Jonathan. K. Kush is the lead business writer at 123 Writing. He holds a BA (Hons) degree in Business Administration from the University of Brighton, UK. As a Market Research Analyst by profession, Jonathan has nearly a decades experience in market research and business analysis. His passion includes studying markets and industry trends to understand their impact on company strategy, performance and ways firms can mitigate their environment to outcompete rivals.
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Maruti Suzuki is the biggest vehicle manufacturer in India with a market share of over 50% meaning, one out of every two cars purchased in India is a Maruti Suzuki. In fact, such is the dominance of Maruti Suzuki that seven of its passenger vehicles were featured in a list of India’s best selling cars of 2017. Its closest rival is Hyundai Motors India with a market share of around 17% meaning the combined market share of Maruti Suzuki and Hyundai Motors India India is close to 70%. Such a high concentration of the market share between the two dominant players means India’s automotive sector is a duopoly.
Using Porters five forces, this report examines the current industry structure of the Indian automobile industry to understand the nature of competition and more importantly shed some light on how Maruti Suzuki has gained and maintained such dominant market share in recent years despite increased competition in India’s automobile industry.
NO CITATION FOR THIS WORK WAS RECORDED
Maruti Suzuki Strategy Case Study
Key Learning Outcomes
By the end of the case, students should be able to:
- Analyse the Indian automobile industry and how the five forces have affected the biggest vehicle manufacturer in India-Maruti Suzuki, and rivals and the impact on industry structure, attractiveness, and profitability.
- Understand how Maruti Suzuki has managed to defend against intense competition from Hyundai, Tata, Mahindra etc. and the strategies it uses to create 'blue oceans' that are defensible, helping it capture market share and maintain competitive advantage.
- To apply strategy business models and frameworks such as Porters five forces to real company cases.
Analyse the competitive environment of the automobile industry in India and examine the impact of Porters five forces on the industry and how Maruti Suzuki is keeping rivals at bay.
1.0 INTRODUCTION
Why is Porters industry analysis important? It is important because without an understanding of the competitive environment in which firms operate, they cannot make sound strategic decisions. Porters five forces analysis of Maruti Suzuki and the Indian automobile industry helps automobile firms operating in it to either identify attractive and lucrative segments within the Indian automobile industry as well as the sources of competitive advantage. This analysis of Maruti Suzuku using Porters five forces will thus help us understand why Maruti is embarking on certain strategies in an attempt to wrestle with rivals and more importantly shed some light on how has Maruti Suzuki has gained and maintained market share in recent years despite increased competition in India’s automobile industry.
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