Organizational Analysis: A Case Study

of TVS Motor Company

Table of Contents
1. An introduction to the Organization:............................................................................... 3

1
 1.1. All products (current and old):.............................................................................4
1.1.1. Motorcycles:................................................................................................ 4
1.1.2. Scooterettes:................................................................................................ 5
1.1.3. Stepthru:..................................................................................................... 5
1.1.4. Mopeds:..................................................................................................... 5
1.2. Current products:................................................................................................ 5
1.3. Directors:.......................................................................................................... 5
1.4. Organization Structure:......................................................................................... 5
1.5. Company milestones:........................................................................................... 5
2. Conducive factors identified:........................................................................................ 5
3. Mission and Vision of the company:............................................................................... 5
3.1. Mission:........................................................................................................... 5
3.2. Vision Statement:................................................................................................ 5
4. Growth and the factors affecting the growth of TVSM:........................................................5
4.1. Percentage sales:................................................................................................. 5
4.2. Sales in Rupees:.................................................................................................. 5
4.3. Comparison of different data from 2004-05 to 2008-09:.................................................5
5. Rise and Fall of TVS Motors:....................................................................................... 5
6. Awards and Recognitions:............................................................................................ 5
7. Daily Work Management-Culture:.................................................................................. 5
8. Community development and social responsibility:.............................................................5
9. Code of Business conduct and ethics of Board and Senior Management:..................................5
10. Brand Ambassadors and Print Ads:.............................................................................. 5
11. Effective use of Information Technology:......................................................................5
12. Diversification and future plans:................................................................................. 5
13. Conclusion and learning from the project:.....................................................................5
14. References:........................................................................................................... 5

2
1. An introduction to the Organization:
TV Sundaram Iyengar and Sons Limited (TVSs) is the holding company for the TVS Group

of companies engaged in the manufacturing of almost all kinds of automotive components, best

two wheelers and a few other industrial products. They are also into the financial services sector.

The turnover of the entire group was close to $2 billion in 2003.

TVS was founded by T. V. Sundaram Iyengar in 1911.

It is the only automotive manufacturer in India to get the prestigious Deming

Prize. One of its subsidiaries Sundaram Clayton was the first company in India to receive the

Deming followed by Sundaram Brake Linings also getting the Deming Prize. This prize is "given

to organizations or divisions of organizations that have achieved distinctive performance

improvement through the application of TQM in a designated year." Sundaram Clayton went on

to be awarded the Japan Quality Medal.

The TVS group of companies is mainly situated in Padi, Tamil Nadu, in the outskirts of Chennai

(formerly Madras).

TVS Motor Company is the third largest two-wheeler manufacturer in India and one among the

top ten in the world, with annual turnover of more than USD 1 billion in 2007-2008, and is the

flagship company of the USD 4 billion TVS Group. It is the largest company of the group in

terms of size and turnover. It has its origin in Sundaram Clayton Limited, Moped Division,

started in 1980. The factory was started in Hosur, Tamilnadu in southern India. The first product

launched was a 50 cc moped, which appealed to the masses because of its capability to carry two

people. In the same location, the same promotors started another company in 1984, in

collaboration with Suzuki Motor Corporation of Japan, for the manufacture of 100 cc

3
motorcycles under the brand name of Ind-Suzuki Motorcycles. Subsequently in the moped

division was bought by Ind Suzuki Motorcycles in 1987 and the company changed its name to

TVS Suzuki Ltd. Even though the company started producing all kinds of two wheelers like

mopeds, scooters and motorcycles, the collaboration with Suzuki continued for the motorcycles

only. The collaboration with Suzuki Motor Corporation ended in 2001 and since then the name

of the company changed to TVS Motor Company. The company now develops all types of two-

wheelers through its own in house R&D facility and manufactures in three locations in India,

Hosur in Tamilnadu, Mysore in Karnataka and Baddi in Himachal Pradesh. It has recently started

a new manufacturing plant in Indonesia to cater to the South east Asian market. The Chairman

and Managing Director of the Company is Mr. Venu Srinivasan who is the grandson of TV

Sundaram Iyengar.

1.1. All products (current and old):

1.1.1. Motorcycles:

TVS AX 100

TVS Fiero

TVS Samurai

TVS Shaolin

TVS Shogun

TVS Apache(150 cc,13.7 Ps @8500rpm)

4
 TVS Apache RTR 160

TVS Apache RTR 160 EFI (Electronic Fuel Injection)

TVS Apache RTR 180 (17.3ps)

TVS Centra

TVS Fiero

TVS Fiero F2

TVS Fiero FX

TVS Flame

TVS Flame (125 cc,ccvti technology)

TVS MAX 100

TVS MAX R 100

TVS Star

TVS Star City

TVS Star Sport

5
 TVS Supra

TVS Victor (110 cc)

TVS Victor EDGE (125 cc)

TVS Victor GLX (125 cc)

1.1.2. Scooterettes:

TVS Scooty KS (60 cc)

TVS Scooty ES (60 cc)

TVS Scooty Pep (90 cc)

TVS Scooty Pep + (90 cc)

TVS Teenz (60 cc)

TVS Streak (90 cc)

TVS Teenz Electric

1.1.3. Stepthru:

TVS NEO 110

1.1.4. Mopeds:

6
 TVS XL 50(50 cc)

TVS XL (60 cc)

TVS Eco

TVS Astra (60 cc)

TVS Champ (50 cc)

TVS Super Champ (60 cc)

TVS Sport (70 cc)

TVS XL Super (70 cc)

TVS XL Super Heavy Duty (70 cc)

1.2. Current products:

TVS Motor currently manufactures a wide range of two-wheelers from mopeds to racing

inspired motorcycles.

Motorcycles (TVS Apache, TVS Star, TVS Flame)

Variomatic Scooters (TVS Scooty Streak, TVS Scooty Pep +, TVS Scooty Teenz) and

Mopeds (TVS XL Super, TVS XL Heavy Duty)

7
Fig: Current products offered by TVS Motor

The company has 4 plants - located at Hosur and Mysore in South India, in Himachal Pradesh,

North India and one at Indonesia. The company has a production capacity of 2.5 million units a

year.

1.3. Directors:

Venu Srinivasan Chairman & Managing

Director

T. Kannan Director
H. Lakshmanan Director
R Ramakrishnan Director
K.S.Bajpai Director
C.R.Dua Director
Prince Asirvatham Director

8
K.N. Radhakrishnan President & CEO

K S Srinivasan Secretary
S. G. Murali Executive Vice President

Finance

1.4. Organization Structure:

The organization structure consists of the Chairman who appoints the CEO. The Vice-

presidents of the different functions report to CEO as shown in the following diagram.

9
I
M
S
V
R
Q
PC
FH
h
E
a
ru
i.e
n
lO
h
&
a
ro
R
fn
ku
lie
std
a
o
f
cse
iD
u
o
&
rn
tlm
a
cn
ltyic
Tn
e
a
in
e
tQ
u
g
d
A
lPo
iC
sr
n
u
o
i
S
rso
&
n
n
e
g
u
cE
rg
n
Ih
S
v
g
y.a
m
in
sR
c
n
te
e
e
m
sr
i
n
g
Fig: TVSMs Organizational structure

10
The R&D department, which is one of the most important departments of the company,

has a very flat structure. This is because, to facilitate innovative behavior, the employees

have to be empowered to take calculated risks. To foster an innovative nature, the

department should have organic structure with lesser levels of hierarchies. This is shown

in the following diagram.

11
12
C
N
P
S
V
B
E
h
.trV
n
lo
e
n
a
H
yo
P
g
d
e
h
s
cyild
so
T
iu
ctn
ci
n
e
lra
ts
g
in
e
tV
cd
i.
V
T
a
S
y
P
n
e
lC
rg
sh
i(
ta
sifR
e
i&
sn
m
s
cD
ig
)
sa
t
i
o
n
Fig: Structure of R&D department

13
1.5. Company milestones:

1980 Great milestone in Indian automobile industry. Countrys first 2 seater

50cc Moped TVS 50 launched.

1984 First mover. TVS becomes the first Indian Company to introduce 100cc

Indo-Japanese motorcycle
1994 Pioneer of mobility for women. Launched Indias first indigenous

scooterette (sub 100cc variomatic scooters), TVS Scooty.

1996-1997 Bringing in green technology before it became a norm. Introduced

Indias first catalytic converter enabled motorcycle, the 110cc Shotgun. Great

drive. Greater speed. Launched Indias first 5 speed motorcycle, the Shaolin.
2000 Hiking speed limits. Launched TVS Fiero, Indias first 150cc, 4-stroke

motorcycle.
2001 Indigenous technology. Launched TVS Victor, 4-stroke 110cc motorcycle,

Indias first indigenously designed and manufactured motorcycle.

2002 TVS becomes the worlds first 2 wheeler company to win worlds most

prestigious recognition in TQM the Deming award-2002. TVS wins

Technology award from Ministry of Science, Government of India for successful

commercialization of indigenous technology.

2004 Setting benchmarks in mileage. Launched TVS Centra, a world class 4-

stroke 100cc motorcycle with the revolutionary VT-i engines for best in class

mileage. All terrain performance. Launched TVS Star, a 100cc motorcycle ideal

for rough terrain. TVS wins TPM excellence award from Japan Institute of Plant

Maintenance (JIPM). TVS wins outstanding Design Excellence award for TVS

Scooty Pep.
2005-2006-Spreading its roots. TVS launches its Indonesian plant. Making a

style statement. Launched TVS Apache, which set the youths imagination on

14
 fire. It went on to become the bike of the year for 2006, winning 6 prestigious

awards.
2007 TVS Motor Company rolls out 7 new models. TVS launches its Himachal

Pradesh plant at Nalagarh.

2008 Apache refresh with rear disc brakes. TVS Motor Company bags two

coveted IT awards, Sep-2008 SAP ACE 2008 Awards and 2008 Symantec South

Asia Visionary award. Scooty Pep+ launched with balancing wheels. Scooty

Wimbledon collection launched. Apache RTR-FI launched in Jun-2008.

Launches the revolutionary 125cc Flame in Mar-2008. It makes its foray into

three-wheeler market with TVS King in Mar-2008

2009 Launches TVS Apache RTR 180cc.

2. Conducive factors identified:

TVS Motor's strength lies in design and development of new products - the latest launch of 7

products on the same day seen as a first in automotive history. They deliver total customer

satisfaction by anticipating customer need and presenting quality vehicles at the right time

and at the right price.

15
 TVS has always stood for innovative, easy to handle, environment friendly products, backed

by reliable customer service.

TVS Motors are the pioneers in many things. At the time they entered the 2-wheeler market,

the environment was rich. That means, they had very less competition and had not much of a

problem in acquiring the required resources. The environment was very stable and there was

very less ambiguity. In addition to this, to further reduce Resource Dependency, they formed

a Joint Venture with Suzuki and formed TVS-Suzuki.

They were the first to launch a 2 seater in Indian market back in 1980. They were the first to

launch a 100cc Indo-Japanese motorcycle. Also, they were the first to introduce a new range

of 2-wheelers target for women customers. As a result of all these firsts, they were able to

capture a large market share which assisted their fast growth.

Also, during the earlier years of 1900, India became open to the globalization. This led to

creation of lot of opportunities. There were more jobs, more options. This improved the

standard of living of the population. They had more money to spend. As a result of this, there

was a huge market for 2- wheelers in India in general and TVS in particular as it was one of

the highly established firms in the market.

3. Mission and Vision of the company:

The company had a clear vision and mission which helped the company in formulating long term

strategic planning. Also, these helped in designing the organizational structure which was best

suited to achieve the long term goals. This also led to the growth of the company as the culture

and structure of the company contribute to the success of any organization.

16
3.1. Mission:
We are committed to being a highly profitable, socially responsible, and leading

manufacturer of high value for money, environmentally friendly, lifetime personal

transportation products under the TVS brand, for customers predominantly in Asian markets

and to provide fulfillment and prosperity for employees, dealers and suppliers.

3.2. Vision Statement:

TVS Motor - Driven by the customer

TVS Motor will be responsive to customer requirements consonant with its core

competence and profitability. TVS Motor will provide total customer satisfaction by

giving the customer the right product, at the right price, at the right time.

TVS Motor - The Industry Leader

TVS Motor will be one among the top two two-wheeler manufacturers in India and one

among the top five two-wheeler manufacturers in Asia.

TVS Motor - Global overview

TVS Motor will have profitable operations overseas especially in Asian markets,

capitalizing on the expertise developed in the areas of manufacturing, technology and

marketing. The thrust will be to achieve a significant share for international business in

the total turnover.

TVS Motor - At the cutting edge

TVS Motor will hone and sustain its cutting edge of technology by constant

17
benchmarking against international leaders.

TVS Motor - Committed to Total Quality

TVS Motor is committed to achieving a self-reviewing organization in perpetuity by

adopting TQM as a way of life. TVS Motor believes in the importance of the process.

People and projects will be evaluated both by their end results and the process adopted.

TVS Motor - The Human Factor

TVS Motor believes that people make an organization and that its well-being is

dependent on the commitment and growth of its people. There will be a sustained effort

through systematic training and planning career growth to develop employees talents and

enhance job satisfaction. TVS Motor will create an enabling ambience where the

maximum self-actualization of every employee is achieved. TVS Motor will support and

encourage the process of self-renewal in all its employees and nurture their sense of self

worth.

TVS Motor - Responsible Corporate Citizen

TVS Motor firmly believes in the integration of Safety, Health and Environmental

aspects with all business activities and ensure protection of employees and environment

including development of surrounding communities. TVS Motor strives for long-term

relationships of mutual trust and interdependence with its customers, employees, dealers

and suppliers.

18
 In order to further decrease the environmental complexity and to improve its sales, the

company has gone global. In the year 2005-2006, the company has invested around $43

million to build a factory in Karawang, West Java in Indonesia. It sees Indonesia as the

base for its operations in South East Asia.

Fig: Venu Srinivasan (left), Chairman, TVS Motor, with Susilo Bambang Yudhoyono (right),

President of Indonesia, at the PT TVS Motors factory in Karawang, near Jakarta.

Speaking at the inauguration of its plant in Indonesia, at the the sprawling facility, TVS Motor

Company India Chairman Venu Srinivasan said: We have chosen Indonesia as our centre [export

hub] for the ASEAN region ... because we think that this country has great deal of potential, most

importantly human resources. Besides the ASEAN region, vehicles manufactured at the plant would

be exported to Africa and South America, he said.

Our initial investment [on the facility] is about $50 million, with local value addition of 40 per cent

at start up. This investment will be scaled up to $100 million over the next three years to achieve

19
local value addition of 80 per cent, Mr. Srinivasan said. A research and development facility forms

a part of the plant.

4. Growth and the factors affecting the growth of TVSM:

As stated earlier, TVS Motor Company is the third largest2-wheeler manufacturer in India.

Below, there is an analysis of the performance of the company taking different factors into

consideration.

4.1. Percentage sales:

20
Percentage Sales 2008-2009

Spares and accessories ; 1% Three Wheelers; 2%

Scooters ; 10%
Mopeds ; 18% Percentage Sales 2008-2009; 51%

Motorcycles ; 19%

Percentage Sales 2007-2008

Other income ; 3%
Spares and accessories ; 9%
Scooters ; 19%
Motorcycles ; 52%

Mopeds ; 19%

The mopeds sales remained the same because, there are not many competitors in this field.
Increase in percentage sales of 3-wheelers, as they introduced their first 3-wheeler, TVS King in

2008-2009.

4.2. Sales in Rupees:

21
 Sales (Rs in Crores)

Other income

Three Wheelers

2008-2009
Spares and accessories
2007-2008

Scooters

Mopeds

Motorcycles

0.00 1,000.00 2,000.00

There is an increase in revenue from sales of motorcycles in 2008-09. This is because of

introduction of two new models, TVS Apache RTR FI and Flame during that year. These two

models were very successful because of the cutting edge technology that went into them. The

Apache RTR FI had fuel injection technology which gives the motorcycle a crisper throttle

response and enhances its fuel efficiency.

Some of the key features of TVS Flame which led to its success are given below:
Futuristic aerodynamic styling.
The Fuel tank is embedded with Delta Edge clear lens indicators.
First time in India- the LCD digital auto console in a 125 cc segment bike.
India's first Deltaedge exhaust in triangle shape lowers the sounds, emissions delivering

excellent performance.
The 125 cc engine gives 10.5 bhp @ 8250 rpm that are Flame's power performance

statement.
Three wheeler segment is a new revenue earner for TVS in 2008-09, because of the introduction

of King as has been mentioned previously. The company ventured into 3 wheeler segment

because the environment was rich as there were only a few key players in the market, namely

Bajaj and Ape.

22
 Increase in revenue earned by sale of mopeds in 2008-09 because of introduction of two new

models of Scooty, namely Scooty Pep+ and Scooty Wimbledon collection.

4.3. Comparison of different data from 2004-05 to 2008-09:

2008-09 2007-08 2006-07 2005-06 2004-05

Sales and other income 3,741 3,310 3,921 3,306 2,955
Profit before interest,

depreciation and tax 189 132 203 275 291

Profit after tax 31 32 67 117 138
Net fixed assets 1,036 1,043 1,003 794 770

Sales and other income

Sales and other income

3,921
3,741
3,310 3,306
2,955

2008-09 2007-08 2006-07 2005-06 2004-05

From the above graph, it can be observed that there has been a steady increase in the Sales from 2004-05

to 2006-07. This is mainly because of heavy investment by the company in the R & D. This strategic

investment in R & D has helped them in releasing new models as well as improving the performance of

23
already existing models. This as well as the other reasons for the increase or decrease in sales for each of

these years is explained below.

During the year 2004-05, the company successfully launched multiple products:

TVS Star 4-stroke 100cc motorcycle in the economy segment with rugged performance and good

mileage.

New Victor GLX 4-stroke 125cc motorcycle in the executive segment with superior style and power.

New Victor GX 4-stroke 110cc refresh of Victor with 'Duralife' engine and new looks.

Scooty Pep "Splash" series 4-stroke 75cc stylish ungeared scooter with new innovative colours to suit

the youth image. Scooty Pep has received the prestigious NID Award for the best style in 2004-05.

During 2005-06, the launch of Apache and two TVS StaR range including the popular TVS StaR City

variant enabled the company to improve its market share and turnover significantly.

The increase in sales during 2006-07 is attributed to the sales of Star brand. The excitement in the StaR

brand was maintained through continuous innovation and launch of variants viz. StaR City alloy wheel,

StaR City Electric start and StaR Sport. Also, Scooty Pep + was launched in 99 colors which strengthened

the Scooty brand.

During the year 2007-08, the motorcycle category of the two wheeler industry registered a decline of 8%.

The economy segment which has been the driver of growth in the past suffered maximum decline of 19%,

because of non availability of retail finance and stringent credit norms imposed by the financiers,

especially in small towns and rural markets. Also, Launch of TVS Flame, in the executive segment by the

company, was delayed due to litigation on usage of twin spark plug. This is an example which shows how

external environment factors cause uncertainty and hence affects the normal operation of an organization.

This led to an overall decrease in sales during 2007-08.

24
During 2008-09, the launch of Scooty Streak, a tough and stylish variant of Scooty Pep+ and Apache RTR

RD, in the premium motorcycle segment strengthened the portfolio of the Company. The company also

launched TVS Flame which was successful. The Company launched its 2 stroke three wheeler in Petrol/

CNG / LPG variants. This is an example which shows how a company can reduce its uncertainty in one

type of market by diversifying its operations into another related market. All these factors led to an

increase in sales during 2008-09.

From the above analysis, it can be observed that if one uses Internal Systems Approach to measure the

effective of the organization, it can be concluded that TVS Motors is a very effective company. This is

because, it achieves or is trying to achieve many of the goals which is used to measure the effectiveness in

this approach. For example, one of the goals to be set in this approach of measurement is increase in the

rate of product innovation. The company is continuously trying to achieve this goal as is evident by the

number of new models introduced by it during the last 5 years.

300

250

200

150
Profit before interest,
100 depreciation and tax
Profit after tax
50

The profit after tax has been steadily decreasing from 2004 to 2009. The main reason for the reduction in

profits is because the environment is getting poorer. Many competitors are coming to India and expanding

25
their base. As a result of this, there is a struggle to acquire sufficient resources. This and certain other

reasons for the reduction in profits are given below, yearwise:

In 2005-06, the fall in profit was due to higher material cost on account of stringent emission

norms coupled with the rise in cost of aluminium, steel, rubber and plastics.
In 2006-07, the fall in profit was mainly due to steep increase in raw material cost. Due to intense

competition in the industry, especially in the highly price sensitive entry level segment, where the

company has a significant presence, it was not possible to pass on the cost increase to its

customers leading to lower margin. Higher marketing cost consequent to introduction of new

products / variants and increase in interest cost due to higher cost of borrowings further led to

lower profit for the year.

In 2007-08, the fall in profit was due to lower sales and consequent reduction in margins.
In 2008-09, the slight fall in profit was due to the escalation in the input cost especially in the first

half of the year which affected the margins. The Company pursued aggressively the cost

reduction projects to partially neutralize the cost increase.

5. Rise and Fall of TVS Motors:

It was 15th July 1982 when the company was incorporated as Indian Motorcycle Pvt. Ltd, which

was later changed to Indo Suzuki Motorcycles Pvt. Ltd. in 1984 after the company got into a

technical know-how agreement with Suzuki Motor Co. Ltd., of Japan. This was the start to a

fruitful and glorious relationship which lasted for about 15 years and gave the Indian consumer

some very competent two-wheelers.

The company initially manufactured spark-ignited internal combustion engines and outboard

motors and gradually incorporated many ancillary units under its fold. It was in August 1986 that

the company changed its name to TVS Suzuki Ltd.

26
It was in 1990 that the company entered the moped market with a 34cc miniped. Some of the

early motorcycle models of the company were the Ind Suzuki, TVS AX100 and TVS Max and

Max R. While the early products were technically sound, the market took some time to absorb

them and mature to motorcycles from the hugely popular scooter segment. TVS Suzuki never

entered this scooter segment initially thanks to BAJAJ Autos monopoly in the scooter market

with the ever popular Chetak.

After extending its contract with Suzuki in 1991, TVS motors launched its successful

motorcycles- Suzuki Samurai and Shogun in 1992. The two bikes went on to be a huge success

thanks mainly to their efficient and powerful two-stroke engines. Also the bikes faced direct

competition only from a few firms like Yamaha with their RX series bikes. Hence the company

was doing decently well in the nascent motorcycle segment as well as the moped segment where

the competition came from the Kinetic Luna and the Hero Puch.

It was in 1993 when TVS introduced its would-be-successful moped, the Scooty. The Scooty was

instantly popular with the masses thanks to its aesthetic appeal, ease of use and efficient engine.

Around the same time, TVS Suzuki introduced the Suzuki Shaolin. It was a racier version of its

popular Shogun with Indias first 5-speed gearbox and a 140cc engine. The bike did not do very

well in the market as it was deemed to be too ahead for its time. Also the motorcycle market was

slowly shifting to the more efficient four-stroke bikes from the Hero Honda stables. The four-

strokes promised better efficiency and reliability than the two-stroke engines which TVS-Suzuki

and Yamaha used in their bikes. This was the phase when the four-stroke sloper engine from

Honda started making its presence felt in the market. Even the popular Shogun and Samurai

started losing sales.

27
In the late 90s, TVS launched a number of new models like the XL Super moped, TVS Spectra

four-stroke scooter and the Scooty ES. But the most successful product of the lot turned out to be

the 150cc motorcycle Suzuki Fiero. The Fiero competed head-on with the Hero Honda CBZ

(Indias first 150cc 4-stroke motorcycle) in the nascent premium motorcycle segment. The Fiero

turned out to be a successful product and did manage to beat the CBZ on most technical accounts

but still did not set the sales charts on fire which the CBZ very well managed to do. Market

analysts attributed this to various reasons like aesthetic appeal, brand name and comfort. The

other products in the TVS-Suzukis range, barring the Scooty and the XL, were steadily losing

market share to new competition from Bajaj and Hero Honda.

The year 2000 was a milestone in the companys history. Not only did it cross the one-million

customer mark and launch its future-cash-cow, the 100cc Victor but it also marked the end of a

15 year alliance between TVS motors and Suzuki Motors, Japan with the former buying out the

latters 25.97% stake for 9 crore rupees. Due to the exit of Suzuki Motors, the company faced a

downfall in its market share for a few years which was generally attributed to two reasons. First,

the loss of consumers faith in the company after the exit of a giant like Suzuki. Second, the

company did not come out with a truly competition-killing product for a few years which led to

its competitors strengthening their market shares.

Fig: Market share of three major 2 wheeler manufacturers in India

28
Despite the lack of new launches, TVS Motors held onto a strong position in the motorcycle

market thanks to its brilliant 100 cc TVS Victor. The Victor and the Scooty were the two models

which gathered the maximum number of sales for the company and in 2003, TVS Motors

recorded a market share of 35% from motorcycles division. It was during this time that the

Victor started to capture market share from Hero Honda in the 100cc segment. In the same year,

TVS launched the revamped Fiero F2 to compete against the newly launched but hugely popular

Bajaj Pulsar. The Fiero F2 hardly made a dent in the market thanks to its inferiority to the

mighty Pulsar on a number of accounts. The Scooty was also revamped, given a bigger four-

stroke engine, better graphics and christened the Scooty Pep. With the Pep, TVS got it right and

the scooterette was an instant hit with the consumers.

It was in 2004 when TVSs patented technology VT-I made appearance on the 100cc motorcycle

Centra. Though the Centra was technologically superior to its rivals, it could not garner sales

and was gradually phased out of production a couple of years later. The Centra was a learning

curve for the company and the subsequent products stressed on both aesthetics and performance.

In the same year , TVS Motors decided to tap into the nascent but promising 125cc sector with

the TVS Victor GLX. The bike again did not rule the market despite the Victor brandname. In the

next two years, TVS launched a number of variants of the Scooty and the Victor to keep the sales

alive and the product fresh. It again tried its hand at the 100cc segment by introducing the Star

and later the Star City models which continue to achieve impressive sales figures till date.

In 2006, TVS Motors launched its most iconic brand till date the Apache. Apache was a 150cc

motorcycle and took the fight directly to the Bajaj Pulsar which ruled the segment at that time.

Initially the Apache did well in the market and managed to erode the Pulsars market share to an

extent but quick marketing and product-upgrade from Bajaj Auto saw the Pulsar reining the

29
150cc segment comfortably. Realizing the need for an upgrade, TVS motors used its experiences

from the racetrack and launched a 160cc variant christened the Apache RTR. The RTR was an

instant hit and managed to eat into the market share of both the Pulsar 150 and the Pulsar 180

thanks to its strategic market positioning. The RTR was further upgraded in 2008 and got a fuel-

injection system as the RTR-Fi. Also in 2008, TVS Motors launched the Scooty Streak, a version

of the Scooty targeted at the college youth. Recently, in 2009 TVS launched the Apache RTR

180, a 180 cc motorcycle which caters to the premium end of the motorcycle market. The sales

of the Apache models, the Star City and the Scooty lineup have been steadily growing despite

stiff competition from other players in the market.

6. Awards and Recognitions:

Mr Venu Srinivasan, was conferred with the prestigious JRD Tata Corporate Leadership

Award for the year 2004.

Leadership

Star of Asia Award to Mr. Venu Srinivasan, CMD TVS Motor Company by Business

Week International.

Venu Srinivasan, Chairman and Managing Director, TVS Motor Company was

Honoured with Doctorate in Science by University of Warwick, United Kingdom.

Engineering

30
 The Deming Prize - TVS Motor Company is the only two-wheeler company in

the world to be awarded the worlds most prestigious and coveted recognition

in Total Quality Management

Technology Award 2002 from Ministry of Science, Government of India for

the successful commercialization of indigenous technology for TVS Victor

TPM Excellence Award - First category by Japan Institute of Plant

Maintenance (JiPm) Asian Network for Quality Award 2004 - TVS Scooty

Pep won the prestigious 'Outstanding Design Excellence Award' from Business

World and National Institute of Design

Management

Emerging Corporate Giant in the Private Sector awarded by

The Economic Times and the Harvard Business School

Association of India.
Best Managed Company award from Business Today, one of

Indias leading business magazines.

Most Investor friendly company by Business Today, one of Indias leading
business magazines.

31
7. Daily Work Management-Culture:

The management philosophy is based on five pillars of TQM (Total Quality Management)

which rests on the foundation of Total Employee Involvement, daily management and Kaizen

(Continuous improvement).
The Total Employee Involvement program ensures that responsibility for the company's

performance is the shared responsibility of all levels of employees. It provides all employees

with the opportunity to be involved in breakthrough activities and other improvements, over

and above their daily routine.

There are three main points which the company follows to keep its people happy. They are:
Leadership at every level
Keen eye for quality
Understanding the customers

At TVSM, everyone is a leader and there is an overall grounding in Do it right the first

time- a strand of thought from Japanese manufacturing standards. People are happy to take

responsibility and be a part of the system that enables growth.

Daily work management consists of defining and monitoring key processes, ensuring that

they meet set targets, detecting abnormalities and preventing their recurrence. TVS Motor

encourages continuous improvement in all aspects of work, using Cross Functional Teams

(CFT), Supervisory Improvement Teams (SIT) Quality Control Circles (QCC) and

suggestion schemes.

The five pillars start with policy management, which is used to arrive at the annual

32
breakthrough objectives. There are generally not more than three company objectives, arrived

at after a detailed exercise, which are deployed and reviewed periodically.

The company conducts an exhaustive range of training programs, utilising both in-house

skills and consuftants from all over the world. The programs are conducted for all employees,

at all levels.

33
 8. Community development and social responsibility:

Srinivasan Services Trust (SST) is a trust co-sponsored by the Company with the vision of

building self-reliant rural communities. SST extended its coverage to 473 villages across 4

states of Tamil Nadu, Karnataka, Maharashtra and Himachal Pradesh. Some of the significant

achievements are:

22,001 Self Help Groups' members and 23,696 families earn additional income above

Rs.1,000/- through Income generation projects. 7,296 youth are made employable and

earn above Rs.3,000/- per month.

No case of Infant and maternal mortality in the project areas.
422 villages have been provided access to safe drinking water.
Morbidity caused by poor sanitation and hygiene reduced from 42% to 11%.
100% enrolment of children in Balwadis and Schools.
1,32,000 hectares of degraded forests land have been reforested.

Eco leadership:

New technology should also answer appropriately to growing concerns on global warming and pollution.

At TVS Motor, they have always been in the forefront in bringing cleaner technology to two wheelers.

TVS brought the first bike to use the catalytic converter in India way back in 1996 TVS Shogun.

All their vehicles are 85% recyclable. This is of utmost importance in a scenario where countries like

Japanese and Germany have laws on recyclability of the vehicle. Their vehicles comply with world

standards of recyclability today.

New age fuels are very exciting area for TVSM and they have started their exploration into this with the

launch of the electric scooter and the three-wheeler available in factory-fitted CNG, LPG options.

34
9. Code of Business conduct and ethics of Board and Senior Management:

Philosophy of code of Governance:

TVS Motor Company Ltd. (TVSM), in line with TVS group philosophy, truly

believes in independence, responsibility, transparency, professionalism, accountability

and code of ethics, which are the basic tenets of corporate governance. TVSM always

seeks to achieve optimum performance at all levels in adopting and adhering to best

35
 governance practices. TVSM has always focused on corporate governance as means

to maximize long term stakeholders value through disciplined and sustained growth

and value creation.

Code:
This code of business conduct and ethics helps to ensure compliance with legal

requirements and standards of business conduct. The board of directors (the board)

has adopted a code of business conduct and ethics (the code) for all board members

and senior management personnel viz., all levels of management one level below

executive directors, including all functional heads. Every board member and senior

management personnel is expected to read and understand this Code and its

application to the performance of his or her duties, functions and responsibilities.

Honesty and Integrity:

All board members and senior management personnel shall first conduct their

activities, on behalf of TVSM and on their personal behalf with honesty,

integrity and fairness.

Act in good faith, responsibility, with due care, competence and diligence

without allowing their independent judgement to be subordinated.

Act in the best interest of TVSM, its various stakeholders including TSM

shareholders and fulfill the fiduciary obligations.

Not engage in conduct likely to bring discredit upon TVSM.

Conflict of interest:
All board members and senior management personnel shall not engage in any

business, relationship or activity which maybe in conflict of interest of TVS or the

group companies. Directors or senior management personnel involved in any conflict

36
 or potential conflict situations shall exclude themselves from any discussion or

decision relating thereto.

Fair dealing:
All board members and senior management personnel should deal fairly with TVSMs

customers, suppliers, competitors and employees. Gift or entertainment in any form

that is likely to result in a feeling of expectation of personal obligation should not be

accepted or extended.

Corporate opportunities:
All board members and senior management personnel shall not exploit for their own

personal gain opportunities that are discovered through the use of TVSM property,

information or position.

Confidential information:
All board members and senior management personnel shall maintain confidentiality

of information they receive while being in office of TVSM and ensure always

information security policies of TVSM.

Protection of asset:
All board members and senior management personnel shall endeavor their best to

protect TVSMs asset and shall not use the same for their personal benefit, unless

approved by the board.

Regulations:
All board members and senior management personnel shall comply with all

applicable laws, rules, regulations and guidelines, including obligations under

takeover and insider trading regulations and shall report actual non-compliances, if

any, of law, this code, or other TVSM policies or procedures to the board.

37
 10. Brand Ambassadors and Print Ads:

TVS Motors has always signed very effective brand ambassadors for its different range of

products. Through these brand ambassadors, it has been able to successfully connect with the

mass. The current brand ambassador for the Scooty brand is the ace tennis star of India, Sania

Mirza. She emanates the brand attributes of being self sufficient and is a young achiever.

Fig: Print Ad for the new Scooty Streak having Sania Mirza as the brand ambassador

TVSM had earlier roped in Sachin Tendulkar as their brand ambassador for their motorcycles.

Now, they have Mahendra Singh Dhoni, Indias wicket-keeper batsmen, as their brand

ambassador for the Apache and Star City brand of motorcycles as he emanates the brand

attributes of the brands like the power, speed and style. Company officials had then said that

Sachin Tendulkar would ultimately become the brand ambassador for the company itself, rather

than be restricted to just one product.

38
Fig: Print Ad for TVS Star City which is one of their most successful models
TVS Motor has followed a trend of appointing celebrities as their brand ambassadors in

India. In the same vein, TVS Motor has roped in local celebrity Iwan Fals who happens to be

a popular musician in Indonesia as their brand ambassador.

Fig: The brand ambassador for TVSM in Indonesia, Iwan Fals

11. Effective use of Information Technology:

In order to improve its operating efficiency and to improve its relationship with the suppliers

and dealers, TVS Motors has effectively made use of IT. This is explained below:

39
 IT in product development:
Product development would include conceiving the product to availability of the new

product in the retail market. The IT Department has been generating feedbacks from

the market, which have been compiled, analyzed and worked upon to understand the

demographic needs of the customer. The compilation is done electronically thus

saving time. Due to various tests conducted with the help of high-end computer

technology, the company is able to save time in developing prototypes.

IT in Human Resource management:
TVS Motor has implemented SAP HR as the software for organizational structure,

employee data, recruitment processes, competency mapping, career and succession

planning, time office administration, payroll and employee self service where

employees will be given access to manage their own data.

IT in supplier and dealer management:
TVS Motors has implemented web enabled SAP as an Enterprise Resource Planning

(ERP) to manage its relationship with its large base of suppliers and dealers. This has

enabled them to improve its relationship with these very important external

stakeholders. The values added by using SAP are given below:

Component suppliers can find out the status of thier payment online and even

cheque details are available online making payment reconciliation faster.

The suppliers can be shortlisted by the company to participate in its online

auction programs. Short-listed vendors come on line and participate in an

auction bid for specific materials. The auction bids automatically create

quotations in the SAP system, and at the end of the auction, a Purchase Order

is raised by the SAP system on the successful vendor. With this, the supplier

saves time and money and can bag a purchase order sitting in his office!
When a customer in any part of the country buys a product of TVS Motor

Company from any of its dealers, his or her name would be added to the

40
 customer database of the company automatically and the aim is to reach the

TVS customer community on the net in an integrated marketing effort.

On the supplier end a full-fledged ERP system is already in place. A supplier

of TVS thus has access to all the information on the Web. Also in the case of a

two-bin inventory system, when one of the bins gets empty it gets recorded in

SAP and the information is immediately available for the supplier, so that he

can send the replenishment. Suppliers can also create shipping notifications in

SAP through the Internet (which simplifies the goods receipt activity at TVS

Motor).
Dealers can enter their sales orders through the Internet, and subsequently

view details like sales target, their Sales Order status (eliminating multiple

data entries, errors, etc) and payment details. Warranty claims are fed in by the

dealer through the Internet, and the processing status including details of

accepted/rejected claims along with the reasons, the amount credited,

clarifications required, etc, can be viewed on line.

12.Diversification and future plans:

TVS Motor Company is planning to look at IT as a profit centre by providing IT and IT-

enabled services (ITeS) to external customers. TVS IT team, which comprises around 100

people, has over the years, developed domain competencies in niche areas like Just-in-Time

(JIT) management, Kanban (replenishment inventory based on pull system) and Total

Productivity Management (TPM) and manufacturing execution systems. Having developed

the competency for implementing IT projects in-house, we are looking at the possibility of

41
providing services for external business partners, particularly in areas where we have

developed core competence, T. G. Dhandapani, Chief Information Officer, TVS Motor.

The in-house IT team has implemented projects at TVS Himachal Pradesh plant, its

Indonesia unit and at the companys three-wheeler plant in Hosur. We have six group

companies and once the IT projects at all our units are completed, we do not mind helping

external customers. Once the thirst of all our group companies has been fulfilled over the

next one year, then we will look at external assignments. IT for us has been a cost centre and

we would also like to look at it as a profit centre.

Several companies have sought solutions for specific IT-related problems and have

approached the TVS IT team which has been helping them and providing clarifications

purely on an informal basis. The companys initiatives include digitising new product

development based on market research and customer feedback.

TVS expects to outdo its past year's performance. In keeping with its overall business plan,

the company expects to maintain cumulative growth in sales, leveraging its recently launched

products. New products to be introduced will trigger growth and improve profitability. The

consolidation in the company's three-wheeler business will be an added advantage.

12.1. New Launches:

Apache RTR, TVS Flame, New Motorcycle, New Scooter and Four Stroke Three-

Wheeler:

In keeping with its plan for new launches during the current financial year, the

company, in June 2009, launched a larger capacity Apache Motorcycle in the

premium segment. The motorcycle's sporty, chiseled looks and unmatched

42
 performance-packed superior engine technology make the bike a class leader in

terms of acceleration, performance, styling, ride handling and stability.

TVS has also launched the 2009 model of its Flame motorcycle under the brand

name Flame SR 125, which features an enhanced engine and revamped graphics.

The new commuter motorcycle is loaded with a host of new and exciting features

and is being targeted at smart city commuters. Developed with AVL Austria, SR

125's engine is propelled by three valve, Controlled Combustion Variable Timing

Intelligent (CC-VTi) technology which ensures better pickup with optimum

mileage and power.

The company would also be expanding its scooter platform to offer a large scooter

and will introduce an all-new motorcycle in the executive segment. In the three-

wheeler segment, the company plans to introduce four-stroke TVS King in Petrol,

LPG and CNG versions.

Futuristic technology, contemporary styling and superior quality will continue to

be the focus for all new products.

TVS Motor Company is planning to set up an arm that would exclusively finance its two-

wheeler customers. The new non-banking finance company (NBFC) is expected to

commence operations by the end of the current calendar year.

It may be noted that last year, the company had delisted its financing arm TVS

Finance from stock markets and said it will re-enter vehicle financing.

43
 Venu Srinivasan, chairman and managing director, TVS Motor, said that the company had

approached the Reserve Bank of India (RBI) for approval which is expected to come in two

months and the operations would commence by the end of the current calendar

In a slowdown year, when the availability of retail finance, especially in small towns and

rural areas, is tight, an in-house retail finance arm would help, he said. He said the demand

for gear-less scooters and mopeds is closely linked to availability of finance.

Meanwhile, TVSM intends to set up an engine testing facility at its R&D centre in Hosur.

The company plans to launch two new vehicles an automatic scooter and a motorcycle

before the end of this calendar year. Last year, the company sold 6.44 lakh motorcycles, 4.38

lakh mopeds and 2.59 lakh scooters. It also sold 4,613 three-wheelers with two-stroke

engines. Sales have picked up and are averaging about 1,000 a month, Mr Srinivasan said.

The company plans to launch a four-stroke version soon at a few places including Delhi and

Bangalore.

13. Conclusion and learning from the study:

1. The TVS Motor Company has shown steady growth in a very competitive market thanks

to its competitive products and technologies. This in turn is due to the proactive and

44
 competent approach by its R&D department which has not only created practical but

reliable products from time to time to cater to the market demand.

2. TVS Motors has a proactive approach towards Corporate Social Responsibility and this

can be witnessed by its consistent endeavor to move towards greener technologies and

products as well as its sponsorship of a number of NGOs.

3. TVS Motors also has a seamless blend of automation within the various processes of the

company and this can be gauged from the number of awards conferred upon it in the

same regard. (e.g 2009 Progressive Manufacturer 100 Award)

4. The study also showcases the strength of TVS Motors to stand alone as a successful

organization even after its venture with Suzuki Motors, Japan on which it was dependent

for technology know-how, came to an end, TVS Motors continued to hold its market

position.
5. Another factor responsible for the companys success is its speed of innovation thanks to

which it can introduce new products quickly in a highly dynamic market environment.

This can partly be attributed to the use of efficient practices like Kanban, Total

Productivity Management, Just-in-time and Manufacturing Execution Systems.

6. TVS Motors manages its relationship with its 450 dealers and 200 suppliers by using

state-of-the-art technologies like mySAP R/3 ERP. This efficient use of technology

allows it to effectively manage its symbiotic interdependencies with its suppliers and

dealers and between its manufacturing plants.

14. References:

http://www.tvsmotor.in/index.asp
http://www.tvsmotor.in/directors.asp
http://en.wikipedia.org/wiki/TVS_Motors
http://www.tvsmotor.in/milestones.asp
www.indonesiamatters.com/933/tvs-motor-company/
http://www.thehindu.com/2007/07/17/stories/2007071760381600.htm
http://apachertr.blogspot.com

45
http://www.surfindia.com/automobile/tvs-flame.html
http://auto.indiamart.com
http://www.infibeam.com/bikes/make/suzuki.html
http://TVS Motors/TheHinduBusiness/TVSMotorCompanytolookatITasprofitcentre.asp

http://www.tvsmotor.in/news.asp?id=204&yr=2009

http://www.business-standard.com/india/storypage.php?autono=367266
http://www.thehindubusinessline.com/2009/08/18/stories/2009081851200200.htm
http://www.2wheelsindia.com/2008/11/whats-up-with-tvs-motor-in-indonesia.html
http://www.tvsmotor.in/excellence.asp
http://www.tvsmotor.in/leader-ship.asp
http://www.thehindubusinessline.com/2007/08/26/stories/2007082651020200.htm
http://www.ciol.com/content/enterprise/2004/104071901.asp
http://www.financialexpress.com/news/how-tvs-motor-rides-on-the-web/54212/0
Annual reports from 2005 to 2009

46