Express Bike Works: Washing In Style

Managerial Communication (MCNCGW23-1)

Submitted to

Prof. Rahul Shukla

Submitted by

Group 1

Aitihya Karmakar (CGW23007)

On

November 03, 2023

Consultant – PwC India

Mr. Niraj Taksande (Director)

Express Bike Works

Shop No. 1, Nagvekar Chawl, Vivekananda Rd,

Near N G Park, Dahisar East

Mumbai - 400066

Subject: Decision report on the expansion strategy of Express Bike Works

Sir,

This report submission is a recommendation for the expansion strategy of Express Bike Works.

It summarises all the relevant facts and analysis that can aid you in reaching a final decision.

Keeping the profitability, probability of getting the desired locations and future growth

prospects in mind, we have shared our recommendations. Further details are mentioned in the

report for your perusal.

Yours truly,

PwC Team

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Executive Summary

Express Bike Works (EBW) has revolutionized two-wheeler washes by automating the process

and reducing wash time to just two minutes. After successful implementations in multiple

locations, the company plans to expand in South India. The challenge for Director Mr. Niraj

Taksande is to decide on the expansion strategy. He must choose between self-owned or

franchise stores. Proximity to petrol stations could boost profits, but securing such locations is

not a given. Collaborating with authorized service stations for franchise stores offers even higher

potential; however, it is less likely. Mr. Taksande’s distribution decision will influence investor

perception and hence EBW's future. Considering profitability, the likelihood of securing desired

locations and future growth potential, this report explores optimal strategies for expanding

EBW.

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CONTENTS

LETTER OF TRANSMITTAL 2

EXECUTIVE SUMMARY 3

SITUATION ANALYSIS 5

THE PROBLEM STATEMENT 6

THE ALTERNATIVES 6

CRITERIA FOR EVALUATION 6

EVALUATION OF ALTERNATIVES 7

RECOMMENDATIONS 8

ACTION PLAN 9

CONTINGENCY PLAN 10

EXHIBITS 10

REFERENCES 10

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Situation Analysis

Express Bike Works, or 'EBW' is an Indian start-up established to make two-wheeler washes

simpler, more efficient, and less tedious for motorcyclists. The organization has enhanced the

bike-washing experience by automating the process with a machine that enables washing a bike

in a limited time while using limited resources and reducing manual labor. As a result, the

average wash time of a motorcycle has decreased considerably to only two minutes. The

company has expanded in multiple Indian states, such as Maharashtra, Karnataka, and

Jharkhand, as well as some overseas locations. Now, the owners plan to expand to various

locations in South India, namely Udupi, Chennai, and Bangalore. Mr. Niraj Taksande, the

Director, needs to decide the retail strategy going forward.

The decision is whether to expand via self-owned stores or franchise stores. Mr. Taksande also

needs to select appropriate store locations. He estimated the per-month profits in both options.

He consulted Mr. Varun Pai, who owns several car wash locations in several Indian cities and

has valuable market insights. Mr. Pai suggested that if the store is closer to petrol stations, the

profit percentage would increase than the initial estimates for both self-owned and franchise

stores. However, the probability of acquiring stores near petrol stations is low. A franchise store

opened in association with an authorised service station could enhance the profits further, but

its likelihood was even lesser.

Mr. Taksande’s goal is to zero in on an expansion strategy, keeping in mind that the decision he

takes will impact the future of EBW as the distribution strategy will influence the decisions of

some investors. An important factor affecting the decision would be the profitability of the

option. He also has to keep in mind the probability of getting the desired locations, as this would

impact the implementation of the strategy.

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The Problem Statement

Niraj has to choose a course of action to increase profits today and sustainable growth

opportunities tomorrow.

Current State:

● EBW has built an excellent reputation due to its innovative cleaning method.

● It is doing well in the market and has set up service stations at multiple locations.

Desired State:

● An effective distribution channel, attracting Series B funding from investors and

promoting overall company growth.

● Expansion by setting up independent stores in multiple locations and generating profit

from the stores.

The Alternatives

1. All self-owned stores

2. All franchise stores

3. A combination of self-owned and franchise store

Criteria for Evaluation

1. Profitability of the selected option

2. Probability of getting the desired locations

3. Future growth prospects

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Evaluation of Alternatives
1. Choosing self-owned stores model for distribution:

a. Pros:

i. Complete control over the business process and technological expertise

i. The expected profit near petrol stations is lower

ii. It would require more investment

iii. With more number of stores, more management is needed

2. Choosing franchise stores model for distribution:

a. Pros:

i. Less investment and hence more economical

ii. The predicted profit near petrol stations and service stations is higher

iii. The probability of getting a location near petrol stations is higher

iv. The benefit of franchise owners’ knowledge and experience

v. No management is required for the stores as franchise owners would be

responsible for their stores

b. Cons:

i. Less control over technological expertise

ii. Not the best option for brand-building

iii. The probability of acquiring a store near the service stations is lower

iv. The predicted profit at locations other than those near petrol stations is

lower

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 3. Choosing a combination of self-owned and franchised stores:

a. Pros:

i. Increased probability of acquiring the desired stores

ii. Increased probable profit

iii. Most suitable for brand building at new locations

iv. Moderately economical

v. Moderate control over technological expertise

b. Cons:

i. Management is required for self-owned stores

ii. This model may seem too complex to the investors

Recommendations

Below are the recommendations ranked in terms of all the criteria mentioned above:

1. Choosing a combination of self-owned and franchised stores: Since the brand

is already successful in Karnataka, it is suggested that franchised stores be opened there.

Preferably, stores must be opened near petrol stations and motorcycle service stations in

Udupi and Bangalore. Self-owned stores are recommended in Chennai as the brand

needs to be established there. This option could increase the probability of acquiring the

desired location and increase profits.

2. Choosing franchise stores model for distribution: Using only the franchise

model can prove to be beneficial if implemented correctly with the aid of franchise

owners’ knowledge and experience. This solution could especially work in the case of

stores near petrol stations.

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 3. Choosing a self-owned store model for distribution: Opening self-owned stores

would give EBW control over the processes and the technology. It could help in taking

the brand name to greater heights. Specifically, in situations where locations near petrol

stations or motorcycle service stations are not available, this model could be helpful.

We have listed the recommendations and ranked them as per the evaluation criteria, keeping the

vision of EBW in mind. You may implement the strategy that you feel is most suitable.

Action Plan

Following are the action plans for the recommendation of a combination of self-owned and
franchised stores:

I. Present and explain the combination of self-owned and franchise stores to the

investors to raise the funds required for expansion.

II. Search for motorcycle service stations willing to collaborate and set up franchise

stores with such service stations in all three locations.

III. Find experienced and enthusiastic franchise owners who would be willing to set

up stores near the petrol stations in Udupi and Bangalore.

IV. In Chennai, set up self-owned stores near petrol stations with a major focus on

branding and promotion.

V. Self-owned stores are to be set up at acquired locations that are not near petrol

stations in all three cities.

VI. Inaugurate and promote the stores with events for biking enthusiasts.

VII. Monitor the performance of the newly opened stores. Work closely with the

franchise owners in the initial phase to ensure they are well-equipped to manage

the stores in the long run.

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Contingency Plan

● In case Mr. Pai’s prediction fails - The recommended plan is based on the

assumption that the numbers Mr. Pai has predicted are almost accurate. If actual

numbers significantly deviate from the predicted ones, the plan must be altered. All

self-owned stores are then recommended.

● In case franchise owners steal the technology - This situation can be avoided by

adding appropriate clauses in the franchise agreement. Still, in the initial phase, it is

advised that short-term agreements are made to monitor the success of the franchise

stores, not just in revenue but also in the relationships with franchise owners.

Exhibits

A. Profit in different situations

B. Pugh matrix

C. Recommendations

D. Consultancy firm success rate

References

● [Link]

● [Link]

● [Link]

me%20companies%20operate%20with%20both,like%20training%20or%20new%20pro

ducts).

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