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Mahindra & Mahindra (M&M) In South Africa

2739 words - 11 pages

Mahindra & Mahindra in South Africa

Evelyn Eugenio
AMBA 660 9044
Dr. Lorna Wallace

Executive Summary

In 1945, Mahindra & Mahindra Ltd. (M&M) functioned as a steal trading entity established by two brother located in India. During 1947, they decided to join the automobile industry and created the UV and tractor vehicle which become the core competency. Even though the strategic method was effective domestically in India, M&M had to reposition its strategic position in South Africa and they have several alternatives. However, M&M was aware that entering the Indian automobile markets would be competitive but they still proceeded. This was a successful ...view middle of the document...

The platform M&M created allowed for growth and expansion involving the automobile industry. M&M decided to venture and invest in a total of eight unrelated industries. M&M evolved has one of the largest multinational industry in India that generated 370 billion dollars across 79 continents. Moreover, the company grew and sustained profitability for a few years. The automobile industry in South Africa contributed to 7.5 of the gross product and therefore a significant factor for the economy. They were responsible for exporting vehicles to over 70 countries, they have the world’s top tire manufacturer, top vehicle manufacturers both locally and globally. During 1995, the Motor Industry Development Programmee (MID) imposed high tariffs in order to protect the local industry from the global competition. However, that program was quickly replaced in 2009 with the Automotive Production and Development Programme (APDP) which placed reasonable tariffs which kept reducing and this helped to improve the automobile industry immensely. This was the beginning of automobile industry evolution in South Africa. The strategic method applied was the engine with different sections or departments. For instance, the vehicle department consisted of one section while the engineering department was another. The company implementing a 50 per cent drop rule which meant that if the economy dropped by 50 per cent than ever department had to remain profitable and vice versa when it increase everyone would gain it equally. However, this global strategy was implemented in South Africa but not successful. Therefore, M&M had to rethink of another method or approach in order to revive the automobile industry in South Africa.

Introduction

Mahindra & Mahindra Ltd. (M&M) is a multinational automobile industry located in India. The company has an established headquarters in India and is the largest automobile manufacture in India. M&M evolved during 1945 by implementing the Jeep vehicle for the roads in India. However, throughout the years the company has implemented and adjusted the strategic measures in order to accommodate the customer needs. M&M adapted a global strategic method that generated billions of dollars even though they had an increasing domestic demand. It expanded its production of automobile vehicles to innovating industrial vehicles such as aerospace, construction equipment and other operational fields in order to remain profitable. M&M implemented this strategic platform of manufacturing its complete built units (CBU’s) in India and using South Africa to exporting purposes in order to leverage from others. While at the same token then have created vehicles for industrial purposes and allowed others to leverage from the company in order to diversify consumer needs. The idea of this strategic method was to create a win-win situation for the company. Since then M&M has established a subsidiary in South Africa and had a...

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