Strategic

Alliance
Presented by,
HARALD HARRIS
DESHINI VARUN TEJA
AKSHAY KHAMBOJ
GOKULKRISHNAN S
Prologue 1

01 02 03 04
THE INDIAN MAHINDRA- 21,000 CR
DEFENCE AIRBUS NAVY
FDI NORMS
MARKET JV CONTRACT
India’s Budget In India, currently FDI On July 13th , 2015 the Joint On 25th August 2018,
Allocation for Defence up to 49 per cent is Venture was announced Defence Acquisition
is 31.97 per cent of permitted in the sector and it aimed to become the Council approved a
the total Central through automatic first private Indian procurement plan of 111
government capital route and beyond that helicopter manufacturer utility helicopters for the
expenditure, which is up to 100 per cent via under the 'Make in India' Indian Navy for ₹21,000
Rs 3,38,569 crore government nod is initiative and aimed to act crore
permitted. as the prime contractor for
India's military helicopter
 2
Journey So Far
July 3rd , Mahindra Aero structures Ltd
to make airframe parts for the
2015 July 12 ,
Panther military th
chopper

1 Announcement of JV
2016

3 4
January 24th,
2 2016
Statement Of Intent Signed
July 20th,
2019
Tech Mahindra declared
signing of a multi-year
contract with Airbus for
cabin and cargo design
engineering
 3
SWOT Airbus and Mahindra are both globally recognized brands, a joint venture
of both these companies would inherit the pedigree of parent companies
and the same legacy would earn them some leeway in securing defense
projects under Make in India initiative
ANALYSIS

S W O ● Cheaper
Manufacturing
T

O P P O RT U N I T I E S
● Airbus is ● Strong and
S T R E N GT H S

● Stiff

T H R E AT S
the Global ● Sluggish
stable
demand for competition
market leader government at
helicopters from other

WEAKNESSES
● Mahindra the center with
has very strong worldwide JVs
significant
● Significant ● Any
market majority in both
bargaining power deterioration
presence in houses capable
India for the sole in India –
of quickly
● Airbus has customer – France
releasing all
Government of political
a wide portfolio pending defense
of India relationship
contracts
technologically ● Track record could have
● Urgent
of failed joint catastrophic
superior need to
ventures in the impact on
products modernize
● Mahindra past the JV
existing old and
 4
S-O
• Leverage brand value for opportunities under Make In India
• Using JV to transfer technology and take advantage of cheaper
manufacturing facilities in India
ANALYSIS • Rising tension among neighbouring countries, cross border
firings and terrorism could get the JV business

W-O
• Skewed consumer power in defense contracts open up the
opportunity to venture into commercial helicopter
manufacture
• JV, an opportunity for both companies to reiterate their
commitment to making Strategic Alliances a success ANALYSI
S
S-T • Brand value of Airbus, early mover advantage, past
performance of its H145 M and the Panther AS565 helicopters
and the manufacturing prowess of Mahindra in India favour the
ANALYSIS JV in beating out competition

W-T
 While the helicopter market is sluggish worldwide, Indian
market is an attracting proposition to Airbus deterioting
relations with neighbouring countries and high defence outlay
indicates future business opportunities for the JV and
improving Indo-French relationship ANALYSIS
 Suggestive Steps into JV’s Future
Transferring Playing Access to Indian Synergies
Finalizing on
know-how on Government between
location strengths tender Airbus and
Mahindra
• Setting up of a • Mahindra began • Mahindra’s
manufacturing plant production of
• Airbus evaluated sync with local
helicopter
feasibility of 7 to 8 components
government
states in India • Airbus helicopters • Mahindra’s
had awarded strong
• It is critical to find
Mahindra aero operation • Government of India
the best team to be
structures Ltd a distributional kicked of its strategic
partnership process to on the vanguard to
contract to network take the JV forward
manufacture air manufacture 111
• Tech Mahindra helicopters for the especially because
frame parts for the the JV is a cross
Panther Military collaboration Navy in India.
• The winning of the border one.
Chopper. will contribute 21000-crore naval
• It would be
• Airbus will help in Airbus IT contract will be the recommended to
Mahindra to set up services first step forward. offer the CEO post
the indigenous • The government is to candidate from
• Airbus has Airbus
manufacturing plant actively on the
which will be used propelled BLUE lookout for private
• The following step
for manufacturing 5 which will players to bridge this will show a step of
good faith from the
the military push eco gap hence a
part of majority
helicopters. Already efficiency meticulously planned
Mahindra – Airbus JV stake holder and
Airbus has started to • Airbus parent reflect on how it
give some small has the potential to be
values the
parts to assemble organization a major player in the
association.
which earns a defense industry.
here at Mahindra • It would be
plant even before revenue of recommended to
Next Logical Step: Finding a manufacturing plant
Prospective locations for setting up a plant

- Shortlisted 7 to 8 states for plant

(Latest Update)

- Become a global production hub

(If everything goes as planned)

- Empowers the objective of “Make in

India”
- (Billions of USD)FDI happens through
setting up the plant
- Significant employment opportunities

Reason : Availability of basic facilities that a manufacturing plant of this scale

 Airbus - Indian
Core Thinking behind Technical Manufacturing
Know how Expertise

- Share control and

responsibilities with Accordingly
each other formulate
Senior
Management
Team

Recommendations:
- CEO post to candidate from Airbus
- Additional post of Executive chair to CEO can be
created to the top candidate from Mahindra
- Equal number of CXOs from both parents
- CTO (Chief Technology Officer) from Airbus (As Airbus is
technically superior)
- the COO (Chief Operations Officer) and CCO (Chief
Compliance Officer) positions for stalwarts from
Mahindra Defense (As Mahindra expertise in supply network Synergies
and operations in India)
 Helps
Helps to
to produce
produce the
the most
most efficient
efficient
Great
Great local
local presence
presence in
in India
India
How They and economic helicopters
and economic helicopters

Setting up the
Setting up the manufacturing
manufacturing plant
plant Can Expertise
Expertise in
in military
military helicopters
helicopters
in
in desired
desired location
location

Provide
Provide IT
IT technology
technology services
services to
to Advancement
Advancement in
in innovation
innovation
Airbus
Airbus

Training
Training &
& Development
Development programmes
programmes
Great
Great network
network of
of suppliers
suppliers for Mahindra Employees
for Mahindra Employees

Helps
Helps build
build this
this project
project under
under “Buy
“Buy Support Financial
Financial Support
Support
and Make India”
and Make India”
Each other
Provide
Provide Marketing
Marketing Strategy
Strategy R
R&&D
D development
development
 The JV of Mahindra and Airbus has offered two different helicopters, the H145 M and the
Panther AS565.

It’s very important for a JV , as the contract could give a significant push for the
completion of setting up of the JV and initiation of manufacturing processes in India.

Airbus has always been clear on its stance towards the JV, the association with
Mahindra is seen as a long-term partnership and it believes that the winning of the
Access to 21000-crore naval contract will be the first step forward

Indian
Airbus has previously stated that the JV will manufacture a wide range of
Government helicopters which will address the needs of Indian Defense sector.

tender
This downward trend has prompted Airbus and Mahindra to undertake meticulous
planning before execution

Existing JVs formed between foreign manufactures and Indian companies have
delivered mixed results, Of late many of the JVs (mainly between HAL and foreign
manufactures has either shut shop or are reporting recurring losses.

There is a need of updating existing old and outdated fleet owned by the Navy, Army and
Airforce. Therefore government is actively on the lookout for private players to bridge this
gap hence a meticulously planned Mahindra – Airbus JV has the potential to be a major player
in the defense industry