strategic management project on Maruti Suzuki udhog limited

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strategic management project on Maruti Suzuki udhog limited

  1. 1. 1 BRCM COLLEGE OF BUSINESS ADMINISTRATION LIBRARY ASSIGNMENT 2013-14 ELEMENTS OF STRETEGIC MANAGEMENT-I TYBBA- SEM-V DIVISION-II [MARKETING] TOPIC NAME- PROJECT REPORT ON VARIOUS TOPIC OF STRETEGIC MANAGEMENT. NAME OD THE ORAGANISATION: MARUTI SUZUKI BY, 115- GANDHI SANI B. SUBMITTED ON -17TH OCTOMBER, 2013 SUBMITTED TO – DR.PRATIK PATEL
  2. 2. 2 Question -1 Organization name – MARUTI SUZUKI Question -2 Visions, mission and objectives Vision The leader in Indian automobile industry, creating customer delight and share holder’s wealth; A pride of India. Mission statement To create exceptional automotive value for our customers by harmoniously blending safety, quality and efficiency. With our diverse team, we will provide responsible stewardship to our community and environment while achieving stability and security now and for future generations. Objectives 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. Criteria for evaluating vision mission and goals Criteria 1. Customers 2. Specification about Product and services 3. Market 4. Technology 5. Concern for survival, growth and profitability 6. Philosophy 7. Self concept 8. Concern for Public image 9. Concern for employee. Vision Yes No Yes No Yes No Yes No No Mission Yes Yes No Yes Yes No Yes Yes No objectives No Yes Yes Yes Yes Yes Yes No No
  3. 3. 3 If I am there to write vision and mission statement then I would write them in following way: Vision: To become one of the respected automobile companies of Asia and to enhance customer value and delight. Mission statement To create superb automotive cars for our customers by focusing on safety, quality and efficiency. With innovations and technology we would try to bring new experience to customers and to produce environment friendly cars while achieving stability and security now and for future generations. Question -3 Identification of various General and specific environmental factors affecting the performance of Maruti Suzuki and impact of these factors on Maruti Suzuki 1. General environment This environment generally includes those indirect action environments which generally affects the whole business of a country or an industry. Which are as following…… 1) Natural factors Availability of natural raw materials is the major issue for auto mobile industry and it affects all the firms in the industry. Apart from it increasing global warming is also a major problem and All car manufacturing have to take into account all pollution related regulations of government which applies to all firms. Apart from it, Anti Pollution Pressure and implementation of euro norms and Bharat norms have created problems in auto mobile industry. Many technologies have been developed and due to natural factors following new ways are developed which firms may have to adapt with passage of time, which are as following. i. Use of eco friendly cars ii. Use of alternate bio fuels and CNG and Electricity run automobiles. 2) Economical factors Economic conditions prevailing in India will affect the entire firm in the industry.
  4. 4. 4 Here for a car manufacturing company, as a costlier product and target is higher income family and middle class family with high income, income level of India, income and assets distribution will determine the customer base for each car making company. Apart from it various economic policy of Indian government and RBI will also affect all the firms in the industry in same way. 3) Political- legal factors Political climate in different countries producing buying automobiles regarding policies on import, export and manufacture of automobiles and automobile components. This will also include policies on allowing setting up of manufacturing plants by foreign companies. Stability of governments. This may affect the future conditions in a country. Taxation policies will also affect all the firms. Industrial policy, tariff policy will also determine the strategy of each firms in industry. Political and legal environment could be understood as pre liberalization and post liberalization of economy. a. Pre-liberalization period i. Government protection by use of license ii. Heavy excise duty on cars iii. Price discrimination by government iv. High import duty v. Liberal policy on foreign participation Adversely, b. post-liberalization period i. foreign direct investment ii. reduction on import duty iii. continues rationalization of excise duty regime iv. the license raj is cease to be exist So with liberalization price discrimination of government, import duty and high excise got reduced after liberalization. 4) Technological factors i. Innovation Increasing innovations in technology will always going to affect whole industry. Some innovations are as following… a. Fuel efficiency
  5. 5. 5 b. Hybrid cars If one company in the industry comes up with above two then it will Crete pressure for other firms in the industry. ii. Greater emphasis on research and development Increasing role of innovations and improved technology is important and this can be gained through research and development and it will affect most firms in the industry. iii. Increased regulation of technological change Anti Pollution Pressure and implementation of euro norms and Bharat norms have made firms to change their technologies to which are fuel efficient and concerned for environment. 5) Socio cultural factors Lifestyle and preferences of people that impact their choice of types of cars. Social norms that impact the decision to own and use automobiles versus other means of transport. Socio cultural environment will have impact on the marketing Mix of the firms also. 6) Demographic environment i. Changing income level: changing income level shall affect all the car manufacturers in the industry as it will directly affect the pricing strategy of firms. ii. Changing family structure: changing family structure will also affect many firms in industry as it will have impact on the size, design and type of car means if size of the family is decreasing then they have to make small car and vice-versa. 2. Specific environment These factors are task, operating, micro or direct-action environment which affects differently to Maruti Suzuki and other automobile making company. Which are as following…. 1) Competition Competition is the biggest affecting factor in any industry. Maruti has competition mainly from Hyundai ford, tata and toyata. Here in automobile whenever Maruti comes up with any new car model or certain features, it will be soon copied by the competitors. As Maruti’s focus is mainly related with price and competitors are always providing price competition to Maruti. 2) Intermediaries Intermediaries include distributors of Maruti car who provide services and delivers cars to final customers.
  6. 6. 6 Attitude, viability, reliability, trusts worthiness of distributors is most important for the Maruti because Maruti itself not deal with these customers but these distributors. Apart from it transporters are also important for Maruti because timely delivery from Maruti plant Gurgoan (Hariyana) to whole country depends only on transporters only. 3) Suppliers For the smooth functioning of Maruti Suzuki it requires reliable source of supply. Because without raw materials production cannot be carry forwarded. For example if Maruti is purchasing tyres from MRF or Ciet and if they don’t supply tyres in time, Maruti would have to face a problem. Apart from it price of the car will also depends upon, price at which Maruti are getting the raw materials, and distance for the transportation cost. 4) Customers As in every industry, here customers are most important for Maruti .here Maruti is targeting upper middle class family with medium family sized cars. And hence relative profitability, sustainability of Maruti is dependent upon these middle class families only to whom they are targeting. Question 4 porter’s five forces analysis for Maruti Suzuki 1. 2. 3. 4. 5. The threat of new entrants. The bargaining power of buyers/customers. The threat of substitute products. The amount of bargaining power suppliers have. The amount of rivalry among competitors 1. The threat of new entrants In most markets, the capital and expertise needed to setup an auto or parts manufacturing facility would be a great enough barrier to entry to prevent many new entrants from setting up. And as new government rules one foreign country can directly enter into the market which now creating new threats for Maruti Suzuki. However, given India's incredible growth forecasts, infrastructure progress (especially new and better roads), and ever-expanding financing options to rural residents, the market is attractive. As such, we expect the threat of new entrants to be high. Result: Unfavorable
  7. 7. 7 2. The bargaining power of buyers/customers Buyers in India have a wide variety of choice. There are more than 20 foreign manufacturers selling in India (including ultra high-end such as Rolls-Royce and Lamborghini). Of course there are also a plethora of incredibly cheap choices, like the famous Tata Nano. So large numbers of sellers are there with more or less little differentiated car but not at all unique car provider is there. Most important is that switching cost is very low from customer’s side. While Maruti is targeting middle income familiies and they focus more on price rather than additional feature of cars and hence Maruti may have to face bargaining power based on price from customers. Result: Unfavorable 3. The threat of substitute products Maruti Suzuki is car manufacturer but in India, there are too many two wheelers making companies are also available which can be a substitute to Maruti cars especially for small family sizes target customers. Apart from it if one company brings about a new car model with new features then it is immediately substituted by another car making company in the industry and this can be a huge problem to Maruti Suzuki. Result: Unfavorable 4. The amount of bargaining power suppliers have In automobile industry if supplier of engine or tyres has the possibility and opportunity of doing Forward integration and entering into car market then it may happen that supplier do have much bargaining power. If supplier for Maruti has inbuilt switching cost for changing supplier then supplier may have bargaining power. If supplier is supplying most important component of car for example engine of the car then supplier may have too much bargaining power. It is likely that the suppliers to the manufacturers have considerable bargaining power. They are not held ransom by one single manufacturer as they can market their products to any of the others car manufacturer in India. Result: Unfavorable
  8. 8. 8 5. The amount of rivalry among competitors The rivalry among firms is very intense because of entry of foreign companies in the market. Every new innovation that one company brings is immediately copied or imitated by the other companies in the market. While Maruti, Hyundai and Tata always have price competitions in the market. The industry is not yet in its shake-out phase and is still struggling to find the up-and-coming stars and possibly topple the leaders. Result: Unfavorable Question 5 Identification of Category of the automobile industry of Maruti Suzuki (Industrial setting) Industry setting here deals with the pattern of automobile industry in terms of their stage of evolution and maturation as well as geographical dimension. Here automobile industry is Global industry. Reasons: Automobile industry is global industry because strategic positions of competitors are in major geographical or national markets and such markets are heavily affected by overall global positions. In this automobile industry many firms such as Toyota, Nissan, General motors, ford are multinational national and transnational companies and operates in more than one country and in large companies almost all countries of the world. And hence a firm in automobile industry can expand his business to more and more countries and hence automobile is a global industry. Question 6 Identification structure of the automobile industry under which Maruti Suzuki falls (Industrial structure) Industry structure essentially deals with underlying economic and technical forces operating in an industry. It consists of the nature of competition based on number of competitors and their roles and product differentiation. Industry structure of automobile industry is Differentiated Oligopoly under which Maruti Suzuki falls.
  9. 9. 9 Reasons: In automobile industry, number of sellers (that is in India around 20) are limited in number but those all companies offers differentiated cars from each others. Here Audi, BMW, Mercedes etc produce high class cars which something unique in each of their models while Maruti, Hyundai, Nissan produce middle income group cars and having different positioning from each other and hence they make differentiation on technology, pricing, styling and design, after sales services etc. and hence competitors are there in automobile industry but each has its own differentiation strategy. So automobile industry is considered as a differentiated oligopoly because number of competitors is limited but each has its own unique selling propositions. Question 7 : comment about overall attractiveness of automobile (Industry attractiveness). Industry attractiveness consists of factors prevailing in the industry affecting the profitability of an organization favourabaly and unfavorabaly. Attractiveness of automobile industry i. Nature of Demand Here the analysis is done on market size which is Indian automobile market which is one the biggest automobile markets in the world. Market size will determine demand of the market while population, income etc also affects demand. India is an attractive market because….. a. Population of India is increasing Day by Day and industry demand of automobile industry will also increase. b. India is a huge market for automobile industry. c. In past decade per capita income has increased by manifold and improvement in income distribution will result into increase in demand and hence attraction of more and more automobile firms. ii. Industry potential It deals with scope of business that it offers at present and in future. This is mainly concerned with the total auto mobile industry sale potential.
  10. 10. 10 As India is a large market and having more potential of sales in the industry, it will attract more and more car companies in India. iii. Profit potential Profit potential is concerned with the degree to which differentiation or standardization is there in industry. In automobile sector in India with if one company enters with some innovation then that firm will have uniqueness in their car and hence through innovation one can earn high profit. In automobile industry profit potential is substantially high because through technological changes and research and development one can have differentiated car model and can earn high profit. iv. Entry and exit barriers In automobile industry entry barriers are in the form of economies of scale of operations, investment requirement, degree of product differentiation, cost disadvantage etc. However, given India's incredible growth forecasts, infrastructure progress (especially new and better roads), and ever-expanding financing options to rural residents, the market is attractive. As such, we expect the threat of new entrants to be high in automobile industry of India. While there is huge investment done for stating automobile company, existing may be very costly as technology is very costly, land and distribution outlay were also purchased at high cost and withdrawal is very difficult from Automobile industry. And hence automobile industry has many entry and exit barriers which reduces the attractiveness. Question 8: comment about performance of automobile (industry performance) Industry performance is related to the following factors….. i. Profitability In automobile industry profitability is measured through either sales or investment done. But as automobile industry is a highly capital intensive industry sales may be very high which creates difficulty to evaluate performance and hence investment should be taken for consideration.
  11. 11. 11 ii. Operational efficiency This part operational efficiency is dependent on input-output relations, inputs like availability of raw materials like steel, fuel, machinery components etc, huge infrastructure facilities like huge production plant, distribution outlets and service stations, large number of manpower and so on. And in automobile industry operational efficiency is very high because output with respect to input is very high. iii. Innovations Innovation refers to any product or idea that is perceived by someone as new. In auto mobile industry car innovations are very high that is addition of new features in car, fuel efficient technologies, new design or different marketing channel innovations etc are possible. And through innovations differentiation is possible in automobile industry. iv. Technological advancement In automobile industry technological advancement refers to new ways and technologies for making cars, and immediate adoption of new technology creates entry barriers to entry of new firms. Adoption of Technological advancement creates competitive advantage in automobile industry to a firm in the form of cost benefits and differentiation of features. Question 9: strategic group analysis A strategic group is in a country consists of those firms which has similar combination of strategies to compete. Strategic Group is likely to be more in auto mobile industries where there is a great difference between product lines of firms, especially in terms of pricing. The rivalry among the firms within a Group is far greater than the inter-group rivalry. On the customers’ part, there can be a shift from one group to another, especially when upgrading to a more expensive automobile, the firms effectively compete for customers in different market segments on their parts. In automobile industry following strategic groups can be formed. i. Strategic groups based on price competition. Here mainly competition in same market segment takes place where customers are more price sensitive. For example, Maruti-Suzuki competing with Ford, Fiat & Chevrolet because their target customers in the Indian market are broadly similar and they focus mainly upon the pricing strategy.
  12. 12. 12 ii. Strategic groups based on comfort and luxury with high pricing. For example, Ford does not compete with Ferrari, but it does, in some segments, with BMW, Audi & Mercedes. This is because Ford’s more expensive and less mass-market range of cars are in similar segments with BMW’s lesser expensive, more mass-market cars. So a Ford Focus would compete with a BMW 1-Series and not a BMW 7-Series as the target customers. Benefits to Maruti Suzuki through strategic analysis i. ii. iii. Maruti can come to know that who are their close and direct competitors in terms price and targeting middle income group families. What can be the strategic problem for Maruti needed to be improved? Maruti can easily analyze whether they opportunity to enter into high premium segment and what is the favouribility. Question 10: competitor approach analysis Competitor analysis includes the following steps…… i. Assessing the strength and weakness of all automobile manufacturing firms. ii. Prices of competitors and Maruti. iii. Product differciation of competitors on the basis of price, product positioning and distribution channel. iv. Cost advantage and disadvantage of Maruti’ s competitors v. Car positioning of competitors. vi. Car performance of competitors and car design, engine etc. Here in this question swot analysis for all competitors Is not possible as more then 20 car companies are there in India. Question 11: ETOP for Maruti Suzuki Environmental threats and opportunity profile of Maruti Suzuki Factors analyzed Political and legal environment 1. Taxation 2. industrial policy 3. import duty Degree of Degree of strength Degree of Total importance for Maruti (+) weakness for (out of 5) Maruti (-) 5 4 4 3 3 5 -15 12 -20
  13. 13. 13 4. export promotion measures 5. stability of government Total Demographic environment 1. Size of family 2. Income of family 3. Population increase in India Total Natural environment 1. availability of raw materials 2. anti pollution controls 3. new technology for eco friendly car Total Economic factors 1. FDI 2. Fiscal policy 3. Economic policies of India Total Socio cultural environment 1. Lifestyle and preferences of people 2. Social norms Total Technological environment 1. Innovations 2. Research and development 3. Cost efficient technologies for cars 4. Emergence Fuel efficient engines Total Competitive environment 1. No of competitors 2. Entrance of foreign companies 1 3 3 2 4 8 -12 4 5 3 4 3 5 16 15 15 46 4 3 12 3 3 3 5 9 15 36 4 4 3 5 3 4 -20 -12 12 -20 2 1 2 2 1 2 4 4 4 2 3 8 12 3 4 12 5 5 15 47 3 4 3 5 -9 -20
  14. 14. 14 3. Chinese manufacturers 4 Total Grand total score of Maruti 5 -15 -44 (-12+46+36-20+4+7-44) =57 From above ETOP analysis we can say that Maruti has its own advantages from external environment but competition, economical factors are largely unfavorable to them. Question 12: identification of following for Maruti Suzuki a. Strength and weakness in various areas Strength: i. ii. iii. iv. v. vi. vii. viii. Huge and well spread distribution network and after sale service network. Knowledge of Indian market. Good support from government and ability to liaison with government. Ability to design product with diffenciating feature. Well established brand image of Maruti. Huge product line. 55% market share in India. Technological advancement from Japan through Suzuki. Weakness: i. ii. iii. iv. v. Demotivated human resources. And negative attitude of employee towards Maruti. High import duty and tariffs to be paid on exports from the Japan. Entry of foreign competitors with heavy pocket while Maruti has limited financial capacity. Frequent strikes due to HR problem and stoppage of production. Long waiting time for customer to get delivery of new cars, especially newly launched car model. b. Core competences Core competencies of an organization can be simply defined as a set of qualities, which are unique to that particular organization that cannot be easily imitated by its competitors. Core competencies are factors which give competitive advantage to the organization in its chosen market. Core competencies may be of various types- technical know-how, relationship with customers, employee-dedication, manufacturing process etc.
  15. 15. 15 An analysis of the Maruti Suzuki India Ltd. shows three core competencies: A. Strong Customer Base and brand Image The Maruti Suzuki has a market share of about 55% in the Indian passenger car segment and is the largest manufacturer of small cars in India. The company has been voted as first by Indian customers for level of customer service and customer satisfaction. The company manufactures affordable small cars which serve the needs of an average Indian customer faithfully and hence have a strong brand image as the common man’s car in India, which an average Indian customer identifies with. Such a strong brand image and huge customer base can sustain the position of the company as the market leader in the Indian small car segment. B. Well developed sales and service network throughout India. The Maruti Suzuki India has a strong dealership network comprising more than 450 cities across India and a huge service network of more 2750 franchises of service outlets spreading about 1300 cities throughout India. Such a widely distributed sales and service network can help the company to relate with its customers across India and also facilitates bargaining power with suppliers and increase profitability. C. Very Strong knowledge of Indian market. Maruti Suzuki is the India’s one of the oldest car manufacturers and Maruti has been dealing in huge customer base can sustain the position of the company as the market leader in the Indian small car segment and hence Maruti has strong knowledge base. c. Competitive advantage The firm has competitive advantage from a high market share and well knows brands. The high volumes drive economies of scale for the company in manufacturing, purchasing, distribution and such scale driven activities. In addition the company has increased the lead by expanding its distribution networks (more dealers), opening new service centers and by expanding into allied services such as insurance and used car sales. All this results in higher customer loyalty and more repeat business.
  16. 16. 16 Question 13: preparation of OCP for Maruti Suzuki Organizational Threats and opportunity profile of Maruti Suzuki Factors analyzed Degree of Degree of strength Degree of Total importance for Maruti (+) weakness for (out of 5) Maruti (-) A. Production factors 1. 2. 3. 4. Plant location Plant capacity Capacity utilized Quality of technology used 5. Supply of raw materials 6. R& D facilities Total 4 4 4 3 3 4 4 3 -12 16 16 9 5 4 20 3 3 9 58 B. Marketing Factors 1. Competitive advantage 2. Market share 3. Product life cycles 4. Distribution outlets 5. Promotional efforts 6. Market research 7. Competitive pricing Total 3 5 3 5 3 3 5 5 4 2 5 2 2 4 15 20 6 25 -6 -6 20 C. Finance factors 1. 2. 3. 4. Cost of capital Ease in raising fund Financial position Use of financial resources 5. Tax advantages Total 3 5 3 4 3 -9 15 6 16 4 -20 3 2 4 5 10 D. Human resources factors 1. Quality of managerial personnel 2. Quality of operatives 3. Employee attitude 5 4 20 5 4 4 20 -20 5
  17. 17. 17 4. Employee motivation and morale 5. Employee absenteeism 6. Employee turnover Total 4 5 -20 4 2 5 5 -20 -10 -30 E. General management factors 1. Company image 2. Information and reporting system 3. Willingness to bring change Total 5 3 3 3 15 9 3 1 3 Total score for Maruti 27 85 Question: 14 preparation of SAP for Maruti Suzuki i. ii. iii. iv. v. vi. vii. viii. Huge product line and wide Varity of cars but problem is that they are facing competition in each category. 55% market share in India and turnover is about two million cars a year. Maruti is market leader in India because of two reasons a. Plant is very old and established long ago so fixed cost is very low in terms of investment outlay and depreciation. b. As a large setup they have the advantage of low operating cost per unit. Huge and well spread distribution network and after sale service network. The Maruti Suzuki India has a strong dealership network comprising more than 450 cities across India and a huge service network of more 2750 franchises of service outlets spreading about 1300 cities throughout India. Knowledge of Indian market. Ability to design product with diffenciating feature. Well established brand image of Maruti. Technological advancement from Japan through Suzuki.
  18. 18. 18 Question: 15 value chain analysis for Maruti Suzuki Value Chain A value chain is a chain of activities. Products pass through all activities of the chain in order and at each activity the product gains some value. The goal of these activities is to offer the customer a level of value that exceeds the cost of the activities so that the company can charge a premium price for the product hereby resulting in a profit margin. Value chain analysis includes two activities viz… a. Primary activities Primary activities are those that are involved in creation of cars which are as following… i. Inbound logistics The receiving and warehousing of raw materials, and their distribution to manufacturing. MUL’s inputs primarily comprise raw materials and purchased components. In order to improve quality and generate economies of scale, MUL has reduced the number of vendors of components in India. ii. Operations Manufacture of products and services. The way that the resource inputs convert to outputs that is cars. Operations Includes machining, assembly of various components of cars etc. iii. Outbound logistics Required to get the finished goods and services to the customer. It includes warehousing, order fulfillment, transportation, distribution, distribution management of cars. iv. Marketing and sales Associated with getting buyers to purchase the product. This Includes channel selection, advertising and promotion of cars, selling, final pricing, retail management, etc. related with cars. v. Services Maintain and enhance the product performance after the car has been sold. Includes customer support, repair services, installation, training, spare parts management, upgrading, etc. b. Supportive activities
  19. 19. 19 i. Supportive activities are those that are provide provide effective performance of primary activity which are as following… Firm infrastructure This includes Maruti’s production plant, service stations and distribution channel etc. ii. iii. Human resources management Technological development Concerned with managing information processing and the development and protection of knowledge in business, specially Maruti’s knowledge about Indian market. This Includes technology development to support the value chain activities such as research and development. iv. Procurement Concerned how resources are acquired for a business. Procurement of raw materials, servicing, spare parts, buildings, machines in which car assembling technology, service and repair components etc are included. Question 16 Functional analysis for Maruti Suzuki It evaluates the strengths and weaknesses of various functional areas. The areas are Production, Marketing, Finance, Human Resources and general management.  Production: i. Allocation and use of resources: before starting up of production firstly the company has to allocate the resources properly and use it and that too with high efficiency. ii. Location pattern: here the MARUTI will select Hariyana location where it got all the raw material available. iii. Production capacity and its uses: In future if company wants then it can increase its capacity and use it optimally. iv. Cost structure: The Company has to do cost analysis for the product. And if it increase than the company have to take steps.
  20. 20. 20 v. Cost volume profit analysis: It suggest the profitability of the organization at various levels of production. vi. Operation procedures: Here the production design, scheduling, output, quality control, etc. are taken into consideration and then the process takes place. vii. Raw material availability: The planning for various raw materials are also takes place in production area. If the materials are scare than they can order it before scarcity arises. viii. Inventory Control system: Here they consider that the wastage of resource does not take place. Besides it can control and regulated the procurement of materials in such a way its cost is minimum and it should be available on time. ix. Research and Development: It is the most important part of the production area as many advantages are associated with it like the company can bring new flavour coffee, can change its packaging, etc. Besides it may create competitive environment by introducing new things. x. Patent right: the MARUTI have the patent right so no one can copy the cars and car features and no one can start the company by their name.  Strength :- Favourable vocational pattern of plant. - Optimum use of production capacity. - Effective inventory control, - Adequate and efficient use of R&D. - Low cost of production.  Weakness:- Scare and limited resources. - Defective allocation and use of resources. - The cost may get high.  Marketing / Service: MARUTI advertises through TV, websites, etc.
  21. 21. 21 1. Competitive competence: Business organizations have to operate in a competitive field. The organization’s competitive competence can be appraised on the basis of trends in market shares for which the information can be made available from various outside sources as well as through the MARUTI own marketing research department. 2. Market research: Marketing research offers the information for taking various marketing decisions in the light of the environmental demand. 3. Channel of distribution: The Maruti Suzuki India has a strong dealership network comprising more than 450 cities across India and a huge service network of more 2750 franchises of service outlets spreading about 1300 cities throughout India. 4. Promotional efforts: Effective promotional efforts are strength for the organization and their absence a weakness.  Strength: - Favourable image of the company. - High market share. - Effective and efficient selection of channels. - Efficient promotional efforts. - Proper product positioning. - Best marketing research.  Weakness: - Market share may get decreased. - Declining product life cycle of cars. - Ineffective sales forces. - Stagnant marketing strategy.  Finance: -
  22. 22. 22 Finance area deals primarily with raising, administering and distributing financial resources to various activities. 1. Capital cost: The various sources through which the MARUTI raises its financial funds determine the capital cost. While determining the sources for funds, debt/equity norm, capital market position, etc. are taken into consideration. 2. Financial planning: It is the determination, in advance, of the quantum of capital requirement and its forms. What type of assets will be required to run the business and how much capital will be required for this. 3. Tax benefits: When governments seek to develop or change tax policy, they invariably seek input from a wide range of interested stakeholders, including business advocacy groups and a large number of individual companies.  Strength:- Sound capital structure. - Sound financial planning. - Proper capitalization. - Efficient and effective accounting system and procedures.  Weakness:- High capital cost.  Human Resources : In analysing human resources, following factors are taken into consideration: 1. Quality of personnel: Quality of a personnel employed by an organization is a key determinant of its success. MARUTI has to be careful while choosing the employees. Quality of personnel includes their knowledge, skills, attitudes, and motivation to work. 2. Personnel turnover and absenteeism: It is a big problem for organization in today’s context. To the extent, an organization is not able to retain its key personnel.
  23. 23. 23  Strength: - Highly skilful labourers. - High motivation of top management  Weakness : - High personal turnover. - Negative attitude of employee - Frequent strike by employees. - The worker may not like to learn new technology. Associated with recruiting, development compensation of employees and managers. Motivation and training to employees. (education), retention and

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