Bajaj Auto 2010
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Transcript of Bajaj Auto 2010
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Presented By:
Ashutosh Gautam
PGDM-IB
IB091104
ANALYSIS OF
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Founder Jamnala Bajaj
Year Of Establishment 1926
Key People Rahul Bajaj(Chairman)
Madhur Bajaj (Vice-Chairman)
Rajiv Bajaj(Managing Director)
Industry Automobile-Two & three Wheelers
Business Group The Bajaj Group
Presence Distribution network covers 50 countries.
Dominant presence in Sri- Lanka, Columbia,
Guatemala, Peru ,Egypt, Iran and Indonesia
Joint Venture Kawasaki Heavy Industries of Japan, Nissan,
Renault
Rehistered & Head Office Akurdi
Pune-411035
india
Employees 13000
Net income 8,671.16cr(2008-09)
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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
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MISSION AND VISION STATEMENT
VISION To attain World Class Excellency by demonstrating Value added Products
to customers
MISSION
Focus on value based manufacturing Continual Improvement
Total elimination of wastes
Pollution free & safe environment
OBJECTIVE
Bajaj Limited is to cater the market needs of transportation by providing 2wheeler and 3 wheeler vehicles.
BAL has been producing the catalogue products to cater to the changingmarket requirements. Based on the customer feedback, improvements arebeing made continuously in the existing products.
GOAL
To catapult Bajaj Auto as the countrys largest automobile company
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THE FALL OF AN ICON
HAMARA BAJAJ
Ad campaign helped Bajaj position CHETAK:
A geared model-scooter occupying near iconic
status. In January 2006, BAL announced that it had
stopped production of Chetak. With thisannouncement, BAL closed a major chapter in
its history. Mr.Rajiv said that it was a history hewould like to forget. His company has lived toolong on nostalgia... holding on to anything fromthe past is a sign of weakness
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"Like Volkswagen Beetle, the product (Bajaj Chetak) had lost its relevance."
"W e believe it is not good enough to be better, it is
important to be distinct.
This Lead to the strategy of
DISTINCTLY AHEAD
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HAMARA
BAJAJ
INSPIRING
CONFIDENCE
DISTINCTLY
AHEAD
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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 financingthe automobile)
High economies of scale.
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Weaknesses:
Hasn't employed the excess cash for long.
Still has no established brand to match HeroHonda's Splendor in commuter segment.
Not a global player in spite of huge volumes.
Not a globally recognizable brand (unlike thepartner Kawasaki)
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Opportunities
The growing gearless trendy scooters andscooterette market.
Can use the existing R&D capabilities for newmodels.
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
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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 asdomestic players.
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Two Wheeler Industry: An Overview
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Market Segmentation
The high performance segment
The 125 cc segment
The 100 cc segment
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Buyer's Bargaining Power:
Buyers in automobile market have more choice tochoose from and the increasing competition isdriving the bargaining power of customers uphill.With more models to choose from in almost allcategories, the market forces have empowered
the buyers to a large extent.Industry Rivalry:
The industry rivalry is extremely high with anyproduct being matched in a few months by
competitor. This instinct of the industry isprimarily driven by the technical capabilitiesacquired over years of gestation under thetechnical collaboration with international players.
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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, whichagain are a mode of transport, do neverdirectly compete or come in considerationwhile selecting a two-wheeler, cycles do never
even compete with the low entry level mopedfor even this choice comes at a comparativelyhigher economic potential.
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CORE COMPETENCIES
Bajaj Auto is one of the oldest and the second largesttwo 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 pioneeringtechnology along with style.
The Profitability Pyramid in Exhibit 4 shows that themargin is very low in the sub-125cc segment butvolumes are high. BAL wants to shift users from 100,115cc segment to 125cc and higher
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150cc
125cc
30%
100cc
40%
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SUPPLY CHAIN MANAGEMENT
Vendors
Bajaj Auto has a consolidated base of 180 vendorssupplying components to all Bajaj Autos plants.
A large number of vendors are located either nearPune or Aurangabad.
Around 60% by value of Bajaj vehicle is outsourced.Virtually no components are imported & 70% of BajajAutos 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.
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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
Dealers
Bajaj Auto has a network of 422 dealers and over 1,300authorized service centers
The company plans to increase the number of dealers to 500 bythis 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.
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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 GCseries
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 Geseries
Pantnagar , Uttarakhand
The most advanced plant of bajaj auto .
It has Capacity of 0.9 million vehicles per year , product manufactured hereare platina and XCD.
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GLOBAL BAJAJ
Bajaj is present in over 50 countries all over the globe
Dominant presence in Africa, Latin America and SouthAsia with increasing market share every year
891,002 units exported in 2009-10, an increase of over15 % over the previous year
Total motorcycle exports of 726,115 in 2009-10, growthof 15% over 2008-09
Largest exporter of three wheeled commercial vehiclesin the world: 164,887 units exported in 2009-10, a riseof 19% over 2008-09
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Recent News on Bajaj Auto
Bajaj-Renault-Nissan to drive small car (ULC)
Bajaj Auto Ltd has announced that thecompany may launch a small car in the year
2012 in India.
The Discover has now been positioned tofulfill the former need in a segment where
Hero Honda reigns supreme while the Pulsarhas established itself in the sporty slot, withmonthly sales of over 40,000 units.
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