ASSIGNMENT NO: 3
A little Introduction
It was originally established in Czechoslovakia by Thomas Bata in 1894. He was actually engaged in no formal shoe making business. He decided to visit Michigan for observing how Ford Motor company were making auto mobiles in assembly line production. He observe and took that idea and started applying all those same lines for production of shoes on large scale. As he started doing so, a revolution came over there in shoe making industry. In 2002 Bata was the largest organization in world of footwear industry with 14 billion pair of shoes produced and sold. Company has 75 footwear factories and tanneries in 95 countries. In Pakistan Bata had started its business in 1942 near Lahore. SWOT ANALYSIS
* Bata is multinational company with strong image and recognized in the world. * It was a part of a big Organization and very much strong in terms of finance. * Its biggest reason behind success was its retail network although it was competed by Servis later. * One of the reason of success was its footwear for whole family. * Company has its own retail outlets on which company has full control. * Company was targeting middle and lower middle segment of the country which was a big part of the population. Weaknesses
* It could not control its other departments, like tanneries and Tube and tyre production. * It could not sustain leadership for long time.
* It has set its image as for middle and lower middle class, which could not be changed immediately. * It has sold too much in the whole sales on credit which was not controlled. * Advertisement was not made through proper planning.
* It was the best opportunity for BATA to avoid defects and heavy costs by partnership with small manufacturers. * It could target to upper middle class and elite class.
* Use of Internet and TV channels for proper advertisement to hit the market. * Ecommerce could be used for advertisement and provide online purchase platform for potential buyers. Threats
* Due to defects in the footwear and non proper checking some customers were getting dissatisfied with the products which was big threat to BATA. * There were lot of competitors were entering in the market. * Low price competition was a major threat for BATA specially imported footwear from china on affordable price for lower segments. * Due to political instability Bata together with other formal manufacturers were facing lot of problems, which were beyond prediction parameters. * Changing fashion and preferences was also a big threat for BATA to tackle.
Porter Five Forces
Threat of New Competition
Profitable markets which are yielding high return can attract new firms to enter and can create problems for existing firms and can lead all the firms into competition resulting in lower profits with perfect competition environment. In this case lot of new companies are getting into business like shafi group, Servis, China and other players. Bata was facing all this and in this scenario BATA had to perform with extraordinary to survive.
Threat of Substitute Products
In this industry, There are no substitute products. If any new firm enter into the market or existing can manufacture footwear. But China has emerged as a big player in footwear market in the world. China was somewhat playing to cover the substitute products but in footwear market it also have footwear but on difference in prices. Bargaining Power of Suppliers
Bata Pakistan was importing its raw material from outside Pakistan with somewhat obtaining inside Pakistan. After this BATA has started its own tanneries after increase in the prices of tanneries. After some time it has made its subsidiary Company which was closed later due to heavy loss. But now suppliers are much more in numbers so bargaining power of suppliers is not...