Mahindra & Mahidra
Essay by people • September 8, 2011 • Case Study • 593 Words (3 Pages) • 1,437 Views
Mahindra & Mahindra
Problem:
* Recommend to the company's board whether or not it should pursue the formation of a Joint Venture with Jiangling Tractor Co.
Alternatives to JV
* M&M consolidating with a greenfield tractor manufacturing Project in the US
* Launch of marketing operations in Australia. Assembly plant in Brisbane
* M&M bid for Valtra (Finland), lost it to AGCO (US)
* Take over of a State owned Enterprise in Romania
* Expansion to high cost (labour) markets (US EU), therefore technology expenditures to lower wage outputs
Mahindra & Mahindra aim to secure global leadership through (Project Vishjaweet)
Hambrick-Fredrickson
* Arenas:
o Parent company in India
o Expansion to Asia, US, Europe and Australia
* Vehicles
o JV (China)
o Acquisition
o Consolidated Company (US)
o Expansion (Aus)
* Economic Logic
o Cost leadership (quick break-even)
o Unit cost (161,785.94 INR)(3540,95 USD, low price versus world price 17,200 USD)
o Entry into China with 20% overpricing compared to John Deere.
o Expand to gain economies of scale
* Differentiators
o Project Vishwajeet
o Good reputation
o Dening Prize
* Staging
o Become the world's largest producer, by volume of tractors by 2009 (5 years)
JTC as a potential partner
* JTC 20-30 hp range tractors
* 42 dealerships, they are way too many
* JMCG exits with 80% government owned
* Strategy: first look at competition then produce, not going to be a leader but a follower
* Feng Shou: state owned Enterprise
o Very high overhead costs
o Limitation to production
* Huge costs
o Managerial changes
o Would not pass standards set by M&M
o Bad Factory lay-out
* Product portfolio: focus on quality
SWOT
* Strengths
o Portfolio
o Focus on quality
o Corporative management
o Approval from the government
o Equipment in very good conditions
o Feng Shou brand
* Weaknesses
o High costs (poor management decisions, HR deplorable)
o Too many managerial changes leads to inefficiency
o Tractors (FS-254) are not up to standards
o Bad Factory lay-out
o JMCG leaving, why the change of heart?
o Very bad financial status
o Financial Malpractice:
* P&L has ben either tampered with, reports profits when there are losses, ask for JTC to check up on problems, trust is now an issue
* Opportunities
o Feng
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