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CHAPTER I

INTRODUCTION TO STRATEGIC ALLIANCE


A strategic alliance is an agreement between two or more parties to pursue a set of agreed
upon objectives needed while remaining independent organizations. This form of cooperation
lies between mergers and acquisitions and organic growth.
Partners may provide the strategic alliance with resources such as products, distribution
channels, manufacturing capability, project funding, capital equipment, knowledge, expertise,
or intellectual property. The alliance is a co-operation or collaboration which aims for
a synergy where each partner hopes that the benefits from the alliance will be greater than
those from individual efforts. The alliance often involves technology transfer (access to
knowledge and expertise), economic specialization, shared expenses and shared risk.

Definition of Strategic Alliance

A strategic alliance is an agreement between two or more players to share resources or


knowledge, to be beneficial to all parties involved. It is a way to supplement internal
assets, capabilities and activities, with access to needed resources or processes from
outside players such as suppliers, customers, competitors, companies in different
industries, brand owners, universities, institutes or divisions of government.[2]

A strategic alliance is an organizational and legal construct wherein partners are


willing-in fact, motivated-to act in concert and share core competencies. To a greater
or lesser degree, most alliances result in the virtual integration of the parties through
partial equity ownership, through contracts that define rights, roles and
responsibilities over a span of time or through the purchase of non-controlling equity
interests. Many result eventually in integration through acquisition.

Advantages
For companies there are many reasons to enter a Strategic Alliance:

Shared risk: The partnerships allow the involved companies to offset their market
exposure. Strategic Alliances probably work best if the companies portfolio complement
each other, but do not directly compete.

Shared knowledge: Sharing skills (distribution, marketing, management), brands,


market knowledge, technical know-how and assets leads to synergistic effects, which
result in pool of resources which is more valuable than the separated single resources in
the particular company.

Opportunities for growth: Using the partners distribution networks in combination


with taking advantage of a good brand image can help a company to grow faster than it
would on its own. The organic growth of a company might often not be sufficient
enough to satisfy the strategic requirements of a company, that means that a firm often
cannot grow and extend itself fast enough without expertise and support from partners

Speed to market: Speed to market is an essential success factor In nowadays


competitive markets and the right partner can help to distinctly improve this.

Complexity: As complexity increases, it is more and more difficult to manage all


requirements and challenges a company has to face, so pooling of expertise and
knowledge can help to best serve customers.

Costs: Partnerships can help to lower costs, especially in non-profit areas like
Research&Development.

Access to resources: Partners in a Strategic Alliance can help each other by giving
access to resources, (personnel, finances, technology) which enable the partner to
produce its products in a higher quality or more cost efficient way.

Access to target markets: Sometimes, collaboration with a local partner is the only
way to enter a specific market. Especially developing countries want to avoid that their

resources are exploited, which makes it hard for foreign companies to enter these markets
alone.

Economies of Scale: When companies pool their resources and enable each other to
access manufacturing capabilities, economies of scale can be achieved. Cooperating with
appropriate strategies also allows smaller enterprises to work together and to compete
against large competitors.

Disadvantages
Disadvantages of strategic alliances include:

Sharing: In a Strategic Alliance the partners must share resources and profits and
often skills and know-how. This can be critical if business secrets are included in this
knowledge. Agreements can protect these secrets but the partner might not be willing
to stick to such an agreement.

Creating a Competitor: The partner in a Strategic Alliance might become a


competitor one day, if it profited enough from the alliance and grew enough to end the
partnership and then is able to operate on its own in the same market segment.

Opportunity Costs: Focusing and committing is necessary to run a Strategic Alliance


successfully but might discourage from taking other opportunities, which might be
benefitial as well.

Uneven Alliances: When the decision powers are distributed very uneven, the weaker
partner might be forced to act according to the will of the more powerful partners
even if it is actually not willing to do so.

Foreign confiscation: If a company is engaged in a foreign country, there is the risk


that the government of this country might try to seize this local business so that the
domestic company can have all the market on its own.

Risk of losing control over proprietary information, especially regarding complex


transactions requiring extensive coordination and intensive information sharing.

Coordination difficulties due to informal cooperation settings and highly costly


dispute resolution.

Importance of Strategic Alliances


Strategic Alliances have developed from an option to a necessity in many markets and
industries. Variation in markets and requirements leads to an increasing use of Strategic
Alliances. It is of essential importance to integrate Strategic Alliance management into the
overall corporate strategy to advance products and services, enter new markets and leverage
technology and Research&Development. Nowadays, global companies have many alliances
on inland markets as well as global partnerships, sometimes even with competitors, which
leads to challenges such as keeping up competition or protecting own interests while
managing the Alliance. So nowadays managing an alliance focuses on leveraging the
differences to create value for the customer, dealing with internal challenges, managing daily
competition of the alliance with competitors and Risk Management which has become a
company-wide concern. Statistics show that the percentage of revenues for the top 1000 U.S.
public corporations generated by Strategic Alliances increased from 3-6% in the 1990s up to
40% in the year 2010, which shows the fast changing necessity to align in partnerships. The
number of equity-based alliances has dramatically increased in the last couple of years,
whereas the number of acquisitions
has decreased by 65% since the year 2000. For a statistically examination over 3000
announced alliances in the USA have been reviewed in the years 1997 to 1997 and results
showed that only 25% of these alliances were equity based. In the years 2000 until 2002 this
percentage increased up to 62% equity-based alliances among 2500 newly formed alliance.

CHAPTER II
COMPANY PROFILE

Maruti Suzuki India Limited , commonly referred to as Maruti and formerly known
as Maruti Udyog Limited, is an automobile manufacturer in India. It is a subsidiary of
Japanese automobile and motorcycle manufacturer Suzuki. As of November 2012, it had a
market share of 37% of the Indian passenger car markets. Maruti Suzuki manufactures and
sells a complete range of cars from the entry level Maruti 800, Alto, to the
hatchback Ritz, Celerio, ,

A-Star, Swift, Wagon

R, Zen and

sedans DZire, Ciaz, Kizashi and SX4, in the 'C' segment Eeco, Omni, Multi Purpose vehicle
Suzuki Ertiga and Sports Utility vehicle Grand Vitara. The company's headquarters are at No
1, Nelson Mandela Road, New Delhi. In February 2012, the company sold its ten millionth
vehicle in India.
Maruti Suzuki India Limited engages in manufacturing, marketing, sale and export of motor
vehicles, components, and spare parts in India and internationally. The company produces
passenger cars, light duty utility vehicles, and multi-purpose vans primarily. Maruti Suzuki is

also involved in the facilitation of pre-owned car sales, fleet management, and car financing
business. The company has its Head Office Located in New Delhi.

VISSION STATEMENT The Leader in the Indian Automobile Industry, Creating


Customer Delight1 and ShareholdersWealth2; eventually become a pride of India
MISSION STATEMENT.:- 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

HISTORY
Maruti Udyog Limited was established in February 1981, though the actual production
commenced only in 1983. It started with Maruti 800, based on the Suzuki Alto kei car which
at the time was the only modern car available in India. Its only competitors were Hindustan
Ambassador and Premier Padmini. Originally, 74% of the company was owned by the Indian
government, and 26% by Suzuki of Japan. As of May 2007, the government of India sold its
complete share to Indian financial institutions and no longer has any stake in Maruti Udyog.
Maruti Suzuki India Ltd., incorporated in the year 1981, is a Large Cap company (having a
market cap of Rs 110694.22 Cr.) operating in Auto sector.
Maruti Suzuki India Ltd. key Products/Revenue Segments include Passenger Cars & Light
Duty Utility Vehicles which contributed Rs 43612.00 Cr to Sales Value (89.22% of Total
Sales), Spare Parts & Components which contributed Rs 4208.80 Cr to Sales Value (8.61% of
Total Sales), Other Operating Revenue which contributed Rs 698.30 Cr to Sales Value
(1.42% of Total Sales), Scrap which contributed Rs 357.50 Cr to Sales Value (0.73% of Total
Sales), Mould & Dies which contributed Rs 2.00 Cr to Sales Value (0.00% of Total Sales), for
the year ending 31-Mar-2014.

For the quarter ended 31-Dec-2014, the company has reported a Standalone sales of Rs.
12263.14 Cr., up 2.22% from last quarter Sales of Rs. 11996.33 Cr. and up 15.48% from last
year same quarter Sales of Rs. 10619.68 Cr. Company has reported net profit after tax of Rs.
802.16 Cr. in latest quarter.
The companys management includes Mr.S Ravi Aiyar, Mr.A Ganguli, Mr.A K Tomer, Mr.A
Seth, Mr.Ajay Seth, Mr.C V Raman, Mr.D K Sethi, Mr.D S Brar, Mr.K Ayabe, Mr.K Ayabe,
Mr.K Ayukawa, Mr.K Saito, Mr.K Suzuki, Mr.M M Singh, Mr.M Nishio, Mr.M Pareek, Mr.M
Suzuki, Mr.O Suzuki, Mr.P Narula, Mr.R C Bhargava, Mr.R Gandhi, Mr.R P Singh, Mr.R S
Kalsi, Mr.R Uppal, Mr.S Ravi Aiyar, Mr.S Srivastava, Mr.S Y Siddiqui, Mr.Shigetoshi Torii,
Mr.T Hashimoto, Mr.T Hasuike, Mr.T Suzuki, Mr.Y Kojima, Mr.Y Ozawa, Mr.Y Suzuki,
Ms.P Shroff.

Beginnings
Maruti's history begins in 1970, when a private limited company named 'Maruti technical
services private limited' (MTSPL) is launched on November 16, 1970. The stated purpose of
this company was to provide technical know-how for the design, manufacture and assembly
of "a wholly indigenous motor car". In June 1971, a company called 'Maruti limited' was
incorporated under the Companies Act and Sanjay Gandhi became its first managing director.
"Maruti Limited" goes into liquidation in 1977. On 23 June 1980 Sanjay Gandhi dies when a
private test plane he was flying crashes. A year after his death, and at the behest of Indira
Gandhi, the Indian Central government salvages Maruti Limited and starts looking for an
active collaborator for a new company. Maruti Udyog Ltd is incorporated in the same year.

SUZUKI ENTERS
In 1982, a license & Joint Venture Agreement (JVA) is signed between Maruti Udyog Ltd.
and Suzuki of Japan. At first, Maruti Suzuki was mainly an importer of cars. In India's closed
market, Maruti received the right to import 40,000 fully built-up Suzukis in the first two
years, and even after that the early goal was to use only 33% indigenous parts. This upset the
local manufacturers considerably. There were also some concerns that the Indian market was
too small to absorb the comparatively large production planned by Maruti Suzuki, with the

government even considering adjusting the petrol tax and lowering the excise duty in order to
boost sales. Finally, in 1983, the Maruti 800 is released. This 796 cc hatchback is based on
the SS80 Suzuki Alto and is Indias first affordable car. Initial product plan is 40% saloons,
and 60% Maruti Van. Local production commences in December 1983. In 1984 the Maruti
Van, with the same three-cylinder engine as the 800, is released. Installed capacity of the
plant in Gurgaon, reaches 40,000 units.
In 1985 the Suzuki SJ410-based Gypsy, a 970 cc 4WD off-road vehicle, is launched. In 1986
the original 800 is replaced by an all-new model of the 796 cc hatchback Suzuki Alto/Fronte.
This is also when the 100,000th vehicle is produced by the company. In 1987 follows the
company's first export to the West, when a lot of 500 cars were sent to Hungary. Maruti
products had been exported to certain neighboring countries already. By 1988, the capacity of
the Gurgaon plant is increased to 100,000 units per annum.

Market liberalisation
In 1989 the Maruti 1000 is presented after having been shown earlier. This 970 cc, threebox is Indias first contemporary sedan. By 1991 65 percent of the components, for all
vehicles

produced,

are

indigenised.

Meanwhile,

the

liberalisation

of

the Indian

economy opens new opportunities but also brings more competition to the segments in which
Maruti operates. In 1992 Suzuki increases its stake in Maruti to 50 percent, making the
company a 50-50 JV with the Government of India the other stake holder.
A flow of new models begin in the early nineties. In 1993 the Zen, a modern 993 cc,
hatchback which is later exported globally as the Suzuki Alto. In 1994 the
1298 cc Esteem appears, a more luxurious redesigned Maruti 1000. This and other Marutis
begin appearing in a plethora of different equipment levels, to better suit India's increasingly
discerning consumers. A Zen Automatic arrives in 1996, as does the Gypsy King, a 1.3 liter
version of the compact off-roader, and a minibus version of the Omni (the Omni E).
In 1994 Maruti Suzuki produces its 1 millionth vehicle since the commencement of
production, being the first company in India to do so. This is still not enough in a booming
market and the next year Maruti's second plant is opened, with annual capacity reaching
200,000 units. Maruti also launches a 24-hour emergency on-road vehicle service, the first of

its kind in the country. In 1996 the United Front government is formed, with Murasoli
Maran new Industries Minister. On 27 August the following year the government nominates
Mr. S.S.L.N. Bhaskarudu as the Managing Director, as the then current Managing
director R.C. Bhargava, was completing his tenure. This creates a conflict with Suzuki,
discussed closer in the Joint venture related issues section.
In 1998 the new Maruti 800 is released, the first change in design since 1986. This is simply a
facelift of the existing model, to ensure steady sales. Also, the two millionth vehicle is
produced. Other news include theZen D, a 1527 cc diesel hatchback and Maruti's first diesel
vehicle. The Omni van and microbus is also redesigned. The next year the Omni bus arrives
in a high roof version, the Omni XL. The 1.6 litre Maruti Balenothree-box saloon, advertised
as the 'Maruti Suzuki Baleno', also appears. This is Maruti's biggest car yet. Finally, in what
is a very busy year, the Wagon R is launched.
In 2000 Maruti becomes the first car company in India to launch a Call Center for internal
and customer services. The new Alto model is also released, somewhat larger and more
modern than the 800. The estateBaleno Altura is also shown, while IDTR (Institute of
Driving Training and Research) is launched jointly with the Delhi government to promote
safe driving habits. In 2001 Maruti True Value, selling and buying used Maruti Suzukis, is
launched in Bangalore and Delhi, later in Mumbai and elsewhere. In October of the same
year the Maruti Versa sees the day, a bigger engined and more luxurious microbus than the
Omni. It never catches on in the market and is discontinued by late 2009, only to be replaced
by a cheaper, stripped-down version called Eeco. Customer information centers are also
launched in Hyderabad, Bangalore and Chennai. In 2002 the Esteem Diesel appears, as does
Maruti Insurance. Two new subsidiaries are also started: Maruti Insurance Distributor
Services and Maruti Insurance Brokers Limited. Suzuki Motor Corporation increases its stake
in Maruti to 54.2 percent.
In 2003 the new Suzuki Grand Vitara XL-7 appears, while the Zen and the Wagon R are
upgraded and redesigned. The four millionth Maruti vehicle is built and they enter into a
partnership with the State Bank of India. Maruti Udyog Ltd is Listed on BSE and NSE after a
public issue, which is oversubscribed tenfold. In 2004 the Alto becomes India's new best
selling car, overtaking the Maruti 800 which had been number one for nearly two decades.
The five-seater Versa 5-seater, a new variant, is created while the Esteem undergoes cosmetic
changes and is re-launched with a price cut. Maruti Udyog closed the financial year 2003-04
with an annual sale of 472,122 units, the highest ever since the company began operations 20

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years earlier, and the fiftieth lakh (5 millionth) car rolls out in April, 2005, with overall sales
growing by 15.8%. The 1.3 L Suzuki Swift five-door hatchback also appears. 2004-05
marked another record year (487,402 domestic sales) and exports reached 48,899 cars to
about fifty different countries. The United Kingdom took the lion's share, with 10,623
deliveries.
In 2006 Suzuki and Maruti set up another joint venture, "Maruti Suzuki Automobiles India",
to build two new manufacturing plants, one for vehicles and one for engines. Cleaner cars
were also introduced, with several new models meeting the new "Bharat Stage III" standards.
In February 2012, Maruti Suzuki sold its ten millionth vehicle in India.

OBJECTIVE OF THE STUDY: The present study of the marketing strategy of the Maruti
Suzuki (Pvt.) Limitedrevolves around the following broad objectives:
(i) To study the evolution and growth of the Maruti Suzuki (Pvt.) Limited in the context of
the automobile revolution in India;
(ii) To study the growth strategy of the Maruti Suzuki (Pvt.) Limited and the marketing
methods followed by it in this regard.
(iii) To study the small car revolution in India and the contribution of the Maruti Suzuki (Pvt.)
Limited to it.

Strategy Formulation

SWOT ANALYSIS: Consists of analysis of internal environment (Strength and weakness)


and external environments.
STERNGHTHS: Contemporary technology. Japanese Management practices (that had
captured Japan over USA to the status of top Auto manufacturing country in the world)Early
mover advantages. Recruitment is done in very tedious manner ensuring talent and best
professionals, Working culture, after sale services , distribution, diversification, R&D.

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WEAKNESS: Still depends upon SUZUKI COPORATION, Japan For tech. support, 10%
components are manufactured outside India. Though MUL has launched luxury cars as well
its still considered as poor mans brand. Diversification is not supported with all India
presence of Manufacturing Units. Bureaucracy, Technological disadvantages, Decades of
isolation, inertia and subservience to the whims of government bureaucrats have made MUL
unaccustomed to international standards or keen competition.

OPPURTUNITY: first company to roll out suitably designed cars before 2008 as per Govt.s
Proposal of new ethanol (renewable)mixed fuel. Other companies lacks economy of scale, so
market is still open. Importing new technology is controlled by Govt. so there is plenty of
untapped market and with increase in Income scale, Demand is rising.

THREAT: Numbers of new Technology driven players and manufactures are in market.
Government .reducing support and cutting down the Gas supply quota

WHY MARUTI SUZUKI


The Quality Advantage
A car is an engineering product, only as good as the technology used to make it.
Actual users of our technology are saying something very clearly Maruti Suzuki is
No.1 in quality:
Maruti Suzuki owners experience fewer problems with their vehicles than any other can
manufacturer in India (J.D. Power IQS Study 2004). The Alto was chosen No.1 in the
premium compact car segment and the Esteem in the entry level mid-size car segment
across 9 parameters.

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The J.D. Power APEAL Study 2004 proclaimed the Wagon R. No. 1 in the premium
compact car segment and the Esteem No.1 in the entry level mid- size

car

segment. This study measures owner delight in terms of design, content, layout
and performance of vehicles across 8 parameters.
Maruti Suzuki has a sales network of 307 state-of-the-art showrooms across
189 cities*, with a workforce of over 6000 trained sales personnel to guide our
customers in finding the right car. Our high sales and customer care standards
led us to achieve the No.1 nameplate in the J.D. Power SSI study
2004. The SSI study measures sales satisfaction across 6 parameters: deal received,
paperwork, dealer facility, salesperson, delivery timing and delivery process. Maruti
Suzuki has not only got the No.1 nameplate in the J.D. Power SSI study 2004, but
also ranked way above the industry average (Maruti Suzuki was at 784 while
industry average was at 760). What is significant is that it was ranked above Skoda,
Ford, Chevrolet, Mitsubishi and Hyundai.
To be really happy with the car you own, it should have a reliable service network at
hand and within easy reach. Their 1036 city

strong service network is

equipped to service 20,000 vehicles a day. No wonder Maruti Suzuki has been
awarded the No.1 nameplate in customer satisfaction in India for the fifth year in a
row, a feat unprecedented for any automobile market leader in the world.
In the J.D. Power CSI study , Maruti Suzuki scored the highest across all
7 parameters: least problems experienced with vehicle serviced, highest service
quality,

best

in-service

experience,

best

service

delivery,

best

in- service

experience, most user-friendly service and best service initiation experience.


In fact, 92% of Maruti Suzuki owners feel that work gets done right the first time during
service. The J.D. Power CSI study 2004 also reveals that 97% of Maruti Suzuki owners
would probable recommend the same make of vehicle, while 90% owners would probable
repurchase the same make of vehicle.

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A Buying Experience Like No Other


Maruti Suzuki has a sales network of 307 state-of -the-art showrooms across 189 cities,
with a workforce of over 6000 trained sales personnel to guide our customers in finding the
right car. Our high sales and customer care standards led us to achieve the No.1 nameplate in
the J.D. Power SSI Study 2004.

Quality Service Across 1036 Cities


In the J.D. Power CSI Study 2004, Maruti Suzuki scored the highest across all 7
parameters: least problems experienced with vehicle serviced, highest service quality,
best in-service experience, best service delivery, best service advisor experience, most userfriendly service and best service initiation experience.
92% of Maruti Suzuki owners feel that work gets done right the first time during service.
The J.D. Power CSI study 2004 also reveals that 97% of Maruti Suzuki owners would
probably recommend the same make of vehicle, while 90% owners would probably
repurchase the same make of vehicle.

One Stop Shop


At Maruti Suzuki, you will find all your car related needs met under one roof. Whether it is
easy finance, insurance, fleet management services, exchange- Maruti Suzuki is set to
provide a single-window solution for all your car related needs.
The Low Cost Maintenance Advantage
The acquisition cost is unfortunately not the only cost you face when buying a car.
Although a car may be affordable to buy, it may not necessarily be affordable

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to maintain, as some of its regularly used spare parts may be priced quite steeply. Not
so in the case of a Maruti Suzuki.
It is in the economy segment that the affordability of spares is most competitive,
and it is here where Maruti Suzuki shines. The recent Auto car Survey conducted in
August 2004 bears testimony to this fact. In the Maruti Suzuki stable, the Omni has
the lowest aggregate cost of spares followed by the Maruti-800. The Maruti- 800
has the cheapest spares of any Indian car with a basket of just Rs. 23,422.
In the Lower Mid-size segment as well, price-consciousness is very high, where
the cars have to be not only affordable on purchase price but also need to combine
quality, drivability and have comfortable interiors. In this segment, the Maruti
Suzuki Versa has scored particularly well with the lowest cost of spares in the
segment. In the Upper Mid-size segment, the Maruti Suzuki Baleno has the
segment's lowest prices on a majority of the spares.
Lowest Cost of Ownership
To be really happy with the car one owns, it should be easy on the pocket to buy
and to run-which is why the cost of ownership is so important. And here again, a
Maruti Suzuki is a clear winner, as shown by the recent J.D.Power CSI study 2004.
It is clear that a Maruti Suzuki delights you even when you run it for years. The 6
highest satisfaction ratings with regard to cost of ownership among all models are all
Maruti Suzuki vehicles: Zen, Wagon R, Esteem, Maruti 800, Alto and Omni. They are
proud to have the lowest cost of operation / km (among petrol vehicles) - the top 5
models are all Maruti Suzuki models: Maruti 800, Alto, Zen, Omni and Wagon R.
Employee Quality Measures
Kaizen is based on the concept of making incremental improvements in our products.
It incorporates a series of continuous small and simple improvements, which aim at
involving employees at all levels.
The Suggestion Scheme is based on the same principle. Under this scheme, employees are
encouraged to make suggestions for improvement in any area of our operation. Over 50,000
suggestions are received from employees every year.
Maruti has won the First place in "Excellence in Suggestion Scheme Contest

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2003", which is the 6th consecutive award won in as many years. This contest is
organized by Indian National Suggestion Schemes Association (INSSAN). Since
1998 Maruti has won this award 10 times.
"Quality Circles" are groups of five to eight members from a particular work area who
work as a team to identify priorities and solve work related problems in the area.
We believe that it is this unwavering commitment to quality that will lead to the further
growth of the organization as competition increases.

GROWTH OF MARUTI SUZUKI


The companys network of sales and services outlets continues to be its strength. Network is
set to expand in the future and it will help to tap opportunities in the country.
Manesar Plant reopens under full security of employees
MSIL to fast track its New alto launch which is priced about 2 lakhs, Suzuki making MSIL
a small car manufacturing hub, Volume growth of 10.8% for FY2012
Company facing slowdown as the demand environment is impacted
Share in diesel vehicle is 38% during 1st quarter FY13
Net sales grew by 27.5% yoy to Rs.10,778cr in 1st quarter FY13, EPS Estimates to be INR
66.87 and ROE of 12.1% for FY2013, Expected significant volume growth of 15% for FY13
Coming up with new plant and Skill development center in Gujarat and R&D center in
Haryana

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CHAPTER III
BUSINESS STRATEGY
Maruti Suzuki co Ltd intend to continue to focus on the small car segment, while
offering products in most segments of the Indian passenger car market. They aim to
achieve

their

principal

objectives

by

pursuing

the

following

business

strategies:
Maintain and enhance their product range: They intend to utilize Suzukis
expertise in small car technology to produce new variants of their existing models and
to upgrade their products with contemporary technology and features.
Increase reach and penetration: They plan to continue to utilize their
extensive sales and service network to increase the reach, in terms of geographical
spread, and penetration, in terms of sales volumes, of their products across India.
Increased availability of automobile finance: They continue to seek opportunities to
expand the size of the Indian passenger car market, especially in the small car
segment, through facilitating easy availability of automobile finance. To that end,
they have recently entered into an agreement with the State Bank of India.
Secure repeat purchases by offering a 360 degree customer experience: On the
basis of their belief that securing repeat purchases from an existing customer requires
less expenditure than acquiring a new customer, they aim to provide customers with a
one-stop shop for automobiles and automobile- related products and services.
Continue to benchmark their manufacturing capabilities: They plan to continue to
benchmark our manufacturing capabilities with the most efficient car manufacturing
facilities of Suzuki and its subsidiaries.

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Continue to reduce costs to offer more competitive products:


Cost competitiveness has been, and continues to be, central to their strategy as the
leading manufacturer in the small car segment to expand the size of the market by
offering competitively priced, high quality products. The components of this
strategy are:

Higher levels of localization


Vendor participation in cost reduction Cost
reduction on warranties Reduction in initial

investment cost
Reduction in number of vehicle platforms
Achieve further cost reduction through higher productivity

Lower cost of ownership:


Through their business strategies, they seek to reduce the consumer s cost of
ownership of their cars, which comprises the cost of purchase, the cost of fuel and
maintenance, including spare parts and repairs, during the life of the vehicle,
insurance, and resale value.
CURRENT STRATEGIES OF MSIL
A. Focus on small market segment to beat the stiff competition.
B. Develop capabilities & internal resources to finance its expansion and growth.
C. To stay away from ultra-low cost segment.
D. To make India an exclusive small car manufacturing base to leverage frugal engineering.
E. To establish R&D facility in India to produce cars in India, starting from design till
production.
CORE COMPETENCIES OF MSIL: 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

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types- technical know-how, relationship with customers, employee-dedication, manufacturing


process etc. An analysis of the Maruti Suzuki India Ltd. shows three core competencies:
1. Strong Customer Base & Brand image The MSIL 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 mans 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 carsegment.
2. 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.
3. Very Strong knowledge of Indian market The Maruti Suzuki India has a strong
knowledge of the Indian market which has helped them to grow their sales and market share
in India.
a) Threat of New Entrants: Increasing although most of the major global players are
present in the Indian market; few more are expected to enter due to the welcoming
government policies and expected retaliation.
b) Threat of Substitutes: Low to Medium Maruti Suzuki faces serious threat from consumer
shifting to hybrid or electric cars. Currently, the electric car market in India is dominated by
sole player Reva Electric Car Company. However brands like Tata Motors, Chevrolet and
Nissan are also planning to launch their electric car this year.
c) Bargaining power of Supplier: Low Automakers are the key to the supply chain of the
automotive industry. Maruti Suzuki has manufacturing units where engines are manufactured
and parts supplied by first tier suppliers and second tier suppliers are assembled. There are a
large number of automobile component suppliers whose switching costs are very high. Thus
reducing the bargaining power of the suppliers.

19

d) Bargaining power of buyers: Increasing Today, consumers are considered kings in the
automobile market. There is an increasing awareness among them and they are given a
humongous number of choices. Buyers get incentives in the form of cost discounts and better
after sales services. This further increases the bargaining power of the buyers.
e) Competitive Rivalry: High Competition in certain segments is very high e.g., small and
mid-car segment. Brands like Hyundai, Chevrolet, Tata and Skoda have given huge
competition to Maruti Suzuki. In the recent past Volkswagen, Honda, Ford has also given
competition to the premium car segment.
MAJOR CHALLENGES
KEY INDUSTRY PAIN POINTS

Decreasing sales and market share - The long-term battle for market share continues
to intensify. In the mature automotive industry, where business cycles drive sales
fluctuations, market share is critical to survival. Consumers are less brand-loyal than in
the past, and every market segment has an increasing number of vehicle choices.
To increase sales and gain ground in the market share battle, companies must
improve their ability both to acquire first-time customers and to develop customer
loyalty to their current brands. To achieve these related objectives, companies must
set an aggressive goal -deliver the best customer experience in the automotive
industry.
Difficult dealer relationships and a lack of dealer collaboration - As the consumer
's primary touch point ,the dealer network is a critical component of customer-facing
operations. Therefore, the integration of the dealer network is absolutely essential to
improving the quality of the customer experience. Only with an infrastructure that
enables the buying cycle.

20

Lack of multichannel capabilities - With the advent of the Internet as a research


tool, the majority of customers are accessing the automotive enterprises through
several different channels. Many times, the switch between channels happens very
rapidly as a prospect or customer can view a Web site, make a phone inquiry, and
visit a retail store within days
improve

or

even

hours

of

an

initial

contact.

To

customer satisfaction and secure customer lifetime value, companies

must be able to capture these multiple interactions, provide seamless management


between channels, and leverage shared customer information to create rewarding
experiences and to develop and execute highly targeted marketing campaigns.
Inefficient demand chain planning and high associated IT cost - Cost
reduction is an ongoing competitive requirement. Just as supply chain management
must be supported by a sophisticated information infrastructure, effective demand
chain management also requires the right supporting infrastructure, enabling car
companies

to

fully leverage each customer relationship through exceptional

customer service, efficient lead generation and management, and effective promotions
and campaigns. In addition, global automotive enterprises operate a wide variety of IT
systems in their various business units and functional groups. Rationalizing these
systems offers significant cost savings.
Lack of effective information sharing - Car companies must integrate global
operations in order to achieve the benefits of consolidation -cost reduction, effective
communication, and true integration of core competencies. In addition, internal
alignment between business units functional group, and brand operates through
independent systems, programs, and touch points. As a result, there is limited synergy
across the ecosystem, leading to significant inefficiencies, lack of coordination,
and most important, an inability to maximize "share of wallet "from every customer
through well-targeted marketing and cross-selling. Synergy between traditionally
independent business units such as captive finance companies and between functional
groups such as sales, service, and marketing is more critical now than ever before.
Only by sharing customer information can customer lifetime value be maximized
among different groups.

21

Complex data governance requirements - Global automotive enterprises have large,


complex information technology ecosystems. While customer information must be
shared within this ecosystem in order to fully maximize global operations, it must also
be protected. Proper management of customer information requires a sophisticated
capability to manage a variety of access rules and to accommodate legal
restrictions that can change very quickly. The trust required for successful
collaboration between groups in the automotive enterprise must be

built

by

demonstrating that customer information can be shared while observing these


complex requirements.
Difficulty managing employee relationships - In today 's fast-paced business
environment, automotive companies need to ensure that their most valuable asset -their
employees -have immediate access to the critical

information,

services,

and

applications required to be productive. Organizations must enable employees to make


better decisions, work collaboratively, enhance customer relationships, and maximize
productive time. Global automotive enterprises must be able to enact and enforce
consistent policies across business units, instill a common corporate culture across
a

geographically

dispersed

and diverse

workforce,

equip

employees

with

effective search tools to training necessary to service customers in a volatile and


demanding market.

FUTURE CHALLENGES: To meet Future challenges of growing car market, Indias


biggest carmaker Maruti Suzuki India Ltd. (MSIL) is focusing on two key areas capacity
expansion and research and design (R&D)capabilities. With more global auto majors like
Honda, Toyota, Volkswagen, Ford, Skoda, and General Motors besides Hyundai and Tata
Motors eyeing a major pie of the small car segment, MSIL is gearing up to maintain its
leadership position.
Maruti Suzuki Sets the Pace for Future Green Cars Maruti Suzuki develops products for the
new generation and changeable lifestyles, constantly creating new technologies and applying
them to products with affluent imagination. The team covers a wide range of latest advances
in energy, environment, electronics, communication, information and control applications.

22

STRATEGY FOR FUTURE: The companys annual report also emphasized its growing
focus on the export market. Maruti Suzuki is looking to make India an exclusive base to
manufacture small cars for Europe. "We want to export 2 lakh units annually by 2012- 2013.
Maruti Suzuki which controls slightly over half of the domestic car market in the country has
said that it would design small cars suitable for the Indian conditions as a strategy to beat the
stiff competition with the entry of global auto makers. It would be launching compact cars
with more features to meet the needs of the customers locally.

CHAPTER IV
RESEARCH

METHODOLOGY

The nature of the project work has been exploratory as no h ypothesis, is taken
to be tested. Though

the conclusions drawn could be taken as the hypothesis

and further tested b y the research work undertaken in the relevant field.
The reason for choosing the exploratory research design is the fact the project
report has been primarily based upon the secondary sources of data and whose
authenticity could be assured of.
The

reluctance

information

led

of
the

the

company's

project

report

personnel
to

be

in

parting

based

with

substantially

much

of

on

the

secondary source of data.


Marketing research is a systematic design, collection, analysis & reporting of Data which is
relevant to specific market situation . The objective of the research conducted was to study
of consumers preference for online share trading. Secondary objective of the survey was to
know the customers satisfaction level. My other objectives were to find out the overall
perception about the system and what motivates the people to think about going for online
share trading.

Developing research plan: The second stage of marketing research calls for developing a
most efficient plan forgathering needed information. Designing a research plan calls for
taking decision on data sources research, approach, research instrument, sampling plan and
contact methods.

23

Data Source: There are two types of methods used in data collection i.e. primary data &
secondary data.

A) Primary Data: Those data which are collected at first hand by the researcher especially
for the purpose of the study ,are known as primary Data .The data is collected directly from
the person in sample population. In this project research the collection of data is directly
interviewing customer. In the collection of the primary data, I have used survey method and
used the questionnaire methods.
B) Secondary Data: Any data which had been gathered earlier for other purposes are
secondary data in hand of marketing research. These data has been collected from company
dealer like Dealer profile, industrial profile, company profile are collected from the internet.
In my survey, I have used the personal interview to know customer awareness towards
online share trading. I have visited respondents personally. The secondary data are collected
from the internet and Web -sites. Different web sites like www.sharekhan.com and GOOGLE
Search engine help in collecting the detailed information.

QUESTIONAIRES
Salary
Totals

Rs.5,000-10,000
2

Rs.10,000-15,000
6

24

Rs.15,000-20,000

Rs.20,000

Above
7

and

Salary
8
7
6
5
4
3
2
1
0

salary

Interpretation:
More number of Consumers are earning more than Rs.20,000/- per month earn a vehicle

Age
Totals

20-30
3

30-40
6

25

Above 40
11

Age
11

Totals

20-30

30-40

Above 40

Interpretation:
Most of the people of age above 40years are having vehicles.

Which company vehicle do you have?

Vehicle

Tata

Maruti

Others

Percentage

25%

30%

45%

Totals

26

Totals

25%
Tata

45%

Maruti
Others
30%

Interpretation:
Most of the customers use Vehicles of other than TATA and Maruti brand. But, number of
consumers of Maruti are more than TATA. Which means Maruti has a good Market share.

From how many years do have this vehicle?

Years
Totals

1 to 5 yrs
11

5 to 10 yrs
7

10 to 15 yrs
2

Years
12
10

Years

8
6
4
2
0
1 to 5yrs

5 to 10yrs

27

10 to 15yrs

Interpretation:
More number of Consumers are using their vehicles from 1 to 5yrs. Only 1% consumer
contribute to use vehicle for 10-15yrs.

What version of vehicle do you have?

Version

Petrol

Diesel

Petrol with LPG kit

Totals

10

Version

Petrol with LPG Kit; 10%

Petrol

Petrol; 40%

Diesel
Petrol with LPG Kit

Diesel; 50%

Interpretation:
Customers are using Diesel Version more than Petrol and LPG Kit.

If given a chance to buy a vehicle of your choice, which you would prefer?

Vehicle

Tata Motors

Maruti

Others

Totals

28

Purpose
8

7
6
5

4
3
2
1
0
Tata Motors

Maruti

Others

Interpretation:
More number of consumers are interested in buying Maruti Suzuki due to its Low
maintenance quality. Thus, there is customer satisfaction and brand loyalty.

How often you get your vehicle serviced?

Service

3months

6 months

1 year

Totals

29

Service
9
7
Duration
4

3 months

6 months

1 year

Interpretation:
Most of the consumers service their Vehicle for every 3months.

Can you rate the satisfaction level with respect to features?

Satisfaction

Excellent

Good

Fair

Level

Fuel

Style

Other

Efficiency

Totals

Satisfaction Level
5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
Excellent

Good

Fair Fuel EfficiencyStyle

30

Other

Interpretation:
Consumers rate their vehicle Good enough for its features. Also people are interested in
stylish appearance of their vehicle.

Who influenced you to buy this vehicle?

Influences

Motive

Friends

Advertisements

The

person

who is already
using
Total

vehicle
3

Sales

The person already using this vehicle; 15%


Motive; 30%

Motive
Friends
Advertisements
The person already using
this vehicle

Advertisements; 35%
Friends; 20%

Interpretation:

31

this

Highly percent of the consumers has been influenced by advertisements. Thus, advertisement
plays an important role for consumer retention. Only 15% people are influenced by the
person recommended who is already using the vehicle.

How you feel about the after sales services offered?

After Sale Service

Highly satisfied

Satisfied

Not satisfied

Totals

11

After Sale Service


Not Satisfied

Satisfied

Highly Satisfied
0

10

12

Interpretation:
Consumers are satisfied with their After Sale Service. This leads to customer retention for the
company.

32

CHAPTER V
FINDINGS & CONCLUSION
FINDINGS
MARKETING MANAGEMENT:
This segment is the initial cause for the sustainability of maruthi as an leader in
themarket of passenger cars.

Maruthi suzuki conducts r&d, in developing marketing strategies and products ,which
are near to customer preferences and tastes.
FINANCIAL MANAGEMENT:
As Maruthi Suzuki is an company which consists of Indian governments capital ,
itfollows lawful and ethical practices impractically in accounting its finance.
This company at most reaches the standard ratio in every ratio every year.
Currently Suzuki holds 54.2% stake of Marti, the balance being held by variousQIBs,
PCBs
Public. On BSE, Marti has the highest market capitalization in the auto sector.
We are the largest car company in the country. So far, we have produced more than6.6
million cars.
We are Suzuki's largest manufacturing facility, outside Japan offering 11 modelsin
over 150 variants.
The turnover last year was USD 3.37 Bn employing more than 6700 employees.
The high localization of parts within India is one of our distinct strengths.
Where the company has 3 plants in Gurgaon facility, 4th plant was added withthe
capacity of 100000 Cars.
CUSTOMER SATISFACTION:
Maruti Suzuki, the country's largest car maker has ranked highest in customer satisfaction
with dealer service for a 14th consecutive year- rated by a market researcher JD
Power AsiaPacific. The study measures overall satisfaction in five factors- service quality,
vehicle pick-up, service advisor, service facility and service initiation.

33

CONCLUSION
A detail analysis on the business of Maruti Suzuki is done based on the various theories laid
down under business strategy. The analysis included applying various concepts and theories
to understand portfolio analysis, value chain of the company, cost component, willingness to
pay and growth prospects of the company in near future. It can be concluded that Maruti
Suzuki is expanding its product basket by offering value(swift, sx4) at different income level.
Maruti Suzuki stands for value as much as it stands for performance. In spite of rising input
costs, Maruti Suzuki always tries to provide cars a treasonable cost. Their running costs and
resale values are unbeatable too. This enabled Maruti to become Market leader. Suzuki
gaining globally on back of small car portfolio. Economies of Scale make India attractive
destination for Maruti Suzuki. With the passenger car sales over spiraling fuel prices and high
interest rates, Indias largest car manufacturer, Maruti Suzuki India, is working on customer
specific marketing strategy to increase its sales among the first time buyers. The company
have maximum 47 per cent market share among the first time buyers. Maruti Suzuki is far
behind in luxury and SUV car, the other player like GM, TATA, Mahindra, Honda and Toyota
are already established in the market, so replacing them would not be easy Learning can be
put as understanding of various theories of business strategy and practically using them to
comprehend on economic, industry and financial details.
The study also calculated the satisfaction level among the vehicle buyers who visited the
authorised service centre for maintenance/repair work within the first 2 years of vehicle
ownership. It is also stated that the overall quality of service showed a consistent strong
performance across the auto industry year over year.

Bibliography:

34

www.google.com
www.marutisuzuki.com
www.autodrive.com

35

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