Auto Ancillaries

STM Assignment Workbook
Faculty: Prof. Anshuman Tripathy

Submitted byBhagyashree Patra- UM14138
Saurabh Wadhwa- UM14163
Shruti- UM14165Contents
1
Executive Summary............................................................................................................................................................... 4
Industry Overview.................................................................................................................................................................. 5
2.1
Nature and Size of the Industry....................................................................................................................................... 5
2.2
Key Growth drivers for the Industry................................................................................................................................. 6
2.3
Identification of Critical Success Factors (CSF)................................................................................................................ 7
2.4
Market Analysis based on CSFs....................................................................................................................................... 8
2.5
Industry Benchmarks....................................................................................................................................................... 8
2.6
PESTEL Analysis............................................................................................................................................................. 13
2.7
Porters Five Forces Analysis.......................................................................................................................................... 15
2.8
Strategic Group Mapping............................................................................................................................................... 16
2.9
Competitive Landscape................................................................................................................................................. 17
2.10 Market Segmentation.................................................................................................................................................... 19

2.11 Buying Criteria Analysis of the Industry......................................................................................................................... 20
2.12 Key trends and future developments............................................................................................................................. 21
3
Company Overview.............................................................................................................................................................. 24
3.1
Company background.................................................................................................................................................... 25
3.2
Timeline with key milestones and their strategic impact............................................................................................... 27
3.3
Vision, Mission, Goals, and Strategic Themes................................................................................................................ 29
3.4
Key Product and Service Portfolio.................................................................................................................................. 30
3.5
Core Competencies of the firm...................................................................................................................................... 34
3.6
Business Model of the organization............................................................................................................................... 37
3.7
3rd Generation Balanced Scorecard (Amalgamation of 1st Generation BSC and Activity System Map)........................38
3.8
SWOT Analysis............................................................................................................................................................... 42
3.9
Competitor Analysis (identify competitors)................................................................................................................... 45
3.9.1
Based on Critical Success factors............................................................................................................................ 45
3.9.2
Based on Financial indicators.................................................................................................................................. 46
Future Growth Strategy for the organization........................................................................................................................ 47

4.1
Portfolio Analysis........................................................................................................................................................... 47
4.1.1
Based on BCG Matrix............................................................................................................................................... 47
4.2
Companys Strategic Roadmap for future...................................................................................................................... 48
4.3
Product Market Investment Strategy............................................................................................................................. 50
4.4
Re-imagining the Organization with the transformed business model or Use-case based on SMAC and IOE................51
1 Executive Summary
India in last decade has grown into a large automotive market particularly for Japanese OEMs while the European and
Americans have also entered for the long haul. India however due to the recent economic slowdown witnessed weak auto sales
which impacted consumer as well as OEM sentiment.
We believe henceforth India auto story will now be driven by four factors :
a) pent up demand (low sales last 2-3 years),
b) reducing food and fuel inflation (down 600 bps to 9.4%/ down 400 bps to 4%) from peak)
c) income growth due to improved business climate,
d) lower penetration into households (e.g. 14 per thousand in Passenger vehicles).
We believe the Indian automotive market could witness ~15% CAGR FY14-17E on the back of the demand improvement. From
auto component makers perspective besides, the aforementioned reasons would also lead to higher content per car and
consumers up-trading to higher quality & safety and increased features.
Auto sector to benefit greatly from Make in India! The governments has laid out a vision statement towards ushering India as
a global manufacturing hub via the Make in India campaign. It has been accepted well across the board notably from auto
component behemoths like Bosch Ltd. At present auto sectors contribution to GDP remains at ~7%, leads the manufacturing
sector, thus we believe it would greatly benefit from this specialized focus. Global auto components market is valued at
~US$800billion; of which India contributes ~ 5% share at ~$38 billion. In this context it is little wonder that large automotive
companies like Volvo, VW, GM, Bosch, Magna are investing into the Indian automotive market with not only the view of a large
market but as well as a global manufacturing hub.
We believe that auto-component players are well poised to leverage operating benefits from the cyclical turnaround in auto
sales. The Indian ancillary industry, as per the Automotive Component Manufacturers Association (ACMA) estimates, stands at
~$38 billion.
2 Industry Overview
2.1 Nature and Size of the Industry
History and Evolution of the industry
Key Consumers of this industry and

their changing needs
The Indian auto ancillary industry is very competitive with the presence of a handful of
global and Indian auto-companies. The industry had witnessed slower growth in 2008
09 due to the global recession. Over the years, these companies have enlarged their
global reach and the exports have grown at ~17% p.a. in the last six years (from FY
05). Global best practices like 5-S, TQM, Kaizen, 6 Sigma, TPM etc. are followed by a
significant number of component manufacturers and these quality certifications are
giving them global recognition. The Indian automobile market is estimated to become
third largest in the world by 2016 and will account for more than 5% of the global
vehicle sales.
The industry caters to 3 major segments
OEM Segment (Original Equipment Manufacturer)
Replacement/After Market (AM)
Export
OEM segment, Replacement sector and export constitute 60%, 25% and 15% of total
production respectively. With the quality of production improving and with lower
manufacturing cost in India exports will be increasing going forward.
Stage in the Industry Life cycle
Growth Stage
Total Available Market Size (National

and Global)
USD 38 billion (In FY 13, National)

USD 1.2 trillion (In FY 13, Global)
Total Serviceable Market Size (National

and Global)
Not Available
References:
https://www.equitymaster.com/research-it/sector-info/autoc/Auto-Ancillaries-Sector-Analysis-Report.asp
http://www.eresearchglobal.com/pdf/Snapshot_Auto_Ancillary_Aug11_eRPI.pdf
2.2 Key Growth drivers for the Industry

Key Growth drivers
Rationale
Automobile Industry
The growth in automobile industry will give a boost to the auto ancillaries industry
since more than 50 percent sales are to the OEMs. The current low penetration along
with rising income levels and a rapidly growing middle class gives a wide scope for
growth.
Exports of automobiles have also emerged as a key component of growth. They will
indirectly increase the demand for Indian auto components.
Easy availability of finance and sales promotion offers and declining interest rate cycle
directly impacts demand for vehicles and components and is thus a growth driver.
The Automotive Mission Plan (AMP) 2006-2016,and a sequel of AMP II (2017-27), to
put in place a framework for the long-term growth trajectory of the auto and auto
ancillary sector.
Creation of Technology Up-gradation & Development Scheme (TUDS) for Auto
Components and setting up of the Auto Component Technology Development Fund
(ATDF), will help the companies in accessing loans at reduced rates of interest for the
R&D activities, up gradation of process, and technology acquisition.
The government has allowed 100% foreign equity investment in the sector, through the
automatic route, without any minimum investment criteria.
The Governments Union budget 2014 has allocated an enormous amount of Rs.
37,850. More roads would lead to more vehicle sales, and thus a boost to auto ancillary
industry.
The current public transport is inadequate and thus there is a scope of growth in the
same, which would lead to higher demand of auto ancillary products.
Rising exports
Credit availability
Government initiatives
Technology Innovation
Foreign Investment
Infrastructure development
Inadequate public transport

References:
http://www.big-consultants.com/images/Auto%20Ancillary.pdf
2.3 Identification of Critical Success Factors (CSF)

Critical Success Factor identified
Rationale
Diversified Customer Base

Presence in AM and export markets
Cost Control Measures
Strengthens a company's bargaining position in negotiating supply contracts with OEMs

since they carry higher ratings than their less diversified counterparts.
AM segment is relatively more profitable and less exposed to pricing pressures than the
OEM segment. Export revenues also add diversity and stability to a company's overall
revenue streams.
In an industry looking at cost reduction avenues, material costs constitute a strong
focus area; operational efficiency therefore translates into ability to sustain market
position in a competitive environment. Companies with strong operational efficiencies
attract the cost-focused OEMs.
Access to technology
Companies with quick access to technology are in a better position to procure orders
from OEMs and be competitive. Products with updated technology greatly influence
OEM decisions in finalising auto ancillary vendors.
Degree of product complexity
The extent of research and development efforts, operations define the degree of
product complexity. It discourages new entrants, thus ensuring stable market position.
Market Share
A strong market share enables companies to withstand pricing pressure giving it the
option of bulk ordering, hence enabling it to offer competitive prices in both the
domestic and export markets.
References:
http://www.autolineind.com/presentation/auto_industry_presentation.pps
ftp://ftp.software.ibm.com/software/plm/de/challenges_automotive.pdf
2.4 Market Analysis based on CSFs

Region
CSF 1
CSF 2
CSF 3
CSF 4
Global
India
NA
NA
NA
NA
North
NA
NA
NA
NA
South
NA
NA
NA
NA
East
NA
NA
NA
NA
West
NA
NA
NA
NA
North-East
NA
NA
NA
NA
Central
NA
NA
NA
NA
Note: Use data for the year 2013-14
2.5 Industry Benchmarks

Size of industry:
Category
Industry
(National)
Industry Average of Top 5 Firms or

players serving 75-80% of the market
Market Leader
201112
201213
201314
2014-15
(till Q3)
201112
2012-13
201314
2014-15
(till Q3)
NA
NA
NA
NA
NA
NA
NA
NA
Size as % of
GDP
NA
NA
NA
NA
NA
NA
NA
NA
Inventory
turnover
7.74
9.44
11.83
12.22
9.14
7.76
8.56
7.31
Indicator
Level
Market Size
Category
Activity Ratios
Liquidity Ratios
Solvency Ratios

Market Leader
201112
201213
201314
2014-15
(till Q3)
201112
2012-13
201314
2014-15
(till Q3)
Receivables
turnover
NA
NA
NA
NA
NA
NA
NA
NA
Payables
turnover
NA
NA
NA
NA
NA
NA
NA
NA
Asset
turnover
1.86
2.11
2.12
1.96
1.67
1.71
1.6
1.45
Current ratio
1.99
2.28
2.18
2.05
2.12
2.09
2.37
2.14
Quick ratio
1.21
1.63
1.67
1.52
1.58
1.46
1.75
1.54
0.184
0.13
0.089
Indicator
Cash ratio
0.163
0.145
0.121
0.071
0.17
Debt-toassets ratio
69.45
46.33
65.44
72.45
71.61
46
68.56
69.46
Debt-tocapital ratio
Debt-toequity ratio
0.15
0.1
0.08
0.06
0.07
0.06
0.03
0.02
Interest
coverage
ratio
73.07
131.22
1,569.0
9
748.45
264.27
3298.8
245.76
434.31
Gross profit
margin
12.5
14.29
14.14
13.21
12.3
14.19
11.34
10.28
Operating
16.45
13.34
14.58
17.63
16.09
17.39
15.58
14.63
Category
Profitability Ratios
Valuation Ratios or
Price Ratios

Market Leader
201112
201213
201314
2014-15
(till Q3)
201112
2012-13
201314
2014-15
(till Q3)
Net
profit
margin
17.4
22.5
16.61
13.64
12.4
13.5
10.61
9.64
Return
on
assets (ROA)
14.16
17.43
18.37
18.8
13.39
16.05
11.82
8.93
Return
on
equity (ROE)
24.9
29.27
30.45
30.34
22.96
30.62
20.91
18.02
Price
Earnings
(P/E)
25.1
18.93
27.02
37.80
23.1
18.96
31.05
35.80
61.77
-212.18
-466.13
Indicator
profit margin
to
PEG Ratio =
(P/E Ratio) /
Projected
Annual
Growth
in
Earnings per
Share
62.44
58.59
-109.18
-345.13
67.66
Price to Cash
Flow
115.11
89.81
93.06
107.58
22.4
47.87
34.15
29.90
Price to Book
(P/B)
20.95
17.9
20.28
25.49
4.84
4.50
5.34
5.03
Category
Indicator
Price
Sales
Competitive Ratios
to

Market Leader
201112
201213
201314
2014-15
(till Q3)
201112
2.97
2.206
3.403
3.231
2.753
0.63
2012-13
201314
2014-15
(till Q3)
2.606
3.436
3.589
1.99
0.63
0.55
37.76
19.65
19.52
Dividend
Yield
6.01
5.97
4.66
4.09
Dividend
Pay-out Ratio
26.53
15.01
15.01
15.02
Enterprise
value (EV is
market
capitalisation
plus
debt
minus cash)/
EBITDA
47875.2
6
49689.5
1
63400.4
82388.08
18791.6
4
20638.99
28496.5
8
30414.62
Staff
Turnover or
Industry
Attrition Rate
NA
NA
NA
NA
NA
NA
NA
NA
Staff
Cost/
Salary
as
percentage
of Sales
0.139
0.201
0.104
0.115
0.119
0.111
0.12
0.135
Operating
Expenses as
percentage
0.813
0.752
0.718
0.729
0.8423
0.852
0.838
0.869
35.45
Category

Market Leader
201112
201213
201314
2014-15
(till Q3)
201112
2012-13
201314
2014-15
(till Q3)
Depreciation
as
percentage
of Sales
0.078
0.037
0.052
0.073
0.038
0.032
0.0424
0.0436
Fixed Assets
to
Sales
Revenue
0.446
0.365
0.424
0.588
0.453
0.411
0.455
0.488
Advertising
as
percentage
of Sales
0.025
0.016
0.018
0.021
0.015
0.011
0.014
0.012
Indicator
of Sales
In case you come across other benchmark ratios used in particular Industry, then please include them as well.
References:
www.moneycontrol.com
www.acekp.in
2.6 PESTEL Analysis

Category
Description
Political
Political factors
the
most
Key factors for analysis
Rationale
How stable is the political

environment influence
Influence
of
the
Any business done in a countrys territory is

highly affected by the countrys government
important
influence
on
the regulation
of
any
business.
Economic
Economic
factors lead to
the buying and
changing
patterns
of
industry
and
consumers.
Social
Technological
The demand of
cars has been
fuelled
by
social factors,
which in turn
are a boost to
auto
ancillary
industry.
With
the
technological
innovations
Government Policy / Law on

your business
Immediate
laws
which
affect any business in
general are Central Excise,
Sales Tax/ VAT, Corporate
Income
Tax,
Personal
Income Tax & Service Tax
stance on the policies.
Government Policies on the

Economy.
Inflation
Employment
Disposable income
Business cycles
Bank Financing
Interest Rates
Exchange Rate Mechanism
Business Cycles
Lifestyle changes
Demographics
&
Distribution of Income
Availability
of
various
media tools
Reach of the media to the
population
New
discoveries
and
innovations
Speed
of
technology
Rising GDP consecutively for the last 5 years

has led to increased purchasing power and
hence the automobiles.
Per capita Income is rising, which is affecting
the segments of automobiles being ventured
into.
There is cut Throat competition among many
players in market.
Increasing urbanization of rural India also has
given rise to increase in sales.
Indian families are becoming increasingly
nuclear Increasing Propensity to spend
Increasing distances between work-place and
residence
Increase in percentage of working women has
increased number of earning members in a
family.
Alternate Fuel: increasing use of CNG and
LPG instead of conventional fuel has made
the entry of new kinds of vehicle in the
happening,
companies are
betting high on
Research
and
Development
costs.
Environmental
Environmental
factors
like
global warming
have
created
the need of
new type of
technologies
and companies
are
adopting
the same.
Legal
Legal matters
are the most
serious
in
corporate and
companies are
utmost careful
while following
these
transfer
Internet
Advantage of Technology
Economies of Scale
Changing global climate

Pollution on roads
Consumer law
Antitrust law
Employment law
Health and safety law
market.
Advent of Internet: The customer can now
use the Internet to place the order and
expect the manufacturer to fulfil his
customized demand in the minimum time.
Electric
Car:
With
technological
advancements electrical car may emerge as
a preferred option.
The
growing
desire
to
protect
the
environment is having an impact on many
industries
such
as
the
travel
and
transportation industries (for example, more
taxes being placed on air travel and the
success of hybrid cars).
The
general
move
towards
more
environmentally
friendly
products
and
processes is affecting demand patterns and
creating business opportunities.
The health and safety of employees is a major

concern for the manufacturer. The amount of
money spent on the safety is thus an additional
cost which reduces the profit.
References:
http://xtra.strategypal.com/audit/strategy-questions/pestel-analysis/
www.sciencepub.net/american/am0805/018_8561am0805_135_138.pdf
2.7 Porters Five Forces Analysis

Porters
Five Forces
Buyer
Power
Description
Small number of buyers, purchases of
large volumes, prevalence of alternative
options, and price sensitive customers
influence of the buyers in any industry.
Key
factors
for analysis
Extreme price
sensitivity,
small size of
orders
Rationale
Technologically superior product, improved life
of components curtail the replacement demand
for components
The high price differential between non-genuine
and branded genuine parts is likely to entice
vehicle owners to purchase non-genuine parts
Supplier
Power
The automobile raw material and ancillary

supply business is quite fragmented.
Many suppliers rely on one or two
automakers to buy a majority of their
products.
Low cost of If an automaker decided to switch suppliers, it

substitutes,
could be devastating to the previous suppliers
small size of business. As a result, suppliers are extremely
suppliers,
susceptible to the demands and requirements of
fragmented
the automobile manufacturer and hold very little
suppliers.
power.
Existing
Competitio
n
The presence of many players of, little

differentiation between competitors, are
the features of a highly competitive
industry. These generally earn low returns
because pricing power is low and the cost
of managing competition is high.
Low switching
cost, market
highly
concentrated,
low customer
loyalty
To remain ahead in competition, automakers

were tempted to offer value added services to
the customers incurring more costs. Easy finance
options and long term warranties were offered to
lure the customers. But these measures cut into
the profit margins.
Capital
There is a great threat for existing players from
Threat
to Globalization is a huge factor affecting the
new
entrants
auto market. For the Indian automobile

market it is becoming easier for foreign
auto part makers to enter and take away
market share from established players.
Threat
to If substitutes were available offering
substitutes
similar services, the likelihood of buyers
switching over to another competitor
depended mainly on the cost. The cost of
the automobiles along with their operating
costs was driving customers to look for
alternative transportation options.
required,
the big foreign manufacturers who have already
technologies
created a base in the Indian market.
available,
economies of
scale, no cost
advantages
Low cost of
substitution,
availability of
many product
options
References:
www.outsource2india.com/kpo/pdf/automobile-industry-report.pdf
www.wenku.baidu.com/view/c10d677c27284b73f2425020.html
2.8 Strategic Group Mapping
When determining the availability of substitutes

you should also consider time, money, personal
preference and convenience in the auto travel
industry.
Strategic Group Mapping
Increasing Profits
0.00
100.00 200.00 300.00 400.00 500.00 600.00 700.00 800.00 900.00 1000.00
Increasing Market Capitalisation
References:
http://www.moneycontrol.com/stocks/marketinfo/marketcap/bse/auto-ancillaries.html
2.9 Competitive Landscape
Value propositions
The profitability of companies in auto ancillary industry depends on streamlined operations, effective marketing, and a sturdy
sales force. Large companies have advantages in manufacturing efficiencies, raw material purchase, and product distribution.
Market Share Concentration
The industry is highly concentrated. Market Capitalization of the top five firms accounted for 80% of total market during 2014.
The market is highly fragmented with a large number of small and medium enterprises operating in the industry.
The majority of the manufacturers lack substantial technologies and capital, and only produce single products and spare
parts.
Large firms manufacture a wide variety of auto ancillaries whereas small firms stick to a single product form.
Extensive distribution network
Having effective sales channels can help manufacturers increase market share and revenue growth.
Research and development
Product innovation and expenditure on research and development can be a competitive advantage for industry firms.
Technology, techniques and technical expertise
The degree of investment in technology and product development can improve the products and revenue of firms.
Technology advances, usage of state-of-the-art facilities have helped firms to maintain their competitive advantages.
Establishment of export markets
The development of export markets is important for some firms in this industry.
Product quality and control
Firms that have the ability to manufacture products according to specifications can have an advantage in the market.
Customers generally find a balance between quality and price when choosing equipment suppliers. Successful companies in
this industry adopt quality assurance techniques and policies to improve their products and processes.
Investment scale
The high investment cost in large and efficient manufacturing facilities can discourage competitors from entering the
industry. In addition, the cost of developing large-scale production is very high.
Competitive Strength Assessment
Key Success Factors
Market Share
Degree
of
Weig
ht
0.20
product 0.20
Bosch
Ratin
g
Score
9
1.8
8
1.6
Amara
Batt.
Raja
Exide Ind.
Motherson
Sumi
Rating
7
7
Rating
8
8
Rating
6.5
6.5
Score
1.3
1.3
Score
1.4
1.4
Score
1.6
1.6
Amtek
Ratin
g
6
6
Auto
Score
1.2
1.2
complexity
Access to technology
Presence in AM and
export markets
Cost Control Measures
Diversified
Customer
Base
Sum of weights
Overall strength rating
Rating Scale:
0.10
0.9
0.7
0.9
0.6
0.7
0.15
0.20
9
9
1.35
1.8
6
8
0.9
1.6
8
8
1.2
1.6
6
7
0.9
1.4
6
7
0.9
1.4
0.15
1.00
1.05
0.9
1.05
1.05
6.5
0.98
8.50
1
=
Very
weak
6.90
5
=
Averag
e
7.95
6.55
6.38
10 =
Very
stron
g
References:
https://www.ibisworld.com/gosample.aspx?cid=86&rtid=1
2.10 Market Segmentation

Key Products and/or Services
Engine components (31 percent): Engine components fall into three broad categories- core engine
components, fuel delivery system and others. This also includes products such as pistons, piston
rings, engine valves, carburettors, and diesel-based fuel delivery systems. This is the most critical
component and requires high involvement from the supplier.
Drive transmission and steering components (19 percent): Gears, wheels, steering systems, axles
and clutches are the important components in this category.
Body and chassis (12 percent)
Regions
The
geographical
spread of medium and
large companies as per
records of ACMA
North region
40
%
Suspension and braking components (12 percent) - These include brakes, leaf springs, shock
absorbers
Equipment (10 percent) - This includes headlights, dashboard instruments
Electrical components (9 percent) - The main products in this category include starter motors,
generators, spark plugs and distributors.
Others (7 percent) - Sheet metal components and plastic moulded components are two of the
major components in this category.
Western region
Southern region
Eastern region
31
%
23
%
7%
References:
www.dsir.gov.in/reports/ittp_sme/AutoCompReport.pdf
2.11 Buying Criteria Analysis of the Industry
Parameter
Stability
Warranty
Period
Details
Business stability and a strong balance sheet of the vendors operating in the
country are important factors for any client
Refers to the warranty period provided by the OEMs to the end-user
End-user
Segments
OEMs
Export
Markets
Aftermarket
OEMs
Export
Significance
Attached (Low,
Medium, High)
High
High
Medium
High
High
Cost
Quality
Time
Refers to the overall cost charged by service providers to the end-user
and Refers to the quality and timeliness of the service provided by the service
providers to the end-users
Flexibility
Refers to the ability to upgrade or repair the component
Markets
Aftermarket
OEMs
Export
Markets
Aftermarket
OEMs
Export
Markets
Aftermarket
OEMs
Export
Markets
Aftermarket
Low
High
Medium
Medium
High
High
Low
Medium
Medium
Low
The impact of the buying criteria is graded on the basis of the intensity and duration of their impact on the current market
landscape. The magnitude of the impact has been categorized as described below:
Low - Negligible or no impact on the market landscape
Medium - Medium-level impact on the market
High - Very high impact with radical influence on the growth of the market
References:
https://www.equitymaster.com/research-it/sector-info/autoc/Auto-Ancillaries-Sector-Analysis-Report.asp
http://business.gov.in/Industry_services/automobile_industry.php
2.12 Key trends and future developments

Key Trend
Impact on Industry Certainty of Impact (Low

(Low,
Medium, probability,
medium
High)
probability, high probability)
Diversification
Low
Low probability
Increasing emphasis on Quality
High
High Probability
Adoption of green strategy
Medium
Low Probability
Declining integration levels of Vehicle

Manufacturers
High
Medium Probability
Declining Pricing Flexibility
High
High Probability
Increasing emphasis on Quality

The entry of global vehicle manufacturers in the domestic market is leasing to the adoption of global quality control practices
in the domestic industry. Effective quality control leads to improved export competitiveness, better quality perception in the
retail market and increased acceptance by global passenger car manufacturers operating in India. Self- certification in as an
emerging concept in the industry, which obviates the need for a quality check to be undertaken by the vehicle manufacturer
as the components are delivered directly to the OE clients in a ready - to - use quality certified form. However, enforcement of
quality control calls for increased investments in technology and automation of facilities.
The demanding requirement from the new VMs, the need for investments in the new capacity, quality improvement systems
and technology upgradation are expected to lead to the emergence of tier-isation in the industry. The Tier 1 manufacturer
outsources sub-assemblies from various Tier II players, (who buy sub-components from Tier III players), and assemble entire
system modules to be used as inputs by the VM. The Tier I supplier would be made responsible for the quality of the subassembly including the sub-components and would be required to make significant investments in quality control and
inventory management. Players engaged in the manufacture of complete assemblies and having superior inventory and
production management systems, quality certification for their products and processes and financial strength are well
positioned to emerge as Tier I players.
Declining Pricing Flexibility

As the auto ancillary industry is characterised by derived demand, pricing flexibility in the industry is constrained by the
pricing pressures on the end-user auto sector In the scenario of price-based competition among VMs, the component
manufacturers are faced with considerable pressure on their realisation and are frequently required to absorb increases in the
cost of production with consequent pressure on profitability. The impact of tier-isation in the domestic industry is expected to
increasingly relegate a number of small and medium - sized units to servicing the replacement market over the long term.
This is expected to increase the pressure on profitability in the replacement market. Moreover, the emerging trend of single supplier sourcing is expected to find increased acceptance resulting in lower pricing flexibility for component manufacturers
unless significant volume from the replacement market is implied. Further, the large number of variants and models is
expected to result in lower capacity utilisation levels and a consequent decline in operating profitability. Moreover, the
reduction in the number of vehicle platforms would also translate into significant volumes for the component manufacturer
and result in lower developmental cost of components.
References:
www.crisil.com/Ratings/Commentary/CommentaryDocs/insitanc.pdf
3 Company Overview
Name of Company - BOSCH
Bosch India (Bosch) with its strong technology leadership and market share (>70%), is one of the few ancillary companies
with significant bargaining power with original equipment manufacturers (OEMs).
In India, Bosch is a leading supplier of technology and services in the areas of automotive and industrial technology,
consumer goods and building technology. Additionally, Bosch also has in India, the largest development centre, outside
Germany, for end to end engineering and technology solutions.
The Bosch Group operates in India through six companies, viz. Bosch Limited, Bosch Chassis Systems India Limited, Bosch
Rexroth India Limited, Robert Bosch Engineering and Business Solutions Limited, Bosch Automotive Electronics India Pvt Ltd,
Bosch Electrical Drives India Pvt Ltd. In India, Bosch set up its manufacturing operation in 1953, which has grown over the
years to include 10 manufacturing sites and 7 development and application centres Bosch Group in India employs over
26,000 associates.
Name of Company - AMTEK AUTO

In 1985, Amtek Group was established with the incorporation of Amtek Auto (headquartered in Delhi), the flagship company.
Ever since, it is growing rapidly and has emerged as a leader in the automotive component industry having a worldwide
presence across India, North America, and Europe. Its manufacturing capabilities comprise of Forgings, Iron and Aluminium
Castings, Complex Machining and Ring Gears Flywheel Assembly. It also manufactures components for non-auto sectors such
as the railways, specialty vehicles, and aerospace, agricultural, and heavy earth moving equipment.
Name of Company - AMARA RAJA BATTERIES

Amara Raja believes in influencing and improving the quality of life by building institutions that provide better access to
better opportunities, goods and services to people all the time. With innovative engineering, research and design, Amara Raja
has grown with partnerships and information sharing with world leaders.
Amara Raja is committed towards latest generation technologies by developing and manufacturing globally competitive,
customer focused products of world class quality and responsibly introducing these products into relevant markets.
References:
Respective Companys website
3.1 Company background

From the very beginning, the company's history has been characterized by innovative drive and social commitment.
The company was set up in Stuttgart in 1886 by Robert Bosch (1861-1942) as a Workshop for Precision Mechanics and
Electrical Engineering. This was the birth of today's globally active Robert Bosch GmbH. The special ownership structure of
Robert Bosch GmbH guarantees the entrepreneurial freedom of the Bosch Group, making it possible for the company to plan
over the long term and to undertake significant up-front investments in the safeguarding of its future.
Ninety-two percent of the share capital of Robert Bosch GmbH is held by Robert Bosch Stiftung GmbH, a charitable
foundation. The majority of voting rights are held by Robert Bosch Industrie treuhand KG, an industrial trust. The
entrepreneurial ownership functions are carried out by the trust. The remaining shares are held by the Bosch family and by
Robert Bosch GmbH.
Its operations are divided into four business sectors: Mobility Solutions, Industrial Technology, Consumer Goods, and Energy
and Building Technology. The Bosch Group comprises Robert Bosch GmbH and its roughly 360 subsidiaries and regional
companies in some 50 countries. This worldwide development, manufacturing, and sales network is the foundation for further
growth. The Bosch Groups products and services are designed to fascinate, and to improve the quality of life by providing
solutions which are both innovative and beneficial. In this way, the company offers technology worldwide that is Invented for
life.

Amtek Auto envisions providing world class products to their customers, suppliers and stakeholders by capitalizing their
superior technology base. In India, it is a leading supplier of iron cast automotive components. Incorporated in 1985, it is one
of the largest integrated automotive component manufacturers in India having a strong global presence. The revenue of the
company on 2013-14 was Rs 3999.7 Cr and PAT was Rs 323.36 Cr. In India, it is a leading supplier of iron cast automotive
components. Its product portfolio comprises of a range of components for 2/3/4 wheelers, tractors, light and heavy
commercial vehicles (LCV & HCV) and stationary engines. The major components manufactured are connecting rod
assemblies, flywheel ring gears and assemblies, cylinder blocks, steering knuckles, suspension and steering arms, CV joints
and turbo charger housing. The Amtek group has its forging, iron casting (in Jharkhand and Rajasthan), aluminium casting
(only in Maharashtra), and automotive machining division in India. The company has 7 different divisions, viz. Amtek Centre
of Excellence (ACE), Amtek Forging Division (AFD), Amtek Iron Casting Division (AICD), Amtek Aluminium Casting Division
(AACD), Amtek Automotive Machining Division (AAMD), Amtek Ring Gear Division (ARGD), and Amtek JVS.

Amara Raja Batteries Ltd., incorporated in the year 1985, is a Large Cap company (having a market cap of Rs 14810.3 Cr.)
operating in Auto Ancillaries sector.
Amara Raja Batteries Ltd. key Products/Revenue Segments include Batteries (Storage) which contributed Rs 3732.77 Cr to
Sales Value (97.27% of Total Sales), Uninterruptible Power Systems which contributed Rs 71.36 Cr to Sales Value (1.85% of
Total Sales), Sale of services which contributed Rs 30.93 Cr to Sales Value (0.80% of Total Sales), Scrap which contributed Rs
2.12 Cr to Sales Value (0.05% of Total Sales), for the year ending 31-Mar-2014.
References:
Respective Companys website
3.2 Timeline with key milestones and their strategic impact

2012
Bosch entry in Bangladesh

Bosch Packaging Technology plant in Goa
Thermo technology plant in Bangalore
2011
MoU with IISc
2010
Launch of A4000 Pump
2009
Bosch components in low price car

Start of ECU Production
2008
Brand name change

Electrical Drives
2001
Establishment of Bosch Rexroth
1999
Establishment of Jaipur Plant
1998
Software development center is born
1993
Electric Power Tools
1969
Nashik Plant
1965
Special purpose machine
1954
Start of Production
1951
A name that became a brand: Mico
1922
Entrance of Bosch in India
2012 Started machining facility
2011 Joint venture with South Korean automaker Autech Corporation to manufacture specialized vehicles.
Amtek Autos group companyAmtek Defence Technologieshas entered into a Joint Venture Agreement with
Enertec Management.
2010 Joint venture with Sumitomo, Japan.
2009 Established to machining facility, Dharuhera.
2008 Joint venture with American Rail Car, USA.
2007 Established a new manufacturing facility at Sanaswadi, Pune (India) for Forging, Casting and Machining
2006 Set up a new machining facility at Dharuhera (India)
MPT Magna India Ltd (India) (JV with Magna Powertrain for manufacturing Fractured Connecting Rod Modules)
Large scale Aluminium High Pressure Die Casting facility at Ranjangaon, Pune (India)
2005 Acquisition of Hallberg Guss Aluminum, an Aluminium Casting facility at UK
Took over Zelter GmbH (Germany), one of the largest manufacturers of Turbo Charger Housing in the world
Amtek Tekfor Automotive Ltd (India) (JV with Neumayer Tekfor for manufacturing one and two piece flex plates)
2004 Acquired UK based Sigmacast Iron LtdSet up a Ring Gears facility at Amtek Gears Inc (USA)
2003 Took over Letchworth (UK) based GWK Group Ltd., known for complex machining and high level module
assembly
Acquired UKs largest manufacturer of Ring Gears and Flywheels at Lloyds Brierly Hill Ltd.

May-11
Launch of PowerZone 18 months warranty products
Dec-10
Launch of Amaron Volt, Amaron Sleek for Industrial applications
Jul-10
HR Excellence Award from CII
Apr-10
Among the Top 100 Franchising Opportunties in India for Year 2010 by 'The Franchising World'
magazine
Mar-09
Tie-up with TATA Intl. for distribution of Amaron in African Markets
Feb-09
Co-branding Amaron-MGB (Maruti Genuine Battery)

Amity Corporate Excellence Award for 0utstanding marketing
Jun-05
OE agreement with Hyundai Motors
Oct-04
OE agreement with Maruti Udyog Ltd.
Sep-04
Received Ford World Excellence Award
References:
Respective Companys website and annual reports
3.3 Vision, Mission, Goals, and Strategic Themes

Our Vision: Enabling Lives and Livelihood through Education and Technology
Our Mission- How we intend to achieve the mission: Like a spark that ignites an engine, the foundation aims to empower
individuals to create an impact that will help communities stand on their own feet, through employability training and technosolutions.
BeQIK Quality is our most valued asset Innovation today ensures business tomorrow Customer orientation inspires
customers and associates
BeBetter We want continuous improvement We want to be better than our competitors
BeBosch We offer outstanding products and services worldwide We keep our promises Profit secures our growth
Strategic Goals and Objectives:

Provide Employability Training and Techno-Solutions through Partners: Vocational training aims at connecting individuals and
societies to the economic engines, while technological solutions aim at robust affordable solutions that work in the
community context; e.g.: telemedicine or Solar Power for remote villages.
The foundation works through partners who may provide resources to enable this work. Eg: by funding providers of
marketable vocational trainings and entrepreneurs who create machines that could provide improvement in the quality of life
for disadvantaged communities.

Vision & Mission
To become a world class engineering company in the Automotive and Non-Automotive sector. This is to be achieved by
capitalizing on our superior technology base for the benefit of our customers, suppliers and stakeholders.

VisionThrough the Amara Raja way and through enduring progressive partnerships we will be a Global Leader in Batteries and
Battery Technologies and a dominant player in Indian Ocean Rim.
Mission and Philosophy-
"To transform our spheres of influence and to improve the quality of life by building institutions that provide better access to
better opportunities, goods and services to more peopleall the time."
Introduce latest generation technologies

Adapt these technologies to suit the operating environment
Develop and manufacture globally competitive, customer-focused products of world-class quality
Responsibly introduce these products into relevant markets
Provide world-class customer support
References:
3.4 Key Product and Service Portfolio

Product
Portfolio
Product Specification
Automotive
Parts & Accessories

Batteries
Belts
Filters
Horns
Lighting
Relays
Machining
Braking systems
Diesel fuel injection systems & components
Gasoline systems
Rotating machines & power spares
Spark plugs
Fuel injection calibration test benches (from inline pumps for common rail testing)
Technical
Auto electrical test bench (for starter motors and alternators)

Diagnostics scan tools
Engine analyser
Tyre service equipment, tyre changer, wheel balancer and wheel aligner and nitrogen tyre inflator
Battery service equipment (battery tester, battery charger, battery load tester)
Air conditioning service equipment (for automotive and HVAC applications)
Wide range of service tools for vehicle repairs and diesel equipment repair
Vehicle lifts
Electric vehicle solutions
End of line solutions
Diagnostic consultancy services
Technical IT and information systems
Connected vehicles (remote diagnostics, fleet management systems, fuel and CO2 management,
mileage reporting, vehicle tracking) Augmented reality (user manuals, brochures, diagnostics, repair
procedures)

Product Portfolio
Flywheel
Gears
Machining
Ring
Product Specification
Starter Ring Gear

Flex plate Assemblies (2 Piece)
Flywheel Assemblies
Conrod Piston Sub Assembly
Steering Knuckles
Ladder frames
Engine bearing ladders
Exhaust manifolds
Aluminium Case Housings
Bridge Fork Assemblies
Hubs
Spindles
Connecting Rods
Crankshaft
Housings
Gear Shifter Forks
Front Axle Beam Assembly
Crankshaft Assembly
Conrod Piston Sub Assembly
Flywheel Assembly
Pivot Arms
Flywheel Housing & Assembly
Front Axle Beams
Front & Rear Axle
Forging
Connecting rods & Caps

Crankshafts & Camshafts
Steering Levers
Gear shifter forks
Sector gears & shafts
Front Impact Beams Drive Shafts
Spindlers
Hubs & Flanges
Transmission Components
Steering Parts
Pistons
Propeller Fork Shafts
Stub - Axle
Front Axle Beam
Front & Rear Axle Shaft
Casting Aluminium
Clutch Cases
( HPDC & GDC )
Transmission cases
Timing Chain Covers
Mounting Brackets
Camshaft Covers / Carriers
Bearing Ladders / Sumps
Structural Covers
Differential Flange

The Companys ability to grow in the rapidly evolving and adverse external environment was due to its customercentric
approach, balanced nature of the business portfolio and entrenched presence across India and strengthening footprint in
international markets which resulted in a positive divergence high sales growth and an even higher profit growth.
Segment
Products
Industrial
Product portfolio offers capacities ranging from 4.5 Ah to 5,000 Ah under multiple brands
Amaron VoltTM (Telecom networks, data center, power station, oil and gas)
Power Stack (Telecom networks, data center, power stations, oil and gas, Indian Railways)
Quanta (UPS applications)
Power SleekTM (Wireless telecom network, UPS applications)
Passenger cars: Amaron Pro, Amaron Flo, Amaron Go, Amaron Black and Amaron Fresh
Commercial vehicles: Amaron Hiway
Tractors: Amaron Harvest
Two-wheelers: Amaron Pro Bike RiderTM
battery
division
Automotive
battery
division
References:
3.5 Core Competencies of the firm
Strategic far-sightedness
Our many years of experience allow us to recognize technical and business trends in a timely way, to set clear and
compelling objectives, and to ensure that they are attained systematically. Our objectives and actions always follow a
clear long-term strategy, both for our business field portfolio and for the global distribution of our business activities. This
rigorous pursuit of long-term objectives is based on a systematic business policy intended to preserve our entrepreneurial
freedom and financial independence at all times.
Innovative strength
The germ cell of our company and driving force behind our development is our determination to use our own creative
ideas to generate new technological solutions that deliver a high level of customer utility. The ability to do this stems from
the high qualifications and motivation of our associates and our close cooperation with customers who are at the cutting
edge of technology. This includes the readiness to invest significant resources in our own basic research, as well as in
projects whose market success will only be attained in the long term.
Efficient processes
As a mature industrial company, we have extensive experience of processes on all levels of value creation, from
development and production to sales. Our strengths also include our deep-rooted drive and capacity for continuous
improvement (CIP), which we use to continuously increase our efficiency in achieving the best return on investment. In
global competition, this allows us to perform a balancing act between functional differentiations of our products on the
one hand and cost leadership in commodity products on the other.
Quality and reliability

Since its inception, our company has earned a reputation for providing products and services of the highest quality and
reliability. Robert Boschs statement that quality is our most valued asset has remained an unwavering guideline for our
business policies. Its successful implementation is the reason for the excellent image of the Bosch brand. Our customers
put their trust in our ability to deliver high quality, even as products and systems become more complex. This trust is
based on our strength in implementing necessary improvements in a fundamental and lasting way.
Global presence
The company has its roots in Germany, but has also always had a strong international orientation. In the areas in which we
do business, hardly any other companies have such a broad global presence. Our global production and development sites
work together as a very closely-knit network. This network and our global experience put us in an excellent position to
exploit opportunities in current and future growth regions of the world.

The core competence of this unit is the precision machining of a very wide variety of iron castings and forging components.
The Group has developed core capabilities and know-how in the areas of progressive precision metal stamping; progressive
precision cold forging; precision machining; laser welding and bonding as well as plastics and rubber moulding, providing:
automotive components; casing and enclosures for enterprise servers and networking equipment; electrical and electronics
products for the power and energy sectors; consumer electronic products; imaging and printing products as well as other life
science and industrial equipment products.
Company has the ability to provide customers with an integrated range of casting, machining and sub-assembly capabilities.
Moving down the value chain into casting has enabled the company to increase the product range, provide a bundled service
to its customers and control more effectively raw material prices, processes and wastages.

The Company recognizes innovation as its core competence and strives to develop it as an organizational competence,
organizing focused training programs and interventions on innovation for all employees in the management grade.
References:
3.6 Business Model of the organization
Key Partners
Key
Activities
Value
Propositions
Customer
Relationship
s
Customer
Segments
Key
Vendors
Inventory intelligence agency
Customers
(MSMEs
and
Standalone)
Vendor Base development
Customer Base development
Quality check
Marketing (Digital and Social
Media)
Single stop point or portal for
all MRO needs.
Quality
checked
products
which
helps
maintain
continuity
of
service
or
manufacturing process.
Less hassle acquiring items,
less paperwork, cost saving
(Streamlined process)
Motivations for partnerships

Optimization and economy
Reduction of risk and uncertainty
Acquisition of particular resources and activities
Categories
Production
Problem Solving
Platform/Network
Characteristics
Newness
Performance
Customization
Getting the Job Done
Design
Brand/Status
Price
Cost Reduction
Risk Reduction
Accessibility
Convenience/Usability
Face- to- face interaction

Customer complaint redressal
team
Online
1. MSMEs
a. Manufacturing
b. Ancillary
2. Standalone customers
Sales Team
Mass Market
Niche Market
Segmented
Diversified
Multi-sided Platform
Types of resources
Resources
Channels
Cost
Structure
Revenue
Streams
References:
Warehouse
Vendors
Website
Variety of products offered
Procurement team
Website
Sales Team
Suppliers
Web hosting costs

Marketing and sales costs
Quality check costs
Vendor development costs
Administrative costs
Delivery Costs
Offline sales(Mainly bulk)
Online sales (Bulk and single)
Physical
Intellectual (brand patents, copyrights, data)
Human
Financial
Channel phases
1. Awareness
2. Evaluation
3. Purchase
4. Delivery
5. After sales
Cost Driven (leanest cost structure, low price value proposition,
maximum automation, extensive outsourcing)
Fixed Costs (salaries, rents, utilities)
Variable costs
Economies of scale
Economies of scope
Companys annual reports
3.7 3rd Generation Balanced Scorecard (Amalgamation of 1st Generation BSC and Activity System Map)
In the automotive industry, customers are always willing to pay a premium for innovation. Both process innovation and
product innovation are required to compete and earn a profit. Companies that can bring better quality in the form of new
products and new technology to market faster and cheaper become the winners in the automotive industry. It is necessary to
measure the speed at which innovation can be converted from ideas to profit.

Perspective
Financial
Objectives
Increase Return on Capital Employed
Reduce Unit Costs
Increase Asset Utilization
Grow Revenue/Increase Market Share
Measures
ROCE (12%)
% Productivity Improvement
Gross Margin
Sales/Assets
% Capacity Utilization (90%)
% Revenue Growth (12%/yr.)
Customer
Deliver On-Time, On-Spec

Achieve Image of Trusted Supplier
Enhance Customer Relationships
Become Innovative Supplier
Process
Improve Maintenance Effectiveness
Improve Manufacturing Efficiency
Upgrade Equipment
Improve Supplier Relationships
Understand Customer Needs
Build Distribution Network
Market Share (#1 or #2)

OTD %
Customer Defects/Returns
Customer Retention
Customer Ranking
Key Customer Account Share
($/%) Sales New Products
($/%) Sales New Technology Products
$ Hours Unscheduled Downtime
# Breakdowns/Incidents
PPM Defect Rates
Cycle Time
Changeover Time
Cost/Unit
% Gross Assets < 3 years old
% Certified Suppliers
Supplier OTD
Supplier PPM Defect Rate
Supplier Cost Reduction
# Hours with Key Customers
# Plans Jointly Developed with Customers
# Customers Profiled
# New Distributors
Units Sold Through Distributors
Excel at Product Development
Learning & Growth
Enhance Workforce Capabilities

Leverage Information Technology
Build a Culture for Change

References:
3.8 SWOT Analysis
NPV of Product Pipeline

Customer Rating of Pipeline
Time-To-Market
Strategic Job Coverage
# Cross-Trained Employees
Customer Databases
CRM Availability
Process Improvement (JIT) Tools
Employee Survey
# Best Practices Shared
Strength
Continuous improvement of products and

quality.
Streamlined Procedures for every function of the
company.
Leadership through innovation.
World class infrastructure facility.
Continuous improvement of products.
Bosch is cash rich, so dependency for external
funds is minimal.
Weaknes
s
Excellent distribution network throughout the

country.
Very good market share.
O.E to many vehicles.
Monopoly in a wide range of products like
Spark plugs, Fuel injection pumps, Nozzles,
Filters etc.
Access to advanced Technology through the
German company, BOSCH.
Large number of competent AND WILLING
Work Force, consulting the backbone of
Bosch.
Adaptability towards change is low.
Unionized work environment.
Performance appraisal of the employees is
not satisfactory.
Havent diversified into other lines of
business.
Lack of Promotions and Advertisements.
Increased demand for Trade Goods.

Sharing of advanced technology with Bosch.
Specialized distribution network.
Increase in Market share through sale of
Bosch products range.
Opportunitie
s
Bosch can foray into other line of

business as it has a good brand image.
It can produce eco-friendly to replace
existing products as the market for ecofriendly products are growing and the
economic forums have cited the need for
these products.
Increase of competition.
Too many substitute products available
in the market.
Growing bargaining power of suppliers
and customers.
Traditional method of working of the
business.
New and stronger competitors entering
Threats
Improper Customer complaint feedback

mechanisms.
Dissatisfaction among the retailers on
account of smaller margins.
Poor communication vis--vis Authorized
distributors compared to the other players in
the market.
the Market.
Brand image being slowly diluted due to
venturing into too many products.
Brand awareness declining on account of
lack of promotional and advertising
support.
OE products of other Brands posing a
threat to the Trade Goods.
Existence of spurious products.
Strength
Opportunit
y
Use of high end world class

technology
Excellent customer relation
Company has grown significantly
through acquisitions over last 3 years.
Weak Distribution channel

Low market share
Growing automotive industry
Exposed to cyclical downturn of auto

mobile industry
Healthy economic outlook
Rising labour cost and price of raw

materials
Auto after market demand

Growing Investments
Cheaper Imports
Intense Competition
Technical inefficiency
Depreciating currency
Opportunity
compliance law
from
new
US
IT
Weaknes
s
Threat

Strengths
Opportunitie
s
Extensive distribution network helps enhance Weaknes

s
presence
Strong Technological tie up (with Johnson
Controls Inc).
Strong Industrial and Automotive Client base
(supplies to BSNL, MTNL, BHEL, Indian Railways,
Maruti, Hyundai, Ford, Mahindra & Mahindra,
Ashok Leyland)
Buoyant automobile market with strong Threats

underlying demand coupled with MNCs
targeting India as manufacturing base
Continued Power deficits and strong telecom
demand underlies huge potential demand
References:
Not present in all automotive OE

sub segments (not present in high
growing
two
wheeler
OE
segment)
Has Manufacturing presence in
only one location
No captive smelting for key raw
material Lead
Intense competition with players
(Exide Industries, Tata GS-Yuasa)
expanding capacities
Cheaper imports from low cost
countries (China,
Thailand)
3.9 Competitor Analysis (identify competitors)

3.9.1 Based on Critical Success factors
Critical Success factors in this industry are:
Positive Image: One critical factor that often defines an automotive company is its public image. Because buyers entrust
their safety, along with a sizable portion of their income, to a car company, the perception of the company figures greatly
in the buying decision. Factors influencing an automotive company's image include advertising, word of mouth and expert
reviews and opinions.
Distribution Network: A more practical critical success factor for any automotive company is a strong network for
distribution. Because cars and trucks are not sold directly to customers, auto manufacturers rely on franchised dealerships
to provide local showrooms. These dealers must be knowledgeable and reputable to sell cars, which is essential for the
automaker. Like auto corporations, dealers are reliant on a positive image that may be influenced by, or influence in turn,
the image of the automaker.
Cash Flow: A healthy cash flow is another practical critical success factor. When an automaker provides incentives or
lowers prices, it almost always sells more cars, but the profit margin may not be a healthy one. At the same time, an
automaker needs to keep costs under control, including line items that are prone to fluctuation such as the price of raw
materials and outsourced components. Achieving a sustainable cash flow is central to the frequent discussions between
automakers and employee unions.
Compliance: Automakers must also ensure that the vehicles they sell are in compliance with various federal and local
regulations. These include emissions standards, fuel efficiency and safety standards. While it may cost less to produce
vehicles that perform marginally in these areas, the cost of a safety recall or government-mandated repairs are often
much higher and difficult to anticipate.
Flexibility: An elusive critical success factor for the automotive industry is the ability to be flexible. American car buyers
may change their buying habits quickly in response to factors like the state of the economy, the price of fuel and new
automotive technologies. It is essential that automakers remain attentive to these trends and keep in place a system that
can adapt quickly to create new products that meet the current and near-future needs of customers.
References:
Essentials of Strategic Management by Hill & Jones
3.9.2 Based on Financial indicators

Name
Last Price
Market
Cap.
(Rs. cr.)
Sales
Turnover
Net Profit
Total Assets
Bosch
26,069.10
81,854.11
9,858.77
1,050.21
6,425.90
Motherson Sumi
508.80
44,872.06
4,550.78
535.13
2,523.40
Exide Ind
188.85
16,052.25
5,972.66
487.08
3,731.46
Amara Raja Batt
870.10
14,862.40
3,451.75
367.44
1,447.04
WABCO India
5,722.10
10,853.44
1,110.70
117.48
755.17
Sundaram-Clayto
1,811.35
3,664.74
1,196.76
53.66
643.04
Amtek Auto
163.60
3,604.40
3,999.70
323.37
11,503.13
Horizon Infra
126.05
2,729.88
377.58
-171.54
5,424.97
Federal-Mogul
430.40
2,394.41
1,217.13
33.70
621.86
Amtek India
75.00
2,084.68
3,015.03
247.87
7,666.98
Minda Corp
88.40
1,850.31
616.76
21.77
390.08
Wheels
1,334.85
1,606.13
1,823.15
28.41
621.04
References:
4 Future Growth Strategy for the organization

4.1 Portfolio Analysis
4.1.1 Based on BCG Matrix
Question
Marks
Market Growth Rate
STAR
COW
Exide Ind
Amara Raja
Batt
Minda
Corp
Amtek
India
Bosch
Motherson
Sumi
Horizon
Infra
FederalMogul
Dogs
Market Share
References:
4.2 Companys Strategic Roadmap for future

Near Term (<- 2 years)
Mid Term (2-5 years)
Long Term (5-10 years)
Growth Areas
Four-wheeler OEM business
Establish
strategic
partnership with all major
customers
Introduce
new
range
of
batteries to suffice Quick
Charge and Deep Discharge
requirements
Effective
customer
engagement
at
multiple
levels to strengthen customer
bonding
Focusing on below-the-line
activities
for
effective
channel engagement
Maintaining effective post
after sale services
Potential
Benefits to be
achieved
Graduate from a product

vendor
to
a
complete
solutions provider
Bridging the gap in product Initiate business with other global

and domestic 4-wheeler OEMs
offering
Strengthening reach and
penetration in 2-wheeler
segment
Continue
to
outperform
industry growth
Capacity
expansion
in
progress
Improving
the
brand
visibility through media
campaign
Strengthen the presence in
the replacement market
High
Tasks
Level
Aftermarket business (four- OEM business

wheelers & two-wheelers)
Rewards
Risks
Foreign
Exchange
fluctuation risk
rate Raw materials price risk
Aggressive growth plan continue

to outperform the industry growth
Focus on the tractor segment to
increase market share
Commence business with leading
2-wheeler OEMs in India
Increase business volumes and

share with Indias leading car
manufacturer both diesel and
petrol variants
Operating business risk
Key
Success
Factors
Image
Quality Dealer system
Cost Control
Meeting company Standards
Good short term and long term Good Strategy

goals
References:
Companys Annual Report
4.3 Product Market Investment Strategy
Indian Auto-component industrys reaction to the global financial crisis of 2008

- Atmosphere of Gloom and Doom
- Volume demand shrunk by almost 50% overnight
- Industry reaction Laying of people
- Cutting back production
- Expansion plans put on hold (industry was running out of cash)
- (Investment in new capacity grew by 1% instead of 33% in previous year)
Caught completely off-guard by quick turnaround in fortunes of the automobile sector, on the back of governments fiscal
stimulus package
Production Capacity risen by 2 million in last 2 years).
Finally when it began to shift gears
- Tier II and Tier III players in the forging, casting and fabrication industry who had laid-off skilled and semi-skilled labor,
found it difficult to get them back.
- Bigger players skeptical about stimulus led demand, wanted to wait before making fresh investments (yet in cash
conservation mode)
Estimates for High-Growth
According to an ACMA-E&Y study
Domestic demand expected to jump from $ 30 billion (2009) to $ 119 billion (2020)
Exports expected to jump from $ 3.8 billion (2009) to $ 29 billion (2020)
1.2 million people to be added to workforce
Share in Indias GDP 2.1% to 3.6%
To tap this demand, domestic industry
Needs to scale up significantly

Should attract talent in a big way
Enhance product development capabilities
Tier II and Tier III players must either grow or consolidate rapidly
Needs to scale up significantly
Challenge margins are wafer thin

Auto-majors compensate only for increase in cost of raw-material
Industry left with very little surplus
Should attract talent in a big way
If India has to become a true global car mfg. hub, engineering skills would have to be dramatically ramped up.
Many millions of young engineers prefer IT over the shop floor
Should enhance product development capabilities
Delphi (once a part of GM), made the instrument cluster for Tatas Nano 30% cheaper than competing products
(looking to leverage this advantage with other manufacturers as well)
Tier II and Tier III players must either grow or consolidate rapidly
Global giants like Bosch, Continental and Delphi are building, buying capacity & eyeing local firms to tap India as a market
and a low-cost manufacturing destination
Wake up call for 500 odd domestic part makers, who at times cannot handle orders larger than 50000 units.
References:
Essentials of Strategic Management by Hill & Jones
4.4 Re-imagining the Organization with the transformed business model or Use-case based on SMAC and
IOE
In a recent interview, executives from Robert Bosch GmbH and McKinsey discussed the Internet of Everything (IoE) and its
impact on manufacturing. They described significant changes to the production process and to the management of supply
chains from this fourth industrial revolution.
The IoE allows for the interconnection of factories within and
across regions and the exposure or display of the status of
each component of each product for each customer via each
distribution method.
Sensors in machines and in
components will be able to keep universally in synch about
what has to be done, what has been done and how well it
was done.
A global decentralization of production control is now
possible. Creating this reality will require new forms of
intercompany and interdisciplinary collaboration. The buyer,
seller and distributor will all be involved in product design,
engineering, and logistics.
Today, physical flows and financial flows and information
flows are different for manufacturing. The IoE vision has
them increasingly fusing together.
In this coming future state information, via the

cloud, will be real-time available to all concerned
parties. The decisions to be made based on this
information will be subtle, situation-sensitive, and
so voluminous and time dependent that people
wont be making them. Algorithms running in
machine-machine (M2M) systems will.
Changing the trading cycles for Wall Street are
recent, real examples that provide a roadmap for
the manufacturing transition. In that world the
number of days allowed to settle a trade, the
settlement
cycle,
has
undergone
major
transitions. The most notable was from 5 days to 3
days, so-called T+5 to T+3, occurred in 1995. That
change required almost every firm in the US to
make some changes to their processing flows and
systems.
Since the move to T+3 various
exchanges have made further improvements
towards T+1.
T+1, even if never mandated, can be viewed as an example of industry opportunity through dislocation. At some level, IoE
capabilities can enable dramatic cycle time gains by unlinking end-to-end dependencies (e.g. I no longer need to affirm
trades based upon evaluating confirm trade messages). Some entities/roles will become more independent, some more
dependent.
The parallels for manufacturing in an Internet of Everything world are clear (though some elements used in trading may not
be used here or at the same level of emphasis). Cross-industry governance will be needed on the format and import of
transactions, acceptable technical modes of sending and receiving the messages, management of the quality and timing of
the messages both in content and technically, and how to handle disputes.
References:
http://ideas.returnonintelligence.com/tag/ismac/

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STM Assignment Workbook

Faculty: Prof. Anshuman Tripathy

Nature and Size of the Industry....................................................................................................................................... 5

Key Growth drivers for the Industry................................................................................................................................. 6

Identification of Critical Success Factors (CSF)................................................................................................................ 7

Market Analysis based on CSFs....................................................................................................................................... 8

Porters Five Forces Analysis.......................................................................................................................................... 15

Strategic Group Mapping............................................................................................................................................... 16

2.10 Market Segmentation.................................................................................................................................................... 19

Timeline with key milestones and their strategic impact............................................................................................... 27

Vision, Mission, Goals, and Strategic Themes................................................................................................................ 29

Key Product and Service Portfolio.................................................................................................................................. 30

Core Competencies of the firm...................................................................................................................................... 34

Business Model of the organization............................................................................................................................... 37

Competitor Analysis (identify competitors)................................................................................................................... 45

Based on Critical Success factors............................................................................................................................ 45

Based on Financial indicators.................................................................................................................................. 46

Future Growth Strategy for the organization........................................................................................................................ 47

Based on BCG Matrix............................................................................................................................................... 47

Companys Strategic Roadmap for future...................................................................................................................... 48

Product Market Investment Strategy............................................................................................................................. 50

Key Consumers of this industry and

Stage in the Industry Life cycle

Total Available Market Size (National

USD 38 billion (In FY 13, National)

Total Serviceable Market Size (National

2.2 Key Growth drivers for the Industry

Inadequate public transport

2.3 Identification of Critical Success Factors (CSF)

Diversified Customer Base

Cost Control Measures

Strengthens a company's bargaining position in negotiating supply contracts with OEMs

Degree of product complexity

2.4 Market Analysis based on CSFs

Note: Use data for the year 2013-14

2.5 Industry Benchmarks

Industry Average of Top 5 Firms or

Industry Average of Top 5 Firms or

Industry Average of Top 5 Firms or

Industry Average of Top 5 Firms or

Industry Average of Top 5 Firms or

2.6 PESTEL Analysis

Key factors for analysis

How stable is the political

Any business done in a countrys territory is

Government Policy / Law on

stance on the policies.

Government Policies on the

Rising GDP consecutively for the last 5 years

Changing global climate

The health and safety of employees is a major

2.7 Porters Five Forces Analysis

The automobile raw material and ancillary

Low cost of If an automaker decided to switch suppliers, it

The presence of many players of, little

To remain ahead in competition, automakers

There is a great threat for existing players from

to Globalization is a huge factor affecting the

auto market. For the Indian automobile

2.8 Strategic Group Mapping

When determining the availability of substitutes

Strategic Group Mapping

2.9 Competitive Landscape

Competitive Strength Assessment