1. The first diversification is seen in 1931 when Shri Jamanalal Bajaj went in for establishing the Sugar manufacturing facility for farmers of Utter Pradesh at the advice of Mahatma Gandhiji. Incidentally Shri Jamalal Bajaj is known as 5th adopted son of Mahatama Gandhji and he belived in 'holding wealth in Trust for people of his country'. This philosphy has been at the centre of all efforts undertaken by the group in the last 92 years over 5 generations
2. Shri Kamalnayan Bajaj took over in 1942 and further diversified the group to add verticals like Consumer care, Power, Steel , Electricals and Automobiles. They imported Vespa scooters from Piagio of Italy and sold in India. later in 1960 they started local production of Vespa scooters. This is 'Vertical Integration, backwards as Bajaj is moving from an importer and trader to manufacturer ; This is also an Expansion strategy under Co-operation with Joint Venture; This shows the group used a combination of Expansion /Growth strategy simultaneously.
3. Shri Rahul Bajaj joined Mukund Steel Ltd in 1965 as Purchase Officer Mukund Steel Ltd, by 2018, manufactures 420 different grades of steel alloy required for manufacturing three wheelers and two wheelers. This again is a Vertical Integration backwards.
4. Expansion/Growth strategy can be seen in their move to manufacture three wheeler goods cariers in 1971 and rare engine auto-rickshaws in 1977
5. During the period 1970s and 1980s, India had several JVs in two-wheeler manufacturing By 1972, Bajaj launched Chetak Scooters leaving the JV with Piagio of Italy, and ruled the roost with 'Hamara Bajaj' slogan. But towards end 1970s Bajaj found itself not so safe in the scooter space and moved to manufacturing of motorcycles under JV with Kawasaki. In the two-wheeler space, carving a focus for motorcycles. Here we find, Bajaj group using retrenchment strategy - manufacturing over a million bikes with 9000 workers in 2018, where that many scooters were made with 22,000 workers in the old days.In the motorcycles market, it acquired self -sufficiency with launch of 'Pulsar' brand of motorcycles in 2001and JV with Kawasaki ended in India. Also here we find the repeat of the backward integration combo with JV used by Bajaj group again. By 2007, JV with KTM Power Sports A G , Austria gave big push for high end bikes niche market.
5.a Bajaj group following Horizontal Integration can be seen in their Growth plans for manufacturing two-wheelers at aurangabad (1985), Chakkan(1999) and Pantnagar (2007)
6.The Ansoff Matrix is about product-market strategies: Not just the product innovation played out by them Vespa to Chetak; then Kawasaki to Pulsar; latest the EVs Chetak scooters (Jan 2020) and Quadricycle -Qute(2019); Bajaj launched Bajaj Auoto Finance Ltd in 1987 to promote the purchasing power of their customers.
6a.Subsequently, in 2010, the Bajaj Auto Finnace Ltd is renamed as Bajaj Finance Ltd transformig itself to a fullfledged NBFC. Concentric diversification is attributed here. By cross selling products to retail customers and adding SMEs and Infrastructure funding later stages.Later, we find that BFL has stopped infrastructure funding business by mid 2011 (retrenchment strategy-not severe as that of BAL)
6.b The Porters Value Chain analysis is found in application again at the use of probiking network to promote the sports bikes and superbikes, the first being the auto-finnacing facility.
7. The year 2001 is important for Bajaj, as you find conglomorate expansion in undertaken by the group by entering Insurance business. Alliance AG, Germany supporting both General Insurance and Life Insurance in two separate JVs. This is also an Expansion thro cooperation strategy
Not much is known about Bajaj using Mergers and Acquisitions. Strategic Alliances are forged with Triump of UK for manufacturing and distribution of motorcycles there.
7a. Bajaj Group has two subsidiaries, VIZ.., Bajaj International Holdings BV and PT Bajaj Indonesia. PT Bajaj Indonesia entered into JV with KAWASAKI , Japan in 2012 to deal bikes in that market. this is a combination strategy having a JV, in the international market for expansion of presence in that market.
8. International Strategies are of 4 types. International Strategies - where the companies products are simply exported and sold. Pulsar is exported as a standard product to 70 countries today. The Multi-Domestic Strategy is noted in the Strategic Alliance in 2017 with Triump of UK for manufacturing and distribution of motocycles in that market. The Global strategy consists of more control than the Multi-domestic strategy, which is not having much examples from Bajaj so far. We find such strategies are used by firms in the industries like aerospace, automobiles, telecommunications, metal and computers. The Transnational Company strategy is also not very visible in the case of Bajaj Group. In this strategy, a company may be sourcing, producing and selling just like a domestic company in whichever country they find host. Examples are McDonald, Nestle, Coca-Cola etc..
From 2008 onwards, Bajaj Group is divided into three. The younger brother of Rahul Bajaj left the group with the business they were dealing in : Consumer Care, Power and Sugar.This can be attributed to retrenchment strategy. The remaining business were divided into Financial Services and Physical services with two holding companies created and given reigns to each of the two sons of Rahul Bajaj,
End result: Finserv is
fast catching up with Rajiv's Bajaj Auto: the firm with a finger in both
insurance and lending has seen a huge turnaround from a loss of Rs
32 crore
in 2007/08 to a profit of Rs
1,338 crore
in 2011/12. In comparison, Rajiv's auto business profits have jumped four times
from Rs
726 crore
to Rs
2,990 crore
during the same period.
The Bajaj group ended the year 2018 as
the fourth biggest in the country by market capitalisation
(the market cap of the group was Rs 3.77
lakh crore
on December 31, 2018, as against Rs
30,321 crore
on March 31, 2007), behind just HDFC, Tata group and Reliance Industries, and pipping
such worthies as the AV Birla group, the Wadias,
the Godrejs,
the Mahindras,
the Adanis...They
are now the third-largest family group after Tatas
and Ambanis.
The Bajaj Group provides a good platform to study Strategic Management with a canvass of 92 years spanning 5 generations
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