Essay On Maruti Suzuki

770 Words4 Pages
2.3. The bargaining power of customers
Customers: Bargaining Powers of Buyers – Moderate
Buyers of the industry have high bargaining power because they have many options in the same price range. Consumer buying power increases industry competitiveness and reduces industry profitability. Increased awareness amongst consumers has increased expectation. It is important to understand the stated and the unstated needs of the consumer for every segment and evolve technologies accordingly. Companies provide incentives to buyers in form of price discounts, accessories, after-sales services. There are lots of options available to the customer, because of lot of competition.
In line with this, Maruti does a very careful selection of technologies and features for each segment of cars. Fuel economy, safety features, Noise Vibration Harshness and comfort technologies are high on the priority list for Maruti, to ensure customer
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The threat of Substitute Products or Services
Several India-specific cars were launched by competitors. These were priced aggressively. As a consequence, the ability to pass on the rising costs was constrained to an extent. Nevertheless, Maruti’s EBITDA remained above 10 per cent thanks to higher volumes, productivity and cost cutting measures. High risk as there is many competitors offering similar products.
There are rapid development of new technologies and hence constant threat. Consumer preferences are changing, inter product substitution is taking place. It’s possible that an increase of substitutes coming from outside the immediate industry, but which could replace industry products, would increase industry competitiveness and reduce profitability. There are many substitutes’ products but Maruti Suzuki products are efficient and cost effective. There are not many products that are very efficient so their importance goes down. There are few substitutes that are efficient or reputable, still Maruti Suzuki has a foot hold in that
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