Background
Flat Tyres Of India LtdPresented by Group 5- SDMAnupam Mishra
27NMP06Manush Maken 27NMP19Swati Gupta 27NMP 31Komal Tagra 27 NMP
51BackgroundFlat Tyres of India Ltd is one of the leading Tyre
Manufacture Company in India
Established in year 1962, Head office in Mumbai and Factory in
Mumbai and Nasik
With around 30 offices & 4000 dealers, Company had ambitious
plans to achieve 3000 crores in 3 years time from 2000 crores in
2005-06.
Good Consumer Acceptance and was rated one of the top four
brands in the country. Ranked No 2( Exhibit II). Very Close
Competition.
Company was exploring options to intensify its distribution
network either through setting up sales offices in various
locations or by appointing C & F agency sytem
Decision Taken By the CompanyFLAT TYRES OF INDIA LTD ruled out
opening a company owned sales office:It was too expensiveNon
feasible to open offices at many chosen locationsAPPOINTMENT OF
SAMY as C&F AGENT IN MADURAI:Would increase its sales from
current 80 lakhs to 100 lakhs per monthAvailability of supplies in
C&F stocking point , better supplies to the dealersGoods shall
remain the property of flat tyres of India.Company sales officer
shall have control over the C&F appointedMANAGER , CLERKS
TYPISTS , DELIVERY BOYS & DRIVERS
Tyre Manufacturers and DealersCompany/Samy Auto PartsManickam
& CoSKS Auto CentreAuto TyresBalu TyresKSS & CoRatna
Auto-mobileTotalDealerMSApollo Tyres Ltd15065405188922%Birla
Tyres150031053369%Bridgestone3010352005914%Falcon320102082%Flat
Tyres of India Ltd40531015528019%Goodyear India Ltd5112531184%JK
Industries Ltd30100020338%MRF Ltd152051510557518%TVS
Srichkara5001031101%Others20010003TOTAL160301541855030411Dealer
Wise Contribution in Flat Tyres50%6%4%13%19%6%3%Dealerwise Market
Share of Flat Tyres25%17%20%24%18%10%7%19%Overall Market Share of
the Dealers 39%7%4%10%21%12%7%Madurai Market Scenario and concerns
Post DecisionIn Madurai tyre market there are other prominent
players like Apollo , MRF and Bridgestone etc. Flat Tyres has 19%
market share it is the second largest player in the area.Few
dealers Balu, KSS and Auto tyres are not happy post decision and
currently ranked no. 2, 3 and 4 respectively in the Madurai
Market.Balus Majority Sales comes from Brand Apollo,
KSS-BridgeStone, Auto Tyres-MRFIf the company fails to pacify the
antagonized dealers it would lose the channel reach it enjoyed
before thus giving edge to the competitorsDealers Concern would be
that Samy could tamper with the orders placed by dealer thus
squeezing other dealers supplyThis would also adversely affect the
company strategy of intensifying the distribution.
Dealers Overall BusinessDealers TradeTyre Other TradesAuto-Spare
PartsOil and LubricantsMiscellaneous*Tyre BusinessOverall Possible
Turnover(in lakhs/month) 1. Samy Auto Parts80%-15%5%1602002.
Manickam & Co.15%80%5%-302003. SKS Auto Centre10%-80%10%151504.
Auto Tyres30%70%--401335. Balu Tyres80%--20%851066. KSS &
Co.30%-40%30%501677. Ratna Automobiles90%--10%3033Addressing
Channel Conflict FrameworkImpact On current Volumes and
ProfitabilityHigh LowProspect of Destructive ConflictHighAct to
Avert or Adress ConflictAllow Threatened Channel to DeclineLowLook
for Oppurtunities to Reassure channel and Leverage your Power with
Balu, Auto and KSSDo Nothing with RatnaRecommendationsFlat Tyres
Must convince the dealers about the benefits of the new structure.
Some arguments that the company can make are as follows: -The CFA
is under the control of Sales Manager hence the possibility of
muscling out the opponent is not there.With the expansions plans in
process the availability of goods would be better under the
umbrella of a CFAAlthough Mr. Krishna has tried to convince the
dealers and failed he must retry with the above mentioned
arguments. Company Should Specifically work hard with Balu, Auto
Stores and KSS These dealers could be presented the pilot run of
the new channel and if some problems emerge then company sales
manager will be there to take care of issues.Dealers should not be
allowed to dictate terms as this could lead to long term problems
for the company.
8
