2nd AssignmentGroup: C

PoliticalPolitical factors are those which are directly controlled by Government and political parties. These factors can influence directly to companys strategies and policies. Bata is operating in number of countries like Europe, Africa, Asia, the Middle East, and Australia so it has to pay a close attention to political climate of these countries. Bata cant isolate its one operating country from others as their system is highly integrated so they have to monitor consistently not only the political situations but laws and regulations also. While talking about Bata Pakistan, political instability is one of the biggest thread for them. Rapid changes in political governments effect badly on companys growth. With every change in political government policies and procedures of trade also changes. So Bata have to manage and reshape its strategies. But now a days political government is supporting industries and giving them subsidies. Trade tariffs with neighbor countries are also lower down which is a good sign for Bata Pakistan, where they can easily import raw martial India and China. India a big hub for Bata company and Bata Pakistan has to import time to time different raw martial through India. Another problem we are facing is terrorism. Terrorism is one of the major problem of Pakistan. Now a day it is the most crucial hurdle in growth of industries. Energy crisis is another factor which demolishing industries growth heavily. It causes lower and costly production which leads to lower profit margin and ultimately downsizing to unemployment. One good thing is that now government is trying to develop industry safety regulations, basically an effort to support and give maximum protection to industry sector to make it more safe and stable.EconomicEconomic factors are directly controlled and influenced by financial institutes like State Bank of Pakistan, so they help the industry in giving economic soundness and provide financial aid to industry to survive at the time of crises. Operating in number of different countries Bata has a global economic perspective with focus on each individual market. Operating in large number of markets give an edge to Bata to learn from different market experience, so when they face any variable economic changes in the market they can gather information and resources from all over the world to address any issues. In Pakistan overall economic conditions are not very good as the inflation rate is increasing day by day. Currency vale is also decreasing at the same rate which lowers down the buying power of consumers like Currency fluctuations can equate to higher or lower demands for Bata shoe which in turn affect profitability. It can also mean a rise in costs or a drop in returns which is a clear threat for a company. We are holding approximately $$$ % interest rate which is among the highest in world so it makes very difficult for any industry like Bata to have its economic activities smoothly. One advantage to Bata in this regard is the lowest labor rates. At the end of 2013 financial year Pakistan has the lowest industrial labor cost among other countries (including very minimal labor laws), which is an opportunity for Bata.

Social & Cultural Social trends and the demographics are the key elements that are taken in consideration to do business in any country. Each country has different culture and trend basing on their norms and values. Now people are becoming more health conscious, which means more people are moving towards work-outs and different games. To cater these all Bata had a large number of product range to satisfy different segments with different needs and demands. Like females are coming to games and athletics more than ever, keeping them in view Bata launch a full range of Female Sports shoes (Power). Brand awareness in rural areas is another problem Bata is facing. Strong media support towards brands awareness can influence these people decisions about shoes. TechnologyTechnology is the best weapon to win the war of competition in these days and Bata Company is a head in the game of technology field. The Bata operates in more than 80 countries world-wide. This enables Bata to have lots of experience and resources to draw from for research and development purposes. According to one of their department head, The foundation of the companys growth is a deep understanding of economic stimuli and customer needs, and the ability to translate them into customer-desired offerings through leading edge R&D (Bata). Bata have a strong R&D department whose activities are carried out in key areas of production, process and martial. R&D department also emphasizes on solid waste utilization to create a pollution free work environment. Automation is another recent goal on which Bata is working. All over the world companies are moving from labor intensive to automated plants. SWOT ANALYSIS:Strengths:i. Pakistans second biggest Foot manufacturers.ii. They are providing services at 500 outlets around the Pakistan by operating in more than 20 cities.iii. Huge range of brands.iv. They looked outside the footwear industry for the expansion.v. They have established a strong public image through their social responsible act.vi. Providing quality at an affordable price.Threats:i. Service, Styleo, Milli and Starlet are the strong competitors.ii. New entrants can easy come into the market because of low barriers.iii. China Shoes market.iv. Pakistan economic recession.

External Factor Evaluation (EFE) Matrix:Key External FactorWeightRatingWeighted Score

Opportunities

Trend Changes (people are becoming more health conscious, which means more people are moving towards work-outs and different games.) 0.2030.60

Govt. trade policies (Allowing easy trade with India).0.1430.42

Investing and encouraging growth in renewable technologies0.1430.42

Threats

Service, Styleo, Milli and Starlet are the strong competitors.

0.1920.38

New entrants can easy come into the market because of low barriers.0.0610.06

Pakistan economic recession0.0820.16

China Shoes market.

0.1910.19

Total1.002.23

Analysis:As the Total Weighted Score is 2.23 which is less than the 2.50, so it shows that the company is not availing of the opportunities and not avoiding the threats.

Internal Factor Evaluation (IFE) Matrix:Key Internal FactorWeightRatingWeighted Score

Strengths

They have a strong brand image.0.1630.48

Investment in development of Automated plant. 0.1140.44

Strong Network (More then 5000 outlets all over Pakistan)0.0940.36

They have strong relationship with the suppliers.0.1230.36

Huge range of product. 0.1530.45

Weaknesses

High advertisement expenses causes increase in operating cost.0.1320.26

Low operating profit margin.0.1020.20

Highly dependent just on super market.0.0910.09

Soft drink price growth rate is Not reaching the CPI growth rate0.0520.10

Total1.002.74

Analysis:As the Total Weighted Score of the IFE Matrix is 2.74 which greater than 2.50, so it shows that the company has strong internal position.