BCG Matrix and P-M Grid - Royal Enfield

 There is not one person in this world who doesn't know the magnanimous biking industry ie, Royal Enfield. There is nothing that is not regal about it. Everything about it is legendary. 

1901 marked the entry of the first RE motorcycle into the market. Before becoming the famous bike that it is, Royal Enfield was a brand that sold mainly motorcycles, bicycles, lawnmowers, and stationary engines which they manufactured all by themselves. Like I said before, Enfield started selling bikes in 1901 and cars in 1902.

Royal Enfield motorcycles had been sold in India since 1949. In 1955, the Redditch company joined Madras Motors in India to form "Enfield India". We all know that the Indian government used these vehicles for police and army purposes ie, for patrolling the country's border. Royal Enfield is also distinctive in its logo with a cannon and a tagline of "Made like a gun". This logo shows the heritage of the Enfield Company. 

While looking at the journey of the Royal Enfield through the eyes of the BCG Matrix, we have to consider four areas. These four segments are star, question mark, cash cows, and dogs. The stars of the market are those that have a large market share in an industry. These companies require huge investments to maintain their lead. A cash cow is one that represents business units having a large market share in a mature industry that grows slow. The third segment is the question mark of the industry. They represent business units that have low relative share and are located in industries that have great growth. Now, the last segments are the dogs. They have a weak market share in industries that grow slow. 

In 1955, RE started in India with scooters, motorcycles, and mopeds. The Indian government wanted this RE to succeed and show great results. And thus, it was a star. The 800 and 350 CC models were specifically ordered by the government.

It had to become 1962 when all components that were required for its manufacture were produced in India itself. The 350 cc and 500 cc models are still in great demand. And that's why it continues to stay strong as the cash cow and have great returns.  

This brand became a question mark from the period of 1990-2014. The collaboration with Eicher Group in 1994, and the ceased motorcycle production in 2002, shows the difficulties faced by RE. 

In 2015, they announced that they are establishing its North American headquarters and a dealership in Milwaukee, Wisconsin, intending to offer three bikes, the Bullet 500, Classic 500, and the Continental GT 535 Cafe Racer as they feel its engine size represent an underserved market. The 350 cc and 500 cc models started as a star segment and continue to be cash cows in the market. Even in 2020, these models are greatly demanded. People are ready to pay the price for these bikes, no matter how high it is. The Himalayan and Continental models arrived with an explosive marketing strategy, but it still remains a question mark. Apart from the consumers who are interested in buying the above-mentioned models, ordinary consumers can't afford these models. 

While searching for the dogs of these brands, it is the accessories that RE produces. This has a low market share and faces a cost disadvantage as well. There is not much competition and not much gain. But this still exists as lots of Enfield lovers prefer this brand the most. 

The segmentation shows middle-class people who want a bike that is stylish and powerful. And, the target market is the middle-class youth from the age group of 25-35. RE is positioned as a powerful motorcycle for bike adventures. The Bullet, Thunderbird, and Classic brands under Royal Enfield are the prominent products in its portfolio. 

Now, let's try to understand Royal Enfield with the help of the Product-Market Grid.  The four segments of the P-M Grid are Market Penetration, Product Development, Market Development, and Diversification. While looking at the market penetration of Enfield, we can always see a rise and fall in its market share. Within October, the twin segment 350 cc saw 58% growth with 53,229 units. Whenever a brand sees slow sales and rising competition, this makes them try new ideas. The slow sale and rising competition make them try new ideas. Consumer sentiment is the key to success. Motorcycle fairs held annually help the brand in sustenance.  

Enfield's innovation to design and develop their product expanded to its product portfolio and accessories. By manufacturing real-time simulations, the brand reduces cost and time to market new products. They have been using SIMULIA application. RE also introduced India's first twin-cylinder motorcycle. 

Royal Enfield tried to enter new markets to position themselves in the middle-weight motorcycle segment. They started sales in Thailand and Indonesia. This is the oldest motorcycle brand which still continues its production. Certain changes are brought every now and then to target new consumers. The marketing part of the brand is managed by multi-brand stores and Royal Enfield stores. 

The Classic 350 and Bullet 350 lag in their demand at times, but its production still shows growth. The orders for these models are still counting, yet this shows a lower volume to the firm. The company's efforts to diversify sales met with limited success as Continental GT and Himalayan models are yet to gain traction in the market.