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BAJAJ QUADRICYCLES
ASM ASSIGNMENT 2

SUBMITTED TO DR. RADHAKRISHNAN S

SUBMITTED BY GROUP B6
RAHUL THAMPY MADHEV DAS 12035 12086

SAKSHI RANADIVE 12100 SANDEEP HANEEFA 12102 ARUN K P 12129

DECEMBER 7, 2013

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Contents
1. Bajaj Auto Ltd (BAL) -Company Profile ................................................................................... 2 1.1 Two wheeler segment .................................................................................................................. 2 1.2 Three wheeler segment ............................................................................................................... 2 2. 3. 4. Strategic intend of BAL ................................................................................................................ 3 Concept of quadricycles................................................................................................................ 4 Bajaj RE60..................................................................................................................................... 4 4.1 Comparison with Bajaj auto rickshaw...................................................................................... 5 4.2 How Bajaj achieved this trio of benefits ................................................................................... 5 5. Viewpoints ..................................................................................................................................... 6 5.1 Bajaj Auto .................................................................................................................................... 6 5.2 TATA Motors .............................................................................................................................. 6 5.3 TVS Motors ................................................................................................................................. 6 5.4 Piaggio:......................................................................................................................................... 6 5.5 Mahindra & Mahindra............................................................................................................... 7 6. Rationale behind the RE60........................................................................................................... 7 6.1 7. 8. 9. Analysis of Indian three wheeler industry using Porters five force model ..................... 8

SWOT Analysis ........................................................................................................................... 10 Challenges in quadricycles ......................................................................................................... 10 Marketing Plan............................................................................................................................ 11 9.1 SLEPT Analysis ........................................................................................................................ 11 9.2 Marketing Strategies ................................................................................................................ 12

10. 11.

McKinsey 7s model ................................................................................................................. 13 Conclusion ............................................................................................................................... 16

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1. Bajaj Auto Ltd (BAL) -Company Profile

Bajaj Auto Ltd is the flagship company of the Bajaj group which is into the business of manufacturing and selling of two-wheelers and three-wheelers. The company was formed on November 29th, 1945 from the Bajaj group founded by Jamnalal Bajaj in 1926. It was under the leadership Rahul Bajaj, present chairman of the group that the company grew substantially. It is during his tenure as the Managing director of the company, beginning from the year 1965 to 2005, and the sales turnover of this flag ship company of the Bajaj group went up from INR 72 million to INR 120 billion. BAL, currently under the leadership of Rajiv Bajaj, is the worlds third largest manufacturer of motorbikes and the largest manufacturer of three-wheelers. In India BAL is the second largest producer of motorbike only behind Hero motor corp. As on march 31st 2013, BAL is Indias 23rd largest publicly traded company with a market capitalization of INR 520 billion. Bajaj Auto remained Indias No. 1 exporter of motorcycles and three-wheelers. The Company exports to 57 countries, and is a market leader in 12 of these. Though the exports of motorcycles remained more or less steadythe volume falling by 2% compared to the previous yearthe big crunch occurred in three-wheelers. The drastic drop in three-wheeler export was mainly due to the increase in import tariff in Srilanka. Significant part of the export of BALs three wheeler export is to Srilanka.
FY2012 Motorcycles(nos.) Three-wheelers (nos.) Total Exports (million) in 1267648 312176 1579824 USD 1369 FY2013 1293231 253926 1547157 1309 Growth % 2.0% (18.7%) (2.1%) (4.4%)

1.1 Two wheeler segment

The major models of motorbikes in production by BAL are the XCD, Platina, Discover, Pulsar and Avenger. Apart from the motorbikes produced by them, the company also distributes motorcycles in India for other manufacturers, such as the Kawasaki Ninja 250R, the Ninja 650R and the KTM Duke 200. BAL acquired 14.5% stake in KTM Power AG in 2007 and entered into a deal by which the later will provide the know-how for the joint development of water-cooled four stock 125 cc and 250 cc engines and Bajaj will take up the distribution of KTM motorbikes in India as well as in some other South Asian countries. In the previous financial year, BAL sold around 3.76 million motorcycles which accounted for 31% of the total market size of the Indian two wheeler industry. Of the total approximately 66% is sold domestically and the rest is exported.

1.2 Three wheeler segment

BAL pioneered the manufacturing of three wheelers in India and currently accounts for almost 84% of three wheeler exports from India. The Company currently has three major
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brands of three wheeler which are Compact, Optima and Maxima with options in In the FY 2012-13 it sold around 480000 three wheelers of which 53% where exported. Bajaj has a market share of 51% making them the market leader. Bajaj Auto sold the most number of vehicles during FY 2012 which sums to 29,395 units against 27,247 units in the same period last year registering a growth of 7.88%. Piaggio also registered a delicate growth of 1.02%. Atul Auto is the most enriched brand in April-May period of 2013, as they seized a 10.27% growth against April-May 2012. Mahindra sales in this segment decreased by 10.19 while the worst hit brand has been TVS where they witnessed their sales went down by a massive 39.29%. Three wheeler passenger segment

Main players in three wheeler segment Players Bajaj Brand/ Product name GC series of goods carriers. (Max diesel, Max CNG) RE600 RE passenger series (2S, 2S CNG, 2S LPG, 4S, 4S CNG, 4S LPG, Diesel, GDI), Mega Max Ape City, Ape Cargo, Ape Xtra Passenger TVS King

Piaggio TVS

2. Strategic intend of BAL

To begin with, it is surprising to learn that BAL does not have a stated vision and mission. But it can be learned that the companys interest lies predominantly in the two wheeler industry wherein it aspires to become the worlds largest manufacturer and in commercial vehicles. The broad strategy adopted by the company to achieve its goal is the strategy of differentiation. It has been stated in its policy that BAL is committed towards continuously specializing in its motorcycles and commercial vehicle brand through its strategy of differentiation. It can be observed that the companys actions, especially in the last decade have been very much in line with its strategy. When pulsars dominance in its segment started getting threatened, BAL was quick to respond with the new variant Pulsar NS 200 with three spark plugs promising better performance. This brought about a differentiation which
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increased the perceived value of the brand by a customer and which in turn helped in defending the supremacy of the brand. The core competency of the company is believed to be in its values of innovation, perfection and speed. The company is innovative in identifying the needs of the customer and delivering quality products at the right time. By doing so, the company has been able to garner a considerable amount of brand loyalty spanning even outside the country. Success of most of the brands of BAL in the market for the last decade can be seen as a testimonial for the same. One of the very important aspects of Bajajs strategy is to defend their brands. The company has been very particular of not diluting its brand. The company believes its brand led strategy to be the reason for being profitable even at the difficult times. BAL boasts of having the highest operating margin in the automobile industry. It has been able to maintain an operating margin of 16.7% in the last FY year even when the overall demand for motorcycles took a considerable dip. It can be inferred from the above discussion that the BAL predominantly belongs to the positioning school. The Brand led strategy of the company can be seen as a consequence of the same. However the influence of other schools of strategy cannot be overlooked. There is lot of influence of the enterprernial and the learning school on the functioning of BAL. The decision of Rajiv Bajaj to leave the scooter business can be seen as entrepreneurial in nature.

3. Concept of quadricycles
The concept of quadriycles was first introduced in Europe. In Europe quadricycles are defined as four wheeled micro cars that are limited in terms of weight, power and speed when compared to a car. Quardicycles are seen as leisure vehicles used off the road rather than on it. There are two categories of quadricycles in Europe: Light quadricycles which are limited to 350 kg and top speed exceeds not more than 45 km/hr. Heavy quadricycles which are limited to 400 kg and maximum power not exceeding 15 KW

In India quadricycle is a concept that is aimed as an alternative to the unsafe three wheeler auto rickshaws. It is not targeted at competing with small cars but the cost of the proposed quadricycles are close to the range of small cars and hence it becomes a direct competition to small car manufacturers. Also, majority of Indian population generally use vehicle for mass transport rather than as a leisure transport.

4. Bajaj RE60
Bajaj Re 60 is basically a quadricycle; quadricycles are low speed light weight four wheelers having an engine at the rear meant for intra-city commuters. The most important point to consider is that even though its a four wheeler it should not be coined as a car. This is not a car, it is for a totally different market, this is what Rajiv Bajaj quoted during the launch of Re-60 at the 2012 auto expo. While the RE60 was originally conceived as an answer to the compact Tata Nano (positioned as worlds cheapest car), Bajaj Auto Ltd. has since made it crystal clear that its new brand is targeted towards the three-wheeler sector and is not intended to compete with Tata Nano. There is logic behind this statement as Bajaj wants the 2
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and 3 wheeler customers in its two largest markets; India and Sri Lanka, to view the RE60 as their next evolution. While Tata targeted first-time car owners, Bajaj is considering process of cannibalization by looking to convert its existing market base of auto-rickshaws into the RE60 market.

4.1 Comparison with Bajaj auto rickshaw

PARAMETERS FUEL EFFICIENCY MAX POWER CO2 EMISSION WEIGHT SEATING CAPACITY PRICE BAJAJ RE 60 35-40 Kmpl 20Bhp 60gm/km 400Kg 4 1,10,000-1,50,000 BAJAJ AUTOS 25-30 8Bhp 85.6gm/km 330kg N.A 1,00000-130,000

The table above stresses the 3 core benefits of re-60 as compared to conventional three wheelers. Higher power Max power obtained for Re 60 is 20Bhp which is about 40 percent more than the power generated by a standard 175 cc powered three-wheeler. Fuel efficiency Bajaj claims that RE60s best mileage so far has been 35+ kmpl and it is fuel efficient because of its limited 450kgs of kerb weight and minimal frictional and transmission losses. Ultra low emissions Bajaj claims that re-60 produces ultra-low emissions of 60gms CO2 per kilometre. For a vehicle that has the looks of a car, the RE60 has the lowest CO2 emissions in the world. Compared to the conventional autos in the market the emission levels of Bajaj re-60 is very low.

4.2 How Bajaj achieved this trio of benefits

Kerb weight was limited to 450 kgs by the use of a Metal-Polymer hybrid structure. By not loading with excessive steel, the weight of the vehicle was reduced considerably. Re 60 uses a small, 4 valves, DTSi, engine (water cooled) with a closed loop fuel injection system minimizing frictional and transmission losses.

The additional benefits of safety (seatbelts, doors) and better travel comfort travel (especially during monsoon seasons) are also claimed by Bajaj.
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5. Viewpoints
The different viewpoints of the auto manufacturers in India would give a better picture of quadricycles:

5.1 Bajaj Auto:

Though Bajaj Auto has in the past opposed the idea of a quadricycle, they have re-introduced the concept with the manufacture of RE60 which they have showcased at the 2010 Delhi Auto Expo. Bajaj Auto has been requesting the permission of government to start the production of RE60. The lack of policies regulating quadricycles in India has led the government to chart out new norms for the same. Bajaj has proposed the EU norms to be adopted for the quardicycles in India. The proposed norm states the weight to be restricted to 400 kg and a top speed of 70 km/h. Bajaj has also recommended that the quadricycles should be limited to urban use and the vehicles not to be used in highways. According to Bajaj, the restricted speed would ensure that the vehicles does not ply on the highways

5.2 TATA Motors:

The concept of quadricycle was first introduced by V. Sumantaran, who was the head of Tata Motors passenger car business as a cheaper alternative to a car. The concept was opposed by Maruti Suzuki and Bajaj Auto citing safety and emission norms. Tata dint want to drop the concept and went on to manufacture Tata Nano. Presently, when the concept was re-introduced by Bajaj Auto, Tata Motors has strongly opposed the concept. According to Karl Slym, MD at Tata Motors, quadricycles would take India only backwards as it is against all the progressive norms that the Government, manufacturers and agencies have been working on over the years. Due to the economic slowdown sales of Nano has drastically decreased and with the launch of quadricycles, market for Nano would further shrink. The customers would likely overlook aspects like safety and performance and would open hands for better gas mileage and a cheaper cost price.

5.3 TVS Motors:

TVS has proposed the launch of quadricycles in India nearly a decade ago. The launch was opposed by Maruti and Bajaj Auto who questioned the norms at that time. Presently TVS is against the launch of quadricycles in India as the same idea was opposed by Bajaj Auto a decade ago. TVS would be in trouble if the quadricycles are launched as an alternative to the auto rickshaw. The proposed price for the quadricycles are just at a slight premium to a three wheeler. The sales of the three wheelers would be hit as TVS is the second largest manufacturer of three wheelers in India.

5.4 Piaggio:
They were the pioneers of quadricycle in Europe and along with TVS proposed quadricycles for India in 2004. As the idea was opposed by Maruti and Bajaj Auto at that time, Piaggio started manufacturing three wheelers for passenger and goods transport.

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Presently, Piaggio is supporting the quardicycles and supports the adoption of EU norms. Unlike other manufacturers, Piaggio would have a head start in designing as they have already launched the quadricycles in Europe. With the quality of the materials used for production and capability of the company, Piaggio can capture a large chunk of the unpopulated market.

5.5 Mahindra & Mahindra:

M&M is into the manufacture of two wheelers, three wheelers, cars and trucks. They are open to the concept of quadricycles. They believe that quadricycles would change the landscape as it would create opportunities for the three wheelers to upgrade to the four wheelers at a marginally higher cost. Also when compared to the three wheelers, quadricycles are much safer.

6. Rationale behind the RE60

The thought process behind the launch of RE60 by BAL can be best captured from the following statements of Rajiv Bajaj, Gillettes nightmare was that someone will make a cartridge with two blades, so it made one with three blades. This is the strategy of defence. I, as the worlds largest three wheeler maker, was afraid. What if somebody put a fourth wheel on it? I would be doomed. So I put the fourth wheel myself. I attacked myself, evolved the product, and listened to the brand. This has been a great concern for BAL. The fact that in the last FY the exports of three wheelers have dropped considerably adds on to concern of BAL even if the reason identified for the drop may not have so much of bearing to the fear expressed by Rajiv Bajaj above in regard to the three wheeler segment. It has been already mentioned that a major part of the production of three wheelers by BAL is exported and furthermore the three regions which are of particular significance in this regard are Africa, Latin America and South East Asia. On observing some of the developments in these regions over the last decade with respect to the three wheeler industry, one can better fathom the seriousness of the fear expressed by Rajiv Bajaj of three wheelers being obsolete. One impelling example in this regard would be that of Indonesia. Bajaj Autos had a strong presence in Indonesia for the almost the last four decades. It was so popular in Indonesia that the name Bajaj became synonym for three wheelers there. Initially Bajaj entered the Indonesian market with their three wheelers in the early seventies as a substitute to the cycle rickshaw which was popular then. It was then seen by the Indonesian as mark of modernity. As the country developed, by 1990s the same Bajaj auto rickshaw came to viewed as polluting, unsafe and backward. The government of Indonesia wanted to ban Bajaj 2-stroke three wheeler. However, by then Bajaj had a very strong hold in the market since it became an integral part of the Indonesian transportation system and it was becoming very difficult to find ran appropriate substitute for the Bajaj auto rickshaw. The presence of Bajaj for many years led to making of an ecosystem itself in Indonesia. The most attractive aspect of the Bajaj auto rickshaw was its economic viability. The Indonesian government initiated the development of an indigenous small sized four wheel car called Kancil hoping that it would go on to replace Bajaj auto rickshaws which never happened. Further on the Government gave permission to import CNG 4 stroke auto rickshaw made by Bajaj itself but that also did not quite take off since it was considerably expensive than the Bajaj 2 stroke engine.
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One big problem with other alternative source of energy not working in a country like Indonesia is the fact that the government is not in a position to provide significant subsidy on the greener source of energy in contrary to the situation in developed countries. However the important point here is that with the growth of economy of a country the three wheelers will slowly start becoming obsolete. This scenario discussed above is not an isolated occurrence. The situation is similar in most of the countries that Bajaj export their three wheelers. Srilankan government has already banned the import of 2 stroke engine powered auto rickshaws. In Nepal they have shifted to CNG engine powered auto rickshaws since they have the availability of CNG. The obvious understanding from these examples is that a three wheeler is no more a desired option for a community but rather an option of compulsion. The situation is no different in India. The example of Delhi can be an impelling one in this regard where government regulation on running all the public transport vehicles in CNG was brought about. At the advent of an economically viable greener option for intra city transportation, most of the developing nations and India will be more than happy to adopt the same.

6.1 Analysis of Indian three wheeler industry using Porters five force model
Potential of new entrants into industry- Low

In Passenger vehicle segment Bajaj Auto has sold 223,287 units in FY 2012-13 taking their sales figures up by 26,146 units equated to last FY. Bajaj Auto is the market leader with 51% market share followed by Piaggio and Mahindra & Mahindra with 10% market share. Piaggio continues to be the market leader in goods segment with 52% market share. In this segment Piaggio is the market leader from couple of years followed by Mahindra and Mahindra and Bajaj with 7% market share. Thus it is very evident that the three wheeler industry is dominated by few key players with long history of trust making the entry barrier high. Power of suppliers Low

For critical parts like engine parts and suspension parts, Bajaj three wheelers rely on few selected vendors such as Kharbanda Automotive and Mithani Group. These suppliers are more concentrated on the three wheeler industry to which it sells, implying their chance of supplying to other industries are minimal. Thus making the bargaining power of suppliers low. Power of customers - High

The bargaining power of the buyers are high. There are a variety of products available to customers to choose from players like Piaggio, Mahindra & Mahindra etc. The customer is treated as a king.
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Indian three wheelers market segment is growing as there is an increased demand for intra city transport. But when we consider Indian three wheeler transportation customers use three wheeler more of compulsion than comfort. There is always threat of alternate mode of transport. Customers chance of welcoming new modes of transport which are sustainable are high. Also changing government regulations on emissions and other regulatory policies can be a threat for the three wheelers. There are also other substitutions for three wheelers like Tata Magic, it is a passenger version of Tata Ace mini truck which allows customers a choice of four wheeler over a three wheeler for intra city transport. Competition in the industry - High

The industry saw a slight decline in 2011 which can be recognised by government policies such as cap on permits and high interest rates. However the market has been performing pretty well thereafter as a result of climbing population, growing commercialization, increasing commercial activities, etc. which all are contributing to the increased demand for intra city transportation. The passenger three wheeler segment leads the market as the need for passenger commutation is greater than the need for goods carriage within a city. The modifications in FDI policies and flourishing retail sector in the country are driving the growth for commercial three wheelers. Bajaj Auto sold the most number of vehicles during FY 2012 which sums to 29,395 units against 27,247 units in the same period last year registering a growth of 7.88%. Piaggio also registered a delicate growth of 1.02%. Atul Auto is the most enriched brand in AprilMay period of 2013, as they seized a 10.27% growth against April-May 2012. Mahindra sales in this segment decreased by 10.19 while the worst hit brand has been TVS where they witnessed their sales went down by a massive 39.29%. Thus we can see that all the players in the three wheeler industry compete each other for their survival. Porters five force analysis leads to an opportunity of an alternative. The increasing importance of sustainability and other emission regulations opens a new opportunity which the companies can look for.

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7. SWOT Analysis

STRENGTHS
Brand image Robust distribution network Global presence (especially in emerging markets) First mover advantage

WEAKNESS
Lack of labour skills Lack of prior experience in marketing similar product

SWOT Analysis
OPPORTUNITIES
Desire for a greener and safe alternative for three wheelers Growing economy of India inin quadricycle Challenges Opportunity export market

THREATS
Auto drivers mentality towards change Future competition from Tata and m&m Lobbying by major auto manufacturers Government regulations

Meeting safety and pollution standards

8. Challenges in quadricycles

The list of negative flexible materials include rexin, cloth, and plastic. The government expects quadricycles to deliver better safety than three wheeler auto rickshaw. Quadricycles are new to the vehicle segment. Lack of proper norms are a major concern. The government has to come up with stringent norms which restrict the amount of carbon dioxide emissions. The number of passengers including the driver that the vehicle can accommodate is four in case of a passenger vehicle. The maximum load allowed is 450 kg. In case of goods vehicles under this category must have seating capacity for 2 including the driver. The maximum load allowed is 550 kg. In India majority of the population use vehicles for mass transportation but the quadricycle cars are meant to be used as a leisure vehicle and not as a mass transport vehicle. The acceptability of the vehicle by the middle segment to which it is mainly targeted has to be understood.

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The opposition faced from the competition is severe as none of them has the facility to build quadricycles. Competitors like Tata, TVS and Maruti Suzuki has strongly opposed the concept of quadricycles. Their point of argument is regarding the safety and emission norms. In a country like India where the number of reported accidents are higher (around 1.4 lakh), introduction of an unsafe vehicle can exponentially increase the numbers. All the opposing players have asked the Government to not to sanction the proposal until all the players build the capacity to manufacture.

9. Marketing Plan
9.1 SLEPT Analysis
Social: The quadricycles are targeted at three wheeler owners. It is introduced as an up gradation to a three wheeler. The customers/three wheeler owners would get the status of a four wheeler owner. Quadricycles are much safer and stable than a three wheeler which offers better comfort and transport experience for the passengers. RE60 costs a little more than a three wheeler which makes it affordable for the target customers Legal: As mentioned earlier there was substantial opposition for the Bajaj RE60 from the major manufacturers like Tata motors and Maruti. Government body has given the required sanctions to launch RE60 in India under the following norms: RE60 can only be used as a commercial vehicle Only a person with commercial license can drive the vehicle The quadricycles will be amended as a new category in the central motor vehicle rules The RE 60 should have a Q symbol on it to differentiate it from the other vehicles The quadricycles will comply to EU norms for quadricycles and will be upgraded in the time span of 6 months in the case the same being revised

The government regulation on the RE60 is to the interest of BAL, however Tata motors and Maruti are also reasonably happy with regulation since RE60 is confined to commercial use. It is being said that the government process regarding the amendments will get done in period two months from now. Bajaj seeing the commercialization of RE60 in the coming year is the final testing stage for the vehicle. Economic & Environment: RE60 is priced slightly higher to a three wheeler which makes it affordable to the target customers. The maintenance cost of RE60 is low when compared to a car. Carbon dioxide emission from a car is around 120 g whereas the emissions from a quadricycle is around 60 g thus making quadricycles environment friendly. Political Various political factors affected the delaying of the launch of quadricycle in India. Lobbying by car manufacturer majors like Tata, TVS and Maruti has delayed the launch of quadricycle.
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The main reason for their opposition being safety and emission norms. Also the concept was initially opposed by Bajaj and their re-introduction at a later stage was actually a lost opportunity for Tata and TVS. Since government policies for quadricycles were absent, the policies were actually dependent on the viewpoints of the auto makers. Technological RE60 was initially a project which was carried out by Bajaj in association with Nissan and Renault. The reason for the association being the technical incompetency of Bajaj to manufacture the quadricycle. However, when the product was almost ready to be launched Nissan and Renault backed off citing that RE 60 was not the right product that they envisioned. The collaboration continued till the final stages of product development and the withdrawal of the parties would question the technical expertise of BAL.

9.2 Marketing Strategies

The biggest challenge for Bajaj is that they are planning to sell something that has never been sold before in the Indian market. The success of the product will largely depend on the marketing campaign undertaken by Bajaj. The company will have to develop a marketing campaign such that it will create the awareness among the target group. The success of the product will largely depend on the mentality of the customers. The company has revealed very less details regarding the aspect of how they will go about sales and promotion of RE60 once its all set for commercialization. In this section an attempt is made towards understanding the dynamics of the market in the context of the launch of RE60 by BAL. Targeting & Positioning It is very clear from the media release of BAL that RE60 is targeted towards the three wheeler owners. It is believed to be an up gradation for the auto rickshaw owners. Rajiv Bajaj had made it clear that RE60 is not meant as a competition to cars as such. It is aimed at giving a safer and greener option for three wheelers. Positioning of the product will be critical in the success. Bajaj has been very particular with the positioning of any of their product for that matter. The brand led strategy has been the driving force for BAL in the last decade. BAL has given indication that the RE60 would be positioned based on the benefits provided by the product.

Marketing Mix
Product RE-60 is a replacement for three wheel autos and it has features like better fuel efficiency, power, safety and riding comfort compared to three wheelers. The strong brand name of Bajaj in the Indian market augurs very well for Re 60. Design Design is sleek and attractive and it is small in size which is best suited for Indian markets. Variants
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Petrol, CNG and LPG. Services The wide distribution network of Bajaj and its service outlets promises to provide the best in class services to customers.

Price RE60 is believed to be priced between three wheel auto rickshaws and Tata Nano (worlds cheapest car). Therefore the price is very much affordable for new buyers and also replacement buyers. Place High penetration in urban and rural areas with the help of the large presence of dealerships and showrooms of Bajaj. Promotion The biggest challenge is to change the mind-set of auto users to move from auto rickshaws to quadricycles. For evoking such a change the user should get the opportunity to drive the vehicle which will remove any negative feelings/perception that they may have towards the vehicle. Test driving should be done at all Bajaj outlets and authorized service centres Attractive exchange and finance schemes should be introduced by Bajaj to tap the auto rickshaw market. Financial risk is one of the most common risks perceived by customer and if Bajaj is able to lower that then it will be a huge factor to drive sales for Re-60.

10. McKinsey 7s model:

Strategy:

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It is the plan devised to maintain and build competitive advantage over the competition. Bajaj Auto usually uses differentiation strategies. Rajiv Bajaj, the CEO of Bajaj Auto has come up with the concept of quadricycles to differentiate itself from the competitors in the auto industry. Bajaj Auto is the largest manufacturer and exporter of three wheelers in India. Rajiv Bajaj took a precautionary defensive strategy because he thought of a possibility of a potential competitor putting a fourth wheel to his three wheeler would mean a huge loss to the company. Hence he came up with this defensive strategy even though it would cannibalise the current products (Bajaj Auto three wheelers). Structure: It is the way the organization is structured and who reports to whom. In 2007, Bajaj Auto underwent a focussed organizational restructuring which helped to strengthen the existing business roles and responsibilities to ensure greater empowerment and effective management. The five pillars of this structure were R&D Engineering Two wheeler business unit Commercial vehicles business unit International business unit

These pillars were supported by functions of finance, MIS, Human Resource, Business development and Commercial. The division into these pillars helps Bajaj Auto to take quick decisions. Systems: It is the daily activities and procedures that the staff members engage in to get the job done. The company believes in building a distinctly ahead organization by developing competent and engaged employees. Bajaj Auto has put in place a learning environment for the employees. Some initiatives taken by the company are Individual owned learning- wherein the employees develop their own learning plan which are based on mutually identified competency gaps in present and aspired job in their career path User friendly learning management software- which are instructor led training programs, e- learning modules and informal learning through communities Idea management and knowledge sharing- employees are encouraged to explore the unknown and in the process create value. Kaizen idea management and various knowledge sharing forums are facilitated

Shared Values: These are superordinate goals which are core values of the company that are evidenced in the corporate culture and general work ethics. Innovation is the core value of BAL. They believe that customer satisfaction is the key element of success. In order to satisfy the customers, they should be provided with the best quality products at affordable prices. BAL uses latest manufacturing technologies like robotics and automation to build quality in the products.
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It is the style of the leadership adopted. Jamnalal Bajaj, the founder of the Bajaj group was a Gandhi disciple. Integrity, dedication, resourcefulness and determination to succeed are the main characteristics of the group today. These qualities are often tracked back to its inception which are characteristics of that period of relentless devotion to a common cause. Rahul Bajaj is the present chairman of the group under whose leadership the company has grown in revenues from Rs 72 million to Rs 120 billion. Rajiv Bajaj has brought about an entrepreneurial spirit to the company. He is also well known for his abilities to make good judgements and quick decision making. Staff: Staff includes the employees and their general capabilities. Bajaj recruits the best engineers from premium institutes like NITs and IITs. Lateral hiring is also done to bring together individuals from various organization cultures which helps in pooling different perspectives to a problem. Looking at the present situation there are no gaps in the required competencies. The R&D department, Engineering department and other structural units are doing well. Employees are well kept engaged and facilities for recreational activities like basketball, table tennis, swimming, trekking etc. are provided to help the staff to maintain a healthy work life balance. The organic growth provides numerous opportunities to the employees to climb the ladder of authority and take responsibility Skills: The actual skills and competencies of the employees working for the company constitutes the skill part of the 7S. Bajaj is known for its technological innovation. Bajaj houses brilliant engineering minds who consistently conceptualize new ideas and comes forth with breakthrough technologies. Bajaj possess innovative patents like the Bajaj DTS engine which was a breakthrough product of the past decade. The new RE60 which is an alternative to the three wheeler is also an excellent example of the engineering and R&D skills of the company. The organization culture which provide the employees with high degree of autonomy in their day to day decisions empower and motivate them in their performance.

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11. Conclusion
The study conducted has shown that it was a reasonable decision by BAL to launch RE60. The timing is also believed to be apt considering the growing issues of pollution and need for better technology. However, the roll out of RE60 is not expected go very smoothly for BAL. It is expected that the company will have to overcome significant hurdles to be successful in this venture. As indicated earlier in the report, implementation of an effective marketing campaign focusing on core benefits of the product will be crucial for the success of BAL in this endeavour. It was recently told by Rajiv Bajaj that he would not wait longer if the launch of RE60 further delays in India. It has been reported of him saying that there is promising potential for RE60 in the countries like Indonesia and Srilanka. Further on it was also told that the government in these countries are interested in the concept of RE60. The reasons behind the same have been discussed above in the report. Opportunity in the European countries can also not be ruled out. Considering the demographics and the economic scenario in European nations, RE60 with may be a little modification can be a prospective last mile private transport vehicle. There are a lot older people in Europe who might be interested in having a cheap mode of private transport which is easy to use. However it does go without saying that it would require some significant changes in the value proposition of RE60 as of now. Italy, France and Spain can be some of the prospective European countries in this regard.

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