Bajaj Auto Limited's Business Strategy - From Market Leader to Follower

            
 
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Case Details:

Case Code : BSTR344
Case Length : 16 Pages
Period : 1990-2009
Pub Date : 2009
Teaching Note :Not Available
Organization : Bajaj Auto Limited
Industry : Automobile
Countries : India

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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"Even though they [Bajaj Auto] have worked much harder than Hero Honda in creating a differentiated product, none of them, other than the Pulsar, have been successful."1

- Joseph George, Analyst at BNP Paribas Securities Limited, in January 2009.

Introduction

On July 18, 2009, India-based Bajaj Auto Limited (Bajaj Auto), a leading manufacturer of two wheelers and three wheelers, launched the 100 cc Discover DTS-Si motorcycle. The new product had several unique features such as a Digital Twin Spark-Swirl Induction (DTS-Si) engine, nitrox suspension, the longest wheelbase in the 100 cc segment, a 5 speed gear - the first in the 100 cc segment, and a maintenance free battery. Commenting on the new product, Rajiv Bajaj (Rajiv), Managing Director, Bajaj Auto, said, "We are launching a bike which is not seen as a 100 cc bike and we wish to offer it to people who typically buy 100cc motorcycles but would like to upgrade."2

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For Bajaj Auto, the launch of the 100 cc Discover DTS-Si motorcycle served as a point of re-entry into the entry segment3 of the motorcycle market.

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1] Shally Seth, "Bajaj Auto Plans New Models to Improve Sales, Analysts Skeptical," http://www.livemint.com, January 11, 2009.
2] "Bajaj Auto to Re-Focus on 100 cc Market," http://www.moneycontrol.com, July 10, 2009.
3] The Indian motorcycle market is divided into three segments - entry segment, executive segment, and premium segment. The entry segment has 100 cc motorcycles at a price point of Rs. 35,000. The executive segment comprises 100 cc to 135 cc motorcycles, priced between Rs. 40,000 and Rs. 50,000. The premium segment comprises motorcycles with price points above Rs.50,000.


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