Deccan Sales & Services Private Limited: How to Compete with a Bigger Brand?
Code : MM0081 |
Region : Asia |
||||
 |
 |
 |
 OR |
||
|
A NOTE ON HEAVY CONSTRUCTION EQUIPMENT INDUSTRY: In India, the heavy construction equipment industry had witnessed a 32% growth between 2013 and 2019 due to the advent of the backhoe loader (a bucket attached to a hinged boom), a new-age piece of earthmoving equipment. The backhoe loader consisted of a tractor like unit fitted with a loader-style shovel/bucket at the front and a backhoe at the back (Refer to Figure I). It could be used for a wide variety of tasks such as small demolitions, light transportation of building material, digging holes/excavation, landscaping, and breaking asphalt and paving roads. The heavy construction equipment industry was therefore highly dependent on the backhoe loader. It contributed to 40% of the overall sales of the entire heavy construction equipment industry. It was even forecast by industry experts that the sale of backhoe loaders would expand in the next 5 years i.e. (2020-2025)... |
|
| For Case Books
Click Here >> For Case eBooks Click Here >> |
|
ABOUT DECCAN: Deccan was established in the year 1996. It had 850+ technical and non-technical employees working at more than 40 client locations. The company’s vision was to make a positive difference in the lives of all its stakeholders by providing world class after-market service. Deccan was an authorized distributor of various known brands like Cummins, Mahindra, Wipro, Voltas, Bosch, L&T, and Fleetguard. It had headquarters in Indore, Madhya Pradesh, and offices in the states of Gujarat and Rajasthan. The company earned a profit of Rs 1 billion every year...
TAKING ON THE LEADER: Chitranshi called a meeting on July 5, 2015, with all the employees of the Marketing & Sales department and set a target of achieving a 50% market share in the backhoe loader market of Madhya Pradesh by 2019. The company made a list of competitors in which it considered JCB at the top, followed by other players such as Caterpillar, Terex, Bull, CASE, Escort, Volvo, Komatsu, and ACE. The main agenda of the company was to capture the JCB Backhoe Loader’s market share...
MARKET RESEARCH: Chitranshi hired Patel (an MBA intern) on February 22, 2020, for three months till May 22, 2020, to conduct market research to identify the main reasons behind the company’s failure to achieve a 50% market share in the backhoe loader market of Madhya Pradesh. Patel was told to complete the market research within 3 months. Patel started working on February 23, 2020 – the first day of his joining. He tried to understand the various initiatives taken by the company from the year 2015 to strengthen its position in the market. He also gathered information about Mahindra’s Earth-Master Backhoe Loader and its major competitor i.e. the JCB Backhoe Loader. Patel realized that Deccan had missed an important element in its endeavor to increase its market share and that was understanding consumer behavior. ..
THE FINDINGS: Patel’s analysis showed that the JCB Backhoe Loader was the strongest on each factor of brand selection and purchase decision that had been considered for testing. All the factors of brand selection were found to be significant in determining the purchase decision of the JCB Backhoe Loader. Patel’s report stated that the measures taken by Deccan from 2015-2019 had failed because of customers’ extreme trust in JCB that had been built over many years...
PATEL’S RECOMMENDATION: Patel was aware that Deccan had incurred Rs 60 million in the last five years on marketing and other expenses. Deccan was already fighting for profitability in the Mahindra segment and the company had also borrowed money from other dealership segments to meet its expenses (Refer to Table VII). Patel recommended that Chitranshi close down the Mahindra dealership. ..
ROAD AHEAD: • To continue making serious efforts to gain market share in the Backhoe Loader market in Madhya Pradesh, with a definite plan to capture a 50% market share during the period 2020-2024..
Related Case Studies
- »Satyam Computers Corporate Governance Fiasco (A): Siblings Are Dearer Than Shareholders?
- »Satyam Corporate Fiasco (B): The Role of Independent Directors
- »Satyam Corporate Fiasco (C): CEO Confesses, Company Collapses
- »Satyam Computers Corporate Governance Fiasco (D): Government Intervenes, Perplexity Prevails
- »Satyam Computers Corporate Governance Fiasco (E): New CEO's Known Problems, Unknown Solutions
Recently Bought Case Studies
