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MARUTI SUZUKI
Maruti Suzuki India ltd.




         Presented By:-
         Praveen Sharma
            Sec-C 147
              NDIM
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 .
Fig.
Michael Porter’s 5         New
Forces Model for           Entrants
Industry                               Threat of New
Competitiveness                        Entrants


                           Industry
              Bargaining   Competitor       Bargaining
              Power        s                Power
  Suppliers                                              Buyers
              of           Rivalry among    of
              Suppliers    existing firms   Buyers


                                  Threat of
                                  Substitutes

                             Substitutes
 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
 maruti  suzuki india ltd
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
   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.
Welfare Camps
Medical support & welfare
 Education to
underprivileged
Road Safety
Maruti Driving Schools
Greening of Supply Chain
Adopting energy saving
technologies
Reducing water wastage
Green Growth
 Launched 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.
 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.
 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
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

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maruti suzuki india ltd

  • 2. Maruti Suzuki India ltd. Presented By:- Praveen Sharma Sec-C 147 NDIM
  • 3. Content  Introduction  Michael Porter’s 5 Forces Model for Industry  PESTLE Analysis  Glance on Maruti’s Strategies
  • 4. 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 .
  • 5. Fig. Michael Porter’s 5 New Forces Model for Entrants Industry Threat of New Competitiveness Entrants Industry Bargaining Competitor Bargaining Power s Power Suppliers Buyers of Rivalry among of Suppliers existing firms Buyers Threat of Substitutes Substitutes
  • 6.  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.
  • 7.  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
  • 8. 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
  • 10. 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
  • 11. 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.
  • 12. Welfare Camps Medical support & welfare Education to underprivileged Road Safety Maruti Driving Schools Greening of Supply Chain Adopting energy saving technologies Reducing water wastage Green Growth
  • 13.  Launched 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
  • 14.  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.
  • 15.  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.
  • 16.  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.
  • 17. 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
  • 18. 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.
  • 19. New Strategy  PROMOTIONAL strategies including price cuts, promotional offers, launching campaigns  VALUE ADDED SERVICES offering to its customers
  • 20. 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.
  • 21. 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.
  • 22. 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
  • 23. 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
  • 24. 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.
  • 25. 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.
  • 26. 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.
  • 27. 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.
  • 28. sold over 10million cars.. !!!! Thank you