Details

Case

Educator Copy

Bata: Strategic Choices

Jawaid A Ghani


INDUSTRY : Footwear

AREA : Marketing

ORGANIZATION : Bata

LENGTH : 29

LUMS No : 04-2323-2004-1

PUBLICATION YEAR : 2004

DESCRIPTION

KEYWORDS:

Bata,Strategic Choice,Marketing,Footwear,Pakistan,Shoes,Vertical Integration,Manufacturing,Buying Power


DESCRIPTION:

The case describes the history of Bata (Pakistan) together with relevant information on major competitors in Pakistan's footwear industry. Bata started as a vertically integrated manufacturer and soon dominated the industry. The development of the leather export industry and growth in consumer buying power in the 1080s, selective imposition of sales tax in the mid-1980s, and lowering of trade barriers in the 2000s, resulted in the emergence of firms specializing in different stages along the value chain. When this occurred, Bata¿s wide scope and vertical integration no longer remained a source of competitive advantage, and resulted in threats from inexpensive imports and leaner and more specialized firms. The case allows students the opportunity to analyze outsourcing decisions, issues related to franchised versus company-owned stores, and introduction of global brands, in the context of a highly competitive and rapidly changing industry. 


LEARNING OBJECTIVES:

The Bata case is designed for use in the strategy course in the module on organization limits to the scope of the firm. The case enables students to: 1) Discuss the economic and strategic rationales for vertical integration. 2) Apply the theoretical treatment of market failures and transaction cost economics to a practical problem. 3) Discuss notions of "relation-specific" assets, uncertainty level, and core competence. 4) Examine how broad scope can be a competitive advantage or disadvantage depending on the stage of industry development. 5) Examine how firms within the same industry can evolve varying sets of core competencies. 6) Study an industry's evolution from infancy to maturity. 8) Evaluate the impact of brand management and product mix decisions on channel design. 9) Discuss why a firm might simultaneously decrease its level of backward integration while increasing its level of forward integration.


SUBJECTS COVERED:

Marketing