Final Bajaj Ppt
Transcript of Final Bajaj Ppt
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Bajaj Auto Limited
Soni Rachel Oommen
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Overview
Bajaj Auto is the flagship company of the Bajaj group.
On November 29, 1945 Bajaj Auto came into existence as
M/s Bachraj Trading Corporation Private Limited.
Bajaj Auto business: 2 wheeler segment
3 wheeler segment
Bajaj Auto, is ranked as the world's fourth largest two- and
three- wheeler manufacturer
It operates at Waluj, Chakan and Pantnagar all located at
Maharashtra
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Company strategy
A highly focused brand-centered strategy
Less is more: A few high class, choice brands at strategic
and tactical price points
Focused on continuously leveraging its two dominant brands,Discover and Pulsar
Market positioning:
Commuter STD Entry segment
Commuter DLX Mid segment
Sports Premium segment
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International Business Approach
Africao Deeper penetration through exclusive sales networko Ensure after sales reach and reparability
o Build Boxer brand
o Develop new markets for CV
Asiao Defend high shares.
o Drive growth through penetration in Bangladesh
o Indonesia : re-jig portfolio with Pulsar 135
o Reposition Pulsar brand
Latamo Focus on Pulsar and Discover brands
o Selectively strengthen routes to market
Invest in last point capability
Develop strategies for larger new markets
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Sales (units)
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
Exports: 28.5% of the Companys total net sales
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Industry v/s BAL
Year ended
31 March
Market
(nos.)
Market
growth
BAL
(nos.)
BAL
growth
BAL market
share
2006 6,200,749 18.8% 1,912,306 31.9% 30.8%
2007 7,099,551 14.5% 2,379,499 24.4% 33.5%
2008 6,544,482 -7.8% 2,139,783 -10.1% 32.7%
2009 6,806,114 4.0% 1,907,853 -10.8% 28.0%
2010 8,444,243 24.1% 2,506,791 31.4% 29.7%
2011 10,500,073 24.3% 3,387,043 35.1% 32.3%
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Two wheeler segment
43%
18%
14%
13%
3%
2%7%
Market share (in units)
Hero Honda
Bajaj
TVS
Honda
Suzuki
Yamaha
Others
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SWOTStrengths Weakness
Widespread distributionnetwork.(Concentrated plant locations
reducing the cost of inbound logistics)
Defensive strategy and negligence of3 wheeler market
Core competence in high-end products
TPM initiative to build perfectionand speed
No established brand to match Hero
Hondas splendorin commuter
segment
High performance products across all
categories with individual brand
identity
Not a global player in spite of huge
volumes (unlike the JV partner
Kawasaki)
Extensive R &D focus : Process
engineering
Dealers have reported dissatisfaction
for Bajaj
Highly experienced management. Unsuccessful with Bajaj Kristal
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Competencies
Distinctive Competencies
o Individual brand identity
o Widespread distribution network.
Core competencies
o Vast pool of industry experience
o Manufacturing of high end products
o TPM initiative
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Analysis of strengths n weakness
Automobile sector:
Quality manpower
Capital efficiency
High economies of scale
Strong distribution network
Technical expertise.
Bajaj well match these key success factors but it needs to have
offensive strategies so as not to repeat its mistakes Maintain dealer satisfaction
Become competitive in terms of prices without undermining
quality and promotions.
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SWOT
Opportunity Threat
Double-digit growth in two-wheeler
market
The competition catches-up any new
innovation in no time
Growing population and
Increasing disposable income
TATA Ace is a serious competition for
the three-wheeler cargo segment
Motorcycle is becoming a lifestyle
statement
Increasing fuel prices
Increasing acceptance for 4-wheelers
Margins getting squeezed( price as
well as cost)
The growing gearless trendy scooters
and scooter market
Adverse movements in foreign
exchange rates
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Actions to improve
The foremost step should be to improve its competitiveness in
the three segments of 2 wheelers.
Change its strategy from defensive to offensive.
Concentrate on commercial vehicle segment as it currently has
upperhand in it or might lose its market to piaggio or ace
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Purchasing ofraw materials
Chassismanufacturing
Auto partassembling
R & D
Human resources
General administration
Support activities
Primary activities
Marketing
BAL Value chain
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Value chain costs for Discover
Value chain activities Amount(crores) Amount(crores)
Purchasing of raw materials 2514.603
Chassis manufacturing 161.19
Auto part assembling 181.178
Sales and after sales 120.894
Technical know how 29.654
Labour 116.862
Other overheads 92.684
Profit margin 822.082Total sales 4029.816
No. of units sold :8,06,750
Average price to a consumer per bike : 49,951Rs
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Analysis
BAL lost its market leadership due to its incompetency inkeeping up with the market trends and the growth projected ismainly due to industry growth
Due to increasing competition, BAL has to keep its pricescompetitive or might lose its market share
Extensive value chain analysis of the competitors can reveal
the discrepancies
Not the right time for the launch of Bajaj-Lite under the 4wheel segment
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Strategic issues
BAL might fall into the trap of compromising on quality to
reduce cost in order to face competition as they cant further
increase their price
They have reduced their marketing promotion to the level that
dealers are not even provided with sufficient marketing
accessories like brochures and pamphlets
There is a possibility of losing market share to the competitors
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Alternatives ..
If inventory selling is taking place, they need to slow down
their production and address the grievances
Suppliers: negotiate prices
mutual cost saving ventures
Increasing promotions and taking feedback from dealers
To reduce further product line stretch.
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Thank you!!!
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