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INDIRA SCHOOL OF BUSINESS STUDIES

Research Methodology Report


On Ashok Leyland

SUBMITTED BY:-
Abhishek Singh
Roll no.50(DIV-A)
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INDEX

1..INTRODUCTION

2. COMPANY HISTORY

3. .VISION AND MISSION OF THE COMPANY

4.ORGANIZATION STRUCTURE

5. FINANCIAL PERFORMANCE AND OWNERSHIP


STRUCTURE

6.MARKET CAPITALIZATION

7. SIZE IN TERMS OF NO. OF EMPLOYEE AND TURN


OVER

8. EXCUTIVE PROFILE
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9. PLANT LOCATION

10.JOINT VENTURE

11.BUSINESS STATUS

12.PEST ANALYSIS

13.INDUSTRY OVERVIEW AND ANALYSIS

14.SWOT ANALYSIS

16.MARKETING STRATEGIES

17.CSR ACTIVITY

18.MARKETING OPPURTUNITIES

19. EXECUTIVE SUMMARY


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INTRODUCTION

The manufacture of commercial vehicles in the country started in 1948.


Initially the production was of only light commercial vehicle of jeep and
car derivation. Within a few years the heavy commercial production
overtook the LCV production and by early sixties the heavy commercial
production was four times the light commercial vehicle production.
Ashok Leyland vehicles have built a reputation for reliability and
ruggedness. The 5,00,000 vehicles we have put on the roads have
considerably eased the additional pressure placed on road transportation
in independent India. In the populous Indian metros, four out of the five
State Transport Undertaking (STU) buses come from Ashok Leyland.
Some of them like the double-decker and vestibule buses are unique
models from Ashok Leyland, tailor-made for high-density routes. The
blueprint prepared for the future reflected the global ambitions of the
company, captured in four words: Global Standards, Global Markets.
This was at a time when liberalisation and globalisation were not yet in
the air. Ashok Leyland embarked on a major product and process
upgradation to match world-class standards of technology.
In the journey towards global standards of quality, Ashok Leyland
reached a major milestone in 1993 when it became the first in India's
automobile history to win the ISO 9002 certification. The more
comprehensive ISO 9001 certification came in 1994, QS 9000 in 1998
and ISO 14001 certification for all vehicle manufacturing units in 2002.
It has also become the first Indian auto company to receive the latest
ISO/TS 16949 Corporate Certification (in July 2006) which is specific to
the auto industry.
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COMPANY HISTORY
The origin of Ashok Leyland can be traced to the urge for self-reliance,
felt by independent India. Pandit Jawaharlal Nehru, India's first Prime
Minister persuaded Mr. Raghunandan Saran, an industrialist, to enter
automotive manufacture. In 1948, Ashok Motors was set up in what was
then Madras, for the assembly of Austin Cars. The Company's destiny
and name changed soon with equity participation by British Leyland and
Ashok Leyland commenced manufacture of commercial vehicles in
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Since then Ashok Leyland has been a major presence in India's


commercial vehicle industry with a tradition of technological leadership,
achieved through tie-ups with international technology leaders and
through vigorous in-house R&D.
Access to international technology enabled the Company to set a
tradition to be first with technology. Be it full air brakes, power steering
or rear engine busses, Ashok Leyland pioneered all these concepts.
Responding to the operating conditions and practices in the country, the
Company made its vehicles strong, over-engineering them with extra
metallic muscles. "Designing durable products that make economic
sense to the consumer, using appropriate technology", became the
design philosophy of the Company, which in turn has moulded
consumer attitudes and the brand personality.
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Ashok Leyland vehicles have built a reputation for reliability and


ruggedness. The 5,00,000 vehicles we have put on the roads have
considerably eased the additional pressure placed on road transportation
in independent India.
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VISION AND MISSION

LEYLAND¶S VISION:cLeyland¶s vision is to enhance the quality and


safety of travel and achieve customer satisfaction.
Leyland focuses on maintain and implement better quality standards to
ensure people with more comfortable and safe drive.There vision is
expressed in their statement as: âLeyland-Enriching people¶s Lives.´
The significance of this is that Leyland aims to participate in the
development and progress of society through its business activities
worldwide. This is only achieved through set of objectives that needs to
be focused and better implemented through effectiveness and efficiency

LEYLAND¶S MISSION:

1.Identifying with the customers

2.Being the lowest cost manufacturer

3.Global benchmarking our product,processes and people


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ORGANISATION STRUCTURE
MANAGING DIRECTOR

EXECUTIVE DIRECTOR

SENIOR DIRECTOR

GENERAL MANAGER

ASST. GENERAL MANAGER

DEPUTY GENERAL MANAGER

ASST. MANAGER

SENIOR OFFICER
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OFFICER

DIVISIONAL MANAGER

MANAGER

SENIOR MANAGER

DEPARTMENTAL MANAGER
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FINANCIAL PERFORMANCE AND

OWNERSHIP STRUCTURE

COMPANY¶S PERFORMANCE IN THE YEAR 09-10


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OWNERSHIP STRUCTURE
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MARKET CAPITALIZATION
Market Capitalization: 9292.15 (cr)

PE Value: 26.56

Dividend: 2.15

MARKET CAPITALIZATION=NO.OF SHARES* CLOSE VALUE OF SHARE

= 176.49*52.65

MARKET CAPITALIZATION= 9292.15


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SIZE IN TERMS OF NO OF EMPLOYEES


AND TURNOVER

Ashok Leyland, a flagship company of The Hinduja Group, is engaged


in manufacturing and marketing of commercial vehicles. The company
manufactures trucks, buses, defense vehicles, and engines. It primarily
operates in Asia. The company is headquartered in Chennai, India and
employs about 12,000 people. The company recorded revenues of
INR66,666.4 million ($1,454.7 million) during the financial year ended
March 2009 (FY2009), a decrease of 25.5% compared to FY2008. The
operating profit of the company was INR3,406.4 million ($74.3 million)
during FY2009, a decrease of 51.4% compared to FY2008. The net
profit was INR1,900 million ($41.5 million) in FY2009, a decrease of
59.5% compared to FY2008.
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EXECUTIVE PROFILES
Born on June 1, 1948, Mr. R. Seshasayee is a Chartered Accountant who
started his career with Hindustan Lever Limited in 1971. He joined
Ashok Leyland in 1976. Appointed as Executive Director in 1983, he
was elevated as Deputy Managing Director in 1993 and has been the
Managing Director since April 1, 1998. On the National Council of
Confederation of Indian Industry (CII) for over 15 years, he has been
Chairman of several National Committees of CII including on Eighth
Plan, Economic Affairs, Defence, Surface Transport and International
Trade & WTO. He was a member of the Government of India
delegations to Doha and Hong Kong Ministerial Rounds of WTO in
2001 and 2005 respectively. He is also past Chairman of the CII -
Southern Region. He is the immediate Past President of the CII.
Currently, he is the Chairman of IndusInd Bank Ltd. He was the
President of Society of Indian Automobile Manufacturers- the apex body
representing automobile industry in India during 2001-2003, Seshasayee
has served on several professional committees such as the Accounting
Standards Board and the research committees of the Institute of
Chartered Accountants of India. He is a member in the governing
council of the Institute for Financial Management & Research and the
Academy for Management Excellence. He is presently the Chairman of
the Board of Governors of National Institute of Technology
Tiruchirapalli (NITT). He has served as a director in ICICI Bank, EID
Parry India Ltd, and Sundaram Asset Management Co. Ltd.
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served as the Managing Director of Jessop & Co. Ltd. Mr. Shahaney
served as the Managing Director of Ashok Leyland Ltd. from July 1978
to May 1998 and has successfully led its through to its present stature
and eminence. He has over 50 years of Board level experience. Before
joining Ashok Leyland, Limited in 1978, Mr. Shahaney served as
Chairman of the Board of Jessop & Co. Ltd., Kolkata (a Government ...

PROPORTION OF DIFFERENT EXECUTIVE IN


ASHOK LEYLAND
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BUSINESS OPERATIONS AND PLANT


LOCATION ALL OVER THE WORLD

Plant Locations

1.Ennore
Kathivakkam High Road
Ennore
Chennai

2.Hosur ± Unit I
175 Hosur Indl. Comple
Hosur

3.cHosur ± Unit II
77 Electronic Complex
Perandapalli Village
Hosur

4. Hosur ± Unit IIA


Cab Panel Press Shop
SIPCOT Industrial Complex
Mornapalli village
Hosur

5.cBhandara
Plot No.1 MIDC Industrial Area
Village Gadegaon,
Sakoli Taluk, Bhandara 441 904
Maharashtra
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6.Alwar
Plot No.SPL 298
Matsya Indl. Area
Alwar 301 030
Rajasthan

7.cAmbattur
3A/A&2 North Phase
SIDCO Industrial Estate
Ambattur
Chennai 600 098
Tamil Nadu

8.cTechnical Centre
Vellivoyalchavadi
Via Manali New Town
Chennai 600 103
Tamil Nadu

9.cPantnagar
Plot No.1, Sector XII
II E, Pantnagar,
Pin - 263 153
Uttarakhand
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JOINT VENTURE AND ALLIANCE


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A 50:50 Joint Venture to manufacture


and market construction equipment
under both the Ashok Leyland and John
Deere brands. The JV will commence
production by 2010 and will initially roll
out Backhoes and Four-wheel-drive
Loaders.
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Ashley Alteams

A 50:50 Joint Venture to produce High


Pressure Die Casting (HPDC)
aluminum components pre-dominantly
for telecommunications & automotive
sectors.
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Nissan Motor Company

A Joint Venture to develop,


manufacture and co-operate for the
manufacture and distribution of Light
Commercial Vehicles under both the
Ashok Leyland and Nissan brands. The
Joint Venture has three separate
companies with different share-holding
structures:
A vehicle manufacturing company
in which the shareholding is Ashok
Leyland: 51% and Nissan: 49%
A powertrain manufacturing
company in which Nissan has 51%
and Ashok Leyland 49%
A technology development
company which is owned 50:50 by
both partners

Automotive Infotronics

A 50:50 Joint Venture set up to design,


develop and adapt infotronics products and
services for automotive customers and will
cater to the requirements of Ashok Leyland
and available opportunities with other vehicle
manufactures in India and overseas.
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BUSINESS STATUS

Ashok Leyland is the second largest manufacturer of medium and heavy


commercial vehicles (M&HCV) in India. It had a 27% market share in
the domestic M&HCV segment and a marginal presence in the LCV
segment (light commercial vehicles). In FY09, the company had entered
into an agreement with Nissan manufacturing company for the
manufacture of LCVs, thus taking a big step towards consolidating its
presence in the segment.

PEST ANALYSIS
There are many factors that affect any organization. Tax changes, new
laws, trade barriers, demographic changes government policy changes
etc. are all examples of macroscopic changes. To help analyse these
factors we categorize them using the PEST model. This classification
distinguishes between political, economical, social and technological.

By PEST analysis we can know about extended environment and key


drivers of change of an organization.
Political:
These refer to government policy such as the degree of intervention in
the economy. What goods and services does a government wants to
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provide, to what extent does it believe in subsidising firms, what are its
priorities in terms of business support.

The political factors related to automobile industry are:


‡ Indian government auto policy aimed at promoting an
integrated, phased and conductive growth of the Indian
automobile industry.
‡ Promoting multi-model transportation and the implementation
Of mass rapid transport system.
‡ Changes in taxation policy.
‡ Foreign equity investment up to 100% in the automotive
sector and there is no minimum investment criteria.
Economical:
These include interest rates, taxation changes, economic growth,
inflation and exchange rates. Economic change can have a major impact
on a firm's behaviour.
The economics factors related to automobile industry are:
‡ Weighted tax deduction of up to 150% for in-house
research and R&D activities.
‡ Govt. has granted concessions, such as reduced interest
rates for export financing.
‡ Several Indian firms have partnered with global players
‡ Rise in price of the raw materials.
‡
Deteriorating foreign exchange situation in western country, poor buying
capacity and comparatively cheaper import of second hand automobile
from developed country reduces the export of automobile from India in
recent days.
Social:
Changes in social trends like population increase can impact on
the demand for a firm's products and the industry as a whole.
The social factors related to automobile industry are
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‡ Indian customers are highly price sensitive and put a lot of


emphasis on value for money.
‡ Changed lifestyle of people has lead to increased
purchase of automobiles. So the company has a large customer base to
serve.
‡ Upward migration of household income levels.
‡ Preference for fuel efficient vehicles with lower running
cost.
. Growth in urbanization.
Technical:
New technologies create new products and new processes. Technology
can reduce costs, improve quality and lead to innovation. These
developments can benefit consumers as well as the organizations
providing the products. Sometimes the technology reduces the life cycle
of products. The technological factors related to automobile industry are
. Accelerated acquisition of technology capabilities to raises
productivity in agriculture.
Continuous technological innovation.
‡ Renewable energy development. Ex, coal gas renewable.
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INDUSTRY OVERVIEW AND ANALYSIS

A Porter's Five Forces Analysis explores five principal industry factors


to determine the attractive of a given industry in a given market. In this,
we look at the automobile industry in India. This is independent of any
manufacturer. As such, it applies to every Indian car manufacturer.
In any P5F analysis, one must examine the following:
1.The threat of new entrants.
2.The bargaining power of buyers/customers.
3. The threat of substitute products.
4. The amount of bargaining power suppliers have.
5. The amount of rivalry among competitors.

The threat of new entrants:

In most markets, the capital and expertise needed to setup an auto or


parts manufacturing facility would be a great enough barrier to entry to
prevent many new entrants from setting up.
However, given India's incredible growth forecasts, infrastructure
progress (especially new and better roads), and ever-expanding
financing options to rural residents, the market is attractive. As such, we
expect the threat of new entrants to be high.

The bargaining power of buyers/customers:

Buyers in India have a wide variety of choice. There are more than 20
foreign manufacturers selling in India (including ultra high-end such as
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Rolls-Royce and Lamborghini). Of course there are also a plethora of


incredibly cheap choices, like the famous Tata Nano.

The threat of substitute products


India is famous for its two-wheelers (bikes and mopeds) and three-
wheelers. These are very real and obvious threats to auto manufacturers.
The amount of bargaining power suppliers have:

It is likely that the suppliers to the manufacturers have considerable


bargaining power. They are not held ransom by one single manufacturer
as they can market their products to any of the others in India.

The amount of rivalry among competitors:

The amount of rivalry amongst competitors in India is high. The


industry is not yet in its shake-out phase and is still struggling to find the
up-and-coming stars and possibly topple the leaders.
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SWOT ANALYSIS
For the Quality assurance Ashok Leyland completed journey towards
global standards of quality, history to win the ISO 9002 certification.
The more comprehensive ISO 9001 certification came in 1994, QS 9000
in 1998 and ISO 14001.
SWOT ANALYSIS
Strength of the company
1. Good Training System.
2. Good Organisational Climate.
3. High Market Share
4. Skilled Employees
5. Strong Functional Structure
6. Standard Quality Product
Weakness of the company
1. Low margin
2. High price
3. Sales representatives are less
4. There is no proper mechanism to handle the grievance of the
Customers.
Opportunities for the company
1. Due to liberalization, demand for heavy vehicle have steeped
up all over the globe.
2. National market through good advertisement.
3. Company provides better credit facility to dealers.
4. Company introduces promotional programmes
Threats faced by the company
1.High competition
2. Liberal credit policy of other brand
3. Promotional programmes of other bran4. Complicated national market
5. Good replacement facility if other brands.
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MARKETING STRATEGIES

Product - A tangible object or an intangible service that is mass


produced or manufactured on a large scale with a specific volume of
units. Intangible products are often service based like the tourism
industry & the hotel industry. Typical examples of a mass produced
tangible object are the motor car and the disposable razor. A less
obvious but ubiquitous mass produced service is a computer operating
system.

Price ± The price is the amount a customer pays for the product. It is

determined by a number of factors including market share, competition,


material costs, product identity and the customer's perceived value of the
product. The business may increase or decrease the price of product if
other stores have the same product.

Place ± Place represents the location where a product can be purchased.


It is often referred to as the distribution channel. It can include any
physical store as well as virtual stores on the Internet.
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Promotion ± Promotion represents all of the communications that a


marketer

may use in the marketplace. Promotion has four distinct elements -


advertising, public relations, word of mouth and point of sale. A certain
amount of crossover occurs when promotion uses the four principal
elements together, which is common in film promotion. Advertising
covers any communication that is paid for, from television and cinema
commercials, radio and Internet adverts through print media and
billboards. One of the most notable means of promotion today is the
Promotional Product, as in useful items distributed to targeted audiences
with no obligation attached. This category has grown each year for the
past decade while most other forms have suffered. It is the only form of
advertising that targets all five senses and has the recipient thanking the
giver. Public relations are where the communication is not directly paid
for and includes press releases, sponsorship deals, exhibitions,
conferences, seminars or trade fairs and events. Word of mouth is any
apparently informal communication about the product by ordinary
individuals, satisfied customers or people specifically engaged to create
word of mouth momentum. Sales staff often plays an important role in
word of mouth and Public Relations
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CSR ACTIVITIES

mcGREEN MISSION
mcDRIVER TRAINIING CENTRE
mcHIV /AIDS AWARENESS
mcCOMMUNITY SERVICE
mcFUN BUS
m c Donations
m c Career guidance
mcGuest lecturers for school and college students

MARKETING OPPURTUNITIES
The new face of prosperous India has thrown open tons of opportunities for
business. With road networks becoming smoother and more widespread, the
commercial vehicle industry is on the upswing. For close to six decades, the
company has moulded the Indian Commercial vehicle industry with pioneering
technologies and product innovations including Multi-axle vehicles, Tractor
trailers, CNG buses, Double Decker and Low floor buses. The company has
chartered out a growth plan that will meet the demands of the market place. A
growth plan that marks a new plant in Uttarakhand and a focused drive to reach the
1,05,000 vehicle mark in the coming year.

What does this mean to you? It is a fully loaded opportunity that not only gives
you great returns, but also the satisfaction that you play a big role in the
networking of the new India. So, if you have a passion for engineering tomorrows,
please welcome aboard.
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EXECUTIVE SUMMARY

This document discusses the marketing strategies for Ashok Leyland and
its foray into small car segement Ashok Leyland is launching a new car
with the name of ´Leyland cand this document provide an
efficient and workable marketing plan for the product. In India
automobile industry is growing at a rapid pace. The demand for cars in
India over time has increased a lot due to growth of economy and
stability of people economic condition. This has attracted a number of
producers towards the market. Leyland along with other producers like
Toyota, Suzuki and Honda etc. is a player in the automobile market.
Now Leyland has planned to launch a new car with significant
innovations. For the success of the car in industry a deep study and
research has been undertaken to develop an effective and efficient plan.
Some of the important areas covered in this document while developing
a Marketing Plan for the selected company are:
· Discussion of the Industry
· Analysis of company¶s position
· Marketing objectives
· Promotions strategies
· Pricing strategies
· Product strategies
. Swot Analysis
. Pest Analysis
Furthermore, action plan lays out successful implementation through
monitoring has also been included.