BUSI 2701 - International Business: Mahindra & Mahindra Ltd Analysis

This report provides an analysis of Mahindra & Mahindra Ltd's international business strategies, marketing approach, logistics, and human resource management. It highlights the company's focus on reverse innovation, diversification, and R&D in emerging markets, particularly in Asia. The report evaluates Mahindra's strengths and weaknesses, including its strong R&D and market-specific products versus its geographical dependence and product recalls. It also examines the company's distribution channels, communication strategies, and the use of advanced technologies in supply chain management. The HRM approach, blending traditional and scientific methods, is also discussed, along with potential risks and benefits of doing business in India. The report concludes with recommendations aimed at improving Mahindra & Mahindra's market position.

INTERNATIONAL
BUSINESS

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Executive Summary
Management of operations in the modern day business has become very much crucial. In
such an environment, it is crucial that companies have their own approach to management of
business. The strategies are also to be defined on the basis of strengths and weaknesses that a
company is facing. They must evaluate their international strategy so as to become better than
their competitors. Mahindra has focused on Research and Development such as reverse
innovation where they have focused on the Asian region and countries like India. Evaluation
of company’s marketing approach is essential for its own growth. Diversification and
Innovation is used by the company as a product strategy. This report will analyse approaches
taken by Mahindra & Mahindra Ltd so as to improve its position in the market. PLANT-
RSO-Dealer network by using linear optimisation approach has been used by the company.
Traditional and scientific approach to HRM has been done.

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Contents
Company’s Description.........................................................................................................................2
Company’s international strategy..........................................................................................................2
Company’s marketing approach............................................................................................................3
Company’s logistics Approach..............................................................................................................4
Company’s Human Resource Management Approach..........................................................................5
Analysis.................................................................................................................................................6
Recommendation and Conclusion.........................................................................................................6
REFERENCES......................................................................................................................................7
Appendix...............................................................................................................................................8

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Company’s Description
Mahindra & Mahindra Ltd is a multinational car manufacturer from India having its
Headquarter in Mumbai. Company was founded back in the year 1945 as Mohammad &
Mahindra which was later they changed the name to Mahindra and Mahindra. It is one of the
biggest vehicle manufacturer in terms of production in India and one of the largest
manufacturers of tractors in the world. This company is ranked as 17th in the list of Top
companies within India by Fortune India 500 as per the list generated in 2018. Company has
revenue of US$13 billion. There are around 39,276 employees working with the company. It
is operational in more than 100 nations all around the globe (Prasad Mohanty & Augustin,
2014). This company deal in the business of automobile goods and services. The product
range includes SUV, pickups, heavyweight commercial vehicles, saloon cars, light weight
commercial vehicles, tractors and motorcycles. In the last two three years, company has
acquired different firms in different parts of the world. This includes acquisition of 75.1
equity stake in Hisarlar Makina Sanayi Ve Ticaret Anonim Sirketi in Turkey as a part of
expansion in the country. This Company also acquired Erkunt Traktor Sanayii AS, a tractor
manufacturer from Turkey in the year 2017. Company’s performance at different levels of the
organisation has been good over the years and hence it is highly stable in terms of the profits
that can be achieved over the years.
Company’s international strategy
Mahindra and Mahindra Ltd use different types of strategies so as to improve its position in
the market. As a part of their R&D strategy, they are following reverse innovation. This leads
to designing and building products in the emerging markets. They are giving more focus on
developing products. They are not focusing on the cost cutting or focus on leveraging flexible
capacity. This gives access to emerging markets and reduced cycle time to drive innovation
and business growth. Their idea is to integrate engineering strategy in an overall business
strategy (Arora, Patel & Ubeja, 2015). They need to add new fresh trusted partners who have
been in the industry for quite some while. Company’s main focus is towards robust
engineering through reliability, system engineering and six sigma and taking use of next
generation technology. They are using value addition and value engineering along with
designing modularity and use of alternative materials as a part of international R&D strategy.

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Their main area of focus is the developing economies especially the Asian region which has
large numbers of developing countries. This region has been selected as there is large scope
of development in this area. At the same time, there are people living in this area which can
be made their prime customers. The region is also selected due to the fact that cost of
operations is lower in this area and hence the products can be developed for the developed
countries as well. Their major competitors include Tata Motors, Ashok Leyland, Eicher,
Honda, Nissan, Ford etc. In the developing market, the major competition is given by Tata
Motors as they have surpassed them in many markets in the SUV segment (Rangnekar,
2010).
Strengths of Mahindra & Mahindra Limited include strong research and development,
Excellent products according to the Asian market and road condition, low after sale cost etc.
This company has a workforce that is highly skilled and they have focused towards hiring
people that are actually skilled. Company has been successful in customising products as per
the need of the market. At the same time weaknesses include geographical dependence,
overdependence on automotive industry as the same time some incidents of product recall
affected the image of the company (Sarkar, 2011). They have not been able to develop their
market in the developed nations which could have been the major source of income for the
company.
Their strategies are good for the short term as they are changing their products as per the
demand in the market (Ramaswamy & Chopra, 2014). This makes them successful in the
market in the short term. Their low cost strategy has helped them in achieving higher sales. In
the long term strategy, company is using innovation and research and development as a
strategy for the long term which will help them in creating a long term value in the market.
Their strategy of developing products according the market has been successful in the market.
Company’s marketing approach
This company has been using different kind of marketing approach so as to sell its product in
the market. This company sells its product in the Asian region along with this they are also
focused towards American market. The reason for the selection of this region is the fact that
there are large numbers of people living in this area. It gives them a huge target segment
which can be converted into purchaser.
Product strategies include:

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Diversification: This Company is putting a lot of efforts on diversifying its product range.
They are producing products at different prices and most of the products have prices on the
lower side. The diversification in the product range is also as per the demand in the local
markets. Customisations of products are done according to the significant needs in the market
especially in terms of size and prices (Bhanot, 2012).
Innovation: This is another product strategy that company is utilising for creating value in
the market. Innovation has been made in the product design, efficiency of the product and
changing need of the market. They are making innovation in their products as per the
changing demands in the market. Innovation is also made in the operational methodology and
the technology that is being used in the operations (Gayathri, 2016).
They have used many distribution channels so as sell their products in the market and reach
to their global customers. They are using Wholesaler/Distributors as their primary channel to
sell their products. This gives them wide reach in every corner of the country. With their
strong supply chain management, they have been able to maintain the balance between
demand and supply. Utilisation of internet mediums for making sales is lesser. They are also
using distribution channels such as consultants, dealers, retailers in some parts of their
operational region (Gandhi, 2017). They also have a direct sales team that is capable of
selling the products in the market.
For making a better relation with their customers they are using different types of
communication channels. These channels include digital and non-digital mediums. Mahindra
utilises the communicational methodologies such as advertising, direct marketing, public
relations, sales promotions and most effectively they utilise digital marketing (Raj, Sasikumar
& Sriram, 2013). This varies from country to country as in the technological advanced
nations such as USA they utilise advanced online mediums while in developing nations they
use direct marketing.
Company’s logistics Approach
This company manufactures most of its products in its home country India. The major reason
for selecting this region as the area of manufacturing is that there is less production cost. At
the same time government is also supporting manufacturing companies through the initiatives
such as ‘Make in India’. Easy availability of cheap and skilled labourers is also a boost for
manufacturing the products in the market. India has also developed many advanced

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technologies and there are many skilled labourers that are capable of utilising these resources
(Kumar, Singh, Ghate, Pal & Wilson, 2016). This country has made technological
advancements that is capable of meeting the needs of the demand and strengthens the
production capacity of the company. India is also developing IT and internet infrastructure
that will make the logistics operations simpler. It is also to be noted that India is also building
strong alliances with different countries. The export tariffs have been pushed on the lower
side for the companies that manufactures in India.
India is one those countries that is having larger amount of population and being a country
that is having requirement of farm related products is beneficial for the Mahindra. The
designs of the SUV as well as the tractors are also according to the Indian market. The
variations in the product strategy have also been made according to the demands in the
market. As a part of their logistics approach they are using advanced technologies such as
data analytics to solve the biggest challenges in the supply chain management. They are using
synergistic model so as to cut down the cost of logistics. At the same time they are using
linear optimisation model for optimising of logistics freight. They have also built a PLANT-
RSO-Dealer network by using linear optimisation approach (Bhatia, 2017).
Company’s Human Resource Management Approach
This company has a skilled labourers and for maintaining a quality workforce at the
workplace. The approach that Mahindra and Mahindra have maintained in their organisation
for maintaining healthy HRM is traditional and scientific approach. They recruit the best of
talents from different parts of the world (Brighthubpm, 2019). They are more into hiring
people from the same nation in which they are operating. They are using digital mediums for
hiring people as they are launching job description on the digital platforms. The recruitment
and selection is carried out with the help of online technologies.
Company is committed towards creating a high-performing team for which they provide
training to their employees that is able to deliver the goals of the organisation. At the same
time they are providing compensations and bonuses to promote their employees at the
workplace.
This approach has a positive impact in India as the HRM policies in the country resembles
with that of the Mahindra’s strategy. Only thing that needs to be taken into account by the
company is that company utilises more technological mediums so as to manage the HRM

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practices but India has a large section in the society which is not familiar with high use of
technology especially the lower grade workers (Bhattacharya, 2012).
Analysis
The risks that might confront the company in doing their business in India are:
 Bureaucracy: For the development of firm this is the biggest challenge that the cited
firm had to face. This can be understood by the fact that bureaucratic processes in the
country is too slow and it is not allowing companies to make investments as fast as
they hope to.
 Huge unemployment rate: In India the unemployment rate has been in its worst form
in the past two or three decades. This is reducing the average expenditure capacity of
the people. SUV and other market grow when there is growth in the basic lifestyle of
people (DSIM, 2016).
Benefits that are attached with doing business are:
 Huge market: There are large numbers of people which can be an excellent market for
the company.
 Manufacture and export: India is a good country for doing manufacturing as the cost
of production is low at the same time it has good relations with all the nations hence
export can also be easily done.
Financial Analysis
According to the financial analysis (explained in Appendix) the financial condition of the
company represent as healthy. The profit margin of the company increase from year to year.
However, the cost of the company also increase that represent as average of the company.
Recommendation and Conclusion
It is recommended that company should think of taking the online mediums for doing
marketing and other activities. This is because Indian society is also changing. Company
needs to work on the future technologies especially in the tractor segment where the tractor
needs to run on the alternative fuel sources. Company also need to move towards automation.

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It can be concluded that company has taken reverse innovation where they are focusing on
developing nations for their research and development. Company has taken Diversification
and Innovation as product strategy. Linear optimisation model is used as a logistics approach.
Bureaucracy and Huge unemployment rate is threat for operating in India while huge market
and Manufacture and export are the benefits of operating in India.

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REFERENCES
Arora, S., Patel, J., & Ubeja, S. (2015). Event study on stock prices of Mahindra and
Mahindra Ltd.: A study on launch of Mahindra e2o. FIIB Business Review, 4(4), 71-
77.
Bhanot, S. (2012). Use of social media by companies to reach their customers. SIES Journal
of Management, 8(1).
Bhatia, R. 2017. How Mahindra & Mahindra is solving its logistics network optimization
challenge with data & analytics. Retrieved from:
https://www.analyticsindiamag.com/mahindra-mahindra-solving-logistics-network-
optimization-challenge-data-analytics/
Bhattacharya, R. 2012. Mahindra & Mahindra rejigs HR processes to enhance team
performance. Retrieved from:
https://economictimes.indiatimes.com/news/company/corporate-trends/mahindra-
mahindra-rejigs-hr-processes-to-enhance-team-performance/articleshow/
15579616.cms
Brighthubpm, 2019. Human Resource Management Traditional Approach: Processes and
Controls. Retrieved from:
https://www.brighthubpm.com/resource-management/75466-a-traditional-approach-
to-human-resource-management/
DSIM, 2016. CASE STUDY: How Mahindra & Mahindra accelerated its marketing strategy
to be ahead from its competitors?. Retrieved from:
https://dsim.in/blog/2016/02/25/case-study-how-mahindra-mahindra-accelerated-its-
marketing-strategy-to-be-ahead-from-its-competitors/
Gandhi, M. A. (2017). A Review of the Indian Automobile Manufacturing Sector. IOSR
Journal of Business and Management, 19(3), 9-15.
Gayathri, S. (2016). An Insight in to the CSR Activity of Mahindra & Mahindra
Ltd. International Journal of Innovative Research in Management Studies, 1(1), 108-
115.

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Kumar, M., Singh, S., Ghate, A. T., Pal, S., & Wilson, S. A. (2016). Informal public transport
modes in India: A case study of five city regions. IATSS Research, 39(2), 102-109.
Prasad Mohanty, R., & Augustin, P. (2014). Business strategy of automotive and farm
equipment sector of the Mahindra & Mahindra Group of India. Journal of Strategy
and Management, 7(1), 64-86.
Raj, M. P. M., Sasikumar, J., & Sriram, S. (2013). A Study on Customers Brand Preference
in Suvs and Muvs: Effect of Marketing Mix Variables. Researchers World, 4(1), 48.
Ramaswamy, V., & Chopra, N. (2014). Building a culture of co-creation at
Mahindra. Strategy & leadership, 42(2), 12-18.
Rangnekar, S. (2010). Case Study On Knowledge Management Practices In Indian
Manufacturing Organizations-Tata Motors, BHEL And Mahindra And
Mahindra. Journal of Digital Convergence, 8(1), 27-40.
Sarkar, S. (2011). A study on employee engagement at manufacturing industries. Global
management review, 5(3).

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Appendix
Financial Risk Analysis
Source: Money Control
Financial Data
Income Statement
Standalone
Profit &
Loss
account
---------------
---- in Rs.
Cr.
---------------
----
Mar 18 17-Mar 16-Mar Mar 15 14-Mar 13-Mar 12-Mar