In this assignment we tried to look into the Baja Auto’s ain place in Indian domestic market and how it has performed in last twelvemonth comparison to local challengers. In add-on. we suggest company to put straight in America’s car industry as America and India is more or less similar in footings of operating transnational administrations. As. it is a long term investing and high hazard scheme for company. we clinically analysed new market scenario and different facets of it.
1. 0 Competitive Position
Baja Auto is ranked as the world’s 4th largest two and three Wheelers production company. It is in two Wheelers and three Wheelers Indian market since 1945 and recognised trade name across Asia. Middle Eastern states. Latin America. Bajaj Auto portions 26. 70 % of two Wheelers market in India. reasonably behind Hero Honda Motors which has 41. 35 % Indian clients. and in front of TVS Motor Company which holds 18. 14 % . But when it comes to three Wheelers vehicles. Bajaj Auto clearly control the bulk of the market with 58. 60 % . much in front so Piaggio Vehicles 32. 70 % . Bajaj’s closest rival in two Wheelers market is Hero Honda Motors. Hero Honda sold 3. 72 million two Wheelers units. about dual so Bajaj. who managed to sold 1. 28 million units. Bajaj Auto is the country’s largest exporter of two- and three-wheelers.
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During 2008-2009. Bajaj Auto’s international gross revenues achieved an all-time high of 772. 519 units of two and three Wheelers. stand foring a growing of 25 % over the old twelvemonth. ( Sources: Car Industry study -2012. India ) . Though. there is a immense difference in footings of selling units between three major participants of India’s two Wheelers. their growing rate is about similar to each other. Hero Honda Motors enjoys 15. 4 % growing in 2012. and it was followed by TVS Motor and Bajaj Auto with 13. 3 % and 13. 2 % severally. ( Sources: Annual studies of Bajaj Auto. Hero Honda Motors and TVS Motors-2012 ) . In works wise capacity Bajaj Auto clearly out plays its rivals. Bajaj Auto has 4 active workss compare to 3 of each for Hero Honda motors and TVS Motors. Therefore Bajaj has upper manus in footings of figure of units’ productions. Bajaj Auto’s workss are capable of bring forthing 5 million units of vehicles comparisons to Hero Honda’s 4. 75 million and TVS’ 4. 50 million of units. ( Sources: Car Industry report-2012. India ) .
Adopted from Automobile Industry report-2012. India.
2. 0 Market Entry Bajaj Auto is extremely recognised company throughout the universe and has immensely experienced direction squad. In add-on. it has its ain engineering labs. technology colleges and really strong labor power. Apart from holding a just sum of domestic market portion. it is a taking exporter of India. Bajaj is celebrated for fabricating two and three Wheelers which have good fuel efficiency and strong outer organic structure and comes in really inexpensive prise compares to other makers. It is right clip for the company to travel frontward and do its ain base in good developed state like The USA. which help company to cut down the good sum of money spent on exporting its merchandises to Latin America and Africa and furthermore. America itself has immense crowd who are fighting with current world-wide economic ruin and looking for inexpensive available options. 2. 1 Reason for Entering Into the USA Market
PESTLE analysis is an utile analysis tool to measure future programs and it helps administrations like Bajaj Auto who is traveling to come in in new concern environment to understand the hazard associated with its following move. PESTLE helps company to analyze its place. possible and way in new market topographic point.
2. 1. 1 Political Situation of the USA It is really of import to measure political status of new working field before traveling abroad. It helps company like Bajaj to do its concern scheme. America is strong democratic state like India the fatherland of Bajaj Auto and this will work company’s favour as it knows the pros and cons of such a political environment.
2. 1. 2 Economy
The US has the largest and most technologically powerful economic system of the universe. with per capita GDP of $ 49. 800. US Business companies have more flexibleness than any other portion of the universe in determination to spread out their capita works. . At the same clip. they face higher barriers to come in their rivals’ place markets than foreign houses face come ining US markets. It is moneymaking industry to come in for foreign company like Bajaj Auto.
2. 1. 3 Social
America’s population is 316. 668. 567 which consist of 79. 96 % white. black 12. 85 % . Asiatic 4. 43 % . 40. 2 % of America’s population is 25-54years old. 82 % population is urbanized and an one-year urbanization rate is 1. 2 % . 99 % of entire population is literate.
2. 1. 4 Technological
extremely diversified. universe taking. high-technology pioneer. 2nd largest industrial end product in universe ; crude oil. steel. motor vehicles. aerospace. telecommunications. chemicals. electronics. nutrient processing. consumer goods. timber. excavation. Bajaj Auto will bask a good sum of success due to technological enlargement of the company which is comparably low in India.
2. 1. 5 Legal America has strong. fast legal system which gives every person a just opportunity to appeal determination of the tribunal. Supreme tribunal is the highest organic structure who makes the concluding finding of fact on any legal issue.
2. 1. 6 Environment
Air pollution ensuing in acid rain in the US ; the US is the largest individual emitter of C dioxide from the combustion of fossil fuels ; H2O pollution from overflow of pesticides and fertilisers ; limited natural fresh water resources in much of the western portion of the state necessitate careful direction ; desertification. Bajaj Auto developed the engineering in recent old ages and some of its vehicles run on CNG and LPG which cut down the sum of C dioxide. This engineering gives company an border over its rivals to derive assurance of the US authorities to come in into their market. ( Sources: hypertext transfer protocol: //www. Central Intelligence Agency. gov/library )
2. 2Market Attractiveness DIAMOND MODEL Source: Porter. M. ( 1990 ) 2. 2. 1 Firm scheme. construction and competition As mentioned earlier. Bajaj Auto is celebrated for bring forthing light weight two and three Wheelers vehicles which have good fuel efficiency and strong organic structure and it’s new for American population. There is no strong rival in market at the present that can menace the place of Bajaj Auto in its production scope. Bajaj Auto manufactures twosome of minibikes like Pulsar. Duke. and Discover which is heavy but it will non be a good thought to establish them in America as Harley Davidson. Yamaha motors. Kawasaki motors have strong clasp on American clients. Bajaj Auto follows hierarchal scheme which resulted in advantages within industries and it helps company to derive upper manus in competition with major participants.
2. 2. 2 Demand Conditions Light bikes. the drumhead say. will surpass other ICE merchandise types and keep their place as the largest individual section of the bike market in America. This will be due to several factors. including the fastest population growing of any part. the lowest average age and the lowest ( but mounting ) per-capita GDP. ( Beginning: universe demand bikes grow ) . This is good hereafter facet for Bajaj Auto to win in international escapade.
2. 2. 3 Factor Endowment America has strong and big factor gifts compare to Western Europe. The US has comparative advantages of skilled workers. substructure. unfastened market entry for international companies. natural resource and engineering. Romalis ( 2004 ) provides a quasi-Rybczynski anticipation. “if a state accumulates a factor more quickly than remainder of the universe. so that country’s production and exports will consistently switch toward that more intensively use that factor. ” The US has good developed engineering when it comes to motorcycle industry and that attracts Bajaj Auto to derive an entry in this market.
2. 2. 4 Related and Supporting Industries The US is rich in bring forthing natural resources like Fe. lead. crude oil. natural gas. In add-on America has the universe largest coal modesty with 491 billion short dozenss accounting for 27 % of the world’s sum. ( Beginning: hypertext transfer protocol: //www. Central Intelligence Agency. gov/library ) . Strong supply concatenation of minibikes engines parts. natural stuff for minibike organic structure. leather and machineries are ever cardinal factors in success of car concern and America provides all these characteristics to Bajaj Auto.
2. 3 2. 3. 1 Target Market Young. universities’ pupils. African and Asiatic immigrants. in-between category households and little sellers should be first precedence as a mark market for Bajaj Auto as they portion big figure of entire American population ( see 2. 1. 3 ) . Above reference clients have limited resources of income and other duties and hence they ever look out for inexpensive available option. The sort of two and three Wheelers Bajaj Auto green goodss are low in prise and have high fuel efficiency. These two points will work in company’s favor and manage to draw large crowd. Once company acquire established. it can establish the scope of heavy weight vehicles to supply competition to giants like Yamaha. Royal Enfield. Honda and Harley Davidson.
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