PESTEL ANALYSIS OF ROYAL ENFIELD

INTRODUCTION

PESTLE Analysis of Royal Enfield analyses the brand on its business tactics. Royal Enfield
PESTLE Analysis examines the various external factors like political, economic, social,
technological (PEST) which impacts its business along with legal & environmental factors.
The PESTLE Analysis highlights the different extrinsic scenarios which impact the business
of the brand.

PESTLE analysis is a framework which is imperative for companies such as Royal Enfield,
as it helps to understand market dynamics & improve its business continuously. PESTLE
analysis is also referred to as PESTEL analysis.

OUTLINE OF THE CASE

Let us start the Royal Enfield PESTLE Analysis:

1. Political Factors
2. Economic Factors
3. Social Factors
4. Technological Factors
5. Legal Factors
6. Environmental Factors

In this case analysis, the Royal Enfield various external factors involving in the Business.

ANALYSIS OF THE CASE

Political Factors:

The political factors in the Royal Enfield PESTLE Analysis can be explained as follows:

Royal Enfield motorcycle company has a strong presence across the world. Companies are
very prone to the policy decisions of the government. It could bring opportunity to grow or
could be very dangerous even to the extent of closure of closure of the company. In the recent
ruling, the government has decided to skip BS5 engines altogether and directly move from
BS4 engines to BS6 from 2020. BS norms are based on EURO standards and since we are
lagging behind, the government has decided to move BS6 directly. Now the problem is BS6
is technological advanced and a lot of money is required to invest in developing the BS6
engines which will increase the cost of the bike and Royal Enfield bike which is already a
premium bike will cost more.

Economic Factors:

Below are the economic factors in the PESTLE Analysis of Royal Enfield:

The country’s GDP, its per capita income, inflation rate and per capita income of the country
in which the company operates significantly affect its business.

Royal Enfield is based in India. The current boom in the economy of the country has
provided great opportunity for Enfield to increase its customer base in the country. The
economic boom increased the per capita income of Indians rapidly and since the Enfield is in
semi premium segment, the increase in middle class income has significantly increased the
sale of the company’s bike. The Classic 500 cc bike it launched has become a huge success in
the market so much so that one will get the bike 9 months after ordering it. Royal Enfield
company is planning to launch its bike in many other countries but before it needs to do
thorough research of the economic condition of the countries in which it is planning to launch
its bike.

Social Factors:

Following are the social factors impacting Royal Enfield PESTLE Analysis:

Brand name is something that resonates in the mind of the people for the long time. In India,
youth begins to purchase things of that brand which shows high status symbol. That’s where
Royal Enfield has established itself in the market. Its brand value is so much so that Booking
period is 9 months means people will get the bike 9 months after booking the bike. Royal
Enfield has become the status symbol of people. Its heaviness and the heavy sound make it
more attractive to the people. The brand has initiated the biking campaign to Ladakh which
became so popular that now travelling to Ladakh on bike means travelling on Enfield. This
campaign created in people the urge to ride to long distances either alone or with friends on
Enfield. It is now launching the Rider mania which is the largest gathering of the Royal
Enfield enthusiasts in the world.

Technological Factors:

The technological factors in the PESTLE Analysis of Royal Enfield are mentioned below:
Royal Enfield spends a lot of money on research and development. It has developed the
iconic the thud noise engine for its bikes which became instantly popular among the bikers. It
is regularly developing it engine making it more fuel efficient while keeping the noise and
feel of the bike intact at the same time. Royal Enfield is very social media active and always
connects with its riders and ask their opinions regarding product development and solving
their grievance which the riders post online.

Royal Enfield in 2017 opened up its innovation factory in the UK wherein there is test track
facility, engine development facility etc.

Legal Factors:

Following are the legal factors in the Royal Enfield PESTLE Analysis:

It is very important for a company to abide by the rules and regulations set by the government
and the judiciary of a country. Royal Enfield many a times come into the lime light and not
always for a good reason. Many times, the companies got the complaint of faulty brakes and
clutch, blurred engine noise, defect of the magnetic coil etc. and people became very
dissatisfied when company does not resolve the problem of the people. Flash electronics, a
new Delhi based automobile component manufacturer, has filed a law suit against the Royal
Enfield for the patent infringement of a component known as regulator-rectifier.

Environmental Factors:

In the Royal Enfield PESTLE Analysis, the environmental elements affecting its business are
as below:

The growing concern of the environmentalists regarding the increasing use of petrol and
diesel which are the major contributor to the environment pollution is something that no
company now can neglect. The Royal Enfield bikes are heavy and consume lot of fuel and
are not fuel efficient. Royal Enfield is making efforts to make its bike more fuel efficient.

The company is spreading awareness about the environment protection through its various
campaigns. The company has dedicated itself to create awareness through its largest asset
which is its riders who not only build the image of the company but also helps in spreading
awareness about the environment. In its recent Rider Mania 2019 event, an annual event for
the Royal Enfield enthusiasts all over the world, the company is creating awareness for the
single zero plastic use.
To conclude, the above Royal Enfield PESTLE Analysis highlights the various elements
which impact its business performance. This understanding helps to evaluate the criticality of
external business factors for any brand.

SUGG
 MCKENSY’S 7’S FRAMEWORK

INTRODUCTION

The McKinsey 7-S framework. Developed in the early 1980s by Tom Peters and Robert
Waterman, two consultants working at the McKinsey & Company consulting firm, the basic
premise of the model is that there are seven internal aspects of an organization that need to be
aligned if it is to be successful. The McKinsey 7-S model can be applied to elements of a
team or a project as well. The alignment issues apply, regardless of how you decide to define
the scope of the areas you study.

“Hard” elements are easier to define or identify and management can directly influence them
these are strategic statements; organization charts reporting lines: and formal processes and
IT systems.
Soft elements on the other hand can be more difficult to describe and are less tangible and
more influenced by culture. However, these soft elements are as important as the hard
elements if the organization is going to be successful.
OUTLINE OF THE CASE
 Strategy: The plan devised to maintain and build competitive advantage over the
competition.  Structure: The way the organization is structured and who reports to whom.
 Systems: the daily activities and procedures that staff members engaged in to get the job
done.
 Shared Values: Called super ordinate goals. When the model was first developed these are
the core values of the company that are evidenced in the corporate culture and the general
work ethic.
 Style: the style of leadership is adopted.
 Staff: the employees and general capabilities.
 Skills: the actual skills and competencies of the employees working for the company
ANALYSIS OF THE CASE
Organisational Structure

STRUCTURE: DEPARTMENTS:
1. SALES DEPARTMENT
2. SERVICE DEPARTMENT
3. ACCOUNTING DEPARTMENT
4. SPARES DEPARTMENT
EXPLAINATION:
SALES DEPARTMENT
SALES EXECUTIVES’ RESPONSIBILITIES
 Check the assigned test ride bike status & ensure it is clean

 Check for the availability of brochures, sales stationary etc and keep it ready

Customer engagement Walk-in –

 Welcome the customer to our showroom
 Probe the customer with well directed questions to understand the customer need
Tele & web:
 Collect the list from CRE every hour – do the follow up- invite the customer for
showroom visit and test ride
 Convert for home test ride and experience ride
Booking & Retail-
 Explain the booking procedure & complete delivery process to the customer. Clearly
mention the waiting period.
 Provide booking receipt, booking form & beat magazine
RTO:
Follow RTO team to track registration planned completed for your customers
Follow up for the RC book receipt for the customers delivered previous month.
2. SERVICE DEPARTMENT
This department is mainly concerned to give the service for the customer. Like wheel
alignment, oil changing, engine repair, mirror work, etc. any type of work which is concerned
to the vehicles. The head of this department is service manager.
VARIOUS DECISION IN SERVICE DEPARTMENT
This department is responsible to improve quality repairs.
This department is responsible to solve the problem of the customer accurately
.This department is responsible to reduce customers’ complaints and improve productive
Hours.
This department is head of workshop having authority to control the workshop.
This department head is responsible for the maintenance of quality system in his
departments.
3. ACCOUNTING DEPARTMENT:
WORKS IN THE ACCOUNTING DEPARTMENT
Billing ,RTO, passing ,Cash receiving, Payment ,Bank payment, Purchase entry ,Sales entry,
RTGS ,Maintaining the accounts daily, Accounting will be done in the SQL software

4. SPARES DEPARTMENT:
Spare parts management is a main component of a complete strategic service
management process that companies use to ensure that right spare parts and resources are at
the right place, Where the broken part is at the right time.
WORKS IN THE SPARES DEPARTMENT:
Sales, Order replace, Purchase, Oil order, Spare order, Stock details, Local accessories,
Maintaining the spares at right places & Explaining the products to mechanicals

STRATEGY:
The Strategy is to be made to win over an opponent. But in this organisation there is no one
opponent to the royal Enfield bikes that’s why they will not plan any strategy.
But they will make the bike camping’s. To make the awareness of the bike features
and the prices to the people
.expand its production capacity owing to the growing demand for its motorcycles worldwide,
Royal Enfield started production at its second manufacturing facility at Oragadam in Tamil
Nadu, in April 2013. Royal Enfield’s new state of the art manufacturing facility at Oragadam
equip ped the 115 year old motorcycle brand for its next level of global growth and achieve
the highest level of quality and productivity. Royal Enfield sold over 5,00,000 motorcycles
in 2015 -16 , and the Oragadam plant has been instrumental in achieving this scale and
quality standards. Spread over 50 acres, the Oragadam plant will contribute significantly in
Royal Enfield achieving its planned production of 6,75,000 motorcycles in 2016-17. Built in
a record time of 11 months, the Oragadam plant has helped the iconic brand up its production
scale in many ways such as: cost optimization through low cost automation , new CED paint
shop, a robotic painting system and powder coating system, ergonomically sound new vehicle
assembly line and torque controlled tools with feedback
Systems:
System means all the rules, regulations and procedures of Royal Enfield both formal and
informal. All work should be done in time and honestly.
Systems, which are followed in Shri Munishwar Motors are as follows,
 Timing punctuality should be followed
 Proper packing
 Hard work and sincerity
 Sending goods plan to the outlets (Schedule)
 Mutual cooperation and respect to for all workers and all time
 Discipline is to be maintained in the premise
SKILL:
The Royal Enfield Company has the skill training camps in the Bangalore, and in the Chennai
city. The employees will be given training there.
That training is known as (NICHE TREE)
There they will increase the skills of the employees, and give the full knowledge of the royal
Enfield Company, and they also give some tips how to work in the organisation.

STAFF:
The trained persons in the ‘NICHE TREE’ are to be selected in the royal Enfield
showrooms.
The benefit for higher management is very good in terms of financially as compare with
lower and mid levels Organisation are made up of humans and it’s the people who make the
real difference to the success of the organisation in the increasingly knowledge based society.
The importance of human resource has thus got the centeral position in the strtegy of the
organisation, away from the traditional model of capital and land.
The people/ human resource of management process used to develop managers socialization
process, shapping basic value of management ways of introducing young recruit to the
company way of helping to manage the cries of the employees. The company has different
selection process depending on the candidate’s qualification, experience, communication
skill, leadership quality and decision making skill for long term or short term.
Royai enfield consisting of well trained staff. Which are well trained in systamatic manner.As
being a manufacturing company the whole process is risky so for that purpose the staff is
must required with well trained with out a proper training the work can not be carried in the
well manner. For that purpose the staff is been well trained in terms of all the aspects 3.6
STYLE: This part of Mckensy’s 7s frame work includes the leadership style of the top
management and the overall operating style of the organisation. It also includes motivational
style used in the company. In the munishwar motors top management will make decisions.
And manager spends their time with employees.
SHARED VALUES: Shared values are fundamental ideas around which business is built.
They are main values which the business is based upon. Shared values when properly
articulated can provide a strong basis of stability to a rapid changing world by providing a
basic meaning to people working for the company. Shared values of an organization can be
characterized as the whole of the norms view & shared by the people working in the
organization