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Assessment of JTC as an Acquisition Target for M & M

Mahindra and Mahindra Ltd (M&M) the fifth largest producer of tractor strive to close the significant gap between themselves and the market leaders to grow. For the organization growth, there are different methods including methods of improving internal efficiency and acquisitions. 

The acquisition can be anything from joint venture to cooperation agreement.  As the original answer says that for M&M, acquisition with Chinese Tractor Company Jiangling Tractor Company could be a great investment (Chandrasekhar& Schaan, 2007, pg. 538), I agree because come to acquisition with Chinese company means a gate to enter into Chinese market which is mapped in 31 provincial regions and 20 major cities of China. As the original question analyzed the motivation and reasons for M&M and JTC both to do acquisition, I agree with the answer that M&M can achieve economic scale, cheaper raw materials, strength to the business and enhance research and development with improved marketing and distribution techniques by acquiring and sharing risks and opportunities. Get professional writing paper

 

As far as other basic risks and opportunities of the acquisition is concerned M&M has done market research and the five years working experience of president in Chinese market helped the company to decide establishing a local leverage advantage for low costs which could be attained most successfully through an alliance with a local partner, i.e. a joint venture and acquisition with JTC. As identified in the answer that JTC is strong in the areas that are of importance to M&M and had a strong position in the market of small tractors as well as strong company name, I believe that a company with good name in the market can be a good candidate for acquisition like JTC. The original answer defines the language barriers, different cultures, financials and legalities as the potential risks of the acquisition, while I believe that not all the risks factors will have more effects than the opportunities available in Chinese tractor market. Language barriers and different culture are such risk factors that can be overcome with effective corporate strategy.  I agree with the original answer that financials and legalities should be great concern for the company as an important risk factor.

 

Besides, original answer describes that there are number of opportunities available for M&M as JTC possesses 2.5 percent market share in the Chinese tractor market and had been successful enough to expand and build factories and always had a focus on quality. I believe that with all these qualities JTC Company is not only an appropriate candidate for acquisition but also making a successful acquisition. Moreover, original answer suggests that Chinese economy is expected to grow 13.2 percent during the period 2004 to 2008 and agricultural GDP will grow by 11.1 per, I believe that these forecasting about the economy growth in China will be great opportunity for M&M to build and expand in China with the agricultural reform promoting consolidation of land holdings leading to improved efficiency and adjustments in the state’s grain procurement prices.

 
Review posted and now it's pending for approval!Review posted and now it's pending for approval!