Final Bajaj Ppt

8/4/2019 Final Bajaj Ppt

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Bajaj Auto Limited

Soni Rachel Oommen


2/19

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


3/19

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


4/19

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


5/19

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


9/19

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.


12/19

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


17/19

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


18/19

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.


19/19

Thank you!!!
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Final Bajaj Ppt

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