A comprehensive analysis of Apollo Tyres [Biswadeep Ghosh Hazra] - {XIMB}

MARKETING RESEARCH END-
TERM ASSIGNMENT
BISWADEEP GHOSH HAZRA
APRIL 12, 2020
A comprehensive analysis of Apollo Tyres
SUBMITTED TO PROF. PLAVINI PUNYATOYA
UM19148 || Section- C

Biswadeep Ghosh Hazra Section-C UM19148
1
INDEX
Topic Page No.
1. Abstract ---------- Pg. 2
2. Methodology ---------- Pg. 2
3. Brief about the company and history ---------- Pg. 2
4. Analyzing the industry and environment ---------- Pg. 5
a. PEST Analysis ---------- Pg. 5
b. SWOT Analysis ---------- Pg. 6
5. Financial Analysis ---------- Pg. 9
6. Acquisitions over the years ---------- Pg. 13
7. Marketing and Advertising ---------- Pg. 13
a. Marketing Mix ---------- Pg. 13
b. Building Brand Equity ---------- Pg. 15
c. Post COVID World ---------- Pg. 17
8. Corporate Governance ---------- Pg. 19
9. Conclusion ---------- Pg. 19
10. References ---------- Pg. 19
11. Plagiarism Report ---------- Pg. 20

2
A comprehensive analysis of Apollo Tyres
I) Abstract
Apollo Tyres is one of the largest companies of not only India but the world. Hence to analyze and
study an Indian Multinational is a task in itself and in addition; with the advent of electronic vehicles,
the tyre companies are coming into more focus. Apollo Tyres has grown from a small plant to a global
entity that is racing to become one of the biggest tyre companies in the world. This report aims to
figure out what the company in its years of existence did right and could not quite do right.
II) Methodology
The research methodology used is Secondary Research with a mix of Content Analysis (for analyzing
the campaigns done by Apollo), Data Analysis (for analyzing and interpreting the financials). The Data
Collection method was primarily observation-based from the internet that entailed a complex mixture
of various social media pages, annual reports, news channels and blogs.
III) Brief about the company and history
Incorporated in 1972, the Apollo Tyres company is the world's seventh-largest tyre manufacturing
company with revenues (consolidated) over $ 2.46 Bn as of March, 2018. It is now traded in both BSE
as well as NSEand is headquartered in Gurgaon, Haryana, India. The company has a history of growth
which is impressive, to say the least as evidenced by the fact it is rapidly catching up to MRF, another
leading tyre manufacturing company in the country.
Source

3
The company gets almost 70% of its revenues from India, around 26% from Europe and the remaining
from other places combined. In India, Apollo Tyres has a lot of competitors, both National and
International with some of the prominent ones being- MRF Tyres, JK Tyres, Goodyear,
Bridgestone, CEAT Limited, Continental, TVS Tyres, Pirelli to name a few.
Tagline
go the distance
Mission
 Be a customer-obsessed company- customer first 24X7
 No. 1 Tyre Brand in India
 Most profitable tyre company in India
Vision
To be a premier tyre company with a diversified and multinational presence
Apollo has an excellent national and international presence, and the company is targeting is more
overseas locations in the coming years. Some of its manufacturing plants throughout the world are as
shown below-

4
Source

5
IV) ANALYZING THE INDUSTRY AND ENVIRONMENT
Analyzing the industry and the outside environment is extremely useful while researching about a
company as it provides insights about the actions of the company and its long- and short-term strategies
that it undertakes. PEST Analysis is based on analyzing the outside environment, which is a generic
analysis for all manufacturing firms. The SWOTanalysis is specific to Apollo or all tyre manufacturing
firms in particular.
A) PEST ANALYSIS
The Pestel analyses the external environment of the organization thereby analyzing what the factors
that are out of control for the organization as the firm cannot control its external environment but can
only mould itself according to these forces are.
i) Political Factors-
Political factors have direct as well as indirect implications on business. Political Stability is a much-
needed factor for business development and added factors are taxation (which has negative
consequences in the organizational expansion). Also, another factor is that there are different political
factors in different countries all around the world. In all these countries, the laws are different from
each other. Hence, Apollo Tires should preserve the standardization irrespective of these changing
rules and laws in order to succeed.
The political factors can be broadly divided into-
1. Policy Formation
2. Political Stability
3. Support from Government
4. Taxation
ii) Economic Factors-
Perhaps the most important factor for any kind of business, from the ability of the consumer to pay for
its product to the government's ability to keep the interest rates low for easy corporate borrowing,
everything is covered within economic factors. Almost all macro-economic factors like Inflation,
Aggregated Purchasing Power Capacity, GDP, availability of employees will have impacts on the
organization.
The economic factors can be broadly divided into-
1. Inflation
2. Unemployment
3. Interest Rates
4. GDP
iii) Social Factors-

6
The social patterns of different countries are different and, in many cases, social patterns dictate
consumption. Social patterns and consumer behaviour are closely related. Social trends also
incorporate the changing consumer mindset; consumers who were much more accommodating are
criticizing and don’t hesitate to spread bad reviews at the slightest chance they get. Thus, in the context
of selling, social factors are important and cannot be overlooked.
iv) Technological Factors-
Technology is the driving force of any business today without which; any business is a lost cause.
Apollo can try to eliminate the middle man, and with the help of logistics, providers can deliver tyres
straight to consumers' homes which will enable value addition in consumer's life and help Apollo save
cost. Social Media Analytics should be tracked and more efforts to be put into the same.
Currently, Apollo's social media metrics stand at-
Facebook Page- 918,809 likes || Instagram- 14.5k Followers || Twitter- 117.1k Followers || YouTube-
32.8k Subscribers
More efforts should be put into increasing these metrics to gain useful user insights.
The technological factors can be broadly divided into-
1. Innovation
2. Research and Development
3. Operational efficiency and improved value chain
4. Social Media and Digital Analytics
B) SWOT ANALYSIS
SWOT analysis analyses the internal forces of the organization and helps capitalize on its strengths
and opportunities, while fighting weaknesses and threats.
Strengths-
a) Market Share-
Apollo Tyres has one of the highest market shares in the country, trailing behind only MRF in the LCV
section (Light Commercial Vehicle) and is the highest market shareholder in the Medium and Heavy
commercial vehicles

7
Source- Google Images
b) Strong Financials-
The company has been growing rapidly in the past couple of years (net sales grew at CAGR 2%, and
profit grew at a whopping CAGR of 34%). This has helped Apollo in its expansion quest where
Hungarian Prime Minister inaugurated its second plant in Europe (Hungary) in 2017 and a service
centre in Malaysia in May, 2019
Source
c) Research and Development emphasis
Apollo's emphasis on Research and Development has enabled it to have a diverse product mix that is
finding acceptance across countries. Apollo strives to improve itself in the key areas of performance
for a tire manufacturing firm- grip, durability, and mileage.

8
Weaknesses-
a) Indian Market dependence-
Although Apollo is expanding and has expanded globally, it is still dependant on Indian markets for a
major portion of its revenue. This makes the company prone to changes that occur in India, be it
politically, economically or socially. Thus, the company becomes divisive in terms of handling its
parent country and global business, which are completely different and requires different strategies to
manage and handle.
b) Labour unrests-
Labour unrests put backlogs on production and that blocks supply and create massive problems for the
company. Previous unrests have occurred in plants of Vadodara and Durban. These unrests directly
affect the bottom-line of the company.
Opportunities-
a) Four-wheeler growth in India-
As disposable incomes rise and more and more people find their way into the middle class, the demand
for four-wheelers and in turn car tires rise, which is an untapped potential opportunity for Apollo Tires.
b) Two-wheeler growth in India-
Just as the growth in the four-wheeler market, the two-wheeler market is also steadily growing,
especially in rural areas. Apollo has the opportunity to capture this market with steady production and
advertising and PR to go alongside it.
Source
c) Global scenario
For the past years, Apollo has been expanding to other countries globally to expand its business. It has
expanded to countries like Qatar, Jordan and Lebanon. The global markets pose a massive opportunity
that the Indian MNC should use to its advantage.

9
Threats-
a) Competitive environment-
This industry is highly competitive with fierce competition amongst all the competitors who race round
the clock to provide better products at cheaper prices to Indian customers.
b) Rubber production pitfalls
Rubber production is volatile in India, and even in other parts of the world (Vietnam, Myanmar), there
are rampant production and supply chain issues that plague the supply of high-quality rubber. This has
implications in the pricing strategy, bottom-line and efficiency of a company.
V) FINANCIAL ANALYSIS
The following image shows how the shares of Apollo have fared over a period of five years. As
expected, due to the ongoing Corona crisis, the sales of cars have dropped off and combined with the

10
fact that people staying indoors, the share prices have gone down after spiking in mid-2018. With the
52-week high being Rs. 221.25 and the low being 73.40, it can be said that there is a lot of loss in share
price due to the ongoing pandemic.
Source
Financial Ratios
Financial Ratios tell about the health of an organization and gives a fair estimate of what the
organization might expect in the coming years. There are several types of ratios which can be found
out by carefully analyzing the Balance Sheet, Income Statements and the Cash Flow Statements of the
company. These ratios are broadly divided into –
1) Investment Valuation Ratios
2) Profitability Ratios
3) Solvency and Liquidity Ratios
4) Management Efficiency Ratios
5) Debt Coverage Ratios
i) Investment Valuation Ratios
 Dividend per share is steadily increasing, which signifies that shareholders are getting their
dues for putting their trust and resources into the company.
 Operating Profit per share reflects the profit a company makes from its operations before taxes
and interests are deducted. Hence, for every 100 rupees invested into operations, the following

11
are the pay-outs received. Since this takes into account depreciation and amortization, the
figures vary from year to year. Activities like Cost of Goods sold, Selling and Distribution and
Administrative costs affect this ratio
 NOPAT or Net Operating Profit per share is an important ratio to calculate EVA or Economic
Value Added, and it can be seen that the NOPAT has significantly improved from 2015 till
2019
ii) Profitability Ratios
 Operating Profit Margin tells whether the company is effectively making enough money from
operations. Here it can be seen that the Operating Profit Margin is gradually decreasing over
the years, which is not a good sign. This can occur when sales decline as well as when sales
of higher-margin products decrease while sales of lower-margin items remain the same
 Both Cash Profit Margin and Net Profit Margin are decreasing, which might mean that the
company has more leverage or loans in the years. This might also mean that due to rapid
expansion, the profit has been diverted to those activities instead of keeping it with the
company
 Apollo's ROCE is gradually declining, which means Apollo is not employing its capital
effectively as it should be. However, ROCE is an isolated metric and should not declare the
health of a company on a standalone basis.
iii) Solvency and Liquidity Ratios
 The Current Ratio of the company is improving throughout the years, which is a good
indication. As the current ratio dictates the ability of the company to repay short term debts,
this is a good sign
 Although the Quick Ratio has improved, a QR of more than 1 signifies that the organization
has enough assets to pay for current liabilities. Investors prefer companies with better quick
ratios
 A Debt to Equity ratio of 1 means that the creditors and the stockholders equally contribute to
assets of a business. A less than 1 ratio dictates that the portion of assets provided by
stockholders is greater than the portion provided by creditors. A greater than 1 ratio tells us

12
that the portion of assets provided by creditors is greater than the portion provided by
stockholders
iv) Management Efficiency Ratios
 Inventory turnover is the measure of how efficiently a company can control its merchandise.
It is important to have a high turnover. This indicates that the company does not overspend
by buying too much inventory or wastes resources by unnecessarily storing non-saleable
inventory. It also shows us that the company can effectively sell off the inventory it buys.
However, as the ratio shows, the ratio is gradually decreasing which is not a good sign
 Debtors turnover ratio is used in conjunction with short term ratios. A high ratio indicates that
receivables being more liquid and are collected promptly
 Companies that take more time to time
v) Debt Coverage Ratios
 An interest coverage ratio under 1.0 indicates the business is having difficulties generating
the cash necessary to pay its interest obligations. A higher ratio indicates better financial
health as it means the company is capable to meet its interest obligations from daily operating
earnings. On the other hand, a high ICR might also suggest that a company is playing "too
safe" and is neglecting opportunities to magnify earnings through leverage
From the above financial analysis it can be concluded that in the short run, Apollo Tyres is pretty well
off or is proceeding in a stable direction. But there are some hiccups in the long-term financial
structuring, and the company needs to rectify that.
Financials obtained from Annual Reports of Apollo Tyres.

13
VI) ACQUISITIONS OVER THE YEARS
 Apollo Tyres over the years have done quite a few acquisitions, with acquiring the Dunlop
business in South Africa in 2006 with an all-cash deal of Rs. 290 crores. This gave Apollo the
right to sell tyres in 32 African countries. However, due to an uncompetitive market and
frequent labour unrests, Apollo had to sell off the division to Sumitomo Rubber Industries at $
60 Million.
 Apollo acquired Vredestein B.V., a Netherlands tire manufacturer in 2009. It acquired the
company from Russia’s tyre manufacturer Amtel- Vredestein N.V. for an undisclosed amount.
The acquisition has proved to be extremely strategic and has helped Apollo project its image
as a premium tyre maker because of the fact that Vredestein itself is a premium tyre maker.
 Apollo Tyres failed the acquisition of Cooper Tires of the USA, which led to a decrease in their
share prices as the shareholders did not want the acquisition to go through.
 Apollo Tyres’ acquisition of Reifencom made it appear on the global map. The acquisition was
done for Rs. 320 Crores and would help Apollo establish its influence on six major markets-
Germany, Italy, Austria, France, Denmark and Switzerland.
VII) MARKETING AND ADVERTISING
Apollo being a major tire manufacturer, spends considerable amounts on Marketing and
Advertisements worldwide.
a) Marketing Mix of Apollo Tyres
Product
Apollo's Product mix is well known throughout the entire Indian sub-continent and have regards
amongst consumers. Apollo manufactures tyres, tubes, flaps used in passenger cars, motor-bikes, farm
equipments, industrial appliances and earthmovers.
Apollo’s entire product mix can be entirely summed up into the following list-
Passenger Cars-
Apollo offers tires for Vans, SUVs and cars which includes SUV, Radial and Crossply tires. Some of
the brands that Apollo offers are Apterra AT and Apterra HT.
Trucks and Busses-
Trucks and Busses are large vehicles that need different kind of tires. Products include Mine Lug (for
mining operations), Endu Race LD, and XT-9 Gold, to name a few. This type of product range needs
Radial and bias type of tyres.
Farming and Agriculture-

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This range includes tractors, trailers and harvesters, to name a few. Some of the products in this
category are- Powerhaul, Bhim, and Krishak
Industrial and Earth Mover-
Items under this category are often designed for rough and heavy usage. Some of the different
equipments used are- Loader, Backhoe, Grader, Excavator and Compactor. Apollo Tyres has a wide
range of products for this range- ALT 118, AWL 822, AWE 713, ATL 188 TX etc.
Bikes-
Apollo Tires have a plethora of models for bikes such as- Suzuki, Honda and the products offered are-
Actzip S2, Actzip F3
Place
Apollo has an extensive network of distributors, and retailers spread out throughout the country. The
company has more than 5,000 dealerships in the country out of which 2,500 are exclusive in nature.
The company has more than 3,700 outlets in Europe. The company can deliver anywhere within 24
hours provided a specific outlet's range covers the area. In fact, now, wholesaler e-Commerce sites
like India Mart deliver Apollo’s Tires online.
Apollo aims to deliver the right product to the right people at the right time, which has helped the
company grow. Apollo sells its products to more than 100 countries in the world and has established
manufacturing centres in Europe for faster product dispatch.

15
Source
Price
Apollo’s tyres are priced, keeping in mind that Indian consumers are very conscious about price and
quality received. Apollo generally uses penetrative pricing to gain customers and market share by
offering attractive discounts and afterwards stopping the same. The organization has also been known
to use competitive pricing when the situation demands such. All in all, pricing a product is the result
of intensive strategy formulation and implementation, and Apollo's pricing has been paying off till
now.
Promotion
Although this has been discussed in details below, Apollo uses an array of creative marketing strategies
in order to increase brand equity. The company also runs tyre loyalty programs for customers and
encourages them to adopt better driving habits. The PRteam of Apollo Tyres created a campaign called
“Adopt a pothole” that won the prestigious Cannes Silver Lion Award.
Another social media campaign called #RockTheRoad won the Global Dolphin Award in Cannes in
the integrated communications category.
b) Building Brand Equity (Image Research)
Campaigns in focus
Apollo has created a plethora of beautiful campaigns throughout the years, and as discussed, it has
won a number of awards for the same.
-Go The Distance Heroes
Apollo Tyres collaborated with The Jude Felix Hockey Academy, which is a Non-Profit Organization
that looks after orphaned children and helps them find direction in life. The campaign also collaborated
with Indian Super League, and have sent talented children to tours de France hockey clubs.

16
Source
-India’s Playing Millions with Sachin
This campaign focussed on India’s lost talent that needs to come out and play and conquer the world.
The advertisement is inspirational, and Sachin adds onto it by showing his signature moves.
Source
Brand Ambassador
Brand Ambassadors have immense importance for a brand as they literally carry the brand on their
shoulders. Moreover, a brand ambassador must be globally likeable and popular in order to draw in
more customers. India is the land of Cricket and a country where Cricket is worshipped like a religion,
who better to represent the company than the God of Cricket himself?
Apollo Tyres signed a contact with Sachin for a period of five years in 2018 and for the global markets,
Apollo has signed up with Manchester United, the famous football club of England.

17
Source
Source
c) Post COVID-19 World
Keeping in line with the Social Distancing that has been implemented off late, Apollo has changed its
logo to reflect the same better to show solidarity with the decision.

18
Source
Source

19
Apollo is even posting interesting content on its Facebook page to entertain its customers during the
period of lockdown. Even football stars come on live chats to pacify and lift the moods of people
during hard times like these.
VIII) CORPORATE GOVERNANCE
Corporate Governance is the collective set of regulations, practices, processes and rules that govern
and control an organization. The stakeholders involved here are the stockholders of the organization,
the senior executives, definitely the customers, the incumbent government, the community, the
suppliers and financers.
In India, due to the strict rules and regulations of the SEBI, now minority shareholders, as well as
institutional investors, have a lot of power and control than before. Activism is also channelled through
environmental and employee groups.
IX) CONCLUSION
To conclude, Apollo Tyres have an effective Marketing and Advertising strategy as it has managed to
increase as well as retain its brand equity in India and overseas. But it needs to look at its long-term
financials which are in not so good of a shape as evident from the Financial Analysis. On top of that,
the situation currently ongoing will further add to the worries of lessening sales. A holistic strategy is
required that will help the company ride over these difficulties and help it towards its goal of becoming
the best tyre company.
Apollo should carefully strategize its acquisitions, for example, the Cooper Tire and Dunlop in South
Africa did not work out while the other two discussed here did. However, it is easier said than done as
these acquisitions require months if not years’ worth of strategizing and often, they don’t work out the
way they were supposed to. But these failures prove to be invaluable case studies of what not to do or
what to do beforehand, in the future. Also, the financial analysis of Apollo, as discussed before, needs
to be looked at heavily if the company wants to become one of the biggest tyre manufacturing
companies in the world.
X) REFERENCES
 https://en.wikipedia.org/wiki/Apollo_Tyres
 https://brandequity.economictimes.indiatimes.com/tag/apollo+tyres
 https://corporate.apollotyres.com/
 https://economictimes.indiatimes.com/industry/auto/tyres/apollo-tyres-ropes-in-sachin-
tendulkar-as-brand-ambassador/articleshow/66749822.cms?from=mdr
 https://www.businesstoday.in/sectors/auto/apollo-tyres-south-africa-dunlop-tires-
international/story/210405.html
 https://www.livemint.com/Companies/YpqbExl63sRjxlJDv4EpvM/Apollo-Tyres-completes-
acquisition-of-Vredestein-Banden.html

20
 https://www.facebook.com/ApolloTyresLtd/
 https://www.businesstoday.in/opinion/perspective/apollo-tyres-reifencom-acquisition-global-
biggie/story/226064.html
XI) PLAGIARISM REPORT

A comprehensive analysis of Apollo Tyres [Biswadeep Ghosh Hazra] - {XIMB}

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