BATA SOME INTERESTING FACTS

Bata Shoe Organization The Bata Shoe Organization (BSO) runs the global operations of Bata Ltd. Based in. Lausanne, Switzerland, it is credited with being the world's largest manufacturer and retailer of footwear, selling about 140 million pairs a year. BSO has a reputation for manufacturing sturdy yet stylish mass-merchandized shoes-both formal and casual-for men, women, and children. (Being privately owned, financial performance figures are not released, but 2007 sales revenues are estimated at $3 billion.) It retails in 50 countries, employing about 40,000 people. It owns 5,000 stores, apart from distributing through several thousand franchisees worldwide. Its 40 operating units in 26 countries include shoe manufacturing, mold making, quality control laboratories, hosiery units, and tanneries.The operating companies are grouped into four regional business units that, according to BSO, are based on similarities in markets and business issues. Each unit benefits from synergies in product development, sourcing, and market appeal. The four business units include Bata Asia Pacific-Africa, based in Singapore; Bata Europe, based in Lausanne;Bata Latin America, based in Mexico City; and Bata North America, based in Toronto. The Batas, a family of shoemakers, began operations in 1894 in Czechoslovakia, and had built a shoe network in 28 countries by the 1930s. Tom Bata Sr., the tenth generation, migrated to Canada at the time of the Nazi invasion of the country. In recent times, he, along with his son Thomas J. Bata, was largely responsible for building the company to its present status. In 2001, his grandson, Thomas G. Bata, was appointed chairman. Eighty-five percent of BSO's subsidiaries are wholly owned; although in some countries, due to local regulations, Bata Ltd. has only a minority ownership. Where it has no equity, it provides licensing, consulting, and technical assistance. BSO keeps a watchful eye over its autonomous subsidiaries. For instance, Bata India, the largest subsidiary in the Asia group, is 51 % owned by Bata Ltd. and had a record loss of $9.8 million in 1995. BSO intervened by sending expatriate managers with turnaround experience and providing fresh investments and an interest-free loan of $10 million. The new managing director,Stephen Davies, moved from Bangladesh with a charge to focus on marketing. Similarly, problems in Uganda led to closing operations there with the market to be served from its production center in neighboring Kenya. Factories and stores are built to standard specifications around the world. Bata focuses on low-cost manufacturing and builds a local network of retailers and suppliers 81around it. It takes advantage of local materials in the

countries where its plants are It prefers to produce in a given market nearly everything it sells there. [batas stratergy] The company operates in several developing countries and is conscious of its role as a provider of jobs in the economy. While top management may be composed of expatriates, local personnel are inducted, trained, and given increasing responsibilities. Regular training programs are conducted at headquarters for senior worldwide employees. Country-based training programs work toward solutions to local problems that are culturally sensitive to their area.BSO deals with a variety of political environments and has units in democratic and totalitarian regimes. In some countries, its operations have been nationalized and then denationalized. It sponsors local sporting events and engages with the local communities, such as supporting Junior Achievement (an organization that promotes entrepreneurship) and AIDS education. Many of the company's factories are located away from urban centers. In some countries, Bata provides housing, schools, and other amenities for its workers. Tariff protection and other government incentives have helped protect its marketing some places. The arrival of manufacturers such as Nike and Adidas, however, into the industry on a global scale caused consumer preferences to change dramatically. Innovation and brand image in the footwear industry in the early 1990s forced the industry to be more market driven rather than manufacturing driven. From 1995 to 1996, Bata closed about 20% of its outlets-as many of them had begun to lose money-and the company restructured its operations in Europe. Bata's strategy is to provide foot Wear at affordable prices to the largest possible segment of the population, but in some African markets it has faced competition from Chinese imports and second~hand goods. It has also opened its own procurement center in China. More recently, in various markets around the world, it has begun to renovate its stores and revitalize its image from traditional and conservative to modern and up market and work toward a globally, integrated marketing.

Questions 1] Is the positioning strategy right? 2] Today are they market driven or manufacturingdriven? 3] Are they changing enough with the competitive world? 4] Are the product ranges and pricing strategy enough to beat the global competition? 5] What Image has Bata today in terms of Social welfare? 6] What are the Challenges faced by Bata during 1990?

BATA & MARKET SCENERIO The company is also depending on institutional business heavily. "We will have shoes tailor-made for hospitals, military forces, factoryworkers, and airlines. We will also introduce anew range of sports shoes in India this year which will be comparable to the best sportswear brands available here," Sinha says.
The company has already set up a dedicated teamheaded by a retired defence man to secure contracts.The total market size for footwear used by the defencepersonnel is about 12 million pairs a year."The country has roughly three million defence andparamilitary personnel and each buys four pair of shoesper year, totalling 12 million pairs a year. That's a bigmarket," Sinha says. Defence authorities currently source most of itsfootwear requirement from unorganised players. After eyeing the defence segment, Bata is also movingaggressively into the safety footwear market as a new thrust area for growth.Parent group Bata Worldwide would be providing technology sourced from the Safety and IndustrialCentre at Holland. Turnover of Rs 1008 crores during 2008 4.5crores sale of foot pairs 13.34% rise in profits Reduced borrowings and generation of higher liquidity to fund growth plans Better brand image Long range impact and better positioning INDUSTRY SCENARIO Footwear industry at present Rs21,000 crores Growth rate :8-9 % Branded segment constitutes 40%of market & would grow more than50% in next 5 years Major brands : Liberty, Woodland,Khadim, Metro, Redtape, and sportswear brands like Nike, Reebok,Adidas Men's footwear accounts for almost half of thetotal market with women's shoes constituting 40per cent and kids' footwear the rest.According to industry estimates, the Indianfootwear retail market is expected to grow atover 20 per cent from 2009 to 2011. Footwear isexpected to comprise about 60 per cent of thetotal leather exports by 2011 from over 38 per cent in 2006-07.