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Family Businesses – A Dominant Form of Business
Familybusinesses,adominantformofbusinessduringthefirstIndustrialRevolution2 , are equally significant in the 21st century. Veryoften,afamilybusinessoriginatesduetotheinitiativesofoneortwofamilymembers.Familybusinessescanbeviewedasone
oftheinitialstagesinthelifecycleofanenterprise.Gradually,othermembersofthefamilyalsojointhebusiness.Lateron,non-family
membersare alsobroughtin,as itbecomesdifficultfor thefamilymembers alonetocarryout alltheactivitiesof thebusiness...
Family Businesses in India
In India, economic development began in the 1950s and 1960s. However, during this period, it was planned by the
state. There were strict government rules and regulations and every industrial activity was licensed. It was commonly
referred to as the period of ‘License Raj’6 . Under the protection of License Raj, family businesses functioned as near
monopolies. Further, due tomonopoly laws, there wasn’tmuch competition amongst the companies.As a consequence,
family businesses gradually lapsed into complacency, resulting in reduced efficiency. However, this scenario changed
in the early 1990s...
M&M’s Future Plans
The businesses involved in the automotive division aremanufacturing andmarketing of UVs and LCVs, whereM&M
has amarket share ofmore than 50%27 . In India, in the segment of UVs,M&M is the market leader (Exhibit VI) with a share
of 42%,28 which ismuch higher than that of its competitors. In January 2009, project ‘Ingenio’ ofM&Mlaunched aMultiUtility
Vehicle (MUV) called ‘Xylo’ to compete directlywith Toyota’s ‘Innova’ andChevrolet’s ‘Tavera’.M&Mtried to enter theMUV
market earlier through the launch of the ‘Voyager’ van (developed with the help ofMitsubishi of Japan). However, Voyager
was not a big success owing to the unsuitable price-value equation29 of the vehicle. M&M is focusing on becoming a global
leader in theUVsegment too.Apart fromIndia,M&Mhas already been selling its SUVs inSouthAfrica,Uruguay, Serbia and
Italy. With a hybrid SUV, M&M also plans to enter the US market. Moreover, through the Mahindra-Renault JV, the two
companies plan to launch the entire range ofRenault products in India...
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