Pak Suzuki Assignment

8/17/2019 Pak Suzuki Assignment

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COMPANY OVERVIEW

History of Pak Suzuki

Pak Suzuki Motor Company Limited was formed as a joint venture betweenPakistan Automobile Corporation and Suzuki Motor Corporation (SMC) - apan!

"#e Company was in$orporated as a publi$ limited $ompany in Au%ust &'and started $ommer$ial operations in anuary &' *! "#e initial s#are #oldin%of SMC was &+!, w#i$# was %radually in$reased to . !/' !

Pak Suzuki is pioneer in Automobile 0usiness #avin% t#e most modern andt#e lar%est manufa$turin% fa$ilities in Pakistan wit# an Annual produ$tion$apa$ity of &,/1/// ve#i$les! "#e ve#i$les produ$ed in$lude $ars1 small vans1Pi$kups1 Car%o vans and Motor$y$le! Pak Suzuki #olds more t#an ,/ MarketS#are!

2ollowin% t#e a%%ressive poli$y of 3ndi%enization1 Suzuki ve#i$les #ave a#ealt#y lo$al $ontent upto .+ ! "#is was made possible by stron% support ofour vendors!

Pak Suzuki #as t#e lar%est 4ealers network o5erin% S (Sales1 Servi$e andSpare Parts) fa$ilities a$ross Pakistan!

Carin% for t#e 6nvironment Pak Suzuki was pioneer in introdu$tion of 2a$tory7tted C89 ve#i$les!

Pak Suzuki always endeavors to %o a%%ressively for t#e sound developmentof t#e so$iety by in$reasin% motorization1 industrialization and $reatin% job

opportunities t#us improvin% t#e people:s livin% standards wit# t#e $ombinede5orts of all t#e dealers1 vendors and Pak Suzuki employees!

Pak Suzuki is also e;portin% Suzuki


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%rowt#!3ndus Motor took advanta%e of %rowt# in t#e #i%#er en%ine $apa$itypassen%er $ar se%ment1 wit# sales of t#e "oyota Corolla $ontributin% to%rowt# of +, y-o-y in =$tober and %rowt# of .. for t#e 7rst four mont#s of t#e 7nan$ialyear! "#is took t#e $ompany s market s#are to *+ from + int#e same periodof t#e previous 7nan$ial year! Pak Suzuki s market s#are for

t#e four mont#s fell to *, as its sales for t#e period were down + y-o-y1despite a + in$rease m-o-m in =$tober and + y-o-y in$rease for t#emont#!

6 68"S

Laun$#in% Ceremony of Suzuki >a%on<

Pak Suzuki a$#ieved anot#er milestone on & t# April1 +/&* bylaun$#in% worldwide su$$essful Suzuki >a%on< Car in Pakistan!

Suzuki >a%on< is of its own $lass in terms of te$#nolo%y wit##i%#ly fuel eD$ient E-Series 6n%ine1 Spa$ious interior! "#e Suzuki>a%on< is also $onsidered as a Star Produ$t in Suzuki MotorCorporation:s line up and #as won many appre$iations andawards worldwide!

3ntrodu$tion of .S Campai%n

Suzuki dealers#ips are now movin% beyond S Servi$es and providin%$omplete solution of automobile needs $overin% Sales1 Servi$e1 Spare parts1Suzuki 6;$#an%e1 Suzuki Certi7ed Fsed Cars1 Suzuki 2inan$e and Suzuki3nsuran$e! "#ese .S Servi$es are provided at all Suzuki aut#orizeddealers#ips so t#at $ustomers $an bene7t from t#ese fa$ilities under one roof!

A promotional $ampai%n based on .S $on$ept was e;e$uted at $ountry wideSuzuki aut#orized dealers#ips in t#e mont# of April1 +/&* for $ustomer:sawareness about t#ese servi$e!

+ BP a % e


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1st Outboard Motors handin o!"r C"r"#onyPak Suzuki a$#ieved anot#er milestone by introdu$in% =utboard motors inPakistan! "#e 2irst =utboard motor was #anded over to a $ustomer at Eara$#i0oat Club in a $eremony #eld on &&t# une1 +/&*!

C"rti$"d %s"d Car &a'aPak Suzuki =r%anized +nd Fsed Car 9ala of +/&* in La#ore1


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6;istin% Mission and ision statement

3S3=8 "o be re$o%nized as a leadin% or%anization t#at valuesCustomers: needs and provides motorin% solutions wit# stron%$ustomer $are!

M3SS3=8• GStrive to market value pa$ked ve#i$les t#at meet $ustomers:

e;pe$tations!• GProvide a platform w#ere our stake#olders passionately

$ontribute1 invest and e;$el!• GMake valuable $ontribution to So$ial development of Pakistan!

86> 3S3=8A84 M3SS3=8 S"A"6M68"S

Our Vision

H"o be 6;$ellent All AroundIOur Mission

H"o provide automobile of international Juality at $ompetitive pri$e!I

SWO, ANA-YSIS

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PES, Ana'ysis

Fn$ontrollable environment are t#ose e;ternal fa$tors w#i$# $an $reate#urdles between us and our business! 3t is also $alled pest analysis1 w#i$# isas followK

Po'iti.a' En!iron#"ntPakistan #as to fa$e lots of politi$al ups and downs sin$e its independen$e! Somany %overnments #ave been overtaken by military personnel and most oft#e time martial law was imposed on Pakistan! 3n t#is s$enario noentrepreneur was willin% to invest in Pakistan e;$ept few! 4ue to su$#$onditions1 market environment wasn:t #elpful in Pakistan! "#e Pakistani%overnment #as never been trustwort#y for any investor!

-" a' En!iron#"ntAs all $ountries1 Pakistan also #as some le%islation about ea$# se$tor! 0utlike developin% $ountries it is #ardly bein% imposed by aut#orities! "#e$orruption1 smu%%lin% and bla$k marketin% #ave been supported by9overnment related oD$ials! "#e undue favor is %iven to t#ose business menw#o #ave been politi$ally aDliated and #ardly any le%al suite is $arried ona%ainst t#em! Su$# unet#i$al a$tivities destroy all law and le%islation .

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E.ono#i. En!iron#"ntPakistan1 an impoveris#ed and underdeveloped $ountry1 #as su5ered fromde$ades of internal politi$al disputes and e;ternal on%oin% $on i$t wit# 3ndia!?owever1 3M2 approved t#e %overnment poli$ies1 en$oura%es by di5erentforei%n assistan$e and renewed a$$ess to %lobal market sin$e +//&!

0y followin% t#ese poli$ies %overnment su$$eed to reverse t#e situation ofe$onomy durin% last 7ve years .

So.io/Cu'tur" En!iron#"ntPakistan #as stron% $ulture ba$k%round and it #as been follow in someparti$ular re%ion of Pakistan stri$tly! 0ut wit# t#e passa%e of time it is %oin%to $#an%e! "#ou%#ts of people1 $#oi$es1 taste and style #as been totally$#an%ed! 3f we talk about t#e transportation sour$e in Pakistan1 People usebuses1 pi$kups et$ for journey! "#ey also #ave t#eir own bi$y$le and bikesand lots of people are pedestrian! 0ut now t#e people w#o #aven:t any

sour$e of transportation t#ey also want somet#in% for t#eir $onvenien$ebe$ause t#ey wants to save t#eir time as mu$# as t#ey $an! People want touse su$# ve#i$le w#i$# looks beautiful and also a5ordable!

,".hno'o i.a' En!iron#"nt "e$#nolo%i$al fa$tor also very important and we #aven:t $ontrol on it! "e$#nolo%y is %roomin% wit# t#e passa%e of time! People also want t#at t#eprodu$t t#at t#ey #ave is full of te$#nolo%y! >e never $ontrol on te$#nolo%yfor e;ample you laun$#ed t#e produ$t last year and your sale volume on t#attime is very #i%# but after sometime due to latest invention a lots ofsubstitute e;ist in market w#i$# a5e$t on your business so you $an:t #old onit!

∗ E0t"rna' Ass"ss#"nt

CPM

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E0t"rna' (a.tor E!a'uation Matri0 E(E2

OPPOR,%NI,IES W"ihtRatin

sW"i ht"d

S.or"

&! 3n$reasin% 4emand for Cars /!&, * /!@/+! 6D$ient 623 6n%ines /!&/ /! /! Lar%e Market to operate /!&/ /! /

*! 9lobal spare parts market /!/, + /!&/,! Small size C89 Cylinders /!&+ /! @

,HREA,S&! "ou%# Competitors like "oyota and ?onda /!&* + /!++! 3n ation


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Int"rna' (a.tors E!a'uation Matri0 I(E2

S,REN&,HS W"ihtRatin

sW"i ht"d

S.or"&! ?i%#est Market S#are /!+/ * /! /+! Low Pri$e e#i$les /!&/ * /!*/

! Lar%e 4istribution C#annels /!&+ * /!**! 6asy availability of spare parts /!/ * /! +,! ?i%#ly 3nnovative and deep produ$t line /!&+ * /!*

WEA9NESSES&! S$ar$ity of raw material /!/ + /!&@

+! La$k of $oordination and linka%e wit#9ovt! bodies /!/, + /!&/

! Less fo$us on Looks and desi%n /!&/ & /!&/*! Less "e$#ni$al "rainin% 3nstitutes /!/, & /!/,

,! Less distribution $#annels in sub urbanareas /!&/ & /!&/

,ota' W"i ht"d S.or" 13* )344

Ratin s6& Major >eakness Minor Stren%t#+ Minor >eakness * Major Stren%t#

"#e s$ore )344 s#ows t#at $ompany #as solid internal position1 its stren%t#sare over$omin% t#e weaknesses!

7usti$.ation of Ratin s6

&! Pak Suzuki Motor Company #as lar%e market s#are #erein and also t#elar%est produ$ers of Cars w#i$# is a major stren%t#!+! "#eir pri$es are very a5ordable in t#e same Juality t#at is anot#er majorstren%t#!

! "#e lar%e distribution $#annel is anot#er major stren%t# w#i$# #elps t#emto a$#ieve t#eir desired sales tar%ets!*! "#e innovation is anot#er key stren%t# of Pak Suzuki and t#e e;ample isnew Suzuki S>32"!,! "#e spare parts availability is a $riti$al issue w#i$# $ars1 Suzuki #as$omparative advanta%e in spare parts availability as most of t#em are bein%manufa$tured in Pakistan!

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@! "#e major weakness w#i$# 3 felt is t#e non-availability of skilled en%ineersand workfor$e! And t#e reason be#ind is la$k of te$#ni$al institutes undert#eir banner!.! "#ey s#ould also fo$us on sub-urban areas like Sout#ern Punjab and3nterior Sind w#i$# t#eir distribution network!

&/ B P a % e


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&+ BP a % e


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& BP a % e


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S,RA,E&Y (ORM%-A,ION

SWO, Matri0

SWO, : ,OWSMatri0

S,REN&H,S WEA9NESSES&! ?i%#est MarketS#are

&!S$ar$ity of 3 4evelop fueleD$ient en%ines to%ain ed%e andeliminate t#reat of fuelpri$es in$rease(S*1S,1",1"+)

53 6n#an$e distributionto avoid t#reat fromse$ond #and imported$ars (>,1"*)

+! 3n ation


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Q&Q+

Q Q*

Slow Market 9rowt#

>eak Competitive Position Stron% Competitive Position

&RAN? S,RA,E&Y MA,RI@

&rand Matri0

"#e %rand matri; #elps us to determine t#e strate%y t#at 7rm must pursue1based on its $ompetitive position and market %rowt#!

"#e Pak Suzuki Motor Company Limited #as stron% $ompetitive positiona%ainst its major $ompetitors and t#e market %rowt# is #ealt#y and atin$reasin% pa$e!

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0ut t#ey still need to do lot to %et t#emselves at top! As per my jud%ment1t#ey fall under Quadrant & and t#ey s#ould follow a%%ressive strate%ies likeMarket 4evelopment and Produ$t 4evelopment!

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0C9

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SPACE MA,RI@ ?A,A

SPACE MA,RI@

S a." Matri0

(inan.ia' Str"n th (S2

orkin% Capital RS#ort "erm Assets R*

"otalK R&&Industry Str"n th IS2

Lar%e Market to operate R,3n$reasin% per Capita 3n$ome RConsumption =riented Culture R*

"otalK R&+Co# "titi!" Ad!anta "s CA2

?i%# Quality Produ$ts -Sleek and Stylis# 4esi%ns -*2amous 0rand 8ames -

"otalK -&/En!iron#"nta' Stabi'ity ES2

"ou%# Competition -+C#an%e in 9ovt! rules and re%ulations -3mported


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3n spa$e matri; we:ve observed t#at $ompany will pursue a%%ressivestrate%ies! >e $onsider t#ey key fa$tors of 2inan$ial Stren%t#s1 3ndustryStren%t#s1 Competitive Advanta%es and 6nvironmental Stability! 0y assi%nin%t#em values as per t#eir importan$e worst to best1 we $al$ulated t#e s$orew#i$# lead us to t#e de$ision t#at $ompany will pursue A%%ressive strate%ies!And 3 would su%%est Market 4evelopment and Produ$t 4evelopmentstrate%ies will work best for PSMC!

IE MA,RI@

626Matri;S$ores

326 Matri; S$ores

Stron% Avera%e >eak* + &

Stron% *i ii iii

Avera%eiv v vi

+>eak

vii viii i;&

"#e 326 matri; s$ore for Pak Suzuki Motor Company Limited (PSMCL) is +!''and for 626 matri; is +!' t#erefore our 36 matri; falls more around Viv: $ell!

"#e $ompany s#ould adopt %rowt# and built strate%ies and 3 re$ommendMarket 4evelopment and Produ$t 4evelopment Strate%ies!

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S a$e


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BSPM MA,RI@

Mark"t?"!"'o #"nt

Produ.t?"!"'o #"nt

E0t"rna' (a.torsW"i

ht

Attra.ti

!"S.or" ,ota'

Attra.ti

!"S.or" ,ota'

3n$reasin% 4emand for Cars /!&/ * /!*/ * /!*/6D$ient 623 en%ines /!/@ /!& * /!+*Lar%e Market to operate /!/ * /! + * /! +9lobal Spare parts market /!/* /!&+ + /!/

"ou%# $ompetitors /!/ * /! + + /!&@3n ation /!/@ & /!/@ & /!/@C#eaper 3mported $ars /!/ * /! + * /! +3n$rease in fuel pri$es /!&/ * /!*/ * /!*/

Int"rna' (a.tors?i%#est Market s#are /!/ /!+* * /! +Low pri$e ve#i$les /!&/ & /!&/ * /!*/Lar%e distribution $#annel /!/@ + /!&+ /!&6asy availability of spareparts

/!/+ /!/@ /!/@

3nnovative and deep produ$tline

/!/@ * /!+* /!&

Less fo$us on style anddesi%n

/!/* * /!&@ * /!&@

S$ar$ity of #uman resour$e /!/* /!&+ * /!&@

,ota's 13* ;31= ;3++

0y $omparin% bot# Market 4evelopment and Produ$t 4evelopment1 weobtained more wei%#ted attra$tive s$ore for Produ$t development! "#atmeans $ompany s#ould follow t#e produ$t development w#i$# is part ofa%%ressive strate%ies! "#is strate%y is %oin% to #elp t#e 7rm in eliminatin% itst#reats and %rab t#e opportunities to be su$$essful in t#e present ma$roenvironment!

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+& BP a % e


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S,RA,E&IC P-AN

"#e main fo$us of Suzuki Motors is t#e =verall Low Cost ProviderStrate%yw#ere t#ey provide low $ost automobiles alon% wit# fueleD$ien$y and low$ost of maintenan$e

Suzuki also di5erentiates its produ$t in parti$ular se%ment to $aptureand %ainmarket s#are by usin% di5erentiation strate%y

3ntrodu$tion of Suzuki Liana and Suzuki Swift is a $lear si%n t#atSuzuki Motorsare movin% towards e;tendin% t#eir produ$t portfolio

?I((EREN, S,RA,E&IES APP-IE? Y PA9 S%8%9IMO,ORS -IMI,E?

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The objective is to become the lowest-cost producer in the industry


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ompetitive advantage is an advantage over competitors gained by offeringconsumers greater value, either by means of lower prices or by providing greaterbenefits and service that justifies higher prices.

Strategies for Competitive Advantage :-Differentiation Strategy :-

This strategy involves selecting one or more criteria used by buyers in a market -and then positioning the business uni uely to meet those criteria. This strategy isusually associated with charging a premium price for the product - often to reflectthe higher production costs and e!tra value-added features provided for theconsumer. Differentiation is about charging a premium price that more thancovers the additional production costs, and about giving customers clear reasonsto prefer the product over other, less differentiated products.

"ow #ost "eadership Strategy :-

$ith this strategy, the objective is to become the lowest-cost producer in theindustry. %any &perhaps all' market segments in the industry are supplied withthe emphasis placed minimising costs. (f the achieved selling price can at leaste ual &or near'the average for the market, then the lowest-cost producer will &intheory' enjoy the best profits. This strategy is usually associated with large-scalebusinesses offering )standard) products with relatively little differentiation that areperfectly acceptable to the majority of customers. *ccasionally, a low-cost leader

will also discount its product to ma!imise sales, particularly if it has a significantcost advantage over the competition and, in doing so, it can further increase itsmarket share.

Quick response Strategy :- +ust in time inventory partnership strategy between suppliers and retailers ofgeneral merchandise. (t is aimed mainly at reducing order response time, andachieving greater accuracy in shipping the correct goods in correct uantities, byemploying computeri ed e uipment such as barcodes and D( to speed up flowof information. (ts other objectives include reduction in operating e!penses, out-

of-stock situations, and forced mark-downs &discounts'.

S,RA,E&IC RECOMMEN?A,IONS

+ B P a % e


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Produ$t 4evelopment is t#e sele$ted strate%y at t#is point of time for PakSuzuki Motor Company Limited t#at we observed from our strate%i$ analysisof t#e 7rm!

3n produ$t development strate%y we re$ommend t#e $ompany to fo$uses on

#avin% t#e #i%#est level of produ$t performan$e1 t#e #i%#est level offun$tionality or fun$tions and features1 t#e latest te$#nolo%y or t#e #i%#estlevel of produ$t innovation!

"#is strate%y mi%#t #ave some risk for t#e $ompany as innovative produ$tsare involved but proper resear$# and development will $ater t#e risk and$ompany $an pursue wit# t#e strate%y to be t#e market leaders and %et ontop!

=ne major setba$k to PSMC was in t#e s#ape of Suzuki L3A8A1 w#i$# was notable to meet t#e e;pe$tations and $ouldn:t #old t#e market it was made for!

0ut $ompany didn:t stop its journey t#ere1 and now Suzuki S>32" #as re$entlybeen laun$#ed in t#e market1 w#i$# seems to be an attra$tive o5er for t#emarket in t#e & //$$ $lass! 0ut still $ompany #as not#in% to $ompete wit#?=84A and "=N="A! "#e Suzuki needs to enter into t#e &@//$$ and & //$$market to e;pand its market s#are and market %rowt#! 0ut for t#at purposet#ey need to put more e5orts of produ$t development as t#e new produ$tmust #ave all t#e reJuired features and te$#nolo%y t#at is needed to$ompete wit# %iant $ompetitors! And of $ourse1 PSMC #as $ompetitiveadvanta%e in lo$al assemblin% and manufa$turin% of parts and t#ey $anutilize t#at advanta%e to produ$e $#eaper $ars in t#e $ate%ories mentioned

above!

"#e PSMC #as re$ently re$eived a$knowled%ement from Prime Minister ofPakistan for bein% t#e only $ar manufa$turers for t#e lower and middlein$ome people of Pakistan! 0ut t#ey s#ould also need to %et into t#e line of?=84A and "=N="A1 to a$#ieve t#at tar%et t#ey need to develop morete$#nolo%i$ally $#eap and eD$ient and Juality oriented produ$ts!

(%,%RE RECOMMEN?A,IONS

"#e former President Asif Ali Oaradari invited leadin% automobile industries toinvest in Pakistan! So %overnment $an be a$$redited for its sin$erity in e5orts!

apan is t#e *t# lar%est investor in t#e automobile se$tor in Pakistan w#i$#in$ludes Suzuki and ot#er %iants like 3ndus motors and ?indo Pak motors!

4ue to t#e de$line in t#e duty of t#e se$ond #and $ars in Pakistan1 Suzuki #ast#e %reat in$entive!

+* B P a % e


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4ue to t#e lower pri$e level1 t#ere is an #u%e in$entive for t#e $onsumer! 0ut$ompetition also %ets sti5!

"#ey s#ould $ompete wit# t#e ot#er brands in t#e market so it $an in$reaseits performan$e but s#ould not lose its tar%et audien$e w#i$# is upper middle

and lower $lass!IMP-EMEN,A,ION

Date post:	06-Jul-2018
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Pak Suzuki Assignment

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