In this paper, we present a thorough stress analysis of the Cu-Zr metallic-glass composite with embedded B2 particles subject to a martensitic transformation. Within the framework of the Eshelby theory, we are able to explain, in a quantitative manner, (1) the formation of three types of shear bands with distinct morphologies as observed experimentally in the severely deformed Cu-Zr metallic-glass composite and (2) the work hardening ability of the Cu-Zr metallic-glass composite as related to the coupled effects of elastic back stress and elastic mismatch caused by the martensitic transformation. Furthermore, we also discuss the issues about the stress affected zone of the individual B2 phase and the stability of the crystalline-amorphous interface. Given the general agreement between the theoretical and experimental findings, we believe that the outcome of our current work can lead to a deeper understanding of the transformation-induced plasticity in the Cu-Zr based metallic glass composites, which should be very useful to the design of the metallic-glass composites with improved ductility.