PESTLE two brothers KC Mahindra and J.C Mahindra

PESTLE and SWOT
ANALYSIS ON MAHINDRA AND MAHINDRA

 

Executive summary:
– in this assignment I have taken a firm from my country and done a Pestel and
SOWT analysis. Before starting off with the analysis I have given introduction
of the firm that how it started from where it started and where the head
quarters is, also in this assignment I have talked about the company’s
financial status that is it in crisis or in good situation and I’ve mentioned
about the revenue, assets, net income.

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Introduction

 

Mahindra and
Mahindra is an automobile manufacturing company founded in India in 1945 right
2 years before India’s independence. The company is famous in India for its
commercial vehicles and farming vehicle the company has lot of collaboration
with other firms as well like Ssang Yong motors, Reva electric car company,
B.S.A Company, Erkunt tractor(1). The Company has its headquarters in Mumbai
India. The company is a public company and is listed on the Bombay stock
exchange, the company’s executive chairman is Mr. Anand Mahindra and Dr. Pawan
Goenka as managing director of Mahindra and Mahindra limited. The company’s
products are served worldwide.  The
company was ranked 21st in 2011 by fortune 500, it was named the 21
top companies in India (2).  

Mahindra and Mahindra
limited was established in the year 1945.  
The company was founded by two brothers KC Mahindra and J.C Mahindra and
Malik Gulam Mohammed.  In 1945 two
brothers and Malik  Gulam Mohammed
started a company in Bombay named Mahindra and Mohammed they started as a steel
company. Two years later India won its independence, Gulam Mohammed had to
leave the company and had to go to Pakistan later he became the first finance
minister in Pakistan.  After Gulam
mohammed left the company the Mahindra Brothers touched the sky after making
the decision to do collaboration with willy overland  corporation and started assembling  willy jeeps in Mumbai and soon the name of
the company was changed to Mahindra and Mahindra .After the success of willy
jeeps they decided  to launch light
commercial vehicles and  agriculture
tractors . Mahindra Engines built up an indigenous diesel motor for its
vehicles to beat the fuel emergency in 1975. In 1984, Mahindra Hellenic Auto
Industries S.A. was built up in Greece to gather and market utility vehicles in
Europe.

In 1991, the
organization presented the Commander scope of vehicles and the Armada scope of
vehicles was divulged in 1993. The Mahindra Ford India Limited was set up in
1996 to fabricate traveler autos. The biggest online utilized vehicle site in
India was propelled by Mahindra Network Services in 1999. The organization
receives another logo in 2000. The Scorpio was propelled in 2002. The Scorpio
introduced another age, world-class Sports Utility Vehicle (SUV) that reclassified
the SUV showcase and satisfied its situating: ‘Everything else should be
ignored’. In 2004, the Bolero and Scorpio were propelled in Latin American,
Middle East and South African market

Mahindra and
Mahindra became the first Indian automobile company to launch common rail
diesel engines offering it in the Scorpio which they launched in 2005.In the
same year they had done a collaboration with Renault and had launched a car
logan which was a sedan in India .Bolera one of the models of Mahindra and
Mahindra had won the tittle of UV number 1 in 2006.In a study conducted by TNS
Mahindra and Mahindra was ranked second in the prestigious most trusted car
company in India.

 

Financial position

The current share
price of Mahindra & Mahindra limited is 766 INR ( 16 SGD). The company has
shown a constant growth from few months. There domestic sale have went up by 8%
as compared to last year sales. (3) The passenger vehicles showed some lost due
to the competition in the market from Maruti Suzuki. The profit of the last
year was more than 39 million dollars. If we talk about the liabilities side of
the company of past five years it has been decreasing because they have stopped
taking long term borrowings. But their long term provision has been increasing
because they are making provisions for the increase competition in the market.  (4) When in 2010, Mahindra acquired stake Reva
electric, it has been giving good profit and the company revenue has been
increasing from past five years. Mahindra also hold a stake in SSYANG MOTOR
which has been providing more revenue than Reva electric. In previous year Q1
the company showed a slope of 46% of net profit which happened because of more
taxation and interest earned. The provision also had big impact because it grew
89.6% which made a big impact on the financial position of the company. As of
now, the total asset value of the company is 9.5 Billion dollars (usd). The
cash flow from financial activities had a big change because it fell about 50%
as compared to the last year. The cash flow from operating activities remained
constant if compared to last 3 years. The company sales have been increasing
from year to year, 2017 showed a good number in net sales. The balance sheet
for year 2017 shows the total liabilities and total assets  of  6
billion dollars (usd) (5)

 

Swot
analysis

 

 

 

 

Strength
of Mahindra and Mahindra limited: –

Mahindra
and Mahindra is a vast company and it focuses on lot on technology and
innovation, throughout the years the company has invested a lot of capital in
technology to serve best products (6). Mahindra and Mahindra limited follows
the 5S frame work which is space, self-indulgent creativity, simplicity, sans,
sustained experiments. Which helps the M to improve in the innovation and
technology field (2). The Mahindra and Mahindra is a big brand name in
commercial vehicle industry as it has been on the 2nd position is
trying to improve it since the day (7). The company has also crated its brand
name in passenger vehicles as its on 3rd position in India (8). As
of now the company has 14-16 new products in 2015-16, which helped the company
to grow its sales (9).

 

 

Weakness
of Mahindra and Mahindra: –  Mahindra and
Mahindra entered the two-wheeler market in 2008 after buying kinetic motors and
the sales of the hasn’t been good (10). Moving on to the tractors, Mahindra is
dependent on the rural are for the sale of tractors as the sales of tractors
are made from rural area. It dependents on the because all the crop farming is
done in rural area and if there is no rain the sales are to drop drastically
(11).

 

 

Opportunities
for Mahindra: – the growth of automobile industry and support from government
is a good opportunity for Mahindra and Mahindra. As the government of India is
doing make in India initiative which will be a good as it has potential growth
which will be a good linkage for Mahindra and Mahindra. The company has a good
opportunity to export its cars to African market (12). Mahindra and Mahindra
has been a pioneer for electric vehicles in India and concentrating on
improvement of the electric vehicles showcase the vitality is made reasonable
by popularity of half and electric vehicles.  

 

 

Threats
for Mahindra and Mahindra: – the concern of air pollution, road safety is
growing in Mahindra as it will impact the ownership patterns and will also
impact the future of automotive industry. As the recent ban on registration of
2000cc diesel cars has caused problems. The Indian government is already
considering Mahindra existing product portfolio a threat. The competition is
rising in the Indian market for the automobile industry and the competitors are
launching new vehicles which are fuel efficient and provide more benefits this
can be a major threat for Mahindra and Mahindra.

 

Pestel
analysis

 

Political
factors influencing Mahindra and Mahindra: –

 

Government
laid weight on mechanization of agriculture to help the nourishment grain
production. Therefore the farming division began getting monetary help, which
reinforces the request of agribusiness situated results of M&M. The
government arrangements on Indian car industry have been surrounded keeping in
mind the end goal to help in the development of the cars area in India. A
reduction in the levy forced on car exports out has been affected by the Indian
government. There has likewise been an expulsion of the base capital
speculation required from new speculators. The Indian government is asking the
state government to ensure the continuous power supply to the automobile
manufacturing units as well granting the automobile companies the land they
want. The Indian government has done a concession on the import duty for the
establishment of new manufacturing units. (14)

 

 

 

 

 

 

Economical
factors influencing Mahindra and Mahindra: –

 

The
interest rates decide the cost of the capital for the company. As commercial,
state, rural, regional banks give credit to the company and give loans to the
customers, these rates are major factor. The exchange rates matter the most to
a firm as they decide the company’s foreign investment, imports and export
supply price. The national growth of economy matter because when it’s raising
the demand of the automotive products will also rise. The inflation plays a
part in this because if the inflation is high then the supplies will cost more
and so will the company products.

 

 

Social
factors influencing Mahindra and Mahindra: –

 

The
company has to plan strategies to adapt the social trends like what’s going on
in the world, which type of things people are into and what new they would like
to see in automotive products. The company has to create products according to
the social. The company needs to keep record of the people living standards so
that they could make automotive products according to that. As the Mahindra and
Mahindra has value for money products. (13)

 

 

Technological
factors influencing Mahindra and Mahindra: –

 

Technical
shifts can influence costs, quality, and prompt development. Vehicles chipping
away at sustainable power source are the demand of present.

Ease,
low fuel utilization vehicles/products are essential of worry to the client,
which are satisfied by new and imaginative innovation.

Utilization
of web as a medium to exchange utilizing e-techniques re enforces the
advertising system of organization.

 

 

 

 

Legal
factors influencing Mahindra and Mahindra: –

 

The
legal changes matters to the company because it can affect the company’s costs
if there are new rules and regulation by government. The legal factors of
government are also collaboration which leads to collaboration with
agriculture. If the rules and regulation are changed by government then it
might affect the working hours of employees, safety, wages and these are also
counted in legal factors.

 

 

 

 

Environmental
factors influence Mahindra and Mahindra: –

Mahindra’s
industry wastes system management project has achieved water positive status.
The company is looking out to match the environment factors with government by
manufacturing vehicles which emit less and they are making electric vehicle so
the environment won’t get polluted and they will use CNG gas which emit less.
But the company has to follow the environmental laws if they want to set up
plants.(15)

 

 

 

 

 

 

 

 

Conclusion

Mahindra and
Mahindra are doing great performance domestically and overseas. Past
performance of Mahindra and Mahindra implies the growth of the company.
Mahindra and Mahindra is one of the largest manufactures and sellers of
tractors across the world. Mahindra and Mahindra have received great heights
within short period of time. Its biggest strengths are cooperative environment
and effective management. Mahindra and Mahindra are considered the market
leader in the automotive industry.

 Thus according to research on Mahindra
& Mahindra Group it shows that the company uses the Strategic Key points in
the external environment for long-term sustainability and sustained success. It
is the one which encourages the new ideas and also have plan to sale the new
product in the market. This company is the one which try to develop new
products for consumers. Mahindra & Mahindra company is also socially
responsible it give 1.3 crore only from its annual report for helping poor and
unprivileged girls. Which shows that the company not only think about its
profits but also feel the responsible about our country India? It is that which
also do international trading with other countries. It also have a clear vision
and goal which shows the dedication of the company. The mission itself says
that it is not thinking about profits but it want develop ourselves. Mahindra
and Mahindra try to develop the new products which do not harm the environment
and save the renewable resources example MAHINDRA REVA which is an electric
car. According to research it shows that Mahindra & Mahindra is one company
which is respected and trusted by consumers and it is the top industry in
INDIA.