Introduction

This case describes the challenges faced by the Bata Management in the wake of changing
market trends in the form of increased competition from the local players as well as the
constantly increasing threat of Chinese imports.
Bata had traditionally targeted the lower middle and middle class segments of the society and
was now considering changes in its strategy to be able to survive in the market. The MD of Bata
was considering the efforts necessary to realign Bata Pakistans manufacturing, outsourcing,
distribution and brand strategy in the light of increased local competition and Chinese imports.

Strengths
1. Brand Image
2. Reasonable quality at low or reasonable price
3. Diversity with ranges in running, training, court, basketball, football and Outdoor
4.
5.
6.
7.
8.
9.

Footwear for the entire family

Financialy Strong
Conveniently accessible outlets in various parts of the country
Targetting all income segments
Provide training for managers and employees
Nationwide retail network

Weaknesses
1.
2.
3.
4.

No continuity of leadership
In 2001, 5% decrease in net saless
No proper planning regarding Advertisement
No variety in Fashionable shoes

Opportunities
1.
2.
3.
4.
5.
6.

E-Commerce
Acquired, Partnership with small players
Entring new segments of Markets
Capturing Market where no other potential competitor exists
Innovative Products
New mediums for advertisements

Threats
1.
2.
3.
4.
5.

Customer Dissatisfaction
Price wars with competitors
Competitors
Political Instability
Economic Threat

6. Changing in consumer prefernces.

SWOT Matrix
Strengths
Weaknesses
1. Brand Image
1. No continuity of
2. Reasonable quality
leadership
at
low
or
2. In 2001, 5% decrease
reasonable price
in net saless
3. Diversity with
3. No proper planning
ranges in running,
regarding
training, court,
Advertisement
basketball, football
4. No variety in
and Outdoor
Fashionable shoes
4. Footwear for the
entire family
5. Financialy Strong
6. Conveniently
accessible outlets
in various parts of
the country
7. Targetting
all
income segments
8. Provide training for
managers
and
employees
9. Nationwide retail
network
Opportunities
1. E-Commerce
2. Acquired,
Partnership with
small players
3. Entring new
segments of
Markets
4. Capturing Market
where no other
potential
competitor exists
5. Innovative
Products
6. New mediums for
advertisements

SO Strategies
Acquisition, Joint Venture
(S2, S5, O5)

WO Strategies
Introduce new segments
(W4,O3)

Product Development
(S2, S5, O5)

Market Penetration
(W3, O6)

Threats
1. Customer

ST Strategies
Increase Customization

E-Market Development
(S1, S5, O1)

WT Strategies
Related Diversification

2.
3.
4.
5.
6.

Dissatisfaction
Price wars with
competitors
Competitors
Political Instability
Economic Threat
Changing in consumer
preferences

(S2, S8, T1)

(W4, T1)

Customers can be satisfied

with Batas quality and
reasonable prices.
(S2, T1)

Innovative Products
(W4, T6)

Evaluation of Three Strategic Options for Bata

Manufacturing:
Bata can use its regional expertise e.g. in Malaysia for rubber based shoes and in China for
artificial leather shoes and use their expertise and economies of scale to be able to meet the needs
of the product lines for which they had some sort of a cost disadvantage.
Bata can also stay in its International markets that are benefitial to compete with potential
competitors.
Distribution:
Bata should give more importance to Company-owned stores. In which it can control and
managae its operations easily. It should arrange more training programmes for employees to have
better quality according to consumer preferences.
They can get profits from franshises but with assurance that employees working there are also
trained otherwise it can hurt the image of Bata.
For wholesale channel, they should come out of that and stop having their footwear at the
Wholesale shops, because having that can damage their chances of maintaining a proper image
for their brand.
Brands:
Bata should target to middle and upper class, because lower class now prefer to purchase
Chinese and local shoes. Bata should continue to grow in uuper middle class. Should provide
better products in terms of quality as well as price.
Bata should not focus on fashionable footwear because Bata is well known for its functional
footwear for its reliability. It should focus on their successful brands like Bubble gummers.

Respond to competition from Chinese imported shoes and other local shoes
seller
According to my analysis Chinese imported shoes and other local shoes seller are not a major
threat for Bata, because now a days people are more quality consious instead of price consious.
They know very well about the quality of Bata as compare to these Chinese and local shoes.
Bata should build a strong relationship with its customers so that they come with their families
for the best quality shoes. It would enhance its brand equity.
People still does not have an idea of quality difference of Chinese products as compare to
Bata.They just prefer to buy because of low price, Bata should aware those people.

Competitive Profile Matrix

Bata
Critical
Success
Factor
Product
Quality
Outlets
Market
Share
Price
Financail
Position
Customer
Loyality
Global
Expansion
Advertisin
g
Total

Weight

Rating

Score

Rating

Score

Shafi
Group
Rating

0.10

0.3

0.3

0.3

0.10
0.05

4
3

0.4
0.15

3
2

0.3
0.1

2
2

0.2
0.1

0.10
0.15

4
3

0.4
0.45

3
3

0.3
0.45

2
2

0.2
0.3

0.10

0.3

0.3

0.2

0.20

0.6

0.4

0.2

0.20

0.4

0.4

0.2

1.00

Service

2.25

Grand Strategy Matrix

Potential strategies are:
Market Development

Score

1.7

 Market Penetration
Product Development
Backward Integration
Forward Integration
Horizontal Integration
Related Diversification

Quantitative Strategic Planning Matrix

Key Factors

Opportunities
1. E-Commerce
2. Acquired,
Partnership
with
small
players
3. Entring new
segments
of
Markets
4. Capturing
Market where
no
other
potential
competitor
exists
5. Innovative
Products
6. New mediums
for
advertisements

Weight

Product
AS

Development
TAS

Market
AS

Development
TAS

Market
AS

Penetration
TAS

0.05
0.05

2
-

0.1
-

2
-

0.1
-

3
-

0.15
-

0.10

0.2

0.3

0.2

0.10

0.2

0.3

0.2

0.4

0.3

0.3

0.05

0.05

0.15

0.10
0.05

0.05
0.10

Threats

0.10
0.05
0.05
0.3

1. Customer
Dissatisfaction
2. Price wars with
competitors
3. Competitors
4. Political Instability
5. Economic Threat
6. Changing in
consumer
preferences

Strengths
1. Brand Image
2. Reasonable
quality at low
or reasonable
price
3. Diversity with
ranges in
running,
training, court,
basketball,
football and
Outdoor
4. Footwear for
the
entire
family
5. Financialy
Strong
6. Conveniently
accessible
outlets
in
various parts
of the country
7. Targetting all
income
segments
8. Provide
training
for
managers and
employees
9. Nationwide
retail network
Weaknesses

0.15

3
-

0.3

0.1

0.15

3
-

0.3

3
-

0.3

0.9

0.6

0.6

0.10
0.10

3
3

0.3
0.3

3
3

0.3
0.3

3
3

0.3
0.3

0.10

0.3

0.2

0.2

0.4

0.4

0.4

0.05

0.1

0.15

0.5

0.05

0.05

0.10

0.10

0.3

0.2

0.05
0.10

1. No continuity of
leadership
2. In 2001, 5%
decrease in net
saless
3. No proper
planning regarding
Advertisement
4. No variety in
Fashionable shoes

Total

0.05

0.15

0.45

0.45

0.6

0.05

0.05

0.2

0.2

0.1

0.15

0.05
0.05

1.00

4.5

4.3

4.9

According to QSPM Company should more focus on Market Penetration Strategy

Financial Analysis
Current ratio = Current assets/Curretn Liabilities
2001 = 1.17:1
2000 = 1.15:1
1999 = 1.23:1
Debt to equity Ratio = Total debts/Shareholder Equity
2001 = 3.09:1
2000 = 3.44:1
1999 = 3.60:1
That means company is mostly relying on external resources, and the ratios of last three years are
continuously decreasing.
Inventory Turnover = Cost of goods sold/Average Inventory

2001 = 3.52 Times

2000 = 3.31 Times
This ratio is increasing it means management is improving its strategies about the inventory and
stock
Gross Profit Margin = Gross profit/Sales
2001 = 33%
2000 = 29.6%
1999 = 28.9%

Recommendations
Company should focus on Product Development, Market Development and Market
penetration Strategies
Should exit from the lower end segment and focus more on the middle and upper middle
class of the society, because of the growth in numbers of people belonging to these
segments and also because of the rising incomes of its target customers.
Renewed brand image will enable Bata to earn premium at the upper middle end of the
market will aid the achievement of the financial goals.
Footwear industry is highly fashionable industry; hence Bata must improve the efficiency
of product development in order to bring new design and style.
The service standards should be strictly monitored and hence an experience fit will be
provided to the customers and these customers for this will be willing to pay a bit of
premium because of Batas brand and hence the competition undercutting Bata on price
would no longer be that big a threat.
It will need to focus on marketing itself as an outlet meeting all basic needs of the
families in its target market segment
Should provide consistent quality service to its customers so that customers can associate
the same experience with whichever outlet they visit of Bata.
Bata debt to equity ratio is 3.51, which means almost 75% are debts. Management should
reduce its debts to reduce the financial charges.
Reduce Selling and Administration expenses to get more Net income.
Internet is a broad medium so they should also improve e-business.