2

nd
Assignment
Group: C

Political
Political 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.
Economic
Economic 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.
Technology
Technology 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 Factor

Weight

Rating
Weighted
Score
Opportunities
Trend Changes (people are becoming more health conscious,
which means more people are moving towards work-outs and
different games.)
0.20 3 0.60
Govt. trade policies (Allowing easy trade with India).
0.14 3 0.42
Investing and encouraging growth in renewable technologies
0.14 3 0.42
Threats
Service, Styleo, Milli and Starlet are the strong competitors.

0.19 2 0.38
New entrants can easy come into the market because of low
barriers.
0.06 1 0.06
Pakistan economic recession
0.08 2 0.16
China Shoes market.

0.19 1 0.19
Total 1.00 2.23

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 Factor

Weight

Rating
Weighted
Score
Strengths
They have a strong brand image.
0.16 3 0.48
Investment in development of Automated plant.
0.11 4 0.44
Strong Network (More then 5000 outlets all over Pakistan)
0.09 4 0.36
They have strong relationship with the suppliers.
0.12 3 0.36
Huge range of product.
0.15 3 0.45
Weaknesses
High advertisement expenses causes increase in operating cost.
0.13 2 0.26
Low operating profit margin.
0.10 2 0.20
Highly dependent just on super market.
0.09 1 0.09
Soft drink price growth rate is Not reaching the CPI growth
rate
0.05 2 0.10
Total 1.00 2.74

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.