MACRO : factors that run a business

 

Maruti Suzuki India Limited, earlier known as Maruti Udyog, was established on 24 February 1984. Incorporate almost 40 years ago, and with a current market share of 55%, Maruti Suzuki is the leading automobile manufacturer in India. According to the Brand Trust Report published by True Research Advisory, Maruti Suzuki is in 9^th position among the most trusted brands of India. Here, we’ll about how the macro environment of the brand affects its business.

 

POLITICAL FORCES

 Referred to the politically induced rules and regulations by the government, the political factors come in the form of new taxation policies or labour laws. Maruti Suzuki, as a brand, follow these rules which in turn majorly affect the sales and revenue of the company. For example, to deal with increment in taxes, the company has to increase its product price. The government can demand to generate new employment opportunities; new development in policies and labour laws can demand for more skilled labours, which makes it easy for jobseekers to get a job.

 

ECONOMIC FORCES

Indian automobile industry is still recovering from the economic downfall due to the unforeseen demonetisation drive initiated in 2016. Even though, Maruti Suzuki has always outdone itself in sales, post demonetisation the sales decreased by 32.7% as recorded in August 2019.

An increase in interest, inflation, tax, import and export rates; raise in oil prices; constant changes in exchange rates will mostly have a negative impact on the growth of the company. High economic growth rate increases the demand and purchasing power. Since Maruti provides better and easier car financing options now, more consumers are opting to buy cars.

 

CULTURAL FORCES

Maruti Suzuki has set up welfare camps, driving schools across India that aims to design cars with more comfortable features. Increased tourism during international cricket matches, IPL matches provide a great opportunity for automobile brands to market its business to boom. Now, since Maruti has a strong value among Indians for over three decades, its easier to attract customer. The company had launched Maruti Genuine Accessories as a CSR activity, which offers car parts, stereo systems, seat covers, etc.

 

DEMOGRAPHIC FORCES

India has one of the fastest growing populations in the world. Large and diverse demographics both offer opportunities as well as challenges. Maruti has a vast network in India in terms of its customers and retail service, with 3598 sales outlets and 3792 service outlets, across 1861 cities in India. With rising income and a decent young population in India, Maruti’s car market has increased since cars are taken as status symbols. Maruti provides arguably some of the most affordable cars in today’s market with class features.

TECHNOLOGICAL FORCES

In today’s age, everybody is always looking for something that is up to date. Artificial intelligence and autonomous driving technology are the biggest technological changes that had affected the car market. To keep up with it Maruti Suzuki India. Ltd came up with top R&D centres in Rohtak and Manesar. Upgrading itself technologically is what helps the brand stay relevant.

 

NATURAL FORCES

Maruti Suzuki has been practicing the 3R- Reuse, Reduce and Recycle and became the first ever automobile brand to manufacture CNG fitted cars like Eco, Alto, Wagon R and SX4. Such efficient eco-friendly changes are implemented to curb pollution and at the same time, maintain industry regulations.