ENVIRONMENTAL FACTOR AFFECTING ON APOLLO TYRE DEMAND

1. APOLLO TYRES : Learning from Environmental Scanning Ankurpatel (MBA-IB) Amity International Business School

2. Purpose of the Case Study How to track and identify opportunities and threats in the macro-environment. How to assess the importance of demographic, economic, political and technological factors. How to sustain, survive and grow in the changing business milieu.

3. Introduction One of the leading tyre companies in India. Turnover of Rs. 2600 crore. 2nd largest in the country. 17th largest in the world. Major Competitors – MRF, Ceat, JK Industries.

6. Tremendous economic growth

7. Political scenario

8. Societal changes

9. Technology boom…Worried Karan Sinha – Strategy Head we need to do something otherwise we will get devoured by these changes in envt.

10. The whole data crunching is going to take a lot of time, cant go for it bcoz of busy schedule. Satish Mehra – Chief operating officer Hire BOSTON CONSULTANCY GROUP to scan the macro envt. and present their findings with the impact on their company.

11. Methodology To identify factors - drive economic growth in the country. Selection of final factors - by statistical correlations Development of ECONOMETRICS MODEL

13. INDUSTRIAL PERFORMANCE

14. TRANSPORTATION

15. PRODUCTION OF VEHICLES

16. Mainly dominated by Organised Sector.

18. 6.23 lac kms of metalled roads

19. 9.81 kms of unmetalled roads

20. 4.12 lac trucks

21. 1.27 buses

22. 7.23 lac cars

23. RM costs 70% of cost of prod.

24. Rubber and carbon prices - low

25. Lower costs of prod.

26. Free ex-imp policypotential RM intensive

27. After 1991… The Indian economy Liberalised foreign investment and exchange regimes. Reform and modernization of the financial sector Significant adjustment in govt. monetary and fiscal policies. Significant reductions in tariffs and other trade barriers. Resulted in Lower inflation Higher growth rates Significant increases in foreign investment.

28. Relationship between Transport and Economy Economic Growth Increase in income Good transportation Increase in goods transport More production Efficient movnt. of goods and services More mobility More consumption Economic growth Passenger transport Increase transport demand

29. DEMAND FOR TYRES 3 SEGMENTS ORIGINAL EQUIPMENT MAKERS REPLACEMENT EXPORTS Less than 10% of total demand Primary driver of demand 2nd driver of demand Depends on automobile production Depends on automobile output in the recent past

30. D E M A N D IN L A C S

31. Macro factors selected for econometrics Macro Factors Rejected Year ( time) GDP Absolute Inflation Road length Index of industrial production (IIP) Service Sector Contribution GDP per capita Monsoon and Agriculture National Highway Wages Employment, PLR, FDI SENSEX Due to low or negative co relations.

32. lower costs for the tyre industry Free import of all types of new tyres and tubes Liberalized foreign investment Adjustments in govt. monetary and fiscal policies Increase in income OPPORTUNITIES IN MACRO ENVT. Increasing population Increase in consumption pattern Increase in production Reduction in tariffs

33. How macro economic analysis has a bearing on company's marketing strategy?? Eg… Increase in income Inflation Increase in consumption Less consumption Increasing demand of vehicles Less production Increase in replacement tyre segment Less transportation Schemes, discount. Can tie link with automoblie companies

34. Strategies to stay in step with the changes.. Go according to the customers’ tastes and prefrences. Youth population is increasing – Can go for campaigns attracting youth too go for DRIFTING, RACING, where tyres are a significant driver. Have tie ups with automobile companies. Can have tie ups in the rural areas where consumption of the two wheelers as well as tractors is increasing at an enormous rate.

35. Straws to the winds If Apollo tyre makes tie-up with the various automobile industry then in the long run it will serve to the company . For example: Hero Honda Motors has tie-up with MRF tyres and TVS Tyres.