Sunday, February 26, 2017

Blue Ocean Strategy India – Honda Activa Scooters dethroned motorcycles in India 2 Wheeler market

The iconic motorcycle brands Hero Honda’s Splendor and Bajaj’s Pulsar had successfully moved Indian consumers from iconic scooter brands Bajaj Chetak & LML Vespa in the year 2000. Motorcycles took over scooters since then and the market for the motor cycles grew exponentially in India until Honda India’s iconic automatic scooter Activa dominated the India two-wheeler market sales for seven consecutive months from January 2016 till July 2016. Honda Activa, the automatic scooter was design built and launched in the year 2001 with a unisex appeal targeting both men and women. Women empowerment was facilitated to some extent by Activa as women bought this scooter for their professional and domestic needs. Kinetic Honda was a successful automatic scooter that Honda initially launched which was also woman oriented. Honda Activa had emerged as a most preferred daily commute 2 wheeler vehicle both in urban and rural India. Yadvinder Singh Guleria said: “Activa today represents the metamorphosis of the society. The superior convenience, unisex appeal coupled with product features -- increased mileage, style and technology -- has converted millions from pillions to riders.”

Yadvinder Singh Guleria, senior vice-president, sales and marketing, Honda Motorcycle and Scooter India in an interview to Business Standard highlighted, “Activa included four-stroke technology and tuff up tube — a double-layered tube with a sealant. All of this, made the scooter business a “blue ocean" (creation of an uncontested market space) for Honda, even as Activa evolved over the years with innovations such as the company’s eco technology in 2012 that further enhanced mileage and nearly bridged the gap with 100cc motorcycles. The country’s economic growth also opened up a market of women users. With education and empowerment of more women, they stopped being dependent on men. This added to the “scooterisation" of the country. In rural areas, poor roads have for long tended to favour the sturdier motorcycles. But, with increased motorisation and more metalled roads, there are signs of greater acceptance of scooters. “Another positive change is the acceptance of working women, many of whom are employed in the health and education sectors and have their own commuting needs."

In terms of Eliminate, Raise, Reduce & Create grid, Activa eliminated kick start and provided automatic start, designed in such a way that both men and women can use Activa. Activa also raised the mileage per litre closer to 100 cc motorcycle mileage, reduced the maintenance cost and created a unisex automatic scooter urban market. Initially Activa was targeted as intracity vehicle but as the rural roads improved the rural adoption also increased. Even today the company dominates the uncontested market it created 17 years age and despite many competitors launching automatic scooters, the company has close to 18,000 back orders in 2016, which speaks of the consumer trust and confidence it has built. Activa has over 12 million customers in India despite the fact that there had been always waiting period for the consumers in buying Activa scooters and consumers had options from Honda competitors without any waiting periods. The Activa customers happily adopted the 100cc Activa in 2001 and the company successfully upgraded the consumers to 110cc and 125 cc without any consumer demanding or complaining and the company may do it again by moving consumers to 150cc. For, as Yadvinder Singh Guleria says, “it is all about creating new demand and guarding one’s turf.” 

Blue Ocean Strategy India Financial Services Industry – Axis Securities 3 pronged competitive strategy

Axis Securities Ltd, a 100% subsidiary of Axis Bank had in a very short span grew to be one of the Top Financial services players in India. For the most part of the year 2016, Indian Stock Markets have seen muted growth due to the global macroeconomic factors that affected all the developed and developing markets. Rising yields in United States and weak macroeconomic indicators in emerging markets had made investing in markets tough. Foreign fund outflows also affected Indian market but the outflows were compensated by domestic fund flows into equity markets. With the real estate market going through tough legislative changes there had been investment flows increase into financial assets. There had been significant rise in the retail investors interest in mutual funds as the industry saw record fund flows as investors bought in SIP’s and mutual funds to stay invested in the subdued market.

Axis Securities adopted technological innovation through its website and mobile app Axis Direct as explained by Arun Thukral, MD & CEO, Axis Securities in an interview to BW Businessworld, “Constantly innovating our mobile app and significant increase in trade volumes through the app. We have also revamped our website to provide a simplified, delightful user experience and works on all devices be it mobile, tablet, desktop or laptop. We realize that users prefer to access content in the form videos and not text. That is why most of our research reports and learn courses are now in the form of quick 2-3 minute videos.  We also understand that people want information on a real-time basis to take decisions, it was therefore imperative that our customer facing emails are live i.e. whenever the user opens the email they see the real time information in terms of stock price, research updates, market news, portfolio etc. For this industry first innovation, we have won awards by DMA not only in India and Asia but also at an international level.”

Axis Securities blue ocean strategy as highlighted by Arun Thukral, MD & CEO, Axis Securities in an interview to BW Businessworld, “we are among the top 5 players in the industry in terms of customer base, new acquisition & active investors. I am happy to share that we have been awarded as the best growing equity broking house for the last 3 consecutive years by BSE and D&B. Our strategy is 3 pronged - Go deep, stay agile and aim for customer delight. We believe that India is deeply under penetrated with 3 per cent population participating in the equity markets and the potential for expansion is enormous. We want to therefore take the Blue Ocean Strategy and reach out to new customers by creating more awareness about the benefits of equity as an asset class. We want to stay agile and lead technology innovation by taking big strides in mobile technology in form of simple yet powerful user interface and introduction of voice based investing. Last but not the least; we want to create customer delight through great user experience across channels.”

Despite the tough environment and turmoil to continue into the current year 2017, Axis bank is focusing on new customer acquisition through more awareness, using mobile apps and technology innovations to enhance customer delight and increase its market share and revenues. Through a structured customer life cycle management Axis securities customers can create efficient portfolios as the company is also a  full-fledged investment solutions provider.