If we take a expression at the history of footwear industry in India. we shall see that Bata India has been the emperor of footwear merchandises. Bata had such a good tally that it about became a generic name for places. Peoples used to travel to stores and merely inquire for Bata and non any other trade name.
But today. the trade name is confronting stiff competition from other participants. A host of other jobs have cropped up and added to their sufferings. In this instance. we shall seek to analyze how Bata slipped down and what they are making to repossess the lost throne.
Bata was established by Thomas Bata on August 24. 1894 in Zlin. Czechoslovakia. The company was incorporated in India in 1931. The production of footwear started in 1933 in rented premises at Konnagar. near Kolkata. where for the first clip gum elastic and canvas places were manufactured in India.
The first fabrication unit was set up. at a topographic point called Batanagar. The mill shifted from Konnagar to Batanagar in 1936. In 1940-45. during World War II. the factory’s production was geared to run into war demands. In 1950. Bata successfully launched the trade name Hawaii. In 1952. one of Asia’s largest tanneries was set-up at Mokamaghat. Bihar. In 1988. The Bata mill was set-up in Peenya. Bangalore. In 1993. Batanagar mill became the first Indian shoe-manufacturing unit to have ISO 9001 enfranchisement.
Presently. the production units of the company are situated in Batanagar ( West Bengal ) . Faridabad ( Haryana ) . Bataganj ( Bihar ) . Mokamaghat ( Bihar ) . Bangalore ( Karnataka ) and Hosur ( Tamil Nadu ) . Bata India Limited industries and markets all types of footwear. footwear constituents and leather merchandises. In add-on. the company markets merchandises related to footwear. accoutrements. garments. athleticss goods and other ware.
Bata is one of the world’s most widely dispersed companies. with operations in 68 different states. It employs over 50. 000 people in retail.
fabrication and whole-selling operations. The company has over 4. 700 self-owned retail shops. and over 100. 000 independent retail merchants and franchisees administering Bata footwear. Bata yearly manufactures over 140. 000. 000 braces of places in 46 production installations. and over 30 million square pess of leather in nine tanneries. Bata companies serve about one million clients each twenty-four hours.
Bata has the largest retail web in India and has over 1000 stores and around 600 franchisees. It is a trade name that Indians have grown up with. In malice of such an celebrated bequest. Bata’s public presentation has slipped in recent times. A traditional SWOT analysis could good supply an apprehension of the current state of affairs:
1. The widespread retail web of the company owned and franchisee shops allows the company to function clients across the state. 2. The company’s ain tanneries in Batanagar and Mokamaghat guarantee uninterrupted supply of natural stuffs. 3. The company. being a portion of Bata Shoe Organisation. has easy entree to new designs. trade names and production engineerings. 4. The trade name has earned a repute of trust. which adds well to the strengths of the company. 5. In add-on to the eight internationally renowned trade names – Bata. Hush Puppies. Marie Claire. Bubble Gummers. Power. Sandak. North Star and Weinbrenner – the company besides offers a broad scope of domestic labels like Quo Vadis. Jubilee. Featherlite. Ambassador. Signor. Hawaii. Naughty Boy and Tennis.
1. The company has a big labor force ensuing in high employee costs. 2. The company has been in being for more than seven decennaries and faces a challenge in exchanging to new production engineerings. 3. Poor fiscal place in the market has resulted in Bata incurring immense losingss for the past four old ages. 4. Unorganised top-level direction ; facts: 28 managers have been changed in last three old ages. Eight surrenders from cardinal top managerial forces since 2001 5. The inability of the direction to cover with a extremely nonionized mill and gross revenues staff is yet another major job as the administration wastes considerable clip to decide labour differences and work stoppages. Opportunities
1. Footwear being an point of mass ingestion has immense demand potency in Indian market. 2. Merchandises like Bata Aquastatic. Bata Airsystem and Bata Lavorazione Artigiana. which are really good known as premium trade names in other foreign markets. keep immense promise for Bata. 3. There is a monolithic potency for the company to leverage the Bata trade name and retail coverage for marketing ware consumer merchandises other than footwear.
1. The Company faces stiff competition from assorted regional participants like Action. Lakhani. Mesco’s. Relaxo and Liberty. which are able to sell footwear at even lower monetary values due to take down operating expenses and fabrication costs. 2. Opening of the Indian market to imports has resulted in the company confronting competition from inexpensive imports every bit good. 3. Change in the gustatory sensation of consumer towards lifestyle statements like Sprandi. Catterpillar. Stacy Adams and others has created another challenge for Bata in the high terminal market. 4. The jobs which the company is already populating with – high fabrication costs – has been coupled with increasing employee costs twelvemonth on twelvemonth.
Bata’s 2004-05 fiscal consequences are non yet available ( at the clip of traveling to publish ) . nevertheless. net loss for FY03 was Rs. 241. 23 million. as against the net loss of Rs. 113. 02 million for FY02 and in the twelvemonth 2004 till September it got worse. net loss further increased to Rs. 404. 61 million. Bata’s exports grosss and gross revenues have decreased dramatically up to 50 % or even more in the last few old ages.
Now these figures clearly show that while the footwear industry is turning. Bata is fighting to do net incomes because of their immense outgo. There are besides several other factors. some of which are detailed below:
Consolidating the factors impacting Bata’s public presentation:
1. Workforce & A ; Expenses:
The company has a big work force. ensuing in high employee costs. Their operating disbursals are rather high ; and in retail operations. the said cost is every bit high as three to four times more than their rivals. Bata has five fabrication installations and a nation-wide retail and sweeping distribution. Reducing employee costs and restructuring and streamlining its operations are the major challenges and hazards which. if addressed decently. can work out a batch of jobs.
2. Relationss between Top Level Management and Trade Unions:
There are eight recognised trade brotherhoods in the company and the company direction has had a history of differences with these trade brotherhoods and has been fraught with labour agitation. Quite late. there was another call for a work stoppage. but the direction succeeded in avoiding it.
3. Tendencies and Lifestyle:
With the epoch of consumerism and globalization. footwear has progressed from being a necessity to going a manner statement. Bata has to be advanced in fabricating engineering and inventing new selling schemes. so that it is able to keep and spread out its client base. The company faces competition from non merely high terminal footwear merchandises. but besides from unbranded merchandises produced by the big unorganized sector that compete on lower costs.
4. Globally competitory concern environment
With the gap of the Indian economic system. Bata now faces competition from international participants. along with bing competition from the national participants. Though the company has taken stairss. like importing readymade places with attractive design and manners. to hit over rivals. it might hold to cut down its monetary values because of the competition. This may in bend cut down the company’s grosss and hence might adversely impact its concern.
5. Lack of Sustained Advertising and Promotions:
Bata is continuously presenting new designs of footwear ; but the company is still non associated with being ‘fashionable’ . Neither the publicity. nor the advertisement of the company. is strong.
The premium section rivals seem to wholly dominate the presence of the company. However. Bata has non announced any new merchandises or concern sections in recent times. Further. the investings on advertisement and publicities seem to be ‘following’ instead than ‘leading’ . That is. instead than passing more on advertisement. Bata has started passing less on advertisement. as a direct consequence of gross revenues diminishing.
6. Non being in garment merchandises
It has been about seven decennaries since their launch in India. but Bata has non been able to tag its presence in the garments sector. Because of non-existent publicities. non even 1 % of the population is cognizant of Bata’s presence in shirts and pants. Bata could leverage their strong retail presence to travel into such sectors in a planned mode.
7. Wholly dependent on booster group for engineering
The company entered into a proficient coaction understanding dated December 29. 2000 with Bata Limited. Canada ( Bata Canada ) for a period of 10 old ages. for having assorted services from Bata Canada. including technology. building and architectural. research and development. testing and quality control services. footwear engineering and general proficient services. environmental. wellness and safety services and trade name development services. On one manus. this understanding provides Bata India entree to most modern engineerings. At the same clip. on the other manus. it shackles Bata India’s domestic advanced capacities.
8. Hallmark violations by domestic unorganized sector
Small companies are copying the hallmark of the company and selling the footwear at significantly low monetary values as compared to company’s monetary values. The company is seeking to follow legal proceedings against such rivals to forestall them from utilizing the designs. But such counterfeiting has had inauspicious effects on the company’s concerns and net incomes. The Situation Now
Bata’s trade name equity in India has been and continues to be under menace.
However. internationally it is still rather a strong trade name. Though the market portion of Bata is non really high. its market place is decidedly important. There is no existent premium commanded by the Bata trade name. since Bata is synonymous with lastingness and “value-for-money” footwear.
Bata is now traveling through a mass turbulence. The company is enrolling immature executives. who can convey in advanced thoughts to fit the competition. In 2003. Bata tried to shift itself from a fabricating company to a selling company. after entering losingss of about Rs. 119 crores in 2002. Bata has besides started concentrating on ‘quality sales’ with a heavy emphasis on consumer satisfaction. as it found that measure gross revenues could increase the turnover. but measure without quality would merely destabilize the consumer assurance that had taken ages to construct up. Now as Stephen J. Davies. MD of Bata India. plans out assorted new schemes. the inquiry remains on what schemes should the new MD focal point on so that the company regains the lost pride in old ages to come?