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Campus: Bangalore Stream: Business Level: PCL-1I Year/Semester 2011 Module Name: Students Name: Issued on: Actual Submission Date: CPA Ajith ingua 23.04.2011 Assignment Type: Assessors Name: Reqd. Submission Date: Submitted to : Weekly Assignment 27.04.2011

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. ________________________ (Students Name/Signatures) EXPECTED OUTCOMES Assessment Criteria To achieve each outcome Achieved (Y/N) a student must demonstrate the ability to : Concept of various types of costs used in decision making. Compute the various elements of cost and their practical implications. Understand the various types of costs used in decision making and their significance. Understand the computation of various elements of cost and their significance and practical implications. Achieved Yes/No (Y / N)

Assignment Grading Summary (To be filled by the Assessor) Grades Grade Descriptors 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: TUTORS COMMENTS ON ASSIGNMENT: SUGGESTED MAKE UP PLAN (applicable in case the student is asked to re-do the assignment) REVISED ASSESSMENT GRADE TUTORS COMMENT ON REVISEDWORK (IF ANY) Date:

Assessors Name / Signatures:

Q1. What value creation strategy was adopted by TI Cycles? How did it work for the company? Ans.1 Before coming to the value creation strategy adopted by the TI Cycles it is necessary to understand what is value creation. Value creation is to create a reasoned growth path for the future. Value creation is all about utility and functionality and refers therefore, to those the company serves, rather than to those who own it. Profits and growth are the outcomes of effective value-creation logic. The value creation strategy adopted by TI cycles was based on value creation strategy as in UK as it was a joint venture. They built high quality, elegant bikes based on drawings and designs from England. To successfully implement this strategy the company went for vertical integration. They built each and every component required for bicycle manufacturing in - house. They also implemented organization values and people process as per British expertise which lead the company to be a dominant manufacturing unit rather than customer oriented. As we have seen what value creation logic is and also the strategy adopted by TI Cycles and also after going through the case study I can concluded that the strategy adopted by TI cycles did not work for the organization. Though at the initial stage company achieved success in getting profit but it could not meet the customer needs as all the cycles manufactured by them were based on the designs from England where the needs of the customers was different than the Indian customers.

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? Ans.2 The value strategies of TI Cycles & Hero Cycles can be stated as under: TI CYCLES VALUE CREATION LOGIC: Value creation at TI Cycles was based on UK expertise and they made a policy of vertical integration which means they started each and every product i.e. from tubes to steel required for manufacturing cycles in house. Which though profitable for the company; but incurred huge cost and high labor turnover. All the designs & drawings of cycles manufactured where from England. HERO CYCLES VALUE CREATION LOGIC: The value creation of Hero Cycles was towards customer satisfaction by meeting its need and this is what they did. 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 spare time cycling. Its bicycles, on the other hand, helped the farmers of Punjab carry a heavy load of vegetables to the village market. Instead of vertical integration like TI Cycles, Hero Cycles outsourced most of the components and focused on creating a highly efficient assembly operation in-house. Indeed, to a significant extent, Hero Cycles created local component supplier infrastructure by inducing friends and family to set up ancillary units, often supporting them with both funds and technical assistance. Also 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 the prices of cycles as compared to TI Cycles for the cheapest models. CONCLUSION: Hero Cycles had more profit due to its value creation and the reason are that they made cycles which were according to the need s of the Indian Customer market and also they developed new vendors for manufacturing heavy cycles and thus became a major competitor to TI Cyles.

Q3. What lessons one can learn form its competitors to design a successful plan for future growth. Ans.3 Lessons one can learn from its competitors to design a successful plan for future growths are: One key lesson from the above case study is that no company can achieve radical performance improvement without transforming resource productivity; the other equally important lesson is that no company can achieve such results only through improvement in operating efficiencies. Just an overall vision and a logical plan are not good enough for creating a continuous growth process, to shape and manage the future a company also needs the ability to effectively act on the vision and implement the plan. For managing growth, attention must be paid to both the content and the process. A company needs to align clear value-creation logic with its organizing principles and people processes. It is exactly such a position that which has to support or strengthen from beneath the historical success of companies like Hero Cycles. Effective position leads to success, resulting in both internal and external satisfaction, and that satisfaction further supports the position. Over time, this supporting process acquires greater and greater force, with the position becoming tighter and tighter. CONCLUSION: Thus we can state that to design a successful plan for future growth we should have the ability to manage value creation, principles and peoples process in such a way that they should be effective for long term basis.