Stratesy in Sme - Application of Sbu Concept in Auto Components Units

Abstract

Indian automobile market has been showing some fluctuations during the last 1-2 years. This certainly has put adverse pressure on the auto components manufacturing units. In India, the auto components industry has captured huge market of the Small and Medium Scale Enterprises (SME) Sector. The auto components industry contributed 21% to the GDP of the country in 2010. The vehicle makers usually incur more than 90% of their total manufacturing cost, only on purchasing the components. This clearly indicates that the auto components manufacturing units will have to fulfil the supply expectations (qualitative and quantitative) of the vehicle makers. The SME have to components market is in a sense perfectly competitive since it directly depends upon the vehicle makers. Such a competitive nature of this industry demands a strategic orientation for the SMEs auto components units. Strategic Business Unit or SBU is that unit of organization which offers a product or service to the reachable and potential market segment, and which has high value profit calibre.