Strategy of M/s Maruti Suzuki

Team membersP Veera Pratap (BUB0912013)

Ch. Deepak (BUB0912016)

S. Mohamed ali (BUB0912020)

R Prabhu (BUB0912023)

Module :- Manufacturing strategy

Module Leader :- Mr. K.N. Ganapathy

2

Contents of presentation

Introduction Mission and Vision Competitive advantage External and Internal analysis SWOT Analysis TWOS Matrix Porter’s Five Force Model PESTLE Analysis BCG Matrix Business level strategy Functional strategy Conclusion

Maruti Suzuki India Limited (MSIL, formerly Maruti Udyog Limited) is a

subsidiary of Suzuki Motor Corporation of Japan. MSIL is a

leading manufacturer of passenger vehicles in India.Established in February 1981, though the actual production commenced in

1983 with the Maruti 800

Maruti Udyog Limited was renamed as Maruti Suzuki India Limited in 17

Sept. 2007

Headquarters are located at New Delhi and has two manufacturing facility

in Gurgaon and Manesar

3

Company at a Glance

Maruti 800 (A1)

4

Product varieties

Alto (A2) Estilo

Wagon R

Ritz Kizashi (A4)

Swift

SX4

ECCO

Viatra (MUV)

Etrigo

Gypsy

Dzire (A3)

A Star

Omni (MPV)

4

Major competitors

5

Business resultsYOY performance and MS

46

16

11

6

53

3 3 3 211

Market share distribution chart

Maruti Suzuki Hyundai M&M ToyotaTata Motors GM Renault HondaVolkswagen Ford Nissan Others

Source : Official Maruti Suzuki websiteIndian Car Sales Report - February 2013

7

Vision statement

The Leader in the Indian Automobile Industry,

Creating Customer Delight and Shareholders Wealth,

Eventually become a pride of India.

Core values

Customer obsession

Fast, Flexible and First mover

Innovation and

creativity

Networking and

creativity

Openness and

Learnings

8

Mission statement Modernization of the Indian Automobile Industry

Developing cars faster and selling them for less

Production of fuel-efficient vehicles to conserve scarce resources

Production of large number of motor vehicles which was

necessary for economic growth

Market Penetration, Market Development Similarly Product

Development and Diversification

Partner relationship management, Value chain, Value delivery

network .

9

Competitive advantage

10

External analysis

# Opportunities Weight Rating 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 matrix 0.05 2 0.10

5 Small size CNG Cylinders 0.12 3 0.36

Ratings1 – Poor 2 – Below average3 – Above average 4 – Superior

External Factor Evaluation matrix (EFE Model)

11

External analysis# Threats Weight Rating Weighted score

1 Tough competitors 0.14 2 0.28

2 Inflation rate 0.08 3 0.24

3 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 weightage 1 2.98

The Total weighted score of 2.98 shows that company is responding above

average to its external factors. They are trying to grab maximum

opportunities available there and avoiding the threats to their best

12

Internal analysis

# Strength Weight Rating Weighted score

1 Highest market share 0.20 4 0.80

2 Low price vehicles 0.10 4 0.40

3 Large distribution charnels 0.12 4 0.48

4 Easy availability of channels 0.08 4 0.32

5 Highly innovative product line 0.12 4 0.48

Ratings1 – Poor 2 – Below average3 – Above average 4 – Superior

internal Factor Evaluation matrix (IFE Model)

13

Internal analysis# Weakness Weight Rating Weighted

score1 Scarcity of Raw internal 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 weightage 1 2.99

The score 2.99 shows that company has solid internal position, its

strengths are overcoming the weaknesses

14

Competitor analysis

Focus on indigenization and Lower Costs

Increase dealer network

Target to tap growing middle class

By 2050 Top Spot in Car Volumes

Local Manufacturing Plants

World class features at affordable prices

15

TWOS Matrix

16

Generic competitive strategies

Lower cost

Differentiation

Broad target

Cost leadership Differentiation

Narrow target

Cost Focus Focus Differentiation

17

Generic environmental analysisPESTLE Analysis

Political(Attractive)

Economic(Attractive)

Social(Moderate)

Technology(Unattractive)

Legal(Unattractive)

Government promoting foreign investments (FDI’s) Stable political environment

Good access of funds due to availability of cheap loans Persistent high growth for past few years

Rise of middle class leading to improve purchasing power Mass transportation due to increase environment consciousness

Capital intensive Huge investment required to achieve economy of scale

Need to comply with ever evolving emission standards Need to comply various safety and technical standards

18

Porters five force model

19

BCG Matrix

20

Business level strategy

How a Business level strategy is built

Capabilities Core competencies

Business level strategy

Whom to serve

What needs to serve

How to serve the

needs

Business level

strategy

21

Capabilities of MSIL

Manufacturing and production technology

Understanding customer’s needs

Developing new designs and models of cars which

are fuel-efficient

Quality focus

Prompt service and customer satisfaction

22

Core competencies

23

Business level strategyCompetitive advantage

Cost Uniqueness

Com

petiti

ve s

cope

Nar

row

targ

etBr

oad

targ

et

24

Other functional strategy4 P’s strategy

25

Product & Price strategy

Segment Models Price range in Lakhs.*

A1 Alto 800 2.9 to 3.4

A2 Estilo, Swift, Wagon R, A-start, Ritz 3.9 to 6.6

A3 Dizre, SX4 6.7 to 10.4

A4 Kizashi 17 to 18

MUV Etrigo, Grand vitara, Gypsy King 6.3 to 23

MPV Omni, EECO 2.4 to 4.6

*Ex-Showroom price at Bangalore

MSIL has various segment and variety of models that suits all type of customers.

The products are divided in to different segment based on Price , features and

usage pattern of customers

26

Place strategy

600 New car sales outlets covering 393 cities.

265 ‘Maruti True Value’ outlets spread across 189 cities.

2628 Maruti Authorized Service Stations, covering 1220 towns.

Tie up with Adani group for exporting 200,000 units through Mnudra port

Gujarat Place strategy

Maruti the place of the car is in the whole world. MSIL decides its distribution

channels for selling car, like use some time one level or some time two level

marketing channels. They show the permanent location for selling the cars. They

provide the many useful inventory. MSIL defines the transport facility of the

company for company to market and market to consumers

27

Promotion strategy

MARUTI Main promotion of car is done by the Advertising. The advertising

is mainly done in the form of different T.V. channels, different newspaper,

holdings etc. Now days the main promotion is done by the brand

ambassadors such as film stars, celebrities, sportsmen, etc

28

Customer Relationship Management (CRM )

Maruti created a land-mark in CRM by launching a website first time in

India for the customers in the year 1998

Maruti is investing a lot of money and effort in building customer

loyalty programmes

The advantages of Maruti Auto Cards are

4% value back and much more

Exclusive discounts on car exchange

Exciting rewards on car referrals

Complimentary gift vouchers, etc.

09/02/2013/ 29

Customer Relationship Management (CRM )

True value outlets for Pre – Owned cars

Maruti On-road Service facility

Availability of easy finance with lower interest rates

Quality Service Across 1220 towns In the J.D. Power CSI Study Maruti Suzuki scored the highest across all 7 parameters:

1.least problems experienced with vehicle serviced, 2.highest service quality, 3. best in-service experience4.best service delivery, 5.best service advisor experience, 6. most user-friendly service and 7.best service initiation experience

09/02/2013/ 30

Advantages of CRM

No. 1 in JDP CSI, Consecutive 13 years

31

Other future plans

Design small cars suitable for the Indian conditions as a

strategy to beat the stiff competition with the entry of

global auto makers. “Mr. Bhargava, MSIL”

Launching compact cars with more features in ultra low-

cost segment to meet the needs of the customers locally

MSIL has decided to develop twin facilities in Gujarat.

09/02/2013/ 32

Conclusion MSIL, through its cost leadership approach – market leader for 3

decades , 46% market share

Constant innovation to its processes, hence helping it achieve efficiency

Cost advantage by maintaining long term contracts with its suppliers -

reliable supply of materials

Moving towards Integrated cost leadership/differentiation strategy to

cater to changing demands of customers and changing environment

Sustainability of this strategy in the long run

24

Reference

Author unknown, Business level strategy

http://www.slideshare.net/hedaurahul/business-policy-and-strategic-manage

ment-of-maruti-suzuki

- Retrieved on 18.04.2013

Author unknown, MSIL Strategy

http://www.slideshare.net/sanjaysan1/maruti-suzuki-strategic-management-1

2583528

, Retrieved on 19.04.2013

Author unknown, MSIL Business level strategy

http://www.slideshare.net/keshavcrashk/maruti-suzuki-business-level-

strategy, Retrieved on 20.04.2013

34