MARUTI:

VISION
VISION,, MISSION
MISSION,, SWOT ANALYS
ANALYSIS
IS
 AND APPLICATION OF MICHAEL
PORTER’S FIVE FORCE MODEL

Maruti History :
Maruti Udyog Limited (MUL) was established in Feb 1981 through an
Act of Parliament, to meet the growing demand of a personal mode of 
transport caused by the lack of an efficient public transport system. It
was
was esta
establ
blis
ishe
hedd with
with the
the obje
objectctiv
ives
es of - mode
modern
rniz
izin
ing
g the
the Indi
Indian
an
automob
automobileile indust
industry,
ry, produc
producing
ing fuel
fuel effici
efficient
ent vehic
vehicles
les to conser
conserve
ve
scarce resources and producing indigenous utility cars for the growing
need
needs s of thethe Indi
Indian
an popu
popula
lati
tion
on.. A lice
licens
nse
e and a Join Jointt Ventu
enturre
agreement were signed with the Suzuki Motor Company of Japan in Oct
1983
19 83,, by whic
which h Suzu
Suzukiki acqu
acquir
ired
ed 2626%% of the
the equi
equity
ty and agree
agreedd to
prov
provid
idee the
the late
latest
st tech
techno
nolo
logy
gy as well well as Japa
Japane
nese
se mana
manage geme
ment
nt
practices. Suzuki was preferred for the joint venture because of its
track record in manufacturing and selling small cars all over the world.
 There was an option in the agreement to raise Suzuki’s equity to 40%,
which it exercised in 1987. Five years later, in 1992, Suzuki further
increa
increased
sed its equity
equity to 5050%
% turnin
turning g Maruti
Maruti into
into a non-go
non-goververnme
nment
nt
organization managed on the lines of Japanese management practices.

Maruti created history by going into production in a record 13 months.

Maruti is the highest volume car manufacturer in Asia, outside Japan
and Korea,
Korea, having
having produc
produced
ed over
over 5 millio
million
n vehicl
vehicles
es by May 2005.
2005.
Maruti is one of the most successful automobile joint ventures, and has
made
made prof
profit
its
s ever
every
y year
year sinc
since
e ince
incept
ptio
ion
n till
till 20
2000
00-0
-01.
1. In 20
2000
00-0
-01,
1,
although Maruti generated operating profits on an income of Rs 92.5
billion, high depreciation on new model launches resulted in a book
loss.

The Evolution
Maruti’s history of evolution can be examined in four phases: two
phases during pre-liberalization period (1983-86, 1986-1992) and two
phases during post-liberalization period (1992-97, 1997-2002),
followed by the full privatization of Maruti in June 2003 with the launch
of an initial public offering (IPO).The first phase started when Maruti
rolled out its first car in December 1983. During the initial years Maruti
had 883 employees. From such a modest start the company in just
about a decade (beginning of second phase in 1992) had turned itself 
into an automobile giant capturing about 80% of the market share in
India. Employees grew to 2000 (end of first phase 1986), 3900 (end of 
second phase 1992) and 5700 in 1999.

During the pre-liberalization period (1983-1992) a major source of 

Maruti’s strength was the wholehearted willingness of the Government
of India to subscribe to Suzuki’s technology and the principles and
practices of Japanese management. Large number of Indian managers,
supervisors and workers were regularly sent to the Suzuki plants in
 Japan for training. Batches of Japanese personnel came over to Maruti
to train, supervise and manage. Maruti’s style of management was
essentially to follow Japanese management practices. It is largely
credited for having brought in an automobile revolution to India. It is
the market leader in India. On 17 September, 2007, Maruti Udyog was
renamed to Maruti Suzuki India Limited. The company's headquarters
remain in Gurgaon, near Delhi.

The Path to Success for Maruti was as follows:

(a) teamwork and recognition that each employee’s future growth and
prosperity is totally dependent on the company’s growth and
prosperity

(b) strict work discipline for individuals and the organization

(c) constant efforts to increase the productivity of labor and capital

(d) steady improvements in quality and reduction in costs

(e) customer orientation

(f) long-term objectives and policies with the confidence to realize the
goals
 (g) respect of law, ethics and human beings. The “path to success”
translated into practices that Maruti’s culture approximated from the
 Japanese management practices.

Maruti adopted the norm of wearing a uniform of the same color and
quality of the fabric for all its employees thus giving an identity. All the
employees ate in the same canteen. They commuted in the same
buses without any discrimination in seating arrangements. Employees
reported early in shifts so that there were no time loss in-between
shifts. Attendance approximated around 94-95%. The plant had an
open office system and practiced on-the-job training, quality circles,
kaizen activities, teamwork and job- rotation. Near-total transparency
was introduced in the decision making process. There were laid-down
norms, principles and procedures for group decision making. These
practices were unheard of in other Indian organizations but they
worked well in Maruti. During the pre- liberalization period the focus
was solely on production. Employees were handsomely rewarded with
increasing bonus as Maruti produced more and sold more in a seller’s
market commanding an almost monopoly situation.

Business Portfolio:
 The Group's principal activity is to manufacture, purchase and sale of 
Motor Vehicles and Spare parts. The other activities of the Group
comprises of facilitation of Pre-Owned Car Sales and Car Financing. The
Group also provides services like framing of customized car policies,
economical leasing of car, maintenance management, registration and
insurance management, emergency assistance and accident
management. The product range includes 14 basic models with more
than 150 variants. The company has a sales network of 802 centers in
555 towns and cities, and provides service support to customers at
2,740 workshops in over 1,335 towns and cities (as on March 31,
2010). The company is focused on rapidly expanding the sales and
service further across the country. MSIL has been the leader of the
Indian car market for over two and a half decades. The company has
two manufacturing facilities located at Gurgaon and Manesar, south of 
New Delhi, India. Both the facilities have a combined capability to
produce over a 1.2 million (1,200,000) vehicles annually.

  The company plans to expand its manufacturing capacity to 1.75

million by 2013. The company offers a wide range of cars across
different segments. It offers 15 brands and over 150 variants - Maruti
800, people movers, Omni and Eeco, international brands Alto, Alto-
K10, A-star, WagonR, Swift, Ritz and Estilo, off-roader Gypsy, SUV
Grand Vitara, sedans SX4, Swift DZire and Kizashi. In an environment
friendly initiative, in August 2010 Maruti Suzuki introduced factory
fitted CNG option on 5 models across vehicle segments. These include
Eeco, Alto, Estilo, Wagon R and Sx4.

Vision:
Visions of any company are those values on which company works. As
the MUL is started by Governmental initiatives it tends to be more
consumer oriented and hence cost effective, but on the other hand
Suzuki’s participation ensures not only need of the profit, but of the
need of maximum profit. The only way for this Nora’s dilemma of 
selecting principals for company’s working vision ,was to maximize
profit and reducing cost by maximizing output and sales Hence MUL
declared its Vision as-

“The Leader in the Indian Automobile Industry,

Creating Customer Delight1 and Shareholder's
Wealth2; eventually become a pride of India”
Customer Delight1 is making sure that performance, after sales service
and customer support are best and beyond expectation. Shareholder’s
wealth2 is the prime concern for running business smoothly. MUL
knows this and understands “customer is king”, he can change the
fortune of any company, hence goes company’s brand line: COUNT ON
US!

Mission:
Mission is the statement of an organization’s purpose, what it want to
accomplish in the larger environment and its goals which are specific,
realistic and motivating. Missions are described over visions and
visions demand certain objectives.

 The main objectives/Missions of MUL are:

- Modernization of the Indian Automobile Industry.

- Developing cars faster and selling them for less.

- Production of fuel-efficient vehicles to conserve scarce resources.

- Production of large number of motor vehicles which was necessary for

economic growth.

- Market Penetration, Market Development Similarly Product

Development and Diversification.

- Partner relationship management, Value chain, Value delivery

network .

SWOT ANALYSIS: Consists of analysis of internal environment

(Strength and weakness) and external environments (Opportunity and
 Threat).

STERNGHTHS:
1. Contemporary technology. Japanese Management practices (that
had captured Japan over USA to the status of top Auto
manufacturing country in the world)

2. Early mover advantages.

 3. Recruitment is done in very tedious manner ensuring talent and
best professionals, Working, culture.

4. after sale services, distribution, R&D.

5. Is considered to be the most fuel efficient cars producing

company in the industry

WEAKNESS:
1. Still depends upon SUZUKI COPORATION, Japan For tech.
support, 10% components are manufactured outside India.

2. Though MUL has launched luxury cars as well it’s still considered
as poor man’s brand.

3. Bureaucracy, Technological disadvantages, Decades of isolation,

are still having a negative impact on the company.

4. Have to import there diesel engines from Fait.

OPPURTUNITY :
1. first company to roll out suitably designed cars before 2008 as
per Govt.’s Proposal of new ethanol (renewable) mixed fuel.

2. Other companies lacks economy of scale, so market is still open.

3. Demand is rising

4. Growing market as there is a considerable increase in the

demand levels.

 THREAT:
1. Numbers of new Technology driven players and manufactures
are in market.

2. Government reducing support and cutting down the Gas supply

quota.

3. Rapid technological changes

 4. New players coming in India

5. Fuel prices are increasing at a very fast rate resulting in slowing

down the growth rate of the market

6. Increase in interest rates has inverse result on car sales and is a

great threat to the company.

 MICHAEL PORTER’S FIVE FOURCE MODEL:

Michael Porter described a concept that has become known as the

"five forces model". This concept involves a relationship between
competitors within an industry, potential competitors, suppliers, buyers
and alternative solutions to the problem being addressed. We used the
five-forces model as a basic structure and built on it with concepts
from the works of many other authors. The result was a model with
over 5,000 relational links.
porter's five forces

1. Existing competitive rivalry in industry:

2. Threat of new market entrants

3. Bargaining power of buyers

4. Power of suppliers

5. Threat of substitute products (including technology change)

 MARUTI:
VISION,MISSION, SWOT ANALYSIS
 AND APPLICATION OF MICHAEL
PORTER’S FIVE FORCE MODEL
SUBMITTED BY: SUBMITTED TO:

AARIF RATHER [ROLL NO.0 2] MISS FEYONA

SOUOD FAROOQ [ROLL NO. 13]

AYESHA MIRZA [ROLL NO. 11]