Term Paper Sample

Analysis of the ‘footwear’ industry by representing “Bata shoe company Bangladesh Ltd”
Term paper
On
Analysis of the ‘footwear’ industry by representing

“Bata shoe company Bangladesh Ltd”
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It Includes,
Strategic execution process, Porter’s five process model, & Macro environment analysis
of the industry, SWOT analysis & value chain activities of the company as well as some
strategic approaches suitable for the company
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This Term paper is based on the
Analysis of the ‘footwear’ industry by representing

“Bata shoe company Bangladesh Ltd”
Submitted to:
Sheikh Mohammad Raihan Uddin
Lecturer of
Southeast Business School,
Southeast University
Submitted by:
Ariful Islam Shuvo 2016210000134
Masuka Nasrin Pinki 2016010000351
Riyad Hasan Rony 2016110000077
MD. Mahfujur Rahman 2016110000130
Abdullah AL Mamun 2016110000008
Submission date: 21th August 2019
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21th August, 2019
Sheikh Mohammad Raihan Uddin

Lecturer of
Southeast Business School
Southeast University, Bangladesh
Dear Sir,
In the term paper of strategic management course about analysis of the ‘footwear’
industry by representing “Bata shoe company Bangladesh Ltd”. We have tried our best
to implement the learning from the course. The experiences we made through the
process are very useful to analyze the industries & companies with appropriate
structures, models & processes in order to make sophisticated strategies & decisions
best suited for the organization. We would like to thank you for providing us an
opportunity to work on this project, despite many limitations; we have tried our best to
make this report with authentication and sophistication.
If you have any further enquiry concerning any additional information or providing
feedbacks for development we would be very pleased to accommodate that. Thank you.
On behalf of my group mates
Sincerely yours,
Ariful Islam Shuvo
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Table of Contents
Executive summery................................................................................................................- 5 -
1.0 Introduction......................................................................................................................- 6 -
1.1 Objective of the study......................................................................................................- 7 -
1.2 Methodology....................................................................................................................- 7 -
2.0 Bata shoe company Bangladesh Ltd.(Profile)...................................................................- 8 -
2.1 Present condition of Bata.................................................................................................- 8 -
2.2 Leaders in action...............................................................................................................- 8 -
2.3 Organogram of Bata shoe company Bangladesh Ltd........................................................- 9 -
3.0 The strategy making, strategy & executing process of Bata shoe company Ltd.............- 10 -
3.1. Vision & Mission............................................................................................................- 10 -
3.2. Objectives:.....................................................................................................................- 10 -
3.3. Crafting strategy to achieve objectives and visions:......................................................- 10 -
3.4. Executing Strategies:.....................................................................................................- 11 -
3.5. Evaluating performance and initiating corrective performance:...................................- 11 -
4.0. Porter’s five forces model implemented in Bata shoe company Bangladesh ltd in the
‘footwear’ industry...............................................................................................................- 12 -
4.1. Threats of new entrants:...............................................................................................- 13 -
4.2. Rivalry in the industry:...................................................................................................- 13 -
4.3. Threat of substitute products:.......................................................................................- 14 -
4.4. Bargaining power of suppliers:......................................................................................- 14 -
4.5. Bargaining power of buyers:..........................................................................................- 14 -
4.5.1. Analysis of competitors:.............................................................................................- 15 -
5.0. Macro environment Analysis by using PESTEL analysis:................................................- 16 -
5.1. Social and Cultural Factors of Bata shoe company Bangladesh:....................................- 16 -
5.2. Political and Legal Factors:.............................................................................................- 16 -
5.3. Economic Factors:..........................................................................................................- 16 -
5.4. Technological Factors:...................................................................................................- 16 -
5.5. Environmental factor:....................................................................................................- 17 -
6.0. SWOT analysis of Bata shoe company Bangladesh ltd...................................................- 18 -
6.1. Strengths:......................................................................................................................- 18 -
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6.2. Weaknesses:..................................................................................................................- 18 -
6.3. Opportunities:...............................................................................................................- 18 -
6.4. Threats:..........................................................................................................................- 19 -
6.5. Current Challenges & things to overcome them:...........................................................- 19 -
6.6. Utilizing opportunities:..................................................................................................- 19 -
7.0 Drawing the value chain activities of Bata shoe company Bangladesh Ltd.....................- 20 -
7.1. Assessment of value chain activities of Bata shoe company Bangladesh Ltd................- 21 -
7.2 The primary parts of Bata shoe company Bangladesh:...................................................- 21 -
7.2.1. Inbound logistics:........................................................................................................- 21 -
7.2.2. Operation:..................................................................................................................- 21 -
7.2.3. Outbound logistic:......................................................................................................- 21 -
7.2.4. Marketing & sales:......................................................................................................- 22 -
7.2.5. Services:......................................................................................................................- 22 -
7.3. The supporting parts of Bata shoe company Bangladesh:.............................................- 23 -
7.3.1. Technological development:.......................................................................................- 23 -
7.3.2 Human resource development:...................................................................................- 23 -
7.3.3. Procurement:..............................................................................................................- 23 -
7.3.4. Firms infrastructure:...................................................................................................- 23 -
8.0. Strategic approaches best suited to the company (Bata shoe company Bangladesh Ltd).. .-
24 -
9.0. Our Observation & recommendation:...........................................................................- 25 -
9.1. Conclusion:....................................................................................................................- 26 -
9.2. Bibliography.......................................................................................................................- 27 -
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Executive summery
The term paper I based on analysis of the ‘footwear’ industry by representing “Bata
shoe company Bangladesh Ltd”. The study consist several parts to ensure that this
analysis has the quality information, evaluation & interpretation. This study is required
by our honorable faculty Sheikh Mohammad Raihan Uddin, Lecturer of Southeast
Business School, Southeast University.
This term paper is divided into nine parts to be exact. In the 1st part it contains an
introduction, objective of the study as well as methodology used for the analysis. The 2 nd
part is the elaboration of company’s profile (vision, mission). The 3 rd part contains the
discussion of strategic execution process about ‘Bata shoe company Bangladesh Ltd’.
The 4th part has the implication of porter’s five process model by Bata shoe company
Bangladesh Ltd in the ‘footwear’ industry. The 5th part contains the macro environment
analysis for the ‘footwear’ industry. The 6th part is all about SWOT analysis. The 7th part
contains the value chain activities of ‘Bata shoe company Bangladesh Ltd’. The 8th part is
created with some strategic approaches best suited to the company (Bata shoe
company Bangladesh Ltd). At last but not the least, the 9th part contains our
observation, recommendation & conclusion, which includes bibliography.
The results generated from the study are very useful for developing new strategies,
ideas & decisions for the organization operating in the ‘footwear’ industry. It enables
the opportunity for the company to be competitively aware about the industry & its
competitors as well as how the company can be in a position of consistent growth.
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1.0 Introduction
Bata is one of the well reputed footwear companies not only in Bangladesh but also in
numerous countries in the world. It is a multinational manufacturing and retail based
Canadian owned company. Bata is a family owned business founded by “Thomas Bata”
on 24th august 1894 in today it’s called Czech Republic. This leading company has the
retail presence over 70 countries and has production facility in 22 different countries,
including enormous amount of retail shops all over the world and its growing
consistently. Bata’s headquarter is situated at Lausanne, Switzerland. The company has
market presence in all the major continents and their major product line is footwear and
accessories. It is now the world’s largest manufacturer and marketer of footwear
operating across the globe.
Bata was the first multinational footwear manufacturer started its operation in 1962 at
Tongi, Bangladesh. The company suffered a lot during the war in terms of manufacturing
and making business but, reestablished after newly born country. Since then Bata is the
largest retailer and footwear manufacturer in the country despite the presence of new
strong competitors entering into the market. Its major production activity take place at
Dhamrai Tannery Effluent Treatment Plant (ETP) which was established at 1988.Major
production works is still operated at Dhamrai but there is some small production facility
at Tongi corporate head office. Its retail presence enormously spreads throughout every
part of the country. They have 261 retail outlets which have been directly monitored by
Bata due to its high volume of sales and profitability. Bata outlet at Bashundhara City
Mall which is one of the exclusive Bata store in the country which generates the highest
selling volume and this is the largest Bata outlet in the world. They also have 13
wholesale depots located in important cities throughout the country and responsible for
satisfying local retail demand.[ CITATION Bata19 \l 1033 ]
For over 13 decades, Bata has been on the leading edge of footwear design. Today,
professionals in Bata’s Shoe Innovation Centers around the world continue the tradition
of innovation as they dedicate themselves to discovering new shoe materials,
developing modern shoe technologies, and creating fresh footwear that combines style
with comfort.
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1.1 Objective of the study

The objectives of our study are given below:
 Implementing the knowledge we gathered from the course called strategic

management.
 Identifying the strategic execution process of Bata shoe company Bangladesh
Ltd.
 Analyzing the footwear industry with help of porter’s five process model.
 Analyzing micro & macro environment of the footwear industry.
 Identifying company’s strength & opportunities as well as weakness & threats
related to Bata shoe company Bangladesh Ltd.
 Drawing the value chain activities of Bata shoe company Bangladesh Ltd.
 Interpreting the results & establishing appropriate strategies suited for Bata shoe
company Bangladesh Ltd.
1.2 Methodology
The research process for this report is mostly based on qualitative data, which is
secondary data gathered from Annual reports, Journals, Articles & News, and Websites
as well as Wikipedia & also textbooks.
We used exploratory research technique in order to aggregate the information we need

to establish an authentic report. The report contains data that are required to be
analyzed & at the same time it also leads to interpretations useful understand
company’s market position, market growth, opportunities as well as threats related to
the specific industry or in a region.
This report has different types of analysis attached to it like, porters five forces, PESTEL,
& SWOT analysis as well as the report also includes porter’s five process model & value
chain analysis. These tools of analysis can measure company’s efficiency & effectiveness;
also it will lead to the maximization of efficiency & effectiveness without deducting the
quality of the goods.
We are glad to mention you that even if we are in era of mass information, but still we
were able to alleviate biased information & gathered only authentic information to
create a quality report.
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2.0 Bata shoe company Bangladesh Ltd.(Profile)
2.1 Present condition of Bata

This company started in 1894 from Czechoslovakia currently known as the Czech
Republic. Bata Shoe Company is the biggest manufacturer and market leader of the
footwear industry in Bangladesh.
Throughout the world Bata has develop a vast distribution channel that is shown below:
Today Bata’s operation:
 Bata serves 1.5 million customers each day

 It has 60,000 people as stuff members
 They have 5250 retail outlets over the world
 Bata’s retail facility covers 70 countries
 They have 27 manufacturing plants situated in 22 countries
2.2 Leaders in action:
The important members of the Bata shoe company Bangladesh Ltd.
Name of the Management team Designation

Chitpan Kanhasiri Managing Director
Mr. Muhammad Sohail Aslam Finance Director
Mr. Syed Zahidul Islam Head of Human Resource
Mr. Omar Faisal Chowdhury Non Retail Sales Manager
Mr. Patricio Andres Alegris Oteiza Product Development Manager
Mr. Lee Sin Kee Retail Manager
Mr. A. A. Md. Arfanul Hoque Merchandising Manager
Mr. Jalil Ahamed Chowdhury Supply Chain Manager
Table-01: key people [ CITATION SMR19 \l 1033 ]
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2.3 Organogram of Bata shoe company Bangladesh Ltd.
Company Manager
CFO Marketing Retail Wholesale Purchase Production Merchandising Product H.R

Develop
Depot Distribution
A/C VAT Audit MIS

DPS/RWD AUB LAB CDC
City Central East/West
Store Store Store
Figure-01: Management Hierarchy of Bata shoe company Bangladesh Ltd. [ CITATION

SMR19 \l 1033 ]
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3.0 The strategy making, strategy & executing process of Bata shoe
company Ltd.
3.1. Vision & Mission

Bata Shoe Company has been successfully running for years with a vision and mission at
the heart of all its operations.
Vision
 “To make great shoes accessible to everyone.”
Mission
 To help people look and feel good.

 To be the customer's destination of choice.
 To attract and retain the best people.
 To remain the most respected ‘footwear’ company.
3.2. Objectives:
 Achievement of 100% estimated business in each category
 Maintain a shoe line with 700 lines of which 200, 300, 150 & 50 lines for
Men, Women Children & Plastic respectively.
 Introducing of shoe lines according to the life style as well as fashion trend.
 Achieve an average 55% margin in each category
 Innovating ideas or system for better management of merchandise

distribution by maintaining 4 times stock turn.
3.3. Crafting strategy to achieve objectives and visions:
As indicated the task of Bata’s stitching a strategy together entails addressing a series of
“Hows”; how to attract and please customers, how to compete against rivals, how to
position the company in the market place, how to respond to a changing market
conditions. The more Bata’s business environment is changing, the more critical it
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becomes for its managers to be good entrepreneurs in diagnosing the direction and
force of the changes under way and in responding with timely adjustments in strategy.
3.4. Executing Strategies:
 Penetration to new & targeted market segments through introduction of

shoe lines as per life styles with supportive promotion activities
 Defined number of lines, assortment & quantity for each store according to
merchandise classification & store profile in order to increase efficiency in
distribution.
 Identification of loopholes in cost structure to increase production efficiency.
 Detail analysis of price points of entire shoe line in order to achieve

maximum margin.
 Detail analysis of departmental work flow & bringing necessary changes for
efficiency better coordination with other departments.
3.5. Evaluating performance and initiating corrective performance:
Monitoring internal & external developments, evaluating the progress and making
corrective adjustments; Bata decide whether to continue or change the company’s
visions and mission, objectives, strategy, or strategy execution process. As long as Bata’s
strategy continues to pass the three tests of a winning strategy (good strategic fit,
utilization competitive advantages & continuation strong performances) Bata’s
executives decides to stay in the course. Simplifying & tuning the strategic plan and
continuing with efforts to improve strategy execution that is sufficient.
Bata trying to use new forms of technology MIS department will monitor their whole
operation. The POS system in the wholesales depot is useful for this process.
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4.0. Porter’s five forces model implemented in Bata shoe company

Bangladesh ltd in the ‘footwear’ industry
Porter's Five Forces is a business analysis model that helps to explain why different
industries are able to sustain different levels of profitability. The model was published in
Michael E. Porter's book, "Competitive Strategy: Techniques for Analyzing Industries and
Competitors" in 1980. The model is widely used to analyze the industry structure of a
company as well as its corporate strategy. Porter identified five undeniable forces that
play a part in shaping every market and industry in the world. The forces are frequently
used to measure competition intensity, attractiveness, and profitability of an industry or
market. These forces are:
1. Competition in the industry
2. Potential of new entrants into the industry
3. Power of suppliers
4. Power of customers
5. Threat of substitute products
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Figure- 02: Porter’s five forces model.
4.1. Threats of new entrants: The potential for earning abnormal profit will attract
new entrants of an industry, where the very threat of new firm entering an in industry
potentially constrains the pricing of exiting firms within the ‘footwear’ industry.
Therefore, the case with which new firms can enter an industry is a key development of
its profitability.
Threat of new entrants is high in Bangladesh because apex in Bangladesh already

entered into the market as a domestic shoe industry with high expectations and good
management apart from that foreign competitions like liberty of India which already
taking a grip into the shoe market especially the women segment. There are also some
other foreign shoes manufacture like Nike, Reebok, Adidas and woodland.
There are also some other domestic companies like Baly, Pegasus, and homeland etc. So
the road ahead for Bata is not smooth at all and to forget the independent sellers. And
smuggled shoe sellers who already have the highest market share. Bata has to go for
variety in the product category as well as their durability for which they are known for
long.
4.2. Rivalry in the industry: In most industries, the average level of profitability is
primarily influenced by the nature of rivalry among exiting firms in the industry.
Though Bata has enjoying quite a good market shore and know the market for long the
market competition is intensifying day by day. In the decades the only worry for Bata
was independent sellers who have the minimal establishment costs and in many cases
they sale shoes of high quality design at minimal cost on poor quality shoes. But the
situation has been changing much since now not only the independent seller but also
the regional and world famous brands are now in Bangladesh. So, the competition has
become much more intense. Bata Bangladesh has to think both of their old threats as
well as new competitors who has much more organized structure than the old
competitors.
Bata’s switching cost are not so high and exist barriers are at condition in Bangladesh
leather industry.
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4.3. Threat of substitute products: Another competition in an industry is the

threat of substitute product or service, relevant substitutes are not necessary to those
that have the same style as the existing products, but those that actually perform the
same function.
There are ecofriendly shoes available, which are stylish and quiet quick in decomposing
in to the nature. But Bata is aware about differentiating their products and minimizing
their costs through economies of scale. Leather industry’s production cost is moderately
low in Bangladesh so there is one way to see as Bata’s threat because of innovative
startups but from the perspective of a market leader (Bata) cost leadership can be
certain expectation. Other things is switching cost is low.
And Bata’s every product price is reasonable but recently their quality is decreasing in
the market. This is an important part for Bata to focus on quality assurance along
efficiency.
4.4. Bargaining power of suppliers: The bargaining power of suppliers is a major

part of the analysis in order to identify the influences in cost of production that can lead
to increase in the bargaining power of buyers in an industry. In the leather industry
there are some leather companies who’s supply power is higher than other leather
companies because they provides differentiated product.
Bata also provides the differentiated products to the consumer so the barging power of
supplier is relatively moderate and there are more suppliers that deal with Bata’s
company. In the upcoming of Bata and other shoe companies’ buyers will be so much
quality concerned that the suppliers have to satisfy them even if by increasing quality
and decreasing price. The threat of forward integration by the suppliers is high as brand
identity is not a critical issue in the shoe industry in many cases.
4.5. Bargaining power of buyers: The bargaining power of customers is also

described as the market of outputs. The ability of customers to put the shoe firms under
pressure, which also affects the customer’s sensitivity to price changes.
Bargaining power of buyers is increasing day by day as new shoe companies with
optimistic future plan and changing trend and quality consciousness is increasing day by
day. People want durable shoes as well as modern designs. So to satisfy the customers
the companies have to keep up with the trend as well as the entrance of foreign brands
like Nike, reebok doesn’t make the scenario easier. Soon they have to say that the
competition is just heating up in the shoe industry, where no one can take it easily even
the established brand like Bata who have more than 35 years of experience in
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Bangladeshi market. So they must be aware of the situation and work and take steps
accordingly.
4.5.1. Analysis of competitors:

Apex: Most of their shoes are expensive they don’t provide any school shoes; they
remain open on every day of the week except any government holidays. They provide
new design after every 6 months according to their employees. The most successful
sales companies are 60% off on specific design. Their market share is about 1.50% in
Bangladesh.
Liberty: Here in this shoe stores the average price of the shoe are also expensive .their
average retail price is tk. 600+. They also have the same kind of offerings in their
respective divisions. After 3-6 months they bring new design shoes. The market discount
on specific design shoe is about 1%. They are in the market for about 13years as a
franchise they are from India.
Reebok: They only sale sports shoes and some children shoes who are in their teens.
The price of all shoes is high tk. 1200+. The color and design of their shoes are of high
quality. Reebok brings different types t-shirts, tracksuits and non-shoes items, which are
quite expensive. After every 1-2 months new designed of shoes arrives in their store, 20-
25% discounts on specific design are their most effective sales campaign. About 10%
market share reebok is quickly gaining ground and getting attention of the brand
conscious segment of the country.
Nike: Same as reebok, Nike only offers high quality sports and some children shoes.
Their shoes are also expensive sports shoes ranging from tk. 1200-5000, which are sold
most. Best sold non-shoes item such as t-shirt, tracksuit are ranging from 750-2250 taka.
They open the store every day of the week. They brought new design in the market after
every 3 months. They don’t have any sales campaign up to now in Bangladesh. [ CITATION
Riv13 \l 1033 ]
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5.0. Macro environment Analysis by using PESTEL analysis: A PESTEL

analysis is a framework used by marketers to analyze and monitor the macro-
environmental (external marketing environment) factors that have an impact on an
organization. The result of which is used to identify threats and weaknesses which is
used in a SWOT analysis.[ CITATION goo13 \l 1033 ]
5.1. Social and Cultural Factors of Bata shoe company Bangladesh:

People’s lifestyle is changing with the increase in disposable income and more and more
people are becoming quality and fashion conscious. Since people travel more and more
they know what the others as well as Bata store offers to them elsewhere. So Bata
Bangladesh must have to come out of their old styling and store design transformation
to suit with more modern fashion. Social and cultural indicators are positive signal for
the future prospects of the company.
5.2. Political and Legal Factors: In Bangladesh, political turmoil like hartal, strikes
etc. are a serious barrier in the smooth functioning of a company. However, Bata
Bangladesh is able to take some positive outputs from political factors. As they are 100%
taxpayers to Bangladesh government, they must be able to make understand the
politicians the importance of FDI in the country. Therefore, Bata Bangladesh can get
some benefit from political factor as well.
Bata maintains a comprehensive audit checklist adopted by LFMEAB Compliance Cell

used throughout the audits on the basis of Bangladesh Labor Law 2006, relevant ILO
convention & recommendations ratified by Bangladesh and relevant Leather industry
laws and rules, including environmental law.[ CITATION LFM19 \l 1033 ]
5.3. Economic Factors: Per capita income is increasing. Shoe industry is growing
with the increase of urban population and income level. Currency rates are fluctuating
which influence the cost of procurement of raw materials from external sources.
In august 2019 leather prices fall because of the syndicate created by all the raw leather
manufacturers in Bangladesh. This can be a benefit for Bata shoe Bangladesh.
5.4. Technological Factors: Due to vast improvements in the information

technology systems, ‘Internet’ has posed itself to be new media to reach the consumers.
Realizing the need and the opportunity Bata Bangladesh has already set a state of the
art facility in Dhamrai. 92% of all the leather products they produce here in Bangladesh.
They provide new forms of technological improvement where MIS department monitor
their whole operation. The POS system in the wholesales depot is also a positive step
towards good use of technology in the survival and competition in today’s business.
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Robotic shoe and leather manufacturing machinery are not yet available in Bangladesh.
[ CITATION Ass17 \l 1033 ]
The tunnel system of Bata, it is a built- in shock absorber incorporated to spare the
joints and keep the wearer upright. It acts by spreading the load and giving the heel
extra stability.[ CITATION Bata19 \l 1033 ]
5.5. Environmental factor: Bata is company that serves Bangladesh for a long
time; they also have a duty towards the society and environment as a whole. Due to
climate change sea levels are raising, waste like, plastic, lace and leather processing
chemicals are getting contaminated in the water as well as in landfills.
Bata needs innovation through their R&D to have a sustainable growth without
damaging the environment, building ecofriendly products. For climate management
Bata Industrials uses genuine and breathable leather upper along with moisture
absorbing linings which ensure a soft, dry and fresh feel by expelling the moisture to the
outside.[ CITATION Bata19 \l 1033 ]
Bata as an international company dedicated to the future needs of workers we invested

in research, supply chain, quality manufacturing and innovating new products around
the world. We believe that safety for every working human being should be accessible,
to the highest standard, even in extreme conditions. Safety should not be optional in
any work environment.[ CITATION Bata19 \l 1033 ]
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6.0. SWOT analysis of Bata shoe company Bangladesh ltd.
SWOT analysis is a strategic planning technique used to help a person or organization

identify strengths, weakness, opportunities, and threats related to business competition
or project planning. It is intended to specify the objectives of the business venture or
project and identify the internal and external factors that are the favorable and
unfavorable to achieving those objectives.
6.1. Strengths:
 High quality products
 Strong brand image
 Huge Financial backup
 Extensive product lines
 Strong and mass distribution network
 Wide range of associated bands
 Skilled management team
 Modern manufacturing facilities
 Potential target market
 Loyal customers
6.2. Weaknesses:
 More emphasizes on quality rather than design
 Lack of promotional activities
 Less effort to attract new customers
 Inability to catch the present trend time
 VAT & tax barrier
6.3. Opportunities:
 Consumers like differentiated products, they also likes to shop in a store where
they can buy shoe for whole family (different age basis).
 More competition results in more campaign for products.
 Business expansion through diversification.
 Utilize the broad product category.
 Strategic alliances, opportunity work with global brands like Nike, Rebook etc.
 Better customer service.
 Rise in export.
 More emphasize on product quality and design.
 Strong retail store network.
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6.4. Threats:
 Any political instability affects the supply of raw materials and distribution of
finished product.
 Artificial intelligence (AI) based machinery for manufacturing.
 Uncontrolled counterfeit of Bata product in uncontrolled location.
 New companies are invading in Bangladesh like Apex, Homeland, Pagasus.
 Rapid market expansion program organized by companies like Apex.
 Switching new generation to trendy products.
6.5. Current Challenges & things to overcome them:

Bata needs to maintain shoe styles based trend, what consumer actually wants to wear
& also they need make sure the quality does not get hampered in the process. Bata
must start promoting their brand to the youth as well as to the current adulthoods
through online and offline marketing programs, build superior customer value, including
promotions like, discount offer, membership card etc.
6.6. Utilizing opportunities:
Bata just have to be conscious about what their next step should be, in order to do that
they have many option to choose from but from our opinion, Bata’s differentiation and
cost efficiency cannot be done at the same time. They can use both cost leadership &
focused differentiation strategy as a solution. Bata can seek growth through
diversification in another industry related of nonrelated. The ultimate goal is to satisfy
and serve customer as much as possible.
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7.0 Drawing the value chain activities of Bata shoe company Bangladesh
Ltd
Value chain of Bata Bangladesh:
Firms Infrastructure
Procurement
Technological Development
Human Resource Development
Inbound Logistics Operations Outbound Marketing & Services

Logistics Sales
Raw material: > Produces > Collection > Tag line, >Warranty
shoes in their of finished print ads
 Leather >Exchange or
own products
 Rexene > TV ads refund
manufacturing
 PVC sole >Logistics
plant > Road side >Customer
 Nylon net
>Distribution advertising, care and web
 Rubber > Provide
across the Banners access.
 Elastic employees
country &
 Lase exceptional > Online ads,
throughout
 Chemicals working social media
the world
condition & ads
from
community
distribution > Discount
facilities.
hub or gifts
channel.
>New stores,
Retail Shops.
Table- 02: Value chain of Bata
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7.1. Assessment of value chain activities of Bata shoe company

Bangladesh Ltd
Bata shoe company Bangladesh is the market leader of ‘footwear’ industry in
Bangladesh since it started it’s journey in 1962. The name Bata positioned itself in their
consumer’s mind that whenever they (consumers) hears about Bata consumers
imagines a bundle that has style & quality (comfort and durability), which can be
achieved at affordable price ranges based on consumer’s purchase power. Bata has
been serving it’s consumer for more five decades with wide ranged product category
that is continuing to satisfy the consumer demands. Bata has a unique value chain with
a combination of environment consciousness in each set of operation.
7.2 The primary parts of Bata shoe company Bangladesh: From the view of
value chain process there are 5 parts that an organization identifies as primary parts of
their business.
7.2.1. Inbound logistics: Leathers is the key raw material for Bata which are
collected from different parts in Bangladesh. They collect raw leather from supplier and
then process them in their manufacturing plant (modern tannery) that is built with
sophisticated technological facilities that can produce five million square fits of leather
in a single year. Bata also collects finished leather from local tannery Hezerybag; now is
in Savar Bangladesh. Other raw materials like Rexene, PVC sole, nylon net, rubber &
chemicals are collected from China.
7.2.2. Operation: Bata has two factories one is in Tongi, Gazipur and another one is
in Dhamrai, Savar. All the rubber related productions are done in Tongi factory. On the
other hand all leather related productions are done in Dhamrai factory. All most 92% of
all Bata products are produced in these two factories [ CITATION Scr19 \l 1033 ]. Each
factory can produce 4,000 pair per hour, where the factory is monitored by plant
managers. The plant managers are responsible to the production director. The
managers are responsible for directing, controlling, & coordinating with workers as well
as the overall production starting from purchasing raw materials and turning them into
complete shoes. The production manager’s work is to assist the director of production
in order to achieve the production target for specified period of time. Other functions
like planning & supply manager’s measures the production material needed for
production as well as how the production process should be occupied.
7.2.3. Outbound logistic: The finished products are then sent to CDC (central
distribution center) in Tongi factory. After receiving the finished products the packaging
is done according to the requirements of different stores, agencies, dealers &
22 | P a g e
wholesalers. All the goods are transferred directly to the distributors by using company
owned vehicles. Bata has separate process for own agencies and stores; another system
for wholesalers & dealers. The goods for agencies & stores are sent straight to the store
headquarters and goods for others are sent through 13 depots around the country from
where they collect the goods.[ CITATION Bata19 \l 1033 ]
7.2.4. Marketing & sales: Bata’s marketing activities are depended on market &
consumer behavior research in order to be aware about current market situation as well
as current consumer needs & demands, which will lead them (Bata) to ask the
questions, that what could be the next move of the rivals, threats of new entrants; what
are the trends followed by Bata’s targeted consumer and also what are happening in
other markets to identify the scopes of diversification. Bata’s marketing department is
also concerned about planning, implementing & controlling of persuasive
communication with customers like, advertising (online & offline), sales promotion,
which also includes personal selling. The matter of fact is Bata is an established brand
here in Bangladesh as well as they are still holding the maximum portion of market
share, which makes them market leader in the ‘footwear’ industry here in Bangladesh.
Bata thinks that they should go on with more and more outlets rather than intense
advertising. [ CITATION Scr19 \l 1033 ]
Which is a right decision for a certain level but they also requires nurturing their position
in the market place by positioning their brand in minds of their actual & potential
customers.
70% of Bata’s sales revenue comes from it’s own retail outlets. Besides there is a
network of approximately 500 exclusive wholesalers, who serves 300 retail stores all
over the country; including wholesale depots and distribution centers around the world.
[ CITATION Scr19 \l 1033 ]
7.2.5. Services: In Bata’s stores in the world they repair, exchange or refunds any
products if defects are founded. They also exchange or refund unworn merchandise if
one changes one’s mind. Proof of purchase is required for refunds. They also provide
warranty for 6 months in their different shoe categories. Bata shoe company Bangladesh
Ltd has a customer service center and the contact address is: +88029800501-5 EXT- 209.
Bata also provides home delivery services, orders made possible through catalogue,
websites and also call centers only in mega city.[ CITATION Scr19 \l 1033 ]
23 | P a g e
7.3. The supporting parts of Bata shoe company Bangladesh: There are 4
parts that actually helps all those primary parts of an organization to run in an order of
standardization, capitalization, sophistication, coordination & digitalization; including,
development of people, planning, and process.
7.3.1. Technological development: As weekly demand reaches up to 460,000

pairs, it is very difficult to cut them by old Atom cutting machines. On that basis, a new
Thong cutting machine was introduced to meet the increasing market demand,
producing 4000 pairs in an hour. Additionally, new value added Thongs were launched
by introducing Thermal printing & PVC Bi color straps.[ CITATION Scr19 \l 1033 ]
7.3.2 Human resource development: Activities of human resource department in

Bangladesh are to ensure proper section of personnel, help the employees to grow and
develop themselves, maintenance of personnel record & maintain cordial & peaceful
labor management relationship to ensure discipline among the employees. Bata
provides a wide range of employee benefits (UK- Eassy). Beside that Bata also provides
adequate training, reduce employee turnover, takes care of employee’s physical health
& also provides motivation to improve employee’s mental health to produce world class
products. [ CITATION Scr19 \l 1033 ]
7.3.3. Procurement: In Bangladesh Bata use their own value chain to collect raw
materials. They also have high tech equipment & machinery for mass manufacturing. In
rare cases, Bata uses third parties if needed.
7.3.4. Firms infrastructure: The finance department of Bata shoe company

Bangladesh ltd. tries to allocate the funds in an appropriate way that minimizes the cost
& maximizes the profit. To maintain the growth of the organization Bata allocates
resources in R&D, it also helps innovate & creates opportunity to stay one step ahead
from their rivals. The coordination is always required for strategic development
between the departments like accounting, marketing, finance, R&D, human resource,
and the CEO as well as the board of directors.
24 | P a g e
8.0. Strategic approaches best suited to the company (Bata shoe

company Bangladesh Ltd).
Porter's generic strategies describe how a company pursues competitive
advantage across its chosen market scope. There are three/four generic strategies,
either lower cost, differentiated, or focus. A company chooses to pursue one of two
types of competitive advantage, either via lower costs than its competition or by
differentiating itself along dimensions valued by customers to command a higher price.
A company also chooses one of two types of scope, either focus (offering its products to
selected segments of the market) or industry-wide, offering its product across many
market segments. The generic strategy reflects the choices made regarding both the
type of competitive advantage and the scope. The concept was described by Michael
Porter in 1980. [ CITATION Wik12 \l 1033 ]
Figure- 03: Porter’s generic strategy
On the basis of our analysis we would like recommend that Bata must go for two
strategies at same time:
1) Cost leadership strategy

2) Focused differentiation strategy
25 | P a g e
Cost leadership strategy: Bata serves mostly middle class people, which are price
sensitive peoples as well as they lower class & higher class people as well. So, to attract
both lower & middle class people Bata must use cost leadership strategy.
Focused differentiation strategy: For higher class people Bata needs to approach a
different strategy, which is specially focused on taste, standard, preference, demand &
trends related to higher class peoples, who are quality conscious & do not care about
the price tag. Bata must use focused differentiation strategy to reach its missions &
consisting the growth as well.
9.0. Our Observation & recommendation:
We have seen the strategic execution process is well developed of Bata, starting from
crafting vision, mission & objective based strategy as well as their execution and
monitoring system are appropriate as it comes. From the view of Poter’s five forces
model Bata has to be aware of the market situation, seek opportunities for
differentiation & diversification as well as they need to be ready aware about the
threats coming towards them from current & potential competitors. The SWOT analysis
uplifts the opportunities of differentiation and diversification, market expansion etc.
Bata must use their strengths to erase those weaknesses they are or might face & they
also have to reduce the threats that might appear in future by simply being aware of
market condition & interpretation of the data. The value chain activities of Bata are
flexible they must improve their marketing strategy and needs to build strong image in
the minds of actual & potential customers. Bata also needs to be a step ahead from
their competitors by investing in innovation through R&D. The two strategies we
mentioned in the report will certainly lead Bata to best cost provider strategy, which is
the ultimate goal.
Bata is already the market leader in terms of serving the customer of Bangladesh, so
they just have to make sure that they can continue to hold that position in Bangladesh.
26 | P a g e
9.1. Conclusion:
There are some emerging shoe stores in Bangladesh which have already gained
customers loyalty in footwear products. The study compared the Bata shoe company
with other emerging shoe brands such as Apex, Reebok, Liberty & Pegasas, and many
unorganized shoe stores (independent sellers) like at Elephant road. The finding of the
study is that Bata Shoe Company is in a better position in the ‘footwear’ industry than
the competitor except serving customers up to date stylish and trendy shoes. Bata has
loyal customers group who buy Bata only for its quality. The current situation in the
economy and within the industry Bata can utilize the time and build a strong position in
the consumer’s mind. However, Bata does need some modifications in its marketing
tactics regarding attracting new customers and service offerings to the older ones. Bata
should not take the brand loyalty for granted and should take specific steps to ensure
that they can hold on to the lucrative customer base that they have while focusing on a
few informational tactics to reach potential customers. Bata is in a secure position right
now regarding customer satisfaction, loyalty, and the strategy they follow seems to be
effective. They do not need to go through any major overhauls, but, a few tweaks here
and there can be the chance of improvement upon their current position and secure
them as the market leader in times to come.
27 | P a g e
9.2. Bibliography
Bata Shoe Company Bangladesh Ltd. (2019, Auguest 20). Retrieved Auguest 20, 2019, from
batabd.com: https://www.batabd.com/pages/about-us
Ahmed, R. (2013, 6 17). Academic edcation. Retrieved 08 23, 2019, from academia.edu:
https://www.academia.edu/7967456/Final_report_of_Bata_Company?
fbclid=IwAR1EUWQkR7Jhzt68_Q90md_ejIo1ubzsaIoW42fy1Py13d20y0pqautxyJA
Alam, S. R. (2019, 01 08). Performance Analysis of Bata Shoe Company Ltd. Performance
Analysis of Bata Shoe Company Ltd., p. 51.
google. (2013, 4 01). google. Retrieved 08 23, 2019, from google:

https://www.google.com/search?
q=pestel+analysis&oq=Pestel+&aqs=chrome.1.69i57j35i39j0l4.5395j1j4&sourceid=chro
me&ie=UTF-8
LFMEAB. (2019, 08 23). LFMEAB. Retrieved 08 23, 2019, from LFEEAB:

http://lfmeab.org/services/compliance-guidance/
Point, A. (2017, 09 25). Assignment point.com. Retrieved 08 23, 2019, from Assignment
point.com: https://www.assignmentpoint.com/business/marketing-business/bata-shoe-
company-operations-in-bangladesh.html
Scribd. (2019, 08 21). scribd value chain of Bata. Retrieved 08 21, 2019, from SCRIBD:
https://www.scribd.com/document/345270522/Value-Chain-of-Bata
Wikipedia. (2012, 04 04). Wikipedia. Retrieved 08 23, 2019, from Wikipedia:

https://en.wikipedia.org/wiki/Porter's_generic_strategies
28 | P a g e

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Analysis of the ‘footwear’ industry by representing “Bata shoe company Bangladesh Ltd”

Analysis of the ‘footwear’ industry by representing

This Term paper is based on the

Analysis of the ‘footwear’ industry by representing

Masuka Nasrin Pinki 2016010000351

Riyad Hasan Rony 2016110000077

MD. Mahfujur Rahman 2016110000130

Abdullah AL Mamun 2016110000008

Submission date: 21th August 2019

21th August, 2019

Sheikh Mohammad Raihan Uddin

On behalf of my group mates

Ariful Islam Shuvo

1.1 Objective of the study

 Implementing the knowledge we gathered from the course called strategic

We used exploratory research technique in order to aggregate the information we need

2.0 Bata shoe company Bangladesh Ltd.(Profile)

2.1 Present condition of Bata

 Bata serves 1.5 million customers each day

2.2 Leaders in action:

The important members of the Bata shoe company Bangladesh Ltd.

Name of the Management team Designation

2.3 Organogram of Bata shoe company Bangladesh Ltd.

CFO Marketing Retail Wholesale Purchase Production Merchandising Product H.R

A/C VAT Audit MIS

City Central East/West

Store Store Store

Figure-01: Management Hierarchy of Bata shoe company Bangladesh Ltd. [ CITATION

3.1. Vision & Mission

 “To make great shoes accessible to everyone.”

 To help people look and feel good.

 Achievement of 100% estimated business in each category

 Achieve an average 55% margin in each category

 Innovating ideas or system for better management of merchandise

3.3. Crafting strategy to achieve objectives and visions:

3.4. Executing Strategies:

 Penetration to new & targeted market segments through introduction of

 Identification of loopholes in cost structure to increase production efficiency.

 Detail analysis of price points of entire shoe line in order to achieve

3.5. Evaluating performance and initiating corrective performance:

4.0. Porter’s five forces model implemented in Bata shoe company

1. Competition in the industry

2. Potential of new entrants into the industry

5. Threat of substitute products

Figure- 02: Porter’s five forces model.

Threat of new entrants is high in Bangladesh because apex in Bangladesh already

4.3. Threat of substitute products: Another competition in an industry is the

4.4. Bargaining power of suppliers: The bargaining power of suppliers is a major

4.5. Bargaining power of buyers: The bargaining power of customers is also

4.5.1. Analysis of competitors:

5.0. Macro environment Analysis by using PESTEL analysis: A PESTEL

5.1. Social and Cultural Factors of Bata shoe company Bangladesh:

Bata maintains a comprehensive audit checklist adopted by LFMEAB Compliance Cell

5.4. Technological Factors: Due to vast improvements in the information

Bata as an international company dedicated to the future needs of workers we invested

6.0. SWOT analysis of Bata shoe company Bangladesh ltd.

SWOT analysis is a strategic planning technique used to help a person or organization

6.5. Current Challenges & things to overcome them:

6.6. Utilizing opportunities: