Choosing Innovation Projects

The Mahindra Shaan: Gambling on a Radical Innovation

Mahindra Tractors, the Farm Equipment Sector of the Mahindra & Mahindra Group in India is one of the world’s largest producers of tractors. a In the late 1990’s, over 20 percent of Indian’s gross domestic product came from agriculture and nearly 70 percent of Indian workers were involved in agriculture in some way. b However, seasonal rainfall meant that Indian farmers only used tractors for farming purposes about one-third of the year. The rest of the year they would use the tractors for personal transportation and to haul goods to earn extra income. Many farmers made modifications to their tractors to make them more useful as transporters. Furthermore, a large number of farmers had plots so small—perhaps 1–3 hectares—that it was difficult to raise enough funds to buy any tractor at all. Managers at Mahindra & Mahindra sensed that there might be an opportunity for a new kind of tractor that better served this market.

R.N. Nayak, R&D Manager at Mahindra & Mahindra (and a person well-known as a maverick that tended to break with company norms) began developing a prototype for a radical product concept he called the “Sactor”—a hybrid between a transporter and a tractor that farmers could use on and off the farm. Nayak believed that innovators should always start out with an attempt to gain deep insight into a customer problem through extensive observation rather than financial or technical analysis—too much analysis would stifle innovation. As he stated it, “start with the pictures not with the numbers.” c

In just over a year, he had developed a prototype of the futuristic looking vehicle. It had smaller tires than a typical tractor that would be better for driving on roads. It also drew from the aesthetics of the Jeeps Mahindra & Mahindra made in their automotive division. No marketing studies had been conducted and sales people were reluctant to support the new vehicle, particularly since Indian farm equipment market was in a deep downturn due to repeated droughts and excess tractor inventory. Nayak himself was unsure of how customers would react to the trade-offs that had been required to produce the economically priced page 130hybrid—after all, it would have lower farming performance than Mahindra & Mahindra’s other tractors. To make matters worse, even after 15 production prototypes had been built, the Sactor had technical problems that needed to be resolved. Frustrated with the project’s slow progress, Nayak left Mahindra & Mahindra.

Nayak’s departure could have meant the death of the project, however Sanjeev Goyle, Head of Mahindra & Mahindra’s Farm Equipment Sector was intrigued by the project, deeming it the “perfect confluence of M&M’s two core strengths: Jeeps and tractors.” His prior experience at American Home Products (healthcare) and Piaggio (motor scooters) made him realize how important dramatic innovation could be for a company. He felt that the company’s existing farm equipment lines were too similar to those of competitors; innovation had been too incremental and the products appealed primarily to older farmers. He wanted a way to invigorate the product line up and the brand. As he noted, “My background in fast-moving consumer goods and motor scooters makes me a firm believer that new products and innovation can create a new aura in brands and make the brands appear to be on the move.”The assignment due date is November 6th/ Please read the instructions carefully/

ALL Projects papers are to be APA format and research References must be included/