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IB091104 ANALYSIS OF HISTORY : HISTORY The company was the world's fourth largest manufacturer of two-wheelers, behind Japan's Honda, Suzuki, and Kawasaki
Bajaj Auto ltd is the flagship company of the Bajaj group.
Founded in 1926 by Jamnalal Bajaj, founder of the group.
The present Chairman of the group, Rahul Bajaj, took charge of the business in 1965
Bajaj entered into a strategic tie-up with Kawasaki in late 1990s to enhance its product line and knowledge up-gradation
By 1997, Bajaj faced tough competition in the domestic market and its market share stood at 40.5%. Under the leadership of Rahul Bajaj, the turnover of Bajaj Auto has gone up from Rs.72 million to Rs.46.16 billion MISSION AND VISION STATEMENT : MISSION AND VISION STATEMENT VISION
To attain World Class Excellency by demonstrating Value added Products to customers
Focus on value based manufacturing
Total elimination of wastes
Pollution free & safe environment
Bajaj Limited is to cater the market needs of transportation by providing 2 wheeler and 3 wheeler vehicles.
BAL has been producing the catalogue products to cater to the changing market requirements. Based on the customer feedback, improvements are being made continuously in the existing products.
To catapult Bajaj Auto as the country‘s largest automobile company THE FALL OF AN ICON : THE FALL OF AN ICON “HAMARA BAJAJ”
Ad campaign helped Bajaj position CHETAK:
“A geared model-scooter occupying near iconic status”.
In December 2009, BAL announced that it had stopped production of Chetak. With this announcement, BAL closed a major chapter in its history. Mr.Rajiv said that it was a history he would like to forget. His company has lived too long on nostalgia... holding on to anything from the past is a sign of weakness Slide 6: "Like Volkswagen Beetle, the product (Bajaj Chetak) had lost its relevance."
"We believe it is not good enough to be better, it is
important to be distinct.”
This Lead to the strategy of…………
DISTINCTLY AHEAD : Internal Factors - Strengths & Weaknesses : Internal Factors - Strengths & Weaknesses Strengths:
Highly experienced management.
Product design and development capabilities.
Extensive R & D focus.
Widespread distribution network.
High performance products across all categories.
Great financial support network (For financing the automobile)
High economies of scale. Slide 10: Weaknesses:
Hasn't employed the excess cash for long.
Still has no established brand to match Hero Honda's Splendor in commuter segment.
Not a global player in spite of huge volumes.
Not a globally recognizable brand (unlike the partner Kawasaki) Slide 11: Opportunities
The growing gearless trendy scooters and scooterette market.
Can use the existing R&D capabilities for new models.
Can invest and grow the life style segments.
Double-digit growth in two-wheeler market.
Untapped market above 180 cc in motorcycles.
More maturity and movement towards higher-end motorcycles Slide 12: Threats
The competition catches- up any new innovation in no time.
Threat of cheap imported motorcycles from China.
Tough competition faced by foreign as well as domestic players. Two Wheeler Industry: An Overview : Two Wheeler Industry: An Overview Market Segmentation : Market Segmentation The high performance segment
The 125 cc segment
The 100 cc segment The Industry Analysis - Five Forces Analysis : The Industry Analysis - Five Forces Analysis Entry Barriers:
Entry barriers are high.
The market runs on high economies of scale .
The need for technical expertise is high.
Owning a strong distribution network is important and is very costly.
Supplier Bargaining Power:
Suppliers of auto components are fragmented and are extremely critical for this industry since most of the component work is outsourced. Proper supply chain management is a costly yet critical need. Slide 17: Buyer's Bargaining Power:
Buyers in automobile market have more choice to choose from and the increasing competition is driving the bargaining power of customers uphill. With more models to choose from in almost all categories, the market forces have empowered the buyers to a large extent.
The industry rivalry is extremely high with any product being matched in a few months by competitor. This instinct of the industry is primarily driven by the technical capabilities acquired over years of gestation under the technical collaboration with international players. Slide 18: Substitutes:There is no perfect substitute to this industry. Also, if there is any substitute to a two-wheeler, Bajaj has presence in it. Cars, which again are a mode of transport, do never directly compete or come in consideration while selecting a two-wheeler, cycles do never even compete with the low entry level moped for even this choice comes at a comparatively higher economic potential. CORE COMPETENCIES : CORE COMPETENCIES Bajaj Auto is one of the oldest and the second largest two wheeler manufacutrer in India.
Mr Bajaj said that any company, which wants to survive, must have quality and service orientation.
With the introduction of DTS-i and DTS-Fi technology, Bajaj Auto Limited has led the way in pioneering technology along with style.
The Profitability Pyramid in Exhibit 4 shows that the margin is very low in the sub-125cc segment but volumes are high. BAL wants to shift users from 100, 115cc segment to 125cc and higher : Volume Profit Margin SUPPLY CHAIN MANAGEMENT : SUPPLY CHAIN MANAGEMENT Vendors
Bajaj Auto has a consolidated base of 180 vendors supplying components to all Bajaj Auto‘s plants.
A large number of vendors are located either near Pune or Aurangabad.
Around 60% by value of Bajaj vehicle is outsourced. Virtually no components are imported & 70% of Bajaj Auto‘s requirements are sourced from within the state of Maharashtra
Bajaj Auto has also begun actively assisting its suppliers in finalizing joint ventures with counterparts in Japan, Italy, Taiwan & Spain. : Key suppliers:
Bajaj auto has approximately 198 suppliers for their raw materials.Some of the key suppliers are:-JBM -Frames
MRF & Dunlop – tires
Minda - Locks & ignition system
Reinder – headlamps & lights
Endurance – brakes, clutch & Cast wheel
Varroc – Plastic parts & Digital Meter
Max auto components – ignition system and switches
Silco cable – wires and cables
Makino industry – Brake shoes . Brake lining, clutch center
Bajaj Auto has a network of 422 dealers and over 1,300 authorized service centers
The company plans to increase the number of dealers to 500 by this financial year
During the financial year 2007-08, the company extended BASS (Bajaj Auto Service Standard) to standardize the workshops of 250 dealers & 50 authorized service centers. Manufacturing locations : Manufacturing locations Akurdi, Pune
This is one of the oldest plant of bajaj auto ltd with production capacity of 0.6 million vehicles/ year.
The plant has been closed in order to equip for four wheeler production
Bajaj Nagar, Waluj Aurangabad
This is second plant with production capacity of 0.86 million/ year.
Products manufactured here are Kristal, XCD and platina and commerial GC series
Chakan Industrial Area, Chakan , Pune
This is the biggest plant of bajaj auto Production Capacity of 1.2 million/ year .
Product manufactured here are pulsar and avenger and commercial Ge series
Pantnagar , Uttarakhand
The most advanced plant of bajaj auto .
It has Capacity of 0.9 million vehicles per year , product manufactured here are platina and XCD. GLOBAL BAJAJ : GLOBAL BAJAJ Bajaj is present in over 50 countries all over the globe
Dominant presence in Africa, Latin America and South Asia with increasing market share every year
891,002 units exported in 2009-10, an increase of over 15 % over the previous year
Total motorcycle exports of 726,115 in 2009-10, growth of 15% over 2008-09
Largest exporter of three wheeled commercial vehicles in the world: 164,887 units exported in 2009-10, a rise of 19% over 2008-09 Recent News on Bajaj Auto : Recent News on Bajaj Auto Bajaj-Renault-Nissan to drive small car (ULC)
Bajaj Auto Ltd has announced that the company may launch a small car in the year 2012 in India.
The Discover has now been positioned to fulfill the former need in a segment where Hero Honda reigns supreme while the Pulsar has established itself in the sporty slot, with monthly sales of over 40,000 units. : THANKS