Mahindra & Mahindra in South Africa Harvard Case Solution & Analysis


Mahindra and Mahindra have been one of the leading multinational automotive manufacturing companies. It is headquartered in Mumbai, India, which was initially a steel manufacturing company that was formed in 1945 by two brothers namely J.C. Mahindra and K.C. Mahindra. The company has been one of the largest companies in India that has made a remarkable name for itself as a company that has expanded itself into diversified businesses and into various global markets. Basically, the case “Mahindra and Mahindra in South Africa” is about  the decision making which Parvin Shah the Chief Executive, International Operations (Automotive and Farm Equipment Sectors) have to take the decision where he has to select the growth strategy for the company in the South African market (R. Chandrasekhar, 2011).

Basically, he has got four options to choose from where one option for the company was to M&M (SA). He would eventually move for making an agreement with the local vendors to in fact use the latter surplus facility. Second option was to skip this step and in fact invest on developing the company’s own manufacturing facility. Thirdly, Shah has the option of waiting until the subsidiary logged in sales volume that will be a suitable option in the long term for the company. The last and the final option for Shah is to grow the existing business model of importing the completely built units (CBUs) from India by using the South African market as the hub from where the company can sell its vehicles into different markets different countries in the African continent (R. Chandrasekhar, 2011).


Current Situation of M&M in South African market

Mahindra and Mahindra entered South Africa in 2005 where the company set up a subsidiary with a share of 51 percent in the company; the remaining percentage was with a local partner. The company entered the country with its two products the Bolero and the Scorpio. Basically, M&M wanted to play in the niche market and not the traditional mass market. They offered value proposition vehicles to compete in the market. The experience of M&M in South Africa until now is a good option and a productive one as well. The company in spite of all the leading and renowned automotive brands in the region was able to grab a substantial market share in the South African market. The sales for SUV for M&M were in fact the highest as it was in demand by locals either the black or the white population. The company had its own dealers in all the nine provinces of the country. All in all, it can be said that the experience of M&M in South African market is a positive one where the company can further invest to reap more profits (R. Chandrasekhar, 2011).

Potential role of M&M’s South African subsidiary

The potential role of the M&M South African subsidiary is quite an important one for its success in the global market. The reason is quite simple, the subsidiary operating in South African region gives the company global exposure. Along with this, it helps M&M in attracting foreign clients for the company. Being part of international market will bring in the latest technology within the company. Along with this, M&M will also have access to other African market, as South Africa plays a center role in the region. It will also help in ensuring quick delivery time to customers. If operating only in India, it will be quite difficult to export card on time, therefore a subsidiary helps a lot. It helps in diversification and increased efficiencies. Along with support monetary support from a local investors reduces the risk for M&M. Therefore it is quite evident and clear that the South African subsidiary is of great importance for the company (Daniels, 2010).

Shah’s recommendation to board of directors

In my opinion, Shah should recommend the board of directors, who is also a member of the board that for now the board should adopt the wait and watch strategy. The reason for this recommendation or suggestion is quite simple rather, the main reason is that since the economy has just recovered from the financial crisis, it is quite difficult to opt for a particular strategy therefore the company should play safe and understand the consumer spending patterns. It is a fact, since recession 2010 market has shown quite productive results, but still the suggestion of Shah should be to play safe and secure....................

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"Mahindra & Mahindra Ltd (M & M) is a manufacturing leader in the commercial vehicle (UVS) segment in the Indian automobile industry. Since 2004, M & M UVs exports to South Africa, the only country in Africa with a significant middle class . M & M has created a wholly owned subsidiary in South Africa, where he also established service and spares infrastructure and dealer network. This subsidiary enjoyed a wave of growth in the South African automotive industry up to 2007, then fell to a three-year decline, largely a result of the downturn in the global automotive industry. industry is now on the verge of renovation in 2011, the subsidiary must plan their next steps in South Africa, where most of the global automotive companies have established either manufacturing or trading outposts in response to the long-term potential of South Africa and industry policy favorable to his government. event is positioned as in May 2011 when a subsidiary of M & M has to choose one of four options. M & M can continue its prevailing business model import completely built units (CBUS) from operations in India to meet local demand, using South Africa, re-center the target growth markets in Africa south of the Sahara. You can also choose to work with a local supplier to assemble vehicles locally completely knocked down (CKD) parts imported from India. addition, M & M may choose to create their own production facilities in South Africa, a model followed by many of its competitors. Finally, M & M, you can choose to wait and watch until he notes, the final recovery in demand, which would make it more certain of its stages. then grant opportunity for students to explore each option and decide on the way forward M & M in South Africa '. "Hide
by Jean-Louis Schaan, Ramasastry Chandrasekhar Source: Richard Ivey School of Business Foundation 17 pages. Publication Date: November 30, 2011. Prod. #: W11547-PDF-ENG

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