ASHOK LEYLAND — SHATTERED DREAMS —

TRANSFORMATION FOR SURVIVAL

Submitted To :- Dr. Neeraj Anand

Submitted By :- Group 3

Shivam Ahuja Akash Agrawal

Prateek Sinha Syed Waris
 TABLE OF CONTENT
✤ History

✤ Background / About the case

✤ Rebuilding Brand

✤ Identification of Issues

✤ Theory

✤ Recommendations

✤ Evaluation of Consequences

✤ References
 HISTORY

✤ Founded in 1948 by Mr. Raghunandan Saran as Ashok Motors .

✤ Renamed and started manufacturing CV in 1955 .

✤ 2nd largest India’s commercial vehicle maker in 2007 .

✤ R. Seshasayee, Managing Director, Vision was a grand plan .

✤ Vinod K. Dasari, was Chief Operating Officer in 2007 .

✤ Flagship business of The Hinduja Group

 ABOUT THE CASE

✤ Case study provides evaluation &

decision scenario in field of Strategy
& Execution. It also touches upon
business topics such as - Value
proposition, Strategy execution.
✤ The case describes the
challenge before AL’s
management when faced
with bankruptcy, and to
consider how company
could be transformed and
led towards profitability
and growth.
 VEHICLES

✤ Buses

✤ Trucks

✤ Light Vehicles

✤ Defence Vehicles

✤ Power Solution
COMPETITOR ANALYSIS

✤ Major Competitors of Ashok Leyland :-

✤ TATA Motors

✤ EICHER Motors

https://www.slideshare.net/rohitdhoundiyal1991/ashok-leyland-29206574
 REBUILDING BRAND
✤ Closure of Unviable Product lines

✤ Revamp of Management Information System

✤ Re-gearing the system

✤ Brainstorming sessions

✤ Corporate Material Department and Material Management Department

✤ MaximiSe bought-out parts

✤ AL considered both domestic and international vendor.

✤ Vendor as partners.
 FROM SMOOTH SAILING TO A PERFECT STORM

✤ Ashok Leyland has stayed ahead of the curve, and in its first 65
years, it was a consistently profit-making company

✤ With the market split 25:75 between AL and Tata Motors, and
the industry was predominantly a seller’s market.

✤ Profitable from inception and very tech-savvy, AL has led

many of the biggest innovations in the Indian Commercial
Vehicle industry, from introducing air brakes, double-deckers
and power steering.
 Contn.
✤ The rumblings of disruption began in 2005, with the entry of new players like
Mahindra & Mahindra, Eicher, and Bharat Benz, and a surge in industry
capacity

✤ the market was hit by a perfect storm – a slowing economy drove industry
volumes down 50 per cent from 350,000 to 200,000 units per annum in just two
years

✤ Given that industry capacity was far in excess of demand, discounts jumped
from Rs 20,000 to Rs 250,000 per vehicle, turning the market into a buyer’s
market overnight

✤ AL’s debt swelled alarmingly. Even as AL remained fiscally prudent, its

outstanding debt rose from Rs 40 billion to Rs 62 billion in a matter of months.
Working capital was at 37 days and the stock price had touched Rs 11, well
below the book value. All of a sudden, the company was in survival mode.
 SINGLE WINDOW SYSTEM

✤ Engineering (CQM) form.

✤ Creating huge database of 22000 plus parts of vehicles.

✤ Total 1400 suppliers. High business with few suppliers and

vice-versa.

✤ 18% account for 92.5% business and 61% account for 1.9%
business
 SUPPLIER TYRING Y

✤ Tire-1 supplier is supported by tire-2 and tire-3 suppliers.

✤ Reduced the number of suppliers.

✤ Example: A tool kits that accompanied every vehicle. In the

late 1990s, six suppliers’ spread over Punjab , Faridabad
Bangalore and Chennai used to supply the 15 items, which
were assembled in house. A short supply of 1000 screwdrivers
meant 1000 numbers of the remaining 14 items in idle
Inventories. To overcome this problem, AL aimed at a
reduction of tits supplier base from 1400 to 750.
 RECOMMENDATION

✤ Ashok Leyland Had to restructure and reprioritise ,and in

2013, it began doing just that. Its debt was too high and its
stock had taken a beating. The team’s entire focus shifted to
making the business profitable again.
 CONT.

✤ Gunning for cost reduction – and selling non-core assets

✤ Enhancing the focus on efficiency and quality

✤ Revisiting the portfolio and diversifying dependence

✤ Selecting and tracking key metrics: End-outcome recognition is

key

✤ Restructuring the business

 WAY FORWARD
✤ Going forward, Ashok Leyland has three broad goals on revenue: pursue
domestic growth; grow the a-cyclical businesses; and drive up the share of
international revenue.

✤ Ashok Leyland had formally announced its first set of digital initiatives in
August last year:

✤ I-Alert’, which gives real-time data on the vehicle performance

✤ E-Diagnostics’, which provides diagnostics that reduces vehicle down time

disruptively

✤ Service Mandi’, a mobile platform that seamlessly connects drivers,

mechanics, parts retailers, fleet operators and dealers

✤ Leykart’, which provides platform for procuring parts on-line We are also
doing multiple things using Analytics and Deep Learning.
 REFRENCES

✤ https://www.facebook.com/ashokleylandnepal/photos/1616-il-fully-built-cont
ainer-has-large-loading-area-with-steel-covered-on-all-s/790004681391501/

✤ https://www.ashokleyland.com/en/web/ashokleyland/home

✤ https://en.wikipedia.org/wiki/Ashok_Leyland

✤ https://www.business-standard.com/company/ashok-leyland-31/information/
company-history

✤ https://in.reuters.com/finance/stocks/company-profile/ASOK.BO

✤ https://www.hindujagroup.com/ashok-leyland-ltd.html

✤ https://www.slideshare.net/rohitdhoundiyal1991/ashok-leyland-29206574
THANK YOU