Competitive Position Essay

In this assignment we well-tried to look into the Baja motorcars own sentiment in Indian domestic grocery and how it has performed in last year comp ar to local rivals. In addition, we suggest connection to invest directly in the Statess automobile industry as the States and India is more or less similar in terms of operating multinational organisations. As, it is a long term investment and high risk strategy for company, we clinically analysed new market scenario and different aspects of it.1.0 Competitive PositionBaja gondola is rank as the worlds fourth largest deuce and three wheelers intersection company. It is in two wheelers and three wheelers Indian market since 1945 and value scratch across Asia, Middle Eastern countries, Latin America. Bajaj cable car shares 26.70% of two wheelers market in India, fairly behind booster Honda labours which has 41.35% Indian customers, and ahead of TVS Motor Company which holds 18.14%. But when it comes to three wheelers vehicle s, Bajaj Auto understandably control the bulk of the market with 58.60%, much ahead then Piaggio Vehicles 32.70%. Bajajs closest enemy in two wheelers market is Hero Honda Motors. Hero Honda sold 3.72 gazillion two wheelers units, almost double then Bajaj, who man advanced to sold 1.28 million units. Bajaj Auto is the countrys largest exporter of two- and three-wheelers.During 2008-2009, Bajaj Autos international sales achieved an uncomparable high of 772,519 units of two and three wheelers, representing a growth of 25% everyplace the previous year. (Sources Automobile Industry report -2012, India). Though, there is a bulky difference in terms of selling units between three study players of Indias two wheelers, their growth rate is almost similar to separately former(a). Hero Honda Motors enjoys 15.4% growth in 2012, and it was followed by TVS Motor and Bajaj Auto with 13.3% and 13.2% respectively. (Sources annual reports of Bajaj Auto, Hero Honda Motors and TVS Motors-201 2). In plant wise capacity Bajaj Auto clearly out plays its competitors. Bajaj Auto has 4 active plants compare to 3 of individually for Hero Honda motors and TVS Motors. Therefore Bajaj has upper hand in terms of tote up of units productions. Bajaj Autos plants are capable of producing 5 million units of vehicles compares to Hero Hondas 4.75 million and TVS 4 .50 million of units. (Sources Automobile Industry report-2012, India). select from Automobile Industry report-2012, India.2.0 Market Entry Bajaj Auto is highly recognised company throughout the world and has vastly experienced management team. In addition, it has its own technology labs, engineering colleges and very operose labour power. isolated from having a fair amount of domestic market share, it is a spark advance exporter of India. Bajaj is famous for manufacturing two and three wheelers which have just fuel aptitude and buckram outer soundbox and comes in very cheap prize compares to other(a) manufacturers . It is right time for the company to move forward and base its own base in well developed country equal The ground forces, which help company to reduce the good amount of money exhausted on exporting its products to Latin America and Africa and moreover, America itself has huge clustering who are struggling with current worldwide economic downfall and face for cheap available options. 2.1 Reason for Entering Into the USA Market mold analysis is an useful analysis tool to evaluate future plans and it helps organisations standardised Bajaj Auto who is going to enter in new crease environs to understand the risk associated with its next move .PESTLE helps company to analyse its position, emf and direction in new market place.2.1.1 Political Situation of the USA It is very important to assess political condition of new functional field before moving abroad. It helps company like Bajaj to make its business strategy. America is strong democratic country like India the motherla nd of Bajaj Auto and this will work companys favour as it knows the pros and cons of such a political environment.2.1.2 EconomyThe US has the largest and most technologically omnipotent economy of the world, with per capita GDP of $49,800. US Business companies have more flexibility than any other part of the world in decision to broaden their capita plant. . At the same time, they face higher barriers to enter their rivals home markets than international firms face entering US markets. It is lucrative industry to enter for unconnected company like Bajaj Auto.2.1.3 SocialAmericas universe is 316,668,567 which time out of 79.96% white, black 12.85%, Asian 4.43%. 40.2% of Americas existence is 25-54 geezerhood old. 82% population is urbanised and an annual urbanisation rate is 1.2%. 99% of native population is literate.2.1.4 Technologicalhighly diversified, world leading, high-technology innovator, second largest industrial output in world petroleum, steel, motor vehicles, a erospace, telecommunications, chemicals, electronics, food processing, consumer goods, lumber, mining. Bajaj Auto will enjoy a good amount of success due to technological expansion of the company which is comparably low in India.2.1.5 Legal America has strong, fast sub judice system which gives every individual a fair chance to charm decision of the court. Supreme court is the highest body who makes the final verdict on any legal issue.2.1.6 EnvironmentAir pollution resulting in paneling rain in the US the US is the largest single emitter of carbon dioxide from the electrocution of fossil fuels water pollution from runoff of pesticides and fertilizers limited indwelling freshwater resources in much of the western part of the country require sleepless management desertification. Bajaj Auto developed the technology in recent years and some of its vehicles run on CNG and LPG which reduce the amount of carbon dioxide. This technology gives company an edge over its competitors to gain confidence of the US governing body to enter into their market. (Sources http//www.cia.gov/library)2.2Market Attractiveness DIAMOND MODEL Source Porter, M. (1990) 2.2.1 Firm strategy, coordinate and rivalry As mentioned earlier, Bajaj Auto is famous for producing light load two and three wheelers vehicles which have good fuel efficiency and strong body and its new for American population. There is no strong competitor in market at the present that can threat the position of Bajaj Auto in its production range. Bajaj Auto manufactures couple of motorbikes like Pulsar, Duke, and excise which is heavy but it will not be a good idea to launch them in America as Harley Davidson, Yamaha motors, Kawasaki motors have strong hold on American customers. Bajaj Auto follows hierarchical strategy which resulted in advantages within industries and it helps company to gain upper hand in disceptation with major players.2.2.2 Demand Conditions Light motorcycles, the summary say, will outper form other ICE product types and maintain their position as the largest single fragment of the motorcycle market in America. This will be due to several(prenominal) factors, including the fastest population growth of any region, the lowest median age and the lowest (but climbing) per-capita GDP. (Source world demand motorcycles grow). This is good future aspect for Bajaj Auto to succeed in international adventure.2.2.3 Factor Endowment America has strong and large factor endowments compare to Western Europe. The US has comparative advantages of practiced workers, infrastructure, open market entry for international companies, natural resource and technology. Romalis (2004) provides a quasi-Rybczynski prediction, if a country accumulates a factor more rapidly than rest of the world, then that countrys production and exports will systematically tilt toward that more intensively use that factor. The US has well developed technology when it comes to motorbike industry and that attract s Bajaj Auto to gain an entry in this market.2.2.4 related to and Supporting Industries The US is rich in producing natural resources like iron, lead, petroleum, natural gas. In addition America has the world largest coal reserve with 491 billion short tons accounting for 27% of the worlds total.(Source http//www.cia.gov/library). fast(a) supply chain of motorbikes engines parts, raw material for motorbike body, leather and machineries are always key factors in success of automobile business and America provides all these features to Bajaj Auto.2.3 2.3.1 Target Market Young, universities students, African and Asian immigrants, middle tier families and small vendors should be first priority as a post market for Bajaj Auto as they share large number of total American population (see 2.1.3). Above mention customers have limited resources of income and other responsibilities and therefore they always look out for cheap available option. The physique of two and three wheelers Bajaj Auto produces are low in rate and have high fuel efficiency. These two points will work in companys favour and manage to pull big crowd. at once company get established, it can launch the range of heavy weight vehicles to provide competition to giants like Yamaha, Royal Enfield, Honda and Harley Davidson.