You are on page 1of 24

Strategy Analysis OF TI cycle India

Present by: K Mohamed navasdeen Pineal Samuel Kaushal kumar

Content
Introduction Pest analysis Porters Five forces Swot analysis Strategy Recommendation References

Introduction
TI cycle part if Tube Investment of India 2nd largest mfg of bicycles top brands- BSA, Hercules The company export to 12 countries Manufacturing unit in Chennai, Nasik, noida, The company under muruggappa group.

PESTEL ANALYSIS
Political factor:
As manufacturers dont have rights to increase the price of cycles without getting the proper authorization from the government. In order to keep the bicycle industry under control the government guides the company's in the finalizing the price of the products. It is not necessary to pay the cost of audit to small scale industries .

Economical factor
The contribution would be between 8% to 10% of the total production . India produces approximately 10% of the world annual bicycle production, which is estimated at 125 million units. . This is important, with India's growing economy there is an increase in the per capita income for rural place The annual domestic demand of bicycles in India is approximately 10 million units out of which around 2.5 million units are a government's demand for various welfare schemes

Social factor
Cycling has become a socially acceptable activity for women due to which the demand for the ladies model has significantly increased. The demand for cycles tends to increase on occasions such as birthdays and festivals that have exchange of gifts in them. The social trend in India even till date is the use of cycles extensively by the rural consumers. Some consumers also prefer cycles instead of cars and bikes in order to reduce pollution as pollution in the current times is a major concern.

Technology factor
The growths increase depended on the new technology such as the new light weight materials in the frames of the bicycles which greatly increases performance.

PORTERS Five Forces Rivalry:


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.

New entrance:
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.

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

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.

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.

swot Analysis
Strength:
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.

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

Opportunity:
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 (Scotty) More competitors entering the market.(China,Tiawan) Shift of demand for higher priced to lower priced bicycles. Unsure trends in the bicycle industry.

Strategy Analysis
Market development strategy Product development strategy Diversification strategy Integration strategy

Market development Strategy


The 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.

Product development Strategy


The TI should develop an advanced version of standard cycles for rural area by adding shock absorbers to carry heavy load with ease. 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.

Diversification strategy:
TI investment group consists of TI cycle; Tube products of India Ltd, TI diamond Chain, Miller and the Saddles of India all of which are manufacturing companies. So TI group is making tubes, saddles, chains for cycles and motor cycle therefore it is using related diversification strategy by using the almost same value chain.

Integration strategy
TI is using backward and forward integration strategy. TI is manufacturing cycle parts for itself for example Tube products of India is making tube for cycle and motor cycle,TI dimond chain Ltd also is making chains for cycle and motor cycle so TI cycle taking material from its companies for making cycle.

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

References
tiindia. (n.d.). tiindia. Retrieved septeber 7 , 2012, from tiindia: http://www.tiindia.com/article/pressrelease/310 Case TI Cycles: Corporate Strategy (A), by Professor Mukund R. Dixit and Professor Abhinandan K. Jain, Copyright 2002 by the Indian Institute of Management, Ahmedabad

Thanks