To Identify & track opportunities & threats in the Macro Environment To asses the importance of Demographic, Economic, Political

& Technological factors To sustain, survive & grow in the changing environment

Mr. Satish : COO Apollo Tyres Karan : Strategy Head Apollo Tyres

Mr.

Mr.

Karan : Shares his fear of survival in the present competitive and changing market with Mr. Satish. Decided to Hire a consultancy firm and gave BCG the contract for Identifying the effects of Economic growth in India on their company.

Fortune of the Tyre Industry depends on.

Agriculture & Industry performance Transport Needs Production of Vehicles

It is a very sensitive industry & has to adapt to highly volatile environment.

4 Major Players which occupy 63% of the market share are

MRF Apollo Ceat & JK Industries

Largest Player : MRF with strong brand Equity Export-Import Policy allows free import of new tyres & tubes. Import of Retreated tyres not allowed.

Increase in Economic Growth implies increase in goods transport which results in increase in passenger transport. Transport system keeps the economy ticking over. Transport employs a large chunk of Indian population. Transport requirement depends on Economic growth, implies tyres requirement depends on the same.

From 3 segments
Original Equipment makers Replacement & Exports (replacement market is primary drive)

Profitability in Original Equipment market is relatively lower than replacement market. Passenger Cars Original Equipment segment accounts for 60% of total demand which is 50% for Two wheelers & Tractors. Demand for tyres has doubled from 1996-2004 period at the time when Economy grew by an average rate of 6%

Following are the factors selected to develop the model considering their effects on tyre industry.
Year GDP absolute

Inflation
Road Length Index of Industrial Production Service sector contribution & Population

Demand of Tyres is highly volatile with change in two of the affecting parameters
Inflation & Service Sector Higher inflation will have lower demand for the fuel and hence lower transport, Replacement market is most affected

Marketing Strategy has to change depending on the present

market condition and demand, it may depend on Original equipment market or on Replacements market.

As the road length increases, more people can use vehicles and

there is higher penetration of amenities to the newly developed areas which ultimately increases the overall demand for vehicles & hence the tyres.