Maruti Suzuki India competitive advantage

Document Type:Thesis

Subject Area:Business

Document 1

Maruti Suzuki had established a leading brand by offering solid and reliable products to the Indian market. They were also ranked number one in customer satisfaction before their market share started to drop. This was caused by the entry of other companies that were producing similar cars such as Hyundai, Tata Motors and General Motors. These companies posed competition problems to Maruti Suzuki due to the wide range of products they offered, their trusted brand image among customers and their ability to cater to the changing market (Ishigami 8). The loss of competitive advantage in Maruti motors is evident because it loses its market share from 61 to 49 percent. These strategies are cost leadership strategy, differentiation strategy, and focus strategy. Cost leadership strategy aims at offering products or services of acceptable quality at a low price.

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This strategy involves combining low per unit profit with high sales to make a profit. Economies of scale help cost leaders to reduce the costs of goods when the organization’s production increases. The cost leadership strategy makes it hard for new companies to enter the market because of the small profit margins. One limitation is that the research does not address the disadvantages of these strategies. The second limitation is that one strategy may not be effective and one might need to apply more than one at the same time which can cost the company a lot of money and time. For example, the development of a new product by Maruti Motors would cost them 6 billion. Summary and Analysis of another company that faced a similar problem as Maruti Suzuki motors Hyundai also faced a competition problem similar to MSIL.

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The entry of companies such as Ford, Toyota that had previously only offered luxury products was now offering premium hatch cars thereby increasing competition in the A-segment. The management of every company should apply strategies like cost leadership, differentiation, technology, and information advantage to ensure that they do not lose their competitive edge. Companies should also be able to adapt fast to the changing markets needs. In the car Industry, the age of car owners is changing. Younger people are buying cars more and more, and hence car manufacturers should strive to cater to their needs by changing the features to be more attractive other than just functional. Works Cited Porter, Michael E. , Nicholas J. Aquilano, and F. Robert Jacobs.  Operations management for competitive advantage.

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