99975929 pak suzuki motors

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Business Scope

Region

Functions/Applications Fuel Economy

Parts Availability Affordability

Reliability

CNG-Fitted

Customers & End Users Business They are Not In


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PAK SUZUKI MOTORS

EXTERNAL

ANALYSIS


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Market Structure Analysis

Luxury Oriented

Users of luxury oriented cars seek High Class, Prestige, Safety and Pleasuredrive in their cars.

Executive people or the Elite Class people who belongs to the Upper-Upperclass 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 orbusiness man prefers such cars.


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Market Structure Analysis

Economical

The cars in this segment tend to provide fuel efficiency, low cost ofmaintenance and reasonable prices.

Lower or Middle class families are the end users of these cars due to low costof 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 ofimported cars.


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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 followingresults: 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

ComfortProduction 57,119 52,412 43,997 45,234

Sales 54,321 54,157 44,126 44,326

EconomicalProduction 45,754 52,356 54,121 53,813

Sales 45,522 52,791 52,995 53,714

Imported CarsProduction

Sales 46,425 33,521 21,835 15,361


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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 ahike.

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 1,050,000Sales 46,172,850,000 51,449,150,000 44,126,000,000 46,542,300,000

EconomicalPrice 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

ImportedPrice 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


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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 ascompared to 18,500 units in January to March period.

imports of completely knocked down (CKD) kits for motor cars during July-March 2009-2010 hasswelled 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 forcompletely 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 Oriented2% 5% 7% 9%

14,395 15,115 16,173 17,629

Comfort5% 6% 8% 9%

46,542 49,335 53,282 58,077

Economical6% 8% 10% 12%

56,937 61,492 67,641 75,758

Imported Cars15% 18% 20% 22%

17,665 20,845 25,014 30,517


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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 finestdealership networks across the country.

CompanyAuthorized

Dealers

Pak Suzuki 70

Indus Motors 30

Honda 18


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Key External Trends

EXTERNAL TRENDS POTENTIAL IMPACTSPAK

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


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Market Share

during the year 2009 Pak Suzuki has well maintained its market share even inthe period of high recession .

The main reason for this is the low cost maintenance and fuel efficiency thatgives customer the power to afford a vehicle even during recession.

Since Honda has maintained its high prices for almost all the products duringsuch period of declining sales, the market share have been low as compared toother competitors.


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PAK SUZUKI MOTORS

INTERNAL

ANALYSIS


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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


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SWOT Analysis

Opportunities Ever increasing prices of fuel and rising inflation resulting in high

cost of maintenance have increased the demand of low cost andfuel efficient cars.

opportunity to enter into the luxury segment and comfortsegment.

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 furtherdampen the purchasing power of the customer


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CONFRONTATION MATRIX

Strength

Opportunities

Pak Suzuki Motors can use its strong brand image to buildstrategic 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 Suzukibut are now searching for Luxury Cars.


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CONFRONTATION MATRIX

Strength

Threats

Due to Suzukis low priced automobiles, fuel efficiency and lowcost of maintenance, it have an edge over imported cars in thelocal 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.


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CUSTOMER BUYING CRITERIA

Factor NumberAbsolutely

Critical

Very

Important

Quite

Important

Nice to

have

Not

Significant

Dont

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


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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%


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CUSTOMER BUYING CRITERIA MATRIX


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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 thehighest level


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MISSION STATEMENT

To provide automobile of international quality atcompetitive 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 promotePakistans automobile vending industry

To make valuable contribution to social development ofPakistan through development of industry in general andautomobile industry in particular


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BUSINESS OBJECTIVES

Increase market share to 55% during the next 5 years

Increase capacity utilization to around 85% during thenext 5 years

Increase dealership network to 100 across Pakistanduring the next 5 years

Introduction of low cost automobiles in other segments of

the business thereby extending the existing product lineduring the next 5 years

Reduce the cost of sales by 2% during the next 5 years


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KEY ISSUES

Economic Downturn

Limited investment in high technology equipment

and machinery

Lack of diversified products

Increase in manufacturing cost


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IMPACT OF ISSUES ON STRATEGIC PROFILE

Issue Number Issue 1 Issue 2 Issue 3 Issue 4

Issue NameEconomic

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 +++


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GENERIC STRATEGY MODEL


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GENERIC STRATEGY MODEL

The main focus of Suzuki Motors is the Overall Low Cost ProviderStrategy where they provide low cost automobiles along with fuelefficiency and low cost of maintenance

Suzuki also differentiates its product in particular segment to captureand 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


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BUSINESS BALANCED SCORE CARD

ISSUES

REFERNCE

PAGE NO.

STRATEGIC ACTION

Availability of

the productsDistribution

StructurePage

No. 11Increasing the outlets by 30% across the

Pakistan in the next 5 yearsIncreased Fuel

CostKey External

TrendsPage

No. 13Be more innovative in creating high fuel

efficient cars so as to capture the entire

Economical segment of the industryForeign

Investment in

Automobile

Industry

Key External

TrendsPage

No. 13Suzuki 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

AnalysisPage

No. 22Enter into other segments of the business by

launching cars like Liana and Swift


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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.


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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

99975929 pak suzuki motors

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