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Auditors
Rahman Rahman HuqChartered Accountants9,
Mohakhali C/A (11th
Floor)Dhaka-1212
Company Secretary
Md. Hashim Reza
Legal Advisers
Malik Law Associates
Bankers
Eastern Bank Ltd.Dutch Bangla Bank Ltd.HSBC
Ltd.Islami Bank (Bangladesh) Ltd.
Tannery
Dhamrai, Dhaka
Share Liaison Office
6, B. B. Avenue (2Floor)Dhaka
Registered Office
Bata Shoe Company (Bangladesh) LimitedTongi Industrial
AreaTongi, Gazipur
Factories
1 . T o n g i I n d u s t r i a l A r e a Tongi, Gazipur
2.Dhamrai, Dhaka
B A C K G R O U N D / H I S T O R Y O F B AT A S H O E C O .LTD
The business that became the Bata Shoe Organization was established
O n August 24, 1894 in Zlin, Czechoslovakia by Tomas Bata, and included his brother Antonin
and sister Anna. Although this business was new, the Bata name had b e e n p a r t o f a
t r a d i t i o n o f s h o e m a k i n g f o r e i g h t g e n e r a t i o n s , s p a n n i n g t h r e e hundred years.
It was one of the first modern-day shoe 'manufacturers', a team of stitch and shoemakers
creating footwear not just for the local town, but also for distant retail merchants. This
departure from the centuries-old tradition of t h e o n e m a n c o b b l e r s w o r k s h o p w a s
a brand new
concept
creating an
entirely
n e w i n d u s t r y.
T h e B a t a e n t e r p r i s e r e v o l u t i o n i z e d t h e t r e a t m e n t o f employees
and
labor
conditions. Tomas consistently maintained a human focus, t h e enterprise built housing,
schools and a hospital near the shoemaking plant in Z l i n . I t p r o v i d e d f o o d a n d
i n e x p e n s i v e r e n t d u r i n g v e r y d i f f i c u l t t i m e s . B a t a companies later provided rail
services, construction, insurance, publishing and a tannery in Zlin." T h e B a t a S ys t e m "
d e v i s e d b y t h e Z l i n t e a m , a n d l a t e r a p p l i e d i n o t h e r B a t a Shoe Organization
companies, organized operations into autonomous workshops and departments ("profit
centre"), allowing employees to contribute ideas and stimulate production, and
contributed significant breakthroughs in footweartechnology. B y 1 9 3 8 B a t a S h o e
O r g a n i z a t i o n h a d e s t a b l i s h e d a u n i q u e a n d widespread presence, designing,
producing and marketing footwear in more t h a n 3 0 c o u n t r i e s . T h e B a t a S h o e
O r g a n i z a t i o n r e g a r d e d i t s e l f a s a rather than multinational enterprise, making it a
priority to contribute to the economy in any new markets it entered. 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 i t s r e t a i l
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.
BATA TODAY
B a t a i s o n e o f t h e w o r l d s w i d e s t r e a c h i n g c o m p a n i e s , w i t h o p e r a t i o n s i n
6 8 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. B a t a o p e r a t i n g
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
andmarketing support. Each business unit is entrepreneurial in nature, and
canq u i c k l y a d a p t t o c h a n g e s i n t h e m a r k e t p l a c e a n d s e i z e p o t e n t i a l
g r o w t h opportunities.
BATA LEADERSHIP POINTS:
Bata operates in many different economic and cultural environments around the world,
dictating very different types of operations. Although Bata does not sell the same
shoes nor does it have identical stores in each country, customers will recognize common
elements to the Bata experience everywhere in the world. These common elements are
the Bata Leadership Points.
The best product
The best product of Bata companies offers our customers fresh, fashionable footwear and
accessories, designed specifically for the needs of the local market. Our shoes are
always well made from quality materials.
The best service
The best service w h e r e t h e i n I n d i a o r I t a l y, o u r s a l e s a s s o c i a t e s o f f e r
c o n s i s t e n t l y f i r s t - c l a s s service. They are well trained to ensure a proper fit, and
we pledge customer satisfaction.
The best value and quality
The best value and quality the efficient sourcing and distribution of Bata products, we can
control the cost and quality at every step to ensure value to our customers.
The best locations
The best locations Bata stores are modern, attractive and located conveniently to our
customers.B a t a c o m p a n i e s u t i l i z e i n n o v a t i v e p r o m o t i o n s a n d d i s p l a y
s t o d i s p l a y o u r products in attractive manner.
BATA BANGLADESH:
The Bata Shoe Organization was founded in 1894 by Czech businessman Tomas Bata in the city
of Zlin, what was then Czechoslovakia. Coming from a family of shoemakers with a long
heritage of eight generations and over three hundred years, Tomas Bata capitalized on
knowledge, expertise and skills to propel his newly founded company forward. The introduction
of factory automation, long distance retailing and modernized shoe making ensured the
profitability of the company from the very beginning. It is now the worlds largest manufacturer
and marketer of footwear operating across the globe.
Today the Bata Shoe Organization is a sprawling geo-centric company encompassing operations
in more than 70 countries around the world and is managed by 4 regional commercial business
units (CBUs) across five continents. It serves 1 million customers per day, employs more than
50,000 people, operates 5,000 retail outlets, manages a retail presence in over 70 countries and
runs 27 production facilities across 20 countries.
In Bangladesh, Bata started its operation in 1962. The company is one of the largest taxpaying
corporate bodies contributing Tk. 1.2 billion (year 2009) which represents approximately 70% of
tax paid by the entire footwear sector of Bangladesh. Currently Bata Shoe Company
(Bangladesh) Limited operates two manufacturing facilities one in Tongi and the other in
Dhamrai. With a production capacity of 110,000 pairs of shoes daily, the company also has a
modern tannery facility with an output of 5 million square feet of leather annually. An annual
shoe sale currently stands at slightly more than 30 million pairs with a turnover for the year 2009
of Tk 5 billion.
Bata is playing a pivotal role in developing the leather industry of the country. Bata has a firm
commitment to eco-friendly business and a state of the art Effluent Treatment Plant (ETP) has
been set up to provide a pollution free environment for both workers and the locality.
Fashion would never be complete without a well designed pair of shoes. This marketing insight
has prompted Bata to introduce a number of designers collections for men, women and children.
Internationally renowned brands such as Bata Comfit, Marie Claire, Hush Puppies, Scholl, Nike,
Bubblegummers, Sandak, Weinbrenner and Bfirst are a few names that testify to the momentous
change towards branded shoe marketing in Bangladesh. Specialized shoe categories such as
athletic shoes have been targeted through development of the Power brand.
Uncompromising quality with striking designs have put Bata shoes in a key position to appeal to
different segments of consumers.
Another major change in the Bata business policy is the segmentation of retail outlets according
to profiles of different market segments and the introduction of novel concepts such as Bata City
Stores. These selective outlets, in conjunction with other types of outlets such as Bata Bazar and
Bata Family Stores, are adding a new level of consumer satisfaction. The City Stores incorporate
spacious floor space allowing a comfortable shopping experience, modern interior dcor
enriched with novel shelving systems, fittings, fixtures and lighting that can be found in the large
retail shops in the Far East and Europe. Bata has a network of 242 retail outlets located
strategically in different parts of the country. These retail outlets are an integral part of our brand
marketing. This extensive retail network is supplemented by an equally extensive network of
depots and dealers. Bata has 13 Wholesale depots covering Bangladesh. Under these depots 390
RWD (Registered Wholesale Dealers) and 553 DSP (Dealer Support Program) stores are
operating. Bata Bangladesh has already developed its vision up to 2013 showing significant
business growth as well as increased market share.
One of the critical areas associated with external shareholders and the community at large is the
Corporate Social Responsibility Program of the company. From supporting nationwide sports
sponsorships and disabled persons to addressing environmental concerns, scholarship programs,
charity contributions etc Bata has always supported individuals and communities in need. A
partnership with other voluntary and charitable organizations is another prominent feature of
Batas corporate social responsibility. Bata, in partnership with CARE, extends assistance to over
two thousand rural women in order to become independent entrepreneurs in the Rajshahi,
Comilla and Chittagong division selling shoes from door to door under its Rural Sales
Programme.
Since its inception, Bata Shoe Company (Bangladesh) Ltd. has strived towards one goal
customer satisfaction. With the vision of building a worldwide family of satisfied customers and
dedicated workers the legacy of Tomas Bata continues strong and unabated to this day the
tradition is safe.
SOURCES OF PRODUCTION
Bata Bangladesh has four different sources of production:
Own:
Bata Bangladesh has two factories in Tongi and Dhamrai. All the rubber and r e l a t e d
p r o d u c t i o n h a s b e e n d o n e i n Ton g i f a c t o r y. E v e r y t yp e o f l e a t h e r products
are been manufactured in the Dhamrai factory. About 92% of all Bata products are
produced in these two factories.
Outsourcing:
As related and supporting industries are growing in shades of the massive structure of Bata
Bangladesh. T h e p a r t i c i p a t i o n o f outsourcing in the companys business is 4%.
Import:
With high import duty it is hard for Bata to import a substantial amount from different
subsidiaries and other outside suppliers. It can be mentioned that t h e d u t y f o r
importing complete shoe here in Bangladesh is 101%. Even though Bata
B a n g l a d e s h i m p o r t s h o e s t o k e e p u p w i t h t h e m a r k e t t r e n d , which is around 1%
in every year.
INTERNAL ANALYSIS:
Target Market:
L o w e r t o m i d d l e i n c o m e g r o u p a s w e l l a s t h e u p p e r segment.
Basis of Segmentation:
There are two different criteria used in order t o s e g m e n t t h e m a r k e t . T h u s B a t a S h o e
O r g a n i z a t i o n d i v i d e d h e m a r k e t g e o g r a p h i c a l l y a s w e l l a s o n t h e b a s i s
O f p r o d u c t t y p e ( t h e r a p e u t i c group).
Retail marketing manager:
As retail is the highest contributor of the companys business. Retail marketing manager
is responsible for planning, advertising as well as the whole of the retail operation
around the country. He also deals with the governmental regulation in respect of price,
stability, license, fees etc. for launching new products. It is his responsibility to take
initiative to pass all the necessary documents from the regulation board of
government. F o r t h i s r e a s o n t h i s p o s t - r a n k e d t h i r d i n t h e h i e r a r c h y o f t h e
companies organ gram in Bangladesh.
Wholesale marketing manager:
T h e f u n c t i o n a l o b j e c t i v e o f t h e wholesale marketing manager is to monitor and
planning of wholesale market operation of Bata Bangladesh, which also is a very important
sales channel of the company.
Merchandising manager:
In charge of the heart of the company the M e r c h a n d i s i n g d e p a r t m e n t .
W h o r e p o r t s t o t h e C F O a n d m a n a g i n g director directly and to some instance to
the sales channels especially to R e t a i l ? A l l t h e c a t e g o r i e s o f s h o e s a r e h e a d e d
b y t h e M e r c h a n d i s i n g officer/Category Merchandiser/Buyer who is in charge of
every detail of his/her category. He/she is responsible for his category business, choosing the
right merchandise according to the market need, distribute it properly and getting the
feedback of the performance of his/her merchandise in the market and plan
accordingly. He/she on the other hand repots to the M e r c h a n d i s i n g m a n a g e r.
There are basically four categories in Bata
Bangladesh
of
which
a
merchandiser
who
is
basically
the
category has a distributor,
w h o i s r e s p o n s i b l e o f d i s t r i b u t i o n o f t h e merchandise to the right place at
the right time and the right amount. A d e s i g n e r a l s o u n d e r t h e c a t e g o r y
m e r c h a n d i s e r w h o i s r e s p o n s i b l e f o r designing new shoes according to the market
needs and the advice of the merchandising officer.
:Production Department:
Production division is aimed to increase productivity and quality as much as required
without spending more. There are two plant m a n a g e r s o n i n Ton g i a n d o t h e r i n
D h a m r a i . T h e y a r e c o n t r o l l e d b y t h e director of production. The function of
planning and supply manager is material planning, production planning etc.
Finance Department:
To maximize the interest of the shareholders of Bata Shoe Co. (BD) Ltd.
To allocate the fund in a proper way that minimizes its
c o s t a n d maximizes its profit.
To ensure conductive financial climate of the company.
To ensure sound management of the administrative staff and financial matters
of administrative staff and selection grade employees.
Company Secretariat
To ensure discipline, mutual coordination, smooth communication among the
administrative stuff and thereby peaceful corporate environment.
To provide sufficient training and opportunities to the administrative stuff to improve
their skill and efficiency for the well being of the company.
To ensure proper management of the financial matters of selection grade administrative
stuff.
Accounts Department:
To ensure conducive financial trend of the company.
To ensure sound financial plan in terms of raising and allocation of funds and
thereby maximizing shareholders interest.
To prepare Annual Financial Plan of the company in terms of
b o t h procurement and allocation of fund.
To maintain books of accounts, cost and financial accounts o
f t h e company as per the requirement of law and group head office.
To manage the assets of the company.
t h e c o u n t r y. E x i s t i n g r e t a i l s t o r e s w o u l d b e u p g r a d e d e v e n a s w h o l e s a l e
d e p o t s would be set up in smaller towns and semi-urban areas. BB's main efforts will bet a
streamlines the wholesale business. BB's thrust is on becoming marketing
driven firm from a manufacturing oriented company. Steps are also being taken t o r e d u c e
c o s t s , i m p r o v e d i s t r i b u t i o n l o g i s t i c s a n d f o c u s o n l a u n c h o f n e w products in
order to improve the performance of the company.
INDUSTRY ANALYSIS:
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 B a n g l a d e s h i t i s p r e s e n t l y g o i n g t h r o u g h
t h e g r o w t h s t a g e s w h i c h a r e characterized by many new consumers entry
in the market, by fall in price as e x p e r i e n c e a n d e c o n o m i e s o f s c a l e
h a v e b e e n a t t a i n e d , b y d e v e l o p e d distribution channel and by increasing
intensity of competition.
REEBOK:
They only sale sports shoes and some children shoes who are in their teens. The price of all
shoes is high 1200+. The color and design of their shoes are of high quality. Reebok brings
different types T-shirts, tracksuits and non-shoes items, which are quite expensive. After every 12 months new design of shoes comes in their store. 20-25% discounts on specific design
are their most effective sales c a m p a i g n . Ab o u t . 1 0 % m a r k e t s h a r e R e e b o k i s
q u i c k l y g a i n i n g g r o u n d a n d getting attention of the brand conscious segment of the
country.
NIKE:
Same as Reebok, Nike only offers high quality sports and some children shoes. Their
shoes are also expensive sports shoes ranging from 2000-5000, which are sold most. Best-sold
non-shoe items such as T-shirt, tracksuits are ranging from750-2250 taka. They open their
store everyday of the week. They brought new design in the market after every 3 months.
They dont have any sales campaign u p t o n o w . S a m e a s R e e b o k b u t
t h e i r m a r k e t s h a r e i s l e s s t h a n t h e i r international rival as they have
enter Bangladesh market for 6 or 7 years.
WOODLAND:
Trendy high quality shoes for all. They dont provide school shoes. Dust, Brown
and Green are their dominating color in every category. They have lots of non- shoes
item like T-shirts, trousers, and shoe polish. The most popular price ranges among those are 6951395 taka. They open every day from 10:00-9:00. It brings n e w d e s i g n i n a f t e r 3 - 4
m o n t h s . T h e e f f e c t i v e s a l e s c a m p a i g n i s s a m e a s R e e b o k . Ver y g o o d
quality trendy shoes which quickly gaining ground in the c o u n t r y. T h i s
i s t h e s a m e c o m p a n y t h a t b r i n g s R e e b o k i n t h e c o u n t r y a s franchisee.
PAGASUS:
They made their name as sports shoe manufacturer. After that they come up shoes
for both the male and the women. Their best-sold price range is 800-1200for men, 550-750
for women and 300-500 taka shoes for children. Their best sold sports shoes are ranging
from 700-900 taka. They open their store everyday from 9:00-10:00 in the evening. After 2
months they bring out at least some kind of new design in one of their segments. Most effective
sales campaign up to 20%discount. Their market presence in the country is over 25
years but not doing that well. Market share is only .50% mainly the quality of the shoe is
moderate.
HOMELAND:
O p e n everyday9:00-10:00PM in the evening. On average bring out new design after23months. Discount up to 20% on specific design are their most effective sales
campaign. It is a Bangladeshi company. Not too many people know them but t h e y
are in market for more than 10 years. Their main lacking is their poor
distribution channel. Only 15-20 stores in the country is the indication of it.
INDEPENDENT HIGH:
It is most popular among buyers. They are the type of seller who usually sold
relatively high priced imported shoes. Mens best-sold price ranges are1400-1750
taka, womens 600-750 taka, no school shoes but have childrens shoes320-400 taka.
They remain open every day form 10:30-10:00PM at night.
RECOMMENDATIONS:
Give sales discount and free samples to influence more sales
i n t h e growing shoe market.
Reduce the price level.
More advertisements should be aired.
Should build awareness among the potential users of this type of footwear product.
Bring more design, color, and design combination to be competitive.
To merge with the local companies and to expand more segmentation.
CONCLUSION:
From the analysis of Bata Shoe Company Bangladesh Ltd and the shoe industry we have
identified that the shoe industry is growing and identified their main weakness is
insufficient lack of development with the rapid changing market needs, insufficient
promotional activities, and downward trend of quality. On the other hand, distribution system
and vertical integration are the strengths of Bata From strategic marketing viewpoint; we see that
Bata is taking corrective stepson almost all the way. In very few sides Bata has lacking. Based
upon these facts recommended strategies would assist in more growth of Bata shoe
company Bangladesh Ltd. in among the upcoming fierce competition in the shoe industry.