Learning through Failures Case of Reviewing Strategy & Execution Yamaha - Out Board Market (OBM Market)

Abstract

Associated Motorways (AMW) was founded by Cyril De Soya in 1949 and was initially engaged in re-trading used tyres. He initiated the concept of attaining the maximum use of Sri Lanka's natural rubber, through home-grown manufacture, in conceiving the idea of tyre rebuilding and the manufacture of rubber goods. Later, the company gradually began to import new automotives and related products through agreed tie-ups with some of the world’s leading automotive manufacturers. Following a period of growth, the company was listed on the Colombo’s Stock Exchange in 1969. In 1981, the company secured the agency for Yamaha motor-cycles, and in 1992 signed an agreement with Maruti Udyog of India. Since then, AMW has secured distribution agreements for Yamaha marine products, Gizmo/Effie mopeds, Renault automobiles, Eicher commercial trucks and Piaggio auto-rickshaws. The company also secured an authorized dealership for Suzuki automobiles in June 2006. Since 2003, AMW has maintained its position as the country’s leading distributor of new passenger cars. Most of the brands represented by AMW are among the most sought after in the domestic market. In 2005, AMW accounted for around 31% of total passenger car registrations, of which Maruti alone made up about 26%. In 2006, AMW’s total revenues and operating profits amounted to LKR 8,983mn and LKR 954mn respectively, of which approximately 65% was derived from the sale of passenger cars. The company is also the sole distributor for Yamaha motor-cycles and outboard-motors, Eicher heavy vehicles and has several other manufacturing interests.