This case talks about Bata Shoe Organization, the world’s largest manufacturer and retailer of Footwear Company and the challenges faced by the company while determining its future long-term strategy and in finding a top management team. The case deals with the problems that Bata might face due to the political and economic changes taking place worldwide while running the company around the globe, over 62 manufacturing units and 4458 company- stores owned worldwide. Based on the economic freedom scales, what kind of differences do you think Bata might face in the Czech Republic and Slovakia?
Czech Rebublic was economically free. So Bata achieved free market and freedom to own and run the factory. Itcan thus continue its operations in the country smoothly in the future. While Slovakia was considered economically unfree. The government regulates how a business run, how goods are produced and labor are used, priced or distributed in the market. As a result the slovakian government is unwilling to give the factory back to Bata, forbidding it to rebuild the factory with new resources. Hence as a result of huge government interventions, Bata will face difficulty in gaining market in the Slovakia.
What are the advantages and disadvantages to both Bata and the republic of Slovakia of having Bata take over his former operations? Why do you think the Czech Republic allowed Bata to reenter the market, but Slovakia did not?
Bata tried to acquire economies of scales by making huge volume of sales at a lower price. The company’s strategy was to capture market share in the world. So acquiring back the business in Slovakia would help increase Bata’s sales and ultimately a source of revenue for the company. However, controlled economy, communist country and lack of support from the government may cause great difficulty for Bata to run its operations smoothly in the country. It has to face lots of government pressure which might even harm...