Porter Generic Strategies on Indian Automobile Induatry Essay
PORTER’S GENERIC COMPETITIVE STRATEGY
MARUTHI: Low Cost Product – Differentiated service
Maruthi build high walls of safety against competition by its very competitive pricing i.e. pricing as low as possible for the particular product. Maruthi has also been a company that has strived for sustainable development with their “three R” framework standing for “reduce, recycle, reuse” in its plants, so that there is a minimal stress on resources emphasizing on low cost while retaining their promise to the customer. Maruthi Product – Target Market – Pricing
As important for low cost provider they are also backed by huge economies of scale as depicted below;
In the other hand maruthi has been sought by people for its distribution and service availability across the length and breadth of the nation. “Yes, you can get lost in India, but chances are there will be a Maruti Suzuki Service Station close at hand. Wherever you go, across the length and breadth of this vast nation, our service network follows.” boasts maruthi relying on its widest service network servicing more than 40,000 cars a day. Maruthi has been No.1 in the J D Power Customer Satisfaction Award for a staggering 13 years in a row. It’s a survey that rates the after-sales service experience, one that no other global car market leader has won even once. Source:Maruthi.co.in
TATA: COST LEADERSHIP
Tata motors is a part of the conglomerate TATA and their focus is to provide cost effective solution to their customers going in line with their mission of “To be passionate in anticipating and providing the best vehicles and experiences that excite our customers globally.” Source: Tatamotors.com Focusing on values like Integrity, Accountability, Innovation, Passion for excellence with their focus to provide low cost solution ranging from TATA flag mark product NANO. The following picture gives the price list for the
Source: Car pricedhekho.com
Their economies of scale are one of the highest in the industry signifying the low cost in production also reuse and less emphasis on design features and these coupled with their unique processing of fixing reverse methodology of pricing the product first and thereby innovating and designing so as to fit the price makes them the leader in providing low cost solutions reaching out the customers. TATA also boasts it service network being wide and reachable in almost all corners of the nation but their main focus and strive is on providing low cost solutions.
MAHINDRA: DIFFERENTIATION (BLUE OCEAN STRATEGY)
Mahindra & Mahindra (M&M) manufactures utility vehicles (UVs), tractors, commercial vehicles (CVs), three-wheelers and gensets. Mahindra was the first mover when it comes to utility vehicles in India and has an indomitable market and place in customer mind when their focus is on performance under optimal price. It is India’s market leader in UVs and tractors and In land, Mahindra has dominant share in all its segments –
Source: SIAM, Company Data, Credit Suisse estimates|
Mahindra earns a competitive advantage via a combination of a tractor and UV business in India which face very little or no competition. Mahindra brought in SUV’s in Indian market focusing on raw power and performance with the launch of Bolero and the launch of Scorpio has proven to be a game-changer for the company and has help it transform its image from a people-mover to luxury SUV manufacturer followed by launch of its most-awaited XUV 500 dominating the SUV category with its differentiated products. All this was keenly observed by famous strategist and thinker Mr. C K Prahlad and named the whole milieu as “FORTRESS MAHINDRA”. Fortress Mahindra means that if you go into a certain mobility business where you can share procurement, where you can share research and development synergies, where you can share logistics, where you can share brand, you can share channel and then create a mobility web where it becomes easier to enter a mobility business that somebody else can’t and easier to defend when somebody tries to emulate. Source: Business Today
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