Economic Influences of Mahindra & Mahindra †MyAssignmenthelp.com

Question: Discuss about the Economic Influences of Mahindra Mahindra. Answer: Economic Political Influences At its domestic peak in 2010, Mahindra Mahindra rose to become Indias fourth largest automaker, in order to experience growth the company needed to look to expand to international markets. The global automotive is of particular importance in the mature economies including the United States of America and emerging economies including China and India, as well as wealth the industry provides a lot of job opportunities to locals. Data from the KPMG report attributes the automobile industry as one of the key drivers in Indias economy, accounting for approximately 4% of the gross domestic product and over 200 000 jobs in 2010. As the Indian economy has grown at a steady rate so to has the percentage of people who are able to afford vehicles, which has resulted in a rise in demand. This rise also saw Mahindra Mahindra look to international markets and alliances to ensure access to the best technology and infrastructure. Political factors that aided expansion into global markets resulted from the changingeconomic state which say the breakdown of trade and investment barriers. In regards to the Indian government's input in the future of automobiles they need to provide the support to ensure growth trends are maintained as well as encourage ecologically sustainable vehicles, this will come through closely regulating environmental standards. Evaluation and solutions (Sam) India's large enterprises have many similar aspects, one of which is involved in the industry is very wide, covering different areas. The advantage of this strategy is enterprise could easily achieved economies of scale effect, winner takes all. Meanwhile, across different industry could makes its product line wider and use differentiation strategy (porters generic strategy) its helpful to find out the potential business opportunities. However, its disadvantage is obvious as well, because of the wildly operating, its capital can not been used concentratelly. Its capital advantage is splitted. Therefore, the product line with opportunities will not receive enough support from company. Although, those companies always get policy and capital support from local government. In global period, over rely on government support without improve its power , company will not spread its advantage at domestic market from all over the world. The case mentioned that Mm COMPANY has a very wide product line, including different categories. Their direct competitors including japanese automobile industry and American auto industry. Japanese companies are famous for its eco category cars, which is cheap and energy saved product.American companies have a deep understand about their domestic market and customer demand. Each company has been in this particular market for many years, accumulated a lot of technology and patent advantages, through the global OEM to reduce labor costs and Maximize those advantages. In the other hands, The US auto market has been developed for many years, the market is mature. New competitors are unfriendly in North America. Those big names have their own vertical market for years. Each company's market share is stable.It is very difficult for MM to gain its market share. Currently,M M is mainly through the acquisition of internationally renowned brands to complete the technology upgrade, enhance market share and remain competitive.This practice is very effective in the short term, but for the company's long-term development is not feasible. Acquisition not only requires large capital Expenses, while the acquisition of asset conversion rate can not reach 100%, the acquisition of enterprises often have some business problems such as debt, the product line did not meet the market demand.If the company can not be reasonable for the acquisition of assets Of the M M company's current situation, the difficulty of entering the US market will be higher than entering the Asian and European countries.For the characteristics of the US market, M M could launch some specific product to test the market reaction. it is not recommended to provide full range of products to the US market in the short term.For the special needs of US consumers, several well selected product to win a good market reputation, Combined with the acquisition before, steadily expand its investment, can effectively resist the investment risk. Conclusion: Being one of the biggest representatives of Indian Automobile industry, Mahindra Mahindra makes important contribution to GDP as well as employment of India. Theeconomic steady state growth and resultant rise in income and affordability subsequently increased the demand for the vehicles in market. The domestic demand of the nation propelled the business of the company making it fourth largest automaker. The international big players in this sector are US, Japan and China that create much competition for the Mahindra Mahindra in form of better knowledge of market, sound technology and resultant cheap pricing and availability of capital. Expansion of international market demand became the prime focus of the company .This has led the firm to adopt the strategies of diverse production and economies of scale, acquisition and alliance with international brands to upgrade its technology and infrastructure. The firm needs to shift its focus toward strategies giving it edge over others in the long run. This requires consolidation of capital. The method of acquisition comes with challenges of debt, higher capital base and the firm needs to adopt techniques of asset acquisition combined with selective product launch that would consolidate the firms market popularity overseas as well as Resilience against investment risk. Moreover, the role of political bodies in the market expansion is immense because the policies in support of the abolition of trade and investment barrier are of crucial importance to make cross-border movement of goods and make transaction. Another way government helps in business growth and operation of the firm is to regulate for encouraging production maintaining ecological standards that would also make the products competitive in world market.