The Indian Automobile Market

smallest cars - MUL made up 24% of the automobile market two-wheelers 79% increasing demand for UVs Toyota was a major player in the UV segment (Qualis) then Tata Sumo, Tata Safari

Mahindra & Mahindra brand image light commercial vehicles and

tractor manufacturer Anand Mahindra extensive business process re-engineering

Scorpio
Won CNBC Autocar Award, 2003 R&D by internal funding key to M&Ms image change Priced at $ 11,000 (people could obtain loans & were willing to pay) Positioning: Upper end of the cheapest segment of UVs Major Competitor: Toyota Qualis

Challenges for M&M

Goal: All M&M companies should derive 20% rev. from abroad not forayed into US and China biggest markets M&M could play in only one segment other offered a range

Porters Five Forces Analysis

Time and Cost of
Entry were high High Switching Costs Not easy to quickly replicate their model Brand Image of being a tractor manufacturer

Large no. of buyers

HIGH
collaborative
relationships systems were designed & engineered by suppliers luck & timing

Indian market &

dominance of twowheelers (79% of all vehicle purchases) public transport

Product Portfolio Analysis (M&M)

Source: BCG matrix & Exhibit 5 High Light Commercial Vehicles Low

Relative Market Growth Rate

Tractors High

Scorpio (UV)

Bolero(UV)

Low

Maxx(UV)

Relative Market Share

External Environmental analysis (M&M) Source: PEST Analysis

Political
Reduction in Excise Taxation Policy Concession on import duty for establishment of new manufacturing units

Economic
Sales on Credit Cheap Interest Rates Competition among finance companies

Social
Rising Income Levels Credit Facilities

Technological
Improvement of Road networks Increase in the numbers of models available

Understanding the Value Chain

Firm Infrastructure: Global expansion through JVs and tie-ups, new labor SUPPORT ACTIVITIES agreements Human Resource Management: small team, well-trained, culture of teamwork, extensive team integration Technology: Design, development and manufacturing capabilities, engine development, component integration capability Procurement: Flexible in choosing partners and suppliers to achieve lower costs, hired fewer people and hence, low manpower costs. Inbound Logistics: From suppliers From partners/ collaborators Operations:

Customized product development

Assembly Testing

Outbound Logistics: Existing dealers to reduce costs Separate outlets in urban areas

Marketing & Sales: Break Free Bolero Scorpio from

Mahindra

Services: Trained personnel After-sales service Procurement of spared parts

Positioned as a car rather than a UV

PRIMARY ACTIVITIES

Product Market Portfolio Analysis Ansoffs Matrix

(Scorpio) (Bolero)

BALANCED SCORECARD
Objectives Cut down on personnel & testing costs Maintain project budget

FINANCIAL
Measures Limited Workforce (128) Testing fewer units at lower cost Targets To decrease production costs and thus launch Scorpio at competitive price Initiatives Tested only 75 prototypes Small teams Sourcing from suppliers Flexibility in choice of manufacturer

CUSTOMER
Objectives To change brand identity Measures Extensive market research Branding Shadow Endorsing Targets Position Scorpio as urban & stylish Initiatives Catchy taglines Press events 29 states in 29 days Objectives To encourage innovation in design process

INTERNAL BUSINESS PROCESS

Measures Cross functional sub-teams (19) Flat hierarchy high degree of integration Targets Immediate translation of market research to design & engineering of Scorpio Initiatives Creation of IADM Kept young agegroup

Vision and Strategy

Objecti ves Becomi ng a global name

Measures Expansion of production capacity (export) Expansion to foreign markets (setting up manufacturing facilities there)

Targets Generating 20% revenues from outside India

Initiatives Launched Mahindra Goa in Europe Tied up with Peugeot for outsourcing engines Ventured in South Africa

LEARNING & GROWTH