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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 TURNOVER

8. EXCUTIVE PROFILE

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 andcar derivation. Within a few years the heavy commercial productionovertook 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 haveconsiderably 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 HISTORYThe 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 enterautomotive 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

1955.

Since then Ashok Leyland has been a major presence in India's

commercial vehicle industry with a tradition of technologicalleadership,

achieved through tie-ups with international technology leaders andthrough 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 economicsense 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

LEYLANDS VISION:Leylands vision is to enhance the quality andsafety of travel and achieve customer satisfaction.Leyland focuses on maintain and implement better quality standards toensure people with more comfortable and safe drive.There vision isexpressed in their statement as: Leyland-Enriching peoples Lives.The significance of this is that Leyland aims to participate in thedevelopment and progress of society through its business activitiesworldwide. This is only achieved through set of objectives that needs to

be focused and better implemented through effectiveness and efficiency

LEYLANDS MISSION:

1.Identifying with the customers

2.Being the lowest cost manufacturer

3.Global benchmarking our product,processes and peoplethe cu

O


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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

COMPANYS 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 endedMarch 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 joinedAshok 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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R. J. Shahaney B.Sc.(Engg.), ACGI(London)

R. J. Shahaney serves as advisor to the Hinduja Group. Mr. Shahaneyserved as the Managing Director of Jessop & Co. Ltd. Mr. Shahaneyserved as the Managing Director of Ashok Leyland Ltd. from July 1978to May 1998 and has successfully led its through to its present statureand eminence. He has over 50 years of Board level experience. Before

joining Ashok Leyland, Limited in 1978, Mr. Shahaney served asChairman 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.EnnoreKathivakkam High RoadEnnore

Chennai

2.Hosur Unit I175 Hosur Indl. CompleHosur

3.Hosur Unit II77 Electronic ComplexPerandapalli Village

Hosur

4. Hosur Unit IIACab Panel Press ShopSIPCOT Industrial ComplexMornapalli villageHosur

5.BhandaraPlot No.1 MIDC Industrial AreaVillage Gadegaon,Sakoli Taluk, Bhandara 441 904Maharashtra


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6.AlwarPlot No.SPL 298

Matsya Indl. AreaAlwar 301 030Rajasthan

7.Ambattur3A/A&2 North PhaseSIDCO Industrial Estate

AmbatturChennai 600 098Tamil Nadu

8.Technical CentreVellivoyalchavadiVia Manali New TownChennai 600 103Tamil Nadu

9.PantnagarPlot No.1, Sector XIIII E, Pantnagar,Pin - 263 153

Uttarakhand


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JOINT VENTURE AND ALLIANCE

John Deere & Company

A 50:50 Joint Venture to manufactureand market construction equipmentunder both the Ashok Leyland and JohnDeere brands. The JV will commence

production by 2010 and will initially roll

out Backhoes and Four-wheel-driveLoaders.

Ashley Alteams

A 50:50 Joint Venture to produce HighPressure Die Casting (HPDC)aluminum components pre-dominantlyfor telecommunications & automotivesectors.


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Nissan Motor Company

A Joint Venture to develop,manufacture and co-operate for themanufacture and distribution of LightCommercial Vehicles under both theAshok Leyland and Nissan brands. TheJoint Venture has three separatecompanies with different share-holdingstructures:

A vehicle manufacturing companyin which the shareholding is AshokLeyland: 51% and Nissan: 49%

A powertrain manufacturingcompany in which Nissan has 51%and Ashok Leyland 49%

A technology developmentcompany which is owned 50:50 by

both partners

Automotive Infotronics

A 50:50 Joint Venture set up to design,develop and adapt infotronics products andservices for automotive customers and willcater to the requirements of Ashok Leylandand available opportunities with other vehiclemanufactures 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 anintegrated, phased and conductive growth of the Indianautomobile 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 automotivesector 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-houseresearch and R&D activities.

Govt. has granted concessions, such as reduced interestrates 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 onthe 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 ofemphasis on value for money.

Changed lifestyle of people has lead to increased

purchase of automobiles. So the company has a large customer base toserve. Upward migration of household income levels. Preference for fuel efficient vehicles with lower runningcost.. Growth in urbanization.Technical:

New technologies create new products and new processes. Technology

can reduce costs, improve quality and lead to innovation. Thesedevelopments 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 productsIndia 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 towardsglobal standards of quality, history to win the ISO 9002 certification.

The more comprehensive ISO 9001 certification came in 1994, QS 9000in 1998 and ISO 14001.SWOT ANALYSISStrength of the company

1. Good Training System.

2. Good Organisational Climate.

3. High Market Share

4. Skilled Employees5. 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 theCustomers.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 programmesThreats 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 massproduced or manufactured on a large scale with a specific volume ofunits. Intangible products are often service based like the tourismindustry & the hotel industry. Typical examples of a mass producedtangible object are the motor car and the disposable razor. A lessobvious but ubiquitous mass produced service is a computer operatingsystem.

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 amarketer

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 cinemacommercials, 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 paidfor 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 orpeople 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

GREEN MISSIONDRIVER TRAINIING CENTREHIV /AIDS AWARENESSCOMMUNITY SERVICEFUN BUS Donations Career guidanceGuest 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 andits foray into small car segement Ashok Leyland is launching a new carwith the name of Leyland next and this document provide anefficient and workable marketing plan for the product. In Indiaautomobile industry is growing at a rapid pace. The demand for cars inIndia over time has increased a lot due to growth of economy andstability 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 significantinnovations. For the success of the car in industry a deep study andresearch has been undertaken to develop an effective and efficient plan.Some of the important areas covered in this document while developinga Marketing Plan for the selected company are: Discussion of the Industry Analysis of companys position Marketing objectives Promotions strategies Pricing strategies Product strategies. Swot Analysis. Pest AnalysisFurthermore, action plan lays out successful implementation throughmonitoring has also been included.

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