Compulsory Case studies
–Bajaj Motorcycles Unlike in Western countries, where motorcycles are a minority mode of transport, motorcycles, scooters, and three-wheelers dominate the Indian transportation industry. In 2010, about 7 million of these vehicles were sold, increasing to 16 million in 2013. Indian markets grew at a 5% annual rate in 2010 but remained nearly stagnant by 2013, owing mostly to national government economic policies. Their engines are quite modest by international standards – typically 120cc in India versus 400cc in the West – and quite inexpensive in India, costing roughly $2000 versus $8000 in more prosperous Western countries. Additionally, motorbikes are used for family transport in India – with two children riding on the handlebars and the mother riding side-saddle behind the father – whereas motorcycles are mostly used by people in Western countries. All of this reflects the reality that household incomes in India are far lower on average than in the West — typically $5,000 per year compared to anywhere between $25 and $30,000. However, the average Indian customer is becoming wealthier, and there is a burgeoning middle class with much greater wages — indicating the potential for a small family car. Similarly, Bajaj sold 1.4 million vehicles in 2013 and increased yearly sales to about 3.8 million, roughly 1 million of which were exported. Its primary product line was motorbikes, which accounted for around 90% of the above-mentioned sales. Bajaj was the market leader in India’s three-wheeler sector and generated a profit from this category. While three-wheelers are uncommon in Western markets, they are prevalent in several Asian nations, including Indonesia and the Philippines. They are open on all sides and frequently lack doors. They can be utilized as passenger transporters as well as cargo transporters. Bajaj was the market leader in this segment in 2013, selling 480,000 units and commanding a 57 percent share of the Indian domestic market. To grow its early motorcycle business, Bajaj signed an agreement with Japanese motorcycle manufacturer Kawasaki in the early 1990s to use Kawasaki technology – even though the latter firms were then the market leaders in India – Bajaj Auto eventually lost market leadership in motorcycles to a rival company, Hero Honda. Bajaj maintained a stable 31 percent market share in 2014. Bajaj implemented three primary tactics to reposition itself in the motorbike market: 1. New top-of-the-line ‘executive’ machines. 2. Cost-cutting. 3. Exports and production in other countries. Source: Lynch, R., 2020. Strategic Management, 7Th Edition – PDF Free Download – Fox Ebook. [online] Fox eBook. Available at: [Accessed 28 March 2022].
N.B Answer ALL questions from this section
1. Should Bajaj enter the automobile manufacturing business? What are the arguments in support and what are the arguments against? What would you suggest??
2. Conduct a SWOT analysis for Bajaj Motorcycle Company.
3. Clarify how Bajaj can utilize the latter three strategies extensively.
4. Explain to Bajaj managing director the merits and demerits of doing business internationally.