PORTER’S FIVE FORCES MODELFOR

MARUTI SUZUKI

ByR RAGHAVENDRA ……121568

CONTENT:

INTRODUCTION

PORTER’S 5 FORCES MODEL

GLANCE ON MARUTI ‘S STRATEGIES

A BRIEF INTRODUCTION TO MARUTI SUZUKI

In 1982, Government of India entered into a joint venture with Suzuki motor corporation of Japan

Plant was established at Gurgaon in Haryana

It was the first company in india to mass produce and sell more than a million cars

Maruti Suzuki is the on of the india’s leading automobile manufacturers and the market leader in the car segment

Threat from the new players: Increasing

- Most of the major global players are present in the Indian market; few more are expected to enter.

- Financial Strength assumes importance as high are required for building capacity and maintaining adequacy of working capital.

Rivalry with in the industry: High

- There is keen competition in select segments.(compact and mid size segments).

- New Multinational players may enter the market.

Market strength of suppliers: Low

- A large number of automotive components suppliers

- Automotive players are rationalizing their vendor base to achieve consistency in quality

Market strength of consumers: Increasing

- Increased awareness among consumers has increased expectations. Thus the ability to innovate is critical

- Product differentiation via new features, improved performance and after sales support is critical

- Increased competitive intensity has limited the pricing power of manufactures

Threat from substitutes: Low to Medium

- Consumer preference is changing (Mini cars are being replaced by compact or mid size cars)

- Setting up integrated manufacturing facilities may require higher capital investments than establishing assembly facilities

- India also is likely to increasingly serve as the sourcing base for global automotive companies, and automotive experts are likely to gain increasing importance over the medium term

- Competition is likely to intensify in the SUV segment in India following the launch of new models at competitive price

MAJOR COMPETITORS

MARUTI SRATEGIES

Major Restructuring Exercise:

- The company focused on improving its OPERATIONAL EFFICIENCY by upgrading manufacturing using new manufacturing techniques

- INCREASING CAPACITY, using information technology in manufacturing

- Focus on NEW PRODUCTS at regular intervals

- Venturing into OTHER RELATED BUSINESSES like car finance, insurance, buying and selling of used Maruti cars.

New Strategy:

- UPGRADED its manufacturing facilities to meet the foreign challenge. (CRDI, VVTI engines)

- BROADENED its product portfolio (LUV- ERTIGA)

- EXPANDED its sales and service network to reach all over India

- VENTURED into new associated businesses

- PROMOTIONAL strategies including price cuts, promotional offers, launching campaigns

- VALUE ADDED SERVICES offering to its customers