CASE STUDY ANALYSIS ON BAJAJ AUTO LIMITED

Submitted By: Prakhar Deolia Mohd. Zubair Kunnal Arora Pooja Nandan Nishesh Agarwal

Q. What challenges confronted Bajaj Auto Ltd. in 1993? Which were its own makings? BAL faced a stagnant domestic market that had declined by 5% in 1991-92 and increasing competition from the major Japanese two wheeler manufactures. The arrival of foreign competitors expanded the market which created a more intense competitive market for BAL. BAL had faced problems in explaining and educating the suppliers so that they could reliably deliver the right quality of components. BAL products lacked new design capabilities and were not able to transform their new product concepts and designs into prototypes and in finally for commercial production where as Japanese were able to do so. BAL was not able to produce new models periodically as quickly as its Japanese competitors. The new products of BAL had technical problems. The distribution system was not much effective. BAL exports to developed countries were cut short by piaggio alleged of illegal copying the exterior design shape of VESPA scooter. Q. How should BAL respond to increase in competition? Developing countries mainly concerned with value with appeal, so BAL should introduce a product with power and style. BAL should introduce new products periodically based on the consumers wants. BAL should increase its sale in the overseas with new models. Within equal intervals BAL should increase its models in the domestic market because of the higher resale value of the original product. BAL concentrated on rural area where people mainly concerned with value for money. BAL should introduce the vehicles with features like more fuel efficiency, better spare parts availability and should have higher sale value.

Q.Which Export markets offered the most promise for BAL? Should BAL focus on developing/developed countries? The export market provides ample opportunity for bajaj auto in terms of expanding its current markets. This is especially so in case of developing countries where in the consumers usually looks for features such as fuel efficiency, reliability, durability and low price. Bajaj auto is well known for making vehicles that fulfill the customers needs. It is interesting to note that the customers in the developing countries look at value for money but the same is not true in case of developed countries where customers focus more on looks styling and performance. Latin American nations like Peru, Venezuela, Paraguay, Chile, Mexico and Columbia are a good market for Bajaj as Bajaj has a clear price advantage over its Japanese competitors. But in case of Developed nations the taste and preference of customers is different. There the customers could focus on the lower end of the market. Q: Could BAL rely on domestic market alone to achieve its goals and objectives? For any company to become a multinational it has to look for opportunities in the global market. After establishing itself in the domestic market BAL sought opportunities abroad especially in the developing countries. Competition in the domestic market started heating up with new entrants in to the market and in order to sustain itself in the long term BAL has to look at the foreign market. It could begin with having favorable deals with foreign distributors. It could also establish research and development centers in these foreign markets for creating new designs for its products. Q How was the market in India for two and three wheelers evolving? The market in India for two and three wheelers were potential market as after the improvement in the economic policies resulted in increase in purchasing power parity of the Indian consumers.

 In India the public transport was not efficient enough so there was a definite need of private transport which was fuel efficient, reliable and less expensive. BAL recognized this need of Indian consumer and manufactured two wheelers for different sections of the society The protected market due to the restrictive Govt. policies had given BAL a high share of market. Resale market increased. 20% of the potential market was captured by two wheelers and also the maximum sales growth in the market came from rural areas. Q. why did BAL exports became week ? was the goal to achieve 15% of the sales realistic ? Ans. BAL became due to following reason : dominating domestic market , they didnt think of exporting .at that time there was no marketing department. Also developed countries had already been occupied by japans two wheelers manufacturing companies PIAGGIO already made a market there with their sleek models in developed countries. Exports were also affected by licensing policies of the govt. for different nation BAL focused on developing nations like srilanka and Indonesia where two wheeler market was prominent Export market were dependent on the distributors of the respective countries as well as marketing strategies Yes following policies would have been followed it would have made a difference Development of export market in develop countries and change in the manufacturing approach would have made the difference Marketing department in abroad should have been opened by BAL and supervise effectively QHow was BAL performing before 1993?

1950 to 1960 BAL imported scooter from piaggio 1959 BAL got licensing to produce 6000 scooter and three wheelers in India 1960 first plan set up in Acurdi near pune due to Indian economy and political environment it was very tough to get new license or increase production capacity thats why BAL got Protected market. In 1980 the main focus of BAL was to increase product demand and was working on the strategy of economies of scale Their strategy was to keep the prices and the cost low there product were fuel efficient they only concentrated on two and three wheelers their product has high resale value and they had vast no of service center their product had high resale value After collaborating with Kawasaki in 1984 they became technologically advanced as well