Bata Strategy

Strategic forward march :BATA

Prof S P Garg

Jaipuria Institute of Management

Jaipur (INDIA)


• Bata India , a part of Switzerland based Bata Group

• Mr Marcelo Villigran: MD • Seventy five+ age old foot wear brand• ‘Back –to–School’ shoe days to appeal

young generation by presenting a much more youthful and vibrant face

• Theme : to “surprise customers” with an expanded range for all at “great prices”– in an improved or new environment


• Bata India MD Marcelo Villagran says, "In today's challenging market, our strategy of opening large format stores has been successful and we would continue to invest in expanding our retail business. Along with this, we have also focused upon providing our customers with a new trendy collection and better shoe designs. Our value pricing, coupled with improved customer service, has helped us to grow."


• Strategies adopted

• Positioning in fashion footwear segment with a huge range of trendy footwear

• Realizing that customer service and satisfaction is the mantra

• To reinforce its image as the “the most trusted footwear brand”


• Expanding its retail footprints in major metro and other big cities

• Revamping key stores :More store space• Superior retail out fits &Closing unviable

stores• At present 1300 stores in 400 cities in

India, all company owned• Reaching out rural markets through dealer

network


• reinventing itself to get back into the fast track. The company has a three-pronged strategy: setting up 60 large-format stores every year (minimum area of 3,000 sq ft), closing down the unviable ones and increasing its focus on institutional business.

• Defying the trend in the retail industry of putting expansion plans on hold, Bata opened 32 new retail stores in the first quarter of 2009. These new stores have a minimum area of 3,000 sq ft each.


• Focus on product design –contemporary look

• Range of offering in every market segment and every occasion

• Introducing new offerings: men, ladies, sports, children

• Targeting for family as a whole• Launch of new specialized division :Bata

Industrials for sectors like defense, automobiles, petroleum, construction, agriculture, metal


• Initiation of regular customer feed back process, customer research ,training of staff

• Multi pronged sourcing strategy to reach faster procure faster, more economically,

• Consolidation of manufacturing operationsy• Restructuring of wholesale division into four

independent distribution channels : urban, and institutional, safety, branding segment for more impact and better sales

• Strong focus on financial controls


• Investment in technology & systems

• Bringing all major commercial and financial process under common technology platform

• Installation of a “point of sale” software in almost all retail outlets

Strategic forward march :BATA• The stores operate in a four-tier retail format under a new model --

upmarket flagship stores, smart and trendy city stores and super stores and traditional family stores. This helps the company service its customers better in places where currently it does not have presence.

• "The large-format stores are mostly franchise-run. The new-design store interiors itself cost the company around Rs 2 crore per store," Bata chairman P M Sinha says. These new stores have helped Bata to bring its contemporary and trendy range of footwear sold in an international style outlet to customers even in small towns.

• Rapid expansion and modernisation is one part of the story. The other is shedding flab. Bata has reduced the number of its unviable stores from 140 to 74 and is open to shutting down more such stores in future. The company has close to 1200 stores and 2,000 SKUs in India.


• The company is also depending on institutional business heavily. "We will have shoes tailor-made for hospitals, military forces, factory workers, and airlines. We will also introduce a new range of sports shoes in India this year which will be comparable to the best sportswear brands available here," Sinha says.


• The company has already set up a dedicated team headed by a retired defence man to secure contracts. The total market size for footwear used by the defence personnel is about 12 million pairs a year.

• "The country has roughly three million defence and paramilitary personnel and each buys four pair of shoes per year, totalling 12 million pairs a year. That's a big market," Sinha says

• . Defence authorities currently source most of its footwear requirement from unorganised players. After eyeing the defence segment, Bata is also moving aggressively into the safety footwear market as a new thrust area for growth.

• Parent group Bata Worldwide would be providing technology sourced from the Safety and Industrial Centre at Holland.


Results• Turnover of Rs 1008 crores during 2008• 4.5crores sale of foot pairs • 13.34% rise in profits• Reduced borrowings and generation of

higher liquidity to fund growth plans• Better brand image • Long range impact and better

positioning


INDUSTRY SCENARIO•Footwear industry at present “Rs 21,000 crores•Growth rate :8-9 %•Branded segment constitutes 40% of market & would grow more than 50% in next 5 years•Major brands : Liberty, Woodland, Khadim, Metro, Redtape, and sports wear brands like Nike, Reebok, Adidas


• Men's footwear accounts for almost half of the total market with women's shoes constituting 40 per cent and kids' footwear the rest.

• According to industry estimates, the Indian footwear retail market is expected to grow at over 20 per cent from 2009 to 2011. Footwear is expected to comprise about 60 per cent of the total leather exports by 2011 from over 38 per cent in 2006-07.

For Additional details pl contact

[email protected]

Mobile : 0 93092 92080

mailto:[email protected]

Bata Strategy

Documents

Transcript of Bata Strategy