20132013

Introduction to the IndustryIntroduction to the Industry and the Company and the Company

Founded: 19261926 Founder: Jamnalal BajajJamnalal Bajaj Present Chairman: Rahul Bajaj: Rahul Bajaj Bajaj Group has 34

companies. Tie-up with: Kawasaki in late : Kawasaki in late

1990s; 1990s; Famous for Tagline

“Hamaara Bajaj”“Hamaara Bajaj” Has stake of 51% in KTM51% in KTM. 33rdrd largest in world, 2 largest in world, 2ndnd largest largest

in Indiain India in motorcycle manufacture.

Plants: WalujWaluj ChakanChakan Pant Nagar Pant Nagar

Vision and MissionVision and Mission

VISIONVISION• To attain World Class Excellency by demonstrating

Value added products to customers

MISSIONMISSION• Focus on value based manufacturing• Total elimination of wastes• Pollution free & safe environment

Source: Bajaj Auto Ltd

Industry analysisIndustry analysis• The auto industry have been going through

troubled times.• Falling rupee is adding woe to the automotive industry.• This is inflating the production.• Alliance with other companies have become trend.

Industry analysis (contd.)Industry analysis (contd.)

External environmentExternal environmentPOLITICAL: Agreement with Bhartiya Kamgar Sena(BKS) at worli plant.Restriction in production policy in 1969.ECONOMIC:Recession , inflation , high interest rates and decline in purchasing power.SOCIAL:Demographics Lifestyle

TECHNOLOGY :Business processFirst company to come up with DTSi in bikes.LEGAL :Employee protection for unfair discrimination at

work place.Health and safety at work place.Fair wages.ENVIRONMENTAL :A production unit in Pantnagar near uttarakand

was affected due to natural disaster.

StrengthStrengthExtensive R & D focus.Widespread distribution network.High performance products.High export to domestic sales ratio.

Bajaj has not been able to reach the Hero Moto Corp’s sales volume.

Not a global player in spite of huge volumes.Less globally recognizable brand.

WeaknessWeakness

OpportunitiesOpportunitiesAlliance with KTM.Scope for Developing new Technology.Launching of new products and variants.Emerging markets and expansion abroad.

ThreatsThreatsFrom Hero, Honda and TVS.Strikes and Lockouts from Employees.Government regulations.Unstable Economy.Change in tastes of consumers.Price wars

Top 3 competitorsTop 3 competitorsHero Moto CorpHondaTVS

Future of Industry & CompanyFuture of Industry & Company

• Take longer route to become #1 in volumes.Re-entry into the entry-level marketRe-entry into the entry-level marketReturn to scootersReturn to scooters, but only after Bajaj reaches a

"dominant" global share in bikes.

“We are No. 1 in technology, in exports, in

market cap, in profitability....the only bit

that remains is to be a leader in volumes.“

MaximizationMaximization• 3-wheeler fits into a strategy of

‘MaximizationMaximization‘• Realization:

Splendor and Passion Splendor and Passion v/sBajaj 4S and the Boxer Bajaj 4S and the Boxer (Less success of Bajaj).

• Instead of “me-toome-too” built his own “nichesniches”.Reference: Blackberry vs Apple.

• Between 2001-2003 he made the difference by introducing ……….

DifferentiationDifferentiation

øBajaj's strategy is not too different from that of

øBajaj’s Highest operating margins:3-wheelers: 25%Pulsar: 20% øBajaj hopes to earn more

respectability in this segment by graduating to a Quadricycle (RE60)

““We specialize in motorcycles and make good money from them, but We specialize in motorcycles and make good money from them, but we make a hell of a lot more in 3-wheelers”we make a hell of a lot more in 3-wheelers”: Rajiv Bajaj

Management guru Michael Porter’s Quote: : "The essence of strategy is "The essence of strategy is choosing what not to do“choosing what not to do“

Tom Heehler: “Courage is the ability to ignore your options““Courage is the ability to ignore your options“

““One day Bajaj will have to come back to scooters but I am sure it will One day Bajaj will have to come back to scooters but I am sure it will be a premium product, and high on fuel efficiency"be a premium product, and high on fuel efficiency" : says R L Ravichandran, executive director, Eicher Motors.

http://online.wsj.com/article/SB10001424127887324165204579030243351986628.html

http://autobei.com/blog/indian-two-wheeler-market-analysis-april-may-2013-scooter-segment-grows-at-13-88-while-overall-market-grow-by-1-04/

• Bajaj is successful in implementing its strategies.

• Looking forward to develop technology.• Introduce various new products.• Be #1 in 2-wheeler segment.