Mahindra Tractor- Market Entry Analysis for the EAC

GROUP 3

Aditi Goyal Shantanu Kumar Shruti Venugopalan Tanmay Srivastava

Porters Diamond Model

WHY?? We have used Porters diamond to analyze whether EA nations are more competitive than other nations and if yes, than why tractor industry in that nation is more competitive than other industries.

Porters Diamond Model

Demand condition

Government

1. 2. 3. 4. 5. 6.

Need of more production in less time No. of bulls for ploughing is decreasing. Tractor for transportation purpose also. Good financial support for agricultural equipment's. Kenya 75% of population Agriculture Tractor con. 3.2 Kenya. Rank 94/134
Rivalry

Factor market condition

1. 2. 3. 4. 5.

Physical resources, Technological innovation, Raw material Skilled human power Good financial support for agricultural equipment's

Related and supporting industry

This industry comprises of many players including MNCs. Big competitors like New Holland, Fiat, Massey Ferguson are competing in market which leads to a healthy competition.

The related and supported industry like casting industry, Forging part industry, Equipment industry, Battery industry, Engineer and Technological industry, Piston and Ring industry are available largely which leads to high quality product with low cost.

Chance

Result
Porter diamond model helped us to analyze that why East African countries( Kenya, Uganda, Tanzania etc.) are more competitive, and why Tractor industry in these nations is a good opportunity.

Why Porters Five Forces ?

Conducted to know about the immediate environment Analyze the attractiveness of an industry Assess the potential opportunities for the venture

Threats of New Entrants

More time and high cost of entry Government Policy favourable but NTBs present Access to distribution channels Capital-oriented with intensive technology requirement

Low to Moderate

Low Bargaining power of Suppliers

Switching cost is low Many Suppliers Raw material cost constitute more than 50% of the expenses Tractor industry not the sole buyer of steel

Moderate Moderate
Consolidated industry Second hand imports from EU Subsidized hiring of 4 tractors/ constituency - Constituent management committee

Intensity of Rivalry

Bargaining Power of Buyers

-

Consumer base is highly disbursed Price sensitive Quality of goods is critical

Threat of Substitutes
No credible substitutes Bull ploughs Pedestrian tractors

Low

Recommendation
Enter the EAC, industry environment appears to be attractive enough

THANK YOU