Mahindra War Room 2013

2Wheelers - Bracing the Backend

MAHINDRA 2WHEELER SECTOR BRACING THE BACKEND FOR HEADWINDS CASELET Mahindra 2 Wheelers Limited (MTWL) offers a range of Scooters and Bikes and is the rst Indian two-wheeler manufacturer to enter the Moto Grand Prix Championship. This caselet, titled Bracing the Backend for Headwinds is one of the two optional caselets that can be chosen in this sector. BUSINESS BACKGROUND Mahindra entered the Two Wheeler industry in 2008 and launched a portfolio of PowerScooters to critical acclaim in September 2009. Within a year of launch, MTWL captured a double digit market share of the domestic 2 wheeler market. In 2011, Mahindra became the rst Indian two-wheeler manufacturer to enter the Moto Grand Prix Championship, showcasing engineering and technology expertise on a platform where the best in the world compete. The racing DNA was continued further with recent launch of motorcycles such as Centuro and Pantero. Mahindra 2Wheelers aspire to launch one new model every quarter for the next 10 quarters, to keep pace with the fast growing Indian Two-wheeler market. India is the 2nd largest 2wheeler market in the world, and the domestic industry is volume driven. With several global players in the fray, the meat in the market lies in the commuter segment which is also the most competitive. The other 2 ends of the spectrum are relatively less developed, with product offerings widely dispersed on the price line. The market is expected to grow by 5-6% in FY14, as against ~10% in the previous year, with expected zero growth in bikes and a llip from scooters. OEMs are resorting to higher marketing spends and launching several new products and variants to entice the Indian consumer to spend on 2 wheelers. Several new subsegments and niches have emerged, with OEMs aiming to create niches to dominate and protect as a long-term hedge. Some key attributes of the Industry currently are:Ineffective mass media plans; overreliance on high-cost, low-impact traditional media; Capacity glut due to massive expansion plans and low demand; Rising input costs, both in raw materials and logistics; Greater adverse impact on small players in difcult market environment; too many new launches that impede establishing of brand identities, and Rapid product development plans. In the current phase, all players have been caught off-guard, and aim to strike a balance between being conservative, yet innovative and aggressive to ride out the storm. It is expected that the survivors of this phase will emerge stronger with consumers being net gainers. BRACING THE BACK-END FOR HEADWINDS Under the market circumstances outlined above, develop the strategy to help Mahindra 2Wheelers brace their back-end for headwinds, by focusing on 2 levers:
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Mahindra War Room 2013

2Wheelers - Bracing the Backend

1. New Product Development strategy to enhance the product portfolio:

Which are the strategic areas or niche/new segments for MTWL to enter and win in the current environment? What should be MTWLs approach in new product development that will create disruptiveness in the market? What should be the trade-off between Rapid product development and Sustained differentiation? How should MTWL achieve a low-cost, high-quality development process? What strategies can be adopted to reduce cycle time and lower development time? Is there a better trade-off between Buy and Develop approaches in R&D?

2. Efcient Management of Operations

With most OEMs having installed capacity more than the demand, how should MTWL effectively use its capacity? How should the productivity of manpower and equipment be maximized? Is there any way of de-risking in the likely case of a change in the market requirements, or a further slowdown in the industry? Having many vendors common across OEMs, how should a smaller player like MTWL manage the vendor base to maintain continuity of supplies? How can MTWL help its vendors manage their return on investment better?

Focusing on these areas, provide a comprehensive plan for MTWL to brace the backend for headwinds.

Broadvision Perspectives Client Condential

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