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Analysis
Pak Suzuki Motor Company Limited
Muazzam Imtiaz
Roll Number: 22
MBA (Morning) 4th A
ACKNOWLEDGMENT
EXECUTIVE SUMMARY
This project is about the strategic Analysis of Pak Suzuki Motor
Company. During the project, Ive done the detailed study of Pak
Suzuki Motor Company Limited like their company profile, mission,
vision and corporate values. Then I observer the some of the major
products manufactured and assembled by the Pak Suzuki Motor
Company limited which include SWIFT, LIANA, CULTUS,
MEHRAN, APV etc With the help of Internal and External
analysis, Ive sorted out some of their strengths, weaknesses and the
opportunities and threats prevailing in the market. Also the PEST
analysis was conducted to observe the external factors that may
influence the performance of the company.
Then I did prepare the External Evaluation Matrix, which scored 2.98
that means company is trying best to utilize their opportunities by
avoiding the threats. And Internal Evaluation Matrix which scored
2.99 shows that company has solid internal strengths and they are
overcoming the weaknesses quite well. Then the TOWS matrix
helped us to suggest some of the strategies to the company which can
be helpful for them in future outlook.
The BCG matrix helped me to study the important products of the
company; I did identify in which stage the products are and tried to
do the SBU analysis for each product.
With the study of Pak Suzuki Motor Company Limited, Ive learned
that they are doing well in the Pakistani market and are leading
market shareholder. They are producing Cars at affordable prices for
the low income to middle income people. But they are unable to
compete with Corolla and Honda in Luxury and semi-luxury cars.
They need product development strategy to follow so they tried to get
into the Honda and Corolla market by introducing Suzuki LIANA but
that couldnt make its space. Now they have again tried that by
launching Suzuki SWIFT which is a 1300cc fully loaded car. I
recommend Product Development strategy for PSMC to pursue in
order to compete with HONDA and TOYOTA. Then they will be able
to grow their market share and growth.
TABLE OF CONTENTS
Sr. no.
Contents
Page #
Introduction
Product Mix
10
SWOT Analysis
10
PEST Analysis
11
13
14
15
BCG Matrix
16
10
SBU Analysis
17
11
18
12
Space Matrix
19
13
Grand Matrix
21
14
QSPM Matrix
22
15
Conclusion
23
16
Recommendations
24
17
References
25
INTRODUCTION
Pak Suzuki Motors Company Ltd. is a company assembling and distributing Suzuki
Japan's cars in Pakistan. Currently they are one of the most successful motor companies in
Pakistan.
The firm was founded in 1983 as a joint venture between PAK and Suzuki, formalizing the
arrangement by which AWAMI Auto Ltd. had produced the Suzuki SS80 from 1982. Suzuki
originally owned 25% of the stock, and has gradually increased their holding; they now own
73.09%. The company now assembles a wide range of Suzuki vehicles and aims to produce
150,000 vehicles per year. (2005 production was 100,000)
Our Vision
Our Mission
These are Mission and Vision Statement of Pak Suzuki, and they always try to improve skills
of employees by imparting training and inculcating in them a sense of participation.
Corporate Strategy
Pak Suzuki is built on the idea of a responsible corporate citizenship thereby managing
environmental, safety & occupational health matters as an integral part of our business. In
fulfilling this responsibility Pak Suzuki adheres to the following principles:
1) We are committed to provide top quality products to the satisfaction and requirement
of our customers.
As it is clearly mentioned in their Vision Statement that to be excellent all around, and they
always operate in Environment friendly. And their Product will always be the environment
friendly.
With the globalization of markets, greater foreign competition, and the reduction of entry
barriers, it becomes all the more important to benchmark a companys financial indicators on
a worldwide basis. World stock markets have recently witnessed a return to fundamental
financial analysis. Sound management as opposed to hype will in the long run generate
shareholder value.
PRODUCT MIX
Following are some varieties of Cars with their and Prices:
SWIFT (1300cc)
Price: Rs. 1,049,000/The European inspired exterior gives Swift a
distinctive look. A unique stylish and design
that turns a head where you go. The spirited
engine makes for exhilarating drive and gives
you ultimate freedom where the road takes you.
Colors: Pearl Red, Graphite Grey, Solid white,
Indigo, Silky Silver, Aqua Blue, Eminent Blue
LIANA (1300 & 1600 cc)
Price: Rs. 1,230,000/The Suzuki Liana available in 1300 cc manual
transmission
and
1600cc
automatic
transmission takes you out of ordinary and into
the realm. Liana is entirely different car, its
style, dimension and comfort will inspire you
to see every day as an open door to a new age.
Colors: Pearl Red, Graphite Grey, Solid white,
Indigo, Silky Silver, Aqua Blue, Eminent Blue
CULTUS (1000cc)
ALTO (1000cc)
Price: Rs. 662,000/Alto has a bright, roomy and comfortable
cabin which keeps body relax and strong and
lighter body shell resulting in smooth drive
due to reduction of unpleasant noise
harshness and vibration. Its small turning
radius and compact body make parking a
breeze.
Colors: Olive Green, Pearl Red, Graphite
Grey, Solid white, Indigo, Silky Silver, Aqua
Blue, Eminent Blue
MEHRAN (800cc)
Price: Rs. 514,000/Unrivalled in its class, MEHRAN is
Pakistans largest selling car. More smart
features like head turning lamp, matching
front grill and a two spoke steering wheel
gives it the tidy look. Functional economy,
peak performance or unmatched fuel
efficiency, MEHRAN VXR is the leader.
Colors: Pearl Red, Graphite Grey, Solid
white, Silky Silver, Eminent Blue
APV (1500cc)
Price: Rs. 1,775,000/APV 1500 cc (Imported) The New APV
gives you everything you ever wanted in
your vehicle. Spacious interior for comfort,
tough engine to carry large loads and plenty
of room for passengers to enjoy a
comfortable day long ride.
Colors: Pearl Red, Graphite Grey, Solid
white, Indigo, Silky Silver, Aqua Blue,
Eminent Blue
JIMNY (1300cc)
Price: Rs. 1,850,000/JIMNY 4X4 JEEP 1300cc (Imported)
Steady, sturdy and smart, Suzuki JIMNY
with new wide tread brings you the ultimate
pleasure of a real 4-wheel drive. It has got all
the sporting spirit to go along for
adventurous free souls.
Colors: Solid white, Silky Silver
Strengths:
Highest Market Share
Low Price Vehicles
Resale of Local Assembled Cars
Large Distribution Channels
Rising per capita income with changing demographic distribution
Highly Innovative and deep product line
Highly maintained supply chain
Well Managed and highly competitive staff
Well defined and bureaucratic organizational structure
Complete understanding between Distributors
Easy availability of spare parts
Weakness:
Scarcity of raw material
Lack of coordination and linkage with Government/semi government supporting
bodies
Less focus on Looks and Design
Less Technical Training Institutes
Less distribution channels in sub urban areas
Opportunities:
Increasing Demand for Cars
Efficient EFI engines
PEST Analysis
Uncontrollable environment are those external factors which can create hurdles between us
and our business. It is also called pest analysis, which is as follow:
Political Environment
Pakistan has to face lots of political ups and downs since its independence. So many
governments have been overtaken by military personnel and most of the time martial law was
imposed on Pakistan. In this scenario no entrepreneur was willing to invest in Pakistan
except few. Due to such conditions, market environment wasnt helpful in Pakistan. The
Pakistani government has never been trustworthy for any investor.
Legal Environment
As all countries, Pakistan also has some legislation about each sector. But like developing
countries it is hardly being imposed by authorities. The corruption, smuggling and black
marketing have been supported by Government related officials. The undue favor is given to
those business men who have been politically affiliated and hardly any legal suite is carried
on against them. Such unethical activities destroy all law and legislation.
Economic Environment
Pakistan, an impoverished and underdeveloped country, has suffered from decades of internal
political disputes and external ongoing conflict with India. However, IMF approved the
government policies, encourages by different foreign assistance and renewed access to global
market since 2001.
By following these policies government succeed to reverse the situation of economy during
last five years.
Socio-Culture Environment
Pakistan has strong culture background and it has been follow in some particular region of
Pakistan strictly. But with the passage of time it is going to change. Thoughts of people,
choices, taste and style has been totally changed. If we talk about the transportation source in
Pakistan, People use buses, pickups etc for journey. They also have their own bicycle and
bikes and lots of people are pedestrian. But now the people who havent any source of
transportation they also want something for their convenience because they wants to save
their time as much as they can. People want to use such vehicle which looks beautiful and
also affordable.
Technological Environment
Technological factor also very important and we havent control on it. Technology is
grooming with the passage of time. People also want that the product that they have is full of
technology. We never control on technology for example you launched the product last year
and your sale volume on that time is very high but after sometime due to latest invention a
lots of substitute exist in market which affect on your business so you cant hold on it.
1.
2.
3.
4.
5.
1.
2.
3.
4.
5.
OPPORTUNITIES
Increasing Demand for Cars
Efficient EFI Engines
Large Market to operate
Global spare parts market
Small size CNG Cylinders
THREATS
Tough Competitors like Toyota and Honda
Inflation Rate
Heavy Taxes
Cheaper Imported Cars
Increase in Fuel Prices
Total Weighted Score
Ratings:
1 Poor
2 Below Average
Weight
0.15
0.10
0.10
0.05
0.12
Ratings
4
3
3
2
3
Weighted Score
0.60
0.30
0.30
0.10
0.36
0.14
0.08
0.08
0.10
0.08
2
3
3
4
2
0.28
0.24
0.24
0.40
0.16
1.0
2.98
3 Above Average
4 - Superior
The total weighted score of 2.98 shows that company is responding above average to its
external factors. They are trying to grab maximum opportunities available there and avoiding
the threats to their best.
Justification of Ratings:
1. The company is producing the maximum number of cars in compare with other
competitors and therefore grabbing the opportunity to meet the increasing demand.
2. Pak Suzuki has introduced new EFI engine in its CULTUS model which is a 1000cc car.
The EFI engine technology is never introduced before in below 1300cc cars.
3. The dealer network of Pak Suzuki is almost all around the country which help them to
maximize their sales and reach in every corner of the country.
4. In new CNG fitted cars, the Suzuki is introducing new compact CNG cylinders which take
less space and are lighter than their equivalent available in the market.
5. The major threat Suzuki Company could have is from Toyota and Honda, as Suzuki is still
unable to meet them in 1300cc and above category of cars. The new product SWIFT is not
giving the respond which was expected.
5.
Weight
0.20
0.10
0.12
Ratings
4
4
4
Weighted Score
0.80
0.40
0.48
0.08
0.32
0.12
0.48
0.08
0.05
0.10
0.05
0.10
2
2
1
1
1
0.16
0.10
0.10
0.05
0.10
1.0
WEAKNESSES
1.
2.
3.
4.
5.
Ratings:
1 Major Weakness
2 Minor Weakness
2.99
3 Minor Strength
4 Major Strength
The score 2.99 shows that company has solid internal position, its strengths are overcoming
the weaknesses.
Justification of Ratings:
1. Pak Suzuki Motor Company has large market share herein and also the largest producers of
Cars which is a major strength.
2. Their prices are very affordable in the same quality that is another major strength.
3. The large distribution channel is another major strength which helps them to achieve their
desired sales targets.
4. The innovation is another key strength of Pak Suzuki and the example is new Suzuki
SWIFT.
5. The spare parts availability is a critical issue which cars, Suzuki has comparative
advantage in spare parts availability as most of them are being manufactured in Pakistan.
6. The major weakness which I felt is the non-availability of skilled engineers and workforce.
And the reason behind is lack of technical institutes under their banner.
7. They should also focus on sub-urban areas like Southern Punjab and Interior Sind which
their distribution network.
SWOT MATRIX
STRENGHTS
OPPORTUNITIES
1. Increasing Demand for cars
2. Efficient EFI engines
3. Large Market to Operate
4. Small size CNG Cylinder
5. Global Spare parts market
THREATS
1. Tough Competitors
2. Inflation Rate
3. Heavy Taxes
4. Cheaper Imported Cars
5. Increase in Fuel prices
WEAKNESSES
S-O Strategies
1. Maximize market share by
producing more cars per year
(S1,S2,O1,O4)
2. Develop more efficient and
innovative Engine which gives
comparative advantage (S4,O2)
3. Use efficient CNG systems
(S4,S5,O4)
S-T Strategies
6. Maintain quality in affordable
price will help to compete with
competitors and imported cars
(S2,S4,T1,T4)
7. Develop fuel efficient
engines to gain edge and
eliminate threat of fuel prices
increase (S4,S5,T5,T2)
W-O Strategies
4. Focus on Looks and Design
to compete with Honda and
Toyota (W3,O1,O3)
5. Fund and establish technical
institutes to gain more skilled
workforce (W4,O3,O1)
W-T Strategies
Proposed Strategies
1. Maximize market share by producing more cars per year
2. Develop more efficient and innovative engines which give comparative advantage
3. Use efficient CNG system
4. Focus on looks and design of exterior to compete with Honda and Toyota
5. Fund and establish technical institutes to gain more skilled workforce from local market
6. Maintain quality in affordable price will help to compete with direct competitors and used
imported cars
7. Develop fuel efficient engines to gain edge and eliminate threat of fuel prices increase
BCG MATRIX
Star
High
Question Mark
JIMNY
SWIFT
BOLAN
Market
Growth
Dogs
Cash Cows
MEHRAN
LIANA
CULTUS
ALTO
APV
RAVI
Low
High
Market Share
Low
SWIFT
JIMNY
BOLAN
MEHRAN
ALTO
CULTUS
RAVI
LIANA
APV
SBUs Analysis
MEHRAN:
MEHRAN has the highest growth rate in automobile sector in Pakistan. Pak Suzuki
always changes the different parts of MEHRAN either exterior or interior whenever it comes
to its maturity level.
MEHRAN is attractive the people who have salaries within 20,000 to 30,000 per month. The
youngsters also prefer the MEHRAN because of its size and economical price. Small
business people also prefer MEHRAN because of its low maintenance cost. MEHRAN also
attracts people who move from bike to the cars.
LIANA:
Liana is a luxurious and highest price car of Pak Suzuki. It was built to compete with
Pak Suzukis biggest competitors like Toyota and Honda. Liana has the same features which
are available in Corolla and Civic but still it couldnt make its market as compare to both
these cars. Liana has replaced the Pak Suzukis BALENO in 2005-06, since Pak Suzuki tried
several ways to establish its position but failed to do so.
It was made for a people of high income group but due to high prices in which the market
was already giving names like corolla and civic who has their strong brand name and
customer loyalty, liana was failed to capture the market.
SWIFT:
Due to failure of Liana Pak Suzuki introduced another 1300cc car in Jan 2009. Swift
has all the latest features like power steering, central locking, Auto Transmission and the
ABS. All the 1300cc cars in Pakistan have price range of 1300000 to 1400000, while Swift
was introduced at 999000 and recently it was increased at 1049000. It has still advantage of
price competition as compare to other 1300cc cars in Pakistan.
RAVI:
Ravi is for the people doing small business especially cargo services like home
delivery services, TCS and market delivery. All people doing business of these types are loyal
customers to Ravi. Although the SHEHZORE has captured some of its market share but still
Ravi is much famous and market leader in its type.
Average
Weak
Average
3
Weak
2
ii
iii
iv
vi
vii
viii
ix
3
2
1
The IFE matrix score for Pak Suzuki Motor Company Limited (PSMCL) is 2.99 and for EFE
matrix is 2.98 therefore our IE matrix falls more around iv cell.
The company should adopt growth and built strategies and I recommend Market
Development and Product Development Strategies.
SPACE MATRIX
Financial Strength (FS)
Return on Investment
Working Capital
Short Term Assets
+4
+3
+4
Total:
+11
+5
+3
+4
Total:
+12
-3
-4
-3
Total:
-10
-2
-3
-4
-2
-11
Average Scores:
FS = 11/3 = 3.67
IS = 12/3 = 4
CA = -10/3 = -3.33
ES = -11/4 = -2.75
X-axis = IS+CA = 4-3.33 = 0.67
Aggressive
Strategies
Space Matrix
In space matrix weve observed that company will pursue aggressive strategies. We consider
they key factors of Financial Strengths, Industry Strengths, Competitive Advantages and
Environmental Stability. By assigning them values as per their importance worst to best, we
calculated the score which lead us to the decision that company will pursue Aggressive
strategies. And I would suggest Market Development and Product Development strategies
will work best for PSMC.
GRAND MATRIX
Q1
Q2
Weak
Competitive
Position
Strong
Competitive
Position
Q3
Q4
The grand matrix helps us to determine the strategy that firm must pursue, based on its
competitive position and market growth.
The Pak Suzuki Motor Company Limited has strong competitive position against its major
competitors and the market growth is healthy and at increasing pace.
But they still need to do lot to get themselves at top. As per my judgment, they fall under
Quadrant 1 and they should follow aggressive strategies like Market Development and
Product Development.
QSPM MATRIX
Market Development
0.10
0.06
0.08
0.04
0.08
0.06
0.08
0.10
Attractive
Score
4
3
4
3
4
1
4
4
Internal Factors
Highest Market share
Low price vehicles
Large distribution channel
Easy availability of spare parts
Innovative and deep product line
Less focus on style and design
Scarcity of human resource
0.08
0.10
0.06
0.02
0.06
0.04
0.04
3
1
2
3
4
4
3
Totals
1.0
External Factors
Weight
Product Development
0.40
0.18
0.32
0.12
0.32
0.06
0.32
0.40
Attractive
Score
4
4
4
2
2
1
4
4
0.24
0.10
0.12
0.06
0.24
0.16
0.12
4
4
3
3
3
4
4
Total
3.16
Total
0.40
0.24
0.32
0.08
0.16
0.06
0.32
0.40
0.32
0.40
0.18
0.06
0.18
0.16
0.16
3.44
CONCLUSION
The following are the findings of the study of Pak Suzuki Motor
Company Limited.
External Factor Evaluation Matrix Score: 2.98
Internal Factor Evaluation Matrix Score: 2.99
BCG Matrix:
Star: JIMNY, BOLNA
Question Mark: SWIFT
Cash Cows: MEHRAN, CULTUS, ALTO, RAVI
Dogs: APV, LIANA
Internal External Matrix: Growth and Built Strategy
Space Matrix: Quadrant 1, Aggressive Strategies
Grand Matrix: Quadrant 1, Aggressive Strategies
Market Development, Product Development
QSPM Matrix:
Market Development: 3.16
Product Development: 3.44
Chosen Strategy is Product Development.
STRATEGIC RECOMMENDATIONS
Product Development is the selected strategy at this point of time
for Pak Suzuki Motor Company Limited that we observed from our
strategic analysis of the firm.
In product development strategy we recommend the company to
focuses on having the highest level of product performance, the
highest level of functionality or functions and features, the latest
technology or the highest level of product innovation.
This strategy might have some risk for the company as innovative
products are involved but proper research and development will cater
the risk and company can pursue with the strategy to be the market
leaders and get on top.
One major setback to PSMC was in the shape of Suzuki LIANA,
which was not able to meet the expectations and couldnt hold the
market it was made for.
But company didnt stop its journey there, and now Suzuki SWIFT
has recently been launched in the market, which seems to be an
attractive offer for the market in the 1300cc class. But still company
has nothing to compete with HONDA and TOYOTA. The Suzuki
needs to enter into the 1600cc and 1800cc market to expand its
market share and market growth. But for that purpose they need to
put more efforts of product development as the new product must
have all the required features and technology that is needed to
compete with giant competitors. And of course, PSMC has
competitive advantage in local assembling and manufacturing of
parts and they can utilize that advantage to produce cheaper cars in
the categories mentioned above.
The PSMC has recently received acknowledgement from Prime
Minister of Pakistan for being the only car manufacturers for the
lower and middle income people of Pakistan. But they should also
need to get into the line of HONDA and TOYOTA, to achieve that
target they need to develop more technologically cheap and efficient
and quality oriented products.
REFERENCES
http://www.paksuzuki.com.pk
http://www.we.com.pk
http://www.maxi-pedia.com
And various news paper articles, research findings and blogs, which helped me indirectly to
build up my mind about Pak Suzuki Motor Company Limited and figure out their External
and Internal Factors which were involved in the project.