Perspectives

How is digital enabling Maruti Suzuki defend market leadership?

Maruti Suzuki India Limited (Maruti Suzuki) got an early start and solidified its leadership position in the market. However, over the years, numerous players entered the market, challenging Maruti Suzuki’s leadership position. But it continues to maintain its leadership position by continually reinventing itself. While this extensive success journey has been possible by management vision and quality of leadership, it is the digital component that has played a key role for the behemoth to truly operate as an integrated and agile entity.

The real challenge for Maruti Suzuki is how to maintain and improve its stronghold on the market and maintain the traditionally built leadership position in an increasingly dynamic and difficult market. The company is aiming to retain a market share of 50%+ in terms of volumes and also reach a capacity of 2 million vehicles over the next five years.

While these targets may seem quite challenging to achieve, the company strategized toward reaching these goals through a well thought out digital strategy. The digital strategy was designed towards not only addressing how to improve internal process efficiency but also addressing how to launch innovative products and services, how to create integrated value for the customer and how to bring new age IT to create new business dynamics and revenue models.

The company’s digital transformation journey has not let its sheer size and spread come in the way of creating a truly dynamic enterprise. The digital technologies have ensured that-

1. The core operations are completely IT driven through a seamless integration of the management system with the operational environment

2. The enterprise system is extended to integrate both the supply and the demand side of the business, thus leading to a complete Value Chain Transformation. It provides it the capability to efficiently manage its supply chain and effectively map customers’ customers to the suppliers’ suppliers

3. Analytics and business insights help the management to have a view into what is happening where, including with the dealers and suppliers

4. IT and Digital have helped Maruti Suzuki to truly operationalize its core value of continual process improvement through participation of all. By digitalizing the processes across business domains, integrating them together, embedding decision logic into them to guide the workers and innovating to solve critical problems, Maruti Suzuki sustains process excellence to support its business goals

Innovation holds the key to Maruti’s future growth strategy, with the market already witnessing new and pioneering offerings by automobile companies quite frequently. And, as it turns out, a lot of this innovation will be coming out from the digital armoury to help Maruti stand up to and take on competition’s onslaught.

It is an interesting example of how a company, a leader in its domain, needs to leverage digital to sustain its traditional leadership in the face of growing competition and a dynamically changing market landscape.

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