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Strategic AnalysisPak Suzuki Motor Company Limited

PAK SUZUKI MOTORS COMPANY LIMITED

ACKNOWLEDGEMENT

In the name of Allah, Most Gracious, Most MercifulMost Gracious, Most Merciful; Master of the Day of Judgment.

INTRODUCTION Pak Suzuki Motors Company Ltd. is a

company assembling and distributing Suzuki Japan's cars in Pakistan. Currently they are one of the most successful motor companies in Pakistan.

The firm was founded in 1983 as a joint venture between PAK and Suzuki,

formalizing the arrangement by which AWAMI Auto Ltd. had produced the Suzuki SS80 from 1982.

INTRODUCTION (CONT’) Suzuki originally owned 25% of the

stock, and has gradually increased their holding; they now own 73.09%.

The company now assembles a wide range of Suzuki vehicles and aims to produce 150,000 vehicles per year. (2008 production was 100,000

VISION

To be Excellent All Around

MISSION

To provide automobile of international quality at competitive price

STRATEGY FORMULATION FRAMEWORK

Matching stage Decision stageInput stage

INPUT STAGE

• Internal • Factor

evaluation

(IFE)

• External factor evaluation

(EFE)

• Competitive profile matrix

(CPM)

EXTERNAL FACTOR EVALUATION MATRIX

OPPORTUNITIES Weight Ratings Weighted Score

1. Increasing Demand for Cars 0.15 4 0.60

2. Efficient EFI Engines 0.10 3 0.30

3. Large Market to operate 0.10 3 0.30

4. Global spare parts market 0.05 2 0.10

5. Small size CNG Cylinders 0.12 3 0.36

THREATS

1. Tough Competitors like Toyota and Honda 0.14 2 0.28

2. Inflation Rate 0.08 3 0.24

3. Heavy Taxes 0.08 3 0.24

4. Cheaper Imported Cars 0.10 4 0.40

5. Increase in Fuel Prices 0.08 2 0.16

Total Weighted Score 1.0 2.98

INTERNAL FACTOR EVALUATION STRENGTHS Weight Ratings Weighted Score

1. Highest Market Share 0.20 4 0.80

2. Low Price Vehicles 0.10 4 0.40

3. Large Distribution Channels 0.12 4 0.48

4. Easy availability of spare parts 0.08 4 0.32

5. Highly Innovative and deep product line 0.12 4 0.48

WEAKNESSES1. Scarcity of raw material 0.08 2 0.16

2. Lack of coordination and linkage with Govt. bodies 0.05 2 0.10

3. Less focus on Looks and design 0.10 1 0.10

4. Less Technical Training Institutes 0.05 1 0.05

5. Less distribution channels in sub urban areas 0.10 1 0.10

Total Weighted Score 1.0 2.99

COMPETITIVE PROFILE MATRIXCritical Success Factors

Weight Suzuki ToyotaRating Score

Total Rating Score

Total

1 Innovation 0.30 4 1.20 3 0.90

2 Market Share 0.10 1 0.10 3 0.30

3 Competitive Pricing 0.15 2 0.30 3 0.45

4 Brand Image 0.10 4 0.40 2 0.20

5 Customer Satisfaction 0.20 3 0.60 3 0.60

6 Advertising 0.15 4 0.60 3 0.45

Total 1.00 3.20 2.90

MATCHING STAGE

SWOT

SPACE

BCG MATRI

X

IE MATRI

X

GSM

SWOT ANALYSIS

SWOT Matrix

STRENGHTS WEAKNESSES

1. Highest Market Share 1.Scarcity of Raw Materials

2. Low Price Vehicles 2. Lack of coordination with Govt. Bodies

3. Large Distribution Channel 3. Less focus on Looks and design

4. Highly Innovative & Deep product line 4. Less Technical Training Institutes

5. Easy availability of spare parts5. Less distribution channels in sub-urban areas

OPPORTUNITIES S-O Strategies W-O Strategies

1. Increasing Demand for cars 1. Maximize market share by producing more cars per year (S1,S2,O1,O4)2. Develop more efficient and innovative Engine which gives comparative advantage (S4,O2)3. Use efficient CNG systems (S4,S5,O4)

4. Focus on Looks and Design to compete with Honda and Toyota (W3,O1,O3)5. Fund and establish technical institutes to gain more skilled workforce (W4,O3,O1)

2. Efficient EFI engines

3. Large Market to Operate

4. Small size CNG Cylinder

5. Global Spare parts marketTHREATS S-T Strategies W-T Strategies

1. Tough Competitors

6. Maintain quality in affordable price will help to compete with competitors and imported cars (S2,S4,T1,T4)7. Develop fuel efficient engines to gain edge and eliminate threat of fuel prices increase (S4,S5,T5,T2)

8. Enhance distribution to avoid threat from second hand imported cars (W5,T4)

2. Inflation Rate

3. Heavy Taxes

4. Cheaper Imported Cars

5. Increase in Fuel prices

BCG MATRIX

Dogs

Question MarkStar

Cash Cows

High

Low

LowHigh

MarketGrowth

Market Share

MEHRAN

ALTO

CULTUS

RAVI

LIANA

APV

JIMNY

BOLANSWIFT

BCG MATRIX (CONT’)

SPACE MATRIXFinancial Strength (FS)

Return on Investment +4Working Capital +3Short Term Assets +4

TOTAL: +11Industry Strength (IS)

Large Market to operate +5Increasing per Capita Income +3Consumption Oriented Culture +4

TOTAL: +12Competitive Advantages (CA)

High Quality Products -3Sleek and Stylish Designs -4Famous Brand Names -3

TOTAL: -10Environmental Stability (ES)

Tough Competition -2Change in Govt. rules and regulations -3Imported Refurbished Cars -4Law and Order Situation -2

TOTAL: -11

SPACE MATRIX FS = 11/3 = 3.67 IS = 12/3 = 4 CA = -10/3 = -3.33 ES = -11/4 = -2.75 X-axis = IS+CA = 4-3.33 = 0.67 Y-axis = FS+ES = 3.67-2.75 = 0.92

SPACE MATRIX

CONSERVATIVE

DEFENSIVE COMPETITIVE

Aggressive Strategies

IE MATRIX

    

EFE Matrix Scores

 

IE Matrix Scores

 

  Strong Average Weak 

4

3 2 1

Strong 4

i ii iii

3Average

iv v vi

2

vii viii ix

Weak

1

GRAND STRATEGY MATRIX(GSM)Rapid Market Growth

Q1Q2

Q3 Q4

Slow Market Growth

Weak Competitive Position

Strong Competitive Position

• Market Development

• Product Development

Decision stage

Quantity strategic planning matrix

QSPM MATRIXMarket Development Product Development

External Factors WeightAttractiveness

Score

Total attractiveness

score

AttractivenessScore

Total attractiveness

scoreIncreasing Demand for Cars 0.10 4 0.40 4 0.40Efficient EFI engines 0.06 3 0.18 4 0.24Large Market to operate 0.08 4 0.32 4 0.32Global Spare parts market 0.04 3 0.12 2 0.08Tough competitors 0.08 4 0.32 2 0.16Inflation 0.06 1 0.06 1 0.06Cheaper Imported cars 0.08 4 0.32 4 0.32Increase in fuel prices 0.10 4 0.40 4 0.40

Internal FactorsHighest Market share 0.08 3 0.24 4 0.32Low price vehicles 0.10 1 0.10 4 0.40Large distribution channel 0.06 2 0.12 3 0.18Easy availability of spare parts 0.02 3 0.06 3 0.06Innovative and deep product line 0.06 4 0.24 3 0.18Less focus on style and design 0.04 4 0.16 4 0.16Scarcity of human resource 0.04 3 0.12 4 0.16Totals 1.0 3.16 3.44

THE FOLLOWING ARE THE FINDINGS OF THE STUDY OF PAK SUZUKI MOTOR COMPANY LIMITED.

EXTERNAL FACTOR EVALUATION MATRIX SCORE: 2.98

INTERNAL FACTOR EVALUATION MATRIX SCORE: 2.99

BCG MATRIX:

STAR: JIMNY, BOLNAQUESTION MARK: SWIFTCASH COWS: MEHRAN, CULTUS, ALTO, RAVIDOGS: APV, LIANA

conclusion

CONCLUSION (CONT’)Internal External Matrix: Growth and Built

StrategySpace Matrix: Quadrant 1, Aggressive StrategiesGrand Matrix: Quadrant 1, Aggressive StrategiesMarket Development, Product DevelopmentQSPM Matrix:

Market Development: 3.16Product Development: 3.44

Chosen Strategy is Product Development