Suzuki's Sucess in China

Global Business

Case 4: Suzuki's advance into India

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ZHANG Xuan

1. Why do you think Suzuki has succeeded in India?

1. Suzuki entered the India market quite early (in 1980s), while other players haven't notice the importance of India market yet. As a result, Maruti Suzuki has a overwhelming advantages in brand power.

2. Suzuki has an advantage in the area of small motorcycles and light vehicles, which exactly met the needs of developing counties market like India.

3. As the only foreign automaker in 1980s, Maruti Suzuki succeeded in attracting outstanding Indian engineers.

4. Suzuki enter India market as a response to India government's request, and by set up joint-venture, Suzuki maintained a good relationship with government and was able to expand its sales network with minimal difficulty.

5. As vehicles supply constantly fell short of demand in the 1980s, Maruti dealer didn't need to market, and as a state-run firm, Maruti was easy to gain the trust from dealers.

6. Suzuki has a corporate culture encouraging consistently advanced product development, so that it can always introduce new models to meet the needs.

Threat of new competition

India can be recognized as an open market where has quite an amount of potential competitors. Toyota and Honda have announced plans to introduce small cars targeting India markets. And both targeting the same segment with Suzuki. (~500,000 rupee)

Threat of substitute products or services

One of the substitute products are products from other company. And with as more and more companies are aiming this market, there will be more products fit the small niche. (such as mini car or low-priced mid-sized car)

Bargaining power of customers(buyers)

As more players are entering this markets, customers will have more choices which increases the bargaining power of buyers.

Bargaining power of suppliers

Labor union hold considerable power in India.

The local parts maker are not capable to produce high-quality parts, so the parts are imported from Japan or partly made in Japan, which make the price of parts still relatively high.

Intensity of competitive rivalry

Current competitors including oversea players like South Korea's Hyundai,

and local players like TATA, which is already the 3rd player in the market.

Threat of new competitionIndia market can be recognized as an open market where there are many potential competitors. Both local and oversea players.

Threat of substitute products or servicesAs the growth of income, people might choose mid-sized car which Suzuki is not that strong now.

Bargaining power of customers As more players are entering this markets, customers will have more choices which increases the bargaining power of buyers.

Bargaining power of suppliersconsidering supplier of labor, Labor union hold considerable power in India.

The local parts maker are not capable to produce high-quality parts, so the parts are imported from Japan or partly made in Japan, which make the price of parts still relatively high.

As a result, bargaining power of