Force Motors

Strategic Management Project

Submitted by:Ankit Singh (M95/13)Deepak Kumar (M103/13)Gaurav Raj (M106/13)Mahesh Yadav (M115/13)Prashant Singh (M127/13)Rahul Yadav (M/13)MissionProviding affordable commercial transport for the masses by harnessing the best available technology and offering economical, reliable and efficient products.Thought ProcessDesign inspiration by making customers expectations central to our product design.Diversified Presence by being flexible and highly vertically integrated company.Performance Driven by cultivating a performance driven culture that awards results.Delivering Value through all channels to be a key growth driver.Evolving Utility of our products and evolution over time.Engineering Expertise in R & D centres which are considered among most advanced in country.Porters Five Forces AnalysisRivalry within industry: HighForce motors is facing tough competition from existing SUVsNew multinational players will enter the market in current yearForce One is yet to create a dedicated loyal customer base and also the market share is less (around 4%),

Threat from New Players: Low-MediumA lot of new SUVs are expected to hit market soon from existing SUV markers. New players too will be launching their product soon in the same segment. Existing players have prior knowledge and technical know-hows of creating and marketing a quality SUV.Threat from substitutes: Med- HighRising fuel prices, awareness towards fuel economy and its impact on environment has made consumers switch to smaller and more fuel efficient cars.There are low cost SUVs available in the market.Strength of Consumers: HighLarge no. of existing options in the same segment provides considerable amount of strength in terms of bargaining power.Differentiation through innovation and efficient pricing is the key to sustain growth in the market segment.Differentiation through innovation and efficient pricing is the key to sustain growth in the market segment.

Threat from Suppliers: LowPresence of large no. of suppliersForce motors has alliances with various suppliers to provide them supplies exclusively.KEY Success Factors : SUV CategoryStatus Symbol : Ownership pride, Visual Appeal, On road presence

High performance : Powerful engine and good handling

Sporty / Rugged appeal : All terrain capability

High technology : Electronic assisted Entertainment, safety features

Ownership cost : Running & Maintenance cost

Comfort : Drivability , Luxurious comfort suitable for long /off road drives

Corporate Structure & StrategyVertical Horizontal Vehicle ManufacturerCommercial Vehicle Manufacturing(Core Business)Auto Component ManufacturerTractors, Farm equipmentsPassenger Vehicle ManufacturingTempo FinanceRelatedUNRELATED Horizontal Significant Mergers Merged with Mercedes-Daimler Auto , Germany to manufacture & supply enginesStrategic Alliances - Alliance with HPCL to develop tailor made engine oils, lubricantsCore CompetenciesValue Chain AnalysisFIRM INFRASTRUCTUREHUMAN RESOURCE MANAGEMENTTECHNOLOGY DEVELOPMENTPROCUREMENTINBOUND LOGISTICS

One Manufacturing plant across India.

Manufactures Axle, Casting & Gear Box and depends upon suppliers for remaining parts.

Tie up with Daimler AG .

One Lac plant capacity

OPERATIONS

Only 30 Distribution Stores across India .Robotized top coat line in paint shop which saves energy and natural resources and reduces cost of production. Product Quality: Use of 2600cc Daimler Engine. Use of Chasses(Strong base) which increases its stability at high speed and makes it suitable for Indian roads.Sold 26k SUVs in 2011-12OUTBOUND LOGISTICS

1 DS in Ranchi, planning to increase it to Jamshedpur and to less competitive markets

Cost of setting up DS is 3 to 5 Crores whichs less than its competitors.

Overall weak supply chain channel due to less number of DS and warehouses

MARKETING AND SALES

TC: High Earning Individuals. Sold 26k SUVs in 2011-12 across India and sells 12-13 per month in Ranchi.Focus on network expansion to increase sales.

Paper Ad every 2 months.BTL activities like Car Demo(Market Place & Apartments), Exchange Mela, Road Shows, Tagging, Loan cum exchange melaAFTER SALES SERVICES

80% customers are satisfied.

Sales people keep in touch with buyer after the purchase.

Spare parts available at lower cost. Low cost of maintenance.

In Ranchi therere only 2 service centers so theyre planning to increase it furtherSUPPORTACTIVITIESPR IMARY ACTIVITIES

MARGINVALUE CHAIN ANALYSISProcurement Human Resource Management Training and development of sales executives and showroom employees: How to interact with customers

Sales executives are being monitored while they interact with customers

Work culture : People are supportive

Licensing agreement with Daimler AG - Gain technical assistance for the engine Mercedes OM 616

Personal Development/ Manufacturing Centers for the production of Axle , Casting and Gearbox Off Road dedicated Exhaust Muffler: Can run 2.5 feet deep under water Strong Fuel Efficient Mercedes OM 616 derived 2.6 L Diesel Engine High performance Gear Box for smooth and silent operation Climbing ability 45 Degree Use of Chasses . Can run in all 4 terrain Use of technology that lowers its maintenance cost. Spare parts available at lower price Suspension tuning between front and rear wheel Offers smooth ride Differential Lock; Ground Clearance 210mm Length = 191 as compared to Safari (183) , XUV 500(181) & Scorpio (176)

Technology Development Firm Infrastructure Location- Total 30 DS across India. In Ranchi only 1 DS and 2 Service Centers

Planning to expand the network of DS to Jamshedpur and North East , North and South India

Finance Cost of setting up 1 DS is around 3-5CroreProduct PortfolioProductTarget CustomersCompetitive AdvantageCompetitor Force One

Power & Status conscious, AffluentTough Chassis, Mercedes Powerful Engine, Segment best features at lowest priceMahindra XUV500,Scorpio, TATA SafariForce Gurkha

Adventurists, Off road EnthusiastsAll terrain capability, Unique sports/Off road dedicated product, Design Inspired Merc G ClassMahindra TharForce Trax

Big Family, Tourist transportLow maintenance, High return on investmentMahindra Bolero, TATA Sumo

Customer Satisfaction modelBalanced Score cardFINANCIAL PERSPECTIVESTRATEGIC: Improve Financial ProfitabilityOBJECTIVE MEASURE: Gross MarginSTRATEGIC: Improve Market ShareOBJECTIVEMEASURE: Market Capitalization at BSE

LEARNING AND GROWTH PERSPECTIVESTRATEGIC : Develop technical and productOBJECTIVEdevelopment expertise in the UV domain.MEASURE : Successful new product development without external guidance.STRATEGIC: Foster an Enjoyable Workplace OBJECTIVEMEASURE: Employee Retention

PROCESS PERSPECTIVESTRATEGIC: Provide High Quality Product/OBJECTIVEServiceMEASURE: Number of instances of dissatisfaction / number of complaints per customerSTRATEGIC: Improve Order ManagementOBJECTIVEMEASURE: Order to Delivery Time

CUSTOMER PERSPECTIVESTRATEGIC : Provide High Quality ProductsOBJECTIVEMEASURE : Number of Products/ Car Parts, Complaints during service/ repair ( 80% satisfied customers 95 % level)STRATEGIC: Development of New MarketsOBJECTIVE MEASURE: Number of Different type of Customers (Profiling of Customers)

SWOT AnalysisSTRENGTHSThe company has a strong presence in the Indian market since1950 and it was running under the brand name TempoTechnical collaboration with Daimler BenzUsage of advanced technology in engine and transmission (PowerTrain)

OPPORTUNITYThe company has entered in to SUV war with its masculine brand Force One The company is expected to launch Gurkha by 2014. Extreme off-road vehicle capable of attracting a large segment of customersCompany is committed to expand its production capacity as well as distribution channelTHREATSDeclining growth rate of overall four wheeler segment in IndiaLikely introduction of stringent fuel efficiency normsIncreasing prices of fuel and consumers awareness towards fuel efficiency

WEAKNESSForce One is low on brand recall valueThe company lacks in advertising and promotional strategiesLow overall product quality.

Critical Issuesadvertising and promotional strategies Low recall valueDependence on daimler for engine & transmission technologyInsufficient distribution channelLack of robust supply chain Longer waiting periodLow overall product quality

RecommendationsFocus on advertising & promotional strategies to create brand awareness & improve brand recallFocus & invest on innovation and R&D for new product development capabilities Imrpove existing product manufacturing processes and controlling quality Through technical collaborations with technology expertsBroaden the distribution channel by opening more showroomsCentralized HUB centers - Create stock centers to serve regional distributors