SWOT Analysis

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Strengths:
1. India’s largest cycle manufacturer. 2. Successful joint venture with Hercules cycles & Motor Co. of UK for longer duration. 3. Strong financial support & professionalism from murugappa group. 4. Already have brand awareness in market to the cycle enthusiasts. 5. Supply of good quality product to customers. 6. Largest distribution network (more than 1000dealer all over the India and warehouses in more than 12 cities) 7. TI had good production capacity , technology, dealer technicians. 8. Good relationships with customers/dealers and after sale services. 9. Company advertises their new cycle through newspaper & using independent event Management Company.

Weaknesses:
1. Distribution lacks in rural areas hence customer of rural areas bought from urban market. 2. Less research & development took place in areas of cost reduction & quality improvement. 3. Cost of production is high. 4. TI cycle sales representative not visiting the hire shop on regular basis, they were just visiting large hire shops once in a while hence didn’t have update information. At the same time their competitors were frequently visiting the shops & providing them attractive gifts & get discount for bulk buying.

Opportunities: 1. Competitors focus on its hire shops and purchase cycles in bulk and get discount. 2. Women and girls are the new markets for the company because the demands for ladies cycles are increasing. 4. Rural affluence agriculturist would move from the bullock cart to the auto age without passing through the cycle age. 3. Cost audit is not applicable on small sectors. Switching of importers to other suppliers & more competitors entering the market. . Indonesia) 5. Threats: 1. because demand for the cycle is more in rural areas than urban areas. No new market tapping specially in north. Changing in government policies. 3. TI needs to focus on hire shops as new market in north because many shop owners had to travel lot of distance to buy cycle.5. 6. Rural areas can become important segment of market. 2. . The sharp increase in the prices of raw materials as steel and wages.(China.

0.44 Weights Rating Weighted Score Murugappa group.05 0.a) Internal Factor Evaluation (IFE) Matrix of TI Key Internal Factors Strengths Largest cycle manufacturer of India New technology Retail and distribution network. Highly successful joint venture.13 0.52 0.05 0.11 3 3 0.06 its 0.00 2.11 3 3 4 4 3 4 0.24 0. Lack of distribution in rural areas No new market tapping (North).05 1 1 2 1 2 0. Strong Financial Support 0.15 0.33 TI representative did not visit hire 0.18 0.05 from 0.09 0.05 0. After sale services.36 0.24 0.86 .08 0.12 0. Weaknesses Lack of research and development High cost of production.05 0.15 0.05 0.10 quality products to 0.05 0.05 shops Total 1. Brand name awareness Provide customers.

Interpretation: IFE score of TI 2.86 which is internally good. TI concentrates on R & D to reduce the cost of products. TI has strong distribution network and strong financial position. .

00 2 0. Changing in govt. policies Total 0.05 market in northern areas of India. Rural areas constituted an important 0.15 Cost audit is not applicable on small 0. Indonesia) Competitors focus on its hire shops 0.(China.1 3 0.30 3 0.45 market.30 3 Weight Rating Weighted score 0.15 3 0.b) EFE Matrix: EFE Matrix Opportunities TI need to be focuses on hire shops as new 0.15 the company Threats Sharp increase in the prices of raw 0.15 segment of the market Women and girls are the new markets for 0.2 2 0. Rural move on auto age without passing 0.1 through the cycle age.45 3 0.10 materials More competitors entering the 0.60 .15 1.05 sectors.30 0.15 2 3 0.30 2.

This is 2nd opportunity because in which weighted score is 0. The highest threats from sharp increase in prices and competitors as china & Indonesia because in which weighted scores is 0. Another opportunity that TI cycle of India has that rural area constitute an important segment of the market and concentrate on this segment.30.45 which is high from others variables.60 and weighted scores on above table indicate that the TI cycle has opportunities because to succeed in the market by focusing on new market segments of women and girls.45 which is highest from others variables. . It is opportunity because weighted score is 0. As one cycle used in urban areas 3 were used in rural areas.Interpretation: EFE score of 2.

constitute about 35% of the total cycle market was expected to grow by more than 20. .c) Grand strategy matrix: Rapid Market Growth Quadrant II Market development Market penetration Product development Horizontal integration Divestiture Liquidation Quadrant I Market development Market penetration Product development Forward integration Backward integration Horizontal integration Concentric diversification Weak competitive Position Strong competitive Position Quadrant III Retrenchment Concentric diversification Horizontal diversification Conglomerate diversification Liquidation Quadrant IV Concentric diversification Horizontal diversification Conglomerate diversification Joint venture Slow market growth Interpretation: Rapid Market Growth The specials segment.000 per month and TI Cycles lead this segment with 50 per cent market share followed by Hero Cycles with 35 per cent and Atlas with 10 per cent.

Product development. Forward integration. According to Grand strategy matrix suggested strategies for 1st quadrant are        Market development Market penetration. Backward integration. Horizontal integration Related diversification .TI cycle of India has strong competitive position in the market because they have 3.23 score in CPM which is high as compare to its competitors’ so market is growing and TI cycle has strong competitive position so that why TI lies in I quadrant.

Penetration is not an easy task therefore it will be done through slowly penetrating into the market. Murguappa has 29 companies from which 12 companies are listed. According to the TI they just want focus on special segments because it is fast growing market but standard cycle market is going down.d) QUANTITATIVE STRATEGIC PLANNING MATRIX [QSPM] e) ANALYSIS TI follows the Kaizen theory and believes on evolutionary change. . TI has strong back of Murugappa group.tube investment of India Ltd established in 1957. TI goes in to rural areas it is a big opportunity for TI because in rural areas people have 3 bicycle and in urban areas on 0ne person bicycle from four person.TI diamond chain was made in 1959. TI cycle is also financially strong as we income statement shows that sale of TI is continuously increase from 1966 to 1970. because it was a continuous change that requires time to penetrate into the market.so Murugappa group take decision on current and suitable situation slowly. Murugappa group continuously related diversify as TI cycle in 1949. Through evolutionary change. TI generate more revenuers by adding value as latest technology and made joint venture with UK companies for sharing of technology and distribution network. TI miller Ltd was established in 1960 and TI saddle in 1962. The shares in standard bicycle is 21%.TI needs to more concentrate on standard segment because the TI performance is not good.TI metal was formed with collaboration of Birmingham Ltd in 1965.Now the TI is market leader in special bicycle with 50% market shares. Now TI use low cost strategy standard cycle to capture the market shares as Hero cycle Ltd.

c) Offering cycles and tricycles to Ice Cream vendors.  Market Development (Big opportunity) The TI should consider following future strategies for the market development. Tea Companies and Soft Drink Companies. Purpose built cycles for house wives with added carriers.f) IMPLEMENTATION According to Grand strategy matrix suggested strategies for TI can be implemented in following ways. e) Offering cycles for athletes. c) A purpose built cycle with wide carrier for lunch providers in the urban areas. b) Light and folding cycles should be developed the urban areas to avoid traffic congestion and parking problems.  Diversification a) Two wheeler Industry ( Motor cycle) b) Tyre Industry c) Logistics and transportation Industry . d) Offer cycles to courier companies. Home delivery services restaurants. b) Offering cycles to Indian Postal Services.  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. a) Northern markets should be focused for broadening sales.

ie using low cost strategy. b) Using professional & independent event management company to organize their event more effectively & efficiently. Market penetration a) Selling cycles of good quality but at lower price. .

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