Company profile

Date of Establishment 1931

Revenue 0 ( USD in Millions )Market Cap 53740.5776625 ( Rs. in Millions )Corporate Address 6 A,S N Banerjee Road, Kolkata-700013, West

Bengalwww.bata.in

Management Details Chairperson - P M Sinha MD - Rajeev GopalakrishnanDirectors - A B Anand, A Chudasama, A Singh, AB Anand, F M Hussein, J Carbajal, J G N Clemons, Jack G N Clemons, M K Sharma, M Villagran, Mahendra Ganatra, N Sankar, P M Sinha, R Gopalakrishnan, Rajeev Gopalakrishnan, Ranjit Mathur, S Sinha, U Khanna, Uday Khanna

Business Operation LeatherBackground Bata India is a footwear manufacturing company

incorporated in 1931. The company was earlier known as Bata Shoe Company, later in 1973 the name was changed to the present one.

The company manufactures footwear for men, women and children. The Company manufactures shoes of various quality such as leather, rubber, canva

Financials Total Income - Rs. 16775.529 Million ( year ending Dec 2011) Net Profit - Rs. Million ( year ending Dec 2011)

Company Secretary AB AnandBankers HDFC Bank, State Bank of IndiaAuditors SR Batliboi & Co

Finished Products

PRODUCT NAME

UNITSINSTALLED CAPACITY

PRODUCTION QUANTITY

SALES QUANTITY

SALES VALUE (Rs Cr.)

Leather FootwearThousands

Pairs20256.00 13564.00 24551.00 1089.0688

Rubber / Canvas Footwear

Thousands Pairs

42500.00 6645.00 16162.00 300.7620

Plastic Footwear N.A. 0.00 0.00 8074.00 111.7068

Accessories, Garment &

OthersN.A. 0.00 0.00 0.00 61.8937

Scrap N.A. 0.00 0.00 0.00 1.1419

Other Fiscal Benefits

N.A. 0.00 0.00 0.00 0.4568

Other Services N.A. 0.00 0.00 0.00 0.0475

Finished Leather From Hides

Thousands Pieces

1596.00 110.00 0.00 0.0000

Bata India Limited — Document Transcript

1. BATA INDIA LIMITED Repositioned Or Still a Foot wearyPresented by- Yugesh Kumar dubey (8279) Vinay Singh (8272) Vinay gupta (8271) External environmentWe have analyze various external environments from case as well as from outside source-Industry environment- Threat of new entrants-There are many barriers to entry preventing new entrants from capturing significant market share. Large footwear producer enjoy economy of scale that create cost advantage over any new rival.BIL differentiated it’s product from rivals product like Comfort (using dynamic spring pad that acted as cushion on the feet for women’s footwear), Wind (in build air technology that allowed feet to breath fresh air) etc.The capital requirements are a high entry barrier to a new firm to the industry. However, an existing shoe manufacturer may enter the athletic shoe industry simply by re-tooling their manufacturing plant.Switching cost is very low for footwear industry because shoes are relatively inexpensive personal goods that are frequently replaced.Access to distribution channel is barrier to entry because it is really difficult for a startup firm to get shelf space at major shoe retailer. But existing firm may use their

existing connections to easily access shoe distribution channel.Bargaining power of buyer-Bata was largest player in industry with 9-10%volume share and 60% market share in organized segment. It had a market share of 70% in canvas shoe segment and 60% in leather shoe segment. Their dominant market share give them power over buyer.Bata is a big buyer of raw material who buys significant part of suppliers’ revenue. This in a way provides good bargaining power over suppliers.As a part of its strategic decision Bata set up a rubber/canvas factory in Faridabad, Haryana in 1951. So it can threaten it’s supplier to integrate backward.Bargaining power of supplier-Shoes are made of leather, rubber, nylon etc. These materials could be classified as commodities, where the manufacturing process adds the value. For this reason supplier have limited bargaining power over buyers.Threat of substitute product-Consumer switched from one product to another if alternatives are available in same quality and performance range and have competing price or lesser price.BIL produces 10% of total hawai ranged from Rs. 35-110 while competing local brands were selling at Rs. 25-50.Again when global trade open then market flooded with many international brands having variety and competing price.Rivalry among existing firms-Mostly numbers of competitors are stable, especially because of high entry barriers. This adds to the rivalry among existing firm. Manufacturers watch each other carefully and make appropriate countermove to match the competitors move. Leading competitor of BIL are Lakhani shoes, liberty shoes, action shoes, woodland, paragon and relaxo in organized segment. CompanyYear endedSales (Rs. Cr.)EPS(Rs.)Bata IndiaDec 2004698.512.2Lakhani IndiaMar 2004109.61.6Liberty shoesMar 2004177.215.9Mirza tannersMar 2004174.69.9Relaxo footwearsMar 2004200.74.4Source- capital market dated April 25-may 8 2005General environment-Demographic- Indian market is highly fragmented between rural and urban market. Rural market was large at approximately 70% of the total market but was dominated by multiple medium size regional players and serviced through traditional independent dealers.Political/legal environment-Industry is governed by central by Central Excise and Custom, Factory act and Labor Law

and Environmental control acts.Council for leather export, Central leather research institute and Footwear design and development institute were promoting industry for special purpose.Political unrest, cross border unrest, terrorism in and out of India has direct or indirect impact on industry. When quantitative restriction was lifted from import then industry slowed down from 20 % (in 90’s) to 8-10 %( in 2004). Increase in excise duty led to increase in cost of footwear (1993-94, excise exemption was withdrawn from shoe costing below rs. 200 and hence price went up by 20% and this led to drop in profit from 20 crore to 95 lac within a year).Tax holidays for period of 10 years on full excise duty and income tax and a subsidy on sales tax, land/building and plant/machinery was given by state government of Himachal Pradesh, Uttaranchal, Jammu & Kashmir and Assam to promote manufacturing. Global environment- India produced more of gent’s footwear while world’s major production was ladies footwear. India has 10% of world’s raw material and low tanning cost made it second in footwear production after China. Sociocultural-Over a period of time, as disposable income increases, consumer preference changed but Bata failed to recognize these social changes and they continue with same product over long period of time.Internal environmentBIL is India’s largest manufacturer and marketer of footwear product which sold over 60 million pair per year in India and overseas market. Here in this section we will analyze resources, capability, core competencies and value chain of Bata India limited. By doing internal analysis we will identify strength and weakness of Bata India limited. Resources-Human resource-Footwear industry is labor intensive and concentrated in small and cottage industry area. Availability of human resource is one of important strength of Bata India limited. Below table will tell why this is strength-Labor cost in leading footwear producing 

Brand Description:Brand Description Bata is one of the world leading footwear retailer and manufacturer with operations across 5 continents managed by 4 regional meaningful business units.

With 1250 stores across the country, it also has the widest retail network.. Bata, over the decades, used the ‘ current knowledge ‘.

Brand History:Brand History Bata Shoe Company is registered in Zlin . Innovative from the beginning it departs from century old traditions of the one-man cobblers’ workshop. The company was set up in Konnagar (near Calcutta) in 1932 which is known as Batanagar . It was also the first manufacturing facility in the Indian shoe industry to receive the ISO: 9001 certification. It operates 63 companies in various industries but footwear remains the core business with 60 million pairs sold per year in more than 30 countries.

Bata: Improving Market Share:Bata: Improving Market Share Bata today… Serves 1 million customers per day Employs more than 40,000 people Operates 5000 retail stores Manages a retail presence in over 50 countries Runs 40 production facilities across 26 countries

BRANDS UNDER BATA 3 CATAGORIES :BRANDS UNDER BATA 3 CATAGORIES MEN WOMEN KIDS AMBASSADOR Rs.599-Rs5499 •BATA Rs.599-Rs5499 •COMFIT Rs.749-Rs2299 •HUSH PUPPIES Rs.1699-Rs3299 •MOCASSINO Rs.999-Rs1599 •NORTH STAR Rs.629-Rs1699 •POWER STAR Rs.699-Rs1599 •QUOVADIS •SCHOLL’S Rs.1799-Rs2899 •WEINBRENNER Rs.699-Rs2099 •BATA Rs.539-Rs4899 •HUSH PUPPIES Rs.539-Rs4899 •COMFIT Rs.599-Rs1299 •MARIE CLAIR •NORTH STAR Rs.539-Rs699 •POWER Rs.1699 • SCHOLL’S Rs.1249-Rs1499 NAUTRALIZER RS.2999-RS3299 • BUBBLEGUMMERS Rs.549-Rs649 •BATA Rs.149-Rs899 •SCHOOL Rs.149-Rs899 •SPARX Rs749

The Product Life Cycle:The Product Life Cycle HUSH PUPPIES DR. SCHOLL WINBRENNER, NORTH STAR,BATA COMFIT, MARIE CLAIRE, BUBBLEGUMMERS POWER HAWAI (Sau paolo Alparagatas)

Marketing channels of :Marketing channels of Company operated retail outlet Dealer network Direct marketing to the customers

SWOT analysis:SWOT analysis Strength Worldwide presence Offers customer best value and great possible service Manages retail presence in 50 countries High demand in foreign market

Weakness:Weakness Losing competition because of the other big players like adidas, nike, woodland etc. Not too much stylist so it is losing the attraction of the customer, specially in the youth segment. They don’t have any powerful brand ambassador to promote their brand. They haven’t promoted themselves thoroughly, invested very less in their add campaign.

Opportunity:Opportunity Bata India Limited has undertaken initiatives to improve the company's cost structure and margins. The company has initiated a financial restructuring exercise to down its interest cost. Financial re-engineering. The company has tightened controls on costs in all areas of and is looking at global sourcing for raw materials and other inputs. Bata India is also exploring third-party manufacturing units in Assam and Jammu & Kashmir as these enjoy tax holidays. Bata Shoe Organization (BSO) has decided to give a breather to its 51 per cent subsidiary.

Threat:Threat Introduction of new brands in the market. Lagging behind in terms of technological factors. Young generation is attracted to the other branded shoes like adidas, nike, woodland etc.

MENS TYPE:MENS TYPE DERBY LACE –TO-TOE LOFER

Slide 13:LOW-BOOT MOCCASIN MONK-STRAP OXFORD

WOMENS TYPE:WOMENS TYPE ANKLE-BAR BALLERINA CHAPPLIES-MULE ESPADRILLE

Slide 15:HIGH-BOOT INSTEP-BAR PUMP SANDAL

Slide 16:SLING-BACK T-BAR

Introduction of Bata India Limited: Introduction of Bata India Limited Bata India, a part of Bata Group Switzerland. Incorporated as Bata Shoe Company Limited on December 23, 1931 Kolkata, West Bengal. Changed its name to Bata Shoe Company Private Limited on April 6, 1956. Converted to a public sector company on April 18, 1973. The name was subsequently changed to Bata India Limited on April 23, 1973. ‘THE MOST TRUSTED FOOTWEAR BRAND’

Bata Today: Bata Today Sells over 45 million pairs every year. Serves over 1,20,000 customers every day. Sells through over 1,200 retail stores. Operates 5 manufacturing facilities. Employs more than 6,800 people.

Average Footfalls: Average Footfalls Weekdays : 40 – 50 Weekends : 60 - 70

Visitors into Customers: Visitors into Customers

Marketing Strategies: Marketing Strategies

Bata Marketing Mix: Bata Marketing Mix

Strengths and Weakness: Strength Weakness Strong financial position. High goodwill. Different training facilities. Large no. of outlets. Serves family packages. Less variety. No proper advertisement. No powerful brand ambassador. Unrelated diversification. Strengths and Weakness

Opportunities and Threats: Opportunities Threats New medium to advertise. New product line. Be updated with new fashion & trend. Competition. Fast changing fashion trends. Opportunities and Threats

Major Problems of Bata India Limited: Major Problems of Bata India Limited Problem in switching to new product line. Unrelated diversification. Less variety of products as compared to others. Follows contemporary look. Doesn’t follow trend.

Mission:

to acheive success and become the biggest n most successful multiple retaling n distirbution organisation with a dynamic n flexible market approach

“Today’s consumer has multiple footwear needs for specific purposes, like dress, sports, outdoor, comfort, party, sports casual etc. Our updated and improvised shoe line is now better segmented to adapt to the ever changing needs of the consumers

competitors

Bata India Ltd.BATIND

Bhartiya International Ltd. BHAINL

Crew B.O.S Products Ltd. CREBO

Dharnidhar Global & Infraprojects Ltd.

SEAGLO

Euro Leder Fashions Ltd. EURLED

KRM International Ltd. KRMINT

Lawreshwar Polymers Ltd. LAWPOL

Liberty Shoes Ltd. LIBSHO

Mayur Leather Products Ltd. MAYLEA

Mirza International Ltd. MIRINT

Montari Leather Ltd. MONLEA

N B Footwear Ltd. NBFOOL

Oscar Global Ltd. OSCGLO

Phoenix International Ltd. PHOINT

Presidency Shoe International Ltd.

PRESHO

Pretto Leather Industries Ltd. PRELEA

Ramco Super Leathers Ltd. RAMSUP

Relaxo Footwears Ltd. RELFOO

Sarup Tanneries Ltd. SARTAN

Somplast Leather Industries Ltd.

SOMLEA

Super Tannery Ltd. SUPTAN

Superhouse Ltd. SUPLTD

Tinna Overseas Ltd. TINOVE

Unimode Overseas Ltd. UNIOVE

Welterman International Ltd. WELINT

Worldwide Leather Export Ltd.

WORLEA

VISION:Togrowasdynamic,innovativeandmarketdrivenmanufactureranddistributor,withfootwearindustrywhilemaintainingacommitmenttothecountry,culture,andenvironmentinwhichthecompanyoperates.

MISSION:Tobesuccessfulasthemostdynamic,flexibleandmarketresponsiveorganization,withfootwearasitscorebusiness.

OBJECTIVES:BataIndia,today,wishestorepositionitselfasamarketdriven,fashionconsciouslifestylebrand.Cateringtoawidevarietyofcustomergroups,Batawillprovideitsproductsandservicestoalltheagegroupsinthecommunity.Alsoaimstoprovidethefinestqualitythroughcustomerinvolvemen

BATA:SWOTANALYSIS

Strengths

1.BrandImage

2.Reasonablequalityatloworreasonableprice

3.Diversitywithrangesinrunning,training,court,basketball,footballandOutdoor

4.Footwearfortheentirefamily

5.FinanciallyStrong

6.Convenientlyaccessibleoutletsinvariouspartsofthecountry

7.Targetingallincomesegments

8.Providetrainingformanagersandemployees

9.Nationwideretailnetwork

Weaknesses

1.Nocontinuityofleadership

2.In2001,5%decreaseinnetsalesduetodiversificationintopremiersegment(impropertargetingandpositioning)

3.NoproperplanningregardingAdvertisementandPromotions

4.NovarietyinFashionableshoe

Opportunities

1.Ecommerce

2.Acquired,Partnershipwithsmallplayers

3.EnteringnewsegmentsofMarkets

4.CapturingMarketwherenootherpotentialcompetitorexists

5.InnovativeProducts

6.Newmediumsforadvertisements.

Threats

1.CustomerDissatisfaction

2.Pricewarswithcompetitors

3.Competitors

4.PoliticalInstability

5.EconomicThrea

t6.Changinginconsumerpreference

Bata:TheMarketingPlan&Communication

Themarketingplanincludesformulatingstrategiesandtacticsforeachofthe4Ps:PRODUCT:BATAIndiahasmanybrandsunderitsoriginalbrandname

BATA.Butweareconsideringdevelopingapromotionalcampaignonlyfortheproductcategoryof“casualfootwear”whichsellsbytheoriginalbrandname“BATA”.

PRICE:BATAIndiaiscurrentlyconcentratingonthemiddleincomelevelsegmentforitsproductcategoryofcasualfootwear,thusthepricewouldberangingfromINR300to1500.

PLACE(DISTRIBUTION):BATA’Sretailnetworkofover1200storesgivesitareach/coveragethatnootherfootwearcompanycanmatch.

PROMOTION:ThiswouldincludeintegrationofvariousmarketingtechniqueslikeSalespromotion,ConsumerPromotions(GiftCoupons),TradePromotions(Count-RecountAllowances),Advertising,In-storeAdvertisingforgeneralshoeretailstores,andPublicRelations.Thesecommunicationtoolsareusedinawaysuchthattheycomplementeachotherinthecommunicationandpersuasionprocess.Takingintoconsideration,thepromotionalelementsinbrief:-SALESPROMOTION:SalesPromotionareoftwobroadtypes:1.ConsumerPromotions2.TradePromotionsConsumerPromotions:ThetoolalreadyinusebytheBataIndiagroupis“BataGiftVouchers”.Thedesigningofthevouchersneedtobecomplementarytothethemeusedforadvertisingsoastoreinforcetheimageofthebrand.Thesegiftvouchershavethefollowingfeatures:Convenientdenominations6monthsvalidityRedeemableonallBataproductsAcceptableatover800BatastoresacrossIndia

TradePromotions:ThepersuasiontoolusedherecanbeCount-RecountAllowance.Underthis,thediscountisappliednottothequantitythattheretailerbuysfromthemanufacturerduringthepromotionalperiod,butonlytothatquantitythatismovedfromtheretailer’sstores.Asaconsequence,theretailergetsgreaterincentivetopassthepricecutontotheconsumersothattheproduct“moves”fromthestoreintotheconsumers’hands.Thistoolcanbeverybe

neficialforabrandlikeBatawhereconsumersareverybrandconsciousandhavehighbargainingpower.

MESSAGESTRATEGYATTENTIONANDCOMPREHENSION

Theattentionandinvolvementoftheaudiencedependsuponability,motivationandopportunity.ABILITYApersonismoreattentivetowardssomethingthey’reabletounderstand.Whattheadvertsays,thewaythespokespersontalksaboutthebenefits/features,thelanguageusedisallveryimportantalongwiththefactwhetherthemessageiscomprehendibleornot.

MOTIVATION

Isthepersoninterestedenough?ApersonmaybeinterestedinaspecificproductcategoryApersonmaybekeenaboutaparticularwayofsendingacrossthemessage(languageused,humorused,jingles,etc.)ormediaused(newspapers).Canamessagebedesignedthatencouragesmaximumnumberofpeopletogetinvolved?EgoInvolvement:Imagethatthepeoplecarryofthemselves.Connectionbetweentheegoofthebuyerandtheproduct(brand).Istheproductsomethingthatwouldenhancetheirpersonality?OPPORTUNITYIstheinformationreadilyaccessible?Doretailershaveenoughinfotobepassedontotheultimatecustomers?Docustomersneedtosearchforinformation?(insuchcases,competitorsareatadvantage)Istheadvertvisibleasmuchasrequired?

COGNITIVERESPONSEAspectsthatbuildCognitiveResponse:SupportArgument:TheCompanyagreeswithwhatevertheconsumerwantstobelieve.CounterArgument:TheCompanyclaimssomethingthatisusuallyunbelievable,i.e.audiencerejectswhattheadverttriestosay.ExecutionBolstering:Whentheasisperceivedverypositivelyandtheaudiencelikethepresentation(colors,charactersused,décor,jingle)ExecutionDerogation:Whenthefeeloftheadvertisnotverygood.Audiencedoesn’tlikethewaytheadispresented

BATA’sMarketPositioningPlans[Assumptions]Bataisplanningtoexitfromthelowerendsegmentandfocusmoreonthemiddleanduppermiddleclassofthesociety,becauseofgrowthinthenumberofpeoplebelongingtothesesegmentsandtherisingincomelevelofitstargetcustomers.Theoverallmarketquitequalityconsciousnow.Bata,inordertodealwiththethreatoftheChineseimports,wouldhaveastrategyfocusingprimarilyoncustomerintimacyasitwouldbeaimingtoenhanceitsbrandequitybyprovidingacompleteexperienceforfamilieswhocometoshopatitsretailoutlets.AnotherpositiveforBatawillbethatthecustomers,whoaremoreawarenow,usuallydonotassociatequalityandreliabilitywithChineseproducts,whereasBatacanuseitsbrandtofillthisvoid.AlsorecentlyBatahasrecentlyrolledoutthe‘veryhighqualityandpremium’productsthatwereintroducedunderitsBatabrandin2001,becauseofthefactthatBata’simagehasbeencreatedoveritsexistenceofaround40oddyearsandtryingtojustmoveoutofitscurrentsegmentofthemiddleanduppermiddl

eclasspeopleandtryingtocapturethehigherendofthemarketovernightcanbeanuphilltaskforBatatosaytheleast