Mahindra Samriddhi: Achieving Growth through Rural Prosperity
Rural markets in India have been recognized as growth opportunities for most businesses. The Tata Strategic Management Group team reported that with 69% of Indian population living in rural areas, rural markets represent a market opportunity that organisations cannot afford to overlook, especially considering that the rural consumption in value terms has grown at 17.2 % p.a. between 2008 and 2010 and that close to one third of FMCG and consumer durable sales come from rural markets Further, between the years, 2009 and 2012, rural India spending reached $69 billion, compared to $55 billion urban market spending [2]. The Accenture (2013) report states that rural growth has exceeded company expectations, and if companies wish to succeed in this growth area, they need to establish effective sales and distribution in rural areas and with intensification of competition, companies would need to devise innovative strategies that shall not only fulfill the needs of the rural customers, but also build scale through mutually beneficial relationships with rural communities with collaboration being recognized as the key driver for growth in rural markets.
The Mahindra Group, a major Indian conglomerate, has been an integral part of the rural market space through its flagship company-Mahindra& Mahindra, manufacturing and supplying Mahindra tractors, since the early 1960s. In recent years, Mahindra & Mahindra has been intensifying its agribusiness in rural markets, by enhancing farm productivity and revenues of farmers........................
ABOUT MAHINDRA
A $16.5 billion group, the Mahindra Group is a diversified business group in India with businesses in industries spanning automobiles, aerospace, aftermarket, components, consulting services, defense, energy, financial services, logistics, real estate, retail, and two wheelers...........
HISTORY
The Mahindra group was founded in 1945 by two brothers, JC Mahindra and KC Mahindra and began as a steel trading company in Mumbai. Partnering with Ghulam Mohammed, the company, Mahindra & Mohammed, began assembling jeeps under license from Willys, USA. Along with the manufacture of the Jeep, under a license and an agreement with Willys Motors Inc., Toledo, Ohio, U.S.A., the Company also acted as exclusive distributors for the whole of India for their entire range of vehicles including.............
AGRICULTURE IN INDIA
India is primarily an agrarian country with 60% of its population being dependent directly or indirectly on agriculture. A McKinsey Report (2013) has recognized the agriculture sector as one which has the potential to help India emerge as a major global agriculture and food powerhouse - while India has emerged as the third largest agriculture producer in the world, after USA and China even though, the sector has earned only 50%-60% of its potential yield. India is the world’s largest producer of pulses and second largest producer of rice and wheat, the sector suffers low crop yields due to lack of information.............
Mahindra’s Presence in Agriculture-Mahindra Agribusiness
Mahindra &Mahindra has had a presence in the agriculture sector for a long time through its Mahindra brand of tractors. Mahindra and Mahindra’s Farm Equipment Division, within the Mahindra and Mahindra Ltd., - the flagship company of the Mahindra Group, began manufacturing tractors in the early 1960s for the Indian market and grew in the following fifty years to become the world’s largest seller of tractors by...........
Mahindra Shubh Labh Services Ltd.
Mahindra’s focus on the agribusiness began with the establishment of a subsidiary, Mahindra Shubh Labh Ltd. (MSSL), in 2000. Operating under Mahindra Agribusiness, MSSL, was established as a single point source of access to farmers for raising farm productivity through products and services including high quality seeds, crop protection solutions and later, the business of MSSL extended to the procurement of fresh farm products, primarily fruits for the domestic market as well as for export..........
Mahindra EPC
To complete being part of the agro-value chain, Mahindra entered the micro-irrigation business through the acquisition of EPC Industries in 2011. The demand for Micro irrigation solutions has increased due to...............
Mahindra Samriddhi
Being a rural focused company and having identified that low farm productivity led to lower farm revenues, Mahindra & Mahindra decided to focus on improving farm productivity, allowing the farmer to improve his earnings, which would allow the company’s growth as well.............
Reaching Rural Customers in India
High cost to serve rural markets has been identified as the biggest challenge in marketing to the rural customers, while an efficient sales and distribution model is what has emerged as most critical for companies to successfully expand their businesses in rural markets in India, with inadequate distribution networks being one of the biggest obstacles in reaching the rural customer which includes partners with limited capabilities..............
Future
Mahindra & Mahindra is also considering expanding into organic farming, oilseeds and dairy; however, it plans to keep away from fertilizers and agricultural pumps, since, the fertilizers segment has the presence of large PSUs while the agricultural pumps market has a large number of small players competing on price.............