As Mahindra plans to launch itself into the two wheeler American market, it makes it

imperative to discuss about the need for it to reinvent its existing business model as
it enters a new segment. In order to meet the needs of a larger proportion of the
population who desire a different means of transport to get around the congested
city, it has developed an electric scooter which is aggressively priced at $3000
which is inexpensive than a car and competitively priced with other gas-powered
scooters.
There appears to be a huge
potential for the electric vehicle
market within the U.S. due to
raising environmental concerns
and the fluctuations in the oil
supplies and prices. This new
venture by Mahindra, GenZe
has been termed as white-
space innovation and it caters
to the unmet need of having an
efficient electric vehicle at a
reasonable cost. It is a 210-
pound electric scooter which
can travel up to a minimum of 30 miles at a speed of up to 30mph in a single
charge. It is trying to occupy the sweet-spot which lies vacant between the bicycles
and vehicle sharing services. This concept is completely novel in a country where
major dependence is on carbon-fueled vehicles at 88% unlike in India where it is at
6% as a majority of the populace likes to go about on a two wheeler. It has also
come up with an ad campaign of Show Me the City in the states of Oregon,
Michigan and California to promote their product. This new division of GenZe has
been classified as a startup within the established structure of Mahindra and has
been setup as a separate base in the Silicon Valley in the U.S. to tap into the
entrepreneurial mindset. It has strong competition from Germanys GOVECS in the
electric scooter segment and from Italys Vespa in the gasoline-powered scooter
segment and from vehicle sharing service provider like Zipcar, so the price tag as
well as the novel solution for mobility is what can be classified as requirements to
play the game and to make the market grow as a whole. As one of the condition for
reinventing a successful business model arises when there is an opportunity to
address the needs of a larger population through disruptive innovation who have
been shut out of the market due to the expensive solutions on offer or their
complicated nature of usage. Here, the electric scooter is a disruptive innovation in
a new and emerging segment in a developed economy which would be addressing
its customers need for mobility in a new way.
Mahindra is also spreading out in the
emerging economies of Africa apart
from South Africa where it already has
an office and small assembly bases in
Chad and Mali for tractors. It has
chosen Nigeria, Egypt and Kenya as
the three new bases based on their
volume potential, ease of doing
business, political stability and the
companys current presence in the
respective countries. It will be led by
Mr. Ashok Sharma who is on the
groups executive board and is also the
president of the agriculture business at
M&M. This separate African arm of the
firm would look entirely into the
emerging markets in the continent in
an integrated manner. It would be acting as an internal distributor for its business
group from two wheelers to tractors instead of each of its business verticals i.e. the
Utility Vehicles, tractors, gensets, two wheelers and trucks trying to explore their
potential individually. It would be trying to understand the local requirements and
provide more customized products which are more user friendly and convenient.
The approach through this new business model in a new continent is aimed at
providing synergies in distribution, supply chain, spare parts, branding, service
advertising and in helping dealers become more viable. The plan is to make the
African unit as a virtual distributor rather than having the independent segments
approaching the market independently. It becomes crucial to have a new business
model for a new market which is unrelated to the domestic market as the rules of
the game in a new domain and in a new geography are prone to be completely
different than those of the home market. These African ventures would also include
potential JVs and strategic alliances being formed with the local companies in the
concerned countries. The route being chosen for a deeper African continent
penetration is through the traditional hub-and-spoke model which would lay
emphasis on localized geographical hubs emerging for the business group and each
business will begin from different hubs and gradually expand in the geographies
adjacent to it in a gradual and streamlined manner.

Mahindra has also entered into the rural Indian market with a new and re-invented
business model for the farmer community by the name Trringo. Under this new
model, the firm is trying to cover and bridge the gap for farmers who have limited
resources by providing them access to the necessary farm equipment and tractors
on rent. It is trying to bank upon the farmers convenience to get ready access to the
crucial equipment for their operations by just making a phone call. It addresses the
latent and unaddressed needs of the farmers who seem to have limited contacts for
hiring the tractors and the farm equipment at a crucial time thus they end up in a
 relatively poorer
state. With this
reinvented business
model in place, the
farmer would not have
to face any sort of
discrimination and
neither would have to
wait for arranging the
equipment during the
peak season. This
venture is seen as a
new age startup
company which would
be based on a
franchisee model. It calls upon the need to reinvent the existing business model as it seeks
to address a new market segment to increase the farm mechanization which has
traditionally been low. The firm aims at laying a pivot role in enabling the farmers to
improve their productivity by providing accessible technology. Its motive is to revolutionize
the agriculture sector by becoming a partner in the lives of the farmers to promote success
and growth. The Trringo farm equipment rental business model will enable farmers to deploy
mechanization technology on a pay per use basis without investing in the asset. This will
increase their output and prosperity and lead to the inclusive growth of the farmer
community.

Mahindra had also acquired a majority stake

in Peugeot Motorcycles (PMTC) and is
working on expanding its presence beyond
Europe by venturing into the adjacent North
African markets as well as in Vietnam. The
two wheelers lie in the premium segment
and thus see potential markets in China as
well as in India. However, since this
approach would be based on margins for a
country like China, for India the plan is to
reduce the cost of the two wheeler so that a
volume game can be played to increase the
profit for the firm. This calls for a tweak in
the existing business model as it seeks to
enter into a two wheeler market within the home country where it has long been associated
as a sports utility vehicle and a heavy vehicle manufacturer.
 Mahindra has recently invested
into the Formula E racing which
is for high performance electric
cars and sees participation from
firms like Audi, Renault, etc.
Mahindra aims at being the low
cost answer to Tesla and is
eager to become a global brand.
It plans on using its existing
expertise in building low cost
cars in emerging economies for
the newer markets. Joining the
FIAs Formula E circuit could
also help share the significant
investment the race series is making in electric-vehicle technology. That kind of
collaborative environment has been lacking in India which it could explore at a
global level. Mahindra has also launched the city car in London, with hopes that the
subcompact could become a potential launch pad to the more mature Western
markets that have been hard to crack with Indian vehicles carrying conventional
powertrains. As it is entering into a new disruptive technology thus there is also a
need for it to reinvent its existing business models as not only the markets but also
the nature of the industry is changing along with its acquisition of new capabilities
in the electric segment which as of now appears to hold significant promise in the
years to come.

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