WELCOME


Presented by:

K.R. Sudhakar

Jr. MBA(ABM)
 Book Review:
 Book Name: Case studies in business
Strategy
 Volume-6
 Publisher: ICFAI center for Management

Research
 Contents:
Ø TATA motors: serving an ‘ace’ for success
Ø P&G’s success story in china
Ø Embraer : The Brazilian Aircraft
manufacturer’s turnaround and growth
Ø Doing business the sustainable way
“climate cool” ; helping business become
carbon neutral
Ø The Indian pharma industry under the
product patent regime
Ø Google’s problems in china
Ø British American tobacco in south Korea
Ø Voltas Ltd. : from turnaround to the ‘Big Bang’
Ø Target stores’ differentiation strategies
Ø Aldi: A low cost retail giant’s distinctive business
practices
Ø Samsung electronics: success by design
Ø Airasia : southeast Asia's most successful low
cost airline
Ø Bajaj auto Ltd.: overtaken in the indian scooter
market
Ø Grasim Industries Ltd. &-Expanding a
Commodity Market through Branding & CRM
Ø
Ø
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 Case study on Bajaj auto Ltd.
 Introduction:
Ø In the mid -1940s,BAL started as an important of two –
and three-wheelers .in the early 1960s,BAL ,in
collaboration with piaggo ,started manufacturing
vespa brand scooters at its plant near pune ,
Maharashtra
Ø In 1970s,BAL started manufacturing scooters under
the Bajaj brand.
Ø Bal’s first scooter model under the Bajaj brand was
introduced in 1972.
Ø In the late 1990’s the Indian two wheeler market
witnessed a shift in consumer preferences
Ø In 2005-06 scooter sales in the Indian market were
around 1 million units annually and consisted
predominantly of gearless scooters. In early 2006
BAL announced that it would launch two new
models of gearless scooters in 2006-07.
 Background Note:
Ø The Bajaj group was founded in 1926 by Jamnalal Bajaj
(Jamnalal) (Refer Exhibit I for the companies in the
Bajaj group as of 2005). In 1945, Kamalnayan Bajaj,
Jamnalal's son, set up Bachraj Trading Corporation
Ltd. (BTCL), a trading company, to import and sell
two- and three- wheelers. This business continued till
1959.
Ø In 1959, the company secured a license from the
Government of India (GoI) to manufacture two- and
three-wheelers. In 1960, BTCL was renamed Bajaj
Auto Ltd. (BAL) and the company went public. The
same year, it entered into a technical collaboration
with Piaggio for the manufacture of scooters...
•
BAL & the Indian Two-Wheeler Market:

 Between the mid-1950s and 1980s, the

Indian industry operated under what was
popularly termed the "License Raj". During
this period, entities that wanted to produce
two-wheelers were required to secure
licenses from the GoI. The production
capacity was also determined by the GoI...
 The Turning Point:
Ø The early 1990s saw a recession in the Indian
two-wheeler market. Overall sales of two-
wheelers declined by 15% in 1991 and 8% in
1992 . This period also saw a steep rise in fuel
prices, which resulted in consumers placing
greater emphasis on fuel efficiency when
purchasing a new two wheeler.
Ø However, even as late as 1997-98, the scooter
segment was the largest sub-segment in the
two-wheeler market. Scooters, with 42% of the
market (in terms of unit sales), were followed
by motorcycles (37%), and mopeds (21%)...
 BAL Fights Back:
Ø By the end of FY 2000, the numbers clearly indicated
that consumer preference had shifted firmly toward
motorcycles with four-stroke engines, and industry
watchers predicted that this trend would continue.
Geared scooter sales registered a fall of 41% in 2001.
"The market has shifted to motorcycles. We will have
to follow the trend, "said Venu Srinivasan, chairman,
TVS
Ø . BAL realized, though rather belatedly, that it would
have to cater to the changing consumer tastes and
preferences, if it had to survive. Rajiv, who later
agreed that BAL had been slow in reading the
demand pattern, said, "See, the company failed to
anticipate the consumer behavior...
 The Fall of an Icon:
 In January 2006, BAL announced that it
had stopped production of the Chetak.
With this announcement, BAL closed a
major chapter in its history. Rajiv said, "It
is a history I would like to forget. My
company has lived too long on nostalgia…
holding on to anything from the past is a
sign of weakness."...
•
 Outlook:
Ø The late 1990s saw the popularity of scooters
wane and motorcycles emerge as the new
favorites in the Indian two-wheeler market. It
was believed that the dramatic shift happened
because players like BAL did not pay sufficient
attention to design, R&D, and customer
satisfaction.
Ø Bajaj Auto Limited (BAL) is one of the leading
players in the Indian two-wheeler market, the
second largest two-wheeler market in the
world.

Continued…
Ø The case traces the company's rise to
dominance in the scooter segment of the
market, and its eventual fall, against a
backdrop of changes in customer tastes and
preferences.
Ø It describes the reasons for the shift in demand
and discusses the initiatives that the company
undertook to regain lost ground. The case also
discusses the competition in the Indian
scooter market, and ends with a brief
discussion on recent developments in the two-
wheeler market.
Images of Bajaj Bikes:
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Thank you