Case Study (Mahindra & Mahindra)

Mahindra & Mahindra (M&M) limited is an Indian-based organization with an interest in several industries including automobile, agriculture, and finance and information technology. The global presence of the M&M limited is common among the automotive industries. M&M core brands are the Mahindra Jeep and the current Mahindra SUV. Recently, M&M global interest is in the developed markets especially in the United States and Europe. In fact, the company has recently acquired major brands like Renault and Tata. The following case study review strategies used by companies in pursuing globalization. Moreover, the case study focuses on M&M presence in the United States and approaches for global branding.

 

  1. What are the unique strategies that the emerging- market companies employ in pursuing globalization?

Historical background

Mahindra & Mahindra limited is one of the most prolific companies in India, and a multination corporation with global appeal. The company was established in 1945 for the purpose of steel manufacturing. However, the company has evolved into becoming one of the leading automotive industrial players in the world. Today, the company has succeeded in diversifying operations in vehicle manufacturing, aerospace engineering, agriculture, finance and insurance, hospitality, logistics, real estate and information technology (Deresky, 2013).

Cultural values

Mahindra & Mahindra success is derived from the organization’s culture of professionalism, customer service, corporate citizenship, quality and respect for human dignity. The company has made progress in ensuring that all the employees are competent for the job. Moreover, the employees enjoy the freedom and exercise innovativeness as a means to individual growth. The culture of good corporate citizenship has made it possible for M&M to operate on a global scale without compromising ethics. Besides providing quality products and services for the customers, M&M is renowned for serving and relating with clients in a respectable manner befitting human dignity.

Emerging-market companies strategies

Focusing on diversification in product and service delivery has elevated M&M and similar companies into global players (Deresky, 2013). Firstly, the company has exploited domestic opportunities in terms of low manufacturing cost, cheap labor and available market. The local market sustainability is critical for testing market capacities in other regions. Secondly, M&M success in the global market is anchored on innovation expertise.  However, this is possible when experimented on a low-income customer base, low-cost business models and through privatization. Emerging-market companies exploit natural resources that are readily available (Deresky, 2013). In this regard, the companies incur minimal costs in terms of marketing and distribution. Example of such natural resources includes low-labor costs, local supplier partnerships, mergers, and acquisitions. Partnering with local government is a critical step in developing emerging-market companies (Deresky, 2013). Local governments provide the necessary environment for growth in terms infrastructures, taxation and export subsidies. The above strategies for companies pursuing globalization are categorized into three aspects; global consolidation, global first mover, and merger and acquisition strategies. Under global consolidation, companies focus on countries that promote product standardization. In addition, companies acquire other global players in the same industry to become market leaders. Global first mover category includes companies with vast knowledge base and financial strength for operations and market expansion (Deresky, 2013). Merger and acquisition strategies are employed by companies that seek tangible and intangible assets for superior manufacturing capabilities. Acquisition and mergers provide companies with brands, image, resources, technology, network and knowledge required in achieving a global market appeal.

  1. What strategies will M&M have to employ in the U. S. to be able to sell its SUVs?

By using the low-optimizer strategy, M&M is bound to succeed in the United States market. Firstly, the demand for low-cost sports utility vehicles (SUVs) in emerging markets is high. In addition, the need for low-cost SUVs in emerging markets is anchored on product efficiency, environment-friendly and reliability (Chattopadhyay, Batra & Ozsomer, 2012). Therefore, manufacturing SUVs with diesel-engines and low-cost spare parts is vital in creating a market niche in the United States. Apparently, the demand for M&M’s SUVs in India, China, Africa, South America, and Europe has supported the company’s global success.  By considering the America’s need for fuel-efficiency and environmentally safe vehicles, M&M use the T2B5 models in improving efficiency. In addition, M&M requires investing in automobile Research and Development (R&D) to reduce vehicle defects.

Merger and acquisition

The previous strategy by M&M to merge and acquire renowned vehicle manufacturers like Chrysler was effective in succeeding in the American market. In addition, joint ventures with manufacturing companies in America will allow M&M access the market without much effort (Deresky, 2013). Example of a successful joint venture is the 2005 partnership between M&M and the International Truck & Engine Corporation that led to manufacturing and marketing of the Mahindra Scorpio SUV in America (Deresky, 2013).

Global first mover strategy

A global first mover strategy can propel M&M into accessing to the United States market for SUVs (Deresky, 2013). In this regard, the M&M can provide the world with the first electric-powered SUV through the American market. Apparently, the American market for the SUV’s requires efficient vehicles in terms of fuel consumption and engine performance (Chattopadhyay, Batra & Ozsomer, 2012). In this context, production of solar-driven SUVs by M&M would be an added advantage.

The entry of the SUVs by M&M in the American market can be initiated by the organization’s hospitality, real estate, finance and insurance firms. However, this strategy must be viewed as a product placement initiative. The essence of this strategy is creating awareness among the potential American customers.

Outsourcing

It is imperative for the M&M to outsource some of the automotive business operations. In this regard, the company can outsource manufacturing of spare parts to low-cost countries like China (Chattopadhyay, Batra & Ozsomer, 2012). Therefore, the overall cost of production for the SUV will be lower compared to the automobile industry in the United States. Moreover, the initiative allows SUVs by M&M to be competitive in the developed market. It is imperative that M&M set up an assembly plant for SUVs in the United States as a means of reducing manufacturing cost.

Cultural competency and marketing

Improving on cultural competency is an issue of concern before selling the SUVs in the American market. It is imperative that staff working for M&M in the United States be culturally competent by understanding American language, spending habits and cultural values (Chaturvedi, Chaturvedi & Chaturvedi, 2011). Improved marketing strategies is an essential aspect in ensuring that SUVs by M&M compete with the American brands. In this regard, pricing, product placing, promotion, and product specifications should be harnessed to achieve competitive advantage. For example, setting a price that is relatively low compared to those of the competitors. In addition, product placing in strategic locations is essential for access (Brady, 2014). However, this is possible through partnership with local distributors and marketers. Importantly, marketing SUVs in the United States require constant promotion through advertisement media like television and billboards (Brady, 2014). Moreover, product branding will require marketing research on what customers prefer in terms of SUV’s specifications.

Corporate leadership

M&M success in the United States will require good corporate leadership. It is important to include corporate directors from the host country. According to Belasen (2000), the essence of diversified corporate leadership is to enshrine a culture of fairness and sensitivity to ethnic diversity and cultures. The structuring of M&M corporate leadership requires competent managers with ability and agility to make decisions. In respect to managing human resource, employee motivation is vital to promoting growth and development. An effective M&M leadership should focus on encouraging networking, continued learning and career opportunities for mid-level managers (Belasen, 2000). Training managers to understand the United States market, partners, competitors, and customers is a necessity.

  1. 3. What are the various alternatives in front of M& M in building its brand at the global level?

M&M has the ability to compete ta the global stage by branding its products, especially the SUVs through an effective conceptual model. According to Davis (2010), the conceptual model focuses on position, communication, delivering, and leveraging the brand equity.

Positioning

Firstly, positioning of the M&M brands should consider the product features that’s satisfy the customers’ perception. For example, tangible attributes like size or shape may attract potential customers. On the other hand, attributing the brand with intangible features offers customers with psychological satisfaction. Therefore, presenting the brand’s functions and benefits provides customers with both functional and relationship values (Davis, 2010).

Communication

Secondly, M&M need to communicate the brand message by establishing awareness campaigns through advertisements. Television, bill boards and electronic media offers the best avenues for automobile advertisements. The effectiveness of a brand communication message depends on theme (Davis, 2010). A theme reinforces the message objective of engaging the customers from an emotional dimension. Therefore, inclusion of celebrities who act as role models is vital to such a campaign. In addition, communicating the brand image is effective if complemented by organized events and shows. However, the communication of the brand image must consider the global consumer attributes.

Delivering brand message

Thirdly, delivering the brand performance is initiated by analyzing a product’s competitiveness at the global level (Davis, 2010). The analysis is based on brand recognition, purchases, awareness and recall. In this regard, M&M is able reinvent marketing strategies that promote brand loyalty, awareness and market performance. At this stage, introducing customer service programs and customer satisfaction metrics is necessary.

Leveraging brand equity

Finally, M&M can translate its domestic success in India to the global market through leveraging of the brand equity. Leveraging brand equity through line extension especially on vehicle manufacturing is necessary for the global success (Davis, 2010). Therefore, M&M need to extend its vehicle manufacturing to low-cost countries like China and Brazil. Moreover, brand extension as evidenced through improved product models like the new electric SUVs is vital at the global level.

 

 

References

Belasen, T. A. (2000). Leading the Learning Organization: Communication and Competencies for Managing Change. Albany, NY: SUNY Press.

Brady, L. D. (2014). Essentials of International Marketing. New York, NY: Routledge.

Chattopadhyay, A., Batra, R., & Ozsomer, A. (2012). The New Emerging Market Multinationals: Four Strategies for Disrupting Markets and Building Brands. New York, NY: McGraw Hill Professional.

Chaturvedi, P. D., Chaturvedi, P. D., & Chaturvedi, M. (2011). Business Communications: Concepts, Cases, and Applications. New Delhi, DH: Pearson education India.

Davis, J. A. (2010). Competitive success, How branding adds value. Hoboken, NJ: John Wiley & Sons.

Deresky, H. (2013). Mahindra & Mahindra (B): An Emerging Global Giant? In H. Deresky, International Management, Management across Boarders. 8th ed. (pp. IC-3-IC-12). Saddle River, NJ: Pearson Prentice Hall.

 

 

 

 

 

 

 

 

 

 

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