Strategic Marketing Presentation
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Transcript of Strategic Marketing Presentation
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7/29/2019 Strategic Marketing Presentation
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Seedhe Sadhe-Akshay
Still pondering-Ankit
Diamond lawyer-Deepshikha
Muscle Man Gaurav
Spinner- Guru Ms. Grp4- IreneStu-co-Ishmeet
Cant seeMitika? Cofee with Namita
Rowdy Guneet Broom-Wroom
Harnek Happy Harsh OMGHimanshu Bouncing Jayanth
Strategic Marketing- Indian Automobile Industry
Section C
Group 4
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Group 4 Sec C
____________________________________________
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Value disciplines model ofMichael Treacy and Fred Wiersema describes
three generic value disciplines. Any company must choose one of these
value disciplines and act upon it consistently and vigorously.
Treacy and Wiersema argue in their book The Discipline of Market Leadersthat any company must choose to excel in one value discipline, where it
aims to be the best - in the world preferably. This does not mean the other 2
dimensions should be completely neglected, but rather that the company
should aim to be merely 'OK' in these other two disciplines:
3 softly defined strategy zones of 1. Product Leadership2. Ops Excellence
What is Product Leadership?
Product Leadership is characterized by products that are the best in their
market and highly valued by customers.
The dimensions of Product Leadership are:
Capability maturity
Intellectual leverageResponsiveness
Time-to-market
High margins in a short time frame.
http://www.valuebasedmanagement.net/leaders_treacy.htmlhttp://www.valuebasedmanagement.net/leaders_treacy.html -
7/29/2019 Strategic Marketing Presentation
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Concurrent engineering
The Traditional Waterflow Model VS Concurrent Engineering
The figure on the left here shows the traditional waterfall model wherein
the process flow is sequential.
In concurrent engineering, on the right
the process flow occurs simultaneously thereby reducing costly design
changes at a later time and improving the time to market.
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Why Product Leadership?
One pointer:
The company should possess the
necessary infrastructure and the
management should not be risk averse.
A classic example is TATAs Nano & Ace.
There was no such a concept of 1 tonnervehicle and they found out this
opportunity, took some risk launching the
product and now they are the market
leaders in that segment
The Auto industry needs to b Very strong in innovation and brand
marketing, operating in dynamic markets.
The principles of a product leadership enterprise are:
Encouragement of innovation a culture that fosters experimentationand innovation and rewards product or service improvement;
Risk-oriented management style management that allows
the enterprise to take risks and reap the rewards of new ventures;
Recognition that the enterprises current success and future prospects
lie in its talented design people and those who support them; and
Recognition of the need to educate and lead the market in the use and
benefits of new products or services.
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Competitive Advantage of Countries in
Auto Industry
Time to Market
Japan originally built an automotive industry at home, but
had to seek lower cost production factors in Southeast Asian
nations, Mexico, and Brazil.
Germany had to relocate much of its mass manufacturing
to Eastern Europe, to secure lower production costs. HMC in Turkey -1997, in India 2000 -2007, China - 2002-
Advantages?
Availability of inexpensive, high-quality labor and proximity
to the Middle East and Western Europe.
Nations attempt to overcome their
inefficiencies relative to other countries,
via
modernization,reduction of excess capacity,
training, and upgrading human resource
skills.
They chose their Time to Market
accordingly
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Early1900s
U.S and other automobile manufacturers were focused on delivering products tocustomers
Henry Ford propounded the concept of mass production leading to cost reductions
1950s
Asian auto manufacturers began to develop and establish their leadership statusworld over by focussing on process streamlining and supply chain efficiencies
Development of JIT and Kaizen Principles of Manufacturing
Subsequen
tly
Manufacturers in other parts of the world realized the significant benefits ofbuilding operational efficiencies in order to be able to compete in a globalizedmarket
PresentDay
Maintaining operational efficiencies has become a basic requirement for survival inthe automobile industry
Increased focus on product in order to be able to differentiate oneself in a highlycompetitive market
Operational Excellence
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Making the work environment more efficient and effective bycreating a team atmosphere, improving everyday procedures,ensuring employee satisfaction and making a job more fulfilling,less tiring and safer.
Elimination of waste, quality control, standardized work and theuse of efficient equipment.
Kaizen
Lean is the set of "tools" that assist in the identification and steadyelimination of waste. As waste is eliminated quality improves while
production time and cost are reduced. Tools like Value Stream Mapping, Five S, Kanban, poka-yoke
Lean
Manufacturing
Parts are moved through operations from step-to-step with no WIP inbetween either one piece at a time or a small batch at a time.
Highly capable processes
Highly repeatable processes Equipment with very high (near 100%) uptime
One-Piece floor
Manufacturing
It requires that equipment, resources and labor are made availableat the right amount and at the time.
Just-in-timeproduction
Tools of Operational Excellence
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Maruti Suzuki hasdifferentiated itself with
superior aftersales servicesand continues to be the
market leader
Hyundai and other playersfollowed suit by building
them over time/piggybacking on
established players
networks.
Maruti Suzuki was the firstto provide financial
assistance, offering theconvenience of a one-stopsolution to the customer
Today, most manufacturersoffer this service via tie-upswith financial institutions
Ford was the first
manufacturer to start saleof cars on the Internet
Manufacturers areconstantly coming up with
novel ways to simplify thebuying process, which isn'tmuch of a deterrent anyway
Companies that sell
popular cars bank onquick delivery times
People can be indifferentto waiting times as well,
as seen in the case ofRoyal Enfield
Customer Intimacy
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Maruti Suzuki startedproviding test drives in
India
Every manufacturerprovides Test drives,
today some even offerfree cars to lucky test
drivers
Manufacturers likeMaruti Suzuki pioneered
pre-owned car sales
Other players like Toyotafollowed suit, now even
new players likeVolkswagen is also
planning to start one
The price that the customer will incur for high customer
intimacy is a deterrent for most potential customers.
There is however a small segment willing to pay thisprice, Rolls Royce and Maybach.
Customer Intimacy
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Take an historic example where Fisher body(supplier) had an
exclusive contract to supply body parts for the cars of General
Motors. In the 1920s there was a sharp increase in demand
that exceeded all expectations that were held at the time and
Fisher Body used this unforeseen development to hold up
General Motors, amongst others, by increasing the price for
the additional parts produced.
The hold up problem in automobile industry
results from many situations where oneparty can holdup the other for the value of
the commitment between the two.
Hold Up
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Hold Up
In the past few years, large hikes in petrol in India has dampened
the sales of petrol cars, which has pushed companies to introduce
diesel engines and spend more on R&D.
Hold Up
Laws of land, taxation and government regulations sometimes
subvert the value to be delivered. For example: Singur land case
resulted in huge delays and the loss of investment in establishing
and moving to Gujarat. Also The Maharashtra government'sdecision to withdraw VAT has put a question mark on Chakan-
Talegaon auto hub.
JIT is a hold up by the auto industry on the autoancillaryindustry. Under investment in R&D, cartelization etc are reverse
hold up techniques of the auto suppliers
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Slack has been found to be more commonwith bigger companies with some being
Market leaders in their industry. Eg: Theclassic case of Maruti Suzuki in India whosemarket share has fallen to 37.76% now asagainst 44.64% in 2010
Bureaucratization, culture, complexity, size,poor information gathering have been foundto contribute to slack
Threat of Slack
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In the case ofMaruti, slack can be attributed to:
Threat of Slack
(HR,workcu
ltureissue)
The infamouslabor unrest atits Manesarplant in 2012forcing theplant lockoutfor a month
(po
orinformationgathering)
Caught unawarewith growingconsumerinclination towardsdiesel cars with itsentry level petrolcars not performing.
Eg: Estilo, Ritz, Alto
800 proving to be adud
Complacency,narrow viewgiven itsmarketleadership
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Tetra Threat Model
Imitation: Threat second to Substitution
Honda Civic entered the sedan segment in 1988 and since then has been very similar toToyota Corolla; from engine, power and dimensions to interiors, price and safety.
Both have been neck to neck competitors on the best sellers list for long.
They Keep coming up with minor changes/improvements which other imitates soon.
Had one of them not been there it is obvious the other would have enjoyed higher sales.
THEN (1988) NOW (2012)
How Companies dealt with Imitation in Auto Industry
Bajaj (DTSI patent) Though it lost case to TVS, it stopped TVS from using the
technology for 4 years PulsarKeeps upgrading its models frequently and enjoys dominance in Indian two
wheeler market
Maruti went for scale with Omni and captured the Indian market but could not fightback when Tata entered the segment with a similar model Magic.
Marutisretaliation with series of small cars like Wagon R, Alto, Swift, A-Star & Ritzas competition increases for its 800 model.
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Strategies to sustain in global markets
AggregationGlobal car makers target many
countries similar indemographics and markets like
North American, SouthAmerican and European
markets. They launch the same
models in all the countriesbelonging to the same market
simultaneously
Adaptation
Many car companies expandtheir markets by the means ofacquisition and joint ventures.
Examples Renault andMahindra, Renault and Nissan,
Suzuki adapted to Indianmarket by the means of JV withMaruti Udyog Ltd. which is one
of the most successfulautomobile companies in India.
ArbitrageCar companies till recent times
launched their new cars inwestern markets and later inthe Indian market. However
times have changed and nowmany model launches coincide
with the global launches.
Many companies manufacturecars in low cost centers like
India, China and export thesecars to other markets.
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Strategies for Declining/Stagnant Industries
Green Cars NissanLeaf & Chevys Bolt
highly being pushedto create new Image,
same being supportedin markets like US
China seeing newmarkets for large
SUVs to reflect socialstatus. Daimler &Mitsubishi clearly
leading to meet theneeds.
Toyota and Audicame up withautonomous
vehicles, in thewake of the pushby Google on its
driverless car.
Toyota envisagedtheir safety tag bybringing features
like adaptiveheadlights, pre-collision systemand continues to
work onimprovement of
safety features.
Land Rover have astrategy of producing
only large SUVs forwhich they are know
and they stick tothese market.
Rolls Royce onlytargets rich
businessmen and topexecutives and their
selling strategy is stillthe same for their
market
Ford- With one ofthe worst Fuel
efficiency recordstrying to go
green predicting
the future.
Volvo slowlychanging its taglinefrom Luxury cars to
Value cars tocontinue
demandingpremium.
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We have been trying to
avoid these since longIts High time we
ANSWER!
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What? We Sure could have done that.