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Process of Strategy Work – Maruti Udyog Limited

Course Project: Maruti Udyog Limited

International Business
Process of strategy work

Assessment:

Date
Grade
Teacher’s Signature

Process of Strategy Work – Maruti Udyog Limited

CONTENTS
1

INTRODUCTION
...
1

2

Company background
...
4
2
...
2

3

Elements of the mission
...
5

THE EXTERNAL AND INTERNAL ENVIRONMENT WITHIN MARUTI COMPANY
...
1

External environment
...
1
...
8

3
...
2

PESTLE Analysis
...
2
3
...
11
Environmental analysis
...
15
4
...
2

Business strategy
...
3
5

Strategic goals and objectives
...
17

SOURCES


...
This report will
focus on certain problems, express vision and goals of the company,
their strategies in the future, show their competition, show Maruti’s
strengths, weaknesses, threats and opportunities in the future
...
The following sections will give answers for the
questions mentioned above
...


1
...
Later it was incorporated
as a joint venture between the Indian Government and Suzuki Motor
Corporation in October 1983 by which Suzuki acquired 26% of the
equity
...
and profit of 17 mn Rs
...
For just a decade Maruti company captured
over 80% of the market share in India
...
Employees had to
report early in shifts, in order for them not to lose time in-between shifts
...
Even
though these practices were unheard in another Indian organization,
they had a really success in Maruti Udyog Limited
...

In 2007 the Government of India sold its complete share to Indian
financial institutions, so 54
...
The
Government of India no longer has stake in Maruti Udyog
...
It produced over 5 million vehicles by the end of May 2005
...

3

Process of Strategy Work – Maruti Udyog Limited

2

BASIC UNDERPINNINGS OF MARUTI COMPANY
This section will describe a lot of important features of Maruti company
such as their mission, vision and their core values to express their basic
factors within the company
...
These all
describe how the company focuses in its production and in all demand
required from customers which helps them a lot for their own interest
and also the other
...
1

Elements of the mission
This concept expresses the company’s interest in market
...
The same is with
Maruti company but in order to accomplish the profit the company first
should apply the demands of the customer
...
Now, it the most loyal
company in India since they produce good quality cars and afford them
to customer in very good deal
...
Other companies are updating
their technology and making cars spent less that those are supposed to
...
This can be achievable from them as long as
they have all the resources needed in the market
...

The core values of the Maruti would be separated in five sections:
1
...
It’s the most important ingredient to gain competitive
advantage against competition
...

2
...
That is one of
the reasons why they still are the leaders in the domestic market
...
Innovation and creativity – The meaning of this concept basically it
shows Maruti’s values partly in car segmentation strategy
...
But not only this segment of the cars also the
others segmentations are very highly innovated year by year
...
Networking and partnership – Another crucial value that expresses
the joint venture that they have with Suzuki which it helped them a lot
by increasing the market worldwide and by increasing the quality of the
technological design
...
Openness and learning – This concept shows their interaction with
the customers
...
Every question is answered by one of the employees and
they working in their weakness in order to satisfy the customers
...

Most of their vision is true and original since there are leaders in their
domestic market, they do work to keep the quality so they can satisfy
their customer and also it accountable as most successful company
...
There is not going to be another
company that beats the values of Maruti in Indian Automobile market;
that’s because they already won the trust of the citizens and they are
innovating year after year and that not an easy job for them
...


2
...
Maruti was only getting one third of the value of a car in
its lifetime so Maruti focused in the maintenance market because it had
a huge potential to profit
...
A rise in material prices
such as steel, rubber, iron and more, will increase costs for Maruti
Suzuki India Ltd
...
Any decrease in inflation rate means a potential
increase in demand for cars
...
Some markets in this region where Maruti is, are Saudi
Arabia, Kuwait, Bahrain, Qatar and UAE
...
4 trillion
...
This
expresses into a contribution of 10% to 11% towards India’s GDP by
2016, which is more than double the current contribution
...

Maruti Suzuki cars are designed with superior specifications to last
longer, and this gives customers high resale value and demands less
service over its lifetime
...

By expansion of the business further, Maruti will enlarge its customer
potential and their structure
...

The competition is one big problem of Maruti
...

Basically, every competitor wants to own the market within a country
and that not the only objective they have
...

In India, Maruti is holding very well till now and their strategies are
working pretty good
...

All their resources and competences are used in order to meet the
customer satisfaction which in the end would be paid very well for them
by including all the gross profit from the market
...


3
...
Furthermore, this section will describe the main competition of
Maruti and their customer base or customer satisfaction
...
What makes them so good is the quality
of cars and low price strategy that they apply on these products
...
There is also
competition from Europe and North America (Volkswagen, Chevrolet,
Ford, BMW, Mercedes, Toyota etc
...

Population in India is the second largest in the world and as a country
they are known as a very cultural country
...
Maruti exceeds those expectations
and affords a very low price for those citizens that are not having a large
income as the others, which means that Maruti exceeds those
expectations and the customers and more than satisfied with the
product
...


7

Process of Strategy Work – Maruti Udyog Limited
3
...
1 Five forces framework
In this model are shown the main threats that company can face in the
future and those that they are facing right now
...
Five forces framework of Maruti
Threat of entry is a concept that is increasing lately
...

Bargaining power of suppliers, currently is low in the market
...
This can be a barrier in the
future for Maruti since the best thing the company has in this moment
is quality
...
actually, this feature has shown that
customers are changing their segmentation on cars moving from mini
cars to compact and mid-sized cars
...

Bargaining power of buyers is a number that is increasing in this
market
...
Different
companies need to produce better products in order to satisfy their
customers in the end
...
As we know already, the competition
is high in this market and it is going to increase too in the future
...


3
...
2 PESTLE Analysis
In this analyze is shown the concepts that Maruti company has been
working on and on those that they achieved what they wanted
...
PESTLE Analysis of Maruti
Political factors that are affecting Maruti and those that they are trying
to develop are: Change in policies, New taxation and labor and Online
purchasing opportunities
...
The new policies
state that the companies should increase the number of employment or
at least give the opportunity to the youth in India
...
The second part, new taxation and labor is connected
with the first part since the government requires more opportunities for
people to work
...
And the last one was online purchasing
power which is official now and Maruti is making sales through internet
by expanding their market even more
...
First, increase in fuel prices will affect not
only Maruti but also all the competition in domestic and in global
market
...
The
second part is related to the import and export rates, as it is known India
has different currency than the other countries
...
The last point is the investment in
rural market
...
According to Maruti’s official website more than
70% of the cars are being purchased on credit
...
First, welfare campuses are
affordable for those citizens that needs medical support and welfare to
particular people
...
Maruti has organized a lot of different events in order to
increase the attention of the drivers during different trips
...
This is one of opportunities
that Maruti is trying to use in order to make the brand name even bigger
globally
...
First, fuel
efficiency is one of the reasons why Maruti is so successful since they
aim to produce cars with lowest expenses in fuel
...
This helps the company to
increase the engine development in a point where the competition did
not arrive yet
...

Legal factors that Maruti is facing and giving the opportunity to show
to the society are: Laws in foreign countries, Legal department for
10

Process of Strategy Work – Maruti Udyog Limited
customers and highest standards in domestic market
...
Import policies for different
countries are very strict and can be more different than those that India
has
...
Also, Maruti
has the highest standards in their market; this is connected with the point
above that everything that includes as not taxation documents will be
punished by its own government
...

Environmental factors that Maruti is following for the moment and try
to change in the future are: Emission of fuels and safety, 3R- Reduce,
Reuse and Recycle and Hybrid cars
...
The phrase 3R is a new concept
in Maruti company and very smart one
...

3
...
Maruti started a plan to launch new
models in different segments of the market and to launch new models
every year
...
Today more than half of the number of cars sold in India
wear a Maruti Suzuki emblem
...
The company offered full range of different cars–
starting from entry level Maruti 800 & Alto to stylish hatchback Ritz,
A star, Swift, Wagon R, Estillo and sedans DZire, SX4 and Sports
Utility Vehicle Grand Vitara
...

As mentioned in the introduction, the company created history going
into production in a record of 13 months
...
It is considered the market leader both
in terms of volume of vehicles sold and revenue earned
...
In this decade, Maruti has been shown interest
to create and innovate cars with low cost expenses
...

Even though, the competition is high in their domestic market they still
aim to increase the percentage of productivity, built new networks
within Europe and other continents in order to increase the image of the
brand worldwide
...

Competitive advantage is putting forth more esteem to clients than what
the competition offers
...
In spite of
the nearness of a few auto organizations in India, both national and
universal, none have touched Maruti Suzuki's guidelines of client
administration
...
3

Environmental analysis
In the figure below are shown the strengths, weaknesses, opportunities
and threats of Maruti Ltd
...


12

Process of Strategy Work – Maruti Udyog Limited

• Leader in domestic
market
• Strong brand value
• Loyal customer base
• Strong brand
segmentation

• Lower interior quality
• Staff problems
• Government as
Shareholder

Strengths

Weaknesses

Opportunities

Threats

• Develop hybrid & fuel
efficeny cars
• Expansion of the company
• Increase on the purchasing
power

• Increase on fuel prices
• Government policies
• Competition

Figure 3
...
The strengths of Maruti Suzuki are: Leader in
domestic market, Strong brand value, Loyal customer base and Strong
brand segmentation
...
Customers seems to be satisfied with Maruti
Suzuki products since they purchase this product a lot and they still
seem to be buying in the future; This creates a strong brand value which
helps the company to develop more in future and increase the quantity
of production
...
Even people who already own a
car from this company are willing again to buy a new one from the same
company
...
Every segment
of the cars has shown improvement on quantity produced and on sales
made from the company
...
The first weakness is described
13

Process of Strategy Work – Maruti Udyog Limited
very easily for the products that Maruti produces the interior quality is
not too good if you compare with other cars companies such as
Volkswagen, Chevrolet and Ford
...
And the
last on was the main one which was government as a shareholder of
Maruti
...

Opportunities of Maruti in cars industry are: Developing hybrid and fuel
efficiency cars, Expansion of the company and increase on the
purchasing power
...
This will also lead to increase the needs of
customers’ which parallel increase the sales and gross profit
...
Thus far, the company needs to
develop hybrid cars and fuel efficiency in order to achieve its goals
...
The last one is increase the number of customer worldwide
which will help Maruti increase the leadership in global and domestic
markets
...

And the last section is threats towards Maruti, which are: Government
policies, Increase on fuel prices and Competition
...
Another threat in
direction of Maruti and other companies is prices of fuel
...
This will affect Maruti,
even though the fuel cars expenses that Maruti produces are not too
high, this will be a problem in the future since the average salary in
India is not as high as it is in Europe
...
This can result not so good for Maruti because as long
as the competition increases, there will be new innovation, new
companies entering and better quality in the market which will affect
Maruti by losing market share in domestic market
...
Also, there
will be further explanation about the risks that the company took in
order to succeed and those that they failed to succeed
...


4
...
Such as:
1
...
Providing value and satisfaction to the customer
3
...
Maximizing Shareholder's value
5
...

Clearly, Maruti leads the way of resources in perspective of manpower
which is a very important resource for them
...
Their philosophy is
that all employees should work together and create a good environment
and also achieve their goals and objective
...
Every employee that works in Maruti must be impartial at
least in their perspective
...
The goals and objectives
are set by the high hierarchal management which are very possible to
happen in next 5 years or so
...
2

Business strategy
The strategy of the company was to offer a compact, modern and fuel
efficient car
...
They fulfilled a lot of needs in the market by selling the
enormous quantity of cars and by making themselves a market leader
in India
...
Nowadays, Maruti Suzuki is focus on changing their
Promotional, Advertising and Distribution strategy
...
Promotional strategy – This concept is known would wide as one of
the best strategies to bring more customers and more profit in the
company
...
In this case, Maruti has
a great line of car segmentation that can use for this strategy and use
them very wisely in order to achieve their goals
...
After this, they made promotion
in other ways such as in schools and by different campaign; They
even started to sell very cheap insurances for the customers
...

2
...
They want expansion of the business
and they want to make it faster
...
Advertising is one of the strategies that can increase the
image of the product faster
...
As
mentioned above, Maruti uses this strategy only to increase the
image of the brands
...

3
...
People had very bad experiences in this field
which was very tired thing to do in the past by waiting for a car
about a year till it arrives home
...
Now they have 802 centers in 555 towns and
cities, and they provide service support to customers at 2740

16

Process of Strategy Work – Maruti Udyog Limited
workshops in over 1335 towns and cities
...


4
...
In that
year, they had to change their strategy because of competition
...

A crucial point of Maruti is customer care
...
On the other side, they are
increasing the market share by producing new car models concentrated
on marketing and institutional sales
...

Maruti faced two difficult years, in one hand the governmental
intervention and in another hand the negotiation with their partner
Suzuki
...

As said before repositioning strategy happens when the company does
not show good performance in particular industry or is losing market
share
...
“Marketing and
customer focus” turned out to be a very successful strategy and in this
way Maruti Suzuki was back in competition by controlling half of
market share in India
...
Focus on the customer is something that Maruti
Suzuki shines and lives with
...

This repositioning strategy can be evaluated as a very successful one
because the company achieved its goals, they were back in competition,
controlled half of market share, fulfilled all customers’ needs, customer
friendly approach, and had different models of cars as Omni, Versa,
Esteem, Zen, Wagon-R etc
...


17

Process of Strategy Work – Maruti Udyog Limited

5

SOURCES

Adamkasi (2016) PESTEL-PESTLE analysis of Maruti Suzuki
...
com/pestel-pestle-analysis-of-maruti-suzuki/ (Accessed: 6
December 2016)
...
(2012) AKASH PATEL
...
slideshare
...

Inc, S
...
Available at:
https://www
...
com/doc/96180254/Analysis-of-Maruti-Suzuki (Accessed: 6
December 2016)
...
ukessays
...
php (Accessed: 6 December 2016)
...
(2016) SWOT analysis of Maruti Suzuki - maruti SWOT analysis
...
marketing91
...

Zigu (2008) Maruti Suzuki | SWOT analysis | USP & competitors | BrandGuide | MBA SkoolStudy
...
Share
...
mbaskool
...
html (Accessed:
6 December 2016)
...
(2016) Article: Suzuki will intensify product development in India: Toshihiro Suzuki,
the chief executive of Maruti Suzuki - the economic times
...
indiatimes
...
cms (Accessed: 6 December 2016)
...
g
...
marutisuzuki
...
aspx (Accessed: 6 December 2016)
...
g
...
marutisuzuki
...
aspx (Accessed: 6 December 2016)
...
company profile by Ayesha Shaikh in case study category on
ManagementParadise
...
g
...
managementparadise
...

Wipro and Wipro (2011) Kshitij Arora
...
slideshare
...

Maruti Suzuki India limited (2015) Available at:
https://www
...
com/essays/marketing/maruti-suzuki-india-limited
...


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Process of Strategy Work – Maruti Udyog Limited
India, P
...
of (2015) Maruti aims 20% growth in exports in 2014-15 at 1
...
Available
at: http://www
...
com/article/pti-stories/maruti-aims-20-growth-inexports-in-2014-15-at-1-2-lakh-units-115011200493_1
...

Exports - Maruti Suzuki India limited (n
...
) Available at:
http://www
...
com/exports
...

Home (2012) Maruti Suzuki in Indian premium car segment essay - 2565 words
...
studymode
...
html
(Accessed: 6 December 2016)
...
(2016) Maruti Suzuki: Reports, company history, directors report, chairman’s
speech, auditors report of Maruti Suzuki - NDTVProfit
...
Available at:
http://profit
...
com/stock/maruti-suzuki-india-ltd_maruti/reports (Accessed: 6
December 2016)
...
(2013) Wasting time
...
economist
...

Network sales and service - Maruti Suzuki India limited (n
...
) Available at:
http://www
...
com/network-sales-and-service
...

Software, G
...
Available at:
http://www
...
com/maruti-swift/service-cost
...

Cost of ownership - Maruti Suzuki India limited (no date) Available at:
http://www
...
com/costofownership
...

Krishnamurthy, S
...
Available at:
http://www
...
edu/3679977/Maruti-Case-Study (Accessed: 6 December 2016)
...
mapsofindia
...
html (Accessed: 6
December 2016)
...
(2015, January 2)
...
Retrieved December 6, 2016, from
http://www
...
net/Ashish1004/project-marketing-strategy-of-maruti-suzuki

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