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TI Cycles of India is a part of Tube Investments of India (TII), a flagship company of the Rs.

7300 plus
crore conglomerate Murugappa Group. TI is the second largest manufacturer of bicycles in India,
marketing top brands like Hercules and BSA. The company is a market leader in the value-added special
segment, with a 50 percent market share. At present, TI has twelve BSA GO stores across India.
Certified with ISO 9001:2000 and ISO 14001, TI Cycles is one of the most quality and customer centric
organizations. TI Cycles is an exporter to many regions across the globe including Europe, South East
Asia and Africa.

SWOT Analysis
Strengths:
• Strong Financial Support from group
• Brand 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.

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

4. Five Force Model Application


4.1. 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.
4.2. New Entrants

Over 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.

4.3. Substitute

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

4.4. 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.

4.5. 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.

5. Future Strategic Options


5.1. Market Development

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

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.

Product Category and Target Market


It would be advisable for the company to divide the market into two tiers:
• Tier I: The basic offering would have the deciding factors as price, loading capacity, riding ease,
and ease of repair.
• Tier II: The attributes would be acceleration, design

Expanding Market Share


TI Cycles could adopt the following strategies for increasing market share:
• Shift from standardized to customized products: Though the company has a ‘delayed logistics’ in
place (i.e. CKDs at the dealers’ end), the same could be extended to designs, colours,
accessories (more at the urban centres than rural). This would not only reduce the supply chain
costs but in the process would lead to an increase in the sales of accessories.
• Increasing sales in rural areas: The company’s largest market is South India. Given the economic
development (i.e. higher growth rates) in the southern states, people are more likely to buy
mopeds/motorcycles, scooters, etc. Hence, demand for cycles would come from the hinterland
and from North and East India. Even its initial thrust to the rural areas
• Increasing sales in urban areas: ‘Sports, health’ are the bandwagons to jump on.
• Contract manufacturing: Though China has been the leader in manufacturing cycles, TI Cycles
could also explore the possibility of manufacturing cycles for the leading cycle manufacturers of
the world.
• Financing: Though a cycle costs around Rs 2,000 – Rs 3,000, the company could arrange for
loans through banks or credit societies for the rural sector to give a boost to its sales.
• Spare-parts: From the experience of the car manufacturers, the profit for these companies would
be mostly from spare-parts sales and servicing. Though TI Cycles has rightly initiated ‘cyclinics,’
there is a need to expand the network to other products as well.

Strategies for Competitive Advantage

• TI Cycles is now facing a location disadvantage as compared to Hero Cycles, Avon, and Atlas as
these are located in North India from where they outsource their cycle parts.
• TI Cycles should follow a differentiation strategy on features that can be perceived as unique by
customers. The company already has a strong base of activities, which if revamped and
strengthened, could be positioned as distinctive from the competitor.
• Some of these features are:
• Strong dealer network.
• Number of sales representatives.
• Brand awareness among customers.
• Variety of models introduced in the market.
• On the other hand, the company would have to definitely improve upon communication strategy
(advertisements, sales promotion, and publicity) and support with dealers. The first step that the
company could take is to re-launch the cycle based on a concept.
• Being the oldest player in India, it could create a feeling of nationality among the users of
‘standard’ category and position its cycle as the ‘cycle of the nation.’ This in a way reflects the
• values of the company as well as how it has incorporated the suggestions and has taken care of
customers’ complaint over a period of time.
• In case of ‘special’ category, being already the leader, it needs to sustain this position and has to
be quick in addressing the need for change. Negotiating with dealers to keep the company’s
cycles as an exclusive brand would indeed support the differentiated player image.
• To supplement this, it can also open exclusive showrooms for their products in cities. Regarding
exporting cycles, the company should target South America, Africa, and East Asian countries for
better results.