Report on Atlas Honda free essay sample

Departmental Head KUBS Karachi Dear Mr. Zaki Subject: Submission of Term Report 2013 Here is the report that you asked us to prepare during the project development. The report contains in detail the strategies employed by Atlas Honda Ltd. It contains the macro-environmental, company and competitor, Micro-environmental and internal, strategic analysis and strategic implementation of Atlas Honda. It has been a privilege to work on this assignment and have put in our utmost effort in order to prepare a comprehensive report on the topic. Should you have any queries concerning the report, we will be happy to discuss them with you. Thank You. Sincerely, Nabil Ahad Khan RESEARCH HYPOTHESIS Ho: Atlas Honda should continue product improvement at low cost HA: Atlas Honda should not continue product improvement at low cost Ho: Atlas Honda should go for backward integration HA: Atlas Honda should not go for backward integration Ho: Atlas Honda should adopt proactive approach HA: Atlas Honda should not adopt proactive approach PAKISTAN’S MOTORCYCLE INDUSTRY AN OVERVIEW In Pakistan, motorcycle assembly started in 1964 when the local Atlas Group started assembling Honda motorcycles in Karachi. We will write a custom essay sample on Report on Atlas Honda or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Currently in addition to Honda, the other Japanese brands being manufactured in Pakistan include Yamaha and Suzuki. The most successful design among the Japanese brands has been the Honda 70CC which enjoys tremendous popularity on account of its fuel economy, resale and low maintenance features. The Pakistan Automotive Manufacturers Association (PAMA) was formed in 1984. Initially three motorcycle OEMs namely Atlas Honda, Dawood Yamaha and Suzuki Motorcycles Pakistan became PAMA members. The other founding members of PAMA were OEMs manufacturing Passenger Cars, Tractors, Light Commercial Vehicles (LCV’s), Truck Bus manufacturers etc. In the 1990’s, three more OEMs joined PAMA, these were, Fateh Motors, Pakistan Cycle Industrial Cooperative Society Limited and Siagol Qingqi Motors Ltd (subsequently renamed Qingqi Motors Ltd. ). The Non-Japanese OEMs entered the Pakistani market in the late 1990’s by introducing clones of the popular Honda 70CC motorcycle using critical parts and components imported from China. For the basic frame and other low tech parts they used the local vendors (part suppliers) whose development had been facilitated by the Government of Pakistan’s indigenization / localization programs for the motorcycle industry. Other than the original 3 Non-Japanese OEMs who became PAMA members, the new entrants preferred to form their own trade bodies and as such are referred to in this study as Non-PAMA members. Presently there are 43 OEMs producing various brands of motorcycles. Out of these 6 are PAMA members and the remaining 37 Non-PAMA members. The Engineering Development Board (EDB) issues licenses to the OEMs for undertaking assembly operations. The Pakistan Standards Quality Control Authority (PSQCA) is responsible for monitoring the production of quality products by the OEMs. As such both the EDB and the PSQCA play an important role in the establishment, licensing and monitoring of the technical operations of the motorcycle assemblers. Figure -4 Market Shares of PAMA NON-PAMA Members Market shares of the major OEMs are shown in Table 4. Table – 4 | |Market Shares of Major OEMs | |S # |OEM Brand |Member of PAMA or |Units |Market Share % |Units |Market Share %| | | |Non-PAMA |(Jan – Dec 2011) | |(Jan – April 2012) | | |1. |Atlas Honda |PAMA |251,232 |55. 0 |96,943 |56. 0 | |2. Dawood Yamaha |PAMA |48,477 |11. 0 |15,515 |5. 0 | |3. |Hero |PAMA |27,725 |6. 0 |7,810 |5. 0 | |4. |Star |NON-PAMA |20,283 |4. 0 |4,600 |3. 0 | |5. |Pak Hero |NON-PAMA |18,982 |4. 0 |8,147 |5. 0 | |6. |Pak Suzuki |PAMA |16,92 6 |4. 0 |4,997 |1. 0 | |7. Sohrab |PAMA |13,390 |3. 0 |4,292 |2. 0 | |8. |Metro |NON-PAMA |4,075 |1. 0 |719 |lt; 1. 0 | |9. |Others |NON-PAMA |52,142 |12. 0 |30,116 |17. 0 | | |Total | |453,231 |100. 0 |172,739 |100. 0 | | | |PAMA |357,750 |79. 0 |129,557 |75. | | | |Top Four NON-PAMA |43,339 |10. 0 |13,466 |8. 0 | | | |Balance | |11. 0 | |17. 0 | |Source: Provincial Excise Taxation Departments of Sindh Punjab | Table 4 shows that in 2006, the PAMA members had 79% market share, the top 4 Non-PAMA OEMs held another 10%, while the balance 11% market share was split between 33 Non-PAMA OEMs! This large number of manufacturers with small market shares seems to indicate that the industry is in for a major shake down with a number of smaller OEMs either closing or merging. Although the number of assemblers has increased from 3 to 43 the PAMA members continue to hold the dominant market position with 79% of the market share with Atlas Honda alone accounting for 55% of all new motorcycles sold in Pakistan. With the increase in production, the prices of motorcycles have come down considerably. In 1999 – 2000, the price of a Honda 70CC motorcycle was Rs. 68,000. The same year the Non-PAMA OEMs supplied 70CC clones for Rs. 50 – 52,000. In order to compete with the Non-PAMA OEM products, Atlas Honda and other PAMA members considerably reduced prices. As a result of these price reductions, the Honda 70CC is currently selling at Rs. 54,000, Non-PAMA member clones are available in the Rs. 35 – 42,000 range. If this trend in prices continues, the market is likely to expand further. CURRENT SCENARIO After witnessing a deceleration in motorcycle sales growth last year, the year under review witnesses a growth in motorcycle sales. This was possible due to overall competitive pricing, despite the fact that there was a consistent rise in general commodity price in the international markets, particularly the steel. This coupled with rising inflation and weakening rupee, led the cost to pass on to the consumer. The installed capacities in almost all the sub-sectors have continued to increase, indicating a strong commitment on part of the strategic investors to the country and the long term prospects of the industry. From an installed capacity of 1. 1 million units in 2005-06, the industry expanded with a capacity to 2. million units till 2011-13. The motorcycle sector experienced an overall growth in sales of around 30 percent over the last five year. However, the industry is being held back by certain factors. First, the unorganized sector is taking unfair price advantage as it is flouting the governments efforts to create a level playing field by avoiding taxes and governments levies. Therefore, this is posing u nfair competition. Secondly, the ever-increasing cost of inputs is pushing up production costs exponentially. This may be a hindrance to the industrys aspiration to become export-oriented. COMPANY BACKGROUND Atlas Honda Limited is a joint venture between the Atlas Group and Honda Motor Co. , Japan. The merger of Panjdarya Limited and Atlas Autos Ltd. created the company in 1988. The Atlas Group established both these motorcycle-manufacturing concerns. In addition, a third concern, Atlas Epak Ltd. was taken over by the Government of Bangladesh. Atlas Honda Limited manufactures and markets Honda motorcycles in collaboration with Honda Motor Company. The Company also manufactures various hi-tech components in-house in collaboration with leading parts manufacturers like Showa Atsumitech, Nippon Denso and Toyo Denso. Honda motorcycles are by far the largest selling motorcycles in the country with an unmatched reputation for high quality, reliability and after-sales-service. Atlas has undertaken to develop local manufacturing capabilities to the highest, economically feasible level. While a major role in localization has been assigned to vendor industries, Atlas has the country’s largest in-house manufacturing capability at its Karachi and Sheikhupura plants. To support the production facilities, the company has established an RD wing and tool making facilities through CDA CAM which are growing rapidly in size and function as the company expands. Atlas has managed to execute 14 Joint Venture/Technical Assistance Agreements between local vendors and foreign manufacturers for transfer of technology. Besides, Atlas has directly executed 5 Joint Venture/Technical Assistance Agreements other than Honda. Atlas management is striving to modernize company operations by adapting applicable aspects of research and theory and more specifically, Honda’s unique philosophy of hard/soft technologies to the realities of Pakistani conditions. Company management structure, systems and processes are changed according to the demands of the customer, growth and new technology. Efforts are being made to develop participation at all levels of personnel in decision-making and a substantial and effective delegation has been established at levels where applicable. Various participation programs such as ‘Ala Mayar’ Quality Circles movement, launched in 1985, are strongly encouraged to allow constructive self-expression and teamwork. Atlas Honda is playing a pioneering role in creating conditions for easy and confident use of motorcycles all over the country. A vast and growing network of over 1600 motorcycles sales service and spare parts dealers has been established. In order to back up this system, Atlas has set up Technical Training Centers in Karachi and Lahore which provide several courses of varying duration and complexity for motorcycle mechanics and users each year. Mobile training facilities take the latest know-how, technology and maintenance of motorcycles to major rural and urban centers around the country. VISION To be a market leader in the motorcycle industry, and emerge as a globally competitive center of production and exports. MISSION A dynamic, profitable and growth oriented company through market leadership, maximizing export and excellence in quality and service; to ensure attractive returns to equity holders; reward employees according to their ability and performance; to foster a network of researchers and engineers ensuing unique contributions to the development of the industry; customer satisfaction and protection of the environment by producing emission friendly green products and to remain a good corporate citizen fulfilling its social responsibilities in all respects. Types of Products Manufactured DIFFERENT VARIANTS |CD 70 |[pic] | |Honda CD 70 is the No. 1 choice in motorcycles. In addition to its |[pic] | |established superiority in terms of great speed and fuel economy, | | |the Honda CD 70 is presented with special features. The new | | |attractively designed CD 70 is right there at the top, with an | | |aerodynamic shape, super econo-power, a smoke-free 4-Stroke engine | | |and the special Honda 12-volt CDI technology. | |The new eye-catching graphics, front and rear mud-flaps, comfortable| | |seat and the new utility box have made Honda CD 70 an ideal | | |combination of elegance and durability. Because of its high resale | | |value, Honda CD 70 is an asset in your life. Its excellent petrol | | |average makes it greatly economical, and its easily available spare | | |parts ensure trouble-free companionship. | | |CD 100 |[pic] | |Quality, Performance, Speed, Economy Petrol and Re-sale Value define |[pic] | |Honda Motorcycles. All these have managed to successfully bag your | | |trust on the New Honda CD100. It is a stunning result of advanced | | |Japanese technology and right up there as an outstanding performer | | |representing all the qualities that make Honda motorcycles so | | |special. | |CG 125 |[pic] | |New Honda CG 125 is the ideal combination of elegance and |[pic] | |power. Its speed and performance symbolizes the true essence | | |of modern life. | | | | |The 125 cc 4-stroke engine generates 11-Horse Power with low | | |fuel consumption. It is ideal for high speed, long runs and | | |rough pathways. | | | | |Honda CG125 has a CDI Ignition System and a 12-volt battery | | |(instead of 6-volt). The headlight and indicators are | | |brighter, with an easy starting-up of the engine. | | Industry Product Life Cycle 70 CC ? 100CC Up to 175CC MACRO- ENVIRONMENTAL INDUSTRY ATTRACTIVENESS The Five Competitive Forces ANALYSIS OF 2 WHEELER INDUSTRY [pic] ASSESMENT OF INDUSTRY ATTRACTIVENESS THREAT OF NEW ENTRANTS LowModerateHigh Threat of new enter is 4 out of the scale of 10 and is low as ? Capital requirements is high and to establish such industry large financial resources are needed in order to compete can deter new entrants. Due to the capital requirement, anly few large brands exist in the market which are Honda itself, Yamaha and Suzuki. Large capital requirements are required for setting up distribution channels and heavy advertising for new entrants, to compete against major well-established brands. Hence, threat from new entrants is minimum. ? Major players enjoy significant economies of scale and have strong brand identity. ? Large capital requirements are required for setting up distribution channels as the motor bikes has to be distributed in whole Pakistan. ? Government restriction also plays a important part as taxes are high on every vehicles sold in Pakistan. Threat of Entrants | |   |Yes |Moderate |No | | |(+) | |(-) | | | | | | |   |   |   |   | | Do large firms have a cost or performance advantage in your segment of the industry? | |   | | | |? | | | | Are there any propriety product differences in your industry? |   |? | | | Are there any established brand identities in your industry? |?    |   | | Do your customers incur any significant costs in switching suppliers? |   |  ? | | | Is a lot of capital needed to enter your industry? |  ? |   | | | Does the newcomer to your industry face difficulty in accessing distribution channels? | |  ? | | | | | | | |Does experience help you to continuously lower costs? |   |? |   | |Does the newcomer have any problems in obtaining the necessary skilled people, materials or|? |   | | |supplies? | | | | | | | | |Does your product or service have any proprietary features that give you lower costs? |  ? |   | | | | | | | |Are there any licenses or qualifications that are difficult to obtain? |   |   |? | |Can the newcomer expect strong retaliation on entering the market? | |   |  ? | |Is serviceable used equipment expensive? |  ? |   |   | |Total |6 |4 |2 | BARGAINING POWER OF BUYERS LowModerateHigh Bargaining power of buyer is 4 out of the scale of 10 and is low as ? Generally, prices of bikes are fixed by the company and retailers have almost fixed profit margins. Therefore, they are not able to bargain for proper discounts. ? Most of the consumers are brand loyal, while few consumers has become increasingly price conscious and are therefore, not very brand loyal. ? The bikes manufacture by different companies can be differentiated in terms of their horse power, comforts and mileage. |2. Bargaining Power of Buyers | |(To what extent are your customers locked into you? | | | |   |Yes |Moderate |No | | |(+) | |(-) | | | | | | |   |   |   |   | |Are there a large number of buyers relative to the number of firms in the business? |? | | | | | | | | |Do you have a large number of customers, each with relatively small purchases? |? | | |Does the customer face any significant costs in switching suppliers? | | | | |Does the buyer need a lot of important information? |? | | | |Is the buyer aware of the need for additional information? | | |? | |Is there anything that prevents your customer from taking your function in-house? | |? | | | | | | | |Your customers are not highly sensitive to price | | |? | |Your product is unique to some degree or has accepted branding |? | | |Your customers businesses are profitable | |? | | |You provide incentives to the decision makers | | |? | |   |   |   |   | |Total |4 |3 |3 | THREAT OF SUBSTITUTES LowModerateHigh Threat of substitutes is 3 out of the scale of 10 and is low as ? Substitutes have performance or cost differences as cars, cycles, and public transport have different prices and convenience. |3. Threat of Substitutes | |(some other product or service that performs the same job as yours) | | | |   |Yes |Moderate |No | | |(+) | |(-) | | | | | | | |   |   |   | |Substitutes have performance limitations that do not completely offset their lowest |? | | | |price. Or, their performance is not justified by their higher price. | | | | | | | | | |The customer will incur costs in switching to a substitute. |? | | | |Your customer has no real substitute. |? | | | |Your customer is not likely to substitute. |? | | |   |   |   |   | |Total |4 | | | BARGAINING POWER OF SUPPLIERS LowModerateHigh Bargaining power of Suppliers is 7 out of the scale of 10 and is high as ? The vendors that make parts of bike are few in numbers and there is no more substitution for the vendors as imported parts are more expensive then making local parts. ? Switching cost of supplier is high as the company makes long term contracts with the vendors and suppliers of parts like batteries. And vendo rs make parts on special order, size, power and design of bike for particular company |4. Bargaining Power of Suppliers | | | |   |Yes |Moderate |No | | |(+) | |(-) | | | | | | |   |   |   |   | |My inputs (materials, labor, supplies, services etc. ) are standard rather than unique or | | |? | |differentiated. | | | | | | | | |I can switch between suppliers quickly and cheaply. | |? | | |I can substitute inputs readily. | |? | | |I have many potential suppliers. | | |? | |My business is important to my suppliers. |? | | | |My suppliers would find it difficult to enter my business or my customers would find it difficult to|? | | | |perform my function in-house. | | | | | | | | | |My cost of purchases has no significant influence on my overall costs. | | |? |   |   |   |   | |Total |2 | 2 |3 | RIVALRY AMONG EXISTING COMPETITORS LowModerateHigh Rivalry among existing competitors is 9 out of the scale of 10 and is high as ? There are many companies that produces motor bike which include major brands like Honda, Yamaha and Suzuki but also bikes from China whi ch are assemble here and sold with local names. And all trying to increase their market share. ? Imports of bikes from China. As there are around 24 local brands bikes from China which are assemble here and sold with local names ? From the start of 2009, the demand for bikes has fallen 21% from the previous year. So Industry growth is slow. |5. Determinants of Rivalry among Existing Competitors | |   |   |Yes |  Moderate |No | | | |(+) | |(-) | |   | | | | | |   |   |   |   |   | |1)|The industry is growing rapidly. |? | | | |2)|The industry is not cyclical with intermittent overcapacity. | |? | | |3)|Fixed costs of the business are a relatively low portion of total costs. | | |? | |4)|There are significant product differences and brand identities between the competitors. |? | | | |5)|The competitors are diversified rather than specialized | | |? |6)|It would not be hard to get out of this business because there are no specialized skills and | |? | | | |facilities or long term contract commitments, etc. | | | | |   | | | | | |7)|My customers would incur significant costs in switching to a competitor. | | |? | |8)|My product is complex and requires a detailed understanding on the part of my customer | | |? | |   | | | | |9)|My competitors are all of approximately the same size as I am. | | |? | |   |à ‚   |   |   |   | |   |Total |2 |2 |5 | OVERALL ATTRACTIVENESS | |Summarized Worksheet | |   |   |Favorable |Moderate |Unfavorable | | | | | | | |1) | Threat of new entrants |?    | | | | | | | | | 2) |Bargaining Power of Buyers |? |   |   | | | | | | | | | | | | | |3) |Threat of Substitutes |? |   |   | | | | | | | |4) |Bargaining Power of Suppliers |   | |? | | | | | | | | | | | | |5) |Intensity of Rivalry among Competitors | |   |  ? | | | | | | | | | | | | | |   |Overall Rating |3 |0 |2 | FINAL ANALYSIS The Porters 5 forces model shows that the motor vehicle is a favorable industry as Threat of new entrance, Bargaining power of buyer and Threat of substitute are favourable for the industry as there are substitutes for the motor bikes but the substitutes are expensive like car or there is large difference in performance like cycle or public transport. The Bargaining power of buyer is low as prices are fixed by the company and capital requirement for entering into this business is high due to which threat for entry is favourable for this industry. Where as Intensity of Rivalry among Competitors and Bargaining Power of Suppliers is unfavorable as rivals are of same size and imports of bikes and their parts is now common in this industry. The suppliers are few so it’s unfavourable. INDUSTRY DRIVING FORCES Social-Environmental [pic] PEST ANALYSIS Political Nearly 80-86% of the raw materials required for manufacturing motorcycles in Pakistan are imported, so costs are also exposed to currency fluctuations risk. Any devaluation of the Rupee currency will make the raw materials much more expensive making it unfeasible for the Japanese motorcycle manufacturers to maintain their quality standards. Government policies regarding local manufacturing also affect the whole industry. Local manufacturing is favored by government. Hence the policy has shown better than expected results. Economic The current improving economic scenario of Pakistan is acting as a catalyst by further giving acceleration to the currently already booming motorcycle industry. The improving economic scenario especially on the agriculture side is helping the motorcycle manufactures increasing their sales further. The improved forecasted GDP estimates and a good crop expected during the following years is going to give a boost to the motorcycle industry, as its rural sales are growing above 50% and constitute the major percentile of revenue for the motorcycle industry. The main sources of income for most of the farmers are their crops and good crops means for motorcycle manufacturer’s good motorcycle sales. Therefore, the growth on the production of food crops (which accounts for 65 to 70 percent of the cropped area) and all the major crops of Pakistan which are also exported are going to earn a fairly large amount of foreign exchange. Thus, contributing a foremost part in GDP and GNP and meaning future growth in motorcycle industry. Also, employment in motorcycle industry has increased substantially, as new capacities and suppliers have come on line. Social Social factors also play a significant and key role in this industry as well established brands are taken on the advice of friends, family and relatives. They are the major influencers in this industry. Technological New and new features are being added by new motorcycle manufacturers to entice the customers towards them. Existing manufacturers, who need to stay ahead of the game, must have to upgrade their facilities and get state of the art equipment to retain their customers by innovating and giving their motorbikes the edge and value for money. On the other hand, a manufacturer can opt for using cheap technology to sell the final product later at cheaper price (Chinese technology). |External Factor Evaluation Matrix | Atlas Honda | |KEY EXTERNAL FACTORS |Weights |Rating |Weighted Score | |OPPORTUNITIES | | | | |1. Growing motorcycle market – Estimated bikes 850,000 by the end of |0. 2 |4 |0. 8 | |2011-12 compared to 750,000 in 2010-11 | | | | |2. Improving economic scenario of Pakistan by contributing more through |0. 1 |3 |0. 3 | |increased selling. Growth in Agriculture sector with good crop expected | | | | |next year. | | | | |3. Customers realizing quality matters, as problems are already cropping up|0. 05 |3 |0. 15 | |in new entrants models | | | | |4. Newer segments introduced with entry of new models, design, which still |0. 1 |2 |0. 2 | |have huge potential for growth | | | | |5. Karachi, a city which has tremendous potential for growth and |0. 1 |3 |0. | |profitability. | | | | |6. New Export Markets like India which has an annual market size of 50 |0. 1 |2 |0. 2 | |million motorcycles per annum opening due to WTO Agreement | | | | |THREATS | | | | |1. Many new features inherent in latest bike models increasing customer |0. 1 |3 |0. | |expectations a great deal for the future | | | | |2. WTO (World trade Order) opening local markets for global competition. |0. 1 |1 |0. 1 | |3. Competitors launching newer models with stress on reduced price for our |0. 1 |2 |0. 2 | |price-sensitive economy proving serious threat in near future | | | | |4. Theft and snatching of bikes increasing, reaching more than 2000 b ikes |0. 5 |1 |0. 05 | |in 2012 | | | | |TOTAL |1. 00 | |2. 6 | ANALYSIS: The Company is able to respond adequately to the future opportunities and the threats its faces as its score is 2. 6 which is above the average score of 2. 5. Ground is all set for atlas Honda to explore tremendous opportunities available in the Pakistani market because of it is the virtual ruler of the industry. With over 50% market share reflect the amount of effort that has been put in to reach this point. †¢ This year agricultural output is estimated to grab in good figures which means an opportunity for Honda to capitalize on and increase the sales. †¢ Karachi is an untapped potential market with a population of 2 million and urban population of more than 14 million. †¢ Bad quality of Chinese bikes has made people to think about making a trade off between quality and cost. †¢ Apparently this huge success seems a big achievement but it is a big threat in itself because even 1% drop in market share means a huge loss in terms of volume, as experienced recently with the introduction of Chinese bikes. Theft and bike jacking is a real threat that is arising and a major factor in the popularity of Chinese bikes besides the low cost factor. †¢ Karachi market is averse of buying Honda just because of this single factor. †¢ WTO is creating an alarming situation and it will be a mammoth task to deal with the global competition, it will be very difficult for local manufacturers to cope up with low-cost better quality Indian bikes. Company Competitor Analysis COMPETITOR ANALYSIS The total number of approved Motorcycle assemblers / manufacturers by â€Å"Engineering Development Board† (EDB) in Pakistan has reached to 29, which include three Brands of Japanese origin while remaining 26 being produced indigenously with the help of Chinese technology. The Japanese bike-makers are: |S. No. Japanese Company |Joint Venture in Pakistan | |1. |Honda |Atlas Honda Ltd. | |2. |Yamaha |Dawood Yamaha Ltd. | | | | | |S. No. |Japanese Company |Subsidiary Company in Pakistan | |3. |Suzuki |Suzuki Motorcycle Pakistan Ltd. | Actual Production of these Japan based Bike manufacturers are as follows: |Atlas Honda |Yamaha |Suzuki | |Per day production |900-1000 units |500 units |100 units | |Per month production |30,000 units |15,000 units |3,000 units | |Per yea r production |350,000 units |180,000 units |36,000 units | Competition from Chinese Manufactures Gone are the days when Honda, Yamaha and Suzuki had virtually ruled the Pakistani roads. Time has now changed. Chinese bikes of various names are now running side by side with the Japanese. Following is list of these 29 assemblers / manufacturers (local and imported) and their production capacities approved by EDB. | | |Products Model |Approved Production Capacity | |S. No. Manufacturers | | | |1 |Memon Associates Foundry, Hyderabad. |Super Star SS – 70 |12,000 Units per annum | |2 |Fateh Motors Ltd, Hyderabad. |Hero RF – 70 |15,000 Units per annum | |3 |Shafiq Sons, Hyderabad. |Jinan JN –70 |3,000 Units per annum | |4 |DS Motor, Hyderabad. |Unique UD – 70 |8,000 Units per annum | |5 |N. J. Auto Industries, Karachi. |Super Power SP – 70 |25,000 Units per annum | |6 |Deewan Motorcycles Ltd, Karachi. Star DS – 70 |20,000 Units per annum | |7 |Ahme d Automobile Co, Karachi. |Safari SD – 70 |10,000 Units per annum | |8 |Dawood Yamaha Ltd, Karachi. |Yamaha YB – 100 |50,000 Units per annum | |9 |Sitara Auto Impex, Karachi. |Guangta GT – 70 |3,000 Units per annum | |10 |Suzuki Motorcycles Pakistan Ltd, Karachi. |Sprinter 110 |53,000 Units per annum | |11 |AB Engineering (Pvt. ) Ltd, Karachi. |Laser AB – 70 |25,000 Units per annum | |12 |Raja Auto Cars Ltd, Karachi. Hawk 70 CC |15,000 Units per annum | |13 |Atlas Honda Ltd, Karachi. |Honda CD – 70 |350,000 Units per annum | |14 |Supersonic Corporation, Karachi. |Supersonic SC – 70 |10,000 Units per annum | |15 |Pakistan P. C. I. C. S. Ltd, Lahore. |Sohrab JS – 70 Plus |25,000 Units per annum | |16 |Pak Hero Industries Ltd, Lahore. |Pak Hero PH – 70 |20,000 Units per annum | |17 |United Sales, Lahore. |United US – 70 |20,000 Units per annum | |18 |Excel Industries, Lahore. Excel XL – 70 |5,000 Units per annum | |1 9 |Saigols Qingqi Motors Ltd, Lahore. |QingQi CD – 100 |32,900 Units per annum | |20 |New Asia Automobiles, Lahore. |New Asia NA – 70 |9,000 Units per annum | |21 |Zxmco Pakistan Ltd. |Zxmco ZX – 70 |10,000 Units per annum | |22 |HKF Engineering (Pvt. ) Ltd, Lahore. |Ravi RA – 70 |30,000 Units per annum | |23 |Blue Satr Automobiles, Lahore. |Blue Star CM – 70 |10,000 Units per annum | |24 |Metro Hi –Tec Industries (Pvt. ) Ltd, Lahore. Metro MR – 70 |20,000 Units per annum | |25 |Suleman Auto Industries (Pvt. ) Ltd, Lahore. |Geo 70 CC |10,000 Units per annum | |26 |Super Asia Motors, Gujranwala. |Super Asia SA – 70 |9,000 Units per annum | |27 |Toyo International Motorcycles, Gujranwala. |Toyo TG – 70 |10,000 Units per annum | |28 |Ghani Automobile Industries Ltd, Lahore. |Ghani Gi-125-16 Black |10,000 Units per annum | |29 |King Hero Motorcycle Industries,Gujranwala. |King Hero KH – 70 |10,000 Units per annum | Co mpetitive Positions | | | | | |Model |2008/9 |2009/10 |2010/11 |2011/12 | | |19% |15. 6% |13. 1% |5% | |YAMAHA | | | | | | |4% |2. 7% |2. 5% |1% | |SUZUKI | | | | | | |7% |18. 8% |30. % |30% | |CHINESE | | | | | | |100% |100% |100% |100% | |TOTAL | | | | | KEY SUCCESS FACTORS 1. Quality The major success factor in the Motorcycle industry is of providing quality products at premium prices. The leading motorcycle manufacturers use the latest technology and hence provide products that are very effective and give bikes more resistance against attacks from harmful natural deterioration. The overall motorcycle industry is ISO 9000 CERTIFIED which further provides quality assurance of the motorcycle. The industry can be urther portrayed through the Japanese manufacturers’ implementation of the KAIZAN QUALITY principles. 2. Distribution The distribution system serves as an effective key success factor. Every leading manufacturer follows its own distribution structure. This is mainly because the major manufacturers in the industry believe in establishing a strong distribution network that will distinguish them from competitors. The overall industry mostly follows a company to exclusive dealer network. 3. Pricing and Resale Value Pricing serves as a key success factor for the motorcycle industry. This is because majority of the players (Chinese motorbikes manufacturers) charge low prices. The price acts as a main restraint in final purchase of the motorcycle. Chinese motorbikes manufacturers are in the market with low pricing compared to Japanese manufacturers, in order to attain high market share and high sales growth. However, fact should be remembered that whether a customer pays less or more, he wants value for money too; he wants good quality at all levels. In addition, customer especially those from rural areas, also want high resale value for a bike. 4. Brand image The motorcycle industry relies on the important key success factor which is the brand image in the consumers mind. 5. Research Development Continuous research development is undertaken by the major players in the industry. This gives them an edge over other industry players, by providing new and improved products, designed to meet customer needs and choices, at a faster pace. 6. Durability/reliability The motorcycle durability and reliability stands out as the second main key success factor (after resale value) for the rural market. The customers mainly from low income group and rural areas, who will keep bikes for long period, want durability and reliability assurance. A motorcycle should be durable for longer experience. 7. Cheap maintenance There maintenance expenses of the motor cycle industry are not much high. Maintenance costs are cheap and parts are easily available. 8. Discrimination free environment The overall industry follows a positive work force environment and a well adapted discrimination free organizational culture. 9. Strong asset position The motorcycle industry has a very high strong asset position in the market. This lets them easily acquire latest technology upgrades which are necessary to produce newer and better bikes. The motor cycle industry has a strong asset power in case of investments due to high visible growth. 10. Strong fuel economy It is so economical that the almost whole industry claims says that â€Å"in 1 litre you can drive up to 60 km. This way the industry is offering best fuel average as compared to the rising petrol prices. This economical advantage to the customers attracts mostly rural areas and underdeveloped regions having poor infrastructure, which are facing price rise in petrol as a highly essential threat. 11. Drive Comfort This KSF is in relation to the quality of the motorcycle. Industry is offering attractive drive comfort measures which act as a very essential key success factor. It is an important feature for customers who are traveling on long routes (like sales people); they acquire comfortable drive for smoothness in road grip of the bikes. 12. Training programs: Extensive training programs to customers, dealers, mechanics and other important employees. This relates mainly to the awareness increase program in form of training provided to internal employees as well as external customers. The training increase knowledge about the product features, functionality and necessary safety measures/techniques. The training programs have been very successful in improving customer satisfaction and internal motivation of quality assurance of the product of the motorcycle industry. DRIVING FORCES Economic Forces: The current improving economic scenario of Pakistan is acting as a catalyst by further giving acceleration to the currently already booming motorcycle industry. The improving economic scenario especially on the agriculture side is helping the motorcycle manufactures increasing their sales further. The GDP estimated at 3. % in 2009/2010 while good crop expected during the following years is going to give a boost to the motorcycle industry, as its rural sales are growing above 50% and constitute the major percentile of revenue for the moto rcycle industry. The main sources of income for most of the farmers are their crops and good crops means for motorcycle manufacturer’s good motorcycle sales. Therefore, the growth on the production of food crops (which accounts for 65 to 70 percent of the cropped area) and all the major crops of Pakistan which are also exported are going to earn a fairly large amount of foreign exchange. Thus, contributing a foremost part in GDP and GNP and meaning future growth in motorcycle industry. Also, employment in motorcycle industry has increased substantially, as new capacities and suppliers have come on line. Political Forces: Nearly 80-86% of the raw materials required for manufacturing motorcycles in Pakistan are imported, so costs are also exposed to currency fluctuations risk. Any devaluation of the Rupee currency will make the raw materials much more expensive making it unfeasible for the Japanese motorcycle manufacturers to maintain their quality standards. Government policies regarding local manufacturing also affect the whole industry. Local manufacturing is favored by government. Hence the policy has shown better than expected results. Bargaining Power of Customers: The humongous increase in the variety of motorcycles in the recent years is leading to giving the consumers a great amount of choice and it is getting more and more difficult to entice and prevent the consumers from brand switching. Many new features inherent in latest bike models are increasing the customer expectations a great deal for the future. A competitor launching newer models with stress on reduced price for our price-sensitive economy is also proving as a serious threat in the near future. The price is one of the key issues which is faced by the Japanese motorcycle manufacturers. Bargaining Power of Dealers: As the motorcycle variety is increasing so are the dealers bargaining power. Increased profit margin offering by competition is creating pressure on companies to increase their dealer’s profit margin and start paying more attention to their dealer’s demands. Most companies do have exclusive dealer networks all over the country but other dealers who carry the variety off all the motorcycle manufacturers have to be given some attention so that they promote the manufacturers requirements and interest. Technological Forces: New and new features are being added by new motorcycle manufacturers to entice the customers towards them. Existing manufacturers, who need to stay ahead of the game, must have to upgrade their facilities and get state of the art equipment to retain their customers by innovating and giving their motorbikes the edge and value for money. On the other hand, a manufacturer can opt for using cheap technology to sell the final product later at cheaper price (Chinese technology). Environmental Forces: New government laws regarding environment are a great threat for some of the major players of the market in the near future. The government has imposed a ban on motorcycles, which are of 2 stroke and/or 70 CC or less than 100 CC, to travel on highways, sue to environmental pollution concerns. If the ban is stretched to rural and urban areas as well, it would create negative impact on sales of motorcycles of these categories to those segments which use motorbikes as a mode for traveling for a long distance. MAIN ENTRY BARRIERS High Tec Part Import Companies who would want to produce good quality product will have to import of high technology parts is one of the main factors which increases cost. Very high tech parts are mainly imported from Japan but spare parts and raw materials are also being imported from China as well. I mporting Chinese technology will make thing easier for a company in short run because raw material imported from China is of poor quality which will deteriorate the product quality. Many existing companies are importing raw materials from China and producing low quality products. They are selling these products at cheaper prices to attract the market. The price wars which started 4 years ago are one of the main issues going on between the Chinese assemblers/manufactures and the Japanese manufacturers. The Chinese are offering motorcycles at cheaper prices, taking all the price sensitive consumers away. Chinese bikes are still cheaper by at least Rs. 15,000 as compared to their competitors. †¢ Deletion Program enforced by the Government The government is focusing on localization of spare parts through their deletion program to safe guard the interests of the local manufactures and to reduce the price of the motorcycles, to create more jobs and to reduce the dependence on foreign parts for manufacturing and assembling. This is also done to reduce the assembling done by the Chinese manufacturers and turn it around into manufacturing. To further discourage imports of entire motorcycles the government has enforced 90% of the import duty on entire motorcycle (end product) as known as CBU in duty terms. High tech parts imports though are allowed and have a 30% import duty known as CKD in duty terms. (See on next page). †¢ Local Industry Competition: The total no of motorcycle manufacturers and assemblers have risen to 29 in the recent years leading to a very competitive environment and leading an ongoing continuous war for customers. The Chinese especially in the recent years are challenging the Japanese manufacturers by offering motorcycles at cut throat low prices. †¢ Global Competition Uncertainty Another thing to worry for motorcycle manufacturers is that with effect to the WTO Agreement the Pakistani market will become open for Global Competitors and the likely hood of new entrants mainly India entering the Pakistani market will be very trouble some for them. The Indian motorcycle manufacturers have an enormous variety to offer and their motorcycles quality matches that of the Japanese manufacturers while they maintain the same pricing as of china which is very cheap. The Pakistan market constitutes of only 500,000 motor cycles per year while the India market constitutes of nearly 5 million motor cycles per year. the competitive profile matrix Critical Success Factor | | | | | | |Weight | |KEY INTERNAL FACTORS |Weights |Rating |Score | | |   |   | | |STRENGTHS | | | | |Brand name image |0. 075 |4 |0. 3 | |Market leadership – Enjoying 56% share |0. 1 |4 |0. 4 | |Efficient performance |0. 05 |3 |0. 15 | |Durability/Reliability |0. 05 |4 |0. | |Quality – ISO C ertification |0. 025 |3 |0. 075 | |Easy availability of Spare Parts |0. 025 |3 |0. 075 | |Strong asset position/increased profits with each year |0. 05 |3 |0. 15 | |High resale value |0. 05 |4 |0. 2 | |Low maintenance costs |0. 1 |4 |0. 4 | |Technical expertise – Benchmarking Honda, Japan. |0. 05 |4 |0. | |Well established dealer network |0. 075 |4 |0. 3 | | |0. 025 |3 |0. 075 | |State of art plants and equipment | | | | | | | | | |WEAKNESSES | | | | |Less of a proactive approach to different matters, reactive approach applied more |0. 05 |1 |0. 5 | |No Anti-theft device installed in the bike against snatching dilemma prevalent especially in |0. 05 |2 |0. 1 | |Karachi | | | | |Price higher than prevailing competition in market, which gives customer thoughts about nearest |0. 1 |1 |0. 1 | |substitutes available | | | | |No Credit schemes for distributors/dealers as well as for customers |0. 05 |2 |0. | | | | | | |TOTAL |1. 00 | |2. 87 | Analysis: Company is shown to be as inte rnally strong as it has aggregated score of 2. 87 which is above the normal average of 2. 5. Atlas Honda has been the trend setter in the bike industry and it has developed the path on which others have moved on. The strengths of the company comes naturally because of these factors it has been the market leader for a long time and probably since the inception of bike industry in Pakistan. †¢ The name Honda has a strong positioning in the minds of consumers as synonymous to quality and reliability. Buying a Honda is seen as a paying investment, because of its high resale value. †¢ Technical edge over the competitors †¢ Extensive dealer network that enables easy accessibility for sales and service. †¢ Euro 2 emission standards that are a benchmarking the bike industry of Pakistan. †¢ Honda being the market leader has a communication gap with the consumers and it has a reactive approach rather a proactive approach. †¢ High price of the product †¢ No a nti-theft system installed THE MATCHING STAGE SWOT ANALYSIS Strengths Product †¢ Brand name image †¢ Market leadership – Enjoying 56% share †¢ Efficient performance †¢ Durability/Reliability †¢ Quality – ISO Certification †¢ Easy availability of Spare Parts Strong asset position/increased profits with each year †¢ High resale value †¢ Low maintenance costs †¢ Technical expertise – Benchmarking Honda, Japan. Price †¢ Reasonable price of genuine parts †¢ Cheap maintenance Place †¢ Well established dealer network †¢ Accessibility to major towns and cities; improving delivery to nearly all parts of Pakistan Promotion †¢ Successful Promotional campaigns via TV and Newspaper channels enjoying extensive viewer ship People †¢ Management/non-management work as a single unit, as a team †¢ Highly loyal, committed and motivated employees †¢ Hardworking, experienced and qualified staff †¢ Technological and managerial know-how Job evaluation which is totally performance based, gives staff incentive to work harder each time †¢ Bonuses and reward system for employees †¢ Trainings given to dealers, motorcycle mechanics and users Processing †¢ TQM principles practiced in work processes †¢ Kaizen (continuous improvement) principle in all processes †¢ State of art plants and equipment †¢ ISO 9002 certified Physical Environment †¢ Frank and congenial work environment †¢ Positive work climate and organization culture – single code of dress supports to maintain discrimination free work environment Others †¢ Customer loyalty †¢ Old and established brand name †¢ Safety guidance given to customers. Weaknesses Less of a proactive approach to different matters, reactive approach applied more †¢ Price higher than prevailing competition in market, which gives customer thoughts about nearest substitutes available â € ¢ Bike launching new features as those of new entrants in market †¢ From customer point of view, in case brand is unavailable for a long time, high pending level allows customer to switch brand †¢ No Credit schemes for distributors/dealers as well as for customers †¢ Customer conscious of bike as a status symbol refrain from buying available Honda brands. It is considered more of a family bike †¢ No anti-theft device installed in bikes against snatching dilemma prevalent especially in Karachi. Opportunities †¢ Growing motorcycle market – Estimated bikes 850,000 by the end of 2011-12 compared to 7550,000 in 2012-13 †¢ Improving economic scenario of Pakistan by contributing more through increased selling. Growth in agriculture sector with good crop expected next year. Customers realizing quality matters, as problems are already cropping up in new entrants models †¢ Initiatives and proposals in process for coping with increased demand of bi kes †¢ Newer segments introduced with entry of new models, design, which still have huge potential for growth †¢ Karachi, a city which has tremendous potential for growth and profitability. †¢ New Export Markets like India with annual market size of 50 million units opening due to WTO Agreement. Threats †¢ Many new features inherent in latest bike models increasing customer expectations a great deal for the future †¢ WTO (World trade Order) opening local markets for global competition †¢ Competitors launching newer models with stress on reduced price for our price-sensitive economy proving serious threat in near future †¢ Theft and snatching of bikes increasing, reaching around more than 2000 bikes in 2012. SWOT MATRIX |STRENGTHS | WEAKNESSES | | | | | | |Product | | | |Brand name image |Less of a proactive approach to | | |Market leadership – Enjoying 56% share |different matters, reactive approach | | |Efficient performance |applied more | | |Durability/Reliability |Price higher than prevailing | | |Quality – ISO Certification |competition in market, which gives | |Easy availability of Spare Parts |customer thoughts about nearest | | |Strong asset position/increased profits with |substitutes available | | |each year |Bike launching new features as those | | |High resale value |of new entrants in market | | |Low maintenance costs |From customer point of view, in case | | |Technical expertise – Benchmarking Honda, |brand is unavailable for a long time, | | |Japan. high pending level allows customer to | | | |switch brand | | |Price |No Credit schemes for | | |Reasonable price of genuine parts |distributors/dealers as well as for | | |Cheap maintenance |customers | | | |Customer conscious of bike as a status| | |Place |symbol refrain from buying available | | |Well established dealer network |Honda brands. It is considered more of| | |Accessibility to major towns and cities; |a family bike | | |improving delivery to nearly all parts of |No anti-theft device installed in | | |Pakistan |bikes against snatching dilemma | | | |prevalent especially in Karachi. | | |Promotion | | | |Successful Promotional campaigns via TV and | | |Newspaper channels enjoying extensive viewer | | | |ship | | | | | | | |People | | | |Management/non-management work as a single | | | |unit, as a team | | | |Highly loyal, committed and motivated employees| | | |Hardworking, experienced and qualified staff | | | |Technological and managerial know-how | | | |Job evaluation which is totally performance | | | |based, gives staff incentive to work harder | | | |each time | | | |Bonuses and reward system for employees | | | |Trainings given to dealers, motorcycle | | | |mechanics and users | | | | | | | |Processing | | | |TQM principles practiced in work processes | | | |Kaizen (continuous improvement) principle in | | | |all processes | | | State of art plants and equipment | | | |ISO 9002 certified | | | | | | | |Physical Environment | | | |Frank and congenial work environment | | | |Positive work climate and organization culture | | | |– single code of dress supports to maintain | | | |discrimination free work environment | | | | | | | | | | | |Others | | | |Customer loyalty | | | |Old and established brand name | | | |Safety guidance given to customers | | |OPPORTUNITIES | SO Strategies | WO Strategies | | |S1, S30, O7 |W7,O6 | |Growing motorcycle market – Estimated bikes |Offer motorcycles to huge new market openings |Provide some safety devices installed | |850,000 by the end of 2008-09 compared to |like India. Reaching out untapped markets as |in bikes especially in Karachi to | |750,000 in 2007-08 |well) |increase sales and decrease fear of | |Improving economic scenario of Pakistan by | |snatching. | |contributing more through increased selling. |S5,S8,S9,S10,O3 |W5,O1 | |G rowth in agriculture sector with good crop |Provide customers high quality bikes with low |Create company operated credit sales | |expected next year. |quality maintenance cost as well. Take |schemes and close the gap by offering | |Customers realizing quality matters, as |advantage of the technical expertise that |credit to those huge segments which | |problems are already cropping up in new |Honda possesses. |thrive on credit consumers. |entrants models | | | |Initiatives and proposals in process for |S10,S24,S25,O5 |W3,W6,O5 | |coping with increased demand of bikes |Targeting new segments with new motorcycle |Launch new innovative designs for new | |Newer segments introduced with entry of new |models with respect to the technical |growing segments which suggest that | |models, design, which still have huge |expertise, state of the art manufacturing |Honda is not only a family bike but | |potential for growth |facility to come up with innovative models and|its products are also po sitioned for | |Karachi, a city which has tremendous |using continuous improvement to stay ahead of |other segments like sports and | |potential for growth and profitability. |the competitors. |recreation. |New Export Markets like India which has an | |W4,O4 | |annual market size of 50 million motorcycles | |Increase production capacity to meet | |per annum opening due to WTO Agreement. | |excessive demand and decrease delivery| | | |lead time. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | THREATS |ST Strategies | | | | |W2,T3 | |Many new features inherent in latest bike |S10, S25,T1 |Increase investment in high technology| |models increasing customer expectations a | |equipment to increase localization to | |great deal for the future |Used the technical expertise and state of art |further decrease costs and target | |WTO (World trade Order) opening local markets|equipment that Honda possesses to provide new |price sensitive consumers. | |for global compe tition. |innovative features in upcoming new bike | | |Competitors launching newer models with |models. W7,T4 | |stress on reduced price for our | |Installation of some anti-theft device| |price-sensitive economy proving serious | |to decrease fear of snatching of bikes| |threat in near future |S19,S30,T2 |and to increase sales in major problem| |Theft and snatching of bikes increasing, |Use the technological know how and the |cities like Karachi. | |reaching around 2000 bikes in 2007. |established Brand Image that Honda possess to | | | |compete in the International markets after WTO| | | |opens foreign markets for Honda. | | | | | | |S10,S25,T3 | | | |Utilize the technical expertise and state of | | | |the art equipment that Honda possesses to | | | |introduce newer low priced motor bikes in the | | | |future. | | THE SPACE MATRIX INTERNAL STRATEGIC POSITION |EXTERNAL STRATEGIC POSITION | |Financial Strength (FS) |Environmental Stability (ES) | |Return on Investment +4 | | |Levera ge +3 |Technological change -3 | |Liquidity +3 |Rate of Inflation -4 | |Working Capital +3 |Demand Variability -2 | |Cash flows +3 |Price range of competing products -2 | | |Barriers to entry into market -4 | | |Competitive pressure -2 | |FS Average +2. 8 |Ease of Exit from the market -2 | | |Price Elasticity of demand -2 | | |Risk involved in business -2 | | | | | |ES Average -2. | |Competitive Advantage (CA) |Industry Strength (IS) | |Market Share -1 | | |Product Quality -1 |Growth Potential +2 | |Product Life Cycle -2 |Profit Potential +4 | |Customer Loyalty -2 |Financial Stability +4 | |Technological Know how -1 |Technological know how +3 | |Control over suppliers and distributors |Resource Utilization +4 | |-2 |Ease of Entry into New Markets +3 | |Resale Value -2 |Productivity, capacity utilization +4 | |Brand Name/Image -1 | | |Dealer Network -2 | | |CA Average -1. 60 | | | |IS Average +3. 42 | [pic] ANALYSIS: As we can see from the SPACE Matrix that Atlas Honda is located in the Aggressive Quadrant I. Atlas Honda is financially strong (+2. 8) as compared to its other competitors in the industry and also has a good competitive advantage (-1. 0). Atlas Honda is in an excellent position to use its internal strengths. Atlas Honda is taking full advantage of external opportunities and overcoming internal weaknesses and avoiding external threats. STRATEGIES: The following are the strategies which Atlas Honda should pursue seeing the results of Grand Strategy Matrix (GSM) : †¢ Market Penetration and Market Development It can do Market Development by introducing its products in new geographic areas like parts of Balochistan and NWFP. Not only this it can also launch its bikes in countries like Afghanistan, Sri Lanka, India and Bangladesh where there is a huge market potential for its bikes. Market Penetration can also be done to increase its market share in present markets by increased marketing efforts and concentrating on aggressive advertising to communicate the real value of the product to the consumer. †¢ Product Development Atlas Honda can improve its quality of the products by Product Development and bringing in new efficient and high performance bikes which are environment friendly also. This can be done through Product Research and Testing and TQM practices including Continuous Improvement, JIT, and KAIZEN etc. †¢ Horizontal Integration Horizontal Integration can also be done by acquiring its competitors: Pak Suzuki and Dawood Yamaha THE BOSTON CONSULTING GROUP MATRIX Market Share High Low Stars |Problem child | | | | | | | | | | |Cash cows |Dogs | |[pic] |[pic] | | | | High Market growth Rate Low THE BOSTON CONSULTING GROUP MATRIX Market Share High Low Stars |Problem child | |CD 70 |CD 100 | |[pic] | | |Cash cows |Dogs | |[pic] |[pic] | |CG 125 | | H igh Market growth Rate Low GRAND STRATEGY MATRIX | | | |Rapid Market Growth | | | | | | | | | | |Quadrant I | | | | | | |Quadrant II | | | | | |1. Market Development | | | | | | | | | |2. Market Penetration | | | | | | | | | | |3. Product Development | | |Weak | | | | | | |Strong |4. Horizontal Integration | | |Competitive | | | | |Atlas Honda | |Competitive |5. Concentric Diversification | | |Position | | | | | | |Position | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Quadrant III | |Quadrant IV | | | | | | | | | | | | | | | | |Slow Market Growth | | | | | ANALYSIS: Atlas Honda falls in Quadrant I since it has a strong competitive position through its brand image and its high resale value and efficient performance. Currently, Atlas Honda is doing fairly well in terms of their competitors. Initially their market share and competitiveness was very high but the emergence of competition they have lost some share. But overall they have placed them selves well. It can do Market Development by introducing its products in new geographic areas like parts of Balochistan and NWFP. Not only this it can also launch its bikes in countries like Afghanistan, Sri Lanka, India and Bangladesh where there is a huge market potential for its bikes. Market Penetration can also be done to increase its market share in present markets by increased marketing efforts and concentrating on aggressive advertising to communicate the real value of the product to the consumer. Atlas Honda can improve its quality of the products by Product Development and bringing in new efficient and high performance bikes which are environment friendly also. This can be done through Product Research and Testing and TQM practices including Continuous Improvement, JIT, and KAIZEN etc. Horizontal Integration can also be done by acquiring its competitors: Pak Suzuki and Dawood Yamaha. Concentric or Related Diversification can be also done by entering into the Tire business. THE QSPM MATRIX QSPM | |Strategic Alternatives | |Key factors |Weight | |*Strategy 1: Product Development, seeking increased sales by developing new low cost efficient products – Motorcycles for the uncatered/lower| | |segment | | | | | |*Strategy 2: Related Diversification by enter ing into the Tire business | | | | | ANALYSIS: From the QSPM Matrix, it is found that the relative attractiveness of Strategy 1: Product Development is clearly more than that of Strategy 2: Related Diversification. STRATEGY 1 Product Development, seeking increased sales by developing new low cost and efficient products – motorcycles for the uncatered/lower segment is the alternative strategy which Atlas Honda must pursue. Atlas Honda with its technical expertise should develop low cost and efficient motorcycles so that the lower segment of the market can also be tapped which the Chinese and local manufacturers are already targeting. The average price of Atlas Honda’s CD 70 cc bike is Rs. 62,900 as compared to the Chinese/local clone of CD 70 which is around Rs 35000 – Rs 39000. Therefore, Atlas Honda can develop low cost bikes with more efficient engine so that a large untapped lower segment can be catered also. STRATEGIC IMPLEMENTATION STRATEGY IMPLEMENTATION Strategy implementation is the most important area of the whole strategic management process. 99% of the strategies fail at the implementation stage. Just being able to devise bold new strategies to outperform the competitors is not enough. The strategic vision has to be translated into concrete steps the internal processes and management system have to be aligned accordingly. Implementing and executing strategy entails converting the organization’s strategic plan into action and then into results. Putting a strategy into place and getting the organization to execute it well call for different sets of managerial skills. Implementing strategy is primarily an operations driven activity revolving around the management people and business processes. Executing strategy is action-oriented, make-things-happen task that tests a manager’s ability to direct organizational change, motivate people, develop core competencies, build valuable organizational capabilities, achieve continuous improvement in business processes, create a strategy supportive corporate culture, and meet or beat performance targets. Keeping our strategy of following focused differentiation, the most recommended strategy appeared is of market development through opening of various outlets in different geographical regions, can be implemented through following ways: Components of Strategy Implementation Atlas Honda should take into consideration the below discussed components in implementing the strategy: †¢ Building an organization with Competencies, Capabilities and Resource strengths to carry out the strategy successfully: Atlas Honda expertise as leading local two wheeler manufacturer as its strength that a company is fairly good at doing and that enhances its competitiveness. The phenomenal success of Atlas Honda Corp. is the result of a corporate culture that connects its geographically scattered retailers and distributors together. Ever since its Atlas Honda promoting a culture that is grounded on its vision statement, which emphasizes quality, service, convenience and value.. The company makes sure that its proven system is maintained by conducting a constant review of the performance of its bikes. Atlas Honda has a wide distribution and supply chain network, through which Atlas Honda is capable to maintain its policies and culture. The company can articulate at by translating the corporate culture into the administrating activities. Although Atlas Honda has pool of talented, fresh and young workforce, yet they lack energy and risk taking capabilities. Therefore, Atlas Honda should provide proper training to it workforce consistent to its lively and energetic culture. †¢ Developing Budgets to steer ample resources into those value chain activities critical to strategic success New strategies require significant budgets. Though being a local company that has a very good and efficient supply chain Atlas Honda implements strategies bringing higher initial costs to the company. In order to implement new strategies such as product development, market development or market penetration, Atlas Honda will need to increase its budget. The market development strategy would subsequently increase their distribution costs and also the product development would mean buying colour, design and engine additionally increase the supplier costs.. †¢ Establishing strategy supportive policies and procedures Atlas Honda needs to stabilize its strategy in two important areas of concern i. e. product development and market development. Firstly, Atlas Honda need to expand its budget for its marketing and promotional activities, by not just promoting few of it products at an interval basis to the set of products marketed to the masses as Atlas Honda is market leader and to maintain its leadership, Atlas Honda must spend on promotion. †¢ Instituting best practices and pushing for continuous improvement in how value chain activities are performed Atlas Honda can improve on its value chain activities by implementing the strategy of backward integration which would help Atlas Honda drive the costs out of the value chain. Atlas Honda can do so by initiating setup of manufacturing its own spare parts in this way Atlas Honda would not require to import the spare parts from China or I will not need vendor to do the same work.

Essay For Thesis Sample - Finding The Essay For Thesis Example That Suits You

Essay For Thesis Sample - Finding The Essay For Thesis Example That Suits YouThe most important thing to do before writing an essay for a thesis is to familiarize yourself with the essay for thesis example that you are going to use. This should include things like research tools, terms and their definitions, steps that you will need to take to accomplish your goal, how to structure your essay, etc. Here are some tips for choosing the essay for thesis example that is right for you.Find a sample that fits your topic. If you are writing an essay for a thesis about learning about Spanish, for example, you should choose an essay sample that involves a lot of reading and research. It would be better if the sample uses vocabulary and grammatical concepts that you have already encountered in your study of the language.Your essay for thesis should involve not only reading but also writing. If this is your first essay for thesis example, you should be more focused on your writing skills than l earning new ones. Look for a sample that has an emphasis on both reading and writing. It will be easier for you to write an essay for thesis example if you already know how to read and write well.Always make your essay for thesis example as interesting as possible. You can do this by not using excessive sentences, rather it should focus on a single idea at a time. Remember that the goal of the essay for thesis example is to explain something using general words, so your paper will be concise yet still very readable. Try to avoid using complex sentences and make the most of every idea you can come up with.Don't be afraid to add your own personal style. If you find the sample that you are using to write an essay for thesis example seems to be lacking, try to fill in the gap by creating your own ideas or even giving it a few twists. While this isn't exactly what the thesis sample was intended for, adding your own style can still add that extra spark of individuality that it needs.Note- taking is important when writing an essay for a thesis. Write down all the main points you want to make in your paper. You will have more ideas once you have jotted down these ideas. Keep in mind that you are aiming for an essay for thesis example with a lot of information, so it is better to make notes than trying to write everything down.Make sure that you provide enough examples for your argument. To keep your writing organized, stick to using examples from common situations and types of objects. Keep a list of the types of examples you will use to back up your arguments.Finally, be sure to structure your essay for thesis example in such a way that it is easy to read. Try to avoid filling your paper with wordy details that you don't need, and make your essay for thesis example as enjoyable as possible.