2014

Strategic Management Project Report

Submitted to: Prof. Jenny Sabu

Submitted By: Shashank jambhulkar Prn : 12088 (Marketing) Batch : 2012-14

Research Project Report On Strategic Management Project Report SUBMITTED TO MIT PUNEs MIT SCHOOL OF TELECOM MANAGEMENT BY

STUDENT NAME:- Shashank Jambhulkar PRN: -12088 BATCH: - 2012-2014

IN PARTIAL FULFILLMENT OF POST GRADUATE DIPLOMA IN MANAGEMENT PGDM 2012-2014 MIT PUNEs MIT SCHOOL OF TELECOM MANAGEMENT MITSOT, PUNE

DECLARATION
I Mr. Shashank Jambhulkar hereby declare that this Research Project Report on Strategic Management Project Report is the record of authentic work carried out by me during the period from last semester and has not been submitted earlier to any university or institute for the award of any degree/diploma etc.

Name of the student: - Shashank jambhulkar PRN: - 12088 Date: - 17/02/2014

PLACE: - MITSOT, Pune

CERTIFICATE

This is to certify that Mr. Shashank Jambhulkar of MIT Punes, MIT School Of Telecom Management (MITSOT) has successfully completed the RPT work titled Strategic Management Project Report in partial fulfillment of requirement for the completion of PGDM course as prescribed by the MITSOT. This RPT report is the record of authentic work carried out by him/ her during the last semester. He / She have worked under my guidance.

Prof. Jenny Sabu MITSOT

Dr. Milind Pande Project Director MITSOT

ACKNOWLEDGEMENT

Writing is a solitary task. However turning of millions of bytes of information requires an army of talented folks. I have been fortunate enough to be assisted by many talented and caring people. And I wish to express my appreciation all those help has been most valuable.

To all these truly outstanding people, and many others too, my warm personal regard.

I am indeed grateful to my Director Mr. MilindPande and mentor Mrs. Jenny sabu providing me the necessary guidance and facility required for completion of this project and for being an effective source of inspiration. I am thankful to the library for providing the necessary magazines and journals without which the completion of this project would not be possible.

YoursFaithfuly

Shashank jambhulkar

Table of Contents
EXECUTIVE SUMMARY INTRODUCTION OUR FOCUS YAMAHA INDIA- A BACKGROUND AND NEED FOR CHANGE IN STRATEGY YAMAHAS CHANGING STRATEGY EXTERNAL ENVIRONMENTAL ANALYSIS INDUSTRY ANALYSIS - Two Wheeler Geared Bikes INDUSTRY ATTRACTIVENESS COMPETITIORS ANALYSIS INTERNAL ENVIRONMENT ANALYSIS VALUE CHAIN ANALYSIS YAMAHA INDIAS RESOURCES TANGIBLE RESOURCES INTANGIBLE RESOURCES YAMAHA INDIAS CAPABILITIES

YAMAHAS CORE COMPETENCIES SWOT ANALYSIS RECOMMENDATIONS REFERENCES ANNEXURE-A Detailed competitor Analysis YAMAHA IN PREMIUM SEGMENT HERO HONDA MOTORS LTD. HONDA MOTORCYCLES & SCOOTERS INDIA PRIVATE LIMITED Annexure B Achievements of Premium Segment Bikes of Yamaha

EXECUTIVE SUMMARY
Yamaha enjoyed a great start in India with its models RX100 and RX135. But, the government ban on two stroke bikes was the biggest breakthrough in Yamahas success. They ran in losses for almost for a decade. Parent company Yamaha Motor Corporation (Japan) has decided to utilize its deep R&D for the Indian markets. Premium segment industry is unattractive for the new entrants due to need of huge initial capital investment. The industry is also affecting by other factors like availability of cars in the same price range, stiff competition. But, rise in per capita income of households, westernization etc. provides an opportunity for the existing players to capture the market. Through this research, we are analyzing one of the new strategies by India Yamaha Motors Private Limited to enter into the premium segment bikes in India. Our research will be focusing to analyze the industry, to study internal and external forces affecting the decision of the company. In this research we have used various strategic tools and frameworks to support our analysis, took the help from various web and literary resources which is given in references section. Yamahas main problems were identified as a late entry in the market, operational inefficiencies and not following aggressive selling. As compared to their competitors, their capabilities are not per standard in the current scenario. However, parent companys financial and technological support facilitates company to show their core competencies to the customers. To improve, Yamaha should focus to increase its production capacities. They should utilize their premium technology by giving focus to introduce new range of products to satisfy the consumer needs. They should also give importance to market the product well.

INTRODUCTION
India is the second largest manufacturer of motorbikes in the world after China. The motorbikes market is considered as a big bull of Indian automobiles industry. In India, the share of motor bikes in the two-wheeler industry has risen to 80% from 30% in the last decade and a half [Refer. Figure 3 Annexure A], during which annual period sales of motorbikes in the country have grown by a multiple of 13. With strong players like Hero Honda, Bajaj Auto, TVS, Yamaha India etc aim to provide efficiency and comfort ability without compromising on the fun and thrill of riding. These companies provide various variants of motorbikes to satisfy all the types of consumers in the country. In India, four different variants of motorbikes are available in the market with the power engines of 100cc, 125cc, 150-250cc and above 250cc bike.

OUR FOCUS
The premium bikes segment has emerged as the biggest growth segment in India because economy is booming and people moving up the salary bracket. There has also been an increase in distinctive and customized products. Besides growing demand, huge margins in the segment have also led major players in the industry to focus on premium bikes. Premium bikes segment consists of the motorbikes with an engine power of 150-250cc. These bikes come under price range between Rs. 50,000 to Rs. 2, 00,000. 40-45% of the motor bikes demand drives from urban India. The factors for premium segment bikes in India can be the increasing income scales of the households, attractive looks and comforts offered etc. In India, only 31 out of every 1000 persons own motor bikes in India. Still, there is a big scope for this industry to explore. The basic target of every Motor Cycles company is the youth and middle-income households (RS. 300000-Rs. 500000).

YAMAHA INDIA- A BACKGROUND AND NEED FOR CHANGE IN STRATEGY

Yamaha Motors, a Japanese company entered in India in 1980s through the acquisition of Escorts Motors Private Limited in 1999. It is the second largest manufacturer of motorbikes in the world after Honda. It forayed into the market with Yamaha RX100 and RX135 in the midnineties. Everything was going well until a government regulation came into force banning 2stroke bikes and compelled Yamaha to pull out its bikes from the market. Later it introduced many new models but their success rate was poor despite the fact that the engines of theses bikes were among the best in the business. Several reasons why these models were not that successful were probably because of the choice of marketing, inefficient operations strategy, shortage of imported raw materials from Japan etc. In 2007-08, Yamaha India suffered an operating loss of Rs. 336 crores. They adopted a turnaround strategy of involving structural, financial and marketing fronts. The company on its part planned to cash in on the market sentiment of increasing tilt towards premium bikes, sales of which were growing y-o-y at 5% even as the total motorcycle sales in 2007-08 plunged by 12 per cent in the first ten months of the FY in 2007-08. Premium bike sales have in the meanwhile leaped up to over 15 per cent of total sales during 07-08.

Yamahas niche in Japan is in racing bikes (high-premium segment) due to its high engine capacity which is its core competency. After sufficient market research, it realized the Indian market is viable for premium segment bikes and has shifted its focus from the lower end segments to the high-premium segment. Its aim is to provide customers the full range of its engineering marvel. With the rising disposable income in India, it has seen an opportunity and attempted to leverage on it. After launching models in premium segment like FZ1, SZ and Fazer, Yamaha India is able to develop a brand image in front of their consumers. YAMAHAS CHANGING STRATEGY 1) Yamaha has shifted its focus from the lower end segments to the premium segment of bikes. It aims to provide its customers the full range of its engineering marvels that make Yamaha the company that it is. 2) Yamaha has a very strong focus on the technical department, the result of which can be seen with Yamaha comfortably leading the constructors championship in the Superbikes racing with Valentino Rossi and Colin Edwards as their riders. 3) Yamaha has aimed to become the No.1 in customer satisfaction and is looking forward to providing the customer with an experience with its products. 4) The target market of India Yamaha Motors is the young and enthusiastic 18-25 yr. Olds who are willing to try taking the not so much treaded path of buying the sports bike rather than a utility two wheeler. These young guns are very conscious of the style quotient and look forward to their ride being a personality statement. 5) With the increasing dispensable income in India and growing middle and upper middle class segment Yamaha is sure to find many prospective customers. From Cost Control to Market Differentiation For a long time till 2007-08, Yamaha has been following the cost control strategy by focusing on the low end 100cc bikes like Crux and Alba. This kept it market share to below 5%. In lieu of the growing Indian economy and the need for differentiator products, Yamaha revamped its strategy and shifted its focus to premium bikes. The 100cc bikes are supplied only if there is a pull, but the company has clearly indicated that it sees its future in the mid-market and premium segments. The company is not just willing to limit itself to just prestige pricing. It will provide more value to the customer in terms of attributes like great technology, superior design, ergonomics for long distance travelling etc. For example the company will be launching its new superbike in the 1000cc segment. Apart from this, it is also optimistic about the FZ-16 series it has launched in the mid-market segment (150 cc) bikes. So hence, we can see that the aim is to provide niche products for the diverse customer segments. This is its market differentiation strategy.

Yamaha can be described as a prospector (especially after the year 2007) as it has been constantly trying to explore new markets and opportunities. It provides bikes for almost every market segment ranging from the 100cc Crux to the 1000cc FZ1. It aims at providing a diversified product range to satisfy a wide variety of customer preferences. It has come up with several innovations like improving fuel efficiency of the bikes, introducing environment friendly engines, reducing the size of the engines and introducing light weight and compact metals for its bikes. Yamahas Breadth Strategy Yamaha has globally forayed into an extensive range of products like motorcycles, scooters, boats, sail boats, watercrafts, outboard motors, music instruments, racing karts etc. EXTERNAL ENVIRONMENTAL ANALYSIS Political Environment Under the UPA rule most of the business from across all industries try and win over as much political support. The core competitors viz. Yamaha and Honda have been coming up with new higher models while the Bajaj industry has been upgrading its bikes model by only varying the cc engine. It is believed that Mr. Bajaj has used his political influence to raise the prices of the competitors models, thereby minimizing his loss of market share. Such political influences helps the incumbents to gain favorable bargains from the government making it difficult for new entrants to flourish thereby making Barriers to Entry high. Economic Environment Tightening of the interest rates by the RBI Makes it difficult for companies to arrange for funds for expansion but it effects the new entrants even more, thus increasing barriers to entry. High Growth Economy with an expected GDP of 8.5% High per capita income results in higher disposable income with the buyers thereby making them less price sensitive. This will decrease the bargaining power of buyers.

Increasing inflow of foreign capital in the country Permission of FDI in the country has attracted many foreign big giants like Harley Davidson to enter into the Indian market. As these companies are already very competent with high technologies and financial resources, the entry barrier will not be any issue and thus will increase the threat of competitors in the industry. Combined Goods and Services Tax is expected by 2011 which is expected to remove the cascading effect caused due to multiplicity of taxes. Deregulation of petrol has led to increase in prices and increase in commission to petrol pump owners and will continue the spiral This shall increase the cost of ownership of the vehicle thereby making them demand for more fuel efficient vehicles. Since the choice of the vehicle can save the buyer the running expenses, this shall make the Bargaining power of buyers high Socio Cultural Environment As education level in the country increases, every customer keeps a basic knowledge about the standard technology required. Also with increasing globalization, India is getting westernized more and more by the day. The public mentality that a two-wheeler is just for day-to-day commuting is changing and people are more and more moving towards premium bikes. The expectations from buyers in this segment are very high since they look as their bikes as a style statement and a reflection of their attitude towards life. This increases the bargaining power of buyers as people start looking for that exclusive brand image and differentiation. To target common commuters, Yamaha Motor India launched 3 new bikes namely YBR 125,Yamaha SZ ,Yamaha SZ-Exit also launched sporty bikes like Yamaha Fazer 250 to cater young Indian population Technological Environment Bikes with higher engine capacities have done commendably well on the Indian roads. Bike styling and fuel efficiency has also seen major developments. The new technologies including the mono shockers, back and front disc brakes, the magnum wheels, DiASil Cylinder etc. are some things that many companies are looking forward to. This decreases the bargaining power of buyers as the product becomes more differentiated and companies woo new customers with innovative products. It also increases the competition in the industry thereby increasing the industry rivalry. Yamaha has been able to involve many of these technology trends in its latest bikes i.e. FZ & FZS. Yamaha also developed CF Aluminum Die Casting Technology for mass production of Aluminum. This helped in reducing the weight of the parts. Legal Environment Due to the steep fuel prices in India, the sector is driven by demands for fuel efficient automobile systems. Hence, the regulations on fuel efficiency are less. As discusses before, it increases the bargaining power of buyers. The vehicular emission regulations are taken care by Society of Indian Automobile Manufacturers (SIAM)

Delhi High Court came out with a ruling that a comprehensive insurance policy for vehicles which also covered the pillion rider on a two-wheeler should be offered by all the insurance firms. This was accepted by all insurance firms after much deliberation. Environmental Forces Demand for two wheelers is increasing and thereby overcrowding the roads. Another problem is the adherence to emission norms because of the lack of infrastructure for inspection. Because of Euro II, there will be a lot of pressure on the two-wheeler industry to come up with greener technologies. This shall compel the companies to invest in innovation and R&D thereby reducing their profits and making the industry unattractive for the new entrants thus decreasing the threat of new entrants. In light of this Yamaha educates its employees about hazardous materials in products and has implemented LCA methodologies. Yamaha improved its production and air conditioning equipment to reduce greenhouse gas emissions. International Environment The two wheeler industry is currently growing at a CAGR of 9.45% from, and has thereby drawn the interest of a number of international players. Suzuki Hayabusa, Kawasaki Ninja, Suzuki Zeus, is some of the bikes which are already launched in India. These players cater to a very specific customer segment but due to the high margins make a profitable venture for players like Harley Davidson, BMW etc. However, for long term sustainability in India every player will have to enter in the market in the premium segment range. Increases the threat of new entrants and industry rivalry since more and more companies would soon be vying for the same customer segment which currently is not that large in size.

INDUSTRY ANALYSIS - Two Wheeler Geared Bikes THREAT OF SUBSTITUTES

Kinetic Mahindra Deal Gearless bikes: M&M, Indias largest tractor and utility vehicle maker has already bought the business assets of loss making scooter maker Kinetic Motor Company and has 80% of the share in JV by investing Rs 110 crore to gain an entry into the two-wheeler market. This means that though this deal Kinetic will get the support of financial muscle of Mahindra Finance whereas, for KMC its a win-win situation as Mahindra has global sourcing expertise and experience in building differentiated products. - E-Bikes: There are several players in this segment which includes YO bikes, BSA Electric bikes, E-bike India, with the increasing global prices of crude oil and gas the demand for such types of bikes is increasing slowly but in consistent fashion. - The NANO Effect: TATAs launch of 1 Lac car has obviously raised concerns for two wheeler automobile industry, as consumer might want to buy a 4-wheeler which is available to them almost at comparable price. Although the speculation was there that after the launch of TATA NANO there might be a drop of 20% in growth of two wheelers, the decline is definitely there but not at such high extent.

- The switching costs in NANOs case would be high but they would be getting a benefit of 4 wheeler but in case of E-Bikes and Gearless Bikes such as Kinetic Honda switching costs are not much high so in a country like India for female drivers and teens, gearless bikes and Ebikes are preferred. - The relative price of substitutes like E-bikes and Kinetic would be lower as compared to NANO but relative quality such as engine, features bikes like FZ, Karizma, R15 would have an edge. OVERALL: Low/Medium Rationale: Indian two-wheeler premium bike industry has been able to create a niche for itself which primarily runs on three factors namely: Mileage/Maintenance Cost, Reliability and Style. Even though E-Bikes and Nano might be able to draw some customers away from geared bikes but they are still not capable enough to become the ride of the youth of the country who are more looking at it as a style statement.

Bargaining power of suppliers

Suppliers of auto components are fragmented and extremely critical for this industry. - Most of the component work is outsourced proper supply chain management is costly yet needed. - Suppliers can influence the industry by deciding on the price at which the raw materials can be sold. This is done in order to capture profits from the market - The industry being capital intensive the switching costs of suppliers is high - Suppliers product differentiation is low - Suppliers threat of forward integration is low as the capital investment required is very high and suppliers are small and fragmented. OVERALL: Low Rationale: Even though the availability of high quality components is very critical for the auto Manufacturers, the parts are not highly differentiated when it comes to additional features and a huge number of small companies have already come up who manufacture such components.

THREAT OF NEW ENTRANTS

- The political influence of incumbents helps them get favors from the government which makes it difficult for new entrants to flourish - HIGHER-END BIKES: Higher end bikes such as Kawasaki Ninja (Priced at Rs 2.7 lacs, Ninja is a 250cc 4-stroke bike), BMW bikes (Priced at Rs 18 lacs upwards and models like R 1200 GS, S 1000 RR and bigger K series bikes with 4-cylinder engines), Ducati (Priced up to Rs 10-45 lacs, with 15 different models including, Hyper Motard, Monster, Street Fighter, Desmosedici RR, SBK and Sport Classic, which are powered by 696- 1,198cc engines) have also entered into India. Since they have global presence and strong brand recognition worldwide, Bikes such as Yamaha R15, R1 can face competition from these players, but the customer base in high end market is not very significant.

- The barriers to entry is very high due to presence of strong players like Yamaha, Hero Honda, TVS - Industry growth rate(CAGR) in past decade is almost 10% which is definitely not so much lucrative after liberalization and Indias GDP has grown up to 8% - After the liberalization policy of 91 barriers to entry for this segment has reduced and government regulations and taxes have been relaxed. - Cost disadvantage would be there for the new players since existing players already benefiting from economies of scale. - Initial Capital Requirement for setting up production plant, marketing costs, supply chain management would be high - Access to Distribution channels would be tough and capital intensive if the new competitor doesnt tie up with any of existing player. (e.g. Kawasaki has tie up with Bajaj Motor Limited) OVERALL: LOW Rationale: Looking at the high barriers to entry due to the initial capital requirements and other Infrastructure like access to distribution channels and also the low growth rate, the industry Should not see many new players entering the arena.

BARGENING POWER OF BUYERS

- High per capita income makes buyers less price sensitive thereby decreasing the bargaining power - High expectations from buyers in terms of Styling and power - Due to increase in number of models in all the categories, the buyers are empowered to a large extent. - Dealers threat of backward integration is low as the capital investment required is very high and buyers are small and fragmented. - Importance of the product to buyers is high due to other factors like traffic congestion, fuel prices - Product differentiation definitely exists and whole industry is different from other industries - The other industries are having products that can act as substitutes but then the switching costs of buyers is high OVERALL: HIGH

INDUSTRY RIVALRY
- The concentration of competitors is high i.e. Bajaj Auto, Hero Honda, KMC, Royal Enfield, TVS, LML etc. - The relative size of competitors is large and they have enough operational excellence and financial muscle. - Product differentiation is low as any product being matched in a few months by competitor.

- Industry growth rate (CAGR) in past decade is almost 10% which is definitely not so much lucrative after liberalization and Indias GDP has grown up to 8% - Industry is earmarked with high profit margins - Buyers switching costs are low as each company has its own portfolio of products and it can cater to each and every segment OVERALL: HIGH/VERY HIGH Rationale: The industry is earmarked with large and powerful competitors like Bajaj and Hero Honda, who already have a huge market share. Due to moderate industry growth rate of 10%, the struggle to increase sales is being reduced to a constant-sum game where everyone is trying to outsmart the competitors by innovations and price wars.

INDUSTRY ATTRACTIVENESS
From the analysis done, we can see that its really very difficult for a new entrant to see the industry as economically viable to enter. The reasons for unattractiveness of industry for a new entrant are:

But for an incumbent the equation changes and with the rising levels of per capita income of people, the Indian two wheeler market offers a decent potential for growth. This growth is relevant in the light of the fact that 70 per cent of Indias population is below the age of 35 Years and 150 million people [Refer Figure 1Annexure A]. The threat of new entrants, the threat of substitutes as well as bargaining power of suppliers are favorable forces. Even though the industry is bound to see a lot of competition, looking at the high profit margins along with some moderate growth opportunities, we would say that the Industry is Attractive

COMPETITIORS ANALYSIS

Big players such as Hero Honda and Bajaj (as shown in the figure above) have exercised a huge Bargaining power over suppliers as well as buyers. As such, Yamaha receives heavy competitive pressures especially on grounds of the cost as well as distribution leadership assumed by these players. Currently Yamaha is providing bikes only in 150cc whereas their counterparts are have already launched their bikes in 150-250c bikes. Also, Yamahas annual capacity is very less as compared to other competitors. [refer Annexure A for detailed competitor analysis] INTERNAL ENVIRONMENT ANALYSIS VALUE CHAIN ANALYSIS PRIMARY ACTIVITIES

Service Customer Satisfaction has always been the top priority of Yamaha and the company is planning to enhance Yamaha Bike Station numbers to 180 from current 100. The Yamaha Best Service Stations are planned to increase to 250. To provide good services, Yamaha ensures the availability of all major parts with their dealers. It also provides engineers to dealers to provide the service to their customers. YAMAHA will replace or repair at its Authorized Dealership free of charge, those parts which may be found on examination to have manufacturing defect, within 2 years from the date of sale of Motorcycle or first 30,000 kilometers of its operation, whichever occurs first, to the purchaser. YAMAHA warrants the products to be free from manufacturing defects for a period of two (2) years from the date of sale of the Motorcycle or first 30,000 kilometers of its operation, whichever occurs first. If during this period of warranty the Motorcycle proves to be defective due to material or workmanship, YAMAHA through its Authorized Dealers will repair the Motorcycle without charging the labor or parts value as per the terms and conditions

Marketing & Sales John Abraham is the Brand Ambassador of Yamaha in India. They usually run their theme with the Campaign Yes Yamaha. They also promote their products through Road Shows, Rock concerts in the country. Yamaha has introduced the unique concept of Yamaha Bike Station (YBS), an authorized Yamaha Dealership with the Best 3S facility - Best Showroom, Best Service Facility and Genuine Parts

Inbound Logistics Yamaha procures the heavy components from its vendors in Japan and Thailand. However, a motorcycle comprises of over 2000 components which are locally sourced. The two wheeler industry largely sources its parts and components from common vendors in North India (Faridabad being the hub). As such, the supply side is marked by a lot of politics between the vendors and bigger players who have a large appetite to place orders beyond capacity thus creating an artificial scarcity in the market. Yamaha has a policy of ordering for the parts at least three months in advance. They coordinate with their all vendors through software. After deciding the number of bikes to be produced, software automatically sends the order to their all vendors with all the requirements. Also, it is the responsibility of the vendor to provide raw materials at the company gate.

Operations Yamaha has two plants i.e. in Faridabad and Surajpur (Noida). Manufacturing of engines and gears are done in Faridabad plant while production runs in Surajpur. Currently, the company has increased its production capacity from 400000 bikes per year to 600000 bikes per year. They have two conveyor lines where bikes can manufacture in parallel in two shifts. Also, they have separate departments for activities like painting, welding etc. The lead time of the bikes is very high as compared to their competitors.

Outbound Logistics Yamaha has a smaller range of models in comparison with its counterparts in India like Hero Honda and Bajaj. As such, it exercises a relatively lesser influence on its distributors in terms of stocking and display. They have tie-ups with Transportation companies to deliver the motorbikes at dealers place. Yamaha India also serves to foreign markets such as Argentina, Mexico, Philippines, and Bangladesh etc. Yamaha does not offer any credit terms to its dealers

except in discretional cases. This is an aberration to the industry trend of an average of 2 month credit period.

SUPPORT ACTIVITIES Firm Infrastructure Manufacturing facilities comprises of 2 state-of-the-art Plants at Faridabad (Haryana) and Surajpur (Uttar Pradesh). The infrastructure at both the plants supports production of motorcycles and its parts for the domestic as well as oversees market. At the core are the 5-S and TPM activities that fuel our agile Manufacturing Processes. We have In-house facility for Machining, Welding processes as well as finishing processes of Electroplating and Painting till the assembly line. Human Resources Management They have more than 2000 employees including staff and managers. All activities in the company are headed by Japanese except HR Department. The Labour Union possesses a very strong bargaining power especially post the 72 day strike in 2000 which led to institution of a binding increment in allowances at the operational-supervisory level every three years.

Technological Development Yamahas technology in India is fully supported by its parent company from Japan. Particularly for 150cc+ bikes, they introduced a very high technology which differentiates Yamaha from its competitors in this segment. For instance, YZF-R15 Yamaha first designed a cowling shape around the radiator that would make maximum use of the running airflow. They have introduced bike in radical tires for the first time on the Indian roads.

Procurement The procurement system in Yamaha is totally online. The role of Purchase Management is to negotiate with the vendors on the terms of price and delivery. As company plans the production for the next 3 months and enters into their software, the order for the raw materials automatically reaches to each and every vendor. Purchase Department checks the quality and quantity of raw material and transfer to stores department. They have also an appropriate capacity to store their raw materials. They store the products in the lot of production which is going to follow.

YAMAHA INDIAS RESOURCES

Tangible Resources Financial Resources Yamaha Motors Corporation, the parent company from Japan provides the required funds to Yamaha India. It also maintains a good working capital because they provide very less credit to their dealers. Organizational Resources Rather than communicating the instructions downward, floor workers are encouraged to plan their work schedule on their own. Then the schedule and resources are finalized through direct interaction of workers and management. Workers are also expected to state a minimum level of productivity- per day or per week and any deviation from this standard is analyzed and corrected by the workers and the management. Physical Resources Company has two plants in Faridabad and Surajpur. Both plants are located in the industrial area of their respective cities. Faridabad plant manufacture the engine, gears and other parts while Surajpur plant is for assembling. Company also has two assembly lines which can run in parallel. As Faridabad is called the hub for raw material for the automotive industry, company has very easy access to the raw materials, Technological Resources The unique technologies like liquid cooled engine, DiAsiL cylinders, and design approach differentiate Yamaha over the other competitors. They have also filed a patent application for various technological solutions related to the diesel engine. Intangible Resources Human Resources Yamaha has around 2000 employees including both the plants. They have a pool of experience holders who are there in the organization over a long time. Decentralization of work clear hierarchy facilitates the smooth flow of working. They also recruit casual workers mainly for the purpose of procurement and assembling. Innovation Resources The strong R&D development from Japan has a capacity to provide innovative products to serve the customer from each segment. Their idea sense is totally based on customer needs. For example, they have launched their bike with Radical tires for the smooth riding. They also have launched many models with innovative design like Enticer.

Reputational Resources Yamaha has the brand image for their products. They believed in keeping a long term relation with their suppliers. With the image of bikes like RX100, Indian customers always perceive Yamaha as a sport bike.

YAMAHAS CORE COMPETENCIES

Yamaha Indias R&D is considered to be the core competency for Yamaha because they produce very powerful engines. made motorbike to mount a liquid cooling system for a better engine performance. Liquid cooling has the ability to keep down the temperature in a highperformance engine that would otherwise reach very high temperatures. That's why it is used on race machines. Also, the liquid coolant in a liquid-cooling system absorbs engine noise. That's why the engine is quieter and the ride has a quality feeling. faster than steel. -R15 and FZ16 engines have a single-axis balancer. This reduces engine vibration, which in turn reduces vibration felt by the riders at the front and rear of the seat, the handlebars and the footrest. All these technologies facilitate a better engine performance, good acceleration capability, a good balance which will provide a good riding performance. A good R&D is always a valuable for any company. The above technologies which Yamaha develops are very rare. It is also very costly to imitate because setting new R&D requires huge investment for the competitors.

RECOMMENDATIONS
Focus on metro cities Yamaha should target metro cities first for their premium bikes. The reason is that the earning capacity of youth is higher as compared to 2 tier cities. The poor roads conditions of other cities is also the one reason not to focus on 2 tier cities. Yamaha should increase their production capacity As Yamaha India has plans to capture four different markets in India i.e. Sports Bikes, Rural area with entry segment bikes and scooters, Yamaha should plan to increase the annual production capacity which is very as compared to its competitors. They should also use their Faridabad plant to assemble the bikes after taking the license. More models in 150cc+ segment (only bikes at 150cc bikes) As other competitors like Hero Honda, Bajaj provides motorbikes up to 250cc, Yamaha should go beyond 150cc+ bikes. Currently, Yamaha have only 3 bikes in 150cc in different variants. Should improve the after sale services Yamaha is not satisfying their customers in after sales services, parts of the bike are not easily available in the market. This is the major drawback in capturing the market share so Yamaha should take some better steps to satisfy and retain their customers. Measures should be taken to improve its dealership Yamaha which is trying to build a brand new image of a high tech and stylish brand of bikes should take appropriate steps to show it in their showrooms. Also, Yamaha should provide credit periods to their dealers so that they give more orders. Yamaha dont provides any credit period to its vendors. Youth oriented promotion Yamaha claims that they target the customers of age group 18-25 but their ad never represents this so they should make such kind of AD where youth should take in as center of attraction. They should do this earliest to capture the market because vast majority of people depending on ads and friends as their chief sources of information about the products.

REFERENCES
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Hero Honda Motors Ltd. is a result of the joint venture between India's Hero Group and Japanese Honda Motors Company in the year 1983. This joint venture has not only created the world's single largest two wheeler company but also one of the most successful joint ventures worldwide. Hero Honda is globally known of being the most fuel-efficient and the largest CBZ selling Indian Motorcycle Company.

Established in 1999, the Honda Motorcycle & Scooter India Pvt. Ltd. (HMSI) is a wholly owned subsidiary of Honda Motor Company Ltd., Japan and is located at Manesar, Haryana. The company's most well-known brand is the Honda Activa that revolutionized the Indian scooter market in terms of design and features. The company exports scooters to the European Union. The annual capacity is 1000000 units. Their main models in this segment are

Established in 1945 Bajaj Auto Ltd was incorporated as a trading company. Bajaj Auto Ltd. is one among India's top ten companies in terms of market capitalization and among the top five in terms of annual turnover. Today, the company has become a market leader. These days, Bajaj Auto Ltd. has started offering products in all segments (mopeds & scoote rettes, scooters, motorcycles, three wheelers).

Annexure B Achievements of Premium Segment Bikes of Yamaha Bike of the the Year 2010 (SZ-X) by ET Zigwheels. 150cc Commuter Motorcycle of the Year 2010 (SZ-X) by ET Zigwheels. Best Executive 125cc Commuter Motorcycle of the Year 2010 (YBR-125) by ET Zigwheels. Viewers Choice Bike of the Year Award (SZ-X) by ET Zigwheels. Viewers Choice Award (SZ-X) by CNBC Overdrive Awards 2011. Viewers Choice Award (SZ-X) by NDTV CAR & BIKE AWARDS 2011. Motorcycle of the Year Above 150cc (SZ-R) by Bike India Awards. Most Sporty, Best Styling & Success in Motorsports by Auto India.