Company Analysis: Bajaj Auto Ltd.
| June 04,2010 10:32 am IST
Bajaj Auto Ltd. (BAL) is one of the oldest and the largest manufacturer of automobiles in India and has been the market leader in scooters.
In 1990s, the near monopolistic market structure, perhaps, lulled the company into being complacent and they gave way to the competitors like Hero Honda and TVS.
Hero Honda and TVS Suzuki tied up with foreign majors to bring in the latest in terms of aesthetics and technology, and Bajaj failed to gauge the changing tastes of consumers. In 1990s, there was a marked shift in customer preference from scooters to motorcycles. Bajaj found itself at a loss here, as this was largely an unchartered territory.
Here in this work, I started with the industry analysis, company analysis, portfolio analysis, and then moved on to exploring the strategies adopted by BAL to reinvent itself and once again become a market force to reckon with in the Indian two-wheeler industry.
The paper touches upon the following areas: -
- Industry Analysis - Five Forces Analysis
- SWOT Analysis
- Tows Matrix
- Marketing Strategies
- Strategies Implementation
- Strategies for Overseas Market
- Research & Development
Bajaj Auto is the flagship of the Bajaj Group of Companies. Bajaj is currently India's largest two- and three-wheeler manufacturer and one of the biggest in the world. Bajaj has long left behind its annual turnover of Rs. 72 million (1968), to currently register an impressive figure of Rs. 81.06 billion.
Current Situation & Current Performance
BAL is currently outperforming the industry growth rate in two-wheeler segment with 32% growth in year 2004-05 v/s industry growth of 19%.
Market share in Motorcycles is improving with every passing year. It has also increased from 28% in 2004-05 to 31% in 2005-06.
Annual turnover for the year 2005-06 is Rs. 81.06 billion v/s Rs. 63.23 billion a year before - an increase of 28% which is very healthy.
BAL has significant presence in all the three basic segments - Price Segment, Value Segment and Performance Segment - and has been showing increased sales in all the segments over years.
Besides this, BAL is a market leader in two-wheeler exports and it consists a great chunk of there overall revenues. Currently, BAL is selling over 1 lac motorcycles annually in Sri Lanka, further, they are commanding 50% market share in Central America.
Profile Change in Indian Two-Wheeler Industry
The demand shift from scooters to motorcycles in the 1990s was without parallel in any comparable product category in India. This was mainly attributed to the change in customers' preference towards fuel-efficient and aesthetically appealing models, which scooter manufacturers failed to provide. The delayed launch of new, advanced scooter models, fear of four-stroke scooters being prone to increased skidding risks and vibrations, and the difficulty of maintenance also contributed to this shift..