7. Post-merger Vs.

Pre-Merger Strategy analysis

7.1 Mahindras International Strategy:

With more than 200,000 employees spanning across 18 industries, Mahindra has
global presence in more than 100 countries around the world.
Mode of Entry:
Exports to foreign
Joint Ventures
M&A
Global Alliances
countries
(complete built units of
(with Renault SA
(with
(with CIE
Scorpio and Bolero to
and also with Midad
SsangYong
Automotive SA)
African states)
Holding)
Motors)
Mahindras most profitable global strategy has been Mergers and Acquisitions to
enable group-wide inorganic growth. With majority of stake in the company,
Mahindra collaborated with firms to diversify in multiple geographies and focus on
product and market development.
Mahindras foreign market focuses on launching new product line in new markets.
Along with that, use R&D expertise to build cost-effective components like engines,
to be utilized in other automobiles. M&M expects to gain high-tech, cost-effective
production of components, entry to huge growth potential markets, develop brand
(to launch own products)
SsangYongs International Strategy:
Founded as motor workshop, with more than 4800 employees, SsangYongs has
dealings with more than 90 countries in cars division.
Strategic Alliances

Set-up of Local Base

(with Mercedes
Benz to produce engines)

(Local offices in South

America, Africa, Asia etc.)

Exporting to foreign
countries
(four-wheeler, SUV
models to UK)

SsangYongs strategy revolves around building global distribution network for cars
and its components. Opened local head offices, part centers to improve local
responsiveness. Also, they had alliances with companies like Mercedes Benz to
leverage technology at both firms to product diesel engines (more of product
component development focus). Company focuses on product diversification, new
market entrance and portfolio management.
Their strategy is in line with the firms focus to develop technology to build ecofriendly engines and target largest market in the world, China.
Analysis:
Mahindra & Mahindra

Pre-merger
Nascent stage in SUV sector
Not great visibility in European market in
this division

Post-merger
Launch of SUVs and
CUVs in new markets
Build common engines
for both firms cars

SsangYong

Operational losses
Not able to meet quota
in domestic markets itself

Succeeded in entering
foreign market
Highest export level:
driving
proactive
growth strategy

Cultural Analysis:
Belonging to different cultures, both companies have varied corporate culture and
same goes for its employees. To ripe the full benefits of the deal, both companys
basic beliefs and assumptions should go hand in hand. Below is the comparison of
important dimensions of culture at both firms:
Vision

Core
Values

Organizatio
nal
structure

Mahindra & Mahindra

Future of Mobility with 5Cs:
Clean, convenience, connected,
clever & cost-effective
Customer First, Quality focus,
Professionalism, Good corporate
citizenship
and
Dignity
of
individual
Multi divisional structure with
sector
Heads
and
COOs
reporting to CEO

SsangYong
To be most innovative and
respected Korean Automotive
company
Customer First, Global mindset,
Integrity, Innovation, Respect &
Collaboration
Simplistic functional structure

Mahindra offers a culture which propagates freedom to operate without fear which
is encouraging to SsangYong, who strives to innovate business processes and
products. Both the companies share their primary belief of adding maximum value
to customers and adapt their product design accordingly. This ideology is adapted at
leadership stage of SsangYong and propagated to workers, to develop a sense of
ownership for the firm.
Even though human resources are from different ethnicities, synergy between
operating teams of both companies is observed bottom up at the firm and main
driver for the turnaround of the firms and they also exchange similar thoughts in
global outlook in automotive division.
State of Trade Union:
Pre-Merger:
-

Huge turbulence at SsangYong plant with violence and strike for 77 days.
Fighting to keep the jobs of workers and force government to take back the
plans of sacking 1000 employees

Both parties came to a compromise to abandon workforce reduction plans and

workers agreed for wage freeze. Later, company filed for bankruptcy following huge
operational losses. At this time, M&M came up with the deal to turn around the
company. Previous 3 owners of the company failed in this respect, but M&M made it
possible.
Post-Merger:

It started with reduction of workforce in an attempt to control operational costs. The

labor union of SsangYong, M&M and SsangYong signed a tripartite agreement with
provisions for employment protection, long-term investment and commitment for no
labor disputes.
With mutual trust of both companies and better than expected financial turnaround,
company recently hired back the workers for Pyeongtaek plants assembly line. KyuHan Kim, Union Leader at SsangYong expressed his satisfaction on the process of
growth in the past 3+ years and positive about the workers condition in years to
come.

Leadership:
Anand Mahindra, CEO of M&M and Pawan Goenka, Chairman of Board at SsangYong
are prominent personalities behind this merger from M&M. Yoo-il Lee, President &
CEO, SsangYong believed that support from Mahindra Group is the backbone to
come this far ahead in the business.
Both the CEOs learnt macro manager-style, innovative and dynamic spirit from each
other.
Anand Mahindra is a visionary who had immense trust in the management and
employee force to achieve targets irrespective of the history. Even though,
SsangYong CEO was doubtful about the trade union attitude just prior to the deal, is
cheerful to see the synergy between all parties working for shared vision.
M&M with the goal to become pioneer in SUVs and SsangYong looking for robust
product line, are now focusing on state of art Korean technology to collectively
achieve the same and also close any gaps left in soft keys.