BUSINESS PLAN ON TATA BIKE

SUBMITTED TO:
Monica Mor

SUBMITTED BY:
Aakriti Bajaj Inna Mathur Kinshuk Deb Lovish Tuteja Sahil Bansal Sharad Agarwal Shweta Singh Sneha Singh

ACKNOWLEDGEMENT
It is great privilege to submit this project as an intact piece of work. We express our gratitude to Ms. Monica Mor for her support and her valuable guidance throughout the project. We are thankful to her for providing us with necessary insights and helping us at every step. Without the knowledge, attention and time that she has bestowed on us, this project would simply have been impossible. We would also like to thank all our friends for their cooperation, advice and encouragement during the arduous task of carrying out the project and preparing the report. We are grateful for everyones support and help when needed.

CONTENT
S. No. 1 2 3 4 5 6 Topics Executive Summary PEST Analysis Porters Five Forces model Analysis TOWS Matrix analysis Conclusion Referencessss

EXECUTIVE SUMMARY
This is the project on Business Plan of Tata Dynamo bike which is a diesel variant of the bike. As the petrol prices have been ever increasing customers needed something that will cut down money that they spent on fuel. So a diesel variant of bike will be a great relief for the customers. This will willingly switch over to a bike that moves on diesel and solar energy. So we have inculcated a Business Plan for the Tata Bike which is a diesel variant of the bike and it moves on diesel and solar energy and is one of its own kinds. This bike is eco- friendly as compared to other bikes which move on petrol. Tata already has a well-established brand image and therefore it will easily be accepted among the consumers. Tata has goodwill and Tata Dynamo is first diesel bike so will be the market leaders. Tata also has a strong well established distribution channel. So they can easily use the goodwill to promote the product. Also Tata has a financial back up and support and can invest in heavy advertising and also build strategic alliances with solar battery providers. Tata has technical expertise supporting innovation. In this Business Plan we have carried out a PEST analysis i.e. the analysis of Political, Economic, Social and Technological environment to determine the environment. Then we have carried out TOWS Strategic analysis to find out the strength, weakness, opportunities and threats for the product before introducing it to the market. Then finally we have carried out Porters five forces model analysis for the product that is analyzed to understand attractiveness of industry structure. Therefore according to us this product is going to be a huge success in the market if launched with proper planning and execution.

PEST ANALYSIS OF TATA DYNAMO

To understand the real need of the customers, it should be highly supported by a strong market research. It is believed that before launching any product in the marketer, the marketer should try and fulfill the perception expectation gap which often is formulated due to the internal and external factors affecting the organizational environment. The internal environment largely includes the staff members and the harmony that exists between them when they work. Thus issues concerning wages, finance, general working conditions, culture, do affect the performance of the organization and determines the future of the product. Then we have the micro environment. This primarily deals with the external customers and their response to the product in offering. Besides, the customers behavior is also affected by factors such as availability, for which one should have strong network coverage with the agents, distributors and suppliers. Besides these factors, we also have competition playing a major role in breaking or making up the reputation of the new product. Pricing strategies such as skimming or market penetration are some methods by which competitors affect the decisions made by the organization.

And finally we deal with the Macro environment. This is generally divided into 4 parts:1) Political 2) Economic 3) Sociocultural 4) Technological

POLITICAL FACTORS
The political factor plays a major role in the business regulation. The stability of the political environment determines the success of the product. With regards to Tata dynamo, government would definitely try and promote an all diesel operated bike which can go with their policies of rising petroleum prices. As for the market ethics and the government outlook upon it is concerned, one can estimate that although Tata dynamo may face several hurdles for acceptance with regards to licensing due to being the first to bring upon such concept, but its worldwide reputation and goodwill would certainly resolve the issue. Ratan Tatas magnificent aura would certainly help them have ground footings. The Tatas would also try to avoid the Singur fiasco and would be very careful before signing themselves with any of the state government with regards of land contract and

setting up plantation units. Tatas also focus heavily on setting up their units at places where the distribution channel is nearer.

ECONOMIC FACTORS
The economic state also determines the conditions to the success of a product. With consideration to the present economy, Tata Nano can be a huge success simply because the rising petroleum prices have created a sense of dissatisfaction among the consumers who would easily shift to an all diesel bike. The rising inflation bears testimony to the fact that consumers have purchasing power and if Dynamo is well accepted by the Indian fraternity, then it can very well take the advantage of it. The rising interest rates in terms of car purchases can help consumer shift to a diesel bike itself which has less of hassles. Besides the younger generation and the Indian middleclass would definitely give Dynamo a try due to its low price range.

SOCIO-CULTURAL FACTORS
In here we see that the fast culture has brought about a transition in the thought process of the consumers. Gone are the days when two-wheeler was considered only for the middle class fraternity. Today consumer who owns big cars, like to have bikes for a different experience altogether. So just in the way Nano became a household name, a proper media planning and right publicity can also make Dynamo a rage in the Indian terrain. Besides the current demography shows India to be land of working class and youth. Tatas dynamo would in turn be an excellent automobile for that younger population who would like style and comfort and the affordable rate with low maintenance, thanks for it being a diesel variant.

TECHNOLOGICAL FACTORS
With Tatas having an excellent R &D, Tata Dynamo had been launched and is maintained so that it is both affordable and with the best quality resources. The technology plays the most important role because this would be the first diesel bike of India. This innovation would be welcomed by all who would now like to shift to diesel operated automobiles.

Besides having online bookings beforehand would boost up its sales to marginal proportion .Maintaining a feedback forum would also be essential in taking the response of general public which would help in product development in the near future. Besides a strong distribution channel and regular up gradation of technology would heavily boost up the demands of Tata Dynamo bikes. Good customer relationship management can also help us convert the suspects into prospects.

Porters Five Forces Model:

Threat of new entrants

UKs Triumph Motorcycles Ltd. is the latest entrant, it plans to start selling its motorcycles in India

from 2012. The maker of the Daytona 675, Sprint and Rocket III motorcycle models plans to sell its products by importing them as fully built units. A few months ago Victory Motorcycles, the Minnesota bike manufacturing subsidiary of Polaris also announced that it will enter the premium market with its cruisers next year. The company manufactures luxury touring bikes, classic-styled motorcycles and powerful inter-state

cruisers, among several others .Harley Davidson, Hyosung, Ducati and Mahindra are also planning to enter into Indian market in 2012. But all these companies will be coming with the high end expensive bikes with petrol supporting engine and have to address the various challenges such as inflation, low price barriers, local competition, governmental regulations, and raw material acquisitions, contracts for distribution and service centers. But Tata dynamo is coming with the diesel supporting engine available at reasonable a price which is much less than that of the new entrants. People will favor the diesel bike as it will lead to huge savings due to differences in prices of petrol and diesel. And Tata have already been existing in Indian market for years and are familiar with all the challenges here. Reputation and strong distribution network will help them to combat the competition from the new entrants. Soon other companies will try to bring in this innovation into their product. So threat of new entrants is there to the Tata dynamo but in the long run.

Rivalry among existing firms:

Major players in the motorcycle industry are BAJAJ, HONDA, YAMAHA, TVS, HERO, and LML etc. These companies are coming with the number of bikes with high power engines, fuel efficiency, styles which will increase the competition in market. For eg Yamaha launched YZF R6 sports bike and R15 was launched in august 2011 and Yamaha sz-x will launched in 2012 o Honda launching interceptor VFR800 and Honda VTR. In 2011 o Bajaj will be launching boxer 150, Bajaj pulsar 250 cc and 300cc o Suzuki will be launching GS 150 R and GW 250 But there is no threat to the TATA Dynamo since this is a diesel variant and there is no other company with the diesel engine in the market. So, it will be able to beat the competition easily in the short run but may face competition in the long run. The main reason for their upper hand will be the high prices difference between petrol and diesel and its fuel efficiency.

Threat from substitutes

Tata dynamo does not face any competition in the motorcycle segment of automobiles since there is no bike in the market with the diesel engine. No companies even have any intention of launching the motorcycle with the diesel engine in the near future. But it might face competition in the long when other competitors launch their products into the market.

Threat from buyers

Tata Motors has to work out their strategies to meet the challenges of sales and aftersales. The first is to meet the high demand that is likely to get created. As there would be many first-time customers, the sales force will have to advise them on issues like running and maintenance of the car. Further, the Indian consumer is very discerning and the product and after-sales service quality will need to live up to the customers expectations for the dynamo to be successful. As the dynamo is made with the diesel engine and there is no other company with such a innovative product in the market we can say there is no power in the hands of buyer at present. But soon there will be the other diesel bikes in the market at lower costs in the and buyers will have power to switch to other cars.

Threat from suppliers

Tata Company needs crores of investment from the suppliers in manufacturing of Tata dynamo as well as providing after sales services to the customers. Tata already produces trucks and cars and is one the biggest companies in automobile industry and have the prolonged history. When Tata decided to launch Nano about 60 suppliers spent around 500 crores to facilitate its production and maintenance. So, Tata dynamo wont face any threat from suppliers and can bargain easily as they are going to acquire various components in large quantities and their prolonged history and relationship with various vendors will help Tata co. to dictate terms while production of Tata dynamo.

TOWS Strategy

W-O STRATEGY When we take into account the W-O STRATEGIES, We primarily deal ways to overcome the companys weaknesses standing in the way of opportunities. The opportunities can be used to overcome your weaknesses Firstly in this regard we see that under the WEAKNESS OPPORTUNITY STRATEGY, our product Tata Dynamo would be facing issue regarding to licensing, solely because it is a new venture in the market. Thereby, it can reduce this licensing costly, as it would get the First Mover s Advantage ,by being the front runners of this technology.

Secondly, if by any chance, there is a condition when there is a lack of confidence by the end of investors or general public regarding the success of this new product, then it can easily be reduced by the mergers and acquisition from a trustworthy firm. Thirdly the costing can be only reduced if we take the opportunity to have a transparent market research and fill up the perception-expectation gap underlying every new concept. Fourthly, by taking the environmental concerns into its foray, they can garner the support of producing an eco-friendly product which becomes an effort to save our ecological balance and also substantiating its differentiation from its counterparts Lastly, as the product is new, this should not be considered as a liability but should be marketed as an asset which everyone should give a shot at.

W-T Strategy
Now when we come across to the WEAKNESS AND THREAT STRATEGIES, we see it is focused on reducing the companys weaknesses and its susceptibility to external threats. Firstly judging by the following conditions, we see that the Diesel and CNG models of Tata Dynamo may have a problem facing tough completion from the petrol bikes. However, it stands to be cheaper and newer in every respect. Secondly, the costing can be reduced with successful partnership and mergers with prominent companies that would bring about revenue generation and ease out the risk taking factors and its consequences. Thirdly, Tatas goodwill definitely gives it a wide space for experimentation and therefore such product launches are often supported by both the corporate fraternity and the media by large. Fourthly, market penetration need to be aptly supported by coordinated distribution and good associations with the dealers.

S-O Strategy
Now taking about STRENGTH AND OPPORTUNITIES STRATEGIES, this focuses on the strategies that use strengths to maximize opportunities. Firstly, as Tata company has very high goodwill so this will help in gaining the opportunity of first movers advantage and there are chances that the product runs good in the market.

Secondly, there are high chances of capturing the market share as people rather preferring good average petrol bikes will prefer this diesel bike because of the difference in the prices of both the petrol and diesel. And finally this bike is a result of new innovation and technologies so for this there is a opportunity of transparent market research which would make the chances for the product high to run profitably and successfully in the market.

S-T Strategy
Now taking into account the STRENGTH AND THREATS STRATEGIES, this focuses on how we can take advantage of our strengths to avoid real and potential threats. Firstly as it is a proactive approach so if the product fails then there are chances that people may form negative perception for other products of the company also so, goodwill of Tata in the market will help saving them from losses in that case this way they will use the strength of having good name in market to mitigate the losses Secondly, as this bike is all new concept so there are chances that the cost for this new innovation will be high but if the product runs successfully in market then this cost will be captured easily again. Finally as this bike is going to be a diesel variant so the price of the bike will be high but the price of diesel is less as compared to the prices of petrol so customers will be benefited by this

Conclusion

Working on this Business Plan was a great learning for our group we came to know about the various aspects that are considered before venturing into any business. We went through the project in a systematic way and went through a thorough research and considered various aspects of environment as well. We also tried to do a market research to find out the current market trends and needs of the customers and what will be the most profitable venture in the current scenario. This diesel variant Tata Dynamo Bike has great opportunity in the current scenario and also Tata has a huge brand name therefore the product will be easily acceptable in the market among the consumers because Tata has a goodwill. Moreover the product is ecofriendly and also works on solar energy which is innovation in the field of current bikes available in the market. Therefore Tata Dynamo can be a huge success if launched with appropriate planning and execution

REFRENCES
www.scribd.com www.google.com www.wikipedia.com

Class Notes