Mahindra War Room 2013

First Choice Services

MAHINDRA AFTER MARKET SECTOR FIRST CHOICE SERVICES BUSINESS CASELET Mahindra After Market Sector comprises 2 companies - Mahindra First Choice Wheels, where multi-brand, pre-owned cars can be bought and sold, and Mahindra First Choice Services (MFCS), which offers a wide range of Automotive repair and service solutions under one roof. This caselet pertains to the Mahindra First Choice Services business. BUSINESS BACKGROUND Established in 2008, Mahindra First Choice services is a one-stop shop for automotive repair and service. With 17 service centres in 10 locations across India as on date, Mahindra First Choice Services expects to double their outlets to 30 by the end of the year. All these outlets are Company Owned and Company Operated (COCO). In addition to this, Mahindra First Choice expects to add about 30 more outlets through the Franchise route, creating a 50-outlet strong services operation by the end of this year. There are further expansion plans to create an operation of 50 COCOs and 100 Franchisees by end of next year and grow by around 100 Franchisees every year from then on. Mahindra First Choices strategic choices so far are beginning to pay off, with growth in revenue, footfalls and conversions seen in all existing outlets. With a strong pipeline of outlets under various stages of opening, the overall business and growth model is falling in place. Mahindra First Choice is also doing signicantly better compared competitors, who invested in large-format workshops, as against Mahindra First Choices 15-bay workshop format with abundant parking space. This model has protected MFCS from the nancial challenges faced by some competitors, whose capital is locked in large, underutilized service centres. LIVE BUSINESS CHALLENGE: INNOVATING ON THE FRANCHISEE MODEL MFCS has consciously chosen to grow through the Franchisee route - an option tried out by few competitors with limited success. Considering the experience of competitors, should Mahindra First Choice adopt the traditional franchisee model, or a different model taking total control, similar to quick service restaurant chains like McDonalds? The latter will be a disruption to the Industry norm, but will it succeed? How should MFCS go about implementing this? What if Mahindra First Choice insists on total control of all aspects of the operation - even supplying Spare Parts - and monitor operations through SAP? Is COFO (Company Owned, Franchisee Operated) the right model or FOCO (Franchisee Owned, Company Operated) or FOFO (Franchisee Owned and Franchisee Operated) chosen by MFCS? Please assess these optional models in detail, and based on research and analysis, recommend a way forward for MFCS. Also, the growing services industry is facing threat of OEMs who plan to increase their warranty periods to enhance their hold on the customer this could adversely impact MFCS expansion plans. How should Mahindra First Choice respond to this threat? MFCSs current brand promise is based on Speed as more outlets being geared to offer speed, MFCS is condent that their customers will feel the difference in a year from now. Is this the real, right position for Mahindra First Choice, or is there an alternate position that is more attractive, credible and differentiated?
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