ajanta shoe company

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CASE STUDIES

Ajanta Shoes Company Ltd

In December 1997 the executives of Ajanta Shoes Company were to decide their pricing strategy for their products in the face of fierce competition in the market. The company has been in business for the past thirty years. Ti1l1991 the company did not have any problem of selling its shoes since the demand exceeded the supply situation. However, after opening up of the economy the company faced severe competition both from other leading shoe manufacturers in the domestic market and also from the multinational companies that had recently entered the market.

It was estimated that the Indian footwear industry was worth 6,000 crores in value terms. The industry was dominated by the unorganized sector to the extent of 80%. The organized sector had the installed capacity to produce both leather and non-leather shoes to the tune of sixty-five million pairs. The multinationals which had recently entered the market mainly focused on sports shoes segment.

Rata Shoe Company, the leader in the market, had difficult times to face. The company faced stiff competition from multinationals. To maintain its leading position, the company was gearing up to improve its popular brands and also launch new ones. For instance its recent launch of Hush Puppies range and Qua Vadis line of slippers was considered to be a good success. Its other popular brands include-Ambassador, Power, North Star, etc. The company had recently revamped its distribution network by appointing a chain of franchisees to improve its market penetration in rural and urban areas. Through its franchising system Rata added 400 new towns in addition to 750 towns in which its products were already sold. The 1.200 retail outlets spread across the country was the great strength of the company. The company saw great future for the Bata brand name. The pricing strategy of the company was to appeal to the middle-class families.

Some of the the other leading competitors...
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