Royal enfield - Management of Technology

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

2. The oldest motorcycle company continuously in production. Royal Enfield is fast
becoming a very important player in the global mid-size motorcycle market and is
working towards re-inventing this space with motorcycles that are evocative and
engaging and great fun to ride.
To Understand how technology made an automobile firm to capture a
niche market, where market is filled with 'commodity' bikes and turned it
into a global market player
How Royal Enfield modernized the bikes without taking away their unique identity
and made the products more reliable. How they used modern technology without
changing the vintage look and also how they improved management practices.
There have been several instances of technological changes with an emphasis on
customer orientations.
How it expanded into different regions and markets and adopted its practices to
sell its motorcycles and what was the result with its sales. How the technology
practices were observed and modified accordingly
Motivation behind the Project

3. Objectives of the Project
Identify key areas
where Royal Enfield
used technology to
become the fastest
growing motorcycle
company in the
world.
Evaluate the level of
technology use by
the company and
benchmark it
against its
competitors.
Analyze the growth
of the company
with respect to
competitiveness in
the global scale.
Evaluate the
strategies that the
company can
implement in the
future to grow and
improve its
profitability
Completely analyze
the company and
the role technology
had played in its
significant
improvement in the
past.

4. Key SMOT Questions
• Enfield risked losing traditional fans without possibly gaining any
new customers
• How Royal Enfield managed to retain old customers while
acquiring new customers?
• How technical changes played its role in making the bikes more
reliable?
• How proper management of technology can ensure a better
satisfaction of customers?
• How, in future, can Royal Enfield leverage technology in addressing
its new set of problems?

5. Needs more research Focus – Reliability and better fuel efficiency
Strategy will be the key – Market share, profitability & category
substitution. Stay profitable, stay niche, aspirer’s on board.
Infrastructure development and better roads will also be the key in India.
Can have own forum for bike enthusiasts like its competitors.
Two new engine platforms on which multiple new products could be
launched. Churn out multiple models for at least next decade.
Critical Success factors
1
2
3
4

6. 1893
Birth
of
Royal
Enfield
1899
Provides Die
Dion Engines 1901
First Royal
Enfield
Motorized
Cycle
Engine in
the frame Model 160
and chain
driving
Model 200,
225cc 2
stroke
976cc V-
Twin
Wolsely
4 stroke,
350 cc 1928
Saddle Tank
centerspring Gerder
Front Forks
Evolution of
Royal Enfield
through
years

7. 1949
350 CC
introduced in
India
1957
250 CC
crusader
Model, 13 bhp
24 bhp, 500cc
Model
Launched
350cc all-
aluminum lean-
burn bullet A350
Electra X, 500cc all
alloy lean burn
engine
500cc UCE, Classic
Model launched
Thunderbird
Café Racer
Evolution of
Royal Enfield
through
years

8. • The Sales of Royal Enfield has been consistently
increasing since 2006 with introduction of new
models. A spike in 2009 is because of its introduction
of the Classic Model, a true result of technology
• Although, it holds a 16% premium market share, it is
behind Bajaj and needs good management of
technology
Market Share and Sales
Insights

9. Innovation
Technology Advancement
• Many new technologies being
introduced to improve the
performance such as Maintenance
free VRLA battery, double heat
treatment process, Robot welding,
torque controlled clip for hose
clamping, SS metal guard
Product Development
• New product development in the
250-750 cc category
• New model launch every year till
2018
• Engine platforms released every year
which is in line with the current
industry benchmarks in terms of
technology
Customer Experience
• Offered unique customer experience
through marquee rides
• Positioned as a cult brand and
generated publicity by having rides in
scenic places and popularizing the
concept of adventure biking
Distribution & production
• Increased the dealership network by
100 to 400 in 2014
• Increased capacity from current
20,000 units per month to 30,000
units per month to meet the surge in
demand both locally and globally
• To increase capacity to 50,000

10. • Core Competency:
Lifestyle biking with
attention to vintage
military styling and
cultivating a biking
community
• New products design to
target Cruiser segment
and introducing Café
Racer in 500 cc range
• Innovation in Unit
Construction Engine
design with adherence to
Classical biking design
along
• Competing in European
and American markets in
premium cruiser bike
range segment
• Brand and Perception of
premium segment
• Core Competency:
Technology – DTSi and
DTSFi
• Product Innovation
such as LED technology,
Braking and Display
Screen and Exhaustec
• Occupying the 3
wheeler auto segment
• Competing in wide
product range from
Economy to Premium
bike segment
• Presence in worldwide
market 2 and 3-
wheeler segment
Royal Enfield Motors Bajaj Motors
• Human Resources
and Capital
• Trust in brand,
technical know-how,
managerial
capabilities and
company culture
• Innovation resources
from suppliers and
work force
• Brand name,
reputation and
product perception
Harley Davidson
Technology Benchmarking

11. Domestic Benchmarking
Market share of different segments
Royal Enfield competes in the Premium 2-wheeler
segment. The opportunity for growth is highest in this
segment especially in the Indian market where the aspiring
young middle class has taken up more of adventure biking
and the Royal Enfield embodies the Indian youth’s thirst for
adventure and hence has become a cult brand in India and
increasingly across the globe

12. Financial Benchmarking

13. Increased
focus on R&D
Emergence of
Cult Brand
Increasing
Profits
Ramping up
production
Increased
exports
Largest
premium bike
manufacture
Reduced raw
material cost
Investment to the
tune of 500 crores to
increase production
Demand surge
across the globe
Aspirational
middle class in
India
Marketing by RE
as a cult brand
Fastest growing
motorcycle brand in the
world
Positioned as a “dream bike”
for Indian consumers akin to
Harley Davidson in US
Global competitors
have high R&D spend
To remain competitive RE
increased their R&D spend
Invest in infrastructure
and talent to improve
R&D facilities
Will produce 50,000
units per month in
the near future
Incentives from the
government to
increase exports
Higher margins from
the global markets
Better brand image in
the global markets
Cost effective when compared
to Harley Davidson
Dominant player in Indian
market which is the fastest
growing in the world
Improved
manufacturing
process

14. Intellectual Property Rights (IPR)
• Bajaj alleged Royal Enfield has infringed its DTSi patent
• Royal Enfield contended its Thunderbird-350 model does not infringe
Bajaj Auto’s patent
• It is also alleged that Royal Enfield has infringed the twin spark
ignition being used in the Unit Construction Engine
• The defense of RE is that Bajaj has the patent for 75cc to 250cc
segment whereas the RE engine is in the 350cc and above segment

15. • Currently, selling in India & exports to
developed markets
• Should export to emerging markets
• Mid-range price customer segments
• High “Sport” bikes’ enthusiastic people
• Royal Enfield ‘Cult’ fans
• Motorcycling aficionados, adventure riders,
college-goers
Four Steps:
1. Aiming at emerging as a significant player in the
250-750 cc segment
2. To make inroads in the mid-weight space
3. To grow the size of the mid-weight segment
4. To emerge as a significant player in the entire
motorcycle market
• Highest selling bike so far
• 56.4% YoY growth rate
• Release new models very often
• Enter early in emerging markets –
South Asia
• Focus on Columbia & Latin America
markets
• Increase of expense in R&D
• New innovations
• More frequent models
• Maintaining cult brand
• Being customer centric
• Increase sales, profitability
• Introducing lighter, efficient engines
going forward
Strategy Diamond map
• Technology & availability of spares
• Vintage feel with modern touch
• Ride quality
• Chassis design of tank
• UCE (Unit Construction Engine)
• 350-500cc cruiser bikes
• High price
• Aluminum alloy

16. Key Takeaways
Royal Enfield
• Committing itself to challenging old ways
• Reducing growing waiting periods for bikes
• Evolving into a brand that caters to a wider, younger audience
• Upgraded its technology without hurting customer sentiments
• Replaced older engines that had reliability issues with new, more advanced units
• Maintaining its cult brand no matter what
• Playing well in its niche market being a leader in share & profits
• Plans to release new models with technological innovations very often soon

17. Way Forward
• Should focus to increase its sales
• As market is niche in India, it can focus on increasing its exports
• Can very well enter into new markets- Latin America, South-East Asia, Columbia
• Understand global markets & the customers perceptions
• Increase quality of bikes in US markets along with warranty period
• Use lighter alloys like Aluminum
• Maintain look-feel and target more profits than just sales
• Release more models periodically

18. Thank You