GROUP PRESENTATION

STRATEGIC MANAGEMENT
IMPLEMENTATION OF STRATEGIC
MANAGEMENT TOOLS AND STRATEGIES

Mubashir Mirza
Umer Rehan
Waqar Ahmed
Waqas Ali Syed
Ashar Jawad

MBA 5 (Eve)
 Scheme of Presentation
 Introduction
 Mission Statement
 External Factor Evaluation (EFE Matrix)
 Competitive Profile Matrix (CPM)
 Threats, Opportunities, Weaknesses, Strengths
Analysis (TOWS) Matrix
 Strategic Position and Action Evaluation (SPACE)
Matrix
 Boston Consultant Group (BCG) Matrix
 Balanced Scorecard
 Blue 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
Weighted
S# Key External Factors Weight Rating
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
Diversification opportunities (bags, accessories
6 0.04 1 0.04
etc)
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)

Key Success BATA LOCAL BRANDS CHINESE INTERNATIONAL
S# Weight
Factors
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 Matrix for
OPPORTUNITIES
1. 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.
THREATS
1. 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.
STRENGTHS
1. Strong supply of raw material
(leather).
TOWS Matrix
2. Advanced manufacturing plants.
3. It annually produces more than 12
million pairs of leather, rubber, canvas
and PVC Plastic footwear of high
quality.
SO Strategies
1. 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).
ST Strategies
1. Product development for local taste
and requirements (S1, T1).
2. Right sizing and cost minimization to
cater inflation and retailing problems
(T2, T3, S3).
WEAKNESSES
1. 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.
WO Strategies
1. 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).
WT Strategies
1. 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

IMPORTANT FINANCIAL RATIOS

Profitability – Margin Analysis – Asset Turnover – Credit Ratios –

BATA PAKISTAN LTD BATA PAKISTAN LTD BATA PAKISTAN LTD BATA PAKISTAN LTD

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

IMPORTANT FINANCIAL RATIOS

Long-Term Solvency – Growth Over Prior Year –

BATA PAKISTAN LTD BATA PAKISTAN LTD

http://investing.businessweek.com/businessweek/research/stocks/financials/ratios.asp?ticker=BATA:PA
 SPACE Matrix
Financial Strength (FS) Environmental Stability (ES)
(+1 worst, +6 best) (-6 worst, -1 best)
Return on Assets 6 Rate of inflation -5
Leverage 4 Technological changes -4
Net income 4 Price elasticity of Demand -3
Income/Employee 4 Taxation -3
Inventory Turnover 4 Barriers -2
       
FS Average 4.4 ES Average -3.4

Competitive Advantage (CA) Industry Strength (IS)

(-6 worst, -1 best) (+1 worst, +6 best)
Market Share -3 Growth Potential 5
Product Quality -2 Financial Stability 6
Customer Loyalty -2 Ease of Entry into market 5
Technical know-how -2 Resource Utilization 4
Control over Suppliers &
Distributors -3 Profit Potential 4
       
CA Average -2.4 IS Average 4.8
 SPACE Matrix

YY Axis
Axis
FS
FS ++ ES
ES == 1.0
1.0

XX Axis
Axis
CA
CA ++ IS
IS == 2.4
2.4
(1.0, 2.4)

Conclusive
Conclusive Strategy
Strategy to
to be
be
opted
opted after
after analysis;
analysis;

AGGRESSIVE
STRATEGY
** Market
Market Penetration
Penetration
** New
New Product
Product Development
Development
BCG Matrix for Bata
 Balanced Scorecard
Learning and Growth
Objectives Measures Targets Strategic initiatives
Competencies Training and 65% of Employees Specialized Trainings
Development
Employee Retention Employee turnover rate Limit turnover to 2 % High rewards for best performers

Employee Employee Productivity 35% Improvement Employee Involvement and

Satisfaction challenges
Philanthropy Increased CSR 2% budget allocation Initiate campaigns for re-imaging
interventions corporate citizenship

Team Building # of integrated All employees to be Cross Departmental Teams

Engagements part of teams

Customers
Objectives Measures Targets Strategic initiatives
Efficient delivery Improved logistics and 98% on time Rewards for meeting delivery/cycle
time management support time
Customer Loyalty Surveys/Feedback at 70% customer Customer service and Product
the time of sales retention Warrantees
Customer Growth Market share 25% growth in Dealers to be given attractive margins
Market share for exceeding periodic targets
 Balanced Scorecard
Internal Processes
Objectives Measures Targets Strategic initiatives
Product innovations Quality/performance Improved designs and Research and development budget
ratings and Surveys endurance capability to be increased by 25%, involving
customers input in innovation

Improved Supply Chain Delivered Cost of 15 % cost reduction Improved stock and spares
Management Raw Materials through supply chain management and supplier
Distribution Cost efficiency collaborations
Quality of Dealers Ratings of Dealers Evaluate strategic hubs Setup new dealerships and
and core markets showrooms
Improved Accounting IFRS/GAAT standards 100 % Conformity Qualified and Ethical Professionals
Practices to be hired

Financials
Objectives Measures Targets Str. Initiatives
Revenue 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 Ratio 5% up
Employed
Return on Assets Ratio 5% up
“Right sizing” Less labor intensive work environment 15% labor cost cut
Improve Shareholder Increase in market value of shares and 5% EPS
equity increased dividend 10% DPS
 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.
 We value your feedback…

Mubashir Mirza
Umer Rehan
Waqar Ahmed
Waqas Ali Syed
Ashar Jawad

MBA 5 (Eve)