8/11/2019 Mahindra 2Wheelers_Scooter Business Strategy Caselet

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Mahindra War Room 2014 AFSTwo Wheeler Caselet

Broadvision Perspectives Client Confidential Page 1of 2

MAHINDRA 2WHEELERS SECTORSCOOTERS BUSINESS CASELET

Mahindra Two Wheelers Limited (MTWL) is into the business of Developing,Manufacturing and Selling of Two Wheelers. This caselet pertains to the Scooterssegment of the business.

BUSINESS BACKGROUND

Mahindra 2Wheelers was created with the inorganic acquisition of the once popularKinetic Motor Company Limited (KMCL) to enter the highly competitive Indian 2wheelermarket with a range of class defining scooters. Mahindra 2Wheelers partners with someof the worlds leading specialists in two wheelers to give the best in quality andinnovation. Mahindra 2Wheelers entered the market in early 2009 with Flyte, followedby the launch of 2 new models, Rodeo and Duro, in late 2009. With improvements in theproduct and a new look, Duro was launched as Duro DZ in 2012. Duro DZ reportedstrong initial sales volume and is a star performer in the Mahindra 2Wheelers Portfolio.Rodeo too was re-launched as Rodeo RZ, with stylish, youthful looks and hi-tech

features, in mid-2012. Rodeo RZ is still the only scooter in India with features such asthe fully Digital Dashboard and front fuelling. In 2013, Mahindra entered the Motorcyclesegment with the Centuro, and plans to dominate the scooter market too with strategiclaunches catering different segments.

LIVE CHALLENGE: SCOOTERS BUSINESS STRATEGY

The Scooter category dynamics have changed drastically in the last couple of years.Formerly viewed as a family or feminine product, Scooters have now become moreacceptable to young males, owing to rapid urbanization, ease of riding gearlessvehicles, better fuel economy and changes in styling. The Scooter category has seen a

plethora of recent launches, as well as the entry of iconic international players such asVespa and Yamaha entering the Indian Scooter market. There have been more than 9new launches, with focus on expansion and high investments by all competitors.Scooter sales have grown 25% over the last 2 years, compared to the near stagnant4%growth in Motorcycles. This trend is expected to continue in the coming years. Thecompetitive intensity in the 2Wheeler industry has increased greatly too, with fasterrefreshes, new launches, loud campaigns, localized activations and aggressive offersand discounts.

This year, the scooter industry has grown 35% so far, with monthly volumes of around3.5 lac units. In spite of new launches, Activa has maintained its market leader position

with a market share of 45% with strong month-on-month growth. Activa has maintainedmarket leadership of the Scooter industry for around a decade now.

8/11/2019 Mahindra 2Wheelers_Scooter Business Strategy Caselet

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Mahindra War Room 2014 AFSTwo Wheeler Caselet

Broadvision Perspectives Client Confidential Page 2of 2

Mahindra, being a relatively new entrant in a space dominated by known internationalplayers, needs to strategically define its position in the market place. The following are afew challenges faced by the Mahindra Scooters range:

Lower awareness of

Mahindra

s presence in 2 Wheeler sector

Perception as a new player and hence need to build credibility & confidenceMarket dominated by well established players like Honda, Hero, TVS & Suzuki

Although the aforementioned are the challenges faced by Mahindra Scooters, theperception of Brand Mahindra is very strong, providing the opportunity. To gain asignificant market share, Mahindra would need to inevitably capture share from themarket leader and come up with innovative plans to establish a strong hold in keymarkets. To shake the dominance of a market leader requires differentiated, innovativeand clutter-breaking strategies. The dominance needs to be broken state-wise and

hence one size fits all strategy may not work. Targeted and focused plan to challengethe market leader needs to be chalked out state-wise.

With this backdrop, please develop a comprehensive strategy to challenge thedominance of the market leader with Mahindra Scooters by focusing on the keystates of India, which are strong scooter markets. Provide actionable localizedstrategies in Marketing, Sales and Customer experience, assuming a budget ofINR. 1000/- per vehicle, keeping in mind that Mahindra 2Wheelers is thechallenger brand taking on a dominant player.