Mahindra & Mahindra: Expansion Strategies and Challenges

This report analyzes Mahindra & Mahindra's journey from a domestic leader to a global player in the automotive industry. It examines the economic and political influences that shaped its expansion, including the impact of India's economic growth and government policies. The report discusses Mahindra & Mahindra's strategies, such as diverse production, economies of scale, acquisitions, and alliances, highlighting the challenges of competing with established players in markets like the US. It emphasizes the need for the company to focus on long-term strategies, including capital consolidation and selective product launches, while also considering the role of government in supporting market expansion through policies that encourage sustainable practices and remove trade barriers. The report concludes with recommendations for Mahindra & Mahindra to navigate the competitive landscape and achieve sustainable growth in international markets.

Mahindra & Mahindra
Chronology (Théo)
Economic & Political Influences
At its domestic peak in 2010, Mahindra & Mahindra rose to become India’s fourth
largest automaker, in order to experience growth the company needed to look to
expand to international markets. The global automotive is of particular importance in
the mature economies including the United States of America and emerging
economies including China and India, as well as wealth the industry provides a lot of
job opportunities to locals. Data from the KPMG report attributes the automobile
industry as one of the key driver’s in India’s economy, accounting for approximately
4% of the gross domestic product and over 200 000 jobs in 2010.
As the Indian economy has grown at a steady rate so to has the percentage of
people who are able to afford vehicles, which has resulted in a rise in demand. This
rise also saw Mahindra & Mahindra look to international markets and alliances to
ensure access to the best technology and infrastructure.
Political factors that aided expansion into global markets resulted from the changing
economic state which say the breakdown of trade and investment barriers. In regards
to the Indian government's input in the future of automobiles they need to provide the
support to ensure growth trends are maintained as well as encourage ecologically
sustainable vehicles, this will come through closely regulating environmental
standards.
Stakeholders and Concerns (Michael)
Evaluation and solutions (Sam)
India's large enterprises have many similar aspects, one of which is involved
in the industry is very wide, covering different areas. The advantage of this strategy is
enterprise could easily achieved economies of scale effect, winner takes all.
Meanwhile, across different industry could makes its product line wider and use
differentiation strategy (porter’s generic strategy) it’s helpful to find out the potential
business opportunities. However, its disadvantage is obvious as well, because of the
wildly operating, its capital can not been used concentratelly. Its capital advantage is
splitted. Therefore, the product line with opportunities will not receive enough support
from company. Although, those companies always get policy and capital support
from local government. In global period, over rely on government support without
improve its power , company will not spread its advantage at domestic market from
all over the world.

The case mentioned that M&m COMPANY has a very wide product line,
including different categories. Their direct competitors including japanese automobile
industry and American auto industry. Japanese companies are famous for its eco
category cars, which is cheap and energy saved product.American companies have
a deep understand about their domestic market and customer demand. Each
company has been in this particular market for many years, accumulated a lot of
technology and patent advantages, through the global OEM to reduce labor costs
and Maximize those advantages. In the other hands, The US auto market has been
developed for many years, the market is mature. New competitors are unfriendly in
North America. Those big names have their own vertical market for years. Each
company's market share is stable.It is very difficult for M&M to gain its market share.
Currently,M & M is mainly through the acquisition of internationally renowned
brands to complete the technology upgrade, enhance market share and remain
competitive.This practice is very effective in the short term, but for the company's
long-term development is not feasible. Acquisition not only requires large capital
Expenses, while the acquisition of asset conversion rate can not reach 100%, the
acquisition of enterprises often have some business problems such as debt, the
product line did not meet the market demand.If the company can not be reasonable
for the acquisition of assets Of the M & M company's current situation, the difficulty of
entering the US market will be higher than entering the Asian and European
countries.For the characteristics of the US market, M & M could launch some specific
product to test the market reaction. it is not recommended to provide full range of
products to the US market in the short term.For the special needs of US consumers,
several well selected product to win a good market reputation, Combined with the
acquisition before, steadily expand its investment, can effectively resist the
investment risk.
Conclusion:
Being one of the biggest representatives of Indian Automobile industry, Mahindra & Mahindra
makes important contribution to GDP as well as employment of India. The economic steady state
growth and resultant rise in income and affordability subsequently increased the demand for the
vehicles in market. The domestic demand of the nation propelled the business of the company
making it fourth largest automaker.
The international big players in this sector are US, Japan and China that create much competition
for the Mahindra & Mahindra in form of better knowledge of market, sound technology and
resultant cheap pricing and availability of capital.
Expansion of international market demand became the prime focus of the company .This has led
the firm to adopt the strategies of diverse production and economies of scale, acquisition and
alliance with international brands to upgrade its technology and infrastructure. The firm needs to
shift its focus toward strategies giving it edge over others in the long run. This requires
consolidation of capital. The method of acquisition comes with challenges of debt, higher capital
base and the firm needs to adopt techniques of asset acquisition combined with selective
product launch that would consolidate the firm’s market popularity overseas as well as

Resilience against investment risk. Moreover, the role of political bodies in the market expansion
is immense because the policies in support of the abolition of trade and investment barrier are of
crucial importance to make cross-border movement of goods and make transaction. Another
way government helps in business growth and operation of the firm is to regulate for
encouraging production maintaining ecological standards that would also make the products
competitive in world market.