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 Strengths Largest cycle manufacturer of India New technology Retail and distribution network. Highly successful joint venture. After sale services. Strong Financial Support 0.05 0.08 0.13 0.09 0.05 from 0.11 3 3 4 4 3 4 0.15 0.24 0.52 0.36 0.15 0.44 Weights Rating Weighted Score

Murugappa group. Brand name awareness Provide customers. Weaknesses Lack of research and development High cost of production. Lack of distribution in rural areas No new market tapping (North). 0.05 0.05 0.12 0.05 1 1 2 1 2 0.05 0.05 0.24 0.05 0.10 quality products to 0.06 its 0.11 3 3 0.18 0.33

TI representative did not visit hire 0.05 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 Opportunities TI need to be focuses on hire shops as new 0.05 market in northern areas of India. Rural areas constituted an important 0.1 3 0.30 3 Weight Rating Weighted score 0.15

segment of the market Women and girls are the new markets for 0.15 the company Threats Sharp increase in the prices of raw 0.10 materials More competitors entering the 0.15 3 0.45 3 0.30 3 0.45

market.(China, Indonesia) Competitors focus on its hire shops 0.15 2 3 0.30 0.15

Cost audit is not applicable on small 0.05 sectors. Rural move on auto age without passing 0.1 through the cycle age. Changing in govt. policies Total 0.15 1.00

0.2

0.30 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 2nd 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 Market development Market penetration Product development Horizontal integration Divestiture Liquidation Quadrant I Market development Market penetration Product development Forward integration Backward integration Horizontal integration Concentric diversification

Weak competitive Position

Strong competitive Position

Quadrant III Retrenchment Concentric diversification Horizontal diversification Conglomerate diversification Liquidation

Quadrant IV Concentric diversification Horizontal diversification Conglomerate diversification Joint venture

Slow market growth

Interpretation: Rapid Market Growth The specials segment, 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.