Stm assisnment


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Stm assisnment

  1. 1. ASSIGNMENT ON STRATEGIC MANAGEMENT<br />SUBMITTED TO,<br />PROF BHOLANATH DUTTA<br />M B A DEPARTMENT,<br />CMRIT<br />SUBMITTED BY,<br /> RAKESH KALYANKAR<br /> 1CR09MBA55<br /> M B A DEPARTMENT CMRIT<br />In the Indian passenger car industry, the following companies are the important players critically evaluate their marketing strategy (focusing on segmentation, targeting and positioning) and explain why they have choosen to operate in the segment they are operating in<br /><ul><li>Maruti udyog.
  2. 2. Hyundai.</li></ul>ANSWER- Maruti Udyog Limited was established in Feb 1981 through an Act of Parliament, to meet the growing demand of a personal mode of transport caused by the lack of an efficient public transport system. It was established with the objectives of – modernizing the Indian automobile industry, producing fuel efficient vehicles to conserve scarce resources and producing indigenous utility cars for the growing needs of the Indian population. A license and a Joint Venture agreement were signed with the Suzuki Motor Company of Japan in Oct 1983, by which Suzuki acquired 26% of the equity and agreed to provide the latest technology as well as Japanese management practices. The success path<br />strict work discipline for individuals and the organization <br />constant efforts to increase the productivity of labor and capital <br />steady improvements in quality and reduction in costs <br />customer orientation <br />long-term objectives and policies with the confidence to realize the goals<br />The global passenger car industry has been facing the problem of excess capacity for quite some time now. For the year 2002, the global capacity in the automotive industry was 75 million units a year, against production of only 56 million units (excess capacity estimated at 25%). Efforts to shore up capacity utilization have prompted severe price competition, thus affecting margins and forcing fundamental changes in the industry. The pressure on sales and margins is driving players to emerging markets in pursuit of better growth opportunities and/or access to low-cost manufacturing bases.<br /> The concept of selling in the passenger car industry is changing from original sales towards lifecycle value generation, encompassing financing, repairs & maintenance, cleaning, provision of accessories, and so on.<br /> Vehicle manufacturers are moving into completely new materials and technologies—partly guided by environmental legislation—in striving to come up with radically different products. Some of these new technologies involve parts that can be bolted on to an existing vehicle with relatively few implications for the rest of the vehicle. <br />Others are much more fundamental, and are likely to have a profound impact throughout the supply chain. The examples include battery, electric or hybrid power trains, and alternatives to the all-steel body. <br />Carmakers are increasingly outsourcing component production, and focusing on product design, brand management and consumer care, in contrast to the traditional emphasis on manufacturing and engineering.<br />HYUNDAI MOTOR INDIA LIMITED:-Hyundai Motor India Limited (HMIL) is a wholly owned subsidiary of Hyundai Motor Company, South Korea and is the second largest and the fastest growing car manufacturer in India. HMIL presently markets over 25 variants of passenger cars in six segments. The Santro in the B segment and Getz in the B+ segment. We are mainly going to concentrate on the various marketing and positioning strategies of Hyundai Santro as against that of Maruti Zen and Alto and Hyundai Getz as against Maruti Swift.<br />POSITIONING: The old positioning of the Santro was that a ‘family car’, this positioning strategy was changed in around 2002 and Santro was repositioned as to that of ‘a smart car for young people.’ The target age group for the car had now shifted from 30-35 years to 25-30 years. The repositioning followed the face-lifts the car has been getting from time to time in the form of engine up gradation, new power steering, automatic transmission, etc, to keep the excitement around it alive in the highly competitive small car market. The repositioning also comes ahead of the possible launch of a new design Santro, and the super B-segment car ‘Getz’, sometime in 2003.<br />This was given a fresh new positioning — from a ‘complete family car’ to a ‘sunshine car’ denoting a fresh new attitude and a ‘changing your life’ positioning. As the average age of a car owner has declined from around 30-35 three years ago to 25-30, primarily because of changing lifestyles, cheap and easily available finance, etc. the company thought that instead of promoting the Santro as a family car, it should be promoted as a car that can change the life of a young person since many of the buyers were young buyers.<br />The cell phone industry (mobile telephony) is passing through a stage of high growth what stage of product life cycle the industry is passing through and what are appropriate strategies for a company like airtel and Vodafone to cope with the competitive and customer challenge. <br />ANSWER- The cell phone industry is passing through the stage of maturity stage.<br />The strategies which the companies will use to cope up the competitive and customer challenge are as follows:<br /><ul><li>It is done through the mergers and the acquisitions of the companies.
  3. 3. It is also done through by providing them good offers with the night calls and week end calls where the calls are less.
  4. 4. Companies should go for the extensive R & D which they will provide with the latest technology
  5. 5. Companies should provide good advertisements, inspirational and emotional ads which will tend the customers to buy which promotions the company.
  6. 6. Good brand ambassadors should be brought in for the company promotion.
  7. 7. Companies should sponsorers for the games and the events where they can get good advertisements.</li></ul>How are strategic objectives superior to financial objectives? How is balance scorecard beneficial in setting objective?<br />ANSWER-The following are some of the objectives of strategic and financial objective<br /><ul><li>Objectives of strategic and financial planning
  8. 8. The traditional goals of strategic planning process:</li></ul>Develop and implement a strategic plan that supports the organization's mission, vision and values <br />Create organizational and business unit plans <br />Identify and evaluate new business opportunities <br />Provide training and education related to planning <br />Perform market assessments and forecasts <br />Reconcile the plan with capital and operational budgets, as well as with human resource and facility planning <br />Monitor plan implementation and measure results <br /><ul><li>The traditional goals of financial planning process:</li></ul>Measure current performance <br />Compare the organization's position against past organizational data and local, regional and national benchmarks <br />Make financial projections <br />Outline the organization's financial requirements <br />Integrate the financial process with the strategic planning process <br /><ul><li>Traditional financial reporting system provides an indication of how a firm has performed in the past, but offers a little information about how it may perform in the future. For example, a firm might reduce the level of customer service in order to boost current earnings, but then future earnings might be negatively impacted due to reduced customer satisfaction.
  9. 9. Learning and growthBusiness process FinancialStrategycustomerTo deal with this problem Robert Kaplan and David Norton developed the balance score card a performance measurement system that considers not only financial measures, but also customers, business process and learning measures. The balance score card is depicted in the following diagram:</li></ul>The score card allows managers to evaluate a firm from different complementary perspectives. The arguments run this:<br />A firm can offer superior returns to stake holders if it has a competitive advantage in its product or service offerings when compared to its rivals.<br />In order to sustain a competitive advantage, a firm must offer superior value to customers.<br />This, in turn, requires development of operations with necessary capabilities.<br />The financial perspective: EVA is what is left over after a frim has covered all its factors of production.<br />The customer perspective: does the firm provide the customer with superior value in terms of product differentiation, low cost and quick response.<br />The operation perspective: how effectively and efficiently do the core processes that produce customer value perform? Which are the most important sources of customer value, which need improving to offer greater customer value.<br />The organizational perspective: can this firm adapt to changes in its environment? Is its work force committed to shared goals? Does the organization learn from past mistakes? When confronted with a problem, does it go to work on root causes or does it only scratch the surface. <br />