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Strategic Analysis New Holland Fiat India

Strategic Management - I
Prof Amita Mital

WMP 2013 04-Oct-2011

Report Submitted By : (Group A8 )

WMP6029 WMP6030 WMP6031 WMP6041 WMP6125 WMP6127

Manu Chauhan Mukul Priyadarshi Nikhil Nangia Sanjeev Kumar Maurya Manmeet Singh Saini Abhinav

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Table of Contents
1. Introduction .....................................................................................3 1.1. New Holland Tractor Organization .............................................................. 3 1.2. Tractor Market in India ......................................................................4

2. General Environment Analysis - PESTL...........................................6 3. Porter’s Five Forces Analysis ..........................................................8 4. SWOT Analysis ...............................................................................10 5. Value Chain Analysis .....................................................................11 6. Resource Based View (VRIO) ........................................................15 7. Financial Analysis ..........................................................................15 8. Conclusion......................................................................................15

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1. Introduction
1.1.
1.

New Holland Tractor Organization
New Holland Fiat India is a 100% subsidiary of USD 15billion CNH Global, the World’s largest agricultural equipments Company, and the leading manufacturer of agricultural and construction equipment manufacturer in the world. Spread across 60 acres in the Greater Noida District of Uttar Pradesh, the state-of-the-art plant with an initial investment of over Rs. 250 Crores, is designed on the lines of New Holland’s international manufacturing facilities. The company's main rivals in tractors are: Mahindra, Swaraj, Sonalika & Escorts.

2.

3.

% Indian Market Share

New Holland 10%

Others Mahindra 18% 23% Swaraj 20%

Escorts 11%

Sonalika 18%

*Source : Tractor industry @ dsir.nic.in

4.

It manufactures tractors in various segments based on horse power(hp). Broadly segment is categorised into three categories. a. 30 to 40 hp. b. 41 to 60 hp. c. 61 hp onwards.

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5.

Product range.

Standard product features across all variants: i. Side shift gears. ii. Oil immersed breaks. iii. Temperature based hydraulics. iv. Sensitivity control. v. Spin on diesel filter. vi. Organized power.

6.

Company’s website: http://newhollandindia.co.in/

1.2.

Tractor Market in India
1. The Indian tractor market is dominated by low price, rugged, versatile and low to medium-powered tractors largely due to inability of farmers to invest much in farm mechanization. 2. In India, the popular range of tractor is 20-40 HP. 3. The tractor industry has a certain cyclical nature and depends heavily upon what happens in the general rural economy—investments by the government, monsoons and availability of credit at affordable rate.

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4. Agriculture accounts for 25 % of country’s GDP and enagages 60 % of population in employment. Average CAGR is around 8% for last three decades.

5. Region wise market share (% of sales).

% Market Share - Region Wise

AP, Kar, Punjab & TN, Kerala Haryana 16% 17% Raj, Guj & Mah 18%

UP and MP 38%

Bihar, WB & Orissa 11%

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2. General Environment Analysis - PESTL
 Government laid stress on the mechanization of agriculture with a view to boost food grain production.  Subsidy on agricultural loans from government. Rs 20,000 crore loan waiver was granted by UPA govt.    Flexibility in taxation policy. 100% FDI policy. “Agricultural dynamism” as part of 5-year plan.

 WTO negotiations for Free Trade of agriculture products.   Credit is being extended by banks for agricultural activities. Cost of tractors in India is the cheapest in world. The cost of a finished...
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