Mubashir MirzaUmer RehanWaqar AhmedWaqas Ali SyedAshar Jawad

MBA 5 (Eve)

STRATEGIC MANAGEMENT

GROUP PRESENTATION

IMPLEMENTATION OF STRATEGIC MANAGEMENT TOOLS AND STRATEGIES

Scheme of Presentation

IntroductionMission StatementExternal Factor Evaluation (EFE Matrix)Competitive Profile Matrix (CPM)Threats, Opportunities, Weaknesses, Strengths

Analysis (TOWS) MatrixStrategic Position and Action Evaluation (SPACE)

MatrixBoston Consultant Group (BCG) MatrixBalanced ScorecardBlue Ocean Strategy

Introduction

Bata Pakistan was established in 1942 when Pakistan came into being, it was ready to serve the nation.

It was incorporated in Pakistan as Bata Shoe Company (Pakistan) Limited in 1951 and went public to become Bata Pakistan Limited in the year 1979.

http://www.bata.pk/about-us.html

Introduction

During the last year Bata produced over 17.2 million pairs and sold 16.9 out of them with the help of their large distribution network of 400 Retail Stores and Agencies, 13 Wholesale Depots, 23 Distributors and about 400 Registered Wholesale Dealers who are selling goods as independent retailers.

In 2009 the company generated turnover of Rs.6.5, billon showed an increase of 26% against previous year.

Mission Statement

Reinforced Mission Statement To grow as dynamic, innovative, profitable

and market driven domestic manufacturer and distributor, with footwear as our core business, while maintaining a commitment to our employees, to the country, culture and environment in which we operate.

External Factor Evaluation (EFE) Matrix

S# Key External Factors Weight RatingWeighted

Score

  OPPORTUNITIES      

1 Use of Technology 0.1 3 0.3

2 School and College Shoe customers 0.25 4 1.2

3 Exports 0.05 3 0.15

4 Distribution and Retails network 0.05 2 0.1

5 High performance sports market 0.04 2 0.08

6Diversification opportunities (bags, accessories etc)

0.04 1 0.04

7 Infrastructure and Capital investment 0.04 3 0.12

8 Marketing Strategies 0.03 2 0.06

  THREATS      

1 Increasing competition with Local Brands 0.1 3 0.3

2 Increasing competition with International Brands 0.15 3 0.3

3 Inflation 0.04 2 0.08

4 Power shortage 0.03 1 0.03

5 Customer care and Value Added Services 0.04 2 0.08

6 Pricing 0.04 2 0.08

  TOTAL 1.0   2.92

Competitive Profile Matrix (CPM)

COMPETITIVE PROFILE MATRIX OF SHOE INDUSTRY (PAKISTAN)

S#Key Success

FactorsWeight

BATA LOCAL BRANDS CHINESE INTERNATIONAL

Rating Score Rating Score Rating Score Rating Score

1 Advertising 0.2 3 0.6 2 0.4 1 0.2 2 0.4

2 Product Quality 0.3 4 1.2 2 0.6 2 0.6 4 1.2

3 R & D 0.05 3 0.15 2 0.1 3 0.15 4 0.2

4 Customer Loyalty 0.05 2 0.1 2 0.1 2 0.1 2 0.1

5 Financial Position 0.15 3 0.45 2 0.3 3 0.45 3 0.45

6 Global Expansion 0.05 2 0.1 2 0.1 3 0.15 3 0.15

7 Market Share 0.05 3 0.15 3 0.15 3 0.15 2 0.1

8 Pricing 0.04 3 0.12 3 0.12 3 0.12 1 0.04

9 E-Commerce 0.03 2 0.06 3 0.09 1 0.03 3 0.09

10 Customer Service 0.03 3 0.09 3 0.09 1 0.03 1 0.03

  TOTAL 1.0   3.02   2.05   1.98   2.76

TOWS MatrixTOWS Matrix for

STRENGTHS1. Strong supply of raw material

(leather).2. Advanced manufacturing plants.3. It annually produces more than 12

million pairs of leather, rubber, canvas and PVC Plastic footwear of high quality.

WEAKNESSES1. Bata does not present itself as a brand

of corporate and sports personalities.2. Old fashion and old designs.3. Retail management and customer

support.4. Supply chain and Inventory

management issues.

OPPORTUNITIES1. Sports and performance market to be

penetrated.2. The income of the business is still

heavily dependent upon its share of the footwear market. This may leave it vulnerable if for any reason its market share erodes.

3. Transforming BATA in to a fashion brand.

4. Export opportunities in new markets.

SO Strategies1. Can get national and international

contracts of Sports manufacture (S1, O1, O3).

2. Can diversify the nature of business (S1, S2, O2).

3. South American markets can be explored and captured through exports (S1, S2, S3, O4).

WO Strategies1. Can transform itself or develop an

SBU to reflect an image of fashion and innovation (O1, W1).

2. Improved international marketing and supply chain management can assist in penetrating international markets (O2, O4, W1, W4).

THREATS1. Continuous market penetration of local

and international footwear manufacturers and suppliers.

2. The retail sector is becoming price sensitive by each period.

3. Increasing inflation in Pakistan.4. Power shortages and lapse of

manufacture orders.

ST Strategies1. Product development for local taste

and requirements (S1, T1).2. Right sizing and cost minimization to

cater inflation and retailing problems (T2, T3, S3).

WT Strategies1. Improvement in distribution channels

and retail management to combat the penetration of competitors (W3, W4, T1, T2).

2. Project and target based assignments to development teams in efficient resource utilization environment. (T3, T4, W4).

SPACE Matrix

Profitability – BATA PAKISTAN LTD

Margin Analysis – BATA PAKISTAN LTD

Asset Turnover – BATA PAKISTAN LTD

Credit Ratios – BATA PAKISTAN LTD

IMPORTANT FINANCIAL RATIOS

http://investing.businessweek.com/businessweek/research/stocks/financials/ratios.asp?ticker=BATA:PA

SPACE Matrix

Long-Term Solvency – BATA PAKISTAN LTD

Growth Over Prior Year – BATA PAKISTAN LTD

IMPORTANT FINANCIAL RATIOS

http://investing.businessweek.com/businessweek/research/stocks/financials/ratios.asp?ticker=BATA:PA

SPACE MatrixFinancial Strength (FS)

(+1 worst, +6 best)Environmental Stability (ES)

(-6 worst, -1 best)

Return on Assets 6 Rate of inflation -5Leverage 4 Technological changes -4Net income 4 Price elasticity of Demand -3Income/Employee 4 Taxation -3Inventory Turnover 4 Barriers -2 FS Average 4.4 ES Average -3.4

Competitive Advantage (CA)(-6 worst, -1 best)

Industry Strength (IS)(+1 worst, +6 best)

Market Share -3 Growth Potential 5Product Quality -2 Financial Stability 6Customer Loyalty -2 Ease of Entry into market 5Technical know-how -2 Resource Utilization 4Control over Suppliers & Distributors -3 Profit Potential 4 CA Average -2.4 IS Average 4.8

SPACE Matrix

(1.0, 2.4)

Y Axis

FS + ES = 1.0

X Axis

CA + IS = 2.4

Conclusive Strategy to be opted after analysis;

AGGRESSIVE STRATEGY

* Market Penetration

* New Product Development

BCG Matrix for Bata

Balanced ScorecardLearning and Growth

Customers

Objectives Measures Targets Strategic initiatives

Competencies Training and Development

65% of Employees Specialized Trainings

Employee Retention Employee turnover rate Limit turnover to 2 % High rewards for best performers

Employee Satisfaction

Employee Productivity 35% Improvement Employee Involvement and challenges

Philanthropy Increased CSR interventions

2% budget allocation Initiate campaigns for re-imaging corporate citizenship

Team Building # of integrated Engagements

All employees to be part of teams

Cross Departmental Teams

Objectives Measures Targets Strategic initiatives Efficient delivery time management

Improved logistics and support

98% on time Rewards for meeting delivery/cycle time

Customer Loyalty Surveys/Feedback at the time of sales

70% customer retention

Customer service and Product Warrantees

Customer Growth Market share 25% growth in Market share

Dealers to be given attractive margins for exceeding periodic targets

Balanced ScorecardObjectives Measures Targets Strategic initiatives Product innovations Quality/performance

ratings and SurveysImproved designs and endurance capability

Research and development budget to be increased by 25%, involving customers input in innovation

Improved Supply Chain Management

Delivered Cost of Raw MaterialsDistribution Cost

15 % cost reduction through supply chain efficiency

Improved stock and spares management and supplier collaborations

Quality of Dealers Ratings of Dealers Evaluate strategic hubs and core markets

Setup new dealerships and showrooms

Improved Accounting Practices

IFRS/GAAT standards 100 % Conformity Qualified and Ethical Professionals to be hired

Internal Processes

Objectives Measures Targets Str. InitiativesRevenue maximization Sales Growth by market penetration 10% increase in each

product line

Cost minimization Reduced raw material and process costs Unit Cost reduction

Return on Capital Employed

Ratio 5% up

Return on Assets Ratio 5% up“Right sizing” Less labor intensive work environment 15% labor cost cutImprove Shareholder equity

Increase in market value of shares and increased dividend

5% EPS10% DPS

Financials

Blue Ocean DEA

Manufacturing of Car interiors and accessories. Conglomerate diversification. The raw material can be optimally utilized. Collaborations in distribution channels of

partners (e.g. Toyota, Honda, Suzuki). Cost leadership through economy of scales.

Conclusion

Bata Pakistan should focus on highlighting itself as a leading choice for the youth and athletes.

Product development and Total Quality Management should be catered for in future strategies to compete against international brands.

Research & Development and implementation of State-of-the-art technology should be emphasized in internal and external processes.

Strategic diversification should also be pursued keeping in view the high apparent returns and increasing threats.

Mubashir MirzaUmer RehanWaqar AhmedWaqas Ali SyedAshar Jawad

MBA 5 (Eve)

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