The Challenges Faced By Suzuki Motors

This project helps us in understanding the business environment of an organisation and what factors describe or design the working environment of an organisation. In this project, we are aiming to evaluate the various challenges faced by Suzuki Motors during the last 5 years and how those challenges were tackled by the company. In our study, we had followed different methods to find and analyse the challenges the company has been facing. To achieve the objective of the research, SWOT analysis has been performed on Suzuki Motors. Based on our finding about the company through the analysis and the challenges faced, this research analysis will provide recommendations for the company.

Business Environment Introduction

Business can be defined as an organisation which is involved in activities that are commercial in nature and these activities are aimed at making profit for the organisation. Like the surroundings in any environment, business environment consists of the factors and elements that surround a business. Since the business environment of any organisation consists of many factors, it is important for a company to study and monitor its environment in order to ensure smooth running of its current and future projects and plans (Gopal 2009).

Therefore, the total of all things whether they are external or internal to the organisation, which effects and brings changes in the plans of an organisation constitute the business environment of an organisation. The factors that have a major and quite often impact the planning process of organisation are external in nature and are beyond the control of organisation or the management of the organisation.

Types of Business Environment

Every business organisation operates in two environments which have a direct or indirect impact on the working and planning of the organisation. These environments are:-

Micro Business Environment These are the forces that are closer or internal to the company and affect the ability of the organisation to serve its customers or bring changes in the organisational plans. The micro environment of an organisation comprises of employees, owners and the board members, suppliers, consumers, contractors, competitors, etc (Gopal 2009).

o Consumer The main motive of all business organisations are to serve to the needs of its customers. Business organisations need to indentify its target group of customers, their tastes and demands. Once the company understand the tastes and demands of their target consumer goods, they should supply those goods that best suit the targeted customer base (Gopal 2009).

o Competitors In order to organisations to be successful, they need to understand the strategies being developed by its competitor and also needs to work on modifying its policies and procedures to deal with the increasing competition (Gopal 2009).

Macro Business Environment The macro environment of business consists of all those factors that are external to the organisation and the company or the management has no control over them and these factors affect the performance and planning of an organisation. The factors of the macro environment comprises of Political, Economic, Social or Technological elements that have a direct or indirect affect on the organisation. For Example Changes in political structure such as changes in law, regulations and government policies of the country of operation of the company can hamper the performance of the company and may force the company to bring changes in its planning to achieve the long term goals of the organisation. Also, the economic conditions such as inflation, deflation, recession, etc also forces and bring changes in the organisations working environment. And the changes in the technology and introduction of new technology to enhance companys performance and to stay updated also have a great affect on the business environment of an organisation (www.marketing-plan-success.com accessed on 01/08/2010).

In order to understand and examine the business environment of an organisation, researchers usually carry out PEST analysis which comprises of the macro environmental factors of Political, Economic, Social and Technological factors that impacts the performance and planning of organisation in a positive or a negative way. There are other analysis techniques also being adopted such as the SWOT analysis which highlights the various strengths and weaknesses of an organisation and at the same time enlightens the opportunities available to business firms and the threats surrounding a company.

Case Study SUZUKI Motors

About the Company

Suzuki Motor Corporations is a Japanese company headquartered in Hamamatsu, Japan. The company was founded in 1909 by Michio Suzuki and the main business of the company was to build weaving looms for the giant silk industry in Japan. The company was highly successful in loom business however Suzuki realised that he wants to diversify and expand the operations of the company, therefore started looking at different options. Realising the consumer demand, the company decided to build small cars for which the project started in 1937. The company officially changed its name to Suzuki Motor Corporation in the year 1954 (Suzuki Motor Corporation Website and Wikipedia).

Today, Suzuki Motor Corporation specialises in manufacturing of automobiles, motorcycles, all terrain vehicles, outboard marine engines, wheelchairs and small internal combustion engines. It is the 12th largest manufacturer in the world automotive industry and has production facilities in 35 main production facilities in 23 countries around the globe. Suzuki Motor Corporation operates in 193 countries and areas worldwide and is ranked at number 1 position in the world of compact automobiles (Suzuki Motor Corporation Website and Wikipedia).

Suzukis subsidiary Maruti Suzuki India Limited based in Gurgaon, India is the largest and the most valuable subsidiary of the company. Suzuki Motor Company holds approximately 52% of the stake in Maruti Suzuki India Limited and the rest is owned by a number of financial institutions in India. The Indian subsidiary of the company manufactures and offers 14 different models of automobiles for the Indian customers catering to people belonging to all classes of the society. The company offers one of the best selling cars in India, Maruti 800 which costs less than $5000 and mainly caters to the lower and middle section of the society and the company also offers luxury cars such as the brand new model of Maruti SX4 which caters to the higher sections or classes of the society. Maruti also caters to need to adventure loving people by offering the luxury SUV, Maruti Suzuki Grand Vitara. Maruti Suzuki Limited was incorporated in the year 1981 and the first model of automobile offered was Maruti Suzuki 800 in the year 1983. Since the introduction of its first automobile, the company has offered several different models in the form of Maruti Suzuki Zen, Alto, Wagon-R, Gypsy, Swift, Baleno, Esteem, Versa SX4, Grand Vitara and some other models as well. The reliability and the trust level that the company has built in the Indian Market has always helped the Maruti Suzuki India Limited to be the market leader among all segments of automobiles offered in the market (Suzuki Motor Corporation Website).

The Business Environment of Suzuki Motor Corporation

There are several factors that describe the business environment of a company. All organisations in the world irrespective of the business industry they are involved in, they are exposed to different factors those impact the performance of companys activities and influence the planning and decision making power of an organisation.

Like Every company, Suzuki Motor Corporations has also dealt with different factors that have impacted the performance of the company and has forced the organisation to bring in changes in its strategies for the smooth and successful running of the company.

Challenges faced by Suzuki Motor Corporation

Below listed are some of the CHALLENGES the company has dealt with over the past few years:-

A. Suzuki Motors Corporation had to recall certain models of vehicles such as the Grand Vitara and XL 7 which were manufactured in the year 2005 2006. A problem was detected in the adjuster pulley for the drive belt which has the outer portion made up of plastic and operates the power steering pump and air conditioner compressor. Repeated heat stress caused the outer body made up of plastic to weaken and pieces of the pulley broke off. The company found out that the broken pieces of pulley can get caught between the pulley and the drive belt which can cause the drive belt to come off resulting in increased effort to steer the vehicle by the driver which in turn increased the risk of a crash or accidents. The company made a plan to resolve the issues in the vehicles with this problem and the dealers of Suzuki Motor Corporation replaced the power steering pump belt tension adjuster free of charge for the customers whose vehicles had the same defect (www.motorcyclistonline.com accessed on 01/08/2010).

B. Suzukis subsidiary Maruti Suzuki India Limited faced a great challenge to keep its lead in the small market segment of automobiles in India. The company was facing severe production issues which resulted in long gestation period for some of the top selling brands such as MAruti Suzuki Swift, Maruti Suzuki Swift Desire and a few other models. These production issues could have lead to loss in the market share of Maruti Suzuki in India however the company dealt with the situation by working with their vendors to increase the supply of the materials and the company was able to deal with the backlogs of its normal sales on many models (www.gadgetophilia.com accessed on 01/08/2010).

C. In early 2010, Maruti Suzuki India Limited announced to recall 100,000 A-Star hatchback models as a problem for fuel leakage was detected in the vehicle. The company recalled all the models of A-Star hatchbacks and replaced the gaskets for the affected vehicles free of charge (Wikipedia).

D. In 2007, the company recalled its Swift models in the UK over safety concerns. In Suzuki Swift, a problem was detected that the parking brake cable end could detach from the trailing brake shoe lever rendering the parking brake ineffective. This resulted in improper or no functioning of the hand brakes in Swift. The company recalled the affected models and replaced the cables (Suzuki Motor Corporation Website).

E. The company also recalled its Grand Vitara 1.9 Diesel Model from the UK Market as a risk of fire was detected in the vehicle. Due to the improper design of the intercooler inlet hose, there was a possibility that the mixture of air with fuel may be incorrect within the diesel particulate filet assembly which could cause the diesel particulate filter to ignite. In order to deal with this situation, the company replaced the intercooler house and fitted a modified version of the same in order to avoid the risk of fire that was detected (Suzuki Motor Corporation Website).

F. The American Suzuki Motor Corporation recalled the Suzuki Forenza model manufactured in the year 2007 as on certain vehicles, the front seat belt tongue was not latching into the buckle and in few cases, even the locked tongue used to pop out by low strectching force. These malfunctions of the buckles prevented the users to use the seat belt while driving which increased the risk of injury in a crash. The dealers of the company were authorised to replace the front driver and passenger seat belt buckles with the improved part without charging the customer (www.motortrend.com accessed on 01/08/2010).

G. Suzuki Motor Corporation determined that a few models of LT-A400K6, LT-A400FK6 and LT-F400FK6 eiger ATVs might have been assembled with missing welds on the upper and lower front suspension arms mounting brackets on the left side of the ATVs frame which could break off during riding and the driver can lose control of the ATV. This could possibly result in a crash causing injury to the driver. In order to deal with this issue, the dealers of the company inspected for missing welds on the suspension arm mounting bracket which takes a short span of time. If the suspension arm mounting brackets were missing welds, the dealer will get them re-welded by a certified welder and this was done free of charge for the users of these models of Suzuki Cycles (www.suzukicycles.com accessed on 01/08/2010).

In order to evaluate and study the business environment of Suzuki Motor Corporation, SWOT analysis has been performed on the company to understand and examine the strengths and weaknesses of the company. At the same time, this would also help us in examining the various opportunities that are available to Suzuki Motor Corporation and the threats that the company is exposed to.

Strengths

Suzuki Motor Corporation is one of the leading companies in the automobile industry around the world. The company operates in more than 193 areas around the world which makes it a global player. The global presence of the company helps them to understand the requirements of people of a country depending upon their demography. Once the company has evaluated the demands of the customers from a particular demography, the company can modify its strategies to manufacture market and sell products to customers in some other country having similar demography characteristics. This helps the organisation to be pro active and to be able to meet the demands of the customers on a timely manner, therefore providing a competitive edge to the organisation (Suzuki Motor Corporation Website).

Also, the wide variety of the products being manufactured by the company helps them to overcome any financial or non financial losses incurred in the production or sales of different products. This ensures smooth operations among different units of the company. It also enables company to serve to the needs of people belonging to different income levels within a country, thereby making Suzuki Motor as their preferred choice in automobile (Suzuki Motor Corporation Website).

Weaknesses

Suzuki Motor Corporation is a world renowned company and offers products that cater to the needs of people belonging to different income groups. The company manufactures automobiles, motorcycles, all terrain vehicles, outboard marine engines, wheelchairs and small internal combustion engines. As discussed in challenges, the company needs to have provisions to meet the demands of the customers on time. The company needs to have multiple suppliers that supply raw materials in different forms so that the manufacturing of the products can be completed on time as this will ensure that the needs of the customer are met on time and will also help the company to increase its market share (Suzuki Motor Corporation Website).

Opportunities

Since the awareness about environmental protection is rising worldwide, the company should redesign its manufacturing plans. Suzuki Motor Corporation can opt for the manufacturing of environment friendly vehicles which will have low or zero fuel emission and will help in saving the environment (Suzuki Motor Corporation Website).

The company also has the opportunity to attend to the needs of the young customers in the global market by understanding their needs and manufacturing products that best serve those needs of the young urban population.

Threats

Suzuki Motor Corporation has performed well since its existence in the early 19th century. Over recent years, the company has faced many challenges some of which have been discussed in this report. The major threat to the company is that due to the various recalls that have taken place over the last few years, reputation of the company can be effected which could result in downturn in the market share of the company. The company needs to work more on detecting such issues or problems before the product has been launched for usage by the common people so that they can be fixed. If the company continues to not being able to detect such issues, it may result in downfall in the share value and shareholders in the company which will severely affect the operations of the Suzuki Motors as a whole (Suzuki Motor Corporation Website).

Conclusion

Through the medium of the above mentioned report, it is clear that Suzuki Motor has a large customer base around the world and that the company serves and manufactures products that serve the needs of almost all people in the society. The report also helps us to understand the strengths and weaknesses of Suzuki Motor Corporation along with various opportunities that are available to the company. The report also highlights few threats that the company is exposed to and against which company needs to take necessary actions.

The report clearly indicates that Suzuki Motor Corporation highly focuses on its customers. The company always works on fulfilling the needs of the customers and providing services for their products as and when required. This high level of commitment of Suzuki Motors towards its customer has helped the company to reach this position and also enabled the company to be able to expand its operations and cater to the needs of the people worldwide.

Recommendations

Suzuki Motor Corporation needs to increase its level of focus on testing their products before they are released in the market. This would help them to detect and analyse any defects in their manufactured products which will help company save huge costs that are involved in the recalls of the defected products and would also help in maintaining the reputation and competency level of the organisation. This would also help the company in investing more in their production units so that they can manufacture and deliver quality products right on time when its needed by its customers.