Case study of Bata.What is Bata? How a Market Leader Lost its Monopoly in IndiaBata Successes Story.

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  • Опубліковано 24 січ 2021
  • #Bata #Batacasestudy #SCMPE #StrategicCostManagentandperformanceEvaluation
    Bata Corporation (originally, and in the Czech Republic and Slovakia, known as Baťa) is a Czech multinational footwear and fashion accessory manufacturer and retailer, founded in the town of Zlín, today in the Czech Republic. After World War II, its factories in socialist states were nationalized, while its branches in capitalist states remained family-owned. It is now based in Lausanne, Switzerland. The principal subsidiaries are Bata Europe (based in Zlín), Bata North America (based in Toronto), Bata Asia-Pacific-Africa (based in Singapore) and Bata Latin America (based in Mexico).
    A family-owned business, the company is organized into three business units: Bata, Bata Industrials (safety shoes) and AW Lab (sports style). The company is the world's leading shoemaker by volume, and it has a retail presence of over 5,300 shops in more than 70 countries and production facilities in 18 countries.
    The T. & A. Baťa Shoe Company was founded on 24 August 1894 in the Moravian town of Zlín, Austria-Hungary (today in the Czech Republic), by Tomáš Baťa , his brother Antonín and his sister Anna, whose family had been cobblers for generations. The company employed 10 full-time employees with a fixed work schedule and a regular weekly wage.
    Tomáš, Antonín and Anna Baťa
    In the summer of 1895, Tomáš was facing financial difficulties. To overcome these setbacks, he decided to sew shoes from canvas instead of leather. This type of shoe became very popular and helped the company grow to 50 employees. Four years later, Baťa installed its first steam-driven machines, beginning a period of rapid modernisation. In 1904, Tomáš read a newspaper article about some machines being made in America. Therefore, he took three workers and journeyed to Lynn, a shoemaking city outside Boston, in order to study and understand the American system of mass production. After six months he returned to Zlín and he introduced mechanized production techniques that allowed the Baťa Shoe Company to become one of the first mass producers of shoes in Europe. Its first mass product, the “Baťovky,” was a leather and textile shoe for working people that was notable for its simplicity, style, light weight and affordable price. Its success helped fuel the company’s growth. After Antonín's death in 1908, Tomáš brought two of his younger brothers, Jan and Bohuš, into the business. Initial export sales and the first ever sales agencies began in Germany in 1909, followed by the Balkans and the Middle East. Baťa shoes were considered to be excellent quality, and were available in more styles than had ever been offered before. By 1912, Baťa was employing 600+ full-time workers, plus another several hundred who worked out of their homes in neighbouring villages.
    In 1914, with the outbreak of World War I, the company had a significant development due to military orders. From 1914 to 1918 the number of Baťa’s employees increased ten times. The company opened its own stores in Zlín, Prague, Liberec, Vienna and Pilsen, among other towns.
    In the global economic slump that followed World War I, the newly created country of Czechoslovakia was particularly hard hit. With its currency devalued by 75%, demand for products dropped, production was cut back, and unemployment was at an all-time high. Tomáš Baťa responded to the crisis by cutting the price of Bata shoes in half. The company’s workers agreed to a temporary 40 percent reduction in wages; in turn, Baťa provided food, clothing, and other necessities at half-price. He also introduced one of the first profit-sharing initiatives, transforming all employees into associates with a shared interest in the company's success (today's equivalent of performance-based incentives and stock options).
    Shoemaker to the world
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    Consumer response to the price drop was dramatic. While most competitors were forced to close because of the crisis in demand between 1923 and 1925, Baťa was expanding as demand for the inexpensive shoes grew rapidly. The Baťa Shoe Company increased production and hired more workers. Zlín became a veritable factory town, a "Baťaville" covering several hectares. On the site were grouped tanneries, a brickyard, a chemical factory, a mechanical equipment plant and repair shop, workshops for the production of rubber, a paper pulp and cardboard factory (for production of packaging), a fabric factory (for lining for shoes and socks), a shoe-shine factory, a power plant and farming activities to cover food and energy needs. Workers, "Baťamen", and their families had at their disposal all the necessary everyday life services, including housing, shops, schools, and hospital.
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