Assessment Front Sheet

IMPORTANT: Your assignment will not be accepted without the FRONT SHEET.
Campus: Stream:
Level: PCL 1I Year/Semester
Module Name: OCPA Assignment Type: Module Assignment
Student’s Name: Assessor’s Name:
Issued on: Reqd. Submission Date:
Actual Submission
Submitted to :
Date:
Higher Level Skills
Students are expected to develop the following skills in this assignment:
• Cognitive skills of critical thinking, analysis and synthesis.
• Effective use of communication and information technology for business applications.
• Effective self-management in terms of planning, motivation, initiative and enterprise.
Certificate by the Student:
Plagiarism is a serious College offence.
I certify that this is my own work. I have referenced all relevant materials. _______________________
(Student’s Name/Signatures)
EXPECTED OUTCOMES Assessment Criteria – To achieve each Achieved
outcome a student must demonstrate the (Y/N)
ability to :
The student should develop an awareness of the To understand how to align with the future
micro level strategies To understand the three critical using the micro level strategies
micro elements: Value creation logic; Organizing
principles; People processes
The student should understand –the effective micro To develop an understanding of the micro
strategic options for executing the laid organizational elements as seen in the context of the
vision. industry
Assignment Grading Summary (To be filled by the Assessor)
Achieved Yes/No
Grades Grade Descriptors
(Y / N)
P A Pass grade is achieved by meeting all the requirements defined.
M1 Identify and apply strategies to find appropriate solutions.
M2 Select/design and apply appropriate methods/techniques.
M3 Present and communicate appropriate findings.
D1 Use critical reflection to evaluate own work and justify valid conclusions.
D2 Ability to anticipate and solve complex tasks in relation to the assignment.
D3 Demonstrate convergent, lateral and creative thinking.

OVERALL ASSESSMENT GRADE:

TUTOR’S COMMENTS ON
ASSIGNMENT:
SUGGESTED MAKE UP PLAN
(applicable in case the student is asked to re-
do the assignment)
REVISED ASSESSMENT GRADE
TUTOR’S COMMENT ON
REVISEDWORK (IF ANY)
Date: Assessor’s Name / Signatures:
 Case Study

Twenty-five years ago, TI Cycles dominated the bicycles market in India. BSA and Hercules, its
flagship brands, were widely known throughout the country and had immaculate reputations for
quality and durability. For over three decades, TI maintained its market leadership based on a
successful alignment of its value-creation strategy, its organizational processes and its value and
people. Originally a joint venture with TI of UK, the company was managed in its early days by
British expatriates. They viewed a bicycle as they did in the UK, and formed the company’s strategy
based on that view. They built high-quality, elegant bikes based on drawings and designs from
England.

To implement this strategy of producing high-quality, beautifully designed cycles, and confronting a
poor infrastructure and paucity of quality component suppliers, TI adopted a policy of vertical
integration. It produced most components in-house, all the way down to the steel tubes needed for
constructing the basic frame of a cycle. This strategy, based on producing high-quality bicycles on the
strength of vertical integration, was implemented through a set of organizational values and people
processes that were also shaped by the British expatriates. Their colonial mindset created a relatively
formal and hierarchical organization dominated by a manufacturing rather than customer orientation.
Bureaucratic values, reflected in an organization with over 1000 managers in a company with Rs. 620
crores in turnover and Rs. 28 crores in profits, shaped its people’s behaviour toward disciplined but
rule-bound implementation.

Then the environment changed, with the arrival of new competition. Over the 1970s and 1980s, Hero
Cycles grew from its origin as a small producer of bicycles in Ludhiana to the largest manufacturer of
bicycles in the world, right under the nose of TI. For much of this period, TI scarcely paid-any
attention to this competitive threat, far less try to respond to it.

At the heart of Hero Cycles’s success lay fundamentally different value-creation logic. While TI
continued to build its bicycles based on the drawings and designs from England, Hero Cycles
developed its products to meet specific Indian needs. It designed a cycle that could carry two people
plus a heavy load, and that could be manufactured at the lowest possible cost. Not quite as elegant as
the BSA or Hercules models of TI and, therefore, not perhaps as appropriate for leisure cycling in the
Sussex, its bicycles, nevertheless, helped the farmers of Punjab carry a heavy load of vegetables to
the village market.

In contrast to TI’s strategy of vertical integration, Hero Cycles outsourced most of the components
and focused on creating a highly efficient assembly operation in-house. Indeed, to a significant
extent, the Munjal family—owners of Hero Cycles—created the local component supplier
infrastructure by inducing friends and family to set up ancillary units, often supporting them with
both funds and technical assistance. Much before the concept of just-in-time production became
famous; the Hero group adopted the system, leading to extremely low costs which allowed them to
undercut TI’s prices by over Rs. 1.50 even for the cheapest models. The tight coupling of value-
creation logic, organizing principles and people processes had made TI blind to the competitive threat
posed by Hero Cycles.
Answer the following Questions:

Q1. What value creation strategy was adopted by TI Cycles? How did it work for the
company?

Q2. Compare and contrast the value strategies of TI Cycles and Hero Cycles. Which
company had more profit making capacity due to its value creation logic and why?

Q3. What lessons one can learn form its competitors to design a successful plan for future
growth.