Mahindra and Mahindra’s Scorpio was started in 1997 with a vision to continue the domination of Utility Vehicle (UV) market in India and also to be a global niche player. Their aim was to make M&M known worldwide for the quality, durability and reliability of its products and services. M&M’s share of business was largely from the semi urban and rural markets of India. Even though M&M had a wide variety of products, it was lacking with products that can cater the modern urban customer needs. The market of M&M was strong but stagnating. These reasons led to the thought of Sports Utility Vehicle (SUV) catering the urban customers. They succeeded in retaining their domestic market leadership with over 50% market share of the Indian utility vehicle segment and create their name in the global market.
1. Situation Analysis:
We can analyze the market environment of Scorpio using the 5C framework. 5C stands for Customers, Company, Competitors, Collaborators and Context.
The basic need the customer is looking at is the value for money in terms of low unit cost, operating economics packaged with modern style and robust design. Some of the findings of IDAM (Integrated Design and Manufacturing) were the customers had a psychological feeling that “big size stands for status” they seek latest technology at affordable prices. They needed the thrill and passion to drive an SUV, luxury and an image of an international vehicle. Customers also had minutest demand of no noise and vibrations. The customers quoted “No one sees my house but everyone sees my car, so I need to make an impression with this purchase.
Mahindra & Mahindra was founded in 1945 and started manufacturing the Utility Vehicles (UV) since 1954. They built the image as a manufacturer light commercial vehicles (LCV’s) and tractors. In 1983 they were the top selling tractor brand in India. The core competencies of the company are UV’s, LCV and tractors. Hence to achieve the world class status, Scorpio was the key elements. The company had employed a new 120 member team (IDAM) to focus on product development of Scorpio. The small size of the team worked in tandem and possessed high technical knowledge and had the competencies to fulfill the need of the customers with respect to the Utility vehicle.
The conventional UV market was too small in size. The UV market was even smaller a percentage. The major player in the urban UV market was Toyota Qualis. Tata motor’s Tata safari was thought to be expensive. Tata sumo a UV in the cheapest segment was a rival of M&M’s Bolero. In 2004 GM launches Chevy Tavera an SUV that competed directly with Scorpio with sales of 2700 units in 3 months.
The IDAM team worked with AVL (An Austrian Company with expertise in power train engg) to develop an engine with 109 hp that was the best in India. To keep the cost low M&M turned over a significant process to suppliers. The major systems were designed and engineers by suppliers who also carried out the testing, validation and materials selection. M&M’s involvement was limited only to specify performance targets, costs and acting as an integrator in bringing together the components to create a final product. They looked to East instead of West for cheaper components. The suspension system was given to Korean Samlip co. Ltd. They hired Lumax Industries for production of headlamps. They also enlisted Lear Corporation for the total interior work for Scorpio.
The age group of the team was purposely kept young to encourage innovation in the design process of Scorpio. Indian environment regulation tagged behind developed markets – vehicles in Indian metros were only required to comply with Euro II (emission standard for cars primarily in the European Union), the petrol version of Scorpio was made to comply with Euro III (a higher emission...