Apollo tyres case study, exercise answers

1. Ans 1: The Macro economic analysis has impacted a lot and tyre company like Apolo is also not
untouched from this, due to the following factors.
The demand for the tyres are dependent upon three SEGMENTS :
• ORIGINAL EQUIPMENT MAKERS : for example: if the price of the steel increases, which
effects the cost in the automobile which in turn effects the sales.
• REPLACEMENT: Depends upon the automobile output in the recent past.
• EXPORTS: Exports are calculated as less than the 10% of the total demand
Other factors influencing are:
• Volatile Business Environment
• Tremendous economic growth
• Political Scenario
• Societal Changes
• Technology Boom
Macro Factors selected for econometrics
a) Year (Time)
b) GDP Absolute
c) Inflation
d) Road Length
e) Index of Industrial Production (IIP)
f) Service Sector contribution

2. Ans2 : As per the dynamic environment created by Macro economy, the following adjustments to the
methodology needs to be taken place.
The Indian Tyre Industry
Segments:
a) Mainly dominated by Organized sector.
b) Unorganized holds bicycle tyres.
Dependency:
a) Agriculture
b) Industrial Performance
c) Transportation
d) Production of Vehicles
RM Intensive:
a) RM Costs 70% of cost of production
b) Rubber and carbon prices – low
c) Lower costs of Production
d) Free ex-imp policy
Potential:
a) 9.81 kms unmetalled roads
b) 4.12 lac trucks
c) 1.27 buses
d) 7.23 Lac Cars
Strategies to stay in step with the changes.
1) Go according to the customer taste and preferences.

3. 2) Youth Population is increasing – Can go for campaigns attracting youth to go for drifting, racing,
where tyres are a significant driver.
3) Tie up with the giant automobile provider like Maruti etc.
4) Apollo tyres can also go for tie ups with the rural areas where consumption of the two wheelers
as well as tractors is increasing at a enormous rate.
.
Ans3 : The Straws to the winds will serve as the maximum number of tie ups Apollo tyre will make then
it will prove out to be highly beneficial for the company.
Opportunities in the Macro Environment
a) Increase in Income
b) Liberalized foreign investment
c) Lower costs for the tyre industry
d) Free Import for all types of new tyres and tubes.
e) Adjustment in govt. monetary and fiscal policies
f) Increase in Production
For example: Hero Honda motors has tie ups with MRF tyres and TVS Tyres. Similarly Apollo tyres should
also increase their tie ups and customer credibility.