Bata is renowned for the quality products that are provided to its customers across 70 different countries in the international market. The company has more than 7900 outlets that are fulfilling the diverse needs of its target market. The company has created different shoe designs, keeping the different needs of its diverse market. In addition, Bata has manufactured shoe care products as well as accessories for women such as handbags (Bata Brands, 2016). The Boston Consulting Group (BCG) Matrix helps an organization to recognize the business units that are growth oriented and the products in the portfolio that have low growth chances. The management can direct their efforts towards the growing segments and make divestment decisions for the unprofitable ones. Bata has been analyzed through BCG Matrix as outlined in the following section:
Cash Cows
The cash cows are the main source of financial stability for an organization. These products have created a strong hold in the market and were able to establish a high demand among the consumers. This strong position has enabled these products to become the main source of earnings for a business entity. The manager’s role is to gain as much profit out of the cash cows as possible and direct that financial output to other business units needing investment to grow. The mature industry enables the organization to gain high level of profits from the products denoted as cash cows. Some items manufactured by Bata can be seen as cash cow because they have been a major source of revenue for the company and had sustained its profitability over the years. The school shoes being manufactured by the company are a cash cow for Bata as the industry has matured over the years, and the demand for the school shoes has gradually increased. The market share of Bata in the school shoes category is also stable, which has led to the conclusion that school shoes are a main source of earning for Bata (Ahari, 2017). Apart from school shoes, Bubble Gummers brand has become a cash cow owing to the high sales it creates for the company in the global market.
Stars
The products which generate enough amount of revenues for the firm to be deemed as profitable, yet have the chances of expanding further are termed as Stars. One of the reasons why stars have a chance of growth in future is that the industry has scope for growth, consequently supporting the increasing market share of these products. The star products can later on become a leading source of profitability for the firm when the market reaches maturity and no further increase in market share is expected, thus indicating that the stars can become cash cows, depending on the favorable market conditions. These products have some chance of improving their financial performance as the industry has the potential to progress, offering growth opportunities to the question marks. Bata has moved beyond its regular school shoes image and created a position as a brand that offers contemporary shoes and accessories that are in accordance to the fashion trends and appeal the youth (Heng, 2017). For instance, Marie Claire is one such addition to the Bata product range which is a rising star. The shoes and hand bags under the brand Marie Claire are designed for women who seek footwear and accessories that are suitable for their professional lifestyle. There are other brands that have created a strong presence in the market such as Ambassador, Weinbrenner and Comfit have been in high demand, and their market share is likely to increase in future.
Question Marks
In the product portfolio being managed by an organization, some products have lower profitability as compared to cash cows and stars. In addition to the weaker financial return yielded by these business units, the future progress of the products termed as question marks is marked by uncertainty. If the market conditions are favorable and products is able to generate a high market share, it can become a star. On the other hand, being restricted by market conditions and continued poor performance can lead to slower growth of market share. Products such as shoe care products have not been able to create a significant position in the market as compared to its shoe brands that have generated high sales, making it a question mark. The management at Bata can invest in these products as there is scope for further growth. The leather shoe cream, for instance targets the customers who purchase leather shoes. This pairing can help Bata in driving up the sales in this domain, making this product move out of the question mark category.
Dogs
The products or business units that are continuously underperforming despite the investment and marketing initiatives taken by the company are regarded as dogs. These products are not likely to experience any significant improvement as the market conditions are not favorable and the industry doesn’t have any noticeable capacity for growth. The poor outlook of growth in terms of market share makes these products a challenge for the organization as they keep on taking up the investment but not generating a high return. One of the probable actions taken to deal with these products is to sell them off to other firms, or discontinue the manufacturing to stop further loss. Even though the products manufactured by Bata have been readily accepted and became high demand items in the footwear industry, some of the products have not generated the desired level of sales. As mentioned by Kazmi (2007), in the category of accessories, socks and shoe laces manufactured by Bata have achieved low sales. As a result, the company had to reconsider its investment decision in this category, by shifting the investment to more profitable units and decreasing the focus on socks and shoe laces. A change in the marketing strategy and market focus can help Bata to increase the demand, however, this segment of the industry has low potential for growth. The decision to continue with the investment in this area needs to be made after analyzing the ratio of ROI.
References
Ahari, M. (2017, May 9). The Shoe Every Single One Of Us Has Probably Worn. Miss Malini. Retrieved from https://www.missmalini.com/2017/05/09/the-shoe-every-single-one-of-us-has-probably-worn/
Bata Brands. (2016). Products. Retrieved from https://www.bata.com/products/
Heng, M. (2017, May 4). Hipper, younger makeover for Bata: 5 things to know about the shoe label. The Straits Times. Retrieved from http://www.straitstimes.com/lifestyle/fashion/hippier-younger-makeover-for-bata-5-things-to-know-about-the-shoe-label
Kazmi, S. H. H. (2007). Marketing management: Text and cases. India: Excel Books.