Maruti Suzuki India Limited - Competitive Strategies of the Market Leader
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Case Code: BSTR351 Case Length: 19 Pages Period: 1991-2009 Pub Date: 2009 Teaching Note: Not Available |
Price: Rs.400 Organization: Maruti Suzuki Industry: Automobile Countries: India Themes: Competitive Strategies, Differentiation |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
Deregulation of the Industry
The Indian automobile industry was regulated by the government till 1990. Indian consumers had little choice as there were only a few players in the industry including Maruti, Hindustan Motors, and Premier Automobiles. In 1991, several sectors of the Indian economy including the automobile industry were delicensed with the announcement of the 'New Industrial Policy'. Over the years, the norms of foreign investment in the automobile industry and import of technology were also eased......
Competitive Strategies
In an effort to counter competition from local and foreign players, Maruti started restructuring its operations. The continuous decline in market share and sales forced the company to rethink its strategy and formulate a new competitive strategy. Maruti upgraded its manufacturing facilities to meet the foreign challenge with its claims of high-end technology. It broadened its product portfolio and expanded its sales and service network to reach all over India...
The Result
Within a year of its launch of its Challenge 50 plan, Maruti's restructuring efforts started reflecting in its financial performance. In the financial year 2003-04, Maruti reported a 25.2 percent increase in net sales to Rs 90.81 billion as compared to Rs 72.53 billion in the preceding fiscal year.
The net profit of the company for 2003-04 also increased from Rs 1.46 billion in fiscal 2002-03 to Rs 5.42 billion in fiscal 2003-04. The company was able to increase its net profit riding on the high sales growth of Alto, which increased by over 130 per cent in fiscal 2003-04 as compared to fiscal 2002-03. (Refer Table II for Maruti's Net Sales and Profit after Tax)...
Looking Ahead
Maruti announced plans to invest Rs 18 billion in the fiscal 2009-10 on launching new models and upgrading plants. In July 2009, the company launched a new version of Grand Vitara. Maruti would also launch a Multi-utility vehicle (MUV) in October 2009. The MUV would be built on the Maruti Versa platform...
Exhibits
Exhibit I: Awards and Accolades Received by Maruti over the Years (1987-2009)
Exhibit II: A Note on Indian Passenger Car Market
Exhibit III: Maruti's Product Portfolio (July 2009)
Exhibit IV: Fuel Efficiency of Maruti's Models
Exhibit V: Maruti's Financial Performance
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