SWOT Analysis:

Strengths:

1. Indias largest cycle manufacturer.

2. Successful joint venture with Hercules cycles & Motor Co. of UK for longer duration.

3. Strong financial support & professionalism from murugappa group.

4. Already have brand awareness in market to the cycle enthusiasts.

5. Supply of good quality product to customers.

6. Largest distribution network (more than 1000dealer all over the India and warehouses in
more than 12 cities)

7. TI had good production capacity , technology, dealer technicians.

8. Good relationships with customers/dealers and after sale services.

9. Company advertises their new cycle through newspaper & using independent event
Management Company.

Weaknesses:

1. Distribution lacks in rural areas hence customer of rural areas bought from urban market.

2. Less research & development took place in areas of cost reduction & quality
improvement.

3. Cost of production is high.

4. TI cycle sales representative not visiting the hire shop on regular basis, they were just
visiting large hire shops once in a while hence didnt have update information. At the
same time their competitors were frequently visiting the shops & providing them
attractive gifts & get discount for bulk buying.
 5. No new market tapping specially in north.

Opportunities:

1. TI needs to focus on hire shops as new market in north because many shop owners had to
travel lot of distance to buy cycle.

2. Rural areas can become important segment of market, because demand for the cycle is
more in rural areas than urban areas.

3. Women and girls are the new markets for the company because the demands for ladies
cycles are increasing.

Threats:

1. The sharp increase in the prices of raw materials as steel and wages.

2. Competitors focus on its hire shops and purchase cycles in bulk and get discount.

3. Cost audit is not applicable on small sectors.

4. Switching of importers to other suppliers & more competitors entering the market.(China,
Indonesia)
5. Changing in government policies,

6. Rural affluence agriculturist would move from the bullock cart to the auto age without
passing through the cycle age.
 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. 0.13 4 0.52

Highly successful joint venture. 0.09 4 0.36

After sale services. 0.05 3 0.15

Strong Financial Support from 0.11 4 0.44

Murugappa group.

Brand name awareness 0.06 3 0.18

Provide quality products to its 0.11 3 0.33

customers.

Weaknesses

Lack of research and development 0.05 1 0.05

High cost of production. 0.05 1 0.05

Lack of distribution in rural areas 0.12 2 0.24

No new market tapping (North). 0.05 1 0.05

TI representative did not visit hire 0.05 2 0.10

shops

Total 1.00 2.86

Interpretation:

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

EFE Matrix Weight Rating Weighted

Opportunities score
 TI need to be focuses on hire shops as new 0.05 3 0.15
market in northern areas of India.

Rural areas constituted an important 0.1 3 0.30

segment of the market

Women and girls are the new markets for 0.15 3 0.45
the company

Threats

Sharp increase in the prices of raw 0.10 3 0.30

materials

More competitors entering the market. 0.15 3 0.45

(China, Indonesia)

Competitors focus on its hire shops 0.15 2 0.30

Cost audit is not applicable on small 0.05 3 0.15

sectors.

Rural move on auto age without passing 0.1 2 0.2

through the cycle age.

Changing in govt. policies 0.15 2 0.30

Total 1.00 2.60

Interpretation:

EFE score of 2.60 and weighted scores on above table indicate that the TI cycle has
opportunities because to succeed in the market by focusing on new market segments of
women and girls. It is opportunity because weighted score is 0.45 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 2 nd opportunity because in which weighted
score is 0.30. The highest threats from sharp increase in prices and competitors as china &
Indonesia because in which weighted scores is 0.45 which is highest from others variables.

c) Grand strategy matrix:

Rapid Market Growth

Quadrant II Quadrant I

Market development Market development

Market penetration Market penetration
Product development Product development
Horizontal integration Forward integration
Divestiture Backward integration
Liquidation Horizontal integration
Concentric diversification

Weak competitive Strong competitive Position

Position

Quadrant III Quadrant IV

Retrenchment Concentric diversification

Concentric diversification Horizontal diversification
Horizontal diversification Conglomerate diversification
Conglomerate diversification Joint venture
Liquidation

Slow market growth

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

d) QUANTITATIVE STRATEGIC PLANNING MATRIX [QSPM]

e) ANALYSIS

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. TI miller Ltd was established
in 1960 and TI saddle in 1962.so Murugappa group take decision on current and suitable
situation slowly.

TI has strong back of Murugappa group. Murguappa has 29 companies from which 12
companies are listed. TI 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 they just want 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.

f) IMPLEMENTATION

According to Grand strategy matrix suggested strategies for TI can be implemented in

following ways.

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.
c) A purpose built cycle with wide carrier for lunch providers in the urban areas.
Purpose built cycles for house wives with added carriers.

Diversification

a) Two wheeler Industry ( Motor cycle)

b) Tyre Industry

c) Logistics and transportation Industry

Market penetration

a) Selling cycles of good quality but at lower price.ie using low cost strategy.

b) Using professional & independent event management company to organize their event
more effectively & efficiently.