The document provides an overview of the Indian agriculture and tractor industry. It notes that India has the highest arable land globally at 47% of total land. The average farm size is small at less than 2 hectares. There is a shortage of agricultural labor due to increasing wages and urbanization, increasing the need for mechanization. Tractors occupy nearly 90% of the Indian agricultural machinery market, which is expected to grow steadily due to factors like low tractor penetration, availability of credits, and opportunities in new markets. The largest players in the industry are Mahindra, TAFE, Escorts and ITL.

1. STM Group: Auto - Tractors
Submitted By:
UM14001 Abhijeet Dash
UM14037 Goutam Rao
UM14056 Sukanya Dash

2. INDIAN AGRICULTURE - SNAP SHOT
Highest Arable Land - 47% of total land
against Avg. 11 % in the world
46 Soil types suited for round the year
cultivation 20 Agro-climatic regions
Average Farm Land Size < 2 Hectare 62% of work force employed in
agriculture sector
Ranks first in production of Pulses, Tea,
Jute & allied Fibers

3. AGRI LABOR
60
250
30
175
0
50
100
150
200
250
300
2005 2006 2007 2008 2009 2010
Men Wages (Rs./Day) Women Wages (Rs./Day)
Shortage of agricultural labor across the country due to increase In labor wages & Urbanization.

4. NEED FOR MECHANIZATION
Paddy Wheat
USA
7941.2
2988.6
China
4748
6590.1
Egypt
6448.2
10000
Australia
Brazil
4365.0
2040.1
9000
1603.3
Russia
5143.4 2318.1
INDIA
2976.7
2840.8
India very low on Opportunity for adoption of
Technology

5. FARM MECHANIZATION - INDIA
0 10 20 30 40 50 60 70 80 90 100
1981-82
2005-06
2011-12
10.92
5.77
5.09
27.23
8.02
6.37
19.95
46.1
51.08
41.9
40.12
37.46
Different Power Sources in India
Agricultural Workers Draught Animal Tractor Stationary Engine
Tractors occupy nearly 90% of the Indian Agriculture Machinery Market.

6. DRIVERS & CHALLENGES
Availability of Credits
Low penetration of Tractors
Low Farm power availability
Low Productivity
Opportunities in new markets
Cost Constraints
Land Fragmentation
Unpredictable Monsoon
Challenges
Drivers
Indian Agriculture machinery market is excepted to grow steadily driven by Tractors

7. Executive Summary
Nature of Industry
Growth Drivers
Critical Success Factors
Competitor Analysis
PESTEL Analysis
Porter’s Five Force
Strategic Group Mapping
SWOT Analysis
Competitive Landscape
Market Segmentation
Buying Criteria Analysis
Key Trend &Future Trends
Largest Player’s Analysis

8. •War surplus tractors and bulldozers imported
•Central and State Tractor Organizations set up to develop and promote the supply and use of
tractors
1945 to 1960.
•Initiated local production began with five manufacturers producing a total of 880 units per year.
Eicher, Gujarat Tractors, TAFE, Escorts, M&M.
1961 to 1970.
•Six new manufacturers were established during this period
•Escorts Ltd began local manufacture of Ford tractors in 1971 in collaboration with Ford, UK.
•Credit facilities for farmers continued to improve
1971 to 1980.
•A further five (Auto Tractors, Haryana Tractors, United Auto Tractors, Asian Tractors, VST Tillers)
manufacturers began production during this period but only last one survived in the increasingly
competitive market place.
•Then India a net importer up to the mid-seventies became an exporter in the 80's mainly to
countries in Africa.
1981 to 1990.
•Since 1992 it has not been necessary to obtain an industrial license for tractor manufacture in
India.
•By 1997 annual production exceeded 255000 units and the national tractor park had passed the
two million mark.
•Many new manufacturers like Bajaj Tempo, New Holland, John Deere have started production.
1991 onwards
Executive Summary
Nature of Industry
Growth Drivers
Critical Success Factors
Competitor Analysis
PESTEL Analysis
Porter’s Five Force
Strategic Group Mapping
SWOT Analysis
Competitive Landscape
Market Segmentation
Buying Criteria Analysis
Key Trend &Future Trends
Largest Player’s Analysis
History & Evolution Consumer Analysis Industry Life cycle Market Size

9. Farmers
---Primary consumers of this
industry
--Tractors are replacing the
traditional methods
--Size of farms drives their
buying decision
--Easy credit facilities available
making buying tractors
convenient
Construction Companies
--They use tractors for
transport of raw materials like
brick, cement, sand, etc.
--Their need is shifting towards
bigger BHP tractors as they can
carry more material by weight
and ensure faster delivery.
Executive Summary
Nature of Industry
Growth Drivers
Critical Success Factors
Competitor Analysis
PESTEL Analysis
Porter’s Five Force
Strategic Group Mapping
SWOT Analysis
Competitive Landscape
Market Segmentation
Buying Criteria Analysis
Key Trend &Future Trends
Largest Player’s Analysis
History & Evolution Consumer Analysis Industry Life cycle Market Size

10. Rationale
Low penetration of tractors in rural sector
Late adoption of farm mechanization
Increase use of tractors for non agricultural
purposes
Increased govt. emphasis on development of
culturable wasteland
Executive Summary
Nature of Industry
Growth Drivers
Critical Success Factors
Competitor Analysis
PESTEL Analysis
Porter’s Five Force
Strategic Group Mapping
SWOT Analysis
Competitive Landscape
Market Segmentation
Buying Criteria Analysis
Key Trend &Future Trends
Largest Player’s Analysis
History & Evolution Consumer Analysis Industry Life cycle Market Size
Introduction Growth Maturity Decline

11. Executive Summary
Nature of Industry
Growth Drivers
Critical Success Factors
Competitor Analysis
PESTEL Analysis
Porter’s Five Force
Strategic Group Mapping
SWOT Analysis
Competitive Landscape
Market Segmentation
Buying Criteria Analysis
Key Trend &Future Trends
Largest Player’s Analysis
History & Evolution Consumer Analysis Industry Life cycle Market Size

12. Expansion and Extension of Agricultural land
Value additions in Farming
Return on Investment (RoI)
Credit and money availability
Government support for agriculture and rural development
Buoyancy in rural income supports tractor growth
Monsoons
Scarcity of farm labour
Increasing non-agricultural application
Strong replacement demand
Export Sales
Executive Summary
Nature of Industry
Growth Drivers
Critical Success Factors
Competitor Analysis
PESTEL Analysis
Porter’s Five Force
Strategic Group Mapping
SWOT Analysis
Competitive Landscape
Market Segmentation
Buying Criteria Analysis
Key Trend &Future Trends
Largest Player’s Analysis

13. Executive Summary
Nature of Industry
Growth Drivers
Critical Success Factors
Competitor Analysis
PESTEL Analysis
Porter’s Five Force
Strategic Group Mapping
SWOT Analysis
Competitive Landscape
Market Segmentation
Buying Criteria Analysis
Key Trend &Future Trends
Largest Player’s Analysis
Customer relations and Service
• providing end-to-end services to customers is expected to be a key differentiator
Technological Innovation
• develop superior insights into what customer’s value and accordingly develop innovations
that satisfy and delight the customers
Sales and Distribution Networks
• Makes the system robust and acts as source of knowledge pertaining to the preferences of
the customers
Strategic Alliance
• powerful instrument to catalyse the organizational forces

14. Executive Summary
Nature of Industry
Growth Drivers
Critical Success Factors
Competitor Analysis
PESTEL Analysis
Porter’s Five Force
Strategic Group Mapping
SWOT Analysis
Competitive Landscape
Market Segmentation
Buying Criteria Analysis
Key Trend &Future Trends
Largest Player’s Analysis
Industry
Average Mahindra TAFE Escorts ITL
Debt Equity Ratio 0.12 0.291 0.025 0.160 0.013
PAT/Sales (%) 0.091 0.098 0.038 0.145
Price to Earning Ratio 5.2525 28.960 13.223 269.375 3.667
Market Value/Book
ValueRatio 8.71 6.536 3.140 24.019 1.150
ROCE
ROE 26.32

15. Executive Summary
Nature of Industry
Growth Drivers
Critical Success Factors
Competitor Analysis
PESTEL Analysis
Porter’s Five Force
Strategic Group Mapping
SWOT Analysis
Competitive Landscape
Market Segmentation
Buying Criteria Analysis
Key Trend &Future Trends
Largest Player’s Analysis
Political Economic Social Technological Environmental Legal
Govt. stress
on
mechanizati
on to boost
grain
production
Subsidy on
agricultural
loans from
government
Regaining “
Agricultural
dynamism”,
a key goal
of eleventh
Five year
plan
Change in
taxation
policy
100% FDI
policy

16. Executive Summary
Nature of Industry
Growth Drivers
Critical Success Factors
Competitor Analysis
PESTEL Analysis
Porter’s Five Force
Strategic Group Mapping
SWOT Analysis
Competitive Landscape
Market Segmentation
Buying Criteria Analysis
Key Trend &Future Trends
Largest Player’s Analysis
Political Economic Social Technological Environmental Legal
Credit
extended by
commercial
banks, state
land
development
banks and
regional rural
banks.
Cost of
tractors in
India is the
cheapest in
world .Hence
there exists
tremendous
scope for
exports.
Deteriorating
foreign
exchange
situation in
western
country, poor
buying
capacity and
comparatively
cheaper
import of
second hand
tractor from
developed
country
inflation may
provoke
higher wage
demands
from
employees
and raise
costs
higher
national
income
growth may
boost demand
for a firm's
products
Less interest
rate charged
by banks for
agricultural
inputs

17. Executive Summary
Nature of Industry
Growth Drivers
Critical Success Factors
Competitor Analysis
PESTEL Analysis
Porter’s Five Force
Strategic Group Mapping
SWOT Analysis
Competitive Landscape
Market Segmentation
Buying Criteria Analysis
Key Trend &Future Trends
Largest Player’s Analysis
Political Economic Social Technological Environmental Legal
Increase in
awareness among
the farmers for the
need of farm
mechanization and
are keen to acquire
tractor
Due to land
fragmentation
farmers with small
land holding are
not buying tractor
There is need for
more tilling due to
depletion of
moisture and
repeated
cultivation of land .
Animal power
available is too
inadequate to meet
power demand of
our farmers.
More farmers are
opting for multiple
cropping over last
decade. Country's
gross cropped area
increased by about
4.7%.

18. Executive Summary
Nature of Industry
Growth Drivers
Critical Success Factors
Competitor Analysis
PESTEL Analysis
Porter’s Five Force
Strategic Group Mapping
SWOT Analysis
Competitive Landscape
Market Segmentation
Buying Criteria Analysis
Key Trend &Future Trends
Largest Player’s Analysis
Political Economic Social Technological Environmental Legal
Accelerated
acquisition of
technology
capabilities to
raises
productivity in
agriculture
Continuous
technological
innovation
Renewable
energy
development.
Ex, coal gas
renewable

19. Executive Summary
Nature of Industry
Growth Drivers
Critical Success Factors
Competitor Analysis
PESTEL Analysis
Porter’s Five Force
Strategic Group Mapping
SWOT Analysis
Competitive Landscape
Market Segmentation
Buying Criteria Analysis
Key Trend &Future Trends
Largest Player’s Analysis
Political Economic Social Technological Environmental Legal
Irrigation facilities
reduce reliance on the
monsoon and allow for
quick yielding varieties
of food -grain .This
reduces the cropping
cycle to 3-4 months
from the traditional 5-6
months. Reduced
cropping cycle require
deep tilling which
translates into higher
demand for tractors.
Strong monsoons,
increase lending by
nationalized banks
which leads to farming
of commodity prices
money availability
catapulted tractor
demand
Global warming

20. Executive Summary
Nature of Industry
Growth Drivers
Critical Success Factors
Competitor Analysis
PESTEL Analysis
Porter’s Five Force
Strategic Group Mapping
SWOT Analysis
Competitive Landscape
Market Segmentation
Buying Criteria Analysis
Key Trend &Future Trends
Largest Player’s Analysis
Political Economic Social Technological Environmental Legal
Collaboration
with
government
which shapes
policy issues
Agricultural
policy
Rules and
Regulations laid
down by the
govt. over labor
employment,
safety, wages

21. Executive Summary
Nature of Industry
Growth Drivers
Critical Success Factors
Competitor Analysis
PESTEL Analysis
Porter’s Five Force
Strategic Group Mapping
SWOT Analysis
Competitive Landscape
Market Segmentation
Buying Criteria Analysis
Key Trend &Future Trends
Largest Player’s Analysis
Buyer Power Supplier Power
Existing
Competition
Threat to new
entrants
Threat to
substitutes
Effect of
Complementors
Varying density
of consumer
base across
locations
Firms: buyers
concentration
ratio is 1:20000
(but only 4
major players)
High switching
costs for buyers
Key
factors
for
analysis
Some places are
over tractorised
and some are
under
tractorised.
No of players in
an industry
determine how
effectively the
demands can be
met
Mostly a tractor
is one time buy
for the farmers
Rationale

22. Executive Summary
Nature of Industry
Growth Drivers
Critical Success Factors
Competitor Analysis
PESTEL Analysis
Porter’s Five Force
Strategic Group Mapping
SWOT Analysis
Competitive Landscape
Market Segmentation
Buying Criteria Analysis
Key Trend &Future Trends
Largest Player’s Analysis
Buyer Power Supplier Power
Existing
Competition
Threat to new
entrants
Threat to
substitutes
Effect of
Complementors
Minimal chance
of forward
integration
Too many
suppliers
Switching cost
is less for
tractor
companies
Key
factors
for
analysis
It requires large
capital and
technological
expertise,
making it
unviable in the
part of the
suppliers.This reduces
the dependency
on a single
supplier
The raw
materials are
generic and
widely available
from many
suppliers.
Rationale

23. Executive Summary
Nature of Industry
Growth Drivers
Critical Success Factors
Competitor Analysis
PESTEL Analysis
Porter’s Five Force
Strategic Group Mapping
SWOT Analysis
Competitive Landscape
Market Segmentation
Buying Criteria Analysis
Key Trend &Future Trends
Largest Player’s Analysis
Buyer Power Supplier Power
Existing
Competition
Threat to new
entrants
Threat to
substitutes
Effect of
Complementors
Total No of
firms (Listed
as well as
Unlisted)
No of large
firms
Entry of
foreign
players
Larger
M&As
Key
factors
for
analysi
s
20
4
They may
bring high
technological
innovation
and expertise
hence better
products.
This makes
the existing
firms bigger
and hence
brings more
rivalries.
Rationa
le

24. Executive Summary
Nature of Industry
Growth Drivers
Critical Success Factors
Competitor Analysis
PESTEL Analysis
Porter’s Five Force
Strategic Group Mapping
SWOT Analysis
Competitive Landscape
Market Segmentation
Buying Criteria Analysis
Key Trend &Future Trends
Largest Player’s Analysis
Buyer Power Supplier Power
Existing
Competition
Threat to new
entrants
Threat to
substitutes
Effect of
Complementors
Entry/ Exit
barriers and
costs
Key
factors
for
analysis
Tractor needs
intensive capital
and technology
Large dealer
network needed
Brand loyalty
high
Rationale

25. Executive Summary
Nature of Industry
Growth Drivers
Critical Success Factors
Competitor Analysis
PESTEL Analysis
Porter’s Five Force
Strategic Group Mapping
SWOT Analysis
Competitive Landscape
Market Segmentation
Buying Criteria Analysis
Key Trend &Future Trends
Largest Player’s Analysis
Buyer Power Supplier Power
Existing
Competition
Threat to new
entrants
Threat to
substitutes
Effect of
Complementors
No credible
availability of
substitutes
Certain parts
have hardly any
substitute.
Key
factors for
analysis
Tractors don’t
have substitutes
as such. The only
option available
is bull plough
which is not that
efficient as the
use of tractorsFor eg. Power
tillers have very
low power of
substitute.
Rationale

26. Executive Summary
Nature of Industry
Growth Drivers
Critical Success Factors
Competitor Analysis
PESTEL Analysis
Porter’s Five Force
Strategic Group Mapping
SWOT Analysis
Competitive Landscape
Market Segmentation
Buying Criteria Analysis
Key Trend &Future Trends
Largest Player’s Analysis
Buyer Power Supplier Power
Existing
Competition
Threat to new
entrants
Threat to
substitutes
Effect of
Complementors
High number
of
complements
increases
demand.
Key
factors
for
analysis
For eg. Plow
needs to be
complemented
with tractor for
its use.
Rationale

27. Executive Summary
Nature of Industry
Growth Drivers
Critical Success Factors
Competitor Analysis
PESTEL Analysis
Porter’s Five Force
Strategic Group Mapping
SWOT Analysis
Competitive Landscape
Market Segmentation
Buying Criteria Analysis
Key Trend &Future Trends
Largest Player’s Analysis

28. Executive Summary
Nature of Industry
Growth Drivers
Critical Success Factors
Competitor Analysis
PESTEL Analysis
Porter’s Five Force
Strategic Group Mapping
SWOT Analysis
Competitive Landscape
Market Segmentation
Buying Criteria Analysis
Key Trend &Future Trends
Largest Player’s Analysis
Government
support for
agricultural
sector
High rate of
Indian GDP
Easy
availability
of finance
Strengt
h Sale
depends on
monsoon
Indian
farmers
have low
income
Fragmented
land
ownership
Weakne
ss Low
penetration
of tractors
Export of
tractors
Commercial
use other
than
agriculture
Opport
unities
Agriculture
has the
minimum
growth
among all
sectorsSome parts
of India
have high
penetration
Threats

29. Executive Summary
Nature of Industry
Growth Drivers
Critical Success Factors
Competitor Analysis
PESTEL Analysis
Porter’s Five Force
Strategic Group Mapping
SWOT Analysis
Competitive Landscape
Market Segmentation
Buying Criteria Analysis
Key Trend &Future Trends
Largest Player’s Analysis

30. Executive Summary
Nature of Industry
Growth Drivers
Critical Success Factors
Competitor Analysis
PESTEL Analysis
Porter’s Five Force
Strategic Group Mapping
SWOT Analysis
Competitive Landscape
Market Segmentation
Buying Criteria Analysis
Key Trend &Future Trends
Largest Player’s Analysis
Segments Horse Power Market Share (%) Regional
Concentration
Small Tractors 21-30 HP 23-25 North India
Medium Tractors 31-40 HP 53-56 West & South India
Large Tractors 41-50 HP 17 West India- Large
Landholdings
Large Tractors > 50 HP 2-4 West India
31-50 HP
Segment (Mid
Segment)- 70%
Fastest growing
Segment- >40 HP

31. Executive Summary
Nature of Industry
Growth Drivers
Critical Success Factors
Competitor Analysis
PESTEL Analysis
Porter’s Five Force
Strategic Group Mapping
SWOT Analysis
Competitive Landscape
Market Segmentation
Buying Criteria Analysis
Key Trend &Future
Developments
Largest Player’s Analysis
• Individual Customers & SMEs
• High Significance
Reputation of Brand
• Individual Customers & SMEs
• High Significance
Resale Value
• Individual Customers & SMEs
• High Significance
Availability of Finance
• Individual Customers & SMEs
• Low Significance
Special Features
• Individual Customers & SMEs
• High Significance
Margin Money
• Individual Customers & SMEs
• High Significance
Customer Relationship
• Individual Customers & SMEs
• High Significance
Parts Availability

32. Executive Summary
Nature of Industry
Growth Drivers
Critical Success Factors
Competitor Analysis
PESTEL Analysis
Porter’s Five Force
Strategic Group Mapping
SWOT Analysis
Competitive Landscape
Market Segmentation
Buying Criteria Analysis
Key Trend &Future
Developments
Largest Player’s Analysis
Improving Farm
Mechanisation
Levels
Low Overall
Penetration
Non Agricultural
use of Tractors
Increasing
Exports
Key Trend
High
Medium
High
Medium
Impact on
Industry
High Probability
Medium
Probability
High Probability
Medium
Probability
Certainty
of Impact