AUTOMOTIVE INDUSTRY
INDUSTRY ENVIRONMENT ANALYSIS (Porters 5 forces)
Threat of new entrants: - More time and high cost of entry -Knowledge and technology -Government policy -Access to distribution channels
Low
Moderate
Bargaining Power of Buyers : - More options - Buyers are large in number - Price sensitive - Brand loyalty
Moderate
Bargaining Power of Suppliers : - Switching cost is high - Unique products - Few suppliers - Quality of goods is critical
High Intensity of Rivalry : High -Number and diversity of competitor - High price competition - High exit barriers - Product quality and features
Moderate
Threats of Substitute: - Use of Public transport - Differentiated industry Products
RESOURCES
Tangible
Financials
Total assets Rs 35,675 Cr Cash Rs 2633 Cr Investments Rs 4825 Cr Low debt/equity ratio
Intangible
Technology
C2 CRDe engine In-house gasoline engine Applied for 24 patents & 8 Design registrations Micro hybrid technology (Pick-ups)
Human
Human
Top Management Centre for Creative Leadership, USA
Physical
Mahindra research & valley, Chennai (Pro dev, testing, validation) Plants at Nasik, Chakan, at 8 different locations Mahindra Samriddhi (soil & water testing labs)
Brand & Reputation
Swaraj, Arjun tractors Worlds no.1 tractor manufacturer Mahindra Tractors iconic brand, enjoys strong following
CAPABILITIES(FUNCTIONAL)
Distribution HR
Effective rural dealership channels
Creating synergy between Tech Mahindra and Satyam employees
Yuvraj-215 Tractor received Golden Peacock Award,2010 for innovative product and Scorpio won Autobid technology award for its Micro Hybrid technology Successfully diversifying into IT, Hospitality, Financial services sectors
R&D
Management
VIRU ANALYSIS
Capability Valuable Costly to imitate Yes Rare Unmatchable Competitive Consequences Sustainable Competitive Competitive Parity Competitive Parity Performance Implication Above Avg. Return Average to above avg. Return Average to above avg. Return Below Average Return Avg. Return Competitive Parity Average Return Largest Producer of Tractors in world SUVs: Bolero Sales Scorpio: Own R & D; Mahindra Satyam Mahindra Finance Brand Value Yes Yes No
Yes Yes
No Yes
No No
Yes No
No Yes Yes
No No No
No Yes No
No No No
INTEGRATION
2002: SUV 1999:Launch of Bijlee, a battery-operated, environmental-friendly 3-wheeler 2007:Mahindra Navistar Automotives Ltd. 1965: LCV 1963: Tractors 1949 :Assembly of Willys Jeep 1958:Machine tool Div 1986: Tech Mahindra 1975 :Engine Mafg plant(Igatpuri) 2009: Electric car segment(REVA) 2010: SUV(SsangYong Motor Company)
1995: Mahindra Holding & Finance Limited
Forward Intgr Backward Intgr Horizontal Intgr Diversification
1962:Mahindra Ugine Steel Company 2005:Manufacture of gears and transmission shafts
VALUE CHAIN ANALYSIS(Xylo)
Simplified Planning Practices to Reduce Planning Costs
Support Activities
Effective Training Programs to Improve Worker Efficiency and Effectiveness
Easy-to-Use Manufacturing Technologies
Systems and Procedures to find the Lowest Cost Products to Purchase Raw Materials Highly Efficient Systems to Link Suppliers Products with the Firms Production Processes
Investments in Technology in order to Reduce Costs Associated with Manufacturing Processes Frequent Evaluation Processes to Monitor Suppliers Performances Effective Product Installations to Reduce Frequency and Severity of Recalls
Located in Close Proximity with Suppliers
Efficient Plant Delivery Schedule Small, Highly Scale to Minimize that Reduces Trained Sales Manufacturing Costs Force Costs Products Priced to Generate Sales Selection of Low Volume Organizational Cost Transport Learning National Scale Carriers Advertising
10%
5%
5%
0%
Cost Reduction Of 21%
Primary Activities
VALUE CHAIN ANALYSIS
MERGER & ACQUISITION
c
In Dec1999 Mahindra-Gujraat Tractor(60%) In Jan 2007 Mahindra- Schoneweiss, Germany(90%) In March 2008 Mahindra- [Link] 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 In Nov 2005 Mahindra-Navistar Truck, USA (51:49) In March 2010 Mahindra + Yueda Group = MYYTCL
Joint Venture:
ACQUISITION
Year Dec1999 Jan 2007 March 2008 Acquisition
`
Stake % 60 90 -
Mahindra-Gujraat Tractor Mahindra- Schoneweiss, Germany Mahindra- [Link] Ricerca Design (GRD)
July 2008
July 2008 April 2009 Apr 2010 May 2010
Mahindra-Punjab tractor
Mahindra-Kinetic cc Tech Mahindra Satyam Mahindra-Logan Mahindra- Reva
63
80 100 55
May 2010
Aug 2010
Mahindra- GippsAero,Australia
Mahindra- Ssangyong Motor Company
Proposed
Joint Venture:
Nov 2005 March 2010 Mahindra-Navistar Truck, USA Mahindra + Yueda Group 51:49 51:49
DIVERSIFICATION
AUTOMOBILES ENGINEERING
AGRI
IT
RETAIL
FINANCE
INFRASTRUCTURE
HOSPITALITY
RELATED & UNRELATED DIVERSIFICATION
TRADING FORAY Retail ENGINEERING Odyssea Lifespace Two Wheeler LOGISTIC INFRASTRUCTURE (3%) AUTOMOTIVE (60%)
Electric Car
World City Aircraft Powerol Trucks
Farm Equipments
Defense Vehicles
IT (24%)
Finance
(12%)
BCG DATA
Product Current Market Share(%) 0.8 10.1 Key Competitor Competitor s' Market Share(%) 59 63.6 X Industry Growth(%) 26 25.9
Two wheeler Three wheeler Logon (mid size) Tractor Bolero(UV) Scorpio (SUV) Xylo (MPV)
Hero Honda Bajaj
0.013 0.15
1.9
41.4 26 22.5 6.8
Honda
TAFE Force Trax Ford Endeavour Innova
17
22 13 19.4 31
0.12
1.8 2 1.15 0.22
14.2
28.3 20 29.3 40.9
BCG MATRIX
50 High
Industry Growth(%)
Tractor (1.8 X) 27.8
Scorpio (1.15 X)
Xylo (0.22 X)
Bolero (2 X)
Three Two wheelers wheelers (0.013 X) Logon (0.15 X) (0.12 X)
Low 100 X
High
Relative Market Share
Low
0.01 X
GE MATRIX
Agri Equipments
Automobile
Mahindra Finance Real Estate
MARKET ATTRACTIVENESS
Mom and Me Two wheelers
Tech Mahindra Mahindra First Choice Defense
COMPETITIVE STRENGTH
Agri Equipments
Automobile
Mahindra Finance Real Estate
MARKET ATTRACTIVENESS
Mom and Me Two wheelers
Tech Mahindra Mahindra First Choice Defense
COMPETITIVE STRENGTH
INTERNATIONAL STRATEGIES Internationalization: It is a process of increasing involvement of an enterprise in international markets. Strategies :
Exporting Franchising Licensing Joint Ventures
Acquisitions
Production Sharing BOT Concept
Green-Field Development
Turnkey Operations Management Contracts
INTERNATIONAL STRATEGIES 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.
MAHINDRA GROUP
THANK YOU
