Bajaj Auto Limited Case Study

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CASE STUDY:
BAJAJ AUTO LTD.
EXECUTIVE SUMMARY
Bajaj Auto Limited was established in 1945, initially importing scooters and three wheelers from Piaggioand later becoming a powerhouse in the Indian two wheeler industry. This paper highlights the effects of the Indian government policy on foreign imports until 1991, BAL’s marketing or lack of it during this period and the evolution of the Indian two wheeler industry from scooters to 2 stroke and 4 stroke bikes with a strong emphasis on BAL while reviewing its strategies. Along with the analysis, this paper suggests the possibility of BAL moving into developing markets in order to increase sales and establish a global footprint. The report also includes SWOT & PESTLE analysis of BAL which will help it to formulate an effective marketing strategy for the next five years. In addition to SWOT and PESTLE analysis, Porters five forces model was used to help gain a more comprehensive understanding of external and internal factors which will affect BAL in the coming years. COMPANY PROFILE: BAJAJ AUTO LTD. Bajaj Auto Limited (BAL) is the flagship company of Bajaj group, one of India's well-known leading business houses.The aim of the report is to provide BAL with a comprehensively researched and analyzed report which will help it develop an effective marketing strategy for their future growth in both its domestic and international market. {text:list-item} In the early 1990s, Bajaj Auto Ltd’s two and three wheelers domestic market in India became stagnated. Domestically, the two-wheeler market industry has declined by 5% between 1991 and 1992. Bajaj Auto faced severe competition with one of the world’s major manufacturers, Japan, as they produced new and improved models of the two-wheelers, which were crucial at the time (Mindak & Cook, 1984). However, had Bajaj Auto Ltd sensed the realities of the marketplace and dealt with them through specificity and understanding in the early 1980s, the company could have been in a better state of affairs (Canning, 1988). The gradual lifting of the bans on foreign technology and equity had opened a plethora of opportunities for foreign companies who now in the long run challenge Bajaj Auto Ltd in the two and three wheeler industry. In addition, the deregulation of a previously closed economy has resulted in radical modifications of industry structures caused by government intervention in the Indian economy (Harvey & Kerin, 1987). By 1993, it was estimated that all the competing brands of two wheelers had captured approximately 20% of the potential Indian market. The recession of economy has started to take its toll on Indian consumers and these factors have automatically lead to a decrease in consumer purchasing power (Mcgrath, 1992). The market situation is grim as the supply of two wheelers in the domestic market exceeds the demand defying all previous forecasting techniques applied (Karger, 1988), which has led to a saturated market of two wheelers with a low level of demand. COMPANY PERFORMANCE

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Before the early 1990s, the majority of the Indian public purchased a two-wheeler for daily transport and daily commuting, due to inadequate public transport. However the scenario changed drastically in the early 1990s. By this time, the Indian market for two and three wheelers was the second largest in the world, second to China. Bajaj dealers faced the increase of competition, profitability pressures, as well as the demands from sophisticated consumers (pg 90). It is believed that only the companies that could deliver value would survive in the Indian marketplace (Thomas, 2006). In the 1990s the two wheeler industry was characterised by: An increase in number of brand available in the market which caused firms to compete on the basis of product features. An increase in the volumes of sales in motorcycle segment in relation to the scooter segment...
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