Bajaj Auto Limited's Business Strategy - From Market Leader to Follower

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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.

Case Details:


Case Code : BSTR344 For delivery in electronic format: Rs. 300;
For delivery through courier (within India): Rs. 300 + Rs. 25 for Shipping & Handling Charges


Failure of Strategy / Revival Strategy / Competitive Strategy
Case Length : 16 Pages
Period : 1990-2009
Pub Date : 2009
Teaching Note : Not Available
Organization : Bajaj Auto Limited
Industry : Automobile
Countries : India


The case discusses the business strategy of Bajaj Auto Limited (Bajaj Auto), a leading Indian manufacturer of two wheelers. Bajaj Auto, which sold two wheelers in India since 1945, was the market leader in the Indian two wheeler industry till late 1990s. However, the company failed to visualize the structural changes happening in the Indian two wheeler industry since the early 1990s. After the Indian economy was liberalized in 1991, foreign players entered the Indian two wheeler industry with their innovative products and sophisticated technology. In spite of rising competition, Bajaj Auto neither upgraded its scooter models, nor focused on the rapidly growing motorcycle segment.

In late 2001, Bajaj Auto initiated a transformation process in an effort to transform its image from being a scooter manufacturer to a motorcycle company. At the same time, the company continued its efforts to revive the geared scooter market. The company continued to invest time and resources in the geared scooter segment even till the early 2000s when the sales of geared scooters were negligible as compared to the gearless scooters. Bajaj Auto also failed to introduce innovative products in the rapidly growing gearless scooter market. The company lost its leadership status in the scooters segment to Honda Motorcycles and Scooter India (HMSI). The case examines how Bajaj Auto became a follower both in the scooter and motorcycle segment from being the market leader in the Indian two wheeler industry.


Understand the structural changes happening in the Indian two wheeler industry in the 1990s and early 2000s and its implications.
Examine the growth strategy of Bajaj Auto over the decades.
Study the transformation process initiated by Bajaj Auto and its impact.
Analyze the shortcomings in the business strategy of Bajaj Auto.


  Page No.
Introduction 1
The Indian Two Wheeler Industry 3
About Bajaj Auto 5
The Transformation 6
What Went Wrong? 10
Future Outlook 11
Exhibits 12


Bajaj Auto Limited, Indian Two wheeler industry, Market leader, Market Follower, Competitive Strategies, Liberalization of Indian economy, Hero Honda Motors Limited, Indian Motorcycles Industry, Geared scooters Segment, Gearless scooter Segment, Honda Motorcycle and Scooters India, Indian Rural Two Wheeler Market, Collaboration, Joint Ventures, Bajaj Chetak, Bajaj Super, Bajaj Caliber, Pulsar, TVS Motor Company, 100 CC motor cycles, Entry segment, Executive segment, Premium segment, Structural Changes in the Industry, Consumer Behavior, Demographics

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