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Mahindra & Mahindra Tractors Introduction

M&M is a subsidiary of the Mahindra group which is a multinational Indian auto manufacturing company based in Mumbai was founded by K.C and J.C Mahindra along with M.G Mohammed in 1945 as Mahindra & Mohammed. Due to the independence ownership was shifted and was named Mahindra and Mahindra in 1948. They started as a steel trading company. With the growing demand for utility vehicles they expanded to manufacturing vehicles and later in to different segments of auto manufacturing into different industries like hospitality, IT, finance etc. The company has been the leader in both this segments have huge market share. They have expanded globally with assembly units and manufacturing and exports number of products and services. They have had partnerships, acquisitions and joint. The company achieved many awards and milestones.

External environment analysis: Macro-environment analysis


PESTEL Analysis : Political Factors Government subsidies on agricultural loans Taxation policy. Economical Factors 95% sale on credit. Cheapest Less interest rate Social Factors Income Credit facilities Demand for tractors Technological Factors Changing technology capabilities. Innovation. Renewable energy development. Ecological Factors Reduced cropping cycle Global warming. Legal Factors Policy issues.

New agricultural policies (Singh, 3 october 2006)

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Micro-environment analysis Five Force Analyses 1- Low:- Bargaining Power of Buyer 2- Less:- Bargaining Power of Supplier 3- High:- Threat of Entry 4- Low:- Threat of Substitute 5- High:- Rivalry (Porter, 2001) Industry Life Cycle 1960- Growing stage Present- Maturity stage (mahindra rise, 2011) EFE Matrix Have profitable by reduction in the fuel prices and by providing better finance provision for the farmers. While threats for the firm decreasing interest of the farmers children to continue in the farming business. (Singh, 3 october 2006) CPM- (Competitive Profile Matrix) M&M is the leader in the tractor industry with a weighted score of 3.3, TAFE with 2.75, Escort with 2.3.

Strength and Weakness of Mahindra Tractor


Strengths 1.Market leader 2.Innovations and advanced technology applications 3.Brand name 4.Large and effective distribution channel Weaknesses 1. The company is highly dependent on the rural sector 2. No patented technology of its own
3. Low labor productivity (Mahindra & mahindra Ltd., 2011)

Key Success Factors:Have achieved a brand name and market leader position so able to manage low cost and have been No1 with high market share and global presence Resource analysisTangible resources: 1. Physical:
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High inventory capacity Own Infrastructure Company, IT Company and Financial service company. High quality equipments for production Own OEMs

2. Financial: Highest market share Large equity capital base

3. Technological: State-of-the art and technologically advanced equipments. Emphasizes on finding alternate fuel technology

6. Fuel:

4. Production: Use methodologies like TQM,QC story and QC tools, Six Sigma, DOE and TPM Process control in production

5. Raw materials: Manufactured by the M&M subsidiary Steel is the parent manufacturing company of this organization

Tractors run on diesel

7. Logistics: In house logistics Improved supply chain management

Intangible resources: 1. Innovation:

Set up web site to provide latest information Indias 1st tractor with turbo technology Developed own engine oil jointly with Servo

2. Marketing: Huge distribution channel

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Established brand name

3. Human: Attracts pool of talent from rich background and senior managers from diverse companies. Proper succession and career planning.

4. Brand Name/Goodwill:

Market Leader High quality standard Meeting customer needs (mahindra and mahindra ltd, 2011)

Capabilities: Tangible resources and intangible resources have helped be the leader and have a competitive advantage. Core Competences:

Low pricing and quality products. Market dominance. (Mangal, 2011)

Competitive Advantage:Due to widespread network, own financing arm, brand name, high resale value, pricing. (Porter, march-april;1979) Resource Analysis PROFIT Analysis Physical resources- Used to accomplish their goals. Reputation- Among top 3 tractor selling companies in the world. Organizational- Highest rating in Total Quality Management. Financial- Growing at steadily pace and have a well managed assets and liabilities Intellectual Property- Employees are efficient and competent. Technological- Innovative products in product line. MoneyControl.com. (2012, january 6) VRHN Analysis:
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Valuable: Distribution channels, human resource, Infrastructure, R&D, brand name and customer responsiveness. Rare: Human resources, distribution network and channel, quality standards and innovations in marketing and technology. Hard To Imitate: Cheapest tractors and products meeting customers needs at high standard of quality. Non Substitutable: R&D, low pricing and brand name Assessment of Valuable Resources: Scarcity test: labor productivity and patented products Mobility test: Non transferable - Infrastructure, brand name, organizational culture, financing, technology, distributional network and channels. Transferable - Human resource, Market share, skills Inimitability test: Branding, patenting and first mover advantage- high brand name, quality standards Path Dependency- Market leaders for the last 50years Causal Ambiguity- strategically diversification into different businesses Scale deterrence- Global players, large customer base The Durability test: Have competitive advantage in pricing, own financial arm and brand name. The Appropriability test:- Able to successfully use resources to its advantage. The Substitutability and Superiority of resource test- In-house logistics and infrastructure has helps, reduce cost and provide international standard products Vipin Gupta, K. G. (2008) IFE Its strongest strength is the companys ability to constantly innovate and the fact that it is currently a market leader. While weakness is highly depend on the rural sector and need to upgrade technology to compete with the foreign players. (Singh, 3 october 2006)

The corporate Portfolio:BCG Matrix (Appendix 1) M&M tractors would fall under the cash cow quadrant since they have high market share but the market growth is declining therefore its a cash cow. (Jr, 2008)

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Parenting Matrix (Appendix 2) There is a perfect feel between the company and the SBU and there is opportunity the parent receives from the SBU therefore it lies in the Heartland. (Scholes, 2006) Anoffs Matrix (Appendix 3) Since they have diversified into the tractor industry that is related to their previous market therefore are following product developments. (Jr, 2008) I-E Matrix (Appendix 4) Since the EFE score was 2.8 and IFE score was 2.9. On plotting the points on the axis it was found that M&M lies in quadrant 5 so it can be suggested that the company maintains and holds the business. Stakeholders Matrix (Appendix 5) In this matrix, based on the power and level of interest of the people that have any interest in the ongoing of the M&M, are divided into four quadrants. This matrix helps the organization to know what the present status of the stakeholders of the company is and how the company would like it to be. From the stakeholders matrix that we have made, the only shift that was made was to lower the power and increase the interest of the media and unions towards the company. TOWS Matrix (Appendix 6) Combining Mahindra Tractors strength and weaknesses with the opportunities and threats, we got the following strategies; SO- Green Tractors WO- Better the technology to be able to compete with international players. ST- Build interest in farming as a profession. WT- Hybrid Crops (Weihrich) QSPM (Appendix 7) After having taken the KEFs and KIF into consideration, we have given weights to 3 chosen strategies that Mahindra Tractors can chose to implement. From the QSPM we know that the most favorable strategy is the one to better the facilities and policies for labor. (Quantitative Strategic Planning Matrix (QSPM), 2012) Force Field Analysis (Appendix 8) The force field analysis helps one determine whether the forces for the change for the chosen plan over weighs the forces against them. In the plan that we have chosen, such is the case. It is favorable for Mahindra Tractors to introduce bio-fueled tractors with alteration in the design. Strategizing Innovation and Technology Management (Appendix 9)
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Platform- Indias first 5% bio-diesel tractor was launched by Mahindra Tractors. They are sold worldwide across six continents. Channel- Mergers and acquisitions is the core of its Growth Strategy. Perpetuation- Mahindra Its USP and network to survive in the market. Sequencing- Using an alternate energy source and fuel efficient tractors. Space Matrix (Appendix 10) M&M tractors lie in the 1st quadrant and hence have to follow an aggressive strategy therefore have to follow strategies that include Market Penetration, Market Development, Product Development, Back Integration, Forward Integration, Horizontal Integration, Conglomerate Division. Grand Strategy (Appendix 11) The company is a market leader in the tractor industry and has been the market leader for a long time but the growth in the of the industry is slow therefore they lie in the 4th quadrant and have to use strategies like Concentric diversification, Horizontal diversification, Conglomerate diversification, Joint ventures.

Multifactor Matrix (Appendix 12) M&M tractors a high on business strength but on the industry attractiveness it is in the medium since the industry is losing due to decreasing market growth. (Mahindra Tractors is one of Indias most innovative cos, 2011) Arthur D Littles SBU System (Appendix 13) Since the company has been in the industry for a number of years but still it has been able to generate sustainable revenue to the organization therefore its in the maturity stage while it the market leader and has a large market share in the tractor industry it is having a strong competitive position therefore it lies in the Strong and maturity matrix. Corporate Strategy:Market Development: Acquired Chinese tractor company Jiangling in pursue of entering new international market. Diversified: Vertically 1) Backward by establishing component companies 2) Forward by setting up finance arm. Horizontally they diversified in the agricultural business (Jones, 2004) Value Net Model:M&M is the champion because it has a well integrated supply chain and majority of its raw material is from its component division and they have a high power over its suppliers therefore
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they have an advantage over suppliers, fuel and financing are the complementary products to the purchase of the tractor M&M has its own financing arm they gives it an edge and their mileage is higher as compared to its competitors so rate better. The customers are the framers and they are price sensitive and M&M tractors are the cheapest, the only substitute to the tractor are the bullock cart and manual labor and since they are the market leaders they can be termed champions. (Oswal, 2011) Business model Their business model is to create empowered companies that can have best entrepreneurial freedom and group-wide synergies. This model has led their growth to US $14.4 billion multinational firm with 144,000 employees in 100 countries all over the world. CSR Activity Mahindra group donates 1% of its profit after tax for the development of corporate social responsibility. To facilitate the employees towards involvement in CSR activities that would line with their choice, an exclusive type of Employ Social Option was launched. They have also announced that they would help by providing free cochlear implants to 60 intensely hearing impaired. They provide a Mahindra All India talent Scholarship for those who are economically deprived. Mahindra group is now planning to open two Mahindra pride school in which they will offer courses with emphasis of employability like training for IT, retail, Automobile engineering etc. They have some functioning body which is working in terms of Corporate Social Responsibility are like:K.C. Mahindra Education Trust Mahindra academy Disaster relief The group has transformed three municipal gardens (Mahindra Rise , 2011) Corporate governance It is the basically the base of operational performance, attracting employees, shareholders returns, clients and partners, gives a positive force in business they are in. Corporate governance in Mahindra &Mahindra has earned level 1 rating for governance and value creation from CRISIL, Indias one of leading rating in research , policy advisory company for three years running. M&M has also received esteemed ICSI National Award in excellence of corporate governance for 2008. This award is presented to those companies which continuously trail the principles of corporate governance and follows best standards which can be exemplified. Ethics

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Mahindra is dedicated to do its business according to the applicable rules, regulations and lows and also the high standard of business ethics and ethical conducts. This code of conduct (Code) reveals the business principles and practices of behavior towards the support of its commitments. The responsibilities for setting standard for code of conduct and also for updating those standards are goes to Board of directors. The code is proposed to give guidance in recognizing and solving ethical issues and to help further a culture of honesty and responsibility. Every director must read this code and understand and also its function to perform in his or her duties and responsibilities. Conclusion After having discussed the foundations of Mahindra Tractors, right from the mission, vision, goals and objectives to the strategies used and resource analysis. We have covered the value chain, and analyzed the firm with the help of various matrixs. We know the firm stands at a comfortable position and will probably remain at the same for a few more years to come. Mahindra Tractors is currently a market leader in its industry and as long as it sticks to its core competencies and innovative style of products, it is likely to remain so.

Bibliography
Jr, J. A. (2008). Stratergic Management Formulation, Implementation & Control. New Delhi: Tata McGraw-Hill Publishing Company Limited. Scholes, G. J. (2006). Exploring Corporate Strategy. New Delhi: Dorling Kindersley (India) Pvt Ltd. (2011). Retrieved from mahindra and mahindra ltd: http://www.mahindra.com/ Mahindra & mahindra Ltd. (2011). Retrieved from Mahindra Rise: http://www.mahindra.com/ Porter, M. E. (march-april;1979). how competitive forces shape strategy. In competitive strategy:technique for analysing industries and competitors (pp. 86-93). Harvard Business Review.

MoneyControl.com. (2012, january 6). Retrieved from M&M sees only 10% growth in the tractor industry in FY13: HYPERLINK "http://www.moneycontrol.com/news/business/mm-sees-only10-growththe-tractor-industryfy13_646120.html" MoneyControl.com. (2009, April 12). Retrieved from M&M tractor sales grows to 29%: http://www.moneycontrol.com/news/business/mm-tractor-market-share-grows-to-29_209740.html

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Vipin Gupta, K. G. (2008). strategy diamond. In Business policy and strategic managment (pp. 4851). New Delhi: Prentice - Hall of India
Mangal, A. N. (2011, 1 24). racing down country roads. Retrieved from mahindra and mahindra: http://evhub.in/events/wp-content/uploads/2011/04/CLSA-Indian-TractorUV-Industry.pdf

Singh, D. P. (3 october 2006). Tractor Industry in India. Raipur: Disha Institute of Management and Technology (DIMAT). oswal, M. (2011, july 26). Mahindra & Mahindra. Retrieved from http.//www.businessstandard.com/content/research_pdf/mm_270711_04.pdf Romer, P. (1989). industry analysis: the fundamentals. Increasing Returns and Long-run Growth , 897908. MoneyControl.com. (2012, january 6). Retrieved from M&M sees only 10% growth in the tractor industry in FY13: http://www.moneycontrol.com/news/business/mm-sees-only-10-growththetractor-industryfy13_646120.html MoneyControl.com. (2009, April 12). Retrieved from M&M tractor sales grows to 29%: http://www.moneycontrol.com/news/business/mm-tractor-market-share-grows-to-29_209740.html
Menon, J. (2011). Indian automotive aftermarket witness humungous growth. The Automotive Horizon , 13. Jones, C. W. (2004). Stratergic Management An integrated Approch. New Delhi: Biztantra. Mahindra Tractors is one of Indias most innovative cos. (2011, Aug 11). Retrieved from Moneycontrol.com: http://www.mahindratractorworld.com/pdf/mahindra_innovative.pdf Oswal, M. (2011, july 26). Model refreshes, new segments drive growth, market share. Retrieved from Mahindra & Mahindra: http://www.businessstandard.com/content/research_pdf/mm_270711_04.pdf Mahindra Rise . (2011). Retrieved from Mahindra & Mahindra Ltd: http://www.mahindra.com/What-We-Do/Farm-Equipment/Companies/Mahindra-andMahindra-Farm-Equipment-Division Quantitative Strategic Planning Matrix (QSPM). (2012). Retrieved from Maxi pedia: http://www.maxi-pedia.com/quantitative+strategic+planning+matrix+QPSM Weihrich, H. (n.d.). The TOWS Matrix --- A Tool for Situational Analysis. Retrieved from Long Range Planning Heinz Weihrich: http://www.usfca.edu/fac_staff/weihrichh/docs/tows.pdf Management Strategy Page 10

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