Symbiosis Institute of Management Studies

(For-(MBA programme only)-Defence Personnel and Their Dependants)

Constituent of Symbiosis International University

STRATEGIC MANAGEMENT

Submitted To: Dr. Vivek Sane

Submitted By:
Name: Gaurav Jena
Roll No: B-16
PRN: 18020441099

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ABOUT THE COMPANY

Suzuki Motor Corporation is a Japanese multinational corporation headquartered in Minami-ku,

Hamamatsu. Suzuki manufactures automobiles, four-wheel drive vehicles, motorcycles, all-
terrain vehicles (ATVs), outboard marine engines, wheelchairs and a variety of other small
internal combustion engines. In 2016, Suzuki was the eleventh biggest automaker by production
worldwide. Suzuki has over 45,000 employees and has 35 production facilities in 23 countries,
and 133 distributors in 192 countries. The worldwide sales volume of automobiles is the world's
tenth largest, while domestic sales volume is the third largest in the country.

Suzuki’s domestic motorcycle sales volume is the third largest in Japan.

Founded in the year 1909 as Suzuki Loom Works, it has completed 110 years as of 2019. The
company operates in three segments; Automotive, Motorcycles and Marine products. The
company’s vehicle production is around 3% of total global production and its rank globally is 11
according to International Organization of Motor Vehicle Manufacturers (OICA). Suzuki’s
mission statement as per their annual report is three-fold: “Develop products of superior value
by focusing on the customer; Establish a refreshing and innovative company through teamwork;
and Strive for individual excellence through continuous improvement.”

ESTABLISHMENT & GROWTH

• 1909: Michio Suzuki founds Suzuki Loom Works founded in Hamamatsu, Shizuoka
Prefecture, Japan.
• 1920: incorporated, and capitalized at ¥500,000 as Suzuki Loom Manufacturing Co. with
Michio Suzuki as president.
• 1954: Company name changed to Suzuki Motor Co., Ltd.
• 1949: Company lists on the Tokyo, Osaka and Nagoya Stock Exchanges.
• 1965: Enters outboard motor market with the launch of D55 5.5 hp, two-stroke engine.
o Introduction of Fronte 800 two-stroke subcompact passenger vehicle.
o T20 motorcycle introduced as "the fastest 250cc motorcycle in the world", aimed
at the US market but gets worldwide attention.
• 1969: Motorcycle plant built in Oyabe, Toyama, Japan.
• 1979: Alto two-stroke mini vehicle introduced.
• 1989: Aggregate car production reached 10 million units.
o Production of Suzuki cars begins at CAMI Automotive Inc. in Ontario, Canada.
o Sidekick sales begin in the United States.
• 2000: The corporation commemorates its 80th anniversary.

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 • 2004: Aggregate domestic automobile sales reach 15 million units.
o After eight years, the Suzuki v. Consumers Union lawsuit about a magazine review
that said the Samurai 4x4 easily tipped over, is settled out of court
• 2009: 100th anniversary of the Suzuki brand name.
o Suzuki markets its first production pickup truck called the Equator.
o Volkswagen and Suzuki announce the establishment of a global strategic
partnership. The Volkswagen Group will buy a 20% stake in Suzuki Motor Corp.
o November: Suzuki breaks ground on a new 650,000 m2. factory in Eastern
Seaboard Industrial Estate in Rayong Province, Thailand, the 20 billion yen
investment for eco-car production to start in March 2012.
• 2015: Permanent court of arbitration showed a judgment that VW owned Suzuki shares
should be sold, and officially dissolved the alliance with Suzuki's stock (19.9%) held by
VW.
• 2018–present.
o Suzuki withdrew from China in September 2018.
o Suzuki launches new 2019 Carry small CV in Indonesia.
o In August, 2019, Toyota announced it would acquire a 4.9% stake in Suzuki, with
Suzuki taking a 0.2% stake in Toyota in return.

SWOT ANALYSIS

Strengths

o Reliable suppliers – It has a strong base of reliable supplier of raw material thus
enabling the company to overcome any supply chain bottlenecks.
o Highly successful at Go To Market strategies for its products.
o Successful track record of developing new products – product innovation.
o Good Returns on Capital Expenditure – Suzuki is relatively successful at execution
of new projects and generated good returns on capital expenditure by building new
revenue streams.
o Successful track record of integrating complimentary firms through mergers &
acquisition. It has successfully integrated number of technology companies in the
past few years to streamline its operations and to build a reliable supply chain.
o Strong dealer community – It has built a culture among distributor & dealers where
the dealers not only promote company’s products but also invest in training the
sales team to explain to the customer how he/she can extract the maximum benefits
out of the products.

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 o Strong distribution network – Over the years Suzuki has built a reliable distribution
network that can reach majority of its potential market.
o Automation of activities brought consistency of quality to Suzuki products and has
enabled the company to scale up and scale down based on the demand conditions
in the market.

Weakness

o The marketing of the products left a lot to be desired. Even though the product is a
success in terms of sale but its positioning and unique selling proposition is not
clearly defined which can lead to the attacks in this segment from the competitors.
o High attrition rate in work force – compare to other organizations in the industry
Suzuki has a higher attrition rate and have to spend a lot more compare to its
competitors on training and development of its employees.
o Not very good at product demand forecasting leading to higher rate of missed
opportunities compare to its competitors. One of the reasons why the days inventory
is high compare to its competitors is that Suzuki is not very good at demand
forecasting thus end up keeping higher inventory both in-house and in channel.
o Days inventory is high compare to the competitors – making the company raise
more capital to invest in the channel. This can impact the long-term growth of
Suzuki
o Organization structure is only compatible with present business model thus limiting
expansion in adjacent product segments.
o Need more investment in new technologies. Given the scale of expansion and
different geographies the company is planning to expand into, Suzuki needs to put
more money in technology to integrate the processes across the board. Right now,
the investment in technologies is not at par with the vision of the company.
o Not highly successful at integrating firms with different work culture. As
mentioned earlier even though Suzuki is successful at integrating small companies
it has its share of failure to merge firms that have different work culture.

Opportunities

o The new technology provides an opportunity to Suzuki to practices differentiated

pricing strategy in the new market. It will enable the firm to maintain its loyal
customers with great service and lure new customers through other value-oriented
propositions.
o Decreasing cost of transportation because of lower shipping prices can also bring
down the cost of Suzuki’s products thus providing an opportunity to the company

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 - either to boost its profitability or pass on the benefits to the customers to gain
market share.
o The new taxation policy can significantly impact the way of doing business and can
open new opportunity for established players such as Suzuki to increase its
profitability.
o New environmental policies – The new opportunities will create a level playing
field for all the players in the industry. It represents a great opportunity for Suzuki
to drive home its advantage in new technology and gain market share in the new
product category.
o New trends in the consumer behavior can open up new market for the Suzuki. It
provides a great opportunity for the organization to build new revenue streams and
diversify into new product categories too.
o The market development will lead to dilution of competitor’s advantage and enable
Suzuki to increase its competitiveness compare to the other competitors.
o Opening up of new markets because of government agreement – the adoption of
new technology standard and government free trade agreement has provided Suzuki
an opportunity to enter a new emerging market.
o Government green drive also opens an opportunity for procurement of Suzuki
products by the state as well as federal government contractors.

Threats

o Liability laws in different countries are different and Suzuki may be exposed to
various liability claims given change in policies in those markets.
o Shortage of skilled workforce in certain global market represents a threat to steady
growth of profits for Suzuki in those markets.
o Changing consumer buying behavior from online channel could be a threat to the
existing physical infrastructure driven supply chain model.
o Imitation of the counterfeit and low-quality product is also a threat to Suzuki’s
product especially in the emerging markets and low-income markets.
o The company can face lawsuits in various markets given - different laws and
continuous fluctuations regarding product standards in those markets.
o The demand of the highly profitable products is seasonal in nature and any unlikely
event during the peak season may impact the profitability of the company in short
to medium term.
o Intense competition – Stable profitability has increased the number of players in
the industry over last two years which has put downward pressure on not only
profitability but also on overall sales.
o No regular supply of innovative products – Over the years the company has
developed numerous products but those are often response to the development by

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 other players. Secondly the supply of new products is not regular thus leading to
high and low swings in the sales number over period of time.

Major Competitors

o Toyota, Volkswagen, GM, Ford, Nissan, Honda, Fiat, Renault Motorcycle: Honda
Motor Company Limited, Yamaha Motor Company Limited, Hero MotoCorp
Limited, Bajaj Auto Limited, Harley-Davidson Incorporation Marine Products:
Honda Marine, Yamaha Motor Corp, Mercury Marine, Tohatsu Corp, Evinrude
Outboard Motor

PORTORS FIVE FORCE MODEL

The Threat of New Entrant:

1. The economies of scale is fairly difficult to achieve in the industry in which Suzuki
operates. This makes it easier for those producing large capacitates to have a cost
advantage. It also makes production costlier for new entrants. This makes the threats of
new entrants a weaker force.

2. The product differentiation is strong within the industry, where firms in the industry sell
differentiated products rather a standardized product. Customers also look for
differentiated products. There is a strong emphasis on advertising and customer services
as well. All of these factors make the threat of new entrants a weak force within this
industry.

3. The capital requirements within the industry are high, therefore, making it difficult for
new entrants to set up businesses as high expenditures need to be incurred. Capital
expenditure is also high because of high Research and Development costs. All of these
factors make the threat of new entrants a weaker force within this industry.

4. The access to distribution networks is easy for new entrants, which can easily set up their
distribution channels and come into the business. With only a few retail outlets selling the
product type, it is easy for any new entrant to get its product on the shelves. All of these
factors make the threat of new entrants a strong force within this industry.

5. The government policies within the industry require strict licensing and legal
requirements to be fulfilled before a company can start selling. This makes it difficult for
new entrants to join the industry, therefore, making the threat of new entrants a weak
force.

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 How Suzuki can tackle the Threat of New Entrants?

1. Suzuki can take advantage of the economies of scale it has within the industry, fighting
off new entrants through its cost advantage.

2. Suzuki can focus on innovation to differentiate its products from that of new entrants. It
can spend on marketing to build strong brand identification. This will help it retain its
customers rather than losing them to new entrants.

The Threat of Substitutes:

1. There are very few substitutes available for the products that are produced in the industry
in which Suzuki operates. The very few substitutes that are available are also produced by
low profit earning industries. This means that there is no ceiling on the maximum profit
that firms can earn in the industry in which Suzuki operates. All of these factors make the
threat of substitute products a weaker force within the industry.

2. The very few substitutes available are of high quality but are way more expensive.
Comparatively, firms producing within the industry in which Suzuki operates sell at a
lower price than substitutes, with adequate quality. This means that buyers are less likely
to switch to substitute products. This means that the threat of substitute products is weak
within the industry.

How Suzuki can tackle the Threat of Substitute Products?

1. Suzuki can focus on providing greater quality in its products. As a result, buyers would
choose its products, which provide greater quality at a lower price as compared to
substitute products that provide greater quality but at a higher price.

2. Suzuki can focus on differentiating its products. This will ensure that buyers see its
products as unique and do not shift easily to substitute products that do not provide these
unique benefits. It can provide such unique benefits to its customers by better
understanding their needs through market research, and providing what the customer
wants.

Bargaining Power of Buyers:

1. The number of suppliers in the industry in which Suzuki operates is a lot more than the
number of firms producing the products. This means that the buyers have a few firms to

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 choose from, and therefore, do not have much control over prices. This makes the
bargaining power of buyers a weaker force within the industry.

2. The product differentiation within the industry is high, which means that the buyers are
not able to find alternative firms producing a particular product. This difficulty in
switching makes the bargaining power of buyers a weaker force within the industry.

3. The income of the buyers within the industry is low. This means that there is pressure to
purchase at low prices, making the buyers more price sensitive. This makes the buying
power of buyers a weaker force within the industry.

4. The quality of the products is important to the buyers, and these buyers make frequent
purchases. This means that the buyers in the industry are less price sensitive. This makes
the bargaining power of buyers a weaker force within the industry.

5. There is no significant threat to the buyers to integrate backwards. This makes the
bargaining threat of buyers a weaker force within the industry.

How Suzuki can tackle the Bargaining Power of Buyers?

1. Suzuki can focus on innovation and differentiation to attract more buyers. Product
differentiation and quality of products are important to buyers within the industry, and
Suzuki can attract a large number of customers by focusing on these.

2. Suzuki needs to build a large customer base, as the bargaining power of buyers is weak.
It can do this through marketing efforts aimed at building brand loyalty.

3. Suzuki can take advantage of its economies of scale to develop a cost advantage and sell
at low prices to the low-income buyers of the industry. This way it will be able to attract
a large number of buyers.

Bargaining Power of Suppliers:

1. The number of suppliers in the industry in which Suzuki operates is a lot compared to the
buyers. This means that the suppliers have less control over prices and this makes the
bargaining power of suppliers a weak force.

2. The product that these suppliers provide are fairly standardized, less differentiated and
have low switching costs. This makes it easier for buyers like Suzuki to switch suppliers.
This makes the bargaining power of suppliers a weaker force.

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 3. The suppliers do not contend with other products within this industry. This means that
there are no other substitutes for the product other than the ones that the suppliers provide.
This makes the bargaining power of suppliers a stronger force within the industry.

4. The suppliers do not provide a credible threat for forward integration into the industry in
which Suzuki operates. This makes the bargaining power of suppliers a weaker force
within the industry.

5. The industry in which Suzuki operates is an important customer for its suppliers. This
means that the industry’s profits are closely tied to that of the suppliers. These suppliers,
therefore, have to provide reasonable pricing. This makes the bargaining power of
suppliers a weaker force within the industry.

How Suzuki can tackle the Bargaining Power of Suppliers?

1. Suzuki can purchase raw materials from its suppliers at a low cost. If the costs or products
are not suitable for Suzuki, it can then switch its suppliers because switching costs are
low.

2. It can have multiple suppliers within its supply chain. For example, Suzuki can have
different suppliers for its different geographic locations. This way it can ensure efficiency
within its supply chain.

3. As the industry is an important customer for its suppliers, Suzuki can benefit from
developing close relationships with its suppliers where both of them benefit.

The Intensity of The Competitive Rivalry:

1. The number of competitors in the industry in which Suzuki operates are very few. Most
of these are also large in size. This means that firms in the industry will not make moves
without being unnoticed. This makes the rivalry among existing firms a weaker force
within the industry.

2. The very few competitors have a large market share. This means that these will engage in
competitive actions to gain position and become market leaders. This makes the rivalry
among existing firms a stronger force within the industry.

3. The industry in which Suzuki is growing every year and is expected to continue to do this
for a few years ahead. A positive Industry growth means that competitors are less likely
to engage in completive actions because they do not need to capture market share from
each other. This makes the rivalry among existing firms a weaker force within the

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 industry.

4. The fixed costs are high within the industry in which Suzuki operates. This makes the
companies within the industry to push to full capacity. This also means these companies
to reduce their prices when demand slackens. This makes the rivalry among existing firms
a stronger force within the industry.

5. The products produced within the industry in which Suzuki operates are highly
differentiated. As a result, it is difficult for competing firms to win the customers of each
other because of each of their products in unique. This makes the rivalry among existing
firms a weaker force within the industry.

6. The production of products within the industry requires an increase in capacity by large
increments. This makes the industry prone to disruptions in the supply-demand balance,
often leading to overproduction. Overproduction means that companies have to cut down
prices to ensure that its products sell. This makes the rivalry among existing firms a
stronger force within the industry.

7. The exit barriers within the industry are particularly high due to high investment required
in capital and assets to operate. The exit barriers are also high due to government
regulations and restrictions. This makes firms within the industry reluctant to leave the
business, and these continue to produce even at low profits. This makes the rivalry among
existing firms a stronger force within the industry.

8. The strategies of the firms within the industry are diverse, which means they are unique
to each other in terms of strategy. This results in them running head-on into each other
regarding strategy. This makes the rivalry among existing firms a strong force within the
industry.

How Suzuki can tackle the Rivalry Among Existing Firms?

1. Suzuki needs to focus on differentiating its products so that the actions of competitors will
have less effect on its customers that seek its unique products.

2. As the industry is growing, Suzuki can focus on new customers rather than winning the
ones from existing companies.

3. Suzuki can conduct market research to understand the supply-demand situation within the
industry and prevent overproduction.

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MARKETING MIX STRATEGY

Marketing Mix of Suzuki analyses the brand/company which covers 4Ps (Product, Price, Place,
Promotion) and explains the Suzuki marketing strategy.

Product
Suzuki is an automotive company with products in categories in automobiles, outboard
motors, ATVs, motorcycles, engines. The products in the marketing mix of Suzuki can be
divided into car and bikes broadly. Some of the products in the car category are APV,
Ertiga, Jimmy, Grand Vitara, Ciaz, Vitara, S-Cross, Baleno, Swift, Swift sport, Ignis,
Celerio. The motorbike segment had following vehicles - QuadSport Z90, QuardSport Z50,
QuadSport Z400, KingQuad, Ozark, DR-Z70, RMX450Z, DR-Z400E, DR-Z125L, Suzuki
Boulevard, VanVan, V-Strom, Bandit, GSX1250FA, Hayabusa, SV 650/A, TU250X,
Inazuma, Burgman, Address, TF125. The Suzuki bikes are categorised under Supersport,
Ultimate Sport, Street, Sport Adventure tourer, cruiser, scooter, Dual Purpose, Off road,
Motocross, Utility ATV, Sport ATV, Kids ATV. The Marine tops consists of 4-stroke
outboards which has Electronic fuel injection series, Carburetor series. The 2-stroke
outboards have Kerosene Out-boards.

Price
The general pricing strategy of Suzuki is from medium range pricing to premium pricing.
The pricing mainly depends upon the category under which the products are classified. The
price in the Suzuki marketing mix would cover not only bikes but also cars. The Swift is a
car that is priced cheaper while Baleno is priced higher. The Suzuki Bikes categorized
under Ultimate sport are expensive than the scooter. The pricing of the company is in
comparison to its competitors depending on the PoDs and PoPs of the product line. In some
categories, the company has an upper hand over others while in some it uses penetrating
strategy. The pricing of Suzuki products also varies from region to region & based on
competitor pricing as well.
For example, in India the pricing is lower to suit the medium range target customers.

Place
Suzuki has its existence worldwide. It has segregated itself on the world map in 4 broad
categories. The classifications are Europe, Middle-East & Africa, Asia & Oceania,
America. The company exists in 31 countries under Europe. It exists in 49 different
countries under Middle-East & Africa. Suzuki as a company has its presence in 26
countries of Asia & Oceania and 46 companies of America. The place in the marketing
mix of Suzuki is not only its geographic presence, but also its distributors and retailers.
The products are sold mainly through its distributor outlets present across the globe. There
are showrooms and dealers through which the Suzuki products get sold. It is impossible

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 for the company to run all the showrooms on their own and hence Suzuki also goes for the
franchise model.

Promotion
Suzuki uses all online and offline platforms for its promotions. The online platforms
include the website, social media platforms like Twitter, Facebook, Google+ and Pinterest.
They also promote themselves through heart touching YouTube videos. The offline
promotional methods include TV commercial advertisements, Bill Boards, Hoardings.
Suzuki also promote themselves through event sponsorships. Motorcycle events, race
events etc are also places where as an advertiser and sponsor, Suzuki has significant
presence. Hence, this gives an overview on the Suzuki marketing mix.

CONCLUSION

Automobile market today is very dynamic & competitive with a range of players and products.
There are many reasons for the impressive growth of the Automobile Industry. Some of these
are easy availability of vehicle finance, attractive rate of interest and convenient instalments. In
today’s cutthroat competition it is very difficult to survive. Stiff competition has forced
manufacturers to be innovative and responsive to customer demands and needs. Suzuki Motors
is a leading company in the Global Automobile sector which occupies prominent place due to
its innovative strategic marketing, promotional, brand positioning, advertising strategies.

In today’s scenario the success of company lies in structuring and restructuring the marketing
strategies and continuous innovation of product and services.

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