STRATEGIC MANAGEMENT PROJECT

Submitted by:
Ankit Singh (M95/13) Deepak Kumar (M103/13) Gaurav Raj (M106/13) Mahesh Yadav (M115/13) Prashant Singh (M127/13) Rahul Yadav (M/13)

MISSION
PROVIDING AFFORDABLE COMMERCIAL TRANSPORT FOR THE MASSES BY HARNESSING THE BEST AVAILABLE TECHNOLOGY AND OFFERING ECONOMICAL, RELIABLE AND EFFICIENT PRODUCTS.

THOUGHT PROCESS
DESIGN INSPIRATION BY MAKING CUSTOMERS EXPECTATIONS CENTRAL TO OUR PRODUCT DESIGN. DIVERSIFIED PRESENCE BY BEING FLEXIBLE AND HIGHLY VERTICALLY INTEGRATED COMPANY. PERFORMANCE DRIVEN BY CULTIVATING A PERFORMANCE DRIVEN CULTURE THAT AWARDS RESULTS. DELIVERING VALUE THROUGH ALL CHANNELS TO BE A KEY GROWTH DRIVER. EVOLVING UTILITY OF OUR PRODUCTS AND EVOLUTION OVER TIME. ENGINEERING EXPERTISE IN R & D CENTRES WHICH ARE CONSIDERED AMONG MOST ADVANCED IN COUNTRY.

PORTERS FIVE FORCES ANALYSIS

Threat from New Players: LowMedium
A lot of new SUVs are expected to hit market soon from existing SUV markers. New players too will be launching their product soon in the same segment. Existing players have prior knowledge and technical know-hows of creating and marketing a quality SUV.
Large no. of existing options in the same segment provides considerable amount of strength in terms of bargaining power. Differentiation through innovation and efficient pricing is the key to sustain growth in the market segment. Differentiation through innovation and efficient pricing is the key to sustain growth in the market segment.

Threat from Suppliers: Low

Presence of large no. of suppliers Force motors has alliances with various suppliers to provide them supplies exclusively.

Rivalry within industry: High

Force motors is facing tough competition from existing SUVs New multinational players will enter the market in current year Force One is yet to create a dedicated loyal customer base and also the market share is less (around 4%),

Strength of Consumers: High

Threat from substitutes: MedHigh Rising fuel prices, awareness towards fuel economy and its impact on environment has made consumers switch to smaller and more fuel efficient cars. There are low cost SUVs available in the market.

KEY SUCCESS FACTORS : SUV CATEGORY

1. STATUS SYMBOL : OWNERSHIP PRIDE, VISUAL APPEAL, ON ROAD PRESENCE

2.

HIGH PERFORMANCE : POWERFUL ENGINE AND GOOD HANDLING

3.

SPORTY / RUGGED APPEAL : ALL TERRAIN CAPABILITY

4.

HIGH TECHNOLOGY : ELECTRONIC ASSISTED ENTERTAINMENT, SAFETY FEATURES

5.

OWNERSHIP COST : RUNNING & MAINTENANCE COST

6.

COMFORT : DRIVABILITY , LUXURIOUS COMFORT SUITABLE FOR LONG /OFF ROAD DRIVES

CORPORATE STRUCTURE & STRATEGY

Vehicle Manufacturer
Related

UNRELATED

Tempo Finance

Tractors, Farm equipments

Horizontal

Commercial Vehicle Manufacturing (Core Business)

Vertical

Horizontal

Passenger Vehicle Manufacturing

Auto Component Manufacturer Significant Mergers Merged with Mercedes-Daimler Auto , Germany to manufacture & supply engines Strategic Alliances - Alliance with HPCL to develop tailor made engine oils,

CORE COMPETENCIES

Core Competencies

Resources

1) Auto Component Manufacturing Capability

2) Technology Access through Mercedes 3) Extensive experience in commercial vehicle manufacturing

1) Manufacturing cost leverage 2) World class engine technology 3) Strong SUV/Off road vehicle credibility

VALUE CHAIN ANALYSIS VALUE CHAIN ANALYSIS

FIRM INFRASTRUCTURE HUMAN RESOURCE MANAGEMENT
SUPPOR T ACTIVITI ES INBOUND LOGISTICS One Manufacturing plant across India. PR IMARY ACTIVITI ES Manufactures Axle, Casting & Gear Box and depends upon suppliers for remaining parts. Tie up with Daimler AG . One Lac plant capacity

TECHNOLOGY DEVELOPMENT PROCUREMENT

OPERATIONS OUTBOUND LOGISTICS 1 DS in Ranchi, planning to increase it to Jamshedpur and to less competitive markets Cost of setting up DS is 3 to 5 Crores whichs less than its competitors. Overall weak supply chain channel due to less number of DS and warehouses MARKETING AND SALES TC: High Earning Individuals. Sold 26k SUVs in 2011-12 across India and sells 12-13 per month in Ranchi. Focus on network expansion to increase sales. Paper Ad every 2 months. BTL activities like Car Demo(Market Place & Apartments), Exchange Mela, Road Shows, Tagging, Loan cum exchange mela AFTER SALES SERVICES 80% customers are satisfied. Sales people keep in touch with buyer after the purchase. Spare parts available at lower cost. Low cost of maintenance. In Ranchi therere only 2 service centers so theyre planning to increase it further

Only 30 Distribution Stores across India . Robotized top coat line in paint shop which saves energy and natural resources and reduces cost of production. Product Quality: Use of 2600cc Daimler Engine. Use of Chasses(Strong base) which increases its stability at high speed and makes it suitable for Indian roads.

MARGI N

Procuremen t
Licensing agreement with Daimler AG - Gain technical assistance for the engine Mercedes OM 616 Personal Development/ Manufacturing Centers for the production of Axle , Casting and Gearbox

Training and development of sales executives and showroom employees: How to interact with customers
Sales executives are being monitored while they interact with customers Work culture : People are supportive

Human Resource Management

Off Road dedicated Exhaust Muffler: Can run 2.5 feet deep under water Strong Fuel Efficient Mercedes OM 616 derived 2.6 L Diesel Engine High performance Gear Box for smooth and silent operation Climbing ability 45 Degree Use of Chasses . Can run in all 4 terrain Use of technology that lowers its maintenance cost. Spare parts available at lower price Suspension tuning between front and rear wheel Offers smooth ride

Technology Development

Support Activities

Firm Infrastructure

Location- Total 30 DS across India. In Ranchi only 1 DS and 2 Service Centers Planning to expand the network of DS to Jamshedpur and North East , North and South India Finance Cost of setting up 1 DS is around 3-5Crore

PRODUCT PORTFOLIO
Product Target Customers Competitive Advantage Competitor

Force One

Power & Status conscious, Affluent

Tough Chassis, Mercedes Powerful Engine, Segment best features at lowest price

Mahindra XUV500,Scorpio, TATA Safari

Force Gurkha

Adventurists, Off road Enthusiasts

All terrain capability, Unique sports/Off road dedicated product, Design Inspired Merc G Class

Mahindra Thar

Force Trax

Big Family, Tourist transport

Low maintenance, High return on investment

Mahindra Bolero, TATA Sumo

CUSTOMER SATISFACTION MODEL

Experience
Customer Perception Highly responsive & semi-trained salespersons Reliable service, local service mechanics can fix. Competent work force Quality standard needs improvement

Judge
Overall Satisfaction

Very competitive pricing(Premium features) Experimental passenger vehicle(Not in same level with XUV500, Safari, Scorpio) Above average Sales delivery Lack of service stations, Spare parts, lesser tie-ups Daimlers engine, Supplier to Mercedes & many other automobile companies(JAI HIND Industries) Commitment is less compared to other indigenous companies. Not in a rush or head on competition, No differentiated marketing strategy

Feel
Emotional Engagement

Act
Future Behavior

Gurkha, New MUV launch in 2015, High expectations Better expectations from revamped & coming variants of Force one Word of mouth publicity(Spacious, Comfortable, Rusty)

BALANCED SCORE CARD

FINANCIAL PERSPECTIVE STRATEGIC: Improve Financial Profitability OBJECTIVE MEASURE: Gross Margin STRATEGIC: Improve Market Share OBJECTIVE MEASURE: Market Capitalization at BSE CUSTOMER PERSPECTIVE
STRATEGIC : Provide High Quality Products OBJECTIVE MEASURE : Number of Products/ Car Parts, Complaints during service/ repair ( 80% satisfied customers 95 % level) STRATEGIC: Development of New Markets OBJECTIVE MEASURE: Number of Different type of Customers (Profiling of Customers)

PROCESS PERSPECTIVE STRATEGIC: Provide High Quality Product/ OBJECTIVE Service MEASURE: Number of instances of dissatisfaction / number of complaints per customer STRATEGIC: Improve Order Management OBJECTIVE MEASURE: Order to Delivery Time

LEARNING AND GROWTH PERSPECTIVE STRATEGIC : Develop technical and product OBJECTIVE development expertise in the UV domain. MEASURE : Successful new product development without external guidance. STRATEGIC: Foster an Enjoyable Workplace OBJECTIVE MEASURE: Employee Retention

SWOT ANALYSIS
STRENGTHS The company has a strong presence in the Indian market since1950 and it was running under the brand name TempoTechnical collaboration with Daimler Benz Usage of advanced technology in engine and transmission (PowerTrain) WEAKNESS Force One is low on brand recall value The company lacks in advertising and promotional strategies Low overall product quality.

OPPORTUNITY The company has entered in to SUV war with its masculine brand Force One The company is expected to launch Gurkha by 2014. Extreme off-road vehicle capable of attracting a large segment of customers Company is committed to expand its production capacity as well as distribution channel

THREATS Declining growth rate of overall four wheeler segment in India Likely introduction of stringent fuel efficiency norms Increasing prices of fuel and consumers awareness towards fuel efficiency

CRITICAL ISSUES
ADVERTISING AND PROMOTIONAL STRATEGIES LOW RECALL VALUE DEPENDENCE ON DAIMLER FOR ENGINE & TRANSMISSION TECHNOLOGY

INSUFFICIENT DISTRIBUTION CHANNEL

LACK OF ROBUST SUPPLY CHAIN LONGER WAITING PERIOD LOW OVERALL PRODUCT QUALITY

RECOMMENDATIONS
FOCUS ON ADVERTISING & PROMOTIONAL STRATEGIES TO CREATE BRAND AWARENESS & IMPROVE BRAND RECALL FOCUS & INVEST ON INNOVATION AND R&D FOR NEW PRODUCT DEVELOPMENT CAPABILITIES IMRPOVE EXISTING PRODUCT MANUFACTURING PROCESSES AND CONTROLLING QUALITY THROUGH TECHNICAL COLLABORATIONS WITH TECHNOLOGY EXPERTS BROADEN THE DISTRIBUTION CHANNEL BY OPENING MORE SHOWROOMS

CENTRALIZED HUB CENTERS - CREATE STOCK CENTERS TO SERVE REGIONAL DISTRIBUTORS