Mktg Strats Tyre Industry
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Transcript of Mktg Strats Tyre Industry
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THE TYRE MANUFACTURING INDUSTRY
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PRESENTED BY:
NAME ROLL NO.
Dattu Ade 1
Reena Alva 4
Vicky Barot 6
Abhijit Bhongle 8
Bhushan Bhoye 9
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INTRODUCTION
• Faces huge competition, cost and price pressure.
• The zooming auto industry has driven the growth.
• The number of vehicles is swelling.
• The truck and bus market is the largest segment in terms of value.
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• Economic expansion and road development has made a contribution.
eg. The golden quadrilateral and the NSEW Corridor project.
• Though the volumes have increased the profitability has gone down due to the increase in raw material cost.
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Five forces model
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A 2 tier Industry
• Tier 1 players
Present in all three segment -
1)Replacement market
2)Original equipment manufacture(OEMs)
3)Export
• Tier 2 player
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Key Players
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Major Sales Segment
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Intensity of Rivalry : High
The tyre industry in India is fairly concentrated, with the top 5 companies accounting for more than 80% of the total production of tyres.
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BARGAINING POWER OF SUPPLIERS
- High
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• Number of Suppliers – Low
• Availability/ acceptability of raw material substitutes – Low
• Switching costs – High
• Threat of forward integration – High
• Tyre industry not the key customer
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Demand for Tyres
48.7%
42.8%
0.3%8.2%
Sales Segments(Volume)
Relacement Market
OEM's
Government
Export
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Bargaining Power of Buyers
• OEM’s High
• In Replacement Market Moderate
• Switching Cost Low
• Threats of Backward Integration Low
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THREAT OF POTENTIAL ENTRANTS
LOW, due to HIGH ENTRY BARRIERS
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ENTRY BARRIERS
• Highly capital intensive industry
Rs4bn for radial tyre plant with a capacity of 1.5mn tyres
Rs1.5-2bn for a crossply tyre plant of a capacity to manufacture 1.5mn tyres
• High raw material costs
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• Shortage of raw material
• Force of rivalry
• High risk
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THREAT OF SUBSTITUTES
Low, but increasing
• Import of tyres
• ISI mark made compulsory
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Porter’s Model
Entry High returns
Barrier High risks
High
Low High Low Exit
Barrier