Output structuring exercise

As a part of this exercise, all of you are individually required to prepare slides on the
following. The content for the slides is also detailed below. No additional research or content
is required. The focus should be on slide structuring. 4 slides are required to be made. Think
of an appropriate key message headline for each slide, current heading is just a guide to the
content. For any queries feel free to get in touch (Neeraj: 9582948843, Sailesh:
9582948842).
Content:

Objective: Evaluation of mid-end segment of earthmoving

equipment as segment of entry into the market
Slide 1: Earthmoving equipment market segmentation and comparison of
mid-end segment with others
Earthmoving Equipment segments:
1. Low End: Backhoe loaders, Mini excavators
a. Market Opportunity 2011-15 : INR 24,993 Cr.
b. Price Range: INR 10-20 lakhs
c. Applications: Low end, small scale, earthmoving
d. Customer Profile: Local contractors
e. Success drivers: Spare part availability; Service network
2. Mid End: Excavator, Loader
a. Market Opportunity 2011-15 : INR 41,284 Cr.
b. Price Range: INR 30-60 lakhs
c. Applications: Large scale earthmoving applications across sectors
d. Customer Profile: Large corporates - developers and construction
companies
e. Success drivers: Equipment reliability and performance; Dealership
reach
3. High End: Specialized mining equipment, Rigs
a. Market Opportunity 2011-15 : INR 20,696 Cr.
b. Price Range: INR >1 cr. lakhs
c. Applications: Earthmoving, crushing in mines. Piling
d. Customer Profile: Mining companies, large construction companies,
rental agencies
e. Success drivers: Equipment reliability and performance
Source: Off Highway research, Primary interactions, Feedback analysis

Slide 2: Growth in excavator and loaders market and drivers of growth

Supporting data:
Investment across sectors
Sector (INR 000 cr.)

2011

2015

Power
Real estate
Roads & Bridges
Railways & MRTS
Water & Irrigation
Ports & Airports
Others
Total

145
100
63
41
78
17
116

271
187
151
74
146
34
134

Market size for excavators and loaders

Equipment (INR 000 cr.)
2011
2015
Excavator
4400
7500
Loader
1100
1800
Source: Feedback analysis & estimates, Off-highway research data, Planning Commission
Key assumptions:
70% realization of government plan estimates, Sector-wise break-up based on 11 th Plan
outlays, Average price of excavators = INR 45 lakhs, average price of loaders = INR 30 lakhs

Slide 3: Key success factors

Technology (Priority- Excavator: High, Loader: Medium):
Performance is the most critical parameter driving choice of equipment. Customers believe
that that high quality technology usually translates into good performance
For a new entrant without CE manufacturing experience, technology partnership or JV is
likely to be the most preferred mode of entry.
Service/Reach (Priority- Excavator: Medium, Loader: High)
The machines are usually deployed at sites, distant from urban centers. Since equipment
down-time has a major financial implication, strong service and spare parts distribution
network is critical, translating into customer satisfaction and retention.
Brand (Priority- Excavator: Low, Loader: Low)
While the customer is usually willing to try a new product with superior/comparable
technology, brand stills plays a small role in purchasing choice. Familiarity with the brand in
the automotive or other related industries would add to the brand perception of the CE
manufacturer.
Source: FVL research; Primary interviews with customers

Slide 4: Methodology used for assessment of overall attractiveness of Midend segment

Overall Attractiveness:
1. Attractiveness for a new entrant:

a. Evolving demand supply scenario: The entrants growth should

derive from the markets growth itself, rather than from stealing
incumbents share
b. Sustainability of economics: The financial attractiveness of the
business should be sustainable over the next 5-7 years term at least
c. Conduciveness of industry structure: The industry structure
should not restrict a new entrant from earning the same financial
returns as the incumbents
2. Likelihood of companys success
a. Likelihood of entry: The plausibility of crossing the entry barriers
should be evident from industry examples
b. Ability to run the business and perform well: There should be
strong chances of xxx delivering at least industry-average
performance, in view of businesss complexity and its natural strengths
c. Time to maturity: The time required to attain relevance and scale
should be <5 years
Notes to the methodology:

Philosophy: Opportunities are assessed on relative as well as

absolute attractiveness

Perspective: Rather than looking at entry barriers, key success

factors are the focus area, to tailor the attractiveness to xxx

Approach: The realness of the opportunity will be tested, beyond

the theoretical attractiveness. Higher reliance on industry inputs will be a tool for
this