Bajaj

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  • Topic: Bajaj Auto, Bajaj Chetak, Bajaj Pulsar
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ICMR Case Collection
Icfai Center for Management Research

Bajaj Auto Ltd.: Overtaken in the Indian Scooter Market
BSTR216 - Teaching Note

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BSTR/216

Bajaj Auto Ltd.: Overtaken in the Indian Scooter Market
TEACHING NOTE
SUMMARY:
Bajaj Auto Limited (BAL) is one of the leading players in the Indian two-wheeler market, the second largest two-wheeler market in the world. The case traces the company’s rise to dominance in the scooter segment of the market, and its eventual fall, against a backdrop of changes in customer tastes and preferences. It describes the reasons for the shift in demand and discusses the initiatives that the company undertook to regain lost ground. The case also discusses the competition in the Indian scooter market, and ends with a brief discussion on recent developments in the two-wheeler market.

TEACHING OBJECTIVES AND AUDIENCE:
This case study is intended to help students to: Examine the evolution of an industry -- specifically, the Indian two-wheeler industry -over time, and the challenges faced by the dominant players with the industry being liberalized and opened up to competition. Appreciate the impact of the economic, social, and cultural changes on the fortunes of an industry. Analyze the strategies adopted by a company to stay relevant in a changing environment. Understand the importance of keeping track of changing customer changing needs and preferences and adopting a customer-oriented product strategy. Gain insights into competition in the Indian two-wheeler market. This case study is meant for students of MBA/PGDBM and is designed to be a part of their Business Strategy curriculum.

TEACHING APPROACH & STRATEGY
The case study may be used in classroom discussions or in distance learning. The moderator may begin the discussion by asking participants about the desired features in a two-wheeler. This may be followed by a discussion on the changes taking place in the economic, social, and cultural environment, and the reasons for the shift in demand in favor of motorcycles in India. Larger lessons may be drawn, based on this discussion, on the impact of such changes on different industries. The participants may also discuss the impact of liberalization of the two-wheeler industry, particularly on companies such as BAL, which had managed to thrive in a closed and protected market, and also on the average Indian consumer. They may then be asked to assess the future prospects for scooters in India, and the extent to which the strategies adopted by BAL would be effective in helping the company regain a leading position in the scooter market. 1

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Some questions that can be asked to promote discussion of the case are: Discuss the changes in India’s economic, social and cultural fabric, post liberalization. What are the changes that were the most significant from the point of view of the Indian two-wheeler manufacturers? What, in your opinion, contributed to the near-iconic status of the Bajaj/Chetak brand? Was its popularity actually due to its quality or due to the non-availability of alternative choices for the customer? What changed with liberalization? Do you think BAL’s position as a near-monopoly manufacturer in the market left it unprepared for the challenges – particularly in the areas of customer satisfaction and technological innovation – of a liberalized market and greater competition? Motorcycles have grown in popularity and have replaced scooters as the favorite...
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