SUZUKI GS125R

Group Members Abubakkar Nawaz Arman Hafiz Sufyan Shahid Aniq Ahmed

INTRODUCTION TO MOTORCYCLE INDUSTRY

Pakistan motorcycle industry is prospering largely due to consistent policy of the government, protection to local investors to expand its businesses locally as well as internationally.

No other manufacturing sector has shown such high and sustained growth during past ten years.

Most of the families have their monthly income linked with the motorcycle industry.

In Pakistan, gross domestic product per capita stood at $1,415 which is much lower as compared to the developed countries. The transfer from motorcycles to cars in Pakistani market will start becoming very clear when per capita income will be $4,000 marks.

The Pakistan motorcycle market is growing at the rate of 15 per cent annually. This is an appreciable static growth which anticipates the importance of presence of the local assemblers.

In the past year over 1.5 million motorcycles were produced in the country out of which most were of 70cc engine capacity. A phenomenal growth has been observed in 100cc, 125cc and above segments with a growth trend of around 34 per cent and 20 per cent respectively.

A decline in production of around 10 per cent is seen in the most popular 70cc motorcycles.

Pakistan motorcycle industry is flourishing as it met 95% localization through state of the art technology implementation, billions of investment and hundred thousands of skilled work forces.

So here is the list of top motorcycle manufacturers in Pakistan. Atlas Honda Suzuki Pakistan Motorcycles Dawood Yamaha Group Sohrab Motorcycles Habib Motorcycles Pvt Ltd Ghani Automobile Industries

HISTORY OF SUZUKI In 1909, Michio Suzuki (1887–1982) founded the Suzuki Loom Works in the small seacoast village of Hamamatsu, Japan. Business boomed as Suzuki built weaving looms for Japan's giant silk industry.

In 1929, Michio Suzuki invented a new type of weaving machine, which was exported overseas. The company's first 30 years focused on the development and production of these machines.

Despite the success of his looms, Suzuki believed that his company would benefit from diversification and he began to look at other products. Based on consumer demand, he decided that building a small car would be the most practical new venture.

The project began in 1937, and within two years Suzuki had completed several compact prototype cars.

With the onset of World War II, production plans for Suzuki's new vehicles were halted when the government declared civilian passenger cars a "non-essential commodity."

Faced with this colossal challenge, Suzuki's returned to the production of motor vehicles. After the war, the Japanese had a great need for affordable, reliable personal transportation.

A number of firms began offering "clip-on" gas-powered engines that could be attached to the typical bicycle. Suzuki's first two-wheeled vehicle was a bicycle fitted with a motor called, the "Power Free."

HISTORY OF SUZUKI IN PAKISTAN

The Company was incorporated as a public Pak Suzuki Motor Company Limited was formed as a joint venture between Pakistan Automobile Corporation and Suzuki Motor Corporation (SMC) - Japan.

Pak Suzuki is pioneer in Automobile Business having the most modern and the largest manufacturing facilities in Pakistan with an Annual production capacity of 150,000 vehicles. The vehicles produced include cars, small vans, Pickups, Cargo vans and Motorcycle. Pak Suzuki holds more than 50% Market Share.

Following the aggressive policy of Indigenization, Suzuki vehicles have a healthy local content up to 72%. This was made possible by strong support of vendors.

Pak Suzuki has the largest Dealers network offering 3S (Sales, Service and Spare Parts) facilities across Pakistan.

Caring for the Environment Pak Suzuki was pioneer in introduction of Factory fitted CNG vehicles.

Pak Suzuki always endeavors to go aggressively for the sound development of the society by increasing motorization, industrialization and creating job opportunities thus improving the people’s living standards with the combined efforts of all the dealers, vendors and Pak Suzuki employees.

VISION To be recognized as a leading organization that values

Customers’ needs and provides motoring solutions with strong customer care.

MISSION Strive to market value packed products that meet customers’

expectations. Provide a platform where our stakeholders passionately

contribute, invest and excel. Make valuable contribution to Social development of Pakistan.

COMPANY PROFILE Location: Downstream Industrial Estate of Pakistan Steel, Karachi Total Area: 259,200 m2 (64 acres) Facilities: Press Shop, Welding Shop, Paint Shop, Plastic Shop,

Engine and Transmission Assembly Shop, Final Assembly & Hi-Tech Inspection Shop. The Company has also established a modern Waste Water Treatment Plant as its contribution to the preservation of environment.

Cost: Rs. 15.187 billion Production Capacity (double shift): Car & LCV’s Plant: 150,000 units per annum Motorcycles Plant: 44,000 units per annum

PRODUCT LINE (BIKES) Suzuki sprinter eco 110 cc

Suzuki raider 110cc Suzuki GD110cc

Suzuki GS150cc SUZUKI HAYABUSA

SUZUKI INTRUDER M800 SUZUKI GW250

Product Line (Cars) Kizashi WagonR Swift Cultus Mehran APV Jimny Bolan Cargo Van Ravi Pickup

FOLLOWING PROBLEMS ARE COMMONLY FACED BY PAKISTANI BIKE USERS

1. Front and rear tire flattens after a short period of time.

2. Bikes gives low millage.3. No fuel indicator.4. No engine oil indicator.5. No engine temperature indicator.6. There is no gear switch which didn’t

allow the bike to start if it in gear.

FOLLOWING PROBLEMS ARE COMMONLY FACED BY PAKISTANI BIKE USERS

1. There is no battery indicator2. Most of the bikes are kick start3. There drive chain need replacement

after a short time

4. Poor break performance5. Poor suspension6. There is no side stand switch.

NEW FEATURES / SOLUTIONS 1. Tubeless tires 2. Fuel injector system3. Stylish digital speedometer fully

digital not manual

4. Fuel gauge5. Engine oil indicator6. Engine temperature gauge7. A system that will not allow

the bike to start until bike is not neutral.

NEW FEATURES / SOLUTIONS 1. Ampere meter2. Electric start3. O-ring drive chain4. Front and rear disc break5. There will be mono shock at

rear

6. Side stand switch7. Alloy rims

OUR PRODUCT

Detailed SpecificationSpeedometer-------- DigitalTachometer----------- YesTachometer Type----- AnalogueShift Light--------------- YesElectric Start------------ YesTrip meter--------------- Yes No Of Trip meters------ 2 Trip meter Type-------- DigitalLow Fuel Indicator----- Yes Low Oil Indicator------- Yes Low Battery Indicator- yesColors Red, Black & Blue Fuel Gauge

Engine Displacement (cc)----- 125 Cylinders----------------- 1 Bore (mm) 63 Stroke (mm) 47 Valves Per Cylinder---- 4 Fuel Delivery System-- Fuel Injection Fuel Type----------------- Petrol Ignition -------------------Digital ECU Based Spark Plugs (Per Cylinder) 1 Cooling System---------- Air cool Transmission Gearbox-- Type Manual No Of Gears---------------- 6 Transmission

Wheels & Tyres Wheel Size (inches)------------------ 17 Front Tyre ------------------------------100/80-17 Rear Tyre -------------------------------130/70-17 Tubeless Tyres------------------------- Yes Alloy Wheels--------------------------- Yes

Dimensions & Weight Weight (Kg)--------------------- ----138 Overall Length (mm) --------------2000 Overall Width (mm) ---------------825 Overall Height (mm)--------- ------1120 Wheelbase (mm)------------- ------1305 Ground Clearance (mm)-------- --190 Seat Height (mm)----------- --------1120 Fuel Efficiency & Range Fuel Tank Capacity (Liters)--- -----13 Reserve Fuel Capacity (Liters)-- --2 Fuel Efficiency Overall (Kmpl)---- 40 Chassis & Suspension Chassis Type--------------------------- Diamond Type Front Suspension--------------------- Telescopic Fork Rear Suspension----------------------- Mono Suspension Braking Brake Type------------------------------- Disc Front Disc-------------------------------- Yes Front Disc/Drum Size (mm) ----------276 Rear Disc ---------------------------------Yes Rear Disc/Drum Size (mm)----------- 220

SWOT ANALYSIS Strengths• Strong Financial Strengths • One of Highest Market Share • Low Price Vehicles/Bikes • Resale of Local Assembled Cars/Bikes • Large Distribution Channels • Rising per capita income with changing demographic

distribution • Highly Innovative and deep product line • Highly maintained supply chain • Well Managed and highly competitive staff • Well defined and bureaucratic organizational structure • Complete understanding between Distributors • Easy availability of spare parts

Weakness: • Scarcity of raw material • Lack of coordination and linkage with Government/semi government

supporting bodies • Less focus on Looks and Design • Less Technical Training Institutes • Less distribution channels in sub urban areas Opportunities: • Increasing Demand for Cars /Bikes • Demand for Hybrid technology is increasing • Large Market size to operate • Global spare part market Threats: • Tough Competitors like Toyota and Honda• Foreign Investment and setup production facilities • Smuggling of Auto Parts • Inflation rate • Heavy Taxes • Competition from cheaper imported cars • Increase in Fuel Prices

TOWS Analysis

A TOWS analysis involves the same basic process of listing strengths, weaknesses, opportunities and threats as a SWOT analysis, but with a TOWS analysis, threats and opportunities are examined first and weaknesses and strengths are examined last.

TOWS Analysis Strength-Opportunities (S-O) Being one of the largest distribution network and good financial

strengths, Suzuki can import the hybrid technology from its parent company to grab the opportunities in the market. Maximize market share by producing more cars per year. Develop more efficient engines and hybrid technology to gain competitive advantage.

Strength-Threats (S-T) Suzuki may overcome the threats by utilizing the strengths like

increasing fuel prices, taxes, and the competition by local manufacturers. Maintain quality in affordable price, will help to compete with competitors and imported cars.

TOWS Analysis Weakness-Opportunities (W-O) In order to avail the opportunities, Suzuki need to develop the

strategies that will reduce the weaknesses and eventually will place the organization in a better position to grab the opportunities.

Weakness-Threats (W-T) Suzuki must focus on both weakness and threats as soon as possible

because both have negative effects on company. Focus on weaknesses by categorizing the weaknesses and threats. More alarming ones should be considered serious and should be reduced immediately. Enhance distribution to avoid threats by imported second hand cars.

PEST ANALYSIS Uncontrollable environment are those external factors which can prohibit

us or can create hurdles between us and our business. It is also called pest analyses which are as follow:

Political Environment Government at all levels is an important component of the general

environment. No organization or industry is immune from the various decisions made by the government.

Due to inconsistent policies and lack of political stability, industry is being affected negatively. But it has been observed that political maturity is growing from last 5 to 8 years which will be good sing for economy.

PEST ANALYSIS Economic Environment Pakistan, an impoverished and underdeveloped country, has suffered from

decades of internal political disputes and external ongoing conflict with neighboring countries.

However, IMF approved the government policies, encourages by different foreign assistance and renewed access to global market since 2001.By following these policies government succeed to reverse the situation of economy during last three years.

Current government has been able to win the interest of foreign investment in the country and has managed to keep the inflation under control i-e 2.11% in April 2015.

PEST ANALYSIS Socio-Culture Environment Pakistan has strong culture background and it has been follow in some particular region of Pakistan strictly. But with the passage of time it is going to change.

If we talk about the transportation source in Pakistan, People use buses, pickups etc. for journey. They also have their own as well e.g. cycle, bikes etc. and lots of people are pedestrian.

But now the people who haven’t any source of transportation they also want something for their convenience because they want to save their time as much as they can. People want to use such vehicle which looks beautiful and also affordable.

As increasing per capita income lifestyles of persons is changing which is good for industry growth.

PEST ANALYSIS Society holds a global or summary belief that an organization is proper

and worthy of support. Suzuki takes pride in being the most trusted name all over Pakistan.

Its vehicles are regarded as a status symbol. It is the guiding principles of Suzuki which has strongly developed trust in the people.

Suzuki respects the culture and customs of every nation and community and contributes to the economic and social development through corporate activities in the communities.

Suzuki believes in honoring the language and spirit of the law of every nation and undertakes open and fair corporate activities to be a good corporate citizen of the world.

PEST ANALYSIS Technological Environment Technology is of particular importance because it has been and continues

to be the main source of increases in productivity. Despite changes in the means used to motivate people and the variety of

incentives that have been offered to stimulated production, the resulting increase has been negligible when compared to that of created by technology.

Suzuki being the most popular auto industry in Pakistan is focusing on the latest technological advancements in order to manufacture the products according to the customer wants and to lead the industry.

BCG MATRIX The BCG growth share matrix is a PORTFOLIO PLANNING MODEL developed by

Bruce Henderson of the Boston Consulting Group in the early 1970’s. It is based on the observation that a company’s business unit can be

classified in to four categories based on combination of market growth and Market shares relative to the largest competitor, hence the name “growth-share”.

BCG matrix is used for developing market strategies and performing marketing analysis is related to portfolio planning and analysis.

BCG MATRIX

• In our model of BCG for Pak Suzuki we have placed our product in question mark as it is assumed that it will have high growth and low market share.

• Because the product is new in the market it has less market share and by meeting the customer’s demands and keeping the product up to the mark, we can manage to move our product from question mark to cash cow or even stars.

SEGMENT, TARGET, POSITIONING (STP) Segment Middle-class people who want a bike that is stylish and gives a good

mileage with some exciting additional features based on latest technology.

Target Group Upper middle, middle and lower middle class youth from the age bracket

of 18-35 years. Positioning Positioning of a product is the most essential part of the success. If a

company can position it right in customers mind then only company has to launch the product it will gain huge success. Positioning of GS125R is as Powerful bike for high speed and performance.

MARKETING MIX Product Product is anything that can satisfy human needs and wants. The product

is a combination of tangible and intangible aspects of the products offered by the manufacturer to the customers.

It can be defined as a bundle of satisfactions and dissatisfactions offered by company to the customers at a point of time.

product GS125R with more speed, latest technology in following colors, Red, Blue, Black.

MARKETING MIX Additional/Differentiated features of GS125R are as follows, Tubeless

tires, Fuel injector system, Stylish digital speedometer fully digital not manual , Fuel gauge , Engine oil indicator , Engine temperature gauge , A system that will not allow the bike to start until bike is not neutral. , Ampere meter , Electric start, O-ring drive chain , Front and rear disc break , There will be mono shock at rear , Side stand switch, Alloy rims .

MARKETING MIX Price The price is the amount a customer pays for the product. It is fixed

after considering various factors such as market share, competition, material costs, product identity and the customer's perceived value of the product.

The price decision is very sensitive and for that special care is to be taken to get the competitive edge.

GS125R is priced at Rs 145,000 while keeping the quality and competitive prices in mind. We have priced it a little higher than our competitor’s price just because we offer much better specifications along with latest technologies.

MARKETING MIX Promotion For Promotion of Pakistan Suzuki

automobiles, we will use different media T.V, Radio, Test Drive, Sponsorship, Newspaper, road shows etc. We will aware our target audience through above sources and will try to penetrate our product in the market as soon as possible.

Placement The distribution channels of Pak

Suzuki shown in the Diagram. We are proud of our distribution system as best around the country.

MARKET ANALYSIS

Porter’s 5 Forces

Potential New Entrants Bargaining Power of Buyers Bargaining Power of Suppliers. Threat of Substitutes Industry Competition/Rivalry between Competitors

Potential New Entrants

In the New Entrant category of Porter's 5 forces, we can see that it would be tremendously difficult for another bike manufacturer to enter into the market.

The rate at which the industry is changing does not allow for new entrants to come into the market very easily, and the cash investment for a new firm to produce massive quantities of bikes is in the billions

Bargaining Power of Buyers Competition is so strong between auto makers and dealers, consumers will

often do research on a bike before making a purchase.

The high quantity of dealer’s forces prices to be very negotiable and the consumer often knows exactly what the dealer paid for the bike. Thus, consumers are in an enviable position

For companies like Pak Suzuki to continue to compete, the quality of their offerings must be excellent, dealership service must be strong, and they must focus on offering consumers a product with high durability and value.

Bargaining Power of Suppliers

Pak Suzuki’s suppliers have been known to be some of the most dedicated suppliers in the industry.

By virtue of the Just-In-Time production concept pioneered by Pak Suzuki, the auto industry itself has seen a very positive relationship develop between its suppliers and producers.

Pak Suzuki, by reducing its part inventory, has been able to speed up production costs, save money by not letting parts sit on the shelf, and improve its relationship with parts suppliers, which rely on Pak Suzuki for their revenue.

Threat of Substitutes

Consumer preference is changing (Mini cars are being replaced by compact or midsized cars as well as low CC bikes are showing less growth as compare to higher engine capacity/CC)

Setting up integrated manufacturing facilities may require higher capital investments than establishing assembly facilities

Pakistan is also likely to increasingly serve as the sourcing base for global automotive companies, and automotive exports are likely to gain increasing importance over the medium term.

Industry Competition/Rivalry between Competitors

Industry competition between auto makers is fierce. The typical consumer, when searching for a particular

vehicle/Bike is bombarded by choices. So in this type of environment it is very difficult to

survive without offering a thing which is of great value to customer and easily available to them.

ANSOFF MATRIX

Market Penetration Maintain or increase the market share of current products Increase usage by existing customers Restructure a mature market by driving out competitors Secure dominance of growth marketsPak Suzuki is of the strategy to penetrate more deeply in the market which will make it to derive the competition by using promotions, aggressive advertisements, sponsoring events etc.

Market Development

Market development is the name given to a growth strategy where the business seeks to sell its existing products into new markets.

There are many possible ways of approaching this strategy, like new geographical markets; for example exporting the product to a new country

Pak Suzuki started to export its Ravi to Nepal and Bangladesh in 1997.

More risky than market penetration

Product Development

Product development is the name given to a growth strategy where a business aims to introduce new products into existing markets.

This strategy may require the development of new competencies and requires the business to develop modified products which can appeal to existing markets.

Our new product GS125R

Diversification

Diversification is the name given to the growth strategy where a business markets new products in new markets.

This is an inherently more risk strategy because the business is moving into markets in which it has little or no experience.

Pak Suzuki has been involved in related diversification offering out board motors of 2 stroke and 4 stroke to the Pakistani market.

GE MODEL

Market attractiveness The attractiveness of a market is demonstrated by how

beneficial it is for a company to enter and compete within this market.

It is based on various factors; the size of the market and the rate at which it is growing, the possibility of profit, the number of competitors within the industry and their weaknesses.

Business/competitive strength This helps decide whether a company is competent enough to

compete in the given market(s). Its assets and holdings, the share it company holds in the

market and the development of this share, the position in the market of its brand and the loyalty of customers to this brand, its creativeness in coming up with new and improved products and in dealing with the fluctuating situations of the market

THANK YOU