Question 1: Conduct a Value Chain Analysis and identify various important sources of

competitive advantage?

Value Chain
Primary Activities:

Inbound Logistics :

Efficient Supply Chain Management: Mahindra does not carry out the most of its inbound logistical
activities itself. The reason why procurement is cost-effective is that Mahindra has established
strong relationships with suppliers. Also, it uses local sourcing, which helps reduce transport
costs by having shorter distances in the supply chain. The company uses an effective logistics
network to guarantee delivery when needed and at low costs.

Operations:

Advanced Manufacturing Techniques: M&M uses its expansive manufacturing facilities and
effective production methods to take advantage of economies of scale. The factories are
equipped with modern machinery & technology, automating production processes, improving
efficiency and ensuring high-quality output. For instance, their state-of-the-art manufacturing facilities
in India support quality assurance and cost effectiveness.

Outbound Logistics:

Extensive Distribution Network: Widespread reach and after-sales support are ensured by an
extensive dealer network spanning India and international markets. Example: M&M offers
accessibility and customer service through more than 1000 dealerships throughout India.

Marketing & Sales:

Strong Brand Recognition and Customer Engagement: M&M utilizes targeted marketing
campaigns, brand endorsements, and competitive pricing strategies to attract customers.

Service:

Comprehensive service network: Customer satisfaction and loyalty can be ensured by proactive
maintenance programs and a comprehensive service network.

For instance, M&M provides roadside assistance services and extended warranties.
Support Activities:

Strategic Sourcing: Cost effectiveness is influenced by supplier relationship management,

negotiation strength, and strategic sourcing. Example: M&M has buying power with suppliers to get
competitive prices for essential components.

Technology Development: Investing money into research and development for safety features,
fuel economy, and new technologies guarantees product differentiation. Example: M&M's focus on
developing electric vehicles and advanced safety features.

Human Resource Management: Training initiatives, a skilled labor force, and employee
engagement programs all enhance operational effectiveness and product quality. One example
is M&M's emphasis on providing workers with advanced manufacturing training.

Infrastructure: To ensure efficient operations, large-scale manufacturing facilities, effective logistics

networks, and cutting-edge technology infrastructure are required. For instance, M&M invested in
cutting-edge research and development facilities.

Sources of Competitive Advantage

Cost Advantage:

● Local sourcing: It is one way M&M achieves cost advantage as a major player in the Indian
tractor market. It entails the sourcing of sheet metal and other key components needed for
their tractors from local suppliers; this significantly reduces transportation costs that would
have been incurred if all components were imported.
● Economies of Scale: M&M is the largest tractor brand globally based on the number of
units sold. This high amount of production has enabled the company to achieve economies
of scale which could mean that the cost of producing each tractor — as well as other
vehicles — is lower.

Market Reach and Customer Focus:

● Extensive Dealer Network: In India alone, Mahindra & Mahindra has more than 1,000
dealerships as per the year 2023 statistics. The wide coverage from this expansive network
makes it easy for customers all over the country to access both sales and service points.
● Targeted Marketing: M&M, a company based in the United States, has been sponsoring
the Indian Premier League (IPL) since its inception. This cricket tournament enjoys
 immense viewership in India which means that the strategic sponsorship is an opportunity for
them to establish a connection with a very large possible customer base.
● Customer Care: Numbers that are used in the evaluation of customer satisfaction might be
difficult to obtain. However, positive remarks and endorsements on the internet indicate M&M
puts customer care first after sales, which may mean losing some clients but keeping those
who value good service.

Product Differentiation:

● Technological Innovation: In its innovation journey, M&M signals its interest in electric cars
by introducing the largest fleet of electric three-wheelers ever seen in India. The move
sets them apart from other competition due to their stand for electric mobility.

Overall Efficiency

● To a skilled workforce: M&M seems to show its attention by emphasizing training and
skilling its staff. On their website it speaks of collaborations with technical institutes to train
employees in mechatronics and robotics— not the typical run-of-the-mill skills one might
imagine an automotive company to provide training on. This unique investment surely leads
them down the path of acquiring these advanced skill sets which can be seen as part of their
operational efficiency.

Strategic Partnerships

● To win M&M uses intelligent partnerships. They collaborate with Ford and Volkswagen, the
tech giants, to ensure they are in the forefront when it comes to innovation. This gives them
an opportunity to enter new markets and reduce costs as well as increase their brand image
through association with established players. It is a win-win for M&M and the partners
considering that this also benefits them at the same time.

Question 2) Identify some valuable and inimitable resources and capabilities of the company
that give rise to its unique competitive advantage. Based on this, evaluate if the company can
sustain its competitive advantage in the future.

The competitive advantage of the automobile industry can be analyzed using Porter’s five forces
model.
1. Threat of New Entries: Low

a. There is a very high requirement of capital to set up an entire production of automobiles.

b. With so many players in the industry, to penetrate the market, it becomes difficult.
c. With many competitors, high brand identity is required as certain competitors already
command increased brand equity value.
d. It is relatively easy for existing brands to expand into new segments through strategic
partnerships, mergers, etc.
e. Product differentiation and sustainability of the brand becomes difficult as switching costs are
low for consumers and with so many options available.

2. Bargaining power of suppliers: Moderate

a. There are various component manufacturers present globally that supply car producers, so
until and unless there is an explicitly unique design, the bargaining power of suppliers is
Moderate to Low. For some specialized components, the suppliers of a company are
generally set.
b. Since there is high brand trust among customers for the brand, delivering and sustaining
quality is crucial for car producers, and a constant supply of high-quality components is
required; giving certain bargaining power to the suppliers.

3. Bargaining power of buyers: Moderate

a. The switching cost of buyers is low and hence the bargaining power of buyers is high.
b. With so many options for cars and other utility vehicles in the industry, the bargaining power
of buyers becomes quite high.
c. In general, price sensitivity in India is a major factor that affects the consumers, hence the
car manufacturers can not expect higher profit per unit.

4. Threat of substitutes: Moderate

a. The threat of customers choosing another mode of travel like bus, train or airplane is not very
high as, as per ICRA’s report on the Indian Passenger Car Industry 2019, these modes
comprise only 10% of the total passenger travel and the rest 90% is undertaken by road. The
 main available substitute for passenger cars is the two-wheeler segment as that
encompasses more than 72% of the total share of road travel.
b. The switching cost and price are quite low for the two-wheeler segment.

5. Threat from competition - High

a. With 100% FDI and policy reforms made in the production and manufacturing industry under
the Make in India initiative, the Indian automobile industry is expected to grow even further.
The competition is high and with other international players entering the Indian market, this
threat only increases.
b. With a wide portfolio of products, the differentiation becomes minimal for products. Hence,
reduces the buyer’s cost and brand loyalty.
c. Huge capital needs to be invested to set up the manufacturing facilities, raising the exit
barriers.

Current Resources of Mahindra & Mahindra

Tangible assets:

Manufacturing facilities (factories): Mahindra & Mahindra operates 30 manufacturing plants in

India and overseas. Land and real estate holdings also a present. They use machinery of morden
standards to maintain their process. The company has an extensive distribution network comprising
warehouses and dealerships. As of 2021, Mahindra's automotive division alone has over 1,500
dealerships across India and a presence in over 100 countries.

Intangible assets: Mahindra & Mahindra is one of India's most recognized and respected brands in
the automotive sector. The exact valuation of its brand is proprietary. Mahindra & Mahindra holds
numerous patents for automotive technology, particularly in electric vehicles, SUVs, and agricultural
machinery. As per TOI, Mahindra has till now received a total of 1,185 patents covering a wide range
of areas, including powertrain (ICE & EV), vehicle mechanical systems, electronics, manufacturing
processes, electric tractors, and advanced engineering. The automobile company is awaiting
approval for 193 applications as of March 31, 2024. The company invests approximately 6-7% of its
annual revenue in research and development, focusing on automotive technology, including electric
vehicles and autonomous driving.

Based on the current scenario, we can analyze

The company’s valuable resources and capabilities that help the company create economic value
are its

1. Global presence
2. Technological adeptness
3. Human capital
4. Brand
5. Partnerships

Global presence
The company produces a wide variety of products in its automotive division and has further
established a global presence to manufacture and service these products. This aligns with its
mission to serve customers with a choice of products and services and create a large distribution
network. This presence also gives an opportunity to serve a large customer base across the world
protecting the company from country specific business cycles. Further, this presence as well as the
product portfolio grants the company economies of scale and scope.
The presence that it has already established through its manufacturing and servicing location for
variety of products is going to be expensive for its competitors to duplicate make the advantage
sustainable.

Technological adeptness
Mahindra acquired Reva and launched XUV in 2011 making it the electric mobility pioneer in India.
After the government announced the new BS6 fuel emission norms, it was one of the first
companies to come up with BS6 norms compliant engines which were produced in a cost
competitive way. The company is also working on connected vehicle technology (iMaxx and
Digisense) which will help enhance fleet operations and vehicle performance management.
Mahindra has a dedicated R&D division which help the company gain agility when it comes to
competing in terms of technology. This technological adeptness that the company has gained
through superior access to inputs (through R&D and partnerships) makes it unique and difficult for its
competitors to copy.

Human Capital
Automotive is only one of the divisions that the company has. Overall, the company employees over
250,000 people across the world. This large talent base helps it deliver wide variety of products not
limited to the automotive division. In terms of future potential, the company may also gain advantage
of economies of scope by leveraging its various business to support one another. For example, its IT
business can support the whole company through its technological prowess or the clean energy can
in future support its EV business. Human capital is also easily available to other companies as
employees may leave and join another company.

Partnerships
To fulfil its mission to provide customers with more options, the company also partners with other
firms through joint ventures and acquisitions. Given its wide distribution and servicing network,
company can be responsive in provide these products giving it advantage in creating such
partnerships. Such partnerships help the company by providing knowledge of performance of such
products as well as the customer feedback they generate which can be used to improve its existing
offerings. The knowledge gained through such partnerships may be valuable and rare but not difficult
to protect from duplication by its competitors.

Brand
The company entered the automotive industry in 1947 through its acquisition of Willys Jeep. Over
the years the company has positioned itself as a reliable firm with affordable products. This
affordable and reliable brand positioning gives the firm a temporary advantage to compete in the
market.
Conclusion - These analysis evidently shows that the company is able to sustain its competitive
advantage in the future.

Question 3: Identify a strategic initiative that the company has undertaken in recent years
which did not meet with success and analyse the reasons for the failure
Technological Difficulties:

Limited Battery Life and Range: The e2o's meagre 120 km per charge proved to be insufficient for
a lot of customers, especially considering the size of India. This narrow range created "range
anxiety," which is a major deterrent to adoption among prospective users.

Infrastructure & Charging Time: The e2o's practical usability was severely constrained by its
lengthy charging time (about five hours for a full charge) and the absence of a widespread,
dependable charging infrastructure. In comparison to comparable EVs with stronger infrastructure or
even regular gasoline vehicles, the lack of fast-charging alternatives makes the vehicle less enticing.

Market and Customer Perception: Price vs. Perceived Value: In a highly price-sensitive market,
the e2o was positioned as a luxury product. It was less appealing because to its greater price, which
was caused by costly battery technology and R&D costs. In addition, it lacked the luxury features
and strong performance that often support a higher price.
Consumer Trust and Awareness: There was a general lack of trust among consumers, which was
exacerbated by worries about the efficiency and dependability of EV technology. Being among the
first few electric vehicles in India, the e2o had to overcome consumer mistrust and cultivate trust in
the electric vehicle space.

Financial and Strategic Concerns:

Cost of Production: The ultimate retail pricing of the e2o was greatly impacted by the high cost of
lithium-ion batteries. Due to these expenses and the limited production volume, Mahindra was
unable to realise economies of scale that would have lowered the vehicle's cost to the customer.
Insufficient Government Support: While the government did offer some subsidies for electric
vehicles under the FAME India plan, these were insufficient and poorly advertised. The lack of
substantial incentives for producers and consumers, coupled with an uneven governmental
environment, negatively affected the economic appeal of the e2o.

Infrastructure and Ecosystem:

Insufficient Supportive Infrastructure: EVs required frequent charging when they were launched.
It required An adequate infrastructure for EV charging at multiple locations which would ease the
adaptation of EVs into the well-established sector of transportation. When the e2o was introduced,
India's charging infrastructure was still developing, which presented a major obstacle to its uptake.
Maybe if it was launched now the product story might had have a different ending.

Market Ecosystem Readiness: In addition to the infrastructure, there was a lack of development in
the dealership, service network, and customer knowledge of EV maintenance. The adoption of the
e2o was further hampered by this ecosystem's lack of preparation.
The e2o's sales didn't take off as the market for electric cars was not ready for this revolution. Few
of the main reasons for the same are:
● Not enough Charging stations at places to plug in and recharge the car, which made it
inconvenient to own, being an infant tech required constant charging.
● Being a New technology it was hard for mechanics to cope up in learning the repairing
process and it became hard to maintain and fix the car on time. this also increased the
repairs cost making it less attractive and appealing.
● Dealerships lacked knowledge of EVs and thus were not able to convince the customers into
buying EVs.
 ● Customer knowledge: People weren't sure how to take care of electric cars, which made
them hesitant to buy one.Basically, the whole system for electric cars wasn't developed
enough yet for the e2o to be a big success.

MAHINDRA 2 Wheeler
Mahindra took their stepping stones in the two-wheeler industry segment in 2008. They entered by
acquiring Kinetic Motor Company.
Mahindra Two Wheelers' downfall in the commuter market could be attributed to various
strategic failures:
They decided to take advantage of Kinetic's established footprint. Even after changing its name and
introducing the Mahindra Centuro and Mahindra Pantero, the company found it difficult to seize
the established footprint and advantage that could be leveraged. This challenge was faced by fierce
rivalry from well-established firms who controlled the market such as Hero MotoCorp, Honda, and
Bajaj.
Financial performance also revealed difficulties, with Mahindra Two Wheelers's sales declining
significantly over time. For instance, their sales fell by 73% in the 2018–19 fiscal year, selling just
over 4,000 devices, in contrast to competitors' millions of sales.

PLAGIARISM REPORT