TMA 02 is made up of three parts: Part A, Part B and Part C.
Part A: Case study – Apollo Tyres
Part B: Block 2 mind map
Part C: Demonstrating your skills and knowledge development
Evaluation of Apollo Tyres using concepts and theories from the module resources.
B207 TMA 03 Chloe Jackson-Nott
Shaping Business Opportunities PART A: 1418 words K2628294
PART B: 129 words
PART C: 248 words
PART A
1.
With Apollo tyres looking to expand their business within Southeast Asia and Eastern
Europe, they will come across some opportunities and threats. In 2006 they bought Dunlop Tyres in
South Africa giving them production facilities and rights to market the Dunlop brand across 32
African Nations. This has given Apollo the opportunity to collaborate and expand their brand name
and reputation globally and allows the chance to develop a new customer group. A threat linked to
this business move is that there is instability and the currency effects in South Africa could be a risk
financially as it is shown that Apollo made a net loss of $10.8m in 2011-2012. Focusing on an
opportunity within Southeast Asia, brand new factories can be built in Indonesia and Thailand which
hope to be completed within 3 years. Once built they will need to source their choice of materials.
Raw materials such as rubber have increased significantly in price since 2007 which could be seen as
a threat although these materials may become cheaper again. According to Chilkoti (2012), “margins
were squeezed by a 32 per cent rise in raw material (rubber) prices against a backdrop of waning
global demand.” Michael Foundoukidis quoted “given Apollo’s positioning, which isn’t premium,
they suffer more from raw material volatility.” If profits and growth go as planned then investors
may see Apollo as less Indian and more international. This could be an opportunity to prevent any
racial comments that may have been made as suggested by Niels Kjellerup (2006) when discussing
the effects of moving the company Dell to Mumbai. One spokesperson said, “many callers refuse to
speak to Indians and ask for an American right away.” In Apollo’s case, this could be a good move to
keep staff loyalty and boost morale. In terms of expanding in Eastern Europe, the economic crisis in
the eurozone has delayed these plans in Poland and Hungary. This is a threat to the company as they
are losing out on a business opportunity in these countries but on the other hand, they are also not
risking their revenue and getting involved in the crisis by delaying their plans.
2.
According to Bloom, P. (2020 – cited by The Open University), “Convergence is defined as
the adoption of similar values and processes by organisations globally.” The innovative idea to
coalesce with Dunlop Tyres in 2006 is an example of Apollo converging their values and adapting to a
new brands policies. With the change in global culture, they expanded their brand in 2019 by
introducing Apollo Truck Tyre Zone, which became their first tyre centre in Malaysia. Cited by The
Open University (2021) it is described that the centre is equipped with modern automotive
technologies. This suggests that Apollo are modernising and adapting their processes to achieve
higher that other tyre company competitors. Apollo are committed to deliver high quality products
and services to the Malaysian market as they have created the Truck Tyre Zone partnership with a
top tyre specialist showing best practice. Choosing to collaborate with specialist, Sin Chu Hin, gives
them the opportunity to overcome any cultural differences as Sin Chu Hin has 80 year long local
experience so can help with any communication or policy misunderstanding.
On the other hand, Bloom, P. (2020 – cited by The Open University) describes divergence as
“an organisation which most closely mirrors the assumptions and practices of an internal or localised
context.” Divergence doesn’t give the opportunity for innovation and instead relays other businesses
ideas. You could argue that this is a positive outlook as it saves time when building the company’s
empire. The method of divergence may work in Apollo’s favour when sourcing raw materials as they
have already come across a loss with rubber being so expensive. For example, there may be a
business that recycles unused materials to make good quality alternatives. If Apollo were to find a
way to reuse any wasted rubber and make some cheaper, but lower quality tyres, their profits may
increase slightly. They would also need to consider whether they are happy to produce cheap and
low quality tyres, or if it would affect their brand reputation.
, B207 TMA 03 Chloe Jackson-Nott
Shaping Business Opportunities PART A: 1418 words K2628294
PART B: 129 words
PART C: 248 words
Finally, Bloom, P. (2020 – cited by The Open University) says, “crossvergence describes the
ability of an organisation to respond to and influence their particular context.” Crossvergence gives
organisations the opportunity to influence others rather than being influenced themselves; it is seen
as the in between of convergence and divergence. This could be a great opportunity for Apollo to
show empowerment with them expanding to Southeast Asia and Eastern Europe. They will learn
about new cultures, develop a new customer base and also influence others to spread their
businesses globally. There are countries with underdeveloped roads where hard-wearing tyres are
needed so Apollo can adapt and create new products. By doing so, it could show other businesses
that their ideas can adapt and help places with technological advances we have that they might not.
Bloom, P. (2020) also said, “it understands culture not as a static, instead, it is constantly being
created and re-created, not least by the organisations that populate it.”
3.
A global firm has been defined as “sees the world as one market,” (Kotler and Armstrong,
2016, p. 595.) It is evident that Apollo Tyres has this way of thinking with their expansion to
Southeast Asia and Eastern Europe. They have grown to supply 118 countries since they established
in 1972. As cars have modernised and spread their use worldwide, tyres are likely to be more
popular in recent years meaning there is a growth in competitors. Apollo has the advantage that
being around since 1972, they have developed a strong brand and have more of an ability to
globalise. According to Jobber and Ellis-Chadwick (2013), there are seven triggers that may prompt
organisations to expand. Cost factors being one of these triggers relates to Apollo and its move to
India. This is where an organisation might try to reduce its costs by taking advantage of lower labour,
energy or raw materials. Cheaper labour is beneficial for the business especially with rubber
continuing to be high in price. It could give the cultural area a boost in employment rates with their
being more work opportunities and Apollo could also maintain their recruitment budget by hiring
more work staff but at a lower labour cost. Although this could also been see as a challenge for the
business because they need to ensure that they are not see as exploiting their staff because of the
low labour costs. Human Resources Management have the responsibility to recruit and maintain
staff morale. If the business is seen to be exploiting labour costs, this could ruin the brand name and
potentially ruin any collaborations they currently have with companies who provide the raw
materials.
Kapferer (2012, p.151) explains brand: “identity is in the sender’s side whereas brand image
is on the receiver’s side.” From a marketer’s perspective, maintaining a brand image is becoming
more of a challenge with the internet’s growth in popularity. Consumers have more of a voice on
platforms such as Facebook, Google Reviews and Trip Advisor. Apollo Tyres may find it challenging to
spread their name across all platforms as they sell a product/service people need rather than want.
Social media platforms could be very beneficial for developing their reputation and content.
Kapferer (2012) argues that brands need to provide content that will engage, help, inform or
entertain people and that they will want to share. As someone who has worked in social media and
analytics, the best content that attracts the most attention is short, sweet and simple. With Tik Tok’s
popularity growth during the COVID-19 pandemic, Apollo could use the opportunity to promote
their brand with a 60 second dance using the tyres as props. This platform is the quickest way to be
sure a range of potential customers views the video due to the algorithms used and the more people
that interact with the post, the faster is spreads.
The decision to expand globally comes with cultural and ethical challenges. Harris, F. (2017,
p. 178), “globalisation has led to cultural homogenisation at the expense of local cultures.” Focusing
on Southeast Asia, there may be traditions and attitudes that Apollo need to adapt to, especially
with their workforce. Factors such as clothing that we don’t consider here in the UK could be a cause
for concern as it constructs a self-identity, so Apollo need to ensure their policies are adapted to
their diverse laws.
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