Royal Enfield Case Study

The 1980’s saw a sudden rush of Japanese bikes into the Indian market. These bikes enjoyed the reputation of having earlier wiping off the local motorcycle industry in the UK, Europe and US markets. Despite being in a precarious situation then, Royal Enfield managed to successfully resist the competition and emerge as a leader in the mid-segment. From sales figures as low as 30000 in 2004, the company managed to pull off a whooping 175000 sales figure in 2013.
Over the years, the company has undergone a makeover, both, technically and aesthetically, in the kind of products it has to offer. The “Classic Series”, “New Thunderbird 500”, and the latest feather on the cap – the Continental GT café racer have positioned brand RE to appeal to all

Its greatest strength lies in its loyal following including its traditional customers in defence and village landlords. But now, with the entry of Harley Davidson and Triumph, the scenario is going to become very competitive for Enfield. Its low cost and loyal customer base will hold it in good stead but brands like Harley have their own following, which will be a threat. Politically, with talks of GST and labour law reforms on the way, things look good for manufacturing firms like Enfield. The new government too, is focused on reviving the economy by pushing growth in manufacturing sector. It is expected that with the market converging towards the midsize segment, Enfield might roll out more variations in this segment. The new plant has increased its production capacity, but the increase in demand has still resulted in long waiting periods. As such, Enfield might decide to expand its capacity further and push aggressively against its new rivals. But, to retain its loyal customers, it is expected to continue with the tradition of handcrafting essential parts. Enfield has addressed its quality concerns to some extent, but for a market leader it still faces too many breakdown issues, which might put off new prospective buyers. It is already making new tech savvy additions like GPS and is expected to continue adding new features

This can be attributed to the absence of quality local competitors. The only rivals are foreign players which incur heavy import duties and are priced beyond the income level of the middle class Indian consumers. Hence, Royal Enfield is one of the most competitive brands in terms of pricing.
• The need for power and majesty governs the purchase behavior of consumers for Royal Enfield and the consumers are predominantly male youth. This iconic brand can also perhaps focus on expanding this segment by targeting adventurous woman of similar age groups.
• In terms of those who do not buy Royal Enfield, booking period is the major factor as demonstrated by the survey conducted. After-sales service, maintenance and spare hassles are secondary issues mentioned by existing customers. In order to further capitalize, Royal Enfield must ensure these issues are sorted out and sorted out quickly.
• Another point of consideration is the negligible investment on Research and Development. With new entrants like KTM, better and innovative technology is the need of the hour and this is a major concern for Royal