Business Environment And External Environment Of Organizations Commerce Essay


Mainly Mahindra and Mahindra was established after the completion of the world war- ii, because Indian roads in the rural areas are very ugly. In this roads travelling is more problem, that's they started the business. Mahindra brothers and Gulam Mohammad started the business Mahindra& Mohammad, after independence it's renamed as Mahindra& Mahindra.

Mahindra and Mahindra was established on 1945, October 2 . It was converted into a public limited company on June 15, 1955,up to that time it is a private limited company .Mahindra & Mahindra is one of the largest private sector company in India. Today Mahindra group of company deals with 14 players and 4 of them are Multinational Companies.

PESTEL analysis:

There are many external factors that will affect the any organization. Some of them are political factors, economical factors, social factors, technological factors, ecological factors and legal factors.

Political factors:

Now a day's all companies are doing friendship with all political parties and leaders.

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Mahindra was started because of the welfare of rural areas and agricultural purposes.

In military Mahindra vehicles are used.

Government gives subsidy for agriculture.

Change in taxation policy

100% Foreign direct investment policy

Regaining " Agricultural dynamism", a key goal of eleventh Five year plan.

Economical Factors:

Credits can be occurred mainly on the sales. 95% o the sales occurred through banks most o them are offering loans.

When compared to other products Mahindra are cheaper .Mahindra products are mainly exported because of low cost.

For agriculture purpose banks are offering low interest rates.

Inflation may provoke higher wage demands from employees and raise costs.

When the GDP of india increases the automatically the firm value also increases.

Social factors:

There is an increase in awareness among the people for the need of mechanization and are keen to acquire automobiles with the help of credit facilities from financial institutions.

Now a days automobiles are required for mainly reducing the man power,because of shortage of lobourer.

More farmers are opting for multiple cropping over last decade. Country's gross cropped area increased by about 4.7%. This indicates the increased popularity of multiple cropping.

When the technology increases, then they also changes the new technology.

When the society changes the firm can also compulsory want to change.

Technological factors:

Now a days all the customers required new technologies.

Continuous technological innovation

Renewable energy development. Ex, coal gas renewable.

When the customer dissatisfy the technology ,they invented the new technology.

Ecological factors:

When there is no monsoons it will effect on the tractors.

When there is no political stability there is no stability for the business.

Strong monsoons, increase lending by nationalized banks which leads to farming of commodity prices money availability catapulted tractor demand.

Global warming.

When there is no recession, information technology is more beneficial, all the buyers buy products what they need and want .

Legal factors:

Collaboration with government which shapes policy issues.

Agricultural policy.

When the satyam is victim, its take over and follow the legal factors.

SWOT Analysis:


Mahindra leads the market. The share of the market is high. This is the biggest strength.

They are more innovation and launching new products, because of survival of long run.

Mahindra had a brand name, that's why they started the new business and survived them.

Effective and large distribution channel.

Enough and Sufficient financial resources.

The products manufactured Mahindra are not harmful to anyone and not harmful to society.


The company is highly dependent on the rural sector

Less technological ability as compared to Foreign players

Low labor productivity


When the government of India encouraged the agricultural sector in the 11th Five year plan.

In the information technology merged satyam they formed a Multinational Company.


When the monsoon increases the tractor business also increases.

Global warming.

Hacking of the websites from the hackers.

The company has a history of having invested in unrelated diversifications such as telecom, holiday and resort inns, financial services, etc. which it has hived off as subsidiaries from time to time when these turned unmanageable. This is a cause for concern as such diversifications could divert the company's attention from its core business. It is a dangerous tendency as it leads to destruction of shareholders value.

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New vision: To be the leader in the automobile industry in the undisputed manner.

New Mission: To provide best value for money to customers through best quality and most cost effective products and services.

Resource analysis-

There are 2 types of resources

1. Stock resources

2. capabilities resources.

Stock Resources: The resources which are started to any business is called stock Resources. They are Physical, financial and technological resources.

Physical resources:

High inventory capacity

The Mahindra company has its own Infrastructure Company, IT Company and Financial service company.

High quality equipments for production

Many number of own out-lets

Large infrastructure

Financial resources:

Highest market share

Share holders rising the funds.

Human resources:

They are encouraging the young talent.

The training and recruitment campuses are encouraging the young talent.

In the guidance of experienced people they encouraged the younger talent.

Technological resources:


They have more research and development teams.

Mahindra & Mahindra, the leading Indian automotive manufacturer for over 60 years, today announced a landmark breakthrough in Indian alternate fuel technology. M&M today formally announced its emphasis on bio-diesel and unveiled the bio-diesel

M&M is a pioneer in R&D of alternate propulsion technologies in India and had also set up its own bio-diesel pilot plant way back in 2001

M&M has been seriously looking at technologies that will help enhance focus on converting bio-mass to bio-fuels.

Capability resources:

The resources which flow on competition is capability resources. They are innovation, production capability, marketing capability and human resources development.


Web site which provides farmers the latest information relating to crops, weather conditions, loans, insurance schemes, commodity prices, Government schemes, news and events.

Developing the new technologies.

They are mainly developing bio diesel motors for innovation.

The first Indian tractor with turbo technology the 'Mahindra Sarpanch 595 Di Super Turbo'.

Production capability:

Efficient and competent employees

Process control in production

Highest production capabilities( 1,50,000 tractors per year)

Larger rural initiative Mahindra Samriddhi, which aims to increase agricultural productivity through creative farming techniques.

Marketing capability:

Huge distribution channel in rural, urban and semi urban area

Established brand name

Highly motivated sales people.

Good advertisement strategy

After sale service for longer period

A quick "one-stop-shop" for promotion of company

Human resources development:

Training and development programmed to all level of employees.

Proper succession and career planning.

Thrust on building the brand name.

They are guidance and review of every two or three months.

Social Responsibilities:

The Mahindra Group pledged to dedicate 1% PAT to social responsibility activities and announced Esops (Employee Social Options) to harness the time and talents of employees for social activities.

Mahindra & Mahindra was assigned the 'Governance & Value Creation Rating (GVC) Level - 1' rating, the highest in the category, by CRISIL for its Corporate Governance Practice.

Mahindra announced a landmark breakthrough in Indian alternate fuel technology by formally announcing its emphasis on bio-diesel and unveiled the bio-diesel Scorpio and Bolero DI vehicles for 100% real world usage trials.

Mahindra is the only Indian company among the top tractor brands in the world.

Mahindra is also one of the few Indian companies to receive an A+ GRI checked rating for its first Sustainability

We don't have a group-wide mission statement. Our Core Purpose is what makes all of us want to get up and come to work in the morning.'

Our Core Values are influenced by our past, tempered by our present, and will shape our future. They are an amalgam of what we have been, what we are and what we want to be

Good Corporate Citizenship As in the past, we will continue to seek long term success, which is in alignment with our country's needs. We will do this without compromising ethical business standards.

Professionalism We have always sought the best people for the job and given them the freedom and the opportunity to grow. We will continue to do so. We will support innovation and well reasoned risk taking, but will demand performance.

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Customer First We exist and prosper only because of the customer. We will respond to the changing needs and expectations of our customers speedily, courteously and effectively.

Quality Focus Quality is the key to delivering value for money to our customers. We will make quality a driving value in our work, in our products and in our interactions with others. We will do it 'First Time Right'.

Dignity of the Individual

We will value individual dignity, uphold the right to express disagreement and respect the time and efforts of others. Through our actions, we will nurture fairness, trust and transparency.

These values are the compass that will guide our actions, both personal and corporate.

This award recognises people/organizations for the quality of service and excellence in the Food, Hospitality, Services & Retailing sector in India today. The award salutes professionals who have made a significant difference to their organizations.

Alternative Thinking has grown from strength to strength in Mahindra and rethinking the regular has become a regular.

In a world where standard, legacy approaches are fast leading to economic, social and environmental dead-ends, at Mahindra, Alternative Thinking is driving sustainability to the heart of business decisions. It is not only helping us cater to the exponentially rising societal and environmental demands, it is also equipping us to harness emerging economic opportunities.

Alternative Thinking is the strong foundation on which we are building global sustainable businesses which contribute towards a progressive sustainable society

On January 18, Mahindra Holidays & Resorts India Limited bagged the coveted Avaya Global Connect Award on account of Best Customer Responsiveness for its Club Mahindra Holidays Brand, in the travel and tourism category.

Mahindra Powerol has won the prestigious "VOICE OF CUSTOMER" award for the most preferred Genset Brand in the telecom segment. The award was announced by Frost & Sullivan in a glittering ceremony at Bangalore on 5th December'07 and exemplifies Mahindra Powerol's customer centric approach.

The award takes into account several parameters, including Business Performance, Corporate Interests, Employee Welfare, Customer and Stakeholder Satisfaction and Social Investment.

Mahindra & Mahindra was awarded the coveted Golden Peacock Award for Excellence in Corporate Governance 2006.

The Mahindra Group defines Corporate Social Responsibility as making socially responsible products, engaging in socially responsible employee relations and making a commitment to the community around it. At the Mahindra Group, Corporate Social Responsibility is not just a duty; it's a way of life.

Environment protection is a part of everyday being at the Mahindra Group

Right from Mahindra products such as vehicles which are designed meeting International standards of Safety and emission, to all Mahindra plants across the nation which comply way beyond necessary environmental regulations by setting new standards in natural resource conservation, efficient water management and with the most recent Green IT; Mahindra shows that it care of planet earth proactively.


Esops - What is commonly known as Employee Stock Options has a whole new meaning at the Mahindra Group -

Esops for the Mahindra-ites means sharing a part of yourself to help the less fortunate. It implies looking beyond one-self. It means sharing one's skills to make the society healthier, cleaner, greener, more literate and hence more sustainable.

Esops here stands for Employee Social Options, a systematic employee-volunteering Programme under CSR (Corporate Social Responsibility). Esops, started in 2005 is a set of social work volunteering options that are created and implemented exclusively by employees themselves based on the needs of underprivileged communities in and around their areas of operation. In a way, it is each employee's CSR.

our Employees speak on their experiences after volunteering in Esops 


Esops in Education

Esops in Health

Esops in Environment


Achieving a leadership position in all its businesses is the belief that drives the Mahindra Group. The hiring philosophy too is in line with this corporate vision. The goal is to attract the best talent for the job either from within the Group or from outside.

With professionalism as one of the Group's core values, it would look for a proper fit and also domain expertise. The Group strives to tap talent through diverse innovative approaches and aims to reach out to the best people for the job. The Group also looks for core values like good corporate citizenship, customer first, quality focus and dignity of the individual in potential candidates.

    The Mahindra Group is co-creating a culture that offers the freedom to operate without fear. As the Group is rapidly growing, there are great opportunities for career advancement.

    The Group's hiring decisions favour individuals who demonstrate well-reasoned risk taking and an innovative mind set. It believes that these qualities contribute to a performance driven work culture.


"Anyone can Fall in Love with Mahindra Service"


From the above it is clearly found that the performance of Mahindra and Mahindra very encouraging. And the business strategy is very highly competitive and innovative. The company should concentrate on strategies like cost advantage and differentiation. Also the emerging market of Mahindra and Mahindra is very encouraging, so only thing is to follow the strategy which will be able to meet the customer needs. As far as resource is concerned mahindra & Mahindra is very strong in resource and capabilities

Excerpts from letters of appreciation the Mahindra group has received over the years.