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)

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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

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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.

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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”

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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

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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

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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?

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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

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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

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How Scorpio compared with Competition

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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

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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

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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

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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)

- - - - - - - - + - - - + - - + - + - + - - - -

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Idea Screening

•Strategy role screen

•Screen for new product type

▫New Product/ Product line

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Product Architecture Process

Chunk 1: Air Conditioning

Chunk 2: Audio

Chunk 3: Lock

Chunk 4: Exteriors

Chunk 5: Seats and Interiors

Chunk 6: Suspension

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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

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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

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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.

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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

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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

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Rationale behind the formation of cross-functional teams

• Speed

• Complexity

• Customer Focus

• Creativity

• Organizational Learning

• Single Point of Contact

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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?

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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

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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

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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

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Thank You!