Royal Enfield: Matchless Growth and Dominance
(9 pages of text)
Case (Pub Mat)
Royal Enfield, the motorcycle division of Eicher Motors Limited, saw its unit sales increase a multiple of 16 times from 2008 to 2018. By 2019, the company controlled 96 per cent of the 250–750 cc motorcycle market segment in India. However, sales growth slowed considerably in financial year 2018–19, when the first three quarters seemed to indicate continuing slow growth for the company. Year-to-date sales for the first nine months dropped 15 per cent compared to the same period the year before. Two major new competitors were having a considerable impact of Royal Enfield’s ability to retain market dominance: Mahindra & Mahindra’s successful Jawa motorcycle line and US motorcycle giant Harley-Davidson, which was contemplating extending its portfolio in India into the 250–750 cc motorcycle segment. Having reached the pinnacle of the market, Royal Enfield was eager to retain its position in the 250–750 cc motorcycle segment. What strategic choices and growth options did it have to maintain market dominance, and what competitive advantage was its most viable growth option?
This case is suitable for a class on strategic marketing in a strategic management course at the undergraduate or graduate level. The case views growth strategy through the lens of the Ansoff Matrix and provides students with an opportunity to understand the sources of competitive advantage. The case study can also be used in a marketing management course to discuss the concept of up-market or down-market stretch and the various marketing strategies that market leaders use. After working through the case and assignment questions, students will be able to
- understand the various growth strategies provided by the product/market expansion grid, known as the Ansoff Matrix;
- assess various generic strategies for cost leadership and differentiation;
- identify the sources of competitive advantage; and
- understand up-market and down-market stretch strategies.
India, Large, 2020
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