Essay About Royal Enfield And Increased Outputincorporation

Royal Enfield Case Study
U543Marketing Management-1Project-Interim Report Submission Table I: Situation Analysis Analysis of:Identify key factors -that may affect the demand and supply of the selected brand in 2015-16  compared  to the previous yearComment- on how these factors may impact the demand/ supply as well as the extent of impact. CompanyProduction capacity-Opening of the new plantWaiting period to be reducedImproved technology to optimize cost of productionIncreasing global presenceThe production to be increased from 4.5 L to 6 L with the opening of new plantWaiting period will  be reduced from 6 months to 2-3 months owing to the increased outputIncorporation of improved automation processes to optimize production cost and conserve energyPlanning to expand global presence by increasing exports CustomersCustomer experienceBrand image and customer satisfactionThe growth rate of the middle class segment crucialChanging preferencesIncreasing customer experience through trips to lesser explored parts of India like North EastImproving brand image through sale of RE accessories and better customer serviceThe increase in disposable income of middle class will have a significant impactKeeping in sync with the changing customer preferences through efficient feedback systemsCompetitionEntry of new players into premium segment Launch of new products from competitorsHarley-Davidson and Triumph, world leaders in cruiser bikes, have been doing well in India KTM 390 Adventure to be launched by 2016, Kawasaki ZX to be launched in India CollaboratorsNeed for more premium showrooms at strategic locationsSuppliers need to meet the dynamic rising demands of the increased productionOpening new showroom at locations of growing youth population to improve brand loyaltyIncreased production by 2015 for Royal Enfield means the suppliers need to ramp up their supply in order to meet the rising demand on timeContext/Macro EnvironmentGrowth of the middle class youth segmentIncrease in the number and quality of highwaysThe target customers being between the age of 25 and 40 years, growth in the middle class youth segment favours the product salesIncrease in the number and quality of the highways can act as incentives to go for more bike trips and hence favours our productKey Situational factors:Company:The long waiting period of 6 months for the product is a cause of major concern for the customers. This has been the major cause behind the histories of cancellations from the customers. Royal Enfield is opening a third plant at Chennai in order to increase the production from 4.5 to 6 lakhs to reduce the waiting period to at least 3 months. To ensure consistency and less wastage, RE has incorporated robotic painting system and powder coating system in the Oragadam plant. Conventional diode rectifiers in plating shop replaced by high efficient IGBT rectifiers resulted in 25660KWh savings. RE plans to improve the technology to conserve more energy and optimize cost of production.RE plans to increase its global presence this year. RE exports over 6000 bikes to over 40 countries including US, UK, Middle East, etc. Increasing global presence will add value to brand image as well as increase in sales.Customers:Improving customer experience through improved customer services and organizing road trips to unexplored areas of North East India. RE organizes yearly trips to Himalayas, Bhutan, etc for its customers. Extending the trips to more exotic, less explored areas could improve brand loyaltyImproving brand image is crucial for RE in the premium segment. The sale of high quality accessories in the showrooms at premium prices in order to elevate the brand imageCustomer preferences follow highly dynamic trends in today’s scenario and there is a need for following market driven strategies in order to keep up with the competition. Efficient feedback system to know the needs and demands of the customers, surveys and market analysis to keep in sync with the changing preferencesCompetition:The presence of Harley Davidson and Triumph in the market has created room for competition. In spite of the market share being low compared to Royal Enfield, presence of Harley Davidson brings down value sales for Royal Enfield as high class bike enthusiasts would prefer Harley to Royal Enfield.The launch of new products like KTM 390 at comparable prices (Rs. 2.2 lakhs) can pose as a threat as the market is opened up for customers with more choices, thereby increasing competition and threatening sales. Collaborators:Royal Enfield is planning to expand the distribution channel in order to have stronger presence in the consumer market. More premium showrooms and presence in more retail stores is a strategy to be implemented this year for better customer experience and brand loyalty. The number of showrooms is to be increased to 500 from 400 in urban locations.With the new plant installation at Chennai, the production is to be ramped to 6 lakhs and the suppliers are to be well ramped in order to meet the rising dynamic demand. The waiting period is planned to be reduced to half from 6 months to 3 months. This needs to be addressed with the support from suppliers with efficient transport systems and improved supplies.Context:Growth of the middle class segment with growing disposable income favours our product. It is projected that Indian middle class population is to touch 267 million in 5 years, promising high growth rates for the segment. Surveys say that a typical middle class household spends about 50% of their income on expenses on durables, etc, which shows the increasing purchasing power of the segment. This is favourable for RE, with increasing youth population and bike enthusiasts willing to pay for bikes.Improvement in infrastructure with more highways and good roadways looks favourable for bike enthusiasts and hence favourable for our product.Brand HistoryRoyal Enfield are the makers of Classic 350 in India. Established in 1955, Royal Enfield (India) is among the oldest bike companies. It stems from the British manufacturer, Royal Enfield at Redditch. Royal Enfield has its headquarters at Chennai in India. Royal Enfield bikes are famous for their power, stability and rugged looks.