18082015

MicroProject
DiagnosingStrategicManagementofTechnologyat

BajajAutoLtd.
VijayKrishnan
139278070
Harsha Gollapinni
129278037
DeepakEdake
129278045
Yatharth Grover
129278112

StrictlyforinternalclassuseinSJMSOMbyregisteredlearnersofMNG608in2015only

Disclaimer
AnexampleofmicroprojectpresentationforStrategicManagement
ofTechnologycourseunderguidanceofProfessorK.S.Momaya.
MicroprojectsareundertakenintheuniquecourseatIITBombays
SJMSchoolofManagement(SJMSOM)forlearningandclassroom
discussionpurposeandnottocriticizetheprocessofmanagerial
decisionmakingoractualdecisionsatthecompany.Theymustnotbe
usedassourceofsecondarydatawithoutwrittenpermissionofthe
guideatmomaya@iitb.ac.in
MiniprojectcopyrightbyIITBombay,2014

18082015

Quicktonoticethechangesinthe2wheelerindustry
CreatedaselfreliantR&Dcentrewhichdevelopedmostinnovativetechnologiesandplatformsonwhichmostsuccessful
bikeslikePulsar,Discoveretc.werelaunched
Bajajstwinsparktechnologyactsasaharbinger,developedtriplesparkplugtechnology
Alwaysmanagedtostayaheadofitscompetitors

BenchmarkingBajaAutowithleadingindustrycompetitorson
Financialmetrics
R&Dcapabilities
Patents
Exports
MarketShare
RootCauseanalysis MarketShare
CriticalSuccessFactors
Process
OrganizationalInnovation
ProductInnovation
MarketingInnovation

GamechangersinAutowood inIndia:
WhatcanbeSMOTissuesforaKing?
Bajajgrouphaslonghistoryofcontributiontocountry;theircontributionsto
personalmobilitygavethemmarketleadershipinscooterandautorikshaw
segmentstobecalledaKingofIndianRoads.FireontheIndianroadsafter
100xxrevolutionandparadigmshiftduetodiscontinuitiessuchas1991
broughtmorecompetition.WhileBajajAutotriedseveralinnovations
(mostlyproduct&associatedprocess)tocatchupwithHeroHonda,it
decidedtowithdrawfromitscashcowsegmentscooters.Revivalofthat
segmentsbyHondacanbeattributedtoquitesmartSMOTandother
enablers.YouenergetictechnomanagerialgroupleadbyIITians areasked
toundertakelongitudinalreviewofpositionsandtrendsinbusiness,
strategyandMoT toevolvemajoroptionsfortechnologymanagementto
regainmarketandprofitshareinIndiaandkeyinternationalmarkets.

18082015

KeySMOTQuestions
WhatareCSFin2W(specificsegment)inIndia?Willtheybevery
differentinternationally?What@3W?
WhichofthemareinfluencebySMOTdecisions?
Onwhichofthefactors,BajajhasrelativestrengthonKey/pacing
technologies?
Whataremajorstrategicoptionsin2W,3W,4W?
Whatstrategicchoicescanenhancesuccessontheselectedoption?

BajajSpirit

BajajSunny

60cc2strokescooty

50cc2strokescooty

Vespa 150

KTM390Duke

underthelicenseofPiaggio,Italy

DTSFi FuelInjection

BajajM50
50cc2strokemoped

EvolutionofBajaj
throughyears

1961

1972

1981

1986

1990

KawasakiBajaj
Boxer

BajajPulsar

100cc4strokemotorcycle

DTSi Technology

1994

1998

1999

2000

2001

BajajM80major
KawasakiBajaj
KB100

74cc2strokemoped

100cc2strokemotorcycle

2003

2007

2012

2014

BajajPulsar220
DTSFi FuelInjection

BajajEliminator
175cc4strokemotorcycle

BajajClassic
BajajChetak
145cc2strokescooter

145cc2strokescooter

BajajPulsar

Pulsar400ss,400cs

150cc4strokemotorcycle

18082015

2stroke,scooter&bike(JV)era

4strokebike
Imitatorera

DTSi,DTSFi
Pioneerera

MarketpositionofBajajoveryears
Stepsundertakentoincreasemarketshare
In201112,BajajAuto's dealershipsrose by159to
650, expandingitsreach intothe ruralandsemiurbanareas
FinancingschemessuchastheDirectCashCollection(DCC)
schemesimplementedacrossruralareas
Relauch ofPlatina 125intheeconomysegmentat
RelaunchofDiscover150DTSSiintheexecutivesegmentRs.
45000
LaunchofthepremiumcategorymotorcycleKTMDuke
equippedwitha200ccenginepricedatRs.1.17lakh
LaunchesnewversionofitssportsbikePulsar200NSatthe
exshowroomprice(Pune)ofRs.84,096,inJune2012.
Gainsmarketshareintheeconomyand
executivecategories
Leaderinthepremiummotorcyclessegment
Marketshareinthe premiumcategoryof
motorcyclesdeclinedto43.8percentin2012
13from49.5percentin201011
YamahaMotorsgainsmarketsharefromBajaj
withmajornewlauncheslikeFZ16,SZand
Fazer
Source:Crisil ResearchWebsite

18082015

CriticalSuccessFactorsofBajajMotors

OperatingMargins
BajajAuto

HeroMotorcorp

Organizational Innovation

Process Innovation
The company launched an External

21.6032

Project Hunting, Bajaj Auto sets up

Portal Initiative for sales through a

project called Go Live

Existing SAP R/3 ERP being upgraded

with mySAP

Enterprise Portal for enhancing the IT

to breed quality information

Bajaj was found to have linked 380 out

of its 483 dealers through this system

14.9

assembling units in few of the

continental hubs
The logistics outsourced to third party
vendors like Maersk
JIT supply and inventory system
networked by a single LAN
The supply is triggered by E-Kanbans

TVSMotor

20.1506 20.0044 19.1305

13.575 13.2096

200607 2007
08

2008
09

2009
10

2010
11

2011
12

2012
13

Technological
Innovation
Product Innovation
Updated the low price bikes with the

Marketing Innovation
Ad campaigns brought a completely

latest features like disk-brakes, antiskid technology and dual suspension

Introduction of new technologies like
DTSi, ExhausTEC etc
Product launches that catered to the
needs of different market segments
which differed mainly on CC

new dimension to product design,

engineering, and mind-set of the
market.
Tag line changes from Hamara Bajaj
to Inspiring Confidence to Distinctly

Ahead
Itwassosymbolicof
BajajAutosproceedings
andofferingsasit
proposedthatproducts
shouldbedistinctly
aheadofthe
competition

BajajPulsar135,150,180,
200F,220Sand200NS

Source:
http://businesstoday.intoday.in/story/rajivbajajbajajgroupplanandfuture/1/198329.html

India'slargestexporterof
two andthreewheelers.
Recordedhighestever
exportsin201213
Exportsroseby31percent
overtheprioryear,
accountingfor35percent
ofthecompany'stopline.
BajajAutoIndonesiagives
thecompanyanentryinto
thekeymarketsofJakarta,
Java,BaliandSulavesi.
Thecompanyhasalso
penetratedAfricancountries
likeAngola,Sudanand
Uganda

ExportStatistics

Hero'spresenceinthe
exportmarketswaslimited
till2011
HondarestrictedHero's
entryintomanymarkets.
Asaresult,thecompany's
exportsweremainlyto
Bangladesh,SriLanka,
NepalandColombia.
RecentlyenteredAfrica,
LatinAmericaandthe
SouthEastAsianmarkets.
Planstoexportonemillion
unitsacrosstheworldby
201617
In201213,Hero'stotal
exportsrosesignificantlyby
18.2%

Exportsovertheyears
Domesticsales

5912538

HeroMotors

Bajaj

GlobalPresenceBenchmarking

Exports
Bajaj

Hero

Honda
12,67,648

2606841

2463863

6,33,463

1293231
161043
BAJAJAUTOLTD.

HEROMOTOCORPLTD.

Source:BajajInvestorRelationsReport

147931
HONDAMOTORCYCLE&
SCOOTERINDIA(PVT)LTD

7,26,449

12,93,231

9,72,437

81,193

97,699

1,33,063

1,92,303

1,61,043

200809

200910

201011

201112

201213

Source:Crisil ResearchWebsite

18082015

RootcauseAnalysisfallingdomesticmarketshareandvolume
contraction
Background

Netrevenuefellby5.5%to
Rs.5,183.2crore
Therevenuedeclinewas
arrestedbystrongexport
performancea12.3%
growthinexportvolumes
11.9%dropindomestic
volumesandasharp24%
fallinrealization.
Operatingprofitwasflat
fromtheyearagoperiodat
Rs.1,092crore.
Operatingmarginat21.1%
wasthebestintheindustry
Thefirmisfacingstiff
competitionandconceded
45%marketshareinthe
ninemonthsended
December
Contributionfromthe
premiumsegmentdeclined
from37%to28%.

Expectations
andaspirations
risingtoglobal
standards

Workhard,
partyharder
attitudeof
youth

InterestRates
Manybanks
haveincreased
interestrates
whichmaketwo
wheelers
costlier.

A paradigmshift
inmarket
preferencesfrom
motorcyclesto
scooters

OilPrices
Increasingoil
priceshave
deterredmany
lowermiddle
classfamilies
frombuying
twowheelers.

TighteningRegulations
Itwillbemore
challengingtostringent
normswhilst
simultaneouslyoffering
competitiveprices.

Lackof
penetrationin
gearlessscooter
market

StrategicAlliances,
Jointventures,
Acquisitionsetc

Investmentin
R&Disjust
1.22%ofSales

LaunchofLow
PricedCars
LikeTataNano

RE60hasbeena
failurewhenit
comesto
confrontationwith
Nano

BajajMissingitssales
targetsinits
traditionallystrong
segments
Nothavinganequity
partnerthatprovided
thetechnology,such
asHondaforHero,
gavethem
opportunitytolearn
DTSIyields15per
centmorefuel
economyand12per
centmorepower

http://economictimes.indiatimes.com/bajajautoltd/directorsreport/companyid21430.cms

FinancialBenchmarking

IntermsofmarketshareHerohasbeenthe
marketleaderwithquiteamargin
InpastfewyearsHerohasbeenlosing
marketsharetootherplayers
HMSIhasgrownphenomenallytosurpass
Bajajandbecomethesecondlargest2
wheelerproducerinIndia

From2009to2011Bajaj
hadgrownwellabove
theIndustryaverage

Recentsalesfigureof
Bajajshowsnegative
growth,withtheoverall
automobileindustry
suffering

HMSIshowingexcellent
financialperformance
evenissuchturbulent
times

Source:Crisil ResearchWebsite

18082015

FinancialBenchmarkingContd
ShareofExports
BajajAutoLtd.

7%

11%
HeroMotoCorpLtd.

8%
8%
66%

HondaMotorcycle&Scooter
India(Pvt)Ltd
IndiaYamahaMotorPvt.Ltd.
TVSMotorCompanyLtd.

Technologycost/volumesaleshasgoneup
significantly
EarlierR&Dspendingwerebetween(23)%ofsales
Theindustryaveragestandsataround(57)%of
sales
Decliningsalesvolumeisanothercauseofconcern

OperatingMargins
25
20
BajajAuto

15

Hero
Motorcorp

10

o IntermsofoperatingmarginBajajstandsoutofitscompetitors,
exhibitingoptimizedoperationalefficiency

5
0
200607 200708 200809 200910 201011 201112 201213

o BajajAutoleadstheexportmarketinthe2wheelerindustry
Source:Crisil ResearchWebsite

TechnologyBenchmarking
BajajAutoLtd.(BAL)
Corecompetency:Technologyand
Innovation(DTSi &DTSFi)
Pioneeroftriplesparkignitionsystem
PioneerinProductInnovationsuchas
ExhausTEC,LEDTaillamps,LCD
Display,SNS,Spareparts(Tubeless
tyres,reardiscbrakes),Blackcolour
schemeetc.
Venturingintothemarketofgearless
scooterswhereitisvirtuallyabsent

HondaMotorsScotersIndia(HMSI)
HondaEcoTechnology(Activa,Dio and
theAviator)whichcanboostfuel
efficiencyby11%
NewtechnologicalcentreinManesar
(incorporatesstateoftheart
equipmentlikeachassisdynamo,
benchdynamo,layoutmachines,an
SEMmicroscopeetc.)
Haslaunchedneweditionofdream
Yugain2013equippedwithHET
technology,ineconomyclasssegment
Thecountdownforthecommercial
rolloutofHondaMotorcycle&Scooter
Indias(HMSI)Activa 125hasbegun

18082015

StrategyDiamond
Thespeedoftheexpansionhas
tobefasterasBajajAutoLtd.is
currently2nd intwowheeler
marketinIndia
OneoftheinitiativesthatBALis
takingistotapruralmarkets.
WiththelaunchofDiscover100
Min2013itishopingtotapthe
mileagesegmentofruralmarket
Theiranotherinitiativebeing
venturingintothemarketof
gearlessscooters

Improvecustomerimageasahighqualityproduct
atcompetitivepricesandprovidinggoodserviceto
customers
Theyhavetheirmotorbikesinalmostallsub
segments:
InEconomyclass:Platina
InExecutiveclass:Discover
InPremiumclass:pulsar
Newproductsshouldbeintroducedfasterinthe
markettoachievehighermarketshareandcompete
aggressivelyagainstcompetitorslikeHero
motocorp,TVSandHMSI
Provideproductreliabilitythroughwarrantyand
Guaranteeonitsproducts

24.4%marketsharein2wheelersmarketinIndia
omnipresentinallthesubsegmentsof2wheelers: Economy,Executive
andPremium
Theyaretargetingallrangeofcustomers:mileageconscious,aesthetics
consciousandperformanceconscious
Theircoretechnologiesinclude: DTSi,DTSFi,triplesparkignition.
Pioneerinprovidingqualityproductsatlowercoststhroughinnovation
andcostreductioninmanufacturing
FocusonJITmanufacturingmethodologies
Number1exporterin2wheelersegment
ThereislargeuntappedmarketinruralandsemiurbanIndia.2wheelers
marketisgrowingattherateof12%inIndia.Theirfirstpriorityshouldbe
totakeadvantageofthisopportunitytobecomemarketleaderinIndia

LotofemphasishastogotowardsR&D(internal
development)andincreasingthequalityofproducts
alongwithcostreductiontocompeteagainst
competitorslikeHMSI,Heromotocorp andTVS.
TheyarenotmuchintoJVsandacquisitionswhichare
requiredtointroducequalityproductsatafasterratein
themarkettocompete.
IthasJVswithRenaultandNissanbuttheyarein4
wheelerssegment
Hasgot47.16%stakeinKTM,Europessecondlargest
motobike manufacturer.LaunchedKTMduke200in
2012

Onemethodisscaleadvantagethroughlower
costsusingR&Dandinnovation
Secondmethodistostartfocussingoninorganic
growthtoexpanditshorizonswhichtheyarenot
doingtillnow

PatenthistoryofBajajandothermajorplayersinautomobilesector

Patentsgrantedtoeachcompany

PatentsgrantedtoBALovertheyears

BajajAutoLimitedhasfiledmajorityofpatentsinthecategoryofTransportandEngines
Theactivitypickedupsignificantlyfrom2003peakingin2006beforefallingdrasticallyin2008
Patentgrantwouldtake3 5yearsforthepatenttobegranted,allpatentswerepublishedin2002 03,
whichiswhenPulsarislaunched
Theglobalfinancialcrisisandtheconcomitantuncertaintycouldbethereasonforthemarkeddecreaseinthe
innovationactivityduringthelast4years,whichiswhyBajajhaslimitedfilingsintherecentpast
2Wheelermarketleader,Herohasonlyonepatentgrantedtill2010.AllpatentsgrantedinJVhadgoneasa
partofHonda,whichlicencedthepatentstoHerotouseinitsmotorbikes
FirstcompanytoachieveBharatStage 3normcompliancefortheentirerangeoftwowheelerwithDTSFi
technology

18082015

Contd

BAJAJ

TVS

BajajhassoughtawidegeographicalprotectionofitsIP
Nextbigthinginthetwo wheelermarketinChinese
with12millionunitsalesannually
EyeingthegrowingChinesemarket,BALisgettingits
majortechnologiespatentedinChina
AwidespreadofIPCcategoryindicatesarobust
innovationactivityandtheconcernforIPprotection

BajajVs TVSVs HMSI

TVShas75grantedpatentsasagainst38ofBajaj
TVSfiledfor83patents,almostthesametheyhavefile
tilldate,in2007 08whentheentireautomobilesector,
Bajajwasgoingdown
Bajajhadbeensuccessfulincommercializingthepatents
Inthefiveyearstill201011,Hondahasfiledfora
whoophing 357patents,whichisthekeyfactorwhy
Hondasmarketshareisincreasingatagreaterpace

BajajVs HondaVs Hero

TechnologySignificance

LevelofTechnology Competence
ClearLeader

Strong

Favourable
Hero

Base

Engine

Honda

Bajaj

Base

ERP

Honda
EAM,SCM

Bajaj PLM,SAPR3

Base

Service

Hero

Bajaj

Key

Network

Hero

Bajaj

Honda

Key

Technology

Honda

Bajaj DTSi,Hero

Pacing

R&D

Honda

Bajaj ExhausTEC,
TripleSparkIgnition

Emerging
Emerging Fuel
Efficiency&
alternate
fuels

Tenable

Weak
Bajaj No
presence infast
growingscooter
segment

Honda

Hero only
1patent

Honda Singlewheel Bajaj HEVs,

vehicles
EVs
Hero electric
dieselengine

Bajaj
Engine
efficiency

18082015

Keytakeaways

Bajajhasgoneontechnologicalforefrontswithastrategyof
Lookwide ThatisthereasonwhyithastheR&Ddoneacrossthecategories
Lookdeep MoreR&DhasbeendoneintheareaswhereBajajhasthecorecompetencyi.e.,inthe
enginesandtransport
CompanieshavetoconsidertheTriadicPatentstogetgreateracceptanceandmarketshare
TheTriadicpatentsareaseriesofcorrespondingpatentsfiledattheEuropeanPatentOffice(EPO),
theUnitedStatesPatentandTrademarkOffice(USPTO)andtheJapanPatentOffice(JPO),forthe
same invention,bythesameapplicantorinventor
IntegraltoitsR&Dactivity,Bajajhasassembledasophisticatedproductlifecyclemanagement(PLM)which
enabledmanagementtorapidlyassessoperationalneedsfaster
Electricallydrivenvehiclesarethenextbigthingtohappenintwowheelerindustry.Itwillhavethesame
impactwhat4strokeenginehadintermsofnoiseandpollutionreduction
Enginetechnologyisanotherareawherelargenumberofinnovationswilltakeplacebecauseoftheneed
ofhigherfuelefficienciesandadaptationofneweralternatefuels
BALsprovisiontosupportvendorstoupgradetheirtechnologymadethemtogetstrikingalliancesinduced
bytherapidgrowthintwowheelersegment
Evenwhiletheywereembarkingonthegrowth,theyhavemaintainedcostleadershipwitheverydecision
basedonthreeparameter:Cost,qualityandtime
Supplychainoperationsarestreamlinedtogetefficienciesfromvendors,theecosystemisbuilt

WayAhead

ScalingUpService
Centres

Investmentin
Researchand
development

EntryintoFour
WheelerSegment
Focuson
Gearless
Scooters
Graduating
Customers
fromthe
100ccto
Higher
Segments

Corecompetency
ofBajajisitsR&D
andinvestmentin
technology
Bajajneedsto
investheavilyin
R&D
Theyhaveto
introduceefficient
andpowerfulbikes
aswellasdevelop
alternateenergy
vehicles

Carbonemissions
ofaround60
gramsper
kilometre,less
thanhalfthatof
mostothersmall
cars.

10

18082015

Appendix

Appendix

11

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Appendix

Appendix

12

18082015

References
http://businesstoday.intoday.in/story/rajivbajajbajajgroupplanandfuture/1/198329.html
https://www.crisilresearch.com/industryasync.jspx?serviceId=5&State=null#storyId#94531#sectionId#2704#newsFeed
Id#undefined
http://www.divaportal.org/smash/get/diva2:372751/FULLTEXT01.pdf
http://businesstoday.intoday.in/story/bajajre60/1/21381.html
http://tejas.iimb.ac.in/articles/21.php
http://www.livemint.com/Money/9Hz7jOtDLdZT8lcU8GTizK/DomesticchallengeshurtBajajAutosperformance.html
http://en.wikipedia.org/wiki/Root_cause_analysis
http://www.bajajauto.com/download/MDA.pdf
http://www.iitk.ac.in/techkriti/2004/events/olymbiz/LessonsInExcellenceCase.pdf

Suggestionstoimprovevalue
Therearemanystrengthasdiscussedintheclass
Thisslidefocusesonlyonsuggestionsforfurtherimprovement,sothat
groupcancompeteinsomebasicchallenges;e.g.Glogift;PICMET
Mentionsourcesinallslides
CategorizetheevolutionofBajajoveryears
ImprovementinRootcauseanalysis
InferencefromFinancialAnalysis
ImprovementsinCriticalSuccessFactorsofkeysegmentsBajajwishto
focusinfuture
HardlyanyinfoaboutorganizationstructureofNPD/RDDE,process,
teams,initiatives,learning&action,..

13