LEVELS OF STRATEGIC MANAGEMENT OF

COMPANY.

1. CORPORATE STRATEGY :-

This company profile is a premium company information product offering an unmatched depth and breadth of content. It analyzes the strategic positioning of the company - how the company has evolved and how it has been performing over the years.

Sectional Highlights

- Structure of the organization, partnerships, mergers & acquisitions and recent developments have been examined

- Business segments of the company have been explored alongwith analysis of key products and services

CORPORAT

E STRATEGY

BUSINESS STRATEG

Y

FUNCTIONAL STRATEGY

- SWOT Analysis highlights the weaknesses of the company and the threats to which it is exposed; the strengths of the company and the way the company has positioned itself to take advantage of the opportunities

- Business and marketing strategies boosting earnings, brand value and competitive edge have been discussed

- Key financial indicators have been analyzed

- Competitive positioning of the company has been evaluated in terms of sales, profitability and stock performance, as compared to its competitors

Key Benefits

- Provides input for strategic business planning

- Targets business opportunities & risks

- Exploits competitive intelligence

Target Audience

- Investment Managers

- Venture Capitalists

- Management Consultants

- Research Companies

- Other Industry Professionals

Key Topics Covered:

1. Company Backgrounder

2. Business Focus

3. Corporate Overview

4. Strategic Analysis

5. Financial Analysis

6. Competitor Analysis

7. Company

Abstract: From the 1960s, Yamaha Motor Corporation started diversifying into other businesses to reduce the company's dependence on its motorcycle business. The company's management was confident that the diversification strategies being followed would be beneficial to the company in the long run. Several analysts were also of the opinion that the company was correct in diversifying into other businesses. But others were sceptical about Yamaha's diversification strategies and opined that the company should have stuck to its core business of manufacturing motorcycles.

Pedagogical Objectives:

To understand the evolution of Yamaha over the years and analyse the rationale behind the company's diversification into businesses other than motorcycles

To discuss whether Yamaha was right in diversifying into other businesses.

Keywords : Yamaha Motor Corporation; Diversification strategies; Asian financial crisis; Motorcycle industry; Diversification Strategies Case Study; Outboard industry; Automobile engines; Power products; Aeronautical operations; Intelligent machinery technology; Biotechnology; Semi-conductor cycle

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2. BUSINESS STRATEGY:-

A company’s strategy is its plans or policies to achieve its objectives

(Oxford Mini School Dictionary, 2002: 630 PT Yamaha Motor Kencana

Indonesia has some main corporate objectives such as to gain more market

share and to become the market leader in the Indonesian motorcycle industry.

One of Yamaha’s strategies to achieve the goals is to launch a new product

called Yamaha Mio, which is an automatic scooter. Yamaha Mio is not the

first automatic scooter launched in Indonesia. In 1999, Kymco already

launched automatic scooter in Indonesia, but the sales was not satisfactory. In

an interview,

The CEO of Bajaj Motorcycle Indonesia, claimed that Kymco automatic

scooters are not really successful because of its big body, and because the tire

ring’s size has too small diameters. The ring diameter, which was 12-inch, is

not suitable for the road condition of Indonesia, where there are many holes

and mounts. The tire can easily stuck into potholes, so the Indonesian market

do not prefer to buy Kymco scooters. Before Yamaha Mio, Yamaha Motors

had launched Yamaha Nouvo in 2002, also an automatic scooter, but the sales

of the product was not very satisfactory because of the big size of the body.

Indonesian consumers do not like motorcycle with big body because it will

block them to move easily in crowded traffic. To fill the gap in the automatic

scooter market, Yamaha released Yamaha Mio. Yamaha Mio is targeted to

woman and the scooter has small body with 14-inch diameters of tire

4 ring, so the motorcycle can move easily in crowded traffic and will not be

easily stuck into holes. So, the main features of Yamaha Mio attract the

Indonesian market, and the sales starts to increase since the first time it is

launched and conquers 70.6% market share in automatic scooter market by

March 2007 .

Yamaha Mio has successfully increased Yamaha Motor’s sales from the

second to the first place on March 2007. Honda, which always been on top,

sold 151.127 units of motorcycle, while Yamaha could sell 160.235 units of

motorcycle

3. FUNCTIONAL STRATEGY:-

a) MARKETING STRATEGY:-

Yamaha Motors targeting 10 percent market share in India

Kolkata, Dec 16 (IANS) World’s second Largest motorcycle manufacturer Yamaha Motors has set a target to increase its market share to 10 percent in India by the next two-three years, a top official said here Tuesday. “We’re not satisfied with our present Indian market share of three percent. We are working hard in terms of technological upgradation, bringing out new variants and increasing dealership to reach the target of 10 percent,” Yutaka Terada, group head (dealer development and planning and marketing activities) Yamaha Motors India Sales Ltd, told reporters.

He was here to inaugurate Yamaha’s first company-owned showroom in the city. Countrywide, this is Yamaha’s fifth such showroom.

Now the company has around 20 percent market share internationally.

“We have 430 dealers in India, out of which 100 were added this year only,” he said, adding: “We are now concentrating on strengthening our marketing strategy.”

This year, the company has started an auto-finance arm Bussan Auto Finance along with Axis Bank and Mitsui and Co. Ltd.

The joint venture company is financing customers at an interest rate of 13 percent.

The company sold around 120,000 bikes in India in 2007.

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b) PRICE STRATEGY :- Pricing prowess. YM has astutely used

pricing to boost revenues. It has effected price increases in popular

product segments, where the company is well-entrenched, while holding

the price line in other segments.

c) PRODUCTION STRATEGY :-

Yamaha Transferring Worldwide ATV Production to United States by 2013CYPRESS, Calif., Feb. 12 /PRNewswire/ -- Yamaha Motor Co., Ltd. (YMC) today announced plans to transfer its all-terrain vehicle (ATV) production currently in Japan to the United States.  With this transfer, the production capacity of YMC's Japanese subsidiary – Yamaha Motor Powered Products Co., Ltd. (YMPC) – will be integrated into YMC's U.S. subsidiary based in Newnan, Georgia – Yamaha Motor Manufacturing Corporation of America (YMMC).The move, currently in the planning stages, is scheduled to begin in early 2011 and is intended to optimize manufacturing capacity and improve productivity.  The transfer will facilitate the consolidation of both production management and manufacturing technologies, as well as afford an increased level of responsiveness to market needs by maximizing production in the United States, the country with the largest demand for ATVs.  The production transfer to Newnan, Georgia, is expected to be complete by 2013. "We are pleased to have this additional ATV production transitioning to YMMC in Newnan, Georgia," said Mike Martinez, General Manager of ATV & SxS Operations, Yamaha Motor Corp., U.S.A.  "We expect this transition to have a positive impact on the local economic community and provide worldwide recognition for our state-of-the-art facility and its ability to produce durable and reliable off-road vehicles."YMMC currently manufactures ATVs ranging in engine displacement from 250cc to 421cc.  The production transfer will increase the facility's production lineup to include a wide range of Yamaha ATVs up to models with large 700cc engines. This transfer allows YMPC to concentrate on manufacturing generators, multi-purpose engines and golf cars, while YMMC will also continue to manufacture golf cars, personal watercraft and Side-by-Side vehicles.About Yamaha Motor Corp., U.S.A.Yamaha Motor Corporation, U.S.A., (YMUS), a leader in the motorsports market, makes the toughest, most capable and versatile ATV and Side-by-Side vehicles. The company's ever-expanding product offerings also include motorcycles, outboard motors, personal watercraft, snowmobiles, boats, outdoor power equipment, race kart engines, accessories, apparel and much more. YMUS products are sold through a nationwide network of dealers in the United States.

Headquartered in Cypress, Calif., since its incorporation in 1976, Yamaha Motor also has facilities in Wisconsin and Georgia, as well as factory operations in Tennessee and Georgia.

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KEY STEPS TOWARDS STRATEGIC MANAGEMENT

OF COMPANY.

VISION:- The Yamaha Vision (XZ550) was a motorcycle produced in

approximately 1982-1983, though a smaller XZ400 model was available in

some markets until at least 1987. It offered innovative technology in its motor

and bold Advocacy:-Campaign for change with colleagues, suppliers,

customers, peers, civil society and consumers.

MISSION:-

Vision

We consistently deliver best-fit global IT services & solutions to improve client’s competitive advantage.

VISION

MISSION OBJECTIV

ES

GOALS

VALUES

STRATEGIES

PROGRAMMES

Mission

We are committed as a world-class team to provide total IT solutions, creating value and surpassing client’s expectations.

Core Values

Commitment Innovation Teamwork Transparency Knowledge Integrity

OBJECTIVES:-

1. Expanding the Motorcycle Business and Other Businesses

In NEXT50-Phase II, we have been implementing our basic strategy of balancing value, profitability, and growth in a bid to make Yamaha an exclusive

brand in the global marketplace. Following is an outline of how we have positioned each business based on this policy.

In the motorcycle business in Asia and the automotive engine business, we are working to maximize growth opportunities, while in the motorcycle business in

North America and Europe, the outboard motor business, and the ATV business, we are focused on attaining high profitability. Meanwhile, in the Intelligent Machinery (industrial robot) business, we aim to maintain high profitability and expand the scale of operations. In the motorcycle and boat

businesses in Japan and the PAS electro-hybrid bicycle business, our top priority is stabilizing business infrastructures and improving profitability.

During our previous medium-term management plan, NEXT50, we cultivated a profitable corporate structure. All of our businesses will build on this structure to meet and surpass projected results. We must enhance the competitiveness of our core motorcycle business in particular if we are to achieve further growth.To that end, in mature markets such as Europe and the United States, we will

focus on creating high added value and securing a large market share. Our approach involves strengthening product competitiveness, promoting high value-added marketing to differentiate Yamaha from its competitors, and

enhancing area marketing to improve regional market share.In the ASEAN region and other growth markets, we will expand the scale and

profitability of business by aggressively introducing new products and promoting a branding strategy, and by cutting costs and improving the

production system in line with increased production capacity.In India, China, and Brazil, where our profitability and market share remain

relatively low, we will further strengthen the manufacturing and sales foundation in order to improve profitability.

In Japan, we are facing a generally harsh environment, in spite of some growth in the sports bike category that reflects the positive effects of deregulation. We

will stabilize the foundations of our domestic business through marketing activities that get back to the basics; for example, creating demand and opening

up markets.

2. CSR (Corporate Social Responsibility) Activities

In recent years, we have seen severe public condemnation of scandals that have occurred in numerous Japanese companies. Some of these corporations have

nearly been driven out of business. We at Yamaha Motor, however, have been committed to environmental preservation and corporate compliance since the

company's establishment, when in our corporate pledge we promised "to contribute to the good of our country and society." Carrying on this tradition,

we formally mapped out our CSR program in 2005. This is the first year in which we will pursue the activities specified in that roadmap.

We will place a particular emphasis on fundamentals such as product quality, the environment, employment, personnel management and industrial relations, compliance, and risk management. In each field, we will identify issues and set

goals and schedules to lay the groundwork for consistent improvements in performance.

Starting from this year, we will develop CSR into a global initiative. In the past, CSR activities have been centered on Yamaha Motor Company Limited and its affiliated companies in Japan, but beginning in 2006, we will implement these

activities worldwide, pursuing different tasks and objectives tailored to the conditions and requirements of each locality.

3. Developing Multi-talented, Globally-oriented Personnel

Ultimately, it is our people who will determine whether we succeed in achieving the two key priorities outlined above. With this in mind, we will continue to

actively develop human resources in 2006.Although more than 80% of our consolidated net sales are derived from

overseas markets, we still have a shortage of capable personnel in our global operations. We recognize our weaknesses in long-term personnel development, and are committed to developing systems to address the shortcomings this year.Specifically, to ensure that each and every employee has a broad range of skills

and the ability to handle global operations well enough to meet Yamaha Motor's high standards, we will systematically train young talent and promote more

advanced career development for experienced staff. As a measure to enhance

global perspectives in our workforce, we will reintroduce the overseas study system. We will also take full advantage of the skills and experience of older

employees, for example by gradually extending the mandatory retirement age to 65 in keeping with the revised "Law Concerning Stabilization of Employment of

Older Persons," which was passed in June 2005 and will be enacted in April 2006.

Becoming an Excellent Global Company

Since the launch of the original "NEXT50" medium-term management plan, profitability has been steadily entrenched into Yamaha Motor's corporate

structure. Unfortunately, we are slightly behind in our drive to reach one other crucial objective specified in the "NEXT50" plan: attaining a recurring profit

ratio of 5% at an exchange rate of 100 yen against the U.S. dollar and the euro. We must achieve this objective as soon as possible and set the stage for further growth

if we are to survive in the age of global mega-competition.This January, we are inaugurating a second motorcycle manufacturing company in Indonesia, where our production capacity will increase to 1.8 million units by 2007, and also a motorcycle-parts manufacturing company in Vietnam. In May,

our new parts center in Fukuroi will begin full-scale operation. Construction of an experimental building at our headquarters will be completed in July, and a

biotechnology plant will be completed in October. With these developments, we can and must move forward.

In the racing world, where Yamaha Motor competes as a corporate activity, only the strongest can win. Participating teams have to overcome any problems that arise by the morning of the event, no matter what. Nobody can make excuses

about some difficulty or shortage of support staff. We are determined to take on management tasks with the same sense of urgency.

"Excellent Companies" with a recurring profit ratio exceeding 10% always operate in crisis mode, even when -- especially when -- there is no crisis. We will

quickly transform Yamaha Motor into a truly excellent Japanese company - and a truly excellent global company - by addressing and overcoming the management

issues laid out in NEXT50-Phase II

GOALS:-

Yamaha Motor Europe is happy to announce that David Philippaerts and

Gautier Paulin will again represent the factory Yamaha Monster Energy

Motocross Team for the 2011 FIM MX-GP World Championship.

The Italian and Frenchman will extend their current association with the

Italian set-up into next year’s campaign. Philippaerts will be aiming to

recapture the MX1-GP title he secured in his first season with Yamaha in

2008 while Paulin is slated to attempt the MX2-GP series in which he was

primed to be a major protagonist this term until an unfortunate pre-season

leg break caused him to miss the first four rounds.

Philippaerts gave the new and innovative rear-slating YZ450FM its debut

Grand Prix win last month in France and is currently third in the world

championship table with four podium appearances from the ten rounds run so

far. The 25 year old has also grabbed two pole positions. Paulin has been

building up to speed since his return at the Catalan round in mid-May and

grabbed his first silverware (and for the team since they last contested the

MX2-GP category in 2005) with third position on the YZ250FM last week in

Sweden.

“2011 will be my fourth year with Yamaha and I am happy to have made a

new deal,” said Philippaerts. “We have been working hard this season to get

the new bike up to its best level and we have had some very good races and

some moments of bad luck on the way. The important thing for me is that I

feel at home with the team. They want to win as much as I do and the support

is there every week for me to be able to do my best. I think we will have an

even better year in 2011.”

"The accident at the start of season was a big shame because we had all been

working hard to be in the best shape but we are returning now to the level we

originally planned for,” commented Paulin. “I am pleased we have reached a

deal for 2011 and I know I am in the best place to achieve what I want and

reach the same goals that Yamaha and Monster Energy are also pushing for."

“We are really happy that David and Gautier will again be among our main

title contenders for 2011,” commented Yamaha Motor Europe Racing

Manager Laurens KleinKoerkamp. “They are two professional and pleasant

individuals and are doing a good job in 2010 with the new machinery and

some difficult circumstances in the case of Gautier who was so unlucky with

his injury. We will be in the second year of developing the YZ450FM and the

YZ250FM and to have riders who are already down the road with this

technology is of course an advantage.”

“It is clear that signing these two very good riders for another year is

important and positive for the team and Yamaha,” said Rinaldi Group

Principal Michele Rinaldi. “David will enter another year with what is now

still a new bike, and Gautier will be at the form and speed that he is reaching

at this moment. I would also like to thank Yamaha Motor Europe and our

sponsors, especially Monster Energy, for their excellent support and for

allowing our project and team to go on at the highest level.”

VALUES:-

a. PERFORMANCE

We are passionate about winning. We compete in a tough but fair way.

We are ambitious, hardworking. We are prepared to take risks and act

with speed.

b. QUALITY

We put quality and safety at the heart

c. RESPECT

We genuinely care for YM business and colleagues. We listen,

understand and respond. We are open, friendly and welcoming. We

embrace new ideas and diverse customs and cultures.

d. INTEGRITY

We always strive to do the right thing. Honesty, openness and being

straightforward characterise the way we do business. We have clear

principles and do what we say we will do.

. STRATEGIES:-

The new medium-term management plan features a basic strategy built on the creation of value which differentiates Yamaha from

other brands in the market. As it develops this exclusive value, Yamaha Motor will continue its profit-oriented approach to

establishing a stable corporate foundation, while moving aggressively to maximize opportunities for business growth. Thus,

the Company aims at attaining both further growth and profitability.

Specifically, the Company will promote brand and marketing strategies designed to create value that differentiates Yamaha, in

addition to enhancing that value based on its proprietary technologies. Through these activities, the Company aims to create

and expand value to the customer.

In terms of continuing its profit-oriented approach, the Company plans to expand profits for the motorcycle, outboard motor and ATV businesses in Europe and the U.S., and the IM business. It also intends to continue cost reduction by promoting the system-supplier system, among other measures, and to implement high-

value-added marketing.

In maximizing opportunities for business growth, Yamaha Motor will expand the motorcycle business in the ASEAN region, where further increases in demand are expected. The Company will also strive to restructure the business foundation in Brazil, India and China, while developing the Russian market. Furthermore, the Company will take on the challenge of entering new business

domains, including biotechnology and electric vehicles.

Regarding plant and equipment investment, the Company plans to focus on value, growth and profitable business operations. The

plan calls for 210 billion yen in investments over the new medium-term, about a 60% increase from the previous medium-term.

In order to ensure sustainable growth, Yamaha Motor will also work to fulfill its corporate social responsibilities, enhance

corporate governance and vitalize its personnel and organizations.

Thus, the Company is determined to meet the expectations of stakeholders, delivering both value and a value system that can

really touch people's hearts.

Strategies of yamah motors

1. Motorcycle BusinessIn order to make the motorcycle business the leading force for

boosting corporate sales and profits, Yamaha Motor will focus on Asian operations during the new medium-term, aggressively

investing to expand production capacity, while introducing new models, and establishing a local parts company to raise the in-

house production ratio in the region. Meanwhile, in Europe and the United States, the Company will invest in launching new

models and streamlining business operations. Regarding overall motorcycle operations, the Company will invest in strengthening its product development system and environmental technologies.Specifically, the Company plans to increase the number of new model launches by about 25% during the new medium-term. Production capacity in the ASEAN region will increase by 1.6

million units, to 3 million. Moreover, Yamaha Motor will promote brand and marketing strategies to support sales centering in Europe, Asia and the United States. Thus, the Company will effectively combine the production and strategic marketing aspects of the business to further expand sales and profits.

2. Outboard Motor BusinessIn the outboard motor business, Yamaha Motor will strive to

maintain its world-leading position and high-profitability structure. To this end, the Company will promote the development and expand the lineup of environmentally friendly 4-stroke large

outboard motors. In addition, it will continue to strengthen its collaboration with boat builders. To maintain and increase market

share in developing countries, the Company will introduce 4-stroke models and enhance service activities that pinpoint and

fulfill local market needs.In a bid to further expand the business, the Company will also

focus on the related rigging business, including sales of parts and accessories used for mounting outboard motors on boats.

3. ATV (All-Terrain Vehicle)BusinessIn the ATV business, Yamaha Motor aims to boost profitability in a maturing market, while seeking further growth by developing a new market segment. The Company will focus on products in the

sport and utility categories in North America. In Europe and other regions, it will concentrate on expanding sales.

Meanwhile, the all-new side-by-side vehicle the Company introduced last year has been well received in the market, and the Company intends to further expand sales and profit in this new

product segment.

4. IM (Intelligent Machinery) BusinessIn the IM business segment, Yamaha Motor aims to maintain current high profitability and further expand the scope of the

business. To this end, the Company will strengthen its lineup of best-in-class medium-speed surface mounters, while developing high-speed modular models to exploit the demand for the faster

mounters.The Company will also solidify its solutions support for customers' productivity improvement. It will work to enhance product appeal while reducing costs for existing models. In addition, the Company

will establish a Technical Center to support enhanced sales and service activities. Through these efforts, Yamaha Motor expects to

increase sales to 50 billion yen in 2007.

5. New Businesses1)

Biotechnology BusinessYamaha Motor successfully developed an effective, high-

concentration mass culture of a diatom - Chaetoceros calcitrans - in 2002, in a joint research project with Nisshin OlliO, Ltd.

Chaetoceros calcitrans is known as an aqua-culture supplement - a rare feed for marine life. This product has been marketed on a

test basis since 2003.In 2005, Yamaha Motor will complete construction of a research

center in Fukuroi City, Shizuoka, where it will maximize its cultivation know-how in the research and development of

functional materials useful in the areas of agriculture, forestry, food, cosmetics, and health and medical science. In 2006, the Company will construct a plant for mass production of the

functional materials. Through these efforts, Yamaha Motor will grow the new business to annual sales of 30 billion yen in 10

years.

2)

EV (Electric Vehicle) BusinessAs a leader in the motorcycle industry, Yamaha Motor continues

the development of three electric vehicle technologies: pure electric vehicles, hybrid vehicles, and fuel-cell vehicles.

In the new medium-term, the Company will expedite and expand its efforts for early commercialization. To this end, the Company test-released a self-propelled bicycle incorporating power-assist technology in China. In conjunction with this test marketing, the Company is studying the feasibility of developing the business in

the seaboard cities, where sales of new motorcycles have been prohibited by legal restrictions on issuing license plates for the

vehicles.In the field of pure electric vehicles, the Company plans to

introduce second-generation models, which will offer extended cruising distance and improved performance at lower cost. Meanwhile, the Company will also expedite its research and

development efforts to commercialize hybrid and fuel cell vehicles during the new medium-term

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KEYS TOWARDS

BUSINESS

STRATEGY OF

COMPANY.

Internally Affecting The organisation

Externally affecting the organisation

SBUILD UP

WREDUCE/RESOLVE

OEXPLOIT

TAVIOD

SWOT ANANLYSIS OF COMPANY:-

1. STRENGTHS:

Strong brand names are the main strength of the company.

Rich product mix.

2. WEAKNESSES:

Lack of launch of new brands

3. OPPORTUNITIES:

The Indian market and more specifically the urban areas where the

penetration of YM is low can be developed as a future market through

affordability and availability.

Using information and technology to bring efficiency in logistics and

distribution.

4. THREATS:

Stiff competition in Confectionery segment.

Bcg matrix

start for convenience. TVS WEGO is a multi-user, family-friendly and sleek metal bodied

scooter that strikes a perfect balance between stability and maneuverability, power and mileage,

and sturdiness and ease, making it a delight to ride for any category of users. The company hopes

to add around 15% to 20% to its monthly sales, once these new products are made available in

the market Star Ungeared scootar Question mark (Flame bike and newly launched ungeared scooter) Cash cow ( Mopeds) Dog (Motorcycles)

Cash cow:- tvs moped is the cash cow of tvs motors ,because it covers 82 % market share in the

moped sector The success of this product can be attributable to two things : price and utility. At a low

price one could have something better than a cycle and also which was simple to handle and no

hassles. The brand became favorites for small traders and at one point of time an entry level

category for teenagers

Star: This category represents the high market share and high industry growth. SBU’s in this category require large investment to defend their position. SBU will turn as cash cow after some

time Ungeared scooters grew at 12% as compared to 16% in the previous year, increasing its category share to 14%.that’s why it will come in star category Dogs: SBU’s in this category generates less cash for the company as it operates in low growth

and low market share. Usually companies will not invest in this category and try to liquidate or divest.

In the motorcycle category, the Economy segment suffered maximum decline of 15%, as this

segment is most sensitive to retail finance. The Executive segment increased by 15%aided by

launch of new products by leading manufacturers. Premium segment recorded growth of 7% over

the previous year. The category share of motorcycles came down marginally from 82% in 2007-08 to

81% in 2008-09.so motorcycle will come in dogs category

Question Mark: This category represents high market growth and low market share. SBU’s in

this category has two options, either to invest heavily and bring them to star position or divest /

liquidate from that position. The refresh of TVS Flame and a new motorcycle planned for launch

in the second half of 2009-10 will help the Company to leverage this opportunity. The Company

has a strong presence in the sub-100cc ungeared scooter segment. However, the Company is

currently absent in the large scooter format, which accounts for 70% of the total ungeared

scooters. The Company plans to launch a new product during the second half of 2009-10 to

target these customers. Emergence of electric scooters, especially in the context of rising fuel

prices, provides a new avenue of growth. So these products will come under question mark

category