BSP Final Project New

TI Cycle Of India Ltd

Table of Contents

Acknowledgments...........................................................................................................................3

Executive Summar………………………………………………………………………………..4

Section NO.1

1)Introduction of Indian Bicycle Industry……………………………………………………….05

2) Trends………………………………..…………………………………………………..…..06

3) Industry Product Scope…………………………………………………..................................07

4) PEST Analysis……………………..……………………………………………..………….08

5) Porters 5 Force analysis……………………………………………………………………….10

6) KSF……………..……………………………………………………………………………19

7) Industry Life Cycle……………………………………………………………………............20

Section No.2

8) corporate Profile…………………………………………………………………………...….21

a) Murugappa Group…………………………………………………………………………………………….……………21

b)Tube Investment of India……………………………………………………………………………………….…….…23

9) TI cycle of India……………………………………………………………………………………………………………………………..27

a) Brands of TI……………………………………………………………………………………………………………….29

b) Product Profile…………………………………………………………………………………………………….……29

10) Product life cycle………………………………………………………………………………………………….………………………….31

11) SWOT Analysis……………………………………………………………………………………………………………………….……32

a) IFE………………………………………………………………………………………………………..……………….………34

b) EFE…………………………………………………………………………………………………………………..…………..35

Shahbaz,Khubaib,UmairPage 1


12) Competitor Analysis………………………………………..………………………………………………………..…………………37

13) Strategic group Map………………………………………………………………………………………………………………….…40

14) CPM……………………………………………………………………………………………………………………………………………42

Section No.3

15) Value chain of TI………………………………………………………………………………………………………………………….44

Section No.4

16) Mcgahan Framework Model……………………………………………………………………………………………………….51

17) Ansoof Model……………………………………………………………………………………………………………………………..51

18) Grand Strategic matrix…………………………………………………………………………………………………………..……52

19) Diversification strategy……………………………………………………………………………………………………………….53

20) Integration strategy…………………………………………………………………………………………………………………….54

21) Generic strategy…………………………………………………………………………………………………………………………55

22) IE matrix……………………………………………………………………………………………………………………………………..56

23) Selecting strategy……………………………………………………………………………………………………………………..…57

24) Distribution network of TI……………………………………………………………………………………………………..……58

25) Future strategic option……………………………………………………………………………………………………….………59

Section No.5

26) Financial Analysis………………………………………………………………………………………….……………………………59

27) Reasoning for related diversification………………………………………………………66

28)Conclusion................................................................................................................................66

29) References………………………..………………………………………………………….67

30) appendix………………………………………………………..……………………………68

a) The History of Bicycle Industry……………………………………..……………………..68



Acknowledgments

“We bow our head in gratitude to almighty Allah, who blessed us with the ability and energy to

complete this work.”

We were asked to work on this project of Business strategy and polices. We want to thank my

respected teacher DR Sarwar Azher, who gave us this opportunity to understand & learn field

work of business strategy We also want to thank our class fellows and friends especially Asif

who has guided us in completing this project.



EXECUTIVE SUMMARY

The Murugappa group, headquartered in Chennai, India, is a $1.5 billion conglomerate with

interest in engineering, abrasives, sanitary ware, fertilizers, finance, bio-products and plantations.

It has 29 companies under its umbrella; eight are listed and actively handed on the national stock

exchange and the Bombay stock exchange. Together, they have over 28,000 employees.

TI is a leading player in bicycles segment with 30 percent market share by virtue of its brand

equity, product development capability and proximity to the markets. The company reported a

turnover of RS. 1563.39cror and profit after tax of Rs. 98.55cror in 2004-2005

TI introduced many brand as BSA, Hercules,Philips,and recently introduce carbon made bicycle

with the name of Montra brand.

In this report we use different model as Ansoof model, Mcgrham model, and strategies like

generic, integrated, diversification strategies, and also use matrix as Grand matrix, IE matrix to

finalize the strategy for TI cycle of India. In this project we critically examine the case study and

research on different websites to find out the information. We also analyze the TI strategies

which they are using. We give recommendation on the base of calculation and financial analysis

give suggestion about future strategy.



Section No1

1) Introduction of Indian Bicycle Industry:

India produces approximately 10% of the world annual bicycle production, which is

estimated at 125 Million units.

The annual domestic demand of bicycles in India is approximately 10 million units out of

which around 2.5 million units are a government demand for the various welfare

schemes. Exports out of India are largely to Africa and the less developed economies and

negligible to western markets.

Before 1974 there was only one bicycle manufacturing unit in India making

approximately 400 bicycle.

In 1951 two units with financial and technical support of well known British

manufacturer.

Order weare of 2 million and expected to grow to 9 to 3 million a year by 1975.

India was dominated by 18 large and medium size units.industry has subsential growth

and install capacity 1.37 million in the large sector and 0.75 million in small sector.

The utilization capacity was low in small sector 12-13%.capacity was concentrated in the

North both in large and small sectors.

With an annual turnover of more than 12 million bicycles, the bicycle industry is one of

the most established industries in India.



Second largest bicycle manufacturer in the world, next only to China.

More than 90 per cent of the bicycle production in India comes from four bicycle

companies. Major players with their per cent share in this sector are Hero Cycles 35%,

Atlas Cycles 24%, TI Cycles 18% and Avon 15%. Hero Cycles has grown to become the

world’s largest bicycle maker followed by Atlas Cycles.

(http://www.herocycles.com/indian.php)

2) Trends:

!950-1975

The north Indian market showed definite trends in recent year that a large percentage

of women and girls had taken to cycling. Cycling ahs become a social acceptable

activity for women.

Low awareness of cycling as a sport in India

Only mode of cheap personal transportation

Cycle industry is facing increasing competition in those years.

Typically rural and semi urban consumer depend on the advice of other cyclist.

Demand of cycles is increased with festivals like Diwali, puja, marriage seasons

Licensed by the government

Huge demand exist in Standard segment

After 1980s:

Encouraging trend in usage of cycle for health and leisure activities

A declining market of standard bicycle and increase in special bicycles

Competition from China and other low-cost manufacturing destinations


http://www.herocycles.com/indian.php


Rising prices of raw material such as steel and rubber

Multiple product variations (Style, Size, Color, Material, Trendy)

Sales in the children’s segment, ladies, school and college students were growing at a

speedy pace

Rise of Purchasing Power (Increase in spending power/Income levels)

Demand exists in Special segment

People prefer motor cycle as compare to bicycle as a fast mode of transportation

people prefer public transport system as compare to go on bicycle because of limited

time.

3) Industry products scope:

The bicycle industry can broadly be defined as the industry that is concerned with the bicycles and cycling. It includes bicycle manufacturers, parts or components manufacturers, and accessory manufacturers related to the bicycles. It can also include distributors, retailers, bicycle organizations, bicycle event promoters, and bicycle related service providers. The industry, with the changing environment, also caters to the needs of health, gymnasium and leisure segments.

The size of the Indian bicycle industry stands at US $1.2 billion. The number of units (finished bicycles including all segments) produced is around 12 million, according to an industry source. Of this, the number of units exported annually is about two to three million, which points to a huge demand in the domestic market. According to figures from the Engineering Exports Promotion Council, in 2007-08 India exported bicycles and components worth US $185.42 million. India has seen a tremendous increase in the number of bicycle manufacturers and bicycle exporters in the recent past. Today, the Indian bicycle manufacturing and bicycle spares industry is well accepted and is also widely recognized for its quality standards in international markets.

Most bicycle components, spares and bicycle accessories in India, except for free wheels and single piece bicycle hubs, are manufactured by the Small Scale Sector (SSIs), while the large scale units are permitted to manufacture bicycle frames, chains and rims for captive consumption. The manufacturing and export of complete bicycles falls within the organized sector. The Indian bicycle industry is currently in the midst of making endeavors for enhanced and increased bicycle exports since the scope for export of Indian manufactured bicycles in the international market is significant. As per public reports the present level of exports falls within the range of Rs. 150 crores.6 This includes Bicycles, bicycle spare parts and bicycle accessories.

India produces approximately 10% of the world annual bicycle production, which is estimated at 125 Million units. The annual domestic demand of bicycles in India is approximately 10 million units out of


http://en.wikipedia.org/wiki/Retailing

http://en.wikipedia.org/wiki/Distribution_(business)

http://en.wikipedia.org/wiki/List_of_bicycle_manufacturers

http://en.wikipedia.org/wiki/Cycling

http://en.wikipedia.org/wiki/Bicycles

http://en.wikipedia.org/wiki/Industry


which around 2.5 million units are a government demand for the various welfare schemes. Exports out of India are largely to Africa and the less developed economies and negligible to western markets.

Major players in the domestic bicycle industry are Hero Cycles, TI, Avon & Atlas with 48%, 27% & 14% & 10% of share of volume respectively. (page# 37 ) Most cycles manufactured & sold in India are in the low price bracket of Rs. 2,500 to Rs. 5,000.

The market for the premium or the lifestyle bikes targeted towards the lifestyle consumer is just about emerging. The definition of high end bikes itself is changing. Earlier the high-end bikes were considered as those selling between Rs. 5,000 to 8,000. However now with global brands moving into the country this definition is also changing with price-points starting from Rs.15,000 to as high as a few lakhs. The demand for these cycles at this stage is very limited but is expected to grow at a frenetic pace in future.

(http://www.avoncycles.com/gents-bicycle.asp)

4) Pest Analysis

Political Factors:

Manufacturers should not increase the prices without prior approval of the government.

Manufacturers are asked to freeze prices of their cycle( without saddles or accessories) at

the level of their F.O.R. It was also suggest that the distributor margin cover commission

agent, sole distributors and the dealers.

Distribution margin did not increase 15% of sale.

All price revisions would be cleared with the government for industry safety.

The cost audit and voluntary control were not applicable to the small scale sector only the

large integrated manufacturers were covered by it.

The sixth Tariff commission recommended that Protection need not be extended beyond

December 31,1963


http://www.avoncycles.com/gents-bicycle.asp


Economic Factors:

Small scale sector contribution approximately 8 to 10% of the total production which is

150,000- 200000 units.

India produces approximately 10% of the world annual bicycle production, which is

estimated at 125 Million units. (Article Source: http://EzineArticles.com/4392039)

This is significant in view of the growing economy in India with increasing per capita

income especially for rural India is projected to grow by 17.3 percent to Rs 54,527 in

2010-11 from Rs 46,492 in the year-ago period, according to the official data released

today.

The annual domestic demand of bicycles in India is approximately 10 million units out of

which around 2.5 million units are a government demand for the various welfare

schemes.

Social Factors:

Cycling had become a socially acceptable activity for women because of it demand of

ladies model increased.

The rural consumers bought cycle from urban market or bought them second hand from

an urban or semi urban user it was a common trend in rural consumers.

Sudden burst demand on festival like Diwali, Puja, Harvest,and marriage seasons.

The social trend in India was used cycles sold to the rural consumer.

The rural consumer bought cycle either in the urban market or


http://EzineArticles.com/4392039


The typically a rural or semi urban consumer depended on the advice of other cyclist. For

example the milkman before buying the cycle looked around the brands used by the other

milkmen.

The fitter mechanics employed by the large dealers and as well as self employed cycle

repair shop men had major influence in decision making of the buyers.

Technological Factors:

Lastly, the technology also plays an important role in the bicycle industry. During the 1980’s and 1990’s much of the growth increase can be attributed to new technologies such as the use of new light weight materials in the frame of bicycles which greatly increased performance. Also shift from Dip Brazing technology to Welding to reduce the overall cost of the production. The technology also results in the customization rather than standardization of the cycles.

In 1960-62 India had the technology maturity to manufacture quality cycle with out

external help.

Now with help of new technology Magnesium frames are used in production of cycles

with reason able price.

In cycle industry carbon fiber as a frame material is used for making cycle.

5) Porter Five Forces Analysis

THE PORTERS 5 FORCES MODEL (TEMPLATE)

BARGAINING POWER OF BUYERS.

Determinants Defining Question Assess the power of

Buyers Circle one of the

following.

Shahbaz,Khubaib,Umair Page 10


1 = low, 5 = high, or

N/A if it doesn’t apply to

your industry.

Concentration Are buyer fragmented or highly concentrated

(i.e. do a few monopolize the market?) If they

are few and concentrated, then buyer

bargaining power is typically high.

1 2 3 4 5

N/A

Product Cost

versus Total

Purchases

Does your product buyer’s purchase represent a

significant fraction of the buyer’s cost? If so,

buyer bargaining power is typically high.

1 2 3 4 5

N/A

Product

Differentiatio

n

Is the buyer’s product or serve a commodity? Is

there branding critical to success? Is there any

actual versus a perceived difference? If the

product are standard or undifferentiated, buyers

typically have high bargaining power

1 2 3 4 5

N/A

Switching

Costs

Is Switching cost low or high? If buyers face

few switching costs, their bargaining power is

typically high.

1 2 3 4 5

N/A

Backward

Integration

Can they make what you make themselves? Is

there a threat of backward integration? If so the

threat is typically high

1 2 3 4 5

N/A

Impact on

Quality/

Is the product you offer important to the quality

of the buyer’s product or services? If not buyer

1 2 3 4 5



Performance power is typically high N/A

Buyers

Information

Does the buyer have complete information on

the product he may purchase? If so buyer

power is typically high

1 2 3 4 5

N/A

25/7=3.6

Result:

As the result of the above analysis, it represents that the bargaining power of the buyer is

relatively higher because buyers have low switching cost, low product differentiation and

complete information about the products.

BARGAINING POWER OF SUPPLIERS.

Determinants Defining Question

Assess the power of

suppliers Circle one of

the following.


N/A if it doesn’t apply

to your industry.

Concentration Are the supplier fragmented or highly

concentrated? (Do a few monopolize the

market)? If an industry is dominated by a

1 2 3 4 5

N/A



few companies, the suppliers are

typically powerful.

Presences of

Substitute inputs

Are there any substitutes for your

supplier products? If not suppliers are

typically powerful.

1 2 3 4 5

N/A

Importance Relative

to Customer.

Is your industry an important customer

the supplier group? If not suppliers are

typically powerful

1 2 3 4 5

N/A

Impact on Quality/

Performance

Is your supplier product essential to the

quality or performance of your business?

If so suppliers are typically powerful

1 2 3 4 5

N/A

Product

Differentiation

Is the supplier’s product or service a

commodity? Is branding critical for

success? Is there an actual versus a

perceived difference? Suppliers with

differentiated products typically have

more bargaining power then suppliers

selling commodities.

1 2 3 4 5

N/A

Switching Costs How costly is it for you to switch from

suppliers product? If switching costs are

high, suppliers are typically more

powerful.

1 2 3 4 5

N/A

Forward Integration Can the supplier produce the product you

make? Is there a threat of forward

integration? If so, suppliers are typically

1 2 3 4 5

N/A



powerful 22/7=3.14

Result:

As the result of the above analysis, it represents that the bargaining power of the

suppliers are low because of the presence of substitute, switching cost, product

differentiation is low.

INTENSITY OF RIVALRY


Assess the power of

Buyers, Circle one of the

following.

1 = low, 5 = high, or N/A

if it doesn’t apply to your

industry.

Industry

growth

How slowly or quickly is the industry

growing? If it is a slow growth industry,

there is likely to be more intense fights

among rivals for market share.

1 2 3 4 5

N/A

Fixed Cost Does your business have a high fixed cost?

If so, rivals will typically be tempted to cut

prices to ensure sales, thus posing a

significant threat

1 2 3 4 5

N/A

Product

Differentiation

Is your product or service a commodity?

Typically the closer the product is to being a

commodity the fiercer the intensity of

1 2 3 4 5

N/A



rivalry.

Brand Identity Is branding critical for your Rival’s success?

Is there actual vs. perceived difference?

Brand identification by buyer reduces the

threat of rivals.

1 2 3 4 5

N/A

Switching

Costs

How costly is it for your buyer to switch

between providers? Low switching costs

typically increase rivalry. When a customer

can freely switch from one product o

another, companies must struggle to capture

and retain customers.

1 2 3 4 5

N/A

Concentration

and balance

Are there a large number of firms of equal

size and power, all chasing after the same

customer? If so rivalry is typically intense

1 2 3 4 5

N/A

Diversity of

competitors

Are there competitors with different

strategies and frame of reference? When

competitors are diverse it is more difficult to

establish the rules of game, so the threat

from competitors is greater.

1 2 3 4 5

N/A

Exit Barriers Are exit barriers low or high? High exit

barriers make it costly to abandon a product.

E.g. when an organization has specialized

assets that cannot be easily sold off.

1 2 3 4 5

N/A

33/8=4.125

Result:



As the result of the above analysis, it represents that the intensity of rivalry is high

because the high fixed cost, exit barrier and no product differentiation and market is a

competitive market with a number of companies that lead to a tough competition.

THREAT OF NEW ENTRANTS.


Assess the power of

Buyers. Circle one of

the following.



to your industry.

Economies of

Scale and

experience

Does successful entry require that companies have

significant economies of scale or experience?

Barriers to entry are typically high when an aspiring

company must cut costs in order to compete in a

large-scale and/or experienced market.

1 2 3 4 5

N/A

Product

Differentiation

Do new entrants need to differentiate by spending

heavily on advertising, customer services or product

differences to overcome existing customer loyalty?

Product differentiation is typically a barrier to entry.

1 2 3 4 5

N/A

Brand Identity Do new companies need to spend heavily on brand

identification to gain customers loyalty? Brand

identification is typically a barrier to entry

1 2 3 4 5

N/A

Switching

Costs

Does the buyer have to pay to switch from one

supplier’s product to another? High switching costs

1 2 3 4 5



are typically a barrier to entry. N/A

Capital

Required

Does the new company need to invest large financial

resources (relative to market size) in order to

compete? Huge capital requirements are typically a

barrier to entry

1 2 3 4 5

N/A

Access to

Distribution

Do the new comers have access to distribution

channel for product or services? Difficult access can

typically be a high barrier to entry.

1 2 3 4 5

N/A

Cost

advantage

Established companies have cost advantages over

new rivals because they may have already obtained

proprietary product technology, access to raw

materials, favorable locations and government

subsidies. In addition, established company may have

passed a learning or experience curve. Such costs

advantages are typically a barrier to entry for a new

entrant.

1 2 3 4 5

N/A

23/7=3.3

Result:

As the result of the above analysis, it represents that the threat of new entrant is low

and barrier to entry is high because access to distribution is very challenging for new

entrant, huge capital is required and switching cost is also low. The existing players in

the industry have cost advantage to the new rivals because they have already production

technology and favorable locations.

THREAT OF SUBSTITUTION:

Determinants Defining Question Assess the power of



Buyers

Circle one of the

following.



to your industry.

Price performance Does the substitute offer a better price or

performance? A substitute product or service

is a threat to competition when it offers a

higher performance at a given price or the

same performance at a lower price.

1 2 3 4 5

N/A

Switching Cost Is it costly for buyer to switch to the

substitute product? When buyers must pay

more to switch to a substitute the threat of

substitutes is low.

1 2 3 4 5

N/A

4/2=2

Result:

As the result of the above analysis, it represents that the threat of substitutes is lower.

Because the price of the substitute is high as compare to cycle. So it is very difficult to

switch on subtitue.Therefore the threat of substitutes is relatively lower.

Interpretations:

BARGAINING POWERE OF BUYERS:



The Dealers and sub-dealers are compelling to provide the cycles of their choice (Special) which

may cause losing the market for standard cycles. Buyers switching cost is low because of the

availability of Hero, Atlas, Avon and Chinese Cycles in the market. The buyer can switch to the

other brands so the bargaining powers of buyers are high.

BARGAINING POWERE OF SUPPLIERS:

Industry players are not facing sizeable threat from suppliers because the major parts of cycles

are manufactured by them except some of the parts for special cycles are imported from Japan.

INTENSITY OF RIVERLRY

Industry players are facing stiff competition because of number of players Like, Avon, Atlas,

Hero and few foreign competitors. The competition is strong in standard cycles because the

market growth of standard cycles is slow. But it is weak in a sense that market for special cycles

is growing rapidly. Switching cost in special is low so the buyer may shift the demand.

THREAT OF NEW ENTRANTS:

Over all the industry in a mature stage and there is strong threat of new players particularly form

China, Indonesia and Taiwan with low priced cycles. But on the other hand strict regulatory

control of the Government on this industry and access to distribution channels is difficult. So it is

very difficult for the new entrants.

THREAT OF SUBTITUTE:

In cycle industry threat of substitute is low because close substitute of cycles is cycle Scotty and

motor cycle which have high switching cost and high prices.



6) Key Success Factors:

Product design

In cycle industry survival innovative products designs are compulsory to attract the

customers.

Technological up-gradation

The industry players need to replace their old machinery with latest updated machinery

that does reduce production time and cost of the products.

Research & development

The industry players more focus on the research and development to create innovation in

products. By the innovative products as carbon frame and magnesium frames so they can

compete domestic market as well as the international market.

Product quality

In cycle industry there is a huge competition with local and international players. The

players do more concentrate on quality products and sustain this quality on the basis of

quality standards. Quality depends on good material as steel,frames,tubes etc So this way

they can attract and make loyal to customers with their brand.

Strong distribution network

Companies in bicycle industry must have strong retail and distribution network for

survive in the industry.

Cost competitiveness

Industry players and new comers use new technology and install plants to reduce the

production cost by this they can penetrate in the market and gain more market shares.



Customer satisfaction & loyalty

Companies offer low cost and high quality cycles with design through this can succeed in

the industry and can make customers loyal with their brands.

Financial capital

The financial capital is necessary to sustain and compete in the industry because huge

investment is required otherwise no one sustain and enter in this industry.

Market shares:

The companies in cycle industry offer low cost and high quality products to customers

focus on rural and urban areas to gain market shares.

Brand Image:

Indian people are brand conscious as given information in the case that people purchase

cycle which are recommended by other person(cyclist, friends).

7) Industry Life cycle:


Cycle industryIndustry


Bicycle industry is a mature industry where competition is very high. Product innovations are

few and incremental. In Indian bicycle industry two core models exist – ‘specials’ and

‘standards.’ While the market has matured in standard model but in growth in special model, the

market of special segment is growing rapidly. The companies target to youth in special segments.

Industry players are introducing new designs and with different material which are frequently

copied by others. Market of standard bicycle is decreasing because people prefer stylish bicycle

as girls and boys. In Indian market material is available at low cot and they are manufacturing

inside of India .In some cases players import material for special bicycle. The drivers of demand

essentially are the rates of growth of income and its distribution.

Section No.2

8) CORPORATE PROFILE

a) MURUGAPPA GROUP



The Murugappa group, headquartered in Chennai, India, is a $1.5 billion conglomerate with

interest in engineering, abrasives, sanitary ware, fertilizers, finance, bio-products and plantations.

It has 29 companies under its umbrella; eight are listed and actively handed on the national stock

exchange and the Bombay stock exchange. Together, they have over 28,000 employees.

The business has its origins in 1990, when Dew a bahadur AM Murugappa chattier established a

money-lending and banking business in Burma (now Myanmar), which then spread to Malaysia,

Sri Lanka, Indonesia and Vietnam. A century down the line, it has withstood enormous

vicissitudes (including strategically moving its assets bank to India and restarting from scratch in

the 30’s before the Japanese invasion in world war 2) to became one of the country’s biggest

industrial houses. The group turnover crossed the $1 billion mark in 2003-04, with an impressive

growth of 25% Rs. 42,060 million in 2002-03. The group clocked a 40 percent jump in profit

before tax over the previous year. Murugappa Group’s consolidated turnover for 2004-05

crossed %1.44 billion. The group achieved a growth of 20 percent over the previous year.

The group is a market leader in India across a spectrum of products like sanitary ware, fertilizers,

abrasive, automotive chains, car doorframes and steel tubes. Neemzal, a neem - based organic

pesticide, is the country’s best known brands like BSA and Hercules in bicycles, parry ware in

sanitary ware, parry’s spiraling and parry’s Beta carotene in nutraceuticals, ball master and Ajax

in abrasives, Gromor and paramfos in fertilizers, and many more come from the Murugappa

group.

Its companies have tie-up with Borg-warner of the USA, wend of Germany. Morgan Crucibles of

the U.K and Mitsui Sumitomo insurance of Japan. It has registered 43 International patents for

its research and development innovation. The group has grown consistently through its decisive

and visionary response to change times. Its pioneering efforts, steadfast commitment to ethical

business practices and it dogged pursuit of new arras to extend its business acumen have brought

in its wake several prestigious national and international awards.

Social commitment has always been the cornerstone of the group’s ethos and it has been at the

forefront of eco-conservation, public health, and education in the communities where its

companies operate, since 1957. It runs four schools, a polytechnic college and four hospitals.



Besides, the group runs a research and development center for rural development the sir AMM

Murugappa Chettiar research center (MCRC), which has been a designing simple, cost-effective

technology for local artisans since 1977.

The Murugappa group has 29 companies active in the area of engineering, abrasive, sanitary-

ware, fertilizers, finance, bio-products and plantations. The major companies of the group all:

Carborumdum Universal Limited

Cholamandalam Investment & Finance Company Limited

Coromandel Fertilizers Limited

EID Parry Indian Limited

Godavari Fertilizers Limited

Parry Agro Industries Limited

Parry Nutraceuticals Limited

Ube investment of India Limited

Name of the Companies % of turnover

TII 28%

EIDP 34%

CFL 16%

CUL 8%

OTHERS 14%

(Source: http://en.wikipedia.org/wiki/Murugappa_Group)


http://en.wikipedia.org/wiki/Murugappa_Group


b) TUBE INVESTMENT OF INDIA LIMITED

A reputed engineering company in India, driving excellent in work and part of the US $1.5

billion India conglomerate, the Murugappa Group.

CORPORATE HISTORY

Incorporate in 1949- TI cycles of India (TICI) in collaboration with TI, UK the world’s

largest manufactures of bicycles.

A tube product of India (TPI) was established in 1955 with the objectives of providing

backward integration to bicycles.

TPI merged with TICI in 1959. Name of the company changed to tube investments of

India Ltd.

TPI established a cold Rolling mill in 1962 for the production of cold Rolled close

annealed steel strip.

TPI established EOU at Avadi in 1996.

Tube plant commissioned in 1997 at Shirwal, Maharashtra.

Facilities to produce doorframes for Maruti 800 cc and Hyundai Santro in 1998

Cycle’s plant at Nashik set up in 2001.

Tube Investment of India limited is the flagship company of Rs. 6250 cr. Murugappa

Group. It manufactures precision steel tubes and ships, car door flames, auto motives and

industrial chain and bicycles.



The company has 13 manufacturing assembly units spread across the country. Marketing

offices that act as interface between customer requirements and production train ably

support these units. The company’s shares are listed on the national, Mumbai and

Chennai stock exchanges within India and GDRS on the Luxembourg stock exchange.

The company’s product segments are- Engineering, metal formed products and cycles.

TI is the market leader in precision tubes with 61 percent market share by virtue of its

quality & application engineering capabilities.

TI is the market leader in roll formed car door flames with 57 percent market share by

virtue of its cost efficiency, association with key auto majors and roll forming

capabilities. TI is a leading player in auto motive chain with 35 percent market share by

virtue of its quality, cost & delivery and association with two wheeler major.

TI is a leading player in bicycles segment with 30 percent market share by virtue of its

brand equity, product development capability and proximity to the markets. The company

reported a turnover of RS. 1563.39cror and profit after tax of Rs. 98.55cror in 2004-2005

The company also has an interest in the services sector through its investments in

Cholamandalam Investment and finance company Ltd and Cholamandalam MS general

insurance Co. Ltd.,

Tube investment of India was one of the most important post-independence forays of the

Murugappa group into manufactures. It was a niche the group identified as a trump card

for a nascent nation; marking the poor man’s vehicle, the bicycle. It was originally

founded as TI cycles of India and TI miller-, which manufactured cycle, lamps and

dynamo sets-were merged with the company in 1959 and 1984 respectively.

TI is the second largest- manufacturer of bicycles in India. Marketing top Brands like

Hercules, BSA and Philips, and had a market share of 31 percent in 2003-04. In the

value-added special segment, TI in the leader, with a 50 percent market share. More

recently, the company entered the promising health conscious ‘exercise’ bicycle segment

in 2002-03. TI cycles of India, one of the leading bicycle manufacturers in India, started



in 1949, have been at the forefront of innovation and are a pioneer in the market of

cycles. TI cycles are the makes of country’s most famous brands like Hercules, BSA and

Philips cycles. The company’s vision is to be a worldwide leader in cycling and solution

by installing the pride of ownership in the customers”.

Certificates: certified with ISO 9002 & Iso 14001

Exports:

TI cycles is an exporter to many regions across the global-Europe, south East Asia and Africa;

being some of them

Locations:

Chennai (corporate HO), Nashile, Noida, Durgapur, Banglore, Kolkatta, Patna & Ludhiana.

A subsidiary, tube products of India was set up in 195 in collaboration with tube products (old

bury) Ltd, UK to produce electric resistance welded (ERW), cold drawn welded (CDW) tubes

and draw over mandrel (DOM) tubes. In 1957, tube investments of India started production of

cold-rolled close annealed steel strips, in collaboration with TI, UK, primarily to meet in house

and group requirements.

Through started as a backward integration project for the manufacture of bicycles, today, TPI is a

major preferred supply of precision welded tubes to major automotive companies in India and

abroad. It is the undisputed leader in the Indian market for precision welded ERW & CDW steel

tubes, with the widest variety and range in terms of size as well as material gracles offered. TPI

started operation at Avadi, Chennai, but has expanded with two more plants satirically located in

western and northern India.



Another subsidiary, TI metal forming, is a pioneer in cold roll forming. It manufacturers and

supplies value- added metal formed components like car door flames, sash/division channels,

door guide rails and bar assembly. It has plant in Chennai and Bawal (near Gurgaon). Both plants

in Chennai and QS 9000 certified. The Chennai plant is ISO 14001 certified.

A third plant has been set up near Baroda (in Gujarat state, Western India) to manufacture and

supply doorframes, impact beam, bar and rail assembly for general motors, India. Its client list

includes Maruti udyog general motors, India.

TIDC India formerly known as TI Diamond chain Ltd, was established in 1960 in collaboration

with the Diamond chain co, USA. Starting as a marker of bicycle industrial chains TIDC produce

from tiller chains, leaf chains and conveyor chain to industrial power drive chains, engineering

class chains, in automotive TIDC produces motorcycle drive chains and engine mechanism chain

and fine blank parts. Annually production runs to 45 million ESS feet, and commands 40 percent

of the domestic market share. The company is known for developing high performance chains,

for specific applications and machinery. Some of TIDC’s popular brands are Diamond and

Xtron, TIDC exports to over 50 countries worldwide.

TII has entered into a joint venture with Borg Warner Morse TEC, USA for production of timing

and silent chains. It has entered into a technology agreement with Tsubakimoto chains company,

Japan, for engineering class chains. Some of TI Diamond chain’s popular brands are Diamond

and Xtron.

Tube Investment group

TI CYCLES OF India

TUBE PRODUCTS OF India

TI METAL FORMING OF India

TI DIAMOND CHAIN LTD



TII – BUSINESS PORTFOLIO

Business % Turnover

TI Cycle 41%

Engineering 56%

TI Metal Forming 3%

9) TI cycle of India Ltd

TI is a leading player in bicycles segment with 30 percent market share by virtue of its brand

equity, product development capability and proximity to the markets. The company reported a

turnover of RS. 1563.39cror and profit after tax of Rs. 98.55cror in 2004-2005

TI is the second largest- manufacturer of bicycles in India. Marketing top Brands like Hercules,

BSA and Philips, and had a market share of 31 percent in 2003-04. In the value-added special

segment, TI in the leader, with a 50 percent market share. More recently, the company entered

the promising health conscious ‘exercise’ bicycle segment in 2002-03. TI cycles of India, one of

the leading bicycle manufacturers in India, started in 1949, have been at the forefront of

innovation and are a pioneer in the market of cycles. TI cycles are the makes of country’s most

famous brands like Hercules, BSA and Philips cycles. The company’s vision is to be a

worldwide leader in cycling and solution by installing the pride of ownership in the customers”.

Mission:

Ethical norms in dealing with all the stakeholders Provide value of money to customers through quality and services



Treat employees with respect; provide opportunity to learn innovativeness and creativity in business.

Vision:

TI Cycles’ vision is “To be the most preferred brand in fitness, recreation & personal mobility solutions”. It strives to give its customers not only a bicycle but a lifetime experience.

a) BRANDS Of TI cycle of India Ltd:

Hercules

Hercules the flag ship brand of TI cycles portfolio, this brand of ours is still as young as ever.

Hercules stands for a unique pride of possession-anchored in the time-tested values of heroisne

and integrity, to which the brand’s customers subscribe in their own lives.

BSA

BSA anchor flag ship brand of TI cycles, BSA stands for Birneighani small arms. It signifies the

joy of cycling; fun and comfort go hand in hand with BSA. BSA today is an intrinsic part of the

Indian family with cycles for everyone kids teams and adults.

Phillips

Phillips Cycles Limited was a British bicycle manufacturer based in Smethwick near

Birmingham, England. Its history began early in the 20th century and ended in the 1980s by

which time it had become part of Raleigh Industries, itself a part of the Tube Investments group.

For a number of years, the company was the second-largest bicycle producer in Britain, after

Raleigh.

Track and Trail


http://en.wikipedia.org/wiki/Tube_Investments

http://en.wikipedia.org/wiki/Raleigh_(bicycle)

http://en.wikipedia.org/wiki/England

http://en.wikipedia.org/wiki/Birmingham

http://en.wikipedia.org/wiki/Smethwick

http://en.wikipedia.org/wiki/Bicycle

http://en.wikipedia.org/wiki/United_Kingdom

http://en.wikipedia.org/wiki/Limited_company


Track and Trail is the ultimate destination for everything in cycles - from the best of international

bicycles and world-class accessories to a network of people with expertise on technology,

performance and the intricacies of cycling. For mountain, road and hybrid bikes, you can choose

from Cannondale, Bianchi or Schwinn – world-class brands known for incomparable designs,

superior comfort and ease of riding. We also have an exciting range of BMX and MTB cycles

from GT and Mongoose for those who like a bit of adventure in their lives.8

b) PRODUCT PROFILE

TI cycles is one of the largest integrated cycle manufactures in Asia, Manufactures high quality

bicycles for both domestic and international market. TICI manufactures and markets the

HERCULES, PHILIPS and BSA brands.

Hercules

Brand Names Model Names

Hercules Thriller

Hercules Bravo

Hercules Torando

Hercules Axn

Hercules Glider

Hercules Top Gear Ezy Ultra

Hercules Explorer

Hercules Captain Kidz

Hercules Ultima Dx

Hercules Ultima Ex

Hercules Wind pacer

Hercules Hurricane



BSA


BSA Lady bird spot

BSA Bravo

BSA Lady Bird

BSA Dino sour

BSA Dash DX

BSA Comet

BSA Champ-H-Plus

BSA Aqua Zing

BSA I-Bike

BSA Dina

BSA Rocket

Health Segment


BSA Trimgyni

BSA Trimgyni Jogger

BSA Trimgyni Stepper

10) Product life cycle:



The Company is operating in a MATURE industry where competition is very high. Product

innovations are few and incremental. A long run product life cycle operates for the two core

models – ‘specials’ and ‘standards. Special bicycles for youth as kid’s school, college students

which is in growth stage. Incremental product innovations (that are usually quickly imitated)

expand the growth phase for the ‘specials’ from time to time. Ability to introduce new variants

of existing models and somewhat different models quickly is critical to retain market shareTI has

50% market shares in special segment. Therefore standard bicycle in mature stage but trends

shows that which is moving from mature stage to decline stage because sale of standard bicycle s

are decreasing and TI has market shares is 22% in standard bicycle.

Bicycle



11) SWOT Analysis:

Strengths:

Largest cycle manufacturer of India (one in every 5 cycles came from TI).

Highly successful joint venture with Hercules cycles & Motor Co. of UK.

Largest distribution network (more than 1000dealer all over the India and warehouses in

more than 12 cities)

Provide quality products to its customers.

Strong Financial Support from Murugappa group.

Brand name awareness – Most cycle enthusiasts know the TI name.

TI is known as a high-performance leader through technology and in the bicycle industry.

Good relationships with customers/dealers and after sale services

The company advertised its cycles fairly extensively through the newspaper media.

Weaknesses:

Lack of distribution in rural areas and because of this reason people bought from urban

market.

Lack of research and development to reduce the cost and improve the quality.

High cost of production and follow the economy of scale.

TI & M sale representative did not visit cycle hire shops as a routine. They just went on

the large hire shops once in a while. So it was realized that competitors of TI cycles was

wooing the hire shops by gift and frequent visit on the shops and get discount for bulk

buying.

No new market tapping (North).



Opportunities:

TI need to be focuses on hire shops as new market in northern areas of India because hire

shop owners had to travel long distance to buy a cycle. Some of them travel as much as

40Km.

The study revealed that rural areas constituted an important segment of the market. As

one cycle used in urban areas 3 were used in rural areas.

Women and girls are the new markets for the company because the demands for ladies

cycles are increasing.

TI cycle has an opportunity to open more warehouse to meet the bust demand of

associated with the festivals like Diwali,puja,harvests and marriage seasons.

Threats:

The sharp increase in the prices of raw materials as steel and wages.

Competitors focus on its hire shops and purchase cycles in bulk and get discount.

Cost audit is not applicable on small sectors.

Rural affluence agriculturist would move from the bullock cart to the auto age without

passing through the cycle age.

More competitors entering the market.(China,Tiawan)

Changing in government polices successive tariff inquiries and asked to the

manufacturers to freeze the prices and also commission not exceed from 15%.



a) Internal Factor Evaluation (IFE) Matrix of TI

Key Internal Factors Weights Rating Weighted Score

Strengths

Largest cycle manufacturer of India 0.05 3 0.15

New technology 0.08 3 0.24

Retail and distribution network. 0.15 4 0.6

Highly successful joint venture. 0.08 4 0.32

After sale services. 0.05 3 0.15

Strong Financial Support from

Murugappa group.

0.10 4 0.40

Brand name awareness 0.07 3 0.21

Provide quality products to its

customers.

0.10 3 0.30

Weaknesses

Lack of research and development 0.05 2 0.10

High cost of production. 0.05 1 0.05

Lack of distribution in rural areas 0.15 2 0.3

No new market tapping (North). 0.05 1 0.05

TI representative did not visit hire

shops

0.05 2 0.10



Total 1.00 2.99

Interpretation:

IFE score of TI 2.99 which is internally good. TI has strong distribution network and

strong financial position financial position. TI concentrate on R & D to reduce the cost of

products.

b) EFE Matrix:

EFE Matrix

Opportunities

Weight Rating Weighted

score

TI need to be focuses on hire shops as new

market in northern areas of India.

0.05 3 0.15

Rural areas constituted an important

segment of the market

0.1 3 0.30

Women and girls are the new markets for

the company

0.15 3 0.45

Open more warehouse to meet the bust

demand of associated with the festivals

0.05 2 0.1

Threats

Sharp increase in the prices of raw

materials

0.05 3 0.45

More competitors entering the market.

(China,Tiawan)

0.15 3 0.45

Competitors focus on its hire shops 0.15 2 0.10



Cost audit is not applicable on small

sectors.

0.05 3 0.15

Rural move on auto age without passing

through the cycle age.

0.1 2 0.2

Changing in govt. policies 0.15 2 0.30

Total 1.00 2.65

Interpretation:

EFE score of 2.65 and weighted scores on above table indicate that the TI cycle has opportunities

because to succeed in the market by focusing on new market segments of women and girls. It is

opportunity because weighted score is .045 which is high from others variables. Another

opportunity that TI cycle of India has that rural area constitute an important segment of the

market and concentrate on this segment. As one cycle used in urban areas 3 were used in rural

areas. This is 2nd opportunity because in which weighted score is 0.30. The highest threats from

sharp increase in prices and competitors as china & Taiwan because in which weighted scores is

0.45 which is highest from others variables.



12) Competitor Analysis

Competitiveness of TI

TI Cycles faced competition from Hero Cycles Limited, Atlas Cycles Limited, and Avon Cycles

Ltd. All of them were located in the North. TI Cycles had established a name and reputation for

quality. Till the early seventies, being a dealer of Hercules cycles was a symbol of prestige. It

lost its exclusivity when competitors from the North entered the industry and built leadership

positions on the basis of lower price. (See the appendix for the evolution of the bicycle industry

in India.) In the sixties TI cycles was a price leader with a price of Rs.198 for BSA cycle and

Rs.172 for Hercules. Hero from Hero Cycles Limited and Atlas from Atlas Cycles Limited sold

their cycles for Rs.140 and Rs.150 respectively. In seventies TI Cycles sold its BSA for

Rs224.95 and Hercules for Rs.205.90. Hero Cycles and Atlas Cycles had increased their prices

to Rs.170.30 and Rs.181.60. In the early nineties TI had increased its prices to Rs.1475 and

Rs.1270. Hero Cycles and Atlas Cycles had increased their prices to Rs.1090 and Rs.1176.

Avon from Avon Cycles Limited sold its cycles at the lowest price of Rs.690.

In 1994-95 Hero held 47 per cent of the `standard’ market, followed by Atlas with 27 per cent.

TI cycles share was 12 percent while Avon’s share was 14 per cent. The specials segment,

constitute about 35% of the total cycle market was expected to grow by more than 20,000 per

month and TI Cycles lead this segment with 50 per cent market share followed by Hero Cycles

with 35 per cent and Atlas with 10 per cent.

An executive remarked:



Since our company had started the industry in India the general psychology was that the

leadership would continue owing to the technical sophistication of the product. Hero Cycles

intuitively learned to make the cycles on its own and offered value for money. It competed on

price and tapped the price conscious segment, which turned out to be the largest segment in the

country. We lost our leadership position in 1978 when our employees went on strike, and the

strike lasted for a year. This enabled competitors to strengthen their position. The company got

marginalized in north and was almost forced to vacate the northern market.

Now Major players in the domestic bicycle industry are Hero Cycles, TI, Hind,Avon & Atlas

with 35, 21% & 176% & 10% of share of volume respectively. Most cycles manufactured & sold

in India are in the low price bracket of Rs. 2,500 to 3000.

Competitors of TI cycle of India Ltd:

There are many competitors of TI cycle of India Ltd as given below

Hero cycle Ltd

Avon cycles industries

Atlas cycle industries

Hind cycle Ltd

Sen-Raleight industries

Everest cycles Ltd

Road master industries

But the major competitors’ are Hind cycle ltd, Atlas cycle of industries and Avon cycles

industries

Majors competitors Names Market shares

Hero cycles Ltd 35%



TI cycle of Ltd 21%

Hind cycle industry 15%

Atlas cycle industries 15%

Avon cycle industries 8%

Other 6%

(Article Source: http://EzineArticles.com/4392039)

Market shares

35%

21%15%

15%

8% 6% Hero

TI

Hind

Atlas

Avon

Other


SEN-RALEIGH

TI cycle

HERO EVEREST AVON RIM

HIND

ATLAS


13) Strategic Group:

Strategic group compromises of a set of business units or firms that have the same similar

strategies with same resources. For any industry, it is necessary to divide it into categories that

help to better understand the competitive environment.

.

Narrow Product line Breadth

Wide


SEN-RALEIGH TI cycle

Avon EVEREST RIM

Hind

Atlas

Hero


Therefore, TI cycle of India Ltd, Sen-Raleigh, Hero, Everest, Avon, Rim, Atlas, Hind all

companies have different products prices and product breath. So in which Atlas, TI cycle and

Hind have almost same so they are in a same strategic group. Therefore Hero, Everest, Avon and

Rim have also same strategies so we keep in a same strategic group but sen-raleigh has high

prices and narrow product breath so it is separate.

No # 2

Market shares

In second strategic group map TI, Hind and Atlas have close market shares and price so they are

in one strategic group.



14) Competitive Profile Matrix (CPM )

Critical Success

Factors

TI HIND ATLAS

Weights Ratings Score Ratings Score Ratings Score

Strong Distribution

network

0.15 4 0.60 3 0.45 3 0.45

Product Designs 0.1 3 0.30 3 0.30 2 0.20

Product Quality 0.1 3 0.30 2 0.20 3 0.30

Customer satisfaction

and loyalty

0.08 3 0.24 3 0.24 3 0.24

Market Share 0.1 3 0.30 3 0.30 2 0.20



Financials position 0.11 4 0.44 3 0.33 2 0.22

Technology up

grading

0.12 3 0.36 3 0.36 2 0.24

Price

Competitiveness

0.06 3 0.18 2 0.12 4 0.24

R&D 0.06 3 0.18 2 0.12 3 0.18

Brand image 0.12 3 0.36 2 0.24 2 0.24

1.00 3.26 2.66 2.51

INTERPRETATIONS of CPM:

CPM scores for TI Ltd showing aggressiveness as compared to the Hind, and Atlas.

TI Ltd Limited is number one company within the local environment; it is basically maintaining

market shares in cycle industry in special segment the following aspects:

Strong distribution network

Ti cycle of India Ltd focus on distribution network therefore it is a core competency

of the company. On the base of this quality company is satisfying the customer or

retailer demands.

Moreover, Hind at the 2nd number and leading industry in effective distribution and strong

financial position. Finally Atlas comes at number 3rd with leading position in persistence in

distribution and technology.



Section No.3

15) Value Chain of TI cycle of India

Support Activities:

Procurement department:

The basic task of procurement department is to buy raw material for processing. The basic raw

material used in the cycle industry is steel, stainless steel etc. They have 6 major vendors, from

whom they get the spare parts like mudguards and frames etc..

Technology development:



Information Technology

TI Cycles used computers for office related work like accounts finalization, budgeting and

planning, report preparations and the like. Computers were not installed on the shop floor.

Manufacturing Technology:

They used technology to join the various metal parts was called “dip brazing”. Also the new

technology was introduced in 1985 and a new technology called ‘charge brazing’ was adopted to

join the parts and change into triangle shapes.

Human resource management:

In 1994-95, TI cycles had total staff strength of 4016 people. The non-managerial staff strength

was 3742. TI cycle of India is continually focusing on hiring highly qualified professionals who

are young, energetic and motivated towards achieving tasks as challenges. The company has a

separate HRM department hiring the right employee for the right job. The qualification of the

product mangers and others are MBA and labour qualifications mostly inter and graduates. They

are likely offering higher salaries to their professionals based on their motivation towards

achieving tasks. They are emphasizing on a friendly working environment to their employees

that helps then to achieve their tasks in a positive way. Another task of HRM department is to

upgrade the skills of their employees through training programs. Therefore, they initiate training

programs for their employees to boost the sales of their employees to better perform their tasks.

General administration:

The basic task of the administration department is effective planning to attain the overall goals

and objectives of the company. Therefore the basic objective of TI cycle of India is to serve their

customers with high quality at a relatively lower cost. This can only be achieved through strong

integration amongst different departments and that can only be ensure through the administration

department.

Inbound logistics



TI cycle of India Ltd use pipes. , Steel, Stainless Steel, Forks, Mudguards, Rims, Tubes,

Tyres,saddle,lamp,stand,carrier,lock,bell,chain guard.

Operations:

Operations at the Ambattur Plant

The Ambattur unit began with the assembly of completely knocked down kits imported from the

collaborator. The indigenization of the components began with the commissioning of

components manufacturing units in 1954 at Ambattur itself. The management decided to make

all parts under one roof, as there were no reliable suppliers of parts in and around Madras. The

unit started by producing parts for standard black colored `Hercules’ bicycles. An executive

remarked, “In those days producing parts that fitted to each other was a commendable

engineering effort.”

The key parts were the frame and the fork made from steel tubes. To the frame and fork

assembly were fitted the various parts of the bicycles like tyres, mudguards, handles, brakes and

carriers. Fitting the frame and the fork together was the most critical operation. The technology

used to join the various metal parts was called “dip brazing”. The technology called for dipping

the parts to be joined in a bath of molten brass and allowing the molten metal to enter the gap

between two parts and solidify. This was a very tough and hazardous operation. It led to

wastage by way of excess deposit of brass on the parts. The excess metal was recovered by

dipping the joined parts in zinc acid. This operation released zinc fumes and caused pollution. It

also restricted the shape of the frame to a `triangle’. This technology was changed in 1985 and a

new technology called ‘charge brazing’ was adopted to join the parts. In this technology fine

particles of brass were charged into the cavities of the two parts and heated at high temperature.

This saved the metal but consumed more energy. This technology was replaced by welding. The

parts were welded together using welding rods. Welding created the possibilities of alternative

shapes and facilitated the introduction of luxury and sports bikes.



The frames and fork assembly was painted in the painting shop. Earlier the parts were dipped in

a paint bath. This was discarded in favour of spray painting in which fine particles of paint were

deposited on the parts by a spray gun.

Outbound logistics

Initially fully assembled bikes were sent to the market. To save the cost of transportation and

improve logistics, the format was changed to sending ready to assemble kits to the dealers. The

components were put in a cardboard box and dispatched to the dealers by truck. The dealers

received the cycles in completely knocked down (CKD) conditions in cases. Each case

contained 5, 6, 10 or 16 cycles. The dealer assembled the cycles before sale. The dealers

assembled the parts into full bikes at their premise. The technicians of the dealers were trained

by the dealer himself.

Marketing and sales

The basic task of marketing department is to market their products to the local and the

international market to their prospectus customers to boost their overall sales. Company marketer

focus to the three segment as employed who use cycle, white collar worker, and the affluent

youth. Through marketing effort BSA SLR models which sold about 300000cycles a years was

good. They have a very strong sales force that is competent and motivated towards achieving the

target. Company extensively advertise in newspaper and sponsor to the sports player and do



internet marketing and give free gift to its customers for creating customer loyalty.

Services:

They offer after sales services to their customers to better cope with their further demand and

increase their overall revenues. This also helps in customer satisfaction about their product and

customer expectations from the product.

TI cycle of India Ltd give warranty and after sale services to its customers as mention given

below

Everything we make and sell is guaranteed to be free of manufacturer's defects for the time

period specified from the original date of purchase. This warranty applies only to frames and

components that have been subjected to ordinary stresses of use or component type purchased

(mountain, road, cyclocross, track, touring or BMX) and does not apply to frames or components

sold to or used regularly by someone other than the person for whom the frame or component

was built. This warranty does not cover alteration or failure due to accident. Ti Cycles liability

for breach of warranty is limited to repair or replacement of the frame or component at the sole

discretion of Ti Cycles. Ti Cycles disclaims all other express or implied warranties as provided

in this section, including warranties of fitness for a particular purpose. This warranty is extended

to the original owner of the frame or component and is non-transferrable. In all cases, proof of

original purchase is required. Production Components - 1 year. Custom Components - 2 years.



Production Frames - 2 years. Custom Steel Frames - 5 years. Custom Titanium Frames - 10

years.

Value Chain Activity:

Value-chain

Activity

Yes/ no How Does TI cycle of India Create Value For

Customers

Primary:

Inbound

logistics

Yes Mainly once in a year because they purchases in bulk

for cater their yearly demand.

Operations Yes Through traditional and latest automated machinery

& quality control check.

Outbound

logistics

Yes Shipment in large lot to minimize cost and assure

quick delivery.

Marketing &

sales

Yes Focusing on good retailer and customer relationship

to boost the sales

Service Yes Provide warranty and after sale services to its

customers and Emphasize on customer feedback to

improve quality.

Support:

Procurement Yes Buy good quality steel that fits their standards from

selected suppliers

Technology

development

Yes Large emphasize on quality than to quantity

Human

resource

management

Yes Friendly environment with emphasize on quality

work.

General

administration

Yes Effective planning with ability to coordinate and

integrate activities across the system.



Resources, activities and relationships that enable TI to achieve a sustainable competitive

advantage?

Resource/Activity Is it Valuable? Is it Rare? Are there few

substitutes?

Is it difficult to

make?

Inbound logistics Yes No No Yes

Operations Yes No No Yes

Outbound logistics Yes No NO Yes

Marketing & Sales Yes Yes Yes Yes

Service Yes No No Yes

Procurement Yes No Yes Yes

Technology

development

Yes NO yes No

HRM Yes Yes No Yes

General admin. Yes No Yes Yes



VROI Analysis:

(1 is low and 5 is high)

KSF Value Rare limitability Substitute Competitive

advantage

Brand image 4 4 5 4 17/20=0.85

Technology 5 4 3 4 16/20=0.80

Continuous innovation

5 3 3 4 15/20=0.75

R & D 3 3 3 3 12/20=0.60

Product

quality &

design

4 3 2 2 12/20=0.60

Distribution

network

5 4 4 4 17/20=0.85

Financial

position

5 3 4 5 17/20=0.85

Core Competencies:

Murugappa Family’s has experience, knowledge, values, decision making power. The core

competences and competitive advantage of TI is strong distribution network strong financial

position and good brand image. Also TI has good score in innovation and technology.

TII capabilities:

Expertise in Engineering & Electroplating



Competencies in Technical Sophistication of the Product

Process Efficiencies

Section No.4

16) McGahan Framework Model BCG Matrix

As per McMahan Framework, TI is not facing serious threat of obsolescence of core assets and

core activities either. So TI falls in Progressive change. And it is cash cow. On the other hand TI

has opportunity to go into auto industry because by using same assets and activities can produce

motor bikes.

Star ?

Cash Cow Dog


Core Activities

Cor

e A

sset

s

Threatened Not Threatened

Thr

eat

Radical change Creative change

Not

Intermediating

change

Progressive

change


17) Ansoff Model:

Chennai,

March 24,

2011Murugappa Group, announced the launch of India’s first indigenously manufactured carbon frame

bicycle series with the brand name ‘Montra’.Therefore TI is doing product development so it exist in 2nd

quadrant of new products and existing market. TI brands as BSA Hercules and Philips exists in 1 st

quadrant existing product and existing market. TI has opportunity t go into new market as rural market

because they have only stores in urban areas people of rural areas come in cities for purchasing bicycle.

18) Grand strategy matrix:

Rapid Market Growth

Quadrant II Quadrant I

Market development Market development Market penetration Market penetrationProduct development Product development Horizontal integration Forward integration

Montra bicycle:

BSA,Hercules,Philips



Divestiture Backward integrationLiquidation Horizontal integration Concentric diversification

Weak competitive Strong competitive Position Position

Quadrant III Quadrant IV

Retrenchment Concentric diversificationConcentric diversification Horizontal diversificationHorizontal diversification Conglomerate diversification Conglomerate diversification Joint ventureLiquidation

Interpretation:

Rapid Market Growth

The specials segment, constitute about 35% of the total cycle market was expected to grow by

more than 20,000 per month and TI Cycles lead this segment with 50 per cent market share

followed by Hero Cycles with 35 per cent and Atlas with 10 per cent.

TI cycle of India has strong competitive position in the market because they have 3.23 score in CPM which is high as compare to its competitors’ so market is growing and TI cycle has strong competitive position so that why TI lies in I quadrant. According to Grand strategy matrix suggested strategies for 1st quadrant are

Market development Market penetration, Product development, Backward integration, Forward integration, Horizontal integration Related diversification



19) Diversification strategy:

TI investment group consists of TI cycle; Tube products of India Ltd, TI diamond Chain, Miller

and the Saddles of India all of which are manufacturing companies. So TI group is making tubes,

saddles, chains for cycles and motor cycle therefore it is using related diversification strategy by

using the almost same value chain.

20) Integration strategy:

TI is using backward and forward integration strategy. TI is manufacturing cycle parts for itself

for example Tube products of India is making tube for cycle and motor cycle,TI dimond chain

Ltd also is making chains for cycle and motor cycle so TI cycle taking material from its

companies for making cycle.

TI is also using forward integration for example it is distributing products itself through TI M

sales Ltd distribute TI products with branches and district offices all over India

Horizontal strategic alliance:

TI investment group had horizontal strategic alliance with UK companies as TI metal sections

were formed with collaborations with BARHINGAM of Tube Investment ltd UK. The TI miller

ltd was established in 1960 with H Millar & co. of UK. The Wright saddles of India made

collaboration in 1962 with JB Brooks & co ltd UK. So all these alliances were made with related

UK companies that had same business and value chain.

21) Generic Strategy:



The TI is using “Differentiation Strategy” on the base of quality and price. TI more focuses on

quality and don’t compromise on quality because TI cycle charge high prices from its customers

but on the other hand competitors are using penetrating strategy to capture the market. Hero gain

market shares on the base of penetrating strategy.

Market of standard cycle has declined and special cycle market is growing so this time TI needs

to use low cost strategy for standard cycle by changing its style and design to attract the

customers.

On the other hand TI use same differentiation strategy in special cycle segment because this

market segment is growing TI already has 50% market shares in special cycle segment. TI can

charge high price on the base of quality and different styles.

22)IE Matrix.

The IFE Total Weighted Scores

4.0 3.0 2.0 1.0



EFE total score

Strategy for different quadrants

Growth and Build (I, II, IV ) Hold and Maintain (III, V, VII ) Harvest or Divest ( VI, VIII, IX )

IFE score 2.9 and EFE score is 2.65 which means that the company comes in 5 st quadrant that is in (III, V, VII) so the company should go for the hold and maintain strategies that are market penetration and product development, market development

23) Selecting Strategy:


Strong

(3.0-4.0)

Average

(2.0-2.99)

Weak

(1.0-1.99)

High

3.0-4.0

3.0

I II III

Medium

2.0-2.99

2.0

IV V

TI

VI

Low

1.0-1.99

1.0

VII VIII IX


Alternative Strategies

Anita Modle

Ansoff Modle

IE Matrix GRAND Mtrix

TOTAL

Forward Integration

2

Backward Integration

2

Horizontal Integration

2

Market Penetration

4

Market Development

2

Product Development

3

Related Diversification

1

Unrelated Diversification

Retrenchment

Divestiture

Liquidation

Interpretation:

From the above calculation that the highest score in market penetration and product development

which is 4 and 3 so feasible for TI is to concentrate more on penetrating and market development



strategy. If we see the original condition of the cycle industry that the competitors of TI as hero

and Hind use penetrating strategy by offering low cost concentrate on and product development

so they gain more market shares in current situation now hero is the market leader with 35%

market shares. Therefore TI also focuses on market penetrating strategy by offering low cot

product with good quality. TI has technology to produce low cost bicycles Also concentrate on

product development and introduce new designs, stylish bicycles to tap the market in this way TI

again can become the market leader.

24) Distribution Network of TI cycle of India Ltd

TI has strong distribution network all over the India (1,500 direct dealers under whom there are

over 10,000 indirect outlets across the country. About 600 of these are trained outlets, including

180 exclusive BSA-GO stores and warehouses in more than 12 cities). The company expects that

the number of retail outlets to increase to 700 and exclusive stores to 250 by the end of the next

financial year.

TI has extensive distribution channel and distribute its products through multiple channels as given below

Company (TI) Authorized dealers

Retailers End consumers

Company (TI) Unauthorized dealers

Retailers End consumers

Company (TI) wear house

End consumers



25) Future Strategic Options

Market Development ( Big opportunity)

The TI should consider following future strategies for the market development.

a) Northern markets should be focused for broadening sales.

b) Offering cycles to Indian Postal Services.

c) Offering cycles and tricycles to Ice Cream vendors, Home delivery services restaurants,

Tea Companies and Soft Drink Companies.

d) Offer cycles to courier companies.

e) Offering cycles for athletes.

Product Development

a) The TI should develop an advanced version of standard cycles for rural area by

adding shock absorbers to carry heavy load with ease.

b) Light and folding cycles should be developed the urban areas to avoid traffic

congestion and parking problems.

a) A purpose built cycle with wide carrier for lunch providers in the urban areas.

b) Purpose built cycles for house wives with added carriers.

Section No.5

26) Financial Analysis:



Profit and loss account of TI (Lakhs)

1965 1966 1967 1968 1969 1970 net sales 845.18 813.9 1002.85 981.87 1163.27 1310.96less cost of good soldstock consume 388.94 398.12 473.63 522.53 615.56 709.12wages and salaries 104.09 109.7 133.27 123.33 148.52 170.88net mfg.expences 123.74 130.26 171.65 168.29 202.72 223.17total CGS 625.65 638.08 776.55 823.15 966.8 1103.17

gross profit 219.53 175.82 226.3 158.72 196.47 207.79less operating expensesadmn. &gen.expenses 56.82 55.94 66.77 80.33 88.05 105.17Interesty 18.19 27.05 38.49 41.5 35.31 39.32Depreciation 33.24 34.95 40.75 44.99 45.5 51.41

operating netprofit/loss 1118.28 57.89 8.29 -8.1 27.61 11.89add non operating 17.11 29 36.88 41.56 54.52 89.87

net profit 128.39 86.96 117.17 33.46 82.13 101.76less provision of taxation 64 40 49.92 1.44 26.34 41.29

net profit after tax 64.39 46.96 67.22 32.02 55.79 60.4Add. transfer from previous reserve 6.95 2.75surplus b/f 0.04 0.02 0.01 0.05 0.02 0.02

available for appropriation 64.43 46.98 74.18 34.82 55.81 60.49less statutory dv.reb.reserve 2.6 9.77 31.24 4.08 5.05 7.45

disposable profit 61.77 37.21 42.95 30.02 50.77 53.04less dividends 31.25 31.25 37.5 30 37.50 39.71transfer to reserve 30.5 5.95 5.4 13.25 13.32total transfer 61.75 35.2 42.9 30 50.75 53.03

balance being surface 0.02 0.01 0.05 0.02 k 0.02

INTERPRETATIONIncome statement shows that TI sales was increasing from 1965 to 1970 and



the same trend in CGS.There were fluctuation in NP in those years.

Horizontal Analysis(% change In)

1965 1966 1967 1968 1969 1970

(Sale)100% -4% 23% -2% 18% 13%

100% 2% 19% 10% 18% 15%

100% 5% 21% -7% 20% 15%

100% 5% 32% -2% 20% 10%

CGS)100% 2% 22% 6% 17% 14%

100% -20% 29% -30% 24% 6%

100% -2% 19% 20% 10% 19%

100% 49% 42% 8% -15% 11%

100% 5% 17% 10% 1% 13%

100% -95% -86% -198% -441% -57%

100% 69% 27% 13% 31% 65%

100% -32% 35% -71% 145% 24%



100% -38% 25% -97% 1729% 57%

(N.P)100% -27% 43% -52% 74% 8%

100% -50% -50% 400% -60% 0%

100% -27% 58% -53% 60% 8%

100% 276% 220% -87% 24% 48%

100% -40% 15% -30% 69% 4%

100% 0% 20% -20% 25% 6%

100% -80% -9% -100% 0% 1%

100% -43% 22% -30% 69% 4%

100% -50% 400% -60% 0% 0%

Vertical Analysis of TI(% of sale)

1965 1966 1967 1968 1969 1970

100% 100% 100% 100% 100% 100%



46% 49% 47% 53% 53% 54%

12% 13% 13% 13% 13% 13%

15% 16% 17% 17% 17% 17%

(CGS)74% 78% 77% 84% 83% 84%

26% 22% 23% 16% 17% 16%

7% 7% 7% 8% 8% 8%

2% 3% 4% 4% 3% 3%

4% 4% 4% 5% 4% 4%

132% 7% 1% -1% 2% 1%

2% 4% 4% 4% 5% 7%

15% 11% 12% 3% 7% 8%

8% 5% 5% 0% 2% 3%

Net profit 8% 6% 7% 3% 5% 5%

0% 0% 1% 0% 0% 0%

0% 0% 0% 0% 0% 0%

8% 6% 7% 4% 5% 5%

0% 1% 3% 0% 0% 1%



7% 5% 4% 3% 4% 4%

4% 4% 4% 3% 3% 3%

4% 1% 1% 0% 1% 1%

7% 4% 4% 3% 4% 4%

Horizontal

Analysis(% change

In) hind atlas sen.raleigh

1968 1969 1970 1968 1969 1970 1968 1969 1970(Sale)100

% 227% 163% 100% 4% 12% 100% 8% -9%100%100% 86% 219% 100% 8% 16% 100% 0% 7%100% 0% 130% 3% 8% 100% 4% 9%100% 0% 323% 100% -3% 21% 100% -15% -1%

(CGS)100% 291% 205% 100% 8% 15% 100% -1% 7%

100% 110% 10% 100% -14% -5% 100% -15% -19%100% 290% 15% 100% 16% 4% 100% 7% 11%100% 107% 244% 100% 0% 0% 100% 0% 0%100% 0% 321% 100% 30% 1% 100% 6% 21%100% 14% 8% 100% 5% -2% 100% 2% -7%100% 181% 69% 100% 15% 3% 100% 6% 9%

100% -78% -1969% 100% -53% -30% 100% -124% -838%100% 85% 681% 100% 136% 51% 100% 52% 12%

100% -44% -155% 100% -27% 6% 100% -82% -639%



100% -92% -100% 100% -31% -18% 100% -17% -100%(N.P)100

% 26% -160% -1014% -17% 58% 10% -95% -2360%

Vertical Analysis(% of sale) hind atlas sen.raleigh

1968 1969 1970 1968 1969 1970 1968 1969 1970(Sale)100

% 100% 100% 100% 100% 100% 100% 100% 100%

66% 38% 46% 59% 61% 64% 54% 50% 59%0% 28% 24% 14% 14% 13% 17% 16% 19%0% 13% 21% 9% 9% 9% 11% 9% 9%

(CGS)66% 79% 91% 80% 84% 86% 82% 75% 87%

33% 21% 9% 20% 16% 14% 18% 14% 13%11% 13% 6% 9% 10% 9% 9% 9% 11%

2% 1% 1% 0% 0% 0% 0% 0% 0%0% 3% 5% 1% 1% 1% 3% 3% 4%

12% 4% 2% 1% 1% 1% 3% 3% 3%24% 21% 13% 11% 12% 11% 15% 15% 18%

9% 1% -4% 8% 4% 2% 3% -1% 5%2% 1% 4% 1% 3% 4% 1% 1% 2%



12% 2% 0% 10% 7% 7% 4% 1% -4%7% 0% 0% 7% 5% 3% 1% 0% 0%

(Net profit) 5% 2% 0% 3% 2% 3% 3% 0% -4%

Hind %sale was fluctuating in three consecutive years and the same trend seen in Raleigh but %

continuous increasing trend in Atals which is 59%,61%,64%.Onther hand overhead cost also

increasing from 1968 to 1970.The net profit % is high of atlas as compare to Hind and Religh.

Ratios of TI cycle:

RATIO ANALYSIS (FROMM1965 TO 1970)

CURRENT 3.28 0.99 1.04 1.41 1.45 1.53 1.14 1.25 1.2QUICK 0.32 0.40 0.44 0.81 0.68 0.73 0.40 0.41 0.47DEBT EQUITY

0 0 0 0.23 0.17 0.14 0.24 0.39 0.44

OP.P. M 9% 0% -5% 9% 4% 2% 3% -1% -4%ASSET TURNOVER

61% 51% 86% 243% 244% 252% 109% 109% 109%

NP.TO N.SALE

5% 2% -1% 3% 2% 3% 2% 0% -4%

N.P TO T.ASSETS

3% 1% 0% 7% 5% 8% 4% 0% -4%

D.P.E.C 0% 6% 0% 13% 13% 13% 7% 0% 0%DU PONT(ROE)

4% 5% -2% 36% 24% 39% 16% 1% -18%



Ratio analysis From (2008 to 2009)

Current Ratio:

Liquid or Liquidity or Acid Test Ratio:


Year 2009 2008

Current assets

3337063765

3226827618

Current liabilities

1736638728

1942587980

Current Ratio

1.921 1.661

Year 2009 2008

Liquid assets

2559482488

2119891277

Current liabilities

1736638728

1942587980

Acid test Ratio

1.47 1.091


Absolute Liquid Ratio

(Annual Report:http://www.tiindia.com/)

TI follows the Evolutionary change:

TI follows the Kaizen theory and believes on evolutionary change, because it was a continuous

change that requires time to penetrate into the market. Penetration is not an easy task therefore it

will be done through slowly penetrating into the market. Through evolutionary change, TI

generate more revenuers by adding value as latest technology and made joint venture with UK

companies for sharing of technology and distribution network. Murugappa group continuously

related diversify as TI cycle in 1949,tube investment of India Ltd established in 1957.TI diamond

chain was made in 1959.TI metal was formed with collaboration of Birmingham Ltd in 1965.


Year 2009 2008

Absolute liquid assets

152820715

151600603

Current liabilities

1736638728

1942587980

Acid test Ratio

0.087 0.078

http://www.tiindia.com/


TI miller Ltd was established in 1960 and TI saddle in 1962.so Murugappa group take decision

on current and suitable situation slowly.

28) Conclusion:

After doing the whole project that TI has strong back of Murugappa group.Murguappa has

29 companies from which 12 companies are listed. I cycle is also financially strong as we

income statement shows that sale of TI is continuously increase from 1966 to 1970.Now

the TI is market leader in special bicycle with 50% market shares. The shares in standard

bicycle is 21%.TI needs to more concentrate on standard segment because the TI

performance is not good. According to the TI spokes person the that we are just more

focus on special segments because it is fast growing market but standard cycle market is

going down. Now TI use low cost strategy standard cycle to capture the market shares

as Hero cycle Ltd.TI goes in to rural areas it is a big opportunity for TI because in rural

areas people have 3 bicycle and in urban areas on 0ne person bicycle from four person.

29) References:

http://www.herocycles.com/global.php TII Annual Report, 2005 http://en.wikipedia.org/wiki/Transport_in_India#Bicycles Article: “Bicycle industry eyes urban market” PTI, Nov 1, 2007, 01.07am IST http://articles.economictimes.indiatimes.com/2009-03-29/news/28461898_1_bicycle-industry-

shiv-inder-singh-firefox-bikes


http://articles.economictimes.indiatimes.com/2009-03-29/news/28461898_1_bicycle-industry-shiv-inder-singh-firefox-bikes

http://articles.economictimes.indiatimes.com/2009-03-29/news/28461898_1_bicycle-industry-shiv-inder-singh-firefox-bikes

http://en.wikipedia.org/wiki/Transport_in_India#Bicycles

http://www.herocycles.com/global.php


http://www.indianbicycleexporters.com/ http://en.wikipedia.org/wiki/Phillips_Cycles

http://www.tiindia.com/article/divisions/12 Case Study “TI Cycles: Corporate Strategy (A), by Professor Mukund R. Dixit and Professor

Abhinandan K. Jain, Copyright 2002 by the Indian Institute of Management, Ahmedabad.”

30) Appendix:

The History of Bicycle Industry

Innovation Year Country Details


http://www.indianbicycleexporters.com/


1817 German

y

Baron Von Drais invents the "running machine" or

Laufmaschine. Patented the following year. Known in

various forms as :

Draisine, Draisienne, Velocipede. English version was

the Hobby Horse (Denis Johnson). All have two, in-line

wheels and the ability to steer.

Hand Drive 1821 England Louis Gompertz adds a hand-driven, ratchet mechanism

to the front wheel of a Hobby Horse but the innovation,

as with Drais' was never really followed up.

1839-

1840

Scotland Kirkpatrick Macmillan is traditionally credited with a

machine in which power was supplied to the back wheel

via rods connected to treadle-type pedals. Thomas

McCall marketed copies; an 1845 version is in the

Dumfries Museum. It is questionable whether significant

progress resulted from either.

Rear-Wheel-

Drive Bicycle

1843 France Alexandre Lefebvre is credited with a rear-drive

machine; he took it to America twenty years later and it

still exists in the "History San Jose"

museum (the earliest extant bicycle?).

Pneumatic Tire 1845 England R. W. Thompson invents the pneumatic tire but with no

commercial follow-up.

Treadle Drive 1847 Scotland Gavin Dalzell builds a two-wheeled hobbyhorse with a

treadle-drive, possibly copied from the Macmillan

design.

Crank-Driven 1851 England Willard Sawyer exhibits his four-wheeled, crank-driven



4-Wheeler vehicle at the Great Exhibition and subsequently becomes

established as a Velocipede manufacturer.

Boneshaker

Bicycle

1864 France J. Townsend Trench documents his purchase of a

velocipede from the Michaux family. Possibly the first

record of a "production" front wheel, pedal-driven

bicycle (but note that it was not presented untill 1895).

This style became known as the "Boneshaker". Historians

still debate the claim of Pierre Lallement that he had

previously invented the first pedal-driven machine.

1866 USA Lallement, now in the USA, gets the backing of an

investor, James Carroll, and their patent application is

granted; probably the world's first public record of the

pedal-powered two-wheeler.

1870 England James Starley products the "Ariel" High Wheeler (aka

"Ordinary" or "Penny Farthing"). Later versions had front

wheel sizes of upto 5 feet.

Wire-Spoked

Wheel

1870 England W. H. J. Grout patents the radially spoked, nipple

adjusted bicycle wheel (unlike prior load-bearing

wheels). Some credit Meyer with this design two years

previosly.

Ball Bearings 1872 German Friedrich Fischer first mass-produces steel ball bearings,

patented by Jules Suriray in 1869.

Caliper Brake 1876 England Browett and Harrison patent an early caliper brake.

Differential

Gear

1877 England James Starley patent a differential gear; probably the first

for a bicycle but the principle was not new.



Internal Hub

Gearings

1878 England Scott and Phillott patent the first practicable epicyclic

change-speed gear fitted into the hub of a front-driving

bicycle.

Folding

Highwheeler

1878 England Grout patents a folding High Wheeler, the first "portable"

bicycle.

1879 England Henry J. Lawson patents a rear wheel, chain-driven

safety bicycle, the "Bicyclette" (his earlier models were

lever driven).

Chain 1880 England Thomas Humber adapts the block chain for use with his

range of bicycles.

Safety Bicycle 1885 England John Kemp Starley (James Starley's nephew) markets the

revolutionary Safety Bicycle (the "Rover") with a

chain/rear-sprocket drive and tangentially-spoked, similar

sized wheels. Includes many of the major features of

modern bicycles.

Seamless

Tubing

1886 German

y

The Mannessman brothers are credited with the invention

of the process to manufacture seamless steel tubing.

1888 Scotland Commercial development of the pneumatic bicycle tire

by Dr. John Boyd Dunlop.

1890

s

France Cycles Aluminium becomes one of the earliest

manufacturers of an aluminium bicycle.

Derailleur 1896 England E. H. Hodgkinson patents a 3-speed Gradient gear, a pre-

cursor of the modern derailleur.

Internal Hub

Gearing

1896 England William Reilly patents a two-speed hub gear. His later 3-

speed version was put into production by Sturmey Archer



in 1902.

Butted Frame

Tubes

1897 England Alfred M. Reynolds takes out a patent on "butted" steel

bicycle tubes.

Freewheel 1898 German

y

First major commercialization of the freewheel by Ernst

Sachs. William Van Anden had obtained the first

freewheel patent in 1869.

1910 France The first, easy-to-use derailleur is invented by Paul de

Vivie (Velocio) that shifted among four gears at the

pedals.

Recumbent 1914 France Peugeot markets their production recumbent bicycle.

Charles Challand had exhibited his "Horizontal

Bicyclette Noemale" in Geneva in 1895.

Dual-

Suspension

Mountain Bike

1915 Italy Bianchi produced a folding bicycle for the Italian Army

with telescoping seatstays, a leaf spring at the bottom

bracket, a spring fork and large profile pneumatic tires.

Bianchi now calls it the first dual suspension mountain

bike! There are earlier versions of military folding

bicycles.

1930 Italy Tullio Campagnolo intriduces the bicycles hub quick-

release.

Recumbent 1932 France Charles Mochet designs the Velocar, a recumbent bicycle

on which Francois Faure breaks both the mile and

kilometer records.

1933-

1934

USA Introduction by Schwinn of the balloon tire and

"streamlined" bikes which leads to rugged bikes that can



take the abuse of teenage boys and which set a forty-year

trend.

Mountain Bike 1938 USA Schwinn markets the "Fore-wheel" brake, "Cantilever

Frame" and the "Spring Fork". Resulted in what was to

be the Grandfather of today's mountain bikes.

Folding Bicycle 1939 France A. J. Marcelin petents "Le Petit Bi", a 16-inch wheeled

folding bicycle, remarkably similar to the Moulton and

Bickerton of later years.

Shifter 1946 Italy Campagnolo markets the dual-rod "Cambio Corsa" gear

shifter (over ten years after the prototype) widely used for

atleast a decade.

Index Shifting 1949 England The Hercules Herailleur is launched; a rear derailleur

with indexed shift levers. Marketed for five years.

Derailleur 1951 Italy Introduction of Campagnolo's modern Gran Sport

derailleur.

1962 England Launch of the Moulton small-wheeled bicycle with

separately sprung suspension and custom tires. Competed

successfully in time trials and track pursuit events.

String-Ray 1963 USA Schwinn introduces the Sting-Ray that subsequently

helped launch the BMX craze.

Rear Derailleur 1964 Japan The Sun Tour Grand Prix is marketed as the first slant

parallelogram derailleur, a design that has held up till the

present day.

Index Shifting 1969 Japan Sun Tour launch their indexed shift lever, the Five-Speed

Click, and a combined freewheel-plus-rear hub, the Unit



Hub. Neither of them found a market, and were

abandoned. Bayliss Wiley in England has also

experimented with unit hubs as far back as 1938.

1970 England The aluminium Bickerton portable small-wheeler is

developed. Followed by the successful Brompton in 1976

and Dahon in 1980.

Bmx (Bicycle

Motocross)

1970 USA The movie On Any Sunday by Bruce Brown debuts.

Although it is a motorcycle documentary, a brief scene

during the beginning of the movie shows kids on Sting-

Ray bikes emulating motocross. This small spark

eventually evolves into full-fledged, organized BMX

racing by 1974.

Mass-Produced

Titanium

Frame/Fork

1974 USA Teledyne markets the first titanium bike that was

produced in any quantity (Speedwell of England had

some Ti production frames as far back as the 1960s,

welded by Lamborghini!) Litespeed brought titanium

frames to a broader market in the 1980s.

1975 USA The first carbon-tubed, metal lugged frame appears: the

Exxon Graftek. Suffered from frequent frame failure. The

technology was later perfected by Look, Trek and others.

Aluminium

Frames/Bikes

1975 USA Gary Klein displays his welded and heat-treated

aluminium frames at the International Bike show. Alan

(Italy) and Vitus (France) were producing their lugged

aluminium frames arround the same time. Cannondale

launch their "Aluminium for the Masses" in 1983.

1978 USA Fomac Corporation designs the Avatar recumbent. It is



one of the many styles that constituted the 1980s

renaissance of recumbents which included Lightning

Cycle winning the HPV-RAAM relay and Easy Racers

breaking the 65 mph barrier.

High-Quality

Folding

Clincher Tire

1978 USA Specialized introduce the first high-quality foldablr

clincher tire (the Turbo) which launches the demise of the

tubular.

Aerodynamic

Road/Track

Bicycles

1980 East

German

y

Introduction of aerodynamic bicycles with a stable

construction. Culminated in the American "Super Bike"

at the 1984 Los Angeles Olympics.

Mass-Produced

Mountain Bike

1981 USA The specialized Stumpjumper mountain bike is launched

nationwide, capitalizing on the Marin Country vogue

inspired by Calofornian icons, Gary Fisher, Joe Breeze,

Tom Richey et al. (all of whom also produced earlier

mountain bikes).

Electronic

Cycle

Computer

1983 USA Avocet launch the first electronic cyclometer (bike

computer).

Moulton 1983 England Moulton launches his second generation of "space-frame"

small-wheeled bicycles.

Clipless Pedals 1984 France LOOK markets their clipless pedal (following on an

earlier track model launched by Cinelli in 1970; the

"Death Cleats", no automatic release).

Index Shifting 1985 Japan Shimano introduces SIS indexed shifting (learning from

their inferior product, the Positron, from 1977).



1986 USA Kestrel introduces their production non-lugged, carbon

fiber frame and Trek market their first lugged carbon

frame.

Suspended

Mountain Bike

1987 USA Paul Turner demonstrates a full suspension bicycle with

front and rear shocks. Eventually becomes a partner in

Rock Shox. Diversified the sport of off-road biking.

Aero

Handlebars

1987 USA Scott USA manufactures the first modern aerobars,

originally the brainchild of Boone Lennon. Pete Pensyres

had earlier used his own clip-on style bars in setting his

RAAM record.

High-

Performance

Folding Bike

1989 USA Hanz Scholz designs the Bike Friday "World Tourist". A

reasonably compact folding bicycle that matches the

performance of conventional touring machines.

Integrated

Brake/Shift

Levers

1990 Japan Shimano introduces integrated brake/gear levers.

Electric

Derailleurs

1993 France Mavic markets their ZAP electronic shifting. Ceases

production in 2001. Possible future follow-up by

Campangnolo. Browning Research had invented a

prototype electronic system in 1974.

Hydraulic Disc

Brake

1994 USA Sachs (SRAM) introduces Power Disc, the first mass-

produced hydraulic disc brake system.

1998 German

y

Rohloff develops the Speedhub, 14 equally-spaced hub

gears which are operated by a twist-grip with no

overlapping ratios and a gear range as wide as a 27-speed



derailleur system.

30-Speed

Derailleur

Drivetrain

2002 Italy Champagnolo offers a 30-speed derailleur drivetrain with

the Record 3-x-10a adrivetrain.

(http://www.herocycles.com/global.php)


http://www.herocycles.com/global.php


Diversification In To

Two wheeler Industry ( Motor cycle)

Tyre Industry

Logistics and transportation Industry


Documents

BSP Final Project New