Maruti Suzuki India: Defending Market Leadership in the A-segment SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Maruti Suzuki India: Defending Market Leadership in the A-segment
Maruti Suzuki India Ltd. (MSIL), a subsidiary of Suzuki Motor Corporation Japan, is considering a new product introduction to defend its pre-eminent position and retain its competitive advantage in the Indian car market. Three different choices have emerged, out of which only one can be pursued. There is a need to reassess MSIL's potential growth opportunities and strategy for competing in the "A-segment." Which product should MSIL invest in to successfully defend its position? Jaydeep Mukherjee is affiliated with Management Development Institute, Gurgaon, India.
Swot Analysis of "Maruti Suzuki India: Defending Market Leadership in the A-segment" written by Jaydeep Mukherjee, Gaurav Mathur, Nikhil Dhar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Suzuki Msil facing as an external strategic factors. Some of the topics covered in Maruti Suzuki India: Defending Market Leadership in the A-segment case study are - Strategic Management Strategies, Marketing, Product development, Strategy and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Maruti Suzuki India: Defending Market Leadership in the A-segment casestudy better are - – increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings,
geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Maruti Suzuki India: Defending Market Leadership in the A-segment
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Maruti Suzuki India: Defending Market Leadership in the A-segment case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Suzuki Msil, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Suzuki Msil operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Maruti Suzuki India: Defending Market Leadership in the A-segment can be done for the following purposes –
1. Strategic planning using facts provided in Maruti Suzuki India: Defending Market Leadership in the A-segment case study
2. Improving business portfolio management of Suzuki Msil
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Suzuki Msil
Strengths Maruti Suzuki India: Defending Market Leadership in the A-segment | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Suzuki Msil in Maruti Suzuki India: Defending Market Leadership in the A-segment Harvard Business Review case study are -
Effective Research and Development (R&D)
– Suzuki Msil has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Maruti Suzuki India: Defending Market Leadership in the A-segment - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Suzuki Msil are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Analytics focus
– Suzuki Msil is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Jaydeep Mukherjee, Gaurav Mathur, Nikhil Dhar can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Sustainable margins compare to other players in Sales & Marketing industry
– Maruti Suzuki India: Defending Market Leadership in the A-segment firm has clearly differentiated products in the market place. This has enabled Suzuki Msil to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Suzuki Msil to invest into research and development (R&D) and innovation.
Learning organization
- Suzuki Msil is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Suzuki Msil is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Maruti Suzuki India: Defending Market Leadership in the A-segment Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Suzuki Msil has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Suzuki Msil has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Highly skilled collaborators
– Suzuki Msil has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Maruti Suzuki India: Defending Market Leadership in the A-segment HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Suzuki Msil is present in almost all the verticals within the industry. This has provided firm in Maruti Suzuki India: Defending Market Leadership in the A-segment case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High switching costs
– The high switching costs that Suzuki Msil has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Suzuki Msil digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Suzuki Msil has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Low bargaining power of suppliers
– Suppliers of Suzuki Msil in the sector have low bargaining power. Maruti Suzuki India: Defending Market Leadership in the A-segment has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Suzuki Msil to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Suzuki Msil has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Suzuki Msil to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Maruti Suzuki India: Defending Market Leadership in the A-segment | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Maruti Suzuki India: Defending Market Leadership in the A-segment are -
Aligning sales with marketing
– It come across in the case study Maruti Suzuki India: Defending Market Leadership in the A-segment that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Maruti Suzuki India: Defending Market Leadership in the A-segment can leverage the sales team experience to cultivate customer relationships as Suzuki Msil is planning to shift buying processes online.
Need for greater diversity
– Suzuki Msil has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High operating costs
– Compare to the competitors, firm in the HBR case study Maruti Suzuki India: Defending Market Leadership in the A-segment has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Suzuki Msil 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Suzuki Msil has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Maruti Suzuki India: Defending Market Leadership in the A-segment, is just above the industry average. Suzuki Msil needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow decision making process
– As mentioned earlier in the report, Suzuki Msil has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Suzuki Msil even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Skills based hiring
– The stress on hiring functional specialists at Suzuki Msil has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Maruti Suzuki India: Defending Market Leadership in the A-segment, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow to strategic competitive environment developments
– As Maruti Suzuki India: Defending Market Leadership in the A-segment HBR case study mentions - Suzuki Msil takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Maruti Suzuki India: Defending Market Leadership in the A-segment HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Suzuki Msil has relatively successful track record of launching new products.
Lack of clear differentiation of Suzuki Msil products
– To increase the profitability and margins on the products, Suzuki Msil needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Maruti Suzuki India: Defending Market Leadership in the A-segment | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Maruti Suzuki India: Defending Market Leadership in the A-segment are -
Better consumer reach
– The expansion of the 5G network will help Suzuki Msil to increase its market reach. Suzuki Msil will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Suzuki Msil can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Maruti Suzuki India: Defending Market Leadership in the A-segment, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Suzuki Msil can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Manufacturing automation
– Suzuki Msil can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Suzuki Msil can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Suzuki Msil can use these opportunities to build new business models that can help the communities that Suzuki Msil operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Suzuki Msil can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Suzuki Msil can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Using analytics as competitive advantage
– Suzuki Msil has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Maruti Suzuki India: Defending Market Leadership in the A-segment - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Suzuki Msil to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Suzuki Msil can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Loyalty marketing
– Suzuki Msil has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Buying journey improvements
– Suzuki Msil can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Maruti Suzuki India: Defending Market Leadership in the A-segment suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Suzuki Msil can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Suzuki Msil is facing challenges because of the dominance of functional experts in the organization. Maruti Suzuki India: Defending Market Leadership in the A-segment case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Maruti Suzuki India: Defending Market Leadership in the A-segment External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Maruti Suzuki India: Defending Market Leadership in the A-segment are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Maruti Suzuki India: Defending Market Leadership in the A-segment, Suzuki Msil may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Suzuki Msil business can come under increasing regulations regarding data privacy, data security, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Suzuki Msil will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Technology acceleration in Forth Industrial Revolution
– Suzuki Msil has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Suzuki Msil needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Regulatory challenges
– Suzuki Msil needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Suzuki Msil needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Suzuki Msil in the Sales & Marketing sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Suzuki Msil in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Suzuki Msil.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Suzuki Msil can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Suzuki Msil can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Environmental challenges
– Suzuki Msil needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Suzuki Msil can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Weighted SWOT Analysis of Maruti Suzuki India: Defending Market Leadership in the A-segment Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Maruti Suzuki India: Defending Market Leadership in the A-segment needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Maruti Suzuki India: Defending Market Leadership in the A-segment is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Maruti Suzuki India: Defending Market Leadership in the A-segment is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Maruti Suzuki India: Defending Market Leadership in the A-segment is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Suzuki Msil needs to make to build a sustainable competitive advantage.