2. 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
3. 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
7. 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
9. PORTERS FIVE FORCES MODEL
POWER OF BUYERS POWER OF SUPPLIERS
THREAT OF MARKET
ENTRY
THREAT OF
SUBSTITUTE
THREAT OF
COMPETITION
10. 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
11. 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
12. THREAT OF COMPETITION : MODERATE
Industry Growth
Price competition
Product differences
13. 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
14. 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”
15. 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.
16. 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
17. 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
18. Aims to strengthen rural reach
Separate distribution channel for high end models
Operations In India
19.
20.
21. PESTLE Analysis(1985)
•U.S. President Ronald Reagan privately sworn in
for a second term in office
•Ongoing Cold War
Political 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
22. •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
23. PORTERS FIVE FORCES MODEL
POWER OF BUYERS POWER OF SUPPLIERS
THREAT OF MARKET
ENTRY
THREAT OF
SUBSTITUTE
THREAT OF
COMPETITION
24. 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
25. 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
26. THREAT OF COMPETITION : HIGH
High aggressiveness of firms
High variety and differentiation of firms
Low number of large firms
27. 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.
28. 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%
30. 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.
Hinweis der Redaktion
1949 – listed
1952 designed a cycle, launched car in 1955
In 1983, Maruti Suzuki commenced its production.
By 1988, the Gurgaon unit’s production capacity which used to produce Maruti 800 raised to 1Lakh units per annum.
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” to build two new manufacturing plants, one for vehicles and one for engines.
Initially, the company has planned to set up 600 acres manufacturing unit in Gujrat.
Bargaining power of Buyers:
This part directly affects the revenue part of the company’s business.
Bargaining power of Sellers:
This component of 5 force analysis reflects the interaction between firms and suppliers.
