The automobile industry of the modern world is on a booming stage as more and more companies are joining the bandwagon to be one of the most celebrated companies in the recent times. The industry is full of companies that are getting all the attention due to their superior nature cars and also the potential customer base (Battini, Boysen, and Emde 2013). However, there are certain companies that are still facing a lot of problems either due to their management or due to their organiostioanl problem nature. One of the major companies that faced such issues is Suzuki which has faced a number of organizational issues in the recent past due to the various management decisions. The form of decisions not only caused tremendous harm to the overall business of the organization but also made sure that the profit and overall visibility of the company in the span of time become way lesser expected in the form of time (Harwit 2016). The following report analyses Suzuki as a company along with one of the management problems of Suzuki which is related to the management decision of pulling out the sales of Suzuki cars from North America and China. The following paragraph highlights the secondary data analysis along with the management program for the research and the analysis of the same. The recommendations and set of research questions are also analyzed in the following paragraphs.
Suzuki is one of the most celebrated multinational Japanese brands that is engaged is the production of a number of automobiles including cars and bikes. The company is headquartered in Minami-ku, Hamamatsu which was established in the year 1909 in the name of Suzuki Loom Works. The 109-year-old company was founded by Michio Suzuki and serves the global arena excluding the country of Pakistan (Global Suzuki. 2018). The present chairman of the company is Osamu Suzuki and is a company that specializes in the production of automobiles, engines, motorcycles and outboard motors. The company has an increasing stock exchange company with a revenue of approximately $2580 million in the year 2012. The company has over 50000 employees all over the world with an estimated base of 35 production houses in 23 countries. There are approximately 133 distributors in 192 countries with a sales volume that accounts for tenth position in all over the world.
There are a number of problems in Suzuki that are related to the management of the company in some of the way or other. One of the major management decisions that had led to the closure of the operations and selling of cars in North America and China by the brand Suzuki. According to Guajardo, Cohen and Netessine (2015), both North America and China are one of the potential markets for the automobile industry due to the huge number of potential customers and also to the fact that both the countries are economically strong to sustain the price increase as well as include the new variations of models in the span of time (Suzuki Motor of America, Inc. 2018). There are a number of potential causes that led to the situation and loss which affected both their business as well as their profit in the longer period of time.
The discrepancies in the internal management of the situation also led to the problem of volunteering out of the country and also to the fact that this led to loss of business and loss of future growth prospects in the span of time (Law 2017). The management problem of Suzuki in its internal house includes the lack of consistency of cars and also to the fact that the goals of the company in sales are not clear. There is a lack of clear strategy which also excelled the overall problems of management in Suzuki leading to the decline in the longer run (Suzuki-china.com. 2018). The management problem of Suzuki is related to the less amount of demand for the cars in the two countries which has left the company only with a potential subsidiary organization in Maruti, an Indian brand. The management problem of Suzuki also included the lack of technological innovation and variations for attracting a greater number of customers in the concerned span of time. The lack of the modern knowhow is also one of the major authorities’ problems in the period.
In order to solve the management problem regarding the opting out of Suzuki from the markets of China and North America, there are a number of research questions that needs to be dealt with which are as follows –
The following research program is designed to analyze the secondary data in association with the loss at Suzuki in the province of USA and China and their subsequent opting out of the whole business in the country. The loss is due to the inefficient management problems like the lack of innovation in the car strategies as well as the lack of management decisions in the concerned span of time (Ganesh 2016).
Figure – Loss due to management problems of Suzuki in USA
(Source – Hashmi and Biesebroeck 2016)
In the above figure, the analysis of the secondary analysis from the source of the sales of Suzuki cars in the United States of America. The country that has been one of the best potential customer bases for the automobile industry has been striving to see the less amount of sales in the country due to the management problems that has been rolling in the company for the longest period. The figure sees the market share from the year 1984 to the year 2013 which also sees that the sales of the cars and other automobiles have increased from the time and then has decreased at considerable rate. According to Hashmi and Biesebroeck (2016), the figure sees the rate of market share increase from 0.02% in the year 1985 to 0.53% within the span of two years. The innovation and the improvement in the management decision contributed to the overall improvement of the plan. The rate then further decreased to 0.36% in 1988 and remained fairly stable in the period. Moreover, the rate of sales and market share started increasing in 1999 after being stagnant for 4 years. The rate then continued to increase upto 0.64% in the year 2008 when the company sales and market share was at its highest. The rate then decreased at a drastic rate and turned to 0.03% in 2013 which is due to the faulty management decision and issues in the overall fact.
Figure – Graph showing the collapse of Suzuki in USA
(Source – Castillod 2016)
In the above figure, the collapse of Suzuki in the province of United States of America is being seen where the rate of sales and profit is increasing at a steady rate from 2002 to 2006 after which the stagnancy of the rates started pouring in. The rates remained stagnant in 2006-2007 and after which the considerable decrease in the rate started to enter the market. According to the opinion of Castillod (2016), the rate decreased at a considerable rate from the year 2007 up to the year 2009 and then decreased at a slower pace. The overall rate of decrement remained constant from the year 2010 to the year 2012 which showed the rare of decrease in growth in the year. The collapse of Suzuki has been contributed to the faulty management decisions and the lack of newer and improved versions of the cars. In addition, the collapse of the company is due to the fact that the company has been stagnant in the overall pace of the sector.
Figure – Decline of Suzuki cars in China
(Source – Zhang and Stening 2014)
The above figure sees the decline of the growth of Suzuki cars in the province of China which is another potential source of market for the Japanese based company. The various number of cars in the overall matter is to be calculated in the overall sector which has seen steady decrease from the year 2012 to the year 2017 and the decrease has been very swift and steady. In the view of Zhang and Stening (2014), the overall sales as well as the structure for the company has been on a steady decrease due to a number of management faulty decisions and also to the fact that the company experienced lack of innovative ideas and newer technological measures to keep the customers intact to the overall sector of the span. The sales of the brand towering nearly 60000 in the year 2012 to approximately just above 20000 in the year 2017. This lack of sales due to the lack of proper management decision has been backed by the lack of business in most of the cars of Suzuki in China.
Figure – Loss of the company due to management problems
(Source – Anderson and Young 2012)
The above figure sees the loss that is being incurred by the company due to the management decisions and lack of proper sourcing of the amendments in the concerned amount of time. In the opinion of Anderson and Young (2012), the company has bee incurring a steady loss from the years of 2015, 2016 and 2017 in the different months which is seen in the above figures. The business of the company ranged from above 15000 in the year 2015 to below 5000 in the year 2017. The overall loss has been very depictive which is seen in the figure.
There are a number of alternatives that can be formed for the opting out for Suzuki from the province of North America and China which are both their potential markets in the span of time. The reasons that led to the opting out of such cases lead to the mismanagement as well as the lack of management efficiency in the period of time (Lokhande and Rana 2013). The alternatives to the problem included the venturing of the company into other countries in which their presence is still low and can be improved with proper implementation. According to the view of Sehgal (2012), the improvement and efficiency in management for Maruti, their collaborative partner in the province of India is to be done so that their presence in the Indian subcontinent is better which is another potential market for them in the modern world.
Conclusion
At the end of the analysis, it can be concluded that Suzuki due to its management problems and faulty decisions has opted out of the province of China and United States of America which is one of their potential markets in the longer period of time. The decline in sales and the overall market glitches lead to the problem of loss of business which has been analyzed following the secondary analysis of the data in the concerned span. The report analyzed all the secondary data following the management problem along with the alternatives that can be used in the span of time. In addition, the recommendations for the betterment of the problems has been analyzed which is one of the potential solutions of the problems mentioned.
Reference
Anderson, S.W. and Young, S.M., 2012. Implementing management innovations: Lessons learned from activity based costing in the US automobile industry. Springer Science & Business Media.
Battini, D., Boysen, N. and Emde, S., 2013. Just-in-Time supermarkets for part supply in the automobile industry. Journal of Management Control, 24(2), pp.209-217.
Castillod, J.J., 2016. Teamwork in the Automobile Industry: Radical Change or Passing Fashion?. Springer.
Ganesh, A., 2016. Understanding the Relationship between Employee Motivation and Customer Retention. Vilakshan: The XIMB Journal of Management, 13(1).
Global Suzuki. (2018). Global Suzuki. [online] Available at: https://www.globalsuzuki.com/ [Accessed 4 Oct. 2018].
Guajardo, J.A., Cohen, M.A. and Netessine, S., 2015. Service competition and product quality in the US automobile industry. Management Science, 62(7), pp.1860-1877.
Harwit, E., 2016. China’s Automobile Industry: Policies, Problems and Prospects: Policies, Problems and Prospects. Routledge.
Hashmi, A.R. and Biesebroeck, J.V., 2016. The relationship between market structure and innovation in industry equilibrium: a case study of the global automobile industry. Review of Economics and Statistics, 98(1), pp.192-208.
Law, C.M., 2017. Restructuring the global automobile industry. Routledge.
Lokhande, M.A. and Rana, V., 2013. Marketing Strategies of Indian automobile companies: a case study of Maruti Suzuki India Limited.
Sehgal, R., 2012. ‘Maruti Workers Are the Villains’: Truth or Prejudice?. Economic and Political Weekly, pp.12-15.
Suzuki Motor of America, Inc. (2018). Suzuki Motor of America, Inc.. [online] Available at: https://www.suzuki.com/ [Accessed 4 Oct. 2018].
Suzuki-china.com. (2018). Suzuki China [online] Available at: https://www.suzuki-china.com/ [Accessed 4 Oct. 2018].
Zhang, X. and Stening, B.W., 2014. Post-acquisition integration: A two-level framework lessons from integration management of cross-border acquisitions in the global automobile industry. In Advances in Mergers and Acquisitions (pp. 75-111). Emerald Group Publishing Limited.
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