AUTOMOTIVE INDUSTRY

INDUSTRY ENVIRONMENT ANALYSIS (Porters 5 forces)

Intensity of Rivalry : High
-Number and diversity of
competitor
- High price competition
- High exit barriers
- Product quality and
features


Bargaining Power of
Suppliers :
- Switching cost is high
- Unique products
- Few suppliers
- Quality of goods is critical




Threats of Substitute:
- Use of Public transport
- Differentiated industry
Products

Threat of new entrants:
- More time and high cost of
entry
-Knowledge and technology
-Government policy
-Access to distribution channels

Bargaining Power of Buyers :
- More options
- Buyers are large in number
- Price sensitive
- Brand loyalty


Low
Moderate
High
Moderate
Moderate
RESOURCES
Financials
Total assets Rs 35,675
Cr
Cash Rs 2633 Cr
Investments Rs 4825 Cr
Low debt/equity ratio
Physical
Mahindra research &
valley, Chennai (Pro dev,
testing, validation)
Plants at Nasik, Chakan,
at 8 different locations
Mahindra Samriddhi
(soil & water testing
labs)

Human
Top Management
Centre for Creative
Leadership, USA



Technology
C2 CRDe engine
In-house gasoline
engine
Applied for 24 patents
& 8 Design
registrations
Micro hybrid
technology (Pick-ups)
Brand & Reputation
Swaraj, Arjun tractors
Worlds no.1 tractor
manufacturer
Mahindra Tractors
iconic brand, enjoys
strong following

Tangible Intangible Human
CAPABILITIES(FUNCTIONAL)
Effective rural dealership channels
Distribution
Creating synergy between Tech Mahindra
and Satyam employees HR
Yuvraj-215 Tractor received Golden
Peacock Award,2010 for innovative
product and Scorpio won Autobid
technology award for its Micro Hybrid
technology
R&D
Successfully diversifying into IT,
Hospitality, Financial services sectors
Management
VIRU ANALYSIS
Capability Valuable Costly to
imitate
Rare Unmatchable Competitive
Consequences
Performance
Implication
Largest Producer
of Tractors in
world
Yes Yes Yes No Sustainable
Competitive
Above Avg.
Return
SUVs: Bolero
Sales
Yes No No Yes Competitive
Parity
Average to above
avg. Return
Scorpio: Own R
& D;
Yes Yes No No Competitive
Parity

Average to above
avg. Return

Mahindra
Satyam
No No No No Below Average
Return
Mahindra
Finance
Yes No Yes No Avg. Return
Brand Value Yes No No No Competitive
Parity

Average Return

INTEGRATION
1963: Tractors
1965: LCV
1999:Launch of Bijlee, a battery-operated,
environmental-friendly 3-wheeler
2007:Mahindra Navistar
Automotives Ltd.
1962:Mahindra Ugine Steel Company
1975 :Engine Mafg plant(Igatpuri)
1958:Machine tool Div
1949 :Assembly of Willys Jeep
2002: SUV
2005:Manufacture of gears and transmission shafts
2010: SUV(SsangYong
Motor Company)
2009: Electric car
segment(REVA)
1995: Mahindra
Holding & Finance
Limited
1986: Tech Mahindra
Forward Intgr
Backward Intgr
Horizontal Intgr
Diversification
Primary Activities
S
u
p
p
o
r
t

A
c
t
i
v
i
t
i
e
s

Simplified Planning
Practices to Reduce
Planning Costs
Effective Training Programs
to Improve Worker
Efficiency and Effectiveness
Highly Efficient
Systems to Link
Suppliers
Products with the
Firms Production
Processes
Efficient Plant
Scale to Minimize
Manufacturing
Costs
Selection of Low
Cost Transport
Carriers
Delivery Schedule
that Reduces
Costs
National Scale
Advertising
Products Priced to
Generate Sales
Volume
Small, Highly
Trained Sales
Force
Effective Product
Installations to
Reduce Frequency
and Severity
of Recalls
Easy-to-Use Manufacturing
Technologies
Investments in Technology in order
to Reduce Costs Associated with
Manufacturing Processes
Systems and Procedures to find the
Lowest Cost Products to Purchase
Raw Materials
Frequent Evaluation Processes to
Monitor Suppliers Performances
Located in Close
Proximity with
Suppliers
Organizational
Learning
10% 5% 5% 0%
VALUE CHAIN ANALYSIS(Xylo)
Cost Reduction Of
21%

VALUE CHAIN ANALYSIS
MERGER & ACQUISITION
c
In Dec1999 Mahindra-Gujraat Tractor(60%)
In Jan 2007 Mahindra- Schoneweiss, Germany(90%)
In March 2008 Mahindra- G.R.Grafica Ricerca Design (GRD)
In July 2008 Mahindra-Punjab tractor
In July 2008 Mahindra-Kinetic (80%)
In April 2009 Tech Mahindra Satyam
In Apr 2010 Mahindra-Logan
In May 2010 c
In May 2010 Mahindra- GippsAero,Australia
In Aug 2010 Mahindra- Ssangyong Motor Company
Joint Venture:
In Nov 2005 Mahindra-Navistar Truck, USA (51:49)
In March 2010 Mahindra + Yueda Group = MYYTCL

`
Year Acquisition Stake %
Dec1999 Mahindra-Gujraat Tractor 60
Jan 2007 Mahindra- Schoneweiss, Germany 90
March 2008 Mahindra- G.R.Grafica Ricerca Design (GRD) -
July 2008 Mahindra-Punjab tractor 63
July 2008 Mahindra-Kinetic cc 80
April 2009 Tech Mahindra Satyam 100
Apr 2010 Mahindra-Logan -
May 2010 Mahindra- Reva 55
May 2010 Mahindra- GippsAero,Australia -
Aug 2010 Mahindra- Ssangyong Motor Company Proposed
Joint Venture:
Nov 2005 Mahindra-Navistar Truck, USA 51:49
March 2010 Mahindra + Yueda Group 51:49
ACQUISITION
DIVERSIFICATION
AUTOMOBILES
IT
RETAIL
FINANCE
INFRASTRUCTURE
HOSPITALITY
AGRI
ENGINEERING
RELATED & UNRELATED DIVERSIFICATION
AUTOMOTIVE
(60%)
IT (24%)
INFRASTRUCTURE
(3%)
TRADING
FORAY
Finance
(12%)
Trucks
Two Wheeler
Electric Car
Defense
Vehicles
World City
Lifespace
Powerol
LOGISTIC
Aircraft
Odyssea
Retail
ENGINEERING
Farm
Equipments
Product
Current
Market
Share(%)
Key Competitor
Competitor
s' Market
Share(%)
X
Industry
Growth(%)
Two wheeler 0.8 Hero Honda 59 0.013 26
Three wheeler 10.1 Bajaj 63.6 0.15 25.9
Logon (mid
size)
1.9 Honda 17 0.12 14.2
Tractor 41.4 TAFE 22 1.8 28.3
Bolero(UV) 26 Force Trax 13 2 20
Scorpio (SUV) 22.5 Ford Endeavour 19.4 1.15 29.3
Xylo (MPV) 6.8 Innova 31 0.22 40.9
BCG DATA
Relative Market Share
I
n
d
u
s
t
r
y

G
r
o
w
t
h
(
%
)

100 X High 0.01 X Low
L
o
w

H
i
g
h

27.8
Scorpio (1.15
X)
Bolero (2 X)
Three
wheelers
(0.15 X)
Tractor
(1.8 X)
Logon
(0.12 X)
Two wheelers
(0.013 X)
Xylo (0.22 X)
50
BCG MATRIX


GE MATRIX



M
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A
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A
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S

COMPETITIVE STRENGTH
Tech Mahindra
Automobile
Agri Equipments
Two wheelers
Mahindra Finance
Real Estate
Mom and Me
Mahindra First Choice
Defense



M
A
R
K
E
T

A
T
T
R
A
C
T
I
V
E
N
E
S
S

COMPETITIVE STRENGTH
Tech Mahindra
Automobile
Agri Equipments
Two wheelers
Mahindra Finance
Real Estate
Mom and Me
Mahindra First Choice
Defense
Internationalization: It is a process of increasing
involvement of an enterprise in international
markets.

Strategies :
INTERNATIONAL STRATEGIES
Exporting Licensing
Franchising Joint Ventures
Acquisitions Green-Field Development
Production Sharing Turnkey Operations
BOT Concept Management Contracts
Exporting :

The company exports its products to several regions
including Europe, Africa, South America, South Asia
and the Middle East.
Exports tractors to Turkey
Scorpio, as Mahindra Goa in Italy
Mahindra Pik Up & Bolero Pik Up (Cimarron) in Africa
Xylo Cargo Van in S. Africa
Mahindra Agribusiness (MSSL) exports grapes,
pomegranates and apples to Europe & UK
INTERNATIONAL STRATEGIES
Joint Ventures :

In Nov 2005, Mahindra signed a JV with Navistar
International Corporation known as Mahindra
International Engines Ltd. (51:49).
Mahindra Yeuda Tractors Co. (80:20) has setup R&D
and Engine facility in China in Mar 2010.
Mahindra is now in talks with Proton, an auto giant
from Malaysia for a joint venture.
INTERNATIONAL STRATEGIES
Acquisitions :

In Jan 2007, Mahindra acquired Schoneweiss & Co.,
Germany through its subsidiary Mahindra Forgings.
In May 2010, Mahindra acquired Gippsland
Aeronautics one of the Australias most reputed
aircraft producer and Aerostaff Australia, a aircraft
component maker.
In Aug 2010, it is planning to acquire Ssangyong
Motor Company of South Korea.
INTERNATIONAL STRATEGIES
Franchising :

Mahindra Ocean Blue Marine Pvt. Ltd. which
manufactures powerboats for Indian marine and
defence sector is finding international franchisees for
enthusiastic customers of recreational boating.
INTERNATIONAL STRATEGIES
MAHINDRA GROUP
THANK YOU