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BAJAJ QUADRICYCLES ASM ASSIGNMENT 2

SUBMITTED TODR. RADHAKRISHNAN S

SUBMITTED BY

GROUP B6

RAHUL THAMPY 12035

MADHEV DAS 12086

SAKSHI RANADIVE 12100

SANDEEP HANEEFA 12102

ARUN K P 12129

DECEMBER 7, 2013

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Contents1. Bajaj Auto Ltd (BAL) -Company Profile ................................................................................... 2

1.1 Two wheeler segment .................................................................................................................. 2

1.2 Three wheeler segment ............................................................................................................... 2

2. Strategic intend of BAL ................................................................................................................ 3

3. Concept of quadricycles ................................................................................................................ 4

4. Bajaj RE60 ..................................................................................................................................... 4

4.1 Comparison with Bajaj auto rickshaw ...................................................................................... 5

4.2 How Bajaj achieved this trio of benefits ................................................................................... 5

5. Viewpoints ..................................................................................................................................... 6

5.1 Bajaj Auto .................................................................................................................................... 6

5.2 TATA Motors .............................................................................................................................. 65.3 TVS Motors ................................................................................................................................. 6

5.4 Piaggio: ......................................................................................................................................... 6

5.5 Mahindra & Mahindra ............................................................................................................... 7

6. Rationale behind the RE60 ........................................................................................................... 7

6.1 Analysis of Indian three wheeler industry using Porters five force model ..................... 8

7. SWOT Analysis ........................................................................................................................... 10

8. Challenges in quadricycles ......................................................................................................... 10

9. Marketing Plan ............................................................................................................................ 11

9.1 SLEPT Analysis ........................................................................................................................ 11

9.2 Marketing Strategies ................................................................................................................ 12

10. McKinsey 7s model ................................................................................................................. 13

11. Conclusion ............................................................................................................................... 16

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1. Bajaj Auto Ltd (BAL) -Company Profile

Bajaj Auto Ltd is the flagship company of the Bajaj group which is into the business ofmanufacturing and selling of two-wheelers and three-wheelers. The company was formed on

November 29 th, 1945 from the Bajaj group founded by Jamnalal Bajaj in 1926. It was underthe leadership Rahul Bajaj, present chairman of the group that the company grewsubstantially. It is during his tenure as the Managing director of the company, beginning fromthe year 1965 to 2005, and the sales turnover of this flag ship company of the Bajaj groupwent up from INR 72 million to INR 120 billion.

BAL, currently under the leadership of Rajiv Bajaj, is the worlds third largest manufacturerof motorbikes and the largest manufacturer of three-wheelers. In India BAL is the secondlargest producer of motorbike only behind Hero motor corp. As on march 31 st 2013, BAL isIndias 23 rd largest publicly traded company with a market capitalization of INR 520 billion.

Bajaj Auto remained Indias No. 1 exporter of motorcycles and three -wheelers. TheCompany exports to 57 countries, and is a market leader in 12 of these. Though the exports ofmotorcycles remained more or less steady the volume falling by 2% compared to the

previous year the big crunch occurred in three-wheelers. The drastic drop in three-wheelerexport was mainly due to the increase in import tariff in Srilanka. Significant part of theexport of BALs three wheeler export is to Srilanka.

FY2012 FY2013 Growth %

Motorcycles(nos.) 1267648 1293231 2.0%

Three-wheelers(nos.)

312176 253926 (18.7%)

Total 1579824 1547157 (2.1%)

Exports in USD(million)

1369 1309 (4.4%)

1.1 Two wheeler segmentThe major models of motorbikes in production by BAL are the XCD, Platina, Discover,Pulsar and Avenger. Apart from the motorbikes produced by them, the company alsodistributes motorcycles in India for other manufacturers, such as the Kawasaki Ninja 250R,the Ninja 650R and the KTM Duke 200. BAL acquired 14.5% stake in KTM Power AG in2007 and entered into a deal by which the later will provide the know-how for the jointdevelopment of water-cooled four stock 125 cc and 250 cc engines and Bajaj will take up thedistribution of KTM motorbikes in India as well as in some other South Asian countries. Inthe previous financial year, BAL sold around 3.76 million motorcycles which accounted for31% of the total market size of the Indian two wheeler industry. Of the total approximately66% is sold domestically and the rest is exported.

1.2 Three wheeler segment

BAL pioneered the manufacturing of three wheelers in India and currently accounts foralmost 84% of three wheeler exports from India. The Company currently has three major

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brands of three wheeler which are Compact, Optima and Maxima with options in In the FY2012-13 it sold around 480000 three wheelers of which 53% where exported. Bajaj has amarket share of 51% making them the market leader.

Bajaj Auto sold the most number of vehicles during FY 2012 which sums to 29,395 units

against 27,247 units in the same period last year registering a growth of 7.88%. Piaggio alsoregistered a delicate growth of 1.02%. Atul Auto is the most enriched brand in April-May

period of 2013, as they seized a 10.27% growth against April-May 2012. Mahindra sales inthis segment decreased by 10.19 while the worst hit brand has been TVS where theywitnessed their sales went down by a massive 39.29%.

Three wheeler passenger segment

Main players in three wheeler segment

Players Brand/ Product nameBajaj GC series of goods carriers. (Max diesel, Max CNG)

RE600 RE passenger series (2S, 2S CNG, 2S LPG, 4S, 4S

CNG, 4S LPG, Diesel, GDI), Mega MaxPiaggio Ape City, Ape Cargo, Ape Xtra PassengerTVS TVS King

2. Strategic intend of BALTo begin with, it is surprising to learn that BAL does not have a stated vision and mission.But it can be learned that the companys interest lies predominantly in the two whe elerindustry wherein it aspires to become the worlds largest manufacturer and in commercialvehicles. The broad strategy adopted by the company to achieve its goal is the strategy ofdifferentiation. It has been stated in its policy that BAL is committed towards continuouslyspecializing in its motorcycles and commercial vehicle brand through its strategy ofdifferentiation.

It can be observed that the companys actions, especially in the last decade have been verymuch in line with its strategy. When pu lsars dominance in its segment started getting

threatened, BAL was quick to respond with the new variant Pulsar NS 200 with threespark plugs promising better performance. This brought about a differentiation which

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increased the perceived value of the brand by a customer and which in turn helped indefending the supremacy of the brand.

The core competency of the company is believed to be in its values of innovation, perfectionand speed. The company is innovative in identifying the needs of the customer and delivering

quality products at the right time. By doing so, the company has been able to garner aconsiderable amount of brand loyalty spanning even outside the country. Success of most ofthe brands of BAL in the market for the last decade can be seen as a testimonial for the same.

One of the very important aspects of Bajajs strateg y is to defend their brands. The companyhas been very particular of not diluting its brand. The company believes its brand led strategyto be the reason for being profitable even at the difficult times. BAL boasts of having thehighest operating margin in the automobile industry. It has been able to maintain an operatingmargin of 16.7% in the last FY year even when the overall demand for motorcycles took aconsiderable dip.

It can be inferred from the above discussion that the BAL predominantly belongs to the positioning school. The Brand led strategy of the company can be seen as a consequence ofthe same. However the influence of other schools of strategy cannot be overlooked. There islot of influence of the enterprernial and the learning school on the functioning of BAL. Thedecision of Rajiv Bajaj to leave the scooter business can be seen as entrepreneurial in nature.

3. Concept of quadricyclesThe concept of quadriycles was first introduced in Europe. In Europe quadricycles aredefined as four wheeled micro cars that are limited in terms of weight, power and speed whencompared to a car. Quardicycles are seen as leisure vehicles used off the road rather than on

it. There are two categories of quadricycles in Europe:

Light quadricycles which are limited to 350 kg and top speed exceeds not more than45 km/hr.

Heavy quadricycles which are limited to 400 kg and maximum power not exceeding15 KW

In India quadricycle is a concept that is aimed as an alternative to the unsafe three wheelerauto rickshaws. It is not targeted at competing with small cars but the cost of the proposedquadricycles are close to the range of small cars and hence it becomes a direct competition tosmall car manufacturers. Also, majority of Indian population generally use vehicle for masstransport rather than as a leisure transport.

4. Bajaj RE60

Bajaj Re 60 is basically a quadricycle ; quadricycles are low speed light weight four wheelershaving an engine at the rear meant for intra-city commuters. The most important point toconsider is that even though its a four wheeler it should not be coined as a car . This is nota car, it is for a totally different market, this is what Rajiv Bajaj quoted during the launch ofRe-60 at the 2012 auto expo. While the RE60 was originally conceived as an answer to thecompact Tata Nano (positioned as worlds cheapest car), Bajaj Auto Ltd. has since made it

crystal clear that its new brand is targeted towards the three-wheeler sector and is notintended to compete with Tata Nano. There is logic behind this statement as Bajaj wants the 2

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5. ViewpointsThe different viewpoints of the auto manufacturers in India would give a better picture ofquadricycles:

5.1 Bajaj Auto :

Though Bajaj Auto has in the past opposed the idea of a quadricycle, they have re-introducedthe concept with the manufacture of RE60 which they have showcased at the 2010 DelhiAuto Expo. Bajaj Auto has been requesting the permission of government to start the

production of RE60. The lack of policies regulating quadricycles in India has led thegovernment to chart out new norms for the same. Bajaj has proposed the EU norms to beadopted for the quardicycles in India. The proposed norm states the weight to be restricted to400 kg and a top speed of 70 km/h. Bajaj has also recommended that the quadricycles should

be limited to urban use and the vehicles not to be used in highways. According to Bajaj, therestricted speed would ensure that the vehicles does not ply on the highways

5.2 TATA Motors :

The concept of quadricycle was first introduced by V. Sumantaran, who was the head of TataMotors passenger car business as a cheaper alternative to a car. The concept was opposed byMaruti Suzuki and Bajaj Auto citing safety and emission norms. Tata dint want to drop theconcept and went on to manufacture Tata Nano.

Presently, when the concept was re-introduced by Bajaj Auto, Tata Motors has stronglyopposed the concept. According to Karl Slym, MD at Tata Motors, quadricycles would takeIndia only backwards as it is against all the progressive norms that the Government,manufacturers and agencies have been working on over the years. Due to the economicslowdown sales of Nano has drastically decreased and with the launch of quadricycles,market for Nano would further shrink. The customers would likely overlook aspects likesafety and performance and would open hands for better gas mileage and a cheaper cost

price.

5.3 TVS Motors :

TVS has proposed the launch of quadricycles in India nearly a decade ago. The launch wasopposed by Maruti and Bajaj Auto who questioned the norms at that time.

Presently TVS is against the launch of quadricycles in India as the same idea was opposed byBajaj Auto a decade ago. TVS would be in trouble if the quadricycles are launched as analternative to the auto rickshaw. The proposed price for the quadricycles are just at a slight

premium to a three wheeler. The sales of the three wheelers would be hit as TVS is thesecond largest manufacturer of three wheelers in India.

5.4 Piaggio:They were the pioneers of quadricycle in Europe and along with TVS proposed quadricyclesfor India in 2004. As the idea was opposed by Maruti and Bajaj Auto at that time, Piaggio

started manufacturing three wheelers for passenger and goods transport.

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Presently, Piaggio is supporting the quardicycles and supports the adoption of EU norms.Unlike other manufacturers, Piaggio would have a head start in designing as they havealready launched the quadricycles in Europe. With the quality of the materials used for

production and capability of the company, Piaggio can capture a large chunk of the un- populated market.

5.5 Mahindra & Mahindra :

M&M is into the manufacture of two wheelers, three wheelers, cars and trucks. They areopen to the concept of quadricycles. They believe that quadricycles would change thelandscape as it would create opportunities for the three wheelers to upgrade to the fourwheelers at a marginally higher cost. Also when compared to the three wheelers, quadricyclesare much safer.

6. Rationale behind the RE60The thought process behind the launch of RE60 by BAL can be best captured from thefollowing statements of Rajiv Bajaj, Gillettes nightmare was that someone will make acartridge with two blades, so it made one with three blades. This is the strategy of defence. I,as the worlds largest three wheeler maker, was afraid. What if somebody put a fourth wheelon it? I would be doomed. So I put the fourth wheel myself. I attacked myself, evolved the

product, and listened to the brand. This has been a great concern for BAL. The fact that inthe last FY the exports of three wheelers have dropped considerably adds on to concern ofBAL even if the reason identified for the drop may not have so much of bearing to the fearexpressed by Rajiv Bajaj above in regard to the three wheeler segment.

It has been already mentioned that a major part of the production of three wheelers by BAL isexported and furthermore the three regions which are of particular significance in this regardare Africa, Latin America and South East Asia. On observing some of the developments inthese regions over the last decade with respect to the three wheeler industry, one can betterfathom the seriousness of the fear expressed by Rajiv Bajaj of three wheelers being obsolete.One impelling example in this regard would be that of Indonesia.

Bajaj Autos had a strong presence in Indonesia for the almost the last four decades. It was so popular in Indonesia that the name Bajaj became synonym for three wheelers there. InitiallyBajaj entered the Indonesian market with their three wheelers in the early seventies as asubstitute to the cycle rickshaw which was popular then. It was then seen by the Indonesian

as mark of modernity. As the country developed, by 1990s the same Bajaj auto rickshawcame to viewed as polluting, unsafe and backward. The government of Indonesia wanted to ban Bajaj 2-stroke three wheeler. However, by then Bajaj had a very strong hold in themarket since it became an integral part of the Indonesian transportation system and it was

becoming very difficult to find ran appropriate substitute for the Bajaj auto rickshaw. The presence of Bajaj for many years led to making of an ecosystem itself in Indonesia. The mostattractive aspect of the Bajaj auto rickshaw was its economic viability. The Indonesiangovernment initiated the development of an indigenous small sized four wheel car calledKancil hoping that it wou ld go on to replace Bajaj auto rickshaws which never happened.Further on the Government gave permission to import CNG 4 stroke auto rickshaw made by

Bajaj itself but that also did not quite take off since it was considerably expensive than theBajaj 2 stroke engine.

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One big problem with other alternative source of energy not working in a country likeIndonesia is the fact that the government is not in a position to provide significant subsidy onthe greener source of energy in contrary to the situation in developed countries. However theimportant point here is that with the growth of economy of a country the three wheelers willslowly start becoming obsolete.

This scenario discussed above is not an isolated occurrence. The situation is similar in mostof the countries that Bajaj export their three wheelers. Srilankan government has already

banned the import of 2 stroke engine powered auto rickshaws. In Nepal they have shifted toCNG engine powered auto rickshaws since they have the availability of CNG. The obviousunderstanding from these examples is that a three wheeler is no more a desired option for acommunity but rather an option of compulsion.

The situation is no different in India. The example of Delhi can be an impelling one in thisregard where government regulation on running all the public transport vehicles in CNG was

brought about. At the advent of an economically viable greener option for intra citytransportation, most of the developing nations and India will be more than happy to adopt thesame.

6.1 Analysis of Indian three wheeler industry using Porters five force model

Potential of new entrants into industry- Low

In Passenger vehicle segment Bajaj Auto has sold 223,287 units in FY 2012-13 takingtheir sales figures up by 26,146 units equated to last FY. Bajaj Auto is the market leaderwith 51% market share followed by Piaggio and Mahindra & Mahindra with 10% marketshare.

Piaggio continues to be the market leader in goods segment with 52% market share. Inthis segment Piaggio is the market leader from couple of years followed by Mahindra andMahindra and Bajaj with 7% market share.

Thus it is very evident that the three wheeler industry is dominated by few key playerswith long history of trust making the entry barrier high.

Power of suppliers Low

For critical parts like engine parts and suspension parts, Bajaj three wheelers rely on fewselected vendors such as Kharbanda Automotive and Mithani Group. These suppliers aremore concentrated on the three wheeler industry to which it sells, implying their chanceof supplying to other industries are minimal. Thus making the bargaining power ofsuppliers low.

Power of customers - High

The bargaining power of the buyers are high. There are a variety of products available tocustomers to choose from players like Piaggio, Mahindra & Mahindra etc. The customeris treated as a king.

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Threat of substitute products High

Indian three wheelers market segment is growing as there is an increased demand for intracity transport. But when we consider Indian three wheeler transportation customers usethree wheeler more of compulsion than comfort. There is always threat of alternate mode

of transport. Customers chance of welcoming new modes of transport which aresustainable are high. Also changing government regulations on emissions and otherregulatory policies can be a threat for the three wheelers.

There are also other substitutions for three wheelers like Tata Magic, it is a passengerversion of Tata Ace mini truck which allows customers a choice of four wheeler over athree wheeler for intra city transport.

Competition in the industry - High

The industry saw a slight decline in 2011 which can be recognised by government

policies such as cap on permits and high interest rates. However the market has been performing pretty well thereafter as a result of climbing population, growingcommercialization, increasing commercial activities, etc. which all are contributing to theincreased demand for intra city transportation. The passenger three wheeler segment leadsthe market as the need for passenger commutation is greater than the need for goodscarriage within a city. The modifications in FDI policies and flourishing retail sector inthe country are driving the growth for commercial three wheelers.

Bajaj Auto sold the most number of vehicles during FY 2012 which sums to 29,395 unitsagainst 27,247 units in the same period last year registering a growth of 7.88%. Piaggioalso registered a delicate growth of 1.02%. Atul Auto is the most enriched brand in April-May period of 2013, as they seized a 10.27% growth against April-May 2012. Mahindrasales in this segment decreased by 10.19 while the worst hit brand has been TVS wherethey witnessed their sales went down by a massive 39.29%.

Thus we can see that all the players in the three wheeler industry compete each other fortheir survival. Porters five force analysis leads to an opportunity of an alternative. Theincreasing importance of sustainability and other emission regulations opens a newopportunity which the companies can look for.

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7. SWOT Analysis

Challenges in quadricycle Meeting safety and pollution standards

8. Challenges in quadricycles The list of negative flexible materials include rexin, cloth, and plastic. The

government expects quadricycles to deliver better safety than three wheeler autorickshaw.

Quadricycles are new to the vehicle segment. Lack of proper norms are a majorconcern. The government has to come up with stringent norms which restrict theamount of carbon dioxide emissions.

The number of passengers including the driver that the vehicle can accommodate isfour in case of a passenger vehicle. The maximum load allowed is 450 kg. In case ofgoods vehicles under this category must have seating capacity for 2 including thedriver. The maximum load allowed is 550 kg. In India majority of the population usevehicles for mass transportation but the quadricycle cars are meant to be used as aleisure vehicle and not as a mass transport vehicle. The acceptability of the vehicle bythe middle segment to which it is mainly targeted has to be understood.

STRENGTHS

Brand imageRobust distribution networkGlobal presence (especially inemerging markets)First mover advantage

WEAKNESS

Lack of labour skillsLack of prior experience inmarketing similar product

OPPORTUNITIES

Desire for a greener and safealternative for three wheelers

Growing economy of IndiaOpportunity in export market

THREATS

Auto drivers mentality towardschangeFuture competition from Tata andm&mLobbying by major automanufacturersGovernment regulations

SWOT Analysis

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The opposition faced from the competition is severe as none of them has the facilityto build quadricycles. Competitors like Tata, TVS and Maruti Suzuki has stronglyopposed the concept of quadricycles. Their point of argument is regarding the safetyand emission norms. In a country like India where the number of reported accidentsare higher (around 1.4 lakh), introduction of an unsafe vehicle can exponentiallyincrease the numbers. All the opposing players have asked the Government to not tosanction the proposal until all the players build the capacity to manufacture.

9. Marketing Plan9.1 SLEPT Analysis Social:

The quadricycles are targeted at three wheeler owners. It is introduced as an up gradation to athree wheeler. The customers/three wheeler owners would get the status of a four wheelerowner. Quadricycles are much safer and stable than a three wheeler which offers bettercomfort and transport experience for the passengers. RE60 costs a little more than a threewheeler which makes it affordable for the target customers

Legal:

As mentioned earlier there was substantial opposition for the Bajaj RE60 from the majormanufacturers like Tata motors and Maruti. Government body has given the requiredsanctions to launch RE60 in India under the following norms:-

RE60 can only be used as a commercial vehicle Only a person with commercial license can drive the vehicle

The quadricycles will be amended as a new category in the central motor vehiclerules

The RE 60 should have a Q symbol on it to differentiate it from the other vehicles The quadricycles will comply to EU norms for quadricycles and will be upgraded in

the time span of 6 months in the case the same being revised

The government regulation on the RE60 is to the interest of BAL, however Tata motors andMaruti are also reasonably happy with regulation since RE60 is confined to commercial use.It is being said that the government process regarding the amendments will get done in periodtwo months from now. Bajaj seeing the commercialization of RE60 in the coming year is the

final testing stage for the vehicle.Economic & Environment:

RE60 is priced slightly higher to a three wheeler which makes it affordable to the targetcustomers. The maintenance cost of RE60 is low when compared to a car.

Carbon dioxide emission from a car is around 120 g whereas the emissions from aquadricycle is around 60 g thus making quadricycles environment friendly.

Political

Various political factors affected the delaying of the launch of quadricycle in India. Lobbying by car manufacturer majors like Tata, TVS and Maruti has delayed the launch of quadricycle.

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The main reason for their opposition being safety and emission norms. Also the concept wasinitially opposed by Bajaj and their re-introduction at a later stage was actually a lostopportunity for Tata and TVS. Since government policies for quadricycles were absent, the

policies were actually dependent on the viewpoints of the auto makers.

TechnologicalRE60 was initially a project which was carried out by Bajaj in association with Nissan andRenault. The reason for the association being the technical incompetency of Bajaj tomanufacture the quadricycle. However, when the product was almost ready to be launched

Nissan and Renault backed off citing that RE 60 was not the right product that theyenvisioned. The collaboration continued till the final stages of product development and thewithdrawal of the parties would question the technical expertise of BAL.

9.2 Marketing Strategies

The biggest challenge for Bajaj is that they are planning to sell something that has never beensold before in the Indian market. The success of the product will largely depend on themarketing campaign undertaken by Bajaj. The company will have to develop a marketingcampaign such that it will create the awareness among the target group. The success of the

product will largely depend on the mentality of the customers.

The company has revealed very less details regarding the aspect of how they will go aboutsales and promotion of RE60 once its all set for commercialization. In this section an attemptis made towards understanding the dynamics of the market in the context of the launch ofRE60 by BAL.

Targeting & Positioning

It is very clear from the media release of BAL that RE60 is targeted towards the threewheeler owners. It is believed to be an up gradation for the auto rickshaw owners. Rajiv Bajajhad made it clear that RE60 is not meant as a competition to cars as such. It is aimed atgiving a safer and greener option for three wheelers.Positioning of the product will be critical in the success. Bajaj has been very particular withthe positioning of any of their product for that matter. The brand led strategy has been thedriving force for BAL in the last decade. BAL has given indication that the RE60 would be

positioned based on the benefits provided by the product.

Marketing Mix

ProductRE-60 is a replacement for three wheel autos and it has features like better fuel efficiency,

power, safety and riding comfort compared to three wheelers. The strong brand name of Bajajin the Indian market augurs very well for Re 60.

DesignDesign is sleek and attractive and it is small in size which is best suited for Indianmarkets.

Variants

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Petrol, CNG and LPG. Services

The wide distribution network of Bajaj and its service outlets promises to provide the bestin class services to customers.

PriceRE60 is believed to be priced between three wheel auto rickshaws and Tata Nano ( worldscheapest car). Therefore the price is very much affordable for new buyers and alsoreplacement buyers.

Place

High penetration in urban and rural areas with the help of the large presence of dealershipsand showrooms of Bajaj.

Promotion

The biggest challenge is to change the mind-set of auto users to move from auto rickshawsto quadricycles. For evoking such a change the user should get the opportunity to drive thevehicle which will remove any negative feelings/perception that they may have towards thevehicle . Test driving should be done at all Bajaj outlets and authorized service centres

Attractive exchange and finance schemes should be introduced by Bajaj to tap the autorickshaw market. Financial risk is one of the most common risks perceived by customer andif Bajaj is able to lower that then it will be a huge factor to drive sales for Re-60.

10. McKinsey 7s model :

Strategy :

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It is the plan devised to maintain and build competitive advantage over the competition. BajajAuto usually uses differentiation strategies. Rajiv Bajaj, the CEO of Bajaj Auto has come upwith the concept of quadricycles to differentiate itself from the competitors in the autoindustry. Bajaj Auto is the largest manufacturer and exporter of three wheelers in India. RajivBajaj took a precautionary defensive strategy because he thought of a possibility of a

potential competitor putting a fourth wheel to his three wheeler would mean a huge loss tothe company. Hence he came up with this defensive strategy even though it wouldcannibalise the current products (Bajaj Auto three wheelers).

Structure :

It is the way the organization is structured and who reports to whom.

In 2007, Bajaj Auto underwent a focussed organizational restructuring which helped tostrengthen the existing business roles and responsibilities to ensure greater empowerment andeffective management. The five pillars of this structure were

R&D Engineering Two wheeler business unit Commercial vehicles business unit International business unit

These pillars were supported by functions of finance, MIS, Human Resource, Businessdevelopment and Commercial. The division into these pillars helps Bajaj Auto to take quickdecisions.

Systems :It is the daily activities and procedures that the staff members engage in to get the job done.The company believes in building a distinctly ahead organization by developing competentand engaged employees. Bajaj Auto has put in place a learning environment for theemployees. Some initiatives taken by the company are

Individual owned learning- wherein the employees develop their own learning planwhich are based on mutually identified competency gaps in present and aspired job intheir career path

User friendly learning management software- which are instructor led training programs, e- learning modules and informal learning through communities

Idea management and knowledge sharing- employees are encouraged to explore theunknown and in the process create value. Kaizen idea management and variousknowledge sharing forums are facilitated

Shared Values :

These are superordinate goals which are core values of the company that are evidenced in thecorporate culture and general work ethics. Innovation is the core value of BAL. They believethat customer satisfaction is the key element of success. In order to satisfy the customers,they should be provided with the best quality products at affordable prices. BAL uses latestmanufacturing technologies like robotics and automation to build quality in the products.

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Style :

It is the style of the leadership adopted. Jamnalal Bajaj, the founder of the Bajaj group was aGandhi disciple. Integrity, dedication, resourcefulness and determination to succeed are themain characteristics of the group today. These qualities are often tracked back to its inception

which are characteristics of that period of relentless devotion to a common cause. Rahul Bajajis the present chairman of the group under whose leadership the company has grown inrevenues from Rs 72 million to Rs 120 billion. Rajiv Bajaj has brought about anentrepreneurial spirit to the company. He is also well known for his abilities to make good

judgements and quick decision making.

Staff :

Staff includes the employees and their general capabilities. Bajaj recruits the best engineersfrom premium institutes like NITs and IITs. Lateral hiring is also done to bring togetherindividuals from various organization cultures which helps in pooling different perspectives

to a problem. Looking at the present situation there are no gaps in the required competencies.The R&D department, Engineering department and other structural units are doing well.Employees are well kept engaged and facilities for recreational activities like basketball, tabletennis, swimming, trekking etc. are provided to help the staff to maintain a healthy work life

balance. The organic growth provides numerous opportunities to the employees to climb theladder of authority and take responsibility

Skills :

The actual skills and competencies of the employees working for the company constitutes theskill part of the 7S. Bajaj is known for its technological innovation. Bajaj houses brilliant

engineering minds who consistently conceptualize new ideas and comes forth with breakthrough technologies. Bajaj possess innovative patents like the Bajaj DTS engine whichwas a breakthrough product of the past decade. The new RE60 which is an alternative to thethree wheeler is also an excellent example of the engineering and R&D skills of the company.The organization culture which provide the employees with high degree of autonomy in theirday to day decisions empower and motivate them in their performance.

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11. ConclusionThe study conducted has shown that it was a reasonable decision by BAL to launch RE60.The timing is also believed to be apt considering the growing issues of pollution and need for

better technology. However, the roll out of RE60 is not expected go very smoothly for BAL.It is expected that the company will have to overcome significant hurdles to be successful inthis venture. As indicated earlier in the report, implementation of an effective marketingcampaign focusing on core benefits of the product will be crucial for the success of BAL inthis endeavour.

It was recently told by Rajiv Bajaj that he would not wait longer if the launch of RE60 furtherdelays in India. It has been reported of him saying that there is promising potential for RE60in the countries like Indonesia and Srilanka. Further on it was also told that the government inthese countries are interested in the concept of RE60. The reasons behind the same have been

discussed above in the report.

Opportunity in the European countries can also not be ruled out. Considering thedemographics and the economic scenario in European nations, RE60 with may be a littlemodification can be a prospective last mile private transport vehicle. There are a lot older

people in Europe who might be interested in having a cheap mode of private transport whichis easy to use. However it does go without saying that it would require some significantchanges in the value proposition of RE60 as of now. Italy, France and Spain can be some ofthe prospective European countries in this regard.