pak suzuki motors
TRANSCRIPT
PRESENTED BY:
FAHAD MUSARRATMUHAMMAD JUNAIDHAMMAD ABUBAKAR
PAK SUZUKI MOTORS
Business Scope
RegionFunctions/Applications
Fuel Economy Parts Availability Affordability Reliability CNG-Fitted
Customers & End UsersBusiness They are Not In
PAK SUZUKI MOTORS
EXTERNAL ANALYSIS
Market Structure Analysis
Luxury Oriented
Users of luxury oriented cars seek High Class, Prestige, Safety and Pleasure drive in their cars.
Executive people or the Elite Class people who belongs to the Upper-Upper class are the users of such cars.
Comfort Segment
Users in this segment wants comfort, pleasure drive and safety from their cars.
Upper class who belongs to the middle management of the organization or business man prefers such cars.
Market Structure Analysis
Economical
The cars in this segment tend to provide fuel efficiency, low cost of maintenance and reasonable prices.
Lower or Middle class families are the end users of these cars due to low cost of maintenance and high fuel efficiency
Imported Cars
Imported cars are highly efficient, durable, and highly comfortable and user can experience the real essence of Pleasure Drive.
Families relating to Upper Middle Class or Upper Class are the end users of imported cars.
Market Size – Past 4 Years (Volume)
The sales in each segment have declined a bit after 2006-07 due to economic crises. Sale of imported cars has been declined drastically due to levying of heave import duties. If we take year 2005-06 as base year and consider its sales as 100% than we can get the
following results: Sales for luxury segment in the year 2008-09 is decreased by 15.5 %. Sales for economical segment in the year 2008-09 is increased by 18%. Sales for comfort segment in the year 2008-09 is decreased by 18%. Sales for Imported segment in the year 2008-09 is decreased by 67%.
Market Size (Volume)
Segment
2005-06 2006-07 2007-08 2008-09
Luxury Oriented
Production 16,829 13,464 13,840 14,125
Sales 16,712 14,339 13,831 14,113
Comfort Production 57,119 52,412 43,997 45,234 Sales 54,321 54,157 44,126 44,326
Economical Production 45,754 52,356 54,121 53,813
Sales 45,522 52,791 52,995 53,714
Imported Cars Production Sales 46,425 33,521 21,835 15,361
Market Size – Past 4 Years (Value)
Although the unit sales have been decreased in the last two years but the Sales in value have shown a hike.
The prices of cars have increased much more as compared to the decline in the unit sales Unit sales as well as the Volume sales have been declined for Imported cars Unit demand have been declined drastically for imported cars
Market Size (Value)
Segment
2005-06 2006-07 2007-08 2008-09
Luxury Oriented
Price Assumed 1,300,000 1,400,000 1,600,000 1,800,000 Sales 21,725,600,000 20,074,600,000 22,129,600,000 25,403,400,000
Comfort Price Assumed 850,000 950,000 1,000,000 1,050,000
Sales 46,172,850,000 51,449,150,000 44,126,000,000 46,542,300,000
Economical Price Assumed 350,000 375,000 400,000 475,000
Sales 15,932,700,000 19,796,625,000 21,198,000,000 25,514,150,000
Imported Price Assumed 1,100,000 1,200,000 1,400,000 1,750,000
Sales 51,067,500,000 40,225,200,000 30,569,000,000 26,881,750,000
Market Size – Future 4 Years
In the recent months some banks have resumed auto financing after seeing boom in demand.
Slight improvement in law and order situation have boosted consumers’ confidence.
Pak Suzuki Motor Company Limited is planning to roll out over 20,000 units in April-June this year as compared to 18,500 units in January to March period.
imports of completely knocked down (CKD) kits for motor cars during July-March 2009-2010 has swelled to $315 million from $181 million in the corresponding period of last fiscal year.
Federal Board of Revenue (FBR) has proposed 10 to 20 per cent reduction on import duty for completely knocked down (CKD) kits and five to 10 per cent duty cut on completely build-up units (CBU) in the budget
Segment 2010 2011 2012 2013
Luxury Oriented 2% 5% 7% 9% 14,395 15,115 16,173 17,629
Comfort 5% 6% 8% 9% 46,542 49,335 53,282 58,077
Economical 6% 8% 10% 12% 56,937 61,492 67,641 75,758
Imported Cars 15% 18% 20% 22% 17,665 20,845 25,014 30,517
Distribution Structure
Indus Motors have a high Dealership network as compared to Honda
As compared to Honda and Toyota, Pak Suzuki has one of the largest and finest dealership networks across the country.
Company Authorized
Dealers
Pak Suzuki 70
Indus Motors 30
Honda 18
Distribution Structure
Honda is selling 10% cars through unauthorized dealer network whereas Indus motors are selling 15% of cars through unauthorized dealers.
Unauthorized dealers are one of the main influencers in the market and capture handsome percentage in the overall market.
Considering the dealership network of Pak Suzuki motors, it is selling 100% of the cars through authorized dealers
Company Authorized Dealers (%)
Unauthorized Dealers (%)
Pak Suzuki 100% 0%
Indus Motors 85% 15%
Honda 90% 10%
Key External Trends
EXTERNAL TRENDS POTENTIAL IMPACTS PAK
SUZUKI MOTORS
HONDA MOTORS
INDUS MOTORS
Increased Consumer Demand for Higher Quality and Value Added Services
Consumer demand for high quality and more services in same prices will result in low profit margins
Increased Fuel Cost This results in shifting demand of consumers to fuel efficient vehicles
Foreign Investment in Automobile Industry
Prices of imported cars reached competitive level thereby shifting customer demand from local cars to imported cars
Car Financing / Leasing
Since leasing and financing have started again, it will increase the demand for automobiles
Monetary & Fiscal Policies
High taxation and ever increasing interest rates will lower the demand for automobiles
Market Share
during the year 2009 Pak Suzuki has well maintained its market share even in the period of high recession .
The main reason for this is the low cost maintenance and fuel efficiency that gives customer the power to afford a vehicle even during recession.
Since Honda has maintained its high prices for almost all the products during such period of declining sales, the market share have been low as compared to other competitors.
PAK SUZUKI MOTORS
INTERNAL ANALYSIS
SWOT Analysis
Strengths Highest market share in the industry. High resale value Highly innovative and deep product line Easy and cheap availability of the spare parts Strong Research & Development
Weaknesses No penetration in the large car market (greater than
1300cc) Very limited Distribution Channel in the sub urban areas
SWOT Analysis
Opportunities Ever increasing prices of fuel and rising inflation resulting
in high cost of maintenance have increased the demand of low cost and fuel efficient cars.
opportunity to enter into the luxury segment and comfort segment.
Threats Foreign investment in the automobile industry Sales of imported used cars boost up Smuggling of Auto Parts is another threat to the local
manufacturers The double digit inflation rate in 2009 is expected to
further dampen the purchasing power of the customer
CONFRONTATION MATRIX
Strength – Opportunities Pak Suzuki Motors can use its strong brand image to
build strategic alliances with local as well as foreign vendors.
By using its strong R&D, Pak Suzuki Motors can enter into newer segments.
Weakness – Opportunities Since Suzuki does not entertain customers that seek
Luxury and Comfort in their products other than being economical, Suzuki may lose customers who are brand loyal with Suzuki but are now searching for Luxury Cars.
CONFRONTATION MATRIX
Strength – Threats Due to Suzuki’s low priced automobiles, fuel efficiency
and low cost of maintenance, it have an edge over imported cars in the local market
Weakness - Threats Since Suzuki does not entertain customers in this
segment, foreign car manufacturers have an edge over the Pak Suzuki Motors in this area.
CUSTOMER BUYING CRITERIA
Factor Number Absolutely Critical
Very Important
Quite Important
Nice to have
Not Significant
Don’t Want it
Rating 1 2 3 4 5 6
After-Sales
Brand Name
CNG Fitted
Comfort
Design
Fuel Efficiency/ Mileage
Low Maintenance Cost
Luxury
Maintain Status
Price/Affordability
Quality
Reliability/ Durability
Resale Value
Safety
Smooth Drive
Spares Cost
RATING AGAINST CUSTOMER BUYING CRITERIA
QUALITY & PRICE SUZUKI HONDA TOYOTA
Non-Price attributes effecting customer choice
% WEIGHTAGE
PRODUCT RELATED 80%
1. Fuel Efficiency 10 10 4 5
2. Reliability/Durability 6 5 6 6
3. CNG Fitted 7 7 0 0
4. Safety 4 2 4 3
5. Affordability 9 8 5 5
6. Resale Value 9 8 6 5
7. Luxury 4 2 4 3
8. Design 4 3 4 4
9. Smooth Drive 3 2 4 3
10. Maintain Status 2 0 2 2
11. Brand name 5 3 5 4
12. Quality 6 4 5 4
13. Spares Cost 8 8 3 4
SERVICE RELATED 20%
1. After Sales service 10 8 7 7
2. Maintenance Cost 10 10 4 6
TOTAL 100% 80% 63% 61%
CUSTOMER BUYING CRITERIA MATRIX
VISION STATEMENT
VISION STATEMENT
“Excellence in all Respects”
PRPOSED VISION STATEMENT
“To become a leader in producing customer friendly, innovative and over all low cost
automobiles so as to gain customer loyalty by satisfying customer at the highest level”
MISSION STATEMENT
To provide automobile of international quality at competitive prices to the customers
To improve skills of valued employees by imparting training & inculcating in them a sense of participation
To achieve maximum indigenization and promote Pakistan’s automobile vending industry
To make valuable contribution to social development of Pakistan through development of industry in general and automobile industry in particular
BUSINESS OBJECTIVES
Increase market share to 55% during the next 5 years
Increase capacity utilization to around 85% during the next 5 years
Increase dealership network to 100 across Pakistan during the next 5 years
Introduction of low cost automobiles in other segments of the business thereby extending the existing product line during the next 5 years
Reduce the cost of sales by 2% during the next 5 years
KEY ISSUES
Economic Downturn
Limited investment in high technology equipment and machinery
Lack of diversified products
Increase in manufacturing cost
IMPACT OF ISSUES ON STRATEGIC PROFILE
Issue Number Issue 1 Issue 2 Issue 3 Issue 4
Issue Name Economic Downturn
Limited investment in
high technology equipment
Lack of diversified products
Increase in manufacturing
cost
Customers ++
++ +
Regions
++
Market segments
+ ++
Needs/wants/applications +++
++ +
Products (prices)/services ++ + +++
Product Creation Process ++ ++ + +
Sales Acquisition Process
++ ++
Operations + ++
++
Technology
+++
+
Plant & Equipment
++
+
GENERIC STRATEGY MODEL
GENERIC STRATEGY MODEL
The main focus of Suzuki Motors is the Overall Low Cost Provider Strategy where they provide low cost automobiles along with fuel efficiency and low cost of maintenance
Suzuki also differentiates its product in particular segment to capture and gain market share by using differentiation strategy
Introduction of Suzuki Liana and Suzuki Swift is a clear sign that Suzuki Motors are moving towards extending their product portfolio
BUSINESS BALANCED SCORE CARD
ISSUES REFERNCE PAGE
NO.
STRATEGIC ACTION
Availability of
the products
Distribution
Structure
Page
No. 11
Increasing the outlets by 30% across
the Pakistan in the next 5 years
Increased Fuel
Cost
Key
External
Trends
Page
No. 13
Be more innovative in creating high fuel
efficient cars so as to capture the entire
Economical segment of the industry
Foreign
Investment in
Automobile
Industry
Key
External
Trends
Page
No. 13
Suzuki will play on its strengths like
Fuel Efficiency, low cost of maintenance
and affordable prices so as to have an
edge over imported cars.
No penetration
in large car
market
SWOT
Analysis
Page
No. 22
Enter into other segments of the
business by launching cars like Liana
and Swift
BUSINESS BALANCED SCORE CARD
ISSUES REFERNCE PAGE
NO.
STRATEGIC ACTION
Increased
demand of
fuel efficient
cars due to
increased
Fuel prices
SWOT
Analysis
Page
No.
22
Increase production capacity to 85% in
the next five years so as to curtail the
increasing demand of the customers
Lack of
research and
development
SWOT
Analysis
Page
No.
22
Allocation of funds and proper research
before the launch of products
Improving
Band Name
Customer
Buying
Criteria
Page
No.
27
Well spend and well plan promotional
strategies
Failure to
manage cost
of operations
Cost
Analysis
Page
No.
28
Managing operational cost by using
collocation facilities.
BUSINESS BALANCED SCORE CARD
ISSUES REFERNCE PAGE
NO.
STRATEGIC ACTION
Limited
investment in
high
technology
equipment
and
machinery
Key Issues Page
No.
32
Good amount of investment in
technological equipment so as to
reduce the cost of the product and
bring innovation in the vale chain