Maruti Suzuki India Limited - Competitive Strategies of the Market Leader

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Case Details:

Case Code : BSTR351
Case Length : 19 Pages
Period : 1991-2009
Pub Date : 2009
Teaching Note :Not Available
Organization : Maruti Suzuki
Industry : Automobile
Countries : India

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts

Background Note

It was in the 1970s that the Indian government decided to develop an affordable small car or a 'people's car' in India. Its target customers would be the burgeoning middle class. Maruti Limited was set up in 1971.

However, in 1978, the company was liquidated. In the early 1980s, the small car project was brought back to life by the government. The government entered into a joint venture agreement with Suzuki. The joint venture company, Maruti Udyog Limited was incorporated in 1981, to take over the assets of Maruti Limited...

Deregulation of the Industry

The Indian automobile industry was regulated by the government till 1990. Indian consumers had little choice as there were only a few players in the industry including Maruti, Hindustan Motors, and Premier Automobiles. In 1991, several sectors of the Indian economy including the automobile industry were delicensed with the announcement of the 'New Industrial Policy'. Over the years, the norms of foreign investment in the automobile industry and import of technology were also eased...

Competitive Strategies

In an effort to counter competition from local and foreign players, Maruti started restructuring its operations. The continuous decline in market share and sales forced the company to rethink its strategy and formulate a new competitive strategy. Maruti upgraded its manufacturing facilities to meet the foreign challenge with its claims of high-end technology. It broadened its product portfolio and expanded its sales and service network to reach all over India...

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