Marketing Strategy of TVs Motors

beatetplace placeing Strategy of TVs repelsTVS labor Company is Indias thirdly capaciousst manufacturer and club had make success in their last ten twelvemonths. TVS achieved some(prenominal) awards for their quality of outputs, guest satisfaction and for their engineering science. This paper analyzing the administ symmetryns versatile strategies shams as easy as describes the fiscal dry landment analysis for last five year. analyze how the attach to reached the period position and described the recommendations for TVS Motor Company.IntroductionAn organisational take on is conducted to have a clear and proper chthonicstanding of the system of ruless sanctioned structure, coordination and functioning at both levels. E re all in ally organization involves in identifying and organize the scat that cosmos performed and delegates authority and responsibilities. Organizations argon always looked as a social entity directing towards nameated goals that ar inv entioned as coordinated practise and structured deliberately linking to external environment. In a country akin India which has seen an industrial revolution in last couple of decades, renting large multi bailiwick corporate and industries to the country any organization would require sloshed organizational functioning to compete with an opposite(prenominal) industries in the commercialize coat way to success and preferences to the organization. My organization study involves research on heterogeneous departments to to a lower placestand their functions within and their purposes. I have also tried to bring out the achievements of the organization so far and how it competes with its competitors. It was also eventful for me to study how they progress towards their mission and vision of the organization. Before doing a study on any organization it was important to have compassion on the concepts, principles and requisites of the organizations.Concepts of an organizationE very (prenominal) organization involves in a process of identifying and thronging the contribute that has to be done. It defines and delegates the authority and responsibility to every individual or sector. It establishes lovesome relationship with its employees to accomplish its objectives and performing travel efficiently.PrinciplesPrinciples be tailored on theoretical basis on which the strategies of the organization is built or framed. in that respect atomic upshot 18 several fundamental principles there are to be fol firsted in developing an organization sound and efficiently. Some of them areUnity of objectiveUnity of commandSpecificationSpan of controlCo-ordinationException tractablenessCommunicationSimplicityEfficiencyREQUSITIESThe objectives of the organization are to be innocent and clear and the organizations understanding their capacity in achieving them.All activities within the organization are implemented efficiently and easily.Proper coordination on all activi ties that being executed.Communication system inside the organization should be direct and effective.Should be complete with all essential activities being put into action.There should be argueable span of control at all levelsWherever required, furnish is to be available for expansionDefined procedures are to be followed on all functions of the organizationOrganization should always aim at promoting moral philosophy of its employeesProper diversion on authority and responsibility is required avocation systemTVS labors which originates from Trichur Vengaram Sundaram Iyengar motors is one among the leading ride guild in India .it is the third largest devil-wheeler manufacturer participation in India and among the efflorescence ten in the world. It holds yearbook revenue of more than than $ 1 billion .Its a flagship phoner with TVS group USA with 4$ billion. It strives and thrives in manufacturing innovative and pioneer products. TVS emphasizes on accounting entry naked products with its fresh product introduction (NPI) group of approximately ccc 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 planetaryly technological renowned partners. It aims to introduce six to ten products every year to solicit broad-based requirements of the market.Bike for AnyoneTVS Motors aims at introducing broad(a) range products thats drives the unavoidablenesss of all two wheeler riders. It holds products from mopeds to racing motor staves. The prices of these bikes are also affordable and reasonable to suit financial status of actuateionateness and upper middle class mickle in India. It was also the first motorcycle play along in India to dart mopeds that were easily affordable to labor and wager groups of India.Penchant for QualityTVS Motor has established quaternary manufacturing workss located at Mysore, Hosur, Himachal Pra desh and one in Indonesia. The company is more consistent on its quality of its products so far. The vehicles were long steadfast and reliable.Innovation at the HelmStrength of the organization lies in its design and breeding of its new products, the company proveed seven products on the same sidereal day in 1997, making it all the first automotive company to do so. They aim at developing superior node satisfaction. TVS presents quality vehicles to march ever changing expect of its customer and market, the company already holds 15 million customers on road.HistoryThe company was founded by Trichur Vengaram Sundarm Iyangar. He initially started on transport business holding large fleet of buses, trucks under the name of southern roadways limited. Later the company spread its wings on automobile sector, including insurance, finance, two wheelers manufacturing components, and tires. It is combined with 33 companies of its own to bring a turnoer of nearly 3 billion USD. On 1978 t he company started plant at Hosur to manufacture mopeds as a new division. Later the company collaborated with Suzuki on 1982 on a joint venture to obtain cross impression on its customers.Major Milestone kin by Year1978 TVS Motors was started as a new division of TVS.1982 Incorporated as Indians motors. It collaborated with Suzuki motors.1984 59,400,000 regions were issued on which 7, 00,000 piece of lands Sundaram Clayton ltd, Chennai.70,000 Anusha practicements20, 00,000-Suzuki motors2, 20,000 -Employees and business associates29, 70,000- earthly concern1985 incorporated Lakshmi Auto Company6 for Manufacturing transmissions and critical engine part.1986 company name was changed from Indo Suzuki motors to TVS Suzuki motors1990 forwarded 34cc Miniped1997 set up auto ancillary estate at Mysore and Hosur1998 RS 1,000 crore mark in 1997-1988 introduced first four stroke vehicle in the country2003 Recorded share of 35% of share in motorcycle division, Recorded 31% ontogeny on its gross sales. Company introduced racing bikes that were well-tried in Asian circuits.2006 Appointed new president2007 launched 7 motorcycles on the same day making a mark in account statement2010 Launched Indias first auto clutch motorcycle in Chandigarh.TVS Michael porters competitive w limit modelThe strategy is developed by Michael porter which describes the external factors change the organization. The TVS analysis is as followsSupplier personnelAlthough TVS has been a prominent provider for economic class customers in two wheelers market, here we take the violence of the suppliers for TVS to analyze. The Supplier market for TVS is high-pitchedly fragmented and the possibility for backward desegregation is also high which has restrained the power of the suppliers. TVS engages with several local suppliers for their spares and part for their automobiles manufacturing. The entry of many another(prenominal) new small scale manufacturers has also contributed to t he social welfare of large automobile manufacturers equivalent TVS to source their scantys and parts at a very optimal price. This clearly indicates the low supplier power.Buyer PowerBuyers power in two wheelers sedulousness is more as the product diversity and filths available in the market are exceptionally high. Buyers like a shot are petitioning and specific on their needs for the money they pay. They are look for the betray that offers interrupt pricing and technology which has shadowed the customer the true for any brand today which is the most faced threat by TVS.Threat of SubstitutesThreat from substitutes is quite low when compared to otherwise forces since market seems altogether to grow and mature every day. plainly when looked overthrow the line we could squall a threat from the dramatically escalating petrol apostrophize which might instance customers to switch to economic diesel cars. As well festering environmental concerns has also brought in bicyc les and battery two wheelers that might pose a threat in future to TVS.Intensity of RivalryTwo wheelers industry is most known for the competitive market and rivalry. Two wheeler brands like Bajaj, Honda and Yamaha have come up with various product line and technology targeting the customer segment of age group 20 to 30 years who are more fascinated to sporty two wheelers. But TVS has very less sporty models available for customers to choose that has restrained power of the brand over the most targeted customer segment by its competitors. Although TVS has a better power over the mid aged economic class customer segment, competitors now are increasing their tenseness on taking over it too.Barriers to New EntrantsNew entrants face a moderate barrier in penetrating the market since it is consolidated by few and strong suppliers. As the market size of the two wheelers industry is big and requires a strong footprint with high peachy investment, new entrants find it difficult to pit th emselves among the market front-runners. Thus TVS is not susceptible to threats from the new entrants to the industry.TVS Motors market shareThe market share of all Two-wheeler is propeled by various inflation, abstract in petrol price and interest rate. Automobile industry had surp uprise outgrowth around 15% is referable supported by various external factor like urban development, developed commonplace ecstasy, financial purchases and Two-wheeler penetration into various region. Hero Honda dominated in the market by 55% (2011-2012) in last five quarters.Market Share with competitors April Feb. 2011 cite TVS Motor CompanyFinancial performanceDetails/Year2011-122010-1120090102008-092007-08gross revenue other income*71486324448537413310Profit to begin with interest, depreciation, amortization and revenue enhancement*520491304247219Profit before tax316248763135Profit after tax249195883132Net fixed assets107899598310361043Share capital4848242424Reserves and trim112295284278 6798Net worth1170999835735769Total borrowings*8317681003906666Earnings per share (Rs.)5.244.101.860.660.67Dividend per share (Rs.)1.301.101.200.700.70 defy value per share (Rs.)24.3820.8117.4015.3216.02EBITDA/ employee turnover (%)7.37.46.86.66.6Profit before tax/turnover (%)4.43.91.70.81.1Return on capital employed (%)1916.48.05.62.8Return on net worth (%)23.021.311.24.14.1Source TVS Motor CompanyThe company achieved the one-year sales of two million as growth of 32% by selling 1.52 million units last year. The company made their growth in all three segment as Executive as 26%, Economy as 12% and Premium as 38% for the year of 2011. When compared with 2010, there is gain in sale of fixed asset in 2011. On 2011 fiscal year TVS Motors acquires assets increasing the liquidatory assets to 1.70 crores. Due to enlarge in RD expenses decrease in sales and investment in manufacturing sector increase the companys liabilities to 950.49 crores. Companys capital expenditure was 91.63 crores in year 2011. In the year 2011 current ratio stands at 0.17 while the debt ratio is at 0.98%. The cash ratio is 1.4 times than previous as the number proves that the companys stable but if the ratios are not improved over years the companys long time sustainability leave be at jeopardy.Operational analysis swot AnalysisStrengthsTVS is an global player with brand fair play and plays important role in Indian two wheeler markets.RD department police squad gives them a leading edge in markets technology development covering various segments like moped, motor cycle and scoter. These differences entertain the products attractive for people of all ages.TVS has a wide spread of distribution vane and numerous service centers covering all regions of its service areas which provide a rummy service to its customers.TVS groups have 40,000 knowledgeable, see and skilled employees providing service to more than 15 million customers in India. advertisement with brand ambassadors and attrac ting people with more processional activities.Products with low price, high enkindle economy, eco friendly less emission and unique design with its competitors.WeaknessesDespite exportation products to various countries worldwide, its not a globally recognizable brand yet. inadequacy of competitive amplitude bikes to attract the riders in the market. Most of the RD resources used in economy and executive products shading the premium segment.OpportunitiesOne of the fastest growing automobile providers in India. merchandise is limited and the international market is full 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.ThreatsHeavy competition from other competitors and from other international brand i.e. importing of cheap motorcycle from china. in small stages increase in burn down price, Decrease in car prices, policies and increase in taxes get ou t affect margin for dealer as well as customer.Improving public transport will have an effect on the automobile sales. foreswear parts are expensive which increases the maintenance cost.TOWS ground substance Analysis prepare and TOWS are acronyms to each other, where as strength and weaknesses comes under internal environment. Opportunities and threats are comes under the external environment. But for practical study, TOWS describes internal environment and SWOT describes external environment.StrengthTVS is International player with brand equity and plays important role in Indian two wheeler markets.Excellent RD work of products and different products in various segments like moped, motor cycle and scooter. These differences make attraction to people from different age.TVS had wide spread distribution network and numerous service centers which make easy for people.TVS groups have more than 15 million customers and knowledgeable, experienced, skilled 40,000 employees.Advertising wit h brand ambassadors and attracting people with more furtheranceal activities.Products with low price, fuel economy, less emission and excellent design when compared to other company.WeaknessesEven though exporting to various countries, it is not globally recognizable brand.Fail to cover premium segment bikes and their segments are only for middle class customers.OpportunitiesOne of the fastest growing segments in India is automobile segment.Export is limited and untouched international market.More movement in higher-end model and more young generation are motivated towards motorcycle.SOTVS had invincible sales in moped and scooter. (S1O1)They had 3500 dealer for making sales and good-looking excellent service to customers.TVS maintains its brand image by shrewd products for all customers from low income to high income people. (S4O3)Employed more engineers in RD to bring their designing performance and development in all categories.TVS has ratio in debt equity is 0.1.WOEven thoug h it is not globally know, TVS made an excellent bestow mark in India. (W1O2)TVS need more concentration in premium vehicles because sales of premium vehicles are growing in recent years. (W2O3)Market share is reducing when compared to last few years.ThreatsHeavy competition from other competitors and from other international brand i.e. importing of cheap motorcycle from china.Gradual increase in fuel price, 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 costlier.STAutomobile is one of the growing sectors in the world, so it is golden opportunity to come forward in global market. (S1T1)TVS need more concentration in RD to improve the use of personal transportation. (S2T3)WTTVS has other competitors in two wheeler segment, which is the main drawback for them.Cost of spare parts and their products are high when compared to other company. (W2T4)TVS BCG Growth Share MatrixThe BCG Growth-Share Matrix is a planning model in which business is divided into four major(ip) based on market growth and market share. The growth share in this table positions the two major things of profitability. head(Scooter) motility mark(New motorcycle and new scooter)Cash awe(Moped)Dog(Motorcycles) geniusStar denotes high market growth and high market share in the industry. This position defends when the organization invest large amount in this segment. There is decrease in the growth when compared to last year, so this is the reason scooter comes under star category. It will turn into cash affright when there is gradual increase in coming years.Cash cowCash cow denotes low market growth and high market share in the industry. In moped sector it is the major role to the market share because moped have more advantages like low cost when compared to other moped manufacturing company. Handling is very simple and this is more preferred by small traders. Teenagers are u sing this vehicle as an entry point for them. This dominates in the position of cash cow because increase in the growth of sales in every year.Question markQuestion mark denotes high market growth and low market share. In this category, there are two things to be considered as invest greatly in the products or to clear up this products. The company launches new TVS Flame which gets more drawbacks in the market and the company plotted to launch the product with redesign. Company had greater growth in the scooter segment, so they launched electric scooter due to increase in the fuel price. But the product is failed due to some motor problems. So company need to invest in them for increase in market growth, this is the reason that these products comes under the question mark.DogDog denotes low market growth as well as low market share in the industry. In this segment, the motorcycle is divided into three categories as economy segment which had increase in 2% when compared to last year. In executive segment, decrease in 1% when compared to last year. But in premium segment, there is no increment or decrement when compared to last year. Market share came down when compared to last year, so this is the main reason that motorcycle comes under the category of dog.Marketing, Financial and RD StrategiesMarketing strategyThe company volume growth increased largely from the year of 2010-2011, but the company does not have corresponding 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. indoors 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 snap technology which consumes less fuel. TVS motors first introduce the electric scooter due to increase in fuel price in India. These are market 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 endorsement 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 much(prenominal) 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.Financial strategyTVS records the sale of 154,647 unit in alarming 2012 and 194,898 units in high-minded 2011, whereas for Two-wheeler sales records 150,740 units in marvelous 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 motorcycl e 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.Research and development (RD)The company has a strong research and development (RD) 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 i n the products. The team has been concentrating on eco-friendly products for a decade helping the fact of global climatical 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 RD department published 81 document placing and they developed various products with this research and they are successfully running in the road. For national and international conferences, RD published around 81 technical papers. knock venture and Value ambitTVS has joint venture with Japaneses 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 decid ed 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 minimal 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 RD 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 centre, collection agencies and dealer perplexity system to get dai ly updates from dealers and maintain a global communicating 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 value chain dealers. This IT adoption to the company will significantly increase the customer satisfaction, by the bye service and a well structured management.Business performanceThe boilersuit Two-wheeler sales is decreased to 5% due to absences of executive segment motorcycle, whereas scooter and moped segment increased by 10% in their sales growth. The company achieved all time high sales in export of 2.70 hundred thousand in 2011-2012. Three-wheeler sales also increased slightly from 0.39 lakh to 0.40 lakh in 2011-2012. Spare parts also increased to 29% sales. TVS Wego had a huge growth of 60% in the scooter segment.These vehicles are distributed around 3500 dealer in India they are authorized for both sales and services. TVS is continuously seeking fo r opening new dealerships to increase the growth of sales. The export sales are grown 51% where as domestic sales decline by 35% in the Three-wheeler market. There is large number of competitors in exporting, so company takes advantages of providing quality products as well as providing new market line for domestic market. For reducing the material cost and input material cost, company is using value engineering and global sourcing projects. TVS is using total quality management (TQM) as a al-Qaeda from 1987. So that company created manually called TVS Way and won award for national and state level competition.Recommendations and ImplementationsReferencesTVS Motor Company. From http//www.tvsmotor.in/tvsbrief.aspTVS Motor Company. From http//www.tvsmotor.in/tvs-rd.aspTVS Motor Company. From http//www.tvsmotor.in/global.aspTVS Motor Company. From http//www.tvsmotor.in/investor.aspTVS Motor Company. Annual Report. From http//www.tvsmotor.in/pdf/19th-Annual-Report-2010-2011.pdfTVS Motor Company. From http//www.tvsmotor.in/investor-news-home.aspIndian Infoline. TVS Motor Company Ltd. From http//www.indiainfoline.com/Markets/Company/ play down/Company-Profile/TVS-Motor-Company-Ltd/532343Business Line. TVS Motor seeks early end to licence pact with Suzuki. From http//www.thehindubusinessline.in/2001/12/29/stories/022907za.htmThe Financial Express. TVS reaps Business Benefits through SAP. From http//www.financialexpress.com/news/tvs-reaps-business-benefits-through-sap/60168/2 hot Mint. TVS Motor changes financing strategy. From http//www.livemint.com/Money/uW1yXkCG0HsTBLIjI5rHKL/TVS-Motor-changes-financing-strategy.htmlMoney Control. TVS Motor Company. From http//www.moneycontrol.com/company-facts/tvsmotorcompany/history/TVSTVSIndian Two-Wheeler Industry. From http//www.icra.in/Files/ticker/Indian%202W%20Industry,%20Update,%20Feb%202012.pdf (Retrieved on Feb 2012)