Mahindra Mahindra Business Case
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: * Parent company in India * Expansion to Asia, US, Europe and Australia * Vehicles * JV (China) * Acquisition * Consolidated Company (US) * Expansion (Aus) * Economic Logic * Cost leadership (quick break-even) * Unit cost (161,785.94 INR)(3540,95 USD, low price versus world price 17,200 USD) * Entry into China with 20% overpricing compared to John Deere. * Expand to gain economies of scale * Differentiators * Project Vishwajeet * Good reputation * Dening Prize * Staging * 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 * Very high overhead costs * Limitation to production * Huge costs * Managerial changes * Would not pass standards set by M&M * Bad Factory lay-out * Product portfolio: focus on quality
SWOT * Strengths * Portfolio * Focus on quality * Corporative
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: * Parent company in India * Expansion to Asia, US, Europe and Australia * Vehicles * JV (China) * Acquisition * Consolidated Company (US) * Expansion (Aus) * Economic Logic * Cost leadership (quick break-even) * Unit cost (161,785.94 INR)(3540,95 USD, low price versus world price 17,200 USD) * Entry into China with 20% overpricing compared to John Deere. * Expand to gain economies of scale * Differentiators * Project Vishwajeet * Good reputation * Dening Prize * Staging * 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 * Very high overhead costs * Limitation to production * Huge costs * Managerial changes * Would not pass standards set by M&M * Bad Factory lay-out * Product portfolio: focus on quality
SWOT * Strengths * Portfolio * Focus on quality * Corporative