change as turnaround bata gurleen kaur parmar pre phd hr

7/26/2019 Change as Turnaround BATA Gurleen Kaur Parmar Pre PhD HR

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Change as Turnaround

Gurleen Kaur Parmar

Pre-Phd

Human Resouce Management



About the Organization

Bata (also known as Bata Shoe Organization)is a family-owned global footwear and fashionaccessory manufacturer and retailer.

Headuarters - !wit"erland.

#t is one of the world$s largest manufacturers andretailers of footwear.

%rganised into three business units& 'ata uroe* based in #taly+ 'ata merging Market (,sia* Pacific* ,frica and atin ,merica)* based

in !ingaore* and 'ata Protectie (worldwide '/' oerations)* based in the 0etherlands



History

'ata was founded by siblings with a smallinheritance in the town of 1lin*2"echosloakia on ,ugust /3* 4563.7omas 'ata and his family had beencobblers for generations.

#n ess than 48 years later* 'ata roduced//88 airs er day.

,fter 7omas 'ata died in a air crash* the

business was headed by 9an ,nton 'ata*his brother and then by 7omas 9 'ata tillhis death in /885 and is now headed by7omas G 'ata



Starting up in India

H#!7%R: stablished in 46;4 as 'ata !hoe 2omany Priate

imited

<ent ublic in 46=; under the name of 'ata #ndiaimited

>irst factory was setu in Konnagar in 46;4* waslater shifted to 'atanagar in <est 'engal in 46;?

'atanagar factory-4st #ndian shoe manufacturingunit to receie the #!% 6884 certification in 466;



Current Scenario

2omany sells around ?8 million airs of shoes annually

7oday the comany is the largest shoe comany in #ndia interms of sales and reenues.

#t commands around ;@ ercent of market share in #ndia.

!read across 388 cities in #ndia.

More than @888 retail outlets

Retail stores in oer =8 countries and roduction facilitiesin /? countries

2urrently it has fie factories located at 'atanagar (<est'engal)* 'ataganA ('ihar)* >aridabad (Haryana)* Peenya(Karnataka) and Hosur (7amil 0adu)



The Bata Story

'ata has traditionally ositioned itself as a one sto familystore for all footwear and related roducts.

7ill the 4658s* 'ata enAoyed an almost monoolistic ositionin the organi"ed footwear market.

'ata - a need brand . Bata met the needs of almost all members of the family, since

it had product ranges for children, men, women etc Bata was the choice for e!eryone in the family "hether it was

shoes for the monsoon, school shoes, formal wear or e!en

comfort wear for the elderly, the brand had something fore!ery member in the Indian household

7here was a eriod in the ast in #ndia when anyonementioned shoes or chaels* there would be a single name

'ata.



Stagnation and #ecline

<ith the adent of other international brands and increasedcometition* 'ata had eentually lost its aeal with the same olddesigns and roducts such as rubber slier brand* Hawai* launched in46@8* other brands like 0aughty 'oy* 'allerina school shoes and ,mbassador.

'ata ket trying to get back by launching brands like 0orth !tar* Marie2laire* Power* remium brand Hush Puies in 58s and 68s but maAorlabor issues and other roblems ket bringing it down.

#n the 68s Managing director* P K Butt* reied a number of sub- brands to contemori"e the image of 'ata and was aidly inoled in

the camaign too but could not bring in many maAor changes. Profits continued to slide* and 'ata #ndia went into the red.

#n the third uarter of /884* 'ata #ndia reorted a net loss of Rs 3.3@crore* against a net rofit of Rs 8.;5 crore the reious fiscal.



The $%%& turnaround

>rom /883 onwards* with a new management i.e. with ' ( Sinha)the former C*O of 'epsi Cola International South Asia+ as

the chairman and the C*O of Bata Chile,

(arcelo illagran, as the (#

,fter osting losses till /883* 'ata made a net rofit of Rs4/.36 crore in the year ended Becember ;4* /88@. MaAorchanges brought in in this year were Bata came hard on the labor irregularities Bata outsourced production in line with its specifications Bata impro!ed the product mi- Bata.s stores were a /ey branding cue with remodeled

interiors in line with a global format Bata shut loss0ma/ing stores and stoc/ed high margin

products.



Today

'ata$s camaigns today are concetuali"ed focusing on

Cfashion* comfort* symbolising shoes that are lifestyle-led* young and ibrant*C says MB Goalakrishnan.

!elling online

0ew !tore >ormats such as its largest store in 7hane* >ooting stores launched in /843 that stock affordable shoes* remium Hush Puies !tores

>launting handbags* sunglasses* clutches and scares as its other

roducts.

<ith all these changes* it would be hard to recognise 'ata in/84;-43 against its troubled ast. 7hough* the classic brands fromthe 58s* 0orth !tar and Power* continue to be strong

contributors.



Brands

Bata Comfit (comfort shoes)

1orth Star (urban shoes)

(arie Claire (womenDs shoes)

Baby Bubbles (childrenDs shoes)Safari (desert shoes)

'ower (athletic shoes)

Hush 'uppies (remium shoes)

'atapata (fli flos)2ootin (trendy shoes)

Bata Industrials (work E safety footwear)

S'A34 (sort shoes)



The Change 5e!ers

,BR!H#P Marcelo Fillagran took charge of 'ata #ndia in early /88@

Fillagran was tasked with rescuing a comany that had reortedthree successi!e years of losses and was facing

ban/ruptcy after haing lost its way amid growing cometition 7o do list&

!hed flab*

imroe brand building*

bum u roduct mi*

shut redundant stores*

streamline manufacturing*

secialise sourcing



Change 5e!ers )Cont+

,ccording to Fillagran* the organi"ation faced the downfall because they did not kee u with an economy that erutedafter liberalisation. 7he brand suffered a crash in consumer confidence.

Production was disruted seeral times because of trouble withunions and

suly chains began to look Aaded. 7hese ut a damer on demand.

7he organi"ation needed to secialise* reduce costs and imroeuality.

'ata ushed aside much of the old guard and romoted young*talented eecuties. 7he comany introduced a oluntaryretirement scheme for 4*3?6 emloyees in /883 alone. #taggressiely cut costs and streamlined the business.




'ata also refurbished its image* closed uniable stores* made sure stores remain oen eery day for 4/

hours

recast outlets and imroed the collection and design of footwear.7oday* it has a wide bouuet of brands targeted at customers as

dierse as adenture enthusiasts and well-heeled eecuties.

7he low-margin canas segment* whose cheaer rices aealedto consumers than the brand and constituted almost half of the

olumes* made way for high-margin leather shoes. !oon* all these moes began to ay off.

7he number of loss-making stores reduced to =3 from 388 between/884 and /88@.

!ales grew ;./ between /88= and /848.

%erating margins imroed to 43.3 between /88= and the first halfof /844.




,fter the turnaround* the comany turned its attention togrowing its retail business 'ata has shut down nearly 388 small stores in the ast fie

years. #n their lace* it added ?6 stores in /886* 485 in /848

and ?5 until 9une /844. ,ll these were Dbig-formatD stores with the si"e uwards of

;*888 s ft. 'ata will also eanded to rural markets and tier ## and tier ###

cities with a oulation of more than 4 lakh.

#n /843 -/84@* 'ata also started the >ootin stores targeting the4@- to /@-year-old age grou with an etensie range of stylish andtrendy footwear and accessories.




!7R,7G: Fillagran said I7he organi"ation needed to secialise* reduce costs and imroe

uality.J abor irregularities HR 2hanges ,dded new roducts and diisions Refurbished its image

'randing (array of brand launched and reamed)

!ecific targeting Marketing (store formats)

!7R27R %utsourced roduction. ,dded a Procurement diision L now to be headed by a FP. Regional Bistribution 2entres (RB2) teams are restructured. 2hanged retail channels(closed old ones and oen new format stores)




HR PR,27#2! Promoting young talent. Foluntary retirement scheme for 4*3?6 emloyees in /883 abour #ssues

Hiring of secialised rofessionals to suort the functions likeuality control* endor deeloment* comliance* inentory* retailand logistics management.

ecutie and G7 Beeloment rogrammes

72H0%%G:* ,#7: ,0B 2%!7! %utsourced roduction in line with its secifications. FRs heled aggressiely cut costs and streamline business.

7he factories hae been seciali"ed to make footwear of articular ariety. Hosur >actory seciali"es in Hush Puies*

'angalore >actory makes !chool shoes and

'atanagar turns out sorts shoes and sandals.

change as turnaround bata gurleen kaur parmar pre phd hr

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