Mahindra & Mahindra in South Africa
Case: Mahindra & Mahindra in South Africa In May 2011, Pravin Shah, the CEO at Mahindra & Mahindra, was evaluating four possible options of company’s growth strategy in the South Africa. Those options included: entering into agreement with the local vendor for the contract assembly of M&M vehicles, investing in its own manufacturing plant in South Africa, using South Africa as a hub for the further export of the other countries and lastly waiting and watching until enough vehicles are sold for the sustainable long term growth. Once those options were evaluated, Shah needed to present the final chosen one to the board of directors for the final approval on the best strategy for company’s growth in the South African Market. 1) Which option should Shah chose?
Based on the information presented in this case (and not based on the class discussion and video presented), I would advise Shah to exercise the wait and watch strategy at a given period of time. Shah was faced with this decision in 2011, which was only a few years after the global recession took place. Even though they had an outstanding result in 2010 showing the growth of sales at 24% and making the projections for the further sustainability, that was only one year of the positive outcome compared to the years before that. During the time of the recession and specifically in years 2007 through 2009, an automotive market suffered dramatically. It was mainly due to the flow of credit and the passing of the law by the local South African government to limit further availability of credit. Solely based on the case information, it would make sense to make a projection plan for the next 3-5 year to watch the growth of the automotive market and then take additional necessary steps to further grow the company’s overall expansion in the local market. Even though this option has some negative sides such as higher import duty and losing some of the market share to its competitors, in case of the declining
Based on the information presented in this case (and not based on the class discussion and video presented), I would advise Shah to exercise the wait and watch strategy at a given period of time. Shah was faced with this decision in 2011, which was only a few years after the global recession took place. Even though they had an outstanding result in 2010 showing the growth of sales at 24% and making the projections for the further sustainability, that was only one year of the positive outcome compared to the years before that. During the time of the recession and specifically in years 2007 through 2009, an automotive market suffered dramatically. It was mainly due to the flow of credit and the passing of the law by the local South African government to limit further availability of credit. Solely based on the case information, it would make sense to make a projection plan for the next 3-5 year to watch the growth of the automotive market and then take additional necessary steps to further grow the company’s overall expansion in the local market. Even though this option has some negative sides such as higher import duty and losing some of the market share to its competitors, in case of the declining