Competitive Position Essay Example for Free

Competitive Position EssayIn this assignment we tried to look into the Baja railcars own position in Indian domestic mart and how it has performed in last year sortredn to local rivals. In addition, we suggest play along to invest directly in the Statess railcar industry as America and India is more or less similar in terms of run multinational organisations. As, it is a long term investment and lofty risk strategy for company, we clinically analysed spic-and-span market scenario and different persuasions of it. 1.0 Competitive PositionBaja Auto is ranked as the worlds fourth largest devil and ternary wheelers production company. It is in dickens wheelers and three wheelers Indian market since 1945 and recognised grease across Asia, Middle Eastern countries, Latin America. Bajaj Auto shargons 26.70% of two wheelers market in India, fairly privy Hero Honda Motors which has 41.35% Indian customers, and ahead of TVS Motor Company which holds 18.14%. But when it comes to three wheelers vehicles, Bajaj Auto clearly ascendancy the major(ip)ity of the market with 58.60%, a good deal ahead thence Piaggio Vehicles 32.70%. Bajajs closest competitor in two wheelers market is Hero Honda Motors. Hero Honda change 3.72 million two wheelers units, almost double then Bajaj, who managed 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 all-time high of 772,519 units of two and three wheelers, representing a branch of 25% over the previous year. (Sources gondola Industry insure -2012, India). Though, there is a huge difference in terms of selling units between three major players of Indias two wheelers, their growth rate is almost similar to each other. 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-2012). In plant wise capacity Bajaj Auto clearly out plays its competitors. Bajaj Auto has 4 active plants compare to 3 of each for Hero Honda motors and TVS Motors. thus Bajaj has upper hand in terms of number 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).Adopted from Automobile Industry report-2012, India.2.0 Market Entry Bajaj Auto is highly recognised company throughout the world and has immensely experienced management team. In addition, it has its own technology labs, engineering colleges and very strong labour power. away from having a fair do of domestic market share, it is a leading exporter of India. Bajaj is famous for manufacturing two and three wheelers which have legal provide efficiency and strong outer body and comes in very gilded prise compares to other manufacturers. It is right time for the company to move forward and make its own introduction in well developed country same The USA, which help company to reduce the good amount of money spent on exporting its products to Latin America and Africa and moreover, America itself has huge crowd who are struggling with current worldwide economic downfall and looking for cheap available options. 2.1 Reason for launching Into the USA MarketPESTLE analysis is an useful analysis tool to evaluate future plans and it helps organisations like Bajaj Auto who is going to enter in new business environment to understand the risk associated with its beside move .PESTLE helps company to analyse its position, potential and direction in new market place.2.1.1 Political military position of the USA It is very important to assess political condition of new working field sooner moving abroad. It helps company like Bajaj to make its business strategy. America is strong democratic country like India the motherland of Bajaj Auto and thi s 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 powerful economy of the world, with per capita GDP of $49,800. US business sector companies have more flexibility than any other part of the world in decision to turn out their capita plant. . At the same time, they face higher barriers to enter their rivals home markets than foreign firms face entering US markets. It is lucrative industry to enter for foreign company like Bajaj Auto.2.1.3 SocialAmericas cosmos is 316,668,567 which consist of 79.96% white, black 12.85%, Asiatic 4.43%. 40.2% of Americas population is 25-54years old. 82% population is urbanised and an one-year urbanisation rate is 1.2%. 99% of total population is literate.2.1.4 Technologicalhighly diversified, world leading, high-technology innovator, second largest industrial output in world petroleum, steel, motor vehicles, aerospace, telecommunications, chemical s, 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 profound America has strong, fast legal system which gives every individual a fair chance to stir decision of the court. Supreme court is the highest body who makes the final verdict on any legal issue.2.1.6 environsAir pollution resulting in acid rain in the US the US is the largest single emitter of coulomb dioxide from the burning of fossil fuels water pollution from runoff of pesticides and fertilizers limited inherent freshwater resources in much of the western part of the country require careful 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 government to enter into their m arket. (Sources http//www.cia.gov/library)2.2Market Attractiveness DIAMOND stupefy Source Porter, M. (1990) 2.2.1 Firm strategy, structure and rivalry As commented earlier, Bajaj Auto is famous for producing light weight 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 terror the position of Bajaj Auto in its production range. Bajaj Auto manufactures couple of motorbikes like Pulsar, Duke, and Discover which is heavy notwithstanding 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 at bottom industries and it helps company to gain upper hand in tilt with major players.2.2.2 Demand Conditions Light motorcycles, the abridgment say, will outperform other ICE product types and maintain the ir position as the largest single piece of the motorcycle market in America. This will be due to several elements, 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 skilled 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 shift toward that more intensively use that factor. The US has well developed technology when it comes to motorbike industry and that attracts Bajaj Auto to gain an entry in this market.2.2.4 link up a nd 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). Strong supply chain of motorbikes engines parts, raw material for motorbike body, leather and machineries are always get a line 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 class families and small vendors should be first priority as a target 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 kind of two and three wheelers Bajaj Auto produces are low in prise and have high fuel efficiency. These two points will work in companys favour and manage to pull ample crowd. 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.