Mahindra & Mahindra in South Africa Essay

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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 …show more content…
This presents a colossal opportunity for M&M’ to enter the local South African market and continue its growth and profitability by securing the trust of local population. As long as company considers the growing need and affordability of the vehicle introduced in the future, they have a strong potential in further securing the larger auto market segment in the local market.

4) What potential roles can M&M’s South African subsidiary play in the company’s global network?
With the globalization growing it is very important for international companies to be able to secure the brand within local markets. In this particular case, a South African subsidiary could potentially mean a large growth for the M&M. They would be able to shorten their delivery time and secure additional market segment by signing with the government. It would also be easier to export vehicles to other locations. The parent-subsidiary operating structure allows for greater diversification and increased efficiencies, partly because senior management at the parent company does not have to be involved in the operational details of its subsidiary. It would also isolate certain financial risks because the two companies are separate legal entities.

5) What should be Shah’s recommendation to M&M’s board of directors?
Shah should advise the board of directors that at the current time it would be beneficial for the company to monitor the growth/decline of the
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