Project Scorpio was Mahindra & Mahindra's (M&M) attempt to reinvent itself in the Indian automobile market and counter competition from other manufacturers. M&M realized the potential of utility vehicles (UVs) in urban markets and developed Scorpio, which started production in 1997. Scorpio launched in 2002 and proved to be an immediate success, appealing to both passenger car buyers and SUV fans. It helped M&M increase its market share. M&M's supplier strategy for Scorpio involved complete supplier involvement from the beginning and outsourcing multiple components, lowering costs. Cross-functional teams were formed for their different perspectives and to speed up the project.

1. Project Scorpio
Presented By: Group A8 Presented To:
Gourab Mahajan (12018) Dr. M.R.Suresh
Mohan Karthikeya (12028)
Shashank Goswami (12045)
Robin Kumar Sahu (12097)
Akilan P (12123)
Pappu Yadav (12166)
Sarthak Rohatgi (12182)

2. Background
“Project Scorpio was not a top-down strategy nor one man’s
vision; it was a bottom up programme” – Anand Mahindra
In November 2003, M&M, a major automobile and farm
equipment manufacturer, became the second auto company
in India to receive the prestigious National Award for R&D
Within a year of its launch, Scorpio won major awards like
“Best car of the Year 2003”, “Best SUV of the Year” and
“Product Launch of the Year” award
2

3. Need… Impact… Result
3
Need Impact Result
M&M – brand name in the UV market and enjoyed near monopoly until the early
1990s.
Telco introduced “SUMO”.
SUMO, with its better
looks, appealed to an
urban market.
Sumo sold 100,000 units were
as M&M sold 26,321 units
(between 1994 – 1997)
SUMO quickly snatched
market share
M&M conducted a
thorough survey of the
market
M&M realized the potential of
UVs in the urban market and
made a conscious decision to
develop a vehicle designed for
urban use
The outcome was Project
Scorpio, on which work started
in 1997
UVs were generally used
by car rental agencies and
taxi service providers for
commercial purposes
TOYOTA launched Qualis in
the early 2000s
Appealed to the urban buyers,
and many people began to
purchase Qualis for personal
use.
M&M launched Bolero in
2000, received mixed
reactions
It was not as big as success as
M&M had hoped it would be
It did help the company
establish a stronger presence in
the urban UV segment
M&M’s sales stagnated by early 2000s and its share price touched an all – time low
of INR 100. It was in this scenario that M&M launched Scorpio in June 2002.

4. Need… Impact… Result
4
Need Impact Result
Launch proved to be the
much – awaited turning
point for M&M
Sporty looks and powerful
performance appealed to a
great number of people
Scorpio was an immediate
success
Scorpio catered to a
previously neglected niche
It fell between a passenger car
and as SUV
Scorpio’s target market
straddled both passenger car
buyers as well as SUV fans
Scorpio is a luxury car
which covered the INR
500,000 – 800,000 price
range
The company also found that it
was the segment in which
customers were most likely to
buy instead of a car
Scorpio compete with all the
cars in the luxury segment,
along with other UVs in the
market. (CAR PLUS)
M&M followed an
innovative sourcing
system
Made the project more efficient Lower cost
Bottom-line: “It is easier to make what you can sell than to sell what you have made”

5. 5
GAP Analysis
Factors Past scenario Expectations Result
Products Focussed mainly on
Rural markets
Wanted to have
foothold in the industry
They Came up with
Scorpio, an SUV for
urban market and
which retained its
image as a strong
vehicle
Segment No SUV in B or C
segment catering to all
the needs of the
consumers
An SUV with style and
power meeting
customer’s expectations
Scorpio with power of
an SUV and style
comfort and luxury of a
passenger car
Market share Declining Market Share Wants to be the Market
Leader
Scorpio increased their
Market Share
Technology Do not have the
technology to compete
with its competitors
Want to have the best
combinations of the
designs, looks, power
and performance
For the first time they
outsourced the whole
project to suppliers and
did only the assembling
part with the best of the
equipment received

6. Product Innovation Charter
Focus
 Reasonable cost, quality and Performance
Vehicle for Urban segment passenger SUV.
Goals/Objectives
 Increase the Market Share
Guidelines
 Use of Cross functional teams
 Adopting flexible manufacturing system
6

7. Question 1
Scorpio was said to be M&M’s attempt to
reinvent itself in the Indian automobile market.
How did Scorpio help M&M improve its image
and counter competition from giants like Telco
and Toyota? Do you think M&M was right in
departing from its traditional forte and
positioning Scorpio as an urban UV?
7

8. Strategy adopted by M&M
• M&M concentrated on the niche segment, vehicle in between
the passenger cars and SUVs
• It differentiated itself from its competitors by positioning it as
both luxury and adventure
• They came up with a new engine for a new car design which
was the major element of differentiation for Mahindra
• The company came up with Scorpio which was designed
according to the customer’s preferences
8

9. Strategy adopted by M&M
 Quality Deployment function
 They focused on a customer centric approach
 House of quality: The attributes customer wants and translate them to engineering
 Help from cross functional teams
 Customer needs
Offer comfort and elegance of a passenger car
Sporty look and sturdy design
Low in price compared to other SUV’s in market
 QFD SCORPIO.xlsx
 Supplier Involvement
 Cross functional teams
9

10. How Scorpio compared with
Competition
10

11. Concept Generation
Form
A World - Class new generation SUV with excellent styling,
superior performance, car like comfort at a “value” price
Technology
Innovative and flexible manufacturing system (IDAM)
Development of a new engine in a new car design
New world class lines for manufacturing components
Innovative sourcing system
Designed to cost
11

12. Concept Generation (contd.)
Need/Benefit
Scorpio catered to the consumers who would want
to consume premium imagery at price affordable
to them
Referred as car-plus, it offered the all the benefits
of a car plus the thrill of driving a SUV
12

13. Concept Generation (contd.)
M&M started of by rightly identifying the NEED,
then implemented INNOVATIVE TECHNOLOGY
and came up with a very SUCCESSFUL FORM
Need
Form
Technology
13

14. Yorum Wind and Robertson Model
Criteria-
1. Company capability
2. Time to develop
3. Ability to market
4. Market growth
14
Positioning
Segmentation
PRICE COMFORT SPACE POWER TECHNO
L-OGY
IMAGE
A (ENTRY LEVEL) - - + - + - - - - - + - + + - - - - - - - - - -
B (SEMI LUXURY) + + + - - + - + - + - + + - + - - + - - + - + -
C (LUXURY) + + + - + + - + + + + + + - + + + - + + + + - +
D (PREMIUM) - + - - - - - + + - + - + - + - - + - + - + - -
E (SUPER
PREMIUM)
- - - - - - - - + - - - + - - + - + - + - - - -

15. Idea Screening
• Strategy role screen
• Screen for new product type
▫ New Product/ Product line
15

16. Product Architecture Process
 Chunk 1: Air Conditioning
 Chunk 2: Audio
 Chunk 3: Lock
 Chunk 4: Exteriors
 Chunk 5: Seats and Interiors
 Chunk 6: Suspension
16

17. Full Screen
• Factor Score
17
Factor Weight score (1-5)
Technical Accomplishment:
Look & styling 4
Engine & performance 4
Gear box 3
Space &comfort 3
Ride &handling 3
Refinement 4
Fuel economy 2
Commercial Accomplishment:
Market volatility 4
Probable market share 4
Sales force requirements 3
Competition to be faced 4
Degree of unmet need 3

18. Was it right positioning Scorpio as an
Urban UV?
• M&M faced tough competition from the sumo in the UV
segment in late 90’s
• Potential for the UV’s in urban was increased
• Perceptions of the customers was also changed on the vehicles
such as
▫ Image defined by international vehicle
▫ Thrill and passion of driving suv’s
▫ Big size stands for status
• After launching – owned a share of 31% in SUV & MUV
18

19. Question 2
Suppliers played a vital role in the success of
Project Scorpio. Describe M&M’s supplier
strategy for Project Scorpio. How important is it
to give suppliers autonomy? Also, comment on
the rationale behind the formation of cross-
functional teams for the project.
19

20. M&M’s supplier strategy
• Complete Supplier involvement of suppliers from
beginning to end
• Identification of the best vendors in the field worldwide
and collaborating with them
• Outsourcing of multiple suppliers, resulting in reduction
of costs
• Giving suppliers, contracts for other product portfolios
for ensuring commitment
20

21. Importance of supplier autonomy
• Complete autonomy and decentralize supply system
• Freedom to do anything as long as it comes in budget
constraint
• Indigenous development where supplier set up their
facilities in company manufacturing plant
21

22. Rationale behind the formation of
cross-functional teams
• Speed
• Complexity
• Customer Focus
• Creativity
• Organizational Learning
• Single Point of Contact
22

23. Question 3
Scorpio proved to be an immense success. What
were the reasons for its success? Comment on
the importance of testing and validation in the
automobile industry. What were the main
criticisms against Scorpio?
23

24. Reasons for success
• The robust design of Scorpio was the main attraction of
Indian buyers towards this vehicle
• Use of latest technology
• The affordable pricing was the greatest advantage
• The powerful engine, good seating capacity, the overall
look, the independent front suspension was the other
reasons for the popularity of this vehicle
24

25. Importance of Testing and Validation
• Testing vehicles and components are important to ensure that only
the best combination of form and function remained
• Today, simulations provide a highly conclusive basis for configuring
structures
• But in other domains, like fuel spillage or some of the simulations in
crash testing, they still don’t provide the necessary accuracy
• This is where tremendous importance is still placed on testing,
particularly in terms of validation for satisfying statutory
requirements
25

26. Criticism
• Few criticism raised were:
▫ Amount of outsourcing that went in the making of
Scorpio
▫ Collaboration with Foreign companies
▫ Not Crash Tested
• Despite the shortcomings, Scorpio proved to be a
milestone for M&M and the Indian automobile industry
26

27. Thank You!
27