PRESENTED BY:

KREEPA SHANKAR CHOWRASIA

MBA (G)
SECTION A

STRATEGIC ROLL NO. A-36

A0101918282

MANAGEMENT
Under the Guidance of Prof. Ramesh Kumar Bagla
 1.1Introduction

Ashok Leyland is an Indian automobile company headquartered in Chennai, India. It is owned by the
Hinduja Group. Founded in 1948, it is the second largest commercial vehicle manufacturer in India,
fourth largest manufacturer of buses in the world and 10th largest manufacturer of trucks globally.

About Ashok Leyland is a commercial vehicle manufacturing company based in Chennai, India.
Founded in 1948, the company is one of India's leading manufacturers of commercial vehicles, such
as trucks and buses, as well as emergency and military vehicles. Operating six plants, Ashok Leyland
also makes spare parts and engines for industrial and marine applications. It sells about 60,000
vehicles and about 7,000 engines annually. It is the second largest commercial vehicle company in
India in the medium and heavy commercial vehicle (M&HCV) segment with a market share of 28%
(2007–08). With passenger transportation options ranging from 19 seaters to 80 seaters, Ashok
Leyland is a market leader in the bus segment. The company claims to carry over 60 million
passengers a day, more people than the entire Indian rail network. In the trucks segment Ashok
Leyland primarily concentrates on the 16 ton to 25 ton range of trucks. However Ashok Leyland has
presence in the entire truck range starting from 7.5 tons to 49 tons. The joint venture announced with
Nissan Motors of Japan would improve its presence in the Light Commercial Vehicle (LCV) segment
(<7.5 tons).

Vision
The vision of Ashok Leyland is to be top among Indian corporations acknowledged nationally and
internationally for:

 Excellence in quality of its product.

 Excellence in customer focus and service.

Mission
Be a leader in the business of commercial vehicles, excelling in technology, quality and value to
customer fully supported by customer service of the highest order and meeting national and
international safety environments and safety standards.

Core Values
 Passion

 Partnership for Growth

 Uncompromising Integrity

 Thoughtful Innovation

PRODUCT RANGE OF THE COMPANY INCLUDES:

Products:
1. Buses

2. Trucks

3. Light Vehicles

4. Defence Vehicles

5. Power Solutions

2) PORTER’S FIVE FORCES (P5F) ANALYSIS

A Porter's Five Forces Analysis explores five principal industry factors to determine the attractive of
a given industry in a given market. In this, we look at the automobile industry in India. This is
independent of any manufacturer. As such, it applies to every Indian car manufacturer.

In any P5F analysis, one must examine the following:

1. The threat of substitute products.

2. The amount of rivalry among competitors.

3. The threat of new entrants.

4. The amount of bargaining power suppliers have.

5. The bargaining power of buyers/customers.

Threat of new entrants:

The capital and expertise needed to setup an auto or parts manufacturing facility would be a great
enough barrier to entry to prevent many new entrants from setting up.

India's incredible growth forecasts, infrastructure progress (especially new and better roads), and
ever-expanding financing options to rural residents, the market is attractive. As such, we expect the
threat of new entrants to be high.

The bargaining power of buyers/customers:

Buyers in India have a wide variety of choice. There are more than 20 foreign manufacturers selling
in India (including ultra-high-end such as Rolls-Royce and Lamborghini). Of course there are also a
plethora of incredibly cheap choices, like the famous Tata Nano.

Threat of substitute products:

India is famous for its two-wheelers (bikes and mopeds) and three-wheelers. These are very real
and obvious threats to auto manufacturers .

Bargaining power suppliers have:

It is likely that the suppliers to the manufacturers have considerable bargaining power. They are not
held ransom by one single manufacturer as they can market their products to any of the others in
India. The amount

Rivalry among competitors:

The amount of rivalry amongst competitors in India is high. The industry is not yet in its shake-out
phase and is still struggling to find the up-and-coming stars and possibly topple the leaders.
PESTEL ANALYSIS

Political:
These refer to government policy such as the degree of intervention in the economy. What
goods and services does a government wants to provide, to what extent it believes in subsidising
firms, what are its priorities in terms of business support. The political factors related to
automobile industry are:

• Indian government auto policy aimed at promoting an integrated, phased and

conductive growth of the Indian automobile industry.
• Promoting multi-model transportation and the implementation of mass rapid
transport system.
• Changes in taxation policy.
• Foreign equity investment up to 100% in the automotive sector and there is no
minimum investment criteria.
Economical:
These include interest rates, taxation changes, economic growth, inflation and exchange rates.
Economic change can have a major impact on a firm's behaviour. The economics factors related
to automobile industry are:

• Weighted tax deduction of up to 150% for in-house research and R&D

activities.
• Govt. has granted concessions, such as reduced interest rates for export
financing.
• Several Indian firms have partnered with global players.
• Rise in price of the raw materials.
• Increase in petrol price.
• Cost of automobile in India is the cheapest in world .The cost of a finished
vehicle here is as much as the cost of gear box in developed countries. Hence
there exists tremendous scope for exports.
• Deteriorating foreign exchange situation in western country, poor buying
capacity and comparatively cheaper import of second hand automobile from
developed country reduces the export of automobile from India in recent days.
Social:
Changes in social trends like population increase can impact on the demand for a firm's
products and the industry as a whole.
The social factors related to automobile industry are
• Indian customers are highly price sensitive and put a lot of emphasis on value
for money.
• Changed lifestyle of people has lead to increased purchase of automobiles. So
the company has a large customer base to serve.
• Upward migration of household income levels.
• Preference for fuel efficient vehicles with lower running cost.
• Growth in urbanization

Technical:
New technologies create new products and new processes. Technology can reduce costs,
improve quality and lead to innovation. These developments can benefit consumers as well as
the organizations providing the products. Sometimes the technology reduces the life cycle of
products. The technological factors related to automobile industry are

• Accelerated acquisition of technology capabilities to raises

productivity in agriculture.
• Continuous technological innovation.
• Renewable energy development. Ex, coal gas renewable.
Environmental:
The ecological factors related to automobile industry are

• Physical infrastructure such as roads and bridges affect the use of automobiles.
• Global warming.

Legal:
These are related to the legal environment in which firms operate. In recent years the changes
legal factors of developed countries affected firms' behaviour in other countries due to
globalization. Legal changes can affect a firm's costs if new systems and procedures have to be
developed and demand if the law affects the likelihood of customers buying the good or using
the service. The legal factors related to tractor industry are

• Collaboration with government which shapes policy issues.

• Legal provision relating to environmental pollution by automobiles.
• Legal provisions relating to safety measures.
External Opportunities and Threats

Opportunities
1. Due to liberalization, demand for heavy vehicle have stepped up all over the globe.
2. National market through good advertisement.
3. Company provides better credit facility to dealers.
4. Company introduces promotional programmes
Threats
1. Good replacement facility if other brands.
2. High competition
3. Complicated national market
4. Promotional programs of other brand
5. Liberal credit policy of other brand
EFE MATRIX

Key External Factors Weights (0.0 Rating 1 Weighted

to 1.0) to4 Score
External Opportunities
1. Company introduces promotional 0.08 3 0.24
Programs

2. National market through good 0.01 2 0.02

advertisement.
3. Company provides better credit facility 0.14 3 0.42
to dealers.
4. Due to liberalization, demand for heavy 0.3 2 0.6
vehicle have stepped up all over the globe.

External Threats
1. Promotional programs of other 0.08 2 0.16
Brand
2. Liberal credit policy of other brand 0.05 2 0.1
3. Good replacement facility if other 0.15 3 0.45
brands.

4. Complicated national market 0.04 3 0.12

5. High competition 0.15 2 0.3

Total 1.51
INTERNAL STRENGTHS AND WEAKNESSES
VRIO Framework

Strength Valuable Rare Difficult Difficult Conclusion

to Imitate to Substitute

1. Skilled Yes No No Yes Competitive

Employees. Parity

2. Good Yes No Yes Yes Temporary

Organizational Competitive
Climate. Advantage
3. Strong yes No No Yes Competitive Parity
Functional
Structure
4. High Market yes yes Yes Yes Sustainable
Share Competitive
Advantage
5. Standard yes yes Yes Yes Sustainable
Quality Competitive
Product Advantage
6. Good yes yes yes Yes Sustainable
Training System Competitive
Advantage
 Weakness Valuable Rare Difficult to Difficult to Conclusion
Imitate Substitute

1. Sales Yes No No No Temporary

representative s Competitive
are less Advantage
2. Low margin Yes No No No Temporary
Competitive
Advantage
3. High price Yes Yes Yes Yes Sustainable
Competitive
Advantage
4.No proper yes No No Yes Competitive Parity
mechanism to
handle the
grievance of
the customers

Value Chain Analysis

IFE MATRIX

Key Internal Factors Weights (0.0 Rating 1 Weighted

to 1.0) to4 Score
Internal Strength
1. Skilled Employees 0.1 4 0.4
2. Good organizational Climate. 0.15 3 0.45
3. Strong Functional Structure 0.05 3 0.15
4. High Market Share 0.1 2 0.2
5. Standard Quality Product 0.13 4 0.52
6. Good Training System. 0.07 3 0.21

Internal Weakness
1. Sales representatives are less 0.09 2 0.18
2. Low margin 0.11 1 0.11
3. High price 0.12 1 0.12
4. No proper mechanism to 0.08 2 0.16
handle the grievance of the customers
Total 2.5

SWOT ANALYSIS
Strength of the company
Weakness of the company
 Skilled Employees
 Good organizational Climate.  Skilled Employees
 Strong Functional Structure
 Good organizational Climate.
 High Market Share
 Standard Quality Product  Strong Functional Structure
 Good Training System.
 High Market Share

Opportunities for the company Threats faced by the company

 Due to liberalization, demand for
heavy vehicle have stepped up all
over the globe.
 National market through good
advertisement.
 Company provides better credit
facility to dealers.
 High competition
 Liberal credit policy of other brand
 Promotional programs of other brand
 Complicated national market
 Good replacement facility if other
brands.

 Company introduces
promotional programs
Strength of the company
1. Skilled Employees
2. Good organizational Climate.
3. Strong Functional Structure
4. High Market Share
5. Standard Quality Product
6. Good Training System.

Weakness of the company

1. Skilled Employees
2. Good organizational Climate.
3. Strong Functional Structure
4. High Market Share

Opportunities for the company

1. Due to liberalization, demand for heavy vehicle have stepped up all over the globe.
2. National market through good advertisement.
3. Company provides better credit facility to dealers.
4. Company introduces promotional programs
Threats faced by the company

1. High competition
2. Liberal credit policy of other brand
3. Promotional programmes of other brand
4. Complicated national market
5. Good replacement facility if other brands.
2) CPM Matrix

Eicher Tata Ashok

Motors Motors Leyland
Critical Success Weight Rating Score Rating Score Rating Score
Factor
Brand reputation 0.13 2 0.26 3 0.39 1 0.13
Level of product 0.08 4 0.32 3 0.24 1 0.08
integration
Range of products 0.05 3 0.15 1 0.05 2 0.1
Successful new 0.04 3 0.12 3 0.12 3 0.12
introductions
Market Share 0.14 2 0.28 4 0.56 4 0.56
Sales per 0.08 1 0.08 2 0.16 3 0.24
employee
Low structure cost 0.05 1 0.05 3 0.15 4 0.2

Variety of 0.07 4 0.28 2 0.14 2 0.14

distribution
channels
Customer 0.02 2 0.04 4 0.08 1 0.02
retention
Superior IT 0.11 3 0.33 4 0.44 4 0.44
capabilities
Strong online 0.15 3 0.45 3 0.45 4 0.6
presence
Successful 0.08 1 0.08 2 0.16 1 0.08
promotions
Total 1 - 2.14 - 2.84 - 2.51
CURRENT PLAYERS IN THE COMMERCIAL VEHICLE
INDUSTRY:
 Ashok Leyland
 Tata Motors
 Eicher Motors
 Swaraj Mazda
 Volvo
 Tatra Udyog
 Force-MAN
 Asia Motor Works
 Mercedes Benz
 Scania
 Hino Motors
 Daimler -Chrysler
New entrants on the anvil- Mahindra Navistar, URAL

ASHOK LEYLAND MARKETING MIX (4PS) STRATEGY

Product:
Ashok Leyland is one of the leading automobile players in India. The armed forces too benefit
from a wide range of product portfolio of Ashok Leyland. Its Stallion truck platform is versatile
and extremely abuse friendly. The Ashok Leyland range further extends to super stallion and
colt and include Truck fire Fighters, Rapid Intervention Vehicles, Light Recovery vehicles,
Field Artillery Tractors, Water Bowsers and Fuel Dispensers.
Ashok Leyland is known for manufacturing buses, trucks, army vehicles etc. Ashok Leyland
manufactures buses for the application in cities, suburban areas, intercity, School/Staff/Tourist
and sometimes special applications. These can seat from 18- 80 people.
Ashok Leyland Trucks range from long haul to mining and construction as well as distribution
trucks. They offer a wide range of driveline and configurations keeping economical use and
high reliability prioritised. For a wide range of applications ranging from ferrying of vegetables,
cement, sand, bricks, furniture, water, groceries to covering basic transportation needs, Ashok
Leyland’s light vehicles are offered in various configurations for the self-employed. These
include DOST, Partner, Mitr and other small LCV trucks.
Price:
Ashok Leyland prices its product competitively. With the entry of Bharat Benz, Ashok Leyland
has also started looking at the niche segment in trucking. With added features, higher safety,
greater technological application in vehicles, costs have also gone up. But since Ashok Leyland
cannot price it higher than its main rival Tata Motors and looks at enhancing revenues by
undercutting most models of Tata vehicles by a significant margin.
Its light vehicles are also priced aggressively to cater to local, rural and semi urban target
audience for whom prices matter a great deal. Through regular exchange offers and discounts
during festive months Ashok Leyland ensures that it remains at amongst the top two heavy
commercial vehicles manufacturer in India.
Place:
Ashok Leyland products are available not only India, but are also exported abroad. Ashok
Leyland buses and trucks are available through company owned warehouses where companies
and enterprises can make a purchase. With plans to increase exports by up to five times, Ashok
Leyland is clearly targeting the international markets from 7% to 35% by the end of five years.
With plans to set up an assembling unit In Kenya.
Promotion:
Ashok Leyland promotes its brand through various media channels. Other than using such
iconic celebrities as Mahendra Singh Dhoni and the ace golfer Jeev Milkha Singh as the brand’s
ambassador. Ashok Leyland also leverages the Indian factor in all its promotional activities.
ATL and BTL advertising is commonly adopted by them. Ranging from Television
commercials to print, newspaper, radio spots and spot advertisement including posters,
banners, flexes and standees. Targeting the commercial and semirural-rural sectors the heavy
commercial vehicle manufacture drastically reduced inventories, and boosted sales for Ashok
Leyland.
 BCG Matrix

BCG matrix(or growth-share matrix) is a corporate planning tool, which is used to portray firm’s
brand portfolio or SBUs on a quadrant along relative market share axis (horizontal axis) and speed
of market growth (vertical axis) axis.

It helpful for managers to evaluate balance in the companies’s current portfolio of Stars, Cash
Cows, Question Marks and Dogs.It should be able to manufacture and sell new products at a price
that is low enough to get early market share leadership. Once it becomes a star, it is destined to be
profitable.
GE Matrix
GE multifactoral analysis is a technique used in brand marketing and product management to
help a company decide what product(s) to add to its product portfolio and which opportunities in
the market they should continue to invest in. It is conceptually similar to BCG analysis, but
somewhat more complicated. Like in BCG analysis, a two-dimensional portfolio matrix is created.

However, with the GE model the dimensions are multi factorial.

This helps in evaluate the existing portfolios of strategic business units and to develop strategies to
achieve growth by addition of new products and businesses to this portfolio and further.
To analyze which business units to invest in and which ones to sell off

GS Matrix
Grand strategy matrix it is popular tool for formulating alternative strategies. In this matrix all
organization divides into four quadrants.
Any organization should be placed in any one of four quadrants. Appropriate strategies for an
organization to consider are listed in sequential order of attractiveness in each quadrant of the
matrix.
It is based two major dimensions
1. Market growth
2. Competitive position
All quadrant contain all possible strategies
Current and Suggested Strategies
Current Strategies

 Effective management of technology.

 Innovation in product management and process technology.
 Globalization in industry.
 Goodwill inside and outside the organization.
 An aggressive marketing strategy and risk taking ability.
 Location and layout.
 Product selection and technology.
 Capital selection and investment.
 Flexible strategy of production.
 Standardization of design.
 Economy of size and variety.
Alternate Strategies

 Build trust with customer reviews

 Adjust your campaign budgets based on car-buying trends
 Target the right people with your automotive campaigns
 Compel shoppers to come into your store with unique offers
  Use all call features possible
 Remarket
 Introducing new innovations like AI , Electric Vehicles
 Listen to feedbacks
 Commit to the Brand

Five trends for upcoming years Self driving will accelerate

Companies will need to determine whether they can develop the technology to compete in this
arena. If not, they may have to partner with a company that can better provide autonomous car
technology. In addition, any companies hoping to be players in the self-driving market must
consider the impact on supplier relationships and manufacturing operations, particularly what’s
needed to make these cars available in blossoming global markets in emerging nations.
Electric vehicles will take off
This may offer an opportunity for automakers to meet increasingly strict CO2 emissions
requirements and to provide an array of new consumer and fleet products.

Expansion of connectivity
Connectivity, which is already having an impact, will expand to include a much wider range of
features, such as car-to-X appliance communications. For instance, your home air conditioning
system will automatically activate when you (and, more precisely, your car) are 20 minutes
away. Automakers will have to build an ecosystem that includes partnerships with technology
companies to develop connectivity features that stand out and attract consumers.
Profit pools will shift through new services
Traditional carmaker business models are commoditizing, and OEMs need to re- examine their
sweet spot in the value chain to address shifting customer needs. This could involve moving
from car ownership to pay-per-use and ride-sharing services. But before choosing to enter this
market, vehicle manufacturers will have to understand the full costs of safety features, design
innovations, and licensing rules in different global markets, as well as car-sharing overhead
(parking, liability, and insurance) if they want to provide the services themselves.
Business models will become more local
Operating globally has become significantly more challenging and complex. Automakers must
find ways to understand and navigate the regulatory policies wherever they sell their products
and wherever they have manufacturing facilities and suppliers.

3) Recommended procedure for strategy evaluation and review

Consequently, additional investment in the area of R&D Marketing & customer interface has
been announced.

Consistency: Are the external strategies consistent with (supported by) the various internal
aspects of the organization? You must examine all the various functional and internal
management strategies employed by the organization and compare them with the external
business strategy.
Consonance: Are the strategies in agreement with the various external trends (and sets of
trends) in the environment? To answer this questions, you need to look at all the major trends
that impact the selected strategy - both positively and negatively.
Feasibility: Is the strategy reasonable in terms of the organization's resources?

 Money and capital

 Management, professional, and technical resources
 Time span
Advantage: Does the strategy create and/or maintain a competitive advantage?

 Resources
 Skills
 Position