Case Study Description of Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor
Mahindra & Mahindra Limited was the largest manufacturer of farm equipment in India, with a more than 40 per cent market share. It manufactured five different tractor brands in the domestic market, including a brand of mini-tractor, the Yuvraj 215 NXT. This brand was targeted at small farmers with less than two hectares of land, who were primarily dependent on bullocks or power tillers for farming but aspired to own a tractor to increase productivity at an affordable price. Although such farmers formed over 70 per cent of the farming population, the penetration of tractors in this segment was the lowest. While the situation demonstrated high potential, selling tractors in this segment was challenging due to low product awareness, limited access to information, and low financial resources among target customers. With such a product in its portfolio, how should Mahindra & Mahindra Limited promote the Yuvraj 215 NXT among small and marginal farmers? Rakhi Thakur is affiliated with SP Jain Institute of Management & Research.
Swot Analysis of "Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor" written by Rakhi Thakur includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Mahindra Tractor facing as an external strategic factors. Some of the topics covered in Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor case study are - Strategic Management Strategies, Decision making and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, increasing household debt because of falling income levels,
central banks are concerned over increasing inflation, wage bills are increasing, etc
Introduction to SWOT Analysis of Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mahindra Tractor, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mahindra Tractor operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor can be done for the following purposes –
1. Strategic planning using facts provided in Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor case study
2. Improving business portfolio management of Mahindra Tractor
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Mahindra Tractor
Strengths Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mahindra Tractor in Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor Harvard Business Review case study are -
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Mahindra Tractor digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Mahindra Tractor has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Superior customer experience
– The customer experience strategy of Mahindra Tractor in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Mahindra Tractor has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Mahindra Tractor has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Cross disciplinary teams
– Horizontal connected teams at the Mahindra Tractor are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Innovation driven organization
– Mahindra Tractor is one of the most innovative firm in sector. Manager in Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Mahindra Tractor has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Mahindra Tractor has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Strong track record of project management
– Mahindra Tractor is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Mahindra Tractor has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Mahindra Tractor is present in almost all the verticals within the industry. This has provided firm in Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Analytics focus
– Mahindra Tractor is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Rakhi Thakur can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Ability to lead change in Sales & Marketing field
– Mahindra Tractor is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Mahindra Tractor in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor are -
Increasing silos among functional specialists
– The organizational structure of Mahindra Tractor is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Mahindra Tractor needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Mahindra Tractor to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor, is just above the industry average. Mahindra Tractor needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor, it seems that the employees of Mahindra Tractor don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Aligning sales with marketing
– It come across in the case study Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor can leverage the sales team experience to cultivate customer relationships as Mahindra Tractor is planning to shift buying processes online.
Interest costs
– Compare to the competition, Mahindra Tractor has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Products dominated business model
– Even though Mahindra Tractor has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Mahindra Tractor has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Skills based hiring
– The stress on hiring functional specialists at Mahindra Tractor has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Mahindra Tractor supply chain. Even after few cautionary changes mentioned in the HBR case study - Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Mahindra Tractor vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Mahindra Tractor has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Opportunities Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Mahindra Tractor can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Leveraging digital technologies
– Mahindra Tractor can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Creating value in data economy
– The success of analytics program of Mahindra Tractor has opened avenues for new revenue streams for the organization in the industry. This can help Mahindra Tractor to build a more holistic ecosystem as suggested in the Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor case study. Mahindra Tractor can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Mahindra Tractor can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Mahindra Tractor can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Mahindra Tractor to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Mahindra Tractor to hire the very best people irrespective of their geographical location.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Mahindra Tractor can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Mahindra Tractor can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Building a culture of innovation
– managers at Mahindra Tractor can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Learning at scale
– Online learning technologies has now opened space for Mahindra Tractor to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Mahindra Tractor in the consumer business. Now Mahindra Tractor can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Mahindra Tractor can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Mahindra Tractor has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Mahindra Tractor to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor are -
Shortening product life cycle
– it is one of the major threat that Mahindra Tractor is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Mahindra Tractor needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Consumer confidence and its impact on Mahindra Tractor demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Mahindra Tractor with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor, Mahindra Tractor may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Technology acceleration in Forth Industrial Revolution
– Mahindra Tractor has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Mahindra Tractor needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Mahindra Tractor business can come under increasing regulations regarding data privacy, data security, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Mahindra Tractor.
Stagnating economy with rate increase
– Mahindra Tractor can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Mahindra Tractor in the Sales & Marketing sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Mahindra Tractor in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Weighted SWOT Analysis of Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Mahindra & Mahindra: Marketing a Low-Priced Mini-Tractor is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Mahindra Tractor needs to make to build a sustainable competitive advantage.
