MARUTI SUZUKI

Maruti Suzuki India ltd.

Presented By:-Praveen Sharma

Sec-C 147NDIM

Content

Introduction

Michael Porter’s 5 Forces Model for Industry

PESTLE Analysis

Glance on Maruti’s Strategies

Introduction( Brief) Maruti Udyog Limited (MUL) was

established in February 1981, though the actual production commenced in 1983 with the Maruti 800

Maruti Suzuki is India's number one leading automobile manufacturer and the market leader in the car segment, both in terms of volume of vehicles sold and revenue earned

Until recently, 18.28% of the company was owned by the Indian government, and 54.2% by Suzuki of Japan. Later Indian Govt. Sold its shares to F.I.I.’s .

Industry Competitors

Rivalry among existing firms

New Entrants

Buyers

Substitutes

Suppliers

Threat of New Entrants

Bargaining Power

of Buyers

Threat of Substitutes

Bargaining Power

of Suppliers

Fig.Michael Porter’s 5 Forces Model for Industry Competitiveness

Threat from the new players: Increasing • Most of the major global players are present in the

Indian market; few more are expected to enter.• Financial strength assumes importance as high

are required for building capacity and maintaining adequacy of working capital.

Rivalry within the industry: High

• There is keen competition in select segments. (compact and mid size segments).

• New multinational players may enter the market.        

Market strength of suppliers: Low

• A large number of automotive components suppliers

• Automotive players are rationalizing their vendor base to achieve consistency in quality

Market strength of consumers: Increasing• Increased awareness among consumers has

increased expectations. Thus the ability to innovate is critical

• Product differentiation via new features, improved performance and after-sales support is critical

• Increased competitive intensity has limited the pricing power of manufacturers

Threat from substitutes : Low to medium

• Consumer preference is changing (Mini cars are being replaced by compact or mid sized cars)

• Setting up integrated manufacturing facilities may require higher capital investments than establishing assembly facilities

• India is also likely to increasingly serve as the sourcing base for global automotive companies, and automotive exports are likely to gain increasing importance over the medium term

• competition is likely to intensify in the SUV segment in India following the launch of new models at competitive prices

Exteral Environmentn

Political Environment The policies & objectives laid down by the Indian

Government regarding the automobile sector are: Exalt the sector as a lever of industrial growth and

employment and to achieve a high degree of value addition in the country

Promote a globally competitive automotive industry and emerge as a global source for auto components

Establish an international hub for manufacturing small, affordable passenger cars and a key center for manufacturing Tractors and Two-wheelers in the world

Ensure a balanced transition to open trade at a minimal risk to the Indian economy and local industry

ECONOMIC ENVIRONMENT

Sales of Passenger car has been increased to 8.45% per year.

Maruti now plans to tap the rural market, 60 per cent of

which runs on cash .

Maruti has appointed 2,000 sales executives to target

customers in the rural areas.

The manufacturing sector has grown at 8– 10 per cent per

annum in the last few years.

More than 70 per cent of the VEHICLES purchase is on

credit.

Finance availability to CV buyers has grown in scope during

the last few years.

SocialWelfare Camps Medical support & welfare Education to underprivileged Road Safety Maruti Driving SchoolsGreening of Supply ChainAdopting energy saving technologies Reducing water wastageGreen Growth

TECHNOLOGICAL ENVIRONMENTLaunched CNG kit for Alto, its highest

selling small car.The company as a proactive move is

all set to make its entire fleet of cars adhere to ‘end of life vehicles’ (ELV).

The company is involved with the development of small and fuel-efficient car engines.

In future, the company has high plans to increase the engine development work in India along with other R&D operations

The company uses next generation KB series Engine in its new Hatchback car A-star.

The company added Virtual Design Review to its R&D activity to enable virtual validation to reduce cycle time and development cost.

In the field of alternate fuel technology, the company developed LPG/CNG/HYBRID system for MPI engine.

Ecological Environment Practicing 3 R

3R- reduce, reuse, and recycle.

Continuous process of promoting 100% recyclable and reusable car parts.

Targets reducing fresh water consumption and implement rain water harvesting.

Physical infra structure such as roads and bridges affect the use of automobiles. If there is good availability of roads or the roads are smooth With the development or evolution of alternate fuels, hybrid cars have made entry into the market.

Legal Environment Follows highest standards of Corporate Governance

Customer can contact the Secretarial & Legal Department for any questions/clarifications.

Legal compliance reporting The board periodically reviews reports of compliance

with all laws applicable to the Company, as well as steps taken by the Company to rectify instances of non-compliances.

The Company has developed comprehensive legal compliance scheduling and management software by which specific compliance tasks are assigned to each individual. The software enables in planning and monitoring all compliance activities across the Company.

Major Restructuring Exercise. The company focused on improving its

OPERATIONAL EFFICIENCY by upgrading manufacturing using new manufacturing techniques

INCREASING CAPACITY, using information technology in manufacturing

Focus on NEW PRODUCTS at regular intervals

Venturing into OTHER RELATED BUSINESSES like car finance , insurance , buying and selling of used Maruti cars

New Strategy UPGRADED its manufacturing facilities to

meet the foreign challenge. ( CRDI, VVTI engines)

BROADENED its product portfolio( LUV -ERTIGA)

EXPANDED its sales and service network to reach all over India.

VENTURED into new associated businesses.

New Strategy PROMOTIONAL strategies including

price cuts, promotional offers, launching campaigns

VALUE ADDED SERVICES offering to its customers

Upgrading manufacturing facilities The company started its new car plant &

diesel engine facility at Manesar In 2008,Maruti increased its

manufacturing capacity from 800,000 to one million units annually.

The company inaugurated the new fuel efficient KB engine plant at Gurgaon.

In April 2009 Maruti launched K12M engine.

In addition, it also increased its diesel engine manufacturing capacity by 100,000 units annually.

Large product portfolio Maruti decided to cater all the

segments of Indian car market. The company launched new models

and also upgraded its existing model at a faster pace.

Maruti launched Alto in 2000. In 2001,it launched a new model

Maruti Versa. In 2003 ,New Zen and New Esteem

were launched.

Large product portfolio Maruti’s strategy to offer product at every price point meant it had a product whenever a customer wanted to upgrade his car.

The consumer did not have to buy a competitor’s product , as Maruti already a product at the relevant price

Expanding business portfolio Maruti also expanded its business portfolio

by starting new but related businesses such as

-Maruti Driving School -Maruti True Value -Maruti Finance -Maruti Insurance Maruti plans to invest Rs-700 million by

2010 in the institute of Driving Training & Research.

In 2001 Maruti established Maruti True Value.

Promotional Strategies In 2000, in an effort to regain its

market share, maruti slashed the prices of three ot its models Maruti 800 ,Omni , Wagon R.

The company also offered vehicle Insurance for Rs one only.

The company also started rewarding its customers by giving them loyalty bonus between Rs 8000 & Rs 25000 if they exchange their cars for Zen,Wagon R,Alto or Baleno.

Promotional strateges Maruti started marketing Maruti

800 in small towns targeting two wheeler owners who could upgrade their two wheelers to cars.

In 2004 Maruti started ‘2599’offer in which consumers could buy Maruti 800 by paying an EMI of Rs 2599 for seven years.

Distribution Network

In 2001 it started an initiative called ‘Non stop Maruti express highway’.

Maruti developed 250 customer service outlets along 20 highway routes by 2001-02

The company also started ‘express service facility’ to ensure service in minimum time.

It also offered a shuttle service and pick & drop facility when the car was given for servicing.

Distribution Network….. ( contd)

it was the distribution network of Maruti which set the company ahead from its competitors.

In 2008-09,the service network of Maruti covered 1314 cities across India.

Maruti has plans to cover 1700 cities by 2010,and also to increase the number of service stations & workshops to over 3800 by 2010.

sold over 10million

cars.. !!!!Thank you