Bata BCG matrix, swot analysis and PEST analysis

Bata BCG matrix, swot analysis and PEST analysis

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INTRODUCTION

Bata India is the largest retailer and leading manufacturer of footwear in India and is a part of
the Bata Shoe Organization. The parent company Bata was founded by three siblings; Tomas
Bata, his brother Antonin and his sister Anna with a small inheritance in the town of Zlin,
Czechoslovakia on August 24, 1894. Initially known as Bata Shoe Company, it was one of
the world‘s first shoe manufacturers; a team of stitches and shoemakers creating footwear not
only for friends and local residents, but also for distant retail merchants.
Key Events:-
 1905: Tomas Bata introduced mechanized production techniques that allowed the
Bata Shoe Company to become one of the first mass producers of shoes in Europe.
 1914: The company had a significant development due to military orders.
 1928: The company‘s head factory in Zlin was expanded as demand for the
inexpensive shoes grew rapidly.
 1931: Bata Shoe Organization setup factories in Germany, England, The Netherlands,
Poland, France, Austria, Romania, Sweden, Switzerland, Egypt, Belgium, Finland,
Luxembourg, Hungary, Italy, Indonesia, Singapore and India.
 1932: Tomas Bata died in a plane crash and control of the company was passed to his
half-brother, Jan, and his son, Thomas John Bata.
 1939: Due to the outbreak of World War II Thomas Jan Bata decided to move Bata
Shoe Organization to Canada established the Bata Shoe Company of Canada. By
 1950: Bata was positioned as the world‘s leading footwear exporter. From its new
base in Canada, the company gradually rebuilt itself, expanding into new markets
throughout Asia, the Middle East, Africa and Latin America.
 In 1970s, 80s and 90s: Bata continued to grow through its new, innovative strategies
guided by Bata‘s founding principles which focused on customers, marketing and
employees.
Today, Bata has a retail presence in over 70 countries across five continents, with a million
customers per day. It employs more than 40,000 people in its 5,000 retail stores, manages 27
production facilities. The acting headquarters of Bata Shoe Organization is located in
Lausanne, Switzerland. There are 3 main Business Units: Bata Europe, based in Italy; Bata
Emerging Market (Asia Pacific, Africa and Latin America), based in Singapore, and Bata
Protective (worldwide B2B operations), based in the Netherlands.
Type: Private company
Industry: Retail and Manufacturing

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Headquarters: Lausanne, Switzerland.
Area served: Europe, Africa, Asia, Latin America
Chairperson: Christopher Kirk
Products: Footwear, clothing and accessories
Owner: Bata family
Motto: We love shoes!!
Website: www.bata.com
VISION
“To make great shoes accessible to everyone”
MISSION
 To help people to look and feel good by continuously focusing on product quality,
innovation and value.
 To become the customer’s destination of choice by offering a personal shopping
experience to create long-standing customer relationships.
 To attract and retain the best people by showing great leadership, a passion for high
standards, respect for diversity and a commitment to create exceptional opportunities
for professional growth.
 To remain the most respected footwear company by being socially responsible and
ethical in everything the does and a credit to every community in which it operates.

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OBJECTIVES OF THE STUDY
 To identify and analyse the Strengths, Weaknesses, Opportunities and Threats of
Bata Company.
 To recognise the market growth rate and market share of Bata products by
conducting BCG Matrix.
 To analyse the Political, Economic, Social and Technological factors
influencing/affecting the operations Bata company.

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SWOT ANALYSIS
A SWOT analysis is a study undertaken by an organization to identify its internal strengths
and weaknesses, as well as its external opportunities and threats.

STRENGHTS
Global Presence: Bata is present in more than 70 countries, with production facilities
in 27 countries. This makes Bata a global player and hence not dependent on a single
market.

Market Penetration: Bata has penetrated the market really well. Bata is present in
large cities to small towns. This helps in maintaining its customer base and also
capturing the new demand created in the market.

Strong Distribution Network: Bata has a very strong distribution network
throughout the world with about 5000 retail stores worldwide out of which more than
1200 are located in India.

Excellent positioning: Bata has positioned itself really well as a fashionable yet
affordable footwear brand.

Cost Advantage: It is quite clear that Bata has the cost advantage and is able to
manufacture a huge range of footwear’s at a very affordable price.
Global Presence
Strong Distribution
Network
Strong Distribution
Network
Excellent positioning
Cost Advantage
Lim ited market
share due to
com petition
Falling Sales
Low quality image

Footw ear as a
Fashion statement
Grow ing Rural
Market
Grow ing demand in
the premium
footwear category
Intense
com petition
Duplicity in the
m arket

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WEAKNESS
Limited market share due to competition: Bata has been subjected to high
competition which doesn’t allow Bata to have a high market share. Bata’s market
share has been reduced to 6 per cent.
Falling Sales: Bata India’s year on year sales has been on a downturn. Although the
company’s profits have been increasing.
Low quality image: Because of the low pricing of Bata shoes, most consumers think
the quality of the shoes will be low as well. This is a typical price quality approach of
positioning.
OPPORTUNITIES
Footwear as a Fashion statement: Footwear’s are now considered fashion statement
and hence sales are bound to increase. This creates an opportunity for Bata to enhance
its revenues.
Growing Rural Market: Bata has a strong presence in the emerging nations. Rural
market in the emerging nations is growing at a high rate. Bata needs to take advantage
of the demand created in the rural market. This will help in improving its bottom-line.
Growing demand in the premium footwear category: There is a growing demand
in the premium footwear industry, especially in the emerging nations where the
standard of living is growing.
THREATS
Intense competition: Bata is facing intense competition from other leading footwear
brands like Liberty shoes, Metro shoes, Red tape in all the categories and hence
enlarging its customer base and market share is becoming difficult.
Duplicity in the market: The Footwear industry is also subjected to duplicity in the
market, which not only decreases sales but also weakens the brand name.

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BCG Matrix Analysis
The Boston Consulting Group (BCG) Matrix helps an organization to recognize the business
units that are growth oriented and the products in the portfolio that have low growth chances.
The management can direct their efforts towards the growing segments and make divestment
decisions for the unprofitable ones. Bata has been analyzed through BCG Matrix as outlined
in the following section:






Cash Cows
The cash cows are the main source of financial stability for an organization. These products
have created a strong hold in the market and were able to establish a high demand among the
consumers. This strong position has enabled these products to become the main source of
earnings for a business entity. Some items manufactured by Bata can be seen as cash cow
because they have been a major source of revenue for the company and had sustained its
profitability over the years. The school shoes being manufactured by the company are a cash
cow for Bata as the industry has matured over the years, and the demand for the school shoes
has gradually increased. The market share of Bata in the school shoes category is also stable,
which has led to the conclusion that school shoes are a main source of earning for Bata. Apart
from school shoes, Bubble Gummers brand has become a cash cow owing to the high sales it
creates for the company in the global market.
RELATIVE MARKET
SHARE
M
A
R
K
E
T

G
R
O
W
T
H

R
A
T
E
HIGH
HIGH
LOW
LOW

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Stars
The products which generate enough amount of revenues for the firm to be deemed as
profitable, yet have the chances of expanding further are termed as Stars. One of the reasons
why stars have a chance of growth in future is that the industry has scope for growth,
consequently supporting the increasing market share of these products. The star products can
later on become a leading source of profitability for the firm when the market reaches
maturity and no further increase in market share is expected, thus indicating that the stars can
become cash cows, depending on the favourable market conditions. These products have
some chance of improving their financial performance as the industry has the potential to
progress, offering growth opportunities to the question marks. Bata has moved beyond its
regular school shoes image and created a position as a brand that offers contemporary shoes
and accessories that are in accordance to the fashion trends and appeal the youth. For
instance, Marie Claire is one such addition to the Bata product range which is a rising star.
The shoes and hand bags under the brand Marie Claire are designed for women who seek
footwear and accessories that are suitable for their professional lifestyle. There are other
brands that have created a strong presence in the market such as Ambassador, Weinbrenner
and Comfit have been in high demand, and their market share is likely to increase in future.
Question Marks
In the product portfolio being managed by an organization, some products have lower
profitability as compared to cash cows and stars. In addition to the weaker financial return
yielded by these products, the future progress of the products termed as question marks is
marked by uncertainty. If the market conditions are favourable and products are able to
generate a high market share, it can become a star. On the other hand, being restricted by
market conditions and continued poor performance can lead to slower growth of market
share. Products such as shoe care products have not been able to create a significant position
in the market as compared to its shoe brands that have generated high sales, making it a
question mark. The management at Bata can invest in these products as there is scope for
further growth. The leather shoe cream, for instance targets the customers who purchase
leather shoes. This pairing can help Bata in driving up the sales in this domain, making this
product move out of the question mark category.
Dogs
The products or business units that are continuously underperforming despite the investment
and marketing initiatives taken by the company are regarded as dogs. These products are not
likely to experience any significant improvement as the market conditions are not favourable
and the industry doesn’t have any noticeable capacity for growth. The poor outlook of growth
in terms of market share makes these products a challenge for the organization as they keep
on taking up the investment but not generating a high return. One of the probable actions
taken to deal with these products is to sell them off to other firms, or discontinue the
manufacturing to stop further loss. Even though the products manufactured by Bata have
been readily accepted and became high demand items in the footwear industry, some of the
products have not generated the desired level of sales. In the category of accessories, socks
and shoe laces manufactured by Bata have achieved low sales. As a result, the company has
to reconsider its investment decision in this category, by shifting the investment to more
profitable units and decreasing the focus on socks and shoe laces.

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PEST ANALYSIS
PEST Analysis (Political, Economic, Social, and Technological) is a method whereby an
organization can assess major external factors that influence its operation in order to become
more competitive in the market.


POLITICAL
 The GST rate on leather goods is at 28%, making leather shoes more expensive.
 Government initiatives to attract foreign direct investment.
ECONOMIC
 Rising disposable income and consumers increasing spending.
SOCIAL
 Consumer attitudes and opinions changing favourably towards branded shoes. They
prefer buying a relatively expensive shoe rather than the one which is cheap with less
durability.
 With various schemes promoting primary and secondary education, more students are
enrolling in schools and colleges, creating a demand for school footwear.
TECHNOLOGICAL
 Bata’s rival companies are using digital media for their product advertising and
sponsoring at major events organised in India.
 Many footwear companies are focusing on product innovations enhancing comfort,
agility and durability posing a threat on Bata’s market share.

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Bibliography
https://www.scribd.com/presentation/311040292/PESTEL-Analysis-of-bata-liberty-
relaxo
https://www.marketing91.com/swot-analysis-bata/
http://bcgmatrixanalysis.com/bcg-matrix-analysis-for-bata/
https://en.wikipedia.org/wiki/Bata_Shoes
http://www.investopedia.com/terms/p/pest-analysis.asp