Analysis and Evaluation of Allied Auto Ltd

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Years .Allied Autos Ltd is in the business of manufacturing auto components and is one of the largest manufacturers of Sheet metal parts, Machined Tabular,Electroplated & painted components ,welding facilities with integrated world Class features in India.

With growing opportunities and enhanced experience base Allied Autos has strengthened horizontally, widening its

Customer base and products by entering into 4 wheeler industry, not only within they have established themselves

In the domestic market but left their mark globally with strong infrastructure base and enlightened human resource

Reached the zenith of success

To attain high level of growth and experience they have gone through continuous and aggressive strategy building

And execution of same. Their strategy is towards

Improvement in customer satisfaction

To optimize cost and move up in value chain

Progress through a strong base laid on in depth research and development

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VISION : Highly customer oriented ,humane and system run global organisation with a concern for society.

MISSION : Excellence through latest technology ,people empowerment and brand equity to produce world class

Products by adapting best business practices and ethics.

To achieve its vision and mission the company is working towards major changes

Development of in house research and development department to capture the market through innovation

Improvement in the efficiency of operations , especially focused to meet the planned output

Effective PDI leading to defect free products to customers

Improvement in the Production system

To meet the growing demand of the two wheeler , the company is augmenting capacity in existing lines

as also adding additional equipments

There is an opportunity in the market for exports so the company is planning to go globally

Planning for related diversification and expansion in home market

FUTURE OUTLOOK

Greater operational efficiency and managing cost better

As the economy is showing signs of lifting up organisation will prepare itself to reap the benefits of take off keeping investment in place.

organisation is planning to compete in global market , and there is a high level of market competition , in order to gain competitive advantage there was a need to analyse the organisation to know what it is good at , where it is lacking , what opportunities can it grab and what are the likely threats .business environment is changing rapidly and there is a cut throat competition . so there is need to analyse both the business environments to know the current position

Analysis of 2 environments i.e. internal and external environment which reveals internal strengths and weaknesses and external opportunities and threats.

SWOT analysis is a tool that helps generate information and to have a strategic fit between strengths and opportunities ,to downplay weaknesses or improve them after a while and avoid threats or convert them into opportunities with the use of innovation and creativity.

Internal Analysis is basically the analysis of internal environment i.e. analysis of

Resources

Value chain

Strategy, Structure,System,Shared Values

External Analysis is the analysis of external environment i.e. Micro and macro environment

Micro Environment: Analysis of micro environment in which allied auto operates ,which can be analysed with the help of five forces

Barriers of entry or exit- In case of allied auto if barrier of entry is high which means that it is difficult for other competitors to enter in the auto sector is good for the survival.

Availability of substitutes : Since allied auto is a nicher so it has hardly any substitutes available but in near future as auto industry is growing there are chances of new entrants which means that substitutes can become available.

Bargaining power of suppliers : At allied auto the prices of raw material went up ,which is not a good indication as it indicates that bargaining power of supplier is high , if bargaining power of supplier is high than they will fix the prices.

Bargaining power of customers-for the products produced by us we fix the prices as there are no close substitutes ,bargaining power of customers is low at our organisation .

Competitiveness of industry-auto industry is very competitive as it attracts new entrants which is a threat for us as entry of new competitor will increase the competition so there is a need for allied auto to be more innovative and creative .

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Competitor analysis

Who my competitors are :

How big are they

What advantages they have over me

How much Market share they have

On what basis they are competing ( Unique Selling Preposition) i.e

Quality: Our competitors cannot compete us on quality as our employees are our strength and this is our core competency which cannot be easily replicated

Consistency - whether they have a permanent customer base : it might be quiet possible that they have a permanent customer base which is a threat for us as the customer would not like to shift easily.

Innovation :

Customer Responsiveness

Analysis of Stakeholders expectations

Different Stakeholders of Business

Shareholders

Customers

Suppliers

Employees

Government

Analysis of Macro Environment

PEST Analysis

Political and Legal

Economical

Social and Cultural

Technological

Resource Audit

Allied auto has two kinds of resources

1.Tangible Resources

2.Intangible Resources

I. Tangible Resources

Physical Resources : allied auto had an excellent location with less infrastructure cost

Financial Resources : it enjoys Credit worthiness , good records with banks

Profitable Ratios

Return on total assets = net income/Total assets

Liquidity Ratios

Human Resources : Skilled manpower , multi skilled ,professional people with good IT background which is astrength for us as this resource of ours is unique and it cannot be easily replicated by competitors

Informational Resources : Informational Resources are ok but they are not unique to the organisation

Intangible Resources: Allied auto enjoys a huge amount of goodwill, brand loyality which helps us in building a customer base and also brings in new customers.

VALUE CHAIN

Allied Auto is very strong at its value chain

STRENGTHS : These are internal to organisation , they reveal our ,strategic capabilities

Employee

Ability to draw a world on a worldwide pool of talents

Ability to nurture employee a and managing employees relationship

Logistics

Very good Inbound and Outbound Logistics : good coverage of their territory, timely deliveries, excellent storage space

Multi facilitated Tool Room

WEAKNESSES

No Research and Development department

Purchasing system not effective including quality of inputs

Lack of accountability

More pressure on production

THREATS

Economic

negative effects of the global financial crisis

depreciating value of the Indian rupee and falling income

severe sales contraction related to fall in world wide demand

rising costs of financing stocks and debtors

contraction of the export market

Lack of state support and export credit guarantee schemes

OPPORTUNITIES

HOME MARKET

Growing demand for two wheelers

Growth and demand for Home Furnishings

INTERNATIONAL MARKET

As the market consolidates and the global recovery happens the international players would find a renewed appetite for sourcing from India.

GOVERNMENT INITIATIVES

Prioritisation of key project areas by the government which will accelerate the process of national growth and India will emerge as a

Step ahead in word equation

Reduction of excise duty by 4% on all vehicles and

reduced excise duty to 8% from 10% on commercial

vehicles and auto parts.

Reduction in Central Sales Tax from 3% to 2%

Introduction of GST

Setting up of special institutions to promote skill development.

Recommendations -My recommendations as a manager are that there is need for us to change the business strategies as Business strategy can take 3 directions it can be any one of porter,s 3

1.Undifferentiated

2.Differentiated

3.Focused (Nicher)

If we choose Mass Production (Undifferentiated) where we give importance to the quantity than we need to have formalised planning system and according our HR strategy will change.

If we Choose Job and Batch Production (Differentiated) where quality matters than quantity than we can have In formalised planning system and accordingly we have to change HR strategy and Value chain .

If we choose Process Production (Nicher) highly differentiated where creativity and innovation matters than we need to have task culture and accordingly our HR strategy and value chain will be changed.

At allied auto there is no fit between Business strategy and HR strategy ,according to me HR strategy and Business strategy should be aligned because if they are not aligned than the objectives of the organisation and employees clash which is not a good indicator of sustainability and if there is no sustainability than there will be no profitability.

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We need to have creative and innovative manpower which possess high skills as the organisation has chosen to emerge as a niche player which is highly differentiated

One of reason for loosing the market share can be that inspite of performing well we are not changing with the dynamic environment ,My recommendation as a manager is that we should change our organisation way of operations , it should not be like that everything should be changed at once but we can bring incremental change that is we can change slowly