This document analyzes Mahindra and Mahindra's creation of the Scorpio vehicle. It discusses Mahindra's core competencies in building strong, rough vehicles. It outlines the strategies used to develop the Scorpio, such as extensive customer research, collaboration with suppliers, and positioning the Scorpio as a car rather than utility vehicle. A SWOT analysis and Porter's Five Forces model analysis are also presented. Challenges for Mahindra include new competing SUV models and the need to expand its dealer network and vehicle offerings.

1. Case Study Analysis
• Mahindra and Mahindra : Creating
Scorpio
Presented by,
Group 7

2. Global automobile overview
• Dominated by GM Ford and Daimler in US,Volkswagen in Europe andToyota,
Honda and Nissan in Japan.
• Shifts in the Industry
• Mass production technique of Henry Ford
• Lean or JIT System followed byToyota
• Japanese emphasized on good working relationship with suppliers whereas US
manufacturers 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 domestic
market and were successful.

3. Global automobile overview
Global automakers vs small automakers
• Easy transfer of technologies
• Low cost
• Standardisation.

4. Indian Automobile Market
• The Indian automobile market falls under 5 category.
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.

5. Mahindra

6. 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 preferences
to make a car completely customised to the taste of India customers.
• Collaboration with the suppliers to make their own choices which enabled then to
build 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.

7. Scorpio strategies
• Scorpio was positioned as a car rather than a UV to target customers who
wants 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.

8. SWOT
Analysis
Strength
Customised for Indian customers
Economical vehicle
Rough and tough look
Weakness
• Mahindra image of uncomfortable and not easy to drive
• A rural image
Opportunities
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

9. 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 forArmy.

10. Distinctive competence
A Distinctive competence is a completely important activity that a company
performs better than its rivals. It represents a competitively superior internal
strength.
• Cost cutting without sacrificing much on the quality
• The development of Scorpio was completely cost effective compared to the cost of
development of a new vehicle byAny automobile manufacturer.
• The price of Scorpio was very less compared to its direct competitorToyota Qualis.

11. 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 it
offers 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 the
same 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.

12. 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 to
another 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.

13. 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 seller
Scorpio.
• The company need to increase its chain of dealers to meet the customer
demand. It should also separate the commercial and passenger segment
dealers.
• Focus on new models and designs to give more choices to customers.