Description
The doc describes about TVS Motors using the concepts and theories of Organizational Theory and Practice.
Organizational Analysis: A Case Study of TVS Motor Company
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Table of Contents
1. An introduction to the Organization: .................................................................................................... 3 1.1. 1.1.1. 1.1.2. 1.1.3. 1.1.4. 1.2. 1.3. 1.4. 1.5. 2. 3. All products (current and old): .................................................................................................. 4 Motorcycles: ......................................................................................................................... 4 Scooterettes: .......................................................................................................................... 5 Stepthru: ................................................................................................................................ 6 Mopeds:................................................................................................................................. 6
Current products: .......................................................................................................................... 6 Directors:....................................................................................................................................... 7 Organization Structure: ................................................................................................................. 8 Company milestones: .................................................................................................................. 12
Conducive factors identified: .............................................................................................................. 14 Mission and Vision of the company: .................................................................................................. 15 3.1. 3.2. Mission:....................................................................................................................................... 15 Vision Statement: ........................................................................................................................ 15
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Growth and the factors affecting the growth of TVSM: ..................................................................... 19 4.1. 4.2. 4.3. Percentage sales: ......................................................................................................................... 19 Sales in Rupees: .......................................................................................................................... 20 Comparison of different data from 2004-05 to 2008-09: ............................................................ 21
5. 6. 7. 8. 9. 10. 11. 12. 13. 14.
Rise and Fall of TVS Motors: ............................................................................................................. 25 Awards and Recognitions: .................................................................................................................. 29 Daily Work Management-Culture: ..................................................................................................... 31 Community development and social responsibility: ........................................................................... 33 Code of Business conduct and ethics of Board and Senior Management: .......................................... 35 Brand Ambassadors and Print Ads: ................................................................................................ 38 Effective use of Information Technology: ...................................................................................... 40 Diversification and future plans: ..................................................................................................... 42 Conclusion and learning from the project: ...................................................................................... 45 References:...................................................................................................................................... 46
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1. An introduction to the Organization:
TV Sundaram Iyengar and Sons Limited (TVSs) is the holding company for the TVS Group of companies engaged in the manufacturing of almost all kinds of automotive components, best two wheelers and a few other industrial products. They are also into the financial services sector. The turnover of the entire group was close to $2 billion in 2003.
TVS was founded by T. V. Sundaram Iyengar in 1911.
It is the only automotive manufacturer in India to get the prestigious Deming Prize. One of its subsidiaries Sundaram Clayton was the first company in India to receive the Deming followed by Sundaram Brake Linings also getting the Deming Prize. This prize is "given to organizations or divisions of organizations that have achieved distinctive performance improvement through the application of TQM in a designated year." Sundaram Clayton went on to be awarded the Japan Quality Medal.
The TVS group of companies is mainly situated in Padi, Tamil Nadu, in the outskirts of Chennai (formerly Madras).
TVS Motor Company is the third largest two-wheeler manufacturer in India and one among the top ten in the world, with annual turnover of more than USD 1 billion in 2007-2008, and is the flagship company of the USD 4 billion TVS Group. It is the largest company of the group in terms of size and turnover. It has its origin in Sundaram Clayton Limited, Moped Division, started in 1980. The factory was started in Hosur, Tamilnadu in southern India. The first product launched was a 50 cc moped, which appealed to the masses because of its capability to carry two people. In the same location, the same promotors started another company in 1984, in
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collaboration with Suzuki Motor Corporation of Japan, for the manufacture of 100 cc motorcycles under the brand name of Ind-Suzuki Motorcycles. Subsequently in the moped division was bought by Ind Suzuki Motorcycles in 1987 and the company changed its name to TVS Suzuki Ltd. Even though the company started producing all kinds of two wheelers like mopeds, scooters and motorcycles, the collaboration with Suzuki continued for the motorcycles only. The collaboration with Suzuki Motor Corporation ended in 2001 and since then the name of the company changed to TVS Motor Company. The company now develops all types of twowheelers through its own in house R&D facility and manufactures in three locations in India, Hosur in Tamilnadu, Mysore in Karnataka and Baddi in Himachal Pradesh. It has recently started a new manufacturing plant in Indonesia to cater to the South east Asian market. The Chairman and Managing Director of the Company is Mr. Venu Srinivasan who is the grandson of TV Sundaram Iyengar.
1.1. All products (current and old): 1.1.1. Motorcycles:
? ? ? ? ? ? ? ?
TVS AX 100 TVS Fiero TVS Samurai TVS Shaolin TVS Shogun TVS Apache(150 cc,13.7 Ps @8500rpm) TVS Apache RTR 160 TVS Apache RTR 160 EFI (Electronic Fuel Injection)
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? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?
TVS Apache RTR 180 (17.3ps) TVS Centra TVS Fiero TVS Fiero F2 TVS Fiero FX TVS Flame TVS Flame (125 cc,ccvti technology) TVS MAX 100 TVS MAX R 100 TVS Star TVS Star City TVS Star Sport TVS Supra TVS Victor (110 cc) TVS Victor EDGE (125 cc) TVS Victor GLX (125 cc)
1.1.2. Scooterettes:
? ? ? ? ?
TVS Scooty KS (60 cc) TVS Scooty ES (60 cc) TVS Scooty Pep (90 cc) TVS Scooty Pep + (90 cc) TVS Teenz (60 cc)
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? ?
TVS Streak (90 cc) TVS Teenz Electric
1.1.3. Stepthru:
?
TVS NEO 110
1.1.4. Mopeds:
? ? ? ? ? ? ? ? ?
TVS XL 50(50 cc) TVS XL (60 cc) TVS Eco TVS Astra (60 cc) TVS Champ (50 cc) TVS Super Champ (60 cc) TVS Sport (70 cc) TVS XL Super (70 cc) TVS XL Super Heavy Duty (70 cc)
1.2. Current products:
TVS Motor currently manufactures a wide range of two-wheelers from mopeds to racing inspired motorcycles. Motorcycles (TVS Apache, TVS Star, TVS Flame) Variomatic Scooters (TVS Scooty Streak, TVS Scooty Pep +, TVS Scooty Teenz) and Mopeds (TVS XL Super, TVS XL Heavy Duty)
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Fig: Current products offered by TVS Motor The company has 4 plants - located at Hosur and Mysore in South India, in Himachal Pradesh, North India and one at Indonesia. The company has a production capacity of 2.5 million units a year.
1.3.Directors:
Venu Srinivasan Chairman & Managing Director
T. Kannan H. Lakshmanan
Director Director
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R Ramakrishnan K.S.Bajpai C.R.Dua Prince Asirvatham K.N. Radhakrishnan
Director Director Director Director President & CEO
K S Srinivasan S. G. Murali
Secretary Executive Vice President – Finance
1.4. Organization Structure:
The organization structure consists of the Chairman who appoints the CEO. The Vicepresidents of the different functions report to CEO as shown in the following diagram.
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Manufacturing
Marketing Sales and Service Vehicle Program R&D Quality Assurance Chairman CEO Production Engineering Central Purchase Personnel & I.R H.R & TQC
Finance Information Systems
Fig: TVSM’s Organizational structure
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The R&D department, which is one of the most important departments of the company, has a very flat structure. This is because, to facilitate innovative behavior, the employees have to be empowered to take calculated risks. To foster an innovative nature, the department should have organic structure with lesser levels of hierarchies. This is shown in the following diagram.
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Engine Chassis NVH Testing Electrical Product Verification Senior V.P (R&D) Styling
V.P (2 wheeler)
Vehicle Testing
Engine V.P (3 wheeler) Body and Chassis Electrical Vehicle Systems
Fig: Structure of R&D department
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1.5. Company milestones:
? 1980 – Great milestone in Indian automobile industry. Country‘s first 2 seater 50cc Moped TVS 50 launched. ? 1984 – First mover. TVS becomes the first Indian Company to introduce 100cc Indo-Japanese motorcycle ? 1994 – Pioneer of mobility for women. Launched India‘s first indigenous scooterette (sub 100cc variomatic scooters), TVS Scooty. ? 1996-1997 – Bringing in green technology before it became a norm. Introduced India‘s first catalytic converter enabled motorcycle, the 110cc Shotgun. Great drive. Greater speed. Launched India‘s first 5 speed motorcycle, the Shaolin. ? 2000 – Hiking speed limits. Launched TVS Fiero, India‘s first 150cc, 4-stroke motorcycle. ? 2001 – Indigenous technology. Launched TVS Victor, 4-stroke 110cc motorcycle, India‘s first indigenously designed and manufactured motorcycle. ? 2002 – TVS becomes the world‘s first 2 wheeler company to win world‘s most prestigious recognition in TQM – the Deming award-2002. TVS wins Technology award from Ministry of Science, Government of India for successful commercialization of indigenous technology. ? 2004 – Setting benchmarks in mileage. Launched TVS Centra, a world class 4stroke 100cc motorcycle with the revolutionary VT-i engines for best in class mileage. All terrain performance. Launched TVS Star, a 100cc motorcycle ideal for rough terrain. TVS wins TPM excellence award from Japan Institute of Plant
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Maintenance (JIPM). TVS wins outstanding Design Excellence award for TVS Scooty Pep. ? 2005-2006-Spreading its roots. TVS launches its Indonesian plant. Making a style statement. Launched TVS Apache, which set the youth‘s imagination on fire. It went on to become the bike of the year for 2006, winning 6 prestigious awards. ? 2007 – TVS Motor Company rolls out 7 new models. TVS launches its Himachal Pradesh plant at Nalagarh. ? 2008 – Apache refresh with rear disc brakes. TVS Motor Company bags two coveted IT awards, Sep-2008 SAP ACE 2008 Awards and 2008 Symantec South Asia Visionary award. Scooty Pep+ launched with balancing wheels. Scooty Wimbledon collection launched. Apache RTR-FI launched in Jun-2008. Launches the revolutionary 125cc Flame in Mar-2008. It makes its foray into three-wheeler market with TVS King in Mar-2008 ? 2009 – Launches TVS Apache RTR 180cc.
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2. Conducive factors identified:
TVS Motor's strength lies in design and development of new products - the latest launch of 7 products on the same day seen as a first in automotive history. They deliver total customer satisfaction by anticipating customer need and presenting quality vehicles at the right time and at the right price. TVS has always stood for innovative, easy to handle, environment friendly products, backed by reliable customer service. TVS Motors are the pioneers in many things. At the time they entered the 2-wheeler market, the environment was rich. That means, they had very less competition and had not much of a problem in acquiring the required resources. The environment was very stable and there was very less ambiguity. In addition to this, to further reduce Resource Dependency, they formed a Joint Venture with Suzuki and formed TVS-Suzuki. They were the first to launch a 2 seater in Indian market back in 1980. They were the first to launch a 100cc Indo-Japanese motorcycle. Also, they were the first to introduce a new range of 2-wheelers target for women customers. As a result of all these ?firsts?, they were able to capture a large market share which assisted their fast growth. Also, during the earlier years of 1900, India became open to the globalization. This led to creation of lot of opportunities. There were more jobs, more options. This improved the standard of living of the population. They had more money to spend. As a result of this, there was a huge market for 2- wheelers in India in general and TVS in particular as it was one of the highly established firms in the market.
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3. Mission and Vision of the company:
The company had a clear vision and mission which helped the company in formulating long term strategic planning. Also, these helped in designing the organizational structure which was best suited to achieve the long term goals. This also led to the growth of the company as the culture and structure of the company contribute to the success of any organization.
3.1. Mission:
?We are committed to being a highly profitable, socially responsible, and leading manufacturer of high value for money, environmentally friendly, lifetime personal transportation products under the TVS brand, for customers predominantly in Asian markets and to provide fulfillment and prosperity for employees, dealers and suppliers. ?
3.2. Vision Statement:
TVS Motor - Driven by the customer TVS Motor will be responsive to customer requirements consonant with its core competence and profitability. TVS Motor will provide total customer satisfaction by giving the customer the right product, at the right price, at the right time.
TVS Motor - The Industry Leader TVS Motor will be one among the top two two-wheeler manufacturers in India and one among the top five two-wheeler manufacturers in Asia.
TVS Motor - Global overview TVS Motor will have profitable operations overseas especially in Asian markets,
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capitalizing on the expertise developed in the areas of manufacturing, technology and marketing. The thrust will be to achieve a significant share for international business in the total turnover.
TVS Motor - At the cutting edge TVS Motor will hone and sustain its cutting edge of technology by constant benchmarking against international leaders.
TVS Motor - Committed to Total Quality TVS Motor is committed to achieving a self-reviewing organization in perpetuity by adopting TQM as a way of life. TVS Motor believes in the importance of the process. People and projects will be evaluated both by their end results and the process adopted.
TVS Motor - The Human Factor TVS Motor believes that people make an organization and that its well-being is dependent on the commitment and growth of its people. There will be a sustained effort through systematic training and planning career growth to develop employees talents and enhance job satisfaction. TVS Motor will create an enabling ambience where the maximum self-actualization of every employee is achieved. TVS Motor will support and encourage the process of self-renewal in all its employees and nurture their sense of self worth.
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TVS Motor - Responsible Corporate Citizen TVS Motor firmly believes in the integration of Safety, Health and Environmental aspects with all business activities and ensure protection of employees and environment including development of surrounding communities. TVS Motor strives for long-term relationships of mutual trust and interdependence with its customers, employees, dealers and suppliers. In order to further decrease the environmental complexity and to improve its sales, the company has gone global. In the year 2005-2006, the company has invested around $43 million to build a factory in Karawang, West Java in Indonesia. It sees Indonesia as the base for its operations in South East Asia.
Fig: Venu Srinivasan (left), Chairman, TVS Motor, with Susilo Bambang Yudhoyono (right), President of Indonesia, at the PT TVS Motor’s factory in Karawang, near Jakarta.
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Speaking at the inauguration of its plant in Indonesia, at the the sprawling facility, TVS Motor Company India Chairman Venu Srinivasan said: ?We have chosen Indonesia as our centre [export hub] for the ASEAN region ... because we think that this country has great deal of potential, most importantly human resources.? Besides the ASEAN region, vehicles manufactured at the plant would be exported to Africa and South America, he said. ?Our initial investment [on the facility] is about $50 million, with local value addition of 40 per cent at start up. This investment will be scaled up to $100 million over the next three years to achieve local value addition of 80 per cent,? Mr. Srinivasan said. A research and development facility forms a part of the plant.
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4. Growth and the factors affecting the growth of TVSM:
As stated earlier, TVS Motor Company is the third largest2-wheeler manufacturer in India. Below, there is an analysis of the performance of the company taking different factors into consideration.
4.1. Percentage sales:
Three Wheelers Spares and 1% accessories Other income 2% 9%
Scooters 18%
Motorcycles 51%
Mopeds 19%
Percentage Sales 2008-2009
Three Wheelers 0%
Spares and Other income accessories 3% 8% Scooters 18%
Motorcycles 52%
Mopeds 19%
Percentage Sales 2007-2008
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? ?
The mopeds sales remained the same because, there are not many competitors in this field. Increase in percentage sales of 3-wheelers, as they introduced their first 3-wheeler, TVS King in 2008-2009.
4.2.Sales in Rupees:
Sales (Rs in Crores)
Other income Three Wheelers Spares and accessories 2007-2008 Scooters Mopeds Motorcycles 0.00 500.00 1,000.00 1,500.00 2,000.00 2008-2009
?
There is an increase in revenue from sales of motorcycles in 2008-09. This is because of introduction of two new models, TVS Apache RTR FI and Flame during that year. These two models were very successful because of the cutting edge technology that went into them. The Apache RTR FI had fuel injection technology which gives the motorcycle a crisper throttle response and enhances its fuel efficiency. Some of the key features of TVS Flame which led to its success are given below: ? Futuristic aerodynamic styling. ? The Fuel tank is embedded with Delta Edge clear lens indicators. ? First time in India- the LCD digital auto console in a 125 cc segment bike.
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? India's first Deltaedge exhaust in triangle shape lowers the sounds, emissions delivering excellent performance. ? The 125 cc engine gives 10.5 bhp @ 8250 rpm that are Flame's power performance statement. ? Three wheeler segment is a new revenue earner for TVS in 2008-09, because of the introduction of King as has been mentioned previously. The company ventured into 3 wheeler segment because the environment was rich as there were only a few key players in the market, namely Bajaj and Ape. ? Increase in revenue earned by sale of mopeds in 2008-09 because of introduction of two new models of Scooty, namely Scooty Pep+ and Scooty Wimbledon collection.
4.3. Comparison of different data from 2004-05 to 2008-09:
2008-09 Sales and other income Profit before interest, depreciation and tax Profit after tax Net fixed assets 189 31 1,036 132 32 1,043 203 67 1,003 275 117 794 291 138 770 3,741 2007-08 3,310 2006-07 3,921 2005-06 3,306 2004-05 2,955
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Sales and other income
Sales and other income
3,741 3,310
3,921 3,306 2,955
2008-09
2007-08
2006-07
2005-06
2004-05
From the above graph, it can be observed that there has been a steady increase in the Sales from 2004-05 to 2006-07. This is mainly because of heavy investment by the company in the R & D. This strategic investment in R & D has helped them in releasing new models as well as improving the performance of already existing models. This as well as the other reasons for the increase or decrease in sales for each of these years is explained below. During the year 2004-05, the company successfully launched multiple products: • TVS Star – 4-stroke 100cc motorcycle in the economy segment with rugged performance and good mileage. • New Victor GLX – 4-stroke 125cc motorcycle in the executive segment with superior style and power. • New Victor GX – 4-stroke 110cc refresh of Victor with 'Duralife' engine and new looks. • Scooty Pep "Splash" series – 4-stroke 75cc stylish ungeared scooter with new innovative colours to suit the youth image. Scooty Pep has received the prestigious NID Award for the best style in 2004-05. During 2005-06, the launch of Apache and two TVS StaR range including the popular TVS StaR City variant enabled the company to improve its market share and turnover significantly. 22
The increase in sales during 2006-07 is attributed to the sales of Star brand. The excitement in the StaR brand was maintained through continuous innovation and launch of variants viz. StaR City alloy wheel, StaR City Electric start and StaR Sport. Also, Scooty Pep + was launched in 99 colors which strengthened the Scooty brand. During the year 2007-08, the motorcycle category of the two wheeler industry registered a decline of 8%. The economy segment which has been the driver of growth in the past suffered maximum decline of 19%, because of non availability of retail finance and stringent credit norms imposed by the financiers, especially in small towns and rural markets. Also, Launch of TVS Flame, in the executive segment by the company, was delayed due to litigation on usage of twin spark plug. This is an example which shows how external environment factors cause uncertainty and hence affects the normal operation of an organization. This led to an overall decrease in sales during 2007-08. During 2008-09, the launch of Scooty Streak, a tough and stylish variant of Scooty Pep+ and Apache RTR RD, in the premium motorcycle segment strengthened the portfolio of the Company. The company also launched TVS Flame which was successful. The Company launched its 2 stroke three wheeler in Petrol/ CNG / LPG variants. This is an example which shows how a company can reduce its uncertainty in one type of market by diversifying its operations into another related market. All these factors led to an increase in sales during 2008-09. From the above analysis, it can be observed that if one uses ?Internal Systems Approach? to measure the effective of the organization, it can be concluded that TVS Motors is a very effective company. This is because, it achieves or is trying to achieve many of the goals which is used to measure the effectiveness in this approach. For example, one of the goals to be set in this approach of measurement is increase in the rate of product innovation. The company is continuously trying to achieve this goal as is evident by the number of new models introduced by it during the last 5 years.
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300 250 200 150 100 50 0 Profit before interest, depreciation and tax Profit after tax
The profit after tax has been steadily decreasing from 2004 to 2009. The main reason for the reduction in profits is because the environment is getting poorer. Many competitors are coming to India and expanding their base. As a result of this, there is a struggle to acquire sufficient resources. This and certain other reasons for the reduction in profits are given below, yearwise: ? In 2005-06, the fall in profit was due to higher material cost on account of stringent emission norms coupled with the rise in cost of aluminium, steel, rubber and plastics. ? In 2006-07, the fall in profit was mainly due to steep increase in raw material cost. Due to intense competition in the industry, especially in the highly price sensitive entry level segment, where the company has a significant presence, it was not possible to pass on the cost increase to its customers leading to lower margin. Higher marketing cost consequent to introduction of new products / variants and increase in interest cost due to higher cost of borrowings further led to lower profit for the year. ? ? In 2007-08, the fall in profit was due to lower sales and consequent reduction in margins. In 2008-09, the slight fall in profit was due to the escalation in the input cost especially in the first half of the year which affected the margins. The Company pursued aggressively the cost reduction projects to partially neutralize the cost increase. 24
5. Rise and Fall of TVS Motors:
It was 15th July 1982 when the company was incorporated as Indian Motorcycle Pvt. Ltd, which was later changed to Indo Suzuki Motorcycles Pvt. Ltd. in 1984 after the company got into a technical know-how agreement with Suzuki Motor Co. Ltd., of Japan. This was the start to a fruitful and glorious relationship which lasted for about 15 years and gave the Indian consumer some very competent two-wheelers. The company initially manufactured spark-ignited internal combustion engines and outboard motors and gradually incorporated many ancillary units under its fold. It was in August 1986 that the company changed its name to TVS Suzuki Ltd. It was in 1990 that the company entered the moped market with a 34cc miniped. Some of the early motorcycle models of the company were the Ind Suzuki, TVS AX100 and TVS Max and Max R. While the early products were technically sound, the market took some time to absorb them and mature to motorcycles from the hugely popular scooter segment. TVS Suzuki never entered this scooter segment initially thanks to BAJAJ Auto‘s monopoly in the scooter market with the ever popular Chetak. After extending its contract with Suzuki in 1991, TVS motors launched its successful motorcycles- Suzuki Samurai and Shogun in 1992. The two bikes went on to be a huge success thanks mainly to their efficient and powerful two-stroke engines. Also the bikes faced direct competition only from a few firms like Yamaha with their RX series bikes. Hence the company was doing decently well in the nascent motorcycle segment as well as the moped segment where the competition came from the Kinetic Luna and the Hero Puch.
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It was in 1993 when TVS introduced its would-be-successful moped, the Scooty. The Scooty was instantly popular with the masses thanks to its aesthetic appeal, ease of use and efficient engine. Around the same time, TVS Suzuki introduced the Suzuki Shaolin. It was a racier version of its popular Shogun with India‘s first 5-speed gearbox and a 140cc engine. The bike did not do very well in the market as it was deemed to be too ahead for its time. Also the motorcycle market was slowly shifting to the more efficient four-stroke bikes from the Hero Honda stables. The fourstrokes promised better efficiency and reliability than the two-stroke engines which TVS-Suzuki and Yamaha used in their bikes. This was the phase when the four-stroke sloper engine from Honda started making its presence felt in the market. Even the popular Shogun and Samurai started losing sales. In the late 90s, TVS launched a number of new models like the XL Super moped, TVS Spectra four-stroke scooter and the Scooty ES. But the most successful product of the lot turned out to be the 150cc motorcycle – Suzuki Fiero. The Fiero competed head-on with the Hero Honda CBZ (India‘s first 150cc 4-stroke motorcycle) in the nascent premium motorcycle segment. The Fiero turned out to be a successful product and did manage to beat the CBZ on most technical accounts but still did not set the sales charts on fire which the CBZ very well managed to do. Market analysts attributed this to various reasons like aesthetic appeal, brand name and comfort. The other products in the TVS-Suzuki‘s range, barring the Scooty and the XL, were steadily losing market share to new competition from Bajaj and Hero Honda. The year 2000 was a milestone in the company‘s history. Not only did it cross the one-million customer mark and launch its future-cash-cow, the 100cc Victor but it also marked the end of a 15 year alliance between TVS motors and Suzuki Motors, Japan with the former buying out the latter‘s 25.97% stake for 9 crore rupees. Due to the exit of Suzuki Motors, the company faced a
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downfall in its market share for a few years which was generally attributed to two reasons. First, the loss of consumer‘s faith in the company after the exit of a giant like Suzuki. Second, the company did not come out with a truly ?competition-killing‘ product for a few years which led to its competitors strengthening their market shares.
Fig: Market share of three major 2 wheeler manufacturers in India Despite the lack of new launches, TVS Motors held onto a strong position in the motorcycle market thanks to its brilliant 100 cc TVS Victor. The Victor and the Scooty were the two models which gathered the maximum number of sales for the company and in 2003, TVS Motors recorded a market share of 35% from motorcycles division. It was during this time that the Victor started to capture market share from Hero Honda in the 100cc segment. In the same year, TVS launched the revamped Fiero F2 to compete against the newly launched but hugely popular Bajaj Pulsar. The Fiero F2 hardly made a dent in the market thanks to its inferiority to the mighty Pulsar on a number of accounts. The Scooty was also revamped, given a bigger fourstroke engine, better graphics and christened the Scooty Pep. With the Pep, TVS got it right and the scooterette was an instant hit with the consumers. It was in 2004 when TVS‘s patented technology VT-I made appearance on the 100cc motorcycle Centra. Though the Centra was technologically superior to its rivals, it could not garner sales and was gradually phased out of production a couple of years later. The Centra was a learning
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curve for the company and the subsequent products stressed on both aesthetics and performance. In the same year , TVS Motors decided to tap into the nascent but promising 125cc sector with the TVS Victor GLX. The bike again did not rule the market despite the Victor brandname. In the next two years, TVS launched a number of variants of the Scooty and the Victor to keep the sales alive and the product fresh. It again tried its hand at the 100cc segment by introducing the Star and later the Star City models which continue to achieve impressive sales figures till date. In 2006, TVS Motors launched its most iconic brand till date – the Apache. Apache was a 150cc motorcycle and took the fight directly to the Bajaj Pulsar which ruled the segment at that time. Initially the Apache did well in the market and managed to erode the Pulsar’s market share to an extent but quick marketing and product-upgrade from Bajaj Auto saw the Pulsar reining the 150cc segment comfortably. Realizing the need for an upgrade, TVS motors used its experiences from the racetrack and launched a 160cc variant christened the Apache RTR. The RTR was an instant hit and managed to eat into the market share of both the Pulsar 150 and the Pulsar 180 thanks to its strategic market positioning. The RTR was further upgraded in 2008 and got a fuelinjection system as the RTR-Fi. Also in 2008, TVS Motors launched the Scooty Streak, a version of the Scooty targeted at the college youth. Recently, in 2009 TVS launched the Apache RTR 180, a 180 cc motorcycle which caters to the premium end of the motorcycle market. The sales of the Apache models, the Star City and the Scooty lineup have been steadily growing despite stiff competition from other players in the market.
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6. Awards and Recognitions:
Mr Venu Srinivasan, was conferred with the prestigious JRD Tata Corporate Leadership Award for the year 2004. ? Leadership Star of Asia Award to Mr. Venu Srinivasan, CMD TVS Motor Company by Business Week International. Venu Srinivasan, Chairman and Managing Director, TVS Motor Company was Honoured with Doctorate in Science by University of Warwick, United Kingdom.
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Engineering ? The Deming Prize - TVS Motor Company is the only two-wheeler company in the world to be awarded the world‘s most prestigious and coveted recognition in Total Quality Management
? Technology Award 2002 from Ministry of Science, Government of India for the successful commercialization of indigenous technology for TVS Victor ? TPM Excellence Award - First category by Japan Institute of Plant Maintenance (JiPm) Asian Network for Quality Award 2004 - TVS Scooty
Pep won the prestigious 'Outstanding Design Excellence Award' from Business World and National Institute of Design
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?
Management ? Emerging Corporate Giant in the Private Sector awarded by The Economic Times and the Harvard Business School Association of India. ? Best Managed Company award from Business Today, one of India’s leading business magazines.
? Most Investor friendly company by Business Today, one of India’s leading business magazines.
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7. Daily Work Management-Culture:
The management philosophy is based on five pillars of TQM (Total Quality Management) which rests on the foundation of Total Employee Involvement, daily management and Kaizen (Continuous improvement). The Total Employee Involvement program ensures that responsibility for the company's performance is the shared responsibility of all levels of employees. It provides all employees with the opportunity to be involved in breakthrough activities and other improvements, over and above their daily routine. There are three main points which the company follows to keep its people happy. They are: ? ? ? Leadership at every level Keen eye for quality Understanding the customers
At TVSM, everyone is a leader and there is an overall grounding in ?Do it right the first time?- a strand of thought from Japanese manufacturing standards. People are happy to take responsibility and be a part of the system that enables growth. Daily work management consists of defining and monitoring key processes, ensuring that they meet set targets, detecting abnormalities and preventing their recurrence. TVS Motor encourages continuous improvement in all aspects of work, using Cross Functional Teams (CFT), Supervisory Improvement Teams (SIT) Quality Control Circles (QCC) and suggestion schemes. The five pillars start with policy management, which is used to arrive at the annual breakthrough objectives. There are generally not more than three company objectives,
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arrived at after a detailed exercise, which are deployed and reviewed periodically. The company conducts an exhaustive range of training programs, utilising both in-house skills and consuftants from all over the world. The programs are conducted for all employees, at all levels.
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8. Community development and social responsibility:
Srinivasan Services Trust (SST) is a trust co-sponsored by the Company with the vision of building self-reliant rural communities. SST extended its coverage to 473 villages across 4 states of Tamil Nadu, Karnataka, Maharashtra and Himachal Pradesh. Some of the significant achievements are:
?
22,001 Self Help Groups' members and 23,696 families earn additional income above Rs.1,000/- through Income generation projects. 7,296 youth are made employable and earn above Rs.3,000/- per month.
? ? ? ? ?
No case of Infant and maternal mortality in the project areas. 422 villages have been provided access to safe drinking water. Morbidity caused by poor sanitation and hygiene reduced from 42% to 11%. 100% enrolment of children in Balwadis and Schools. 1,32,000 hectares of degraded forests land have been reforested.
Eco leadership:
New technology should also answer appropriately to growing concerns on global warming and pollution. At TVS Motor, they have always been in the forefront in bringing cleaner technology to two wheelers. TVS brought the first bike to use the catalytic converter in India way back in 1996 – TVS Shogun.
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All their vehicles are 85% recyclable. This is of utmost importance in a scenario where countries like Japanese and Germany have laws on recyclability of the vehicle. Their vehicles comply with world standards of recyclability today. New age fuels are very exciting area for TVSM and they have started their exploration into this with the launch of the electric scooter and the three-wheeler available in factory-fitted CNG, LPG options.
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9. Code of Business conduct and ethics of Board and Senior Management:
?
Philosophy of code of Governance: TVS Motor Company Ltd. (TVSM), in line with TVS group philosophy, truly believes in independence, responsibility, transparency, professionalism, accountability and code of ethics, which are the basic tenets of corporate governance. TVSM always seeks to achieve optimum performance at all levels in adopting and adhering to best governance practices. TVSM has always focused on corporate governance as means to maximize long term stakeholders‘ value through disciplined and sustained growth and value creation.
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Code: This code of business conduct and ethics helps to ensure compliance with legal requirements and standards of business conduct. The board of directors (the board) has adopted a code of business conduct and ethics (the code) for all board members and senior management personnel viz., all levels of management one level below executive directors, including all functional heads. Every board member and senior management personnel is expected to read and understand this Code and its application to the performance of his or her duties, functions and responsibilities.
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?
Honesty and Integrity: ? All board members and senior management personnel shall first conduct their activities, on behalf of TVSM and on their personal behalf with honesty, integrity and fairness. ? Act in good faith, responsibility, with due care, competence and diligence without allowing their independent judgement to be subordinated. ? Act in the best interest of TVSM, its various stakeholders including TSM shareholders and fulfill the fiduciary obligations. ? Not engage in conduct likely to bring discredit upon TVSM.
?
Conflict of interest: All board members and senior management personnel shall not engage in any business, relationship or activity which maybe in conflict of interest of TVS or the group companies. Directors or senior management personnel involved in any conflict or potential conflict situations shall exclude themselves from any discussion or decision relating thereto.
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Fair dealing: All board members and senior management personnel should deal fairly with TVSMs customers, suppliers, competitors and employees. Gift or entertainment in any form that is likely to result in a feeling of expectation of personal obligation should not be accepted or extended.
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?
Corporate opportunities: All board members and senior management personnel shall not exploit for their own personal gain opportunities that are discovered through the use of TVSM property, information or position.
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Confidential information: All board members and senior management personnel shall maintain confidentiality of information they receive while being in office of TVSM and ensure always information security policies of TVSM.
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Protection of asset: All board members and senior management personnel shall endeavor their best to protect TVSMs asset and shall not use the same for their personal benefit, unless approved by the board.
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Regulations: All board members and senior management personnel shall comply with all applicable laws, rules, regulations and guidelines, including obligations under takeover and insider trading regulations and shall report actual non-compliances, if any, of law, this code, or other TVSM policies or procedures to the board.
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10. Brand Ambassadors and Print Ads:
TVS Motors has always signed very effective brand ambassadors for its different range of products. Through these brand ambassadors, it has been able to successfully connect with the mass. The current brand ambassador for the Scooty brand is the ace tennis star of India, Sania Mirza. She emanates the brand attributes of being self sufficient and is a young achiever.
Fig: Print Ad for the new Scooty Streak having Sania Mirza as the brand ambassador
TVSM had earlier roped in Sachin Tendulkar as their brand ambassador for their motorcycles. Now, they have Mahendra Singh Dhoni, India‘s wicket-keeper batsmen, as their brand ambassador for the Apache and Star City brand of motorcycles as he emanates the brand attributes of the brands like the power, speed and style. Company officials had then said that
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Sachin Tendulkar would ultimately become the brand ambassador for the company itself, rather than be restricted to just one product.
Fig: Print Ad for TVS Star City which is one of their most successful models TVS Motor has followed a trend of appointing celebrities as their brand ambassadors in India. In the same vein, TVS Motor has roped in local celebrity Iwan Fals who happens to be a popular musician in Indonesia as their brand ambassador.
Fig: The brand ambassador for TVSM in Indonesia, Iwan Fals
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11.Effective use of Information Technology:
In order to improve its operating efficiency and to improve its relationship with the suppliers and dealers, TVS Motors has effectively made use of IT. This is explained below: ? IT in product development: Product development would include conceiving the product to availability of the new product in the retail market. The IT Department has been generating feedbacks from the market, which have been compiled, analyzed and worked upon to understand the demographic needs of the customer. The compilation is done electronically thus saving time. Due to various tests conducted with the help of high-end computer technology, the company is able to save time in developing prototypes. ? IT in Human Resource management: TVS Motor has implemented SAP HR as the software for organizational structure, employee data, recruitment processes, competency mapping, career and succession planning, time office administration, payroll and employee self service where employees will be given access to manage their own data. ? IT in supplier and dealer management: TVS Motors has implemented web enabled SAP as an Enterprise Resource Planning (ERP) to manage its relationship with its large base of suppliers and dealers. This has enabled them to improve its relationship with these very important external stakeholders. The values added by using SAP are given below: ? Component suppliers can find out the status of thier payment online and even cheque details are available online making payment reconciliation faster.
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? The suppliers can be shortlisted by the company to participate in its online auction programs. Short-listed vendors come on line and participate in an auction bid for specific materials. The auction bids automatically create quotations in the SAP system, and at the end of the auction, a Purchase Order is raised by the SAP system on the successful vendor. With this, the supplier saves time and money and can bag a purchase order sitting in his office! ? When a customer in any part of the country buys a product of TVS Motor Company from any of its dealers, his or her name would be added to the customer database of the company automatically and the aim is to reach the TVS customer community on the net in an integrated marketing effort. ? On the supplier end a full-fledged ERP system is already in place. A supplier of TVS thus has access to all the information on the Web. Also in the case of a two-bin inventory system, when one of the bins gets empty it gets recorded in SAP and the information is immediately available for the supplier, so that he can send the replenishment. Suppliers can also create shipping notifications in SAP through the Internet (which simplifies the goods receipt activity at TVS Motor). ? Dealers can enter their sales orders through the Internet, and subsequently view details like sales target, their Sales Order status (eliminating multiple data entries, errors, etc) and payment details. Warranty claims are fed in by the dealer through the Internet, and the processing status including details of accepted/rejected claims along with the reasons, the amount credited, clarifications required, etc, can be viewed on line.
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12.Diversification and future plans:
TVS Motor Company is planning to look at IT as a profit centre by providing IT and ITenabled services (ITeS) to external customers. TVS‘ IT team, which comprises around 100 people, has over the years, developed domain competencies in niche areas like Just-in-Time (JIT) management, Kanban (replenishment inventory based on ?pull‘ system) and Total Productivity Management (TPM) and manufacturing execution systems. ?Having developed the competency for implementing IT projects in-house, we are looking at the possibility of providing services for external business partners, particularly in areas where we have developed core competence,? T. G. Dhandapani, Chief Information Officer, TVS Motor. The in-house IT team has implemented projects at TVS‘ Himachal Pradesh plant, its Indonesia unit and at the company‘s three-wheeler plant in Hosur. ?We have six group companies and once the IT projects at all our units are completed, we do not mind helping external customers. Once the thirst of all our group companies has been fulfilled over the next one year, then we will look at external assignments. IT for us has been a cost centre and we would also like to look at it as a profit centre.? Several companies have sought solutions for specific IT-related problems and have approached the TVS IT team which has been helping them and providing clarifications purely on an informal basis. The company‘s initiatives include digitising new product development based on market research and customer feedback. TVS expects to outdo its past year's performance. In keeping with its overall business plan, the company expects to maintain cumulative growth in sales, leveraging its recently launched products. New products to be introduced will trigger growth and improve profitability. The
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consolidation in the company's three-wheeler business will be an added advantage.
12.1.
New Launches: Apache RTR, TVS Flame, New Motorcycle, New Scooter and Four Stroke ThreeWheeler: In keeping with its plan for new launches during the current financial year, the company, in June 2009, launched a larger capacity Apache Motorcycle in the premium segment. The motorcycle's sporty, chiseled looks and unmatched performance-packed superior engine technology make the bike a class leader in terms of acceleration, performance, styling, ride handling and stability. TVS has also launched the 2009 model of its Flame motorcycle under the brand name Flame SR 125, which features an enhanced engine and revamped graphics. The new commuter motorcycle is loaded with a host of new and exciting features and is being targeted at smart city commuters. Developed with AVL Austria, SR 125's engine is propelled by three valve, Controlled Combustion Variable Timing Intelligent (CC-VTi) technology which ensures better pickup with optimum mileage and power. The company would also be expanding its scooter platform to offer a large scooter and will introduce an all-new motorcycle in the executive segment. In the three-wheeler segment, the company plans to introduce four-stroke TVS King in Petrol, LPG and CNG versions. Futuristic technology, contemporary styling and superior quality will continue to be the focus for all new products.
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TVS Motor Company is planning to set up an arm that would exclusively finance its twowheeler customers. The new non-banking finance company (NBFC) is expected to commence operations by the end of the current calendar year.
It may be noted that last year, the company had delisted its financing arm — TVS Finance — from stock markets and said it will re-enter vehicle financing.
Venu Srinivasan, chairman and managing director, TVS Motor, said that the company had approached the Reserve Bank of India (RBI) for approval which is expected to come in two months and the operations would commence by the end of the current calendar
In a slowdown year, when the availability of retail finance, especially in small towns and rural areas, is tight, an in-house retail finance arm would help, he said. He said the demand for gear-less scooters and mopeds is closely linked to availability of finance.
Meanwhile, TVSM intends to set up an engine testing facility at its R&D centre in Hosur. The company plans to launch two new vehicles — an automatic scooter and a motorcycle — before the end of this calendar year. Last year, the company sold 6.44 lakh motorcycles, 4.38 lakh mopeds and 2.59 lakh scooters. It also sold 4,613 three-wheelers with two-stroke engines. Sales have picked up and are averaging about 1,000 a month, Mr Srinivasan said. The company plans to launch a four-stroke version soon at a few places including Delhi and Bangalore.
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13. Conclusion and learning from the study:
1. The TVS Motor Company has shown steady growth in a very competitive market thanks to its competitive products and technologies. This in turn is due to the proactive and competent approach by its R&D department which has not only created practical but reliable products from time to time to cater to the market demand. 2. TVS Motors has a proactive approach towards Corporate Social Responsibility and this can be witnessed by its consistent endeavor to move towards greener technologies and products as well as its sponsorship of a number of NGOs. 3. TVS Motors also has a seamless blend of automation within the various processes of the company and this can be gauged from the number of awards conferred upon it in the same regard. (e.g 2009 Progressive Manufacturer 100 Award) 4. The study also showcases the strength of TVS Motors to stand alone as a successful organization even after its venture with Suzuki Motors, Japan on which it was dependent for technology know-how, came to an end, TVS Motors continued to hold its market position. 5. Another factor responsible for the company‘s success is its speed of innovation thanks to which it can introduce new products quickly in a highly dynamic market environment. This can partly be attributed to the use of efficient practices like Kanban, Total Productivity Management, Just-in-time and Manufacturing Execution Systems. 6. TVS Motors manages its relationship with its 450 dealers and 200 suppliers by using state-of-the-art technologies like mySAP R/3 ERP. This efficient use of technology allows it to effectively manage its symbiotic interdependencies with its suppliers and dealers and between its manufacturing plants.
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14. References:
http://www.tvsmotor.in/index.asp http://www.tvsmotor.in/directors.asp http://en.wikipedia.org/wiki/TVS_Motors http://www.tvsmotor.in/milestones.asp www.indonesiamatters.com/933/tvs-motor-company/ http://www.thehindu.com/2007/07/17/stories/2007071760381600.htm http://apachertr.blogspot.com http://www.surfindia.com/automobile/tvs-flame.html http://auto.indiamart.com http://www.infibeam.com/bikes/make/suzuki.html http://TVS Motors/TheHinduBusiness/TVSMotorCompanytolookatITasprofitcentre.asp http://www.tvsmotor.in/news.asp?id=204&yr=2009 http://www.business-standard.com/india/storypage.php?autono=367266 http://www.thehindubusinessline.com/2009/08/18/stories/2009081851200200.htm http://www.2wheelsindia.com/2008/11/whats-up-with-tvs-motor-in-indonesia.html http://www.tvsmotor.in/excellence.asp http://www.tvsmotor.in/leader-ship.asp http://www.thehindubusinessline.com/2007/08/26/stories/2007082651020200.htm http://www.ciol.com/content/enterprise/2004/104071901.asp http://www.financialexpress.com/news/how-tvs-motor-rides-on-the-web/54212/0 Annual reports from 2005 to 2009
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doc_264333075.docx
The doc describes about TVS Motors using the concepts and theories of Organizational Theory and Practice.
Organizational Analysis: A Case Study of TVS Motor Company
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Table of Contents
1. An introduction to the Organization: .................................................................................................... 3 1.1. 1.1.1. 1.1.2. 1.1.3. 1.1.4. 1.2. 1.3. 1.4. 1.5. 2. 3. All products (current and old): .................................................................................................. 4 Motorcycles: ......................................................................................................................... 4 Scooterettes: .......................................................................................................................... 5 Stepthru: ................................................................................................................................ 6 Mopeds:................................................................................................................................. 6
Current products: .......................................................................................................................... 6 Directors:....................................................................................................................................... 7 Organization Structure: ................................................................................................................. 8 Company milestones: .................................................................................................................. 12
Conducive factors identified: .............................................................................................................. 14 Mission and Vision of the company: .................................................................................................. 15 3.1. 3.2. Mission:....................................................................................................................................... 15 Vision Statement: ........................................................................................................................ 15
4.
Growth and the factors affecting the growth of TVSM: ..................................................................... 19 4.1. 4.2. 4.3. Percentage sales: ......................................................................................................................... 19 Sales in Rupees: .......................................................................................................................... 20 Comparison of different data from 2004-05 to 2008-09: ............................................................ 21
5. 6. 7. 8. 9. 10. 11. 12. 13. 14.
Rise and Fall of TVS Motors: ............................................................................................................. 25 Awards and Recognitions: .................................................................................................................. 29 Daily Work Management-Culture: ..................................................................................................... 31 Community development and social responsibility: ........................................................................... 33 Code of Business conduct and ethics of Board and Senior Management: .......................................... 35 Brand Ambassadors and Print Ads: ................................................................................................ 38 Effective use of Information Technology: ...................................................................................... 40 Diversification and future plans: ..................................................................................................... 42 Conclusion and learning from the project: ...................................................................................... 45 References:...................................................................................................................................... 46
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1. An introduction to the Organization:
TV Sundaram Iyengar and Sons Limited (TVSs) is the holding company for the TVS Group of companies engaged in the manufacturing of almost all kinds of automotive components, best two wheelers and a few other industrial products. They are also into the financial services sector. The turnover of the entire group was close to $2 billion in 2003.
TVS was founded by T. V. Sundaram Iyengar in 1911.
It is the only automotive manufacturer in India to get the prestigious Deming Prize. One of its subsidiaries Sundaram Clayton was the first company in India to receive the Deming followed by Sundaram Brake Linings also getting the Deming Prize. This prize is "given to organizations or divisions of organizations that have achieved distinctive performance improvement through the application of TQM in a designated year." Sundaram Clayton went on to be awarded the Japan Quality Medal.
The TVS group of companies is mainly situated in Padi, Tamil Nadu, in the outskirts of Chennai (formerly Madras).
TVS Motor Company is the third largest two-wheeler manufacturer in India and one among the top ten in the world, with annual turnover of more than USD 1 billion in 2007-2008, and is the flagship company of the USD 4 billion TVS Group. It is the largest company of the group in terms of size and turnover. It has its origin in Sundaram Clayton Limited, Moped Division, started in 1980. The factory was started in Hosur, Tamilnadu in southern India. The first product launched was a 50 cc moped, which appealed to the masses because of its capability to carry two people. In the same location, the same promotors started another company in 1984, in
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collaboration with Suzuki Motor Corporation of Japan, for the manufacture of 100 cc motorcycles under the brand name of Ind-Suzuki Motorcycles. Subsequently in the moped division was bought by Ind Suzuki Motorcycles in 1987 and the company changed its name to TVS Suzuki Ltd. Even though the company started producing all kinds of two wheelers like mopeds, scooters and motorcycles, the collaboration with Suzuki continued for the motorcycles only. The collaboration with Suzuki Motor Corporation ended in 2001 and since then the name of the company changed to TVS Motor Company. The company now develops all types of twowheelers through its own in house R&D facility and manufactures in three locations in India, Hosur in Tamilnadu, Mysore in Karnataka and Baddi in Himachal Pradesh. It has recently started a new manufacturing plant in Indonesia to cater to the South east Asian market. The Chairman and Managing Director of the Company is Mr. Venu Srinivasan who is the grandson of TV Sundaram Iyengar.
1.1. All products (current and old): 1.1.1. Motorcycles:
? ? ? ? ? ? ? ?
TVS AX 100 TVS Fiero TVS Samurai TVS Shaolin TVS Shogun TVS Apache(150 cc,13.7 Ps @8500rpm) TVS Apache RTR 160 TVS Apache RTR 160 EFI (Electronic Fuel Injection)
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? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?
TVS Apache RTR 180 (17.3ps) TVS Centra TVS Fiero TVS Fiero F2 TVS Fiero FX TVS Flame TVS Flame (125 cc,ccvti technology) TVS MAX 100 TVS MAX R 100 TVS Star TVS Star City TVS Star Sport TVS Supra TVS Victor (110 cc) TVS Victor EDGE (125 cc) TVS Victor GLX (125 cc)
1.1.2. Scooterettes:
? ? ? ? ?
TVS Scooty KS (60 cc) TVS Scooty ES (60 cc) TVS Scooty Pep (90 cc) TVS Scooty Pep + (90 cc) TVS Teenz (60 cc)
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? ?
TVS Streak (90 cc) TVS Teenz Electric
1.1.3. Stepthru:
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TVS NEO 110
1.1.4. Mopeds:
? ? ? ? ? ? ? ? ?
TVS XL 50(50 cc) TVS XL (60 cc) TVS Eco TVS Astra (60 cc) TVS Champ (50 cc) TVS Super Champ (60 cc) TVS Sport (70 cc) TVS XL Super (70 cc) TVS XL Super Heavy Duty (70 cc)
1.2. Current products:
TVS Motor currently manufactures a wide range of two-wheelers from mopeds to racing inspired motorcycles. Motorcycles (TVS Apache, TVS Star, TVS Flame) Variomatic Scooters (TVS Scooty Streak, TVS Scooty Pep +, TVS Scooty Teenz) and Mopeds (TVS XL Super, TVS XL Heavy Duty)
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Fig: Current products offered by TVS Motor The company has 4 plants - located at Hosur and Mysore in South India, in Himachal Pradesh, North India and one at Indonesia. The company has a production capacity of 2.5 million units a year.
1.3.Directors:
Venu Srinivasan Chairman & Managing Director
T. Kannan H. Lakshmanan
Director Director
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R Ramakrishnan K.S.Bajpai C.R.Dua Prince Asirvatham K.N. Radhakrishnan
Director Director Director Director President & CEO
K S Srinivasan S. G. Murali
Secretary Executive Vice President – Finance
1.4. Organization Structure:
The organization structure consists of the Chairman who appoints the CEO. The Vicepresidents of the different functions report to CEO as shown in the following diagram.
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Manufacturing
Marketing Sales and Service Vehicle Program R&D Quality Assurance Chairman CEO Production Engineering Central Purchase Personnel & I.R H.R & TQC
Finance Information Systems
Fig: TVSM’s Organizational structure
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The R&D department, which is one of the most important departments of the company, has a very flat structure. This is because, to facilitate innovative behavior, the employees have to be empowered to take calculated risks. To foster an innovative nature, the department should have organic structure with lesser levels of hierarchies. This is shown in the following diagram.
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Engine Chassis NVH Testing Electrical Product Verification Senior V.P (R&D) Styling
V.P (2 wheeler)
Vehicle Testing
Engine V.P (3 wheeler) Body and Chassis Electrical Vehicle Systems
Fig: Structure of R&D department
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1.5. Company milestones:
? 1980 – Great milestone in Indian automobile industry. Country‘s first 2 seater 50cc Moped TVS 50 launched. ? 1984 – First mover. TVS becomes the first Indian Company to introduce 100cc Indo-Japanese motorcycle ? 1994 – Pioneer of mobility for women. Launched India‘s first indigenous scooterette (sub 100cc variomatic scooters), TVS Scooty. ? 1996-1997 – Bringing in green technology before it became a norm. Introduced India‘s first catalytic converter enabled motorcycle, the 110cc Shotgun. Great drive. Greater speed. Launched India‘s first 5 speed motorcycle, the Shaolin. ? 2000 – Hiking speed limits. Launched TVS Fiero, India‘s first 150cc, 4-stroke motorcycle. ? 2001 – Indigenous technology. Launched TVS Victor, 4-stroke 110cc motorcycle, India‘s first indigenously designed and manufactured motorcycle. ? 2002 – TVS becomes the world‘s first 2 wheeler company to win world‘s most prestigious recognition in TQM – the Deming award-2002. TVS wins Technology award from Ministry of Science, Government of India for successful commercialization of indigenous technology. ? 2004 – Setting benchmarks in mileage. Launched TVS Centra, a world class 4stroke 100cc motorcycle with the revolutionary VT-i engines for best in class mileage. All terrain performance. Launched TVS Star, a 100cc motorcycle ideal for rough terrain. TVS wins TPM excellence award from Japan Institute of Plant
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Maintenance (JIPM). TVS wins outstanding Design Excellence award for TVS Scooty Pep. ? 2005-2006-Spreading its roots. TVS launches its Indonesian plant. Making a style statement. Launched TVS Apache, which set the youth‘s imagination on fire. It went on to become the bike of the year for 2006, winning 6 prestigious awards. ? 2007 – TVS Motor Company rolls out 7 new models. TVS launches its Himachal Pradesh plant at Nalagarh. ? 2008 – Apache refresh with rear disc brakes. TVS Motor Company bags two coveted IT awards, Sep-2008 SAP ACE 2008 Awards and 2008 Symantec South Asia Visionary award. Scooty Pep+ launched with balancing wheels. Scooty Wimbledon collection launched. Apache RTR-FI launched in Jun-2008. Launches the revolutionary 125cc Flame in Mar-2008. It makes its foray into three-wheeler market with TVS King in Mar-2008 ? 2009 – Launches TVS Apache RTR 180cc.
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2. Conducive factors identified:
TVS Motor's strength lies in design and development of new products - the latest launch of 7 products on the same day seen as a first in automotive history. They deliver total customer satisfaction by anticipating customer need and presenting quality vehicles at the right time and at the right price. TVS has always stood for innovative, easy to handle, environment friendly products, backed by reliable customer service. TVS Motors are the pioneers in many things. At the time they entered the 2-wheeler market, the environment was rich. That means, they had very less competition and had not much of a problem in acquiring the required resources. The environment was very stable and there was very less ambiguity. In addition to this, to further reduce Resource Dependency, they formed a Joint Venture with Suzuki and formed TVS-Suzuki. They were the first to launch a 2 seater in Indian market back in 1980. They were the first to launch a 100cc Indo-Japanese motorcycle. Also, they were the first to introduce a new range of 2-wheelers target for women customers. As a result of all these ?firsts?, they were able to capture a large market share which assisted their fast growth. Also, during the earlier years of 1900, India became open to the globalization. This led to creation of lot of opportunities. There were more jobs, more options. This improved the standard of living of the population. They had more money to spend. As a result of this, there was a huge market for 2- wheelers in India in general and TVS in particular as it was one of the highly established firms in the market.
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3. Mission and Vision of the company:
The company had a clear vision and mission which helped the company in formulating long term strategic planning. Also, these helped in designing the organizational structure which was best suited to achieve the long term goals. This also led to the growth of the company as the culture and structure of the company contribute to the success of any organization.
3.1. Mission:
?We are committed to being a highly profitable, socially responsible, and leading manufacturer of high value for money, environmentally friendly, lifetime personal transportation products under the TVS brand, for customers predominantly in Asian markets and to provide fulfillment and prosperity for employees, dealers and suppliers. ?
3.2. Vision Statement:
TVS Motor - Driven by the customer TVS Motor will be responsive to customer requirements consonant with its core competence and profitability. TVS Motor will provide total customer satisfaction by giving the customer the right product, at the right price, at the right time.
TVS Motor - The Industry Leader TVS Motor will be one among the top two two-wheeler manufacturers in India and one among the top five two-wheeler manufacturers in Asia.
TVS Motor - Global overview TVS Motor will have profitable operations overseas especially in Asian markets,
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capitalizing on the expertise developed in the areas of manufacturing, technology and marketing. The thrust will be to achieve a significant share for international business in the total turnover.
TVS Motor - At the cutting edge TVS Motor will hone and sustain its cutting edge of technology by constant benchmarking against international leaders.
TVS Motor - Committed to Total Quality TVS Motor is committed to achieving a self-reviewing organization in perpetuity by adopting TQM as a way of life. TVS Motor believes in the importance of the process. People and projects will be evaluated both by their end results and the process adopted.
TVS Motor - The Human Factor TVS Motor believes that people make an organization and that its well-being is dependent on the commitment and growth of its people. There will be a sustained effort through systematic training and planning career growth to develop employees talents and enhance job satisfaction. TVS Motor will create an enabling ambience where the maximum self-actualization of every employee is achieved. TVS Motor will support and encourage the process of self-renewal in all its employees and nurture their sense of self worth.
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TVS Motor - Responsible Corporate Citizen TVS Motor firmly believes in the integration of Safety, Health and Environmental aspects with all business activities and ensure protection of employees and environment including development of surrounding communities. TVS Motor strives for long-term relationships of mutual trust and interdependence with its customers, employees, dealers and suppliers. In order to further decrease the environmental complexity and to improve its sales, the company has gone global. In the year 2005-2006, the company has invested around $43 million to build a factory in Karawang, West Java in Indonesia. It sees Indonesia as the base for its operations in South East Asia.
Fig: Venu Srinivasan (left), Chairman, TVS Motor, with Susilo Bambang Yudhoyono (right), President of Indonesia, at the PT TVS Motor’s factory in Karawang, near Jakarta.
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Speaking at the inauguration of its plant in Indonesia, at the the sprawling facility, TVS Motor Company India Chairman Venu Srinivasan said: ?We have chosen Indonesia as our centre [export hub] for the ASEAN region ... because we think that this country has great deal of potential, most importantly human resources.? Besides the ASEAN region, vehicles manufactured at the plant would be exported to Africa and South America, he said. ?Our initial investment [on the facility] is about $50 million, with local value addition of 40 per cent at start up. This investment will be scaled up to $100 million over the next three years to achieve local value addition of 80 per cent,? Mr. Srinivasan said. A research and development facility forms a part of the plant.
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4. Growth and the factors affecting the growth of TVSM:
As stated earlier, TVS Motor Company is the third largest2-wheeler manufacturer in India. Below, there is an analysis of the performance of the company taking different factors into consideration.
4.1. Percentage sales:
Three Wheelers Spares and 1% accessories Other income 2% 9%
Scooters 18%
Motorcycles 51%
Mopeds 19%
Percentage Sales 2008-2009
Three Wheelers 0%
Spares and Other income accessories 3% 8% Scooters 18%
Motorcycles 52%
Mopeds 19%
Percentage Sales 2007-2008
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? ?
The mopeds sales remained the same because, there are not many competitors in this field. Increase in percentage sales of 3-wheelers, as they introduced their first 3-wheeler, TVS King in 2008-2009.
4.2.Sales in Rupees:
Sales (Rs in Crores)
Other income Three Wheelers Spares and accessories 2007-2008 Scooters Mopeds Motorcycles 0.00 500.00 1,000.00 1,500.00 2,000.00 2008-2009
?
There is an increase in revenue from sales of motorcycles in 2008-09. This is because of introduction of two new models, TVS Apache RTR FI and Flame during that year. These two models were very successful because of the cutting edge technology that went into them. The Apache RTR FI had fuel injection technology which gives the motorcycle a crisper throttle response and enhances its fuel efficiency. Some of the key features of TVS Flame which led to its success are given below: ? Futuristic aerodynamic styling. ? The Fuel tank is embedded with Delta Edge clear lens indicators. ? First time in India- the LCD digital auto console in a 125 cc segment bike.
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? India's first Deltaedge exhaust in triangle shape lowers the sounds, emissions delivering excellent performance. ? The 125 cc engine gives 10.5 bhp @ 8250 rpm that are Flame's power performance statement. ? Three wheeler segment is a new revenue earner for TVS in 2008-09, because of the introduction of King as has been mentioned previously. The company ventured into 3 wheeler segment because the environment was rich as there were only a few key players in the market, namely Bajaj and Ape. ? Increase in revenue earned by sale of mopeds in 2008-09 because of introduction of two new models of Scooty, namely Scooty Pep+ and Scooty Wimbledon collection.
4.3. Comparison of different data from 2004-05 to 2008-09:
2008-09 Sales and other income Profit before interest, depreciation and tax Profit after tax Net fixed assets 189 31 1,036 132 32 1,043 203 67 1,003 275 117 794 291 138 770 3,741 2007-08 3,310 2006-07 3,921 2005-06 3,306 2004-05 2,955
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Sales and other income
Sales and other income
3,741 3,310
3,921 3,306 2,955
2008-09
2007-08
2006-07
2005-06
2004-05
From the above graph, it can be observed that there has been a steady increase in the Sales from 2004-05 to 2006-07. This is mainly because of heavy investment by the company in the R & D. This strategic investment in R & D has helped them in releasing new models as well as improving the performance of already existing models. This as well as the other reasons for the increase or decrease in sales for each of these years is explained below. During the year 2004-05, the company successfully launched multiple products: • TVS Star – 4-stroke 100cc motorcycle in the economy segment with rugged performance and good mileage. • New Victor GLX – 4-stroke 125cc motorcycle in the executive segment with superior style and power. • New Victor GX – 4-stroke 110cc refresh of Victor with 'Duralife' engine and new looks. • Scooty Pep "Splash" series – 4-stroke 75cc stylish ungeared scooter with new innovative colours to suit the youth image. Scooty Pep has received the prestigious NID Award for the best style in 2004-05. During 2005-06, the launch of Apache and two TVS StaR range including the popular TVS StaR City variant enabled the company to improve its market share and turnover significantly. 22
The increase in sales during 2006-07 is attributed to the sales of Star brand. The excitement in the StaR brand was maintained through continuous innovation and launch of variants viz. StaR City alloy wheel, StaR City Electric start and StaR Sport. Also, Scooty Pep + was launched in 99 colors which strengthened the Scooty brand. During the year 2007-08, the motorcycle category of the two wheeler industry registered a decline of 8%. The economy segment which has been the driver of growth in the past suffered maximum decline of 19%, because of non availability of retail finance and stringent credit norms imposed by the financiers, especially in small towns and rural markets. Also, Launch of TVS Flame, in the executive segment by the company, was delayed due to litigation on usage of twin spark plug. This is an example which shows how external environment factors cause uncertainty and hence affects the normal operation of an organization. This led to an overall decrease in sales during 2007-08. During 2008-09, the launch of Scooty Streak, a tough and stylish variant of Scooty Pep+ and Apache RTR RD, in the premium motorcycle segment strengthened the portfolio of the Company. The company also launched TVS Flame which was successful. The Company launched its 2 stroke three wheeler in Petrol/ CNG / LPG variants. This is an example which shows how a company can reduce its uncertainty in one type of market by diversifying its operations into another related market. All these factors led to an increase in sales during 2008-09. From the above analysis, it can be observed that if one uses ?Internal Systems Approach? to measure the effective of the organization, it can be concluded that TVS Motors is a very effective company. This is because, it achieves or is trying to achieve many of the goals which is used to measure the effectiveness in this approach. For example, one of the goals to be set in this approach of measurement is increase in the rate of product innovation. The company is continuously trying to achieve this goal as is evident by the number of new models introduced by it during the last 5 years.
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300 250 200 150 100 50 0 Profit before interest, depreciation and tax Profit after tax
The profit after tax has been steadily decreasing from 2004 to 2009. The main reason for the reduction in profits is because the environment is getting poorer. Many competitors are coming to India and expanding their base. As a result of this, there is a struggle to acquire sufficient resources. This and certain other reasons for the reduction in profits are given below, yearwise: ? In 2005-06, the fall in profit was due to higher material cost on account of stringent emission norms coupled with the rise in cost of aluminium, steel, rubber and plastics. ? In 2006-07, the fall in profit was mainly due to steep increase in raw material cost. Due to intense competition in the industry, especially in the highly price sensitive entry level segment, where the company has a significant presence, it was not possible to pass on the cost increase to its customers leading to lower margin. Higher marketing cost consequent to introduction of new products / variants and increase in interest cost due to higher cost of borrowings further led to lower profit for the year. ? ? In 2007-08, the fall in profit was due to lower sales and consequent reduction in margins. In 2008-09, the slight fall in profit was due to the escalation in the input cost especially in the first half of the year which affected the margins. The Company pursued aggressively the cost reduction projects to partially neutralize the cost increase. 24
5. Rise and Fall of TVS Motors:
It was 15th July 1982 when the company was incorporated as Indian Motorcycle Pvt. Ltd, which was later changed to Indo Suzuki Motorcycles Pvt. Ltd. in 1984 after the company got into a technical know-how agreement with Suzuki Motor Co. Ltd., of Japan. This was the start to a fruitful and glorious relationship which lasted for about 15 years and gave the Indian consumer some very competent two-wheelers. The company initially manufactured spark-ignited internal combustion engines and outboard motors and gradually incorporated many ancillary units under its fold. It was in August 1986 that the company changed its name to TVS Suzuki Ltd. It was in 1990 that the company entered the moped market with a 34cc miniped. Some of the early motorcycle models of the company were the Ind Suzuki, TVS AX100 and TVS Max and Max R. While the early products were technically sound, the market took some time to absorb them and mature to motorcycles from the hugely popular scooter segment. TVS Suzuki never entered this scooter segment initially thanks to BAJAJ Auto‘s monopoly in the scooter market with the ever popular Chetak. After extending its contract with Suzuki in 1991, TVS motors launched its successful motorcycles- Suzuki Samurai and Shogun in 1992. The two bikes went on to be a huge success thanks mainly to their efficient and powerful two-stroke engines. Also the bikes faced direct competition only from a few firms like Yamaha with their RX series bikes. Hence the company was doing decently well in the nascent motorcycle segment as well as the moped segment where the competition came from the Kinetic Luna and the Hero Puch.
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It was in 1993 when TVS introduced its would-be-successful moped, the Scooty. The Scooty was instantly popular with the masses thanks to its aesthetic appeal, ease of use and efficient engine. Around the same time, TVS Suzuki introduced the Suzuki Shaolin. It was a racier version of its popular Shogun with India‘s first 5-speed gearbox and a 140cc engine. The bike did not do very well in the market as it was deemed to be too ahead for its time. Also the motorcycle market was slowly shifting to the more efficient four-stroke bikes from the Hero Honda stables. The fourstrokes promised better efficiency and reliability than the two-stroke engines which TVS-Suzuki and Yamaha used in their bikes. This was the phase when the four-stroke sloper engine from Honda started making its presence felt in the market. Even the popular Shogun and Samurai started losing sales. In the late 90s, TVS launched a number of new models like the XL Super moped, TVS Spectra four-stroke scooter and the Scooty ES. But the most successful product of the lot turned out to be the 150cc motorcycle – Suzuki Fiero. The Fiero competed head-on with the Hero Honda CBZ (India‘s first 150cc 4-stroke motorcycle) in the nascent premium motorcycle segment. The Fiero turned out to be a successful product and did manage to beat the CBZ on most technical accounts but still did not set the sales charts on fire which the CBZ very well managed to do. Market analysts attributed this to various reasons like aesthetic appeal, brand name and comfort. The other products in the TVS-Suzuki‘s range, barring the Scooty and the XL, were steadily losing market share to new competition from Bajaj and Hero Honda. The year 2000 was a milestone in the company‘s history. Not only did it cross the one-million customer mark and launch its future-cash-cow, the 100cc Victor but it also marked the end of a 15 year alliance between TVS motors and Suzuki Motors, Japan with the former buying out the latter‘s 25.97% stake for 9 crore rupees. Due to the exit of Suzuki Motors, the company faced a
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downfall in its market share for a few years which was generally attributed to two reasons. First, the loss of consumer‘s faith in the company after the exit of a giant like Suzuki. Second, the company did not come out with a truly ?competition-killing‘ product for a few years which led to its competitors strengthening their market shares.
Fig: Market share of three major 2 wheeler manufacturers in India Despite the lack of new launches, TVS Motors held onto a strong position in the motorcycle market thanks to its brilliant 100 cc TVS Victor. The Victor and the Scooty were the two models which gathered the maximum number of sales for the company and in 2003, TVS Motors recorded a market share of 35% from motorcycles division. It was during this time that the Victor started to capture market share from Hero Honda in the 100cc segment. In the same year, TVS launched the revamped Fiero F2 to compete against the newly launched but hugely popular Bajaj Pulsar. The Fiero F2 hardly made a dent in the market thanks to its inferiority to the mighty Pulsar on a number of accounts. The Scooty was also revamped, given a bigger fourstroke engine, better graphics and christened the Scooty Pep. With the Pep, TVS got it right and the scooterette was an instant hit with the consumers. It was in 2004 when TVS‘s patented technology VT-I made appearance on the 100cc motorcycle Centra. Though the Centra was technologically superior to its rivals, it could not garner sales and was gradually phased out of production a couple of years later. The Centra was a learning
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curve for the company and the subsequent products stressed on both aesthetics and performance. In the same year , TVS Motors decided to tap into the nascent but promising 125cc sector with the TVS Victor GLX. The bike again did not rule the market despite the Victor brandname. In the next two years, TVS launched a number of variants of the Scooty and the Victor to keep the sales alive and the product fresh. It again tried its hand at the 100cc segment by introducing the Star and later the Star City models which continue to achieve impressive sales figures till date. In 2006, TVS Motors launched its most iconic brand till date – the Apache. Apache was a 150cc motorcycle and took the fight directly to the Bajaj Pulsar which ruled the segment at that time. Initially the Apache did well in the market and managed to erode the Pulsar’s market share to an extent but quick marketing and product-upgrade from Bajaj Auto saw the Pulsar reining the 150cc segment comfortably. Realizing the need for an upgrade, TVS motors used its experiences from the racetrack and launched a 160cc variant christened the Apache RTR. The RTR was an instant hit and managed to eat into the market share of both the Pulsar 150 and the Pulsar 180 thanks to its strategic market positioning. The RTR was further upgraded in 2008 and got a fuelinjection system as the RTR-Fi. Also in 2008, TVS Motors launched the Scooty Streak, a version of the Scooty targeted at the college youth. Recently, in 2009 TVS launched the Apache RTR 180, a 180 cc motorcycle which caters to the premium end of the motorcycle market. The sales of the Apache models, the Star City and the Scooty lineup have been steadily growing despite stiff competition from other players in the market.
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6. Awards and Recognitions:
Mr Venu Srinivasan, was conferred with the prestigious JRD Tata Corporate Leadership Award for the year 2004. ? Leadership Star of Asia Award to Mr. Venu Srinivasan, CMD TVS Motor Company by Business Week International. Venu Srinivasan, Chairman and Managing Director, TVS Motor Company was Honoured with Doctorate in Science by University of Warwick, United Kingdom.
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Engineering ? The Deming Prize - TVS Motor Company is the only two-wheeler company in the world to be awarded the world‘s most prestigious and coveted recognition in Total Quality Management
? Technology Award 2002 from Ministry of Science, Government of India for the successful commercialization of indigenous technology for TVS Victor ? TPM Excellence Award - First category by Japan Institute of Plant Maintenance (JiPm) Asian Network for Quality Award 2004 - TVS Scooty
Pep won the prestigious 'Outstanding Design Excellence Award' from Business World and National Institute of Design
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?
Management ? Emerging Corporate Giant in the Private Sector awarded by The Economic Times and the Harvard Business School Association of India. ? Best Managed Company award from Business Today, one of India’s leading business magazines.
? Most Investor friendly company by Business Today, one of India’s leading business magazines.
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7. Daily Work Management-Culture:
The management philosophy is based on five pillars of TQM (Total Quality Management) which rests on the foundation of Total Employee Involvement, daily management and Kaizen (Continuous improvement). The Total Employee Involvement program ensures that responsibility for the company's performance is the shared responsibility of all levels of employees. It provides all employees with the opportunity to be involved in breakthrough activities and other improvements, over and above their daily routine. There are three main points which the company follows to keep its people happy. They are: ? ? ? Leadership at every level Keen eye for quality Understanding the customers
At TVSM, everyone is a leader and there is an overall grounding in ?Do it right the first time?- a strand of thought from Japanese manufacturing standards. People are happy to take responsibility and be a part of the system that enables growth. Daily work management consists of defining and monitoring key processes, ensuring that they meet set targets, detecting abnormalities and preventing their recurrence. TVS Motor encourages continuous improvement in all aspects of work, using Cross Functional Teams (CFT), Supervisory Improvement Teams (SIT) Quality Control Circles (QCC) and suggestion schemes. The five pillars start with policy management, which is used to arrive at the annual breakthrough objectives. There are generally not more than three company objectives,
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arrived at after a detailed exercise, which are deployed and reviewed periodically. The company conducts an exhaustive range of training programs, utilising both in-house skills and consuftants from all over the world. The programs are conducted for all employees, at all levels.
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8. Community development and social responsibility:
Srinivasan Services Trust (SST) is a trust co-sponsored by the Company with the vision of building self-reliant rural communities. SST extended its coverage to 473 villages across 4 states of Tamil Nadu, Karnataka, Maharashtra and Himachal Pradesh. Some of the significant achievements are:
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22,001 Self Help Groups' members and 23,696 families earn additional income above Rs.1,000/- through Income generation projects. 7,296 youth are made employable and earn above Rs.3,000/- per month.
? ? ? ? ?
No case of Infant and maternal mortality in the project areas. 422 villages have been provided access to safe drinking water. Morbidity caused by poor sanitation and hygiene reduced from 42% to 11%. 100% enrolment of children in Balwadis and Schools. 1,32,000 hectares of degraded forests land have been reforested.
Eco leadership:
New technology should also answer appropriately to growing concerns on global warming and pollution. At TVS Motor, they have always been in the forefront in bringing cleaner technology to two wheelers. TVS brought the first bike to use the catalytic converter in India way back in 1996 – TVS Shogun.
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All their vehicles are 85% recyclable. This is of utmost importance in a scenario where countries like Japanese and Germany have laws on recyclability of the vehicle. Their vehicles comply with world standards of recyclability today. New age fuels are very exciting area for TVSM and they have started their exploration into this with the launch of the electric scooter and the three-wheeler available in factory-fitted CNG, LPG options.
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9. Code of Business conduct and ethics of Board and Senior Management:
?
Philosophy of code of Governance: TVS Motor Company Ltd. (TVSM), in line with TVS group philosophy, truly believes in independence, responsibility, transparency, professionalism, accountability and code of ethics, which are the basic tenets of corporate governance. TVSM always seeks to achieve optimum performance at all levels in adopting and adhering to best governance practices. TVSM has always focused on corporate governance as means to maximize long term stakeholders‘ value through disciplined and sustained growth and value creation.
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Code: This code of business conduct and ethics helps to ensure compliance with legal requirements and standards of business conduct. The board of directors (the board) has adopted a code of business conduct and ethics (the code) for all board members and senior management personnel viz., all levels of management one level below executive directors, including all functional heads. Every board member and senior management personnel is expected to read and understand this Code and its application to the performance of his or her duties, functions and responsibilities.
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?
Honesty and Integrity: ? All board members and senior management personnel shall first conduct their activities, on behalf of TVSM and on their personal behalf with honesty, integrity and fairness. ? Act in good faith, responsibility, with due care, competence and diligence without allowing their independent judgement to be subordinated. ? Act in the best interest of TVSM, its various stakeholders including TSM shareholders and fulfill the fiduciary obligations. ? Not engage in conduct likely to bring discredit upon TVSM.
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Conflict of interest: All board members and senior management personnel shall not engage in any business, relationship or activity which maybe in conflict of interest of TVS or the group companies. Directors or senior management personnel involved in any conflict or potential conflict situations shall exclude themselves from any discussion or decision relating thereto.
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Fair dealing: All board members and senior management personnel should deal fairly with TVSMs customers, suppliers, competitors and employees. Gift or entertainment in any form that is likely to result in a feeling of expectation of personal obligation should not be accepted or extended.
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?
Corporate opportunities: All board members and senior management personnel shall not exploit for their own personal gain opportunities that are discovered through the use of TVSM property, information or position.
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Confidential information: All board members and senior management personnel shall maintain confidentiality of information they receive while being in office of TVSM and ensure always information security policies of TVSM.
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Protection of asset: All board members and senior management personnel shall endeavor their best to protect TVSMs asset and shall not use the same for their personal benefit, unless approved by the board.
?
Regulations: All board members and senior management personnel shall comply with all applicable laws, rules, regulations and guidelines, including obligations under takeover and insider trading regulations and shall report actual non-compliances, if any, of law, this code, or other TVSM policies or procedures to the board.
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10. Brand Ambassadors and Print Ads:
TVS Motors has always signed very effective brand ambassadors for its different range of products. Through these brand ambassadors, it has been able to successfully connect with the mass. The current brand ambassador for the Scooty brand is the ace tennis star of India, Sania Mirza. She emanates the brand attributes of being self sufficient and is a young achiever.
Fig: Print Ad for the new Scooty Streak having Sania Mirza as the brand ambassador
TVSM had earlier roped in Sachin Tendulkar as their brand ambassador for their motorcycles. Now, they have Mahendra Singh Dhoni, India‘s wicket-keeper batsmen, as their brand ambassador for the Apache and Star City brand of motorcycles as he emanates the brand attributes of the brands like the power, speed and style. Company officials had then said that
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Sachin Tendulkar would ultimately become the brand ambassador for the company itself, rather than be restricted to just one product.
Fig: Print Ad for TVS Star City which is one of their most successful models TVS Motor has followed a trend of appointing celebrities as their brand ambassadors in India. In the same vein, TVS Motor has roped in local celebrity Iwan Fals who happens to be a popular musician in Indonesia as their brand ambassador.
Fig: The brand ambassador for TVSM in Indonesia, Iwan Fals
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11.Effective use of Information Technology:
In order to improve its operating efficiency and to improve its relationship with the suppliers and dealers, TVS Motors has effectively made use of IT. This is explained below: ? IT in product development: Product development would include conceiving the product to availability of the new product in the retail market. The IT Department has been generating feedbacks from the market, which have been compiled, analyzed and worked upon to understand the demographic needs of the customer. The compilation is done electronically thus saving time. Due to various tests conducted with the help of high-end computer technology, the company is able to save time in developing prototypes. ? IT in Human Resource management: TVS Motor has implemented SAP HR as the software for organizational structure, employee data, recruitment processes, competency mapping, career and succession planning, time office administration, payroll and employee self service where employees will be given access to manage their own data. ? IT in supplier and dealer management: TVS Motors has implemented web enabled SAP as an Enterprise Resource Planning (ERP) to manage its relationship with its large base of suppliers and dealers. This has enabled them to improve its relationship with these very important external stakeholders. The values added by using SAP are given below: ? Component suppliers can find out the status of thier payment online and even cheque details are available online making payment reconciliation faster.
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? The suppliers can be shortlisted by the company to participate in its online auction programs. Short-listed vendors come on line and participate in an auction bid for specific materials. The auction bids automatically create quotations in the SAP system, and at the end of the auction, a Purchase Order is raised by the SAP system on the successful vendor. With this, the supplier saves time and money and can bag a purchase order sitting in his office! ? When a customer in any part of the country buys a product of TVS Motor Company from any of its dealers, his or her name would be added to the customer database of the company automatically and the aim is to reach the TVS customer community on the net in an integrated marketing effort. ? On the supplier end a full-fledged ERP system is already in place. A supplier of TVS thus has access to all the information on the Web. Also in the case of a two-bin inventory system, when one of the bins gets empty it gets recorded in SAP and the information is immediately available for the supplier, so that he can send the replenishment. Suppliers can also create shipping notifications in SAP through the Internet (which simplifies the goods receipt activity at TVS Motor). ? Dealers can enter their sales orders through the Internet, and subsequently view details like sales target, their Sales Order status (eliminating multiple data entries, errors, etc) and payment details. Warranty claims are fed in by the dealer through the Internet, and the processing status including details of accepted/rejected claims along with the reasons, the amount credited, clarifications required, etc, can be viewed on line.
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12.Diversification and future plans:
TVS Motor Company is planning to look at IT as a profit centre by providing IT and ITenabled services (ITeS) to external customers. TVS‘ IT team, which comprises around 100 people, has over the years, developed domain competencies in niche areas like Just-in-Time (JIT) management, Kanban (replenishment inventory based on ?pull‘ system) and Total Productivity Management (TPM) and manufacturing execution systems. ?Having developed the competency for implementing IT projects in-house, we are looking at the possibility of providing services for external business partners, particularly in areas where we have developed core competence,? T. G. Dhandapani, Chief Information Officer, TVS Motor. The in-house IT team has implemented projects at TVS‘ Himachal Pradesh plant, its Indonesia unit and at the company‘s three-wheeler plant in Hosur. ?We have six group companies and once the IT projects at all our units are completed, we do not mind helping external customers. Once the thirst of all our group companies has been fulfilled over the next one year, then we will look at external assignments. IT for us has been a cost centre and we would also like to look at it as a profit centre.? Several companies have sought solutions for specific IT-related problems and have approached the TVS IT team which has been helping them and providing clarifications purely on an informal basis. The company‘s initiatives include digitising new product development based on market research and customer feedback. TVS expects to outdo its past year's performance. In keeping with its overall business plan, the company expects to maintain cumulative growth in sales, leveraging its recently launched products. New products to be introduced will trigger growth and improve profitability. The
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consolidation in the company's three-wheeler business will be an added advantage.
12.1.
New Launches: Apache RTR, TVS Flame, New Motorcycle, New Scooter and Four Stroke ThreeWheeler: In keeping with its plan for new launches during the current financial year, the company, in June 2009, launched a larger capacity Apache Motorcycle in the premium segment. The motorcycle's sporty, chiseled looks and unmatched performance-packed superior engine technology make the bike a class leader in terms of acceleration, performance, styling, ride handling and stability. TVS has also launched the 2009 model of its Flame motorcycle under the brand name Flame SR 125, which features an enhanced engine and revamped graphics. The new commuter motorcycle is loaded with a host of new and exciting features and is being targeted at smart city commuters. Developed with AVL Austria, SR 125's engine is propelled by three valve, Controlled Combustion Variable Timing Intelligent (CC-VTi) technology which ensures better pickup with optimum mileage and power. The company would also be expanding its scooter platform to offer a large scooter and will introduce an all-new motorcycle in the executive segment. In the three-wheeler segment, the company plans to introduce four-stroke TVS King in Petrol, LPG and CNG versions. Futuristic technology, contemporary styling and superior quality will continue to be the focus for all new products.
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TVS Motor Company is planning to set up an arm that would exclusively finance its twowheeler customers. The new non-banking finance company (NBFC) is expected to commence operations by the end of the current calendar year.
It may be noted that last year, the company had delisted its financing arm — TVS Finance — from stock markets and said it will re-enter vehicle financing.
Venu Srinivasan, chairman and managing director, TVS Motor, said that the company had approached the Reserve Bank of India (RBI) for approval which is expected to come in two months and the operations would commence by the end of the current calendar
In a slowdown year, when the availability of retail finance, especially in small towns and rural areas, is tight, an in-house retail finance arm would help, he said. He said the demand for gear-less scooters and mopeds is closely linked to availability of finance.
Meanwhile, TVSM intends to set up an engine testing facility at its R&D centre in Hosur. The company plans to launch two new vehicles — an automatic scooter and a motorcycle — before the end of this calendar year. Last year, the company sold 6.44 lakh motorcycles, 4.38 lakh mopeds and 2.59 lakh scooters. It also sold 4,613 three-wheelers with two-stroke engines. Sales have picked up and are averaging about 1,000 a month, Mr Srinivasan said. The company plans to launch a four-stroke version soon at a few places including Delhi and Bangalore.
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13. Conclusion and learning from the study:
1. The TVS Motor Company has shown steady growth in a very competitive market thanks to its competitive products and technologies. This in turn is due to the proactive and competent approach by its R&D department which has not only created practical but reliable products from time to time to cater to the market demand. 2. TVS Motors has a proactive approach towards Corporate Social Responsibility and this can be witnessed by its consistent endeavor to move towards greener technologies and products as well as its sponsorship of a number of NGOs. 3. TVS Motors also has a seamless blend of automation within the various processes of the company and this can be gauged from the number of awards conferred upon it in the same regard. (e.g 2009 Progressive Manufacturer 100 Award) 4. The study also showcases the strength of TVS Motors to stand alone as a successful organization even after its venture with Suzuki Motors, Japan on which it was dependent for technology know-how, came to an end, TVS Motors continued to hold its market position. 5. Another factor responsible for the company‘s success is its speed of innovation thanks to which it can introduce new products quickly in a highly dynamic market environment. This can partly be attributed to the use of efficient practices like Kanban, Total Productivity Management, Just-in-time and Manufacturing Execution Systems. 6. TVS Motors manages its relationship with its 450 dealers and 200 suppliers by using state-of-the-art technologies like mySAP R/3 ERP. This efficient use of technology allows it to effectively manage its symbiotic interdependencies with its suppliers and dealers and between its manufacturing plants.
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14. References:
http://www.tvsmotor.in/index.asp http://www.tvsmotor.in/directors.asp http://en.wikipedia.org/wiki/TVS_Motors http://www.tvsmotor.in/milestones.asp www.indonesiamatters.com/933/tvs-motor-company/ http://www.thehindu.com/2007/07/17/stories/2007071760381600.htm http://apachertr.blogspot.com http://www.surfindia.com/automobile/tvs-flame.html http://auto.indiamart.com http://www.infibeam.com/bikes/make/suzuki.html http://TVS Motors/TheHinduBusiness/TVSMotorCompanytolookatITasprofitcentre.asp http://www.tvsmotor.in/news.asp?id=204&yr=2009 http://www.business-standard.com/india/storypage.php?autono=367266 http://www.thehindubusinessline.com/2009/08/18/stories/2009081851200200.htm http://www.2wheelsindia.com/2008/11/whats-up-with-tvs-motor-in-indonesia.html http://www.tvsmotor.in/excellence.asp http://www.tvsmotor.in/leader-ship.asp http://www.thehindubusinessline.com/2007/08/26/stories/2007082651020200.htm http://www.ciol.com/content/enterprise/2004/104071901.asp http://www.financialexpress.com/news/how-tvs-motor-rides-on-the-web/54212/0 Annual reports from 2005 to 2009
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