Case Study
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Abstract:
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The case traces the various developments from the time the joint venture took place till the breakup in 2000. In 1995, Escorts and Yamaha Motors formed a 50:50 joint venture (EYML). From 1995 to early 2000, EYML took several steps to become the number one player in India's two-wheeler market. However, in mid-2000, Escorts divested 24% equity to Yamaha Motors and as a result, Yamaha Motors became a majority stakeholder in the venture (74:26). In May 2001, Escorts sold its remaining 26% equity, thus, exiting from the joint venture. The case is intended for MBA/PGDBM level students as part of the Business Environment curriculum. From the case students are expected to understand why Escorts pulled out of the joint venture and how this move is going to affect Yamaha Motors.
Students can also discuss Escorts new business initiatives and examine how the company is placed to succeed in new economy businesses. This case will also enable students to understand the structural changes in the two wheeler market in India.
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Issues:
» Diversification into unrelated business by one of the partners, Problems in the Joint venture due to the external environment
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Contents: | Page No. | Introduction | 1 | Two Wheeler Industry in India | 1 | Escorts, Yamaha Tie the Knot | 3 | The Honeymoon | 3 | The Honeymoon is Over | 4 | The Divorce | 5 | The Road Ahead | 5 |
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Keywords:
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2000, 1995, Escorts, Yamaha Motors, 50:50, EYML, 24%, equity, 74:26, May 2001,26%, Business Environment
The role of the Escorts group was always minuscule since Yamaha has been gradually hiking its stake in the joint venture. The Nandas of the Escorts were only promoters in the JV."
Abstract:
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The case traces the various developments from the time the joint venture took place till the breakup in 2000. In 1995, Escorts and Yamaha Motors formed a 50:50 joint venture (EYML). From 1995 to early 2000, EYML took several steps to become the number one player in India's two-wheeler market. However, in mid-2000, Escorts divested 24% equity to Yamaha Motors and as a result, Yamaha Motors became a majority stakeholder in the venture (74:26). In May 2001, Escorts sold its remaining 26% equity, thus, exiting from the joint venture. The case is intended for MBA/PGDBM level students as part of the Business Environment curriculum. From the case students are expected to understand why Escorts pulled out of the joint venture and how this move is going to affect Yamaha Motors.
Students can also discuss Escorts new business initiatives and examine how the company is placed to succeed in new economy businesses. This case will also enable students to understand the structural changes in the two wheeler market in India.
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Issues:
» Diversification into unrelated business by one of the partners, Problems in the Joint venture due to the external environment
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Contents: | Page No. | Introduction | 1 | Two Wheeler Industry in India | 1 | Escorts, Yamaha Tie the Knot | 3 | The Honeymoon | 3 | The Honeymoon is Over | 4 | The Divorce | 5 | The Road Ahead | 5 |
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Keywords:
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2000, 1995, Escorts, Yamaha Motors, 50:50, EYML, 24%, equity, 74:26, May 2001,26%, Business Environment
The role of the Escorts group was always minuscule since Yamaha has been gradually hiking its stake in the joint venture. The Nandas of the Escorts were only promoters in the JV."