Bajaj Auto transformation from Independence era to Global age. This journey is evaluated using Mckinsey 7's framework Tool.

1. 7’S Framework Assessment for Baja Auto

2. 7’s Framework Model

3. Bajaj Auto Milestone Economic Liberation

4. Pre –Liberation Era (1945-1991) 1945 - Baja Auto being a early movers in Automobile industry. 1966 – Started manufacturing Vespa under license of Piaggio, Italy. 1970 Oil crisis – fueled Two wheeler vehicle growth. 1976-77, Bajaj produced 1,00,000 vehicles. In this era, Government had a socialistic approach towards development and Bajaj did not face much competition in its initial stages. Automobile sector was under License raj. 1977, Bajaj agreement with Piaggio expired; lost 50% export market share due to patent infringement suits filed by Piaggio. 1980 Economic reforms initiated. 1980 – Japanese and Italian scooter companies began entering Indian Market. Bajaj remain market leader in Pre-Liberation era. 1986-87, Bajaj was early mover in Motor Cycle Segment by introducing KB100 under collaboration with Kawasaki , Japan.

5. Post Liberation Era (1991-2010) Indian Economy opens up for Foreign companies in 1991. License raj was abolished in several sectors including Automobile. TVS Motors (With Suzuki) , Hero Honda joined Bajaj in 2 Wheeler Automobile Market. Automobile market became more vibrant, looking for innovation. Consumer is flooded with information from outside world and became more educated. Bajaj started facing stiff competition from rivals and started loosing market share to <50% Scooter segment started declining and Motor Cycle segment had steady growth from Year 2000 onwards.

6. 7’S Framework - Strategy 1985 onwards Scooter market has declined and Motorcycle market share increased annually by 25% scooter segment has been a shift away from traditional metal bodied models to the sleeker scooterettes. Consumer is now 18-25 years (shift from older age who prefers metal body scooter) R & D began exploring new models and Pulsar get ready for market in 2000. Emission norms changed for Two Wheeler segment in April 2000 leaving two options : 1. catalytic converters 2. produce four-stroke scooters. Sales Tax increased for Scooter and catalyst convertor costing INR 1000 hits scooter profitability due to #5. Diversify into Wind Energy and other areas. ‘Distinctly Ahead’ strategy in 2006-2007 means every offering to the customer should be distinctly ahead of the competition.

7. 7’S Framework - Structure Akurdi and Waluj plant has capacity to produce 1 million vehicles In 2000, Chakan(3rd Plant – Phase I ) commission with 30,000 Vehicles per Annum. In 2000, R & D Expense increased from INR 236 million to 316.2 million accounting 1.10 % of total sales to compete in post liberation era. In April 2005, Rahul Bajaj hands over Managing Director post to Rajiv Bajaj . Motor Cycle segment divided into Entry level, value level and premium level. R&D had unveiled a path-breaking technology called DTSi (Digital Twin Spark Ignition) in 2003-2004. The demerger of Bajaj Auto Ltd - [1] Bajaj Finserv Ltd (BFL) [2] Bajaj Auto Ltd (BAL) [3] Bajaj Holdings and Investment Ltd (BHIL) in May 26, 2008. Bajaj Finserv Ltd (BFL), Bajaj Auto Ltd (BAL), and Bajaj Holdings and Investment Ltd (BHIL)—was completed with the shares listing on May 26, 2008 Leader in Sports segment with 31% marketshare out of overall 35% Sports segment in two wheeler. Pantnagar plant (also called as Mother Plant) operational in 2007 to increase manufacturing capacity.

9. manufacturing and bought-out parts, and

10. cutting fixed costs in the plants.Vendor rationalization from 1400 to 200 Production Capabilities increased across plants. Total Productive Maintenance (Increased Equipment effectiveness from 67 to 95% in Tool Room) VRS in 2001-2002 opted by 2017 employees. 9 FANUC Robots were installed in chakan plant to reduce component rejection.

11. 7’S Framework – Style & Skills Flattered and more empowered organization structure in 2003-2004. “Role-Goal clarity “ process in 2003-2004 at each management level. a new and rejuvenated Bajaj Auto in 2003-2004 believes in speed and innovation. A 360-degree feedback was done for all senior managers, including the Managing Director in 2005-2006. Speed, Innovation and Perfection (Distinctly Ahead philosophy) in 2006-2007. Average age of research engineer is below 30 years to maintain vibrancy in research. Total Quality Focus All manufacturing facilities were awarded by JIPM (Japan Institute of Plant Maintenance) as winners of the ‘TPM excellence categoryin 2007-2008. A concurrent TPM Kick-off. conducting TPM on such a scale is definitely a first in India, and possibly in the worldin 2007-2008. 64 vendors received the ‘Bajaj Quality Award’ in 2007-2008. Whistle Blower Policy in 2009-2010.

12. 7 ‘ S Framework – Staff (Part 1) Akurdi Plant provides “A world class development / training centre for its employees, vendors and dealers.” Vendors were treated as brother rather than external entity. TPM extended towards vendors to achieve Zero defect and rejection in component. Lowest Attrition ration in R &D across industry. Continuous training and Quality focus has helped Bajaj to increase Vehicles per Person to 266 vehicles per person in 2007. Bajaj performed re-structuring exercise for efficient Management and greater operation empowerment in July 2007.

13. 7’S Framework - Staff (Part 2) Bajaj Auto Revamped Organizational Structure in 2007

14. 7’S Framework - Shared Value Education - Undertaken 2 IIT in Pune and Pantnagar in 2009-2010. Running educational institutes from School to Management studies. Health – 225 Bed super specialty Hospital in Aurangabad, A.R.T. Centre for HIV/Aids in Pimpri (considered as best ART centre in India). WomenEmpowerment – Rural Entrepreneur ship under IIMC ladies and Gram Vikas sanstha. SelfReliance – Institute of Gandhian studies and Seva trust. RuralDevelopment – Working with NABARD, RUDSETI and various NGO's to conduct Rural Entrepreneurship Development Programmes (REDP) has resulted in creation of 1,400 Rural Service Outlets (RSO) Environment & NaturalResources - Gram vikas sanstha.

15. Score Card - Market Share (2009-10) Bajaj Auto No. 1 Bajaj Auto No. 2 Bajaj Auto No. 1

16. Scorecard - Market Cap and Sales Bajaj leads Market cap by INR 4502.23 Crores and Hero Honda leads by INR 3939.53 Crores Sales.

17. Score card – Balance Sheet

18. Conclusion Bajaj has identified agility needed and has shifted focus from Hard 3’s (Strategy, Structure and System) and extend to Soft 4’S (Style, Skill, Staff and Shared Value). An Independent era company changed its philosophy to keep pace with customer in 21st Century. Steps taken by Bajaj is accepted by Industry and seen in Market Cap (No. 1 in Two Wheeler) against competitor. Global footprint by increasing export to 15% in Year 2010, setup subsidiary in World No 3 Two Wheeler market (Indonesia). Hero Honda still leads the market. However with Honda’s exit from Hero Group may give lead to Bajaj. Bajaj has strong R & D Center and has made good breakthrough in 2 Wheeler technology. Bajaj Auto with new and vibrant management ensures CSR are in-line with founder’s vision and philosophy. 2000+ Employees layoffs executed with utmost care and reflects ethical and value based functioning.

19. References https://www.mckinseyquarterly.com/home.aspx http://en.wikipedia.org/wiki/Bajaj_Auto http://www.fundinguniverse.com/company-histories/Bajaj-Auto-Limited-Company-History.html http://www.indiastudychannel.com/resources/98631-Trends-Economy-Indian-Automotive.aspx http://www.moneycontrol.com/news/business/bajaj-auto-revamps-organisational-structure_290462.html www.bajajauto.com www.herohonda.com http://www.segmenty.com/GenerateNewsStaticJsps/Indonesian_2_wheeler_market_to_reach_10_million_units.html Bajaj Auto Annual reports from 1999 to 2010

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