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    Submitted To: Submitted By:

    Prof. Govinda Sharma INDRA SWETABH MANI (11022)

    GUNDA V RAJYALAKSHMI (11079)

    MANNE RAMYA RAVALI (11089)

    GIRISH S D (11137)

    HANIYA ERAM (11139)

    KANISHKA SHARMA (11144)

    BPSM Proje

    ct on

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    Agenda

    Industry Overview

    Company Overview

    CPM

    Porters Five Forces

    SWOT

    SPACE Matrix

    Quantitative Strategy Planning Matrix

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    About CompanyYear Historical Significance

    1948 Birth of Ashok Motors

    1949 First A40 Assembled

    1950 Ashok Motors and Leyland (UK) collaboration

    1954 Govt. approval for manufacture of commercial vehicles

    1955 Ashok Motors becomes Ashok Leyland

    1967 Nations first Double decker bus (Titan) rolls out from AL

    1970 Special purpose Tipper vehicle (1,000 Nos.) delivered to Indian Army

    1974 Rs. 1,000 million Turnover

    1982 Nations first articulated bus introduced in Bangalore

    1987 The Hinduja Group acquired Ashok Leyland1993 First Indian Auto company to receive ISO 9002 (QA in PIS) Certification

    1997 All-Terrain logistic vehicle Stallion for Indian Army (Adv. during Kargil war)

    2006 Acquisition of AVIA

    2007-2008 Joint venture with Nissan, Continental AG, Alteams, John Deere

    2010 - 2012 Hybrid CNG, U truck platform, controlling stake in Optare, DOST, Jan Bus

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    Hinduja Group

    Ashok Leyland

    Ashok Leyland Defense Gulf Oil (Commercial explosives, Lubricants, Mining, Specialty

    chemicals

    IndusInd Bank(Switzerland)

    Hinduja Global Solutions (formerly named HTMT Global Solutions) P. D. Hinduja National Hospital and Medical Research Centre

    Hinduja Realty Ventures Limited

    Impeccable Imagination (Design related Infrastructure)

    IndusInd Media and Communications Ltd. Hinduja Foundries (Education, Arts & Culture, Social Welfare,

    Sports)

    Defiance Technologies Limited

    British Metal Corporation (India) Pvt Ltd.

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    Products

    1. Buses (City, Sub-Urban, Inter-City, School, Special)

    2. Trucks (Long haul, Mining & Construction, Distribution)

    3. Light Vehicles (Dost)

    4. Defense

    1. Logistical (Fox, Stallion, Rhino)2. Tactical(MPV)

    3. Special Purpose vehicles (Buses)

    5. Power Solutions

    1. Leypower (Diesel Generating Sets)2. Leymarine (Marine Engines and Aggregates)

    3. Special Engines (Engines for Crane, Sprinkler)

    4. Leygas (Generating sets running on Natural Gas)

    5. Leyfire (Engines for Fire Fighting applications)

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    CPM

    Critical Success Factors Weights Ashok Leyland Tata Motors Eicher Motors

    Rating Weighted

    Score

    Rating Weighted

    Score

    Rating Weighted

    Score

    Distribution channel 0.2 3.5 0.7 4 0.8 2.5 0.5

    After Sales Service 0.2 2.5 0.5 3.5 0.7 2 0.4

    Financial

    Position

    0.15 3 0.45 2 0.3 4 0.6

    Product Quality 0.13 3.5 0.455 3 0.39 2 0.26

    Brand Value 0.12 3.5 0.42 4 0.48 2 0.24

    Market Share 0.1 3 0.3 4 0.4 1 0.1

    Price Competitiveness 0.1 3 0.3 3 0.3 4 0.4

    Total 1 3.125 3.37 2.5

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    CPM Contd..

    Distribution ChannelTATA:

    1. 19 Distributors and approximately 1200 authorized retail outlets

    2. Distribution agreement with Apex Greatest Industrial Co Ltd (AGI), Myanmar to sell

    Commercial Vehicles

    3. Integrated CRM-DMS, linking more than 1,200 dealers and tracking 25,000 customers

    Ashok Leyland:

    1. 220 dealer outlets and 410 service centers across the country

    Eicher:

    1. 381 dealers across the country

    2. Presence in 40 countries

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    CPM Contd.. After Sales Service

    Tata Motors

    1. Breakdown assistance in association with MyTVS (Repair and Towing service).

    2. Response time within city limits 60 Mins, State/National Highways 90

    Mins, Ghat roads 120 Mins

    Ashok Leyland

    1. Every major highway has a service centre every 75 Kms, reaching customer

    within 4 hours and restoration of vehicle within 48 hours.

    2. 19,000 mechanics and 5,800 retailers

    Eicher Motors

    1. Repairs within 48 hours in North-South and East-West corridors

    2. Breakdown compensation if it fails to attend

    3. Mobile service vans at all dealerships, to support running repairs

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    CPM Contd.. Financial Position

    Terms Ashok Leyland Tata Motors Eicher

    2011 2010 2009 2011 2010 2009 2011 2010 2009

    PBIT

    990.73 646.63 365.75 3686.48 4219.82 1769.85 144.07 89.06 47.1

    Invested

    capital

    6621.15 5936.75 5435.87 35912.05 31429.69 25559.83 557.1 474.14 413.3

    ROIC

    0.1496 0.1089 0.0672 0.1026 0.1342 0.0692 0.2586 0.1878 0.1139

    ROIC %14.96 10.89 6.72 10.26 13.42 6.92 25.86 18.78 11.39

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    CPM Contd.. Market Share

    Company 2006 2007 2008 2009 2010 2011

    Tata motors 62% 62.9% 60.5% 61.9% 63.3% 60.1%

    Ashok

    Leyland

    27% 27.9% 27.5% 25.7% 23.3% 25.5%

    Eicher

    motors

    7.4% 6.8% 8.2% 7.4% 8.6% 9.3%

    Others 3.5% 2.4% 3.9% 5% 4.7% 5.15%

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    Threat of Substitute

    Products

    Threat of new

    Entrants

    Industry Rivalry Bargaining Power of

    Supplier

    Bargaining Power of

    Customers

    1. Railway and

    Aviation form the

    substitutes

    2. Railway

    connectivity is still

    poor, though the

    freight cost might be

    low.3. Air cargo has a

    CAGR of 10.9%

    (international cargo is

    67%). Complexities in

    expanding network.

    1. Bharat Benz, SML

    Isuzu, Kamaz Vectra,

    Man Se, Volvo, and

    Scania AB

    2. Capital

    requirements to start

    the business are huge

    3. Customers cannoteasily switch loyalty

    4. Developing

    technology suited to

    Indian conditions

    takes time

    5. Developing sales

    and service channel

    takes time

    1. CV Industry

    expected to grow with

    a CAGR of 15%, every

    competitor wants a

    share of the pie

    2.Ashok Leyland JV

    with John Deere to

    distribute and marketconstruction

    equipment in India

    landed in court due to

    Telcon (TATA

    Subsidiary)

    3. Exit barriers are

    high, hence

    competitors will stay

    1. Number of

    dedicated suppliers

    2. Supplier an equal

    partner in the process

    3. Support to

    improvise the supplier

    process

    1. 1st level - Fleet

    owners (bulk buy)

    2. 2nd level State

    Road Transport

    corporations (Price

    conscious)

    3. No drastic product

    differentiation withcompetitor products

    4. Cost of switching is

    low

    5. Too many

    competitors, hence

    customer has the final

    say

    Porters 5 Forces Model

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    SWOTSTRENGTHS

    1. Strong Brand Name

    2. Standard, innovative, unique quality Products

    3. Extensive Dealer Network400 full service outlets in the

    country

    4. Better supplier understanding

    5. Long term relationship with customers

    6. Own comprehensive R&D base - 1000 membered product

    management team

    WEAKNESS

    1. Late entrant in LCV segment

    2. Too much dependency on state road transport corporations

    3. Failure to capitalize on new emerging African and Asian

    markets

    4. Undifferentiated Product

    OPPURTUNITIES

    1. Projects like JNURM are expected to boost the urbaninfrastructure which in turn is expected to drive demand

    2. Expansion to Global Markets

    3. Commercial vehicle Industry is expected to grow with a

    compound annual growth rate of 15% by FY 2016-2017

    (Young)

    4. Delhi Mumbai Industrial Corridor is expected to drive the

    demand.

    5. Proposed 51% in FDI Retail is expected to improve the supply

    chain system creating demand for commercial vehicles.

    Indian Army needs:

    o 1,500 light bullet-proof vehicles

    o 4,500 light specialist vehicles

    o 16,000 infantry combat vehicles

    o 4,000 light armoured vehicles

    o Heavier vehicles needed to tow Howitzers (Telegraph)

    THREATS

    1. Entry of new global competitors2. Weak Index of Industrial production

    3. Tight monetary policy viz., Higher lending rate

    4. Suspension of mining activities in many parts of the country

    5. Deferment of capacity addition by fleet owners

    6. Higher inflation Higher raw material costs

    7. LCV demand from the rural sector dependent on monsoon

    success.

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    SPACE Matrix

    Environmental stability

    Criteria Remarks Score

    Overall economic condition 100% dividend in the year ended March 2012 -2

    GDP growth India is the 4th biggest commercial vehicle market in the world.30%

    Average 24% Y-o-Y growth over last 3 fiscals

    -2

    Inflation High Inflation and Political Issues -4

    Price elasticity Demand is price Inelastic in long run -2

    Technology Headquartered in Chennai (Detroit of South India).Automobile hub of

    India.1000 membered product management team

    -1

    Competitive pressures Now, manufacturers from China, India, and perhaps other emerging

    nations will be significant sources of supply, and customers around the

    world will demand new vehicles at ever-decreasing prices.

    -4

    Average -2.5

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    SPACE Matrix

    Industry Strength

    (PR Web)

    Criteria Remarks Score

    Industry growth

    potential

    India is expected to have the fastest-growing auto sales. since end of

    the License Raj era gave local VMs time to develop, India has capable

    manufacturers and suppliers, which provide talented partners for

    foreign companies

    6

    Barriers to entry The barriers to enter the automotive industry are substantial. Although

    the barriers to new companies are substantial, established companies

    are entering new markets through strategic partnerships or through

    buying out or merging with other companies

    5

    Global Market

    Development

    Asia-Pacific is forecast to emerge into the fastest growing market, great

    future growth opportunities in African countries (Sub-Saharan AfricaTransport Policy Program, SSATP)

    5

    Average 5.3

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    Financial strength

    (Capitaline)

    Criteria Remarks Score

    Return on assets Ashok Leyland ROA is 10.52% and Industry average is 6.30% 6

    Leverage Ratio Ashok Leyland leverage ratio is 0.59 higher the industry's 0.52 3

    Profitability Profit over sales for Ashok Leyland is is 5.53% that is higher than

    industry average of 3.93%

    5

    Average 4.67

    SPACE Matrix

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    Competitive

    Advantage

    Criteria Remarks Score

    Market Share Ashok Leyland hold 25.50% market share which has increased by

    9.44% over the year, Still far behind Tata Motors which hold

    60.10%

    -2

    Global Presence Ashok Leyland is exporting pessenger vehicles to 30 countries.

    Targeting Emerging markets of Asian and African Countries.

    -2

    Average -2

    SPACE Matrix

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    Point on X-axis (3.3)

    Industry Strength (5.3) + Competitive Advantage (-2)Point on Y-axis (2.17)

    Financial Strength (4.67) + Environmental stability (-2.5)

    The Coordinate of X-axis and Y-axis will fall on 1st Quarter

    SPACE Matrix

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    QSPM

    Strategy 1

    Product Line extension of Bussegment to provide luxury Intercity

    Coach (Bus)

    Strategy 2

    Marine engine product line extensionto provide sales and service to vessel

    owners

    Key Internal Factors Weight Attractive Score Total A Score Attractive Score Total A Score

    Strengths

    1. Strong Brand Name 0.12 4 0.48 3 0.36

    2. Better supplierunderstanding

    0.1 3 0.3 2 0.2

    3. Long term relationship with

    customers

    0.12 4 0.48 2 0.14

    4. Unique Product 0.08 2 0.16 4 0.32

    5. Own comprehensive R&D

    base

    0.1 3 0.3 4 0.4

    Weakness

    Sensitive to globalization 0.14 2 0.18 3 0.42

    Undifferentiated Product 0.13 2 0.3 3 0.45

    Marketing 0.08 2 0.16 1 0.08

    Service & Support 0.13 2 0.16 3 0.19

    Sub Total 1.0 2.52 2.56

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    QSPM Contd..

    Strategy 1

    Product Line extension of Bussegment to provide luxury Intercity

    Coach (Bus)

    Strategy 2

    Marine engine product line extensionto provide sales and service to vessel

    owners

    Key Internal Factors Weight Attractive Score Total A Score Attractive Score Total A Score

    Opportunities

    Growth of market 0.15 3 0.45 2 0.3

    Global alliance 0.15 3 0.45 4 0.6

    Corridors between cities 0.15 3 0.45 2 0.3

    Threats

    Inc. market competition 0.1 2 0.2 4 0.4

    Govt. Policy and Taxes 0.15 3 0.45 1 0.15Economy fluctuations 0.15 2 0.6 3 0.45

    Dependency on Customer 0.15 2 0.3 3 0.45

    Sub Total 1.0 2.9 2.65

    Sum Total Attractiveness 5.42 5.21

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    Pointers on Strategy 1

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