MarcoPolo:  Moving  the  masses,  globally Presenta(on  to  the  Board  by  Nanyang  Consul(ng  By  Aswathi  Suresh,  Cory  Reid,  Jonah  Wong,  Sunitha  Vijiyasingam  

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Agenda 1.  Problem  Statement  2.  Analysis  of  Challenges  3.  Recommenda(ons  4.  Alterna(ves  5.  Fleet  Renewal  and  Customiza(on  Management  System  6.  Shared  Service  Organiza(on  7.  Expansion  Markets  8.  Key  Performance  Indicators  9.  Financial  Analysis  10. Implementa(on  Roadmap  11. Analysis  of  Risks  12. Conclusion  

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Problem  Statement

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SHORT  TERM:  Which  markets  to  expand  to?  

LONG  TERM:  How  to  build  up  capabili(es  to  strengthen  their  foothold  both  in  emerging  and  developed  markets?    

Analysis  of  Challenges

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MarcoPolo  needs  to  iden(fy  op(mal  markets  and  develop  new  technologies  and  services  to  posi(on  it  for  long  term  growth  

•  Growth  slowdown  in  local  markets  

•  Increased  demand  in  interna(onal  markets    •  Compe((on  both  from  established  and    

emerging  low  cost  players  

•  Increased  demand  for  sustainable  technologies  

Ø  How  to  retain  domes(c  revenues?    

Ø  How  to  choose  the  right  markets?  

Ø  How  to  differen(ate  Marco  Polo  brand  from  compe(tors?  

Ø  How  to  build  up  technological  capabili(es?  

SITUATION   CHALLENGES  

Recommenda=on

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Marco  Polo  should  focus  simultaneously  both  on  developed  and  emerging  markets  and  develop  a  link  between  the  two  for  be`er  synergies  

FLEET  RENEWAL  MANAGEMENT  +  

CUSTOMIZATION  

EMERGING  MARKETS  (TURKEY)  

DEVELOPED  MARKETS  (USA)  

MARCOPOLO  AS  A  SHARED  SERVICE  ORGANIZATION  

Alterna=ves

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MarcoPolo  needs  to  expand  into  new  markets  as  well  as  establish  in-­‐house  SSO  services  to  enhance  their  profitability  

Alternatives Revenues Costs Competition Existing  synergies Employee  welfare OverallNo  expansionExpand  into  China,  IndiaExpand  into  Canada,  AustraliaExpand  into  TurkeyExpand  into  the  USAEstablish  SSOs  in-­‐houseOutsource  non-­‐core  functionsMove  into  financial  services  for    bus  manufacturersMove  into  consulting  for  bus  manufacturers

Fleet  Renewal  And  Customiza=on  Management

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There  will  be  increased  demand  for  modifying  and  refurbishing  old  bus  fleets  which  MarcoPolo  can  address  

Surge  in  temporary  demand  due  to  2016  Olympics  

New  customer  requirements  –  clean,  efficient  and  luxurious  

Need  for  speed  and  flexibility  to  cater  product  offerings  

Leverage  current  network  and  knowledge  from  experience  curve  

Fleet  Renewal  and  Customiza=on  |  How

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Scale  the  Fleet  Renewal  and  Customiza(on  from  local  to  global  markets,  catering  to  differences  in  requirements    

• Transform  current  Innova(on  Centre  to  Centre  of  Excellence  • Sharing  of  knowledge  and  best  prac(ces  between  all  subsidiaries  • Communica(on  channel  between  technology  and  opera(ons  

Centre  of  Excellence  

• Launch  in  current  domes(c  markets  first  and  expand  to  the  global  markets    Launch  

• Focus  on  customiza(on  in  the  US  • Cater  to  diverse  geographical  requirements    Offerings  

Shared  Services  Organiza=on

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Separate  the  non-­‐core  business  func(ons  for  increased  cost  savings  through  SSOs  

Consolida(on  of  non-­‐core  business  func(ons  

Flexibility  and  HR  op(miza(on  

Cost  savings  

Shared  Services  Organiza=on  

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MarcoPolo  as  an  SSO  will  also  allow  for  consolida(ng  resources  across  geographies  

Consolida(on  

Flexibility   •  Help  grow  overseas  markets  due  to  lower  capital  investment  •  Link  renewal  management  services  between  geographies  

•  Reduce  duplica(on  across  geographical  and  product  groups  •  Streamline  opera(ons  

Cost  savings   •  Economies  of  scale  •  Op(mize  staff  u(liza(on  across  markets  

Shared  Services  Organiza=on  |  How

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Transform  the  organiza(on  to  the  SSO  model  by  developing  SOPs  and  iden(fying  the  right  loca(ons  

Iden(fy  func(ons  to  

be  consolidated  

Develop    SOPs  

Select  loca(ons  

Cross  training  of  

staff  

Monitor  cost  reduc(ons  

Emerging  Markets  |  Turkey

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The  high  opportunity  and  the  lack  of  compe((on  makes  Turkey  the  ideal  loca(on  for  Marco  Polo’s  expansion  in  emerging  markets  

Rapidly  industrializa(on  -­‐>  availability  of  JV  partners    

High  demand  for  bus  fleet  services  

Well  established  network  of  good  roads  

Interlink  between  the  markets  of  Europe,  Asia  and  Middle  East  

Emerging  Markets  |  How

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Consolidate  posi(on  in  the  Turkey  market  through  a  joint  venture  with  a  local  partner  

Research  •  Iden(fy  key  JV  partner  through  comprehensive  market  research  

JV  

•  Nego(ate  and  enter  into  51:49  agreement  •  Secondment  of  MarcoPolo  employees  

Sales  •  Sales  through  partner’s  distribu(on  network  

Selec6on  Criteria    •  Chassis/Trucking  or  Bus  

Manufacturing  Capability  •  Local  Market  Knowledge  •  Culture  fit,  complementary  business  •  Automated  produc(on  capabili(es  •  Financial  performance  •  Market  share  •  Distribu(on  network  

Emerging  Markets  |  Balanced  Score  Card

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Monitor  the  performance  of  the  JV  partner  through  a  balanced  scorecard  

Evalua6on  Criteria    •  Number  of  buses  sold  •  Percentage  of  distribu(on  network  

covered  •  Number  of  employees  seconded  •  Produc(on  level  targets  •  QA  tes(ng  targets  •  Feedback  loop  for  customiza(on  

Developed  Markets  |  USA

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In  addi(on  to  Fleet  Renewal  and  Customiza(on  services,  develop  capabili(es  for  Transit  Management  and  Sustainable  technologies  with  exis(ng  partners  

Transit  Management  System  

Sustainable  technologies  

•  Collaborate  with  Department  of  Transporta(on  to  develop  transit  management  capabili(es  

•  Long  term  services  

•  Leverage  exis(ng  partnerships  with  Navistar  and  San  Marino  to  develop  alternate  fuel  technologies  

•  Rising  oil  costs  and  environmental  concerns    

Key  Performance  Indicators

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• Date  of  launch  • Sales  performance  

Fleet  Renewal  

• Cost  reduc(ons  SSO  

• Number  of  research  projects  scaled  up  to  implementa(on  phase  Centre  of  Excellence  

• Sales  performance  in  Turkey  and  US  New  markets  

Financial  Analysis  |  Assump=ons

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•  Increase  Revenue  from  current  opera(ons  due  to  spor(ng  events    in  2014  and  2016    

• Sales  performance  

Growth  in  current  

opera(ons  

• 51%  share  JV  in  Turkey  

• Profit  Margin  will  increase  Fleet  

management  &  services  

Financial  Analysis  |  Revenues  &  Costs

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Financial  Analysis  |  Profitability

-­‐1,000,000  

0  

1,000,000  

2,000,000  

3,000,000  

4,000,000  

5,000,000  

2014   2015   2016   2017   2018   2019   2020  

BRL  

Year  

Projected  Profits  

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Implementa=on  Roadmap Recommenda(ons   Phase  1   Phase  2   Phase  3  

0-­‐6  months   6-­‐12  months     1-­‐2  years   3-­‐4  years   5  years+  

Fleet  Renewal  &  Customisa6on  Management  Services      

Market  Research  to  iden(fy  core  customer  base        

Center  of  Excellence  Training      

Engagement  of  clients                

Shared  Services  Organisa6on  

Iden(fying  common  func(ons      

Develop  SOPs  for  func(ons      

Training        

Consolidate  Offices          

Entering  New  Markets  -­‐  Turkey  

Iden(fy  key  JV  Partner          

Setng  up  infrastructure  &  Secondment  of  employees          

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Analysis  of  Risks

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•  Employee  turnover  due  to  reloca(on  of  SSOs  

•  No  suitable  JV  partner  in  Turkey  

•  Low  demand  for  Fleet  Renewal  

•  Compe((on  from  low-­‐cost  Chinese  players  

•  Future  shiuing  towards  trains  and  planes    

•  Loss  of  original  focus    

Ø  Op(mize  loca(ons  of  SSOs,  Retrenchment,  Advance  no(ce  

Ø  Leverage  Tata’s  opera(ons  in  Turkey  

Ø  Focus  on  cutng  edge  technology  to  predict  consumer  demand  

Ø  Increase  produc(ons  at  Tata  facili(es  

Ø  Heavy  reliance  on  bus  systems  in  emerging  markets,  high  cost  of  capital  for  other  modes  

Ø  Expand  on  core  competencies,  Diversifica(on  to  reduce  market  vola(lity  risk  

RISKS   MITIGATION  

Conclusion

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Marco  Polo  should  focus  simultaneously  both  on  developed  and  emerging  markets  and  develop  a  link  between  the  two  for  be`er  synergies  

FLEET  RENEWAL  MANAGEMENT  +  

CUSTOMIZATION  

EMERGING  MARKETS  (TURKEY)  

DEVELOPED  MARKETS  (USA)  

MARCOPOLO  AS  A  SHARED  SERVICE  ORGANIZATION