MAN AGEM ENT PER SP EC TIV ES

“ 2 T WO W HEELER GIA NTS IN I ND IA “

GROUP- 7

COU RSE FA CI LI TA TOR MEMBERS AMIT KUMAR ( 08 60 905 3) KRI T KR .V ERMA (0 86 09 052 )

GROUP D im pl e Gr ove r

ROHI T JAI N (0 86 09 054 ) RA CHY JAIN (0 86 09 056 ) AD IT YA AST HANA (0 86 09 057 )

PRATEEK PRAKASH (0 86 090 58) HARPREE T MATHAR U (0 86 09 059 ) ABN ISH KA TWA L (0 86 09 060 )

AC KN OW LE DGE ME NT

We have done the comparative analysis of BAJAJ & HERO HONDA two wheelers and compared their strategic planning through TOWS MATRIX and FORCES OF PORTER ANALYSIS and their respective advantage in this segment.

By these analyses we get to know that which company is better in its strategic planning.

BAJAJ STRATEGI
INTR ODU CTION-

C P LAN NI NG

BAJAJ AUTO Ltd is one of the oldest and largest manufacturers of automobiles in India and has been the market leader in scooters. It is the flagship of the BAJAJ group of companies .BAJAJ is currently India’s largest two and three wheeler manufacturer and one of the biggest in the world. TURNOVER72 MILLION (1968) --------------- 81.06 (BILLION) CURRENT PERFORMANCE 32% growth in 2004-05 US industry growth of 19%  Increase from 28% to 31% in year 2005-06 in motorcycle segment  Annual turnover is of Rs.81.06  It is present in all those segment • PRICE SEGMENT

• VALUE SEGMENT • PERFORMANCE SEGMENT  Selling more than 1.20 lakh motorcycle annually

COMPARATIVE ANALYSIS OF BAJAJ ON BASIS OF TOWS MATRIX SO (Maxi-Maxi)

With the upper hand in high performance segment with several variants BAJAJ can perform very well in the market of high ended motorcycle i.e.(150 cc)

 BAJAJ is pioneer in launching new technology of DTSi which stand’s for digital twin spark ignition which delivers more power and efficiency which can be very helpful in delivering the demand of technology based bikes.  With the concept of free riding it can easily attract the young generation.  Can use the existing R&D capabilities for new models and new segment.  The company is sitting on cash pool and can easily produce the battery operated two wheelers with

higher efficiency for which the demand is expected to be very high in future.  Can use its Kawasaki distribution network to capture the world market. WO(Mini-Maxi) Must employ the cash in production and product capabilities to match competitors and for continuous export growth.  Must hire the brand ambassador with higher face value to attract customer because there is higher demand of a product if celebrity advertise for it.  Engage itself in the production of heavy and more high ended bikes to overcome the weakness in the world market segment and had a opportunity of capturing the market segment  Maintain and deliver the quality service to its customer for capturing the market in terms of quality product service and service provider. ST(Maxi-Mini) Can use its excellent R&D department to catch up with the new innovation & technological change  Due to its already established customer base it can easily remove the threat of customer disloyalty  Can also use its various wings i.e; BAJAJ FINANCE and BAJAJ INSURANCE

 Provides high performance product across all categories all categories that will build image of the company WT(Mini-Mini) Invest in building world class bikes to sustain the international market  Tie up with different companies in foreign to export there production.

BAJAJ’S PORTER ANALYSIS
RIVALRY-

BAJAJ has a competitive advantage over its competitor in following respects;  Own R & D facilities  Low maintenance cost  Innovative design  Large product lines  High performance bikes  Advantage of self owned finance and insurance company. THREATS OF SUBSTITUTES Bajaj Pulsar 225 DTSFi has a threat as its competitor Hero Honda will decrease the price of Karizma  Lowering cost of second hand cars.  Substitute of every model is available in one or other company. BUYER’S POWER  As bajaj auto is a major player in market and it produces different range of products with innovative features which is very well demanded by the buyers.  Individual buyer cannot affect the price of the company so they are less powerful This can be shown by the fact that the sale of bike pulsar has grown to 40000 vehicle per

month and increase of 24% over last year despite of high cost.

SUPPLIER POWERManufacturing of bikes need various kind of spare parts and this spares parts are supplied to bajaj by various suppliers ie;MINDA- ignition locks,fuel tank locks etc. LUMAX- head light,tail light,indicators etc. EXIDE- battery DEE OVERSEAS- clutch plates,gasket,air filters etc. As these suppliers are very renowned and they have the power to affect market supply and BAJAJ cannot easily switch to other suppliers because they use these companies spare parts in various range of products. THREATS OF ENTRYIf BAJAJ want to enter other segment of market then these are the barriers Bajaj entering in car market is a high barrier entry as already there are so many competitors in the market.  Patent on proprietary knowhow is necessary for bajaj in order to prevent the products from being copied.

 Bajaj scooters entry is low as the business is independent and now scooters are being less preferred by gents.

BCG MAP FOR BAJAJ PULSAR 220 DTSFi IS STAR DISCOVER 135 IS QUESTION MARK WAVE DTSi IS LIKE DOGS PULSAR 150 IS CASH COW

HERO HONDA
INTRODUCTIONHERO HONDA MOTORS ltd. Established in 1984 is in a joint venture between Hero group, the world’s largest bicycle manufacturers and the Honda motor company of Japan. Hero Honda manufactures a range of motorcycle like CD Dawn, Splendor, Passion, CBZ, Karizma etc.Its splendour bike is one of the largest selling bikes in the country. Its world largest two wheeler manufacturer in the world.

CURRENT SCENARIO Hero Honda produces largest number of two wheelers in India  Sales of 314567 two wheeler in September

Consolidated over 50% share in the domestic motorcycle market

 Crossed half a million retail sales in the festive season.

THE TOWS MATRIX FOR STRATEGY FORMULATION SO(Maxi-Maxi) Regular production of good quality two wheeler with efficient & skilled worker producing 13000 motorcycle a day approximately it can cover the huge demand from the market.  High performance in the festival season.  Without increasing its cost it can supply large motorcycle to curtail the opportunity of transport and mobility since public transport is not efficient.  Large coverage in tier2 &tier3 cities where the demand for two wheeler is increasing.  Positive image of the company can help it to increase its sales in rural areas due to the growth of road network in rural area by intiative of government.

 Brand Ambassdor like Hrithik Roshan help’s company selling its product. WO(Mini-Maxi)

Develop its own R&D to meet the innovative demand of its customer.

 Bring new technology with new model to the market.  Come up also in the scooter market with high technology to capture the market.  Bring new innovation in there product to cut the competition from the foreign companies.  Bring new product line for attracting the young generation. ST(Maxi-Mini) Its ability to understand customer needs and wants can minimise the threat of loosing the customer.

Effective advertising capability and engagement of the top brand ambassador can attract more customers.

 Recognised & established brand name can help employee in not loosing its market share.  Use the existing R&D facility to maintain the quality of product which it provide to its customer.  Use its existing customer base in extension of its product line

WT(Mini-Mini) Take away the products from the market for which there is very less sale.  Came in joint venture with the foreign company for new innovation

Joint venture partner Honda motor’s Japan,for bringing in the next generation engines, which include fuel injection and other features into India. PORTER’S ANALYSIS

RIAVALRYHero Honda has competitive advantage over its competitor Bajaj in following are as follows;  Huge customer base  High sale i n tier1 and tier2 cities and also in rural areas.  Large distribution network  Technical knowledge to the mechanics.  Large service centre across whole country  Stable prices

Resale value of Hero Honda Bike is more than Bajaj.

THREATS OF SUBSTITUTES-Hero Honda face threat of substitute in many segment.  Splendor with Discover  Pulsar 220 DTSFi with Karizma  Pleasure with Scooty pep  Substitute of high ended bikes like Avenger

Lowering price of second hand cars-The car price is low which gives the switching power to buyers.Due to availability of substitute demand is more elastic.

BUYER’S POWER

Buyers are less powerful because Hero Honda has its own distribution channel.

 Buyer’s are fragmented in the market so no particular group of buyer had a significance on sale of motorcycle or its price so buyer are less powerful. SUPPLIER POWER

Rolex IPEX Company provides the engine, suspension, brakes etc for hero Honda. Saicom International provide electrical parts, head light, tail lights, switches. In case of Hero Honda its suppliers have the power to bargain because in all the product line the same spare part is used by the company so it cannot early switch it. But the

supplier maintains relationship with the company because they regularly receive the order from the company in bulk. BARRIER TO ENTRY AND EXIT

If Hero Honda wants to enter into other segment market ie; producing scooters, cars, three wheelers etc. It has to take patent or proprietary knowhow.

 It has to explore new distribution channels.  Product would be successful or not  Switching to other segment will affect the industry or not.

It is not easy to exit two wheeler segments because Hero Honda has not set up many specialised plants etc.

 Very high exit cost from industry.

BOSTON CONSULTING GROUP MAP FOR HERO HONDA KARIZMA IS STAR SPLENDOR IS CASH COW HUNK IS QUESTION MARK ACHIEVER IS DOGS

BOSTON CONSULTING GROUP (BCG) MAP

The business portfolio matrix was developed by Boston consulting group (BCG).The map shows the link between the growth rate of business and the market share.” Question marks” in business are with weak market share and high growth rate; usually require cash investment so that they can become” stars”. The businesses with high growth and strong competitive position. These kinds of businesses have opportunities for growth and profit. The “cash cows”, with a strong competitive position and low growth rate, are usually well established in the market and such enterprises are in the position of making their products at low cost. The “dogs” are the businesses with a low growth rate and a weak market share. These businesses are usually not profitable and generally should be disposed of. TOWS MATRIXThe tows matrix was developed for analysing the competitive situation of the company or even of a nation. The tows matrix is a conceptual framework for a systematic analysis that facilitates matching the external threats and opportunities with the internal weaknesses and strengths of the organisation. The word tows comprises of “T” stands for threat, “O” stands for opportunities,“W” stands for weakness & “S” stands for strength.

INTERPRETATION

From the above analysis we can say that Bajaj two wheelers will capture the martek share of Hero Honda also incoming years and will perform extreamly well in the industry because of the following facts: 1. It has its own R & D facilities. 2. It varies its bike from time to time . 3. Bajaj bike produce statement on road.
4.

Bajaj has opportunities of providing extra services to its customers by using its finance and insurance company. It can easily target the young age group more efficiently due to its design and technology.

5.

LIMITATIONS 1. Difficulty in finding the numeric data. 2. Difficulty in finding the recent knowledge about the company. 3. Difficulty in adjusting the material into the limited number of slides.

REFERENCES • Tekemeong.com • Bajaj.com

HeroHonda.com

• Essential of Management by Koontz & Weihrich. • Managementparadize.com • Equitymaster.com

Davegelber.com

• Coolavenues.com

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