MAHINDRA & MAHINDRA INDUSTRY ANALYSISWith

you hamesha

CONTENTS

Introduction Group Overview Milestones Vision & Mission Core Business Activities Business Strategies Marketing Strategies Corporate Social

Responsibilities Swot Analysis Recent Ventures Conclusion

INTRODUCTION

Mahindra & 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 & Mohammed by brothers K.C. Mahindra and J.C. Mahindra along with Malik Ghulam Mohammed.

After India gained independence and Pakistan was formed; Malik Ghulam Mohammed moved to Pakistan where he became the nation's first finance minister.

Now, with the Mahindra brothers as the whole sole of the company, its name was changed to Mahindra & Mahindra in 1948.

• J.C.MAHINDRA

• K.C.MAHINDRA

• G. MOHAMMAD

• KESHUB MAHINDRA

• ANAND MAHINDRA

FOUNDERS

CHAIRMAN

V.CHAIRMANM.D

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

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

The company later branched out into the manufacture of light commercial vehicles (LCVs) and agricultural tractors, rapidly growing from being a manufacturer of army vehicles and tractors to an automobile major with a growing global market presence.

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

It offers over 20 models including new generation multi-utility vehicles like the Scorpio and the Bolero. It formerly had a joint venture with Ford called 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 Kinetic Motors 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 of South Korea's SsangYong Motor Company.

Mahindra & Mahindra grew from being a maker of army vehicles to a 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 Renault SA, France and International Truck and Engine Corporation, USA.

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

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

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

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

GROUP OVERVIEW

Mahindra embarked on its journey in 1945 by assembling the Willys Jeep in India and is now a US $7.1 billion Indian multinational.

It employs over 1,00,000 people across the globe and enjoys a leadership position in utility vehicles, tractors and information technology, with a significant and growing presence in financial services, tourism, infrastructure development, trade and logistics.

The Mahindra Group today is an embodiment of global excellence and enjoys a strong corporate brand image.

The Mahindra Group expanded its IT portfolio when Tech Mahindra acquired the leading global business and information technology services company, Satyam Computer Services. The company is now known as Mahindra Satyam.

Mahindra is also one of the few Indian companies to receive an A+ GRI checked rating for its first Sustainability Report for the year 2007-08 and has also received the A+ GRI rating for the year 2008- 09.

MILESTONES OF M&M M&M established its business

connections in the USA through Mahindra Wallace.

It started steel trading on behalf of European suppliers

M&M was converted into a public limited company on June 15, 1955.

Machine Tools division was started.

Mahindra Engineering & Chemical Products Ltd. (MECP) was formed.

M&M became the market leader in the Indian tractor segment-1983

Mahindra British Telecom (MBT) was formed as a joint venture with British Telecommunication plc (BT), UK-1986

VISION AND MISSION

VISION:

To create a fully collaborative environment in which suppliers can deliver exactly what the company needs, when it needs it, and at a competitive cost.

“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

MISSION: To create India's largest automobile and

automobile-related products distribution network by providing dealers and customers with the largest choice of unique world-class products and services.

CORE BUSINESS ACTIVITIES

Automotive Farm Equipment Systech Financial Services Information Technology Infrastructure Development After-Market Two-wheelers Mahindra Partners Division Specialty Services

BUSINESS STRATERGIES

Restructuring of the company.

For the group, organizational restructuring posed the greatest challenge keeping in mind the changing dynamics in the business especially the tractor and automotive division. In the last three years, the emphasis was development of the long term strategy and fixing clear business goals.

E-business Initiatives Joint ventures. Foreign competition.

MARKETING STRATERGIES

USP – ruggedness and performance. Products that redefined the market. Network of dealers, sales offices,

service stations etc. Strong market base in the urban and

semi-urban areas.

CORPORATE SOCIAL RESPONSIBILITIES

“CSR has always been an integral part of M&M group’s vision and the corner stone of our core value of good corporate citizenship” – Keshub Mahindra

EDUCATION ENVIRONMENT INITIATIVES HEALTH & DISASTER RELIEF ART & CULTURE SPORTS NANHI KALI ESOPS

1. Education

K. C. Mahindra Education Trust:Established by the late Mr. K. C.

Mahindra in 1953, the K. C. Mahindra Education Trust aims to ‘Transform the lives of people in India through education, by providing financial assistance and recognition to them, across age groups and across income strata‘.

Mahindra Education Society: As part of its Corporate Social

Responsibility activities, the Mahindra Group has established schools near its factories primarily for children of its employees. At present, the Group has three schools that impart high standards of education - Mahindra Academy at Malad in Mumbai, Mahindra Academy in Zaheerabad and a school in Khopoli.

Mahindra United World College

2. Environment InitiativesTowards making planet earth

greener, the Group has vowed to plant a One Million Trees across the Nation by October 2008 under the Mahindra Hariyali initiative.3. Health And

Disaster Relief The Mahindra Foundation has

been set up with a specific objective: to provide medical relief to the poor and needy sections of society. The foundation has helped patients suffering from cancer, heart ailments as well as burn victims.4. Art & Culture

The Mahindra Excellence in Theatre Awards (META) is the latest in the Mahindra Group’s efforts to encourage national theatre in two broad categories - Emerging theatre and Established theatre.

5. Sports

The National Basketball Association (NBA) and the Mahindra Group, one of India’s largest and most respected companies, today announced a partnership to launch a new multi-city community-based recreational basketball league. The new league for boys and girls ages 14 and up will tip off in Bangalore, Ludhiana and Mumbai, in collaboration with the Basketball Federation of India (BFI).6. Nanahi Kali

A project jointly managed by K. C. Mahindra and Naandi foundation for the girl child.

7. ESOPSEsops - What is commonly known as

Employee Stock Options has a whole new meaning at the Mahindra Group -     Esops for the Mahindra-ites means sharing a part of yourself to help the less fortunate. It implies looking beyond one-self. It means sharing one’s skills to make the society healthier, cleaner, greener, more literate and hence more sustainable.

SWOT ANALYSIS

1. 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 the company's market share is one of its biggest strengths.

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

The reason being that this is very essential for any company, for its survival in the 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 HP tractors market in the US.

2. Weakness The company is highly dependent on the

rural sector, and the 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 on the demand of tractors for the company.

3. Opportunities

The government has been trying to strengthen the exports of agricultural products. As a result, the quality of agricultural products necessarily has to be very high. For this, 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 1000 hectares of cropped area, which is much below the world average of 19 tractors for the same. Thus there is scope for the demand to increase.

4. Threats

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

This is a cause for concern as such diversifications could divert the company's attention from its core business. It is a dangerous tendency 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 technically more competitive than Mahindra & Mahindra.

RECENT /CURRENT VENTURES

Mahindra Navistar Automotives Ltd. (MNAL), the commercial vehicle joint venture between Mahindra & Mahindra Ltd. (M&M) and Navistar Inc. of USA, unveiled its 25 tonne and 31 tonne trucks for the Indian market.

Mahindra & Mahindra Ltd announced the launch of the Maxximo, the world’s first mini-truck to be powered by a 2-cylinder CRDe engine with DOHC technology and 4 valves per cylinder.

India’s iconic SUV, the Mahindra Scorpio, took another step to stardom with the unveiling of a premium, special edition `Scorpio Coffee Table Book’. Film actor Ajay Devgan - the Scorpio’s first customer, and Anand Mahindra, Vice-Chairman and Managing Director, Mahindra Group, took special pride in unveiling the book, which chronicles the journey of India’s best loved SUV since its launch in 2002. – January 6.

Dubai, UAE, June 17, 2010: Mahindra & Mahindra Ltd. along with its subsidiary MOICML (Mahindra Overseas Investment Company Mauritius Ltd.), Arabia Holdings and Ras Al-Khaimah Transport Investments LLC have signed an agreement to create a joint venture company in the Emirate of Ras Al Khaimah in the UAE for armouring of vehicles.

CONCLUSION

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