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COMPANY OVERVIEW

History of Pak Suzuki


Pak Suzuki Motor Company Limited was formed as a joint venture between
Pakistan Automobile Corporation and Suzuki Motor Corporation (SMC) - Japan.
The Company was incorporated as a public limited company in August 1983
and started commercial operations in January 1984. The initial share holding
of SMC was 12.5% which was gradually increased to 73.09%.
Pak Suzuki is pioneer in Automobile Business having the most modern and
the largest manufacturing facilities in Pakistan with an Annual production
capacity of 150,000 vehicles. The vehicles produced include cars, small vans,
Pickups, Cargo vans and Motorcycle. Pak Suzuki holds more than 50% Market
Share.
Following the aggressive policy of Indigenization, Suzuki vehicles have a
healthy local content upto 72%. This was made possible by strong support of
our vendors.
Pak Suzuki has the largest Dealers network offering 3S (Sales, Service and
Spare Parts) facilities across Pakistan.
Caring for the Environment Pak Suzuki was pioneer in introduction of Factory
fitted CNG vehicles.
Pak Suzuki always endeavors to go aggressively for the sound development
of the society by increasing motorization, industrialization and creating job
opportunities thus improving the peoples living standards with the combined
efforts of all the dealers, vendors and Pak Suzuki employees.
Pak Suzuki is also exporting Suzuki Ravi pickup, Liana and components to
Bangladesh and Europe thus earning precious foreign exchange for the
country.
GROWTH

. On February 2009 Pak Suzuki has 48% market share. The sales growth
covered all car segments, but the global trend for a shift to small cars was
buckedas the highest m-o-m growth came in the 1300-1600cc segment,
where sales rose by 31%. The 850cc and 1000- October), sales rose 21%
to34,553 units. However, with October's price hikes likely to affect sales in
thecoming months, BMI is forecasting car sales growth of around 5%. While
weexpect some correction in the market from a particularly low base in the
lastfinancial year, higher prices will drag on the market's potential
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growth.Indus Motor took advantage of growth in the higher engine capacity


passenger car segment, with sales of the Toyota Corolla contributing to
growth of 25% y-o-y in October and growth of 77% for the first four months of
the financialyear. This took the company's market share to 42% from 28% in
the same periodof the previous financial year. Pak Suzuki's market share for
the four months fell to 45% as its sales for the period were down 2% y-o-y,
despite a 23% increase m-o-m in October and 2% y-o-y increase for the
month.
EVENTS

Launching Ceremony of Suzuki WagonR


Pak Suzuki achieved another milestone on 18th April, 2014 by
launching worldwide successful Suzuki WagonR Car in Pakistan.
Suzuki WagonR is of its own class in terms of technology with
highly fuel efficient K-Series Engine, Spacious interior. The Suzuki
WagonR is also considered as a Star Product in Suzuki Motor
Corporations line up and has won many appreciations and
awards worldwide.

Introduction of 7S Campaign
Suzuki dealerships are now moving beyond 3S Services and providing
complete solution of automobile needs covering Sales, Service, Spare parts,
Suzuki Exchange, Suzuki Certified Used Cars, Suzuki Finance and Suzuki
Insurance. These 7S Services are provided at all Suzuki authorized
dealerships so that customers can benefit from these facilities under one roof.
A promotional campaign based on 7S concept was executed at country wide
Suzuki authorized dealerships in the month of April, 2014 for customers
awareness about these service.

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1st Outboard Motors handing over Ceremony


Pak Suzuki achieved another milestone by introducing Outboard motors in
Pakistan. The First Outboard motor was handed over to a customer at Karachi
Boat Club in a ceremony held on 11th June, 2014.
Certified Used Car Gala
Pak Suzuki Organized 2nd Used Car Gala of 2014 in Lahore, Rawalpindi and
Karachi on 13th April and 7th, 15th June, 2014 respectively, where Suzuki
certified used cars were displayed. All events were successful with
participation of large number of customers. A large numbers of vehicles were
sold on the spot.

Indoor Games Festival 2014


Pak Suzuki Indoor Games Festival 2014 was held in the month of April and
May 2014 at Pakistan Sports Board Gymnasium. Events of Basket Ball, Table
Tennis, Badminton and Carrom were played. Large number of audience
enjoyed the sports festival.
In the end, prizes were distributed among winners and runners up. Lucky
draws were also held afterwards.

ISSUES
As a general manufacturer of automobiles, motorcycles, outboard motors,
etc.,Suzuki addresses environmental conservation at all stages in its
operations from development to disposal. In product development, we make
every effort to improve fuel economy, reduce exhaust emissions and noise,
and develop clean energy vehicles, etc. In manufacturing, we address issues
such as reducing environmental risk, reducing energy, and promoting the use
of alternative energy. In distribution, we focus on improving transportation
efficiency and energy reduction, promoting the three Rs and the use of low
emission transport. In marketing, we address issues related to promoting
environmental management at our dealers and proper disposal of end-of-life
products,etc.In addition to activities related to production, we also promote
energy reduction and green purchasing in our offices, provide our employees
with environmental education, promote environmental management at our
dealers, and provide social action programs in local communities
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Existing Mission and Vision statement


VISION
To be recognized as a leading organization that values
Customers needs and provides motoring solutions with strong
customer care.
MISSION
Strive to market value packed vehicles that meet customers
expectations.
Provide a platform where our stakeholders passionately
contribute, invest and excel.
Make valuable contribution to Social development of Pakistan.
NEW VISIONAND MISSION STATEMENTS
Our Vision
To be Excellent All Around
Our Mission
To provide automobile of international quality at competitive price.

SWOT ANALYSIS

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PEST Analysis
Uncontrollable environment are those external factors which can create
hurdles between us and our business. It is also called pest analysis, which is
as follow:
Political Environment
Pakistan has to face lots of political ups and downs since its independence. So
many governments have been overtaken by military personnel and most of
the time martial law was imposed on Pakistan. In this scenario no
entrepreneur was willing to invest in Pakistan except few. Due to such
conditions, market environment wasnt helpful in Pakistan. The Pakistani
government has never been trustworthy for any investor.
Legal Environment
As all countries, Pakistan also has some legislation about each sector. But
like developing countries it is hardly being imposed by authorities. The
corruption, smuggling and black marketing have been supported by
Government related officials. The undue favor is given to those business men
who have been politically affiliated and hardly any legal suite is carried on
against them. Such unethical activities destroy all law and legislation.
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Economic Environment
Pakistan, an impoverished and underdeveloped country, has suffered from
decades of internal political disputes and external ongoing conflict with India.
However, IMF approved the government policies, encourages by different
foreign assistance and renewed access to global market since 2001.
By following these policies government succeed to reverse the situation of
economy during last five years.
Socio-Culture Environment
Pakistan has strong culture background and it has been follow in some
particular region of Pakistan strictly. But with the passage of time it is going
to change. Thoughts of people, choices, taste and style has been totally
changed. If we talk about the transportation source in Pakistan, People use
buses, pickups etc for journey. They also have their own bicycle and bikes
and lots of people are pedestrian. But now the people who havent any
source of transportation they also want something for their convenience
because they wants to save their time as much as they can. People want to
use such vehicle which looks beautiful and also affordable.
Technological Environment
Technological factor also very important and we havent control on it.
Technology is grooming with the passage of time. People also want that the
product that they have is full of technology. We never control on technology
for example you launched the product last year and your sale volume on that
time is very high but after sometime due to latest invention a lots of
substitute exist in market which affect on your business so you cant hold on
it.

External Assessment

CPM

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External Factor Evaluation Matrix (EFE)


OPPORTUNITIES
1.
2.
3.
4.
5.
1.
2.
3.
4.
5.

Increasing Demand for Cars


Efficient EFI Engines
Large Market to operate
Global spare parts market
Small size CNG Cylinders
THREATS
Tough Competitors like Toyota and Honda
Inflation Rate
Heavy Taxes
Cheaper Imported Cars
Increase in Fuel Prices
Total Weighted Score

Ratings:
1 Poor
2 Below Average

Weig
ht
0.15
0.10
0.10
0.05
0.12

Rating
s
4
3
3
2
3

Weighted
Score
0.60
0.30
0.30
0.10
0.36

0.14
0.08
0.08
0.10
0.08

2
3
3
4
2

0.28
0.24
0.24
0.40
0.16

1.0

2.98

3 Above Average
4 - Superior

The total weighted score of 2.98 shows that company is responding above
average to its external factors. They are trying to grab maximum
opportunities available there and avoiding the threats to their best.
Justification of Ratings:
1. The company is producing the maximum number of cars in compare with
other competitors and therefore grabbing the opportunity to meet the
increasing demand.
2. Pak Suzuki has introduced new EFI engine in its CULTUS model which is a
1000cc car. The EFI engine technology is never introduced before in below
1300cc cars.
3. The dealer network of Pak Suzuki is almost all around the country which
help them to maximize their sales and reach in every corner of the country.
4. In new CNG fitted cars, the Suzuki is introducing new compact CNG
cylinders which take less space and are lighter than their equivalent available
in the market.

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5. The major threat Suzuki Company could have is from Toyota and Honda, as
Suzuki is still unable to meet them in 1300cc and above category of cars. The
new product SWIFT is not giving the respond which was expected.

INTERNAL ASSESSMENT

ORGANIZATIONAL CHART

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Internal Factors Evaluation Matrix (IFE)


STRENGTHS
1.
2.
3.
4.
5.
1.
2.
3.
4.
5.

Highest Market Share


Low Price Vehicles
Large Distribution Channels
Easy availability of spare parts
Highly Innovative and deep product line
WEAKNESSES
Scarcity of raw material
Lack of coordination and linkage with
Govt. bodies
Less focus on Looks and design
Less Technical Training Institutes
Less distribution channels in sub urban
areas
Total Weighted Score

Ratings:
1 Major Weakness
2 Minor Weakness

Weig
ht
0.20
0.10
0.12
0.08
0.12

Rating
s
4
4
4
4
4

Weighted
Score
0.80
0.40
0.48
0.32
0.48

0.08

0.16

0.05

0.10

0.10
0.05

1
1

0.10
0.05

0.10

0.10

1.0

2.99

3 Minor Strength
4 Major Strength

The score 2.99 shows that company has solid internal position, its strengths
are overcoming the weaknesses.
Justification of Ratings:
1. Pak Suzuki Motor Company has large market share herein and also the
largest producers of Cars which is a major strength.
2. Their prices are very affordable in the same quality that is another major
strength.
3. The large distribution channel is another major strength which helps them
to achieve their desired sales targets.
4. The innovation is another key strength of Pak Suzuki and the example is
new Suzuki SWIFT.
5. The spare parts availability is a critical issue which cars, Suzuki has
comparative advantage in spare parts availability as most of them are being
manufactured in Pakistan.
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6. The major weakness which I felt is the non-availability of skilled engineers


and workforce. And the reason behind is lack of technical institutes under
their banner.
7. They should also focus on sub-urban areas like Southern Punjab and
Interior Sind which their distribution network.

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FINANCIAL RATIO ANALYSIS OF PAK SUZUKI MOTORS

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STRATEGY FORMULATION

SWOT Matrix
STRENGHTS
1. Highest Market
Share
2. Low Price Vehicles

SWOT / TOWS
Matrix

3. Large Distribution
Channel

3. Less focus on Looks


and design

4. Highly Innovative &


Deep product line

4. Less Technical
Training Institutes
5. Less distribution
channels in sub-urban
areas
W-O Strategies

5. Easy availability of
spare parts
OPPORTUNITIES
1. Increasing Demand
for cars
2. Efficient EFI engines
3. Large Market to
Operate
4. Small size CNG
Cylinder
5. Global Spare parts
market
THREATS
1. Tough Competitors
2. Inflation Rate
3. Heavy Taxes
4. Cheaper Imported
Cars
5. Increase in Fuel
prices

WEAKNESSES
1.Scarcity of Raw
Materials
2. Lack of coordination
with Govt. Bodies

S-O Strategies
1. Maximize market
share by producing
more cars per year
(S1,S2,O1,O4)
2. Develop more
efficient and innovative
Engine which gives
comparative advantage
(S4,O2)
3. Use efficient CNG
systems (S4,S5,O4)
S-T Strategies
6. Maintain quality in
affordable price will
help to compete with
competitors and
imported cars
(S2,S4,T1,T4)
7. Develop fuel
efficient engines to
gain edge and
eliminate threat of fuel
prices increase
(S4,S5,T5,T2)

4. Focus on Looks and


Design to compete with
Honda and Toyota
(W3,O1,O3)
5. Fund and establish
technical institutes to
gain more skilled
workforce (W4,O3,O1)
W-T Strategies

8. Enhance distribution
to avoid threat from
second hand imported
cars (W5,T4)

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GRAND STRATEGY MATRIX

Grand Matrix

Rapid Market Growth

Q1

Q2

Weak Competitive Position

Strong Competitive Position

Q3

Q4

Slow Market Growth

The grand matrix helps us to determine the strategy that firm must pursue,
based on its competitive position and market growth.
The Pak Suzuki Motor Company Limited has strong competitive position
against its major competitors and the market growth is healthy and at
increasing pace.

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But they still need to do lot to get themselves at top. As per my judgment,
they fall under Quadrant 1 and they should follow aggressive strategies like
Market Development and Product Development.

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BCG

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SPACE MATRIX DATA

SPACE MATRIX

Space Matrix
Financial Strength (FS)
Return on Investment
Working Capital
Short Term Assets
Total:
Industry Strength (IS)
Large Market to operate
Increasing per Capita Income
Consumption Oriented Culture
Total:
Competitive Advantages (CA)
High Quality Products
Sleek and Stylish Designs
Famous Brand Names
Total:
Environmental Stability (ES)
Tough Competition
Change in Govt. rules and regulations
Imported Refurbished Cars
Law and Order Situation
Total:

+4
+3
+4
+11

+5
+3
+4
+12

-3
-4
-3
-10
-2
-3
-4
-2
-11

Average Scores:
FS = 11/3 = 3.67
IS = 12/3 = 4
CA = -10/3 = -3.33
ES = -11/4 = -2.75
X-axis = IS+CA = 4-3.33 = 0.67
Y-axis = FS+ES = 3.67-2.75 = 0.92

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Space

In space matrix weve observed that company will pursue aggressive


strategies. We consider they key factors of Financial Strengths, Industry
Strengths, Competitive Advantages and Environmental Stability. By assigning
them values as per their importance worst to best, we calculated the score
which lead us to the decision that company will pursue Aggressive strategies.
And I would suggest Market Development and Product Development
strategies will work best for PSMC.

IE MATRIX
IFE Matrix Scores
Strong
4
Strong
EFE
Matrix
Scores

Average
Weak

Average
3

Weak
2

ii

iii

iv

vi

vii

viii

ix

3
2
1

The IFE matrix score for Pak Suzuki Motor Company Limited (PSMCL) is 2.99
and for EFE matrix is 2.98 therefore our IE matrix falls more around iv cell.
The company should adopt growth and built strategies and I recommend
Market Development and Product Development Strategies.
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QSPM MATRIX

External Factors
Increasing Demand for Cars
Efficient EFI engines
Large Market to operate
Global Spare parts market
Tough competitors
Inflation
Cheaper Imported cars
Increase in fuel prices
Internal Factors
Highest Market share
Low price vehicles
Large distribution channel
Easy availability of spare
parts
Innovative and deep product
line
Less focus on style and
design
Scarcity of human resource
Totals

Weig
ht
0.10
0.06
0.08
0.04
0.08
0.06
0.08
0.10

Market
Development
Attracti
ve
Total
Score
4
0.40
3
0.18
4
0.32
3
0.12
4
0.32
1
0.06
4
0.32
4
0.40

Product
Development
Attracti
ve
Total
Score
4
0.40
4
0.24
4
0.32
2
0.08
2
0.16
1
0.06
4
0.32
4
0.40

0.08
0.10
0.06
0.02

3
1
2
3

0.24
0.10
0.12
0.06

4
4
3
3

0.32
0.40
0.18
0.06

0.06

0.24

0.18

0.04

0.16

0.16

0.04

0.12

0.16

1.0

3.16

3.44

By comparing both Market Development and Product Development, we


obtained more weighted attractive score for Product development. That
means company should follow the product development which is part of
aggressive strategies. This strategy is going to help the firm in eliminating its
threats and grab the opportunities to be successful in the present macro
environment.

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STRATEGIC PLAN

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

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 thatSuzuki Motors
are moving towards extending their product portfolio

DIFFERENT STRATEGIES APPLIED BY PAK SUZUKI


MOTORS LIMITED
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ompetitive advantage is an advantage over competitors gained by offering


consumers greater value, either by means of lower prices or by providing greater
benefits 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 uniquely to meet those criteria. This strategy is
usually associated with charging a premium price for the product - often to reflect
the higher production costs and extra value-added features provided for the
consumer. Differentiation is about charging a premium price that more than
covers the additional production costs, and about giving customers clear reasons
to prefer the product over other, less differentiated products.
Low Cost Leadership Strategy :With this strategy, the objective is to become the lowest-cost producer in the
industry. Many (perhaps all) market segments in the industry are supplied with
the emphasis placed minimising costs. If the achieved selling price can at least
equal (or near)the average for the market, then the lowest-cost producer will (in
theory) enjoy the best profits. This strategy is usually associated with large-scale
businesses offering "standard" products with relatively little differentiation that are
perfectly acceptable to the majority of customers. Occasionally, a low-cost leader
will also discount its product to maximise sales, particularly if it has a significant
cost advantage over the competition and, in doing so, it can further increase its
market share.

Quick response Strategy :Just in time inventory partnership strategy between suppliers and retailers of
general merchandise. It is aimed mainly at reducing order response time, and
achieving greater accuracy in shipping the correct goods in correct quantities, by
employing computerized equipment such as barcodes and EDI to speed up flow
of information. Its other objectives include reduction in operating expenses, outof-stock situations, and forced mark-downs (discounts).

STRATEGIC RECOMMENDATIONS

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Product Development is the selected strategy at this point of time for Pak
Suzuki Motor Company Limited that we observed from our strategic analysis
of the firm.
In product development strategy we recommend the company to focuses on
having the highest level of product performance, the highest level of
functionality or functions and features, the latest technology or the highest
level of product innovation.
This strategy might have some risk for the company as innovative products
are involved but proper research and development will cater the risk and
company can pursue with the strategy to be the market leaders and get on
top.
One major setback to PSMC was in the shape of Suzuki LIANA, which was not
able to meet the expectations and couldnt hold the market it was made for.
But company didnt stop its journey there, and now Suzuki SWIFT has recently
been launched in the market, which seems to be an attractive offer for the
market in the 1300cc class. But still company has nothing to compete with
HONDA and TOYOTA. The Suzuki needs to enter into the 1600cc and 1800cc
market to expand its market share and market growth. But for that purpose
they need to put more efforts of product development as the new product
must have all the required features and technology that is needed to
compete with giant competitors. And of course, PSMC has competitive
advantage in local assembling and manufacturing of parts and they can
utilize that advantage to produce cheaper cars in the categories mentioned
above.
The PSMC has recently received acknowledgement from Prime Minister of
Pakistan for being the only car manufacturers for the lower and middle
income people of Pakistan. But they should also need to get into the line of
HONDA and TOYOTA, to achieve that target they need to develop more
technologically cheap and efficient and quality oriented products.
FUTURE RECOMMENDATIONS
The former President Asif Ali Zaradari invited leading automobile industries to
invest in Pakistan. So government can be accredited for its sincerity in efforts.
Japan is the 4th largest investor in the automobile sector in Pakistan which
includes Suzuki and other giants like Indus motors and Hindo Pak motors.
Due to the decline in the duty of the second hand cars in Pakistan, Suzuki has
the great incentive.

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Due to the lower price level, there is an huge incentive for the consumer. But
competition also gets stiff.
They should compete with the other brands in the market so it can increase
its performance but should not lose its target audience which is upper middle
and lower class.
IMPLEMENTATION

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