Moving ahead of industry

analysis..

Rivalry Among Existing Competitors

Al

Coal

Steel

Auto

CR4

0.949 0.570

0.813

0.671

HHI

0.438 0.124

0.238

0.153

Price/M 160
T

150

90

-----

Ind.
Growth

4.8%

14.5%

14.3%

18.0%

Profits/
Sales

-0.16

-0.80

-0.33

0.18

BE/MT

8.46

28.59

55.72

-----

AVC/M
T

63.36 20.82

45.92

-----

Diff/Sal
es

0.014 0.010

0.026

0.051

Numerous or equally
balanced competitors
Slow growth industry
Low profitability

High fixed costs (Breakeven)

Lack of differentiation or
switching costs
High exit barriers

Structur
e

Conduct

Performance

Strategic Segments and

Competitive Systems
Technological

Number of
Differentiation Sources

differentiation and
brand loyalty

Large

Segmen
t2

Few
(Price
)

Strong threat of
Chinese and Korean
imports and market
maturity
Segmen
t1
Low

Segmen
t4
Segmen
t3
Towards mature
market

Segmen
t5

High
Competitive Position

Sales

Strategic Group Map:2005

MRF

Large
JK Tires

Birla
Tires
Small

TVS

Apoll
o

Ceat

Falco
n

Narrow

Wide

Tire
Range

Sales

Strategic Group C.V. Tire

(2005)
MRF

Large

JK Tires

Birla

Small

TVS

No

Apoll
o

Ceat

Falco
n
Small

Large

Market
Share

Sales

Strategic Group: 2/3 Wheeler Tire

(2005)
MRF

Large
JK Tires

Apoll
o

Birla

Ceat

Small

Falco
n
No

Small

TVS

Large

Market
Share

ROI and Strategy of Indian Tire

Manufacturers (2000)
Return on Sales
(ROS)
18
%
15
%
12
%
9%

JK
Tyres

TVS

Apollo
Tyres

MRF

Ceat

Falcon
Tyres

6%
3%

0.5
%

1%

1.5
%

2%

2.5
%

3%

3.5
% Asset
Turnover

ROI and Strategy of Indian Tire

Manufacturers (2005)
Return on Sales
(ROS)
18
%
15
%
12
%
9%

JK
Tyres

Apollo
Tyres

TVS

6%

MRF

Falcon
Tyres

Ceat

3%

0.5
%

1%

1.5
%

2%

2.5
%

3%

3.5
% Asset
Turnover

Strategic Groups- an example Of the Paper

Industry

Strategic Groups
Firms within an industry differ
systematically in traits other than
size, so that industry contains
subgroups of firms
Firms within a group are somewhat
homogeneous and recognize their
mutual dependence.
Barriers to entry become specific to
the group-Mobility barriers.

Three Generic Strategies

Uniqueness perceived
by customer

Industr
ywide

Particula
r
Segment
only

Low Cost Position

OVERALL COST
LEADERSHIP

DIFFERENTIATION

FOCUS

STRATEGIC ADVANTAGE

S
T
R
A
T
E
G
I
C
T
A
R
G
E
T

Skill sets required

Overall Cost
Leadership
Sustained capital
investment
Process engineering
skills
Ease of manufacture
Low cost distributing
system
Structured
organization
Incentives based on
meeting quantitative
targets

Differentiation
Strong R&D/marketing
abilities
Product engineering
Reputation for
quality/technological
prowess
Strong co-ordination
among functions
Subjective measures of
incentives

Struck in the middle

Return on
Investmen
t

debasis.mallik@gmail.com

Market Share