Hi everybody Royal Enfield is one of the most admired motorcycle brands in India the mighty Royal Enfield Bullet went around the world found its home in India where it became an icon it was the motorcycle that made Royal Enfield into a global brand this is the enery makes the royalfield the.
Best motorcycle in the world no other manufacturer had built a bike like this before for full production use and the rest of the world followed classic was the motorcycle that changed Royal enfield’s fortunes it’s not just Brute Force right and that is the.
Himalayan and you would be shocked to know that in the past 25 years while the stock price of Apple has shot up by 60,000 from the day of listing if you look at Tesla and baj finance their stock prices shot up by 17,800 and 1 lak 126,000 respectively whereas if you look at the stock price of ier Motors it has shot up by.
390,000 per. yes 3 lakh 90,000 and while most people know Royal Enfield to be a legendary brand today what they don’t know is that Royal Enfield was on the verge of shutting down not once not twice but Thrice in its history and Royal Enfield was in such a terrible condition that first a.
UK company tried tried to revive it but they failed then an Indian company called Madras Motors tried to revive it but they again failed and then even ier Motors tried for six long years but they still couldn’t revive the company and just when ier Motors was about to shut down the company a 26-year-old boy named sidharta Lal pleaded with the board to.
Give him one last chance and this boy ended up doing something so incredible that back in 200 Royal Enfield had a capacity of 6,000 units a month but they could only sell 2,000 units a month but after sidharta took over in just a few years they went from selling 25,000 units a year to 50,000 units to 100,000 units to 200,000 units and then to touch.
400,000 units and as of 2023 Royal Enfield has seen its sales shot up by 36 times to hit 920,000 units sold in a single freaking year and today Royal Enfield sells bikes not just in India but it also EXP fors bikes to 50 other countries all across the world so the question we here is when three big companies could not revive a brand what.
Did this 26-year-old boy do differently because of which today Royal Enfield has become a global sensation what were his business strategies that saved Royal Enfield from shutting down and what are the business lessons that we need to learn from the iconic rise of Royal Enfield this video is brought to you by ODU if you’re a business owner you know.
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With World War II and the bikes of Royal Enfield were born out of the fires of World War II po September 1939 the German fo begins its ruthless March of conquest and sets the stage for World War II this just one scene I mean if.
Freedom is your peril you got to do something this little lightweight motorcycle that was used to be parachuted from the aircraft to help support the troops the rolling field flying flea is the most fantastic story imagine these motorcycles could be parachuted Behind Enemy Lines but after.
The war when the civilians started using these bikes these bikes required very high maintenance they often broke down and they were super heavy to handle so when the Japanese bikes entered the market Royal Enfield as a brand died a miserable death but this is when the company found a market in India and started selling to the Indian army soon.
Enough all thanks to narui they started Manufacturing in India and became the favorite bike of the Indian Army but again it was the same old terrible product that survived just because India didn’t have enough options but again in the 1990s just like in the UK when India got liberalized several Japanese bikes enter the market and just.
Like in the UK they killed the sales of Royal Enfield and just when the brand was about to die ier Motors bought Royal Enfield and tried to revive the brand but again even they couldn’t do anything significant in the next 6 years and this is when sidhart alal took over Royal Enfield so the question over here is when the britishers couldn’t turn the.
Company around when Madras Motors couldn’t do anything to revive Royal Enfield after 6 years of struggle even when ier Motors themselves failed what exactly did sidharta Lal do different now amongst the several things that sidharta Lal did we found four important things that changed the fate of Royal Enfield in India the First Act was.
Portfolio rationalization in fact Dr Willman once said at podcast that while good entrepreneurs dabble with scattered Brilliance great entrepreneurs win with focused Brilliance and in this case back then iur Motors had multiple businesses ranging from Footwear to Apper to even trucks and sidharta realized that he wouldn’t be able to focus on growing the.
Bike business if he was too distracted so the first thing he did after taking over was to sell 13 out of the 15 businesses that ier operated why because while ier dabbled with scattered Brilliance sidharta wanted to win with four focused Brilliance the second piece of wisdom is perhaps the most underrated and yet the most powerful attribute of.
Great entrepreneurs which is the practice of empathy and they say that great market research doesn’t stem from excels and McKenzie decks but from the conversations that you have with your customers in this case in spite of being the son of a millionaire sidharta got his hands dirty and chose to live the life of his customers to understand what.
The customers are going through so sidharta got his bike and went on a road trip not for days or weeks but for months just so that he could have meaningful conversations with the customers and in this trip sidarta had Rich conversations with his customers and he asked them kab why did you choose the Japanese bikes over Royal infield.
What did you like about Royal infield what would make you buy a Royal Enfield and what exactly should they change to make them buy a royal infield and after he did it he even made his employees practice empathy with the customers by doing the exact same thing which is by going on a road trip and talking to customers and after connecting with.
Other Riders and riding the bike himself sidharta could identify six issues with the bike which no market research report could tell him so the question is what were these issues now listen to this very very carefully because this is the power of customer Insight the first issue that he could find was the packaging and transportation and this is.
When he realized that while the bikes were being packaged and transported to the retail stores a lot of these bikes were actually getting damaged but the problem was that they came to know about this damage only when the customer started riding it so do you realize after you buy the new bike you as a customer will find something faulty then.
You will have to take it to the store and then get the bike fixed so this resulted into terrible customer experience and more importantly when you buy a new bike and you see something faulty it kind of turns you off right this was the first issue that sidharta identified secondly he realized the problem with separate gearbox and the.
Cast engine and while conducting the MPD experience he understood that this design was making the bikes prone to frequent oil because of which the maintenance cost for the Riders was very high and it caused a lot of trouble to the Riders thirdly the outdated iron engine design did not comply with the modern and stricter emission Norms which.
Also invited regulatory concerns fourthly there was a Kickstart problem in the bikes and while all of the bikes had a sell start button Royal Enfield bikes had a Kickstart in fact one of my old friends even told me that the bikes back then had such a terrible kick mechanism that while he kicked the bike his leg would hit a part of the bike and.
It would hurt him number five he found that the customers had issue with sales and after sales experience with Royal Enfield and lastly as soon as new cheap lightweight better mileage bikes came into the market people started buying them because they didn’t feel that connection with the Royal Enfield brand it’s like today customers buy overpriced.
Jordan not because of its features but because of the emotional connection that they have with the Jordan story but if the popularity of Michael Jordan Fades away and kids don’t and the Jordan story why would they pay extra just to buy a pair of Jordans right same was the case with royan Enfield back then so with all this data sidharta understood that the.
Royal Enfield brand needs to be aspirational that aspiration will lead to an initial boost in sales and when the sale happens the products need to be super amazing which will eventually lead to more brand value and will result into more sales so the first thing that sidharta did was that he moved from a cast iron engine to an aluminium engine.
And this alone gave some incredible advantages to the bike design and if you understand the Delta of the change that it brought to the bikes it will blow your mind firstly aluminium has a density of 2,700 kg per M Cube whereas cast iron has a density of 7,200 kg per M Cube so.
If you make a cube of 1 m x 1 m x 1 M while a cast iron Cube would weigh 7,200 kgs and aluminium Cube would weigh just 2,700 kgs so do you realize aluminium is insanely lighter than cast IR now for a typical 350cc motorcycle engine this could mean a weight reduction of anywhere between 15 to 20 kgs and obviously when the weight of the engine.
Is reduced by 15 to 20 kgs you can handle the bike more easily you can accelerate with less power the braking becomes much easier and more importantly the bike also becomes more fuel efficient this is the first first superpow that aluminium brings to the table the second superpow is better heat dissipation now if you look at the.
Thermal conductivity of aluminium versus cast ion while aluminium has a thermal conductivity of 205 wat per met Kelvin cast iion stands at 50 wats per meter Kelvin so in simple words heat can travel almost four times faster through aluminium than through cast iron in fact my physics teacher once explained that if heat is the car that has to travel.
From aluminium versus cast IR while aluminium acts like a highway for heat where heat can travel quickly from point A to point B cast iron acts like a bumpy Village Road where heat travels very very slowly now what this does to the engine is that while a cast iron engine takes a lot of time to heat and cool aluminum will heat up quickly and then.
When the heat moves out of the engine it will reach the coolant quickly and it will cool down the engine also very very quickly so this heat dissipation red reduces engine damage due to reduced heat stress thirdly if you look at the casting temperatures while the casting temperature of aluminium stands at 600° C for cast ion the casting temperature.
Stands at 1, 1200° C and if you don’t understand casting temperature it’s very very simple casting temperature refers to the temperature at which molten metal is poured into a mold to create a desired shape so obviously the energy required to achieve a casting temperature of 60° is far lesser as compared to 1, 1200° C.
So this results into both less manufacturing cost and less carbon footprint and lastly there is the advantage of damping capacity for those who don’t know damping capacity is a measure of how effectively a material can dampen or reduce vibrations in this case when we say that aluminium has three times more damping capacity than.
Cast iron it means when the engine vibrates the cast iron block and components do do not absorb much of the vibrational energy and they transmit these vibrations onto the bike and this causes discomfort to the driver and also erodes the engine parts whereas if you look at aluminium aluminium by default absorbs a lot of these vibrations in.
Such a way that even at high speeds the bike moves very very smoothly because it vibrates less so this gives Comfort to the driver prevents damage to the engine due to vibrations and also results into less noise so do you realize just because they shifted from cast iron to aluminium Royal Enfield bikes had five advantages lesser cost lighter weight.
Better handling less erosion of engine health and most importantly a much smoother ride this was one of the biggest moves that sidharta made fourthly Royal Enfield spent a lot of money on improving their transportation and changed their packaging to make sure that bikes don’t get damaged when they enter the store and lastly sidharta.
Deployed a very unique brand building strategy in the Indian market so after his long Tour on the Royal Enfield and after meeting with a lot of riders he realized that Royal Enfield was seen more as an engineering and Manufacturing Company rather than an aspirational brand like Ferrari or Harley-Davidson so they did two things to connect with the.
Customers firstly they revamped their stores and turned them into hang out places for bikers where they could experience the Royal Enfield die style and these new stores had the feel of an international retro cool brand which no other bike company had and you you must have noticed that Royal Enfield brand Outlets are so loud and so appealing.
That even if you don’t want to buy a Royal Enfield the store still catches your attention secondly they created communities like Enfield Riders community and they also organized events like motorers hello mote you know this is the energy which makes a royal infeld to make the best motorcycle in the world there’s just something about the.
New ones where inspiration has been taken more than any anything though they’re just wonderful motorcycles to ride so this community and new store design brought together many riders with the same passion for bikes and more importantly it created a tribe for fellow bikers to connect with each other and eventually connect the bike and the.
Brand itself this is how by spending time with the customers to find the most important problems of the brand by changing the design of the engine by building a brand value with stores and community and most importantly by taking care of the small things from the gearbox to the Kickstart sidat revived a company that failed thce and turned it.
Into one of the most iconic brands in the Indian business ecosystem this is the reason why today Royal Enfield sales have shot up by 36 times from a mere 25,000 units sold in 2005 to an insane 920,000 units sold in 2023 and this brings us to the last part of the episode and that are the business lessons that we need to learn from the.
Iconic rise of Royal Enfield lesson number one one as Dr Wiman once said while good entrepreneurs dabble with scattered Brilliance great entrepreneurs win with focused Brilliance lesson number two great market research doesn’t stem from excels and McKenzie decks but from the rich conversations that you have with your customers and your.
Potential customers in this case in spite of being the son of a millionaire sidharta got his hands dirty and chose to live the life of his customers before he tried to revive the company and that is the reason why he was able to make the most important change that revived the Royal Enfield brand lesson number three no matter how big a brand you are.
If you have a bad product you are only one step away from dying at the same time if you have a great product even a giant can’t shake you in this case Royal Enfield was big in UK and India both but as soon as the Japanese bikes enter the market they crushed the Royal Enfield brand with a great product and at the same time when Royal Enfield by itself.
Built a great product it was a dying brand and yet it went on to beat the likes of Harley-Davidson in the inter Market that is the power of a great product these are the lessons that you need to learn from the iconic rise of Royal Enfield and I just hope you learn something valuable from this case study that’s all from my side for today guys.
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