Professional Documents
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CASE STUDY:
Mahindra & Mahindra Ltd. – Farm Equipment
Sector: Acquisition of Jiangling Tractor
Company
by
1. Introduction of Case
2. M&M’s Vision and Mission
3. OD & Business Strategies
4. JTC
5. Feasibility Study of JV – SWOT Analysis
6. Recommendations
7. JV of M&M and JTC
8.
Mahindra & Mahindra : A to Z
•Established on 2nd Oct 1945 jointly (Mahindra & Mohammed)
Vision:-
Indians are second to none in the world. The founders of
our nation and of our company passionately believed this.
We will prove them right by believing in ourselves and by
making M&M Ltd. known worldwide for the quality of its
product and services.
Mission:-
“We don’t have a group-wide mission statement. Our core
purpose is what makes all of us want to get up and come to
work in the morning”
-Anand Mahindra
•
Organizational Development: The need for Change:
Business Strategy
tors were sent to China from India to test the market opportunity.
single province having large land holdings suitable for company’s 25 – 75 hp range of tract
at a price 20% higher than the rivals (John Deere), sending strong message of, “ Superior
Step 4:
Tie – up with a local partner
Jiangling Tractor Company : A to Z
HISTORY
• Part of government owned Jiangling Motor Company (JMCG).
•
• 30 % stake of JMCG was owned by U.S Ford Motor Company.
•
•
• Factory located at Nanchang with production capacity of
10,000 units & 3,000 engines annually.
•
• Operated in 20 – 30 hp range with 42 dealerships.
•
• Work force of 710 people which was 50 % more than the
requirement.
•
DOWNTURN IN TURNOVER
• Problem of low-capacity utilization, surplus labor &
escalating costs.
• 3000
0
• 2500
500
• 2000
1000
• 1500
• 1500
1000
• 2000
500 2500
•
0 3000
• Budget 2004 Jul-04 2003
• Contribution of JTC in JMCG turnover fell from
$1billion to $3.5 million.
•
• JMCG decided to de-focus on JTC by offloading 80% of
tractor affiliate.
•
• Government was also interested in exiting the tractor
BUSINESS STRATEGY OF JTC TO OVERCOME
DOWNTURN
INCREASING RISK
in existing markets
MARKETS
MARKET
EXTENSION DIVERSIFICATION
Achieve higher Sell new products
sales/market in new markets
New share of
existing
products in new
markets
ANSOFF MATRIX ANALYSIS
INCREASING RISK
25.9% in 2004
MARKETS
MARKET EXTENSION
DIVERSIFICATION
•Export to SAARC
No focus on, “High
•Attractive but low tech & high hp
New Volume Market market”.
•Price sensitive
but high volume
market
Strength Weakness
ØExtended product portfolio of M&M (20- ØRestructuring of JTC.
30hp).
ØJTC - Focus on Quality SWOT Analysis ØOver head cost & surplus resources of
JTC.
ØState owned enterprise –local brand name ØLack of Efficiency in new plant layout.
readily available “Feng Shou”. ØMulti franchise.
ØTechnically skilled team of JTC readily
ØIneffective Dealership – often switched
available. to competitors.
ØGovt. Support
ØJTC global focus.
ØInfluence on manufacturing facilities
ØCultural barriers like language & food
from Ford & Isuzu who were collaborated habits.
with JTC.
ØGood Chemistry with Management & Straight
forward Mang. style
Opportunities Threats
ØCan fulfill M&M’s goal to be global ØUndeveloped Banking facility in China.
player. ØLegal considerations.
ØEasy entry to Chinese market with support
ØJTC was part of JMCG & even Ford
of local partner. holding 30% stake, so 3 companies were
ØTo export the Chinese tractors range to involved in JV.
India & Indian tractor range to China to ØDistant location of the Manufacturing
suit the demand respectively. units from the city.
ØIf M&M provided after sales services they
can be more competitive in Chinese market.
ØExpected growth of 13.2% 2004 to 2008.
ØFurther open door to US market where
FS254 of JTC was already doing well.
Reasons for Going for JV
M & M Objective Fulfillment by JTC
1) 20% turn over by 2009 2.5% in Chinese Market and 13%
in <25hp category.
2) Product range Complementary to M&M’s range. 18-
33hp of JTC – requirement of
growing Indian Market and higher
hp from India to China
Mahindra officials with the JTC team. Mr. Anand Mahindra, VC & MD, M&M,
visits the Chinese facility with JTC officials.
JIANGLING TRACTOR COMPANY - CHINA
Inside view of the JTC facility. Inside view of the JTC facility.