Case analysis (Mahindra and Mahindra in South Africa

Subject: Consumer Behavior

Paper Model: APA

Paper Type: Assignment

Total Words: 1441

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Mahindra and Mahindra in South Africa

Question 1: hat criteria are relevant in choosing among the 4 options

What makes South Africa (SA) an attractive destination for an overseas auto company?


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Best criteria for analyzing four options are to analyze them as per their benefits and cost. It benefit of option is more than its cost, and then it should be accepted. If its benefit is less than its cost, then it should be rejected. If all options are giving more benefits than cost then options giving highest returns would be accepted. It is important to include that how much cost company can bear in return of benefits. It should analyze all these steps for deciding that what would be best option to choose from.

If it is not having appropriate market research and idea of market, then it should contract with local vendor. It should collaborate with local vendor to provide him all local information required for manufacturing. It would bind him to depend on vendor. Other option available for company is to expand its Indian operations. It can also import machinery from India and sell it in African market. For analyzing this option, it should also consider cost of manufacturing in India in addition to transfer cost. It should compare it with cost of manufacturing it in South Africa. If labor and material in India is cheap, then it should focus on this strategy.

If cost of transpiration and manufacturing at domestic country is high then it should not use this strategy. All options should be analyzed on short and long run basis. Best option should be selected from all of them. It can should every strategy from financial point of view. Before selecting any option, its long run implications should be analyzed.

What makes South Africa (SA) an attractive destination for an overseas auto company?

Market of South Africa for auto companies has been growing. It is providing opportunities to international investment. It is providing them new ways to invest in continent. It is growth market with fragmentation. In African continent, this region is showing sign of growth in automotive industry. Automotive industry in South Africa is accounting 10% of manufacturing exports. It is exporting to other countries. It is fulfilling demand of own country and exporting it towards other countries.

            Contribution of automotive industry in GDP of South African country is 7.5%. This industry is contributing for increasing GDP of country. Production of vehicles is less than 1% as compared to total global productions. Due to global recession, this industry damaged a lot. After three years of fall in sales, it has gained improvement and growth. It is moving towards growth now. Remarkable growth is analyzed in 2010. It is recorded 24%. It is also targeted by government that production would reach to 1.2 million in 2020

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