TAS

Mahindra: The War Room 2010

S. P. Jain Institute of Management & Research, Mumbai
Team: Samarveer
Members: Pranab Kumar Jha, Praneeth Pentakota, Sneha Jhunjhunwala, Sarah Rizvi
Sector: Hospitality
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Agenda
Case Overview
Case Overview

Sector Overview
Sector Details:

Market Opportunity Infrastructure – Hospitality

Leveraging Club Mahindra’s Infrastructure for growth in this sector
Competitor Analysis
Case Details:
Segmentation and Targeting
Traditional mindset of Indian Pilgrimage: Austerity, Self Denial and Giving
Changing mindset of Indian Pilgrimage: Higher need for comfort
Positioning and Value Proposition

Strategy for Execution

Deliverable:

Scalability and Sustainability Strategy and Roadmap for Club Mahindra to lead the pilgrimage market in India
Comprehensive business plan:
Management Team Structure • Locations
• Types of offering
Risks and Mitigation • Marketing Strategy

Financials

Source: Mahindra War Room Cases

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Agenda Sector Overview

Case Overview

Sector Overview

Market Opportunity

Competitor Analysis

Segmentation and Targeting

Positioning and Value Proposition

Strategy for Execution

• Tourism sector in India was valued at US $ 91.7 billion in 2009 and growing at
Scalability and Sustainability 16.4%
• 3rd largest foreign exchange earner in India
Management Team Structure
Growth drivers:
• Increase in Domestic Tourism: 650 million in 2009 and growing at 7%
Risks and Mitigation
• Increase in Foreign tourists: 5.1 million in 2009 and growing at 8.1%
Financials • Affordable Foreign travel: 10.9 million in 2008 and growing at 15.1%
• Infrastructure Augmentation: Better facilities at tourist destinations, airports,
transport
Source: IBEF Tourism Report 2010 [1]
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Agenda
Market Estimation for India
Case Overview
Year 2011 2012 2013 2014 2015
Domestic Tourists (million) 650 715 779 842 901
Sector Overview
Domestic Religious Tourists (million) 98 107 117 126 135
Foreign Tourists (million) 5.0 5.4 5.8 6.3 6.8
Market Opportunity Foreign Religious Tourists (million) 1.3 1.4 1.5 1.6 1.7
Total Religious Tourists (million) 99 109 118 128 137
Competitor Analysis Assumptions: 15% of domestic tourists are pilgrims
25% of the foreign tourists are pilgrims
Segmentation and Targeting

Positioning and Value Proposition

Market Estimation for Club Mahindra - Tourists
Strategy for Execution Year 2011 2012 2013 2014 2015
Club Mahindra Market Share 1% 2% 2% 3% 3%
Scalability and Sustainability Total CM Religious Tourists (million) 0.99 2.17 2.37 3.83 4.10
Premium Category Tourists Share 25% 25% 26% 26% 27%
Premium Category Tourists (million) 0.25 0.54 0.62 1.00 1.11
Management Team Structure
General Category Tourists (million) 0.74 1.63 1.75 2.84 3.00
Assumptions: 1% of the current tourists at Club Mahindra are religious tourists
Risks and Mitigation
Premium Category tourists will comprise of 1% of the total tourists
Financials

Source: Ministry of Tourism India [8]

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Agenda
Competitor Analysis – About the Company
Case Overview
Club Mahindra – Good Living. Happy Families
Sector Overview  Flagship brand of Mahindra Holidays and Resorts India Limited (MHRIL)
 Started in 1996 ; Revenues Rs. 516 Cr in Yr 2010
Market Opportunity  Customer base of 100000+ members & 33 Resorts
 Market leader in timesharing vacation ownership
Competitor Analysis

Segmentation and Targeting Current Strategy

Increase the number of resorts and provide more holidaying options
Positioning and Value Proposition Enhancing service levels to provide customer delight

Strategy for Execution Proposed Strategy

Scalability and Sustainability

Customers Existing Locations New Locations

Management Team Structure Premium Provide new religious tours Tie-ups with other high end hotels to
Category package serve them
Risks and Mitigation

General Buyout economy hotels near the tourist place and rebrand the new
Financials Category hotel with Mahindra Economy Hotels to serve this new customer base

Source: Club Mahindra Website [4]

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Agenda Industry Analysis

Case Overview • Market highly concentrated with local and small travel & tour operators
• No major player in the Pilgrimage tourism market
• Increasing online tour operators and travel agents (Thomascook.in,
Sector Overview coxandkings.com)
• State govt. promoted tourism resorts and packages
Market Opportunity (Rajasthantourism.com, kerlatourism.com, etc)

Major Competitors in holiday segment and Pilgrimage market

Competitor Analysis Country Club
55 owned properties, 25 affiliated clubs, 72 franchise clubs
Segmentation and Targeting Revenue 2009 – Rs 403 crores ; PAT Rs 65 crores
Members over 170000+

Positioning and Value Proposition

Make My Trip Consolidated Revenue 2010 – Rs 835 crores
Revenue Rs 250 crores from booking of hotels and tour
Strategy for Execution packages (including pilgrimage packages)
109,000 hotel and package bookings done during 2009-
1010 ; 25 % YOY increase
Scalability and Sustainability
Thomas Cook
Management Team Structure Revenue £ 9.2 billion, Net Income £18.3 million
31000 employees, Packaged holidays across the globe

Risks and Mitigation

Cox and Kings
Revenue Rs. 400 crores, Net Income 133 crores
Financials Packaged holidays across the globe

Source: Vccircle.com Website

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Agenda Hard core
Tourists
interested in Secular
Stage in Life Characteristics
pilgrims religious Tourists
places
Case Overview
Few financial
Young: not living burdens-highly
Bachelor
Sector Overview at home recreation
oriented

Initially financially
Market Opportunity Newly married No children
well off-more
vacation
purchasing
Competitor Analysis Youngest
Full nest-stage 1 children Travel restricted
under 6
Segmentation and Targeting
Youngest Finances improving-
Full nest-stage 2 children some family
over 6 holidays
Positioning and Value Proposition
TARGET SEGMENT
Older married
Vacations just one
with
Full nest-stage 3 part of the
Strategy for Execution dependent
purchasing mix
children

Older married-no Optimum financial

Scalability and Sustainability Empty nest-stage 1
children at position. Strong
home, still vacation
working purchasing
Management Team Structure Vacations decline-
Older married
Empty nest-stage 2 depending on
retired
finances
Risks and Mitigation
Purchasing power
Solitary Survivor Still working
high-may travel
Financials Package tour
options-security
Solitary Survivor Retired
sociability
needs high
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Agenda Positioning

Case Overview “Hassle free and Comfortable Pilgrimage “

Sector Overview
Value Proposition

Market Opportunity Membership

Club Mahindra
Competitor Analysis

Segmentation and Targeting Zest

Accommodation Pilgrimage
Positioning and Value Proposition Specific

Strategy for Execution

Travel between The members of club

Scalability and Sustainability Darshan places Mahindra and Zest need to
pay for the Travel between
Management Team Structure places and Darshan where as
the Pilgrimage specific
membership covers all
Risks and Mitigation

Financials
Mix the package with Pilgrimage places and holiday places
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Agenda
Value Proposition – Pilgrimage Specific Offerings
Case Overview
Short Tours Long Tours
Sector Overview (< 5 days) (>= 5 days)

Market Opportunity

Brand A Premium Customers – Resort facilities at

Competitor Analysis Customers Club Mahindra / Premier Hotels, VIP
Passes, Helicopter rides
Segmentation and Targeting
Brand B General Customers - Economy Hotels,
Positioning &Value Proposition Customers normal darshan facilities, affordable pricing

Strategy for Execution

Brand C Special Customers – Only for foreigners and senior
Scalability and Sustainability Customers citizens, Resort facilities at Club Mahindra /
Premier Hotels, special passes for darshan

Management Team Structure

Loyalty Card

Risks and Mitigation Points are redeemable in the form of a holiday coupon at a Mahindra resort on the next trip
Maintain a database also and can get back to them if no activity on their card for long
Plus benefits of life-stage marketing - Can offer them the senior citizen package later on
Financials
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Agenda
Strategy for Indian Pilgrimage tour
Case Overview

Sector Overview Ansoff Matrix Exiting Product New Products

Market Opportunity
Club Mahindra existing Club Mahindra existing
Competitor Analysis premium members for premium customers will now get
Existing Market holidaying the benefit of religious tours
Segmentation and Targeting
Tie-ups with premier Economy hotels in new places
hotels would provide would attract the general
Positioning &Value Proposition New Market
holidaying facilities in new category customers
places
Strategy for Execution

Scalability and Sustainability North India Packages South India Packages

Management Team Structure Dhaam Yatra A – Gangotri, Yamunotri Tirupati

Dhaam Yatra B – Kedarnath, Badrinath Chennai
Charo Dhaam Package Trichy
Risks and Mitigation Vaishno Devi Madurai
Haridwar, Varanasi Kanyakumari
Rishikesh, Amarnath Rameshwaram
Financials
Puri Shirdi
TAS Current Club
Mahindra Resorts
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Agenda
Strategy for Indian Pilgrimage tour
Case Overview
Mahindra resorts should be available at the below places
Sector Overview North India South India

Market Opportunity Vaishno Devi Tirupati

Trichy

Competitor Analysis

Mahindra resorts should make tie-ups at the below places

Segmentation and Targeting

North India South India

Positioning and Value Proposition
Puri – Mayfair, The Chariot, Coco Palms Chennai - Accord Metropolitan, GRT
Strategy for Execution Haridwar – Classic Residency, Country Grand Days, Ambassador Pallava
Inn

Scalability and Sustainability

Mahindra resorts should acquire Economy Hotels at the below places
Management Team Structure
North India South India
Risks and Mitigation
Guwahati Srisalem
Imphal
Financials Ajmer
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Agenda Scalability
Religious Expansion –
Case Overview
Current tourists targeted are mainly the Hindus – highest business opportunity
Sector Overview This tourist base will then be expanded into other religion tourists as well:
• Muslims
• Sikhs
Market Opportunity • Christians
• Parsis
• Jains
Competitor Analysis
Geographical Expansion –
Segmentation and Targeting Current religious tourist destinations are present only in India
These destinations will be expanded into abroad locations:
Positioning and Value Proposition
Hindus – Cambodia, Indonesia
Christians – Vatican City, Italy
Strategy for Execution Muslims – Saudi Arabia

Sustainability
Scalability and Sustainability
• The demand for religious places is going to stay and numbers will keep growing
• New places get added to the current religious places and provide scope of
Management Team Structure expansion
• With greater comfort during such trips the tourists would want to visit more often
Risks and Mitigation
Technology
Extend CRM and Property management solutions to the new business for –
Financials • Lean operations and better capacity utilization
• Track customer preferences ,customize, suggest and educating on tours
• Increase wallet share per customer
• Customer profiling and like marketing
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Agenda
Management Team
Case Overview

Sector Overview
Club Mahindra,
Club Mahindra, CFO Club Mahindra, HR
CEO
Market Opportunity

Competitor Analysis

Segmentation and Targeting

Positioning and Value Proposition President,

Resorts
Strategy for Execution

Scalability and Sustainability

Management Team Structure

Risks and Mitigation

Financials
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Agenda
Risks and Mitigation
Case Overview
Risks Mitigation
Sector Overview
Customers associating the premium factor The marketing communication needs to
with Club Mahindra Economy hotels be proper to the general category
Market Opportunity
Current operators could revolt against Need to see that the current operators
such a massive move also get a role in the new setting
Competitor Analysis
Some cannibalization due to setup of new The target segments for both the
economy hotels in new locations offerings should be properly addressed
Segmentation and Targeting

Positioning and Value Proposition

Five Year Growth Plan
Strategy for Execution

Scalability and Sustainability

2011 2012 2013 2014 2015

Management Team Structure Establish Expand into Enhance Open Enhance

new smaller but service religious service
economy popular offering to tourist offerings by
Risks and Mitigation hotels and religious other hotels integrating
form tie-ups tourist religions in abroad at domestic
Financials with high places in India economical and foreign
end hotels India rates destinations
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Agenda
Financials – Revenue Estimation
Case Overview
Year 2011 2012 2013 2014 2015
Sector Overview Premium Category Tourists (million) 0.25 0.54 0.62 1.00 1.11
Brand A Category Tourists (million) 0.15 0.33 0.37 0.60 0.66
Brand C Category Tourists (million) 0.10 0.22 0.25 0.40 0.44
Market Opportunity

General Category Tourists (million) 0.74 1.63 1.75 2.84 3.00

Competitor Analysis
Brand B Category Tourists (million) 0.74 1.63 1.75 2.84 3.00

Segmentation and Targeting

Revenues from Brand A Category (Rs. million) 296 652 739 1196 1330
Revenues from Brand B Category (Rs. million) 741 1629 1752 2838 2996
Positioning and Value Proposition
Revenues from Brand C Category (Rs. million) 148 326 369 598 665

Strategy for Execution

Total Revenues from Religious Tourists
(Rs. million) 1185 2606 2860 4633 4990
Assumptions
Scalability and Sustainability
Average ticket size of Brand A Customer Rs. 2,000
Management Team Structure Average ticket size of Brand B Customer Rs. 1,000
Average ticket size of Brand C Customer Rs. 1,500
Risks and Mitigation
60% of Premium category tourists are Brand A category tourists

Financials

Source: Annual Report, Club Mahindra [2]

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Agenda Financials - Investment

Case Overview Year 2011 2012 2013 2014 2015

Total CM Religious Tourists (million) 0.99 2.17 2.37 3.83 4.10
Premium Category Tourists (million) 0.25 0.54 0.62 1.00 1.11
Sector Overview
General Category Tourists (million) 0.74 1.63 1.75 2.84 3.00
No of members/apartments Premium Category 88 158 173 260 273
Market Opportunity No of apartments required Premium Category 2819 3444 3549 3833 4057
No of new apartments reqd Premium Category 1343 626 105 284 224
Percentage Share with Other Premier Hotels 60% 50% 30% 30% 30%
Competitor Analysis
Occupancy Shared with Premier Hotels 806 313 31 85 67
No of new apartments to be built by CM 537 313 73 199 157
Segmentation and Targeting No of Club Mahindra resorts to come up 12 7 2 4 4
No of members/apartments General Category 300 540 541 757 758
Positioning and Value Proposition No of apartments required General Category 2469 3017 3241 3750 3955
No of new apartments reqd General Category 2469 548 224 509 205
No of new economy hotels to come up 25 5 2 5 2
Strategy for Execution
Assumptions
Scalability and Sustainability
Number of resorts 33
Memberships 109884
Management Team Structure No of apartments 1476
Occupancy Rate 85%
Risks and Mitigation Total occupied apartments 1255
No of Members/apartments 88
No of apartments/resort 45
Financials
No of apartments/economy hotel 100

Source: Annual Report, Club Mahindra [2]

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• Triple bottom line approach for sustainability

• Strengthen the operational and financial controls within the organisation
• Scalability - Reduce tie ups and build own hotels , Increase occupancy
rate
• Mention of Sales and distribution
• Mention of membership package is very important – 10yr – 25yr
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References

1. http://www.ibef.org/download/Tourism_Hospitality_060710.pdf

2. http://www.clubmahindra.com/IR_files/Annual_Report_09-10.pdf

3. http://www.clubmahindra.com/images/Media_Press/FE-Fun%20has%20just%20begun.pdf

4. http://www.clubmahindra.com/aboutus.asp

5. http://www.clubmahindra.com/images/Media_Press/HBL3.jpg

6. http://www.clubmahindra.com/images/Media_Press/FE_Brand_Wagon.jpg

7. http://www.india-tourism.com/en_links.0.html

8. http://tourism.gov.in/

9. http://www.incredibleindia.org/newsite/pdf/domestic_tour_operator_Guidelines.pdf

10. http://www.incredibleindia.org/newsite/pdf/Travel_Agents_guideline.pdf