The brewing industry in 1985 can be analyzed using Porter's five competitive forces: threat of new entrants, bargaining power of suppliers, bargaining power of buyers, substitutes and rivalry among existing competitors. All five competitive forces jointly determine the intensity of industry competition and profitability. Furthermore, the five forces narrow in on why the brewing industry became more concentrated and key features defining industry success. In the brewing industry, barriers to entry were high. Fixed costs increased as a percentage of revenue necessitating brewers to have higher production capacities/minimal efficient production scale to achieve economies of scale. This could be achieved by doubling brewery production, which decreased unit capital costs by 25 percent. In addition, high capital requirements existed since $35-$45 million was required in launch costs and advertising for a new brand. These financial requirements implied a competitive advantage for large brewing companies who were spending approximately $1200 million (about 10 percent of sales) in advertising in 1985. An entering firm had limited access to distribution channels as the wholesalers who served the largest brewers did not carry other brewer's beer. The bargaining power of suppliers is medium since the removal of price controls for aluminum led to sharp increase in can prices and therefore raised cost of packaging materials and for the brewers. Some companies, like Coors, reduced these costs by starting can recycling programs to decrease their dependence on new raw materials. Bargaining power of buyers was high as the independent wholesalers who purchased the beer, and sold and delivered to retail accounts earned low profits. The average return on sales for wholesalers had fallen from 3 percent in 1981 to 2.1 percent in 1984. In addition, the increasing production capacity, desire for companies to enter new markets and promote new products and cost reductions led to a 30...
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In 1967 Southwest Airlines was a vision by and investment advisor Rollin Kind and his lawyer Herb Kelleher, they wanted to start a different kind of airline. Rollin King already had a small charter that ran between the smaller Texas cities. This new airline at first was to fly between the three largest cities in Texas, Dallas, Houston, and San Antonio. The company was first names Air Southwest Company, it later received its name of Southwest Airlines. The next year in 1968 the Texas Aeronautical Commission approved their planed to fly between the three major cities. In the next couple of years the company went off to a flying start by the next couple of years it had acquired four planes and employed about 200 people. In the first year of operation the company lost over $3.7 million dollars. It wasn't until the next year and a half that it was able to turn a profit and ever since then has been doing tremendous. Herb Kelleher, who in 1982 took over as President, CEO, and Chairman of the board. He was well respected in his position focusing on employee and customer satisfaction. By 1978 Southwest was the most profitable airline in the industry, and had already carried its 5 millionth passenger. The stock for Southwest was now listed in the New York Stock Exchange as "LUV." By 1996 the market had added Florida and California to expand in their services. By the year 1999, in the summer Southwest has now acquired 55 cities and 29 states that they operate out of, they fly more than 2400 flight a day. Recently, last year in October Southwest was able to fly into Buffalo-Niagara International Airport, with this, it makes them the 5th largest in the industry. External Threats The greatest potential threats to Southwest, were to...
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The fur Industry is an area of commerce that encompasses farming or trapping certain furbearing animals, processing their skins for sale to manufacturer's of fur garments and marketing finished garments to retail outlets. The term fur refers to any animal skin or part that has hair, fleece, or fur fibers attached, either in a raw or processed state. Skins of furbearing animals are also called peltries or pelts. From earliest times, fur has been a prized commodity. Exploration in the New World made furs more readily available, and as early as 1530 regular shipments of beaver pelts were sent to Europe from the colonies. The beaver, trapped by Native Americans, was a main source of barter at trading posts that later grew into such cities as Chicago; St. Louis, Missouri; Saint Paul, Minnesota; Spokane, Washington; and Detroit. II FUR FARMING Fur farming, or raising animals in captivity under controlled conditions, started in Canada in 1887 on Prince Edward Island. Animals with unique characteristics of size, color, or texture can pass those characteristics on to their offspring through controlled breeding. Fur farmers customarily crossbreed animals (mate different varieties from the same species) and inbreed animals (mate close relatives) to produce furs with desirable characteristics. The silver fox, developed from the red fox, was the first fur so produced. Today, so-called mutation minks ranging from white to near black and from bluish to lavender and rosy-tan colors, each with exotic trade names, are raised on thousands of fur farms, as are chinchilla, nutria, and fox. Fur-farmed animals provide a steady supply of fine-quality, well-cared-for peltries. III MARKETING CHANNELS FOR FURS North American fur trappers and farmers have come under increasing pressure from foreign competition. By the late 1980s, the Scandinavian countries produced 45 percent of the world supply of peltries; the USSR supplied 31 percent, the U.S....
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Business systems do not operate in a vacuum, they operate in an environment of institutions. A theory of business system is derived from this, which acknowledges that business systems differ from country to country because of different historical development of institutions. Four elements are important within an institutional environment: · Financial institutions · Social structure · Market structure · Technological and innovation systems. FRAGMENTED BUSINESS SYSTEMS IN KENYA PUBLIC SECTOR In general there are three sorts of business sectors in Kenya. Firstly the parastatals, characterized by their monopolistic production. Their management is highly indigenised, appointments of top managers however are often politically motivated. Parastatals is a term applied, especially in Africa, to an organization established by a government but which, through its constitution and budgetary arrangements, enjoys a great degree of operational freedom and insulation from direct political interference. The memorandum and articles of association are the founding documents of the company. The articles of association define the powers and functions of the different organs. A fairly standard provision in every company's articles is that the business of the firm be managed by the directors and gives the directors the right to exercise all powers. The exceptions are those that are required by the Companies Act or articles to be exercised by the company in a general meeting. Shareholders in a general meeting can therefore not deprive directors of such powers. The finance management act prohibits the board of a parastatal from taking certain decisions that directors ordinarily are empowered to take. For instance, a public entity and its accounting authority (the board) is prohibited from participating in a "significant" partnership, trust, unincorporated joint venture or a similar arrangement. It cannot acquire or dispose of a significant asset or, more problematically, make a significant change in the nature or extent of any interest in a partnership, trust or unincorporated joint...
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Case Study of Automobile Industry Research on General Motors Description of Automobile Industry: Automobile industry is the modern manufacturing industry including commercial vehicles (CVs), cars, three-wheelers and two-wheelers segments. The automotive industry has been playing a leading role in spurring growth in economies throughout the world since the industrial revolution. It is a sector characterized by not only tremendous potential growth, but also very high profile trade disputes, and intense competition. In the 21st century, the automotive industry confronts greater challenges as the industry undergoes fundamental changes. Research on GM: General Motors is the world's largest automotive corporation operating in over 70 countries with a presence in more than 200 countries, more than 260 major subsidiaries, and a total of 395,000 employees worldwide which translate into global opportunities that span the planet. Founded in 1908, GM has been the global automotive sales leader since 1931. GM today has manufacturing operations in 32 countries and its vehicles are sold in more than 190 countries. General Motors is involved in Telecommunications, Aerospace, Defense, Financial and Insurance Services, Locomotives, Automotive Systems and Heavy Duty Automatic Transmissions. In all GM does, their philanthropy and commitment to the environment in which they live, is unsurpassed in the industry. GM Brands: GM's automotive brands are Buick, Cadillac, Chevrolet, GMC, Holden, HUMMER, Oldsmobile, Opel, Pontiac, Saab, Saturn and Vauxhall. In some countries, the GM distribution network also markets vehicles manufactured by GM Daewoo, Isuzu, Subaru and Suzuki. GM Vision: To be the world leader in transportation products and related services. Will earn customers' enthusiasm through continuous improvement driven by integrity, teamwork and the innovation of GM people. In 2002, GM sold more than 8.5 million cars and trucks, nearly 15 percent of the global vehicle market. GM's global headquarters is at the GM Renaissance Center in Detroit. GM set industry sales records in the United States,...
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COMPETITIVE FORCES The U.S. computer hardware industry is one of the biggest in the world with Compaq, IBM, Dell, Gateway and Hewlett-Packard being the main players. This was one industry that was selling 150 million units in one year, (jpmorgan.com) but with economy not looking so good, things are likely to change for PC makers too. Now more than ever before, the companies in the computer industry are competing as fiercely as possible to make things better for their firms. They are fighting for new customers and are targeting markets they were not willing to exploit before. Traditional approaches and market strategies are giving way to newer ideas and innovative moves. RIVALRY AMONG EXISTING COMPANIES Rivalry among competing firms The competition among the firms fighting for market shares has been intense Just as growth was slowing in the computer industry, Dell launched an all out price war in the fourth quarter of 2000 to gain market share. Hewlett Packard and IBM responded to this by saying the price war was "irrational", (fortune.com). This helped Dell leap to number one in the worldwide market share and has left its competition scrambling to catch up. The only player to follow Dells lead has been Gateway and they lost 523 million in the first half of this year, laid off 3000 workers and closed 37 stores (Business week online). The implications of this intense competition are that companies have no room for error or inefficiency's. International Data Corp said that the price war has driven down prices on average 25% this year. This means shrinking profit margins and layoffs at all major companies, (Dell 5700, HP 6500, Compaq8500.) Even though consumers are benefiting from lower prices now, in the long run they may see less technological advancements in their computers and peripherals as companies cut cost to try...
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For the last century, motorcycles have been a major influence to international culture. Back in 1885 Gottlieb Daimler created the first gas-powered motorcycle, with the mindset of function over form. It was nothing but a wooden bicycle frame, with a simple four stroke engine attached (Solomn R. Guggenheim Museum). At that point motorcycles were very experimental. While in the beginning they weren't much to look at, they truly proved their usefulness in both World Wars. For instance, Harley Davidson created motorcycles for the United States in World War I and World War II, BMW for the Axis in World War II and Honda for Japan in World War II (Solomn R. Guggenheim Museum). After playing their parts in the major wars, one at a time each major motorcycle company gradually moved towards racing (that is with the exception of Honda which was originally created with racing in mind) (Solomn R. Guggenheim Museum). They each took their part in different racing categories and were all quite successful. In present day the motorcycle industry is a broad one. Motorcycles satisfy everyone, from people who like to tour, to off-roaders, to those who like to race. They even play a big part in law enforcement. The motorcycle industry can easily be split into two main categories: domestics and imports. The domestic market tends to lean more towards big body style bikes or "hogs", with a lot of power and size. However, non-US countries lead the biggest portion of the industry. Imports encompass all other styles of bikes but are usually stereotyped by "café racers"; bikes with high power to weight ratios. The domestic market is a small yet powerful portion of the world market for motorcycles. The only well known player in the domestic market is Harley Davidson. The domestic market of motorcycles has become...
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Financial Statement Analysis In the healthy and growth inducing economic scenario of the 2000's, P&G has seen double digit revenues growth to around $56b in 2005. Keeping its costs low has seen it achieve healthy profit margins of around 11% - 12%. Refer Table 1. Table 1 Margins P&G (in %) 2003 2004 2005 Gross Margin 49 51.2 51 Profit Margin 11.96 12.61 12.79 Financial Health: P&G is a stable company operating in a very mature and stable steady growth industry. It has an average Return on Assets of 12.5% and a high average Return on Equity of 43%. It turns its Inventory around 12 times a year, which is also an industry average . One weak aspect of P&G is its relatively poor liquidity position. One reason is the high STD (short term debt). P&G, being a low risk firm is able to get STD at low interest rates and hence uses this instead of LTD. It generates huge positive free cash flows to ensure prompt payment of interest. I feel P&G prefers STD due to its speed and flexibility (no covenants). Another reason for the low liquidity is its almost equal balance between its A/R and A/P. While a firm of its size should be able to work on its supplier's capital, P&G surprisingly has not been able to that. Unilever has the highest A/P deferral period in the industry, thus leveraging its size to get a better bargain from the suppliers. P&G however, has an industry average A/P deferral period. The only reason I see P&G doing that it believes in treating suppliers better than its competitors by paying them on time as promised. This is part of P&G's best practices philosophy and also of treating suppliers as partners. Therefore this weak position is not an indication of poor financial management, rather a reflection of good...
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Today, telecommunications technology affects lives to a greater degree than ever before. Communication has evolved over many years from the earliest attempts at verbal communication to the use of sophisticated technology to enhance the ability to communicate effectively with others. Every time a telephone call is made, a television is watched, or a personal computer is used, benefits of telecommunication technologies are being received. The concept of telecommunications may be defined as the transmission of information from one location to another by electronic means. Telecommunications is using electronic systems to communicate. Life is changing constantly and has been changing faster since the rapid advancements in telecommunication. Because of continuing attempts to find better and more efficient ways to communicate, the process of communication has steadily improved. Many of these improvements were made without the use of electronic technology. Human beings' earliest attempts at communication were through nonverbal means such as facial expressions and gesturing. The use of these nonverbal signs, prehistoric people were able to communicate emotions such as fear, anger, and happiness. More specific motions, such as pointing, allowed them to convey more information . Verbal communication probably started with a series of disorganized but meaningful sounds (grunts and snarls). These sounds slowly developed into a system of organized, spoken language that truly allowed humans to share information (Croal 59). Writing, which is the use of symbols to represent language, began with early cave drawings, progressed to picture writings such as hieroglyphics, and finally evolved into the handwritten language we use today (Croal 61). As civilization developed, people found it necessary to communicate their ideas to one another over greater distances. The earliest method of transporting information was to carry it from place to place; but as the development of commerce made speed an essential part, greater effort was expended...
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What are the most important characteristics of the global environment in the automobile industry, especially those opportunities and threats faced by the top players in the industry? Why so? If a list was made of the top economic sectors with the greatest influence on the American economy, one could make a strong argument for including the automotive industry. A prime example of the validity of that claim was evinced when "durable goods, such as cars, made up over 90% of the spike in consumption at the end of 2001." (Wolkomir 34) Since consumer spending is now the prime indicator of the state of our economy, the success of our auto industry is very important to the future of our economy. In the last few years, many were quick to dismiss stalwarts of the Old Economy. In light of the astronomical growth of the "New Economy" technology sector in the late 1990's, the auto industry seemed to be filled with lumbering, corporate behemoths. With the recent crash of the technology sector, the automotive industry is again in the spotlight, along with many other manufacturing industries. Even though sales have been up recently, the automotive industry still faces many challenges. These challenges must be overcome in order to ensure the survival of the industry's major players. In this paper I will discuss what GM, Ford, Daimler-Chrysler, Toyota, and the remaining handful of smaller manufacturers must do in order to stay on top in the future. Each one of these companies is faced with its own unique strengths, weaknesses, opportunities and threats that must be properly addressed. As a whole though, they all face similar issues. I will address those issues in this paper. If any one of these companies is not careful to handle these issues in the coming years, then it stands the...
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Introduction The research proposal begins with an overview of Krispy Kreme's functioning industries as well as current trends within them. The document progresses by describing the corporate structure of Krispy Kreme, specifically outlining company values and philosophies. To help develop the research, various store formats are discussed, followed by an in-depth analysis of Krispy Kreme's financial situation. The following pages also place Krispy Kreme in the context of today's market and illustrate the brand image and different products. The document attempts to combine research, analysis and recommendations to determine if a so called cold doughnut will allow Krispy Kreme to expand globally. Industry Information Krispy Creme Doughnuts, Inc. competes with several industries, to include: Ø Baked Goods Industry Ø Food Industry Ø Restaurant (Eating Places) Industry Ø Cakes and Pastries According to the National Restaurant Association, Americans will spend about $354 billion at the nation's more than 815,000 eating and drinking establishments. "Statistics indicate that restaurants have become an increasingly important part of American lifestyle over the past few decades" (Bread, Cake, and Related Products, 2003, ¶4). When evaluating the restaurant industry, fast-food type restaurants like Krispy Kreme have led way, and the growth of franchising since the 1970s has also propelled the growth (franchises have almost tripled their share of the market). However, starting in the late 1990s, competition decreased in mature markets because they were becoming saturated with fast-food restaurants. During this time, the restaurant industry began to see an influx of themed-eating places trying to redefine their images. For example, T.G.I. Friday's began mostly as a single's bar, but evolved to a family-oriented dining place. Another trend in the restaurant industry started in the mid-1990s when restaurants and supermarkets began to prepare foods for carry-out (commonly referred to as "home meal replacements"). Today, restaurants report that over 50 percent of their revenues come from carryout sales (Restaurants,...
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I. Introduction The UK advertising industry has been at the forefront of the global market for several years now and is set to stay that way. The reason the advertising industry in the U.K has become world leader is due to a number of factors, primarily due to the strong economic structure in the U.K at present, but also a result of a number of political, economic and commercial events that have required active promotion. British advertising has gained a reputation over the past years as being the worlds most creative and effective, with adverts such as the Tango campaign, Hello Boys and Levis pushing the industry to the forefront. II. Market Analysis 2.1 Market Size The UK advertising market is a growing market; between 1992 and 1999 the advertising expenditure rose by 171% to exceed £15 billion in 1999 for the first time. The following graph illustrates the strong growth this market has experienced. Source: Advertising Association Key events that were partly responsible for this development were the Millennium, the Sydney Olympics 2000 and the launch of Digital Television in the UK. The enormous competition in new technology market such as Internet or mobile phones is also a reason why advertising expenditure increased so strongly. Market forecasts predict a further growth; expenditure is prognosticated to increase by 60% by 2004 so that the market value would reach £19 billion. (Euromonitor 2000) 2.2 Market Segmentation In 1999, Newspaper and Television advertisings are with the biggest market segment, they totally account for 58% of the total expenditure. It is followed by Direct mail with 12%. All sectors have grown constantly since 1993 and further increase is expected for the future. The introduction of digital television and the emergence of more private channels could result in a much stronger growth in this sector. Appendix 1 and 2 and 3 illustrate the growth in...
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Since 1989, the wireless industry began to explore by adapting digital technology replacing the existing analog network as a means of improving capacity due to the increase of wireless service demands. Digital has a number of advantages over analog transmission: • Economizes on bandwidth • Allows easy integration with personal communication systems (PCS) devices • Maintains superior quality of voice transmission over long distances • Difficult to decode • Can use lower average transmitter power • Enables smaller and less expensive individual receivers and transmitters • Offer voice privacy At that period, Time Division Multiple Access (TDMA) was chosen to replace Motorola's Frequency Division Multiple Access (FDMA) technology which known today as narrowband analog mobile phone service. FDMA allocates a single channel to one user at a time. FDMA is wasteful of bandwidth: the channel is assigned to a single conversation whether or not somebody is speaking. Moreover, it cannot handle alternate forms of data, only voice transmissions. Qualcomm then introduced the Code Division Multiple Access (CDMA) technology to compete against TDMA technology to provide digital service. Now the two major competing systems (TDMA and CDMA), have been a topic for debate throughout the wireless community over which technology has the superior quality. WHAT IS TDMA? TDMA is digital transmission technology that allows a number of users to access a single radio-frequency (RF) channel without interference by allocating unique time slots to each user with thin a channel. The digital conversations from a single transmitter occupy different time slots in several bands at the same time In TDMA, the access technique used exercises three users sharing a 30-kHz carrier frequency. TDMA is also the technology used in Europe where Global System for Mobile Communications (GSM) is the digital standard used to provide wireless access and in Japan where Personal Digital Cellular (PDC) is used as the standard. TDMA was chosen for these...
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[url]RETAILING Introduction: The word retailing is derived from the French word 'retailer', meaning 'to cut a piece off ' or 'to break a bulk'. in simple terms, it implies a first-hand transaction with the customer. Retailing involves a direct interface with the customer & the coordination of business activities from end to end- right from the concept or design stage of a product or offerings, to its delivery & post-delivery service to the customer. The industry has contributed to the economic growth of many countries & is undoubtedly one of the fastest changing & dynamic industries in the world today. According to a report by the Center for Monitoring Indian Economy (CMIE) investments in organized retailing – which includes shopping malls, retail chains etc. – doubled from Rs.1, 000 crore in January 2000 to Rs. 2,000 crore in January 2001. YEAR URBAN RURAL TOTAL 1978 0.58 1.76 2.34 1984 0.75 2.02 2.77 1990 0.94 2.42 3.36 1996 1.80 3.33 5.13 1999 2.40 3.60 6.00 Retailing & the marketing mix: Customers are first introduced to the product at the retail store. Organizations sell their products & services through these retail outlets & get feedback on the performance of their products & customers expectations about them. Retail stores serve as communication hubs for customers. Commonly known as the point of sale (POS) or the point of purchase (POP), retail stores transmit information to the customers through advertisement & displays. Hence the role of retailing inh the marketing mix is very significant. Retail Marketing Mix: The retail marketing mix consists of the following elements: PRODUCT OFFERINGS: this refers to the product mix that the store retails for customers after a careful study of what their needs & wants are. By matching customer preferences with an assortment of merchandise offered within the stores categories, the retailer gets an ideal basket size per customer. The basket size contains the mix of...
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Executive summary The writer of this report is working as the Vice President of Competitive Intelligence (vPCI) on a multi-national and multi-business company. The CEO has asked the vPCI to investigate whether the company should enter the Malaysian market. The company's product is telecommunication infrastructures. The purpose of the report is to analyze and evaluate a major telecommunication infrastructure development in Kuala Lumpur, Malaysia, from January 2003 and for the following five years. Furthermore, the vPCI is supposed to prepare a briefing for the Board of Directors to indicate how a relevant competitive intelligence system might be established. The 3G industry in Malaysia is on its move, the licenses to offer products and services in the 3G infrastructure will be awarded in July, 2002. The government's will is that, no matter how many licenses, only one infrastructure system should be put up. In the SEPT-analysis, I found that Malaysia is an attractive country to enter since its economy will continue to grow. Furthermore, the government is eager to achieve industrialized nation status, which increases the driving forces for new technology in Malaysia. In Porter's five-forces-model I found that the telecommunication industry is not that attractive in Malaysia, due to few customers and high competition. I think the only cost for trying to get the infrastructure contract is to set up a CI system and monitor customers, competitors and country issues as government statements and economical changes. Since the costs for setting up the CI system and the annual monitor costs are low compared to the potential, I think we should try to get the contract. Concerning the CI system, I think we have to set up one immediately in order to monitor our customers, competitors, and country issues. The team should consist of managers from every function of the company. The team's tasks is to identify...
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The Hospitality Industry The Food and Hospitality Industry has become one of the biggest employers in our state. It now has attained a much higher status in society and demands high standards of work from its employees. Employment opportunities are many, but eagerly sought by a vast majority of people. For this reason as in any other established business, interviews are conducted. Through these interviews, the interviewer looks for personal qualities and interpersonal skills in a prospective employee to fulfill the job requirements. One of the most important things that an employer looks for are personal qualities. These consist of: a keen attitude, a friendly disposition, neat appearance, a willingness to work, confidence, cleanliness, personal hygiene, deportment (efficient) and honesty, among the many others. Interpersonal skills basically include the ability to interact with people and using initiative to deal with problems which may arise if the customer is not satisfied. If interpersonal and personal skills are exercised then they will greatly contribute to a happy and successfully working environment. This can be accomplished by remembering to keep in mind the fundamental aspect of any catering establishment which is to "Always acknowledge that the customers are the most important people in the business, and nothing is more important than serving them." - An introduction to catering. Due to the fact that a large amount of job satisfaction can be found in the food and hospitality industry, jobs are very often sought after. Many who wish to enter the industry usually do so by gaining a apprenticeship . Apprenticeships in the hospitality industry usually last between 2.5 years to 4 years. These apprenticeships mainly consist of 'on the job training', combined with full time practical work experience, along with future training at TAFE. Apprenticeships are usually categorized into : bread making and baking,...
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INTRODUCTION: The Indian two wheeler market has a size of over Rs 100,000 million. The Indian two wheeler segment contributes the largest volumes amongst all the segments in automobile industry. Though the segment can be broadly categorized into 3 sub-segments viz; scooters, motorcycles and mopeds; some categories introduced in the market are a combination of two or more segments e.g. scooterettes and step thru's. The market primarily comprises five players in the two wheeler segment with most of the companies having foreign collaborations with well-known Japanese firms earlier. But most of the companies are now planning 100% subsidiaries in India. In the last four to five years, the two-wheeler market has witnessed a marked shift towards motorcycles at the expense of scooters. In the rural areas, consumers have come to prefer sturdier bikes to withstand the bad road conditions. In the process the share of motorcycle segment has grown from 48% to 58%, the share of scooters declined drastically from 33% to 25%, while that of mopeds declined by 2% from 19% to 17% during the year 2000-01. The Euro emission norms led the existing players in the two stroke segment to install catalytic converters. All the new models are now being replaced by 4-stroke motorcycles. Excise duty on motorcycles has been reduced resulting in price reduction, which has aided in propelling the demand for motorcycles. Fierce competition has also forced players to cut prices in certain models. CURRENT SCENARIO: Motorcycle sales grew by an annual average of 27% over f 1995-2002, and constituted nearly 66% of total two wheeler sales in F2002, up from just 24% in F1995. Average monthly motorcycle sales have increased five-fold since F1995 to almost 250,000 units in F2002. The current share of the leading three companies is shown in the pie chart. And this clearly shows that hero Honda...
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