Strategic Management Case Analysis of Maruti Suzuki India Limited-Competitive Strategies of the Market Leader

1. About Company
Maruti Suzuki India Limited previously named Maruti Udhyog Limited was incorporated in
1981. It is a subsidiary of Japan based Suzuki Motor Corporation (suzuki). Founded in 1981,
Maruti Suzuki was India’s leading automobile manufacturer and the market leader in the car
segment, both in terms of volume of vehicles sold and revenue earned. The major competitive
advantage of the firm is in terms of Price, Service and Quality. The company was known for its
high manufacturing standards, and it received award from the All Indian engineering Export
Promotion Council (EEPC) consecutively for three years-1987, 1988 and 1989.
Ownership
Government-18.28%
Suzuki-54%
IPO 21%
Others 6.72%
Brand Models
Maruti 800, Maruti Alto, Zen, WagonR, Baleno , Swift, Zen Estillo, WagonR Duo, Swift Diesel, SX4,
Grand Vitar, A-Star.
Vision Statement
“The Leader in the Indian automobile industry creating customer delight and shareholder’s wealth;
eventually became a pride of India”.
Mission Statement
 Build firm foundation for modernization and growth of the Indian automobile industry.
 Developing cars faster and selling them for less.
 Production of low cost and 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 and value delivery network.

2. EFE Matrix
Opportunities Weight Ratings Weighted
Score
1. Increasing Demand for Cars 0.15 4 0.60
2. Large Market to operate 0.10 3 0.30
3. Efficient EFI Engines 0.10 3 0.30
4. Small size of CNG cylinders. 0.12 3 0.36
5. Global Spare parts market. 0.05 2 0.10
Threats
1. Tough Competition like Toyota and Honda 0.14 2 0.28
2. Inflation Rate. 0.08 3 0.24
3. Heavy 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 Weighted Score 1.0 2.98
Ratings
1-Poor 3-Above Average
2-Below Average 4-Superior
The total weighted score of 2.98 shows that the 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.
IFE Matrix
Strengths Weight Ratings Weighted
Score
1. Higher Market Share 0.20 4 0.80
2. Low Price Vehicles 0.10 4 0.40
3. Large Distributors Channel 0.12 4 0.48
4. Easy availability of spare parts 0.08 4 0.32
5. Highly Innovative and deep product lines 0.12 4 0.48
Weakness
1. Scarcity of raw materials 0.08 2 0.16
2.Lack of co-ordination and linkage with Government 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 channel in suburban areas 0.10 1 0.10
Total Weighted Score 1.0 2.99
The score 2.99 shows that the company has solid internal position, its strengths are overcoming the
weaknesses.

3. SWOT Analysis
Strengths:
 Established distribution and after sales network.
 Understanding of the Indian market.
 Ability to design products with differentiating features.
 Brand Image.
 Experience and Know how in technology.
Weakness:
 Lack of experience with foreign market.
 Comparatively new with diesel cars.
 People resistant to upper segment models.
 Heavy import tariffs on fully built imported models.
Opportunities
 Increasing purchasing power of Indian middle class category.
 Government subsidies.
 Tax benefits.
 Prospective buyers from the two wheeler segment.
Threats
 Competition from second hand cars and TATA motors.
 Threats from Chinese manufacturers.
Porter’s Five Forces Model
1. Threats from the new players: Increasing Trend.
2. Rivalry within the Industry: High.
3. Bargaining Power of Supplier: Low.
4. Bargaining Power of Consumer: Increasing.
5. Threat from Substitutes: Low to Medium.

4. BCG Matrix
Business Growth Rate
Market Share
Major Restructuring Exercise
 The company focused on improving its OPERATINAL 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 Maruti cars used.
Strategies Implemented by Maruti
Strategy Models
Invest, Integrate, Market Penetration, Related
Diversification
Swift, Alto
Maintain Market Dominance and Leadership Maruti-800, Alto, WagonR
Harvest/Divest SX4, A-Star/Ritz
Harvest, Divest and Liquidate Omni, Baleno
Promotional and Value adding Services.
Stars
-Maruti Zen
-Swift
Question Marks
-SX4
-A STAR
Cash Cows
-Maruti 800
-Wagon R
-Alto
Dogs
-Omni
-Versa
-Baleno