BCG Analysis of Pak Suzuki Motor Company Ltd.

Manufacturing Strategies & Technologies
By Saud Zafar Usmani & Waqas Ali Tunio

Suzuki Jimny 4x4 mountaining height of 5800ft @ Gorakh Hill, Dadu – Pkistan Photo By Waqas Ali Tunio (www.flickr.com/photos/wtunio)
This assignment features BCG Analysis of Pak Suzuki Motor Company Limited cars in Pakistan.

BCG Analysis of Pak Suzuki Motor Company Ltd.

By Saud Zafar Usmani and Waqas Ali Tunio

BCG Analysis of Pak Suzuki Motor Company Limited
High Market Growth

Stars
Jimny

Question Marks
Swift

Cash Cows
Mehran, Alto, Cultus, Ravi, Bolan
High Market Share

Dogs
Liana, APV
Low

Low

BCG Analysis or BCG Matrix

Question Mark(s)

Star(s)  Jimny

Cash Cow(s)      Mehran Alto Cultus Ravi Bolan  

Dog(s) Liana APV

Profit/ Revenue

Swift

Introduction

Growth

Maturity

Decline

Time BCG Positions throughout Product Life-Cycle 2
Institute of Manufacturing Engineering & Management, PNEC (NUST), Karachi

BCG Analysis of Pak Suzuki Motor Company Ltd.

By Saud Zafar Usmani and Waqas Ali Tunio

BCG Analysis
Stars
This is one of the cheapest new 4x4s on sale and it's capable off-road thanks to its low-ratio 'box. The warranty is good, too. She has high quality materials used in its interior and exterior body parts, something which was not there in Suzuki Potohar. Though, it might not seem a good deal to spend 2millions to buy just a 4 seater 4X4 Mini Jeep type Jeep, but it comes with 1328c engine, what makes it top and only 4X4 Jeep in Pakistan. It is a STAR, because all government and NGOs and those private organizations which have setup in small cities/towns/villages, like in Central Punjab or Interior Sindh are blindly purchasing Jimny on contract, including banking sector, as it gives them license to go off roads when needed, and can handle any road situation. To make it cash cow Pak Suzuki need to invest heavily in order to assemble it locally.

Cash Cows
Alto, Mehran, Cultus, Ravi, Bolan are all cash cows. They have the highest sales in their category. All these vehicles have reached a point in their development cycle where the customers are satisfied with the current status of the product. All vehicles which fall in this category are fuel efficient and have low maintenance cost – in short affordable. Mehran is attracting those people who have salaries within 20,000 to 30,000 per month. The youngsters also prefer the Mehran because of its size and economical price. Small business people also prefer MEHRAN because of its low maintenance cost. Mehran also attracts people who move from bike to the cars. Mehran is cheapest and first choice of all people having low income. It has highest sales in Pakistan than any other car in all categories. Alto is good choice because of its spare parts availability and 1000cc engine. All these cars compete in their category and are successful due to following     Good availability of spare parts. Durability Cost effectiveness Suits Pakistani culture and environment.

Suzuki should now focus on improving the quality of these vehicles without compromising on cost. After sales services also have some room for improvement. Ravi is for the people doing small business especially cargo services like home delivery services, TCS and market delivery. All people doing business of these types are loyal customers to Ravi. Although the SHEHZORE has captured some of its market share but still Ravi is much famous and market leader in its type. To maintain status-quo Suzuki should focus on improving the quality, innovation so that when these cash cows reach a maturity level and their sales start to decline; they must be able to come up with a reborn version of same car to maintain/regain market share.

3

Institute of Manufacturing Engineering & Management, PNEC (NUST), Karachi

BCG Analysis of Pak Suzuki Motor Company Ltd.

By Saud Zafar Usmani and Waqas Ali Tunio

Dogs
Liana is a luxurious and highest price car of Pak Suzuki. It was built to compete with Pak Suzuki’s biggest competitors like Toyota and Honda. Liana has the same features which are available in Corolla and Civic but still it couldn’t make its market as compare to both these cars. Liana has replaced the Pak Suzuki’s BALENO in 2005-06, since Pak Suzuki tried several ways to establish its position but failed to do so. It was made for a people of high income group but due to high prices in which the market was already giving names like corolla and civic who has their strong brand name and customer loyalty, liana was failed to capture the market. Liana and APV are the products which lie in the DOGs category and should be killed and discontinued. The problem with LIANA is that it is not competing with its class like Honda City and Toyota Corolla. Following limitation in Liana make it less preferred car than city or corolla in its category.       The looks are not good. The drive is not as comfortable as city or corolla. Liana has design problems in its engine. The engine is underpowered . Liana’s engine is less resistant to moisture and often fails in rains. The engines of City and corolla are technologically superior as both possess “Variable Valve Timing Electronic Control” technology, Whereas Liana has simple EFI engine. The resale value of Liana is low. Liana is a total failure and has failed to compete in its class. This is evident from the number of sales of Liana as compared to city and Corolla.

APV is not competing well in its category. The prices of APV and its spare parts availability is not up to the mark. The local manufacturers of spare parts are not interested to develop APVs spare parts due to low sale volumes of APV. Secondly, Pak Suzuki is also not interested to develop local manufacturing and assembly of APV. All these factors contribute to the low sales and low market growth of APV.

Question Marks
Due to failure of Liana Pak Suzuki introduced another 1300cc car in Jan 2009. Swift has all the latest features like power steering, central locking, Auto Transmission and the ABS. All the 1300cc cars in Pakistan have price range of 1300000 to 1400000, while Swift was introduced at 999000 and recently it was increased at 1049000. It has still advantage of price competition as compare to other 1300cc cars in Pakistan. Its QUESTION MARK because its new introduction, and locally assembly has recently started, hence it doesn’t have high market share. To make it a cow, distribution channel, marketing strategies should be revised. Swift is a new innovation in Suzuki line up. It is has good market growth, because it is the only one in this kind in its 1300 CC category in Pakistan. If Swift is properly advertised and its distribution channel is improved and spare parts availability improved then swift can turn into a star and then a cash cow for Suzuki. The Swift is a smart-looking little super-mini that handles well; plus, it’s well priced and well equipped for the money. Running costs will be affordable, too. The petrol engine is a little weedy, and the refinement leaves something to be desired. The car can’t match the class leaders on quality or practicality, either. References: http://www.scribd.com/doc/32811048/Strategic-Analysis-of-Pak-Suzuki-Motor-Company www.pakwheels.com

4

Institute of Manufacturing Engineering & Management, PNEC (NUST), Karachi

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