Review the case studyMaruti Suzuki India: Defending Market Leadership in the A-Segmentand identify a problem that can be addressed by a research report. Draft a preliminary description of the problem...

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Review the case studyMaruti Suzuki India: Defending Market Leadership in the A-Segmentand identify a problem that can be addressed by a research report. Draft a preliminary description of the problem and a research question based on the problem identified. For this journal and the first final project milestone, you will not need to reference the data sets provided, but you may want to review the data briefly to help inform the development of your research question.
Note: You will notice that there are both qualitative and quantitative data sets accompanying the case study. While both can be used to address a business problem, you will be using quantitative data sets for the purpose of the final project in this course.
Use the questions posed in the summary of the case study on page 8 to inform your ideas for your research problem.


For additional details, please refer to theModule One Journal Guidelines and Rubric PDFdocument.




MARUTI SUZUKI INDIA: DEFENDING MARKET LEADERSHIP IN THE A-SEGMENT W15582 MARUTI SUZUKI INDIA: DEFENDING MARKET LEADERSHIP IN THE A-SEGMENT Jaydeep Mukherjee, Gaurav Mathur and Nikhil Dhar wrote this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. This publication may not be transmitted, photocopied, digitized or otherwise reproduced in any form or by any means without the permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) [email protected]; www.iveycases.com. Copyright © 2015, Richard Ivey School of Business Foundation Version: 2015-12-17 Maruti Suzuki India Ltd. (MSIL), a subsidiary of Suzuki Motor Corporation Japan, had dominated the Indian automotive industry with an unchallenged leadership position in the “A-segment” since its inception in 1983. The Indian car market was normally divided into four product categories: hatch, sedan, sport utility vehicle (SUV)/multi- utility vehicle (MUV) and van. The hatch segment could be further divided into entry-hatch, mid-size-hatch and premium-hatch segments. The overall hatch segment was known as the A-segment (see Exhibit 1). Growth of the Indian car market was driven primarily by growth in this segment. From 2008 to 2013, MSIL’s competition had made inroads in the A-segment with cars like the Hyundai Eon, the Hyundai i10, the Tata Nano, the General Motors Beat and the Honda Brio. During this period, MSIL’s A-segment market share declined from 61 per cent to 49 per cent. Industry sources estimated that the Indian car market would grow to annual sales of 4.7 million units — and the A-segment to 2.4 million units — by 2017/18. A continued drop in market share in the A-segment could jeopardize MSIL’s competitive advantage in the Indian car market. The company needed to reassess its strategy to sustain its market position (see Exhibit 2). Among other initiatives planned in March 2013, the MSIL board had sought a product roadmap to sustain its dominance in the A-segment. Typically, new product development and introduction required four to five years to design, develop, test and produce with a budgeted spend of approximately ₹6 billion,1 apart from associated opportunity costs; hence, it was an important activity for MSIL. The general manager of the product planning department was entrusted with the assignment. THE INDIAN CAR MARKET India’s total passenger vehicle industry (including passenger cars and commercial vehicles) was the sixth largest in the world, with annual production of more than 3.9 million units in 2011, while the country’s passenger car market was the seventh largest in the world, with sales of almost 2.7 million units in 2011. As a car manufacturer, India was growing at an exceptional speed; in 2003, for the first time, national production exceeded the 1 million mark, going on to exceed the 2 million mark in 2006.2 1 All figures are in ₹ (INR or Indian rupee) unless stated otherwise; ₹1 = US$0.02 on May 5, 2015. 2 Society of Indian Automotive Manufacturers, “Industry Performance in 2014-15,” www.siamindia.com/statistics.aspx? mpgid=8&pgidtrail=9, accessed July 30, 2015. This document is authorized for use only by Tannaz Rahimipour in QSO-500-R4504 Business Research 21TW4 at Southern New Hampshire University, 2021. Page 2 9B15A016 MSIL utilized the findings of several macroeconomic studies to draw up its future plans. It also had a research wing that provided information to its planning, marketing and legal departments. Apart from that, it initiated its own research related to competition, dealership health, sales figures and market potential as well as consumer insights. Reports indicated a significant opportunity in the Indian passenger car market, in the form of growing gross domestic product (GDP), increasing income (i.e., more disposable income among consumers), increasing bank networks and credit facilities, and low car penetration (18 car owners per 1,000 people, whereas Brazil and China had figures of around 200 per 1,000). Major global players like General Motors, Ford and Toyota had initially offered only sedan cars and SUVs, but had eventually introduced products in the A-segment — typically, the most compact cars from their international portfolios. Most of these compact cars were in the premium-hatch category of the Indian market. Thus, the sedan, SUV and premium-hatch segments witnessed higher competition. These segments were also supported with some high-profile advertisements and consumer promotions from the car manufacturers, which fuelled growth. As a consequence, the entire A-segment also became very competitive for well entrenched players like MSIL, Hyundai and Tata Motors. Stakes for the entry- and mid-hatch segments also increased among these competitors. Competition was expected to intensify with more multinational companies entering the Indian market, in addition to existing players introducing India-specific products (targeting the entry- and mid-hatch segment) (see Exhibit 3). The Indian market saw increased proliferation of features from the luxury segment becoming available in the lower- end car segments. Features such as air conditioning, power steering and power windows were aspirational for the hatch segment in 2009, but became standard features in the hatch models by 2012/13. Similarly, features available in the luxury sedan segment during 2008, such as touch-screen audio, electric- and auto-foldable mirrors, and automatic air conditioning, were standard across the sedan segment in 2012/13. The used car market in India grew at a compound annual growth rate (CAGR) of 22 per cent from a volume of 1 million units to 2.6 million units from 2007 to 2012. The market was projected to grow at a rate of 22 to 24 per cent from 2012 to 2017. Within the used car market, small cars accounted for 67 per cent of the total sales in 2011/12. The ratio of new car sales to used car sales in India was expected to reach 1:1.8 by 2016/17 (from 1:1.3 in 2011/12). However, even with this increase, India’s ratio would be low compared to developed markets, where the ratio was 1:3. COMPANY BACKGROUND MSIL, formerly known as Maruti Udyog Limited, started operations in 1983, when the Government of India and Suzuki Motor Corporation established a joint venture company to sell small cars in India. Suzuki increased its equity from 26 per cent to 40 per cent in 1987, and further, to 50 per cent in 1992, and 56.21 per cent in 2012 (the remainder was owned by public and financial institutions). The company was listed on the Bombay Stock Exchange and the National Stock Exchange of India. MSIL’s vision statement was: “The leader in the Indian automobile industry. Creating customer delight and shareholders’ wealth: A pride of India.” Its core values were “customer obsession, fast, flexible and first mover, innovation and creativity, networking and partnership, and openness and learning.” By 2013, the company had established a strong brand image by offering solid, reliable products. MSIL’s corporate communications emphasized emotional connection, using the message, “India comes home in a Maruti Suzuki.” MSIL products enjoyed a sturdy, reliable and economical image in the minds of consumers, and A-segment consumers were proud to own a Maruti Suzuki car. The company’s market share reached 85 per cent in 1997, before gradually reducing due to intense competition. By February 2012, the company had sold 10 million vehicles in India. In addition, it was ranked number one in consumer satisfaction for an unprecedented 13th time in a row in the J.D. Power India customer satisfaction index in 2012.3 3 J. D. Power, 2012, “Customer Expectations of Convenience during Vehicle Service Rises Significantly in India,” http://india.jdpower.com/press-releases/2012-india-customer-service-index-csi-study, accessed November 17, 2015. This document is authorized for use only by Tannaz Rahimipour in QSO-500-R4504 Business Research 21TW4 at Southern New Hampshire University, 2021. Page 3 9B15A016 Indian consumers generally spent two times the cost of acquisition on repairs and maintenance over the lifecycle of a car, as per the research conducted by MSIL. MSIL products had lower overall costs of ownership. This was achieved by reducing product cost through localization, value analysis and value engineering (VAVE), and improved quality. The company had developed ancillary industries in and around its factory, indigenized the necessary components and increased the local content in its products. In 2012/13, MSIL achieved revenue of ₹426 billion and a profit of ₹23.9 billion. The company had two state-of-the- art factories. In 2010, it rolled out 1 million vehicles in a year, which was a remarkable landmark for an automobile company in India. The depth of MSIL’s distribution channels played a key role in helping the company to maintain its leadership position in the Indian passenger car industry. By the end of 2012, it had a sales network spread across 878 cities nationwide and a service network spanning 1,422 cities and towns. However, establishing and maintaining distribution outlets in rural markets remained a key challenge for MSIL. Initiatives to maintain constant dealership motivation — through hefty trade promotions, attractive foreign trips and corporate recognition for smaller dealerships — were crucial to success. MSIL dealerships were confident of brand pull, good sales and service
Answered 2 days AfterMay 13, 2021

Answer To: Review the case studyMaruti Suzuki India: Defending Market Leadership in the A-Segmentand identify a...

Nishtha answered on May 15 2021
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Maruti
Suzuki India Ltd. (MSIL), a division of Suzuki Motor Corporation Japan, is considering launching a new product to maintain its market leadership and competitive advantage in India. There are three options available, but only one of them can be pursued. MSIL's potential growth opportunities and strategy for competing in the "A-" market must be re-evaluated. Maruti Suzuki had a stronghold on the Indian market until it tried to maintain its product portfolio (Ivy Publishing, 2021).
Because of the company's weak product management, other businesses like as Hyundai from Korea and Tata from India created distinctive models, increasing rivalry in the A-segment. Automobile manufacturers introduced vehicles that were favourably received by the Indian market, putting pressure on Maruti Suzuki, which saw its market share and sales decline in the segment (Ivy Publishing, 2021).
Several facets of product management had detrimental effects on the company, including innovation, diversification, and the company's brand image. Maruti...
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