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Innovation, Technology, Competitive Strategy: Bajaj Auto and the Motorcycle MarketBy: Shubhi Jain Manisha Neha Bhushan Rajvir Kaur
Contents1.
2.3. 4. 5.
Evolution of Automobile Industry Market Structure Growth in Executive Segment Industry Players Technology Innovation1.
Ignition Mechanism in Two-Wheelers
6. 7.
Competition Innovation and Technology Strategies1. 2. 3.
Hero Honda Bajaj Auto TVS Motors
8.
Patent Wars
Evolution of Automobile Industry
1969: Industrial Policys restrictions 1970: Introduction of MRTP Act and FERA ActTechnology Stagnation Less efficient and High weighted Vehicles
1980: Amendments in PoliciesTechnical collaboration Broad banding policy
1990: Entry of foreign players. 1991: DelicensingChanges in FDI approval limits between 1991 and 2002
Market Structure
1998-1999: Motorcycles dominance (75cc 125cc)- Better style - More powerful - More economical
Characterization of Motorcycle Market -Double-digit growth -New product launches -Competition 2006- 2007: Shift towards executive segment (125cc 250cc) Growth in Executive Segment : Reasons:
Greater disposable income Changing lifestyle Greater brand management in terms of preserving operating margins.
Industry Players1. Hero Honda 2. Bajaj Auto 3. TVS Motors Technology advancement Product development and manufacturing Maintained in economy segment with 67% market share in 2007.
Selling scooters since 1945 Manufactured only scooters since 1959. Collaborated with Kawasaki. 60% market share in executive segment in 2007. Introduced features like DTS-i.
Teamed up with Suzuki to launch 100cc model in 1984. Captured 13% market share in 2007. Focused on fuel efficiency and emission controls.
Technological Evolution
Tighter emission norms led to introduction of four-stroke engines. Less power generation Produce lower emissions Focused on engine technology produce better fuel economy greater power Combustion efficiency Emission control
Cont
Ignition Mechanism in twowheeler
Comprises of 4 major parts Fuel injection Ignition Combustion Exhaust
Competition
Price Wars Executive
segment and Economy segment was diminishing and new segment was recognized at 125cc mark. Bajaj Auto and TVS Motors decided to work upon this newly emerged segment due to price wars created by Hero Honda.
Innovation and Technology StrategiesHERO HONDA - It is a equity joint venture between Hero group and Honda Motors in 1984.Technology Success Criteria Developed engine Superior supply to transform bicycle chain into mopeds. Pioneered Vendor electronic fuel management ignition (EFI) capabilities.R&D Leveraged Hondas design and technology Online R & D with Honda facilities Focus: Understanding consumers needs and expectations
ContBAJAJ AUTO- It is a non-equity alliance between Bajaj Auto and Kawasaki in 1984.
Success CriteriaKawasaki was strong in higher-end bikes Bajaj developed the capability to design and manufacture lower-end bikes
R&DTechnology Developed Digital Twin-Spark Ignition (DTS-i) technologyLaunched Greenfield manufacturing facility Collaboration with Tokyo R & D; automotive design studio.
Cont
TVS MOTORSSuccess CriteriaDeveloped their facility during the joint venture with Suzuki. Technology Licensed CombustionVariable Timing Intelligent (CC-Vti) technology.
R&D Focus on generating more mileage.
Joint Venture TVS-Suzuki formed as a joint venture between Sundaram Clayton and Suzuki Motors in 1982. Split in 2000.
Market Share
Future scenario: The Way Ahead
Graduating Customers from the 100cc to Higher Segments.
Cont
Focus on Gearless Scooters Entry into Four Wheeler Segment Scaling Up Service Centers Focus on Easy Credit Lending Investment in Research and Development Focus on Exports and Global Market
Conclusion
Invest in the right technologies at the right time. Willingness to change. Eg: Bajaj. Strategic rethinking and assess its product focus. New strategy should also be backed i.e. By
ground customer support. By continuous research.
THANK YOU