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An Assignment On



: Razeena Faheema ROLL NO :4pa11mba52 2nd yr MBA, P.A.C.E, MANGALORE.



: 27/08/2012

INTRODUCTION Tata Motors, leader in commercial vehicles, is India's largest automobile company with revenue of USD 14 billion in 2008-09. Tata Motors, the first company from India's engineering sector to be listed in the New York Stock Exchange and has operations in the UK, South Korea, Thailand and Spain. Tata Motors started operations in 1945 and entered commercial vehicle sector in 1954 after forming a joint venture with Daimler-Benz that lasted till 1969. In more than six decades of its operations, it has grown both organically and inorganically. In 2004, Tata Motors bought Daewoos truck manufacturing unit in South Korea followed by the acquisition of the Hispano Carrocera in South Africa. In 2008, it acquired prestigious brands Jaguar and Land Rover from Ford Motor Company. This acquisition was important since before that Tata Motors was considered as a formidable global player at lower market segment only. Vision and Mission Commercial Vehicle Business Unit (CVBU)

Our Vision To be a world class corporate constantly furthering the interest of all its stakeholders. To develop TATA into a world class Indian car brand for innovative and superior value vehicles Our Mission Shareholders: To consistently create shareholder value by generating returns in excess of Weighted Average Cost of Capital (WACC) during the upturn and at least equal to Weighted Average Cost of Capital (WACC) during the downturn of the business cycle. Customers: To strengthen the Tata brand and create lasting relationships with the customers by working closely with business partners to provide superior value for money over the life cycle. Employees: To create a seamless organization that incubates and promotes innovation, excellence and the Tata core values .Vendor

and Channel Partners: To foster a long-term relationship so as to introduce a broad range of innovative products and services, that would benefit our customers and other stakeholders. Community: To proactively participate in reshaping the countrys economic growth. To take a holistic approach towards environmental protection CORPORATE STRATEGY The current strategy of the Tata Motors can best be summarized as Disruptive Innovation, wherein it has offered lower priced products and surpassed the market expectations. Its two latest offerings have further strengthened the Tata Motors position as a leading player. While Ace has been a rage in the market, Tata Nano has taken the world with awe. Much of the practices of Tata Motors, including its customer focus, attributes to the learning and experience of over six decades. Tata Motors that started with a huge success and market demand faced its first product failure in the launch of 1516. With the foreign players entering India, Tata motors that was primarily focusing on High weight commercial vehicles, included LCV in its offering and came up with Tata 407. Tata Motors in the meanwhile was also vying to develop end to end in-house technical competence and thus ventured into engine design by partnering with Cummins. Tata motors continuously faced the problem of overloading by the users and responded by introducing stronger machines. However, a major change came after a heavy loss of Rs 550 cr in 1999 where in it re-aligned its marketing team and became more sensitized to customer needs. The revival strategy of Tata motors had three phased business plan. Firstly, it focused on the cost reduction initiatives for immediate turnaround. Secondly, it focused on domestic and international growth through new products and improved sales and service. Finally, it linked long term growth with increased business in LCVs, new product segments and new geographies. The strategy and learnings have gone a long way with Tata Motors earning net profit of more than Rs 1000 cr even in a lean FY 2008-09. Corporate Governance Tata Motors being part of the Tata conglomerate has its philosophy deeply linked to the core philosophy of the Tata group. It has fair, ethical and transparent governance practices along with highest standards of professionalism, honesty, integrity and ethical behaviour. The company gives maximum importance to the value creation and sustainability of all the other stakeholders viz. customers, creditors, employees, vendors,

community and the Government. Tata Motors have implemented the Tata Business Excellence model which is a part of Tata code of conduct applicable to all subsidiaries of Tata group. The company operates with a strong social conscience and believe in bringing benefit to peoples lives. Tata Motors strictly follows The Whistle Blower Policy, an extension of the Tata Code of Conduct, which requires very employee to promptly report to the management any actual or possible violation of the Code or an event he becomes aware of that could affect the business or reputation of the Company. the Ethics and Compliance Committee who monitors the compliance of the Tata Code of Conduct for Prevention of Insider Trading by checking monthly reports on dealings in securities and also decides penal action, if necessary. This is more important since in Indian market Tata brand is synonymous with Trust. CSR activities of Tata Motors covers major areas like environment, energy and water conservation, health, education and livelihood.

SWOT Analysis

PEST Analysis for TATA Motors POLITICAL Since Tata Motors operates in multiple countries across Europe, Africa, Asia, the Middle East, and Australia, it needs to pay close attention to the political climate but also laws and regulations in all the countries it operates in while also paying attention to regional governing bodies. Laws governing commerce, trade, growth, and investment are dependent

on the local government as well as how successful local markets and economies will be due to regional, national and local influence. In accordance, Tatas headquarters in Mumbai, India, strictly controls and regulates operations in all dealerships and subsidiaries, in addition to knowing and abiding by all labor laws in the multiple countries where they have manufacturing plants it has to watch political change. ECONOMIC Operating in numerous countries across the world, Tata Motors functions with a global economic perspective while focusing on each individual market. Because Tata is in a rapid growth period, expanding or forming a joint venture in over five countries world-wide since 2004, a global approach enables Tata Motors to adapt and learn from the many different regions within the whole automotive industry. They have experience and resources from five continents across the globe, thus when any variable changes in the market they can gather information and resources from all over the world to address any issues. For instance, if the price of the aluminum required to make engine blocks goes up in Kenya, Tata has the option to get the aluminum from other suppliers in Europe or Asia who they would normally get from for production in Ukraine or Russia. Tata Motors also has to pay close attention to shifts in currency rates throughout the world. Currency fluctuations can equate to higher or lower demands for Tata vehicles which in turn affect profitability. It can also mean a rise in costs or a drop in returns. But they also have to pay attention to not just the domestic currency, the rupee, but also to the dollar, euro, baht, won, and pound, to just name a few. Just because the rupee is strong against the dollar does not mean it is strong against all the other currencies. Attention to currency is important because it influences where capital investment will develop and prosper. SOCIAL Undoubtedly, the beliefs, opinions, and general attitude of all the stakeholders in a company will affect how well a company performs. This includes every stakeholder from the CEO and President, down to the line workers who screw the door panel into place, from the investor to the customer, the culture and attitude of all these people will ultimately determine the future of a company and whether they will be profitable or not. For this reason, Tata Motors tends to use an integration and rarely separation technique with foreign companies they acquire. In 2004, Tata Motors acquired Daewoo Commercial Vehicles Company, which was at the time Koreas second largest truck maker. Rather than using de-culturation or assimilating Daewoo, Tata

took an integrated approach, and continued building and marketing Daewoos current models as well as introducing a few new models globally just as it had been done under Korean management. TECHNOLOGY Tata Motors and its parent company, the Tata Group, are ahead of the game in the technology field. The foundation of the companys growth is a deep understanding of economic stimuli and customer needs, and the ability to translate them into customer-desired offerings through leading edge R&D (Tata). Employing 1,400 scientists and engineers, Tata Motors Research and Development team is ahead of the pack in Indias market and right with the rest of the field internationally. Among Tatas firsts are the first indigenously developed Light Commercial Vehicle, India's first Sports Utility Vehicle and, in 1998, the Tata Indica, India's first fully indigenous passenger car, as well as the increasingly famous Tata Nano, which is projected to be the worlds cheapest production car (Tata). In the automotive industry, it is becoming increasingly crucial for manufacturers to stay on top of the technology curve with new problems always rising such as escalating gas prices and pollution problems. Tata recognizes this and dedicates lots of resources and time into research and development to be even with or preferably ahead of other competitors, global trends, and changing economies. In all, an automobile manufacturer must change, adapt, and evolve to stay competitive in the automotive game, and this is exactly what Tata is doing with their rapid growth, and extensive research and development.

TATA-JLR TATA Motors bought the iconic Jaguar and Land Rover operations from Ford for 1.15 billion pounds in Mar-Apr08. Tata gained the rights to the Daimler, Lanchester, and Rover brand names. In addition to the brands, Tata Motors also gained access to 2 design centres and 3 plants in UK. The key acquisition would be of the intellectual property rights related to the technologies. However there is a challenge related to the technology changes in the new entity and Fords technology will help in the short run and looking at the emerging emission standards hybrid and green technology will be the need of the hour. BCG Matrix for Tata Motors SBUs The Major SBUs of Tata Motors in which they have divided their business are:

Commercial Vehicles (Light weight trucks to multi-axle 40 ton vehicles) Passenger Cars, economy and luxury (Indica, Nano, JLR) Utility vehicles, standard and premium (Sumo, Safari) Spare parts, components and accessories (HV Axles transmission, High horse power engine via Tata Cummins) and

Financing for customers and channel partners (via Tata Motors Finance)

Enterprise Process Model (EPM) - Process Management at Tata Motors When Tata Motors made a huge loss of 500 crores in the year 2000-01, analysts had all but written off Tata Motors fortunes. But TML was determined to bounce back and hence started the process of serious introspection. Three key reasons were identified for the massive lossa) Lack of customer focus b) lack of process management c) lack of new products and variants. TML had decided the three elements in a systematic manner, the major emphasis being process management.

Tata Motors hence started to adopt the APQC 13 (American Productivity and Quality Center) processes and sub process and hence derive the Tata Business Excellence Model (TBEM, based on the Malcolm Baldrige National Quality Award Process), thus adopting a process oriented approach than merely people oriented approach. This practice minimized the influence of individual employees in running the operations. This also entailed the documentation of the processes, which brought about


lot of clarity in terms of roles and responsibilities of process owners, inputs and outputs of the processes, in process and end process measures, entities involved and its linkage with the ISO and TS standard system. The Enterprise Process Model has been depicted in the figure below.

Figure: Enterprise Process Model1 Operations & Production Management Inbound Logistics


Vendor Management In the Year 1997, Tata Motors promoted a company called Tata Autocompsystems Limited (TACO) . The main objective was to serve form joint ventures with international auto component manufacturers and streamlining the vendor management processes for the company. 2 Tata Motors sources from vendors who focus on their own R & D to reduce cost. Most of the vendors develop products with Tata Motors itself and quite a few were given designs by Tata Motors. TML also helped the vendors find international partners to make products that would meet their requirements. Some of the vendors who supply to Tata Motors also did competitive buying of material from China and Thailand.3 Manufacturing In an automotive industry, the main emphasis on quality would be on the manufacturing process. There would be about fifteen thousand accessories and component parts to assemble and activate while we manufacture a car. Tata motors believes in the indigenous development of manufacturing process and development of technology. Unless many automobile companies, the strategy of the firm is not to blindly adopt any new successful technology. It believes in state-of-the-art technology. With reference to the product market matrix (with product development, market development, market penetration and diversification) which composes the merging of production and marketing strategies Tata motors is seen to follow the diversification strategy wherein it produces new products and gets into new market to target with the product. Product development New Product Development would involve idea generation, product screening, concept testing, Business and financial analysis, product development, test marketing and commercialization. An automobile

ICMR case study, Operation Management at Tata Motors, excerpts.

product development cycle is said to be consisting of concept stage (where the car starts), Advance engineering (where the car takes shape), product engineering (where the details are filled in), production engineering (where the car is worked out) and the manufacturing stage (where all comes together)3. Tata Motors Engineering Research Centre in Jamshedpur focuses in upgrading the components and parts with evolution of technology and also is one of the best in determining the needs of a customer and developing a new product to cater to the needs. Tata Nano is one such product from the stable of Tata motors. Besides this centre the Research and development of Tata motors has become international with centres in Spain, UK and South Korea also. Cost Cutting Techniques After a rough fiscal year in 2001, Tata Motors realized that the only way to survive this market was to cut down on costs. They started practicing an entirely new way of procuring their supplies and hence gave rise to a unique way of managing supplier relationship. The earlier traditional method that Tata Motors gave the technical specifications to the supplier and the supplier who was successful in acquiring the bid filled up the orders. However under the new system Tata Motors simply provided the output they expected, and allowed the suppliers to be as creative and innovative with their designs, materials, and prices. In other words Tata Motors would simply describe the goal that they wanted to achieve with certain part and the suppliers would supply the parts according their own convenience. For example instead of giving technical specifications for the wind shield of Tata Indica, it would just describe the goal of cleaning the windshield, and let the suppliers come up with ideas to meet those goals in the most cost effective manner, without compromising on quality. This practice led to huge cost savings in raw materials and the Tatas could deliver the cheapest car of the world at just 2500$. By leveraging local design capabilities and avoiding the dependency on high end design systems, Tata Motors has been able to provide low cost solutions in a continuous and efficient manner. Also Tata Motors tried the innovative method of Zero Based Costing. For example initially TML paid for forged components on a cost plus basis, in the new system it paid a price depending on the weight of the forgings. Quality Management The shifting of focus on TQM (Total Quality Management) and Six Sigma principles by Tata Motors has been a gradual one since the year 2000. One quarter of the work force undergo training to maintain and create


high quality products every year. The personnel are even sent to foreign manufacturers locations, whenever a new machine would be imported, to undergo training. Operations

Outbound Logistics

Sales & Marketing at Tata Motors Product and Brand Strategy Tata Motors follows a sub brand strategy. Although there is no separate Brand for TATA motors as such but the TATA brand is used as a mother brand. All products of benefit from the association with the TATA brand, which in India stands for trust and reliability. TATA motors products can be categorised into four major categories: Passenger cars, Utility vehicles, trucks and commercial passenger carriers. The following table shows the different product lines of each category and the launch periods as well. (Source: Company Website). TATA Motors Product Portfolio Product and Variant Launch years


1 9 8 9 TATA Mobile 206 3rd LC V 1 9 9 1 TATA S ierra TAC C rane 1 9 9 2 TATA E state 1 9 9 6 S um o S afa ri 1 9 9 8 Indica 2 0 0 0 C NG B uses Indica V2, Indica V2 Petrol, C NG Indica, TATA S afari Ex 2 0 0 3 Ta ta 207 D I Ta ta S um o'+ 'S eries 2003 S AFAR I rang e Ta ta Indig o 135 PS S afari (E X i) petrol 2 0 0 4 New Indica V2 Ta ta L PT 90 9EX Turbo Truck NOVUS 2 0 0 5 Ace S afa ri D icor Indica V2 Turbo D iesel Ta ta Novus truck Ta ta TL 4X 4 -sports utility vehicle 2 0 0 6 Indica V2 Z eta Ta ta AC E' in S ri L anka Indig o and Indig o Marina rang e 2 0 0 7 Mag ic Wing er Tata AC E in Nepal 2 0 0 8 TATA Nano Indica Z eta LPG S uper Milo rang e of B uses 2 0 0 9 S um oG rande MK II Prim a World Truck IndiG o Manza Freelander 2 launched in India Ta ta 407 Pickup Ta ta S uper Ace Ta ta Ace EX

The product strategy in TATA motors has been driven by two primary objectives Identifying the market need and creating new market segments. The success stories in the past two decades (Sumo, 207, Ace, Indica etc) have been able to fulfil these overall objectives. The strategy adopted behind these products also reflects the commitment of TATA Motors to customer needs and new product innovation. The company has also exported its vehicles after creating customised variants which have higher payload and engine capacity. It has also customised its domestic


products by introducing passenger option, higher payloads, bigger engines etc. In broad terms the following sums up the TATA motors marketing philosophy:

Pricing TATA motors have a pricing advantage due to its low cost leans manufacturing abilities. The in-house steel company acts as a shock absorber against steel price fluctuations. The pricing methodology adopted is that of a perceived value pricing. It was demonstrated by the Rs 1 Lakh price of TATA Nano, where the cost of producing the car left a very small margin for TATA. Promotion TATA Motors uses extensive promotion for its passenger car segment. The Utility vehicle and commercial passenger carrier follow this segment based on Share of Voice. Distribution TATA Motors has a large network of dealers and Stockyards, all across the globe and uses the DMS technology for efficient cooperation between these dealers. Its distribution network includes operations in India, Nepal, Bhutan, Ghana, Italy, Poland, South Africa, Spain, Sri Lanka and Turkey. The company's dealership, sales, services and spare parts network comprises over 3500 touch points. Apart from the wide distribution network Tata Motors also has Distributed manufacturing it has Assembly units at South Africa, Thailand, Bangladesh, Brazil apart from India. The company's manufacturing base in India is spread across Jamshedpur (Jharkhand), Pune (Maharashtra), Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand) and Dharwad (Karnataka). To augment the scarce resources, it has a joint venture with Fiat wherein Fiat sells its vehicles through Tata dealerships and in return Tata Motors has access to Fiats technology and unutilized capacity


Over the years, one of the major success factors of Tata Motors is their supply chain excellence. To keep their distribution costs to the minimum they have outsourced the logistics and distribution part of their business to Tata Motors Ltd. Distribution Company (TDCL), a wholly owned subsidiary of Tata Motors Ltd. Through this arrangement, Tata Motors is able to reduce its logistical costs by at least 1% and to focus more on the core business. This in turn has provided flexibility to Tata Motors in terms of delivering the right product at the right time at the right place. Therefore, today, Tata Motors is a fully integrated automobile manufacturer with a portfolio which covers trucks, buses, utility vehicles & passenger vehicles/cars. The dealers and suppliers are bound by a Supplier Relationship Management Program and Dealer Management System. These programs are reviewed from time to time. The efficiency of transactions within the organization and also supplier coverage are given importance. Suppliers day, Vendors meets, Channel partner meets are organised wherein the Board members can interact with suppliers to share ideas and thoughts. Financial Strategy of TATA MOTORS Cost cutting and recovery strategies: The transformation of Tata Motors into a highly successful, welldiversified, and globally ambitious automobile giant represents one of Indias most remarkable corporate-success stories in recent times. In 2001 after a decade of strong revenue and margin growth, Tata Motors plunged into a financial crisis when demand for its trucks suddenly collapsed. The lost sales compounded by heavy investment for its entry into the passenger car business, the cost of complying with new emissions standards, and an increasing threat from overseas competitors caused Tata Motors to shock the markets with a 5 billion rupee ($110 million) loss for the fiscal year ending March 2001. Even in late 90s Tata Motors was predominantly a manufacturer of commercial vehicles, and that is a very cyclical business. At the time it was making huge investments in car manufacturing to move away from that cyclicality. But while it was in the middle of this diversification, the commercial-vehicle market in India shrank by more than 40 percent, with massive consequences for both the top and, more particularly, the bottom lines of the company. The 5 billion rupee loss in 2001 was the


first time something on this scale had happened in the companys history which really shook everybody within the organization. So in 2001 Tata Motors decided on a recovery strategy that had three distinct phases, each of which was intended to last for around two years six years in all. Phase one was intended to stem the bleeding. Phase two was to be about consolidating our position in India, and phase three was to involve going outside India and expanding our operations internationally. The key objectives were to move to a system of market pricing and to reduce our break-even point, both of which called for major reductions in costsvariable costs, fixed costs, and interest costs. It used many approaches to cost reduction, including bench-marking its rivals. For example, it took apart vehicles to see what they could do to modify their products and to lower costs. They went in for e-sourcing, which was then very new, but today it is the largest company doing e-sourcing in India and one of the leading ones in the automobile industry worldwide. In two and a half years, it reduced our break-even from nearly two-thirds of capacity utilization to around one-third, which meant that even if the market shrank by close to 60 percent, it would still be profitable. The whole organization really got together to ensure that the bleeding stopped. For phase two, the concentration was on improving product quality and upgrading product features so as to make the products more competitive. It also started work on new products that would be required by the market after three to five years and strengthened its position in the marketplace by setting up a new sales-planning process, tightening credit norms, improving the liquidity and profitability of the dealers, reorienting toward customer satisfaction, and extending the reach of its distribution network. For phase three, the concentration was on starting work on international markets by identifying key markets and segments and developing a comprehensive plan to improve its competitive position so as to get a respectable market share. It also started looking at opportunities for inorganic growth. Tata Motors Finance Ltd (TMFL) The auto financing arm for Tata Motors was established in 1957 in the name of BHPC (bureau for Hire Purchase and Credit). TMFL came into existence in June 2003. This was a common front-end, jointly formed by BHPC (Bureau for Hire Purchase and Credit) of Tata Motors and the asset financing arm of erstwhile Tata Finance Ltd. It was in the market for

exclusively financing Tata Motors vehicles. Subsequently Tata Finance was merged with Tata Motors and in April 2005 TMF became a division of Tata Motors. It is engaged in financing entire range of passenger cars & commercial vehicles manufactured by Tata Motors Ltd. TMF is the largest financier of vehicles manufactured by Tata Motors Ltd. With more than 2 million customers financed, TMF reaches out & helps customers to realize their dreams of owning a Tata vehicle easily. Corporate Purpose TMF aspires to be a preferred financier by choice for Tata Motors customers & dealers across all its products. Tata Motor finance would be the top-of-the-mind choice for all stakeholders when it comes to Tata Motors products. With a core purpose to reach out & help customers realize the dream of owning a TATA vehicle easily, we are present across 150+ locations and at all Tata Motors Ltd authorized dealerships. Schemes designed to suit every customer requirement, flexible repayment options, hassle-free eligibility criteria, simple documentation and fast sanctioning process makes it the preferred choice of any customer desirous of owning a Tata Car or Commercial vehicle.

Strategy defined TMF came into existence for the prime reason of easy financing the Tata Car or Commercial vehicles. Through these new initiatives, TMF aimed to reach small towns and villages, where they could find buyers for their products, such as the Ace and, going forward, for their small car. In the competitive world, there is an existing demand for cars, and along with it, it is important to make finance available to the potential buyers to help them buy the vehicles. With the low availability of conventional banking services in rural areas, it was necessary for them to offer finance to their buyers in such far-flung markets. Tata Motors has dealers in nearly every district in India. This helps them to build a good database of the financial credibility and worthiness of their customers across the country, which will be valuable information for the entire Tata Group. Similarly, this perspective would be deployed in their global operations in South Africa, South Asia, South Korea and the Middle East where they





The partnering strategy could well involve a local bank in the respective country as the individual countries have their own financial regulatory requirements. In other cases we could partner with Indian banks which have operations in foreign countries. The State Bank of India, for example, is already present in many African countries. So it can be looked upon as a prospective partner PAT/Sales structure of TATA Motors for the last 30 years: 1975 2251 Sales 0 PAT 541 PAT/Sale 2.40 s % In last 5 Years: 2005 2006 2007 2008 2009 CAGR 206486 242905 321298 287679 256606 6 2 8 1 7 5.58% 123695 152888 191346 165417 92151 7.10% 5.99% 6.29% 5.96% 5.75% 3.59% 1980 4482 7 1762 3.93 % 1985 9335 3 2313 2.48 % 1990 19691 0 10254 5.21% 1995 56831 2 31895 5.61% 2000 89611 4 7120 0.79% 2005 206486 6 123695 5.99%

Sales PAT PAT/Sal es

The above table shows the net profit margin for the last five years and also shows the compounded annual growth rate over the last 5 years. We can see that there has been a 5.58% growth in sales whereas PAT has gone down by 7.10%. However we cannot blame its strategy being wrong because we see that TATA motors has invested heavily in various mergers & acquisitions which has bought down its PAT, but is in line with their Inorganic growth strategy. Sustainability and road ahead: In a broad way, Tata Motors has been silently transforming itself for a long time and this will continue. The company started manufacturing locomotives, and then concentrated on heavy trucks before moving to light trucks, multi-utility vehicles, passenger cars, and buses. It has to continually reinvent itself. The important thing is to keep looking at external changes in the marketplace and to respond to these changes appropriately while continuing to retain its values, which have been its

beacon for the past 60 years. Tata Motors used to be an engineers organization that needed to understand more about profits, costs, and contributions. Now people at all levels realize it doesnt make sense to just manufacture anything, that products must sell to make a healthy contribution, and that market share must continually be increased to sustain growth. It should grow and produce a healthy bottom line, necessary for sustained growth. But in doing so, it be seen as an innovative company breaking new ground and going into uncharted territories successfully like the recent JLR deal. Human Resource at Tata motors Few specific events related to downsizing at Tata Motors would help us describe the HR culture at the company. From 1970s to present Tata Motors share value has increased nearly 4000 pp, turnover has increased from about 1800Cr. to 75000 Cr. But manpower figures have not been following the same trend. From a figure of 11000 employees it rose to 35000, then came down to almost half (18000) and the number is again on rise. For understanding the trend, we must become familiar with the factors affecting manpower. Some of these factors are listed below: Volume of business: a fast growing business like Tata Motors needed more hands to work on day by day Locational delinkage: Tata Motors started off a new unit at Pune Adopting new product or technology: advent of passenger cars and light commercial vehicles Shift in customer preferences: style and comfort became important like never before Starting support activities o Finance: the need to provide finance to people to buy their vehicles, Tata Motors started off Tata Motors Finance o Logistics: the Hub n Spoke model of the dealer network was introduced o IT: need for information was growing day by day and it needed to be addressed soon

o Automation: automation in assembly was introduced This has provided us with a fair background of the changes in the company. Now let us try to understand the companys HR policies and culture against this backdrop. Phase I: During 1970s, money and people were available in abundance with Tata Motors. It cared for its employees like a father cares for his children. Todays buzz words like mentoring and coaching were actually practiced nearly three decades back in Tata Motors. Senior executives handheld new employees and helped them blend with the company. Colonies were made for the TELCO community, which provided residents, apart from basic amenities, with, facilities like security, health care, clubs etc. Tata Motors wanted its employees to have no reason to leave the organization before their retirement. Though it also set out some basic codes of conduct, to which, if one fails to conform, he would be asked to leave the Tata Motors family within a stipulated time period. These included refraining oneself from stealing (even stealing a pencil was an offence), and not indulging in an undesirable relationship between a man and a woman who lived in the colony. The sincerity of management at Tata Motors in implementing these two rules can be judged from the incident that when Daimlers Chief was found guilty of getting into an undesirable relationship he was given a return ticket to his homeland. Also employees were given loans without any interest rates being charged from them. With the advent of IT, IBM 1401 was introduced in the company. The machine required inputs through punch cards and hundreds of people were required to punch these cards. Tata Motors again found a chance to work for the society at large. It employed several widows to do the job in three different shifts and helped them earn bread and butter for their families. Also there was some reconditioning of motors and the winding department had work that could again be performed by women, so again it employed even more women for the job. By 1980s, too much automation had taken place, the wizards of the organization who earlier experienced a sense of vanity about their expertise of precisely identifying the problem areas in a machine or assembly line, felt useless. They were gradually becoming technologically obsolete. At that point Tata Motors offered them a scheme that if they do not wish to stay in the company they may leave but they would continue to get

benefits of employment till 60 years of age. Company was in good shape at that time and was still trying to look after them as parents. The scheme received an overwhelming response and resulted in voluntary downsizing. We see here that though there was a downsizing still it was not cruel; employees werent chopped cruelly off the muster rolls of the company. Phase II: This would show the survival mode adopted by the company. From the year 1995 onwards, company was compelled to share publicly the quarterly results for the benefit of the shareholders. Cost of employees had also risen from about 10% to nearly 30%. Also the company was facing stiff competition. This led to the development of the Tata Business Excellence Model. Every individual was put under a scanner. 360 degree appraisals, Balance Score Cards started being implemented to assess employee performance. Big consultants like Mckinsey and the Tata group itself joined the scanning process. The company was bleeding, everyone was fearing that the company might close down completely. Finally it was decided that the bottom 10% would have to leave the organization. A hockey stick syndrome prevailed throughout the organization; within a very short period of time there was a tremendous morale crash. The company lost about 7000 employees over the years due to the process. It had to take corrective actions. As a result: Salaries of those who stayed were jacked up 4-6 times Huge induction from outside was done at every level Brilliant people were given promotional jumps, eg: Tata Nano chief

Phase III: Tata Motors started in Jamshedpur, operating in the product range of locomotives, commercial vehicles, excavators. Then it started off a new unit at Pune that was majorly a centre for R&D along with production of commercial vehicles. It then had to open up a new plant in Lucknow without any agenda, just because of the pressure from the centre. It involved huge costs. The hierarchy had been becoming unwieldy. Company had to adopt a profit oriented face. It revisited following areas of improvements; Automation Development employed nearly 3000 employees, so many of them were not really needed and were a burden on the company


Today finance is available in abundance, a captive finance company like Tata Motors Finance was not really needed The Hub n Spoke model required thousands of drivers, a number of logistics companies are available today and all this could be easily outsourced at a much lower cost

All these led to several of integrated organs like Tata Motors Finance, Tata Motors Automation Ltd., Tata Engineering & Constructions, Tata Motors Logistics etc. to be snapped out and become individual companies with independent GMs of whom Tata Motors would only be one of the clients. Today the core values of Tata Motors are slightly skewed towards business, but that is because the context changes with era. As the time changes one has to constantly change and adapt with the changing times and as they say, No prescription is a permanent prescription, Tata Motors is simply evolving with time, yet at every step, taking care of what it leaves behind. Information Technology Strategy Enterprise Resource Planning Prior to the SAP implementation TML has a host of legacy applications which had been developed and maintained over a period of time. Thus the underlying technologies and platforms were diverse along with diversity in functions and locations. This led to redundancy, inconsistency and inefficiency in data management. A unified real time database with an IT infrastructure that was integrated across the functions, locations and even businesses was the need of the hour, in order to cut costs and manufacturing cycle times and also serve the customers more efficiently. Why SAP? SAP has a clear superiority in the market. It has a large presence and good support, so we chose the SAP ERP Solution for our company. The results have definitely exceeded our expectations, says Probir Mitra, CIO, Tata Motors. SAP was the business leader in ERP solutions space. SAP offered strategic fit to TMLs TO-BE stage process mapping. SAP was able to integrate various functions across geographies yet maintaining real time data updates.

TMLs business processes were rationalized across all manufacturing units using the power of SAPs ERP infrastructure.

The existing environment prior to SAP implementation was Oracle database solutions, Unix as operating system and predominantly IBM for hardware support. The implementation of SAP ERP solution (Version 3.1H) started in about 1998 and was finished by 2000 for about 3500 users. Later in 2003 TML moved to version 4.6C on a single server platform. The major benefits from implementation included enterprise integration, reduction of inventories, better control over receivables, easier financial consolidation, single unified database, improved efficiency by reducing redundancy and inconsistency, reduced response time to customers and reduction of operational costs. Customer Relationship Management With increasing competition from both Indian and foreign automakers in a cyclical business environment, Tata Motors needed strategies to build competitive advantage through strong relations with customers and good customer service. Being a global player with a widely dispersed dealer network Tata Motors was in the need of a common system to link its company, dealers and customers. In 2005, Tata Motors took a decision to implement a robust CRM throughout the organization. Oracles Siebel Automotive CRM solution customized for the automotive industry was chosen as the CRM system for the organization. Standardizing Customer-Facing Processes Tata Motors aimed to standardize its customer-facing business processes companywide through reengineering, thus improving operational efficiency and effectiveness, building stronger dealer relationships and a better customer experience. This task involves working with about 250 dealers and more than 1600 locations staffed by more than 10,000 salespeople across India. TML has also deployed a robust technology platform consisting of an innovative dealer management system to improve the information flow across the enterprise. This system helps dealers in functions such as inventory management, credit reporting, calculating commissions etc. Siebel Automotive CRM, in conjunction with the dealer management system, has streamlined transactions, ensuring real time capturing of customer data. The solution provides a 360-degree view of customers to the extended organization, with appropriate visibility controls to ensure that one dealer is not privy to information from another.

Registering Strong Success with Dealer Siebel Automotive has transformed Tata Motors into a truly customercentric organization. Information redundancy and disparity has been reduced and the business processes have been improved. By working upon real-time, centralized customer and vehicle data, the employees and dealers have been empowered immensely.

Conclusion In the whole; the group is acquiring the different strategy in the different market; such as; in the home country Tatas strategies are same as to cost leadership and differentiations. The announcement of introduction of Tatas 1 Lakh car had already penetrated the market and the rivals and competitors are worried about the market. Recently; theGlobal Insight stated in the analysis that , It is likely that VW will wait to see what impact Tata's proposed 1-lakh car has on the Indian automotive industry before deciding on a final strategy for entering the country. The eagerly awaited model is due to go on sale at the end of next year and will have a price tag of roughly 100,000 rupees (US$2,298), hence the unofficial name of the project. As per the Bowmans Strategic Clock analysis; adopted by Johnson & Scholes (2005); (1) No frill strategy; a low frill strategy combine a low price and low value added, low perceived product/services benefits and a focus on a price sensitive market segment. The group is using the strategy in Oil industry. (2) A Low price strategy seeks to achieve a lower price then competitors whilst trying to maintain similar perceived product or service benefit to those offered by competitors. The Group is trying to achieve the low price strategy in markets such as automobile industry in order to provide lowest price cars and achieve a high share in the market. (3) A hybrid strategy seeks simultaneously to achieve differentiation and a price lower then that of competitors. The hybrid strategy is used by the company in various industries, it involved a higher degree of organisational excellence and integration of all the departments. Here the strategy of the group is to maintain the cost of raw materials as lowest as possible and to achieve

the lowest cost of final products. The group also invested a huge amount in research and development in order to achieve the highest degree of quality at the lowest price Bibliography