Mahindra &Mahindra (A): Transformation of an Indian FamilyBusiness into a Globally Competitive Firm


Code : FMB0010

Year :

Industry : Automobile Industry

Region : India

Teaching Note:Available

Structured Assignment : Available

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Family Businesses – A Dominant Form of Business
Familybusinesses,adominantformofbusinessduringthefirstIndustrialRevolution2 , are equally significant in the 21st century. Veryoften,afamilybusinessoriginatesduetotheinitiativesofoneortwofamilymembers.Familybusinessescanbeviewedasone oftheinitialstagesinthelifecycleofanenterprise.Gradually,othermembersofthefamilyalsojointhebusiness.Lateron,non-family membersare alsobroughtin,as itbecomesdifficultfor thefamilymembers alonetocarryout alltheactivitiesof thebusiness...

Family Businesses in India
In India, economic development began in the 1950s and 1960s. However, during this period, it was planned by the state. There were strict government rules and regulations and every industrial activity was licensed. It was commonly referred to as the period of ‘License Raj’6 . Under the protection of License Raj, family businesses functioned as near monopolies. Further, due tomonopoly laws, there wasn’tmuch competition amongst the companies.As a consequence, family businesses gradually lapsed into complacency, resulting in reduced efficiency. However, this scenario changed in the early 1990s...

M&M’s Future Plans
The businesses involved in the automotive division aremanufacturing andmarketing of UVs and LCVs, whereM&M has amarket share ofmore than 50%27 . In India, in the segment of UVs,M&M is the market leader (Exhibit VI) with a share of 42%,28 which ismuch higher than that of its competitors. In January 2009, project ‘Ingenio’ ofM&Mlaunched aMultiUtility Vehicle (MUV) called ‘Xylo’ to compete directlywith Toyota’s ‘Innova’ andChevrolet’s ‘Tavera’.M&Mtried to enter theMUV market earlier through the launch of the ‘Voyager’ van (developed with the help ofMitsubishi of Japan). However, Voyager was not a big success owing to the unsuitable price-value equation29 of the vehicle. M&M is focusing on becoming a global leader in theUVsegment too.Apart fromIndia,M&Mhas already been selling its SUVs inSouthAfrica,Uruguay, Serbia and Italy. With a hybrid SUV, M&M also plans to enter the US market. Moreover, through the Mahindra-Renault JV, the two companies plan to launch the entire range ofRenault products in India...

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