bajaj b group8 mot submission
DESCRIPTION
bajajTRANSCRIPT
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MicroProjectDiagnosingStrategicManagementofTechnologyat
BajajAutoLtd.VijayKrishnan139278070
Harsha Gollapinni129278037
DeepakEdake129278045
Yatharth Grover129278112
StrictlyforinternalclassuseinSJMSOMbyregisteredlearnersofMNG608in2015only
Disclaimer
AnexampleofmicroprojectpresentationforStrategicManagementofTechnologycourseunderguidanceofProfessorK.S.Momaya.MicroprojectsareundertakenintheuniquecourseatIITBombaysSJMSchoolofManagement(SJMSOM)forlearningandclassroomdiscussionpurposeandnottocriticizetheprocessofmanagerialdecisionmakingoractualdecisionsatthecompany.Theymustnotbeusedassourceofsecondarydatawithoutwrittenpermissionoftheguideatmomaya@iitb.ac.in MiniprojectcopyrightbyIITBombay,2014
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Quicktonoticethechangesinthe2wheelerindustry CreatedaselfreliantR&Dcentrewhichdevelopedmostinnovativetechnologiesandplatformsonwhichmostsuccessful
bikeslikePulsar,Discoveretc.werelaunched Bajajstwinsparktechnologyactsasaharbinger,developedtriplesparkplugtechnology Alwaysmanagedtostayaheadofitscompetitors
BenchmarkingBajaAutowithleadingindustrycompetitorson Financialmetrics R&Dcapabilities Patents Exports MarketShare
RootCauseanalysis MarketShare CriticalSuccessFactors
Process OrganizationalInnovation ProductInnovation MarketingInnovation
GamechangersinAutowood inIndia:WhatcanbeSMOTissuesforaKing?Bajajgrouphaslonghistoryofcontributiontocountry;theircontributionstopersonalmobilitygavethemmarketleadershipinscooterandautorikshawsegmentstobecalledaKingofIndianRoads.FireontheIndianroadsafter100xxrevolutionandparadigmshiftduetodiscontinuitiessuchas1991broughtmorecompetition.WhileBajajAutotriedseveralinnovations(mostlyproduct&associatedprocess)tocatchupwithHeroHonda,itdecidedtowithdrawfromitscashcowsegmentscooters.RevivalofthatsegmentsbyHondacanbeattributedtoquitesmartSMOTandotherenablers.YouenergetictechnomanagerialgroupleadbyIITians areaskedtoundertakelongitudinalreviewofpositionsandtrendsinbusiness,strategyandMoT toevolvemajoroptionsfortechnologymanagementtoregainmarketandprofitshareinIndiaandkeyinternationalmarkets.
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KeySMOTQuestions WhatareCSFin2W(specificsegment)inIndia?Willtheybeverydifferentinternationally?What@3W?
WhichofthemareinfluencebySMOTdecisions? Onwhichofthefactors,BajajhasrelativestrengthonKey/pacingtechnologies?
Whataremajorstrategicoptionsin2W,3W,4W? Whatstrategicchoicescanenhancesuccessontheselectedoption?
1961 1972 1981 1986 1990 1994 1998 1999 2000 2001 2003 2007 2012 2014
Vespa 150underthelicenseofPiaggio,ItalyVespa 150underthelicenseofPiaggio,Italy
BajajChetak145cc2strokescooterBajajChetak145cc2strokescooter
KawasakiBajajKB100100cc2strokemotorcycle
KawasakiBajajKB100100cc2strokemotorcycle
BajajClassic145cc2strokescooterBajajClassic145cc2strokescooter
KawasakiBajajBoxer100cc4strokemotorcycle
KawasakiBajajBoxer100cc4strokemotorcycle
BajajM80major74cc2strokemopedBajajM80major74cc2strokemoped
BajajSpirit60cc2strokescootyBajajSpirit60cc2strokescooty
BajajEliminator175cc4strokemotorcycleBajajEliminator175cc4strokemotorcycle
BajajPulsarDTSi TechnologyBajajPulsarDTSi Technology
BajajPulsar150cc4strokemotorcycleBajajPulsar150cc4strokemotorcycle
BajajPulsar220DTSFi FuelInjectionBajajPulsar220DTSFi FuelInjection
KTM390DukeDTSFi FuelInjectionKTM390DukeDTSFi FuelInjection
Pulsar400ss,400csPulsar400ss,400cs
BajajSunny50cc2strokescootyBajajSunny50cc2strokescooty
BajajM5050cc2strokemopedBajajM5050cc2strokemoped
EvolutionofBajajthroughyears
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2stroke,scooter&bike(JV)era4strokebikeImitatorera
DTSi,DTSFiPioneerera
MarketpositionofBajajoveryears
Gainsmarketshareintheeconomyandexecutivecategories
Leaderinthepremiummotorcyclessegment Marketshareinthe premiumcategoryof
motorcyclesdeclinedto43.8percentin201213from49.5percentin201011
YamahaMotorsgainsmarketsharefromBajajwithmajornewlauncheslikeFZ16,SZandFazer
Stepsundertakentoincreasemarketshare In201112,BajajAuto's dealershipsrose by159to
650, expandingitsreach intothe ruralandsemiurbanareas FinancingschemessuchastheDirectCashCollection(DCC)
schemesimplementedacrossruralareas Relauch ofPlatina 125intheeconomysegmentat RelaunchofDiscover150DTSSiintheexecutivesegmentRs.
45000 LaunchofthepremiumcategorymotorcycleKTMDuke
equippedwitha200ccenginepricedatRs.1.17lakh LaunchesnewversionofitssportsbikePulsar200NSatthe
exshowroomprice(Pune)ofRs.84,096,inJune2012.
Source:Crisil ResearchWebsite
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CriticalSuccessFactorsofBajajMotors
Technological Innovation
Process Innovation The company launched an External
Portal Initiative for sales through a project called Go Live
Existing SAP R/3 ERP being upgraded with mySAP
Enterprise Portal for enhancing the IT to breed quality information
Bajaj was found to have linked 380 out of its 483 dealers through this system
Organizational Innovation Project Hunting, Bajaj Auto sets up
assembling units in few of the continental hubs
The logistics outsourced to third party vendors like Maersk
JIT supply and inventory system networked by a single LAN
The supply is triggered by E-Kanbans
Product Innovation Updated the low price bikes with the
latest features like disk-brakes, anti-skid technology and dual suspension
Introduction of new technologies like DTSi, ExhausTEC etc
Product launches that catered to the needs of different market segments which differed mainly on CC
Marketing Innovation Ad campaigns brought a completely
new dimension to product design, engineering, and mind-set of the market.
Tag line changes from Hamara Bajaj to Inspiring Confidence to Distinctly Ahead
ItwassosymbolicofBajajAutosproceedings
andofferingsasitproposedthatproductsshouldbedistinctly
aheadofthecompetition
BajajPulsar135,150,180,200F,220Sand200NS
14.9 13.575 13.2096
21.603220.1506 20.0044 19.1305
200607 200708
200809
200910
201011
201112
201213
OperatingMarginsBajajAuto HeroMotorcorp TVSMotor
http://businesstoday.intoday.in/story/rajivbajajbajajgroupplanandfuture/1/198329.htmlSource:
Bajaj India'slargestexporterof
two andthreewheelers. Recordedhighesteverexportsin201213
Exportsroseby31percentovertheprioryear,accountingfor35percentofthecompany'stopline.
BajajAutoIndonesiagivesthecompanyanentryintothekeymarketsofJakarta,Java,BaliandSulavesi.
ThecompanyhasalsopenetratedAfricancountrieslikeAngola,SudanandUganda
Hero
Motors Hero'spresenceinthe
exportmarketswaslimitedtill2011
HondarestrictedHero'sentryintomanymarkets.
Asaresult,thecompany'sexportsweremainlytoBangladesh,SriLanka,NepalandColombia.
RecentlyenteredAfrica,LatinAmericaandtheSouthEastAsianmarkets.
Planstoexportonemillionunitsacrosstheworldby201617
In201213,Hero'stotalexportsrosesignificantlyby18.2%
GlobalPresenceBenchmarking
2463863
5912538
26068411293231
161043 147931
BAJAJAUTOLTD. HEROMOTOCORPLTD. HONDAMOTORCYCLE&SCOOTERINDIA(PVT)LTD
ExportStatisticsDomesticsales Exports
6,33,463 7,26,4499,72,437
12,67,648 12,93,231
81,193 97,699 1,33,063 1,92,303 1,61,043
200809 200910 201011 201112 201213
ExportsovertheyearsBajaj Hero Honda
Source:BajajInvestorRelationsReport Source:Crisil ResearchWebsite
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RootcauseAnalysisfallingdomesticmarketshareandvolumecontraction
Workhard,partyharderattitudeofyouth
A paradigmshiftinmarket
preferencesfrommotorcyclesto
scooters
InvestmentinR&Disjust
1.22%ofSales
InterestRatesManybankshaveincreasedinterestrateswhichmaketwowheelerscostlier.
OilPricesIncreasingoilpriceshavedeterredmanylowermiddleclassfamiliesfrombuyingtwowheelers.
LaunchofLowPricedCarsLikeTataNano
Expectationsandaspirationsrisingtoglobalstandards
Lackofpenetrationingearlessscooter
market
TighteningRegulationsItwillbemorechallengingtostringentnormswhilstsimultaneouslyofferingcompetitiveprices.
StrategicAlliances,Jointventures,Acquisitionsetc
RE60hasbeenafailurewhenit
comestoconfrontationwith
Nano
Background Netrevenuefellby5.5%to
Rs.5,183.2crore Therevenuedeclinewas
arrestedbystrongexportperformancea12.3%growthinexportvolumes
11.9%dropindomesticvolumesandasharp24%fallinrealization.
OperatingprofitwasflatfromtheyearagoperiodatRs.1,092crore.
Operatingmarginat21.1%wasthebestintheindustry
Thefirmisfacingstiffcompetitionandconceded45%marketshareintheninemonthsendedDecember
Contributionfromthepremiumsegmentdeclinedfrom37%to28%.
BajajMissingitssalestargetsinitstraditionallystrongsegments
Nothavinganequitypartnerthatprovidedthetechnology,suchasHondaforHero,gavethemopportunitytolearn
DTSIyields15percentmorefueleconomyand12percentmorepower
http://economictimes.indiatimes.com/bajajautoltd/directorsreport/companyid21430.cms
FinancialBenchmarking
IntermsofmarketshareHerohasbeenthemarketleaderwithquiteamarginInpastfewyearsHerohasbeenlosingmarketsharetootherplayersHMSIhasgrownphenomenallytosurpassBajajandbecomethesecondlargest2wheelerproducerinIndia
From2009to2011BajajhadgrownwellabovetheIndustryaverage
RecentsalesfigureofBajajshowsnegative
growth,withtheoverallautomobileindustry
suffering
HMSIshowingexcellentfinancialperformanceevenissuchturbulent
timesSource:Crisil ResearchWebsite
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FinancialBenchmarkingContd
Technologycost/volumesaleshasgoneupsignificantlyEarlierR&Dspendingwerebetween(23)%ofsalesTheindustryaveragestandsataround(57)%ofsalesDecliningsalesvolumeisanothercauseofconcern
66%8%
8%
7% 11%
ShareofExportsBajajAutoLtd.
HeroMotoCorpLtd.
HondaMotorcycle&ScooterIndia(Pvt)LtdIndiaYamahaMotorPvt.Ltd.
TVSMotorCompanyLtd.
o IntermsofoperatingmarginBajajstandsoutofitscompetitors,exhibitingoptimizedoperationalefficiency
o BajajAutoleadstheexportmarketinthe2wheelerindustry0
5
10
15
20
25
200607 200708 200809 200910 201011 201112 201213
OperatingMargins
BajajAuto
HeroMotorcorp
Source:Crisil ResearchWebsite
TechnologyBenchmarkingBajajAutoLtd.(BAL) Corecompetency:TechnologyandInnovation(DTSi &DTSFi)
Pioneeroftriplesparkignitionsystem PioneerinProductInnovationsuchasExhausTEC,LEDTaillamps,LCDDisplay,SNS,Spareparts(Tubelesstyres,reardiscbrakes),Blackcolourschemeetc.
Venturingintothemarketofgearlessscooterswhereitisvirtuallyabsent
Corecompetency:TechnologyandInnovation(DTSi &DTSFi)
Pioneeroftriplesparkignitionsystem PioneerinProductInnovationsuchasExhausTEC,LEDTaillamps,LCDDisplay,SNS,Spareparts(Tubelesstyres,reardiscbrakes),Blackcolourschemeetc.
Venturingintothemarketofgearlessscooterswhereitisvirtuallyabsent
HondaMotorsScotersIndia(HMSI) HondaEcoTechnology(Activa,Dio andtheAviator)whichcanboostfuelefficiencyby11%
NewtechnologicalcentreinManesar(incorporatesstateoftheartequipmentlikeachassisdynamo,benchdynamo,layoutmachines,anSEMmicroscopeetc.)
HaslaunchedneweditionofdreamYugain2013equippedwithHETtechnology,ineconomyclasssegment
ThecountdownforthecommercialrolloutofHondaMotorcycle&ScooterIndias(HMSI)Activa 125hasbegun
HondaEcoTechnology(Activa,Dio andtheAviator)whichcanboostfuelefficiencyby11%
NewtechnologicalcentreinManesar(incorporatesstateoftheartequipmentlikeachassisdynamo,benchdynamo,layoutmachines,anSEMmicroscopeetc.)
HaslaunchedneweditionofdreamYugain2013equippedwithHETtechnology,ineconomyclasssegment
ThecountdownforthecommercialrolloutofHondaMotorcycle&ScooterIndias(HMSI)Activa 125hasbegun
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StrategyDiamond
Improvecustomerimageasahighqualityproductatcompetitivepricesandprovidinggoodservicetocustomers Theyhavetheirmotorbikesinalmostallsubsegments:InEconomyclass:PlatinaInExecutiveclass:DiscoverInPremiumclass:pulsar NewproductsshouldbeintroducedfasterinthemarkettoachievehighermarketshareandcompeteaggressivelyagainstcompetitorslikeHeromotocorp,TVSandHMSI ProvideproductreliabilitythroughwarrantyandGuaranteeonitsproducts
ThespeedoftheexpansionhastobefasterasBajajAutoLtd.iscurrently2nd intwowheelermarketinIndiaOneoftheinitiativesthatBAListakingistotapruralmarkets.WiththelaunchofDiscover100Min2013itishopingtotapthemileagesegmentofruralmarket Theiranotherinitiativebeingventuringintothemarketofgearlessscooters
24.4%marketsharein2wheelersmarketinIndia omnipresentinallthesubsegmentsof2wheelers: Economy,ExecutiveandPremium Theyaretargetingallrangeofcustomers:mileageconscious,aestheticsconsciousandperformanceconsciousTheircoretechnologiesinclude: DTSi,DTSFi,triplesparkignition. PioneerinprovidingqualityproductsatlowercoststhroughinnovationandcostreductioninmanufacturingFocusonJITmanufacturingmethodologies Number1exporterin2wheelersegment ThereislargeuntappedmarketinruralandsemiurbanIndia.2wheelersmarketisgrowingattherateof12%inIndia.TheirfirstpriorityshouldbetotakeadvantageofthisopportunitytobecomemarketleaderinIndia
LotofemphasishastogotowardsR&D(internaldevelopment)andincreasingthequalityofproductsalongwithcostreductiontocompeteagainstcompetitorslikeHMSI,Heromotocorp andTVS. TheyarenotmuchintoJVsandacquisitionswhicharerequiredtointroducequalityproductsatafasterrateinthemarkettocompete. IthasJVswithRenaultandNissanbuttheyarein4wheelerssegment Hasgot47.16%stakeinKTM,Europessecondlargestmotobike manufacturer.LaunchedKTMduke200in2012
OnemethodisscaleadvantagethroughlowercostsusingR&Dandinnovation Secondmethodistostartfocussingoninorganicgrowthtoexpanditshorizonswhichtheyarenotdoingtillnow
PatentsgrantedtoBALovertheyearsPatentsgrantedtoeachcompany BajajAutoLimitedhasfiledmajorityofpatentsinthecategoryofTransportandEngines Theactivitypickedupsignificantlyfrom2003peakingin2006beforefallingdrasticallyin2008 Patentgrantwouldtake3 5yearsforthepatenttobegranted,allpatentswerepublishedin2002 03,
whichiswhenPulsarislaunched Theglobalfinancialcrisisandtheconcomitantuncertaintycouldbethereasonforthemarkeddecreaseinthe
innovationactivityduringthelast4years,whichiswhyBajajhaslimitedfilingsintherecentpast 2Wheelermarketleader,Herohasonlyonepatentgrantedtill2010.AllpatentsgrantedinJVhadgoneasa
partofHonda,whichlicencedthepatentstoHerotouseinitsmotorbikes FirstcompanytoachieveBharatStage 3normcompliancefortheentirerangeoftwowheelerwithDTSFi
technology
PatenthistoryofBajajandothermajorplayersinautomobilesector
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BajajhassoughtawidegeographicalprotectionofitsIP Nextbigthinginthetwo wheelermarketinChinese
with12millionunitsalesannually EyeingthegrowingChinesemarket,BALisgettingits
majortechnologiespatentedinChina AwidespreadofIPCcategoryindicatesarobust
innovationactivityandtheconcernforIPprotection
BajajVs TVSVs HMSI TVShas75grantedpatentsasagainst38ofBajaj TVSfiledfor83patents,almostthesametheyhavefile
tilldate,in2007 08whentheentireautomobilesector,Bajajwasgoingdown
Bajajhadbeensuccessfulincommercializingthepatents Inthefiveyearstill201011,Hondahasfiledfora
whoophing 357patents,whichisthekeyfactorwhyHondasmarketshareisincreasingatagreaterpace
Contd
TVSBAJAJ
BajajVs HondaVs HeroTechnologySignificance LevelofTechnology Competence
ClearLeader Strong Favourable Tenable WeakBase Engine Honda Bajaj Hero Bajaj No
presence infastgrowingscootersegment
Base ERP HondaEAM,SCM
Bajaj PLM,SAPR3
Base Service Hero Bajaj Honda
Key Network Hero Bajaj Honda
Key Technology Honda Bajaj DTSi,Hero
Pacing R&D Honda Bajaj ExhausTEC,TripleSparkIgnition
Hero only1patent
Emerging Honda Singlewheelvehicles
Bajaj HEVs,EVs
Emerging FuelEfficiency&alternatefuels
Hero electricdieselengine
BajajEngineefficiency
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Keytakeaways
Bajajhasgoneontechnologicalforefrontswithastrategyof Lookwide ThatisthereasonwhyithastheR&Ddoneacrossthecategories Lookdeep MoreR&DhasbeendoneintheareaswhereBajajhasthecorecompetencyi.e.,inthe
enginesandtransport CompanieshavetoconsidertheTriadicPatentstogetgreateracceptanceandmarketshare
TheTriadicpatentsareaseriesofcorrespondingpatentsfiledattheEuropeanPatentOffice(EPO),theUnitedStatesPatentandTrademarkOffice(USPTO)andtheJapanPatentOffice(JPO),forthesame invention,bythesameapplicantorinventor
IntegraltoitsR&Dactivity,Bajajhasassembledasophisticatedproductlifecyclemanagement(PLM)whichenabledmanagementtorapidlyassessoperationalneedsfaster
Electricallydrivenvehiclesarethenextbigthingtohappenintwowheelerindustry.Itwillhavethesameimpactwhat4strokeenginehadintermsofnoiseandpollutionreduction
Enginetechnologyisanotherareawherelargenumberofinnovationswilltakeplacebecauseoftheneedofhigherfuelefficienciesandadaptationofneweralternatefuels
BALsprovisiontosupportvendorstoupgradetheirtechnologymadethemtogetstrikingalliancesinducedbytherapidgrowthintwowheelersegment
Evenwhiletheywereembarkingonthegrowth,theyhavemaintainedcostleadershipwitheverydecisionbasedonthreeparameter:Cost,qualityandtime
Supplychainoperationsarestreamlinedtogetefficienciesfromvendors,theecosystemisbuilt
WayAhead
GraduatingCustomersfromthe100cctoHigherSegments
FocusonGearlessScooters
EntryintoFourWheelerSegment
ScalingUpServiceCentres
InvestmentinResearchanddevelopment
CorecompetencyofBajajisitsR&Dandinvestmentintechnology
BajajneedstoinvestheavilyinR&D
Theyhavetointroduceefficientandpowerfulbikesaswellasdevelopalternateenergyvehicles
Carbonemissionsofaround60gramsperkilometre,lessthanhalfthatofmostothersmallcars.
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Appendix
Appendix
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Appendix
Appendix
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References
http://businesstoday.intoday.in/story/rajivbajajbajajgroupplanandfuture/1/198329.htmlhttps://www.crisilresearch.com/industryasync.jspx?serviceId=5&State=null#storyId#94531#sectionId#2704#newsFeedId#undefined
http://www.divaportal.org/smash/get/diva2:372751/FULLTEXT01.pdfhttp://businesstoday.intoday.in/story/bajajre60/1/21381.htmlhttp://tejas.iimb.ac.in/articles/21.php
http://www.livemint.com/Money/9Hz7jOtDLdZT8lcU8GTizK/DomesticchallengeshurtBajajAutosperformance.htmlhttp://en.wikipedia.org/wiki/Root_cause_analysis
http://www.bajajauto.com/download/MDA.pdf
http://www.iitk.ac.in/techkriti/2004/events/olymbiz/LessonsInExcellenceCase.pdf
Suggestionstoimprovevalue Therearemanystrengthasdiscussedintheclass Thisslidefocusesonlyonsuggestionsforfurtherimprovement,sothatgroupcancompeteinsomebasicchallenges;e.g.Glogift;PICMET
Mentionsourcesinallslides CategorizetheevolutionofBajajoveryears ImprovementinRootcauseanalysis InferencefromFinancialAnalysis ImprovementsinCriticalSuccessFactorsofkeysegmentsBajajwishtofocusinfuture
HardlyanyinfoaboutorganizationstructureofNPD/RDDE,process,teams,initiatives,learning&action,..