Mahindra and mahindra

1. Company
LOGO Farm Mechanization Sector:
Company analysis: Mahindra and
Mahindra Limited
Presented By
Pankaj K Bhaisare

2. Contents
2
Introduction of Mahindra Group
3 1
Mahindra and Mahindra Farm equipment division
3 3
SWOT analysis, Five forces analysis5
Vision, Mission and core Values
3 4
Value proposition and Value chain in India6
Tractor industry in India

3. Introduction of Mahindra Group
Large industrial conglomerate in India
 The company was set up in 1945 in Ludhiana as Mahindra & Mohammed.
Founders: brothers K.C. Mahindra and J.C. Mahindra along with Malik
Ghulam Mohammed.
US $15.9 billion multinational group with more than 155,000 employees
in over 100 countries across the globe.
 Leadership in utility vehicles & tractors in Indian market
 On April 2012, top 5 companies in group are Mahindra and Mahindra ltd.
( $ 8.41 billion), Mahindra Satyam ( $ 1.86 billion), Tech Mahindra ltd. ( $1.81
billion), Mahindra and Mahindra Financial Services ltd ( $1.40 billion) and
Mahindra holidays Resorts India ltd. ( $ 0.49 billion)
Diversified operation span in 18 key industries in 10 sectors.

4. Group Diversification
Financial Service Sector
 Financial services
Insurance Broking
 Rural Housing Finance
Systech Sector
 Aerospace Components
 Steel Consulting
Two wheeler Sector
 Two wheelers
Aftermarket Sector
 Used car purchase and
sales service
Defense Sector
 Defense
Automotive and Farm Sector
 Automotive
 Farm equipments
 Agri –business
 Energy
 Construction equipment
Information technology
Sector
 IT
Mahindra Partners
 Steel
 Retail
 Industrial equipment
 Logistics
 leisure boats
 Solar energy
Infrastructure and
reality Sector
 Infrastructure
Real estate
Hospitality Sector
 Hospitality

5. Vision and Mission Statement and some
financials of Mahindra Group
VISION:
“To create a fully collaborative environment in which suppliers can deliver
exactly what the company needs, when it needs it, and at a competitive cost.”
MISSION:

“To create India's largest automobile and automobile-related products
distribution network by providing dealers and customers with the largest choice
of unique world-class products and services.”
Financials of Group:

6. Indian Tractor Industry
In financial year 2012, Indian tractor market recorded sales of 5,35,210
tractors compared to 4,80,377 tractors in previous year , recording a growth
of 11.4%
 India’s current tractor penetration is estimated at ~20 tractors per 1000
hectares of agricultural land.
Fig: Trends in yearly tractors sales volume ( domestic +
Export)

7. Mahindra and Mahindra Limited
 Among the top three tractor brands in the world
Sales 200000 tractors annually. They sold 1.75 million tractors worldwide.
The first tractor company globally to win the Deming Application Prize in 2003
 The first tractor company worldwide to win the Japan Quality Medal in 2007
It is ranked 21 in the list of top companies of India in Fortune India 500 in 2011
 Business model: Wholly owned, joint venture and franchise
 Value proposition: high quality, focus on customer, individual dignity,
transparency and trust.

8. Cont’d…
 Operation: operates in 40 countries in 6 continents.
It manufactured tractors and farm equipments at four plants in India, two in
China, three in the United States, and one in Australia.
 It has three major subsidiaries: Mahindra USA, Mahindra (China) Tractor
Company, and Mahindra Yueda (Yancheng) Tractor Company (a joint venture
with the Jiangsu Yueda Group).
Supplier to dealer whole process is integrated with IT, use of MIS, ERP, pull-
based production and Supply system, timely procurement of raw material,
selection of dealers and employees management.
 Distribution: local dealers

9. Cont’d…
Products :
Tractors
Tractors ranging from the 15 HP engine to 85 HP.
Sales under name Arjun, Bhoomiputra, Sarpanch, Shaan, Yuvraj and
Swaraj series for Indian Market.
FengShou series for China Market
Huanghai Jinma tractors series for Europe and USA.

Farming Implements:
A) Crop Harvesting Solutions : self-propelled wheel harvester and
Crawler paddy harvester .
B) Rice Planter
C) Cane Thumper and Detrasher for Sugarcane
region specific product for Australia and US.

10. Cont’d…
 Promotion:
a) Advertisement on TV, newspaper, magazine and radio.
b) Promotion campaign near public place like temple, market place.
c) Field demonstration d) Providing financial assistant in collaboration with
banks and co-operatives
 Pricing: largely for medium and large farm land holder but new they target small
farmers also. Low price as compared to competitors.
 Positioning: business leaders, innovative, global potential, financial returns
 CSR: Employee Social Options (ESOPs) volunteers create health, education and
environment awareness. Sponsoring sports and cultural events.
Competitors: TAFE, Eicher, Escort, JD, Sonalika, HMT, Others

11. Mahindra and Mahindra Limited:
 The net revenue
coming from farm
equipment division is
36.6 % i.e. 13615
crore ( $3.37 billion)

12. Mahindra and Mahindra Ltd. In India
No. 1 tractor brand in India,
since 1983, with a domestic
market share of around 42%
Economy:
 Agriculture base economy.
 India has 62 % marginal farmers,
19 % small, 18 % medium and 1 %
large farmers.
 Growth in farm mechanization
due to labor scarcity.
 Credit availability: 95% of tractor
sales are on credit.
 higher national income growth
may boost demand for a firm's
products
Polity:
 Government laid stress on the
mechanization of agriculture with a view
to boost food grain production.
Subsidy on agricultural loans from
government
 Change in taxation policy
 100% FDI policy
Demography
Diversity in land holding and cropping
pattern.
 Regional variation in farm
mechanization practices.

13. Vision, Mission and goals of Mahindra and
Mahindra farm equipment division
Vision:
“To be the undisputed leader of world automobile and farming equipment
industry.”
“ Farm - Tech Prosperity”
Mission:
“To provide best value for money to customers through best quality and
most cost effective products and services.”
Goals:
 To provide highly technological innovative product
 By 2015 it wants to enter almost all continents of world
 to make the production system even more efficient
 To usher prosperity; for its customers, dealers, employees, society and all
other stakeholders.

14. SWOT
Strength
 one among top three player
Strong brand name with market share of 42 %
in Indian tractor business.
 Strong relationship with dealers
 Strong supply chain with new technologies.
 Product development ability.
The parent company has its own Infrastructure
Company, IT Company and Financial service
company.
 Huge distribution channel in rural, urban and
semi urban area
 huge product range and strong R&D . The
team of >600 engineer pushes technology
forward.
 High investment capacity
 Diversified business
Opportunities
Growing economy and improved farm practices.
 Increase in farm mechanization due to labor
scarcity.
 Emerging market because only large and
medium farmers use farm machinery. Huge
market potential. penetration of tractors is 20
tractors per 1000 hectares of cropped area
 Increase in credit availability
 Technological innovation
 Government support for farm mechanization
 High export potential due to low cost of
manufacturing. ( exported 13722 tractors)
Weaknesses
The company is highly dependent on the rural
sector
Less technological ability as compared to
Foreign players
Low labor productivity
Threat
Dependency on rural segment and monsoon
 Farm land fragmentation
 Entry of foreign players
 Increase in diesel prices reduce tractors sales
 Development of technically superior new model
 Government policies (Subsidy)

15. Competitiveness- Five forces analysis
Rivalry :
 Existing competitors TAFE, Eicher, Escort, JD,
Sonalika, HMT, Others
Unconcentrated and competition is more.
 competition on cost and quality.
Economy of scale and continuous technological
innovation create entry barriers.
Bargaining power of Buyers:
 The consumer base of tractor is highly disbursed throughout
India.
 Due to High switching cost tractors companies can compromise
on quality and price
 Lack of awareness among farmers like pricing, offerings. Etc
 there are a few, big buyers so each one is very important to the
firm
 Hence buyers power is high.
Bargaining power of Supplier:
Though steel forms a major inputs , the farm equipment
industry is not most important customer for steel industry.
 Many number of supplier are there for tractor industry
 Switching cost from one supplier to another is less
 Hence supplier power is less.
Threat of Substitute:
 The firms major
product is tractor.
 very less
substitute for
tractors likes bulls
and power tillers but
have very low
performance.
 The tractors
produced by
competitors have
high price.
Hence less threat
of substitute
Threat of New
entrants:
High investment
and economy of
scale by mergers
and acquisitions.
 Highly
integrated dealers
network. It restrict
the entry.
 Hence threat
from new entrant
is less.

16. Value Proposition in India
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 giving 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 in the interactions with
others
Believe that the quality is the key to delivering value for money to the customers
 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 personal and corporate actions of
the group

17. Strategy
 Diversification of business as well as products: Automobiles and Farm
equipments. Different agricultural services in input, finance and IT also
provided by subsidiary of parent company.
 Place: Production plant operate in India, China and USA. In India target rural
farming population.
 Distribution network: Distribute product through local dealer network.
 Products: Different series of tractor with different names ranging from the 15
HP engine to 85 HP. Rice planter, Sugarcane thumper and detrasher.
 Price: low as compared to other competitor due to economy of scale.
 Promotion: Through TV, Newspaper and magazine advertisement, sponsor
local events and sports, arrange promotion campaign and field
demonstration.
 Technology: Production, Forecasting, account management (ERP), Data
management (MIS), Orders fulfillment.
 Management: Skilled employed own hired, Joint venture.

18. Mahindra and Mahindra value chain:
Firms infrastructure: Owned manufacturing plant in India and Joint venture for manufacturing in foreign countries.
High investor equity fund.
Human Resource Management: Recruit skilled people from reputed institute. Trained them and provide
appropriate compensation according to their work.
Technology development: New innovative product design, Use of MIS, ERP, monthly forecasting.
Procurement: Procurement of raw material from identified suppliers by making contracts, Advance machinery
imported form foreign countries.
Inbound logistics
 Identified suppliers
 economy of scale
purchase
 Suppliers agreement
( one subsidiary of parent
company also supplier)
 Just in time order and
delivery. Use Supplier
Kanban system.
 Maintain some
inventory.
 Road Transport use
trucks.
 A GSM based tracking
system was
Implemented to track the
trucks.
Operations
 Production plant : the
Area-wise, model-wise,
week-wise sales
forecasts
 Total quality
management system
monitored by skilled
engineers.
 ERP use for order
and inventory
management.
 MIS use for collecting
data and forecasting
demand.
 According to demand
assemble the tractor
part and deliver.
Outbound logistics
 It deliver tractor
from manufacturing
plat to companies
SKU and dealers
SKU on the basis
of demand.
 Information
system for tracking
order information.
 Keeping finished
good inventory
record.
 Give information
to plan
manufacturing
process to
manufacturing plant

Marketing and sales:
 Product : -
affordable tractor and
farm equipments.
-Standard design of
tractors and farm
equipments.
 Price: Tractor :
according to power
15 Hp to 85 Hp. Farm
equipment: low
compared to
competitor.
 Place: local dealer
showrooms
 promotion:
through add and
campaign.
After sales
services:
 Mahindra
service
stations
provide
maintenanc
e services
Informatio
n about
tools and
farm
equipment
 Register
complaints.

19. Core competence
Quality:
Product development
according to standard
Total quality management
system to ensure quality.
Customer focus:
 Design products according
to customer need through
consultation and feedback.
 Response to changing
need and exception of
customer speedily.
Individual dignity:
 Respect the time and
efforts of all employees and
treat all employees same.
It helps to retain employees.
Transparency and trust:
 They expand the business without compromising ethical
business standards.
 Transparency in transactions with suppliers and
customers
Develop trust among customer by providing standard
product and affordable price.

Sources of sustainable competitive advantages:
Operations:
 Economy of scale in operation helps to reduce cost.
 Total quality management system
 Use of Kanban to manage suppliers.
 Integration of supply chain with IT i.e. ERP, MIS to
manage and communicate. Use GSM for tracing material
delivery.
Firm Infrastructure:
 Strong financial resources
 Technology innovations
 Brand image

20. Recommendation
 Marketing Recommendations:
Focus on 41-50 hp segment tractors with new improved design which can
work in hard field.
Develop in-house credit lending facility (lending through parent
companies subsidiary at low interest rate on time with easy procedure.
 Focus on Channels
Ensure higher distributor margins and increase distribution network
 Implement custom hiring model: Mahindra tractors can be made
available on lease in partnership with government agencies as sugar mill
co-operative societies. Government partnership would impart a stamp of
reliability on Mahindra tractors and at the same time, provide -platform for
the farmers.
 Expand geographically
Diversify Tractors - Monsoons correlation: Tractor sales, as already seen,
are driven by monsoons. A bad 3-months monsoon season generally
translates into large inventories. Geographical expansion would help
diversify tractors sales ± monsoon correlation, thus bringing down
inventories to free up locked-up capital.

21. Conclusion
India is growing economy. Farm Mechanization in India is
still in its early stages. The company Mahindra and Mahindra having
more opportunities to grow due to high investment capacity, Huge
market capture and strong brand name. The competition from rivals
is more, low threat of new entrant, less bargaining power of supplier
and high bargaining power of buyer restrict the growth but
operational competitive advantages and core competence helps to
achieve the goals of company leads near mission and vision of
company.

22. Company
LOGO