Mahindra Group Wide Issues

Written by Broadvision Perspectives Tuesday, 26 July 2011 01:15 -

Developed by Broadvision Perspectives

The Mahindra Group operates in key industries that drive economic growth, enjoying leadership position in utility vehicles, tractors, information technology and vacation ownership. They have a growing presence in the automotive industry, aerospace, aftermarket services, components, consulting services, defense, energy, financial services, logistics, real estate, retail and two wheelers.

Cultural Transformation

The Group comprises many companies united by the common presence to enable people to Rise . After initiation in January 2011, today, Rise is a movement within Mahindra and has gathered momentum. It marks the beginning of the cultural transformation within the Group most effectively. The 3 brand pillars of Rise are: - Accepting no limits - Alternative thinking - Driving positive change

Customer Delight Rise in Action

The question now is of how to go about the cultural transformation and bring Rise into each sector. For the purpose of The War Room, choose 2 business sectors from The Mahindra Group and make concrete recommendations on how these sectors can Rise better from the customer perspective. What key initiatives must these sectors take at the customer touch points to qualify for Rise? How should they do things differently to make Rise happen?

From the customer point of view, the question arises what more or different things would the customer expect from these businesses for them to make the Rise claim? In providing your recommendations, explore all the areas of operations that impact customer perception of these

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sectors.

Give concrete recommendations that align these businesses with Rise and make Rise a real differentiator. It should also ensure that Rise becomes a credible claim for these businesses.

Building Brand Mahindra

Make suggestions as to how the Group should go about building Brand Mahindra and making it a truly global brand? Based on the elements of the brand promise, the Mahindra brand challenges convention and uses innovation to enable people to Rise. The 3 brand pillars are the basis over which the brand is built on. How can individual businesses contribute by providing tangible proof points of having actually incorporated the 3 brand pillars of the Rise philosophy?

For the Group, the end is well defined: enabling customers to rise, realize their ambitions and succeed. Focus on the means and present how to challenge convention and innovate and in the process, bring about disruptive innovation which, if it succeeds, is the surest way to building the brand.

Today, the era of just using money power to build a brand is gone. Building disruption is the way and it is a huge challenge, not just from a brand building perspective, but also to succeed globally. Select any of the business sectors and provide a list of potential disruptive innovations these businesses could roll out.

Disruptive innovation happens in two ways. Through a visionary or as a process which some companies introduce. You can take an industry perspective, a generic perspective or a 60,000 ft perspective and show how Indian businesses can perfect the art of disruptive innovation at a global scale which goes beyond Indias jugaad from which it gains a competitive advantage. Apply this thinking across the three kinds of businesses that make up our spectrum: Start ups which are nascent businesses like solar energy, retail, boats; Businesses which have been around for a while but struggling to scale like Systech, After Market; Established businesses which have global aspirations like auto, farm, financial services, Club Mahindra and Life Spaces.

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Looking at businesses in each of these phases, create a framework of disruptive innovation for each of the phases? Also give a list of disruptive innovations for one business from each of these categories. Where can the disruptive innovation be applied businesses, processes, products, delivery system where in the entire value chain would you change the rules of the game?

Which industry conventions have been challenged or are ripe for challenge? What capabilities must the company build to stand a chance of attempting this challenge?

Pure Play Marketing

Should Indian companies and hence Mahindra Group focus on building the master brand? Or should it keep the master brand in the background, and build the product brands at a global level? Arrive at a working model for the Mahindra Group, with the framework that gives a solution to this challenge. What should the Group look at and configure to work with the framework? What are the pluses and minuses of the system? Give examples of companies for the two routes of branding. Arrive at recommendations for the Mahindra Group to follow route 1 or route 2.

Further, Mahindra understands what it takes to talk to a 45-50 year old male based on its product history. With the introduction of new products and categories like 2-wheelers, retail, etc., how can the Group learn to talk to new segments like teens, women, youth better? What people, processes, does it need to introduce for a shorter learning curve? Suggest a framework for the same. How can social media be used to build Rise across each of these broad segments?

Asides

Choose a product form the Mahindra Group portfolio. Analyze its history, customer base, target segments, competition, market situation and present concepts for ads or communication ideas based on the Rise canvas.

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The presentation can be through ads, videos or just plain doodles. Get your charcoal, pencils and crayons out and get going. Or get your videocam out and go film shooting.

Or

Take the script of Rise. Create your music score to these lyrics. Best entry gets to present to the Group Executive Board.

Or create entirely your own Rise inspired song from lyrics to music score.

Value-for-Mini Paradigm

India is moving to the next paradigm from Value-for-Money to Value-for-Mini. How would you define this? What does it mean for M&M? Where should M&M look for this Bottom of the Pyramid / Value-for-Mini concept? In what areas can M&M leverage it? Give your reasons for the same. Which core competencies are required to leverage them? What capabilities must the Group build to drive this further?

Identify the differentiators for the Group in 2015 that build a competitive advantage. More specifically, suggest solutions of IT that benefit rural and semi-urban economies. There is no dearth of technology development taking place today. But if we take the technology development happening in the world, and bring it to India as is, the cost becomes prohibitive. So, what role can India play in bringing these technologies to rural and semi-urban Indian and what innovation does this require? How does a corporate like the Mahindra Group develop, nurture and exploit this kind of competency which lies within us?

In arriving at the solutions, take an innovative view that seeks to bring services within the financial reach of these customers and for problems that are unique to Indian customers. How can Mahindra create such a process of innovation?

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The Second IT Revolution

The second IT revolution is emerging where IT becomes the heart and brain jointly for industry in the next 5-10 years. At the same time, technologies are converging, bringing greater value to customers across industries and geographical regions.

How do you view the changing IT world with respect to the rural and semi-urban regions in India? How should a company prepare for such a world? Given the lack of IT infrastructure in rural India, it gives the Mahindra Group an open field for innovation. Identify the opportunities for Mahindra by bringing IT into the heart of the regions. What should the Mahindra Group do to continuously identify and leverage these opportunities?

Opportunity in Turmoil

The world is in turmoil. USA has been witness to a prolonged economic crisis. The financial crisis that Portugal, Ireland, Italy, Greece and Spain are going through threatens Europe. Australia and parts of Asia are affected too. This turmoil creates churn which in turn gives rise to tremendous opportunities.

India is fairly isolated from this turmoil which allows it to take advantage of these opportunities. What could be the possible areas of opportunity for the Mahindra Group in this situation? How can it leverage these opportunities? What strategy should it formulate to take advantage of these opportunities? What critical competencies does it require? What internal competencies can M&M leverage to enter into these areas? What is the roadmap for building competencies that dont exist?

Capital Investment Process

The Mahindra Group takes a sectoral approach to opportunity assessment. The three sectors are Auto Farm Sector, IT Sector and the Systech Sector. What should be the model for assessment of opportunities in a federated environment like the Mahindra Group, balancing growth, profitability and ROIC while reviewing investments of various projects with differing

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risk-return-growth options?

How should the Group make the choices and the trade-offs? How does the capital planning process framework balance capital allocation for various growth, sustenance and improvement projects to maximize shareholder and stakeholder value? How do we define the role of the project appraisal team and the business unit teams to address the neutral approach of appraisal to the emotionally attached, highly optimistic reasoning of the project team?

How can the Group continue to stress test the project assumptions during its implementation phase with various levels of capex committed? How can the Group continuously screen or escalate and take steps to mitigate the risk attached with the investment projects?

Minimizing Exposure Risk

Given the current economic crisis, the new normal is marked by high volatility in the financial and commodity markets, reducing certainty of investment and returns. How does one manage risk in this global environment?

The Mahindra Group which has a strong glocal footprint in addition to global pieces which are either strongly global or have exposure to European and US currencies in addition to some emerging markets. What are the opportunities and what are the security mechanisms that the Group needs to build?

The extent of exposure differs from sector to sector, complicating the issue further. Eg., 95% of IT revenues would be from external markets whereas it is managed by people who may be 50% outside and the other 50% in India making the costs Indian and the revenue a combination; About 50% of Automotive exposure is domestic where as another 50% is of South Korea due to the Ssangyong acquisition, leading to multi-domestic exposure in addition to global export exposure; Tractors has domestic exposure, China exposure where Mahindra has acquired two companies and US-Australia exposure. Arrive at the strategy with suggestions on how to manage the risk this involves.

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Further, the complexity of financial markets makes risk management an extremely complex and difficult aspect of financial management. Also, the demands of multiple regulators with ever increasing compliance requirements stretch the bandwidth of companies.

Given these differing rates of exposure, provide innovative methods for the evaluation of investments. Also, protecting and creating value by taking advantage of markets within robust risk boundaries.

How can the Mahindra Group employ common systems, policies and practices without weakening local management empowerment? At the same time, how can it drive and release synergies in financial management, banking relationships and bring value to the group?

Investor relations has become a key function, involving meeting investors and moderating expectations, conveying the story and philosophy of the Group. Also, in the longer term, it needs to find long term investors to reduce share price volatility. Hence, the role of the finance function is undergoing a dynamic change, becoming a predictor of markets, scenario planners and a fast fit operator with the lowest response time. Given this scenario, provide a plan for developing and nurturing talent to meet these requirements.

Post Merger Integration for an Indian Company in a Global Environment

The Mahindra Group has taken the path of organic and inorganic growth to expand its business opportunities. Often this involves acquiring companies which carry technological superiority. This also imposes a challenge of bandwidth in internalizing the new acquisitions.

Given this reality, provide an Indian way of integration that successfully encompasses the left brain and right brain issues involved. What strategy, tactics and methods would you suggest to achieve this? The requirement is for an Indian way of integration which is different from that of a developed company from US. What differences should it have?

How should it be organizationally handled in the federated environment of the Mahindra Group where each division has its own ability to acquire without the need to come to corporate except

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for funds?

Should the process of integration be left entirely to the divisions? How should it be organized? What key skills are required? Should these skills be built within each business to meet the objective of successful integration? Or should there be a combination of centralization and decentralization in skills?

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