bsp final project ti cycle
TRANSCRIPT
TI Cycle Of India Ltd
Table of Contents
Acknowledgments...........................................................................................................................3
Executive Summar………………………………………………………………………………..4
Section NO.1
1)Introduction of Indian Bicycle Industry……………………………………………………….05
2) Trends………………………………..…………………………………………………..…..06
3) Industry Product Scope…………………………………………………..................................07
4) PEST Analysis……………………..……………………………………………..………….08
5) Porters 5 Force analysis……………………………………………………………………….10
6) KSF……………..……………………………………………………………………………19
7) Industry Life Cycle……………………………………………………………………............20
Section No.2
8) corporate Profile…………………………………………………………………………...….21
a) Murugappa Group…………………………………………………………………………………………….……………21
b)Tube Investment of India……………………………………………………………………………………….…….…23
9) TI cycle of India……………………………………………………………………………………………………………………………..27
a) Brands of TI……………………………………………………………………………………………………………….29
b) Product Profile…………………………………………………………………………………………………….……29
10) Product life cycle………………………………………………………………………………………………….………………………….31
11) SWOT Analysis……………………………………………………………………………………………………………………….……32
a) IFE………………………………………………………………………………………………………..……………….………34
b) EFE…………………………………………………………………………………………………………………..…………..35
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12) Competitor Analysis………………………………………..………………………………………………………..…………………37
13) Strategic group Map………………………………………………………………………………………………………………….…40
14) CPM……………………………………………………………………………………………………………………………………………42
Section No.3
15) Value chain of TI………………………………………………………………………………………………………………………….44
Section No.4
16) Mcgahan Framework Model……………………………………………………………………………………………………….51
17) Ansoof Model……………………………………………………………………………………………………………………………..51
18) Grand Strategic matrix…………………………………………………………………………………………………………..……52
19) Diversification strategy……………………………………………………………………………………………………………….53
20) Integration strategy…………………………………………………………………………………………………………………….54
21) Generic strategy…………………………………………………………………………………………………………………………55
22) IE matrix……………………………………………………………………………………………………………………………………..56
23) Selecting strategy……………………………………………………………………………………………………………………..…57
24) Distribution network of TI……………………………………………………………………………………………………..……58
25) Future strategic option……………………………………………………………………………………………………….………59
Section No.5
26) Financial Analysis………………………………………………………………………………………….……………………………59
27) Reasoning for related diversification………………………………………………………66
28)Conclusion................................................................................................................................66
29) References………………………..………………………………………………………….67
30) appendix………………………………………………………..……………………………68
a) The History of Bicycle Industry……………………………………..……………………..68
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Acknowledgments
“We bow our head in gratitude to almighty Allah, who blessed us with the ability and energy to
complete this work.”
We were asked to work on this project of Business strategy and polices. We want to thank my
respected teacher DR Sarwar Azher, who gave us this opportunity to understand & learn field
work of business strategy We also want to thank our class fellows and friends especially Asif
who has guided us in completing this project.
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EXECUTIVE SUMMARY
The Murugappa group, headquartered in Chennai, India, is a $1.5 billion conglomerate with
interest in engineering, abrasives, sanitary ware, fertilizers, finance, bio-products and plantations.
It has 29 companies under its umbrella; eight are listed and actively handed on the national stock
exchange and the Bombay stock exchange. Together, they have over 28,000 employees.
TI is a leading player in bicycles segment with 30 percent market share by virtue of its brand
equity, product development capability and proximity to the markets. The company reported a
turnover of RS. 1563.39cror and profit after tax of Rs. 98.55cror in 2004-2005
TI introduced many brand as BSA, Hercules,Philips,and recently introduce carbon made bicycle
with the name of Montra brand.
In this report we use different model as Ansoof model, Mcgrham model, and strategies like
generic, integrated, diversification strategies, and also use matrix as Grand matrix, IE matrix to
finalize the strategy for TI cycle of India. In this project we critically examine the case study and
research on different websites to find out the information. We also analyze the TI strategies
which they are using. We give recommendation on the base of calculation and financial analysis
give suggestion about future strategy.
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Section No1
1) Introduction of Indian Bicycle Industry:
India produces approximately 10% of the world annual bicycle production, which is
estimated at 125 Million units.
The annual domestic demand of bicycles in India is approximately 10 million units out of
which around 2.5 million units are a government demand for the various welfare
schemes. Exports out of India are largely to Africa and the less developed economies and
negligible to western markets.
Before 1974 there was only one bicycle manufacturing unit in India making
approximately 400 bicycle.
In 1951 two units with financial and technical support of well known British
manufacturer.
Order weare of 2 million and expected to grow to 9 to 3 million a year by 1975.
India was dominated by 18 large and medium size units.industry has subsential growth
and install capacity 1.37 million in the large sector and 0.75 million in small sector.
The utilization capacity was low in small sector 12-13%.capacity was concentrated in the
North both in large and small sectors.
With an annual turnover of more than 12 million bicycles, the bicycle industry is one of
the most established industries in India.
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Second largest bicycle manufacturer in the world, next only to China.
More than 90 per cent of the bicycle production in India comes from four bicycle
companies. Major players with their per cent share in this sector are Hero Cycles 35%,
Atlas Cycles 24%, TI Cycles 18% and Avon 15%. Hero Cycles has grown to become the
world’s largest bicycle maker followed by Atlas Cycles.
(http://www.herocycles.com/indian.php)
2) Trends:
!950-1975
The north Indian market showed definite trends in recent year that a large percentage
of women and girls had taken to cycling. Cycling ahs become a social acceptable
activity for women.
Low awareness of cycling as a sport in India
Only mode of cheap personal transportation
Cycle industry is facing increasing competition in those years.
Typically rural and semi urban consumer depend on the advice of other cyclist.
Demand of cycles is increased with festivals like Diwali, puja, marriage seasons
Licensed by the government
Huge demand exist in Standard segment
After 1980s:
Encouraging trend in usage of cycle for health and leisure activities
A declining market of standard bicycle and increase in special bicycles
Competition from China and other low-cost manufacturing destinations
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Rising prices of raw material such as steel and rubber
Multiple product variations (Style, Size, Color, Material, Trendy)
Sales in the children’s segment, ladies, school and college students were growing at a
speedy pace
Rise of Purchasing Power (Increase in spending power/Income levels)
Demand exists in Special segment
People prefer motor cycle as compare to bicycle as a fast mode of transportation
people prefer public transport system as compare to go on bicycle because of limited
time.
3) Industry products scope:
The bicycle industry can broadly be defined as the industry that is concerned with the bicycles and cycling. It includes bicycle manufacturers, parts or components manufacturers, and accessory manufacturers related to the bicycles. It can also include distributors, retailers, bicycle organizations, bicycle event promoters, and bicycle related service providers. The industry, with the changing environment, also caters to the needs of health, gymnasium and leisure segments.
The size of the Indian bicycle industry stands at US $1.2 billion. The number of units (finished bicycles including all segments) produced is around 12 million, according to an industry source. Of this, the number of units exported annually is about two to three million, which points to a huge demand in the domestic market. According to figures from the Engineering Exports Promotion Council, in 2007-08 India exported bicycles and components worth US $185.42 million. India has seen a tremendous increase in the number of bicycle manufacturers and bicycle exporters in the recent past. Today, the Indian bicycle manufacturing and bicycle spares industry is well accepted and is also widely recognized for its quality standards in international markets.
Most bicycle components, spares and bicycle accessories in India, except for free wheels and single piece bicycle hubs, are manufactured by the Small Scale Sector (SSIs), while the large scale units are permitted to manufacture bicycle frames, chains and rims for captive consumption. The manufacturing and export of complete bicycles falls within the organized sector. The Indian bicycle industry is currently in the midst of making endeavors for enhanced and increased bicycle exports since the scope for export of Indian manufactured bicycles in the international market is significant. As per public reports the present level of exports falls within the range of Rs. 150 crores.6 This includes Bicycles, bicycle spare parts and bicycle accessories.
India produces approximately 10% of the world annual bicycle production, which is estimated at 125 Million units. The annual domestic demand of bicycles in India is approximately 10 million units out of
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which around 2.5 million units are a government demand for the various welfare schemes. Exports out of India are largely to Africa and the less developed economies and negligible to western markets.
Major players in the domestic bicycle industry are Hero Cycles, TI, Avon & Atlas with 48%, 27% & 14% & 10% of share of volume respectively. (page# 37 ) Most cycles manufactured & sold in India are in the low price bracket of Rs. 2,500 to Rs. 5,000.
The market for the premium or the lifestyle bikes targeted towards the lifestyle consumer is just about emerging. The definition of high end bikes itself is changing. Earlier the high-end bikes were considered as those selling between Rs. 5,000 to 8,000. However now with global brands moving into the country this definition is also changing with price-points starting from Rs.15,000 to as high as a few lakhs. The demand for these cycles at this stage is very limited but is expected to grow at a frenetic pace in future.
(http://www.avoncycles.com/gents-bicycle.asp)
4) Pest Analysis
Political Factors:
Manufacturers should not increase the prices without prior approval of the government.
Manufacturers are asked to freeze prices of their cycle( without saddles or accessories) at
the level of their F.O.R. It was also suggest that the distributor margin cover commission
agent, sole distributors and the dealers.
Distribution margin did not increase 15% of sale.
All price revisions would be cleared with the government for industry safety.
The cost audit and voluntary control were not applicable to the small scale sector only the
large integrated manufacturers were covered by it.
The sixth Tariff commission recommended that Protection need not be extended beyond
December 31,1963
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Economic Factors:
Small scale sector contribution approximately 8 to 10% of the total production which is
150,000- 200000 units.
India produces approximately 10% of the world annual bicycle production, which is
estimated at 125 Million units. (Article Source: http://EzineArticles.com/4392039)
This is significant in view of the growing economy in India with increasing per capita
income especially for rural India is projected to grow by 17.3 percent to Rs 54,527 in
2010-11 from Rs 46,492 in the year-ago period, according to the official data released
today.
The annual domestic demand of bicycles in India is approximately 10 million units out of
which around 2.5 million units are a government demand for the various welfare
schemes.
Social Factors:
Cycling had become a socially acceptable activity for women because of it demand of
ladies model increased.
The rural consumers bought cycle from urban market or bought them second hand from
an urban or semi urban user it was a common trend in rural consumers.
Sudden burst demand on festival like Diwali, Puja, Harvest,and marriage seasons.
The social trend in India was used cycles sold to the rural consumer.
The rural consumer bought cycle either in the urban market or
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The typically a rural or semi urban consumer depended on the advice of other cyclist. For
example the milkman before buying the cycle looked around the brands used by the other
milkmen.
The fitter mechanics employed by the large dealers and as well as self employed cycle
repair shop men had major influence in decision making of the buyers.
Technological Factors:
Lastly, the technology also plays an important role in the bicycle industry. During the 1980’s and 1990’s much of the growth increase can be attributed to new technologies such as the use of new light weight materials in the frame of bicycles which greatly increased performance. Also shift from Dip Brazing technology to Welding to reduce the overall cost of the production. The technology also results in the customization rather than standardization of the cycles.
In 1960-62 India had the technology maturity to manufacture quality cycle with out
external help.
Now with help of new technology Magnesium frames are used in production of cycles
with reason able price.
In cycle industry carbon fiber as a frame material is used for making cycle.
5) Porter Five Forces Analysis
THE PORTERS 5 FORCES MODEL (TEMPLATE)
BARGAINING POWER OF BUYERS.
Determinants Defining Question Assess the power of
Buyers Circle one of the
following.
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1 = low, 5 = high, or
N/A if it doesn’t apply to
your industry.
Concentration Are buyer fragmented or highly concentrated
(i.e. do a few monopolize the market?) If they
are few and concentrated, then buyer
bargaining power is typically high.
1 2 3 4 5
N/A
Product Cost
versus Total
Purchases
Does your product buyer’s purchase represent a
significant fraction of the buyer’s cost? If so,
buyer bargaining power is typically high.
1 2 3 4 5
N/A
Product
Differentiatio
n
Is the buyer’s product or serve a commodity? Is
there branding critical to success? Is there any
actual versus a perceived difference? If the
product are standard or undifferentiated, buyers
typically have high bargaining power
1 2 3 4 5
N/A
Switching
Costs
Is Switching cost low or high? If buyers face
few switching costs, their bargaining power is
typically high.
1 2 3 4 5
N/A
Backward
Integration
Can they make what you make themselves? Is
there a threat of backward integration? If so the
threat is typically high
1 2 3 4 5
N/A
Impact on
Quality/
Is the product you offer important to the quality
of the buyer’s product or services? If not buyer
1 2 3 4 5
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Performance power is typically high N/A
Buyers
Information
Does the buyer have complete information on
the product he may purchase? If so buyer
power is typically high
1 2 3 4 5
N/A
25/7=3.6
Result:
As the result of the above analysis, it represents that the bargaining power of the buyer is
relatively higher because buyers have low switching cost, low product differentiation and
complete information about the products.
BARGAINING POWER OF SUPPLIERS.
Determinants Defining Question
Assess the power of
suppliers Circle one of
the following.
1 = low, 5 = high, or
N/A if it doesn’t apply
to your industry.
Concentration Are the supplier fragmented or highly
concentrated? (Do a few monopolize the
market)? If an industry is dominated by a
1 2 3 4 5
N/A
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few companies, the suppliers are
typically powerful.
Presences of
Substitute inputs
Are there any substitutes for your
supplier products? If not suppliers are
typically powerful.
1 2 3 4 5
N/A
Importance Relative
to Customer.
Is your industry an important customer
the supplier group? If not suppliers are
typically powerful
1 2 3 4 5
N/A
Impact on Quality/
Performance
Is your supplier product essential to the
quality or performance of your business?
If so suppliers are typically powerful
1 2 3 4 5
N/A
Product
Differentiation
Is the supplier’s product or service a
commodity? Is branding critical for
success? Is there an actual versus a
perceived difference? Suppliers with
differentiated products typically have
more bargaining power then suppliers
selling commodities.
1 2 3 4 5
N/A
Switching Costs How costly is it for you to switch from
suppliers product? If switching costs are
high, suppliers are typically more
powerful.
1 2 3 4 5
N/A
Forward Integration Can the supplier produce the product you
make? Is there a threat of forward
integration? If so, suppliers are typically
1 2 3 4 5
N/A
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powerful 22/7=3.14
Result:
As the result of the above analysis, it represents that the bargaining power of the
suppliers are low because of the presence of substitute, switching cost, product
differentiation is low.
INTENSITY OF RIVALRY
Determinants Defining Question
Assess the power of
Buyers, Circle one of the
following.
1 = low, 5 = high, or N/A
if it doesn’t apply to your
industry.
Industry
growth
How slowly or quickly is the industry
growing? If it is a slow growth industry,
there is likely to be more intense fights
among rivals for market share.
1 2 3 4 5
N/A
Fixed Cost Does your business have a high fixed cost?
If so, rivals will typically be tempted to cut
prices to ensure sales, thus posing a
significant threat
1 2 3 4 5
N/A
Product
Differentiation
Is your product or service a commodity?
Typically the closer the product is to being a
commodity the fiercer the intensity of
1 2 3 4 5
N/A
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rivalry.
Brand Identity Is branding critical for your Rival’s success?
Is there actual vs. perceived difference?
Brand identification by buyer reduces the
threat of rivals.
1 2 3 4 5
N/A
Switching
Costs
How costly is it for your buyer to switch
between providers? Low switching costs
typically increase rivalry. When a customer
can freely switch from one product o
another, companies must struggle to capture
and retain customers.
1 2 3 4 5
N/A
Concentration
and balance
Are there a large number of firms of equal
size and power, all chasing after the same
customer? If so rivalry is typically intense
1 2 3 4 5
N/A
Diversity of
competitors
Are there competitors with different
strategies and frame of reference? When
competitors are diverse it is more difficult to
establish the rules of game, so the threat
from competitors is greater.
1 2 3 4 5
N/A
Exit Barriers Are exit barriers low or high? High exit
barriers make it costly to abandon a product.
E.g. when an organization has specialized
assets that cannot be easily sold off.
1 2 3 4 5
N/A
33/8=4.125
Result:
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As the result of the above analysis, it represents that the intensity of rivalry is high
because the high fixed cost, exit barrier and no product differentiation and market is a
competitive market with a number of companies that lead to a tough competition.
THREAT OF NEW ENTRANTS.
Determinants Defining Question
Assess the power of
Buyers. Circle one of
the following.
1 = low, 5 = high, or
N/A if it doesn’t apply
to your industry.
Economies of
Scale and
experience
Does successful entry require that companies have
significant economies of scale or experience?
Barriers to entry are typically high when an aspiring
company must cut costs in order to compete in a
large-scale and/or experienced market.
1 2 3 4 5
N/A
Product
Differentiation
Do new entrants need to differentiate by spending
heavily on advertising, customer services or product
differences to overcome existing customer loyalty?
Product differentiation is typically a barrier to entry.
1 2 3 4 5
N/A
Brand Identity Do new companies need to spend heavily on brand
identification to gain customers loyalty? Brand
identification is typically a barrier to entry
1 2 3 4 5
N/A
Switching
Costs
Does the buyer have to pay to switch from one
supplier’s product to another? High switching costs
1 2 3 4 5
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are typically a barrier to entry. N/A
Capital
Required
Does the new company need to invest large financial
resources (relative to market size) in order to
compete? Huge capital requirements are typically a
barrier to entry
1 2 3 4 5
N/A
Access to
Distribution
Do the new comers have access to distribution
channel for product or services? Difficult access can
typically be a high barrier to entry.
1 2 3 4 5
N/A
Cost
advantage
Established companies have cost advantages over
new rivals because they may have already obtained
proprietary product technology, access to raw
materials, favorable locations and government
subsidies. In addition, established company may have
passed a learning or experience curve. Such costs
advantages are typically a barrier to entry for a new
entrant.
1 2 3 4 5
N/A
23/7=3.3
Result:
As the result of the above analysis, it represents that the threat of new entrant is low
and barrier to entry is high because access to distribution is very challenging for new
entrant, huge capital is required and switching cost is also low. The existing players in
the industry have cost advantage to the new rivals because they have already production
technology and favorable locations.
THREAT OF SUBSTITUTION:
Determinants Defining Question Assess the power of
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Buyers
Circle one of the
following.
1 = low, 5 = high, or
N/A if it doesn’t apply
to your industry.
Price performance Does the substitute offer a better price or
performance? A substitute product or service
is a threat to competition when it offers a
higher performance at a given price or the
same performance at a lower price.
1 2 3 4 5
N/A
Switching Cost Is it costly for buyer to switch to the
substitute product? When buyers must pay
more to switch to a substitute the threat of
substitutes is low.
1 2 3 4 5
N/A
4/2=2
Result:
As the result of the above analysis, it represents that the threat of substitutes is lower.
Because the price of the substitute is high as compare to cycle. So it is very difficult to
switch on subtitue.Therefore the threat of substitutes is relatively lower.
Interpretations:
BARGAINING POWERE OF BUYERS:
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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. The buyer can switch to the
other brands so the bargaining powers of buyers are high.
BARGAINING POWERE OF SUPPLIERS:
Industry players are 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.
INTENSITY OF RIVERLRY
Industry players are facing stiff competition because of number of players 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.
THREAT OF NEW ENTRANTS:
Over all the industry in a mature stage and there is strong threat of new players particularly form
China, Indonesia and Taiwan with low priced cycles. But on the other hand strict regulatory
control of the Government on this industry and access to distribution channels is difficult. So it is
very difficult for the new entrants.
THREAT OF SUBTITUTE:
In cycle industry threat of substitute is low because close substitute of cycles is cycle Scotty and
motor cycle which have high switching cost and high prices.
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6) Key Success Factors:
Product design
In cycle industry survival innovative products designs are compulsory to attract the
customers.
Technological up-gradation
The industry players need to replace their old machinery with latest updated machinery
that does reduce production time and cost of the products.
Research & development
The industry players more focus on the research and development to create innovation in
products. By the innovative products as carbon frame and magnesium frames so they can
compete domestic market as well as the international market.
Product quality
In cycle industry there is a huge competition with local and international players. The
players do more concentrate on quality products and sustain this quality on the basis of
quality standards. Quality depends on good material as steel,frames,tubes etc So this way
they can attract and make loyal to customers with their brand.
Strong distribution network
Companies in bicycle industry must have strong retail and distribution network for
survive in the industry.
Cost competitiveness
Industry players and new comers use new technology and install plants to reduce the
production cost by this they can penetrate in the market and gain more market shares.
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Customer satisfaction & loyalty
Companies offer low cost and high quality cycles with design through this can succeed in
the industry and can make customers loyal with their brands.
Financial capital
The financial capital is necessary to sustain and compete in the industry because huge
investment is required otherwise no one sustain and enter in this industry.
Market shares:
The companies in cycle industry offer low cost and high quality products to customers
focus on rural and urban areas to gain market shares.
Brand Image:
Indian people are brand conscious as given information in the case that people purchase
cycle which are recommended by other person(cyclist, friends).
7) Industry Life cycle:
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Cycle industryIndustry
TI Cycle Of India Ltd
Bicycle industry is a mature industry where competition is very high. Product innovations are
few and incremental. In Indian bicycle industry two core models exist – ‘specials’ and
‘standards.’ While the market has matured in standard model but in growth in special model, the
market of special segment is growing rapidly. The companies target to youth in special segments.
Industry players are introducing new designs and with different material which are frequently
copied by others. Market of standard bicycle is decreasing because people prefer stylish bicycle
as girls and boys. In Indian market material is available at low cot and they are manufacturing
inside of India .In some cases players import material for special bicycle. The drivers of demand
essentially are the rates of growth of income and its distribution.
Section No.2
8) CORPORATE PROFILE
a) MURUGAPPA GROUP
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The Murugappa group, headquartered in Chennai, India, is a $1.5 billion conglomerate with
interest in engineering, abrasives, sanitary ware, fertilizers, finance, bio-products and plantations.
It has 29 companies under its umbrella; eight are listed and actively handed on the national stock
exchange and the Bombay stock exchange. Together, they have over 28,000 employees.
The business has its origins in 1990, when Dew a bahadur AM Murugappa chattier established a
money-lending and banking business in Burma (now Myanmar), which then spread to Malaysia,
Sri Lanka, Indonesia and Vietnam. A century down the line, it has withstood enormous
vicissitudes (including strategically moving its assets bank to India and restarting from scratch in
the 30’s before the Japanese invasion in world war 2) to became one of the country’s biggest
industrial houses. The group turnover crossed the $1 billion mark in 2003-04, with an impressive
growth of 25% Rs. 42,060 million in 2002-03. The group clocked a 40 percent jump in profit
before tax over the previous year. Murugappa Group’s consolidated turnover for 2004-05
crossed %1.44 billion. The group achieved a growth of 20 percent over the previous year.
The group is a market leader in India across a spectrum of products like sanitary ware, fertilizers,
abrasive, automotive chains, car doorframes and steel tubes. Neemzal, a neem - based organic
pesticide, is the country’s best known brands like BSA and Hercules in bicycles, parry ware in
sanitary ware, parry’s spiraling and parry’s Beta carotene in nutraceuticals, ball master and Ajax
in abrasives, Gromor and paramfos in fertilizers, and many more come from the Murugappa
group.
Its companies have tie-up with Borg-warner of the USA, wend of Germany. Morgan Crucibles of
the U.K and Mitsui Sumitomo insurance of Japan. It has registered 43 International patents for
its research and development innovation. The group has grown consistently through its decisive
and visionary response to change times. Its pioneering efforts, steadfast commitment to ethical
business practices and it dogged pursuit of new arras to extend its business acumen have brought
in its wake several prestigious national and international awards.
Social commitment has always been the cornerstone of the group’s ethos and it has been at the
forefront of eco-conservation, public health, and education in the communities where its
companies operate, since 1957. It runs four schools, a polytechnic college and four hospitals.
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Besides, the group runs a research and development center for rural development the sir AMM
Murugappa Chettiar research center (MCRC), which has been a designing simple, cost-effective
technology for local artisans since 1977.
The Murugappa group has 29 companies active in the area of engineering, abrasive, sanitary-
ware, fertilizers, finance, bio-products and plantations. The major companies of the group all:
Carborumdum Universal Limited
Cholamandalam Investment & Finance Company Limited
Coromandel Fertilizers Limited
EID Parry Indian Limited
Godavari Fertilizers Limited
Parry Agro Industries Limited
Parry Nutraceuticals Limited
Ube investment of India Limited
Name of the Companies % of turnover
TII 28%
EIDP 34%
CFL 16%
CUL 8%
OTHERS 14%
(Source: http://en.wikipedia.org/wiki/Murugappa_Group)
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TI Cycle Of India Ltd
b) TUBE INVESTMENT OF INDIA LIMITED
A reputed engineering company in India, driving excellent in work and part of the US $1.5
billion India conglomerate, the Murugappa Group.
CORPORATE HISTORY
Incorporate in 1949- TI cycles of India (TICI) in collaboration with TI, UK the world’s
largest manufactures of bicycles.
A tube product of India (TPI) was established in 1955 with the objectives of providing
backward integration to bicycles.
TPI merged with TICI in 1959. Name of the company changed to tube investments of
India Ltd.
TPI established a cold Rolling mill in 1962 for the production of cold Rolled close
annealed steel strip.
TPI established EOU at Avadi in 1996.
Tube plant commissioned in 1997 at Shirwal, Maharashtra.
Facilities to produce doorframes for Maruti 800 cc and Hyundai Santro in 1998
Cycle’s plant at Nashik set up in 2001.
Tube Investment of India limited is the flagship company of Rs. 6250 cr. Murugappa
Group. It manufactures precision steel tubes and ships, car door flames, auto motives and
industrial chain and bicycles.
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TI Cycle Of India Ltd
The company has 13 manufacturing assembly units spread across the country. Marketing
offices that act as interface between customer requirements and production train ably
support these units. The company’s shares are listed on the national, Mumbai and
Chennai stock exchanges within India and GDRS on the Luxembourg stock exchange.
The company’s product segments are- Engineering, metal formed products and cycles.
TI is the market leader in precision tubes with 61 percent market share by virtue of its
quality & application engineering capabilities.
TI is the market leader in roll formed car door flames with 57 percent market share by
virtue of its cost efficiency, association with key auto majors and roll forming
capabilities. TI is a leading player in auto motive chain with 35 percent market share by
virtue of its quality, cost & delivery and association with two wheeler major.
TI is a leading player in bicycles segment with 30 percent market share by virtue of its
brand equity, product development capability and proximity to the markets. The company
reported a turnover of RS. 1563.39cror and profit after tax of Rs. 98.55cror in 2004-2005
The company also has an interest in the services sector through its investments in
Cholamandalam Investment and finance company Ltd and Cholamandalam MS general
insurance Co. Ltd.,
Tube investment of India was one of the most important post-independence forays of the
Murugappa group into manufactures. It was a niche the group identified as a trump card
for a nascent nation; marking the poor man’s vehicle, the bicycle. It was originally
founded as TI cycles of India and TI miller-, which manufactured cycle, lamps and
dynamo sets-were merged with the company in 1959 and 1984 respectively.
TI is the second largest- manufacturer of bicycles in India. Marketing top Brands like
Hercules, BSA and Philips, and had a market share of 31 percent in 2003-04. In the
value-added special segment, TI in the leader, with a 50 percent market share. More
recently, the company entered the promising health conscious ‘exercise’ bicycle segment
in 2002-03. TI cycles of India, one of the leading bicycle manufacturers in India, started
Shahbaz,Khubaib,UmairPage 26
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TI Cycle Of India Ltd
in 1949, have been at the forefront of innovation and are a pioneer in the market of
cycles. TI cycles are the makes of country’s most famous brands like Hercules, BSA and
Philips cycles. The company’s vision is to be a worldwide leader in cycling and solution
by installing the pride of ownership in the customers”.
Certificates: certified with ISO 9002 & Iso 14001
Exports:
TI cycles is an exporter to many regions across the global-Europe, south East Asia and Africa;
being some of them
Locations:
Chennai (corporate HO), Nashile, Noida, Durgapur, Banglore, Kolkatta, Patna & Ludhiana.
A subsidiary, tube products of India was set up in 195 in collaboration with tube products (old
bury) Ltd, UK to produce electric resistance welded (ERW), cold drawn welded (CDW) tubes
and draw over mandrel (DOM) tubes. In 1957, tube investments of India started production of
cold-rolled close annealed steel strips, in collaboration with TI, UK, primarily to meet in house
and group requirements.
Through started as a backward integration project for the manufacture of bicycles, today, TPI is a
major preferred supply of precision welded tubes to major automotive companies in India and
abroad. It is the undisputed leader in the Indian market for precision welded ERW & CDW steel
tubes, with the widest variety and range in terms of size as well as material gracles offered. TPI
started operation at Avadi, Chennai, but has expanded with two more plants satirically located in
western and northern India.
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TI Cycle Of India Ltd
Another subsidiary, TI metal forming, is a pioneer in cold roll forming. It manufacturers and
supplies value- added metal formed components like car door flames, sash/division channels,
door guide rails and bar assembly. It has plant in Chennai and Bawal (near Gurgaon). Both plants
in Chennai and QS 9000 certified. The Chennai plant is ISO 14001 certified.
A third plant has been set up near Baroda (in Gujarat state, Western India) to manufacture and
supply doorframes, impact beam, bar and rail assembly for general motors, India. Its client list
includes Maruti udyog general motors, India.
TIDC India formerly known as TI Diamond chain Ltd, was established in 1960 in collaboration
with the Diamond chain co, USA. Starting as a marker of bicycle industrial chains TIDC produce
from tiller chains, leaf chains and conveyor chain to industrial power drive chains, engineering
class chains, in automotive TIDC produces motorcycle drive chains and engine mechanism chain
and fine blank parts. Annually production runs to 45 million ESS feet, and commands 40 percent
of the domestic market share. The company is known for developing high performance chains,
for specific applications and machinery. Some of TIDC’s popular brands are Diamond and
Xtron, TIDC exports to over 50 countries worldwide.
TII has entered into a joint venture with Borg Warner Morse TEC, USA for production of timing
and silent chains. It has entered into a technology agreement with Tsubakimoto chains company,
Japan, for engineering class chains. Some of TI Diamond chain’s popular brands are Diamond
and Xtron.
Tube Investment group
TI CYCLES OF India
TUBE PRODUCTS OF India
TI METAL FORMING OF India
TI DIAMOND CHAIN LTD
Shahbaz,Khubaib,UmairPage 28
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TI Cycle Of India Ltd
TII – BUSINESS PORTFOLIO
Business % Turnover
TI Cycle 41%
Engineering 56%
TI Metal Forming 3%
9) TI cycle of India Ltd
TI is a leading player in bicycles segment with 30 percent market share by virtue of its brand
equity, product development capability and proximity to the markets. The company reported a
turnover of RS. 1563.39cror and profit after tax of Rs. 98.55cror in 2004-2005
TI is the second largest- manufacturer of bicycles in India. Marketing top Brands like Hercules,
BSA and Philips, and had a market share of 31 percent in 2003-04. In the value-added special
segment, TI in the leader, with a 50 percent market share. More recently, the company entered
the promising health conscious ‘exercise’ bicycle segment in 2002-03. TI cycles of India, one of
the leading bicycle manufacturers in India, started in 1949, have been at the forefront of
innovation and are a pioneer in the market of cycles. TI cycles are the makes of country’s most
famous brands like Hercules, BSA and Philips cycles. The company’s vision is to be a
worldwide leader in cycling and solution by installing the pride of ownership in the customers”.
Mission:
Ethical norms in dealing with all the stakeholders Provide value of money to customers through quality and services
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TI Cycle Of India Ltd
Treat employees with respect; provide opportunity to learn innovativeness and creativity in business.
Vision:
TI Cycles’ vision is “To be the most preferred brand in fitness, recreation & personal mobility solutions”. It strives to give its customers not only a bicycle but a lifetime experience.
a) BRANDS Of TI cycle of India Ltd:
Hercules
Hercules the flag ship brand of TI cycles portfolio, this brand of ours is still as young as ever.
Hercules stands for a unique pride of possession-anchored in the time-tested values of heroisne
and integrity, to which the brand’s customers subscribe in their own lives.
BSA
BSA anchor flag ship brand of TI cycles, BSA stands for Birneighani small arms. It signifies the
joy of cycling; fun and comfort go hand in hand with BSA. BSA today is an intrinsic part of the
Indian family with cycles for everyone kids teams and adults.
Phillips
Phillips Cycles Limited was a British bicycle manufacturer based in Smethwick near
Birmingham, England. Its history began early in the 20th century and ended in the 1980s by
which time it had become part of Raleigh Industries, itself a part of the Tube Investments group.
For a number of years, the company was the second-largest bicycle producer in Britain, after
Raleigh.
Track and Trail
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TI Cycle Of India Ltd
Track and Trail is the ultimate destination for everything in cycles - from the best of international
bicycles and world-class accessories to a network of people with expertise on technology,
performance and the intricacies of cycling. For mountain, road and hybrid bikes, you can choose
from Cannondale, Bianchi or Schwinn – world-class brands known for incomparable designs,
superior comfort and ease of riding. We also have an exciting range of BMX and MTB cycles
from GT and Mongoose for those who like a bit of adventure in their lives.8
b) PRODUCT PROFILE
TI cycles is one of the largest integrated cycle manufactures in Asia, Manufactures high quality
bicycles for both domestic and international market. TICI manufactures and markets the
HERCULES, PHILIPS and BSA brands.
Hercules
Brand Names Model Names
Hercules Thriller
Hercules Bravo
Hercules Torando
Hercules Axn
Hercules Glider
Hercules Top Gear Ezy Ultra
Hercules Explorer
Hercules Captain Kidz
Hercules Ultima Dx
Hercules Ultima Ex
Hercules Wind pacer
Hercules Hurricane
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TI Cycle Of India Ltd
BSA
Brand Names Model Names
BSA Lady bird spot
BSA Bravo
BSA Lady Bird
BSA Dino sour
BSA Dash DX
BSA Comet
BSA Champ-H-Plus
BSA Aqua Zing
BSA I-Bike
BSA Dina
BSA Rocket
Health Segment
Brand Names Model Names
BSA Trimgyni
BSA Trimgyni Jogger
BSA Trimgyni Stepper
10) Product life cycle:
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TI Cycle Of India Ltd
The Company is operating in a MATURE industry where competition is very high. Product
innovations are few and incremental. A long run product life cycle operates for the two core
models – ‘specials’ and ‘standards. Special bicycles for youth as kid’s school, college students
which is in growth stage. Incremental product innovations (that are usually quickly imitated)
expand the growth phase for the ‘specials’ from time to time. Ability to introduce new variants
of existing models and somewhat different models quickly is critical to retain market shareTI has
50% market shares in special segment. Therefore standard bicycle in mature stage but trends
shows that which is moving from mature stage to decline stage because sale of standard bicycle s
are decreasing and TI has market shares is 22% in standard bicycle.
Bicycle
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TI Cycle Of India Ltd
11) SWOT Analysis:
Strengths:
Largest cycle manufacturer of India (one in every 5 cycles came from TI).
Highly successful joint venture with Hercules cycles & Motor Co. of UK.
Largest distribution network (more than 1000dealer all over the India and warehouses in
more than 12 cities)
Provide quality products to its customers.
Strong Financial Support from Murugappa group.
Brand name awareness – Most cycle enthusiasts know the TI name.
TI is known as a high-performance leader through technology and in the bicycle industry.
Good relationships with customers/dealers and after sale services
The company advertised its cycles fairly extensively through the newspaper media.
Weaknesses:
Lack of distribution in rural areas and because of this reason people bought from urban
market.
Lack of research and development to reduce the cost and improve the quality.
High cost of production and follow the economy of scale.
TI & M sale representative did not visit cycle hire shops as a routine. They just went on
the large hire shops once in a while. So it was realized that competitors of TI cycles was
wooing the hire shops by gift and frequent visit on the shops and get discount for bulk
buying.
No new market tapping (North).
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TI Cycle Of India Ltd
Opportunities:
TI need to be focuses on hire shops as new market in northern areas of India because hire
shop owners had to travel long distance to buy a cycle. Some of them travel as much as
40Km.
The study revealed that rural areas constituted an important segment of the market. As
one cycle used in urban areas 3 were used in rural areas.
Women and girls are the new markets for the company because the demands for ladies
cycles are increasing.
TI cycle has an opportunity to open more warehouse to meet the bust demand of
associated with the festivals like Diwali,puja,harvests and marriage seasons.
Threats:
The sharp increase in the prices of raw materials as steel and wages.
Competitors focus on its hire shops and purchase cycles in bulk and get discount.
Cost audit is not applicable on small sectors.
Rural affluence agriculturist would move from the bullock cart to the auto age without
passing through the cycle age.
More competitors entering the market.(China,Tiawan)
Changing in government polices successive tariff inquiries and asked to the
manufacturers to freeze the prices and also commission not exceed from 15%.
Shahbaz,Khubaib,UmairPage 35
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TI Cycle Of India Ltd
a) Internal Factor Evaluation (IFE) Matrix of TI
Key Internal Factors Weights Rating Weighted Score
Strengths
Largest cycle manufacturer of India 0.05 3 0.15
New technology 0.08 3 0.24
Retail and distribution network. 0.15 4 0.6
Highly successful joint venture. 0.08 4 0.32
After sale services. 0.05 3 0.15
Strong Financial Support from
Murugappa group.
0.10 4 0.40
Brand name awareness 0.07 3 0.21
Provide quality products to its
customers.
0.10 3 0.30
Weaknesses
Lack of research and development 0.05 2 0.10
High cost of production. 0.05 1 0.05
Lack of distribution in rural areas 0.15 2 0.3
No new market tapping (North). 0.05 1 0.05
TI representative did not visit hire
shops
0.05 2 0.10
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TI Cycle Of India Ltd
Total 1.00 2.99
Interpretation:
IFE score of TI 2.99 which is internally good. TI has strong distribution network and
strong financial position financial position. TI concentrate on R & D to reduce the cost of
products.
b) EFE Matrix:
EFE Matrix
Opportunities
Weight Rating Weighted
score
TI need to be focuses on hire shops as new
market in northern areas of India.
0.05 3 0.15
Rural areas constituted an important
segment of the market
0.1 3 0.30
Women and girls are the new markets for
the company
0.15 3 0.45
Open more warehouse to meet the bust
demand of associated with the festivals
0.05 2 0.1
Threats
Sharp increase in the prices of raw
materials
0.05 3 0.45
More competitors entering the market.
(China,Tiawan)
0.15 3 0.45
Competitors focus on its hire shops 0.15 2 0.10
Shahbaz,Khubaib,UmairPage 37
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TI Cycle Of India Ltd
Cost audit is not applicable on small
sectors.
0.05 3 0.15
Rural move on auto age without passing
through the cycle age.
0.1 2 0.2
Changing in govt. policies 0.15 2 0.30
Total 1.00 2.65
Interpretation:
EFE score of 2.65 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. It is
opportunity because weighted score is .045 which is high from others variables. Another
opportunity that TI cycle of India has that rural area constitute an important segment of the
market and concentrate on this segment. As one cycle used in urban areas 3 were used in rural
areas. This is 2nd opportunity because in which weighted score is 0.30. The highest threats from
sharp increase in prices and competitors as china & Taiwan because in which weighted scores is
0.45 which is highest from others variables.
Shahbaz,Khubaib,UmairPage 38
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TI Cycle Of India Ltd
12) Competitor Analysis
Competitiveness of TI
TI Cycles faced competition from Hero Cycles Limited, Atlas Cycles Limited, and Avon Cycles
Ltd. All of them were located in the North. TI Cycles had established a name and reputation for
quality. Till the early seventies, being a dealer of Hercules cycles was a symbol of prestige. It
lost its exclusivity when competitors from the North entered the industry and built leadership
positions on the basis of lower price. (See the appendix for the evolution of the bicycle industry
in India.) In the sixties TI cycles was a price leader with a price of Rs.198 for BSA cycle and
Rs.172 for Hercules. Hero from Hero Cycles Limited and Atlas from Atlas Cycles Limited sold
their cycles for Rs.140 and Rs.150 respectively. In seventies TI Cycles sold its BSA for
Rs224.95 and Hercules for Rs.205.90. Hero Cycles and Atlas Cycles had increased their prices
to Rs.170.30 and Rs.181.60. In the early nineties TI had increased its prices to Rs.1475 and
Rs.1270. Hero Cycles and Atlas Cycles had increased their prices to Rs.1090 and Rs.1176.
Avon from Avon Cycles Limited sold its cycles at the lowest price of Rs.690.
In 1994-95 Hero held 47 per cent of the `standard’ market, followed by Atlas with 27 per cent.
TI cycles share was 12 percent while Avon’s share was 14 per cent. The specials segment,
constitute about 35% of the total cycle market was expected to grow by more than 20,000 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.
An executive remarked:
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University Of management & technology
TI Cycle Of India Ltd
Since our company had started the industry in India the general psychology was that the
leadership would continue owing to the technical sophistication of the product. Hero Cycles
intuitively learned to make the cycles on its own and offered value for money. It competed on
price and tapped the price conscious segment, which turned out to be the largest segment in the
country. We lost our leadership position in 1978 when our employees went on strike, and the
strike lasted for a year. This enabled competitors to strengthen their position. The company got
marginalized in north and was almost forced to vacate the northern market.
Now Major players in the domestic bicycle industry are Hero Cycles, TI, Hind,Avon & Atlas
with 35, 21% & 176% & 10% of share of volume respectively. Most cycles manufactured & sold
in India are in the low price bracket of Rs. 2,500 to 3000.
Competitors of TI cycle of India Ltd:
There are many competitors of TI cycle of India Ltd as given below
Hero cycle Ltd
Avon cycles industries
Atlas cycle industries
Hind cycle Ltd
Sen-Raleight industries
Everest cycles Ltd
Road master industries
But the major competitors’ are Hind cycle ltd, Atlas cycle of industries and Avon cycles
industries
Majors competitors Names Market shares
Hero cycles Ltd 35%
Shahbaz,Khubaib,UmairPage 40
University Of management & technology
TI Cycle Of India Ltd
TI cycle of Ltd 21%
Hind cycle industry 15%
Atlas cycle industries 15%
Avon cycle industries 8%
Other 6%
(Article Source: http://EzineArticles.com/4392039)
Market shares
35%
21%15%
15%
8% 6% Hero
TI
Hind
Atlas
Avon
Other
Shahbaz,Khubaib,UmairPage 41
University Of management & technology
SEN-RALEIGH
TI cycle
HERO EVEREST AVON RIM
HIND
ATLAS
TI Cycle Of India Ltd
13) Strategic Group:
Strategic group compromises of a set of business units or firms that have the same similar
strategies with same resources. For any industry, it is necessary to divide it into categories that
help to better understand the competitive environment.
.
Narrow Product line Breadth
Wide
Shahbaz,Khubaib,UmairPage 42
University Of management & technology
SEN-RALEIGH TI cycle
Avon EVEREST RIM
Hind
Atlas
Hero
TI Cycle Of India Ltd
Therefore, TI cycle of India Ltd, Sen-Raleigh, Hero, Everest, Avon, Rim, Atlas, Hind all
companies have different products prices and product breath. So in which Atlas, TI cycle and
Hind have almost same so they are in a same strategic group. Therefore Hero, Everest, Avon and
Rim have also same strategies so we keep in a same strategic group but sen-raleigh has high
prices and narrow product breath so it is separate.
No # 2
Market shares
In second strategic group map TI, Hind and Atlas have close market shares and price so they are
in one strategic group.
Shahbaz,Khubaib,UmairPage 43
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TI Cycle Of India Ltd
14) Competitive Profile Matrix (CPM )
Critical Success
Factors
TI HIND ATLAS
Weights Ratings Score Ratings Score Ratings Score
Strong Distribution
network
0.15 4 0.60 3 0.45 3 0.45
Product Designs 0.1 3 0.30 3 0.30 2 0.20
Product Quality 0.1 3 0.30 2 0.20 3 0.30
Customer satisfaction
and loyalty
0.08 3 0.24 3 0.24 3 0.24
Market Share 0.1 3 0.30 3 0.30 2 0.20
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TI Cycle Of India Ltd
Financials position 0.11 4 0.44 3 0.33 2 0.22
Technology up
grading
0.12 3 0.36 3 0.36 2 0.24
Price
Competitiveness
0.06 3 0.18 2 0.12 4 0.24
R&D 0.06 3 0.18 2 0.12 3 0.18
Brand image 0.12 3 0.36 2 0.24 2 0.24
1.00 3.26 2.66 2.51
INTERPRETATIONS of CPM:
CPM scores for TI Ltd showing aggressiveness as compared to the Hind, and Atlas.
TI Ltd Limited is number one company within the local environment; it is basically maintaining
market shares in cycle industry in special segment the following aspects:
Strong distribution network
Ti cycle of India Ltd focus on distribution network therefore it is a core competency
of the company. On the base of this quality company is satisfying the customer or
retailer demands.
Moreover, Hind at the 2nd number and leading industry in effective distribution and strong
financial position. Finally Atlas comes at number 3rd with leading position in persistence in
distribution and technology.
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TI Cycle Of India Ltd
Section No.3
15) Value Chain of TI cycle of India
Support Activities:
Procurement department:
The basic task of procurement department is to buy raw material for processing. The basic raw
material used in the cycle industry is steel, stainless steel etc. They have 6 major vendors, from
whom they get the spare parts like mudguards and frames etc..
Technology development:
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TI Cycle Of India Ltd
Information Technology
TI Cycles used computers for office related work like accounts finalization, budgeting and
planning, report preparations and the like. Computers were not installed on the shop floor.
Manufacturing Technology:
They used technology to join the various metal parts was called “dip brazing”. Also the new
technology was introduced in 1985 and a new technology called ‘charge brazing’ was adopted to
join the parts and change into triangle shapes.
Human resource management:
In 1994-95, TI cycles had total staff strength of 4016 people. The non-managerial staff strength
was 3742. TI cycle of India is continually focusing on hiring highly qualified professionals who
are young, energetic and motivated towards achieving tasks as challenges. The company has a
separate HRM department hiring the right employee for the right job. The qualification of the
product mangers and others are MBA and labour qualifications mostly inter and graduates. They
are likely offering higher salaries to their professionals based on their motivation towards
achieving tasks. They are emphasizing on a friendly working environment to their employees
that helps then to achieve their tasks in a positive way. Another task of HRM department is to
upgrade the skills of their employees through training programs. Therefore, they initiate training
programs for their employees to boost the sales of their employees to better perform their tasks.
General administration:
The basic task of the administration department is effective planning to attain the overall goals
and objectives of the company. Therefore the basic objective of TI cycle of India is to serve their
customers with high quality at a relatively lower cost. This can only be achieved through strong
integration amongst different departments and that can only be ensure through the administration
department.
Inbound logistics
Shahbaz,Khubaib,UmairPage 47
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TI Cycle Of India Ltd
TI cycle of India Ltd use pipes. , Steel, Stainless Steel, Forks, Mudguards, Rims, Tubes,
Tyres,saddle,lamp,stand,carrier,lock,bell,chain guard.
Operations:
Operations at the Ambattur Plant
The Ambattur unit began with the assembly of completely knocked down kits imported from the
collaborator. The indigenization of the components began with the commissioning of
components manufacturing units in 1954 at Ambattur itself. The management decided to make
all parts under one roof, as there were no reliable suppliers of parts in and around Madras. The
unit started by producing parts for standard black colored `Hercules’ bicycles. An executive
remarked, “In those days producing parts that fitted to each other was a commendable
engineering effort.”
The key parts were the frame and the fork made from steel tubes. To the frame and fork
assembly were fitted the various parts of the bicycles like tyres, mudguards, handles, brakes and
carriers. Fitting the frame and the fork together was the most critical operation. The technology
used to join the various metal parts was called “dip brazing”. The technology called for dipping
the parts to be joined in a bath of molten brass and allowing the molten metal to enter the gap
between two parts and solidify. This was a very tough and hazardous operation. It led to
wastage by way of excess deposit of brass on the parts. The excess metal was recovered by
dipping the joined parts in zinc acid. This operation released zinc fumes and caused pollution. It
also restricted the shape of the frame to a `triangle’. This technology was changed in 1985 and a
new technology called ‘charge brazing’ was adopted to join the parts. In this technology fine
particles of brass were charged into the cavities of the two parts and heated at high temperature.
This saved the metal but consumed more energy. This technology was replaced by welding. The
parts were welded together using welding rods. Welding created the possibilities of alternative
shapes and facilitated the introduction of luxury and sports bikes.
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TI Cycle Of India Ltd
The frames and fork assembly was painted in the painting shop. Earlier the parts were dipped in
a paint bath. This was discarded in favour of spray painting in which fine particles of paint were
deposited on the parts by a spray gun.
Outbound logistics
Initially fully assembled bikes were sent to the market. To save the cost of transportation and
improve logistics, the format was changed to sending ready to assemble kits to the dealers. The
components were put in a cardboard box and dispatched to the dealers by truck. The dealers
received the cycles in completely knocked down (CKD) conditions in cases. Each case
contained 5, 6, 10 or 16 cycles. The dealer assembled the cycles before sale. The dealers
assembled the parts into full bikes at their premise. The technicians of the dealers were trained
by the dealer himself.
Marketing and sales
The basic task of marketing department is to market their products to the local and the
international market to their prospectus customers to boost their overall sales. Company marketer
focus to the three segment as employed who use cycle, white collar worker, and the affluent
youth. Through marketing effort BSA SLR models which sold about 300000cycles a years was
good. They have a very strong sales force that is competent and motivated towards achieving the
target. Company extensively advertise in newspaper and sponsor to the sports player and do
Shahbaz,Khubaib,UmairPage 49
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TI Cycle Of India Ltd
internet marketing and give free gift to its customers for creating customer loyalty.
Services:
They offer after sales services to their customers to better cope with their further demand and
increase their overall revenues. This also helps in customer satisfaction about their product and
customer expectations from the product.
TI cycle of India Ltd give warranty and after sale services to its customers as mention given
below
Everything we make and sell is guaranteed to be free of manufacturer's defects for the time
period specified from the original date of purchase. This warranty applies only to frames and
components that have been subjected to ordinary stresses of use or component type purchased
(mountain, road, cyclocross, track, touring or BMX) and does not apply to frames or components
sold to or used regularly by someone other than the person for whom the frame or component
was built. This warranty does not cover alteration or failure due to accident. Ti Cycles liability
for breach of warranty is limited to repair or replacement of the frame or component at the sole
discretion of Ti Cycles. Ti Cycles disclaims all other express or implied warranties as provided
in this section, including warranties of fitness for a particular purpose. This warranty is extended
to the original owner of the frame or component and is non-transferrable. In all cases, proof of
original purchase is required. Production Components - 1 year. Custom Components - 2 years.
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TI Cycle Of India Ltd
Production Frames - 2 years. Custom Steel Frames - 5 years. Custom Titanium Frames - 10
years.
Value Chain Activity:
Value-chain
Activity
Yes/ no How Does TI cycle of India Create Value For
Customers
Primary:
Inbound
logistics
Yes Mainly once in a year because they purchases in bulk
for cater their yearly demand.
Operations Yes Through traditional and latest automated machinery
& quality control check.
Outbound
logistics
Yes Shipment in large lot to minimize cost and assure
quick delivery.
Marketing &
sales
Yes Focusing on good retailer and customer relationship
to boost the sales
Service Yes Provide warranty and after sale services to its
customers and Emphasize on customer feedback to
improve quality.
Support:
Procurement Yes Buy good quality steel that fits their standards from
selected suppliers
Technology
development
Yes Large emphasize on quality than to quantity
Human
resource
management
Yes Friendly environment with emphasize on quality
work.
General
administration
Yes Effective planning with ability to coordinate and
integrate activities across the system.
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TI Cycle Of India Ltd
Resources, activities and relationships that enable TI to achieve a sustainable competitive
advantage?
Resource/Activity Is it Valuable? Is it Rare? Are there few
substitutes?
Is it difficult to
make?
Inbound logistics Yes No No Yes
Operations Yes No No Yes
Outbound logistics Yes No NO Yes
Marketing & Sales Yes Yes Yes Yes
Service Yes No No Yes
Procurement Yes No Yes Yes
Technology
development
Yes NO yes No
HRM Yes Yes No Yes
General admin. Yes No Yes Yes
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VROI Analysis:
(1 is low and 5 is high)
KSF Value Rare limitability Substitute Competitive
advantage
Brand image 4 4 5 4 17/20=0.85
Technology 5 4 3 4 16/20=0.80
Continuous innovation
5 3 3 4 15/20=0.75
R & D 3 3 3 3 12/20=0.60
Product
quality &
design
4 3 2 2 12/20=0.60
Distribution
network
5 4 4 4 17/20=0.85
Financial
position
5 3 4 5 17/20=0.85
Core Competencies:
Murugappa Family’s has experience, knowledge, values, decision making power. The core
competences and competitive advantage of TI is strong distribution network strong financial
position and good brand image. Also TI has good score in innovation and technology.
TII capabilities:
Expertise in Engineering & Electroplating
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TI Cycle Of India Ltd
Competencies in Technical Sophistication of the Product
Process Efficiencies
Section No.4
16) McGahan Framework Model BCG Matrix
As per McMahan Framework, TI is not facing serious threat of obsolescence of core assets and
core activities either. So TI falls in Progressive change. And it is cash cow. On the other hand TI
has opportunity to go into auto industry because by using same assets and activities can produce
motor bikes.
Star ?
Cash Cow Dog
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Core Activities
Cor
e A
sset
s
Threatened Not Threatened
Thr
eat
Radical change Creative change
Not
Intermediating
change
Progressive
change
TI Cycle Of India Ltd
17) Ansoff Model:
Chennai,
March 24,
2011Murugappa Group, announced the launch of India’s first indigenously manufactured carbon frame
bicycle series with the brand name ‘Montra’.Therefore TI is doing product development so it exist in 2nd
quadrant of new products and existing market. TI brands as BSA Hercules and Philips exists in 1 st
quadrant existing product and existing market. TI has opportunity t go into new market as rural market
because they have only stores in urban areas people of rural areas come in cities for purchasing bicycle.
18) Grand strategy matrix:
Rapid Market Growth
Quadrant II Quadrant I
Market development Market development Market penetration Market penetrationProduct development Product development Horizontal integration Forward integration
Montra bicycle:
BSA,Hercules,Philips
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Divestiture Backward integrationLiquidation Horizontal integration Concentric diversification
Weak competitive Strong competitive Position Position
Quadrant III Quadrant IV
Retrenchment Concentric diversificationConcentric diversification Horizontal diversificationHorizontal diversification Conglomerate diversification Conglomerate diversification Joint ventureLiquidation
Interpretation:
Rapid Market Growth
The specials segment, constitute about 35% of the total cycle market was expected to grow by
more than 20,000 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.
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. According to Grand strategy matrix suggested strategies for 1st quadrant are
Market development Market penetration, Product development, Backward integration, Forward integration, Horizontal integration Related diversification
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TI Cycle Of India Ltd
19) 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.
20) 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.
TI is also using forward integration for example it is distributing products itself through TI M
sales Ltd distribute TI products with branches and district offices all over India
Horizontal strategic alliance:
TI investment group had horizontal strategic alliance with UK companies as TI metal sections
were formed with collaborations with BARHINGAM of Tube Investment ltd UK. The TI miller
ltd was established in 1960 with H Millar & co. of UK. The Wright saddles of India made
collaboration in 1962 with JB Brooks & co ltd UK. So all these alliances were made with related
UK companies that had same business and value chain.
21) Generic Strategy:
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The TI is using “Differentiation Strategy” on the base of quality and price. TI more focuses on
quality and don’t compromise on quality because TI cycle charge high prices from its customers
but on the other hand competitors are using penetrating strategy to capture the market. Hero gain
market shares on the base of penetrating strategy.
Market of standard cycle has declined and special cycle market is growing so this time TI needs
to use low cost strategy for standard cycle by changing its style and design to attract the
customers.
On the other hand TI use same differentiation strategy in special cycle segment because this
market segment is growing TI already has 50% market shares in special cycle segment. TI can
charge high price on the base of quality and different styles.
22)IE Matrix.
The IFE Total Weighted Scores
4.0 3.0 2.0 1.0
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EFE total score
Strategy for different quadrants
Growth and Build (I, II, IV ) Hold and Maintain (III, V, VII ) Harvest or Divest ( VI, VIII, IX )
IFE score 2.9 and EFE score is 2.65 which means that the company comes in 5 st quadrant that is in (III, V, VII) so the company should go for the hold and maintain strategies that are market penetration and product development, market development
23) Selecting Strategy:
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Strong
(3.0-4.0)
Average
(2.0-2.99)
Weak
(1.0-1.99)
High
3.0-4.0
3.0
I II III
Medium
2.0-2.99
2.0
IV V
TI
VI
Low
1.0-1.99
1.0
VII VIII IX
TI Cycle Of India Ltd
Alternative Strategies
Anita Modle
Ansoff Modle
IE Matrix GRAND Mtrix
TOTAL
Forward Integration
2
Backward Integration
2
Horizontal Integration
2
Market Penetration
4
Market Development
2
Product Development
3
Related Diversification
1
Unrelated Diversification
Retrenchment
Divestiture
Liquidation
Interpretation:
From the above calculation that the highest score in market penetration and product development
which is 4 and 3 so feasible for TI is to concentrate more on penetrating and market development
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TI Cycle Of India Ltd
strategy. If we see the original condition of the cycle industry that the competitors of TI as hero
and Hind use penetrating strategy by offering low cost concentrate on and product development
so they gain more market shares in current situation now hero is the market leader with 35%
market shares. Therefore TI also focuses on market penetrating strategy by offering low cot
product with good quality. TI has technology to produce low cost bicycles Also concentrate on
product development and introduce new designs, stylish bicycles to tap the market in this way TI
again can become the market leader.
24) Distribution Network of TI cycle of India Ltd
TI has strong distribution network all over the India (1,500 direct dealers under whom there are
over 10,000 indirect outlets across the country. About 600 of these are trained outlets, including
180 exclusive BSA-GO stores and warehouses in more than 12 cities). The company expects that
the number of retail outlets to increase to 700 and exclusive stores to 250 by the end of the next
financial year.
TI has extensive distribution channel and distribute its products through multiple channels as given below
Company (TI) Authorized dealers
Retailers End consumers
Company (TI) Unauthorized dealers
Retailers End consumers
Company (TI) wear house
End consumers
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25) Future Strategic Options
Market Development ( Big opportunity)
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.
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) A purpose built cycle with wide carrier for lunch providers in the urban areas.
b) Purpose built cycles for house wives with added carriers.
Section No.5
26) Financial Analysis:
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TI Cycle Of India Ltd
Profit and loss account of TI (Lakhs)
1965 1966 1967 1968 1969 1970 net sales 845.18 813.9 1002.85 981.87 1163.27 1310.96less cost of good soldstock consume 388.94 398.12 473.63 522.53 615.56 709.12wages and salaries 104.09 109.7 133.27 123.33 148.52 170.88net mfg.expences 123.74 130.26 171.65 168.29 202.72 223.17total CGS 625.65 638.08 776.55 823.15 966.8 1103.17
gross profit 219.53 175.82 226.3 158.72 196.47 207.79less operating expensesadmn. &gen.expenses 56.82 55.94 66.77 80.33 88.05 105.17Interesty 18.19 27.05 38.49 41.5 35.31 39.32Depreciation 33.24 34.95 40.75 44.99 45.5 51.41
operating netprofit/loss 1118.28 57.89 8.29 -8.1 27.61 11.89add non operating 17.11 29 36.88 41.56 54.52 89.87
net profit 128.39 86.96 117.17 33.46 82.13 101.76less provision of taxation 64 40 49.92 1.44 26.34 41.29
net profit after tax 64.39 46.96 67.22 32.02 55.79 60.4Add. transfer from previous reserve 6.95 2.75surplus b/f 0.04 0.02 0.01 0.05 0.02 0.02
available for appropriation 64.43 46.98 74.18 34.82 55.81 60.49less statutory dv.reb.reserve 2.6 9.77 31.24 4.08 5.05 7.45
disposable profit 61.77 37.21 42.95 30.02 50.77 53.04less dividends 31.25 31.25 37.5 30 37.50 39.71transfer to reserve 30.5 5.95 5.4 13.25 13.32total transfer 61.75 35.2 42.9 30 50.75 53.03
balance being surface 0.02 0.01 0.05 0.02 k 0.02
INTERPRETATIONIncome statement shows that TI sales was increasing from 1965 to 1970 and
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the same trend in CGS.There were fluctuation in NP in those years.
Horizontal Analysis(% change In)
1965 1966 1967 1968 1969 1970
(Sale)100% -4% 23% -2% 18% 13%
100% 2% 19% 10% 18% 15%
100% 5% 21% -7% 20% 15%
100% 5% 32% -2% 20% 10%
CGS)100% 2% 22% 6% 17% 14%
100% -20% 29% -30% 24% 6%
100% -2% 19% 20% 10% 19%
100% 49% 42% 8% -15% 11%
100% 5% 17% 10% 1% 13%
100% -95% -86% -198% -441% -57%
100% 69% 27% 13% 31% 65%
100% -32% 35% -71% 145% 24%
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100% -38% 25% -97% 1729% 57%
(N.P)100% -27% 43% -52% 74% 8%
100% -50% -50% 400% -60% 0%
100% -27% 58% -53% 60% 8%
100% 276% 220% -87% 24% 48%
100% -40% 15% -30% 69% 4%
100% 0% 20% -20% 25% 6%
100% -80% -9% -100% 0% 1%
100% -43% 22% -30% 69% 4%
100% -50% 400% -60% 0% 0%
Vertical Analysis of TI(% of sale)
1965 1966 1967 1968 1969 1970
100% 100% 100% 100% 100% 100%
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46% 49% 47% 53% 53% 54%
12% 13% 13% 13% 13% 13%
15% 16% 17% 17% 17% 17%
(CGS)74% 78% 77% 84% 83% 84%
26% 22% 23% 16% 17% 16%
7% 7% 7% 8% 8% 8%
2% 3% 4% 4% 3% 3%
4% 4% 4% 5% 4% 4%
132% 7% 1% -1% 2% 1%
2% 4% 4% 4% 5% 7%
15% 11% 12% 3% 7% 8%
8% 5% 5% 0% 2% 3%
Net profit 8% 6% 7% 3% 5% 5%
0% 0% 1% 0% 0% 0%
0% 0% 0% 0% 0% 0%
8% 6% 7% 4% 5% 5%
0% 1% 3% 0% 0% 1%
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7% 5% 4% 3% 4% 4%
4% 4% 4% 3% 3% 3%
4% 1% 1% 0% 1% 1%
7% 4% 4% 3% 4% 4%
Horizontal
Analysis(% change
In) hind atlas sen.raleigh
1968 1969 1970 1968 1969 1970 1968 1969 1970(Sale)100
% 227% 163% 100% 4% 12% 100% 8% -9%100%100% 86% 219% 100% 8% 16% 100% 0% 7%100% 0% 130% 3% 8% 100% 4% 9%100% 0% 323% 100% -3% 21% 100% -15% -1%
(CGS)100% 291% 205% 100% 8% 15% 100% -1% 7%
100% 110% 10% 100% -14% -5% 100% -15% -19%100% 290% 15% 100% 16% 4% 100% 7% 11%100% 107% 244% 100% 0% 0% 100% 0% 0%100% 0% 321% 100% 30% 1% 100% 6% 21%100% 14% 8% 100% 5% -2% 100% 2% -7%100% 181% 69% 100% 15% 3% 100% 6% 9%
100% -78% -1969% 100% -53% -30% 100% -124% -838%100% 85% 681% 100% 136% 51% 100% 52% 12%
100% -44% -155% 100% -27% 6% 100% -82% -639%
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100% -92% -100% 100% -31% -18% 100% -17% -100%(N.P)100
% 26% -160% -1014% -17% 58% 10% -95% -2360%
Vertical Analysis(% of sale) hind atlas sen.raleigh
1968 1969 1970 1968 1969 1970 1968 1969 1970(Sale)100
% 100% 100% 100% 100% 100% 100% 100% 100%
66% 38% 46% 59% 61% 64% 54% 50% 59%0% 28% 24% 14% 14% 13% 17% 16% 19%0% 13% 21% 9% 9% 9% 11% 9% 9%
(CGS)66% 79% 91% 80% 84% 86% 82% 75% 87%
33% 21% 9% 20% 16% 14% 18% 14% 13%11% 13% 6% 9% 10% 9% 9% 9% 11%
2% 1% 1% 0% 0% 0% 0% 0% 0%0% 3% 5% 1% 1% 1% 3% 3% 4%
12% 4% 2% 1% 1% 1% 3% 3% 3%24% 21% 13% 11% 12% 11% 15% 15% 18%
9% 1% -4% 8% 4% 2% 3% -1% 5%2% 1% 4% 1% 3% 4% 1% 1% 2%
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12% 2% 0% 10% 7% 7% 4% 1% -4%7% 0% 0% 7% 5% 3% 1% 0% 0%
(Net profit) 5% 2% 0% 3% 2% 3% 3% 0% -4%
Hind %sale was fluctuating in three consecutive years and the same trend seen in Raleigh but %
continuous increasing trend in Atals which is 59%,61%,64%.Onther hand overhead cost also
increasing from 1968 to 1970.The net profit % is high of atlas as compare to Hind and Religh.
Ratios of TI cycle:
RATIO ANALYSIS (FROMM1965 TO 1970)
CURRENT 3.28 0.99 1.04 1.41 1.45 1.53 1.14 1.25 1.2QUICK 0.32 0.40 0.44 0.81 0.68 0.73 0.40 0.41 0.47DEBT EQUITY
0 0 0 0.23 0.17 0.14 0.24 0.39 0.44
OP.P. M 9% 0% -5% 9% 4% 2% 3% -1% -4%ASSET TURNOVER
61% 51% 86% 243% 244% 252% 109% 109% 109%
NP.TO N.SALE
5% 2% -1% 3% 2% 3% 2% 0% -4%
N.P TO T.ASSETS
3% 1% 0% 7% 5% 8% 4% 0% -4%
D.P.E.C 0% 6% 0% 13% 13% 13% 7% 0% 0%DU PONT(ROE)
4% 5% -2% 36% 24% 39% 16% 1% -18%
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Ratio analysis From (2008 to 2009)
Current Ratio:
Liquid or Liquidity or Acid Test Ratio:
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Year 2009 2008
Current assets
3337063765
3226827618
Current liabilities
1736638728
1942587980
Current Ratio
1.921 1.661
Year 2009 2008
Liquid assets
2559482488
2119891277
Current liabilities
1736638728
1942587980
Acid test Ratio
1.47 1.091
TI Cycle Of India Ltd
Absolute Liquid Ratio
(Annual Report:http://www.tiindia.com/)
TI follows the Evolutionary change:
TI follows the Kaizen theory and believes on evolutionary change, because it was a continuous
change that requires time to penetrate into the market. Penetration is not an easy task therefore it
will be done through slowly penetrating into the market. 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. Murugappa group continuously
related diversify as TI cycle in 1949,tube investment of India Ltd established in 1957.TI diamond
chain was made in 1959.TI metal was formed with collaboration of Birmingham Ltd in 1965.
Shahbaz,Khubaib,UmairPage 71
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Year 2009 2008
Absolute liquid assets
152820715
151600603
Current liabilities
1736638728
1942587980
Acid test Ratio
0.087 0.078
TI Cycle Of India Ltd
TI miller Ltd was established in 1960 and TI saddle in 1962.so Murugappa group take decision
on current and suitable situation slowly.
28) Conclusion:
After doing the whole project that TI has strong back of Murugappa group.Murguappa has
29 companies from which 12 companies are listed. I cycle is also financially strong as we
income statement shows that sale of TI is continuously increase from 1966 to 1970.Now
the TI is market leader in special bicycle with 50% market shares. The shares in standard
bicycle is 21%.TI needs to more concentrate on standard segment because the TI
performance is not good. According to the TI spokes person the that we are just more
focus on special segments because it is fast growing market but standard cycle market is
going down. Now TI use low cost strategy standard cycle to capture the market shares
as Hero cycle Ltd.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.
29) References:
http://www.herocycles.com/global.php TII Annual Report, 2005 http://en.wikipedia.org/wiki/Transport_in_India#Bicycles Article: “Bicycle industry eyes urban market” PTI, Nov 1, 2007, 01.07am IST http://articles.economictimes.indiatimes.com/2009-03-29/news/28461898_1_bicycle-industry-
shiv-inder-singh-firefox-bikes
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http://www.indianbicycleexporters.com/ http://en.wikipedia.org/wiki/Phillips_Cycles
http://www.tiindia.com/article/divisions/12 Case Study “TI Cycles: Corporate Strategy (A), by Professor Mukund R. Dixit and Professor
Abhinandan K. Jain, Copyright 2002 by the Indian Institute of Management, Ahmedabad.”
30) Appendix:
The History of Bicycle Industry
Innovation Year Country Details
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1817 German
y
Baron Von Drais invents the "running machine" or
Laufmaschine. Patented the following year. Known in
various forms as :
Draisine, Draisienne, Velocipede. English version was
the Hobby Horse (Denis Johnson). All have two, in-line
wheels and the ability to steer.
Hand Drive 1821 England Louis Gompertz adds a hand-driven, ratchet mechanism
to the front wheel of a Hobby Horse but the innovation,
as with Drais' was never really followed up.
1839-
1840
Scotland Kirkpatrick Macmillan is traditionally credited with a
machine in which power was supplied to the back wheel
via rods connected to treadle-type pedals. Thomas
McCall marketed copies; an 1845 version is in the
Dumfries Museum. It is questionable whether significant
progress resulted from either.
Rear-Wheel-
Drive Bicycle
1843 France Alexandre Lefebvre is credited with a rear-drive
machine; he took it to America twenty years later and it
still exists in the "History San Jose"
museum (the earliest extant bicycle?).
Pneumatic Tire 1845 England R. W. Thompson invents the pneumatic tire but with no
commercial follow-up.
Treadle Drive 1847 Scotland Gavin Dalzell builds a two-wheeled hobbyhorse with a
treadle-drive, possibly copied from the Macmillan
design.
Crank-Driven 1851 England Willard Sawyer exhibits his four-wheeled, crank-driven
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4-Wheeler vehicle at the Great Exhibition and subsequently becomes
established as a Velocipede manufacturer.
Boneshaker
Bicycle
1864 France J. Townsend Trench documents his purchase of a
velocipede from the Michaux family. Possibly the first
record of a "production" front wheel, pedal-driven
bicycle (but note that it was not presented untill 1895).
This style became known as the "Boneshaker". Historians
still debate the claim of Pierre Lallement that he had
previously invented the first pedal-driven machine.
1866 USA Lallement, now in the USA, gets the backing of an
investor, James Carroll, and their patent application is
granted; probably the world's first public record of the
pedal-powered two-wheeler.
1870 England James Starley products the "Ariel" High Wheeler (aka
"Ordinary" or "Penny Farthing"). Later versions had front
wheel sizes of upto 5 feet.
Wire-Spoked
Wheel
1870 England W. H. J. Grout patents the radially spoked, nipple
adjusted bicycle wheel (unlike prior load-bearing
wheels). Some credit Meyer with this design two years
previosly.
Ball Bearings 1872 German Friedrich Fischer first mass-produces steel ball bearings,
patented by Jules Suriray in 1869.
Caliper Brake 1876 England Browett and Harrison patent an early caliper brake.
Differential
Gear
1877 England James Starley patent a differential gear; probably the first
for a bicycle but the principle was not new.
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Internal Hub
Gearings
1878 England Scott and Phillott patent the first practicable epicyclic
change-speed gear fitted into the hub of a front-driving
bicycle.
Folding
Highwheeler
1878 England Grout patents a folding High Wheeler, the first "portable"
bicycle.
1879 England Henry J. Lawson patents a rear wheel, chain-driven
safety bicycle, the "Bicyclette" (his earlier models were
lever driven).
Chain 1880 England Thomas Humber adapts the block chain for use with his
range of bicycles.
Safety Bicycle 1885 England John Kemp Starley (James Starley's nephew) markets the
revolutionary Safety Bicycle (the "Rover") with a
chain/rear-sprocket drive and tangentially-spoked, similar
sized wheels. Includes many of the major features of
modern bicycles.
Seamless
Tubing
1886 German
y
The Mannessman brothers are credited with the invention
of the process to manufacture seamless steel tubing.
1888 Scotland Commercial development of the pneumatic bicycle tire
by Dr. John Boyd Dunlop.
1890
s
France Cycles Aluminium becomes one of the earliest
manufacturers of an aluminium bicycle.
Derailleur 1896 England E. H. Hodgkinson patents a 3-speed Gradient gear, a pre-
cursor of the modern derailleur.
Internal Hub
Gearing
1896 England William Reilly patents a two-speed hub gear. His later 3-
speed version was put into production by Sturmey Archer
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in 1902.
Butted Frame
Tubes
1897 England Alfred M. Reynolds takes out a patent on "butted" steel
bicycle tubes.
Freewheel 1898 German
y
First major commercialization of the freewheel by Ernst
Sachs. William Van Anden had obtained the first
freewheel patent in 1869.
1910 France The first, easy-to-use derailleur is invented by Paul de
Vivie (Velocio) that shifted among four gears at the
pedals.
Recumbent 1914 France Peugeot markets their production recumbent bicycle.
Charles Challand had exhibited his "Horizontal
Bicyclette Noemale" in Geneva in 1895.
Dual-
Suspension
Mountain Bike
1915 Italy Bianchi produced a folding bicycle for the Italian Army
with telescoping seatstays, a leaf spring at the bottom
bracket, a spring fork and large profile pneumatic tires.
Bianchi now calls it the first dual suspension mountain
bike! There are earlier versions of military folding
bicycles.
1930 Italy Tullio Campagnolo intriduces the bicycles hub quick-
release.
Recumbent 1932 France Charles Mochet designs the Velocar, a recumbent bicycle
on which Francois Faure breaks both the mile and
kilometer records.
1933-
1934
USA Introduction by Schwinn of the balloon tire and
"streamlined" bikes which leads to rugged bikes that can
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take the abuse of teenage boys and which set a forty-year
trend.
Mountain Bike 1938 USA Schwinn markets the "Fore-wheel" brake, "Cantilever
Frame" and the "Spring Fork". Resulted in what was to
be the Grandfather of today's mountain bikes.
Folding Bicycle 1939 France A. J. Marcelin petents "Le Petit Bi", a 16-inch wheeled
folding bicycle, remarkably similar to the Moulton and
Bickerton of later years.
Shifter 1946 Italy Campagnolo markets the dual-rod "Cambio Corsa" gear
shifter (over ten years after the prototype) widely used for
atleast a decade.
Index Shifting 1949 England The Hercules Herailleur is launched; a rear derailleur
with indexed shift levers. Marketed for five years.
Derailleur 1951 Italy Introduction of Campagnolo's modern Gran Sport
derailleur.
1962 England Launch of the Moulton small-wheeled bicycle with
separately sprung suspension and custom tires. Competed
successfully in time trials and track pursuit events.
String-Ray 1963 USA Schwinn introduces the Sting-Ray that subsequently
helped launch the BMX craze.
Rear Derailleur 1964 Japan The Sun Tour Grand Prix is marketed as the first slant
parallelogram derailleur, a design that has held up till the
present day.
Index Shifting 1969 Japan Sun Tour launch their indexed shift lever, the Five-Speed
Click, and a combined freewheel-plus-rear hub, the Unit
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Hub. Neither of them found a market, and were
abandoned. Bayliss Wiley in England has also
experimented with unit hubs as far back as 1938.
1970 England The aluminium Bickerton portable small-wheeler is
developed. Followed by the successful Brompton in 1976
and Dahon in 1980.
Bmx (Bicycle
Motocross)
1970 USA The movie On Any Sunday by Bruce Brown debuts.
Although it is a motorcycle documentary, a brief scene
during the beginning of the movie shows kids on Sting-
Ray bikes emulating motocross. This small spark
eventually evolves into full-fledged, organized BMX
racing by 1974.
Mass-Produced
Titanium
Frame/Fork
1974 USA Teledyne markets the first titanium bike that was
produced in any quantity (Speedwell of England had
some Ti production frames as far back as the 1960s,
welded by Lamborghini!) Litespeed brought titanium
frames to a broader market in the 1980s.
1975 USA The first carbon-tubed, metal lugged frame appears: the
Exxon Graftek. Suffered from frequent frame failure. The
technology was later perfected by Look, Trek and others.
Aluminium
Frames/Bikes
1975 USA Gary Klein displays his welded and heat-treated
aluminium frames at the International Bike show. Alan
(Italy) and Vitus (France) were producing their lugged
aluminium frames arround the same time. Cannondale
launch their "Aluminium for the Masses" in 1983.
1978 USA Fomac Corporation designs the Avatar recumbent. It is
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one of the many styles that constituted the 1980s
renaissance of recumbents which included Lightning
Cycle winning the HPV-RAAM relay and Easy Racers
breaking the 65 mph barrier.
High-Quality
Folding
Clincher Tire
1978 USA Specialized introduce the first high-quality foldablr
clincher tire (the Turbo) which launches the demise of the
tubular.
Aerodynamic
Road/Track
Bicycles
1980 East
German
y
Introduction of aerodynamic bicycles with a stable
construction. Culminated in the American "Super Bike"
at the 1984 Los Angeles Olympics.
Mass-Produced
Mountain Bike
1981 USA The specialized Stumpjumper mountain bike is launched
nationwide, capitalizing on the Marin Country vogue
inspired by Calofornian icons, Gary Fisher, Joe Breeze,
Tom Richey et al. (all of whom also produced earlier
mountain bikes).
Electronic
Cycle
Computer
1983 USA Avocet launch the first electronic cyclometer (bike
computer).
Moulton 1983 England Moulton launches his second generation of "space-frame"
small-wheeled bicycles.
Clipless Pedals 1984 France LOOK markets their clipless pedal (following on an
earlier track model launched by Cinelli in 1970; the
"Death Cleats", no automatic release).
Index Shifting 1985 Japan Shimano introduces SIS indexed shifting (learning from
their inferior product, the Positron, from 1977).
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1986 USA Kestrel introduces their production non-lugged, carbon
fiber frame and Trek market their first lugged carbon
frame.
Suspended
Mountain Bike
1987 USA Paul Turner demonstrates a full suspension bicycle with
front and rear shocks. Eventually becomes a partner in
Rock Shox. Diversified the sport of off-road biking.
Aero
Handlebars
1987 USA Scott USA manufactures the first modern aerobars,
originally the brainchild of Boone Lennon. Pete Pensyres
had earlier used his own clip-on style bars in setting his
RAAM record.
High-
Performance
Folding Bike
1989 USA Hanz Scholz designs the Bike Friday "World Tourist". A
reasonably compact folding bicycle that matches the
performance of conventional touring machines.
Integrated
Brake/Shift
Levers
1990 Japan Shimano introduces integrated brake/gear levers.
Electric
Derailleurs
1993 France Mavic markets their ZAP electronic shifting. Ceases
production in 2001. Possible future follow-up by
Campangnolo. Browning Research had invented a
prototype electronic system in 1974.
Hydraulic Disc
Brake
1994 USA Sachs (SRAM) introduces Power Disc, the first mass-
produced hydraulic disc brake system.
1998 German
y
Rohloff develops the Speedhub, 14 equally-spaced hub
gears which are operated by a twist-grip with no
overlapping ratios and a gear range as wide as a 27-speed
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derailleur system.
30-Speed
Derailleur
Drivetrain
2002 Italy Champagnolo offers a 30-speed derailleur drivetrain with
the Record 3-x-10a adrivetrain.
(http://www.herocycles.com/global.php)
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Diversification In To
Two wheeler Industry ( Motor cycle)
Tyre Industry
Logistics and transportation Industry
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