CreatingScorpio Global automobile overview • Dominated by GM Ford and Daimler in US, Volkswagen in Europe and Toyota,Honda and Nissan in Japan. • Shifts in the Industry • Mass production technique of Henry Ford • Lean or JIT System followed by Toyota • Japanese emphasized on good working relationship with suppliers whereas USmanufacturers focussed on low cost. • Unlike major auto manufacturers companies like Suzuki and Land Rover tried expansion to global market in a small segment rather than focussing on domesticmarket and were successful. Global automobile overview
Global automakers vs small automakers
• Easy transfer of technologies • Low cost • Standardization Indian Automobile Market • The Indian automobile market falls under 5 categories. 1. Micro hatch back 2. Ultra-compact hatchback 3. Compact sedan 4. Sedan 5. Luxury cars • The Indian vehicle market is also highly dominated by the 2-wheeler market. Mahindra M&M‟s Brand Portfolio
Cash Cow Flanker
High-end Low end entry
Prestige level Brand Elements ▶ Brand Name (Scorpio) – Conveys the outdoors, thrill,adventure and dominance ▶ Brand Logo – font color is metallic re- emphasizing themetallic grill that is a dominant product visual feature. Mighty muscular on the top band of the logo talks about the masculinity and ruggedness of the product. ▶ Tagline – Nothing Else will Do- conveys a very strong emotional desire to have the product and not settle for anything inferior ▶ Jingle – Nothing Else Will do – these words set to a progressive rock jingle and western vocals to emphasize the international appeal of the product Scorpio strategies
• A team of 120 divided into 19 cross sectional teams.
• Flat hierarchy followed to make the process faster and smoother. • Extensive qualitative research was conducted to identify the customer preferencesto make a car completely customized to the taste of India customers. • Collaboration with the suppliers to make their own choices which enabled then tobuild trust and also to reduce the cost. • 120 million was spent to build the plant in Nashik which is again very low cost compared to global automakers. • The Designing completely done in India which helps reduction of the R & D cost. Scorpio strategies
• Scorpio was positioned as a car rather than a UV to target customers
whowants a car but more power of a UV. • Penetration pricing method to capture market. • Scorpio was differentiated from other Mahindra car like Bolero and trucks giving it a feel of distant identity from other products. • Trusting of existing dealers were also helpful in reducing cost. Strength Customized for Indian customersEconomical vehicle Rough and tough look Weakness • Mahindra image of uncomfortable and not easy to drive
SWOT • A rural image
Opportunities Analysis Growth in the Indian automobile market Introduction of new variants to become a market leader. Threats New models from global automobile manufacturers. Other sedans and mini-SUV segment Core competence of Mahindra
Core competence is an activity that a company performs proficiently
that is also central to its strategy and competitive success.
• The core competence of Mahindra is the manufacture of strong rough
vehicle that they have developed from its inception. • Manufactured agricultural equipment's and vehicles for Army. Distinctive competence
A Distinctive competence is a completely important activity that a
company performs better than its rivals. It represents a competitively superior internalstrength.
• Cost cutting without sacrificing much on the quality
• The development of Scorpio was completely cost effective compared to the cost ofdevelopment of a new vehicle by Any automobile manufacturer. • The price of Scorpio was very less compared to its direct competitor Toyota Qualis. Porters five forces model
Barriers to entry (Weak)
• It is not easy for a new firm to start an automobile company. So less chance of completely new companies. • Many global manufacturers who does not have operations in India are likely to enter the Indian market in future as itoffers a lot of opportunities. Threat of Substitutes (High) • Due to success of Scorpio there is high possibility that other auto manufacturers will try to design new vehicles at thesame price and model range. • New research and studies are being done which will also cause troubles for the existing variant of scorpio. Competitive Rivalry (High) • Auto industry can be considered an oligopoly as a result price based competition is less in this industry. • New features, better design, new models, servicing etc have become very important forms of competition in this Industry. Porters five forces model
Bargaining power of suppliers ( Low)
• The company has formed a long-term relationship with its suppliers. • These suppliers must play as per the rules set by the brands. Bargaining power of customers (MODERATELY STRONG) • Buyers can easily switch to a new brand. There are no big costs involved in switching toanother brand or to a alternative mode of transportation. • Even though most buyers are small single buyers there are government and business organizations that purchases vehicles in bulk and who have a bargaining power. Challenges
• Due to the success of Scorpio, A slew of compact SUVs will make a foray into India and will gun straight for the jugulars one of Mahindra’s best sellerScorpio. • The company need to increase its chain of dealers to meet the customer demand. It should also separate the commercial and passenger segmentdealers. • Focus on new models and designs to give more choices to customers.
