Bajaj Auto and motorcycle market Case Solution
After analyzing the case and inspecting the historic and present condition of the two-wheeler motor cycle market, it can be determined that, the purchasing power of the customers was low in India. It compelled the consumers to purchase bikes, who could not afford cars. Furthermore, it was the most appealing market, in relation to 75cc and 125cc motorcycles,from which, the customers were able to purchase these bikes, attributed to their light weight and high fuel economy. Therefore, the motorcycle manufacturing companies spent heavily on their research and development projects. Which enabled them to develop innovative products, which would meet the changing requirements of the customers available in the market. Furthermore, it was assessed that, initially, the companies developed heavy weigh motorcycles ranging from 150cc to 350cc, which were costly to manufacture and were less fuel efficient. Therefore, at that time, the trend of scooters raised in the market, as they were relatively cheaper to produce and provided better fuel economy compared to the heavier bikes available. After the advent of light weight motor cycles, which were considered more stylish and powerful by the customer and provided better fuel economy to its users. The customer’s trend shifted from Scooter to these motorcycles. Therefore, companies like Bajaj Autos, which were recognized as the leading manufacturer of scooters, decided to shift from producing scooters towards manufacturing light weight, economical motorbikes. This increased their sales revenues and by providing products, as per customer demand it could enhance its brand image in the market. This ensured its long term survival in the highly diverse and competitive market.In addition to this, the governmental restrictions and polices paved a way for potential manufacturing organization to gain a significant profit from their operation in these markets. In like manner, it was evaluated that, the demand of two-wheeler would increase in the future in a country like India.
What is Bajaj’s strategy in the Indian motorcycle industry? And that of TVS?
Bajaj Autos was initially a Scooter manufacturer, which later shifted its business model towards light weight motorcycles after joining hands with Kawasaki. A company known for its 250cc+ bikes, which were able to secure a 60% share of the market. However, it was assessed that, partnership between Bajaj and Kawasaki was not a joint venture like hero Honda, there was no sharing onequity between the two parties. Furthermore, it can be evaluated that, Bajaj spent huge amounts of capital in its Research and development projects. Which enabled the company to develop a commercialized Digital Twin-Spark Ignition (DTS-i) system and be the first to introduce such a system in two-wheeler. Therefore, enablingit to produce quicker and efficient combustion engines, giving better power, low emission and better fuel economy to the customers. Therefore, it can be determined, that Bajaj’s core strategy was to find new and innovate ways to gain a competitive advantage over its competitors available in the market. Furthermore, it planned to abide by the emission regulations imposed by the regulatory authorities, which would increase the appeal of its products among the customers and could have a favorable impact on their sale revenues. Bajaj’s senior management decided to target the economic segment and produce 125cc motorcycles. So that, they could gain potential benefit from the increase in the appeal of 125cc bikes by the customers available in the market. However, it can be assessed that, Bajaj manufactured many bikes with different caliber engine capacities. However, due to the recent shift of customers to 125cc engine capacity bikes, Bajaj had spent heavily on its research and development project to find new innovative ways to enhance its bike’s power, efficiency and fuel economy keeping under consideration the customer’s shift towards style and design of bike under the 125cc caliber engine capacity. It would enhance its products appeal among the customers and result in increasing the revenues generated through the sale of these products in the market. It planned to bring the same enthusiasm that its previous scooters had, with respect to reliability and low emissions levels, keeping under consideration, the road and economic conditions of India and its people. Which would have a favorable impact on the environment as well as provide its users with high quality and technologically advanced products, which would enhance their economies of scale.................................................