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 household debt because of falling income levels, supply chains are disrupted by pandemic , there is backlash against globalization, increasing government debt because of Covid-19 spendings, technology disruption, increasing energy prices, geopolitical disruptions,
competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, 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 -
Ability to recruit top talent
– Suzuki Msil is one of the leading recruiters in the industry. Managers in the Maruti Suzuki India: Defending Market Leadership in the A-segment are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
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.
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.
Training and development
– Suzuki Msil has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Maruti Suzuki India: Defending Market Leadership in the A-segment Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
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.
Superior customer experience
– The customer experience strategy of Suzuki Msil in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Suzuki Msil is one of the most innovative firm in sector. Manager in Maruti Suzuki India: Defending Market Leadership in the A-segment Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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 -
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Suzuki Msil supply chain. Even after few cautionary changes mentioned in the HBR case study - Maruti Suzuki India: Defending Market Leadership in the A-segment, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Suzuki Msil vulnerable to further global disruptions in South East Asia.
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.
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.
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.
Products dominated business model
– Even though Suzuki Msil has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Maruti Suzuki India: Defending Market Leadership in the A-segment should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Suzuki Msil is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Maruti Suzuki India: Defending Market Leadership in the A-segment can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
High cash cycle compare to competitors
Suzuki Msil has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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.
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.
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.
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 -
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Suzuki Msil in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Developing new processes and practices
– Suzuki Msil can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
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.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Suzuki Msil can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Suzuki Msil to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Suzuki Msil to hire the very best people irrespective of their geographical location.
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.
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.
Creating value in data economy
– The success of analytics program of Suzuki Msil has opened avenues for new revenue streams for the organization in the industry. This can help Suzuki Msil to build a more holistic ecosystem as suggested in the Maruti Suzuki India: Defending Market Leadership in the A-segment case study. Suzuki Msil can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
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.
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 -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Suzuki Msil with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Increasing wage structure of Suzuki Msil
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Suzuki Msil.
Shortening product life cycle
– it is one of the major threat that Suzuki Msil is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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 .
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Suzuki Msil can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Maruti Suzuki India: Defending Market Leadership in the A-segment .
High dependence on third party suppliers
– Suzuki Msil high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
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.
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.
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.
