In our last blog, we did an in-depth SWOT Analysis of the leading French car manufacturer, Renault. Here we will be doing a Detailed SWOT Analysis of MRF.
MRF has gained such large success in the market. It can improve its global standings by improving its digital marketing techniques. As we know that most people are shifting towards online platforms. It is convenient for business to market their products to their target audience using digital marketing. Thus digital marketing is very essential for every business. If you are curious about learning what digital marketing is and how to use it to your advantage – check out our Free MasterClass on Digital Marketing 101 by the CEO and Founder of IIDE, Karan Shah.
Thus this makes us keen to know how MRF Tyres maintains a prominent position in the market. To understand that we have given a detailed SWOT Analysis of MRF Tyres. But before we start with its SWOT Analysis let us learn about MRF Tyres as a Company, its products, competitors, financials, and more.
About MRF Tyres
Madras Rubber Factory (MRF) is a renowned tyre manufacturing company from India. It was established in the year 1946 by K. M. Mammen Mappillai. It has its headquarters in Chennai, Tamil Nadu, India.
It has a total of 9 trailblazing industrial units across India. MRF has penetrated the market from manufacturing two and four-wheeler tyres to becoming the only tyre used for fighter aircraft in India.
MRF was established as a toy balloon manufacturing unit by K.M. Mammen Mappillai. It began its venture into the tyre industry in 1952 and by the time of 1961, it became public and established a collaboration with the Mansfield tire and rubber company, a US-based company. In 1967, MRF Tyres broke new grounds and became the first tyre manufacturing company in India to export to the U.S.
It made a sale of 15991.14 crores in the year 2020. It earned a net profit of about Rs 13 crore. It has a market cap of 32873 crores.
|Founder||K. M. Mammen Mappillai|
|Origin||Tamil Nadu, India|
|No. of Employees||18,180 (2020)|
|Market Cap||₹32,873 Crores (2020)|
|Annual Revenue||₹16,321 Crores (2020)|
|Net profit||₹1,249 Crores (2020)|
Products of MRF Tyres
MRF is one of the largest tyre manufacturers in the market. Thus it provides its customers with many products in the market. Following are some of the products that MRF supplies:
- Sports equipment
- Conveyor belt
Close Competitors of MRF Tyres
MRF is one of the top companies in the market it has to face many competitors in the market. Following are some of the competitors of MRF:
- JK Tyre
- Apollo Tyres
- Birla Tyres
- Michelin. S.p.A.
Now that we know about the company let us start with the SWOT Analysis of MRF Tyres.
SWOT Analysis of MRF Tyres
SWOT Analysis is a technique that is used to assess the internal and external factors of a business. SWOT stands for Strength, Weakness, Opportunities and Threats. In this, the Strengths and Weaknesses are the internal factors of the business whereas Opportunities and Threats are the external factors of the business.
SWOT analysis is a useful tool for an organization as it helps to recognise the positives and the negatives in the firm.
Let’s start with its SWOT Analysis by first looking at the Strengths of MRF.
Strengths of MRF Tyres
Strengths are the factors that keep MRF at the top position in the industry. Following are some of the strengths of MRF:
- Marketing Strategy- MRF’s Marketing strategy is quite ingenious. They believe in marketing through value and credibility. Throughout the years MRF has focused on marketing through ambassadorship by great cricketers like Virat Kohli (current brand ambassador), A.B. Devilliers, Shikhar Dhawan and racers such as Narain Karthikeyan and Chetan Korada. This shows that MRF uses ambassadors who show trust and value towards the brand and thereby reflect it onto their brand.
- Brand Value – MRF tyres are well known for their quality of tread rubber and durability of their tyres. The reputation and quality of MRF have greatly favoured the brand value as a whole. Their launch of eco-friendly tyres, different tyre types and the use of their tyres in the Indian fighter planes has provided great value to the brand.
- Great Inventory- The inventory material and management are top-notch with 9 technically advanced manufacturing industries and great material quality. It has high customer satisfaction both quality and service wise.
- Financial Stability- MRF tyres have a strong financial groundwork; with their investment in different sporting events and sponsoring differently they have received a great return on investment which has made it quite stable financially.
- Competitive Advantage- By reviewing the competitor analysis it can be said that MRF has a competitive advantage mainly in the fields of brand reputation, value, inventories and financial stability. The industry is still competitive but MRF still has the edge.
Weakness of MRF Tyres
Weaknesses are the negative factors in the intern part of MRF company. It needs to be aware of these and try to eliminate them as soon as possible. Following are some of the weaknesses of MRF Tyres:
- Lack of Flexibility – MRF has built a good recognition in the past but in recent years MRF has been struggling to market their products at the same wavelength as before. Their quality of tyres is still maintaining its standards but they’re not able to keep up with the recent trends which have led to their competitors seizing the market share.
- Decrease in Net Shareholding – Due to lack of profits, MRF has decreased their shareholding capacities for the public, this may sound like a positive point but since the number of investors on the shares of MRF has decreased they may face a lack of funds in the future ventures. This can also eventually cut down their operating costs as almost half of the funds provided is used for production.
Opportunities of MRF Tyres
Opportunities are the factors that help MRF Tyres to grow in the market. It needs to find out these opportunities in the market and make them their strengths. Following are some of the Strengths of MRF Tyres:
- Heterogeneity of Market – The tyre manufacturing industry is very diverse. There are different types of tyres for different vehicles and different purposes. From two-wheelers to commercial planes the market has a great variety of needs and MRF can take advantage of such opportunities.
- The rise in the Automobile Industry- The automobile industry is booming in both India and other countries around the world. India exports a lot of tyres around the world and MRF tyres have a great reputation in the foreign market which would highly benefit them. The need for automobile parts does not seem to end as of which tyre manufacturers can benefit from it.
- Increase in Shareholders- Investors all around the world are looking for opportunities to invest in a great company to gain higher returns. The reputation of a company plays a major in providing investors for the brand. MRF has a great reputation and brand value which is very valuable in the market. Changing things up and setting on the right track can help MRF to increase their funds for their future ventures.
Threats to MRF Tyres
Threats are the external factors of MRF Tyres. These create a negative impact on the company’s growth. Following are some of the threats to MRF Tyres:
- Having great competition – The tyre manufacturing industry in India has great competition in terms of both quality and brand recognition. CEAT is one of the topmost contenders of the brand as of now. With MRF struggling to keep up with the trends it could become a major issue and loss of competitive advantage if they do not find the solution to this issue.
- Increase in cost of Raw materials- Raw material is the key component for any product. Inflation or an increase in the price can seriously harm the production of the goods or worst case scenario bring the whole production to a standstill. Rubber is the key raw material in manufacturing tyres; if the cost of the raw material increases it could lead to great loss for the company. Mainly the production of tyres could come to a standstill leading to lack of sales.
- Cheaper product availability- Many individuals look for a cheaper option for any product or service. Although the quality of the product is great the consumer is ready to compromise it if a cheaper option is available. If MRF doesn’t go with value-based advertising they could lose the market share to cheap rip-offs.
- Labour Strikes- Chennai has seen a lot of labour strikes throughout the years and MRF has had its fair share of strikes which have led to great losses. The labour community in Chennai plays a huge role in the manufacturing industry not just for MRF but for all the different types of industries across India. As most of India’s industry is run by manual labour the risk of labour strike can heavily hit the production.
With this, we have reached the end of the SWOT Analysis of MRF Tyres. This analysis helps the company to get a wide idea about its company and what are the strategies that it needs to follow.
In the study of the SWOT Analysis of MRF Tyres, we have seen that it is the largest tyre manufacturer in India. It has good marketing strategies in the market and even a good brand image which contributes to its strength. It can grow in the market due to the heterogeneity of the market which it can use as an advantage. Even with such positive points, it has some flaws in the market.
Its lack of flexibility in the market, growing competition, and the increase in the raw material act as a disadvantage to the company. It can improve its market standings globally which will eliminate some part of the competition in the market. It can use digital marketing to its advantage as most people are using digital media and it is easy to find their target audience. Thus digital marketing is essential for every business. If you are interested in learning and upskilling, check out IIDE’s 3 Month Advanced Online Digital Marketing Course to know more.
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