Bajaj Auto Limited's Business Strategy - From Market Leader to Follower
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Case Code: BSTR344 Case Length: 16 Pages Period: 1990-2009 Pub Date: 2009 Teaching Note: Not Available |
Price: Rs.300 Organization: Bajaj Auto Limited Industry: Automobile Countries: India Themes: Failure Strategy, Revival Strategy, Competitive Strategy |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
About Bajaj Auto
The history of Bajaj Auto dates back to the early 1900s. In 1930, the Bajaj Group was formed by Jamnalal Bajaj (Jamnalal). In 1945, Kamalnayan Bajaj, Jamnalal's elder son, established Bachraj Trading Corporation Limited (BTCL) to import and sell two and three wheelers in India. Till 1959, BTCL was importing two and three wheelers from Italy and selling them in India. In 1959, the company got a license to manufacture scooters in India...
The Transformation
In late 2001, Bajaj Auto started a new advertising campaign to change its image of being only a scooter manufacturer. In the advertisements, Bajaj Auto showed motorcycles instead of scooters as part of a conscious effort to change the company's image. The advertisements showed 'slice of life' situations of 'new age India'...
What Went Wrong?
According to industry experts, Bajaj Auto, in spite of being the oldest manufacturer of two wheelers in India, was not proactive enough to visualize the structural demographic changes happening in India. Till the late 1990s, it was the market leader in the two wheeler industry. However, it did not upgrade its scooter models, nor did it introduce new motorcycle models. Despite the opening up of the Indian economy, and foreign players coming in with their innovative technology, it continued to rely on its old scooter models. However, with the competition growing, it was forced to focus on the motorcycle segment...
Future Outlook
In the first quarter of the financial year 2009-10, the motorcycle unit sales of Bajaj Auto declined by 14 percent compared to the corresponding quarter of the previous year. However, the revenue sales figure grew by 29 percent compared to the fourth quarter of 2008-09. The company attributed this success to the launch of the XCD 135 DTS-Si, the new Pulsar 150 DTS-Si, and the Pulsar 180 DTS-Si since February 2009 (Refer to Exhibit V for Bajaj Auto's Vehicle Models and Exhibit VI for Bajaj Auto's sales performance in the first quarter of 2009-10)...
The Other View
Some analysts, however, said that more than anything, Maghound aimed to salvage Time's own flagship publications, which had been showing flat sales performance since 2006. Analysts debated over the viability of the Maghound business model and raised several issues in this connection...
Exhibits
Exhibit I: Market Share of Leading Players in the Indian Two Wheeler Industry (FY 2008-09)
Exhibit II: Bajaj Auto's Financial Highlights (2007-09)
Exhibit III: Bajaj Auto's Logo
Exhibit IV: Motorcycle Sales and Bajaj Auto's Market Share in the Motorcycle Segment (1993-2009)
Exhibit V: Bajaj Auto's Vehicle Models
Exhibit VI: Bajaj Auto's Sales Performance in the First Quarter of 2009-10
Exhibit VII: Pulsar 220 DTSi
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