1. What criteria are relevant in choosing among the 4 options?
Different markets and industries have different structure; therefore, naturally they have offer different corporate opportunities and poses different challenges. It is very evident, from the study, of these markets and industries, that there is trade-off, which makes it more complicated for a company to take a strategic decision to establish corporate/organization in a particular market or industry.
However, strategic decisions primarily are based on long-term objectives. The criteria were related to the market structure, infrastructure of automobile industry, how lucrative it would be as export base and the size of middle-class, of economy.
2. What makes South Africa (SA) an attractive destination for an overseas auto company?
The study, of South African market and industry, make it apparent that is highly competitive and fragmented industry, which means that it offer less economic opportunities. However, it provides a base for export and makes it possible to develop high quality products.
In addition, country had a very evolved automobile infrastructure, which reduces the cost of production, of manufactured items. Furthermore, country has strong and apparently large middle-class, in contrast to other African countries, which makes it an attractive destination, for automobile industry. The political stability is another very relevant factor, which is a high concern of all companies, investing in new economy or market.
3. What makes SA attractive for M&M?
There were several reasons, which made South Africa, a premium option, for M&M. One of the reasons was that it had an elaborated and enhanced automobile industry infrastructure, in contrast to other African countries.
Because of the enhanced and fragmented automobile industry, the cost of production was low and quality, of manufactured products, was high. In addition, the country was politically stable and investor friendly, which became one of the core reasons to invest in South Africa. From the stats its evident that automotive industry contributed highly to GDP, around 7.5%, which reflects its evolution and its size.
Large middle-class was another reason for the investment, as it reflected large potential customers, which were not present in other African economies.
4. What is the growth strategy of M&M? And where is it heading?
The strategy, of M&M is explore new markets and economies, where it could establish corporate and increase it revenues. All the firms, organizations and companies, which operate in competitive corporate system, have one core objective, profit. They make strategies and tactical corporate plans to generate and swell their revenues.
For this purpose, when an economy or corporate become competitive, these companies and organizations, move to more lucrative and less competitive markets/economies. However, sometimes the decisions are taken for other reasons, rather than revenue. In some cases, to internationalize products, companies take such decisions. M&M had taken this decision to increase not only its revenue, but also to internationalize its operations.
The growth strategy, of M&M, is to expand its operations and capture new markets, in different parts of the world, which would establish further, the brand, and it would increase its revenues.
5. What are the considerations that Shah should factor in taking a decision?
Despite of an elaborated and evolved automotive market and industry, South African Automotive Industry is very burdened and volatile. It is volatile because it has huge size and burdened because it contributes immensely to GDP.
Therefore, it is imperative for Shah to understand that because of its high competitiveness and volatility, in the short-run, the decision would yield some complexities. However, in the long-run, South Africa would prove to be a better option, and base to export manufactured products to different African companies.
6. How should Shah develop a business case for each of the 4 options?
All strategies are based on information or data. Therefore, there is need to gather relevant and valid evidence for all four options, which would help to understand thoroughly these four options, and their possible implications, when these options would be exercised.
Shah must study all potions and develop shadow strategies for all these four options, these after the analysis, which could be done through various processes, a clear picture must be created, could help the company in realizing all its economic and corporate objectives, whether short-term or long-term. This is the most apposite and used method to develop a business case, which could provide comprehensive details.