Submitted by:• Samudra Mukherjee- 149278129• Krishna Prasad PS- 149278045• Santhosh N- 149278090• Ashok Samudrala- 149278076• Anup Bali- 149278059

ROYAL ENFIELDTeam Rising Phoenix

Section AGroup 10

MNG 608-Strategic Management of TechnologyMini-Project

The oldest motorcycle company continuously in production. Royal Enfield is fast becoming a very important player in the global mid-size motorcycle market and is working towards re-inventing this space with motorcycles that are evocative and engaging and great fun to ride.

To Understand how technology made an automobile firm to capture a niche market, where market is filled with 'commodity' bikes and turned it into a global market player

How Royal Enfield modernized the bikes without taking away their unique identity and made the products more reliable. How they used modern technology without changing the vintage look and also how they improved management practices.

There have been several instances of technological changes with an emphasis on customer orientations.

How it expanded into different regions and markets and adopted its practices to sell its motorcycles and what was the result with its sales. How the technology practices were observed and modified accordingly

Motivation behind the Project

Objectives of the Project

Identify key areas where Royal Enfield used

technology to become the fastest

growing motorcycle

company in the world.

Evaluate the level of technology use by the company

and benchmark it against its

competitors.

Analyze the growth of the company with

respect to competitiveness in

the global scale.

Evaluate the strategies that the

company can implement in the

future to grow and improve its profitability

Completely analyze the

company and the role technology had played in its

significant improvement in

the past.

Key SMOT Questions• Enfield risked losing traditional fans without possibly gaining any

new customers• How Royal Enfield managed to retain old customers while

acquiring new customers?• How technical changes played its role in making the bikes more

reliable?• How proper management of technology can ensure a better

satisfaction of customers?• How, in future, can Royal Enfield leverage technology in addressing

its new set of problems?

Needs more research Focus – Reliability and better fuel efficiency

Strategy will be the key – Market share, profitability & category substitution. Stay profitable, stay niche, aspirer’s on board.

Infrastructure development and better roads will also be the key in India. Can have own forum for bike enthusiasts like its competitors.

Two new engine platforms on which multiple new products could be launched. Churn out multiple models for at least next decade.

Critical Success factors

1

2

3

4

1893

Birth of

Royal Enfield

1899

Provides Die Dion Engines 1901

First Royal Enfield

Motorized Cycle

1904

Engine in the frame

1911

Model 160 and chain

driving

1915Model 200,

225cc 2 stroke 1921

976cc V-Twin

Wolsely

19244 stroke, 350 cc 1928

Saddle Tank centerspring Gerder

Front Forks

Evolution of Royal Enfield

through years

1949

350 CC introduced in

India

1957250 CC

crusader Model, 13 bhp

198924 bhp, 500cc

Model Launched

1999

350cc all-aluminum lean-burn bullet A350

2004

Electra X, 500cc all alloy lean burn

engine

2009

500cc UCE, Classic Model launched

2011

Thunderbird

Café Racer

Evolution of Royal Enfield

through years

• The Sales of Royal Enfield has been consistently increasing since 2006 with introduction of new models. A spike in 2009 is because of its introduction of the Classic Model, a true result of technology

• Although, it holds a 16% premium market share, it is behind Bajaj and needs good management of technology

Market Share and Sales

Insights

Innovation

Technology Advancement• Many new technologies being

introduced to improve the performance such as Maintenance free VRLA battery, double heat treatment process, Robot welding, torque controlled clip for hose clamping, SS metal guard

Product Development• New product development in the

250-750 cc category• New model launch every year till

2018• Engine platforms released every

year which is in line with the current industry benchmarks in terms of technology

Customer Experience• Offered unique customer

experience through marquee rides• Positioned as a cult brand and

generated publicity by having rides in scenic places and popularizing the concept of adventure biking

Distribution & production• Increased the dealership network

by 100 to 400 in 2014• Increased capacity from current

20,000 units per month to 30,000 units per month to meet the surge in demand both locally and globally

• To increase capacity to 50,000

• Core Competency: Lifestyle biking with attention to vintage military styling and cultivating a biking community

• New products design to target Cruiser segment and introducing Café Racer in 500 cc range

• Innovation in Unit Construction Engine design with adherence to Classical biking design along

• Competing in European and American markets in premium cruiser bike range segment

• Brand and Perception of premium segment

• Core Competency: Technology – DTSi and DTSFi

• Product Innovation such as LED technology, Braking and Display Screen and Exhaustec

• Occupying the 3 wheeler auto segment

• Competing in wide product range from Economy to Premium bike segment

• Presence in worldwide market 2 and 3-wheeler segment

Royal Enfield Motors Bajaj Motors

• Human Resources and Capital • Trust in brand,

technical know-how, managerial capabilities and company culture• Innovation resources

from suppliers and work force• Brand name,

reputation and product perception

Harley Davidson

Technology Benchmarking

Domestic Benchmarking

Market share of different segments

Royal Enfield competes in the Premium 2-wheeler segment. The opportunity for growth is highest in this segment

especially in the Indian market where the aspiring young middle class has taken up more of adventure biking and the

Royal Enfield embodies the Indian youth’s thirst for adventure and hence has become a cult brand in India and

increasingly across the globe

Financial Benchmarking

Increased focus on R&D

Emergence of Cult Brand

Increasing Profits

Ramping up production

Increased exports

Largest premium bike manufacture

Reduced raw material cost

Investment to the tune of 500 crores to increase production

Demand surge across the globe

Aspirational middle class in

India

Marketing by RE as a cult brand

Fastest growing motorcycle brand in the

world

Positioned as a “dream bike” for Indian consumers akin to

Harley Davidson in US

Global competitors have high R&D spend

To remain competitive RE increased their R&D spend

Invest in infrastructure and talent to improve

R&D facilities

Will produce 50,000 units per month in

the near future

Incentives from the government to

increase exports

Higher margins from the global markets

Better brand image in the global markets

Cost effective when compared to Harley Davidson

Dominant player in Indian market which is the fastest

growing in the world

Rise of Royal

Enfield

Improved manufacturing

process

Intellectual Property Rights (IPR)• Bajaj alleged Royal Enfield has infringed its DTSi patent• Royal Enfield contended its Thunderbird-350 model does not infringe

Bajaj Auto’s patent• It is also alleged that Royal Enfield has infringed the twin spark

ignition being used in the Unit Construction Engine• The defense of RE is that Bajaj has the patent for 75cc to 250cc

segment whereas the RE engine is in the 350cc and above segment

• Currently, selling in India & exports to developed markets

• Should export to emerging markets• Mid-range price customer segments• High “Sport” bikes’ enthusiastic people• Royal Enfield ‘Cult’ fans• Motorcycling aficionados, adventure riders,

college-goers

Four Steps:1. Aiming at emerging as a significant player in the

250-750 cc segment2. To make inroads in the mid-weight space3. To grow the size of the mid-weight segment4. To emerge as a significant player in the entire

motorcycle market

• Highest selling bike so far• 56.4% YoY growth rate• Release new models very often• Enter early in emerging markets –

South Asia• Focus on Columbia & Latin America

markets

• Increase of expense in R&D• New innovations• More frequent models• Maintaining cult brand• Being customer centric• Increase sales, profitability• Introducing lighter, efficient engines

going forward

Strategy Diamond map

• Technology & availability of spares• Vintage feel with modern touch• Ride quality• Chassis design of tank• UCE (Unit Construction Engine)• 350-500cc cruiser bikes• High price• Aluminum alloy

Key TakeawaysRoyal Enfield

• Committing itself to challenging old ways

• Reducing growing waiting periods for bikes

• Evolving into a brand that caters to a wider, younger audience

• Upgraded its technology without hurting customer sentiments

• Replaced older engines that had reliability issues with new, more advanced units

• Maintaining its cult brand no matter what

• Playing well in its niche market being a leader in share & profits

• Plans to release new models with technological innovations very often soon

Way Forward• Should focus to increase its sales

• As market is niche in India, it can focus on increasing its exports

• Can very well enter into new markets- Latin America, South-East Asia, Columbia

• Understand global markets & the customers perceptions

• Increase quality of bikes in US markets along with warranty period

• Use lighter alloys like Aluminum

• Maintain look-feel and target more profits than just sales

• Release more models periodically

Thank You