flat tyres

8/14/2019 Flat Tyres

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Flat Tyres of India LtdFlat Tyres of India Ltd

Streamlining Distribution Network

Presented By:

Somil Joshi (113)

Prakhar Singh (100)

Rakesh M (43)Varun S Pilla (119)

Prajith V M (99)

Tarun Gupta (117)


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Introduction to the caseIntroduction to the casey Objective

Flat tyres Inc is planning to push its sales from Rs 400cr to

Rs 600cr. Streamline its distribution and sales channels

y Alternatives To go in for more company owned sales offices and

To go in for an agency system

y Alternative Chosen Agency System was found to be more viable as the cost of

company owned assets for distribution would be extremelyexpensive

y Agency based system certain core conflicts came intothe picture which were as follows Resistance of existing channel members to change

Promotion of an existing dealer to a CFA could aggravatethe existing rivalry


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Company/

Dealer

Samy

Auto

Parts

Manickam & Co SKS

Auto

Centre

Auto

Tyres

Balu

Tyres

KSS &

Co

Ratna

Auto-

mobile

Total

Apollo Tyres Ltd 3.0 - - 0.5 2.0 1.0 0.5 7.0

Tyres

International

0.5 0.25 - 0.15 - 0.5 - 1.4

Flat Tyres of India

Ltd

8.0

50

1.0

6.25

0.5

3.125

2.0

13

3.0

18

1.0

6.25

0.5

3.125

16.0

Dunlop India Ltd 6.0 0.25 - 0.5 1.0 4.0 - 11.75

Goodyear India

Ltd

1.0 0.25 0.25 0.5 1.0 0.5 0.25 3.75

JK Industries Ltd 6.0 0.25 - - - 0.5 - 6.75

Modi Rubber Ltd 3.0 - 1.25 1.0 8.0 1.0 3.5 17.75

MRF Ltd 3.0 4.0 1.0 3.0 2.0 1.0 1.0 15.0

Vikrant Tyres Ltd 1.0 - - 0.25 - 0.5 0.25 2.0

Others 0.5 - - 0.10 - - - 0.6

TOTAL 32.0 6.0 3.0 8.0

25

17.0

17

10.0

10

6.0

8.5

82.0


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Why is it important for Flat tyresWhy is it important for Flat tyres

to convince the players to stickto convince the players to stickwith itwith ity In Madurai tyre market there are other

prominent players like MRF, Modirubber etc.

y If the company fails to pacify the

antagonized dealers it would lose thechannel reach it enjoyed before thusgiving edge to the competitors

y

This would also adversely affect thecompany strategy of expansion in themarket.


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Madurai Tyre MarketMadurai Tyre Market


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Madurai Tyre MarketMadurai Tyre Markety Flat Tyres enjoys a 19% market share it is the second largest

player in the area but without the support of channel partners

the position cant be sustained for long

y Possible cause of concern among the dealers Once Samy Auto Part clinch the CFA offer it could tamper with the orders

placed by dealer thus squeezing other dealers market share

y Possible alternatives As suggested by Deutsche and

Rause the possibility of a negotiation between the companyand dealers is not very high. But still the onus rests with Flat

Tyres to convince the dealers about the benefits of the new

structure.

y

Some arguments that the company can make are as follows:-

The CFA is under the control of Sales Manager hence the possibility of

muscling out the opponent is not there.

With the expansions plans in process the availability of goods would be

better under the umbrella of a CFA Other major players like Dunlop and JK Tyres also follow the same


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RecommendationsRecommendationsy Although Mr. Krishna has tried to convince

the dealers and failed he must retry with theabove mentioned arguments. The companywill have to maintain a mix firm tactics andconcern for the dealers fears.

y They could be presented with an alternativeof a test run of the new channel and if someproblems pop up then the company salesmanager will be there to take of issues.

y The company must make sure that thedealers are not allowed to dictate terms asthis could lead to long term problems for the

company.

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