 Corporate Strategy of Mahindra and

Mahindra:
 A Federated structure enables each business to chart its process.
 Economies of scope.
 Economies of scale.
 Add value to shareholders.
The decade 1953 – 63 saw diversification mainly through collaborations and joint ventures
with foreign companies. The first international foray in the form of exports of utility vehicles
and spare parts started in 1969, making it the first attempt at geographical diversification for
the group. The next two decades, till 1985, were interspersed with strategic actions aimed at
expansion in its mainline business of tractors. A major diversification occurred in 1986 with
the group entering the information technology sector. A reorganization exercise was carried
out in 1994 to create six strategic business units: automotive, farm equipment, infrastructure,
trade, financial services, information technology, and systems. In the post-2001 period, the
group has been focusing on internationalization through mergers and acquisitions and joint
ventures. In December 2001, the company identified the farm equipment sector (FES) as a
core business. In 2002, Operation Blue chip was implemented, which aimed at strengthening
domestic operations as a precursor to going global. In 2006, it became a major market
leader in the telecom segment.
For M&M, Supply Chain Management was the only solution to keep its margin healthy –
minimizing costs by reducing the cost of production, logistics, working capital (inventory),
and the cost lost sales. Mahindra started making passenger vehicles first with the Logan in
April 2007 under the Mahindra Renault joint venture. M&M made its maiden entry into the
heavy trucks segment with the Mahindra Truck and Bus Division, the joint venture with
International Truck, USA. At first, the company was not being able to capture the attention of
customers, but with proper media coverage and business strategies, it gained extreme
popularity in the automobile industry.
 M&M’s strategy is to provide unrivaled customer service. Gradually the company merged
with Kinetic Motors in India. In 2008, Mahindra commenced its first overseas Complete
Knock Down (CKD) operations with the launch of the Mahindra Scorpio in Egypt. The
Mahindra Group is a USD 15.4 billion turnovers multinational conglomerate, with 144,000
employees in over 100 countries across the globe with business interests in fields as diverse
as aerospace to agriculture, energy to information technology, hospitality to housing (2011).
Mahindra Group became the first real estate company in India to publish a standalone GRI
report and expand its customer base to 100+ clients in the World Cities.

G-STIC FOR MAHINDRA

 GOALS-  
Mahindra and Mahindra is a very famous car company whose goals were to be in the
topmost position in the matter of cars and also invent cars with the latest
technologies. Their objective was to keep the prices of the car reasonable so that
people can easily afford to buy the cars they invent and also their cars vary in
different ranges.

STRATEGY-
1. Target market-
 age- 21 to 50 years
 income- Young executives from the upper-middle-income bracket
 value proposition- A brand that promotes new thinking, accepts no limits and
drives positive change. The group, which has decided to use 'Rise' as the new
brand position, will be spending Rs 120 crore in the next three years towards
promoting the new initiative. They strongly believe that the Mahindra brand
epitomizes what our customers want -- a company that empowers them to
'Rise'.

TACTICS-
 Products- tractors, 4 wheelers (SUVs), 2 wheelers, trucks, and pickups
 Pricing- the pricing strategy in the marketing mix of the automobiles is done keeping
the market segment and the competitors in mind. The automobiles in the product
portfolio range from as low as 4.54 lakhs to 40 lakhs. Mahindra & Mahindra follows
competitive pricing as its price range is very similar to its competitors. Some
commercial vehicles are priced marginally lower than the competitors.
 Communication strategy- Mahindra & Mahindra advertises very smartly and
adequately. Mahindra & Mahindra’s “Live young, Live free “campaign became
popular in 2012. Mahindra & Mahindra follows an aggressive promotional strategy in
its marketing mix. It showed Mahindra’s portfolio of vehicles in tough terrains of
different parts of India. They made Varun Dhawan their brand ambassador to target
the younger audience. The advertisement made with the actor had great content and
complimentary music. Their advertising strategy is not confined to just television.
Mahindra & Mahindra do a lot of print, digital, and media advertising as well. They
host on-ground events like the Mahindra adventure initiative.
  IMPLEMENTATION & CONTROL –
 Mahindra uses a great team of researchers and evaluators to make their products
and services better day by day and follow a continuous evaluation at the backend to
entertain the reviews, complaints, and suggestions.

PESTEL ANALYSIS OF MAHINDRA:

 Political Factors that Impact Mahindra &
Mahindra
- Taxation policies – Over the last two decades, Mahindra & Mahindra has benefitted
from lower taxation policies throughout the western hemisphere. It has resulted in
high profits and increased spending on research and development. The increasing
inequality in India can lead to changes in taxation policies. Secondly, local
governments are also looking into Auto & Truck Manufacturers’ specific taxation
policies to contain the carbon footprint of the Consumer Cyclical sector.

- Armed Conflict – There are no imminent threats to India from the disruption in the
business environment because of military policies, terrorist threats, and other
political instability. Mahindra & Mahindra has experience in handling operations in
difficult circumstances.

- Government resource allocation and time scale –India’s new government policies
can improve the investment sentiment in the Consumer Cyclical sector. Given the
wider acceptance of the suggested policies among the population, it is safe to
assume that the time scale of these policies will be longer than the mandated term of
the present Indian government.

- Importance of local governments in India – Unlike in most other countries, local

governments play a critical role in policymaking and regulations in India. Mahindra &
Mahindra has to closely follow the states and territories it has a presence in rather
than devising nationwide policies in India.

- Changing policies with the new government – Studying the current trends it seems
that there can be a transition of government in India in the next election. Mahindra &
Mahindra has to prepare for this eventuality as it will lead to a change in governance
priorities of the Consumer Cyclical sector.

- Other stakeholders such as non-government organizations, protest & pressure

groups, activist movements play a critical role in policymaking in India. Mahindra &
Mahindra should closely collaborate with these organizations so that they can
contribute better to the community goals as well as to corporate goals.

 Economic Factors that Impact Mahindra &

Mahindra
- Increasing liberalization of the trade policy of India can help Mahindra & Mahindra
to invest further into the regions which are so far off-limits to the firm.

- Downward pressure on consumer spending – Even though the consumer

disposable income has remained stable, the growing inequality in society will
negatively impact consumer sentiment and thus impact consumer spending
behavior.

- Economic Performance of India – I believe the economic performance of India

shortly 5-10 years will remain stable given – government expenditure, stable demand
because of disposable income, and increasing investment into new industries.

- Economic Cycles – The performance of Mahindra & Mahindra in India is closely

correlated to the economic performance of India's economy. The growth in the last
two decades is built upon increasing globalization and utilizing local resources to
cater to global markets.

- Availability of core infrastructure in India – Over the years the Indian government
has increased the investment in developing core infrastructure to facilitate and
improve the abusiveness environment. Mahindra & Mahindra can access the present
infrastructure to drive growth in the Consumer Cyclical sector in India.

- Inflation rate – The easy liquidity in the market post the great recession of 2018 will
lead to increasing inflation in the Indian economy.

 Social Factors that Impact Mahindra & Mahindra

- Leisure interests – the customers in India are giving higher preferences to
experiential products rather than traditional value propositions in Consumer Cyclical
sector. Mahindra & Mahindra can leverage this trend to build products that provide
enhanced customer experience.

- Media outlets play a critical role in influencing public opinion in India. Both
traditional media and social media are rapidly growing in India. Mahindra & Mahindra
can leverage this trend to better market and position its products.

- Demographics – For the Consumer Cyclical products, Mahindra & Mahindra has
demographics on its side. India is a young country and growing. Mahindra &
Mahindra can use this trend to cater to various segments of the population.

- Societal norms and hierarchy – the society of India is different from the home
market of Mahindra & Mahindra. It should strive to build a local team that
understands the societal norms and attitudes better to serve the customers in India.

- Attitude towards health and safety – With increasing liberalization the attitude
toward health and safety is getting lax. Mahindra & Mahindra needs to stay away
from these attitudes as the cost of failure is too high in India.
- Education level – The education level is high in India, especially in the Mahindra &
Mahindra sector. Mahindra & Mahindra can leverage it to expand its presence in
India.

 Technological Factors that Impact Mahindra &

Mahindra
- Lowering the cost of production – The latest technology is fast lowering production
and servicing costs in the Consumer Cyclical sector. Mahindra & Mahindra has to
restructure its supply chain to bring in more flexibility to meet both customer needs
and cost structures.

- Technological innovation is fast disrupting the supply chain as it is providing greater

access to information to not only supply chain partners but also to wider players in
the Consumer Cyclical industry.

- 5G and its potential – Mahindra & Mahindra has to keep a close eye on the
development and enhancement of user experience with increasing speed and
access. This can completely transform the customer user experience in the Auto &
Truck Manufacturers industry.

- Intellectual property rights and patents protection – If India has higher safeguards
for IPR and other intellectual property rights then more and more players are likely to
invest in research and development.

- Latest technology-based innovations implemented by competitors of Mahindra &

Mahindra – This can provide a good insight into what the competitors are thinking
and where Auto & Truck Manufacturers business model future is.

- Technology transfer and licensing issues for Mahindra & Mahindra – In the
Consumer Cyclical sector there is no strong culture of technology transfer and
companies often are reluctant to transfer or license technologies for the fear of
creating competitors out of collaborators.

 Environmental Factors that Impact Mahindra &

Mahindra
- Extreme weather is also adding to the cost of operations of Mahindra & Mahindra
as it has to invest in making its supply chain more flexible.

- Waste management especially for units close to the urban cities has taken
increasing importance for players such as Mahindra & Mahindra. The Indian
government has come up with strict norms for waste management in urban areas.

- Customer activism – Greater awareness among customers has also put

environmental factors at the center of Mahindra & Mahindra’s strategy. Customers
expect Mahindra & Mahindra to adhere to not only legal standards but also to
exceed them to become responsible stakeholders in the community.
- Environmental norms are also altering the priorities of product innovation. In many
cases products are designed based on environmental standards and expectations
rather than catering to traditional value propositions.

- Paris Climate Agreement has put real targets for the national government of India
to adhere to. This can result in greater scrutiny of environmental standards for
Mahindra & Mahindra in India.

- Regular scrutiny by environmental agencies is also adding to the cost of operations

of the Mahindra & Mahindra.

 Legal Factors that Impact Mahindra & Mahindra

- Data protection laws – Over the last decade data protection has emerged as a
critical part of not only privacy issues but also intellectual property rights. Mahindra &
Mahindra has to consider whether India has a robust mechanism to protect against
data breaches or not.

- Time taken for business cases in court – some countries even follow international
norms and the time for resolution often runs in years. Mahindra & Mahindra has to
carefully consider the average time of specific cases before entering an international
market.

- Environment Laws and guides – The level of environmental laws in India and what
Mahindra & Mahindra needs to do to meet those laws and regulations.

- Business Laws – The business laws procedure that India follows. Are these norms
consistent with international institutions such as World Trading Organization,
European Union, etc?

- Health and safety norms in India and what Mahindra & Mahindra needs to do to
meet those norms and what will be the cost of meeting those norms.

- Employment law in India and how they are impacting the business model of the
Auto & Truck Manufacturers. Can these conditions be replicated or bettered in the
international market?

STP OF MAHINDRA:
 SEGMENT: Complete automobile segment including SUVs, sedans, and
trucks

 TARGET GROUP: Young executives from the upper middle-income bracket.

 POSITIONING: A brand that promotes new thinking accepts no limits and

drives positive change.
Generic Strategies Based on Porter Five
Forces Analysis of Mahindra & Mahindra

 Cost Leadership
In cost leadership, Mahindra & Mahindra can set out to become the low-cost
producer in the auto & Truck Manufacturers industry. How it can become a cost
leader varies based on the Consumer Cyclical industry forces and structure. In
pursuing a cost leadership strategy, Mahindra & Mahindra can assess – the pursuit
of economies of scale, proprietary technology, supply chain management options,
diversification of suppliers, preferential access to raw materials, and other factors.

 Differentiation
Mahindra & Mahindra can also pursue a differentiation strategy based on the Auto &
Truck Manufacturers’ industry forces. In a differentiation strategy, Mahindra &
Mahindra can seek to be unique in the Auto & Truck Manufacturers industry by
providing a value proposition that is cherished by customers. Mahindra & Mahindra
can select one or more attributes in terms of products and services that customers in
the Auto & Truck Manufacturers value most. The goal is to seek premium prices
because of the differentiation and uniqueness of the offerings. Industry analysis of
Auto & Truck Manufacturers using Porter Five Forces can help Mahindra & Mahindra
to avoid spaces that are already overpopulated by competitors.

 Focus - Cost Focus & Differentiation Focus

The generic strategy of focus rests on the choice of competitive scope within the
Auto & Truck Manufacturers industry. Mahindra & Mahindra can select a segment or
group of the segment and tailor its strategy to only serve it. Most organization follows
one variant of focus strategy in the real world.

 The Focus Strategy has two variants for Mahindra & Mahindra
(a) In cost focus Mahindra & Mahindra can seek a cost advantage in its chosen
segment in Consumer Cyclical sector.

(b) In Differentiation strategy Mahindra & Mahindra can differentiate itself in a target
segment in the Consumer Cyclical sector.

Both variants of the focus strategy rest on differences between Mahindra &
Mahindra’s target segment and other segments in the Auto & Truck Manufacturers
industry.
VALUE CREATION
CORE VALUES:
 Professionalism
 Product development
 Customer focus
 Quality Focus
 Individual dignity
 Transparency and trust  Firm Infrastructure

Core Competencies - Every day M&M team members are developing new
applications based on the current core competencies that (re)define M&M’s
knowledge base. Currently, we identify three main competencies.

QCIT: Quality (Standard), Customer (focus), Individual dignity (employee),

transparency, and trust (employee and customer).
 USP – Ruggedness and performance.
 Value
 Good Corporate Citizenship
Seek long-term success, in alignment with the country's needs, without
compromising ethical business standards.
 Professionalism
Seek the best people for the job and give them the freedom and the
opportunity to grow.
 Support innovation and well-reasoned risk-taking, but will demand
performance.
 Customer First
Respond to the changing needs and expectations of the customers speedily
courteously and effectively.
 Quality Focus
Make quality a driving value in the work, in the products, and the interactions
with others.
 Believe that quality is the key to delivering value for money to the customers
 The dignity of the Individual.
Value individual dignity, uphold the right to express disagreement and respect
the time and efforts of others.
 Nurture fairness, trust, and transparency through actions. These values
become the compass that will guide both the personal and corporate actions
of the group.
MAHINDRA’S VALUE CHAIN: