1. Why SA?

 Customers were getting superior technology which Suzuki had experience with in its home
country i.e. Japan
 Shared knowledge and expertise would have brought superior and customer centric products
to the market
 Suzuki was one of the top 5 automobile manufacturers of the world present at that time and
thus it would have proven beneficial for TVS to learn from such a partner
 The joint venture was formed in the year 1982, which decade saw many more alliances among
competitor Indian firms like Hero Honda, Kawasaski Bajaj, & Escorts Yamaha. Therefore,
forming an alliance with a Japanese firm made sense as part of a competition response
strategy
 Had products off the shell which means the speed to market was much quicker to it would
have been had TVS tried developing products on its own
 Gained Brand advantage to TVS and were able to learn work practices

2. What was pooled?

TVS brought in market knowledge and insights and Suzuki brought in the products along with
technology. Their respective internal capabilities were pooled.

3. What was the nature?

Suzuki entered India through the TVS Suzuki joint venture, originally incorporated as Indian
motorcycles Pvt. Ltd in 1982. The company came out with a public issue in 1984 and was named as
TVS Suzuki.

4. Objective?

The main objective for Suzuki was to tap the immense market opportunity that was lying in Indian
automobile market and was out of its reach due to Govt. regulations restrictions. On the other hand,
for TVS it was more of an aspiration along with market opportunity. They wanted to be recognized as
a potent force in the two-wheeler market and wanted to ease the mobility grievances of the Indian
consumers.

5. Why Cooperate?

For TVS the equation was simple they cooperated mainly for knowledge. To learn the work practices,
gain operational expertise and finally learn the technology in which Suzuki was had an upper hand.

For Suzuki it was about grabbing the immense business opportunity present in the Indian Market.

6. Where?

Joint Research

Expertise contract

7. Range

Non-subsidiary JV with unequal equity

8. Pre-competitive alliance
 9. Strategic Objectives

Learning and Value Addition

10. Current Capabilities

Suzuki: Robust R&D, High Brand Equity-Possessed aspirational value in the minds of the Indian
customers in that era

TVS: Local Market Knowledge, manufacturing and distribution capabilities

Refer to sir’s noted for the framework

11. Type of business level cooperative strategy?

Competition response strategy

12. Risks

Suzuki’s motive of forming an alliance right from the beginning was to learn sufficient market
knowledge and expertise and then in few years emerge as a standalone company in the Indian markets
either by making TVS a subsidiary or by venturing out on its own. The latter happened when the Govt.
regulations were eased at the start of the 21st Century. However, there were several attempts by
Suzuki prior to this which clearly depicted the opportunistic motives of Suzuki in the partnership like
TVS did not agree to a request from Suzuki in mid-1990s to increase its equity holding, and to have a
more effective say in the company’s day-to-day management.

Similarly, TVS also had very big aspirations from the alliance. They specifically had three goals in their
mind when they went into a JV, that were to gain technical knowhow, leverage the brand of Suzuki
and finally gain operational and managerial expertise from the Japanese firm. TVS never wanted to be
subsumed as a subsidiary of a multinational cooperation and fought tooth and nail to prevent the
same. For instance, Prior to 1996, both TVS and Suzuki had an equal number of directors on the Board.
In 1996, TVS had increased the number of Board seats in control to 5, one more than Suzuki.

13. Managing Risks

TVS manged Suzuki by delineating the contractual agreement between the two firms. Moreover, TVS
never allowed Suzuki to gain controlling stake in the partnership. While Suzuki’s equity holding in the
joint venture company was pegged at 25.97 per cent right through, TVS holding had moved up to
32.46 per cent, clearly establishing the latter as the senior partner in the venture. Additionally, in 1999,
taking advantage of policy relaxations, Suzuki gave notice to TVS seeking to increase its equity holdings
to a controlling 51 per cent failing which a concurrence to set up its own 100 per cent subsidiary. The
proposal was vehemently opposed by TVS, and Suzuki dropped the matter.

Similarly, Suzuki was also wary of TVS’s intentions and thus never allowed it to have complete access
of its technical resources and all the technology was shared under license agreements. in the early
1990s, Suzuki rejected TVS’s request for more funding to facilitate internal design capability.

14. Management of alliance

Opportunity maximisation approach was adopted (Exploration)