MAHINDRA AND MAHINDRA What are advantages and disadvantages of global sourcing?

ADVANTAGES Companies get to tap into skills of resources that are not locally available The supplier base is not restricted to the domestic market, giving companies the opportunity to transact with more competitive suppliers. Time difference between countries can be used as a huge advantage where processing times are of high importance Companies get to focus on their core processes and have more capital to invest in the same. Helpful in expanding the market for the product which attract more and more new customer DISADVANTAGES Existence of hidden costs that arise due to cultural as well as time zone differences. It leads to decrease in the profit margin due to increase in competition There may also be increased monitoring costs when work is near shored or off shored when compared to domestic suppliers. There is an increased risk of loss of data as well. Increased risk of shut down of operations due to conditions arising in the supplier country

How will foreign market expansion will help Mahindra and Mahindra? It leads to utilization of advance technology of foreign country. Helpful in creating more and more new customers for its product It leads to cover its domestic loses and there by attaining its required profit Its leads to improve the reputation in the domestic market As on the account of the absence of aesthetic appeal that tong yang tractors have ,M&M current tractors needs to adopt such feature in order to compete in the international market.

How does strategic alliance with tong yang help Mahindra and Mahindra
M&M has the resources but does not have the technology to compete with some of the best in the industry. ADVANTAGES TO M&M:1. An enhanced horse power range i.e. 25-40hp as compared to 25-30 which is much higher. 2. The above shall help M&M to increase the market share which is presently very less. 3. The strategic alliance would make M&M capture the global markets by selling the tractors around the world. 4. Tong Yong shall give M&M tractors an aesthetic appeal which they currently lack. 5. It helps in maintaining and increasing the goodwill of M&M company in the international market.

what are the possible risks of the alliance how can they be minimized.
The following risks can appear in this strategic alliance:Relational Risk: is the risk of unsatisfactory inter-firm cooperation. Such as the bad relationships, or the partner does not comply with the spirit of cooperation. Performance Risk: refers to the probability that intended strategic goals of an alliance may not be achieved, even though cooperation between the partners are satisfactory. . Risks can be minimized by following: Trust Control Documentation Planning Mutual consent Cultural awareness

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