Milestone One: Maruti Suzuki India
Draft of Business Problem and Literature Review
Timothy Stewart-Brown
Southern New Hampshire University
Business Problem
Maruti Suzuki India Ltd. (MSIL), beginning in 1983, dominated the Indian automotive
industry's "A-Segment" line of vehicles. By 2008, due to its unchallenged position, the company
had control of over 60% percent of the market (Mukerjee, 2015, p1). However, between 2008
and 2013, that market share dropped from 60% to 49%. Now, the market drop wasn't caused by
any direct problems within the industry. Instead, industry data shows that the amount of A-
Segment cars purchased in India increased by 2.4 million units between 2008 and 2013. The
primary issue that MSIL was facing was, even though the market for the A-Segment was
increasing, they were seeing a precipitous drop in their share of the market. The reason for this
was that other car manufacturers had arrived in India, namely Hyundai, Tata, and Toyota, among
others. These manufacturers offered vehicles that were more technologically advanced than those
of Suzuki, which made the company look outdated. Hyundai was MSIL's main rival in India.
with their aggressive tactics, competitive prices and wide distributions (Mukerjee, 2015, p3).
Also, Tata already had a presence in India through public buses, and the majority of the
population enjoyed their reliability and ubiquity. MSIL, if they didn't rise to meet this new
challenge, would be in serious trouble.
Research Problem
MSIL did not move to address the needs of consumers, or the changing market around
them. The immediate issue that MSIL needed to address was their failure to manufacture
vehicles in the A-Segment line that met the needs of consumers in the Indian market. This would
require MSIL to develop and execute a new business plan that addressed the need for standard
features specific to the Indian market. This would include air conditioning, power steering and
windows, touch-screen audio, electric and auto-foldable mirrors (Mukherjee et al. 2015). Most of
the other manufacturers in the Indian market had already made these features standard when they
entered the market, and in order to stay competitive, Hyundai responded by changing its business
model (Mukherjee et al. 2015). To determine their new strategy, MSIL executives commissioned
studies in macroeconomics for the region, which looked at sales figures, market potential and
consumer insights
Stakeholders
The Oxford definition of a stakeholder is "A person with an interest or concern in
something, especially a business". In the case of MSIL, the consumers, the country of India, and
MSIL's competition would all be stakeholders. The consumers would be the beneficiaries of
products that have new features and technology. India's economy would benefit due to the
increased sales, granting them additional tax revenue. MSIL's competition, (i.e. Hyundai, Tata,
Toyota) would stand to lose market shares should MSIL retake its top spot in the industry. As
market share increases, it makes sense that profitability would increase. However, as market
share increases, a business will also experience a declining purchase-to-sales ratio, a decline in
marketing costs as