pestle analysis of m&m tractors

PESTLE ANALYSIS OF MAHINDRA AND MAHINDRA AUTOMOTIVE

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PESTLE ANALYSIS OF MAHINDRA AND MAHINDRA AUTOMOTIVE

BYAMEY D. RAJPUT

UNDER THE GUIDANCE OF

Dr. SANTOSH B. RANE2010-2011

PESTLE ANALYSISMAHINDRA AND MAHINDRA

AUTOMOTIVE

PESTLE ANALYSIS OF MAHINDRA AND MAHINDRA AUTOMOTIVE 3

About M&M

Automotive Division of Mahindra & Mahindra Ltd. is in the business of manufacturing and marketing Utility Vehicles, LCVs and services for last 52 years.

It is the market leader in this segment enjoying more than 50% of the market share.


CONTENTS

TOPIC PAGE NO.

OVERVIEW 5

PURPOSE OF PESTLE 6

POLITICAL FACTOR 8

ECONOMICAL FACTOR 11

SOCIAL FACTOR 13

TECHNOLOGY FACTOR 15

LEGAL FACTOR 17

ENVIRONMENTAL FACTOR 19

SUMMARY 21


OVERVIEW Political, Economical, Social,

Technological, Legal, Environmental. It encompasses the important factors

that influence strategic management. It gives an overview of the different

macro environmental factors that the company has to take into consideration.

It is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations.


PURPOSE OF PESTLE

What environmental factors are affecting the organisation?

Which of these are most important at the present time?

Which of these are most important in the future?


PESTLE

Political

Economical

Social

Technology

Legal

Environment


POLITICAL FACTORS

These refer to the government policies such as intervention of government in economy, what goods and services the govt. want to provide?, to what extent?, what are govt.’s priorities?

Political decisions play a vital role in many business areas, like, education of workforce, security, health, infrastructure of the nation.


POLITICAL FACTORS INFLUENCING AUTOMOTIVE INDUSTRY

Government laid stress on mechanization of agriculture to boost the food grain production. Therefore the agriculture sector started getting financial assistance, which bolsters the demand of agriculture oriented products of M&M. (e.g. tractors)

The government policies on Indian automobile industry have been framed in order to aid in the expansion of the automobiles sector in India.

A reduction in the tariff imposed on car exports has been effected by the Indian government. There has also been a removal of the minimum capital investment required from new investors.


POLITICAL FACTORS INFLUENCING AUTOMOTIVE INDUSTRY

The Indian government is also urging the state governments to ensure continuous power supply to the automotive manufacturing units as well as granting them with the preferred plots of land.

The government has also proposed for a concession in import duty for the establishment of new manufacturing units and industrial holdings.


ECONOMICAL FACTORS

These factors are related to taxation changes, interest rates, exchange rates, inflation, recession, economic growth, etc.

Economical factors influences the behavior of Company.


ECONOMICAL FACTORS INFLUENCING AUTOMOTIVE INDUSTRY

Interest rates from banks decide the cost of capital for the company. As Commercial, State ,Rural and Regional banks give credit to the Company and loans to the customers, these rates are essential factors.

Exchange rates decide the Company's foreign investment, imports and export supply price.

National Economic growth increases the demand of automotive products.

Inflation increases the prices of supplies and also company products.


SOCIAL FACTORS

Social factors include the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety.

Trends in social factors affect the demand for a company's products and how that company operates.


SOCIAL FACTORS INFLUENCING THE AUTOMOTICE INDUSTRY

Companies have to plan strategies to adapt to the social trends.

Some social factors: Rapid urbanization of rural and semi urban

regions. Improvement of living standards of middle class. Seeking “Value for money” behavior of

customers. Rising customer emphasis on aesthetics, luxury

and comfort


TECHNOLOGY

“Frugal Engineering is the way forward”

Technological factors include technological aspects such as R&D activity, automation, technology incentives and the rate of technological change. They can determine barriers to entry, minimum efficient production level and influence outsourcing decisions.


TECHNOLOGICAL FACTORS INFLUENCING AUTOMOTIVE INDUSTRY

Technological shifts can affect costs, quality, and lead to innovation.

Vehicles working on renewable energy is the demand of present.

Low cost ,low fuel consumption vehicles/products are primary of concern to the customer, which are satisfied by new and innovative technology.

Use of internet as a medium to trade using e-strategies bolster the marketing strategy of company.


LEGAL FACTORS

Legal factors include discrimination law, consumer law, antitrust law, employment law, and health and safety law.

It is related to the legal environment in which the company operates.


LEGAL FACTORS INFLUENCING AUTOMOTIVE INDUSTRY

Legal changes can affect the company’s costs if new systems and procedures have to be developed, if the law affects the likelihood of the customer buying the goods or using services.

Legal factors such as collaboration with the government shapes the policy. e.g. Agriculture policy.

Rules and Regulations laid down by the govt. over labor employment, safety, wages are some important factors.


ENVIRONMENTAL FACTORS

Environmental factors include ecological and environmental aspects such as weather, climate, and climate change.

Climate change due to pollution is a major concern to everyone. A huge percentage of total pollution is due to automobile.


ENVIORNMENTAL FACTORS INFLUENCING AUTOMOTIVE INDUSTRY

Implementation of Euro norms/Bharat norms. Use of CNG fueled or Electricity driven or dual

fueled engines can reduces CO2 emissions considerably.

Company has to follow environmental laws for setting up plants.


PESTLE ANALYSIS SUMMARY

PEST provides a macro-environmental overview of factors that impact to a greater or lesser degree on all organisations

It provides the broad data from which to identify key drivers of change

These are environmental factors likely to have a high impact on the success or failure of strategy.

Without a sense of the key drivers for change managers are unable to make the decisions that allow for effective action.


THANK YOU.

pestle analysis of m&m tractors

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