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Mahindra War Room 2014

AFS - Tractors & Farm Equipment Business Caselet

MAHINDRA AUTOMOTIVE & FARM EQUIPMENT SECTORS


TRACTOR & FARM MECHANIZATION BUSINESS CASELET
Mahindra Automotive & Farm Equipment Sectors (AFS) comprise businesses ranging
from Automotive (including Cars, UVs, Trucks and Buses), Agri-business (including
Seeds and micro-irrigation), Construction Equipment, Powerol (Engines & Gensets) to
Tractors and farm implements.
This caselet pertains to the Tractors & Farm Mechanization Business of Mahindra AFS.
BUSINESS BACKGROUND
Mahindra began manufacturing tractors in the early 1960s for the Indian market. Nearly
50 years later, Mahindra is the number one tractor company in the world by volume,
with annual sales at over 200,000 units and a cumulative total of over 2.1 million
tractors sold to date. Mahindra pursues a vision of Farm-Tech Prosperity - doing all it
takes to make the farmers in over 40 countries more prosperous. Mahindras Tractor
brands, ranging from the 15 HP engine to 85 HP, have been designed in close
communication with farmers about their day to day tractor usage and farming practices,
and range from low cost tractors that cater to farmers with marginal landholdings, to
higher performance tractors with high-end features. Mahindra is the market leader in
India for nearly three decades, with a market share above 40 percent, and has
expanded its footprints in the United States, China, Australia, New Zealand, Africa
(Nigeria, Mali, Chad, Gambia, Angola, Sudan, Ghana, Morocco), Latin America (Chile,
Argentina, Brazil, Venezuela, Central America and the Caribbean), South Asia (Sri
Lanka, Bangladesh, Nepal), the Middle East (Iran, Syria) and Eastern Europe (Serbia,
Turkey, Macedonia).
LIVE CHALLENGE: CREATING FUTURISTIC TRACTOR DEALERSHIPS
Tractor dealerships in India are usually simple and minimal, driven by the traditional
tractor retailing belief that farmers are inhibited from coming to modern or opulent
looking dealerships. Farmers make their decision to purchase their tractors in their
farms, than dealerships, where they walk-in to close the final transaction. These factors
have caused Indian Tractor Dealers to be skeptical about investing in modernizing their
dealerships thus far. However, trends show that the Indian market and the retail
consumer are going through a sea change across different
categories, driven by several trends:

Change in rural consumption patterns


Move towards more spending
More information availability
Rapid expansion of Internet
Increasing mobile & smartphone penetration
Growth of organized retail across diverse categories
Broadvision Perspectives Client Confidential

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Mahindra War Room 2014

AFS - Tractors & Farm Equipment Business Caselet

These trends are expected to change the paradigm of the rural consumer, who may no
longer be traditional in their approach to Tractor Retailing & Purchase. The invasion of
technology is expected to accelerate change and raise expectations. As the world
leader in tractors, it becomes imperative for Mahindras Farm Equipment business to
understand these trends and develop a futuristic channel strategy.
In this backdrop, evolve a holistic strategy and a business plan to re-imagine
tractor channel strategy and chart the course for the future tractor dealerships,
by addressing the following:
What will the future rural consumer be like? What will he expect? What
experiences will define his choice of brand? What information and
experience would he like, in order to make a good choice? What are the
trends in the characteristics, behavior, likes and dislikes of the Rural Indian
customer, and where will they be 5 to 10 years from now?
What can we learn by benchmarking developed tractor markets such as the
United States and Europe to see how rural channels have changed there, in
agriculture and other similar industries. What are the interesting case
studies on channel concepts and experiential marketing, which can be
introduced in India?

What are the typical operations in our dealerships and what disruptive
innovations can be brought in changing the look and feel, business model,
organization structure and the way of doing business? Should Mahindra
even need dealerships in the future or is there another channel waiting to
be explored?

Broadvision Perspectives Client Confidential

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