Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company
Farm Equipment Services (FES), the tractor manufacturing division of Mahindra & Mahindra Ltd. (M&M), is considering entering the Chinese tractor industry through a joint venture with Jiangling Tractor Company (JTC), a state-owned automotive enterprise. M&M had seeded the Chinese tractor market with exports and had concluded that the most efficient and prudent way to serve the Chinese tractor market was through a joint venture with a local partner. JTC had good brand recognition and strong position in the small tractor market. However, due to the lack of interest from the parent company, Jiangling Motor Company Group, JTC faced severe operational challenges, was over-staffed, had high overhead, owed significant amounts to suppliers, and dealers were fleeing the company. M&M saw an opportunity to work with a management team they were comfortable with and to leverage JTC's potential to grow in China and to export tractors as well as components. The challenge was to determine how management should proceed to restructure and integrate the joint venture assets.
Swot Analysis of "Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company" written by Jean-Louis Schaan, Chandra Sekhar Ramasastry includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tractor Mahindra facing as an external strategic factors. Some of the topics covered in Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company case study are - Strategic Management Strategies, Joint ventures, Reorganization and Global Business.
Some of the macro environment factors that can be used to understand the Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , increasing energy prices, wage bills are increasing, increasing transportation and logistics costs, there is backlash against globalization,
there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tractor Mahindra, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tractor Mahindra operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company can be done for the following purposes –
1. Strategic planning using facts provided in Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company case study
2. Improving business portfolio management of Tractor Mahindra
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Tractor Mahindra
Strengths Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tractor Mahindra in Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company Harvard Business Review case study are -
Training and development
– Tractor Mahindra has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Effective Research and Development (R&D)
– Tractor Mahindra has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Tractor Mahindra has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Tractor Mahindra has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Highly skilled collaborators
– Tractor Mahindra has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Tractor Mahindra is one of the leading recruiters in the industry. Managers in the Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Global Business industry
– Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company firm has clearly differentiated products in the market place. This has enabled Tractor Mahindra to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Tractor Mahindra to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Tractor Mahindra in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Tractor Mahindra
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Tractor Mahindra does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Tractor Mahindra are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Diverse revenue streams
– Tractor Mahindra is present in almost all the verticals within the industry. This has provided firm in Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Ability to lead change in Global Business field
– Tractor Mahindra is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Tractor Mahindra in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Tractor Mahindra is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Jean-Louis Schaan, Chandra Sekhar Ramasastry can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Weaknesses Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company are -
High bargaining power of channel partners
– Because of the regulatory requirements, Jean-Louis Schaan, Chandra Sekhar Ramasastry suggests that, Tractor Mahindra is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Products dominated business model
– Even though Tractor Mahindra has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Tractor Mahindra has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High operating costs
– Compare to the competitors, firm in the HBR case study Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Tractor Mahindra 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company can leverage the sales team experience to cultivate customer relationships as Tractor Mahindra is planning to shift buying processes online.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Tractor Mahindra supply chain. Even after few cautionary changes mentioned in the HBR case study - Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Tractor Mahindra vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Tractor Mahindra is dominated by functional specialists. It is not different from other players in the Global Business segment. Tractor Mahindra needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Tractor Mahindra to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Tractor Mahindra has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Low market penetration in new markets
– Outside its home market of Tractor Mahindra, firm in the HBR case study Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Tractor Mahindra has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Tractor Mahindra has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Tractor Mahindra even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Opportunities Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Tractor Mahindra can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Tractor Mahindra can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Tractor Mahindra in the consumer business. Now Tractor Mahindra can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Tractor Mahindra can develop new processes and procedures in Global Business industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Tractor Mahindra can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Tractor Mahindra has opened avenues for new revenue streams for the organization in the industry. This can help Tractor Mahindra to build a more holistic ecosystem as suggested in the Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company case study. Tractor Mahindra can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Tractor Mahindra can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Tractor Mahindra can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Tractor Mahindra to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Tractor Mahindra to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Tractor Mahindra can use these opportunities to build new business models that can help the communities that Tractor Mahindra operates in. Secondly it can use opportunities from government spending in Global Business sector.
Buying journey improvements
– Tractor Mahindra can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Tractor Mahindra is facing challenges because of the dominance of functional experts in the organization. Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Tractor Mahindra can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Tractor Mahindra to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Threats Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company are -
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Tractor Mahindra in the Global Business sector and impact the bottomline of the organization.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tractor Mahindra can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company .
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Tractor Mahindra will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Tractor Mahindra in the Global Business industry. The Global Business industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Regulatory challenges
– Tractor Mahindra needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Global Business industry regulations.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Tractor Mahindra business can come under increasing regulations regarding data privacy, data security, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
High dependence on third party suppliers
– Tractor Mahindra high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Tractor Mahindra can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Tractor Mahindra demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company, Tractor Mahindra may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tractor Mahindra with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Mahindra & Mahindra Ltd.--Farm Equipment Sector: Acquisition of Jiangling Tractor Company is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Tractor Mahindra needs to make to build a sustainable competitive advantage.
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