What Ails Bata India- Iipm Think Tank

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What ails Bata India ?
If we take a look at the history of footwear industry in India, we shall see that Bata India has been the emperor of footwear products. Bata had such a good run that it almost became a generic name for shoes. People used to go to shops and just ask for Bata and not any other brand.

But today, the brand is facing stiff competition from other players. A host of other problems have cropped up and added to their woes. In this case, we shall try to examine how Bata slipped down and what they are doing to reclaim the lost throne. 

The History
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 time rubber and canvas shoes were manufactured in India.

The first manufacturing unit was set up, at a place called Batanagar. The factory shifted from Konnagar to Batanagar in 1936. In 1940-45, during World War II, the factory’s production was geared to meet war requirements. In 1950, Bata successfully launched the brand Hawaii. In 1952, one of Asia’s largest tanneries was set-up at Mokamaghat, Bihar. In 1988, The Bata factory was set-up in Peenya, Bangalore. In 1993, Batanagar factory became the first Indian shoe-manufacturing unit to receive ISO 9001 certification.

Currently, 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 manufactures and markets all types of footwear, footwear components and leather products. In addition, the company markets products related to footwear, accessories, garments, sports goods and other merchandise. 

Bata World
Bata is one of the world’s most widely spread companies, with operations in 68 different countries. It employs over 50,000 people in retail, manufacturing and whole-selling operations. The company has over 4,700 self-owned retail stores, and over 100,000 independent retailers and franchisees distributing Bata footwear. Bata annually manufactures over 140,000,000 pairs of shoes in 46 production facilities, and over 30 million square feet of leather in nine tanneries. Bata companies serve almost one million customers each day.

Bata has the largest retail network in India and has over 1000 shops and around 600 franchisees. It is a brand that Indians have grown up with. In spite of such an illustrious legacy, Bata’s performance has slipped in recent times. A traditional SWOT analysis could well provide an understanding of the current situation: 

Strengths
1. The widespread retail network of the company owned and franchisee stores allows the company to serve customers across the country. 2. The company’s own tanneries in Batanagar and Mokamaghat ensure uninterrupted supply of raw materials. 3. The company, being a part of Bata Shoe Organisation, has easy access to new designs, brands and production technologies. 4. The brand has earned a reputation of trust, which adds substantially to the strengths of the company. 5. In addition to the eight internationally renowned brands - Bata, Hush Puppies, Marie Claire, Bubble Gummers, Power, Sandak, North Star and Weinbrenner – the company also offers a wide range of domestic labels like Quo Vadis, Jubilee, Featherlite, Ambassador, Signor, Hawaii, Naughty Boy and Tennis.

Weaknesses
1. The company has a large labour force resulting in high employee costs. 2. The company has been in existence for more than seven decades and faces a challenge in switching to new production technologies. 3. Poor financial position in the market has resulted in Bata incurring huge losses for the past four years. 4. Unorganised top-level management; facts: 28 directors have been changed in last three years. Eight resignations from key top managerial personnel since 2001 5. The inability of the management...
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