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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