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STRATEGIC ANALYSIS OF MAHINDRA & MAHINDRA

Submitted to: Submitted by:


Aniveshika Singh
Arun Tripathy
Anshuman Pandey
Apoorv Bhargav
Harshavardhan
Sushma Balakrishnan
Contents
INTRODUCTION: ............................................................................................................................................ 3
BUSINESS ................................................................................................................................................... 3
Strategic Management Process ................................................................................................................ 3
STRATEGIES ................................................................................................................................................... 3
EXTERNAL ANALYSIS ..................................................................................................................................... 4
Key Success Factors....................................................................................................................................... 5
PEST ANALYSIS OF MAHINDRA & MAHINDRA .............................................................................................. 5
POLITICAL FACTORS .................................................................................................................................. 5
ECONOMIC FACTORS ................................................................................................................................ 5
SOCIAL FACTORS ....................................................................................................................................... 5
TECHNOLOGICAL FACTORS ....................................................................................................................... 5
Internal Analysis of Mahindra & Mahindra................................................................................................... 6
RESOURCE-BASED VIEW: .......................................................................................................................... 6
Value Chain Analysis ................................................................................................................................. 7
COMPETITOR ANALYSIS ................................................................................................................................ 9
CHALLENGES FACED BY MAHINDRA & MAHINDRA .................................................................................... 11
CONCLUSION & RECOMMENDATIONS ....................................................................................................... 11
References: ................................................................................................................................................. 12
Introduction:
The company was set up in the year 1945 by the name Mahindra and Mohammed. Later, Mohammed returned to
Pakistan and the name of the company was changed to Mahindra and Mahindra. Initially, the company was known
for doing the assembly of iconic Willis jeep in India. In the later stage, the company started the manufacturing of
tractors, commercial vehicles. At present, Mahindra & Mahindra is the largest SUVs maker in India.

Business
Mahindra & Mahindra is the largest manufacturer of tractors in the world. They have sustained themselves in the
market for 25 years. Mahindra tractors have one of the manufacturing plant situated in China. This plant is
responsible for exporting the tractors to the USA and other countries. In April 2002, they launched Scorpio and
made their entry into the SUV segment. Later they also made an entry into the heavy truck segment with Mahindra
Navistar. Later they launched many cars such as Mahindra Xylo, XUV5OO.

Strategic Management Process


1. The first step of the strategic management process is the formation of a discreet strategy.
2. In the second step, the strategy that is formed is aligned with the mission and vision of the company.
3. In the third step, the analysis of the strategy is done. In this analysis, the various opportunities and threats
are identified.
4. After identifying the various threats and opportunities, Long-term objectives are taken into consideration
that is how the strategy is going to affect their long-term objectives.
5. There is a possibility that the strategy that they have thought may fail so an alternative strategy is prepared
simultaneously.
6. The last step in Strategic Management process is that among the various available strategies, the one which
is most feasible is selected and implemented.

STRATEGIES
The various strategies which are adopted by Mahindra & Mahindra are as follows-
1) Good Quality and Low price- This strategy were one of the most effective strategies to tap the customers
of India. It was found out that the customers expect from the company to offer a good quality product at
a lower price than their competitors. In India, even there is a very small drop in the price, then many new
people start buying your product. Taking this factor into consideration Mahindra & Mahindra use this
strategy and they provided good quality of product at the very low price.
2) Niche Marketing- To tap their potential customers Mahindra and Mahindra has used various strategies.
They did the marketing on social media through Facebook, google plus, YouTube etc. These strategies
were responsible for 4% growth in the sales of Mahindra and Mahindra.
3) Acquisition Strategy- Whip on a report M&M dozen odd acquisitions in the automobiles and oblique
sectors everywhere the past 8 years can tempt you to notice for a single thread that ties up them together.
As smoothly as sectors go they are individualistic, absolute and they are determined by their size logic.
They have contracted for disparate companies like Reva electric motors. Most of the ancillary engagement
in activity application are companies acquired when they had bottomed inaccurate, were in precarious
straits and picked up by M&M at a profitable prize. In July 2016, they have acquired Pininfarina. Now
they have convinced that they will be dealing their products under the Pininfarina brand.
EXTERNAL ANALYSIS

1) Porter 5 Forces
Porters Five Forces of Competitive Position

New Market Entrants, eg:


High

entry ease/barriers
geographical factors
incumbents resistance
new entrant strategy
routes to market

Supplier Power, eg: Competitive Rivalry, eg:


YES
Low
number and size of firms
brand reputation industry size and trends
geographical coverage fixed v variable cost bases
product/service level quality product/service ranges
differentiation, strategy
relationships with customers
bidding processes/capabilities

Product and Technology Buyer Power, eg:


Development, eg:
High
High
alternatives price/quality buyer choice
market distribution changes buyers size/number
fashion and trends change cost/frequency
legislative effects product/service importance
volumes, JIT scheduling
Key Success Factors
Customer Need
Affordable pricing
Reliable products
Healthy Equipment list
Powerful engines
Competition
One of the plant situated in SEZ
Large scale of production, hence low cost
Sufficient reserves to invest in new projects
Robust R&D
Critical Factors
Distinct designs and engines
Excellent service to customers via dealership networks
Numerous acquisitions for technology and other benefits
Global sales growth
Strong brand name
Leveraging technology from sister concerns

PEST ANALYSIS OF MAHINDRA & MAHINDRA


POLITICAL FACTORS
Government encourages investors by removal of minimum capital investment required from new
investors.
Indian govt. is also urging state government to ensure continuous power supply to automotive
manufacturing unit as well as granting them with plot of lands.

ECONOMIC FACTORS
Cheap labor in India as compared to other nation including both skilled and unskilled.
Interest rate offered by bank influence company capital investment and loan to customer aid their
purchasing power by making favorable for company.

SOCIAL FACTORS
It helps in employment level of country.
Employment level leads to increase in standard of living of people having vehicles according to the status
of families.

TECHNOLOGICAL FACTORS
Entry of foreign competitors lead to exposure for customer to a new level of technologically developed
car as technological development.
Internal Analysis of Mahindra & Mahindra
With the help of internal analysis of Mahindra & Mahindra we can know that is the company can cope-up with
complexity and converting its weakness into strength. It is a good strategic tool which helps for making good
strategic decisions.
We can use two Models for internal analysis are as follow: -
1. Resource based view (VRIO)
2. Value chain analysis

RESOURCE-BASED VIEW:

Valuable Rare Imperfectly Exploited by Outcome


PARAMETERS Imitable organization
Marketing YES YES NO NO Temporary competitive
/Advertising advantage
Product R&D YES NO YES YES Sustainable competitive
advantage
Engineering YES NO NO NO Competitive parity
Manufacturing YES NO NO NO Competitive parity
Plant
Product YES YES YES YES Sustainable competitive
Reliability advantage
Customer YES YES NO YES Temporary competitive
service advantage
Dealer Relations NO NO NO NO Competitive
disadvantage
Product Resale YES NO NO NO Competitive parity
value

Value- Mahindra & Mahindra has generated incredible value for itself among its customers by
offering Better Quality Products. It is one of the largest vehicle manufacturers by production
in India and the largest manufacturer of tractors in the world. The company believes in creating
brand value for itself focusing on customer satisfaction which leads to customer loyalty and
customer retention.

Rare- Adoption or access of latest technology leads the company to take full advantage of
reputation which it has built over time through its pricing strategy.

Imperfectly Imitable- Cost of Technology is high and required more technical research and
development.

Organization- In last few years Mahindra has targeting global market. The company is very
particular about its operations and has also been the recipient of several awards over last few
years. It is one of the fastest growing automobile company in the industry.
Value Chain Analysis
A value chain is a systematic way of examining organizations functional activities

Infrastructure

Human resource management

Technology development

Procurement
Operations

Marketing
Outbound

and sales
Inbound

logistics
logistics

Service

Support activities:
1. Firm Infrastructure:
It owns assembly plants in India, Mainland china, United Kingdom and three assembly plants in United States
Mahindras Automotive sector is a full range player with a presence in almost every segment of the automobile
industry from commercial vehicle, Utility vehicle, Sport utility vehicles
Mahindra provides employment opportunities to over 200,000 people in over 100 Countries
2. Human Resources:
The human resource utilization ratio is 100% and no employee is kept as a reserve
It takes 1.5 months to train a new employee and the whole process of recruitment takes 2 months
3. Technology Development:
Mahindra Launches DiGiSENSE, a revolutionary technology solution that connects Mahindra vehicles, tractors,
truck and construction equipment to the cloud, opening upon a whole new dimension to the experience of vehicle
ownership
Mahindra & Mahindra created an eco-system of technology partner like cloud service provider, Map provider,
telecom network provider, hardware manufacture and other third parties
4. Procurement:
Procurement of raw material from optional and economically feasible foreign sources
Primary activities
1. Inbound Logistics:
Oracle Transportation management system, seeks to create a value for its customers and to its partners
M&M recently invested over 500,000 square feet of modern warehousing space, include both multi-user and built
to suite units with the very best/ latest design, engineering layout, material handling system, automation and
warehouse management
2. Operations:
The two main operating divisions of the company were the automotive division, which manufactured UVs and
LCVs, and the farm equipment division, which made tractors and farm implements.
The company employed over 17,000 people and had six state-of-the-art manufacturing facilities spread over
500,000 square meters
3. Outbound Logistic:
Strong presence and an experienced logistic player in outbound operations
Fully integrated system includes services like
Shipex TMS system,
automated reporting of KPIs
Consolidation and distribution
Well-defined scheduling and tracking process

4. Marketing and sales;


They take various steps to promote their sales through the world by utilizing, Visual media, Print media, Social
media fully so that people became aware of its potential and products
Mahindra & Mahindra Ltd. (M&M Ltd.), Indias leading SUV manufacturer auto sales numbers which stood at
37,915 units during December 2015 as against 36,328 units during December 2014, representing a growth of 4%.
5. Services:
Own Service outlets
The first time that M&M will be servicing vehicles of other makes through its First-Choice multi-brand service
outlets.
M&M is also expanding the scope of its spares unit to also provide spares for non-Mahindra vehicles
COMPETITOR ANALYSIS

Attributes Weightage to Mahindra & Maruti Tata Motors Ashok Toyota


100% Mahindra Suzuki Leyland

Customer 70% 4.5 4 3 2 4


Awareness
Product Quality 68% 4 4 2 3 4

Product 56% 3 4 2 2 3
Availability
Technical 78% 4 4 4 3 4.5
Assistance
Market Share 60% 58.5% 20% 59.4% 27.0% 30%
4 1 5 2 3
Score 19.5 17 16 12 18.5

Customer Awareness
Mahindra & Mahindra:
The launched innovative customer kind of digital platform, designed and developed to create awareness among
the customer about the various customer-centric service initiatives and offerings
Maruti Suzuki:
Maruti Suzuki create awareness through the initiative such as Raksha Pack & Road Safety Awareness which
created awareness among the more customer and increased sales
Tata Motors:
Their international expansion strategy and diversified its business across market and product categories, by
increasing its global leader network as well as expanding its manufacturing base in UK and internationally
Ashok Leyland
Ashok Leyland is very effective in OEM services which sets them apart, they had Robust system which ensures
that consumer is always assured about their decision but these services are after purchase but they are not much
in the international strategy in the sector of vehicle
Toyota:
Toyota, run a promotional campaign stating that valuing each customer one and only vehicle, the advertorials
covered many topics which highlighted the advanced computer technologies in car manufacturing
Product Quality
Mahindra & Mahindra:
Mahindra & Mahindra to sharpen focus on the product quality by introducing new models, new model for each
price point and in every segment
Maruti Suzuki:
Maruti Suzuki it cracks down the suppliers if it doesnt meet the quality standards, the policy of zero-defect is
regulated strictly
Tata Motors
Tata motors suffered from the legacy of the product portfolios, quality and services to the adverse impact of Cyrus
Mistry
Ashok Leyland:
It had a strategy for the effective quality management but whenever there are failures it try to rectify and
implement new strategy
Toyota:
It has won the DEMING APPLICATION PRIZE and JAPAN QUALITY CONTROL AWARD after the
statistical quality control, it clearly states that quality first.
Product Availability:
Mahindra & Mahindra:
M&M has involved in the increasing the volume of the launched products, they are not focus upon the launch of
the product for further upcoming years
Maruti Suzuki:
In Maruti Suzuki it takes 12 hours to manufacture one car, and they make one car in every 12 seconds. Maruti
Suzuki launched 13 products in four years
Ashok Leyland:
Ashok Leyland lined up to launch 3 products
Toyota:
Toyota launched eight new models in the years out of that 3 was launched in a month
Tata Motors:
After many years, Tata motor launched a product of SUV, also those products which they launched in the early
years they are not much successful
Technical Assistance
Mahindra & Mahindra:
It offers connected vehicle offerings including solution across telematics, advanced driver assistance system,
infotainment and connectivity
Mahindra has acquired Ssangyong to advance in technical assistance
Maruti Suzuki:
The technical assistance of the Maruti Suzuki is clutch-less technology this innovation is touted to be break
through and first to introduce in India
Tata Motors
New Gen DICR Engines, that offer best-in class driving experience
Ashok Leyland:
Ashok Leyland ties up technology for hythane engines
Toyota:
Its aim to promote an integrated three-part initiative, safety technology to prevent and minimize the accidents.

CHALLENGES FACED BY MAHINDRA & MAHINDRA


1. The challenge for a company like Mahindra & Mahindra is to grow to an $80 billion company as
sustainable growth.
2. Rapid urbanization is one of the economic challenge for Mahindra as Indian cities are growing at an
unprecedented rate.
3. Consumer prices in India have risen at an average annual pace of 10 per cent during the past five years,
and Indian households are bracing for another 13 per cent increase next year so Inflation was the problem
for Mahindra.
4. Riding on strong product development was the challenge for Mahindra.
5. When economic liberalization and potential competition from global players had left M&M, a maker of
pick-up trucks and jeeps for the rural market, with three options: Exit the automotive sector, become a
licensed manufacturer for another company or develop own products. They have chosen to develop their
own products and compete with the world which was the biggest challenge for them.
6. Small players who do not upgrade to global standards would get extinct.
7. Pressure on prices on OEM continues.

CONCLUSION & RECOMMENDATIONS


From the above analysis one can conclude that Mahindra is a home-grown SUV maker who has begun to make
its mark globally. They have invested aggressively in R&D and have tried maintaining a great workforce.
Mahindra Research Valley has been a great value addition to the organization which has helped them to develop
better products and test them to make it a worthy competitor. They have been the best in the tractor business all
over the world.
However, there still are some recommendations for this company-
Need to develop petrol engines
Better quality interior for their products
Fuel efficient engines
Improvement in equipment list
Develop and launch more motorcycle engines
References:
http://www.mahindra.com/news-room/press-release/Mahindra-Launches-a-Game-Changing-Connected-
Vehicles-Technology-Platform-DiGiSENSE
http://djay96.yolasite.com/resources/customer%20satisfaction%20toward%20maruti%20suzuki.pdf
http://www.tatamotors.com/investors/financials/71-ar-html/mda7.html
http://www.mahindra.com/news-room/press-release/1371124390
http://www.toyota-global.com/company/toyota_traditions/quality/jan_mar_2011.html
http://www.indiainfoline.com/article/news/maruti-suzuki-to-launch-new-clutch-less-technology-in-its-global-
hatchback-car-5843762232_1.html
http://www.marutisuzuki.com/manufacturingfacilities.aspx
http://auto.economictimes.indiatimes.com/news/passenger-vehicle/cars/maruti-suzuki-to-launch-13-new-
products-in-four-years/46465683
http://economictimes.indiatimes.com/opinion/interviews/no-new-launches-focussing-on-increasing-volumes-of-
launched-products-pawan-goenka-mahindra-mahindra/articleshow/53924965.cms
https://www.toyotaforklift.com/news/toyota-launches-three-new-products-this-month