Bata is the world's largest shoe manufacturer and retailer operating in 60 countries. It was originally founded in Czechoslovakia in 1894 but moved its headquarters to Canada after World War 2. While successful in many markets, Bata struggled in Slovakia, unable to sell a single pair of shoes. The case discusses Bata's operations and strategy over time, including managing subsidiaries with decentralized autonomy to adapt locally but following a strategy of economies of scale and local production.

1. BATA CASE STUDYBATA CASE STUDY

2. CASE SYNOPSIS
The Bata Shoe Organization, headquarter in Toronto, Canada, is the worlds largest
footwear manufacturer and retailer.
It has built a worldwide shoe network in 28 countries, using machinery and mass production
technology.
Bata’s activities are carried out in 60 countries on virtually every continent.
Bata is originally a Czechoslovakian company but after war swept across Europe in 1939, it shifted
its headquarter to Canada.
Currently, Bata executes all of its strategies through its headquarter. The company's basic strategy is
to provide footwear at affordable prices to the largest segment of the population.
But the success story is not same in all countries. Bata was successful in Czech Republic but it was
not able to sell one pair of shoes in Slovakia.

3. Time line
August 24, 1894
Start of Bata
Thomas Bata establishes a shoe factory in Zlín, Czechoslovakia. Bata succeeded in becoming one of Europe’s leading
shoe manufacturers in just a few decades, due to smart entrepreneurship, mechanization and competitive pricing.
July 12, 1932
Tomas Bata dies
On the 12th
of July, Tomas Bata dies when his private jet crashed near his own factory complex. Tomas Jr. inherits the
majority of the Bata business and establishes the holding company ‘Bata Shoe Organisation’.
1933
Bata’s growth
After the success in Czechoslovakia, Bata starts to build factories in other countries, like the Netherlands. Bata buys
land from the municipality to build a manufacturing complex and Bata village which is an exact replica of company
headquarters in Zlín.
1996
Bata changes
Bata in the Netherlands moves away from fashion shoes and starts to focus completely on safety footwear and
becomes the head office of Bata Industrials. Safety shoes and socks get produced in the high quality European
factories located in Best, the Netherlands.

4. 2004
Automation
Bata Industrials invests in the further automation and robotization of the machinery and equipment, and the production
line.
2006
Bata Branded Business division
Bata Industrials offices worldwide enter into a partnership, forming the Bata Branded Business division. Advantages:
substantial know-how in terms of specific work environments worldwide, purchasing and product development.
2008
A-status
The Bata Industrials laboratory receives the A-status certificate from the SATRA research and technology centre. Bata
Industrials is the first producer of safety shoes to receive this certification.
2009
Lean production
Bata Industrials starts with the ‘lean’ production of safety shoes.
2013
Improving Working Lives
Introduction of the Improving Working Lives goal. Committed to improve working lives all over the world and invest in
making safety accessible for all working people, by creating high quality safety footwear for a fair price.

5. Policy at Bata
Managed in a decentralized way, which means that the company is able to adapt to the local
environment.
Bata has a performing business strategy based on economies of scale.
Trying of not exporting; the local production is basically dedicated to the internal market.

6. Q1] Evaluate the different ways in which Bata has interacted with political system in its investment and
operations abroad?
Ans] Decentralized organization - giving its subsidiary autonomy to easier adjust to their local laws within a
specific country.
Bata opens the global possibilities through partnerships, licensing arrangements, consulting, technical
assistance, franchising or direct ownership and management of subsidiaries in different countries or even
being nationalized.
As Tom Bata’s rightly explained “ Shoes had to be brought and wages paid. Life went on “ and so Bata
followed the same philosophy when it was nationalized and denationalized twice in Uganda.
Bata has experienced a lot of changes from the time it was doing business in Czechoslovakia. They had faced
many problems there and so they were prepared to

7. Do you think Bata made the correct decision to pull out of South Africa?
How do you think the political events in South Africa in
the past few years might change Bata’s strategy for South Africa?
How should Bata formulates a strategy for determining whether or not to re-enter South Africa?
Ans] 1. Being headquartered in Toronto, Bata had to adhere to the framework of the Canadian
government which opposed investments in south Africa. For a company who is in a country where the
majority are blacks, Bata cannot support whites staying in that country and increase its sales and so it
thought of moving from that country which according to us was the right decision for Bata to pull out of
South Africa.

8. Q3] WHAT ARE THE ADVANTAGES & DISADVANTAGES TO BATA OF TAKINGQ3] WHAT ARE THE ADVANTAGES & DISADVANTAGES TO BATA OF TAKING
OVER HIS FORMER OPERATIONS IN CZECH?OVER HIS FORMER OPERATIONS IN CZECH?
Advantages to BataAdvantages to Bata
• Access to eastern European market throughAccess to eastern European market through
FDI.FDI.
• Owning Foreign operation can assuresOwning Foreign operation can assures
Extensive management control to Bata.Extensive management control to Bata.
• Avoid protracted negotiations with cooperativeAvoid protracted negotiations with cooperative
company or Czech government for enforcingcompany or Czech government for enforcing
an agreement.an agreement.
• By wholly owning the operations in Czech, Bata
can use local production to serve local market
instead of exporting shoes to Czech.
Disadvantages to BataDisadvantages to Bata
• Difficulties in cross cultural management.Difficulties in cross cultural management.
• Higher capital requirement and start up cost.Higher capital requirement and start up cost.
• Unstable politics of Czech republic had aUnstable politics of Czech republic had a
negative impact on Bata's operation.negative impact on Bata's operation.
• Tendency for people to be protectionist and toTendency for people to be protectionist and to
buy local brands and not Bata.buy local brands and not Bata.
• hostility generating from host-country citizens
and politicians also increase Bata's investment
risks.

10. • there would be no constraints on the flow
of investment capital. Individuals and firms
would be allowed to move their resources.
Tradefreedom is another attraction of the
economically free government. Bata could
easily export itsshoes to other parts where the
risk is low. Since Bata avoids excessive
reliance on exports due tothe risks of
restricted trade. In the politically free
environment like Czech Republic the
restrictedtrade can be overcome and take the
advantage from exports