1. T RANSFORMATION OF INDIAN TWO WHEELER MARKET

2. Business Environment Internal Environment (Control) Values Mission Objectives Co. Image Human Resource Values Mission Objectives Co. Image Human Resource Suppliers Competitors Customers Inter- mediaries Political Economic Technological Cultural Demographic Legal Micro Environment (Influence) Macro Environment (Respond)

3. FactorChangesImpact on Industry DemographicUrbanization Growing youth population Increased Demand Increased demand for stylish bikes Development of new market segment Regulatory or Policy Broad banding of license Liberalized FDI regulations 100% FDI New Models leading to Market development Joint Ventures between Indian and foreign co.s Break-up of JVs Foreign co.s set up wholly owned subsidiaries Indian co.s had to go alone TechnologicalFuel-efficient Bikes Switch-start Auto Gear Scooters Fall in demand for Scooters and old- tech bikes (Chetak, Rajdhoot, Yezdi, Yamaha, Kinetic Honda etc.) New demand from women and old age people Scooters and Scooterettes for dual / family use Socio-CulturalAcceptance of employment / education for women New demand for sleek, stylish, lower CC scooterettes from women

4. New Work FactorChangesImpact on Industry Socio-CulturalChanges in dressing Increased travel needs among rural India Increased demand for all categories of two-wheelers Pent-up rural demand EconomicIncreasing disposable incomes Reduced interest rates Easy availability of credit for purchase of automobiles Inadequate public transport facilities Increased demand for two / four wheelers Shift from two-wheeler to four- wheeler Second hand two-wheeler market Auto co.s started NBFCs to provide easy-financing options CompetitionIntensified with entry of MNCs Improved market due to availability of variety of scooters and bikes After-sales Service network had to be created with trained technicians Create world-class R&D facilities to face foreign competition

5. FactorChangesImpact on Industry PoliticalEconomic Reforms Liberalization Privatization Globalization Reduced breakdowns due to Improved road conditions Increased demand for all categories of two-wheelers as buying capacity of all segments of people improved tremendously Internal Environment Investment on R&D facilities Changing / re-crafting strategies to compete with MNCs Changing Brand / Co. Image

6. Question: “Firms which systematically analyze and diagnose the environment are more effective than those which don’t”. Comment in the light of the above case. Answer Bajaj – Introduced bikes and discontinued Chetak. Changed its Brand Image to attract youth. Invested on R&D, Distribution, After-sales Service and Marketing to withstand the competition from MNCs Hero, TVS – Developed R&D to stay in the competition after breaking-up of JVs with foreign partners Kinetic – Disappeared from market after breaking-up of JV with Honda. Rajdhooth, Yezdi, Road King – Could not survive in the new competition from Japanese automakers