Bajaj Auto

Bajaj’s defender strategy

 Environment
– Stable market environment till 1992
– Undifferentiated market
– Complete dominance in market
 Strategy
– How to seal of the market
– Competitive pricing
– Good quality products
 Bajaj’s defender strategy
 Entrepreneurial problem-How to seal of market
and maintain it stable
– Only scooters
 Engineering problem-How to produce and
distribute services efficiently
– Tight and highly formalized controls and schedules
– Efficient dispatch through network of 900 dealers and
1400 delivery trucks
– No specific marketing activities
– Core technology, Less investment in R&D
 Bajaj’s defender strategy
 Administrative problems-How to achieve strict
control of the organization to achieve efficiency
– Mechanistic
– High centralization-High formalization
– Functional structure with division of labor
– Rigidly defined hierarchical channels for
communication-11 levels
– Production and cost controllers dominate-Production
and engineering were dominant, No marketing
function
 Changed environment
 Increased competition
 Global rivals
 Split of market-50 and 80cc mopeds,
100cc and 150cc scooters, 2 and 4 strokes
motor cycles
 Better designs and models
 Defender to prospector
 Entrepreneurial-how to locate and exploit
new products/ markets
 Engineering-how to avoid long term
commitment to single core technology
 Administrative-How to facilitate rather
than control
 Structural changes
 Cutting down hierarchies from 11 to 6
 Increasing R&D and decentralized groups
 Greater autonomy to divisions
 Cross hierarchal teams
 Innovation and creativity