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Introduction

Maruti Suzuki India Limited is the manufacturer of all-time best selling


cars in India. The company manufactures a wide range of cars from
hatchbacks, sedans, Multi Utility vehicles and SUVs and is the market leader in
India. Maruti Udyog Limited was established on November 1981. In October
1982, Maruti signed a license and joint venture agreement with Suzuki Motor
Corporation of Japan, which eventually led to growth of the company as the
major motor vehicle manufacturer in India. After collaboration, in December
1983, the company launched its first car, Maruti 800. And in the year 1987,
Maruti entered into the foreign market by exporting first lot of 500 cars to
Hungary. Until the year 2007, 18.28% of the company was owned by the
government of India. But the stake hold by the government of India was sold
off in 2007 and Suzuki increased their stake in the share holdings. After that,
Maruti Udyog was renamed as Maruti Suzuki India Limited (MSIL). As of now
MSIL remains a subsidiary of Suzuki Motor Corporation from the year 2007 and
the Indian
government doesn't own any stake.
MSIL has the largest car producing plant in India and it manufactures the
largest number of cars in a year. Maruti also boasts of the largest sales and
service network amongst the automobile manufacturers in India. Service is also
an important revenue generator for the company. Also, in 2002, Maruti
launched a business venture which provides insurance to its customers - Maruti
Insurance. Another countrywide venture called Maruti Finance was introduced
in 2002 in order to promote its bottom line growth. All these new ventures led
to
an increase in popularity of the company among the people. Maruti True Value
service which was launched recently offers a customer to buy, sell or exchange
any used models of Maruti Suzuki vehicles.
When Maruti Udyog was formed, there were only two cars of Indian
companies running on the road: Ambassador and Premier Padmini. The
formation of Maruti Udyog gave birth to the automobile revolution in India. The
company made history year after year since the launching of their first model,
Maruti 800. Now Maruti is the synonym for the Indian automotive industry. It
has a market share of more than 35% of Indian passenger car market. Apart

from the remarkable technological advancement that Maruti introduced in


India, the automaker is also recognized for being the first in the industry to
take up mass production of cars, for being the first car manufacturer in the
country to sell more than a million units and also, for being the market leader
in automobiles for approximately three decades now.1

How Maruti is different from others?


India is one of the largest automobile markets in the world, in terms of
number of customers who are able to pay and, also in terms of number of
companies competing each other. Since the number of options are increasing
day by day, the demanding power of customers is very high. So one has to
adapt new ways to survive in such a situation. Maruti Suzuki, for more than one
decade, managed to stay on the top of the other companies. They are way
ahead of other foreign companies when it comes to sedan and hatchback
models. Quality of customer care and affordable prizing are not the only things
which keeps the Indian company on top of the charts and minds of the people.
I) Maruti Finance
Finance is one of the major decision making factor in a car purachase. In
a market where more than 70% of cars are financed, Maruti has strategically
utilized this opportunity and entered into financing field quicker than anyone
else. And the company has successfully turned it into a major source of
revenue. Maruti has tied up with 8 different companies to form a consortium
and with these companies, like City group, ICIC, HDFC, Bank of Punjab etc.,
Maruti is evidently dominating this area.
II) Maruti Insurance
1

Jo,Sarath; Financial performance analysis of MSIL ; 2014

Indian people are very cautious about their money transactions and
insurance one of the most important factors in their life, especially of the car
owners. Maruti has tied with different companies like Bajaj Allianz, National
Insurance Company, New India Assurance etc. to bring this service to its
customers. From identifying the most suitable insurance scheme for the
customer to making the process of insurance claim is taken care by the local
dealer. Maruti insurance is an easy way for their customers to get their car
repaired and claim the insurance money in anywhere in India. All you have to
do is go to the near by dealer.

III) True Value Service & Vast distribution and customer care chain
True value service helps the customers to buy second hand vehicles for a
reasonable price and get the customer care facilities, warranty, guaranty and
other facilities by the company itself for some years. People can also sell their
vehicles or exchange it for some other model using the same facility.
Maruti Suzuki is known for its customer service chain all over India. There
are more than 2000 Maruti authorized customer service centers and more than
1000 sales outlets all over India which provides all the aforementioned facilities
by the company.

Human Resources Management


An efficient HR Manager should be:
1. Understanding the business
2. Understanding the skills apt and required for the smooth running of the
business
3. HR competence or precisely subject knowledge
4. People Centric
Employee Recruitment Procedure in Maruti Suzuki
1. Preparation of the manpower budgeting by the Chief Executive Officer,
General Manager(HR) and the Head of the Departments of the company
at

the

end

of

every

financial

year.

The Manager of the concerned department in need of manpower request


for a Manpower Approval Form from the GM-HR of the Company.
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2. After the approval of this form it is send to the Recruitment Manager


where sourcing of the CV is done.
3. The shortlisted candidates are then called for the interview and screening
process.
4. There are three levels of interview
Functional Interview Round
JAF
HR interview
When qualified in the first two interviews the candidates become eligible for
the negotiation regarding the salary and facilities with the Manager-HR.
The Sources of recruitment for the Company are

With the help of a Consulting company (i.e. through consultants)


Employee referral
Company Database
Job Portal Response
Through Advertisements on the company website and Direct Application.
Campus Recruitment

In Maruti Suzuki the newly hired employees are first put through an orientation
program where the trainer makes the candidates familiar with the working
environment as well as the culture of the company. This process is then
followed by an induction process. In this stage the employees are send to their
respective departments in order to familiarize with the working conditions,
people , Health and Safety Training, Laws and Policies, Assessment Criteria etc.
The new recruits are trained both technically and behaviorally. The former
training is intended to enhance the subject knowledge of the trainee in their
own respective field of work. Whereas the later focus on the projected behavior
of the trainees in certain situations and the efficiency with which they can
perform in such situations.
In 2012 the company authorized its managers and supervisors to recruit
workers they consider trust worthy as part of a new Human Resource policy
aimed at building confidence between the management and workers.

Vision of the Company


The leader in the Indian Automobile Industry, creating customer delight

and shareholders wealth. A pride of India.


Values of the company
CUSTOMER OBSESSION
FAST, FLEXIBLE & FAST MOVER
INNOVATION AND CREATIVITY
NETWORKING AND PARTNERSHIP
OPENNESS AND LEARNING
Goals and planning ahead
The goal of Maruti Suzuki is to produce more than 15 Lakhs cars a year and for
fulfilling this in the year 2014 the company invested Rs 1000-1500 crore on
product development, including its upcoming R&D unit at Rohtak, over the next
three-five years. Maruti Suzuki is planning to compete with Ford to become the
first car maker to sell a made in India automobile in a first-world market. The
company plans to focus on the production of small cars and has no immediate
plans to manufacture premium cars in India. The company plan to fully utilize
the plants in Gurgaon and Manesar in the coming years. The combined annual
capacity of the plants is estimated to be around 15.5 lakh units. Maruti Suzuki
being Indias largest car maker is exploring an ambitious plan to build its own
family of diesel engines to power vehicles across segments. The diesel engines
will be developed with key inputs from its Indian subsidiarys R&D, which is
gaining strength from its independent infrastructure at Rohtak in Haryana. The
company is planning a major overhaul of its bestseller Swift and Swift Dzire.
In its new generation both Swift and Dzire will get an all new body and a new
engine at the heart.
The other plans of the company for the year ahead are:

Alto K10 facelift


AMT on the Alto K10 and WagonR
Celerio with a diesel engine
Eeco with a diesel engine
Swift Sport is currently testing in the Gurgaon facility, no updates on the

launch date as of now


SX4 to be replaced by the Maruti Ciaz; available in both petrol and diesel
engine options with new trim levels such as Zdi+ and Zxi+ and also, an

automatic gearbox on the petrol variant.


XA Alpha SUV to rival the Ford EcoSport next year
Y9T. the companys first LCV with a diesel engine
Premium YRA hatchback to rival the Hyundai i20 and Honda Jazz

Maruti Suzuki India (MSI), is planning to bring in several new and face lifted
products in the next one year.
1.
2.
3.
4.
5.

Maruti
Maruti
Maruti
Maruti
Maruti

Suzuki
Suzuki
Suzuki
Suzuki
Suzuki

Vitara sub-compact SUV


S-Cross
Swift Dzire AMT
Wagon R-7 Seater
YRA hatchback

Organizational Structure and Design


Maruti has an organizational structure that is linked horizontally. At these levels
there is always cross functional teams and sometimes direct contact in the
form of a coordinator who acts as a point of contact for communicating the
progress of each department. The division of activity takes place on the basis
of certain important functions such as finance, marketing, engineering and
sale, spares, production material, parts inspection, quality assurance, human
resource

development,

information

technology,

new

business

and

administration. The centralization is quite low in Maruti and the decision


making hence stays decentralized and distributed. The company is divided into
29 divisions and is each headed by a departmental head which remains the
functional post. The formalization of activities and functions is quite high in the
company and hence all the methods, procedures and standards are written
down formally.
The employees usually are divided into six functional heads namely:

Workers and Technicians


Supervisors
Executives
Section Manager
Department Manager
Division Manager

The organizational structure does have an inclination to be a mechanistic


structure though it cant be called so as the decentralization is quite high. A

mechanistic structure is use full only for organizations which do not require
frequent changes in the processes and the environment is stable. The company
aims at achieving perfection at each functional level.
The structural flexibility is not allowed in the structure as the environment in
the automobile sector is almost stable. Each function stays separate at the
functional level and the communication and cooperation among the functional
levels are responsibility of someone at the top of the hierarchy. Communication
stays vertical from departments to division and then the board of directors. The
main decision is always taken by the board of directors.

The company has been trying to use a project based structure to handle the
problems efficiently and effectively in view of the increasing competition in the
automotive sector. This change of structure was introduced initially around two
years back. In this new system the senior and middle level executives are
grouped into teams that would work on specific goals. Around 30 teams of 8-10
members are formed. These teams would then be given specific mandates in
terms of cost reduction, new product development etc. They will also be
allotted with the required resource support and authority in order to implement
the project.
Strategic Planning of Maruthi Suzuki
The heart of any business s is a strategy planning. It's a broad process that
can address the whole business.
strategy of MSIL
1) Increase and strenthen the man power.
2)Increase in salary to sales agent.
3) Provinding incentives.
4)Focus on mini markets segments to beat stiff competition.
5)Developing capabilities and internal resources to finance its expansion and
growth.

6)To stay away from the Ultra-Low cost segment.


PORTERS FIVE FORCES MODEL
Analyzing Porters five forces in context of Maruti Suzuki.
a) Threat of the New Entrants: Increasing
There are major global players in the Indian market; few more are
expected to enter due to the government policies and expected retaliation.
b) Threat of new Substitutes: Low to Medium
Maruti Suzuki facing a serious threat from consumers shifting to hybrid &
elecric cars.
At presant, the electric car market in India have dominated by sole player Reva
Electric Car Company. However few brands like Tata Motors, Chevrolet and
Nissan are also planning to lunch new electrical cars.
c) Bargaining power of the Supplier: Low
Automakers are key to supply chain of the automotive industry. Maruti Suzuki
has been
manufacturing units where engines are manufactured and parts supplied by
first tier
suppliers and second tier suppliers are assembled. There are many number of
automobile component suppliers and there switching costs are very high. Thus
its reducing the bargaining power of suppliers.
d) Bargaining power of buyers: Increasing
Nowadays, consumers are considered to be kings in the automobile market.
There is an increasing awareness among them the consumers and are given a
humongous number of choices. Buyers get incentives in the form of cost
discounts and better after the sales services. Thus its increases the bargaining
power of the buyers
e) Competitive Rivalry: High
Competition in certain part of segments are very high e.g., small and mid-car
segment.Few brands like Hyundai, Chevrolet, Tata and Skoda have given huge
competition to Maruti Suzuki. In the recent years Volkswagen, Honda, Ford has
also given competition to the premium car segments.
.MARKETING STRATEGY OF MARUTI SUZUKI

The company started with Suzuki holding the minor stakes of the company
while Government of India holding the major stakes.Today, Maruti and its
partners employees are more than 75,000. It's manufacturing facilities are
located at two locations, Gurgaon and Manesar, both south of New Delhi.
PRODUCT STRATEGY
The product strategy of Maruti is that it's focus is on the catering the needs of
almost all the segments. Maruti Suzuki offers 16 brands.They are Maruti 800,
Maruti Omni, Maruti Alto, Maruti Versa, Maruti Gypsy, Maruti A Star, Maruti
Wagon R, Maruti Zen Estilo, Maruti Swift,Maruti SX4, Maruti Kizashi, Maruti
Eeco, Maruti Ertiga, Maruti Grand Vitara & 150 variants spanning across all
segments. Thus company creates products which are unique and valued and it
is attaining the advantage either through differentiation via new features,
improving performance, after sales service.
PRICING STRATEGY
The companys pricing strategies are such that every customer can own a car
or else upgrade to another one of there own choice. The company has offered a
different model at a price difference of around 10,000. It follows a price-pointstrategy where in they have all products are available in almost all possible
price points.

DISTRIBUTION STRATEGY
Maruti Suzuki has two manufacturing facilities in India. Both manufacturing
facilities has a combined production capacity of 14,50,000 vehicles annually.
Maruti has a strong dealer network in india. It was one of the first company in
the country to understand the importance of after sales service in high
involvement products like cars. Maruthi has the largest distribution & Service
network comprising of over 400 sales showrooms, over 600 dealer workshops,
and 1900 Authorized Service Stations spanning across over 1190 cities
unparalleled in the country. It has 30 Express Service Stations on 30 National
Highways across 1,314 cities in India. Almost of all service stations are
managed on franchise basis where Maruti trains the local staffs.

PROMOTION STRATEGY
The promotional strategy of Maruti Suzuki is very effective. The company
emphasise on road safety and environment friendly products. The company has
launched road safety mission under which 5,00,000 people will be trained in
the next three years. This will be done through two channels - Institute of
Driving Training and Research (IDTR) and the Maruti Driving Schools spread
across the country. Of the 5, 00,000 people to be trained, at least 1,00,000 will
be people from underprivileged section of society, who are keen to take driving
as a profession. The company has always promoted the concept of "Reduce,
Reuse, Recycle" (3R's). The company has taken help of all the promotional tools
like radio, television, road shows, print media, workshops and seminars to
promote their cars

SWOT ANALYSIS

STRENGTHS:

Established distributions and after sales network

Understanding of Indian market.

Ability to design new products with differentiating features.

Brand image

Experience and knows how in technology

WEAKNESSSES:

Lack of experience with foreign trades.

Comparatively new to diesel cars.

People resist to upper segment models.

Heavy import tariffs on fully built imported models.

OPPORTUNITIES:

Increased in purchasing power of indian middle class category.

Government subsides.

Tax benefits.

Prospective buyers from two wheeler segment.

THREATS:

Competion from second hand cars and few other brands.

Threats from chinese manufactures.

Maruti Suzuki CSR initiatives


Corporate Social Responsibility (CSR) is a well known management
concept all over the world. CSR involves different organizations or corporates
conduct the business in a way that is ethical. In this concept, organizations give
more importance to their 'responsibility' to the society and try to make an
impact and want to play an important role in the development of society. It will
help to increase the goodwill of the company and increase the popularity of the
brand name of a company.
Like all other companies, Maruti also initiates many CSR activities. Being
a top automobile manufacturer in one of the most populated countries in the
world, Maruti believes that they have a huge responsibility when it comes to
road safety, fuel conservation, air pollution etc.
In their policies, Maruti gives a great importance to their environmental
policies. They acknowledge that our actions can affect the planet's future. They
want to pass on an clean environment to the coming generation. So they give
more importance to researches which deals with reduction of carbon emission
and development of hybrid cars. And they believe that conservation of our non-

renewable energy resources is also a very important thing. So they also think
that production of more fuel efficient or automobiles which do not completely
depend on fossil fuels is very important and such automobiles will be the future
of the world. So it is very necessary to make the younger generation and next
generation aware of the importance of conservation of energy resources and
finding alternative and put an end to the energy crisis. For such awareness, the
company conducts many awareness programmes all over India. They mostly
concentrated on top engineering colleges and ITIs in India. In some ITIs, the
company itself funds for some diploma courses on fuel efficiency and energy
conservation and top technicians and engineers from the company give
lectures on the topics.3
As an automobile manufacturer, Maruti is really concerned
regarding the road safety, not only the drivers but also the passengers and
other people on the road. Joining hands with many state governments, like
Karnataka state government, Maruti started a programme on the awareness of
road safety and importance of safe driving. They have conducted road shows
and talks on the topics of road safety. They've conducted many programmes
regarding the importance of road safety and safe driving for school and college
students, without using any government funds. As per the statistics, thousands
of students took part in such programmes and it was a first of the kind venture
by any automobile manufacturer in India.
Road shows and lectures are not the only contribution of Maruti Suzuki
Inc to road safety in India. They have started many driving schools, Maruti
Driving Schools (MDS), in different urban parts of India. In these driving
schools, skilled drivers who are specially trained within the company give
lessons on safe driving and road safety to the common people.
Maruti Suzuki

is also becoming a path maker for volunteering efforts by its

employees and expects to be able to enlist their families and friends as well.
Called e-Parivartan, the e standing for employee, Maruti Suzukis volunteer
programme was launched last year to create a platform that would enable
Maruti employees to engage in social and community work. The programme
offers a wide variety of volunteering options mentoring, teaching, community
development, raising environmental awareness and organizing health camps.4
3
4

http://www.marutisuzuki.com/our-policies.aspx
http://www.indiacsr.in/en/csr-initiatives-of-maruti-suzuki/

The company is actively involved in community development of few


villages

around

their

Manesar

plant.

Maruti

focuses

on

the

health,

infrastructure development and skill training of the people in these villages.


The company also runs two schools for the children of their employees and
village people. They often conducts various health camps for the elderly people
and children in the villages and family members of their staff.

Conclusion
In this age of globalization and liberal economy, more than a country,
India is seen as one of the largest and fastest developing market in the world.
India is not just a market, when it comes to number of people who are able to
pay for whatever they need, India is any companies best option to invest. In
the last decade, we can see a huge increase in the number of car companies
who invested in India. Even companies like Benz, BMW etc. are about to set
their own manufacturing facilities in India. Cars of companies like Audi, BMW,
Volvo etc. are not a big deal for Indians anymore. The big automobile giants like
General Motors and Volkswagen already set their foot on our country. But all
these foreign giants are

fighting with an Indian company for a little space.

Except in the luxury class, Maruti is still giving them tough competition and all
these years they succeeded in maintaining their share in the market
successfully. Through their effective management system, when it comes to
prizing, customer care services, distribution system and quality, Maruti has
successfully strengthened their position in the minds of Indians. From all the
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marketing strategies we mentioned in the above sections, we can easily


understand why is it and how they did it. Without no doubt we can say that,
when someone says 'car', the first image comes to one Indian's mind is of
Maruti and they have achieved it not only through brilliant management
strategies but also through dedication to their customers.
References

http://www.slideshare.net/sanjaysan1/maruti-suzuki-strategicmanagement-12583528

http://www.slideshare.net/hedaurahul/business-policy-and-strategicmanagement-of-maruti-suzuki?from_action=save

http://www.ijaiem.org/Volume2Issue5/IJAIEM-2013-05-17-036.pdf

http://www.marutisuzuki.com/our-policies.aspx

http://www.slideshare.net/tusharkharate1990/maruti-suzuki-csr-activity

http://www.indiacsr.in/en/csr-initiatives-of-maruti-suzuki/

http://www.slideshare.net/hedaurahul/business-policy-and-strategicmanagement-of-maruti-suzuk