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Harvard Case - Ather Energy: Riding the Electric Vehicle Tide

"Ather Energy: Riding the Electric Vehicle Tide" Harvard business case study is written by Anshuman Tripathy, Amey Sahasrabuddhe, Indrasis Bose. It deals with the challenges in the field of Operations Management. The case study is 23 page(s) long and it was first published on : Sep 1, 2018

At Fern Fort University, we recommend Ather Energy prioritize a multi-pronged strategy to solidify its position as a leading player in the burgeoning electric vehicle market. This strategy encompasses enhancing operational efficiency, expanding its product portfolio, and strengthening its brand presence. We believe that by focusing on these key areas, Ather Energy can effectively navigate the challenges and capitalize on the opportunities presented by the rapidly evolving electric vehicle landscape.

2. Background

Ather Energy is an Indian electric scooter manufacturer founded in 2013. The company has gained significant traction in the Indian market with its innovative and technologically advanced scooters. However, Ather Energy faces challenges in scaling its operations, managing its supply chain, and competing with established players in the market.

The case study focuses on the company's efforts to overcome these challenges and achieve sustainable growth. The main protagonists of the case study are:

  • Tarun Mehta: Co-founder and CEO of Ather Energy, responsible for the company's overall vision and strategy.
  • Swapnil Jain: Co-founder and CTO of Ather Energy, responsible for product development and technology innovation.
  • The Ather Energy Team: The dedicated team of engineers, designers, and marketing professionals working to build and promote the company's electric scooters.

3. Analysis of the Case Study

This case study can be analyzed using the Porter's Five Forces Framework, which helps understand the competitive landscape and identify opportunities and threats.

Competitive Rivalry: The electric scooter market in India is highly competitive, with established players like Bajaj Auto and TVS Motor Company entering the market.

Threat of New Entrants: The low barriers to entry in the electric vehicle market pose a significant threat, with new players constantly emerging.

Threat of Substitutes: The availability of traditional gasoline scooters and motorcycles presents a strong threat of substitutes.

Bargaining Power of Buyers: Consumers have a wide range of choices in the electric scooter market, giving them significant bargaining power.

Bargaining Power of Suppliers: The dependence on a limited number of suppliers for key components, such as batteries, gives suppliers considerable bargaining power.

Key Findings:

  • Operations Strategy: Ather Energy's current manufacturing process is constrained by limited capacity and inefficient production planning.
  • Supply Chain Management: The company faces challenges in managing its supply chain, particularly in procuring critical components like batteries.
  • Product Development: While Ather Energy's scooters are technologically advanced, the company needs to develop a wider range of products to cater to diverse customer needs.
  • Marketing: Ather Energy needs to enhance its brand awareness and reach a broader customer base to compete effectively.
  • Financial Sustainability: The company requires significant investments to scale its operations and achieve profitability.

4. Recommendations

1. Enhance Operational Efficiency:

  • Implement Lean Manufacturing: Adopt lean manufacturing principles to optimize production processes, reduce waste, and improve efficiency. This includes value stream mapping, bottleneck analysis, and Kaizen initiatives.
  • Optimize Supply Chain: Implement a robust supply chain management system to ensure timely procurement of components and minimize inventory holding costs. This involves demand forecasting, Materials Requirements Planning (MRP), and Just-in-Time (JIT) production.
  • Capacity Planning: Invest in capacity planning to anticipate future demand and ensure sufficient production capacity. This includes aggregate planning and flexible manufacturing systems.
  • Process Improvement: Employ Six Sigma and Total Quality Management (TQM) methodologies to identify and eliminate process inefficiencies and improve product quality.
  • Outsourcing Decisions: Strategically evaluate outsourcing opportunities for non-core functions to reduce costs and focus on core competencies.

2. Expand Product Portfolio:

  • Product Development: Develop a wider range of electric scooters to cater to diverse customer needs and price points. This includes focusing on product differentiation, innovation, and customer feedback.
  • Product Distribution: Expand distribution channels to increase market reach and accessibility. This includes partnering with retailers, establishing online sales platforms, and exploring international business opportunities.
  • Product Lifecycle Management: Implement a comprehensive product lifecycle management system to manage product development, production, and end-of-life processes.

3. Strengthen Brand Presence:

  • Marketing: Develop a comprehensive marketing strategy to increase brand awareness and drive customer acquisition. This includes leveraging digital marketing, social media, and influencer marketing.
  • Customer Experience: Enhance the customer experience through exceptional service, personalized interactions, and a strong brand identity.
  • Community Building: Engage with customers and build a strong community around the Ather Energy brand. This includes organizing events, forums, and social media groups.

5. Basis of Recommendations

These recommendations are based on a thorough analysis of the case study and consider the following factors:

  • Core Competencies: The recommendations align with Ather Energy's core competencies in technology and innovation, focusing on enhancing its operational efficiency and product development capabilities.
  • External Customers: The recommendations address the needs and preferences of the target customer base by expanding product offerings and improving customer experience.
  • Internal Clients: The recommendations aim to empower internal teams by providing them with the necessary tools, resources, and support to achieve their goals.
  • Competitors: The recommendations consider the competitive landscape and aim to differentiate Ather Energy from its competitors by focusing on operational excellence, product innovation, and brand building.
  • Attractiveness: The recommendations are expected to enhance the company's financial performance by increasing revenue, reducing costs, and improving profitability.

6. Conclusion

Ather Energy has the potential to become a leading player in the electric vehicle market. By implementing the recommended strategies, the company can enhance its operational efficiency, expand its product portfolio, and strengthen its brand presence. This will enable Ather Energy to navigate the challenges and capitalize on the opportunities presented by the rapidly evolving electric vehicle landscape.

7. Discussion

Alternatives:

  • Focus solely on the domestic market: This approach could limit the company's growth potential and expose it to increased competition.
  • Acquire a competitor: This could provide a quick entry into new markets and expand the product portfolio, but it carries significant financial and integration risks.

Risks:

  • Technological disruption: Rapid advancements in battery technology could render existing products obsolete.
  • Competition: The entry of new players and established automotive manufacturers could intensify competition.
  • Regulatory changes: Government policies and regulations related to electric vehicles could impact the company's operations.

Key Assumptions:

  • The electric vehicle market will continue to grow at a rapid pace.
  • Ather Energy will be able to secure the necessary funding to implement its growth strategy.
  • The company will be able to overcome the challenges associated with scaling its operations.

8. Next Steps

  • Develop a detailed implementation plan: Outline specific actions, timelines, and resources required to implement the recommendations.
  • Establish key performance indicators (KPIs): Track progress towards achieving the desired outcomes.
  • Regularly review and adjust the strategy: Adapt to changing market conditions and emerging opportunities.

Timeline:

  • Year 1: Implement lean manufacturing principles, optimize supply chain, and launch a new product.
  • Year 2: Expand distribution channels, invest in marketing, and build a strong customer community.
  • Year 3: Explore international expansion opportunities, focus on product innovation, and achieve profitability.

By taking these steps, Ather Energy can position itself for long-term success in the dynamic electric vehicle market.

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Case Description

This case introduces the readers to information regarding the organization building journey of Ather Energy, an Indian start-up in the electric vehicle (EV) industry and the entrepreneurial journey of its founders. The case deals with challenges that Ather Energy faces as it works to bring its product, a two-wheeler EV, to market, adopting practices that were against the established industry norms (the internal combustion engine vehicles). The case outlines the overall environment of the EV industry across the world and in India, discussing key areas like government interventions, major existing players in the EV industry and key developments that have transpired over the past years. It then traces the journey of Ather Energy and its founders, focusing on the key phases through which it traversed as it grew from a two-membered start-up basis out of an incubator to a 350+ firm working to ensure that their product has a hassle-free entry into the market. The case outlines the background of the founders, their learnings on the course of developing their product, and the challenges faced in various stages of developing the product. The envisaged sustainability of Ather Energy and its product are then discussed, along with the challenges envisaged.

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