case maruti udoyg ltd

8/14/2019 Case Maruti Udoyg Ltd

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Case-Maruti Udoyg Ltd
http://www.marutiudyog.com/index.asp


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MULS STRATEGY

To go for the mass market with a qualityproduct and a foreign collaboration.

Capture a dominant market share, and

then try to capture additional market

segment through introduction of new

products.


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Maruti has not achieved its Mission

Market Segment (Smaller car middle class

consumer market as per mission statement)

However it catering upper strata society.

Govt. lifted concessions

With rise of price there is no substantial

difference between Maruti, Ambassador and

Premier.


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Unfair Disadvantage

An automotive factory to produce a small, low costcar economically has to meet somefundamental requirements, viz:

Access to lowest cost components and materials

of the best quality in the world Incur minimal logistical costs (Location

disadvantage) Proximity to an engineering infrastructure

A production volume of at least 250-3-0thousand per year to enjoy full economics ofscale


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The Generic Value Chain(Porter)


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What Maruti has achieved

The record of completing the plant in 13

months and achieving 50% share by 1985

is commendable.

Consistent Profit from 1983-84 to 1986-87

Our put: Cars per employee

Maruti (30:1)Indian automobile Industry(12:2)

Suzki (70:1)


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Difficulty in achieving Japanese

Management Style

Page 61

Though Mr O Suzi stronly believes maruti

must be prepared to accept Japanese

management style.but at the stage

of implementation...

Absenteeism was a cause of concern..

Malpractices for reimbursement


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Learn from Japanese Management

style.

More people oriented management style.

Consider workers as long-term Corporate

asset.

Training to Employees


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Holistic Marketing Dimensions


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Competitive Strategy

Should position itself for younger age group,

small family.

Maruti started with 100,000 vehicle capacity.

With 50% capacity utilization it can

become market leader.

Capacity output of other cars-30,000-50,000

units


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Manufacturing Strategy

By adopting a policy of keeping in housemanufacturing limited to 30%, fixed cost islow so breakeven point is low.

Quality and timely supply of componentssince 30% self manufacturing.

By laying emphasis on quality and delivery

by vendors , it is able to reduce inventorylevels (with material at times supplieddirectly to shops just-in-time)


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Foreign Collaboration

Rapid Indigenization of components

More no. of ancillary manufacturing units for

making quality and critical components

Low Productivity of Indian Labor


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Impact of Maruti on Competitors

Marutis target segment Household user

segment: Competitors- Institutional Buyers

Now more Competitors: Hyundai


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Future Strategy

In India purchasing power of small luxury car is very limited

Should follow strategies of South Korea and Taiwan: (Local

Demand less)

Should follow strategy of export-led growth

Sellers to Buyers Market

Should take measures to reduce cost

Complete indigenization to get out of the effects of import duties.


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Future Strategy

Managing Human Resources

Redefining automobile policy in terms of

cost of importing components.

Is the car a vehicle of development of

countrys economy?


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Suzuki-Nissan seek port for carsBusiness

Standard: October 11, 2006 Car manufacturer Maruti Suzuki is planning to team up with

multinational automobile major Nissan Motor Company for developing

a greenfield dedicated port to ship out vehicles.

The cost of a greenfield facility will go up to Rs 3,500 crore as port

operators will have to dredge up to 15 metres depth for a shipping

channel. The cost may come down if a major port extends a terminal to

these players, port experts said. The coming together of Maruti Suzuki and Nissan makes sense as the

latter has a tie-up with Maruti for design of cars in India. A common

automobile port will cut down the cost for both players, At present, automobile majors are shipping their cars primarily from

Mumbai and Chennai.

Mahapatra said the idea behind such a port was to cut down the

logistics cost and streamline the export operations of these companies.


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Thank You
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case maruti udoyg ltd

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