SUZUKI MOTOR CORP.

Rohit Jethani 81Pratik Patil 84Karishma Shaikh 88Deepak Nadar 94Frahvak Dumasia 95Ankush Gala 100

COMPANY HISTORY Mr. Michio Suzuki founded Suzuki loom works in the year

1909

It has presence in 192 countries

Suzuki invented a new type of weaving machine, which was exported overseas

The company's first 30 years focused on the development and production of these machines

JOURNEY FROM LOOMS TO AUTOMOBILES

Suzuki believed that his company would benefit from diversification

Based on consumer demand, he decided that building a small car would be the most practical new venture

Between 1937-1939 the company produced several 13 hp (9.7 kW) prototype cars

Suzulight was the brand by which Suzuki entered automobile industry in the year 1955

Product Portfolio Automobiles

Motorcycles

Marine Products

Others

Revenue Breakup

36%

41%

12%

2%

9%

Net Sales By Market

JapanAsiaEuropeNorth AmericaOthers

0.89

0.08

2%0.01

Net Sales By Product

Automobile Motorcycle Marine ProductsOthers

PESTLE Analysis

• Auto policy• Fiscal policy

Political Factors

• Economic conditions were very relaxed and liberal

• Available Resources• Booming banking sector

Economic Factors

• Growth in urbanisation and in Middle classSocial Factors

• R&D• Manufacturing

Technological Factors

• N/ALegal Factors

• N/AEnvironmental Factors

PORTERS FIVE FORCES MODEL

POWER OF BUYERS POWER OF SUPPLIERS

THREAT OF MARKET ENTRY

THREAT OF SUBSTITUTE

THREAT OF COMPETITION

POWER OF BUYERS : LOW Availability of brands Price sensitivity Buyer information Product differentiation

POWER OF SUPPLIERS : HIGH No substitute for critical inputs Switching cost from one supplier to other is high Supplier integrating for higher prices and

margins

THREAT OF SUBSTITUTES : MODERATE Switching cost to substitute is very low Brand loyalty does not exist

THREAT OF MARKET ENTRY : LOW High capital investment required Strong distribution of network of existing

players Strong brands existing

THREAT OF COMPETITION : MODERATE Industry Growth Price competition Product differences

Market entry of Suzuki in India In 1982, a license & Joint Venture Agreement (JVA) was

signed between Maruti Udyog Ltd. and Suzuki of Japan

Originally, 74% of the company was owned by the Indian government, and 26% by Suzuki of Japan

In 1983, the Maruti 800 was released

In 1984, the Maruti Van with the same three-cylinder engine same as 800 was released in Gurgaon (capacity of 40,000 units)

In 1985, Gypsy was introduced

Market entry of Suzuki in India In 1989, Maruti 1000 was introduced

Post Liberalization in 1991, Suzuki increased its stake in Maruti to 50%

In 1993, the Zen was introduced and in 1994, Esteem was introduced

In 1994, Maruti Suzuki started its 2nd plant with a annual capacity of 2 Lakh units.

In 2006, Maruti and Suzuki went into another JV “Maruti Suzuki Automobiles India”

Marketing Strategies adopted by Maruti Suzuki

Product:

• Maruti Suzuki occupies 37% share in the Indian market of passenger cars

• Key features of products of Maruti Suzuki is that these products are made keeping the common man in mind

• The tertiary product of Maruti company is its service

Place:

• In the year 1983 Maruti 800 was released in the Indian market and local production started henceforth from the month of December in 1983

• Maruti Suzuki has two manufacturing facilities in India• It has 30 Express Service Stations on 30 National Highways

across 1,314 cities in India.

Price:- Various factors to determine a price of a car- Pricing strategy of Maruti both, penetrative and competitive- Pricing policy is a very subjective and sensitive issue- Inspite of the rising costs, service is also an important generator of revenue for the company

Promotion:- Use all types of media when launching a new product or a new variant- The company has always promoted the concept of "Reduce, Reuse, Recycle" (3R's)- The company has taken help of all the promotional tools like -

- Radio- Roadshows- Print Media

Marketing Strategies adopted by Maruti Suzuki

Has two major manufacturing plants

Largest distribution and Service Network

Has 400 showrooms

Has most strong aftersales network with 600 workshops and 1900 Authorized service centres across 1910 cities

Has 30 express service stations on 30 National Highways

Operations In India

Aims to strengthen rural reach

Separate distribution channel for high end models

Operations In India

PESTLE Analysis(1985)

• U.S. President Ronald Reagan privately sworn in for a second term in office

• Ongoing Cold WarPolitical Factors

• Average Price for new car is $9,005.00• Average salary per annum $22100• Real GDP Growth is 4.2%• Recession in the US Unemployment Rises to 12 million• Oil prices had fallen sharply, helping lead to the

revitalization of the American auto industry.

Economic Factors

• N/ASocial Factors

• Improvements like disc brakes, fuel injection, electronic engine control units, and electronic ignition

Technological Factors

• "Voluntary restraint agreement" limiting the number of autos that they could import to the U.S.

• The 1st US mandatory seat belt law went into effect in NY

Legal Factors

• Central New York was hit by a earthquake• Hurricane Alicia hits the Texas coastEnvironmental

Factors

PORTERS FIVE FORCES MODEL

POWER OF BUYERS POWER OF SUPPLIERS

THREAT OF MARKET ENTRY

THREAT OF SUBSTITUTE

THREAT OF COMPETITION

POWER OF BUYERS : HIGH

Low switching costs High quality of information Moderate substitute availability

POWER OF SUPPLIERS : LOW Moderate population of suppliers High overall supply Low forward integration of

suppliers

THREAT OF SUBSTITUTES : MODERATE Low switching costs Moderate availability of substitutes Low convenience in using substitutes

THREAT OF MARKET ENTRY : LOW

High capital costs High cost of brand development High supply chain costs

THREAT OF COMPETITION : HIGH High aggressiveness of firms High variety and differentiation of firms Low number of large firms

MARKET ENTRY OF SUZUKI IN USA In 1983, General Motors (GM) purchase 5% of Suzuki hand

helped the company a subcompact car for the US market.

 Suzuki began selling a version of their Suzuki Cultus in the United States as the Chevrolet Sprint in 1985.

The Samurai was also introduced in 1985 for the 1986 model year

In 1989, American Suzuki introduced the Swift which was the 2nd generation Suzuki Cultus.

In 1995, American Suzuki introduced the Esteem and redesigned the Swift. 

MARKET ENTRY OF SUZUKI IN USA In 1996, American Suzuki released the 2-door SUV X-90 and a

revised Sidekick Sport model

In 2004, General Motors and Suzuki jointly purchased the bankrupt Daewoo Motors renaming the venture GMDAT & 2006 was the first year American Suzuki sold more than 100,000 vehicles in the United States. 

Despite a difficult domestic US automarket, Suzuki kept pace with its 2007 sales numbers in 2008, but in 2009, Suzuki sales dropped 48.5%

MARKETING STRATEGIES ADOPTED BY SUZUKI

Pricing Policy for Dealers: Strategy was to sell high volume with low profit margin Planned to offer about 50 dealer installed option, the sale of which would

boost a dealer's unit profit

Allotment to Dealer: Limit the number of samurai dealers so that ASMC could guarantee a

minimum supply of 37 units.  Suzuki had set Douglas Mazza the goal of selling 6000 Samurais in first six

month. Mazza chose to introduce Samurai into California, Florida and Georgia,

which have higher usage of, imported vehicles.

Positioning Strategy: Position as a compact sport utility vehicle. Position as a compact pickup truck. Position as a subcompact car.