Globalization of Mahindra

Executive Summary

Mahindra & Mahindra Limited, a multinational automotive manufacturer from India, is part of the Mahindra Group. To reduce the risk that arises when only focusing on one market, the Company started its efforts to globalise in 2000. The company plant to become a truly global player by being first a domestic leader, then gaining a cost leadership, but not trough labour arbitrage because that vanishes quickly, but by an innovation arbitrage. After that they focused on internal quality, processes and especially organisational development, meaning peoples’ development, to transform the company into a global player. M&M focused with this strategy mainly on the US, India and China, representing 75% of the global tractor market.

Key Facts/ Understanding

The major part of Mahindra’s strategy was the five steps model the company developed. They wanted to first gain a strong position in their domestic market India, which would then make it possible to build up a global supply chain system. But they also emphasised on internal organisational development and making sure that everyone inside the organisation understood the goal of becoming a global player. Mahindra mainly became global by a high amount of acquisitions, in markets where this was possible, and therefore growing but also decreasing the number of competitors. Using the “Fortress Mahindra” strategy, the company protected its core competencies throughout this whole process.

Analysis of Approach to globalisation using Ghemawat’s CAGE Framework

Applying the CAGE framework on Mahindra’s first two targets, the US and China, it becomes clear why Mahindra chose these locations, apart from the fact that they represent together with India 75% of the worldwide tractor market. On the one side, when looking at cultural and geographical attractions, China is clearly in favour, as it is also an Asian country, sharing similar values in culture and even shares a border with India. On the other side, the US...