Individual Project BUS251.2 Course Instructor: Ms. Afnaan Ahmed
BATA SHOE COMPANY (BANGLADESH) LIMITED
Done By
Rubaiyat Khaled (1010766630)
Dear Ms. Afnaan Here is the report on “Bata Shoe Company (Bangladesh) Limited” you asked me to do. In conducting this report, I have found some interesting information Bata’s hiring practices, their market profile, principal activities by searching from different websites, which helped me to get a clear idea about the Bata Company. I hope you would consider my mistakes in preparing this report. If you need any further assistance regarding my report, please feel free to contact me. It would be my pleasure to assist you. I sincerely hope this report will generate a clear understanding about “Bata Shoe Company”
Table of Contents
Company Introduction History – Major Milestones
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Financial Information
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Products and Services
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Organizational Mission and Vision
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Management of the Company
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Organizational Structure
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Human Resource Management
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Global Operations – Structure and Employee Selection
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Global Research and Development
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Strategic Plans
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Tactical Plans
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Two Problems Faced by the Company in the Past
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SWOT Analysis
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Bibliography
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Executive Summary Bata Shoes is a large, family owned shoe company based in Bermuda but currently headquartered in Lausanne, Switzerland, operating four business units worldwide – Bata Europe, Bata Emerging Markets, Bata Branded Business and Bata North America. It has a retail presence in over 50 countries and production facilities in 26 countries. In its history the company has sold more than 14 billion pairs of shoes.
This is report is about Bata Shoe Company (Bangladesh) Limited and how their business operates. I have talked about their financial information, major milestones, the products and services they offer, organization structure and their strategic and tactical plans in this report for you to have a clear idea of how the business operates and what they have done in order to sell 14 billion pairs of shoes in 26 countries in 48 years.
Company Introduction: Legal Status: Bata Shoe Company (Bangladesh) Limited is affiliated to the Bata Shoe Organization, the world's largest footwear manufacturing and marketing organization based on Canada. Bata started its operation in Bangladesh in 1962.
Bata Shoe Company (Bangladesh) Limited is one of the operating companies of worldwide Bata Shoe Organization (BSO). The shares in the company are mostly held by Bafin (Nederland) B.V. Principal Activities: Currently, Bata Bangladesh operates 2 manufacturing plant Tongi and Dhamrai, Bata Bangladesh is producing around 110,000 pairs of shoes daily. It has a modern tannery with the latest technological facilities to process 5 million square feet of leather yearly. The Tannery is equipped with a high-tech effluent treatment plant ensuring a pollution free environment for both workers and locality where it operates.
The company produces approximately 110,000 pairs of shoes per day and also has a modern Tannery processing 5 million square feet of leather each year. The company continues to be backed by sound management sourced from an experienced pool of professionals within Bata Shoe Company’s global network. Market Profile: The footwear market in Bangladesh is estimated to be around BDT 18bn growing at approximately 18% to 20% each year with branded shoes among the fastest growing segments. The demographics of the country present obvious potential for sustained long term growth for footwear manufacturers. Bata Shoe Company (Bangladesh) Ltd, the single largest player in the sector has a market share of approximately 25.3% in terms of value. The company’s largest organized competitor operating at the upper end of the market is Apex Tannery, a listed local manufacturer with 75 stores producing high quality footwear exported to Italy with 25% of its output sold locally. While Apex tannery is almost exclusively in leather, Apex Adelchi and a few other Indian brands also compete in the same space for share in both branded footwear as well as basic functional footwear. Company’s Slogan: “NO ONE IN THE WORLD KNOWS SHOES LIKE WE DO” Address of the Company: Bata Shoe Company (Bangladesh) Limited Tongi, Gazipur Bangladesh Phone: Tel: +880 2 9800501-5 Fax: +880 2 9800511
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Email:
[email protected] Website: www.batabd.com
History - Major Milestones: 1894 The T.&A. Bata Shoe Company is registered in Zlin, Czechoslovakia by the siblings Tomáš, Anna and Antonín Bata. Innovative from the beginning it departs from century old traditions of the oneman cobblers’ workshop. 1895 Antonin leaves the Company to join the army, his sister Anna follows shortly after to get married. Tomas Bata takes over the company leadership alone. 1897 Tomas introduces the ”Batovka”, the first fabric shoe and with it production mechanization. 1905 Production reaches 2,200 pairs per day, produced by 250 employees. Constant innovation of footwear to meet customers’ needs. T.Bata’s motto is “Our customer is our Master” 1909 First export sales and first sales agencies in Germany, in the Balkans and in the Middle East. Bata shoes are of excellent quality and are available in more styles than had ever been offered before. Demand grows rapidly. 1917 Sales reach 2 million pairs per year produced by 5000 employees. Advanced production equipment is imported. As the Company prospers so do the communities where it operates. Bata creates stores, builds housing, schools and hospitals near factories. 1922 Following the first world war currencies are devalued and consumer purchasing power is at an all time low. Bata cuts shoe prices by 50%; stores are flooded with customers forcing the industry to follow the lead. 1925 The “Bata system” organizes operations in autonomous workshops with employee profit sharing introduced since 1923. Each one in the company is an entrepreneur. The Bata School of Work founded. It provides rigorous education and practical training to future Bata managers.
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1929 Introduction of customs tariffs. Bata responds by building factories in Swiss, Germany, England, France, Yugoslavia, Poland, Holland, the USA and India. By the early 1930s, Bata is the world’s leading footwear exporter. 1932 At the time of Tomas Bata’s tragic death in a plane crash the company intensifies diversification into the production of tires, aircrafts, bicycles, machineries. Still a young man, Thomas J Bata, is son, convenes the 1st international congress of young Bata people. 1939 Bata operates 63 companies in various industries but footwear remains the core business with 60 million pairs sold per year in more than 30 countries. 1940 Part of the Company management under the leadership of Thomas J. Bata starts to operate from Ottawa, near Toronto, Canada. 1945 All Bata companies in Eastern European countries are nationalized by communist governments. The Company starts rebuilding itself from the remaining entities located outside Eastern Europe. 1960s The Company’s headquarters are officially relocated in Toronto under the leadership of Thomas J Bata. The Company expands its international reach through new factories serving local markets. 1970s Private labels are created to be marketed to new customer segments: Bubblegummers, Power, Marie Claire, North Star. 1989 Following the political changes the Bata Company is invited to return to the Czech Republic where the Company remains a symbol of national pride and achievement. 1990s Creativity, product innovation and research for higher quality levels lie at the core of Bata product development policy. The result is the international high standard Bata Premium collection. 1995 Partnerships develop in Eastern Europe. Bata stores reopen in Russia, Poland, Croatia, Slovenia. 1999 To adjust to the market evolution Bata undertakes a major reorientation from manufacturing to designing, marketing and distribution. 2001
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Thomas G Bata, founder’s grandson becomes the Group’s chairman. A new international structure is implemented around 4 meaningful business units (MBUs) to give more focus to the business and gain synergies within each region, especially in sourcing and product development. 2002 As part of re-inventing its core competencies, Bata Shoe innovation Centres open around the world to focus on the development of shoes with exclusive comfort technology features and designs. 2004 New steps in China with the opening of the Bata procurement centre in Guanzhou and a distribution partnership for the opening of Bata retail stores.
Financial Information:
During the last few years Bata Bangladesh shows a tremendous operational performance in terms of shoes sales and export. Company’s financial results in terms of growth for the last few years were as follows: Table 1: Growth Area Export sales Net profit before tax Profit After Tax Interim Dividend Final Dividend
2008 30% 26% 38% -21% 0%
2007 18% 21% 17% 11% 430%
2006 11% 27% 34% 30% 0%
Table 2:
Products and Services:
Bata Bangladesh sells all kinds of footwear which are classified in alignment with market sectors as follows: Domestic Market : Under the trademarks of “Bata”, “Power”, “Weinbrenner”, “Bubblegummers”, and “Marie Claire”, through a countywide distribution network comprising retail stores, DSPs and independent dealers. Overseas Market : Under the trademarks of its customers, and also markets its own brands to sister companies and the Middle East.
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Bata produced numerous lines of products e.g. shoes, slippers, dress shoes, and casual tie ups for men, women and children under the brand names like:
Bata
Sandak
Marie Claire
Hush Puppies
Weinbrenner
Power
Bubblegummers
Sun drops
B First
North Star
Dr. Scholls
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Organizational Mission and Vision: Vision To enter the new foreign markets and expand on an international level the Bata brand. Mission To run independent shoe stores with the know-how of the biggest worldwide shoe company and with shoe lines styled and created in Italy. Goals Combine opportunity and local markets knowledge with reliable partners who have a long term vision. Export the Bata Retail system though the strong and well defined three concepts: BATA City Store, BATA Superstore and BATA shop in shop. •
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Strategy Analyze the local markets, the socioeconomic field (location, competitors, costs structure. Average income and spending power) to point out strengths and weaknesses. Share with the new partner our know-how in the shoe business. Utilize all synergies with the Italy Retail structure. Give the maximum attention to the different local needs (fashion trends, climate, seasonal trends, specific needs, usages and customs). • • • • •
Management of the Company and their short profile:
Management Committee of the Company and profile of the top management is delineated as below: 1.
Mr. Rajeev Gopalakrishnan: Managing Director
Mr. Rajeev Gopalakrishnan is newly appointed Managing Director of Bata Bangladesh. Prior to join Bata Bangladesh Mr. Gopalakrishnan has more than 20 years of work experience with Bata Shoe Organization in various capacity. Before joining Bata Bangladesh he was in Bata Thiland. 2.
Mr. B. R. Beg: Head of Manufacturing Department (Plant Manager)
Mr. Beg is working as head of Manufacturing Department of Bata Bangladesh since decade. He has work experience in the field of Manufacturing and product development. Mr. Beg has participated in various workshop and seminars in internationally and locally. 3.
Mr. Md. Abdul Kader: Head of Merchandising & Retail Marketing
Mr. Abdul Kader is serving the Company as head of Merchandising and Retail Marketing since last 30 years. He has vast knowledge on retail marketing. He is also a well-known TV actor.
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4.
Mr. Mujibur Rahman: Head of Export
Mr. Mujibur Rahman is working as head of Export of the Company. He has vast experience on export sale. He is in Bata since 1980s with different capacity. 5.
Mr. Habibur Rahman: Head of Human Resource
Mr. Habibur Rahman is working as head of Human Resource of the Company. He has work experience with Bata Shoe Organization globally. He is in Bata since 1980s with different capacity. 6.
Mr. Md. Hashim Reza: Head of Finance & Company Secretary
Most experienced person Mr. Hashim Reza is acting as head of Finance & Accounts and also as Company Secretary of the Company. He is with Bata Bangladesh since last decade. 7.
Mr. Yee Siew NG: Chief Financial Officer
Mr. Yee Siew NG is newly appointed Chief Financial Officer (CFO) of Bata Bangladesh. Before joining Bata Bangladesh he was working in Bata Malyasia as CFO. He has over 15 years of work experience with Bata Shoe Organization globally. 8.
Mr. Hossain Imam: Head of Internal Audit
Mr. Hossain Imam is working as Head of Internal Audit of the Company. He is responsible for internal audit and regulatory compliance of all relevant local and BSO rules of Bata. He has work experience in the field of Internal Audit in various local and Multi-national Companies.
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Organizational Structure:
Managing Director
Secretary
Manufacturing Department
Tongi
Merchandising Department
Export Department
Dhaka
Human Resource Department
Finance & Accounts Department
Accounts
Retail
Internal Audit Department
MIS
Wholesale
Internal Audit
Compliance
Human Resource Management: Employees: The Company is committed all times to ensuring that its people developed up to their utmost potential and to equip them to face the future challenges effectively and efficiently. As such the Company’s human resources initiatives are designed to encourage open communication, creativity, innovation and initiatives. Bata has a truly international team whose diversity of ideas and exchange of expertise creates an environment that stimulates people to think beyond their immediate national markets. It is Bata culture to provide equality of opportunity, to promote on merit and to provide employees with ongoing training opportunities to build new skills. Assignments in different operational areas or abroad are also common within the Group to enable promising individuals to gather an unusually broad set of experiences. Company’s working culture is characterized by open and informal dialogue between employees and management. Teamwork plays an important role and mutual respect is the key ingredient.
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Manners between colleagues are informal and relaxed, and a sense of belonging plays an important role in everyday life. Human Resource Strength Employee class Key & Senior Management Middle Management Junior Management Non-Management Total
2008 27
2007 11
2006 11
2005 9
2004 8
72 126 1,294 1,519
68 119 1,297 1,495
68 108 1,241 1,428
68 103 1,207 1,387
61 99 1,134 1,302
Training and Development It is the People of an enterprise that make the machine move, improve processes and enhances efficiency to increase the return to the shareholders. The Company gives high priority to the training and development of Human Resources. Training and development of Human Resources is continuous process. Besides arranging various in-house training courses, the employees were also sent on courses in and outside the country to enhance their knowledge, exposure and processional capabilities. Company and the employees have benefited from these training programs. A skilled manpower resource base is also being developed in the country. Hiring Practices: Bata is always seeking for entrepreneurial, enthusiastic, and committed people to join our team. With opportunities across the world, Bata ensures each employee’s success through a culture of knowledge sharing and community spirit. Career probation for each employee is based on result oriented performance.
Global Operations - Structure and Employee Selection:
Bata is one of the world's leading footwear retailers and manufacturers with operations across 5 continents, Europe, Asia pacific, Latin America, North America, Africa and are managed by 3 regional meaningful business units (MBUs), Bata Europe, Lausanne, Switzerland; Bata Emerging Markets, Singapore; Bata Branded Business, Best, Holland. The MBU approach provides quality resources and support in key areas to the companies operating in similar markets such as product development, sourcing or marketing support. Each MBU is entrepreneurial in nature, and can quickly adapt to changes in the market place and seize potential growth opportunities.
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Bata Globally Serves 1 million customers per day Employs more than 40,000 people Operates 5,000 retail stores Manages a retail presence in over 70 countries
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Runs 33 production facilities across 22 countries
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Bata's strength lies in its worldwide presence. While local companies are self-governing, each one benefits from its link to the international organization for back-office systems, product innovations and sourcing. Although Bata operates in a wide variety of markets, Bata companies share the same leadership points. Two important ones are product concept development and constant improvement of business processes in order to offer customers great value and the best possible service. Retail concepts Bata International Franchising is a formula managed from Italy to run independent shoe stores with the know-how of the biggest worldwide shoe company and with shoe lines styled and created in Italy. Sourcing Bata International Franchising is a formula managed from Italy to run independent shoe stores with the know-how of the biggest worldwide shoe company and with shoe lines styled and created in Italy.
Global Research and Development:
Bata operates 6 Shoe Innovation Centres (S.I.C). Research is conducted into the application of new technologies, materials and designs for shoe comfort features. Each S.I.C has a product focus to supply complete packages of services for the manufacturing and marketing of innovative shoes. Bata Premium Collection The Shoe Innovation Centre Europe (SICE) creates new collections for our house brands such as Weinbrenner, North Star, Power, Bubblegummers and uses innovative technologies for the Premium collection. By investing in multi-talented human resources and the latest technology design equipment, (Cad cam), SICE is in a position to realize shoe prototypes, from the early stages of design thanks to a functional product development centre. SICE works with all Bata SICs worldwide to obtain the best quality/price ratio for productive sourcing. SICE offers a wide and qualified range of fashion shoes thanks to market trend research, new ideas and strict attention to production standards. They are the ideal reference point for style and design in the fashion industry and also provide better value–added services.
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Finally, the SICE will be a strategic focal point for European and worldwide BSO Companies for industry experience and skills and for improvements in the manufacturing process from production planning, control, material consumption, cutting, stitching, assembly and finishing. Power Footwear Power Athletics Limited (PAL) operations are based in North America, where the majority of reputable athletic shoe companies are located, and where most athletic footwear specialization, as well as technical features and technologies, originates. The first-class designers on our team are fully dedicated to Power, concentrating all of their expertise on creating the best, most up-to-date product and designs. Most of them are graduates of the highly respected Industrial Design Program at Carleton University. Their training has been focused on process, from concept and design through to manufacturing and, ultimately, the everyday use of the product. Industrial Footwear Bata Industrials is more than just a manufacturer. It is a knowledge enterprise with a progressive Research & Development department and extremely advanced test facilities. Research forms the basis of the powerful Bata Industrials brand. Bata knows what people need in their work environment. Nobody understands human anatomy in quite the way we do. By continuously investing in new materials and technologies, Bata can keep reacting to market developments and to changing working conditions in an appropriate and innovative manner. Our knowledgeable and experienced R&D team is complemented by a group of outside knowledge centres, such as internationally renowned universities. This co-operation results in a unique combination of shoes and socks for every professional in every situation. Affordable high-value footwear for mainly tropical climates The Shoe Innovation Center in Indonesia works with a variety of frameworks including technologies, methods, production processes, designs, materials, trend lifestyle research, economic oriented product development and it all helps Bata to be a leader in footwear for both domestic and international markets. By investing in multi-talented human resources and the latest technology design equipment, the SIC in Indonesia supplies creative services for the manufacturing and marketing of footwear.
Two Strategic Plans and Two Tactical Plans the Company has Undertaken: Strategic Plans: 1. Introducing royalty based product “Hush Puppies”: Merchandising department introduces new concept to market royalty based product named “Hush Puppies” as high-end article. There are 5 retail stores in the Dhaka city solely for market “Hush Puppies” brand.
2. Separation of export wing For gaining tax shield, the company took a decision to separate its export wing and made a new separate Company for export of lather and shoes. By the decision, the Company as a whole made greater profit than that of previous.
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Tactical Plans: 1. Implementation of POS in all sales outlet: The Company introduces automation named Point of Sales (POS) system in all sales outlet retail or wholesale. By introducing this automated system, cash collection and treasury management system become efficient.
2. Change in old line of machinery: Keeping in mind the change in consumer behavior and their tests, the Company changed its old line of machineries with new one. This, in turn, increased turnover and hits positively on net earnings.
Two Problems Faced by the Company in the Past:
It is evident that, doing business is not an easy job. Lots of hindrance will come in every footstep. Bata is not exceptional from that. Here are some problems faced by the Company in the recent past: Loss of Market Share: It is now an enormous challenge for Bata Bangladesh to exist in the immense competition. The challenge came after penetration of Apex in the local and foreign market. Fake Logo: The issue has come severely during last few years. Some local Companies use the Brand of “Bata” or other similar names like Rata etc. and market low quality goods in local market with much lower price. This practice affects seriously the sales and also the market reputation of Bata.
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SWOT Analysis: Strengths Weaknesses Bata’s strength lies in its worldwide • High cost; • presence; Lack of product differentiation; • While local companies are self-governing, • Product mix. • each one benefits from its link to the international; Product innovations and sourcing. Although • Bata operates in a wide variety of markets, Bata companies share the same leadership points; Product concept development and constant • improvement of business processes in order to offer customers great value and the best possible service;
Strong brand value. Opportunities Threats Bata has every opportunity to capture export • Growth of Apex can cause barriers to • market; growth of Bata; Marketize royalty based High-end products • Emergence of Grameen-Adidas in • in local market. Bangladesh; Emergence of new entrants like some small companies with low price. •
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Bibliography:
Bangladesh equities, Bata Shoe Company Bangladesh Limited, “ An LBSL/JKSB Research Publication”, March 2009. Annual Report, 2004-2009, Bata Shoe Company Bangladesh Limited. Mr. Rezaul Karim, Manager, Bata Shoe Company (BD) Ltd . Gave information on hiring practices of Bata Shoes, their management profile, tactical and strategic plans of Bata Shoes. [Questionnaire/Interview] (Personal communication, 10 August 2010). Bata Shoes. 2010. [ONLINE] Available All the news. http://www.batabd.com/news/all_news.php. [Accessed 12 August 10].
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Bata Shoes. 2010. Noone in the world knows shoes like we do . [ONLINE] Available at: http://www.bata.com/products.php. [Accessed 12 August 10]. Bata Shoes. 2010. Franchising and licesing opportunities . [ONLINE] Available at: http://www.bata.com/franchising.php. [Accessed 12 August 10]. Datamonitor Reasearch Store. 2010. Company Overview. [ONLINE] Available at: http://www.datamonitor.com/store/Product/bata_shoe_company_bangladesh_ltd? productid=B1968E6B-18EA-448C-A2D8-5C9DE019CD22. [Accessed 12 August 10]. Bata shoes list of companies. 2010. Bata Shoe Co. Bangladesh Ltd . [ONLINE] Available at: http://www.list-ofcompanies.org/Details/10059216/Bangladesh/Bata_Shoe_Co_Bangladesh_Ltd. [Accessed 12 August 10].
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