Bajaj Auto Ltd

1657 Words Jun 29th, 2010 7 Pages
BAJAJ CASE STUDY

1. What challenges confronted BAL and which were of its own making?
In 1980s, the government’s impact was the most challenging factor confronting BAL. It witnessed an increase in both foreign and domestic competitors because of the Indian government’s permission of foreign technology and local manufacturing capacity expansion. Accordingly, Japanese products were more preferred than domestic brands due to its durability and eye-catching design. Apart from Yamaha, Suzuki, and Piaggio, Honda who took out the major market share of BAL scooter and motorcycle segments was its fiercest rival.
Since 1990, due to the economic downturn, two-wheelers vehicles were no longer the first prioritized consumer products but TVs, VCRs,
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They had found that this target market predominantly valued the purchasing – maintenance cost and the low fuel consumption. BAL also penetrated secondary market to buy BAL’s used vehicles with higher price.
In order to match consumers’ want, BAL reorganized its structure to obtain better cross-functional cooperation among Marketing, R&D and Production departments. New products were introduced periodically and spare parts were sold nation-wide with low cost, which reinforced BAL’s competitiveness. Beside strengthening cost advantage, they established a technology acquisition agreement with Orbital, which provided solutions to improve fuel efficiency and decrease emission levels.
In order to enhance the competency in distribution, BAL connected with private transport companies and trained dealers’ staff to improve their technical capability. BAL also supported their dealers in planning sales targets for specific products, services and advertising. Regarding developing dealer network, regional depots were built up to quicken inventory turnover and supply a full range of two and three wheelers, hence encouraging dealer loyalty.
In addition, BAL provided customers with consumer finance to purchase vehicles by establishing the Bajaj Auto Finance Ltd. Finally, BAL executives invested more in Marketing Department to secure brand awareness and preference as well as to introduce new vehicles. BAL not only broadcast their commercials
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