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Group Number-2 Topic - Eicher Motors

Group 2 analyzed Eicher Motors, which owns Royal Enfield motorcycles. Royal Enfield began manufacturing motorcycles in India in the 1950s after initially selling models to the Indian government and military. The motorcycle industry in India was initially targeted at affluent families and government bodies. A five forces analysis identified bargaining power of buyers and suppliers as moderately high, while threat of new entrants and substitutes was low due to industry maturity and lack of alternative transportation options respectively. Intense rivalry exists between motorcycle manufacturers in India. Complementary products like gasoline prices can also negatively impact the motorcycle industry.

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Siddharth Singh Tomar
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166 views6 pages

Group Number-2 Topic - Eicher Motors

Group 2 analyzed Eicher Motors, which owns Royal Enfield motorcycles. Royal Enfield began manufacturing motorcycles in India in the 1950s after initially selling models to the Indian government and military. The motorcycle industry in India was initially targeted at affluent families and government bodies. A five forces analysis identified bargaining power of buyers and suppliers as moderately high, while threat of new entrants and substitutes was low due to industry maturity and lack of alternative transportation options respectively. Intense rivalry exists between motorcycle manufacturers in India. Complementary products like gasoline prices can also negatively impact the motorcycle industry.

Uploaded by

Siddharth Singh Tomar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Group Number- 2

Topic – Eicher Motors


Members –
Siddharth Singh Tomar – 65
Sarthak Das – 59
Subhasis Roy – 71
Swagat Mishra – 82
Som Sekhar Singh – 99
Avishek Soor - 12
Devasish Mohanthy - 19
Royal Enfield (SBU)
 Royal Enfield is one of the British origin Indian motor
manufacturing companies which was one of the oldest
motorcycle used first time in second world war. It was earlier
manufactured by The Red ditch (Mid land, England). The local
government body of Mid Land (Worcestershire) started selling it
to government services of India. British sold 800 units (major
deal) which was manufacture in England in 1949 to Indian
government for its police and army officials.
 In 1950’s the motorcycle industry was considered to be
targeted for the affluent families and government bodies in India.
Royal Enfield England SBU started exporting it to India for the
citizens in late of 1960s during Sino-Indian War. In that decade,
to serve the transportation needs.
Five Force Analysis
 Threat Of New Entrants – In the automobile industry in India
generally the threat of new entrants is very low. The royal Enfield bike
industry is very mature and is set to achieve the economies of scale, for
this to occur the industry is now focussing on mass production of bikes
in order to cater to the needs of the customers.
 Bargaining Powers of Buyers & Sellers – In case of Eicher motors the
buyers have considerable power of bargaining. The manufacturers
depend on them in order to stay in the business. Generally the
customers have low switching cost if they are not happy. Many
competitors are competing against each other on providing value,
features, quality, style and additional features. However, the bargaining
power is moderately high and not completely high the reason being
that the buyers are not large but few in number. Secondly, the buyers
do not have the ability to integrate backwards to the industry. For
example if a buyer wants to buy a bike then he/she has to purchase it
from the dealer itself and won’t manufacture the bike .
Five Force Analysis
 Bargaining Power of the suppliers – In Royal Enfield this refers to all the
vendors i.e. Suppliers of parts, tires, components, fixtures and even the
assembly line workers. In order to manufacture a bike a lot of different
components are required & in order to accomplish this there exists suppliers.
These suppliers rely on one or two different manufacturers to sell their
products. As a result the suppliers are extremely susceptible to demands and
requirements of the automobile manufacturer to hold very little power.
 Threat of Substitute products – The threat of the substitute products are
relatively low in the case of India. To avail the different sources of
transportation such as cycling, trains, trams, buses, rickshaw to a larger
extent does not offer utility but personal vehicles on the other hand are
convenient, and provide value to the customers. Substitute products all
depend on the geographical location of the consumer. On contrary people
would prefer to have atleast one Two wheeler for the status title in the
society.
Five Force Analysis
 Intensity of rivalry among competitors – Rivalry among the
competitors is very strong in the industry. One of the reasons for such
high rivalry is the lack of differentiation opportunities. The companies
which produce bikes are ( Royal Enfield, Jawa, Benelli). Before making
any purchases the competiors are compared to one another constantly.
The price, quality, durability and many other aspects of different
manufacturers are greately taken into consideration while deciding on
which brand to purchase. The newly launched Jawa is extensively
competing in the price margin of Rs 2 lakh i.e. Royal enfield Classic
350 whose price is more or less the same which seeks the needs of bike
buyers .
Is there an opportunity for the complementary products
of services in the industry. ?
 This force was added in the revised 1990’s model. It refers to the
products or services that are compatible with what a particular industry
sells. The impact of complementary goods can negatively impact upon
the profitability of the industry. Adversely if complementry products
i.e if price of petrol rises then it can negatively impact the level of sales
that was previously obtained by Royal Enfield.
 Example – if the price of petrol rises then the automobile industry will
suffer which may cause customers to look for alternatives i.e. Car
pooling, cycling, walking, or other better measures.

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