasin and other strongly outdoor associated cuts but always in casual style. Closure generally with laces and eyelets, sometimes supplemented with hooks, D-rings and straps with buckles. Colours will be of natural tones including black, brown, caf and burgundy. Outdoors is Yours is a tagline commonly used.

Comfort will be an important feature in design and assembly of all the comfit shoes. Many of the Desirable and characteristics such as double stitching, molded and massage insole, latex foam insole, soft textile or cambrelle lining will be used to emphasize the brand image of both comfort and style. Unit rubber, PVC, PU or TPR sole are commonly used. Get Comfortable Today is a tagline commonly associated with these range of shoes.

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