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Project Scorpio
Presented By: Group A8 Presented To:
Gourab Mahajan (12018) Dr. M.R.SureshMohan Karthikeya (12028)Shashank Goswami (12045)Robin Kumar Sahu (12097)Akilan P (12123)Pappu Yadav (12166)Sarthak Rohatgi (12182)
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
3
Need… Impact… ResultNeed 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
Need… Impact… ResultNeed 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
GAP AnalysisFactors 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
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
7
Question 1Scorpio 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?
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
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
10
How Scorpio compared with Competition
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
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
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
14
Yorum Wind and Robertson Model
Criteria-1. Company capability2. Time to develop3. Ability to market4. Market growth
Positioning
Segmentation
PRICE COMFORT
SPACE POWER TECHNOL-OGY
IMAGE
A (ENTRY LEVEL)
- - + - + - - - - - + - + + - - - - - - - - - -
B (SEMI LUXURY)
+ + + - - + - + - + - + + - + - - + - - + - + -
C (LUXURY) + + + - + + - + + + + +
+ - + +
+ - + + + + - +
D (PREMIUM) - + - - - - - + + - + - + - + - - + - + - + - -
E (SUPER PREMIUM)
- - - - - - - - + - - - + - - + - + - + - - - -
15
Idea Screening
•Strategy role screen
•Screen for new product type
▫New Product/ Product line
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
17
Full Screen
•Factor ScoreFactor Weight score (1-5)Technical Accomplishment: Look & styling 4Engine & performance 4Gear box 3Space &comfort 3Ride &handling 3Refinement 4Fuel economy 2 Commercial Accomplishment: Market volatility 4Probable market share 4Sales force requirements 3Competition to be faced 4Degree of unmet need 3
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
19
Question 2Suppliers 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.
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
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
22
Rationale behind the formation of cross-functional teams
• Speed
• Complexity
• Customer Focus
• Creativity
• Organizational Learning
• Single Point of Contact
23
Question 3Scorpio 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?
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
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
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
27
Thank You!