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COMPANY OVERVIEW

History of Pak Suzuki

Pak Suzuki Motor Company Limited was formed as a joint venture between Pakistan
Automobile Corporation and Suzuki Motor Corporation (SMC) - Japan. The Company
was incorporated as a public limited company in August 1983 and started commercial
operations in January 1984. The initial share holding of SMC was 12.5% which was
gradually increased to 73.09%.
Pak Suzuki is pioneer in Automobile Business having the most modern and the largest
manufacturing facilities in Pakistan with an Annual production capacity of 150,000
vehicles. The vehicles produced include cars, small vans, Pickups, Cargo vans and
Motorcycle. Pak Suzuki holds more than 50% Market Share.
Following the aggressive policy of Indigenization, Suzuki vehicles have a healthy local
content upto 72%. This was made possible by strong support of our vendors.
Pak Suzuki has the largest Dealers network offering 3S (Sales, Service and Spare Parts)
facilities across Pakistan.
Caring for the Environment Pak Suzuki was pioneer in introduction of Factory fitted
CNG vehicles.
Pak Suzuki always endeavors to go aggressively for the sound development of the society
by increasing motorization, industrialization and creating job opportunities thus
improving the peoples living standards with the combined efforts of all the dealers,
vendors and Pak Suzuki employees.
Pak Suzuki is also exporting Suzuki Ravi pickup, Liana and components to Bangladesh
and Europe thus earning precious foreign exchange for the country.
GROWTH
On February 2009 Pak Suzuki has 48% market share. The sales growth covered all car
segments, but the global trend for a shift to small cars was buckedas the highest m-o-m
growth came in the 1300-1600cc segment, where sales rose by 31%. The 850cc and
1000- October), sales rose 21% to34,553 units. However, with October's price hikes
likely to affect sales in thecoming months, BMI is forecasting car sales growth of around
5%. While weexpect some correction in the market from a particularly low base in the
lastfinancial year, higher prices will drag on the market's potential growth.Indus Motor
took advantage of growth in the higher engine capacity passenger car segment, with sales
of the Toyota Corolla contributing to growth of 25% y-o-y in October and growth of 77%
for the first four months of the financialyear. This took the company's market share to
42% from 28% in the same periodof the previous financial year. Pak Suzuki's market share
for the four months fell to 45% as its sales for the period were down 2% y-o-y, despite a 23%
increase m-o-m in October and 2% y-o-y increase for the month.

EVENTS
Launching Ceremony of Suzuki WagonR

Pak Suzuki achieved another milestone on 18th April, 2014 by launching worldwide
successful Suzuki WagonR Car in Pakistan. Suzuki WagonR is of its own class in terms
of technology with highly fuel efficient K-Series Engine, Spacious interior. The Suzuki
WagonR is also considered as a Star Product in Suzuki Motor Corporations line up and
has won many appreciations and awards worldwide.

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Introduction of 7S Campaign
Suzuki dealerships are now moving beyond 3S Services and providing complete solution
of automobile needs covering Sales, Service, Spare parts, Suzuki Exchange, Suzuki
Certified Used Cars, Suzuki Finance and Suzuki Insurance. These 7S Services are
provided at all Suzuki authorized dealerships so that customers can benefit from these
facilities under one roof.
A promotional campaign based on 7S concept was executed at country wide Suzuki
authorized dealerships in the month of April, 2014 for customers awareness about these
service.
1st Outboard Motors handing over Ceremony
Pak Suzuki achieved another milestone by introducing Outboard motors in Pakistan. The
First Outboard motor was handed over to a customer at Karachi Boat Club in a ceremony
held on 11th June, 2014.
Certified Used Car Gala

Pak Suzuki Organized 2nd Used Car Gala of 2014 in Lahore, Rawalpindi and Karachi on
13th April and 7th, 15th June, 2014 respectively, where Suzuki certified used cars were
displayed. All events were successful with participation of large number of customers. A
large numbers of vehicles were sold on the spot.

Indoor Games Festival 2014


Pak Suzuki Indoor Games Festival 2014 was held in the month of April and May 2014 at
Pakistan Sports Board Gymnasium. Events of Basket Ball, Table Tennis, Badminton and
Carrom were played. Large number of audience enjoyed the sports festival.
In the end, prizes were distributed among winners and runners up. Lucky draws were also
held afterwards.
ISSUES
As a general manufacturer of automobiles, motorcycles, outboard motors, etc.,Suzuki
addresses environmental conservation at all stages in its operations from development to
disposal. In product development, we make every effort to improve fuel economy, reduce
exhaust emissions and noise, and develop clean energy vehicles, etc. In manufacturing,
we address issues such as reducing environmental risk, reducing energy, and promoting
the use of alternative energy. In distribution, we focus on improving transportation
efficiency and energy reduction, promoting the three Rs and the use of low emission
transport. In marketing, we address issues related to promoting environmental
management at our dealers and proper disposal of end-of-life products,etc.In addition to
activities related to production, we also promote energy reduction and green purchasing
in our offices, provide our employees with environmental education, promote
environmental management at our dealers, and provide social action programs in local
communities
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Existing Mission and Vision statement

VISION
To be recognized as a leading organization that values Customers needs
and provides motoring solutions with strong customer care.

MISSION
Strive to market value packed vehicles that meet customers expectations.
Provide a platform where our stakeholders passionately contribute, invest
and excel.
Make valuable contribution to Social development of Pakistan.

NEW VISION AND MISSION


Our Vision
To be Excellent All Around
OUR MISSIOM
To provide automobile of international quality at competitive price.

SWOT ANALYSIS

PEST Analysis
Uncontrollable environment are those external factors which can create hurdles between
us and our business. It is also called pest analysis, which is as follow:

Political Environment
Pakistan has to face lots of political ups and downs since its independence. So many
governments have been overtaken by military personnel and most of the time martial law
was imposed on Pakistan. In this scenario no entrepreneur was willing to invest in
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Pakistan except few. Due to such conditions, market environment wasnt helpful in
Pakistan. The Pakistani government has never been trustworthy for any investor.
Legal Environment
As all countries, Pakistan also has some legislation about each sector. But like
developing countries it is hardly being imposed by authorities. The corruption, smuggling
and black marketing have been supported by Government related officials. The undue
favor is given to those business men who have been politically affiliated and hardly any
legal suite is carried on against them. Such unethical activities destroy all law and
legislation.
Economic Environment
Pakistan, an impoverished and underdeveloped country, has suffered from decades of
internal political disputes and external ongoing conflict with India. However, IMF
approved the government policies, encourages by different foreign assistance and
renewed access to global market since 2001.
By following these policies government succeed to reverse the situation of economy
during last five years.
Socio-Culture Environment
Pakistan has strong culture background and it has been follow in some particular region
of Pakistan strictly. But with the passage of time it is going to change. Thoughts of
people, choices, taste and style has been totally changed. If we talk about the
transportation source in Pakistan, People use buses, pickups etc for journey. They also
have their own bicycle and bikes and lots of people are pedestrian. But now the people
who havent any source of transportation they also want something for their convenience
because they wants to save their time as much as they can. People want to use such
vehicle which looks beautiful and also affordable.
Technological Environment
Technological factor also very important and we havent control on it. Technology is
grooming with the passage of time. People also want that the product that they have is
full of technology. We never control on technology for example you launched the
product last year and your sale volume on that time is very high but after sometime due to
latest invention a lots of substitute exist in market which affect on your business so you
cant hold on it.

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External Assessment

CPM

External Factor Evaluation Matrix (EFE)


OPPORTUNITIES
1.
2.
3.
4.
5.
1.
2.
3.
4.
5.

Weight

Ratings

Increasing Demand for Cars


Efficient EFI Engines
Large Market to operate
Global spare parts market
Small size CNG Cylinders
THREATS
Tough Competitors like Toyota and Honda
Inflation Rate
Heavy Taxes
Cheaper Imported Cars
Increase in Fuel Prices

0.15
0.10
0.10
0.05
0.12

4
3
3
2
3

Weighted
Score
0.60
0.30
0.30
0.10
0.36

0.14
0.08
0.08
0.10
0.08

2
3
3
4
2

0.28
0.24
0.24
0.40
0.16

Total Weighted Score

1.0

Ratings:
1 Poor
2 Below Average

2.98

3 Above Average
4 - Superior

The total weighted score of 2.98 shows that company is responding above average to its
external factors. They are trying to grab maximum opportunities available there and
avoiding the threats to their best.
Justification of Ratings:
1. The company is producing the maximum number of cars in compare with other

competitors and therefore grabbing the opportunity to meet the increasing demand.
2. Pak Suzuki has introduced new EFI engine in its CULTUS model which is a 1000cc
car.
The EFI engineASSESSMENT
technology is never introduced before in below 1300cc cars.
INTERNAL
3. The dealer network of Pak Suzuki is almost all around the country which help them to
maximize their sales and reach in every corner of the country.
4. In new CNG fitted cars, the Suzuki is introducing new compact CNG cylinders which
take less space and are lighter than their equivalent available in the market.
5. The major threat Suzuki Company could have is from Toyota and Honda, as Suzuki is
still unable to meet them in 1300cc and above category of cars. The new product SWIFT
is not giving the respond which was expected.

ORGANIZATIONAL CHART

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Internal Factors Evaluation Matrix (IFE)


STRENGTHS
1.
2.
3.
4.
5.
1.
2.
3.
4.
5.

Weight

Ratings

Highest Market Share


Low Price Vehicles
Large Distribution Channels
Easy availability of spare parts
Highly Innovative and deep product line
WEAKNESSES
Scarcity of raw material
Lack of coordination and linkage with
Govt. bodies
Less focus on Looks and design
Less Technical Training Institutes
Less distribution channels in sub urban
areas

0.20
0.10
0.12
0.08
0.12

4
4
4
4
4

Weighted
Score
0.80
0.40
0.48
0.32
0.48

0.08
0.05

2
2

0.16
0.10

0.10
0.05
0.10

1
1
1

0.10
0.05
0.10

Total Weighted Score

1.0

Ratings:
1 Major Weakness
2 Minor Weakness

2.99

3 Minor Strength
4 Major Strength

The score 2.99 shows that company has solid internal position, its strengths are
overcoming the weaknesses.
Justification of Ratings:
1. Pak Suzuki Motor Company has large market share herein and also the largest
producers of Cars which is a major strength.
2. Their prices are very affordable in the same quality that is another major strength.
3. The large distribution channel is another major strength which helps them to achieve
their desired sales targets.
4. The innovation is another key strength of Pak Suzuki and the example is new Suzuki
SWIFT.
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5. The spare parts availability is a critical issue which cars, Suzuki has comparative
advantage in spare parts availability as most of them are being manufactured in Pakistan.
6. The major weakness which I felt is the non-availability of skilled engineers and
workforce. And the reason behind is lack of technical institutes under their banner.
7. They should also focus on sub-urban areas like Southern Punjab and Interior Sind
which their distribution network.

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FINANCIAL RATIO ANALYSIS OF PAK SUZUKI MOTORS

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STRATEGY FORMULATION

SWOT Matrix
STRENGHTS
1. Highest Market
Share
2. Low Price Vehicles

SWOT / TOWS
Matrix

3. Large Distribution
Channel

3. Less focus on Looks


and design

4. Highly Innovative &


Deep product line

4. Less Technical
Training Institutes
5. Less distribution
channels in sub-urban
areas
W-O Strategies

5. Easy availability of
spare parts
OPPORTUNITIES
1. Increasing Demand
for cars
2. Efficient EFI engines
3. Large Market to
Operate
4. Small size CNG
Cylinder

S-O Strategies
1. Maximize market
share by producing
more cars per year
(S1,S2,O1,O4)
2. Develop more
efficient and innovative
Engine which gives
comparative advantage
(S4,O2)

5. Global Spare parts


market

3. Use efficient CNG


systems (S4,S5,O4)
S-T Strategies

THREATS
1. Tough Competitors

6. Maintain quality in
affordable price will
help to compete with
competitors and
imported cars
(S2,S4,T1,T4)

2. Inflation Rate
3. Heavy Taxes
4. Cheaper Imported
Cars

7. Develop fuel
efficient engines to
gain edge and
eliminate threat of fuel
prices increase
(S4,S5,T5,T2)

5. Increase in Fuel
prices

WEAKNESSES
1.Scarcity of Raw
Materials
2. Lack of coordination
with Govt. Bodies

4. Focus on Looks and


Design to compete with
Honda and Toyota
(W3,O1,O3)
5. Fund and establish
technical institutes to
gain more skilled
workforce (W4,O3,O1)
W-T Strategies

8. Enhance distribution
to avoid threat from
second hand imported
cars (W5,T4)

Grand Matrix
Rapid Market Growth

Q1

Q2

Weak Competitive Position

Strong Competitive Position

Q3

Q4

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Slow Market Growth

The grand matrix helps us to determine the strategy that firm must pursue, based on its
competitive position and market growth.
The Pak Suzuki Motor Company Limited has strong competitive position against its
major competitors and the market growth is healthy and at increasing pace.
But they still need to do lot to get themselves at top. As per my judgment, they fall under
Quadrant 1 and they should follow aggressive strategies like Market Development and
Product Development.
BCG-matrix, Boston matrix, Boston Consulting Group
analysis

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SPACE MATRIX DATA

SPACE MATRIX

Space Matrix
Financial Strength (FS)
Return on Investment
Working Capital
Short Term Assets
Total:
Industry Strength (IS)
Large Market to operate
Increasing per Capita Income
Consumption Oriented Culture
Total:
Competitive Advantages (CA)
High Quality Products
Sleek and Stylish Designs
Famous Brand Names
Total:
Environmental Stability (ES)
Tough Competition
Change in Govt. rules and regulations
Imported Refurbished Cars
Law and Order Situation
Total:

+4
+3
+4
+11
+5
+3
+4
+12
-3
-4
-3
-10
-2
-3
-4
-2
-11

Average Scores:
FS = 11/3 = 3.67
IS = 12/3 = 4
CA = -10/3 = -3.33
ES = -11/4 = -2.75
X-axis = IS+CA = 4-3.33 = 0.67
Y-axis = FS+ES = 3.67-2.75 =
0.92

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Space
In space matrix weve observed that
strategies. We consider they key factors of
Strengths, Competitive Advantages and
them values as per their importance worst
us to the decision that company will
suggest Market Development and

company will pursue aggressive


Financial
Strengths,
Industry
Environmental Stability. By assigning
to best, we calculated the score which lead
pursue Aggressive strategies. And I would
Product Development strategies will

work best for PSMC.

IE MATRIX
IFE Matrix Scores
Strong
EFE
Matrix
Scores

4
Strong
Average
Weak

Average
3

Weak
2

ii

iii

iv

vi

vii

viii

ix

3
2
1

The IFE matrix score for Pak Suzuki Motor Company Limited (PSMCL) is 2.99 and for
EFE matrix is 2.98 therefore our IE matrix falls more around iv cell.
The company should adopt growth and built strategies and I recommend Market
Development and Product Development Strategies.

QSPM MATRIX
Market Development
External Factors
Increasing Demand for Cars
Efficient EFI engines
Large Market to operate
Global Spare parts market
Tough competitors
Inflation

Weight
0.10
0.06
0.08
0.04
0.08
0.06

Attractive
Score
4
3
4
3
4
1

Total
0.40
0.18
0.32
0.12
0.32
0.06

Product Development
Attractive
Score
4
4
4
2
2
1

Total
0.40
0.24
0.32
0.08
0.16
0.06

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Cheaper Imported cars


Increase in fuel prices
Internal Factors
Highest Market share
Low price vehicles
Large distribution channel
Easy availability of spare
parts
Innovative and deep product
line
Less focus on style and
design
Scarcity of human resource
Totals

0.08
0.10

4
4

0.32
0.40

4
4

0.32
0.40

0.08
0.10
0.06
0.02

3
1
2
3

0.24
0.10
0.12
0.06

4
4
3
3

0.32
0.40
0.18
0.06

0.06

0.24

0.18

0.04

0.16

0.16

0.04

0.12

0.16

1.0

3.16

3.44

By comparing both Market Development and Product Development, we obtained more


weighted attractive score for Product development. That means company should follow
the product development which is part of aggressive strategies. This strategy is going to
help the firm in eliminating its threats and grab the opportunities to be successful in the
present macro environment.

STRATEGIC PLAN
The objective is to become the lowest-cost producer in the

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The main focus of Suzuki Motors is the Overall Low Cost ProviderStrategy where they
provide low cost automobiles along with fuelefficiency and low cost of maintenance
Suzuki also differentiates its product in particular segment to captureand gain market
share by using differentiation strategy
Introduction of Suzuki Liana and Suzuki Swift is a clear sign thatSuzuki Motors are
moving towards extending their product portfolio
DIFFERENT STRATEGIES APPLIED BY PAK SUZUKI MOTORS LIMITED

Competitive advantage is an advantage over competitors gained by offering consumers


greater value, either by means of lower prices or by providing greater benefits and service
that justifies higher prices.
Strategies for Competitive Advantage:Differentiation Strategy :This strategy involves selecting one or more criteria used by buyers in a market - and
then positioning the business uniquely to meet those criteria. This strategy is usually
associated with charging a premium price for the product - often to reflect the higher
production costs and extra value-added features provided for the consumer.
Differentiation is about charging a premium price that more than covers the additional
production costs, and about giving customers clear reasons to prefer the product over
other, less differentiated products.
Low Cost Leadership Strategy :With this strategy, the objective is to become the lowest-cost producer in the industry.
Many (perhaps all) market segments in the industry are supplied with the emphasis
placed minimizing costs. If the achieved selling price can at least equal (or near)the
average for the market, then the lowest-cost producer will (in theory) enjoy the best
profits. This strategy is usually associated with large-scale businesses offering "standard"
products with relatively little differentiation that are perfectly acceptable to the majority
of customers. Occasionally, a low-cost leader will also discount its product to maximise
sales, particularly if it has a significant cost advantage over the competition and, in doing
so, it can further increase its market share.
Quick response Strategy :Just in time inventory partnership strategy between suppliers and retailers of general
merchandise. It is aimed mainly at reducing order response time, and achieving greater
accuracy in shipping the correct goods in correct quantities, by employing computerized
equipment such as barcodes and EDI to speed up flow of information. Its other objectives
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include reduction in operating expenses, out-of-stock situations, and forced mark-downs


(discounts).

CONCLUSION:
The following are the findings of the study of Pak Suzuki Motor
Company Limited.
External Factor Evaluation Matrix Score: 2.98
Internal Factor Evaluation Matrix Score: 2.99
BCG Matrix:
Star: JIMNY, BOLNA
Question Mark: SWIFT
Cash Cows: MEHRAN, CULTUS, ALTO, RAVI
Dogs: APV, LIANA
Internal External Matrix: Growth and Built Strategy
Space Matrix: Quadrant 1, Aggressive Strategies
Grand Matrix: Quadrant 1, Aggressive Strategies
Market Development, Product Development
QSPM Matrix:
Market Development: 3.16
Product Development: 3.44
Chosen Strategy is Product Development.

STRATEGIC RECOMMENDATIONS
Product Development is the selected strategy at this point of time for Pak Suzuki Motor
Company Limited that we observed from our strategic analysis of the firm.
In product development strategy we recommend the company to focuses on having the
highest level of product performance, the highest level of functionality or functions and
features, the latest technology or the highest level of product innovation.

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This strategy might have some risk for the company as innovative products are involved
but proper research and development will cater the risk and company can pursue with the
strategy to be the market leaders and get on top.
One major setback to PSMC was in the shape of Suzuki LIANA, which was not able to
meet the expectations and couldnt hold the market it was made for.
But company didnt stop its journey there, and now Suzuki SWIFT has recently been
launched in the market, which seems to be an attractive offer for the market in the 1300cc
class. But still company has nothing to compete with HONDA and TOYOTA. The Suzuki
needs to enter into the 1600cc and 1800cc market to expand its market share and market
growth. But for that purpose they need to put more efforts of product development as the
new product must have all the required features and technology that is needed to compete
with giant competitors. And of course, PSMC has competitive advantage in local
assembling and manufacturing of parts and they can utilize that advantage to produce
cheaper cars in the categories mentioned above.
The PSMC has recently received acknowledgement from Prime Minister of Pakistan for
being the only car manufacturers for the lower and middle income people of Pakistan.
But they should also need to get into the line of HONDA and TOYOTA, to achieve that
target they need to develop more technologically cheap and efficient and quality oriented
products.
FUTURE RECOMMENDATIONS
The former President Asif Ali Zaradari invited leading automobile industries to invest in
Pakistan. So government can be accredited for its sincerity in efforts.
Japan is the 4th largest investor in the automobile sector in Pakistan which includes
Suzuki and other giants like Indus motors and Hindo Pak motors.
Due to the decline in the duty of the second hand cars in Pakistan, Suzuki has the great
incentive.
Due to the lower price level, there is an huge incentive for the consumer. But competition
also gets stiff.
They should compete with the other brands in the market so it can increase its
performance but should not lose its target audience which is upper middle and lower
class.

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