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CORPORATE STRATEGY PROJECT ON

TVS MOTOR CORP LTD.

Submitted to: Prof Arun Sangwan Submitted by: Satvik Tyagi

Saurav dadwal

Rama Shankar

Swati shrivastva

Komal sagar

Niharika bhore

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ACKNOWLEDGEMENT
We owe a great many thanks to a great many people who helped and supported us during the
project. Our deepest thanks to Mr Arun Sangwan(subject teacher Corporate Strategy) for guiding
and correcting various documents with attention and care. he has taken pain to go through the
details and make necessary correction as and when needed. We express our thanks to the director
of FIIB for extending his support. Our deep sense of gratitude to our faculty and classmates for
helping us with this project. We also extend our heartfelt thanks to our family and well-wishers
for co-operating with us during the time period.

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Table of Contents
Acknowledgement ............................................................................................................................. 2
Introduction ...................................................................................................................................... 4
Vision ................................................................................................................................................ 7
Corporate level strategy of TVS .......................................................................................................... 9
Advantages and disadvantages of TVS strategy ................................................................................ 13
Targets in case of vertical and horizontal integration……………………………………………………….……………....14

Related and unrelated diversification……………………………………………………………………………………………..15

SWOT analysis……………………………………………………………………………………………………………………………….….16

References…………………………………………………………………………………………………………………………………..……19

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Introduction
TVS was established by Mr. Sundaram Iyengar. He began with Delhi first bus service in 1911
and founded T.V Sundaram Iyengar and Sons Ltd, a company in the transportation business with
a large fleet of trucks and buses with the name of Southern Roadways Limited. When he died in
1955, his sons took the company ahead in different fields like Automobile sector, including
finance, insurance and manufacturer of two wheelers, tires and components. I am shocked to
know that the group has managed to run 97 companies that account for a combined turnover of
nearly $6billion.

Sundaram Clayton was founded in 1962 in collaboration with Clayton Dewandre Holdings, U.K.
it manufactured brakes, exhausts, compressors and various other automotive parts. The set up a
plant at Hosur to manufacture mopeds in 1978. TVS 50 a two seater moped was the first product
to be rolled out of the factory at Hosur in Tamil Nadu in 1980. Whereas TVS collaborated with
Japanese auto giant Suzuki for the production of motorcycles in 1984.

TVS and Suzuki shared 19 years long partnership with was technology sharing and ideas
sharing, it ended in 2001.

TVS Motor Company is the largest two-wheeler manufacturer in India, with revenue of over
13,000 Cr ($2 billion) in 2016-17. The company has an annual sales of 3 million units and
capacity to produce around 4 million vehicles annually. TVS motors India Pvt Ltd is the 2nd
largest exporter which exports in 60 countries around the world

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Business Challenges

TVS mains competitors are Bajaj and Hero moto corporation India these three companies are
effectively and efficiently working in the automobile sector and none of these is lagging behind
from other in technology, sales and quality every year many new products are launched or
modified to increase sales. There is a cut throat competition among these 3 auto giant’s.

Business Strategies

TVS motors which originates from Trichur Vengaram Sundaram Iyengar motors is one among
the leading motorcycle company in India .it is the third largest two-wheeler manufacturer
company in India and among the top ten in the world. It holds annual revenue of more than $ 1
billion .It's a flagship company with TVS group USA with 4$ billion. It strives and thrives in
manufacturing innovative and pioneer products. TVS emphasizes on launching new products
with its new product introduction (NPI) team of approximately 300 engineers who stand at
forefront in executing strategic visions for the organization for its new products. Though these
products are developed domestically it collaborates with globally technical renowned partners. It
aims to introduce six to ten products every year to address broad-based requirements of the
market.

Motorcycle Composition

Premium Segment: Bajaj Auto has a significant presence in the premium segment followed by
Hero Moto Corporation and TVS Motors.

Executive Segment: Hero Moto dominates this segment followed by Bajaj Auto, Honda Motors
and Scooters India and TVS Motors. This segment followed by Bajaj Auto, Honda Motors

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Scooters India and TVS Motors. This segment retrieves higher revenues from the rural areas,
which are less dependent on finance.

Economy Segment: This segment is a strong foothold for Bajaj Auto followed by Hero Honda
and TVS Motors. This is the most competitive segment as all the 3 players relatively have a
higher presence in the same. This segment was the worst hit due to the credit unavailability and
global slowdown.

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Vision

Driven by Customers

TVS Motor will be responsive to customer requirements consonant with its core competence and
profitability. TVS Motor provides total customer satisfaction by giving the customer the right
product, at the right price, at the right time.

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.

Bike for Anyone

TVS Motors aims at introducing wide range products that's suits the needs of all two wheeler
riders. It holds products from mopeds to racing motorcycles. The prices of these motorcycles are
also affordable and reasonable to suit financial status of middle and upper middle class people in
India. It was also the first motorcycle company in India to launch mopeds that were easily
affordable to labor and wager groups of India. Even I am a TVS customer and satisfied with it
completely I own a TVS Apache RTR 180 2012 model and working well since then without any
complain.

Participation Dakar 2005

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TVS is the first Indian company an Indian to participate in Dakar rally in 2005 which is a big
achievement for the bike has been developed and manufactured at Sherco Motorcycles especially
for Dakar 2015. It is more Competitive, lightweight, and equipped with a highly reliable 450cc
engine. Engineers from TVS will be working alongside the team from Sherco at Dakar 2015.

What is DAKAR?

The Dakar Rally is annual rally raid organized by the Amaury Sport Organization. Most events
since the inception in 1978 were from Paris, France, to Dakar, Senegal, but due to security
Threats in Mauritania, which led to cancellation of the 2008 rally, races since 2009 have held in
south America,. The race is open to amateurs and professional entries. In this everyday distance
covered is between 800-900 kilometers and total distance is to be covered is 14000 km in 15 to
16 days. TVS is the first Indian company to participate in Dakar which is a great marketing
strategy and will make brand known around the whole world.

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Corporate level strategy of TVS motor company
Launch new products

There is rise in market share in the first quarter of 2014-15 was tempered by a financial
performance that was below expectations. While its share in the two-wheeler market went up for
the first time in two years from 12.1 per cent to 12.6 per cent, The company recorded growth of
22 per cent in recent year, selling 560,000 two-wheelers compared to 460,000 in the same period
last year. Domestic sales grew 19 percent against 14 percent.

To keep the momentum going, the company is launching new product at least once every four
months over past three years. However, the main criticism against the company remains the
inordinate time it takes to launch a vehicle. Analysts, rivals and industry experts concur on the
fact that despite TVS Motor's products being good, the time they take to reach the market
deflates their chances as its competitors are now more aggressive in their strategies.TVS works
on the field of consumer-led engineering, gain a deep understanding of consumer psychology
and aspirations and convert those to hard engineering and style

Increased investment on R&D

The company has a strong research and development (R&D) department, supported with state of
the art aiding technologies. Their in-house world class testing facility gives them a unique
environment for testing the engines noise, vibration and harshness (NVH) and life time warranty
testing. To they are supported with modern computers for developing good design as well as for
developing new innovation in the products. The team has been concentrating on eco-friendly
products for a decade helping the fact of global climatic changes and increases of carbon dioxide
release into the environment. They succeeded by out coming with a high fuel economy, reusable
parts and low emissions hybrid products. Their automatic transmission technology for scooters is
widely credited across the world due their very low emission and fuel economy. TVS R&D
department published 81 papers placing and they developed various products with this research

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and they are successfully running in the road. For national and international conferences, R&D
published around 81 technical papers.

TVS Motor has increased its R&D investment by around 4 per cent to Rs 130 crore in 2014 (1.8
per cent of revenues). Advertisement and marketing spends have also increased by around 37 per
cent year on year to Rs 280 crore (3.5 per cent of revenues against 2.9 per cent in 2013-14).

TVS Motor has reported robust growth in volumes in the last few quarters, supported by
successful product launches like that of the Jupiter. However, experts point out that the growth in
volumes has failed to lift the EBITDA substantially, partially because of the increasing
competition from players like Honda and Yamaha. TVS Motor also focusing on emerging
markets likes Africa, South America and Indonesia. At present export contributes 15 per cent to
the company's volumes. While the company has lost some money in the Indonesian subsidiary.

Joint venture and Value chain

TVS has joint venture with Japanese's company Suzuki with whom it shares their technology,
design and manufacture for two-wheeler under the banner "TVS-Suzuki". TVS-Suzuki
manufactured various products including Samurai, Shogun and Fiero. Due to the rising disputes
and low profit margins TVS decided to break their collaboration with Suzuki. In 2011,
companies came to an agreement, as per the company was renamed as TVS Motors and Suzuki
promised not to enter Indian market for minimum period of 30 months. This decision by TVS
motors allowed them to operate independently and proves to be effective as their profit increased
noticeably. TVS Motors invested heavily in R&D to launch new products with new technology
and succeeded making TVS a highly recognized brand. After three years Suzuki entered Indian
market and became one of the top five Two-wheeler Company in India.

The value chain for the Two-wheeler company has many value chain partners including
manufacturing, dealers (outlets include sales and service), financial agents, support services,
advertising, contracts, transportation and more. The value chain for TVS Motors will act like one
team and they aim for success. The company has appraisal agencies, call center, collection
agencies and dealer management system to get daily updates from dealers and maintain a global
communication across their value chain partners. TVS has plans to implement Information
Technology across the value chains, to reduce the delays and lags in communication between the

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value chain dealers. This IT adoption to the company will significantly increase the customer
satisfaction, timely service and a well structured management.

Marketing strategy:

The company volume growth increased largely from the year of 2010-2011, but the company
does not have similar growth in last year of 2011-2012. The company had huge demand in
moped, scooter and only in premium motor cycle; so these are volume key drivers in TVS motor
company. The company is planning to build key model brand, so company had planned to have
sustain success in their products like Star, Victor and Apache. These products had made brand
image to maintain its success and these success made the company to introduce the new products
in the market. These are key volume drivers and their focus to sustain their growth of the
company.

TVS motors have decided to launch seven new vehicles at a time in the year of 2007, so this will
make the company as a young multinational company. This makes work for continues three
years to rollout all these seven products at a time. Within these seven vehicles, four of them are
two-wheelers and three are passenger three-wheeler vehicles. These products are various
technologies, design and new engine. TVS introduced CCVTi engine which reduce carbon-
dioxide and reduce the monoxide by 70% which make green revolution and also introducing
Fuel injection technology which consumes less fuel. TVS motors first introduce the electric
scooter due to increase in fuel price in India. These are marketing strategies to cover imagination
of people.

TVS continuous improvement in quality of products resulted in winning various quality awards
which brings more value for the customers. TVS offers 5-year warranty for Star vehicles, which
gives customers more preference. These customer satisfaction and quality are the one of major
role for marketing strategy. TVS dealers are using their own individual promotion plans to the
final buyers. The company advertises to the customers to provide offers to buy products where
dealers provide with sale promotion to the product now. The company offering more
promotional plan such as exchange offer, finance conveniences to the customers, free services,
follow-up customer for their services and complaints and other festival offers. These are various
marketing strategy promotions to customers for buying the products and giving excellent service
to their products to have sustained growth in market place.

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Financial strategy:

TVS records the sale of 154,647 unit in August 2012 and 194,898 units in August 2011, whereas
for Two-wheeler sales records 150,740 units in August 2012 and 190,184 units of sales in
August 2011. In domestic sector, TVS records about 135,513 units in August 2012 against
163,705 units in August 2011. In motorcycle sector, TVS records 53,673 units in August 2012
against 77,726 units in August 2011. In scooter segment, records 38,193 units in August 2012
against 52,253 units in August 2011. From this analysis, there is gradual decrease in the sales of
all sectors including moped, motorcycle and scooters. Company exports 17,934 units in August
2012 against 29,984 units in August 2011. In Three-wheelers, company sold 4,714 units in
August 2011 but it decreased to 3,907 units in August 2012. From the total, the company fails to
compete with the previous year of same month. In 2017 net profit to the 154.35 cr.

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Advantages and disadvantages of TVS strategy

As the competitors of TVS in India immediately launches of new models of scoter and bikes. So
it is good for the TVS to continuously launch new models to increase their market share.

Advantages

 Increase in market share


 More recognition by the customers
 It also help them to establish international market
 Help to attract young generation towards their product
 Leads to sustainable competitive advantage

Disadvantages

 Increases cost to the company


 It will make the process complex
 Low rate of successful implementation

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Targets for acquisition in case of horizontal and vertical integration
Horizontal integration

 India Yamaha Motor is Indian division of Yamaha Motor Company, Japan. The company
controls four percent of Indian motorcycle market and around 7.5 percent of country’s
scooter market. India Yamaha sells around 15,000 scooters per month.
 For the horizontal integration India Yamaha motor is a great option for the TVS because of
the similar market share. Both of the organization goes for the merger
 Suzuki Motorcycle India Private Limited (SMIL). SMIL was set up after Suzuki's re-entry
into the Indian two-wheeler market after it severed ties with partner TVS in 2000-01. Suzuki
was then the technology provider in the former joint venture company TVS Suzuki.
 Another options as TVS We must consider Mahindra 2-wheelers

Vertical integration

For vertical integration TVS needs to acquire their raw material suppliers.

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Related and unrelated diversification
Related diversification

 Best option for related diversification for TVS is go for the electric bikes and electric scoters
because this is the demand of time because now new generation is very concerned about their
environment and our government is also taking action to promote the electric vehicle in
India.
 TVS Also consider self-driving 2-wheelers because one day it becomes the need of the
people. So TVS has to start working upon it.

Unrelated diversification

 TVS also manufactures their own bicycles to attract potential customers


 TVS also goes for artificially intelligent sensors etc.

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SWOT Analysis

Strengths:

TVS is an International player with brand equity and plays important role in Indian two wheeler
markets.

R&D department team gives them a leading edge in markets technology development covering
various segments like moped, motor cycle and scooter. These differences make the products
attractive for people of all ages.

TVS has a wide spread of distribution network and numerous service centers covering all regions
of its service areas which provide a unique service to its customers.

TVS groups have 40,000 knowledgeable, experienced and skilled employees providing service
to more than 15 million customers in India.

Advertising with brand ambassadors and attracting people with more promotional activities.

Products with low price, high fuel economy, ecofriendly less emission and unique design with its
competitors.

Weaknesses:

Despite exporting products to various countries worldwide, it's not a globally recognizable brand
yet.

Lack of competitive premium bikes to attract the riders in the market. Most of the R&D
resources used in economy and executive products shading the premium segment.

Opportunities:

One of the fastest growing automobile providers in India.

Export is limited and the international market is untouched which gives a versatile opportunity to
explore and establish international market.

More movement in higher-end model and more young generation are motivated towards
motorcycle.

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Threats:

Heavy competition from other competitors and from other international brand i.e. importing of
cheap motorcycle from china.

Gradual increase in fuel price, Decrease in car prices, policies and increase in taxes will affect
margin for dealer as well as customer.

Improving public transport will have an effect on the automobile sales.

Spare parts are expensive which increases the maintenance cost.

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Milestones Achieved

1978: TVS Motors was started as a new division of TVS.

1982: Incorporated as Indians motors. It collaborated with Suzuki motors.

1984: 59,400,000 shares were issued on which 7, 00,000 shares ---Sundaram Clayton ltd,
Chennai.

70,000 - Anusha investments

20, 00,000-Suzuki motors

2, 20,000 -Employees and business associates

29, 70,000- public

1985: incorporated "Lakshmi Auto Company6 for Manufacturing transmissions and critical
engine parts.

1986: company name was changed from Indo Suzuki motors to TVS Suzuki motors

1990: launched 34cc Miniped

1997: set up auto ancillary estate at Mysore and Hosur

1998: RS: 1,000 crore mark in 1997-1988 introduced first four stroke vehicle in the country

2003: Recorded share of 35% of share in motorcycle division, Recorded 31% growth on its sales.
Company introduced racing bikes that were tested in Asian circuits.

2006: Appointed new president

2007: launched 7 motorcycles on the same day making a mark in history

2010: Launched India's first auto clutch motorcycle in Chandigarh.

2012: Upgraded Apache RTR series with DRL first in segment and maximum power output in
power to the weight ratio.

2016: Launched RTR200 4v the biggest and Strongest among all RTR series.

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References
economic times. (n.d.). Retrieved 03 18, 2018, from economictimes.com:
https://auto.economictimes.indiatimes.com/news/auto-components/indias-top-5-auto-
component-suppliers-set-to-enter-the-global-top-100-list/46270043

ukessay. (n.d.). Retrieved 03 19, 2018, from www.ukessay.com:


https://www.ukessays.com/essays/marketing/tvs-motor-company-in-india-marketing-essay.php

wikipedia. (n.d.). Retrieved 03 19, 2018, from www.wikipedia.com: www.wikipedia.com/tvs

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