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BATA: STRATEGIC CHOICES

Presented by Ayaan Saeed Fatima Majid Ifrah Jamal Sehar Fatima

INTRODUCTION

The case talks about the challenges faced by Bata management in

the wake of changing market trends


Medium Quality Medium Price Products Caters to lower and middle income market Also competing in the upper middle class The MD is considering the efforts to realign Bata's Manufacturing, outsourcing, distribution and brand strategy in the light of increased competition and Chinese imports.

Ratios

NP margin, ROA, ROE Increased Current ratio decreased but remained above 1 Current Ratio Decreasing Means, liabilities Increasing- Increasing Trade Debt

FootWear Export
10000 9000 8000 7000 $$ Millions 6000 5000 4000 3000 2000 1000 0 World Pak China 1996 43611 51 6859 1997 44228 48 8186 1998 41187 39 8155 1999 39735 38 8464

Declining for Pakistan Increasing for China every year

ISSUE
Increased competition & Chinese Imports

Sharpe increase in Trade Debt

Brand lack premium Image

Agencies hurting Bata Image

Popular design imitation

Changing consumer preferences

Low product life cycle Whether to outsource or in-house a particular product line

CORE ISSUE

How to re-position themselves in the minds of consumer given that they have entered the women fashion footwear segment and the premium segment?

DECISION CRITERIA

Absolute good quality Increase market share strong distribution channels Cater to middle to upper class markets Reduce the ABUs

ALTERNATIVES Evaluate major options in the 3 major functional area


1. 2. 3.

Manufacturing Distribution Branding

PROPOSED STRATEGY

Bata should exit from the lower end segment and focus more on the middle and upper middle class of the society

growth in numbers of people belonging to these segments people are becoming quality conscious

To deal with Chinese competition- need to enhance its brand equity


Batas image has been created over its existence of around 40 years

POSSIBLE SOLUTION
Use a Mix of strategy which includes the following:

Respond to competition from Chinese imported shoes and other local shoes By building a strong relationship with customers Focus on quality Enhance brand equity and brand loyalty Make use of the lower quality being offered by Chinese products
1.

2) Brands: Batas traditional product offerings- known for its functional footwear offering utility and reliability etc

Not in a position to challenge the supremacy of local, more responsive and trendy stores famous for women footwear Brands like Slazenger and Hush Puppies which have their own stores

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