Should Maruti Suzuki Invest In Electric Cars?
(6 pages of text)
Case (Pub Mat)
In April 2017, the Indian government announced the country would be free of fossil fuel cars by 2030. Maruti Suzuki was the market leader in India’s conventional passenger car segment, and did not agree that electric cars should be forced on the average consumer. Electric cars were very expensive and had limited mileage, making them a poor fit for Indian consumers, who were generally budget-conscious and mileage-obsessed. It would be very difficult to replace fossil fuel cars quickly, especially with largely non-existent infrastructure for the operation of electric cars. Maruti Suzuki wondered if it should wait for the uncertainty in the country to clear, while other car manufacturers took their chances on India’s electric car market, or if it should expedite the process of building electric cars and keep its market leadership position intact.
This case is suitable for postgraduate management programs in managerial economics courses and economic environment of business courses. The case is also useful for topics such as game theory and strategic decision making in a managerial economics course or an economic environment of business course. The case can even be adopted for a basic marketing course covering SWOT analysis. The case is also suitable for an elective course on game theory for strategic advantage, covering concepts such as applications of sequential games, Nash equilibrium, and subgame perfect equilibrium. After completion of this case, students will be able to
- assess the decision-making process in an uncertain environment;
- conduct a SWOT analysis to systematically understand the internal and external situations of an uncertain environment;
- apply a game theory approach to solve business problems; and
- evaluate the impact of government policies on business decisions.
Transportation and Warehousing
India, Large, 2017
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