Mahindra British Telecom Case Study

was something they had already managed to capture. The in-depth knowledge they had about this sector was something which was not easily replicable by any of their competitors.

Growth Strategies

It is interesting to note that Tech Mahindra itself was started as a joint venture between Mahindra & Mahindra and British Telecommunications under the name Mahindra British Telecom (MBT) and later changed to Tech Mahindra. The reason this is important is that is highlights an underline value system which is passed down from its parent companies. In the early days Tech Mahindra grew by internal development. If they wanted to expand to a new geographical market they did so by starting their own subsidiary or branch offices. Slow they started the getting

Then the question arises is if acquisitions was the right approach. When you look at technology companies they biggest resource which they are trying to get is the know-hows or the people, hence it is the soft resources. We know that in case of soft resources it is better to go with a strategic alliance instead if an acquisition. However, it is important to understand the context of this particular merger. Satyam was up for sale due to the fraud case. There was no option of having an alliance. Tech Mahindra’s rationale behind this acquisition of scam tainted Satyam computer services was to diversify into multiple verticals like BFSI, manufacturing and retail while offering a wide range of service offerings like enterprise and engineering services to existing and future clients of both Satyam computers services and Tech Mahindra. Tech Mahindra could look to another company to ally with but there was no other with this size and operation efficiency which was there. This was an opportunity which was unique and may come across only once in a while. This merger will also help achieve benefits of a large business which has balanced exposure across geographies all the while utilizing Satyam’s well trained

Also, in case of Satyam, there was no possibility of a strategic alliance because the company was put on sale by the Government of India. However, going forward, Tech Mahindra should look for growth through strategic alliances because given the nature of IT industry, the transfer of soft resources (human resources, customers, skills, solutions etc) is more valuable to any company and an acquisition is likely to hinder the exchange of soft resources. Also, the IT Industry is subject to cyclical fluctuations in the macro-economy and hence, acquisitions substantially increase the risk of loss during recessionary times. However, nonetheless it is important to realize there is not always a fixed formula and it is the context which will decide what strategy a firm should