Organizational Analysis – A Case Study of

The Royal Enfield Motorcycle Company

Submitted By
Aditya Dixit
Anand Agrawal
Nayantara Maria Rodriguez
Shovan Kumar Kundu
Subhayu Roy

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 Contents

Part-I

1.1 Introduction……………………………………………………3

1.2 History………………………………………………………….3

Part-II

2.1 Financial Performance 2000-2001…………………………..12

2.2 Financial Performance 2004-2005…………………………..13

2.3 Financial Performance 2006-2007…………………………..15

Part-III

3.1 Organizational Practices – A Discussion…………………....18

3.2 Factors Conducive for the Growth of the Organization…...20

3.3 Growth of the Organization…………………………………21

3.4 Factors that led to Expansion & Growth…………………..21

3.5 Decline & Subsequent Expansion – Factors……………….21

Part-IV

4.1 Conclusion……………………………………………………22

4.2 Learning from the Project…………………………………..22

4.3 References……………………………………………………22

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1.1 Introduction

Amongst all the two-wheelers sold in India, no Indian brand commands as much respect as the
Royal Enfield marquee. With a rich heritage and a multi-continental history behind it, this brand
today represents the aspirations of the Indian biker to ride a world-class vehicle. One of the only
Indian brands to be exported to 14 countries across the globe, the Royal Enfield brand is a true
story of an organization managing enormous amount of dynamism in the market, and rivaling a
new set of competitors every year. With a sale of 7 lakh 2-wheelers every year, the Indian 2-
wheeler industry has to keep up with the changing tastes of the customers and every participating
corporate is therefore hard pressed to deliver year on year.

The following study aspires to study the history of this illustrious organization and analyze the
organizational strategies and moves that has enabled this company to stay profitable while
catering to a niche segment of customers across the globe.

1.2 History

The Beginning

Hunt End, England was a village of several small mills

manufacturing needles and fish-hooks. It was here in 1851
that George Townsend put up his needle-making mill, which
he named Givry Works. But it wasn’t until his passing away
that his son, George Jr. and his half-brother brought into
Givry Works one of the first 'boneshakers' – a crude cycle. It
had a backbone of iron, with wooden wheels, iron tyres and
pedals of triangular pieces of wood! Though the bike was a
source of some amusement, George and his team felt they
could easily improve on it.

The earliest modern safety bicycle with two wheels of equal size had appeared in about 1880. All
manufacturers were trying their hand at this new venture. So was George Townsend Jr. By luck,
he chanced upon an invention in his neighborhood – a saddle that only used one length of wire in
the two springs and in the framework. This was adopted, patented and marketed as the
'Townsend Cyclists Saddle & Spring'. He had entered the bicycle parts trade!

From bicycle parts, Townsend slowly moved on to producing bicycles himself. He was also
supplying a wide range of parts to other manufacturers - Givry Works was growing rapidly. Over
the next three years he developed his own range of over two-dozen machines. Each machine,
known locally as the 'Townsend cycle' was reputed for its sturdy frame, a character that all
Enfield bikes would follow.

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1891
A Little Trouble
Townsend got himself into a bit of financial trouble in about
1890 and called in some financiers from Birmingham.
Unfortunately, they didn’t quite see eye to eye. So
Townsend parted ways with the financiers leaving the
company to them. The financiers then brought in Albert
Eadie and R.W. Smith. They took control of Townsend’s in
November 1891. The following year the firm was re-
christened ‘The Eadie Manufacturing Company Limited’.
Soon after, Albert Eadie got a lucrative contract to supply
precision rifle parts to the Royal Small Arms Factory in
Enfield, Middlesex. To celebrate the contract, Eadie and Smith decided to call the first new
design of bicycle, the ‘Enfield’

1909
Motorcycle Craze
It would be interesting to note here that motorcycling was thought to be a temporary enthusiasm
that would soon fade out! A brief spin on a motorbike then took several hours of preparations -
tuning the tiny water-cooled engine, getting the tyres pumped, the gears oiled and a supply of
spare parts packed. In 1909, Royal Enfield took the biking world by surprise. At the motorcycle
show that year, they displayed a small 2 1/4 hp V twin-engine machine built in the Swiss
tradition, which ran very well. A slightly larger model was developed in 1911. A 2 3/4 hp, with
all chain drive incorporating the well-known Enfield two-speed gear. This model stood up until
1914.

THE ROYAL ENFIELD BIKES (1911 - 1920)

1911
Enfield and the War
The First World War began in 1914. Royal Enfield was
called on to supply motorcycles to the British War
Department and even awarded a contract to build bikes for
the Imperial Russian Government during the same period.
The machine gun combination and the 6hp stretcher-
carrying outfit were some of the models produced for the
war purpose. Enfield started using its own engines - a 225cc
two-stroke single and a 425cc V-twin about this time. Post-war, it produced a larger 976cc twin
and continued to produce the two-speed 225L until 1929. In 1917, the officers of the Women’s
Police Force were issued with a 2 1/4 RE 2 stroke.

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Interestingly, the models of this period featured 600cc, inlet-over-exhaust, closed valve gear,
hand-operated oil pump, two-speed countershaft gearbox and chain final drive. In the 1913-1914
Enfield V-Twin the lubricating oil was contained in a glass tank attached to the frame tube that
ran from the seat to the rear of the engine. This worked perfectly and also had the added
advantage of providing an instant visual check of oil levels. The 1915 make 675cc in-line 3-
cylinder 2-stroke prototype was the worlds’ first with this configuration and engine type.

THE INTERWAR YEARS (1921 - 1930)

1924
The First Four-stroke
The interwar year was a period when the sidecar reached its
zenith. In July 1925, the Royal Enfield V-Twin-engine
Dairyman’s Outfit took part in the ACU Six Days’ Trial for
Commercial Sidecars and obtained a Special Certificate of
Merit for completing an arduous course without loss of
marks. The year 1924 saw the launch of the first Enfield
four-stroke 350cc single using a JAP engine.

1928
The Depression

In 1928, Royal Enfield adopted saddle tanks and center-

spring girder front forks – one of the first companies to do
so. The bikes now with a modern appearance and
comprehensive range, meant continuous sales even during
the dark days of depression in Great Britain towards the end
of 1930. In 1927 Royal Enfield produced a 488cc with a
four-speed gearbox, a new 225cc side-valve bike in 1928,
and a four-stroke single in 1931. Several machines were
produced in the next decade, from a tiny two-stroke 146cc
Cycar to an 1140cc V-twin in 1937. Can you even imagine
that Royal Enfield’s range for 1930 consisted of 13 models!

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ESTABLISHING BULLET (1931 - 1940)

1933
The Bullet Arrives

In 1931 a four-valve, single-cylinder was introduced, and

christened 'Bullet' in 1932. It had an inclined engine and an exposed valve gear. It was then that
the first use was made of the now famous Bullet name. Longer stroke, four-valve head exposed
valves and heavily finned crankcase were the features that ran from 1932 until the end of 1934.

1940
The Second World War
The most well known offering for the Second World War
was no doubt the ‘Flying Flea’. Also known as the
‘Airborne’, this lightweight 125cc bike was capable of being
dropped by parachute with airborne troupes. The Flea was
fitted into a steel tubular cage called the ‘Bird Cage’, which
had a parachute attached to it. The cage aided in packing
turning handlebars easily. The Enfield Cycle Company was
called upon by the British authorities to also manufacture a
variety of special instruments and apparatus to use against
enemy forces. So it was not bikes alone during the war years.

POST WAR BULLETS (1941 - 1950)

1948
Bigger and Better
The 1939 Bullet 350 kick-started the post-war models. They
used two rocker boxes for the first time. This enabled better
gas flow and consequently higher volumetric efficiency.
Royal Enfield’s own designed and manufactured telescopic
front fork placed the Redditch marquee at the very forefront
of motorcycle design. The biggest advancement introduced
by the new Bullet was its swinging arm rear suspension
system and hydraulic damper units themselves. In 1947
Enfield made a J2 - the first model with a telescopic front end, followed in 1948 by a 500cc twin
(Enfield's 25bhp answer to the Triumph Speed Twin), which stayed in production until 1958.
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1949
The Indian Debut

In 1949, the 350cc Bullet was launched in India, when Madras Motors won an order from the
Indian Army for the supply of motorcycles. It was the
beginning of the reign of the Bullet in the subcontinent. The
Madras Motor Company started off by receiving the Bullet in
kits and simply assembling them. Then they began making
the frames. After this Enfield started sending the engine in
parts to be assembled in India. Eventually they were also
manufacturing the engines, which meant that they were
making the complete bike. For the next thirty years, the
design of their bike remained unchanged!

In 1950, several models were introduced: the 650cc Meteor twin; a 250cc Clipper; a short stroke
250cc Crusader; 250cc Trials; Super 5; Continental; 500 Sports Twin; Super Meteor;
Constellation and the Interceptor.

A TALE OF TWO CITIES (1951 - 1960)

1951
In the UK…
Never before in British automobile history had so much
been done in a single decade, not just by Royal Enfield, but
the every other marque of the time. All new engines, all new
configurations, new paint schemes, new capacity classes…
the motorcyclist had never had such a wide choice ever
before.

The 1950s saw the market open up both ways, downwards

for smaller capacity, light and maneuverable machines, and upwards for larger capacity, high
powered and reliable motorcycles. The Royal Enfield showrooms in the UK saw everything from
125cc two strokes to the mighty 700cc Meteor.

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1955
Meanwhile in Madras…
The Indian Army, the sole reason why the Bullet was
brought to India in the first place, insisted that they would
continue doing business with Madras Motors only if the
Bullet was produced indigenously.The Enfield India Bullet
of the late fifties was quite a different motorcycle from the
one we are used to today. Using the famed Lucas Magdyno
ignition system, the 1955 Bullet was almost a clone of the
52 Redditch Bullet. The frame, electricals tinware and
rolling chassis, however, were to undergo many changes over the next ten years, with the Bullet
slowly evolving into the familiar form we know and love today.

1961
Back in the UK…
In 1960, the badge arrangement with Indian (Of America) had ended, so Enfields were no longer
sold under the Indian marquee (Royal Enfield rival, British
AMC company, acquired the Indian Sales Corp. in 1959).
However, in 1961, Eddie Mulder won the Big Bear Enduro
on an Enfield, which gave the company a new foothold in
the U.S. under its own name and started a new marketing of
the product. Models available in the U.S. that year included
a 700cc twin and six street scramblers, ranging from the
250cc Hornet to the 500cc Fury (essentially the single-
cylinder Bullet) to the 700cc Interceptor. Elliot Shulz also
dominated the half-mile dirt track in Los Angeles on an
Enfield that year. Enfields won 31 out of 39 races in 1961 and had several spectacular victories
in 1964. Royal Enfield had arrived on The Continent!

1963
But back home in Madras…
By 1970, Enfield India was a company established in its
own right, and with a production line going full steam, the
need for collaboration with Enfield of the UK and Villiers of
the UK was no longer seen. But the Bullet flew true and
strong. A number of changes had already been made to the
tinware on the Bullet. Mudgaurd design took on different
forms, taking into account the wet, slushy and messy road
conditions during the Indian monsoon. The Magdyno also
gave way to the alternator ‘Delco’ ignition system. And
front and rear hubs were designed to provide more efficient cooling for Indian conditions, and
thus improve braking performance.

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ENFIELD BECOMES ROYAL ENFIELD (1991 - 2000)

1990
Heavy Fuel
The 1990's saw many revolutionary models from the company. The Taurus Diesel was the first
productionised Diesel motorcycle in the world.

1993
Bullet 500
The Bullet 500 was launched in June this year. It went on to
become the most coveted model of the brand.

1994
Eicher acquires Enfield

In March the ailing company got a new lease of life when

Eicher group acquired Enfield India Company. The
company name changed to Royal Enfield Motors Limited.

ROYAL ENFIELD (2001 - 2010)

2001
The Dare Devils, the motorcycle display team of the Corps of Signals, Jabalpur forms a Human
Pyramid of 201 men on 10 Enfield 350cc bikes and rides a dis
distance
tance of more than 200 meters.

2002

India’s first Cruiser – The ‘THUNDERBIRD’-- is launched.

BBC Wheels awards it ‘The Best Cruiser 2002’ title.
The Bullet Machismo enters commercial production.
Dan Holmes and Johnny Szoldrak won the National Road Race
Rac
Championship (60’s Class) on a Bullet.

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2003
The first ‘RIDER MANIA’ get together is held in Goa.
REDS are formed in Pune.
The Bullet enters the Automotive ‘Hall of Pride’ at the ICICI
Overdrive awards.
1000 Riders descend on Redditch for the Royal Enfield
Enfi Owners
Club 25th Anniversary.
Royal Enfield is one of the top ten 125
125-500
500 cc brands in UK.

2004
The 2004 Bullet Electra is launched.
The retro styled Bullet Machismo is rrated
ated ‘No.1 Cruiser’ in TNS
AutoC
AutoCar survey.
The Bullet Electra International w
with a lean-burn
burn engine is
launched in the UK.
34 men ride simultaneously on a Bullet, setting a new world
record.

2005
Royal Enfield India Celebrates 50 glorious years of
motorcycling and unveils a blueprint for the future.
The 2005 Bullet Electra features a revolutionary 5-Speed
5 left
side gear shift that makes the marquee more accessible to
motorcyclists. The Legend rides on…

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2006
Royal Enfield develops a fully integrated Twin Spark, 55-Speed
Speed engine that delivers a dramatic
increase in performance and efficiency. The new engine will power all domestic and
International models from 2007 onwards.

2007

Royal Enfield launches the all new limited edition Machismo

500LB with customized accessories.

2008

Royal Enfield exports India’s first EFI, Euro III compliant

motorcycle.
The Thunderbird Twin-Spark
Spark is launched with a new Unit
Construction Engine (UCE).

As recently as January 2009, Royal Enfield showcased the new EFI, Euro III compliant 500cc
UCE poweredred Bullet Classic at the Intermot motorshow, Germany.. It brings together the old-
old
world charm of the Bullet while running it on cutting edge technology.

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Performance

The financial performance of the Royal Enfield company has ranged from dismal to ballistic. It
had almost reached extinction in 1994 when Eicher Motors Limited took it over and ever since,
it has posted a rise in sales year on year. The following lists the performance of the Eicher
limited since 2000-2001 with the note on their 2-wheeler division as quoted from their annual
reports for each year.

2.1 Financial Performance 2000-2001

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2.2 Financial Performance 2004-2005

“TWO WHEELERS
The two-wheeler industry registered a growth of 17% during the year with motorcycle segment
growing by 20 %. Your company which operates in the power segment with engine capacity of
350 cc and above, recorded its highest ever sales of 29475 motorcycles during the financial year
2004-05 as against 28361 nos. in the previous year registering a growth of 4%. The turnover at
Rs.187 crores as compared to Rs.175 crores in the previous year reflects a growth of 7%. “Bullet
Electra 2004” introduced at the end of the last financial year received good response from the
customers and accounts for 45 % of the domestic sale. As a part of continuous improvement,
your Company has also introduced Electric Start in this model. The “Bullet Machismo “
introduced in the end of 2003-04 with conventional shift gears to cater to younger age group, has
set a new bench-mark in the motor cycle industry by being ranked first in Total Customer
Satisfaction in the cruiser segment. During the year, International Bullet Electra was introduced
and has been well accepted in the international market. Your company has also set up new
Company Showrooms at Chennai and Jaipur. These will provide customers with different kind of
experience during sales and post sales period as well. The major initiatives launched to improve
the infrastructure and customer experience at our leading dealerships has been accepted well. We
intend taking it further by enhancing the service experience at our dealership workshops. Costs
continued to be under focus. Reduction in manpower costs was achieved through one more
Facilitative Retirement Plan carried out during the financial year 2004-05 resulting in net
reduction of manpower by 114 nos. New product development and Quality enhancement
continued to be a major focus area during the year. Your company upgraded Bullet 500 cc model
with electric start and introduced in the Indian market. New models of Electra and Thunderbird
with conventional left shift gears, dual tone paints, electric start etc are planned for domestic
market introduction in mid 2005.”

“RESEARCH AND DEVELOPMENT

For the two-wheelers New Engine platform based on a Unit Construction design has been
successfully prototyped and is currently under rigorous testing.”

“OPPORTUNITIES, THREATS AND OUTLOOK - Two wheelers

The growth in the motorcycle market is likely to continue. Royal Enfield will continue to exploit
the emerging trend towards more powerful bikes for the modern segments, through launch of
variants as well as new products. Cost reduction, quality improvements to deliver customer
expectations and effective channel management will remain the focus for Royal Enfield. For
international markets, your Company will continue to make efforts directed on delivering
contemporary technology and performance on the ‘Classic’ appeal derived from the brand
heritage. In the Total Customer Satisfaction (TCS) survey conducted by TNS Automotive
Singapore, your Company scored 87 points, which is higher by 3 points against its scores last
year and is also higher than industry average of 78 points. The "Bullet 350cc" topped the
motorcycle industry with score of 93 points. All other models of your company also scored
higher than the industry average. Your Company expects growth in both domestic and overseas
markets in the coming years.”

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Under the leadership of Mr. Siddhartha Lal, CEO, Royal Enfield, the company decided to
reorganize itself and create value through constantly finding new avenues to improve upon its
product.

Despite the performance of the Two Wheeler division being positive, the slump in the sales of
commercial vehicles and gears in 2004-05 led to a small dip in the figures of Eicher in that
Financial Year.

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2.3 Financial Performance 2006-2007

“TWO WHEELERS
The Two-wheeler industry registered a growth of over 18% during the year with motorcycle
segment growing by 14 . Your company, which operates in the power segment with engine
capacity of 350 cc and above, recorded its highest ever sales of 32612 motorcycles as against
30777 motorcycles in the previous year registering a growth of 6%. Sales could have been more
but for capacity constraints in the last quarter. As a result, dealer inventory has almost been
squeezed out with retails exceeding wholesale by more than 1500 motorcycles. Export sales have
recorded 2233 motorcycles in 2006-07 as against 2345 Nos in the previous year. A major order
from Germany that could not be serviced in the current year has been carried over to the next
financial year. Total revenue for the year at Rs.229 Crs grew by 10% as compared to Rs.209 Crs
in the previous year.”

“MARKET AND FUTURE PROSPECTS - TWO WHEELERS

Even though overall Two wheeler industry is experiencing some slow down, 350CC niche
segment in which your Company operates is growing well. Some constraints have been felt in
the year under review in capacity and therefore the key focus in the current year is on
manufacturing supported by quality assurance, materials and
component development and strategic sourcing. The target is to achieve a growth of 20% in
volumes through improving the deliverable capacity.
The Company has completed reliability and endurance tests for the New Engine (Unit
Construction Engine) both for domestic and exports markets to meet the future emission norms.
The new engine, will be offered to export market and will be tested in the European terrain
before it is officially launched in the second half of the current year. Similarly the new engine
will be launched in the premium models of Royal Enfield in India in the current year.”

“RESEARCH AND DEVELOPMENT - TWO WHEELERS

Euro III emission norms compliance for Europe was obtained and based on this new bikes would
be homologated in the current year. Electronic Fuel Injection (EFI) technology has been adopted
to meet Emission norms. Unit Construction Engine in 350 cc with twin spark ignition developed
and ready for pilot launch in the current year.”

“TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION - TWO

WHEELERS
Engine Machining and Assembly have been strengthened by adding new CNC machines for
achieving quality parameters for the new engine. Methods, tooling and inspection standards have
been improved by replacement of tools, gauges and equipment.”

“HUMAN RESOURCES
During the year under review, the Company had undertaken extensive steps for optimising the
use of its manpower through automation, productivity improvement, offloading of components
and services and role enrichment. There is a continuous focus on enhancing productivity in all
facets of our operations. Industrial relations were cordial throughout the year. As on 31st March
2007, the total number of full time salaried employees stood at 2620 Nos.”

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By 2006, Mr. Siddhartha Lal had become the MD & CEO of the Eicher Motors Limited and a
part of the Board of Directors. Under his management, Royal Enfield was receiving greater
priority in the company and undertaking better R&D Projects. The UCE engine, which was being
researched for years now, was almost ready.

16
The following table shows the financial performance of Eicher Motors Limited during 1997-
2007.

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3.1 ORGANIZATIONAL PRACTICES – A DISCUSSION

Structure

Over the years, Royal Enfield has undergone considerable changes in its organization structure.
In 1955, when there was a requirement for 800 of these motorcycles for the Indian army and
police force, the Redditch plant failed to deliver them and outsource
outsourced
d it to a subsidiary in
Chennai called the Enfield India Limited. This geographical diversification was what lasts as
Royal Enfield today as the UK parent company ceased production in 1970.

When Eicher bought this company, they proceeded to revamp the ai ailing
ling company through rapid
restructuring. Introducing new models necessitated a Product Division Structure. The Jaipur
plant was shut down to achieve greater centralization and also to enable better vendor
management. Siddhartha Lal also created cross
cross-functional
tional teams to enable Royal Enfield to come
up with models that would match the customers’ aspirations while fulfilling the requirements of
efficient production. He created a feedback network whereby the customers’ feedback was taken
into consideration while
ile they researched the new products. This led to new developments like the
AVL engine, and the Glass Wool Silencer.

While Thunderbird was launched to cater to the newer market segment who needed a cruiser
lookalike that would give them the ‘Indian
‘Indian-Harley’
y’ feeling, Electra was launched to meet the
retro-segment
segment with the same look as the classic Bullet but with more reliable electrical systems
and greater fuel efficiency. After Sales Service, a traditional sore point with Royal Enfield was
structured into the organization with incentives and rewards instituted
instituted.. All this drastically
improved the image of the company.

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Culture

Royal Enfield has always been the aspirational

motorcycle in India. Being the only product above
250cc in the country, it has attracted motorcycle
enthusiasts over the years. The company ensures that
every individual working for it takes immense pride
in the
he fact that they are part of a heritage. Being a
manufacturing sector company, they follow a
mechanistic structure, which generally gives rise to
tall hierarchies and therefore a more rigid culture. At
Royal Enfield, however, the managers foster a
culture of participative development and there exists
a great ease of communication between shop floor supervisors and the management.
The workers who are part of the “hand
“hand-crafting” division that makes the hand-painted
painted fuel tanks
are treated as royalty at the plant and this respect for workmanship often serves as the greatest
socializing factor for new recruits who join the factory.

Managing the External Environment

Amongst its external environment, three factors that impact the company most profoundly are
i. Competitors
ii. Government
iii. Customers

1. Competitors – Since its foray into India, Royal Enfield has borne witness to the complete
gamut of motorcycles that have ventured into this market. Some, like Rajdoot and Yezdi
have vanished without a trace. Others like Hero Honda and Bajaj have made their mark.
Royall Enfield remains ahead of the competition by being the only motorcycle to cater to the
category above 250cc. Now that other companies are upgrading displacement capacities,
Enfield has taken a step forward in installing the new twinspark and Unit Construction
Construc Fuel-
injected engines. These would enable Enfield to stay in the race with the lighter-weight
lighter
motorcycles without compromising on its marquee value.

2. Government – The Government norms about emission dictate that any automobile company
shall constantly stay on its toes to make sure that they conform to the rules. Enfield manages
this through constant Innovation in silencer design. In fact, there are three different varieties
of silencer and ECUs that are fitted on the various models as of now.

3. Customers – Being a premium segment product, Royal Enfield needs to constant build
rapport with its customers and create greater aspiration value for the brand. This is done by
organizing various national level events around the year.

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 The Calendar generally begins with the Rider Mania around
January. This is the annual Enfield Owners’ get
get-together that
started in 2003 with 32 motorcycles and saw 600 motorcycles
riding to Ooty for the 2009 edition.

Also long-distance
distance and endurance rides li
like the
Rajasthan Tour and Himalayan Odyssey organized
by the company add to the tourer image of this
vehicle.

3.2 Factors Conducive for Growth of the Organization

India has, in recent years, seen a tremendous increase in the spending potential of its youth.
yout
This high demographic dividend has enabled more customers to spend on lifestyle and
leisure. This enlarges the market segment for a premium product like the Royal Enfield
which are priced around the Rs. 1 lakh mark.

Also, the lack of other motorcycles in its segment gives it an almost monopolistic control
over its target customer niche. Any individual who wishes to buy a powerful motorcycle with
long distance and endurance riding capabilities without having to import one would go for
one of Royal Enfield’s
d’s products.

The spares and components that go into a Royal Enfield are almost exclusive to the company.
For example, the 230 mm disc brake manufactured by Pricol is exclusively for Enfields and
this gives the company an excellent opportunity to manage iits
ts suppliers. This control over
symbiotic interdependencies holds the company in good stead against its more generic
competitors.

In the international markets, it is the cheapest entry and it appeals to the retro-sensibility
retro of
the youth in these countries.
s. This would also aid the sales of the brand in the foreign markets
where it is exported.

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3.3 Growth of the Organization

As seen from the Annual reports, the sales of the brand have climbed steadily from 28000 in
2003-2004 to 33000 in 2006-2007. This growth has been made possible by the proactive
steps taken by Mr. Siddhartha Lal at the helm of the organization.

Royal Enfield exports its bikes to over 25 countries including developed countries such as
USA, Japan, UK and several European countries. Royal Enfield is the only motorcycle
company to be certified with the coveted ISO 9001 and ISO 14001 for quality and
environmental systems.

3.4 Factors that Led to Expansion & Growth

Since the take-over by Eicher, Royal Enfield has shown steady growth. This has been
possible because of the plethora of new products that were introduced. The high level of
innovation made sure that they increase their market share without taking the conventional
revamp route taken by most other Indian manufacturers.

The passion and drive of Mr. Lal has also played a major role in shaping the culture of the
organization into a more pro-customer model that has made it more accessible. It is today the
only Indian manufacturer that invites the general public to visit its factory.

3.5 Decline & Subsequent Expansion - Factors

After the entry of Hero Honda into the motorcycle market in the early 1990s, the Indian
public shifted to the more fuel efficient variants while Royal Enfield failed to deliver a new
product. Its sales dwindled and it seemed like it was going to close shop like Yezdi and
Rajdoot had already done. The take-over by Eicher was perhaps the turning point that gave
this company a fresh lease of life and enabled it to expand to its present strength.

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4.1 Conclusion

The Royal Enfield Bullet is the longest standing motorcycle brand in India. It has been in
different countries spanning centuries and today, represents the aspirations of the Indian
biker. Organizationally, it has seen ups and downs alike. From a merger with Zundapp going
bad to forging alliances with AVL, Austria to source successful engine licenses, it portrays a
story of constant organizational change.

It also speaks about how the manager’s vision can translate into a company’s culture. It was
Siddhartha Lal’s zeal as the CEO of Royal Enfield that in reality enabled this company to
tide over adverse times.

With the entry of premium foreign brands like Harley-Davidson into Indian markets, it is left
to be seen how Enfield tackles the latest challenges, but under the present leadership of Mr.
R. Ravichandran, who had engineered success stories for TVS and Bajaj in the past, it holds
potential and promise to reach its goal of becoming a multi-million dollar brand from India.

4.2 Learning from the Project

This project deliberates on the importance of Organizational Change and Culture. It was
through the constant innovation and adaptability that this company has managed to hold its
own in difficult times.

It shows how important it is for a company to manage the internal and external stakeholders
to survive in a globally challenging environment.

It brings out the key role that top managers and their vision play in the shaping of an
organization’s culture and thereby aids in the creation of value effectively.

4.3 References

• http://www.royalenfield.com/
• http://www.eicherworld.com/
• http://www.wikipedia.org
• http://www.team-bhp.com
• Gareth R. Jones & Mary Mathew, Organizational Theory, Design And Change (5th
Edition)
• Bike India Volume 5 Issue 001 August 2009

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