Project Scorpio

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  • as most automobile manufacturers hesitate to take such a risk
  • 19 cross-functional design teams with people from all over design and development, testing and validation, marketing, manufacturing and supplier development.By adopting the above, they differ…themselves
  • Project Scorpio

    1. 1. Project Scorpio Presented By: Group A8 Presented To: Gourab Mahajan (12018) Dr. M.R.Suresh Mohan Karthikeya (12028) Shashank Goswami (12045) Robin Kumar Sahu (12097) Akilan P (12123) Pappu Yadav (12166) Sarthak Rohatgi (12182)
    2. 2. Background “Project Scorpio was not a top-down strategy nor one man’s vision; it was a bottom up programme” – Anand Mahindra In November 2003, M&M, a major automobile and farm equipment manufacturer, became the second auto company in India to receive the prestigious National Award for R&D Within a year of its launch, Scorpio won major awards like “Best car of the Year 2003”, “Best SUV of the Year” and “Product Launch of the Year” award 2
    3. 3. Need… Impact… Result 3 Need Impact Result M&M – brand name in the UV market and enjoyed near monopoly until the early 1990s. Telco introduced “SUMO”. SUMO, with its better looks, appealed to an urban market. Sumo sold 100,000 units were as M&M sold 26,321 units (between 1994 – 1997) SUMO quickly snatched market share M&M conducted a thorough survey of the market M&M realized the potential of UVs in the urban market and made a conscious decision to develop a vehicle designed for urban use The outcome was Project Scorpio, on which work started in 1997 UVs were generally used by car rental agencies and taxi service providers for commercial purposes TOYOTA launched Qualis in the early 2000s Appealed to the urban buyers, and many people began to purchase Qualis for personal use. M&M launched Bolero in 2000, received mixed reactions It was not as big as success as M&M had hoped it would be It did help the company establish a stronger presence in the urban UV segment M&M’s sales stagnated by early 2000s and its share price touched an all – time low of INR 100. It was in this scenario that M&M launched Scorpio in June 2002.
    4. 4. Need… Impact… Result 4 Need Impact Result Launch proved to be the much – awaited turning point for M&M Sporty looks and powerful performance appealed to a great number of people Scorpio was an immediate success Scorpio catered to a previously neglected niche It fell between a passenger car and as SUV Scorpio’s target market straddled both passenger car buyers as well as SUV fans Scorpio is a luxury car which covered the INR 500,000 – 800,000 price range The company also found that it was the segment in which customers were most likely to buy instead of a car Scorpio compete with all the cars in the luxury segment, along with other UVs in the market. (CAR PLUS) M&M followed an innovative sourcing system Made the project more efficient Lower cost Bottom-line: “It is easier to make what you can sell than to sell what you have made”
    5. 5. 5 GAP Analysis Factors Past scenario Expectations Result Products Focussed mainly on Rural markets Wanted to have foothold in the industry They Came up with Scorpio, an SUV for urban market and which retained its image as a strong vehicle Segment No SUV in B or C segment catering to all the needs of the consumers An SUV with style and power meeting customer’s expectations Scorpio with power of an SUV and style comfort and luxury of a passenger car Market share Declining Market Share Wants to be the Market Leader Scorpio increased their Market Share Technology Do not have the technology to compete with its competitors Want to have the best combinations of the designs, looks, power and performance For the first time they outsourced the whole project to suppliers and did only the assembling part with the best of the equipment received
    6. 6. Product Innovation Charter Focus  Reasonable cost, quality and Performance Vehicle for Urban segment passenger SUV. Goals/Objectives  Increase the Market Share Guidelines  Use of Cross functional teams  Adopting flexible manufacturing system 6
    7. 7. Question 1 Scorpio was said to be M&M’s attempt to reinvent itself in the Indian automobile market. How did Scorpio help M&M improve its image and counter competition from giants like Telco and Toyota? Do you think M&M was right in departing from its traditional forte and positioning Scorpio as an urban UV? 7
    8. 8. Strategy adopted by M&M • M&M concentrated on the niche segment, vehicle in between the passenger cars and SUVs • It differentiated itself from its competitors by positioning it as both luxury and adventure • They came up with a new engine for a new car design which was the major element of differentiation for Mahindra • The company came up with Scorpio which was designed according to the customer’s preferences 8
    9. 9. Strategy adopted by M&M  Quality Deployment function  They focused on a customer centric approach  House of quality: The attributes customer wants and translate them to engineering  Help from cross functional teams  Customer needs Offer comfort and elegance of a passenger car Sporty look and sturdy design Low in price compared to other SUV’s in market  QFD SCORPIO.xlsx  Supplier Involvement  Cross functional teams 9
    10. 10. How Scorpio compared with Competition 10
    11. 11. Concept Generation Form A World - Class new generation SUV with excellent styling, superior performance, car like comfort at a “value” price Technology Innovative and flexible manufacturing system (IDAM) Development of a new engine in a new car design New world class lines for manufacturing components Innovative sourcing system Designed to cost 11
    12. 12. Concept Generation (contd.) Need/Benefit Scorpio catered to the consumers who would want to consume premium imagery at price affordable to them Referred as car-plus, it offered the all the benefits of a car plus the thrill of driving a SUV 12
    13. 13. Concept Generation (contd.) M&M started of by rightly identifying the NEED, then implemented INNOVATIVE TECHNOLOGY and came up with a very SUCCESSFUL FORM Need Form Technology 13
    14. 14. Yorum Wind and Robertson Model Criteria- 1. Company capability 2. Time to develop 3. Ability to market 4. Market growth 14 Positioning Segmentation PRICE COMFORT SPACE POWER TECHNO L-OGY IMAGE A (ENTRY LEVEL) - - + - + - - - - - + - + + - - - - - - - - - - B (SEMI LUXURY) + + + - - + - + - + - + + - + - - + - - + - + - C (LUXURY) + + + - + + - + + + + + + - + + + - + + + + - + D (PREMIUM) - + - - - - - + + - + - + - + - - + - + - + - - E (SUPER PREMIUM) - - - - - - - - + - - - + - - + - + - + - - - -
    15. 15. Idea Screening • Strategy role screen • Screen for new product type ▫ New Product/ Product line 15
    16. 16. Product Architecture Process  Chunk 1: Air Conditioning  Chunk 2: Audio  Chunk 3: Lock  Chunk 4: Exteriors  Chunk 5: Seats and Interiors  Chunk 6: Suspension 16
    17. 17. Full Screen • Factor Score 17 Factor Weight score (1-5) Technical Accomplishment: Look & styling 4 Engine & performance 4 Gear box 3 Space &comfort 3 Ride &handling 3 Refinement 4 Fuel economy 2 Commercial Accomplishment: Market volatility 4 Probable market share 4 Sales force requirements 3 Competition to be faced 4 Degree of unmet need 3
    18. 18. Was it right positioning Scorpio as an Urban UV? • M&M faced tough competition from the sumo in the UV segment in late 90’s • Potential for the UV’s in urban was increased • Perceptions of the customers was also changed on the vehicles such as ▫ Image defined by international vehicle ▫ Thrill and passion of driving suv’s ▫ Big size stands for status • After launching – owned a share of 31% in SUV & MUV 18
    19. 19. Question 2 Suppliers played a vital role in the success of Project Scorpio. Describe M&M’s supplier strategy for Project Scorpio. How important is it to give suppliers autonomy? Also, comment on the rationale behind the formation of cross- functional teams for the project. 19
    20. 20. M&M’s supplier strategy • Complete Supplier involvement of suppliers from beginning to end • Identification of the best vendors in the field worldwide and collaborating with them • Outsourcing of multiple suppliers, resulting in reduction of costs • Giving suppliers, contracts for other product portfolios for ensuring commitment 20
    21. 21. Importance of supplier autonomy • Complete autonomy and decentralize supply system • Freedom to do anything as long as it comes in budget constraint • Indigenous development where supplier set up their facilities in company manufacturing plant 21
    22. 22. Rationale behind the formation of cross-functional teams • Speed • Complexity • Customer Focus • Creativity • Organizational Learning • Single Point of Contact 22
    23. 23. Question 3 Scorpio proved to be an immense success. What were the reasons for its success? Comment on the importance of testing and validation in the automobile industry. What were the main criticisms against Scorpio? 23
    24. 24. Reasons for success • The robust design of Scorpio was the main attraction of Indian buyers towards this vehicle • Use of latest technology • The affordable pricing was the greatest advantage • The powerful engine, good seating capacity, the overall look, the independent front suspension was the other reasons for the popularity of this vehicle 24
    25. 25. Importance of Testing and Validation • Testing vehicles and components are important to ensure that only the best combination of form and function remained • Today, simulations provide a highly conclusive basis for configuring structures • But in other domains, like fuel spillage or some of the simulations in crash testing, they still don’t provide the necessary accuracy • This is where tremendous importance is still placed on testing, particularly in terms of validation for satisfying statutory requirements 25
    26. 26. Criticism • Few criticism raised were: ▫ Amount of outsourcing that went in the making of Scorpio ▫ Collaboration with Foreign companies ▫ Not Crash Tested • Despite the shortcomings, Scorpio proved to be a milestone for M&M and the Indian automobile industry 26
    27. 27. Thank You! 27

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