MOSER BAER

Moser Baer India Limited headquartered in New Delhi, is a leading global tech-

manufacturing company. Established in 1983, the company is one of the world's largest

manufacturers of Optical Storage media like CDs and DVDs. Every 5th disc manufactured

globally belongs to Moser Baer and it is the lowest cost optical media manufacturer in the world.

The company is also the first to market next-generation of storage formats like Blu-ray discs and

HD-DVD in India.

Over the years the company has entered exciting areas of solid-state media by launching pen

drives and flash memory cards, content replication, home entertainment and is a market leader in

the high growth photovoltaic space

MICHAEL PORTERS FIVE FORCES MODEL

Prof. Michael Porter teaches at the Harvard Business School.  He has identified five forces that

determine the state of competitiveness in a market. The forces also influence the profitability of

firms already in the industry. These five forces are summarized in the above diagram.  (The fifth

force is the degree of rivalry that currently exists among firms already in the industry.)  Here are

a few additional details about Porter’s model.

Porter five forces analysis is a framework for industry analysis and business strategy

development. It draws upon industrial organization (IO) economics to derive five forces that

determine the competitive intensity and therefore attractiveness of a market. Three of Porter's

five forces refer to competition from external sources. The remainder are internal threats. Porter

referred to these forces as the micro environment, to contrast it with the more general term macro

environment. They consist of those forces close to a company that affect its ability to serve its

customers and make a profit. A change in any of the forces normally requires a business unit to

re-assess the market place given the overall change in industry information. The overall industry

attractiveness does not imply that every firm in the industry will return the same profitability.

Firms are able to apply their core competencies, business model or network to achieve a profit

above the industry average. A clear example of this is the airline industry. As an industry,

profitability is low and yet individual companies, by applying unique business models, have been

able to make a return in excess of the industry average.

Porter's five forces include - three forces from 'horizontal' competition: the threat of substitute

products or services, the threat of established rivals, and the threat of new entrants; and two

forces from 'vertical' competition: the bargaining power of suppliers and the bargaining power of

customers.

TWO WHEELER INDUSTRY

India, is the second largest producer of two-wheelers in the world. In the last few years, the

Indian two-wheeler industry has seen spectacular growth. The country stands next to China and

Japan in terms of production and sales respectively. Majority of Indians, especially the

youngsters prefer motorbikes rather than cars. Capturing a large share in the two-wheeler

industry, bikes and scooters cover a major segment . Two-Wheelers Segment in India:

Motorcycles

Scooters

Mopeds

Large varieties of two wheelers are available in the market, known for their latest technology and

enhanced mileage. Indian bikes, scooters and mopeds represent style and class for both men and

women in India. The trend of owning two-wheelers is due to its-

Economical price

Safety

Fuel-efficient

Comfort level

However, few Indian bike enthusiasts prefer high performance imported bikes. Some of the

most popular high-speed bikes are Suzuki Hayabusa, Kawasaki Ninja, Suzuki Zeus, Hero

Honda Karizma, Bajaj Pulsar and Honda Unicorn.

The two-wheeler market has emerged as the most vibrant and transforming segment of the

overall Indian automobile industry, witnessing an unprecedented growth. Rising rural demand

and fuel efficiency are among the major factors boosting the growth in the market. Despite the

economic slowdown, the Indian automobile industry has been performing consistently well,

compared to other major markets of the world. The Indian two-wheeler market possesses a

significant potential, and is anticipated to grow at a CAGR of around 11% during FY 2011- 2015

to reach 17.8 Million Units by FY 2015-end.

MOSER BAER INTO TWO WHEELER INDUSTRY

Bargaining Power of Suppliers 

The bargaining power of supplier is low because there are various number of suppliers present.

The major raw materials used in the two-wheeler industry are metal, tyres, batteries, shock

absorbers, aluminum casting, wheel rims, motorcycle chain, plastic processing. Many suppliers

rely on one or two automakers to buy a majority of their products. Stiff competition is also the

reason for low bargaining power. There is also low switching cost. For e.g. if a two wheeler

company decide to switch suppliers, it could be devastating to the previous supplier's business.

As a result, suppliers are needed to be careful to the demands and requirements of the

manufacturer and therefore they hold very little power. For parts suppliers, the life span of spare

parts is very important. The longer a two wheeler stays operational, the greater the need for

replacement parts. On the other hand, new parts are lasting longer, which is great for consumers,

but is not such good news for parts makers.

 Bargaining Power of Buyers 

The bargaining power of buyers is high as there are various different and popular brands

available. The buyers also have full information about the cost and the product. Consumers may

become dissatisfied with many of the products being offered by certain company and began

looking for alternatives. There are different substitutes also available like local trains, public

transport, cars etc. On the other hand, while consumers are very price sensitive they tend to

move towards the other available options. There is also supply-demand mismatch in the industry.

The supply is greater than the demand.