Essay About P&L And M&M

Mahindra & Mahidra
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Mahindra & Mahindra
Problem:
Recommend to the companys board whether or not it should pursue the formation of a Joint Venture with Jiangling Tractor Co.
Alternatives to JV
M&M consolidating with a greenfield tractor manufacturing Project in the US
Launch of marketing operations in Australia. Assembly plant in Brisbane
M&M bid for Valtra (Finland), lost it to AGCO (US)
Take over of a State owned Enterprise in Romania
Expansion to high cost (labour) markets (US EU), therefore technology expenditures to lower wage outputs
Mahindra & Mahindra aim to secure global leadership through (Project Vishjaweet)
Hambrick-Fredrickson
Arenas:
Parent company in India
Expansion to Asia, US, Europe and Australia
Vehicles
JV (China)
Acquisition
Consolidated Company (US)
Expansion (Aus)
Economic Logic
Cost leadership (quick break-even)
Unit cost (161,785.94 INR)(3540,95 USD, low price versus world price 17,200 USD)
Entry into China with 20% overpricing compared to John Deere.
Expand to gain economies of scale
Differentiators
Project Vishwajeet
Good reputation
Dening Prize
Staging
Become the worlds largest producer, by volume of tractors by 2009 (5 years)
JTC as a potential partner
JTC 20-30 hp range tractors
42 dealerships, they are way too many
JMCG exits with 80% government owned
Strategy: first look at competition then produce, not going to be a leader but a follower
Feng Shou: state owned Enterprise
Very high overhead costs
Limitation to production
Huge costs
Managerial changes
Would not pass standards set by M&M
Bad Factory lay-out
Product portfolio: focus on quality
SWOT
Strengths
Portfolio
Focus on quality
Corporative management
Approval from the government
Equipment in very good conditions
Feng Shou brand
Weaknesses
High costs (poor management decisions, HR deplorable)
Too many managerial changes leads to inefficiency
Tractors (FS-254) are not up to standards
Bad Factory lay-out
JMCG leaving, why the change of heart?
Very bad financial status
Financial Malpractice:
P&L has ben either tampered with, reports profits when there are losses, ask for JTC to check up on problems, trust is now an issue
Opportunities
Feng