Term Paper

On

International Business

International Business of Bata Shoe Company

 Term Paper

On

International Business
(BUS - 341)

Submitted to

Ayesha Binte Safiulla

Lecturer of UITS

Submitted by

Iqbal Mahmud Mirza ID: 09510022

MD. Najiat Hossain ID: 09510140

Zakaria Hossain ID: 09510293

Mirza Alamin ID: 09510217

Golam Kibria ID: 09510151

Md. Towsif Sikder ID: 10410220

University of Information Technology & Sciences

 Date of Submission: April 26, 2012.

LETTER OF TRANSMITTAL

Date: April 26, 2012.

Ayesha Binte Safiullah
Lecturer
School of Business
University of Information Technology and Sciences
Baridhara, Dhaka-1213

Subject: Submission of Term Paper.

Sir,

With due regards and respect we state that we are very thankful to you as you
assigned us this report on ‘‘International Business of BATA Shoe company Bangladesh
Limited”.It is a great opportunity for us to acquire theoretical and Practical knowledge
about International Business of a reputed multinational organization. We have tried out
best to gather what we believe to be The most complete information available.

Sincerely yours,

(Behalf of the group)

(Iqbal Mahmud Mirza)

Sign______________________

Program: BBA

University of Information Technology and Sciences

 EXECUTIVE SUMMARY

Bata is one of the world’s widest reaching companies, with operations in 68 different
countries. Bata companies strive to listen to the customers in their local markets and
clearly identify their footwear needs, and then to provide products that exceed their
customers’ expectations in terms of quality, style and value. Bata operating companies
are grouped into four business units based on similarities in markets and business
issues. Each group benefits from synergies specific to their requirements, such as
product development, sourcing and marketing support.

Bata is one of the world’s widest reaching companies, with operations in 68 different
countries. Bata companies strive to listen to the customers in their local markets and
clearly identify their footwear needs, and then to provide products that exceed their
customers’ expectations in terms of quality, style and value. Bata operating companies
are grouped into four business units based on similarities in markets and business
issues. Each group benefits from synergies specific to their requirements, such as
product development, sourcing and marketing support. Each business unit is
entrepreneurial in nature, and can quickly adapt to changes in the marketplace and
seize potential growth opportunities.

Mainly we focus this report how to maintain what types of entry mode they use
in their business. Bata International serves customers in much of Asia, the Pacific
and Africa through its 3,000 stores and many dealers. It is supervised from Singapore.
Bata International operates shoe innovation centers in several countries as well as 30
factories to serve individual markets.

We are acquired more experience to research and analysis this report, that help
us future job performance. We also learn various things.We collecting data and
some valuable information by internet from Bata Shoe Company BD Ltd. Official
web-site, and annual report. We create these report by Microsoft office 2007.

Finally, We thanked those people who are help through valuable information.
Also special thanks our honorable Teacher Ayesha Binte Saifullah for his
guideline.
 ACKNOWLEDGEMENTS

In any comprehensive work, like this, credit must go to the multitude of people.

We are still students and just novice. Hence, we have taken help from different
People for preparing our report. Now here is a petite effort to show our deep
Graduate to those helpful people.

First, we commit ourselves grateful to Allah for his unlimited kindness and
maximum helpful hand in continuing our report preparation.

We express our sincere gratitude to our honorable course teacher, Ayesha Binte
Safiullah Lecturer, Business Administration University of information technology &
Sciences University for their guidance and valuable remark about the convention
of the report.

Iqbal Mahmud mirza

(Behalf of the group)

Program: BBA, ID: 09510022

University of Information Technology and Sciences

 Table of Content

CHAPTER 1: INTRODUCTION
07

CHAPTER 2: GENERAL COMPANY DESCRIPTION

2.1 Bata Shoe company Overview 08

2.2 Objectives of Bata shoe Company 09

2.3 The Vision Mission Bata Shoe Company 10

2.4 Strengths and core competencies 10

2.5 Challenges 11

CHAPTER 3: PRODUCT OR SERVICES OVERVIEW

12

Chapter 4: Industry Analysis In Domestic Market

15

Chapter 5: Market plan 16

5.1 Market Analysis 16

5.2 Marketing Strategy 17

Chapter 6: Operational Plan 18

6.1 Mode of entry 18

6.2 SWOT analysis Of the selected entry mode 18

6.3 Location analysis 20

6.4 PEST analysis of the selected area 21

Chapter 7: Conclusion 22

Chapter 8: Bibliography 23

Strategic Profile of Bata Shoe Co. Bd.

Ltd.

1. INTRODUCTION:

International business is a term used to collectively describe all commercial transactions

(private and governmental, sales, investments, logistics,and transportation) that take
place between two or more regions, countries and nations beyond their political
boundary. Usually, private companies undertake such transactions for profit;
governments undertake them for profit and for political reasons. It refers to all those
business activities which involves cross border transactions of goods, services,
resources between two or more nations. Transaction of economic resources include
capital, skills, people etc. for international production of physical goods and services
such as finance, banking, insurance, construction etc.

A multinational enterprise (MNE) is a company that has a worldwide approach to

markets and production or one with operations in more than a country. An MNE is often
called multinational corporation (MNC) or transnational company (TNC).
 Strategic Profile of Bata Shoe Co. Bd.

Ltd.

2. GENERAL COMPANY DESCRIPTION:

2.1 Company Overview:

Bata is one of the world’s widest reaching companies, with operations in 68 different
countries. Bata companies strive to listen to the customers in their local markets and
clearly identify their footwear needs, and then to provide products that exceed their
customers’ expectations in terms of quality, style and value. Bata operating companies
are grouped into four business units based on similarities in markets and business
issues. Each group benefits from synergies specific to their requirements, such as
product development, sourcing and marketing support. Each business unit is
entrepreneurial in nature, and can quickly adapt to changes in the marketplace and
seize potential growth opportunities.

Bata International serves customers in much of Asia, the Pacific and Africa through its
3,000 stores and many dealers. It is supervised from Singapore. Bata International
operates shoe innovation centers in several countries as well as 30 factories to serve
individual markets.

Bata Europe is based in Paris and operates 500 stores offering fashionable footwear.
The world-class shoe innovation center just outside of Venice supplies many of the
exclusive lines found in Bata stores throughout Europe.

Bata Latin America is based in Mexico City. Bata is the leading retailer of shoes in Latin
America and the leading marketer of children's branded footwear.

Strategic Profile of Bata Shoe Co. Bd. Ltd.

Bata Canada is based in Toronto from where 250 stores serve the Canadian market. Its
chain of Athletes World’s and Nike Shops is the leading fashion source in Canada for
young urban customers.

Bata Shoe organization (B.S.O.) is the largest manufacturer and marketer of footwear in
the world. Its global business comprises of shoe factories, tanneries, engineering
plants, quality control laboratories, product development and research centers. Bata
distributes its products through approximately 6,300 retail outlets, 10,000 franchises
and thousands of wholesale depots and dealers. More than 50,000 people are employed
in producing and selling over 300 million pairs of shoes each year, primarily for the
domestic markets in which B.S.O companies operate.
2.2 Objectives of Bata shoe Company:

Achievement of 100% estimated business in each category.

Maintain a shoe line with 700 lines of which 200, 300, 150 & 50 lines for Men,
Women Children & Plastic respectively.

Introduction of a shoe line as per life style as well as fashion trend.

Achieve an average 55% margin in each category.

Innovate ideas or system for better management of merchandise distribution by

maintaining 4 times stock turn.

Strategic Profile of Bata Shoe Co. Bd. Ltd.

2.3 The Mission and Vision Bata Shoe Company:

Mission:

Introduction of a strong shoe line targeted to various market segments to maintain

leadership through increased market share.

Vision:
To provide good quality shoes at an affordable price. By keeping in mind the comfort
that needs to be there and providing new designs with it.

2.4 Strengths and core competencies:

Be obsessed with customer satisfaction.

Build reputation for providing quality product.

Be dedicated to continuous growth in the market.

Widespread availability of Bata shoes in the market.

The prices of Bata shoes are very competitive and in many cases lower than its
competitors.

Very good distribution channel with dedicated employees all through Bangladesh
and established because of Bata’s experience in the Bangladesh for very long.

Taking opportunity of the lower buying power of the people of the country by
providing good quality shoe at a competitive price.

Strategic Profile of Bata Shoe Co. Bd. Ltd.

2.5 Challenges:

During the 50s, 60s and 70s the Organization redoubled its focus on retailing
excellence, international footwear branding, advanced manufacturing techniques and
extensive employee training, another Bata tradition that dated back to the
Organization's earliest years. The Organization continued to expand its retail operations,
production facilities and moved into new countries of operation. Thomas J. Bata, and
son Thomas G. Bata, continued to lead the Organization with the traditional philosophy
ensuring that each operation focused on customer satisfaction. As the world-
manufacturing base for footwear shifted to developing countries. New business
strategies have been guided by the founding principles of focusing on customers,
marketing and employees. Branded products, innovative retail store concepts, lifestyle
merchandising, non-footwear products and participative retailing have been introduced.
In 1992, the Organization and family were invited to return to the Czech Republic,
where Bata had remained a symbol of national pride and achievement.

Bata companies have a tradition of being good corporate citizens and seek to contribute
to the well being of the countries and communities where they operate. Bata companies
conduct themselves as positive and contributing members of any community in which
they operate, and seek to provide employees with a safe and healthy working
environment. Bata companies are committed to ensuring that operations are conducted
ethically, and in compliance with applicable local laws and regulations. Bata Bangladesh
is also concern about the environmental safety related issues. So it has established of
its own an Effluent Treatment Plant (ETP) in its organization premise with a huge
investment.

Strategic Profile of Bata Shoe Co. Bd. Ltd.

CHAPTER 3: PRODUCT OR SERVICES OVRVIEW:

 Marie Claire:

The Mari Clare brand of Bata is for women. It has more than 100 designs and has
different price range of shoes. The price range here starts from Taka 450. In recent
times Bata has targeted the young working women who wants reasonably priced,
decent design and durable shoes for work and this brand in many cases serves this
segment well.

School shoes of Bata:

Bata first earn its name as the most durable shoe manufacturer for school going
children. When it first comes to this country it has realized that there is a huge market
opportunity for school shoes. Quickly they introduced the “Naughty Boy” shoes. Which
quickly earn recognition among the parents of that time, as they need a durable shoe
that really can last even after lots of rough treatment. From there on Bata gone on to
make Canvas shoes, other black leather shoes, hard top white sneakers for school
goers. The most popular brand of school shoes that are now in the market are
NorthStar which provides hard and soft white sneakers and the leather black Bata
school shoes which are of various designs.

Bubblegummers:

The Bubblegummers brand of Bata serves the infant to children, according to them 0-
13 years of age group. Bubblegummer brand has provided Varity of design and type of
shoes for above-mentioned age group of children.

Strategic Profile of Bata Shoe Co. Bd. Ltd.

Sandak:

What we called is Sponge Sandle is professionally called as Thongs. Sandles of Sandak

brand of Bata serves that very segment of the market. It produces different types of
very good quality plastic and Thongs for women. From my survey it has found that it is
the most popular shoe of Bata. The pick seasons for Sandak shoes are rainy season
when many prefer this shoe, which are washable and decent in looks.

Power:

This is a reasonable priced good quality sports shoes and sandle shoes for young male
and female. The target segment of Power is teenagers and some parts of the elderly
people who need sneaker for walking purpose. The price range starts from 695/- and in
many cases not exceed more than thousand taka. According to the buying power this
price range is very popular with the general public as durability comes with it as with
every Bata footwear.

KingsStreet:
The most famous dress shoes of Bata come under the brand name of “KingsStreet”. It
has been nice to know that this brand of shoes has been solely made in Bangladesh.
The Dhamrai factory of Bata has the machinery to make these shoes, which they
established in 1999 at a cost of 1 core taka. These shoes have different price range for
different segments of people.

This brand of Bata provides trendy, outdoor, rough use footwear for men. This is also a
popular brand with the youth of the country. Though the brand is not that cheap but
the quality of it is very good.
 Strategic Profile of Bata Shoe Co. Bd.

Ltd.

Apart from these Bata has numbers of leather sandles of various designs, sandle-shoes
under Bata brand name that serves different segment of the market. Bata also
manufacture and market popular brands such as HushPuppy, Dr.Schole’s in this region
of south Asia. Bata also have quite new brands for male and female like Bata Comfit,
Bata Flexible. According to the Bata officials in Bangladesh Bata have more than 1000
lines of footwear’s here in Bangladesh at present.

Thus Bata's well known brands include Power, Bubble-Gummers, Marie-Claire, Hawai,
Naughty boy, Sandak, North-Star etc. International brands such as Hush Puppies, Nike,
Lotto, and Dr Scholl are sold under manufacturing and licensing agreements. The
company has more than 1000 shoe designs and caters to all the segments. Over 60%
of sales come from the men's range, while children's and women’s range account for
about 20% each. In women's segment the Sun-drop range of casual ladies wear in the
popular range has done well in the market and registered a strong growth of 500% in
F12/2000. The brand is being endorsed by filmstar Rani Mukherjee. Bata also markets
sports wear, readymade garments, hosiery, and other footwear accessories like socks,
shoe polish, etc. The company also exports its products to countries like Germany,
Australia, USA, UK, Holland, Denmark, New Zealand, France and Canada. It exports
about 4mn pairs of shoes in a year.
 Strategic Profile of Bata Shoe Co.Bd.Ltd.

Chapter 4: Industry Analysis in Domestic Market:

Products tend to go through different stages, each stage being affected by different
competitive conditions. These stages require different marketing strategies at different
times if sales and profits are to be efficiently realized. The length of a product life cycle
is in no way a fixed period of time. It can last from weeks to years, depending on the
type of product. In case of shoe industry in Bangladesh it is presently going through the
growth stages which are characterized by many new consumers entry in the market, by
fall in price as experience and economies of scale have been attained, by developed
distribution channel and by increasing intensity of competition.

Introduction Growth Maturity Decline

 Figure: Industry analysis of bata Shoe Company.

Strategic Profile of Bata Shoe Co.Bd.Ltd.

Chapter 5: Market plan:

5.1 market analysis of bata shoe company:

Within a given environment, marketing strategy deals with the interplay of three forces
known as the strategic three C's: the customer, the competition and the corporation.
Based on interplay of the strategic three Cs, formation of marketing strategy requires
the following three decisions:

1. Where to compete: It requires a definition of the market (e.g. competition

across an entire market or in one or more segments).

2. How to compete: It requires a means for competing (e.g. introducing a new

product to meet a customer need or establishing a new position for an
existing product).

3. When to compete: It requires timing of market entry (e.g. being first in the
market or waiting until primary demand is established).
Thus Marketing strategy, in terms of these three key constituents, is defined as an
endeavor by a corporation to differentiate itself positively from its competitors, using its
relative strengths to better satisfy customer needs in a given environmental setting.

Strategic Profile of Bata Shoe Co.Bd.Ltd.

5.2 Marketing strategy of bata shoe company:

Political and Legal

Environment Technological
Environment

Customer

Marketing Strategy:

Achieving maximum

Positive differentiation competition

Corporation Over competition in meeting Competition

Customer needs.
 Economic
Social
Environment
Environment

Key Elements of Marketing Strategic Formulation

Figure: 2 Key elements of marketing strategic formulation

Strategic Profile of Bata Shoe

Co.Bd.Ltd.

Chapter 6: Operational Plan

6.1 Mode Of Entry:

Bata Shoe Company do their business by merchandise export and export. Merchandise
export and Imports usually are a country’s most common international economic
transaction. Merchandise Exports are tangible product that is shoes that sent out of a
country. Bata shoe company do their business with foreign direct investment (FDI)
entry mode. bata shoe company at first fulfill the home country’s customers demand
and then transfer of capital by the nationals or citizens of home country to host country
under his ownership and control.

Objectives of (FDI): by FDI bata shoe earn profit by managing and controlling.
6.2 SOWT analysis of the selecting entry mode:

Strengths:

Image of the company

Quality Product

Differentiated line of products

Competitive Pricing

Modern manufacturing facilities

Brand loyalty at mass level

Strong distribution channel

Strategic Profile of Bata Shoe

Co.Bd.Ltd.

Weaknesses:

Insufficient promotional activities

Bata at present conducts all the store management activity manually. This results
lots of lengthy paper works, errors & waste of time.

Inability to catch the present trend in time

Less competitive price due to high cost structure.

VAT & tax barrier

Opportunities:

Despite political turbulence a segment of our middle-class is coming up with

reasonable buying power. Many of them are women who are decision maker so
the city store concept of Bata can attract them as whole of the family footwear
can be available there.

Consumer like differentiated products. They like to shop in a store where they
serve the whole family.

More competition results in more campaign for products.

Business Expansion in Shoe care products

Utilize outsourcing especially the synergy sources to achieve competitive pricing

Franchisee opportunity with global brands like Nike, Reebok, Hush Puppy

Market expansion opportunity in high fashion & value for money footwear
market for all categories of shoes through Retail & WCSM channels

Strategic Profile of Bata Shoe

Co.Bd.Ltd.

Threat:

Political instability affects the supply of raw materials and distribution of finished
products.
 Uncontrolled counterfeit of Bata products

New companies like Apex, Homeland, Pegasus of Bangladesh and the foreign
companies like Nike, Reebok, Addidas are already in the market with good
quality product. Have to keep up with them respect of quality.

Smuggling of shoes and many stores in the city like the one’s in elephant road
are the major market leaders. As they don’t have to pay for large amount of
money for establishment, production, quality and advertising so they can sell at a
much lower price than established brands like Bata.

Rapid market expansion program by organized competitors like APEX.

6.3 Location Analysis:

For International Business location analysis is essential.

In location analysis consists-

 Demographic & Geographic

 Economy

 Culture

 Target customer

 Target Market

strategic Profile of Bata Shoe

Co.Bd.Ltd.
7 Conclusions:

The report has attempted to point out About International Business of Bata Shoe
company. We can get little information about International Business of Bata Shoe
Company in Bangladesh. We also take support by some secondary reports as well as
internet and Bata Shoe company report publication.

Strategic Profile of Bata Shoe

Co.Bd.Ltd.
7. Bibliography:

The assignment was so interesting and complicated to, and for completing this assignment I
and my group has worked very hard, and I needed so many planning to do this, each and
every task has different commodity and factors. These not just helped me to doing
assignment, i learned so many important things of administration of an organization and
their day to day activities with relevant examples. For collecting samples and evidence for
completing the assignment, I went so many places and searched via Internet search engine.
And for searching I took help from google.com, ask.com etc. and a overview of it is given
below:

Searching via Google.com Searching via Ask.com

www.batabd.com