How did Royal Enfield become successful? | Fall & Rise of Royal Enfield | Business Case Study

History of Royal Enfield

In India currently we have a ton of foreign companies that rule lots of consumer markets for example toothpaste Colgate a non-Indian company has 50% of the market share Gillette again a foreign company has 90% of the market share now this is not a good thing or a bad thing in my eyes because I am a firm believer that business has no boundaries but what if I told you there is an Indian company that now is beating an American company in their home turf America I am talking about Royal Enfield and this story is about how this company is taking over the entire world one step at a time. Currently Royal Enfield has 95% percent market share and sells up to 8 lakh bikes a year Royal Enfield as of now is one of the few B2C Indian two-wheeler companies that export outside of India and they do it so well that they hold the highest market share in the UK as well but this was not true about 25 years ago in fact in the early 2000s Royal Enfield was closed to bankruptcy, one thing that I heard that was common was how Royal Enfield would not be considered an Indian company as its origin is in Europe but on the foreign Brands you’d know that because Royal Enfield is owned by an Indian company and has been operating from India it would in fact be considered an Indian company. it’s true that Royal Enfield was originally a UK based company but in 1949 a man by the name of KR. Sundaram Iyer started Madras Motors during this time he only imported multiple motorcycles and sold them here in India but in 1952 Indian army gave him an order of 500 Royal enfields now for that time this was considerably a difficult task due to the logistics and the sheer amount of capital that would be required but kr. sundram was able to complete this task which led him to develop a very and I mean very good relation with the Indian army and this was the start of the infamous Royal Enfield x Indian army collaboration that is celebrated here in India till today. 

Downfall of Royal Enfield

Seeing this incredible growth Enfield UK decided to partner up with Madras Motors closing their UK facilities and entirely operating from India and thus forming Enfield India. but where there is demand Supply will always increase many bikes like Yamaha’s rajdoot Java’s yezdi and ton of technologically advanced Japanese motorcycles started entering the market these bikes were Superior to R&E (Royal Enfield) in terms of mileage came at a much cheaper rate all of these increasing competition made R&E bleed to the point where it was incurring huge losses every single month

Eicher Motor bought Enfield

When it was extremely close to Bankruptcy Eicher Motors an Indian company decided to buy Royal Enfield towards the start eicher motor did not actually have any particular plans with the Royal Enfield in itself and were planning to just shut it down but the son of the CEO of Eicher Motors Siddharth Lal asked the board for one last chance back then Siddharth was just 26 years old so that decided that he’s going to go Against All Odds and make this company synonymous with the biker culture here in India siddharth’s first approach was to fix the current underlying issues but how do you even fix an issue that you are not even aware of so Siddharth did what no other biker CEO does he actually started riding bikes like all the time he ditched a company car and made all of his employees commute on a royal enfields daily to truly be a part part of the biker culture.

Royal Enfield Marketing and Vision

Siddharth Lal went on rides for days and days wrote with customers and bikers just to know and understand what the biker truly needs and this was a risky move even for Lal. how many CEOs can you imagine who would go to such length just to understand what their customers want very few right this move helped him and his team to fix all the mechanical issues which brought the customer complaints from 5% percent to 0.2% but the problem is Lal was still not satisfied he wanted the company to become a global Powerhouse and the first thing that was standing in front of his vision was the brand image of Royal Enfield you see a lot of youngsters Associated the bike with something that older people are interested in in fact I remember when I was super young I had a similar Vibe associated with Royal Enfield because the person who used to come and deliver milk in our house used to ride a Royal Enfield so you get me right the image is an issue and if you’re in such a position how do you attract young customers Royal Enfield could not even go down the route of creating Sports bike to attract younger customers because their legacy was about modern retro bikes so what exactly do you do well large Vision was to change the way people looked at Royal Enfield completely he wanted Royal Enfield to be bad ass and what sounds more badass than the Indian army Lal took the advantage of the relationship that Royal Enfield shared with the Indian army since the start and doubled down on it he not only sponsored the classic vehicle for the Army but also the policemen and he made sure if there is a mainstream movie which has a military man being shown he better be riding a Royal Enfield this worked wonders to a point that the image of Royal Enfield and Indian army is so well etched into our brain that even you cannot imagine an army man without him riding a Royal Enfield classic and now Royal Enfield had successfully transformed from being something an older man would be interested in to something young men looked at as badass.

Phase 2 of Royal Enfield- product Launch

This marketing tactic was just one phase of the plan though the second phase was launching a product that actually attracts these young customers so after years of R&D in 2003 the company unveiled their brand new bike called the Thunderbird this bike literally took India by the storm before this bike in 2000s R&E was selling about 2000 bikes yearly after this bike’s launch thanks to Lal Royal Enfield sold up to 32000 bikes in 2006. he positioned the new thunderbird as an exploration bike for youngsters their ads were out there like crazy out there once they showed a kid whose umbilical cord was still attached to his mother and he only cuts it after finding a Royal Enfield Thunderbird and finally becomes a man. 

Expanding Royal Enfield

This too was not enough to satiate lal’s hunger Lal eventually became the CEO of Eicher and motors and decided to take Eicher Motors from a 15 business company to a 2 business company Royal Enfield and Tractors he put all of his eggs in one basket and went all in on the Royal Enfield he went on a hunting Spree his goal was simple to make the company a real player in the global motorcycle Market he wanted the best motorcycle engineers and designers and manufacturers to be working with him here I appeared to block the Visionary and the super famous bike designer to work specifically with Royal Enfield he had Rod corpse the former Harley Davidson manager and he made him the president of R&E(royal Enfield) North America which was such a smart move he also bought Harris performance, the UK based chassis designers to create a brand new chassis for the bikes he decided to go crazy and just like he did this here in India he decided to establish lots and lots of dealership in America now you will find an R&E showroom in every single Corner which led to R&E outselling Harley.

Outsell Harley’s in India

The real boom was still coming after studying the game for so long Royal Enfield in 2017 revealed their most popular bike as of now the Interceptor 650. this bike is the dream bike for so many people, this bike took Royal Enfield to the next level becoming the most popular bike in middleweight segment worldwide not only does Interceptor outsell Harley’s in India but also it is the most sold bike in Europe and also in specific parts of America like Texas.

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