Bajaj Auto Ltd is the 2nd largest manufacturer of two-wheelers in India, a bead from their preliberalisation place of being market leaders. They are, nevertheless, the largest exporters in this section, which is in portion due to the recent schemes that they have followed, including a displacement towards more R & A ; D intensive investing, and an effort to provide to all sections of the society. In this study, we propose to show a holistic position of the car industry, adverting the assorted challenges and chances available, and Bajaj ‘s function in the same. We start out with looking at Bajaj ‘s current place in the two-wheeler market, and analyse that with regard to the current macro-economic scenario ( in footings of the PEST analysis ) and the industry scenario ( in footings of Porter ‘s Five Forces Model ) . We besides map the alterations in PEST to alterations in the Five Forces and analyse Bajaj ‘s strengths and failings with regard to these. Thereby, we find out whether these alterations can be exploited by Bajaj and give our recommendations as to what their hereafter scheme should be. Our analysis comes up with the decision that the two Wheeler industry, though it is confronting a little downswing today, is still extremely moneymaking and is likely to supply huge future potency for Bajaj, as is apparent from the prognosiss for the industry. Consequently, we make several strategic recommendations which we expect would give Bajaj competitory advantage over other participants, and would enable them to recover their strong clasp on the two-wheeled industry.
Introduction
BAJAJ AUTO came into being on November 29,1945 as M/s Bachraj Trading Corporation private limited. It started off by selling imported two and three Wheeler in India.In 1959, it obtained a licence from Government of India to fabricate and it went public in 1960.In 1970, it rolled out its 100,000th vehicle. In 1977, it managed to bring forth and sell 100,000 vehicle in a individual fiscal twelvemonth. In 1985, it started bring forthing at Waluj near Aurangabad. In 1986, it managed to bring forth and sell 500,000 vehicle in a individual fiscal twelvemonth. In 1995, it rolled out its 10 millionth vehicle and produced and sold 1 million vehicle in a twelvemonth.
The company is headed by Rahul Bajaj who is worth more than US $ 1.5 billion.
Harmonizing to the writer of Globality: viing with Everyone from Everywhere for Everything, Bajaj has grown operation in 50 states by making a line of value -for-money motorcycles targeted to the different penchant of entry- degree purchasers.
New York plus, 304.ISBN-446-17829-2
( Kotler 1994, pp.13-14 ) . Internal Analysis: SWOT Analysis
Failing
Strong hard currency base but has n’t been invested expeditiously.
Not a strong internation trade name despite high export volumes.
Distribution web is non as strong and extended as Hero Honda.
Strength
Highly experient direction.
Extensive R & A ; D focal point.
High public presentation merchandises across all classs.
Number one place in exports.
Collaboration with BAFL for funding.
High economic systems of graduated table and range.
Opportunity
Rising disposable income.
Increase first clip in minibike purchasers
Decline in involvement rate for two Wheeler funding.
Shift from entry degree minibikes to public presentation oriented motorcycles
Inadequate public transit substructure.
Low operating cost.
Menace
Imitation of designs and technological
Inventions by rivals is easy
Foreign participants coming in India, particularly
Low cost Chinese minibikes makers
Worsening borders due to increasing
Competition
Beginning: New Research Report on Companies and Markets, 2008
PEST Analysis: –
POLITICAL-
a-?Investment policy- 100 per cent foreign direct investings ( FDI ) are allowed in companies through the automatic blessing route- ( STRENGTH )
& gt ; International companies can put in India either by picking up a 100 % equity interest or by geting a portion jointly with another company in the car and car accessory sections.
& gt ; Policy aims to advance a globally competitory car industry in India
a-? Import policy ( STRENGTH )
In order to protect the domestic industry and curtail likely imports, the authorities still sets high responsibilities on these imports.
a-? Fiscal ordinances ( STRENGTH )
In order to protect the domestic industry and curtail likely imports, the authorities still sets high responsibilities on these imports.
a-? Excise responsibility -Two-wheelers and cardinal natural stuffs ( STRENGTH/ WEAKNESS )
Changes in responsibility rates have an impact on demand excessively. In 2001-02, the excise responsibility on the & lt ; 75 milliliter engine capacity two Wheelers was lowered. This caused a displacement in consumer penchant from mopeds to bikes.
a-? Value added Tax ( STRENGTH/ WEAKNESS )
State authoritiess charge value added revenue enhancement ( VAT ) or local gross revenues revenue enhancement and other levies. The alteration from local gross revenues revenue enhancement to VAT is expected to hold benefited the two-wheeler industry in the signifier of lower revenue enhancement incidence.
a-?Emission control Torahs ( STRENGTH )
India has one of the most rigorous emanation norms in the universe.
a-?Safety Torahs ( STRENGTH )
Tighter emanation criterions have edged out two shot bikes, which emit high degrees of hydrocarbons and particulates vis-a-vis four-stroke motorcycles.
Economicss:
Interest Ratess ( STRENGTH )
Large houses have a cost advantage due to take down rates of involvement they are charged while using for loans ( lower hazard involved ) .
A batch of capital is needed to come in the industry as initial spendings on investing are high, therefore higher involvement rates would turn out as a deterrence to come in the industry.
Failing: The purchaser needs information on involvement rates as these aid find whether or non it is economical to do a purchase.
Customers are extremely monetary value medium and higher involvement rates may take to higher monetary values if the purchaser needs a loan to do the purchase.
Inflation ( STRENGTH )
Inflation increases cost of purchase for different participants otherwise, depending on the inputs and beginnings, may do it hard for new participants to come in. Inflation may impact the monetary values of different theoretical accounts otherwise, thereby doing some participants better off than the others, as clients may confront costs in exchanging participants, which may once more do it hard for new participants to come in.
Failing: The purchaser is extremely monetary value medium, and alterations in monetary values affect the industry as a whole as purchasers may non be in a place to purchase a more expensive merchandise
If rising prices affects the two Wheeler and four Wheeler industry otherwise, so rising prices could good hold an inauspicious impact on this sector
Economic Prospects ( STRENGTH )
A batch of capital is needed to come in the industry, which may be hard to come by if the economic system is non making good, and comparatively easier to obtain if the economic system is making good. In times of economic roar, there are a big figure of purchasers. Switch overing costs involved in exchanging to replacements. Easy to exchange between providers.
Failing: These purchasers are extremely sensitive to monetary value, but in times of good economic conditions, monetary values may no longer stay of import standards as disposable income of the population besides goes up.
Quickly turning industry, peculiarly due to bright economic chances.
Sociable:
( STRENGTH/WEAKNESS )
Age of the Population As the demographics of India is skewed towards the young person, more and more people are likely to step unknown waies.
Population have a strong/weak sentiment on green issues
More educated people are focussed towards greener issues, which Bajaj has been able to turn to significantly.
Technological:
Well increasing investings in production capacities ( STRENGTH )
Make big houses have a cost or public presentation advantage in your section of the industry?
Is a batch of capital needed to come in your industry?
Establishing partnerships in India and abroad
Is there a big figure of purchasers relative to the figure of houses in the concern
Proficiency in Understanding Technical Drawings, specifications and good conversant in all Global Automotive Standards ( STRENGTH/WEAKNESS )
Make big houses have a cost or public presentation advantage in your section of the industry.
Are there any proprietary merchandise differences in your industry
Does your merchandise or service have any proprietary characteristics which give you lower costs
Increased natural stuff costs
Increasing costs due to concern rhythms, lifting steel and oil monetary values
Recommendations:
1 ) Use extra capacity nowadays to bring forth ungeared scooters for adult females. The female population representing about 50 per cent of our addressable population contributes less so 10 per centum of the entire two-wheeled demand. With urban markets with addressable male population acquiring saturated, participants will hold to sharply aim the adult females population for enlargement.
2 ) Review merchandise mix, focal point on R & A ; D to convey new merchandises in market
aˆ? Demographics show increased youth population
aˆ? Young people manner understanding
3 ) Focus on Rural market: Rural markets presently contribute about 45 per cent of the industry ‘s demand. However, traveling frontward, with urban markets acquiring saturated, analysts expect a rise in demand from rural markets. To turn to the altering kineticss, BAJAJ would hold to fall back to aggressive rural-centric gross revenues and promotional activities. BAJAJ would hold to change selling schemes by concentrating on rural oriented attending on mass media, educative route shows and make aspiration values for the merchandises, and expand their gross revenues distribution web.
aˆ? Introduce low cost theoretical accounts
aˆ? Develop gross revenues distribution web which is presently weaker than other participants
aˆ? For rural young person, present low cost trendy vehicles
4 ) Increase focal point on exports and perforate new markets:
With domestic demand for two-wheelers decelerating down, it would be progressively of import for BAJAJ to look beyond boundaries to partly extenuate the lag. BAJAJ would consequently hold to develop merchandises suited for different markets ; high investings are required for puting up fabricating installations and for constructing a sensible degree of trade name equity. Till now BAJAJ focussed merely on economic system category and developing state markets, but now in those sections it is confronting competition from inexpensive Chinese participants. Therefore need arises to perforate new markets like USA and UK.
Decision
Bajaj car faces stiff competition from the Market leader Honda and closest rival Suzuki. It is because they are non able to make dependable trade name image among their clients. They need to concentrate on developing their merchandises that can give better experience to their consumer.
From the study, it is seen that Bajaj is merely able to somewhat fulfill their costumiers from their merchandises. They need to make a great sense of joy in their clients by offering odd merchandise characteristics and service that will do their clients loyal to the trade name and this will greatly assist Bajaj in increasing its market portion.
Bajaj ‘s merchandise monetary values are in comparing with its prima rivals. The job is that consumers do non believe that Bajaj has that much value and hence prefer to purchase other trade names. Bajaj need to offer more competitory pricing and better publicities to sell their motor rhythm better.
