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INTRODUCTIONMahindra & Mahindra Limited (BSE: 500520) is part of the Indian

Industrial Conglomerate Mahindra Group based in Mumbai.

The company was set up in 1945 in Ludhiana as Mahindra & Mohammedby brothers K.C. Mahindra and J.C. Mahindra along with Malik GhulamMohammed.

After India gained independence and Pakistan was formed; Malik GhulamMohammed moved to Pakistan where he became the nation's first financeminister.

Now, with the Mahindra brothers as the whole sole of the company, itsname was chan ed to Mahindra & Mahindra in 1948.


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J.C.MAHINDRA

K.C.MAHINDRA

G. MOHAMMAD

KESHUB MAHINDRA

ANAND MAHINDRA

FOUNDERS

CHAIRMAN

V.CHAIRMANM.D


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Initially set up to manufacture general-purpose utility vehicles, Mahindra& Mahindra (M&M) was first known for assembly under license of theiconic Willys Jeep in India.

M&M introduced Jeeps to India and in no time they establishedthemselves as the Jeep manufacturers of India.

The company later branched out into the manufacture of light commercial

vehicles (LCVs) and agricultural tractors.

At present, M&M is the leader in the utility vehicle segment in India withits flagship UV Scorpio.


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It offers over 20 models including new generation multi-utility vehicleslike the Scorpio and the Bolero. It formerly had a joint venture with Fordcalled Ford India Private Limited to build passenger cars.

In recent times the company is engaged in spreading its reach beyond its

traditional markets.

They entered into the two-wheeler segment by taking over the KineticMotors in India.

M&M also has controlling stake in REVA Electric Car Company.

M&M has also been selected as the preferred bidder for the acquisition ofSouth Korea's SsangYong Motor Company.


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Mahindra & Mahindra grew from being a maker of army vehicles toa major automobile and tractor manufacturer.

It has acquired plants in China and the United Kingdom, and has

three assembly plants in the USA.

M&M has partnerships with international companies like RenaultSA, France and International Truck and Engine Corporation, USA.

M&M has a global presence and its products are exported to severalcountries.Its global subsidiaries include Mahindra Europe Srl. basedin Italy, Mahindra USA Inc., Mahindra South Africa and Mahindra(China) Tractor Co. Ltd.


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M&M is one of the leading tractor brands in the world. It isalso the largest manufacturer of tractors in India withsustained market leadership of over 25 years.

It designs, develops, manufactures and markets tractors aswell as farm implements. Mahindra Tractors(China) Co. Ltd.manufactures tractors for the growing Chinese market and isa hub for tractor exports to the USA and other nations.

M&M has a 100% subsidiary, Mahindra USA, whichassembles products for the American market.


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PESTEL analysis


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Political factors:

Government laid stress on the mechanization of agriculture with a view toboost food

Grain production

Subsidy on agricultural loans from government Change in taxation policy

100% FDI policy

Regaining Agricultural dynamism, a key goal of eleventh Five year

plan


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Economical Factors:

95% of tractor sales are on credit.

Cost of tractors in India is the cheapest in world.

Less interest rate charged by banks for agricultural inputs.

Inflation may provoke higher wage demands from employees and raisecosts.

Higher national income growth may boost demand for a firm's products.


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Social factor: Animal power available is too inadequate to meet power demand of

farmers.

Due to land fragmentation farmers with small land holding are

buying tractor. Increase in awareness among the farmers for the need of farm

mechanization

More farmers are opting for multiple cropping.


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Technological factor: Accelerated acquisition of technology capabilities to raises

productivity in agriculture.

Continuous technological innovation

Renewable energy development. Ex, coal gas renewable


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Ecological factors

Irrigation facilities.

Global warming.


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Legal factors

Collaboration with government which shapes policy issues.

Agricultural policy


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Key players There are 14 players operating into tractor manufacturing activity in

the country.

90 per cent of market is shared among the top 5-6 players only


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SWOT ANALYSIS1-Stength : Over the years the company has emerged as one of the top players in the

world in terms of number of tractors sold. This gives a clear indication that thecompany's market share is one of its biggest strengths.

The company's ability to introduce new products in the market and togenerate sales from those new products is a major strength.

The reason being that this is very essential for any company, for its survival inthe long run. The company has established its brand name in other countries

of the world as well.

This is evident from the 40% market share that it holds in the 30-40 HPtractors market in the US.


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2. W eaknessThe company is highly dependent on the rural sector, andthe rural sector in turn is highly dependent on the monsoons.

As a result, if there happen to be bad monsoons (less of rains)for two consecutive years it could have an adverse impact onthe demand of tractors for the company.

3. O pportunitiesThe government has been trying to strengthen theexports of agricultural products. As a result, the quality ofagricultural products necessarily has to be very high. Forthis, they need better rural and agricultural infrastructure.This might result in an increase in demand for tractors.

In India, the penetration of tractors is 10 tractors per 1000hectares of cropped area, which is much below the world

average of 19 tractors for the same. Thus there is scope forthe demand to increase.


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4. Threats

The company has a history of having invested in unrelateddiversifications such as telecom, holiday and resort inns,financial services, etc. which it has hived off as subsidiaries fromtime to time when these turned unmanageable.

This is a cause for concern as such diversifications could divertthe company's attention from its core business. It is a dangeroustendency as it leads to destruction of shareholders value.

The entry of foreign players in the tractors segment could pose

a threat to the company as these foreign players are technicallymore competitive than Mahindra & Mahindra.


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New Market

Existing market

Existing product New product

Ansoff Matrix (Product-Market Matrix)


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Resource analysis There is two types of resources.

1-Stock resources: These are the resources which are required tostart any business at base level.

2- capabilities resources: These are flow resources which arecoming from competencies of employees and capability of

organizations.


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Stock Resources Physical resources

Financial resources

Human resources

Technological resources


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Capabilities resources

Innovation

Production capability

Marketing capability

Human resource development

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