bajaj analysis.pdf

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A PROJECT REPORT

ON

“STRATEGIC ANLYSIS OF

BAJAJ AUTO LTD.”

Submitted By

Pranay Sharma (36/08)

Anju Bala Ahuja (48/08)

Nipun Trikha (58/08)

Abhishek hanana (!38/08)

Session 2008-200

S!"#i$$e% $o&

P'o(. S.P. Sin)*

1



"N#$%

C*+,$e' NAE PAGE NO

1 Company history

• Origins

• Completion in 1990

• End of licence raj

• New toola in 1990

/

/

1

2 Product profile and financial performance

• Motorcycles

• Three wheelers

• Oerall performance

• !inancial analysis

8

0

2

/

S$'+$e)i3 +n+45sis

• ission 6ision +n% 6+4!es

• Lo)o

• S7o$

• Po'$e' (i6e (o'3es #o%e4

• +n+)e'i+4 s$54e

• B!siness s$'e+$e)5

• O$*e' s$'+$e)i3 iss!e

8

20

2

2

2/

2

21

/ S!,,45 3*+in +n+45sis

• +4!e 3*+in

• S!"si%i+'5

• S,+'e ,+'$ %i6ision

29

28

0

CORPORATE SOCIAL RESPONSIBILITY 2

1 T:E FUTURE AND RECOENDATIONS 1

9 BIBLIOGRAP:Y /

2



C:APTER ONE

COPANY :ISTORY

• O"#$#N%

• COMPET#T#ON #N 19&0

• EN' O! (#CEN%E ")*

• NE+ TOO(% O! 1990,%

• P"O'-CT "E.)MP #N /000,%

3



Co#,+n5 :is$o'5& B+;+; A!$o Li#i$e%

The ajaj $roup is amongst the top 10 usiness houses in #ndia2 #ts footprint stretches oer a

wide range of industries3 spanning automoiles 4two5wheelers and three5wheelers63 home

appliances3 lighting3 iron and steel3 insurance3 trael and finance2

ajaj )uto (imited is #ndia7s largest manufacturer of scooters and motorcycles2 The companygenerally has lagged ehind its *apanese rials in technology3 ut has inested heaily to catchup2 #ts strong suit is high5olume production8 it is the lowest5cost scooter maer in the world2)lthough pulicly owned3 the company has een controlled y the ajaj family since itsfounding2

O'i)ins

The ajaj $roup was formed in the first days of #ndia7s independence from ritain2 #ts founder3*amnalal ajaj3 had een a follower of Mahatma $andhi3 who reportedly referred to him as afifth son2 7+heneer # spoe of wealthy men ecoming the trustees of their wealth for thecommon good # always had this merchant prince principally in mind37 said the Mahatma after*amnalal7s death2

*amnalal ajaj was succeeded y his eldest son3 /:5year5old ;amalnayan3 in 19</2 ;amalnayan3howeer3 was preoccupied with #ndia7s struggle for independence2 )fter this was achieed3 in19<:3 ;amalnayan consolidated and diersified the group3 ranching into cement3 ayuredicmedicines3 electrical e=uipment3 and appliances3 as well as scooters2

The precursor to ajaj )uto had een formed on Noemer /93 19<> as M?s achraj Trading(td2 #t egan selling imported two5 and three5wheeled ehicles in 19<& and otained amanufacturing license from the goernment 11 years later2 The ne@t year3 19A03 ajaj )uto ecame a pulic limited company2

"ahul ajaj reportedly adored the famous .espa scooters made y Piaggio of #taly2 #n 19A03 atthe age of //3 he ecame the #ndian licensee for the mae8 ajaj )uto egan producing its firsttwo5wheelers the ne@t year2

"ahul ajaj ecame the group7s chief e@ecutie officer in 19A& after first picing up an M) atBarard2 Be lied ne@t to the factory in Pune3 an industrial city three hours7 drie from omay2The company had an annual turnoer of "s :/ million at the time2 y 19:03 the company had produced 1003000 ehicles2 The oil crisis soon droe cars off the roads in faor of two5wheelers3much cheaper to uy and many times more fuel5efficient2

) numer of new models were introduced in the 19:0s3 including the three5wheeler goods carrierand ajaj Cheta early in the decade and the ajaj %uper and three5wheeled3 rear engine

4

http://www.answers.com/library/Company%20Histories-cid-11389152

http://www.answers.com/library/Company%20Histories-cid-11389152



)utoricshaw in 19:A and 19::2 ajaj )uto produced 1003000 ehicles in the 19:A5:: fiscalyear alone2

The technical collaoration agreement with Piaggio of #taly e@pired in 19::2 )fterward3 Piaggio3maer of the .espa rand of scooters3 filed patent infringement suits to loc ajaj scooter sales

in the -nited %tates3 -nited ;ingdom3 +est $ermany3 and Bong ;ong2 ajaj7s scooter e@ports plummeted from "s 12/ million in 19&05&1 to "s >/ million 4D>2< million6 in 19&15&/3although total reenues rose fie percent to "s 121A illion2 Preta@ profits were cut in half3 to "sA million2

"ahul ;amalnayan ajaj3 AA3 has stepped down as managing director of ajaj )uto passing on

the mantle of the company to his eldest son3 "aji2 "ahul ajaj will continue as the chairman of

the ajaj conglomerate2 ajaj )uto is facing increased competition from Bonda and Piaggio2

Bonda has oertaen ajaj as #ndia7s No21 scooter maer in the past two years2

Ne7 Co#,e$i$ion in $*e 80s

*apanese and #talian scooter companies egan entering the #ndian maret in the early 19&0s2)lthough some oasted superior technology and flashier rands3 ajaj )uto had uilt up seeraladantages in the preious decades2 #ts customers lied the duraility of the product and theready aailaility of maintenance8 the company7s distriutors permeated the country2

The ajaj M5>0 deuted in 19&12 The new fuel5efficient3 >0cc motorcycle was immediatelysuccessful3 and the company aimed to e ale to mae A03000 of them a year y 19&>2 Capacitywas the most important constraint for the #ndian motorcycle industry2 )lthough the country7s

total production rose from /A/3000 ehicles in 19:A to A003000 in 19&/3 companies lie rial(ohia Machines had difficulty meeting demand2 ajaj )uto7s adance orders for one of its newmini5motorcycles amounted to D>: million2 +or on a new plant at +aluj3 )urangaadcommenced in *anuary 19&<2

The 19&A5&: fiscal year saw the introduction of the ajaj M5&0 and the ;awasai ajaj ;100motorcycles2 The company was maing >003000 ehicles a year at this point2

)lthough "ahul ajaj credited much of his company7s success with its focus on one type of product3 he did attempt to diersify into tractor5trailers2 #n 19&: his attempt to uy control of)hso (eyland failed2

END OF LICENSE RAJ

The ajaj %unny was launched in 19908 the ;awasai ajaj <% Champion followed a year later2)out this time3 the #ndian goernment was initiating a program of maret lieraliation3 doingaway with the old 7license raj7 system3 which limited the amount of inestment any one companycould mae in a particular industry2

5



#t was hoping to increase its e@ports3 which then amounted to just fie percent of sales2 Thecompany egan y shipping a few thousand ehicles a year to neighoring %ri (ana andangladesh3 ut soon was reaching marets in Europe3 (atin )merica3 )frica3 and +est )sia2 #tsdomestic maret share3 arely less than >0 percent3 was slowly slipping2

y 199<3 ajaj also was contemplating high5olume3 low5cost car manufacture2 %eeral ofajaj7s rials were looing at this maret as well3 which was eing rapidly lieralied y the#ndian goernment2

ajaj )uto produced one million ehicles in the 199<59> fiscal year2 The company was theworld7s fourth largest manufacturer of two5wheelers3 ehind *apan7s Bonda3 %uui3 and;awasai2 New models included the ajaj Classic and the ajaj %uper E@cel2 ajaj also signeddeelopment agreements with two *apanese engineering firms3 ;uota and Toyo " F '2 ajaj7smost popular models cost aout "s /030002 7Gou just can7t eat a ajaj37 stated the company7smareting slogan2

The ;awasai ajaj o@er and the "E diesel )utoricshaw were introduced in 199:2 The ne@tyear saw the deut of the ;awasai ajaj Calier3 the %pirit3 and the (egend3 #ndia7s first four5stroe scooter2 The Calier sold 1003000 units in its first 1/ months2 ajaj was planning to uildits third plant at a cost of "s < illion 4D1112A million6 to produce two new models3 one to edeeloped in collaoration with Cagia of #taly2

NE< TOOLS IN T:E 0S

%till3 intense competition was eginning to hurt sales at home and aroad during the calendaryear 199:2 ajaj7s low5tech3 low5cost cycles were not faring as well as its rials7 higher5endofferings3 particularly in high5powered motorcycles3 since poorer consumers were withstanding

the worst of the recession2 The company inested in its new Pune plant in order to introduce newmodels more =uicly2 The company spent "s :2> illion 4D1&> million6 on adanced3 computer5controlled machine tools2 #t would need new models to comply with the more stringent emissionsstandards slated for /0002 ajaj egan installing "s &00 catalytic conerters to its two5stroescooter models eginning in 19992

)lthough its domestic maret share continued to slip3 falling to <02> percent3 ajaj )uto7s profitsincreased slightly at the end of the 199:59& fiscal year2 #n fact3 "ahul ajaj was ale to oast37My competitors are doing well3 ut my net profit is still more than the ne@t four iggestcompanies comined27 Bero Bonda was perhaps ajaj7s most serious local threat8 in fact3 in thefall of 199&3 Bonda Motor of *apan announced that it was withdrawing from this joint enture2

REAPING T:E DESIGN

ajaj )uto had =uadrupled its product design staff to >002 #t also ac=uired technology from itsforeign partners3 such as ;awasai 4motorcycles63 ;uota 4diesel engines63 and Cagia4scooters62 7Bonda7s annual spend on " F ' is more than my turnoer37 noted "uhal ajaj2 Bisson3 %angi ajaj3 was woring to improe the company7s supply chain management2 )mareting e@ecutie was lured from T.% %uui to help push the new cycles2

6



%eeral new designs and a doen upgrades of e@isting scooters came out in 199& and 19992These3 and a surge in consumer confidence3 propelled ajaj to sales records3 and it egan toregain maret share in the fast5growing motorcycle segment2 %ales of three5wheelers fell as somestates3 citing traffic and pollution concerns3 limited the numer of permits issued for them2

S:ARE IN COPETITOR

#n late 19993 "ahul ajaj made a id to ac=uire ten percent of Piaggio for DA> million2 The#talian firm had e@ited a relationship with entrepreneur 'eepa %inghania and was looing toreenter the #ndian maret3 possily through ac=uisition2 Piaggio itself had een mostly oughtout y a $erman inestment an3 'eutsche Morgan $renfell 4'M$63 which was looing to sellsome shares after turning the company around2 ajaj attached seeral conditions to his purchaseof a minority share3 including a seat on the oard and an e@clusie Piaggio distriutorship in#ndia2

Employment fell from aout /3000 in 199>59A 4the year ajaj suffered a two5month strie at its

+aluj factory6 to 1:3000 in 19995/0002 The company planned to lay off another /3000 worers inthe short term and another 3000 in the following three to four years2

P'in3i,+4 S!"si%i+'ies& ajaj )uto !inance (td28 ajaj )uto Boldings (td28 ajaj Electricals(td28 ajaj Bindustan (td28 Maharashtra %cooters (td28 Muand (td2

P'in3i,+4 Co#,e$i$o's& Bonda Motor Co23 (td28 %uui Motor Corporation8 Piaggio %p)2

7



C*+,$e' 2

PRODUCT PROFILE AND FINANCIAL

PERFORANCE

• Motorcycles

• Three wheelers

• Oerall performance of the company

•

!inancial ratio analysis

8



P'o%!3$s

o$o'3534es

Two5wheeler sales of #ndian players are dominated y the domestic maret and3 within it3 y

motorcycles2 )fter growing at a sharp clip from the late 1990s3 motorcycle sales witnessed a

:2&H drop in olume in /00:50&3 due to falling domestic demand as a result of rising interest

rates and many priate sector ans reducing their retail lending e@posures2 /00&509 saw a

modest increase in motorcycle sales of <H3 drien largely y growth in cash sales2 Een so3 sales

of motorcycles 4oth domestic and e@ports6 in /00&509 has een lower than what it was in /00A50:3 efore the slowdown hit this sector2 Chart ) depicts the data from 199&5992

Chart )I %ales of two5wheelers 4million units6

9



'espite the slight uptic in the industry,s sales olume3 ajaj )uto did not maintain olume

growth3 for reasons that will e discussed elow2 !rom 12AA million motorcycles in /00:50&3 the

company,s domestic sales fell y/H to 12/& million units in /00&5092 %ome of this was

compensated y a 1H increase in e@ports to A13& units2 ut it was not enough Conse=uently3

ajaj )uto,s maret share 4domestic and e@ports3 comined6 fell from /2:H in /00:50& to /&H

in /00&5092 Tale 1 gies the data2

Tale 1I Motorcycle sales3 domestic and e@ports 4in numers6

Gear ended

1 March

%ales 4nos2

Millions6

%ales growth )( 4nos2

Millions6

)(,s

growth

)(,s

maret share/00 2:>: 12H 02&A& /2H /21H

/00< <21: 1<29H 120/< 1:29H /2:H

/00> >2/1& /029H 12<>0 <12AH /:2&H

/00A A2/01 1&2&H 1291/ 129H 02&H

/00: :2100 1<2>H /2:9 /<2<H 2>H

/00& A2><< 4:2&H6 /21<0 41021H6 /2:H

/009 A2&0A <20H 1290& 4102&H6 /&20H

%ourceI %#)M and Company data

MotorcyclesI 'omestic %ales for the #ndustry

The company classifies motorcycles into three segments3 ased on consumer categories and

appro@imate price points2 These areI

10



Motorcycles of ajaj can e categoried asI

SEGENT OF

BI=ES

FEATURES BAL PRODUCTS COPETITORS

PRODUCTS

En$'5 se)#en$& 100 cc motorcyclesat "s2>3 0002

the Platina2 Thesegment accounted

for <H in #ndia in

/00&509

Bero Bonda PassionPlus

E>e3!$i6e se)#en$& comprises 100 cc to

1> cc motorcycles3

priced etween

"s2<03 000 to "s2>03

0002

#n this segment with

two randsI JC' and

'iscoer2

BE"O BON') CK

E@treme and

%plendour

Pe'(o'#+n3e se)#en$& These are slee3 high

performance3 with

price points in e@cess

of "s2>03 0002

flagship rand3 the

Pulsar3 and our

cruiser3 the )enger2

)( dominate this

space3 with a

domestic maret

share in e@cess of

<:H2

BEO BON')

;arima and Bun

11



T*'ee-7*ee4e's

The company,s domestic sales of three5wheelers in /00&509 were 1/H lower compared to the preious year3 and stood at 1>3<: units2 E@port demand grew at /H to 1930>A units 4see Tale

/ aoe62 Boweer that was not sufficient to preent a decline in the company,s total three5

wheeler sales L which fell y >2<H to /:<3>/9 units in /00&5092 $ien that total industry sales

shran y 12AH in /00&509 oer the preious year3 while ajaj )uto,s fell y >2<H3 the

company,s maret share dropped y /2 percentage points to >>21H2 )t this maret share

howeer3 ajaj )uto remains the leading three5wheeler player in #ndia2

Tale gies the data2

P+ssen)e' 6e*i34e s+4es& 2009-08 2008-0 R+$e o( )'o7$*#ndustry sales :>31&0 <1>3<11 102:H

ajaj )uto sales /A3>9& /A<3/ 02H

ajaj )uto maret share :02H A2AH 4A2:H6

Goo%s 3+''ie's

#ndustry sales 103&/A &/3&/ 4:20H6

ajaj )uto sales /A3:1< 10319: 4A12&H6

ajaj )uto maret share /02<H 1/2<H 4&20H6

To$+4 -7*ee4e's&

#ndustry sales >0A300A <9:3:9 412AH6

ajaj )uto sales /9031/ /:<3>/9 4>2<H6

ajaj )uto maret share >:2<H >>21H 4/2H6 %ourceI %#)M and Company data2

12



&'erall Perrman*e +he *mpany,-inan*ials, (Rs. In Million )

200809 200708!et s"les # ot$e% in&ome 89'323 91'688

%oss %o*it be*o%ee+&etion"l items'inte%est # de%e&i"tion 13'140 14'162

T+al Sales,200809 200708 (!os.) (!os.)

Moto%&y&les 1'907'853 2'139'779

,t$e% t-o-$eele%s 11'772 21'316 ot"l -o -$eele%s 1'919'625 2'161'095 $%ee -$eele%s 274'529 290'312 ot"l 2 # 3 -$eele%s 2'194'154 2'451'407 ,* t$e "bo/e' e.pr+s -e%e

-o -$eele%s 633'463 482'026 $%ee -$eele%s 139'056 136'315 ot"l +o%ts 772'519 618'341

13



FINANCIAL ANALYSIS OF BAJAJ AUTO

Li?!i%i$5 +n% So46en35 '+$io@s

This ratio suggests the short5term li=uidity position of the firm2 The following ratios are to

e calculated2

i C!''en$ R+$io.

Current )ssets 'etors Cash?an Maretale Non Trade #nestments %toc (oans F

)dances Prepaid E@penses2

Current (iaility Creditors an Oerdraft O?% E@penses2 The ideal ratio is /I1

An+45sis&-Current ratio is higher in /009 as compared to /00&2 There is decreased all current

assets e@cept other receiales which increased in /0092 The net current assets increased y

"s2/&2A/ cr2 in /009 and at same time current liailities increased y "s2/0029 cr2 in /0092 #t

means ajaj )uto (td23 has sufficient current assets to pay current liailities2 %hort term solency

of the company is satisfactory2

14

Ye+' C!''en$ Asse$s

(Rs. In &%.)

C!''en$ Li+"i4i$ies

(Rs. In &%.)

C!''en$ R+$io

/00& 1:&02A: /0192/9 02&& times2

/009 /<012<> /A0/2> 029/ times2



A +n+)e#en$ E((i3ien35 '+$io@s

This ratio finds how efficient the management is in their decision5maing F utiliation of

the production capacity F other resources2

i In6en$o'5 T!'no6e' R+$io.

Ye+' S+4es T!'no6e'

(Rs. in &%.)

In6en$o'5

(Rs. in &%.)

In6en$o'5 T!'no6e' R+$io

/00& 9&>A2AA <92A1 /&219

/009 9102/< &2&< /:2<:

An+45sis&-

The inentory turnoer ratio in the year /00& was /&219 which indicate that /&219 times in a year

the inentory of the firm is conerted into receiales or cash2 Boweer3 in /0093 the inentory

turnoer ratio slightly decreased to /:2<:2 This was due to the fact that the ajaj )uto (td2 in

/009 inested more then 02:/ times the inentory in /00&2

15



PROFITABILITY RATIO

G'oss P'o(i$ R+$io

Ye+' NPAT

(Rs. in

&%.)

Ne$ s+4es

(Rs. in

&%.)

P'o(i$ +')in

/00& :>>29> &&/:21> &2>A H

/009 A>A2<& &:0021: :2>> H

An+45sis&-

The profit margin has decreased from &2>AH in /00&3 to :2>>H in /0092 )ccording to the

figures3 company has een successful in decreasing their %ales y "s21/A29& cr2 in /009 ut the

increases in net income aailale common stoc holders was 111H which leaded to a decrease in

the profit margin2

16



B +'e$ +4!e R+$io.

P'i3e E+'nin) R+$io.

Ye+' P'i3e Pe' S*+'e

(Rs. in &%.)

E+'nin) Pe' S*+'e

(Rs. in &%.)

PER

/00& 10 >/2/> 0219

/009 10 <>2: 02//

An+45sis&-

#t can e seen from calculations that in year /009 the ratio is more than douled from 0219 to

02//2 This was due to the fact that the price per share oer the year has same with "s210 per share

where as oo alue per share increased y just "s21092: to "s21/92/2

17



C:APTER T:REE

STRATEGIC ANALYSIS

+.ision mission and alues

"(ogo

3%+OT )nalysis

%Porter,s fie !orces Model )nalysis

eManagerial style

( usiness strategies

)Other strategic issues

18



"S"&N "SS"&N AN# A12$S

ajaj doesn7t hae a straight ision or mission statement2 They define it in terms of randidentity3 rand essence 4deried from mission6 and rand alues2

O!' B'+n% I%en$i$5

Our rand is the isual e@pression of our thoughts and actions2 #t coneys to eeryone our intention to constantly inspire confidence2 Our customers are the primary audience for our rand2

#ndeed3 our rand #dentity is shaped as much y their elief in ajaj as it is y our ownision2

Eerything we do must always reinforce the distinctieness and the power of our rand2 +e can do this y liing our rand essence and y continuously seeing to enhance our

customers, e@perience2 #n doing so3 we ensure a special place for ourseles in the hearts and the minds of our

customers2

O!' B'+n% Essen3e

Our rand Essence is the soul of our rand2 Our rand essence encapsulates our mission at ajaj2 #t is the singular representation of our terms of endearment with our customers2 #t proides the asis on which we grow profitaly in the maret2 Our rand Essence is E@citement2 ajaj stries to inspire confidence through e@citement engineering2 lending together youthful creatiity and competitie technology to e@ceed the spoen

and the implicit e@pectations of our customers2 y challenging the gien2 y e@ploring the unnown and therey stretching ourseles

towards tomorrow3 today2

O!' B'+n% +4!es

+e lie our rand y its alues of (earning3 #nnoation3 Perfection3 %peed and Transparency2

ajaj will constantly inspire confidence through e@citement engineering2

19



Le+'nin)

(earning is how we ensure proactiity2 #t is a alue that emraces nowledge as the platform for uilding well informed3 reasoned3 and decisie actions2

• Inno6+$ion

#nnoation is how we create the future2 #t is a alue that prooes us to reach eyond theoious in pursuit of that which e@ceeds the ordinary2

• Pe'(e3$ion

Perfection is how we set new standards2#t is a alue that e@hiits our determination toe@cel y endeaoring to estalish new enchmars all the time2

• S,ee%

%peed is how we coney clear coniction2 #t is a alue that eeps us sharply responsie3mirroring our commitment towards our goals and processes2

•

T'+ns,+'en35Transparency is how we characterise ourseles2 #t is a alue that maes us worthy ofcrediility through integrity3 of trust through sensitiity and of loyalty throughinterdependence2

LOGO o( BAJAJ&

#N#T#)( (O$O 4upto /00<6 CB)N$E' (O$O 4upto/00:6

()TE%T (O$O 4since /00:6

Be@agonal lue and whitelogo

Completely lue logo tosignify modernity and

dynamism

To stress the leadership position of the rand in

the maret

20



S&T Analysis,(et7s analye the position of ajaj in the current maret set5up3 ealuating its strengths3weanesses3 threats and opportunities aailale2

S$'en)$*s&

Bighly e@perienced management2

Product design and deelopment capailities2

E@tensie " F ' focus2

+idespread distriution networ2

Bigh performance products across all categories2

Bigh e@port to domestic sales ratio2

$reat financial support networ 4!or financing the automoile6

Bigh economies of scale2

Bigh economies of scope2

<e+nesses&

Basn7t employed the e@cess cash for long2

%till has no estalished rand to match Bero Bonda7s %plendor in commuter segment2

Not a gloal player in spite of huge olumes2

Not a gloally recogniale rand 4unlie the *. partner ;awasai6

T*'e+$s&

The competition catches5up any new innoation in no time2

Threat of cheap imported motorcycles from China2

21



Margins getting s=ueeed from oth the directions 4Price as well as Cost6

T)T) )ce is a serious competition for the three5wheeler cargo segment2

O,,o'$!ni$ies&

'oule5digit growth in two5wheeler maret2

-ntapped maret aoe 1&0 cc in motorcycles2

More maturity and moement towards higher5end motorcycles2

The growing gearless trendy scooters and scooterette maret2

$rowing world demand for entry5leel motorcycles especially in emerging marets2

22



Po'$e'@s Fi6e Fo'3es An+45sis&

S!,,4ie' B+')+inin) Po7e'& %uppliers of auto components are

fragmented and are e@tremely critical for this industry since most of the component wor isoutsourced2 Proper supply chain management is a costly yet critical need2

B!5e's B+')+inin) Po7e'& uyers in automoile maret hae more choice to choosefrom and the increasing competition is driing the argaining power of customers uphill2+ith more models to choose from in almost all categories3 the maret forces hae

empowered the uyers to a large e@tent2

In%!s$'5 Ri6+4'5& The industry rialry is e@tremely high with any product eing matchedin a few months y competitor2 This instinct of the industry is primarily drien y thetechnical capailities ac=uired oer years of gestation under the technical collaoration withinternational players2

S!"s$i$!$es& There is no perfect sustitute to this industry2 )lso3 if there is any sustituteto a two5wheeler3 ajaj has presence in it2 Cars3 which again are a mode of transport3 doneer directly compete or come in consideration while selecting a two5wheeler3 cycles doneer een compete with the low entry leel moped for een this choice comes at a

comparatiely higher economic potential2

+n+)e'i+4 S$54e&Off late ajaj )uto (imited3 #ndia,s premier automotie company3 has emphasiseda lot on organiational restructuring for the )uto usiness2 +ith this restructuring3the e@isting usiness roles and responsiilities at the company has eenstrengthened and enhanced to ensure greater operational empowerment andeffectie management2

The fie pillars of this new structure 4%trategic units6 are "F'3 Engineering3 Two+heeler usiness -nit3 and Commercial .ehicles usiness -nit F #nternationalusiness -nit2 These pillars will e supported y functions of !inance3 M#%3 B"3usiness 'eelopment and Commercial2

23



Pradeep %riastaa3 who was .P5Engineering prior to restructuring3 will now ePresident5 Engineering2 )s per the reorganied structure the company will haethree CEO,s2 %2 %ridhar3 currently3 .P3 Mtg2 F %ales Two5+heelers3 will nowhead the Two +heeler usiness -nit as CEO with manufacturing operations at+aluj and )urdi also reporting to him2 "C Maheshwari has joined ajaj )uto as

CEO Commercial .ehicles2 The company is in the process of identifying a CEOfor its #nternational usiness2 The three CEO,s will e responsile for Top line3usiness $rowth F profitaility of their respectie usinesses2 )raham *osephwill continue to lead "esearch F 'eelopment2

Business S+ra+eries,arke+in S+ra+eies,

$e *o&us o* B o** l"te $"s been on %o/idin t$e best o* t$e&l"ss models "t &ometiti/e %i&es. Most o* t$e B"" models &omelo"ded -it$ t$e l"test *e"tu%es -it$in t$e %i&e b"nd "&&et"bleby t$e m"%et. B $"s been t$e ionee% in st%et&$in&ometition into %o/idin l"test *e"tu%es in t$e %i&e sement byud"tin t$e lo- %i&e bies -it$ t$e l"test *e"tu%es lie disb%"es' "ntisid te&$noloy "nd du"l susension' et&.B "doted di**e%ent m"%etin st%"teies *o% di**e%ent models'*e- o* t$em "%e dis&ussed belo-

aasaki 4S 7 i%st "ttemt by b"" to m"e " m"% in t$emoto%&y&le sement. $e t"%et &ustome% -"s t$e *"t$e% in t$e*"mily but t$e t"%et "udien&e o* t$e &omme%&i"l -"s t$e son int$e *"mily. $e time "t -$i&$ "-"s"i 4S -"s l"un&$ed e%oond" -"s t$e m"%et le"de% in *uele**i&ient bies "nd :"m"$" int$e e%*o%m"n&e bies.

B.er 7 It too t$e %eins *%om -$e%e t$e "-"s"i 4S le*t. "%et-"s t$e %u%"l oul"tion "nd t$e %i&e sensiti/e &ustome%. Bo+e%

m"%eted "s " /"lue *o% money bie -it$ %e"t mile"e. "%e%-$eelb"se' $i$ %ound &le"%"n&e "nd $i$ mile"e -e%e t$esellin *"&to%s "nd it -"s in di%e&t &ometition to e%o ond";"-n "nd Su<ui M=100. aliber 7 $e *o&us *o% t$e >"libe% 115 -"s yout$. nd t$ou$B"" m"de t$e bie loo bie% "nd *eel mo%e o-e%*ul t$"n its

24



%ede&esso% (&$"%"&te%isti&s t$"t -ill "tt%"&t t$e "/e%"e' 25lus'e+e&uti/e sement bie buye%)' its "%o"&$ to-"%ds "d/e%tisinis e/en mo%e %"di&"lly di**e%ent t$is time "%ound. B"" "/e t$em"nd"te *o% t$e "d &"m"in to o-e' i&in t$em *%om t$e

&li?ue o* t$%ee "en&ies t$"t do %omos *o% t$e &om"ny (t$eot$e% t-o bein eo Bu%nett "nd ,#M). oin by t$e initi"lm"%et %esonse' t$e &"m"in -"s &le"%ly " $it in t$e 510 ye"%s"e b%"&et. So' t$e te"se% &"m"in "nd t$e em$"sis on t$e>"libe% 115 bein " `Hoodibabaa' bie l"&ed it "s " t%endymoto%&y&le *o% t$e &olleeoe%s "nd t$e 25 lus e+e&uti/es bot$"t t$e s"me time.

Pulsar 7 @uls"% -"s l"un&$ed in di%e&t &ometition to t$e e%oond"As A>BA model in 150 && lus sement. $e &"m"in

be"%ed inno/"ti/e un&$ line o* C;e*initely M"leC ositionin@uls"% to be " m"s&ulinelooin model -it$ "n "e"l to t$ee%*o%m"n&e sensiti/e &ustome%s. $e @uls"% -ent one ste "$e"do* e%o ond"As A>BA "nd l"un&$ed " t-in /"%i"nt o* @uls"% -it$t$e 180 && model. $e model -"s " %e"t su&&ess "nd $"s "l%e"dy&%ossed 1 million m"% in s"les.

#is*'er 7 $e s"me ;SI te&$noloy o* @uls"% e+tended to 125&& ;is&o/e% -"s " %e"t su&&ess. Dit$ t$is' B"" &ould %e"li<e its

su&&ess %idin on t$e b"& o* te&$noloi&"l inno/"tion %"t$e% t$"nt$e oint /entu%e -"y *ollo-ed by &ometito%s to "in m"%ets$"%e.B no- is t"in " le"* out o* t$e M> business model to t"et$e &om"ny to %e"te% $ei$ts.B"" $"s i&ed o** " %oe&t to&omletely %est%u&tu%e t$e &om"nyAs %et"il net-o% "nd &%e"temultile s"les &$"nnels.,/e% t$e ne+t *e- mont$s' t$e &om"ny -ill setu se"%"te s"les&$"nnels *o% e/e%y sement o* its business "nd &onsume%s. B""utoAs enti%e %odu&t o%t*olio' *%om t$e ent%yle/el to t$e%emium' is bein sold by t$e s"me de"le%s. $e %est%u&tu%in -illin/ol/e se"%"te de"le% net-o%s &"te%in to t$e u%b"n "nd %u%"lm"%ets "s -ell "s its t$%ee-$eele% "nd %emium biessements. B"" uto "lso l"ns to setu "n indeendent net-o%o* de"le%s *o% t$e %u%"l "%e"s. $e needs o* *in"n&in' sellin'dist%ibution "nd e/en "*te%s"les se%/i&e "%e &omletely di**e%ent

25



in t$e %u%"l "%e"s "nd do not m"es sense *o% &ity de"le%s to&ont%ol t$is. $e &om"ny "lso l"ns to setu e+&lusi/ede"le%s$is *o% its t$%ee-$eele% %odu&ts inste"d o* $"/in t$emsold t$%ou$ "n estim"ted 300 o* its e+istin de"le%s.

26



&+her S+ra+ei* "ssues,

ash is s+ren+h, B"" uto $"s been sittin on " &"s$ ile *o%

o/e% *i/e ye"%s no-. ,/e% t$e ne+t &oule o* ye"%s' &ometition int$e t-o-$eele% m"%et is set to intensi*y. ES Moto%s "nd e%oond" "%e on " %odu&t e+"nsion bine. o *i$t t$is b"ttle "nd%et"in its $"%de"%ned m"%et s$"%e in t$e moto%&y&le sement'B"" uto -ill need its &"s$ mus&le. loo "t its o-n sto%y o/e%t$e "st *i/e ye"%s %o/ides /"lu"ble insi$t.

S+ake r aasaki, B"" utoAs "ttemt to /est t$e su%lus&"s$ in " se"%"te &om"ny m"y be " %elude to o**e%in " st"e

to "-"s"i o* F""n in t$e e?uity o* t$e "utomobile &om"ny. $e l"tte% $"s been l"yin "n in&%e"sinly "&ti/e %ole in B""As%e&ent models' "nd its b%"nd n"me is "lso mo%e /isible in B""bies t$"n in t$e "st.

Be++er 'alue prpsi+in, S$"%e$olde% inte%ests m"y be bette%se%/ed i* t$e &"s$ is %et"ined to u%sue %o-t$ in " tou$ m"%et.

$is -ould "lso ob/i"te t$e need to *o%out *"n&y sums "s st"mduty to t$e o/e%nment *o% t$e deme%e%. &ombin"tion o* "

l"%e onetime di/idend "nd " %eul"% buyb"& %o%"m t$%ou$t$e tende% %oute m"y o**e% bette% /"lue. st%"tei& st"e *o%"-"s"i -ould only ositi/ely in*luen&e t$e sto&As /"lu"tion.

S+ra+eies r +he &'erseas arke+s,B"" uto loos "t e+te%n"l m"%ets %im"%ily -it$ t$%eest%"teies !) m"%et -$e%e "ll B need to do is dist%ibute t$%ou$ >; o%>BG %outes.) M"%ets -$e%e B need to &%e"te ne- %odu&ts.

3) M"%ets -$e%e B need to ente% -it$ e+istin %odu&ts "nd%ob"bly -it$ " ood dist%ibuto% o% " %odu&tion *"&ility o% " oint/entu%e.

"%lie%' most o* t$e %odu&ts t$"t B"" e+o%ted -e%e s&oote%s"nd some moto%&y&les. o-e/e%' in its t"%et m"%ets' lie inIndi"' t$e s$i*t -"s to-"%ds moto%&y&les. Dit$ t$e e+"nsion in

27



B""As o-n %"ne to "lmost *i/esi+ l"t*o%ms o* moto%&y&les' it$"d " bette% o**e%in to e+o%t' "lso t$e %e"son *o% its st%one%s$o-in. o% t$e l"st *is&"l' 60 e% &ent o* its e+o%ts -e%e t-o-$eele%s "nd t$e %est t$%ee-$eele%s. +o%ts to middle *%i&"

"nd t$e S"$"%"n n"tions. yt "nd I%"n "lso &ontinue to best%on m"%ets *o% B"".

28



C:APTER FOUR

SUPPLY C:AIN ANALYSIS

• .alue chain management

• %usidiaries

• %pare part diision

29



+4!e C*+in +n+)e#en$

en%o's ajaj )uto has a consolidated ase of 1&0 endors supplying components to all ajaj

)uto,s plants2 ) large numer of endors are located either near Pune or )urangaad2 Those that

are far are encouraged to tie up with third party logistics proiders3 who along with local endors

supply multiple delieries daily to Chaan F +aluj plant2 ajaj )uto has e@tended the TPM

4Total Preentie Maintenance6 to endor as well2 )round A0H y alue of ajaj ehicle is

outsourced2 .irtually no components are imported F :0H of ajaj )uto,s re=uirements are

sourced from within the state of Maharashtra2 To improe =uality3 ajaj )uto has also egunactiely assisting its suppliers in finaliing joint entures with counterparts in *apan3 #taly3

Taiwan F %pain2

=e5 s!,,4ie's &

ajaj auto has appro@imately 19& suppliers for their raw materials2

%ome of the ey suppliers are I5

• *M 5 !rames

• M"! F 'unlop tires

• Minda 5 locs F ignition system

• "einder headlamps F lights

• Endurance raes3 clutch F Cast wheel

• .arroc Plastic parts F 'igital Meter

• Ma@ auto components ignition system and switches

• %ilco cale wires and cales

• Maino industry rae shoes 2 rae lining3 clutch center

• #nder auto industries5 Chamers3 $asets3 Cylinder Piston it2

• ;J dis raes assemly

30



In6en$o'5 ,o4i35-

ajaj auto maintains seen days inentory 2 'emand Estimations were ased on Panel

"egression3 which taes into account othtime series and cross section ariation in data 2)ll the

Mediators are connected with each other through #T linage to now e@act status of deliery of

goods

+n!(+3$!'in) 4o3+$ions

A!'%i P!ne /0

This is one of the oldest plant of ajaj auto ltd with production capacity of 02A million ehicles?

year2 The plant has een closed in order to e=uip for four wheeler production

B+;+; N+)+' <+4!; A!'+n)+"+% /1

This is second plant with production capacity of 02&A million? year 2products manufactured here

are ;ristal3 JC' and platina and commerial $C series

C*++n In%!s$'i+4 A'e+ C*++n P!ne /0

This is the iggest plant of ajaj auto Production Capacity of 12/ million? year 3 Product

manufactured here are pulsar and aenger and commercial $e series

P+n$n+)+' U$$+'+*+n%

The most adanced plant of ajaj auto 2#t has Capacity of 029 million ehicles per year 2 product

manufactured here are platina and JC'

De+4e's- ajaj )uto has a networ of <// dealers and oer 1300 authoried serice centers2 The

company plans to increase the numer of dealers to >00 y this financial year2 ) large numer of

these new dealerships are planned in semi5uran F rural areas2

31







:APT$; -"$

&;P&;AT$ S&"A1 ;$SP&NS"B"1"T"$S

• n/i%onment"l *%iendly te&$ni?ues

• >ommunity le"de%s$i %o%"mmes$e"lt$ edu&"tion

• ,t$e% >SR "&ti/ities

34



•

>&;P&;AT$ S&"A1 ;$SP&NS"B"1"T<

s+ ee*+i'e an9 $n'irnmen+al s+ra+eies,

nser'a+in enery,s " "%t o* &ontinuin e**o%ts to &onse%/e /"%ious %esou%&es'*ollo-in stes -e%e t"en to &onse%/e ene%y le&t%i&"l ene%y s"/in -"s "&$ie/ed by inst"ll"tion o* lo&"lisedo%t"ble "i% &om%esso%s "t /"%ious s$os du%in lo- %odu&tione%iods' ene%y e**i&ient s&%e- &om%esso%s by %el"&in >@&om%esso%s' %e"l time% ele&t%i&"l &i%&uits inst"lled to s-it&$ o**

ele&t%i&"l e?uiments du%in lun&$ J te" b%e"s "nd du%in nonutilis"tion o* %odu&tion e?uiments' *"n less &oolin to-e%s *o%> l"nts' $i$ e**i&ien&y %e*le&to% *ittins -it$ ele&t%oni& b"ll"ststube li$ts' use o* ; # > st%eet li$ts' %el"&ement o* 350 D"i% &i%&ul"to%s by 180 D "i% &i%&ul"to%s' 150 D M l"ms inste"do* 250 D @SE l"ms "t s$o *loo%s' E"%i"ble %e?uen&y ;%i/esE;) *o% SGs in "int s$os' -"s$in m"&$ine blo-e%s'&om%esso%s et& "nd %"tion"lis"tion o* umin $ou%s o* m"inum "s -ell "s booste% um o* um $ouse. D"te% s"/in -"s

"&$ie/ed by %el"&ement o* old unde%%ound -"te% ies -it$"bo/e%ound ies to "/oid -"te% -"st"e t$%ou$ le""e' d%ii%%i"tion system *o% "%denin' inst"ll"tion o* lo&"lised *%es$-"te% sto%"e systems' us"e o* t%e"ted -"te% *o% bin -"s$in"nd "int s$o %o&ess' %"in -"te% $"%/estin "nd use o* bio&$emi&"l "dditi/es to %edu&e *%e?uen&y o* -"te% &$"ne in /"%ious"int %o&essesL "nd @ s"/in -"s "&$ie/ed by inst"ll"tion o*-"ste $e"t %e&o/e%y system *o% $ot -"te% ene%"tion used in %et%e"tment %o&ess o* "int s$o' use o* %e*le&ti/e &o"tin inside*u%n"&es *o% bette% $e"t %etention' t$%ee-$eele% ele&t%odeosition (;) "intin %o&ess &$"ned *%om &%yli& ; to>"t$odi& ;' otimis"tion o* lo"din "tte%n in >> "nd se"l?uen&$ *u%n"&es' %edu&tion o* $ot -"te% teme%"tu%e *o% %et%e"tment' use o* bio "s *o% &ooin in &"nteens' st"%tu lossesin o/ens "nd $ot -"te% ene%"tion l"nts "nd &$"ned desin o*"int is to %edu&e i st%iin *%e?uen&y.

35



"mpa*+ measures +aken,s " %esult o* t$e initi"ti/es t"en *o% &onse%/"tion o* ene%y "ndn"tu%"l

%esou%&es' t$e &om"ny $"s e**e&ted "n o/e%"ll %edu&tion in&onsumtion "sunde%

36



"n'es+men+ / sa'ins,In/estment *o% ene%y &onse%/"tion "&ti/ities Rs.9.35 million

S"/in "&$ie/ed t$%ou$ "bo/e "&ti/ities Rs.24.2 million

mmuni+y lea9ership prrammes,

;u%in t$e ye"%' t$e emloyees /oluntee%ed *o% blood don"tion&"m "t ;een"n"t$ M"nes$"% osit"l' @une "nd ;% Sus$eel"

i-"%i osit"l' @"ntn""% i%e *i$tin te"ms o* t$e &om"ny"lon -it$ /e$i&les %esonded to 20 i%e "ssist"n&e &"lls *%omo/e%nment i%e ;e"%tment J ot$e% indust%i"l units outside t$e*"&to%y %emises in t$e l"%e% inte%ests o* s"/in in/"lu"ble li*e"nd %oe%ty.

mmuni+y are,In line -it$ t$e &ommitment to en%i&$ t$e li*e o* "ll -it$ -$omb"" de"ls' it s$o-es sensiti/ity to t$e emloyees' -$o oted *o%/olunt"%y %eti%ement "t t$e u%di @l"nt. Soon "*te% t$e u%diemloyees e+%essed t$ei% inte%est in "&&etin t$e Eolunt"%yReti%ement S&$eme' t$e &om"ny o%"nised " se%ies o*

inte%"&ti/e meetins -it$ le"din *in"n&i"l institutions. $eo**i&e%s e+l"ined t$eneed to %udently "nd s"*ely in/est t$e monies %e&ei/ed'&onside%in t$e /"%ious otions "/"il"ble tod"y. $e &om"nyde/ised "tt%"&ti/e s&$emes *o% inte%ested emloyees so t$"t t$ey&ould %e&ei/e %eul"% mont$ly "yments' in "ddition to lum sum&omens"tion "nnoun&ed. $ey -e%e "lso %o/ided -it$ otionso* t"in lo"ns "t &ometiti/e %"tes o* inte%est.By t$ese "&tions' it is t$e &om"nyAs ende"/ou% t$"t t$e

emloyees' -$o $"/e "&&eted /olunt"%y %eti%ement s&$eme' "%eindeendently sel*sust"inin "nd &"n t"e ood &"%e o* t$ei%*"milies. mloyees -e%e "lso uided *o% "lte%n"ti/e ossibilities'-$et$e% "s emloyee o% ent%e%eneu%.

:eal+h,

37



o/e%nment o* Indi" Minist%y o* e"lt$ "nd "mily Del*"%e !"tion"l ids >ont%ol ,%"nis"tion (!>,) "nd >II $"/e initi"ted@ubli& @%i/"te @"%tne%s$i (@@@) in o%de% to %o/ide bette%$e"lt$&"%e to I;s "tients. $e &om"ny $"s sined " t%i"%tite

MoG -it$ !>, "nd :es$-"nt%"o >$"/"n Muni&i"l osit"l(:>M) in @im%i to set u "n nti Ret%o/i%"l %e"tment >ent%e(R >ent%e) "t :>M in @im%i' @une -it$ t$e &ooe%"tion o*@im%i >$in&$-"d Muni&i"l >o%o%"tion *o% IE "tients.

M"ny dinit"%ies *%om lob"l und' D, "nd su&$ ot$e%o%"nis"tions $"/e /isited t$e R &ent%e' -$i&$ is t$e l"%estunit %un by "n indust%y unde% @ubli& @%i/"te @"%tne%s$i%o%"mme. "%t *%om t-o do&to%s "nd si+ suo%tin medi&"lst"**' t$e R &ent%e $"s "dded "udio/isu"l *"&ilities *o% %ou

&ounselin' "s " %esult o* -$i&$ t$e R &ent%e %eist%"tion $"s%e"&$ed 1'900 numbe%s "nd t$e unit is %e&onised tod"y "s one o*t$e best R &ent%es in t$e &ount%y. Ru%"l "nd &ommunityde/eloment "&ti/ities "nd emo-e%ment o* -omen.

$9u*a+in $e &om"ny $"s l"un&$ed " %o%"mme t$"t -ould $el S>JSstudents "&$ie/e "&"demi& e+&ellen&e "nd m"e t$em on "%-it$ t$ose' -$o &"n "**o%d &o"&$in *o% ent%"n&e to IIs. ;u%in

t$e ye"% unde% %e/ie-' one student -it$ " b%illi"nt "&"demi&%e&o%d -"s identi*ied *%om t$e unde%%i/ileed "nd lo-in&ome%ou' *o% %eimbu%sement o* &omlete *ees *o% t$e %e"%"tion o*II ent%"n&e test unde% t$e uid"n&e o* IIi"ns @%"s$is$"nend%".Gnde% t$e &ent%"l o/e%nment initi"ti/e o* @ubli& @%i/"te@"%ti&i"tion (@@@)' t$e &om"ny $"s /oluntee%ed to "dot 3 IIs(Indust%i"l %"inin Institute) *o% u%"d"tionK II Muls$iK II "/eliK II R"mn"e%

The +her a*+i'i+ies in*lu9e,

38



• B"" uto td. -"s t$e *i%st "nd only &om"ny to l"un&$e&oloi&"lly *%iendly >! enines *o% t$%ee -$eele%s in ;el$i.

• B"" uto %omotes se/e%"l -el*"%e %o%"mmes *o% its

emloyees "s -ell "s /"%ious initi"ti/es %el"ted toen/i%onment' $e"lt$' edu&"tion "nd %u%"l de/eloment in t$e&ommunities "%ound t$e l"nt "%e"s.

:APT$; S"%

• GGR

• R>,MM!;I,!S

39



T:$ -2T2;$

B+;+;-Ren+!4$-Niss+n $o %'i6e s#+44 3+' ULC

ajaj )uto has redrafted its ie strategy for this fiscal that will see the Pulsar and 'iscoer act

as the ey growth driers2 The script goes according to plan3 it has hae set ourseles a target of

/003000 units from oth rands y March /0102 ajaj )uto and the "enault5Nissan )lliance to

uild the car code5 named -(C with wholesale price range starting from />00 -%'

)ll this is part of a renewed thrust y the company to focus on two ey re=uirements of the

maret which3 oer the years3 hae pretty much remained constant for either fuel5efficient

commuter ies or sporty3 powerful products2 The 'iscoer has now een positioned to fulfill

the former need in a segment where Bero Bonda reigns supreme while the Pulsar has estalished

itself in the sporty slot3 with monthly sales of oer <03000 units2

ajaj )uto (td has announced that the company may launch a small car in the year /010 in#ndia2 The second largest two wheeler maer in #ndia will enter the small car segment in

partnership with !rench car giant "enault and Nissan2 The small car prototype was uneiled

today and the company wants to promote the ehicle as economical and affordale car2 The ajaj

)uto,s car will e e@pensie as it will meet safety and emission norms2 The standard ersion will

come with an air conditioner2

40



ajaj )uto has said in a statement that the car will offer a mileage of < ilometer per litter2

ajaj will launch the car in Petrol and 'iesel ariants2 ajaj has plans to manufacture the small

car at its facility in Chaan near Pune2

B+;+; A!$o L$% 0 ,e' 3en$

ajaj )uto3 which is yet to sign a ;oin$ 6en$!'e agreement with its partners3 "enault and Nissan2

The -(C project was conceied as a three5way alliance where ajaj would hold >0 per cent

e=uity2

Ren+!4$ 2 ,e' 3en$

The -(C project was conceied as a three5way alliance where "enault would hold /> per cent

e=uity2

Niss+n 2 ,e' 3en$

The -(C project was conceied as a three5way alliance where Nissaan would hold /> per cent

e=uity2

ajaj )uto3 which is yet to sign a ;oin$ 6en$!'e agreement with its partners3 "enault and Nissan2

The -(C project was conceied as a three5way alliance where ajaj would hold >0 per cent

e=uity with "enault and Niss+n accounting for /> per cent each2 ajaj5"enault5Nissan will

miss its /011 deadline on its ultra5low5cost car project2 ajaj )uto managing director "aji

ajaj has ordered that the wor done so far on the project e scrapped and has demanded

major modifications on design3 positioning and other details3 according to a person familiar

with the deelopment2

41

http://burnyourfuel.com/tag/joint-venture/


http://www.infibeam.com/Cars/search?make=Nissan







Re3o##en%+$ions

The impression of ajaj in the minds of the pulic is that it is a moped F a three5wheeler

company3 F it is a ery orthodo@ F unhappening image in the minds of the youth2 #t

should use a powerful rand amassador F indiidual whom the youth can relate with2

#t should aggressiely maret itself as a motorcycle company F moe from its traditional

mindset 4"ahul ajaj had once stated that he had only one department in his company the

dispatch department F that he did not re=uire a mareting department26

ajaj should aggressiely push sales of higher margin products F launch new products in

niche segments2

ajaj should also try F push for tie5ups F *oint .entures in foreign maret F try F

increase its e@port ase2 4E2g2 Tata Motors tie5up with "oer for mareting of #ndia F

*oint .enture with %enegal goernment for manufacturing trucs F commercial

ehicles26

ajaj should loo for possile mergers F ac=uisitions2 4E2g2 Maharashtra %cooters6 F try

F improe its distriution networ F proide it with products in niche segments F help

increase production capacity F proide economies of scale2

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ajaj should ealuate the process of acward integration as it has huge cash reseres

surplus2 This process would help it in ac=uiring inputs continuously at lower cost F at

regular interals2

#ncrease its dealer networ to tap rural growing marets y going in for tie5ups F

offering etter margins to dealers2

The ey to ajaj real success lies in "esearch F deelopment2 Bow it is ale to use alue

analysis F alue engineering y adding new features to its e@isting product line F how it

is ale to come out with new product for different niche marets2 )nalysis of different

alternaties lie outsourcing3 in5house3 purchase F tie5up should e ealuated2

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Documents

bajaj analysis.pdf