Final Research Project V1.docx - 1 Running Head MSIL Final Project MSIL Final Project Module 9 QSO-500 Business Research Professor 16 September 2018

Final Research Project V1.docx - 1 Running Head MSIL Final...

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Running Head: MSIL Final Project 1 MSIL Final Project Module 9 QSO-500 Business Research Professor 16 September 2018
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MSIL Final Project 2 MSIL Research Project The purpose of this study is to gain a better understanding of what limitations the infrastructure of rural India pose. At the end of this study I hope to answer the question of whether or not MSIL can expand into rural India without operating in the red for years to follow. Using the different data that is provided from the exhibits in the case study by Mukherjee, Mathur, & Dhar, 2015 along with information gathered from the MSIL organization website, and their financial records will help to establish different plans of action to help MSIL further their ability to gain access to the rural markets. Business Problem and Literature Review The country consists of over 29 states and 7 union territories covering 3.3 million square kilometers, stretching from over 4200 feet in elevation to sea level (India.gov). The country consists of a total of 2,537.4 kilometers of national highways ( - network.htm ). India has over 4,000 cities and towns with a population of over 1.3 billion people. The population for a rural area in India is below 15,000 people (B., 2013). The definition urban areas in India has to meet the following three criteria: Minimum population of 5,000 persons; 75 percent and above of the male main working population being engaged in non-agricultural pursuits; and a density of at least 400 persons per sq km[ CITATION Rum17 \l 1033 ]. India’s rural population accounts for 800 plus million people, from 2009 to 2012 this population accounted for 69 billion dollars’ worth of consumer consumption. Nielson estimates rural India to account for 100 billion dollars (Kapur M, 2016). Research problem Currently Maruti Suzuki India Ltd. (MSIL) has 1009 authorized dealerships with only 2946 authorized service centers, leaving a large available market. The majority of MSIL’s 1009
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MSIL Final Project 3 authorized dealerships are located in the top 200 cities of population. In 2008 to 2009 MSIL had 5 dealerships in cities beyond 201 by 2012 to 2013 this number had increased to 12 (Mukherjee, Mathur, & & Dhar, 2015). The ability to break into the rural market is an ongoing issue. The ability to break into the rural market can be expensive, with the requirement to set up the additional infrastructure to establish the dealership. The expense is not just related to the initial cost of building the infrastructure but also the cost of operating the dealership, this overall cost can take up to three years before MSIL will break even and begin making a profit in that location. This paper focuses on the rural population of India, the transportation needs of the over 800 million people that reside in the rural areas and how MSIL can be involved in those requirements. “Car dealerships relied intensely on infrastructure and working capital. Each required an investment of around 85 million Indian rupees in rural areas to 175 million rupees in the major cities” (Mukherjee, Mathur, & & Dhar, 2015, p. 4). As MSIL looks at the different
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