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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 | 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