New Entrants:
New entrants face a moderate barrier in penetrating the market since it is consolidated by few and strong suppliers. As the market size of the two wheelers industry is big and requires a strong footprint with high capital investment, new entrants find it difficult to fit themselves among the market front-runners. Thus TVS is not susceptible to threats from the new entrants to the industry.
TVS Motor's market share
The market share of all Two-wheeler is affected by various inflation, rise in petrol price and interest rate. Automobile industry had unexpected growth around 15% is due supported by various external factor like urban development, developed public transportation, financial purchases and Two-wheeler penetration into various region. Hero Honda dominated in the market by 55% (2011-2012) in last five quarters.
Market Share with competitors April - Feb. 2011
Source: TVS Motor Company
The company achieved the annual sales of two million as growth of 32% by selling 1.52 million units last year. The company made their growth in all three segment as Executive as 26%, Economy as 12% and Premium as 38% for the year of 2011. When compared with 2010, there is increased in sale of fixed asset in 2011. On 2011 fiscal year TVS Motors acquires assets increasing the liquidatory assets to 1.70 crores. Due to increase in R&D expenses decrease in sales and investment in manufacturing sector increased the company's liabilities to 950.49 crores. Company's capital expenditure was 91.63 crores in year 2011. In the year 2011 current ratio stands at 0.17 while the debt ratio is at 0.98%. The cash ratio is 1.4 times than previous as the number proves that the company's stable but if the ratios are not improved over years the company's long time sustainability will be at jeopardy.
Operational analysis
SWOT Analysis
Strengths:
TVS is an International player with brand equity and plays important role in Indian two wheeler markets.
R&D department team gives them a leading edge in markets technology development covering various segments like moped, motor cycle and scooter. These differences make the products attractive for people of all ages.
TVS has a wide spread of distribution network and numerous service centers covering all regions of its service areas which provide a unique service to its customers.
TVS groups have 40,000 knowledgeable, experienced and skilled employees providing service to more than 15 million customers in India.
advertising with brand ambassadors and attracting people with more promotional activities.
Products with low price, high fuel economy, eco friendly less emission and unique design with its competitors.
Weaknesses:
Despite exporting products to various countries worldwide, it's not a globally recognizable brand yet.
Lack of competitive premium bikes to attract the riders in the market. Most of the R&D resources used in economy and executive products shading the premium segment.
Opportunities:
One of the fastest growing automobile providers in India.
Export is limited and the international market is untouched which gives a versatile opportunity to explore and establish international market.
More movement in higher-end model and more young
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