case maruti udoyg ltd
TRANSCRIPT
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Case-Maruti Udoyg Ltd
http://www.marutiudyog.com/index.asp -
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MULS STRATEGY
To go for the mass market with a qualityproduct and a foreign collaboration.
Capture a dominant market share, and
then try to capture additional market
segment through introduction of new
products.
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Maruti has not achieved its Mission
Market Segment (Smaller car middle class
consumer market as per mission statement)
However it catering upper strata society.
Govt. lifted concessions
With rise of price there is no substantial
difference between Maruti, Ambassador and
Premier.
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Unfair Disadvantage
An automotive factory to produce a small, low costcar economically has to meet somefundamental requirements, viz:
Access to lowest cost components and materials
of the best quality in the world Incur minimal logistical costs (Location
disadvantage) Proximity to an engineering infrastructure
A production volume of at least 250-3-0thousand per year to enjoy full economics ofscale
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The Generic Value Chain(Porter)
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What Maruti has achieved
The record of completing the plant in 13
months and achieving 50% share by 1985
is commendable.
Consistent Profit from 1983-84 to 1986-87
Our put: Cars per employee
Maruti (30:1)Indian automobile Industry(12:2)
Suzki (70:1)
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Difficulty in achieving Japanese
Management Style
Page 61
Though Mr O Suzi stronly believes maruti
must be prepared to accept Japanese
management style.but at the stage
of implementation...
Absenteeism was a cause of concern..
Malpractices for reimbursement
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Learn from Japanese Management
style.
More people oriented management style.
Consider workers as long-term Corporate
asset.
Training to Employees
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Holistic Marketing Dimensions
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Competitive Strategy
Should position itself for younger age group,
small family.
Maruti started with 100,000 vehicle capacity.
With 50% capacity utilization it can
become market leader.
Capacity output of other cars-30,000-50,000
units
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Manufacturing Strategy
By adopting a policy of keeping in housemanufacturing limited to 30%, fixed cost islow so breakeven point is low.
Quality and timely supply of componentssince 30% self manufacturing.
By laying emphasis on quality and delivery
by vendors , it is able to reduce inventorylevels (with material at times supplieddirectly to shops just-in-time)
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Foreign Collaboration
Rapid Indigenization of components
More no. of ancillary manufacturing units for
making quality and critical components
Low Productivity of Indian Labor
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Impact of Maruti on Competitors
Marutis target segment Household user
segment: Competitors- Institutional Buyers
Now more Competitors: Hyundai
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Future Strategy
In India purchasing power of small luxury car is very limited
Should follow strategies of South Korea and Taiwan: (Local
Demand less)
Should follow strategy of export-led growth
Sellers to Buyers Market
Should take measures to reduce cost
Complete indigenization to get out of the effects of import duties.
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Future Strategy
Managing Human Resources
Redefining automobile policy in terms of
cost of importing components.
Is the car a vehicle of development of
countrys economy?
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Suzuki-Nissan seek port for carsBusiness
Standard: October 11, 2006 Car manufacturer Maruti Suzuki is planning to team up with
multinational automobile major Nissan Motor Company for developing
a greenfield dedicated port to ship out vehicles.
The cost of a greenfield facility will go up to Rs 3,500 crore as port
operators will have to dredge up to 15 metres depth for a shipping
channel. The cost may come down if a major port extends a terminal to
these players, port experts said. The coming together of Maruti Suzuki and Nissan makes sense as the
latter has a tie-up with Maruti for design of cars in India. A common
automobile port will cut down the cost for both players, At present, automobile majors are shipping their cars primarily from
Mumbai and Chennai.
Mahapatra said the idea behind such a port was to cut down the
logistics cost and streamline the export operations of these companies.
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Thank You
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