33

A PROPOSED STRATEGIC PLAN FOR SUZUKI

Instructor: Sir Javaid Ahmed

Industry: - Automobile

Company: - Suzuki Pakistan

Submitted By:

Muhammad Usman (20181-23999)

Waleed Farooq (20171-21999)

Joher Khan (20171-22078)

Zain Saleem (20171-22308)

Umair Rehman (20181-23997)

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Table of Contents

Module 1: Industry Structure and Macro-environmental analysis.................................................3

Overview of Pakistan’s Automobile Industry: -.......................................................................................3
Structure and Dynamics: -.........................................................................................................................4
Current Vision Statement:.........................................................................................................................6
Current Mission Statement:......................................................................................................................6
Revised Vision Statement:.........................................................................................................................6
Revised Mission Statement:......................................................................................................................6
Political:......................................................................................................................................................7
Economic:....................................................................................................................................................7
Social:..........................................................................................................................................................7
Technological:............................................................................................................................................7
Porter’s Five Forces Impact on Automobile Industry:......................................................................8
Threats of New Entrants (Low):...............................................................................................................8
Bargaining Power of Buyers (Moderately Low):........................................................................................10
Threat of Substitutes (High):...................................................................................................................12
Bargaining power of suppliers (Low):....................................................................................................13
Rivalry Among Existing Competitors (High):.........................................................................................15
Overall Industry Rating:..........................................................................................................................17
EFE Matrix of Auto Mobile Industry:......................................................................................................17
Module 2..................................................................................................................................................19
Company and Competitor Analysis.........................................................................................................19
CPM Matrix:..............................................................................................................................................23
Gap Between Suzuki and Competitors:..................................................................................................23
Module 3: Internal Company Value Chain Analysis:........................................................................24
IFE Matrix of Suzuki:................................................................................................................................31
Module 4..................................................................................................................................................32
The Matching Stage:.................................................................................................................................32
Space Matrix:............................................................................................................................................34
Strategy: Aggressive..................................................................................................................................37
Module 5:.................................................................................................................................................39
The Decision Stage...................................................................................................................................39
QSPM Matrix:............................................................................................................................................39
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Module 1: Industry Structure and Macro-environmental analysis

Overview of Pakistan’s Automobile Industry: -

The automobile industry cannot be dominated by the singer firm to cater the needs of consumers
rather this industry can be managed by multiple competitors to ensure that the need can be
fulfilled. The automobile industry where ever it is in the world follows that oligopolistic
structure where many players are there to share profit and for competition. Pakistan’s automobile
sector is one of the fasted growing industry in Asia. The production and sales of the industry had
a phenomenal rise in its sales and production by 171% and 175.5% (2014 to 2018).
Pakistan is the sixth largest country in population with around 17 million middle class
households and 102 million middle class individuals as of 2018 which implies that the industry
has a vast scope to be catered.
The automobile industry of Pakistan contributes 4% of Pakistan’s GDP employing a workforce
of 1.8 million people. Currently there are 3200 automotive manufacturing plants with the
potential investment of around Rs 92 billion with the production of 1.8 million motorcycles and
200,000 vehicles annually.
At present, the automobile industry is dominated by Honda, Toyota and Suzuki. These
dominators were creating resistance to eliminate the competitors from entering the industry.
However, on 19th march 2016, Pakistan passed the Auto policy 2016-2021 which offers tax
incentives to the new entrants for established the manufacturing the plants in the country. In
response to this policy, Renault, Nissan, Kia, Hyundai, FAW and other renowned companies
have showed interest to start their manufacturing in Pakistan.

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Structure and Dynamics: -

The industry is divided into four main market segments:

1. Automobile Companies: There are 13 companies listed on PSX, which are Toyota,
Honda, Suzuki, Dewan Motors, Millat Tractors, Ghani Automobile, Ghandhara Ind,
Nissan, Al Ghazi Tractors, Ghandhara Diesel, Honda Atlas Cars, Hinopak Motor, Sazgar.
2. Assembling and Manufacturing Units: The Automobile industry is consisting of
assembly and manufacturing units for production of cars (3 units; 1 in Lahore, 2 in
Karachi), tractors (8 units), trucks/buses (10 units), jeeps (2 units), LCV’s/pickups/vans
(8 units), two/three wheelers (113) units.
3. Auto Parts Manufacturing: The auto parts manufacturing segment is consisting of
around 2200-part manufacturers out of which 400-500 are in the organized sector. The
auto parts are divided into two further segments: first one is Sales to OEMs for the
assembly of new cars and the replacement market. The OEMs provide a specified detail
about the spare parts they want and the segment ensures to provide the promised quality.
4. Passenger Car Market: The passenger car market is also divided into further segments
based on the engine power. The 1300cc and above power passenger car category
occupies the highest share of 52% followed by 800cc cars with 36% and 1000cc cars
with 22%.

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Current Vision Statement:

To be recognized as a leading organization that values Customer's needs and provides motoring
solutions with strong customer care.

Current Mission Statement:

Strive to market value packed vehicles that meet customer's expectations.

Revised Vision Statement:

Making the journeys comfortable by providing motoring solutions and premium services which are
economic and user-friendly.

Revised Mission Statement:

 Suzuki aims to create value for those who are part of our family. We make sure that our products are
aerodynamically well designed to conquer the road and the needs of markets we serve. By adopting the
latest technological features and equipping our products with more features, we are aiming to more
profit and sustainable growth. We make sure that our employees are acknowledged with every step we
take in order to help them grow in their career. We are aimed to produce the ecofriendly vehicles to
make the environment toxicants free and journeys economic and comfortable.

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PEST Analysis of Automobile Industry: -

Political:
 Auto Policy 2016-2021 Introduced by the Government
 New comers in the Industry such as Hyundai, KIA, Proton will have 25 % off on import duty of
parts for assembling the car in Pakistan
 The legislations and laws require locally manufactured parts to meet the international standards
 The foreign ownership regulations and technological cooperation’s with other governments
 Trade and Tariff policies related to motor vehicles
 Motor vehicle insurance policies
 High taxes on luxury vehicles
 Strict safety regulations

Economic:
 The rise in inflation has directly cause rise in prices by car manufacturers
 The exchange rate having high effect on imported parts
 The high rates of Oil and Gas and their fluctuation time to time
 With Covid-19 this has led to many people losing their jobs so this has decreased the purchasing
ability for the people to buy cars.
 There has been growth in credit facilitation from 14 to 18%
 Economic GDP will increase by 1.5 % in the financial year of 2021

Social:
 People of Pakistan feel pride in buying car as they feel it gives them a decent look
 People don’t have complains much from the cars but they still love to buy the updated models
 The consumers have increased desirability of customized cars
 The demand is now slowly shifting towards E-cars and E-bikes as this looks a very new thing to
try for them.
 People here always love to buy luxurious rather than small cars

Technological:
 The consumers are now demanding for electronically controlled cars
 The consumers are more likely to purchase Gas-Electric hybrid or Hydrogen-powered fuel
vehicles
 The consumers have increasing demand of technological features like Air bags, Hydraulic breaks
and fuel-efficient cars.
 The technological advancements can raise the sales figures and can play important role in
consumer satisfaction

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Porter’s Five Forces Impact on Automobile Industry:

Threats of New Entrants (Low):

In the Auto Mobile industry of Pakistan, it follows
more of an Oligopoly structure, there are three
main players in the market including Suzuki,
Toyota and Honda. These three auto mobile
companies have cost and performance
advantages in terms of efficient and cheap
network of logistics, expert and dedicated human
resource, energy efficient manufacturing
machines and reduced cost of land and
infrastructure All these cost advantages can only
be acquired by the already existing giants of the
industry, although now after decades with the
help of the Government new auto policies the
new entrant would be able to at-least adjust and
will try to compete with these giants but may or
may not succeed in doing so after entering the
industry as these giants have very strong roots. The attraction provided to investors was 25 % off on
duty of localized parts for 5 Years. Apart from that 100 units of complete built units to be imported on
50 % duty only. Thus, this will provide buyers to check on the quality of the car better.

The best part of this policy is that Government provides with duty free imports of plant and machinery
to set up plant local. This policy has attracted number of companies such as KIA, Hyundai Proton, MG,
DSFK, Renault and Volkswagen. As a result, selling price of cars will decrease in Pakistan.

Furthermore, there are significant proprietary product differences in the auto mobile industry of
Pakistan, Suzuki is known best for its small cars such as Alto, Cultus, Swift who give a good average and a
middle-class family can easily afford it. They try to target the luxury cars sector as well but the sales in
that segment is not much. Toyota and Honda have a higher hold of the luxury cars segment and if
customers are looking to buy luxury cars, they prefer them. Honda is more of known for an amazing
drive experience while Toyota have the best resale point.

In addition, customers do not incur any switching cost, for example if a customer wants to switch from
Yaris (Toyota) to Ciaz (Suzuki) then he won’t incur a very high cost. Similarly, if a customer wants to
switch from Honda Civic new model to Toyota Grande, he won’t have to pay high cost.

The amount of investment required to setup a Car Manufacturing Company in Pakistan is about Rs.10
billion. Which is a very huge amount to be invested. Apart from this heavy investment any new auto
mobile should possess the license of manufacturing and selling in the country, which itself is a very
tough and lengthy procedure. But now in recent times the Government have tried to bring in
competition with companies such as KIA, Proton, Hyundai all setting up in Pakistan with the Government
new policies and ease in getting the license to set up.

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The big three Giants (Suzuki, Honda and Toyota) are running their plants since decades in Pakistan so
they know how to utilize fully all the resources in the best possible way, how to effectively run the
operations and getting the job done in low cost as compared to the new comers such as KIA, Hyundai
who have just entered the market so it will take time for them to adjust and by time get the best skilled
staff, best material in cost effective price etc.

The proprietary feature of Suzuki Pakistan is that it’s the largest producer of car Pakistan, thus it enjoys
low-cost advantage due to bulk buying and bulk production.

The New comer such as MG face retaliation from the old players such as CEO of MG quoted that his duty
scandal was all an act played by big three giants in Pakistan

YES MODERATE NO
1 Do large firms have a cost or performance 
advantage in your segment of the industry?
2 Are there any proprietary product differences in 
your industry?
3 Are there any established brand identities in your 
industry?
4 Do your customers incur any significant costs in
switching suppliers?
.
5 Is a lot of capital needed to enter your industry? 
6 Is serviceable used equipment expensive? 
7 Does the newcomer to your industry face difficulty
in accessing distribution channels? .
8 Does experience help you to continuously lower 
costs?
9 Does the newcomer have any problems in obtaining 
the necessary skilled people, materials or supplies?
10 Does your product or service have any proprietary 
features that give you lower cost?
11 Are there any licenses, insurance or qualifications
that are difficult to obtain?
.
12 Can the newcomer expect strong retaliation on 
entering the market?
9 2 1
Low Moderate High

Opportunities:

O1: The Large firms have a cost or performance advantage as they are experienced and operating since
long.
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O2: there are proprietary product differences in the industry, Suzuki, Honda and Toyota have different
product portfolio.

O3: There are strong brand identities like Suzuki, Honda and Toyota.

O4: It requires a lot of capital to enter the automobile industry.

O5: The serviceable used equipment is expensive of the industry.

O6: The experiences existing giants have advantage of lower costs.

O7: The newcomer will face difficulties in obtaining the skillful workforce.

O8: The offered products have proprietary features which help giants in lower cost.

O9: The Newcomer will face strong retaliation while entering the market from already existing giants.

Threats:

T1: The customer will not incur any significant cost in switching towards the competitors like choosing
KIA, MG and ALSVIN over Toyota, Honda and Suzuki.

Bargaining Power of Buyers (Moderately Low):

There are large number of buyers in the Pakistani market and the number is continuously increasing,
recently the number of suppliers has increased however the demand still exceeds the suppliers. The
clearest example of this is that cars are still being sold on Aun. Automobile Industry of Pakistan is divided
into two segments one being end users and others being B2B users. End user purchases the product for
their own personal use so they have a small purchase and it caters to B2B business as well. The buyer
doesn’t need a lot of information because with these big three giant car parts and mechanic are easily
available so the buyer trusts them and doesn’t seem to be involved much. The customers are highly
sensitive to price, if the price changes they usually switch the brands if the car gets expensive.

Product varies for different segments; every brand has a specific product which targets a particular
segment for example Suzuki targets the lower end customers with its product such as Mehran and Alto.
Honda targets middle class customers with city and upper-class customers with Civic.

Mostly business customers of ours are metro cab, Uber and their business are profitable as they are
taking cars from us high quantity.

With the increased numbers of suppliers coming to Pakistan, the people of Pakistan believe that
this will increase the bargaining power of Buyers but how ever this has been a dream up till now.
As all three major brands of Pakistan such as Honda, Toyota and Suzuki have seemed to be
exploited the people for long time over prices and quality.
But now with so much of Competition is increasing with the help of Government Policies this
can now change. Hence it doesn’t cost much for the customers to switch from one brand to
another if they are not satisfied or they are very much price sensitive as the inflation rate is

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increasing in Pakistan Mostly. For example, switching from a Honda Civic new model to Toyota
Grande will not be incurring a lot of costs so it can be done.
The Buyers of this Industry have been divided into 2 categories: The end customer and the
business-to-business buyers who buy in bulk as compared to the end customers. The companies
such as Airport metro companies, rental companies and Careem or Uber operators buy in bulk as
compared to the end customer who buys just one at a time. Most of the times the customers are
not aware of the additional information as they trust these brands so much that they don’t feel
important to find its disadvantages.

YES MODERATE NO
1 Are there a large number of buyers relative to the 
number of firms in the business?
2 Do you have a large number of customers, each 
with relatively small purchases?
3 Does the customer face any significant costs in 
switching suppliers?
4 Does the buyer needs a lot of important 
information?
5 Is the buyer aware of the need for additional 
information?
6 Is there anything that prevents your customer from 
taking your function-in-house?
7 Your customers are not highly sensitive to price? 

8 Your product is unique to some degree or has 

accepted branding?
9 Your customer’s businesses are profitable? 

10 You provide incentives to the decision makers? 

6 0 4
Low Moderate High

Opportunities:

O1: There is high demand and moderate supply as the number of firms offering products are limited and
there is large number of buyers.

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O2: There are large number of buyers with relatively small purchases.

O3: There are existing competitors which prevent customers from taking our function-in-house

O4: The product offered by the existing competitors is unique and has established brand identity

O5: The customer’s business is profitable as they use our products for commercial purpose too.

O6: The existing competitors provide much incentives to the decision makers by offering them customer
service and after sale service.

Threats:

T1: The customer does not face any significant cost in switching to the competitor as they price of
products is more likely to be the same or market competitive.

T2: The buyer does not need any additional information while making a purchase and is well aware
about the brand identity and the value offered in return.

T3: The buyer is well aware about the important information and knows the process he has to go
through.

T4: The customers are highly sensitive to the prices and can switch to the substitutes if they are being
offered with the best value in the affordable price.

Threat of Substitutes (High):

Substitutes are basically the products and services that serve the same purpose as of another
Product or service. The availability of close substitutes adversely affects the industry profit
structure and makes it less attractive. Customers usually change over Price, Quality or
availability. The substitutes currently operating in the automobile industry of Pakistan are
competitive and provide value for money. Their performance is justified and product is
consisting of various features which make them exceeding the opportunities. Furthermore, the
customer does not incur costs in switching towards a substitute as they perceive that the offered
value is same. The customer of automobile industry of Pakistan has choice to buy a product in
start they used to be limited to Toyota, Honda and Suzuki but now they can switch to the MG,
Proton and KIA. The mostly the customers are happy to go for the substitute as comparatively
they think that they offer the best value.
There are other various substitutes for the Automobile industry too, at first Pakistan was
reluctant to invest in the Transport Industry but in the last few years we saw a change in the
government policies. It emphasized on making Green Line Transits, Orange Trains, Metro in
KPK and in Karachi. Government have further encouraged the Use of E- Cars and E-bikes. This
with other reasons such as high traffic and too much of time consumption in it can lead to
decrease in demand for cars which will be a big issue for the Auto-Mobile Industry of Pakistan.

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YES MODERATE NO
1. Substitutes have performance limitations that 
do not completely offset their lowest price. Or,
their performance is not justified by their
higher price

2. The customer will incur costs in switching to a 

substitute

3. Your customer has no real substitute 

4. Your customer is not likely to substitute? 

0 0 4

Low Moderate High

Opportunities:

There are no opportunities because the threat of substitutes is high.

Threats:

T1: The substitutes have no performance limitations and can exceed the existing competitors in offering
the value for money to the customers.

T2: The customer does not face any costs in switching to the substitutes.

T3: The customers have various choices and can switch towards the substitutes easily.

T4: The customers are more likely to substitute as they are continuously looking for the best quality and
featured product.

Bargaining power of suppliers (Low):

Supplier Power means the ability of suppliers to determine the price and terms of supply.
Suppliers can exert Pressure on the industry by providing low quality and charging High prices
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which can reduce the profitability. Bargaining power of supplier tends to be a very important
factor to be considered
The bargaining power of suppliers is low and weak this is mainly because large number of
suppliers are available in the market so this gives the automatically industry the advantage as if
one supplier given high price or low quality they can immediately switch to the next supplier.
The materials that the companies need are widely available and accessible in the market. It’s not
the case that only one vendor has them. Moreover, there is no threat of forward integration. The
Auto mobile industry are well aware that these suppliers can’t manufacture the car by themselves
so there is no threat of this as well. The input like labor, services are more likely to be the same
and the companies have multiple options to switch between the suppliers. The company’s
business is very important to the suppliers as they rely due to the profitability they get in return.
The cost of purchases has huge impact if the supplier tries to negotiate on the basis of prices but
here the bargaining power of supplier is low which means they will not be able to negotiate on
prices they are offering rather they should go with the flow by offering the lowest price they can.
YES MODERATE NO
1 My input (material, labor, suppliers, services, etc.) 
are standard rather than unique or differentiated
2 I can switch between the suppliers quickly and 
cheaply
3 My suppliers would find it difficult to enter my 
business or my customers would find it difficult to
perform my function in-house
4 I can substitute inputs readily 
5 I have many potential suppliers 
6 My business is important to my suppliers 

7 My cost of purchases has no significant influence 

on my overall costs
6 0 1

Low Moderate High

Opportunities:

O1: The input (material, labor, suppliers or services) is standard and resources can be obtained from any
supplier.

O2: The large numbers of suppliers are available and existing giants can switch easily and cheaply.

O3: The suppliers can never be able to enter the business of existing giants of automobile industry as it
will require a lot of skilled workforce and resources
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O4: The inputs can be substituted readily due to the bulk availability of resources.

O5: The business of automobile industry giants is important for the suppliers as they can the profit in
return.

O6: There are large number of potential suppliers offering the best quality resources.

Threats:

T1: The cost of purchases has significant influence on overall costs and suppliers can take advantage
from it by offering material at high prices.

Rivalry Among Existing Competitors (High):

The extent to which the firm within an industry try to limit each other profit potential and put
pressure on each other is referred to as intense Rivalry among competitors. The competitors are
trying to steal market share and profit from each other. The intensity of rivalry between existing
firms is an important force that shapes the competitive structure of an industry.
When it comes to the automobile sector of Pakistan the market structure which it is following is
an oligopoly structure in which 3 main players exist who have a very strong market appearance.
These include Toyota having a market share of 25.9 %, Honda have 12.3% while Suzuki Being
the Market Leader with 61.8%
Hence, it states that the rivalry among the existing competitors is high due to the rapid growth of
industry bringing more opportunities to be catered. The industry is somewhat cyclical but it may
or may not fulfil the intermittent overcapacity depending on the market conditions and
availability of resources. The giants operating in industry has high fixed cost as they buy the
manufacturing machines and plants. The industry existing brands has significant product
differences. The Suzuki mostly targets the lower class and upper lower class with Alto, Mehran,
Cultus and Wagonr while the Toyota targets middle class and upper middle class and upper class
promised the best quality to be delivered with Corolla, Prada, Land Cruiser. The Honda mostly
targets upper middle class and upper class with Honda Civic and Honda City. They have a very
interesting slogan aligned to their brand identity which is “Mein to Honda hi laisan” means I will
buy the Honda only. The competitors are diversified with targeting different segments of the
market rather than targeting the same. They are diversified in terms of products as well offering
Sedan, SUV and other category vehicles to the customers respecting their choices. It will be very
hard to get out of this business as this automobile industry business requires consistent efforts
and skillful workforce. The customers yet will not incur any significant costs in switching
towards the competitors as there are plenty of choices. The customers are well aware about the
existing brands and their product offerings and does not require much information while
purchasing a product. The firms existing in the market has different sizes based on their customer
chain and experience. Based on that they capture the market share. The Suzuki has targeted

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around 61.8% of the market share and succeed to capture it while others have secured rest
percentage of market share like Honda having 12.3% and Toyota with 25.9%.

YES MODERATE NO
1) The Industry is growing rapidly. 

2) The industry is not cyclical with intermittent 

overcapacity
3) The fixed costs of the business are a relatively low 
portion of total costs
4) There are significant product differences and 
brand identities between the competitors
5) The competitors are diversified rather than 
specialized
6) It would not be hard to get out of this business 
because there are no specialized skills and facilities
or long-term contract commitments, etc.
7) My customers would incur significant costs in 
switching to a competitor.
8) My product is complex and requires a detailed 
understanding on the part of my customer
9) My competitors are all of approximately the same 
size as I am.
3 1 5

Low Moderate High

Opportunities:

O1: The industry is growing rapidly and has vast scope in future as well due to the changing lifestyles of
people and growing businesses.

O2: The variety of products is available with unique and strong brand identities of giants.

O3: The competitors operating in the automobile industry are diversified offering vast product portfolio
to capture the market.

Threats:

T1: The fixed costs of the business are relatively high portion of total costs.

T2: It is very hard to get out of the automobile business if there are no skillful workers and facilities.

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T3: The customers would not incur any significant costs in switching to a competitor.

T4: The products are not very complex and the customers require no any additional information while
making a purchase.

T5: The giants operating in the automobile industry vary in size and market share.

Overall Industry Rating:

No: Favorable Moderate Unfavorable

1. Threat of new entrants. 9 2 1
2. Bargaining power of buyers 6 0 4
3. Threat of substitutes 0 0 4
4. Bargaining power of suppliers 6 0 4
5. Rivalry among existing competitors 3 1 5

Total 24 3 18

EFE Matrix of Auto Mobile Industry:

Opportunities Weight Rating Weighted Score

1 Large firms have a cost or performance advantage

0.05 3
(Economic+ Threat of new Entrants) 0.15

2 A lot of investment and capital is required to enter this industry

which is on average here RS 10-15 Billion so not every person or
company can enter the business that easily. 0.03 2

(Economic+ Threat of New Entrants) 0.06

3 Suzuki provide much incentives to the decision makers by offering

them customer service and after sale service. 0.06 3
(Economical+ Bargaining power of Buyers) 0.18

4 The automobile industry business is important to suppliers because

they get much profit in return (Economic + Bargaining Power of 0.03 3
Suppliers) 0.09

5 The auto-mobile industry is increasing rapidly with 4.6 % growth rate

and the customers are increasing on a daily basis. 0.07 4
(Economic + Rivalry among competitors) 0.28

6 The large number of suppliers who offer low cost with best quality 0.05 3
0.15
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are available in the industry.

(Economic+ Bargaining Power of Suppliers)

7 New Comers have less experience and connections therefore they

incur more cost and will not be able to find skillful workforce. 0.03 1
(Political+ Threat of new Entrants) 0.03

8 The large number of customers are available to be catered.

0.03 4
(Economic + Rivalry among competitors) 0.12

9 The input (labor, material, service, suppliers) is standard and can be

obtained from any supplier. 0.03 2
(Economic+ Bargaining power of suppliers) 0.06

10 The variety of products is available with unique and strong brand

identities of giants. (Social+ Threat of New Entrants) 0.03 2
0.06

Threats Weight Rating Weighted Score

1 The fixed costs of the business are relatively high portion of total
0.06 2
costs. (Economic+ Rivalry among Competitors ) 0.12

2 The customers do not incur any significant costs in switching to the

0.09 2
competitor.( Economic+ Threat of Substitutes) 0.18

3 The cost of purchases has significant influence on overall costs.

0.07 2
(Economic + Bargaining power of Suppliers) 0.14

4 The substitutes have no performance limitations and can exceed the

existing competitors in offering the value for money to the 0.07 2
customers. ( Economic+ Threat of New Entrants) 0.14

5 The customers are more likely to substitute as they are continuously

looking for the best quality and featured product. 0.05 3
(Economic + Threat of Substitute) 0.15

6 The customers are highly sensitive to the prices and can switch to
the substitutes if they are being offered with the best value in the 0.05 2
affordable price. ( Economic+ Threat of Substitutes ) 0.10

7 The products are not very complex and the customers require no
any additional information while making a purchase. 0.06 3
(Social+ Rivalry among Competitors 0.18

8 The giants operating in the automobile industry vary in size and

0.04 3
market share. ( Economic+ Rivalry among Competitors ) 0.12

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9 The customer has multiple choices to select the substitutes like MG,
0.05 2
KIA, ALSVIN, Hyundai (Economic+ Threat of Substitute) 0.10

10 The buyer is well aware about the important information

0.05 2
(Economic+ Bargaining Power of Buyers) 0.10

  Total EFE Score 1.00 0 2.50

Strategies for Opportunities: The auto-mobile industry is increasing rapidly with 4.6 %
growth rate and the customers are increasing on a daily basis.
As the whole automobile market will broaden this opportunity will increase the ground for
all players to conquer therefore Suzuki can exploit this opportunity by focusing on the upper
variant cars like vitara, jimny and ciaz the reason for going behind that segment is because
Suzuki already has very high sale in lower variant cars like alto, but is performing poorly in
upper variant cars therefore they should advertise more for these cars, set up test drive
opportunities for people so they can check the quality of the car. This will gain consumers
trust that Suzuki can also make good luxury cars as well.
Strategies for threats (The customers do not incur any significant costs in switching to the competitor.
(Economic+ Threat of Substitutes)

Well the best way to overcome this threat is that Suzuki should provide its customer with
exceptional after sales services this will bring the customer closer to the company as a result
customer loyalty will increase, allowing Suzuki to overcome this problem. The other step
which Suzuki can take to overcome this problem is that they should focus on providing
customer service in very economical price rather than exploiting the customer for the brand
name like other rivals are doing at the moment. For example, if you send a corolla of regular
checkup the company demand 5000 for just scanning the car whereas if you get it done for
local mechanic he takes around 500-1000 for it.

Module 2
Company and Competitor Analysis

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KEY SUCCESS FACTOR

- Research and Development

- Financial Position
- Market Share
- Product Quality
- Price Competitiveness
- Management
- Global Expansion
- Customer service
- Network sales and distribution
- Production capacity
- Alliances

Mission of Suzuki:
To cater every segment by providing economic and user-friendly cars

Vision of Suzuki:
Suzuki Pakistan aims to provide both its final and business clients with the most reliable products and
quality maintenance services in domestic and International Markets. We aim to be the most tech
friendly company in order to grow and be profitable as well to protect the environment and to make
employees do what they are best at. Thus making us best in the field.

COMPETITIVE ANALYSIS

When it comes to the automobile sector of Pakistan the market structure that the automobile
sector of Pakistan is following is an oligopoly structure in which 3 Main Players exist who have
a very strong appearance and hold in the market of Pakistan. These 3 major Players are Suzuki,
Toyota and Honda. They have dominated this market for decades and have made life miserable
for the ones who have tried to enter into this market and have not let them operate. The market
share of all three are: Toyota (25.9%), Honda (12.3%) and Suzuki being the Market Leader with
(61.8 %).
Now with the Government Auto Policy the government have made ways for the new companies
to enter the market and increase much competition in the Auto Mobile Sector of Pakistan. These
policies have encouraged new companies to come and set up plant in Pakistan. There is 25 % off
for the new comers on import duty for importing the spare parts for the next 5 years. More over
100 units of complete build units can be imported on 50 % off on import duty. With this many
companies such as KIA, Proton, Hyundai, MG have already started operating in Pakistan while
Renault, Volkswagen are on their way to start their operations in Pakistan.

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In some time, this will break the oligopoly Structure in Pakistan and the market share will hence
be divided into different companies rather than only 3 companies.
In order to compete with these companies which are newly introduced the three main players
will have to now work more efficiently provide more and best possible features in a less price,
this can keep their sales constant or it will fall. More over the Research and Development
Department should now work more towards making E-Cars as the trend will be of that now with
petrol prices sky rocketing the sky and people are now being frustrated of it.

1. ADVERTISING:
Advertising plays a key role in making the people aware of your product and increasing
the sales volume by it. Suzuki tends to advertise in a way that it could attract the middle
class and lower middle-class segment of the market by advertising their products as
affordable one among the competitors whereas Toyota and Honda also perform in the
same manner.
2. MARKET PENETRATION: The market penetration strategy is widely implemented by
Suzuki to capture the most market share. Suzuki often starts introducing products by
setting lower prices to penetrate in the targeted segment and then increases the prices
once they get successful in getting recognition. The Toyota and Honda often stick to the
prices they offer at the start.
3. CUSTOMER SERVICE: The customer services involve the after sales services to customers
if they are facing difficulties dealing with the product. Suzuki does a moderate job in
providing quality customer service. The lower score of Suzuki mainly involves untrained
employee which sometimes fail to provide the promised services. Toyota performs the
same in maintaining the customer service whereas Honda outperforms both Suzuki and
Toyota in customer service as they provide the promised quality.
4. STORE LOCATIONS: The store locations are the physical retail stores operated and owned
by retailer. The Suzuki has equal score compared to its competitors Toyota and Honda.
The Suzuki Stores are located at the right places to target and approach the right clients.
5. R&D: The R&D involves the research conducted by companies to ensure that the
product they are going to launch should be according to consumer needs. Suzuki and its
competitors Toyota and Honda have scored equal in this particular sector. They do not
conduct much research before launching a product in Pakistan’s market as they launch
the products which are already been operating in other countries. So, any product before
launching in the Pakistan’s market has already gone through the R&D part.
6. EMPLOYEE DEDICATION: The Employee dedicated is all about satisfied the customer by
fulfilling the promises and by providing the best service possible. The employee
dedicated also ensures that the employee is satisfied with the company and is willing to
work happily for it. Suzuki has done great job in creating employee dedication as it
provides a good salary, incentives and motivated work environment to encourage the
employee dedication comparatively to it’s competitors Honda and Toyota.

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7. FINANCIAL PROFIT: The financial profit of a company states that whether company has
achieved a stability in the market or it is still striving to create its place. The Suzuki earns
almost 200% profit per unit compared to its competitors Toyota and Honda. The Suzuki’s
target market has ability to afford their products even if they are selling it with the profit
margin of 200%. The Suzuki has very strong position in making a financial profit.
8. CUSTOMER LOYALTY: The customer loyalty is the retention of a customer. Retaining a
customer is one of the toughest tasks to be done by any company whether it is Suzuki,
Toyota or Honda. The Suzuki often struggles in retaining their customer because as per
their target market which is middle class and lower middle class. They mostly remain a
bit unsatisfied with the quality of the product which indirectly impacts the customer
loyalty.
9. MARKET SHARE : The market share is the percentage obtained by any entity in the
existing market considering its competitors. The Suzuki is on top having 61.8% market
share in Pakistan lagging behind its competitor Toyota on 25.9% and Honda on 12.3%.
10. PRODUCT QUALITY: The product quality is basically the features being offered to the
consumers which satisfies his/her need. Suzuki has low product quality compared to it’s
competitors Honda and Toyota. Suzuki may have captured the most market share but it is
because there is no any other competitor offering products in low prices but those
products are not value for money as their quality is not up to the mark. The Toyota and
Honda may be charging more for their products but at least they provide the promising
quality which lasts longer.
11. TOP MANAGEMENT: The top management of the company is consisting of the
Executives and Chief of executive of the company. The Suzuki, Honda and Toyota
almost perform the same. The evidence for that is they are the market leaders and giants
which ultimately suggests that they are in the right hands and are managed properly.
12. PRICE COMPETITIVENESS : The price competitiveness implies that whether the product or
service offers the best value in the given segment or not. The Suzuki has very low-price
competitiveness as the charge more but give less. Their products do not come with latest
features including airbags and safety equipment though they charge a lot. An average a
consumer pays around 15-20 lac for their cars like Cultus, Wagonr and Alto but then they
regret buying it due to less comfort and ordinary product quality. Comparatively, Toyota
and Honda are ruling the price competitiveness as they somehow provide the products
with well-equipped safety features and comfort.

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CPM Matrix:

Suzuki Toyota Honda

   
Ratin Ratin Ratin
Weight Score Score Score
Critical Success Factors g g g
Advertising 0.09 3 0.27 3 0.27 2 0.18
Market Penetration 0.10 4 0.40 3 0.30 3 0.30
Customer Service 0.09 3 0.27 3 0.27 4 0.36
Store Locations 0.03 3 0.09 3 0.09 3 0.09
R&D 0.05 2 0.10 2 0.10 2 0.10
Employee Dedication 0.06 4 0.24 3 0.18 3 0.18
Financial Profit 0.08 4 0.32 2 0.16 2 0.16
Customer Loyalty 0.10 3 0.30 4 0.40 4 0.40
Market Share 0.08 4 0.32 3 0.24 2 0.16
Product Quality 0.13 2 0.26 3 0.39 3 0.39
Top Management 0.07 3 0.21 3 0.21 3 0.21
Price Competitiveness 0.12 3 0.36 4 0.48 4 0.48
Totals 1.00   3.14   3.09   3.01

Gap Between Suzuki and Competitors:

1. CUSTOMER SERVICE: Suzuki may have most of the market share but it lacks in providing
the best customer service due to their unskilled workers. Mostly when you visit their
workshop for analysis of your vehicle you will find the workers telling you about the non-
concerned costs and will end up generating the long bill to grab you as much as possible.
They often lack in providing the service as per due date given by them and end up getting
more fix your vehicle. The company customer service also creates difficulties for insured car
customers if they want to claim the insurance, they are required to go through all the
unnecessary process to get the car fixed. Whereas the Toyota and Honda somewhat provide
the best customer service in guiding the customer for their betterment.
2. CUSTOMER LOYALTY: The Suzuki has large customer chain but their customers are not brand
loyal. The customer loyalty is the retention of customer to buy your product again and again
and to stick to your company only. The customers of Suzuki when they are capable of
affording a better car they often switch towards Toyota or Honda because they are also aware
that the quality, they are getting for the amount there are paying is not justified. So, if the
customers want to buy the SUV, he rather switches towards buying Honda Vezel rather than
buying Suzuki Vitara.
3. PRODUCT QUALITY: Suzuki has vast number of products which it offers but the main thing
is whether it provides consumers the products they want and whether they are satisfied with
the quality or they are having trouble. The answer is no, the Suzuki customers often complain
about the product quality they are being offered with. The amount of money they are paying
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does not justify the quality they are getting in return. The Honda provides the best possible
quality to their customers and they have made a very strong brand image in product quality.
The Toyota also lags behind Suzuki in providing the quality to its customers. They may
charge more but they give what they charge for.
4. PRICE COMPETITIVENESS : The price competitiveness can be defined as whether the product
offered at certain price, satisfies the customer needs or not. The Suzuki also lacks in price
competitiveness as we already mentioned that they are not providing the quality they are
charging for. The customer buys their products because they do not have any other substitute
to switch. If we consider the modern automobile industry the customers are now having
substitute like KIA Picanto and mostly consumers have switched towards that which offers
the best value in that price segment.

Module 3: Internal Company Value Chain Analysis:

In bound Logistics:

The inbound logistics department of Suzuki is enriched with many suppliers who provide the raw
materials required to assemble the car. There are approximately 500-650 suppliers with whom
Suzuki Pakistan works, having at-least 10-12 suppliers for each body part of the car. These parts
include Steel Sheets, Plastic Sheets, Aluminum, Tires, engine, glass, leather and many things
which are essential to make a car

In view of increased demand across the country, Suzuki have opened a new plant in Pakistan
worth USD 450 Million due to which now the production of cars will be done at a much faster
pace and in the most cost-effective way possible. This will decrease the delivery time of cars and
the cars will be delivered early which will keep the customers very satisfied.

Real-time Dashboards were developed for Logistics department to display product availability
and stock movement at a particular location. A comprehensive training was also provided to
different employees to develop dashboards of their respective department.

Strengths:
1. Lot of suppliers are available for each spare part of a car so can get best price, availability and
less chance of exploitation from suppliers
2. Real Time dashboards were available for logistics department to help them in managing the
operations quickly and effectively.
Weaknesses:
Low quality raw material being bought from the suppliers to save the cost, no priority to quality
of raw materials.

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Operations:

Suzuki effectively handles its production of car in the best way possible especially in the time of
Covid-19. Compliance of safety culture across the board was focused. Rigorous training sessions
were conducted of the SOPs for our depot staff in the light of compliance of Personal Protective
Equipment (PPEs) and HSE. To better equip personnel with any untoward situations, regular
incident reviews and learning sharing was done at sites along with more structured ERP drills.
Each Car testing is done before it leaves the factory

SAP

Suzuki successfully performed the upgrading of SAP back-end database to the latest release i.e.,
Oracle 12c database which provides enhanced security, performance, and continuous
availability. Additional advanced features which are being utilized include enhanced database
performance, database management & availability. The latest release provides better support,
new functionalities, and reliability for continued business operations on a 24x7 basis.

Solar Power Project

During the year Suzuki has embarked on an initiative to install environmentally friendly solar
energy generation units at its various Plant locations across the country, where feasible. The
operations of these projects have begun and now Suzuki is trying to implement this system in all
their plants and even in the showrooms

Strengths:
1. The Solar panels are being installed to generate their own power so that It should save the cost
and should not rely on any other source of power generation.
2. The SAP is implemented to make things easier and less complicated
Weaknesses:
1. Suzuki has high training cost for sap for employees
2. Suzuki sometimes has delay in production time due to some obvious reasons.

Out Bound Logistics:

After the cars are made ready after the production, they are sent to Suzuki Showrooms which are
in various locations all over Pakistan. Or they are sold directly to the B2B customers. These B2B
customers include Airport Metro and rental car companies who buys cars in high quantities due
to a lot of use and this is beneficial for Suzuki too as it generates high sales and revenue for
them. So, Suzuki targets the end customers through showrooms and social media more over it
entertains the B2B enquiries as well.

Strengths:
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1. The Suzuki has very strong outbound logistics system and the employees are expert at
managing the tasks effectively.
2. The vehicles are sent to the authorized deals first to push them for marketing the products
and this process takes place as fast as possible to enter the market.

Weaknesses:

1. The employees sometimes make mistakes in managing the outbound logistics properly
due to the workload.
2. The Suzuki tries to hire less employees to manage the outbound logistics to save the cost
which sometimes result in mistakes in management.

Sales and Marketing:

Suzuki is the nation’s largest auto mobile company having a market share of 68%, and is
currently engaged in the marketing and distribution of various cars including mainly Mehran,
Alto, Ciaz, Vitara, Cultus and jimny

Suzuki possesses the largest distribution network in the country comprising of 5000 outlets out
of which serve both the end customers and B2B customers

Furthermore, Suzuki targets all the segments of the market. It makes the economical cars such as
Alto, Cultus, Mehran which the lower and middle class can afford and it targets the higher class
as well by manufacturing luxury cars such as Vitara, Ciaz, Jimny. Suzuki have a very strong hold
of market in the economical cars but in Luxury cars its sales are less as compared to the
competitors such as Toyota and Honda as in luxury car people prefer these brands more.

The advertisement of Suzuki includes various product and promotional campaigns, i.e., customer
car draw competition and numerous pocket friendly shopping, meal and enjoyment offers for the
constant consumers, because of Suzuki collaboration with number of retail outlets such as
Imtiaz. Moreover, the digital fan base of Suzuki is extremely strong through Facebook,
Instagram, YouTube, Twitter, and LinkedIn, which contributes a lot towards Suzuki being the
market leader.

Strengths:
1. Being the market leader, Suzuki has high sales and revenue.
2. Marketing done efficiently through digital social media and through different promotion scheme
by combining with different retailers like Imtiaz.
3. The Suzuki has strong distribution channels which helps them in placing their product as fast as
possible to dealer to start the sales and marketing
Weaknesses:
1. The sales and marketing of Suzuki has failed to increase sales in luxury cars and unable to make
customer switch in luxury cars segment.

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Services:

Suzuki Being the Market leader in the Pakistan Auto Mobile industry strive to serve its customer
better and do their best to satisfy them. Customer feedback is taken on frequent basis from b2b
and end customers both to know how are they having the experience in driving Suzuki cars and
if any complains it is dealt in a best way possible and then it is made sure that complain doesn’t
come in the new units being produced and assembled.

Also warranty of cars is given depending on the car and its model and if any issues come then
free of cost services are provided to the customers. Customers dis satisfaction is the last thing
Suzuki wants.

Strengths:
1. warranty being provided by the companies for cars

Weaknesses:
1. Suzuki has poor customer service; customer service team is not able to tackle the complaints in a
proper way and often dissatisfied the customers.
2. Suzuki has employees with lack of experience of customer service team.

Procurement: -

Suzuki’s procurement and services department is inclined towards getting high quality material
and services at the most economic costs through competitive bidding and transparent process and
they prefer buying from such sellers who are ethical, transparent, competitively professional and
cost effective as well so that its goes along Suzuki’s regulatory and procedural requirements and
business objectives and Suzuki is really forward towards strengthening their relationships with
their contractors more based on procurement best practices and value addition in products and
processes. And the procurement department has taken my initiatives in their recent past to bring
influence in the procedure that result in efficient and effective procurement.

There are a lot of suppliers with which the Suzuki Deals with such as of Engines, tires, glass,
different sheets such as Plastic, Metal, Aluminum, and many other components of car suppliers

So therefore, we’re coming to the conclusion that procurement is basically arranging supplies
for different departments of the firm in a way that adds value to the product, aligns with the
objectives of the firm and is cost effective and also strengthens relations with the suppliers, it’s
about soliciting quotations and seeking clarifications from the employees about their wants and
also about negotiating.

Strengths:

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1. Suzuki being the market leader can get raw material at the best possible price as compared to
competitors.
2. Suzuki Gets high credit time from suppliers to repay due to a good reputation in market.
Weaknesses:
1. Quality is not given much priority while procurement.

Technological Development:

As for the technological Development for Suzuki It has introduced a new Plant in Pakistan worth
USD 450 Million, with this there will be efficient production of cars and cost effectiveness will
be done.

Further-more Suzuki have implemented the idea of Solar Panels on some plants which have
eased the ways in running the operations and saving cost of electricity so this gives them
competitive advantage to some extent. Further implementation of Solar Panels is on its way to all
the Suzuki Plants and showrooms.

Suzuki upgraded to seamless integration of 12 SAP modules, a database of over 1500 GB of data
and the profiles and access protocols of over 500 SAP users.

Suzuki has successfully upgraded its internal SAP system to the latest ECC 6.0 version to
streamline its operational efficiency.

This revamp will allow Suzuki to provide business support at par with international standards to
its employees and business partners. This initiative has been undertaken by the management
keeping in view the role such system improvements can play as success factors for the
organizations development.

With this technical upgrading, new horizons in business innovation, cost reduction and
functional capacity improvements have been commenced at Suzuki.

Strengths:
1. Solar panels are being used on manufacturing plants which reduces operation costs and gives a
competitive advantage to the company.
2. Suzuki has implemented efficient Sap module to gain more effective productivity.
Weaknesses:
1. The R&D of Suzuki has slow progress towards innovation and often ends up in low featured
models.
2. The company’s technological sector often lacks in innovation and ideas.
3. Suzuki has very less advanced features in their cars which leads to disappointment for the
customers.

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Human Resource Management: -

As for their human resource management, SUZUKI believes that their human capital is their
asset which appreciates with time and that can happen if they put things correctly in place, right
person should be at the right place and right time, they are working towards making their
organization leaner and more flexible to become more responsive and they have a policy of
handling their HR issues with fairness and transparency. They work towards enhancing their
employees’ skills and leadership qualities through challenging assignments, empowerment,
promoting employees within the organization and concentrating on fast-track employees to fill
higher vacancies.

And their employees who are willing to increase their input in the firm are more considered for
future career development and the young people who are willing to work are also given chance
with assignments that encompass a great deal of autonomy and responsibility. A system of
authentic evaluation of performance is implemented at SUZUKI and the individual performance
is aligned with organization’s goals and to motivate their employees a performance-based reward
is given on yearly basis.

Their training process includes customized training and that’s where trained people from
different companies of the same industry comes and SUZUKI sends their employees there as
well, and also on the job training and that’s where the employees are being trained inside the
firm by observing the existing working staff and their methods and learning through that, off the
job training is also provided where the employees are given lectures, videos, presentations and
self-study.

Also, the methods used at SUZUKI are:

• Job instruction training.

• Job rotation.

• Coaching.

The major focus of training is on:

• health and safety environment

• computer training for integrated resource planning

• technical and operational focused inputs

• management development

• leadership

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• presentation skills

• computer-based finance

• human resource management

• team building

• labor and corporate laws

• supply chain management

As we know that the personality of an organization can be depicted through its corporate
environment, thus SUZUKI gives extra importance to their working environment. The tools for
making the environment more competitive and used by the company are given as follows: -

• Employee recognition

• Motivation Survey

• Communication

• Cafeteria/fitness centers/ recreational activities.

Before recruitment SUZUKI always checks if there is any replacement or not. They always
prefer their current employees for important managerial jobs because they think that the current
employees know the company better as compare to someone else. Another reason for this
internal hiring is to build the morale of their employees as watching the reward for their loyalty
and hard work. If there is no replacement SUZUKI checks the approved strength of department.
It always takes fresh intake of candidates. The candidates are interviewed. SUZUKI takes
preview-based interviews. Candidates are examined based on information in their CV and some
other regular structured questions.

Strengths:
1. Suzuki uses best training methods train its employee working within the organization and
workers working in the workshop
2. Many fringe benefits are provided to workforce to keep them satisfied and motivated at their job.
Weaknesses:
1. Suzuki tries to keep the employee wages and salaries bill low which leads to hiring inexperienced
workforce and less educated.
2. Suzuki gives limited chances to employees for increase in their salaries

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Infrastructure: -

Infrastructure of Suzuki Pakistan comprises of State-of-the-Art plant that spreads over 64 acres,
Luxury Cafeterias, Gymnasiums, latest and technologically updated working environment, health
care facilities, fully furnished daycare centers and learning and recreational activities for the
children of female employees.

Apart from that the company the company provide free transport facilities to all its employees
and for that Pak Suzuki have own feet of pickup vans and buses.

People having managerial positions also enjoy the benefits of free cars for personal use.

Apart from that the company owns some retail stations which provide customers 3s services.
Strengths:
1. Suzuki has new plant being installed in Pakistan worth USD 450 million
2. Suzuki provides free transport facilities to all the Suzuki employees working in the organization.
Weaknesses:

1. The Suzuki hires less experienced staff to save its costs.

IFE Matrix of Suzuki:

Strengths Weight Rating Weighted Score

1 New plant being installed in Pakistan worth USD 450 million 0.04 4 0.16
2 Best training methods are used to train the workers 0.05 3 0.15
3 Many fringe benefits are provided to workforce satisfied 0.02 3 0.06
4 Solar panels being used on plants which reduces operation cost and
0.03 4
gives a competitive advantage 0.12
5 Suzuki provides free transport facilities to all the Suzuki employees
working in the organization. 0.04 4
0.16
6 Warranty of cars being provided depending on the models 0.05 3 0.15
7 As being the market leader, Suzuki can get raw material at the best
0.06 4
possible price as compared to competitors 0.24
8 Gets high credit time from suppliers due to a good reputation in
market 0.04 4
0.16
9 Marketing done efficiently through digital social media and through
different promotion scheme by combining with different retailers 0.04 3
like Imtiaz. 0.12
1 Strong Distribution Channels 0.05 3 0.15

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Weaknesses Weight Rating Weighted Score

1 R And D slow progress towards improving the luxury car segment,
0.06 2
lack of innovation 0.12
2 Quality is not given much priority while procurement of raw
0.05 1
materials 0.05
3 Fails to increase sales in luxury cars and unable to make customer
0.05 2
switch in luxury cars segment 0.10
4 Customer service team not able to tackle to complaints in a proper
0.08 1
way of customers 0.08
5 Delay in Production of Cars, production time not as planned 0.05 1 0.05
6 Less Safety features in cars as compared to competitors such as
0.09 1
airbag features 0.09
7 Lack of Coordination between the organization’s departments 0.06 1 0.06
8 High training cost for teaching sap software to employees 0.05 2 0.10
9 Company sales being low during the time of Covid-19 0.04 1 0.04
1 High maintenance of cars in just few years
0.04 2
0 0.08
  Total IFE Score 1.00 0 2.25

Strategy for Strength and Weakness: what the company should do is that it should pass on this cost
benefit to customer this will encourage the customer to buy more as the demand of cars is elastic. This
will increase the company profits in the long run.

Strategies for overcoming weakness Less Safety features in cars as compared to competitors such as
airbag features)
Well to overcome this weakness what the company can do is that they can provide customer with
option to add on features such as airbags, ac leather seats so on with additional charges.

Module 4

The Matching Stage:

TOWS MATRIX

STRENGTHS WEAKNESS
11. R and D slow progress
1. New Plant of Suzuki towards improving the
being installed worth luxury car segment lack
USD 450 Million of innovation
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2. Best Training methods
are used to train the
workers
3. Many fringe benefits
are provided to the
work force to keep them
satisfied
4. As being the market
leader Suzuki can get
the raw material at best
possible price as
compared to the
competitors
5. Warranty of the cars
being provided
depending on the
models
6. Gets High credit time
from the suppliers due
to good reputation in
the market
7. Strong Distribution
channels
8. Marketing done
efficiently through
Digital social media and
through different
promotion scheme y
combining with
different retailers like
Imtiaz
9. Solar Panels being used
on plants which reduces
operation cost and
reduces the competitive
advantage
10. Good resale value of
cars
OPPORTUNITIES S-O
1 Large firms have cost performance advantage ● (Differentiation)
2 A lot of capital and investment is required to enter this industry
which on average is RS10-15 Billion so not every business or Implementation:-
company can enter this business easily
3 The existing competitors provide incentives to the decision makers As Suzuki main plant is
by providing them customer and after sales service running on the Solar
4 The automobile industry business is important to the suppliers Panel system this gives
because they get much profit in return them less operational
5 The automobile industry is increasing rapidly with 4.6 % growth cost and competitive
rate and the customers are increasing on daily basis advantage so with this
6 Large number of suppliers who offer low cost with best quality are Suzuki can innovate
available in the market and introduce new
7 New comers have less experience and connections so they will models cars rapidly and
incur more cost and will not be able to find skill full workforce also work on making E-
8 Large number of customers are available to be catered cars as people would be
9 The input is standard and can be obtained from any supplier in the very much interested in
market this as people want to
10 The existing competitors provide much incentives to the decision get rid of petrol issues
makers by offering them customer service and after sales service
THREATS S-T
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12. Quality is not given
priority while
procurement of raw
material
13. Fails to increase sales in
luxury cars and unable
to make customers
switch in luxury car
segment
14. Customer service team
not able to tackle
complaints of customers
in a proper way
15. Delay in production of
cars, production time not
as planned
16. Less safety features in
cars as compared to the
competitors such as air
bag features
17. Lack of Coordination
between the
organization
18. High training cost of
teaching SAP software
to employees
19. High Maintainance cost
of cars in just couple of
years
W-O
● With new Entrants
entering the Pakistan
Auto Mobile Market
such as KIA,MG,
Hyundai and Proton it
will take time in to
establish proper
distribution channel and
best skilled labor and
supplier, Suzuki who is
the market leader can
take advantage of it and
produce new models in
competitive prices with
the help of low cost it
will be getting being the
market leader .
W-T
33

1. The fixed cost of the business is relatively high portion of total cost ● Differentiation: -  Suzuki cars lack with
2. The customer doesn’t incur any significant cost in switching to the features such as
competitors No doubt Suzuki have a inserting safety features
3. The cost of purchase has significance influence on the overall cost good resale Value and such as airbags in the
4. The substitutes have no performance limitation and can exceed and have the highest sale of cars for customers safety
can exceed the existing competitors in offering the value for money cars but it still can lose
as now with new comers
to the customers its customer if they
there is very tough
5. The customers are more likely to substitute as they are continuously want and like the
looking for the best quality and featured product competitor’s car more competition and the loss
6. The customers are highly sensitive to the prices and can switch to as the customer doesn’t of customers can be
the substitutes if they are being offered with the best value in the get any additional cost done easily as they keep
affordable price in switching the brand. these features as basic
7. The products are not very complex and the customers require no features
additional information while making a purchase
8. The giants in the auto mobile industry operating in the industry
vary in size and market share
9. The customers have multiple choices to select the substitutes like
MG, KIA, Hyundai
10. The customers are more likely to substitute as they are continuously
looking for the best quality and featured product

 Suzuki lack investment

in luxury segment more
such as Sedan cars and
sales are low as
compared to the ratio of
economical cars

Space Matrix:
Financial position:
When we talk about financial position it consists of 5 factors such as (ROI), leverage, liquidity, working
capital and cash flow. Being strong on these 5 factors show how strong the company financially is.
ROI: return on investment is consider as the profit earned on invested capital.
Leverage: this ratio takes into consideration that how much capital comes from debt(loans) and assesses
the ability of a company to meet the financial obligations that means that the profit of the should be
such that the company can pay of the interest amount of those loans.
Liquidity:

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this shows the company’s ability to pay off its liabilities with its assets. For example, one assets can
payoff one liability.
Working capital: the amount of funds the company is using for its day to day operations.
Stability position:
This highlight the external factors the company has to face and consist of the following factors.
Rate of inflation: inflation is too much money buying too few goods that means the purchasing power of
money start to decline. However, when seeing from the business point of view companies closely
monitor the rate of inflation in a country the reason behind it is that their cost is dependent upon it
apart from that their profits are affected by it plus the sales of good is also effected by the rate of
inflation in a country.
Technological changes:
the development in technological area is fast growing and as a result some companies take advantage
for example at present solar power is a new concept in Pakistan thus many companies are taking
advantage of this technology and reducing their production cost.
Price elasticity od demand: this show that how sensitive your customer is to price. If price increases and
as a result demand decreases this means that you have an elastic demand and if opposite happens this
means the company has inelastic demand. In case of car industry, it has an elastic demand as its
consider luxury item.
Barriers to entry:
This is basically how easy it is for a new comer to enter the industry and get out of it in case of a loss.
Competitive position:
Market share:
This show that how much percentage of the total share is owned to a company. The company which has
most sales in that particular industry is known as the market leader. In case of Car industry Suzuki is
market leader at present.
Product quality: when It comes to product quality Suzuki has different products which offer different
quality to consumers however the most sales which Suzuki gets is from its cheap quality products such
as alto.
Customer loyalty:

Suzuki has a very high customer loyalty the reason behind it is that Suzuki sells cheap cars but however
they provide a very good after sales services. parts are easily available and local mechanics can fix the
car

Industry Position:

Growth Potential:

At present Pakistan economy is suffering, the economy growth rate negative. IMF predicts that in near
future Pakistan will achieve nearly 4 to 5 % this means people income will rise thus demand for cars will
rise

Financial Stability:

Auto-Mobile sector sales recently declined in the Covid-19 time as the people had low purchasing power
and were employed. Normally this sector is increasing on regular basis yearly.

Ease of Entry into market:

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As with auto Policy 2016-2021 of government, it has attracted the companies to come and set up in
Pakistan with less of import duty for them and the insurance and license getting is much easier than it
was before

Profit Potential:

Profit Potential will rise as the market for cars will widen in the coming future thus the profit potential
will rise. The market is expected to grow at 4.6% per annum

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Strategy: Aggressive

Market Development:
Suzuki though have the majority of market share of Pakistan’s automobile industry but still it should
design the market development strategy in order to grow further. The Suzuki is currently famous for its
low-price vehicles like Alto, Cultus and Mehran. The Suzuki has not performed well in developing market
for their other products like SUVs and Sedan. The Suzuki’s Vitara and Ciaz are two ignored vehicles with
very low sales. Suzuki should focus on developing the market as it can help them in generating more
sales and can help them in capturing even more market share.

Market Penetration:

Suzuki has already performed market penetration very well for its main products. Their vehicles with
low end prices break the records of sales as there is no competitor of Suzuki in lower segment but
Suzuki has failed to penetrate their other products in the market. Suzuki Vitara and Suzuki Ciaz are two
major failures of Suzuki which require a lot of attention and different marketing tactics to sale them out
in the market and to help the company for penetration. The market penetration will increase its profit in
the SUV and Sedan segment.

Product development

The Product development involves the innovation and changes which a product can go through. The
Suzuki has less innovated cars compared to its competitors. Suzuki should focus more on product
development and should consider the market acceptable features which they should add in their
vehicles to provide the best quality possible to their customers. Suzuki can also come up with a
completely diversified product to capture an existing market by creating the brand identity and
perception among the customers.

Forward integration:

Forward integration is basically an integration where the company owns and controls the business
activities that are ahead in the value chain of the industry. As for the Suzuki the forward integration will
be it can acquire its own company outlet showrooms from which they can directly sell cars and they
won’t have to pay commission to showroom owners

Backward integration:

It is basically a form of vertical integration in which a company expands its role to fulfill tasks formerly
completed by businesses up the supply chain. As for Suzuki the Backward integration it can set up its
own plant for basic raw materials such as Tires, engine. At present they are importing engines from
Suzuki Japan but a plant can be set up of it with ease

Horizontal integration:

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It is basically the process of company increasing production of goods or services at the part of the supply
chain. As for the Suzuki the horizontal integration can be by taking over Isuzu-Dmax as it is a new
company and its struggling with sales

Concentric integration:

involves adding similar products or service to existing business. This can be for Suzuki as they make
normal cars but they can innovate and similarly make E-Cars as people would be very interested in
switching in it as people are very much frustrated with high prices of petrol.

Module 5:

The Decision Stage

QSPM Matrix:

    Improved R&D & Marketing tactics

    innovation for Sedan & SUV
Strengths Weight AS TAS AS TAS
New plant being installed in Pakistan worth USD 450 million 0.04 3 0.12 2 0.08
Best training workshops 0.05 2 0.10 2 0.10
Many fringe benefits are provided to workforce satisfied 0.05 2 0.10 1 0.05
Solar energy is used to save the cost 0.03 1 0.03 1 0.03
Free transport facilities to the employees 0.04 2 0.08 2 0.08
Warranty of cars being provided depending on the models 0.05 3 0.15 0 0.00
Low-cost raw material because of market leader 0.04 2 0.08 1 0.04
Gets material on credit due to good reputation 0.04 2 0.08 1 0.04
Social medial marketing and promotions 0.04 1 0.04 4 0.16
Strong Distribution Channels 0.05 2 0.10 2 0.10

    Improved R&D & Marketing tactics

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    innovation for Sedan & SUV

Weaknesses Weight AS TAS AS TAS
R&D and less innovated vehicles 0.06 4 0.24 1 0.06
Low quality raw material 0.05 3 0.15 2 0.10
Unable to sale their luxury top vehicles SUV, SEDAN 0.05 2 0.10 4 0.20
Customer service is not punctual and skilled 0.08 1 0.08 1 0.08
Delay in Production of Cars, production time not as planned 0.05 4 0.20 1 0.05
Less safety features 0.09 4 0.36 1 0.09
Lack of Coordination between the organization’s departments 0.06 2 0.12 1 0.06
High training cost for teaching sap software to employees 0.05 2 0.10 2 0.10
Company sales being low during the time of Covid-19 0.04 2 0.08 3 0.12
High maintenance of cars in just few years 0.04 3 0.12 2 0.08

    Improved R&D & Marketing tactics

    innovation for Sedan & SUV
Opportunities Weight AS TAS AS TAS
Large firms have a cost or performance advantage. 0.05 3 0.15 2 0.10
A lot of investment and capital is required to enter this
0.03 2 0.06 2 0.06
industry.
The existing competitors provide incentives to decision
0.07 4 0.28 1 0.07
makers.
The automobile industry business is important to suppliers. 0.03 3 0.09 2 0.06
The industry is increasing rapidly with 4.6 % growth rate. 0.06 4 0.24 2 0.12
The large number of suppliers are available. 0.05 4 0.20 3 0.15
New Comers incur more cost in finding the skillful workforce. 0.03 3 0.09 2 0.06
The large number of customers are available to be catered. 0.03 4 0.12 4 0.12
The input is standard and can be obtained from any supplier. 0.03 4 0.12 2 0.06
Variety is available with unique & strong brand identities. 0.03 3 0.09 4 0.12

    Improved R&D & Marketing tactics

    innovation for Sedan & SUV
Threats Weight AS TAS AS TAS
fixed costs are high portion of total costs. 0.06 3 0.18 2 0.12
There are no significant costs in switching to the competitor. 0.09 2 0.18 2 0.18
The cost of purchases has significant influence on overall costs. 0.07 3 0.21 1 0.07
The substitutes have no performance limitations. 0.07 3 0.21 4 0.28
The customers are more likely to substitute. 0.05 4 0.20 4 0.20
The customers are highly sensitive to the prices. 0.05 4 0.20 3 0.15
The products are not complex and require no additional info. 0.06 3 0.18 4 0.24
The giants operating in the industry vary in market share. 0.04 4 0.16 4 0.16
The customer has choices to substitute like MG, KIA 0.05 2 0.10 4 0.20

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The buyer is well aware about the important information. 0.05 3 0.15 3 0.15
TOTALS     4.44   3.59

The company should implement the first strategy as it has scored 4.44.

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