Individual assignment of Strategy Course by Prof. Baba Prasad, CEO of Vivekin consulting group. One assignment included the application of Porter's 5 forces, Blue Ocean strategy, and his own research on Nimble Strategy.

1. Strategy 101
Final Exam 2021

2. based on Porter's 5 forces
INDUSTRY
ANALYSIS

3. Supplier Power
HIGH
There are very few aircraft
manufacturers like Airbus and
Boeing hence they hold high
power in pricing and there is no
substitute for this pproduct.
Also, fuel costs are controlled by
few Middle-East Asian countries
which is another reason for high
supplier power.
Few suppliers of aircraft and
limited fuel resources
Threat of New Entrants
LOW - MEDIUM
The aviation industry has higher
entry barriers like huge initial
investment and higher operating
costs. For eg Aviation fuel, aircraft
parking charges, hospitality charges,
etc
Intricate beaurocratic procedures
also act as a hindrance for new
entrants. for eg permits, FDI limits,
price caps etc
Entry is easy but capital
intensive

4. Rivalry amongst existing
competitors
There is a stiff rivalry between economy
carriers like Indigo, Spicejet, etc
Public sector carriers like Air India have faired
far better in times of pandemic.
There is hardly any differentiation possible
for airlines, with respect to price, service
experience, etc
UDAAN scheme by the government has also
increased competition amongst economy
carriers(rise of new small airlines) especially
on Tier 2 and Tier 3 routes.
Almost same size players
Threat of Substitute service
HIGH
India has a vast and efficient network
of railways, roadways, etc hence it is
easy to shift to different services other
than airline.
With high speed and premium trains
coming up, the upper-middle-class
segment who holds the ability to pay
turns to railways for ease of service.
Railways and Roadways

5. Buyer Power
MEDIUM _ HIGH
In India, because of poverty, there are
few users of aircraft.
Users are very price-sensitive, they can
easily change the mode of transportation
or service provider for 10-20% of the
price difference.
As overall service is more or less the
same, the buyer will not easily change the
service provider as the ticket price is also
high,
small in number but price-sensitive
users

6. BLUE OCEAN
Strategy
For coffee chain stores
Miss-Tea Coffee

7. Coffee is one of the popular hot beverages in India after tea.
With the majority of the Indian population being between 18 to 46 years of age, the likeliness of
these beverages being consumed at work or at the local ‘dhabas’ for a casual gathering remains
relatively high.
It is estimated that only under 15% of the Indian coffee consumption was under the away-from-
home channels in 2019 and tea consumption outside the home is growing.
An interesting trend that we are witnessing is the growth happening in e-commerce sales as well
as hyper-local deliveries.
Millennials in India have been at the forefront of the coffee culture, and are very enthusiastic to
try alternative coffee brewing methods at home. A recent survey conducted earlier this year found
that nearly 50% of the respondents opt for a cup of coffee as the first meal of the day, and 69% of
Indian millennials relate to coffee as a companion. But Tea is still a major beverage in India,
difficult to topple by numbers.
Why Coffee is attractive?

8. E-R-R-C Grid
Only Brick and Mortar model
- Café exclusive blends of
coffee &Tea can be sold
through multi- channels like
dine-in, direct retail and online
retail, for which increased
trends have been observed.
Prestige associated with cafes
like for eg Starbucks = Rich
In India this perception keeps
big chunk of consumers away
from the coffee except south
India where coffee culture is
already in developed stage.
ELIMINATE
Complexity of selection
Varieties of the coffee like
Americano, Expresso increases
confusion in Indian coffee
drinkers. Hence there is need to
reduce coffee selection
complexity. This can be
improved by use of
Iconography along with cutting
down the number of varieties.
Size of the cafes
Expenses on store size, which
will make café exclusive and
Price versus premium options
To attract middle class as well
as lower higher class.
REDUCE
Price verses budget options to
differentiate from coffee corners
and pocket friendly than that of
premium cafes.
Decent Ambience
better than Tea-Coffee
corner(Tapree)
Though we want to reduce
prestige associated with cafes
there should be a decent
ambience.
RAISE
Coffee & snacks Pairings
Indians always prefer to eat
something with their tea or
coffee. Hence a thoughtful
Indian combinations should
be provided.
Brand involvement with the
purpose
A café chain can connect
coffee drinking purpose by
making available option to
donate tea, coffee and food
pairings. These items will be
visible on the counter and
anyone can ask for it.
CREATE

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10. Nimble
Strategy
HERO CYCLES

11. Who peddles the bicycle in the era when four-wheelers and two-wheelers
are quite affordable?
In post-independence India, the bicycle was the main mode of transport for
almost 80% of India. But with increasing prosperity, rapid change in the mode
of transport has occurred in urban India with affordable public transport.
So, to consider the last two decades, rural India which is still a major buyer
along with Kids in the urban and semi-urban regions are the main buyers.
But with the COVID pandemic, it has been noticed that bicycle purchase was
increased for recreational and short distance commute in urban and semi-
urban India.

12. WHAT CHALLENGES HERO CYCLE IS FACING??
COMMUNICATION INTELLIGENCE
The overall market is growing at a very slow pace. The Indian market for bicycles is also
plateauing—growth rates have been in the single digits for five of the past 10 years, and
the market actually shrank 3.24% in 2017-18. Hence, Hero needs to increase
communication intelligence. This is also needed to acquire the share of closed company
Atlas cycles, which was 3rd largest bicycle manufacturer in India.
INVENTIVE INTELLIGENCE
The evolving electrical segment of the bike is not as lucrative and affordable for buyers, e-
bikes are not affordable, the one from Hero costs around Rs 20,000 to 50,000.
Indian manufacturers are losing ground to several Chinese and Taiwanese manufacturers who
manufacture lightweight bicycles at very affordable prices.

13. ANALYTICAL INTELLIGENCE
There is an opinion by cycle manufacturers about unfair taxes imposed by the
government compared to China and Brazil rates, which is taking away their price
advantage in the global markets of Africa.
OPERATIONAL INTELLIGENCE
Hero Cycles has operational intelligence at par compared to many cycle manufacturers
in India. But to compete with Chinese, Taiwanese, and German manufacturers it needs
to utilize all the possible options. For example, Carbon body bicycles are priced twice
as much as Taiwanese manufacturers, which is certainly a big price difference.
VISIONARY INTELLIGENCE
In the changing dynamics because of the pandemic vionary intelligence to forsee the long
term is very necessary.
The rise of 'Yulu' like electric bike service startups should also be considered by Hero cycles.
Because that is a clear indication of changing customer preferences. Change in the rural and
urban landscape are taking place; need for more at home individual activity because of
pandemic.

14. Company has backing of the Hero and Munjal
group for finances. Hence if leveraged
properly with opportunity it is easy to be a
strong player in recreational and short
distance commute.
HOW WELL PREPARED (OR NOT)
THE COMPANY IS IN TERMS OF
THE FIVE AGILITIES TO HANDLE
CHANGE...
only 90 out of 1,000 people in India
own bicycles, compared with 149 out of
every 1,000 in China and 400 out of
every 1,000 in the US
A new segment of leisure or fun biking
has not really emerged that could offset
the decline in traditional buyers.
This can emerge now because of the
pandemic and economic slowdown
making people to buy cost-effective
transport options India does have its
share of local cycling clubs, but there are
significant problems riders face.

15. Five
Agilities
for
Hero
Cycles

16. WHICH AGILITIES SHOULD BE
PRIORITIZED
Inventive to fight with Chinese and Taiwanese manufacturers and for
affordable electronically aided bicycles.
Communication to gain for the newly formed recreational segment.
Analytical to utilize data of cycle peddlers in turn Hero peddlers.

17. Thank you!
Apoorva lele
Section A