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Royal Enfield: Matchless Growth and Dominance
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Royal Enfield, the motorcycle division of Eicher Motors Limited, saw its unit sales increase a multiple of 16 times from 2008 to 2018. By 2019, the company controlled 96 per cent of the 250-750 cc motorcycle market segment in India. However, sales growth slowed considerably in financial year 2018-19, when the first three quarters seemed to indicate continuing slow growth for the company. Year-to-date sales for the first nine months dropped 15 per cent compared to the same period the year before. Two major new competitors were having a considerable impact of Royal Enfield's ability to retain market dominance: Mahindra & Mahindra's successful Jawa motorcycle line and US motorcycle giant Harley-Davidson, which was contemplating extending its portfolio in India into the 250-750 cc motorcycle segment. Having reached the pinnacle of the market, Royal Enfield was eager to retain its position in the 250-750 cc motorcycle segment. What strategic choices and growth options did it have to maintain market dominance, and what competitive advantage was its most viable growth option?