TI cycles India

2. Murugappa grouphead quarter- Chennaiemployees- 28,000No. of registered companies- 29diverse areas of business- eng, finance, insurance, cycle, sugar, farms, plantations, bio-products, nutraceuticals

3. TI cycles India

4. TI cycle part if Tube Investment of Indiabusiness of 7300 crore2nd largest mfg of bicyclestop brands- BSA, Herculesno.of stores till today- 12certified with- ISO 9001:2000and ISO 14001

5. VisionNo one should lose business with whom you do business, so the company will be successful

6. MissionEthical norms in dealing with all the stakeholdersProvide value of money to customers through quality and servicesTreat employees with respect; provide opportunity to learn innovativeness and creativity in business.

7. Competitors of TI Cycles

9. Interpretation.The market share of TI s not significant in terms of its competitors which must be improved through market and product development. It should exploit the market in special category and standard category.

10. Core Competencies.Murugappa Family’s experience, knowledge, values, decision making and strong financial support has played important role in the success of TI over a long time period; they came to rescue the company when ever the company needed the guidance and support.

11. SWOT Analysis

12. Strengths:Strong Financial Support from groupBrand name awareness – Most cycle enthusiasts know the TI name. TI is known as a high-performance leader in the bicycle industry. Good relationships with customers/dealers. Research and Development capabilities: TI R&D department keeps them up to date with the latest technologies involving manufacturing of bicycles.

13. Weaknesses:Accuracy of future analysis.Lack of established manufacturing capabilities.No products offering in motorcycle category. Lack of global operations.No new market tapping.(North)

14. Opportunities:Internet/Mobile introduces new avenues to customer. This can save costs of dealerships. New markets in India and around the worldEntry into the lower cost bicycle market may add to market share.Entry into market where Bicycles are the substitute product.

15. Threats:The popularity of less expensive substitute products (Scooty)More competitors entering the market.(China,Tiawan)Shift of demand for higher priced to lower priced bicycles.Unsure trends in the bicycle industry.

16. Value Chain Analysis of TI CyclesSUPPORT ACTIVITIES

17. Firm Infrastructure.Dedicated management teamHome-grown Financial SupportFormal Planning and ExecutionProcurementAll necessary inputs provided by one location shop floor only few input are imported.

18. Human Resource ManagementUnionisedCompetitive Pay structureFringe benefitsDivisional MonitoringTechnology a) Indigenous Technical system and facilities b) Appropriate R&D c) Total Quality management

19. PRIMARY ACTIVITIESInbounds. Frames, Forks, Mudgaurds, Rims, Tubes, TyresOperations. Manufacturing of Metal tubes, assembling of parts by charge brazing and welding.Out Bound. Complete Knocked Down kits to dealers in small quantities in cases.

20. Marketing/Sales. a) Well knitted dealers network and sub-dealers.b) Sales cum services showroomsc) Effective advertisement and sales promotion through celebrities organizing events.Services.CyclinicsServices and Spare parts available at show rooms

21. Five Force Model Application

22. Rival.TI is facing stiff competition from the rival companies Like, Avon, Atlas, Hero and few foreign competitors. The competition is strong in standard cycles because the market growth of standard cycles is slow. But it is weak in a sense that market for special cycles is growing rapidly. Switching cost in special is low so the buyer may shift the demand.

23. New EntrantsOver all the industry is growing so there is strong threat of new players particularly form China, Indonesia and Taiwan with low priced cycles. It is also weak because access to distribution channels is difficult and strict regulatory control of the Government.

24. SubstituteTI is facing a considerable threat of substitute because close substitute of cycles Scooty which is offered by Hero but switching cost is high.

25. Supplier TI is not facing sizeable threat from suppliers because the major parts of cycles are manufactured by them except some of the parts for special cycles are imported from Japan.

26. Buyers The Dealers and sub-dealers are compelling to provide the cycles of their choice (Special) which may cause losing the market for standard cycles. Buyers switching cost is low because of the availability of Hero, Atlas, Avon and Chinese Cycles in the market

27. Future Strategic Options

28. Market DevelopmentThe TI should consider following future strategies for the market development.Northern markets should be focused for broadening sales.Offering cycles to Indian Postal Services.Offering cycles and tricycles to Ice Cream vendors, Home delivery services restaurants, Tea Companies and Soft Drink Companies. Offer cycles to courier companies.Offering cycles for athletes.

29. Product Development a) The TI should develop an advanced version of standard cycles for rural area by adding shock absorbers to carry heavy load with ease. b) light and folding cycles should be developed the urban areas to avoid traffic congestion and parking problems.A purpose built cycle with wide carrier for lunch providers in the urban areas. Purpose built cycles for house wives with added carriers.

30. Recommendations1. TI should focus on redeveloping its bicycle manufacturing. 2. Include lower cost segment of bicycles. Create another brand of bikes. These bikes will be of the lower cost variety. 3. Outsource manufacturing of lower cost products to different countries. 4. Change distribution strategy to include major retailers. Lower cost line can be sold in these stores. 5. Include sales over the Internet.

31. Overall, there is great room for improvement on TI’s position. Although the threats to TI are large, the company has opportunity that it is not currently taking advantage of favourable environment. Although the situation is not attractive, with the right change in strategy, TI can have a brighter future.