The Tata Group is a multinational corporation based in Mumbai, India.
In terms of market capitalization and revenues, Tata Group is the largest private corporate group in India and has been recognized as one of the most respected companies in the world. It has interests in steel, automobiles, information technology, communication, power, tea and hospitality. The Tata Group has operations in more than 85 countries across six continents and its companies export products and services to 80 nations. The Tata Group comprises 114 companies and subsidiaries in seven business sectors, 27 of which are publicly listed. 65.8% of the ownership of Tata Group is held in charitable trusts. Companies which form a major part of the group include Tata Steel, Corus Steel, Tata Motors, Tata Consultancy Services, Tata Technologies, Tata Tea, Titan Industries, Tata Power, Tata Communications, Tata Teleservices and the Taj Hotels. Tata Motors is India's largest automobile company, with revenues of US$ 4.7 billion. The company is a market leader in commercial vehicles in India and amongst the top three players in the passenger car industry. It is the world's fifth largest medium and heavy commercial vehicle manufacturer (Media Centre, 2005). Tata Motors is employs strategic alliances and collaborative partnerships within the automobile industry in India and abroad. Fiat S.P.A and Tata Motors Limited announced the signing of a Memorandum of Understanding (MoU) to analyze the feasibility of cooperation, across markets, in the area of passenger cars that would encompass development, manufacturing, sourcing and distribution of products, aggregates and components (Media Centre, 2005). Tata Motors also entered in an alliance with ATFCAN (Advanced Technologies & Fuels) Of Canada to demonstrate advanced CNG Technology for Buses (Media Centre T. M., 2006). The Boeing Company has entered into an agreement with TAL Manufacturing Solutions Ltd. (TAL Mfg. Solutions, 2010), a wholly owned subsidiary of Tata Motors Ltd., for manufacturing structural components for Boeing's 787 Dreamliner airplane program (boeing.com, 2008). Ariba, Inc. (NASDAQ: ARBA), the leading provider of Spend Management solutions, has extended its sourcing solutions partnership with Tata Motors (PRdomain.com, 2005). Tata Motors also partners with its own subsidiaries like when it partnered with Korean subsidiary Daewoo. The partnership recently launched its Prima range of heavy-duty trucks in the 25-49 tones range for the global market (times, 2010). Tata Motors is among the top three in passenger vehicles in India, with successful
Tata Motors has presence outside its domestic market. Hence. it only faces a collection of self-contained country markets. since it is present in several countries in Europe. Ukraine. The customers of Tata Motors’ products are attracted
. South East Asia. The automobile industry does not face any competition in global or world market. Africa. which needs to be dealt with by every company. Bangladesh. Every market (country-specific or regional) has its own distinctive environment. Russia and Senegal. Every country presents a unique set of challenges for automobile companies and Tata Motors is not impervious to this fact. but Tata Motors is some-what immune to this phenomena. which force automobile companies to adapt to country specific markets. The giants of the industry might face the rub-on effect of different markets. The domestic commercial vehicle market is highly cyclical in nature and prone to fluctuations in the domestic economy. Since the domestic commercial vehicle sales of the company are at the mercy of the structural economic factors. the Middle East.products in the compact. It had consolidated revenues of USD 14 billion in 2008-09. Tata motors have entered in partnerships/joint ventures with different companies in different countries some of the resultant entities are listed below: TATA Daewoo Commercial Vehicle (South Korea) Hispano Carrocera (Spain) TATA Marcopolo [TMML] (Brazil) TATA Xenon (Thailand) TATA-Jaguar & Land Rover (UK) TATA Fiat (only in India) The main reason behind Company's global plans is to reduce domestic exposure. and the world's second largest bus manufacturer. it is increasingly looking at the international markets. nearly every firm in the automobile industry lends itself to multicultural competition. South Asia and South America. It has franchisee/joint venture assembly operations in Kenya. It competes globally. The main reason behind this advantage is that Tata Motors is a new entrant in the international market. There are bound to be differences in cross-country market conditions in any industry. The automobile industry is especially susceptible to this phenomenon. The company is also the world's fourth largest truck manufacturer. midsize car and utility vehicle segments. There are many factors .
It focuses on broad market base in countries like India. Tata Motors always enters in to partnerships with local sellers and adapts to local customs and cultures in their marketing and distribution of their products. etc. (Mohanty. its main competitor and next cheapest Indian car priced at Rs. Especially after the introduction of new car “Nano” which was first displaced at the 9th annual Auto Expo on January 10. there is always a room for transferring ideas.988 U. safety equipments. Although this strategy does not call for absolute lowest possible costs. technologies and competencies to similar markets.]. No other firm has been able to imitate their low-cost methods. but Tata Motors has the virtue of having a firm infrastructure with no matches in the industry. As discussed earlier Tata Motors has partnered with different companies in different countries. 184. hence it cannot opt for a uniform product strategy. India. customers in India are attracted to no-frills.] (Sirish. easy to maintain cars whereas customers in other markets may want cars fully-loaded with features. 2008). 2009) (Maruti 800.g. Tata chemicals. It is not only important for a product to be the cheapest in the industry. as it is the industry’s lowest-cost car manufacturer. 2009). Tata Motors has taken great care of including all the necessary features like A/C. at Pragati Maidan in New Delhi. 2008. Although there are variations in strategy followed by Tata Motors in different. legal environments differ in every country along with money markets. Tata Nano is cheaper than the Maruti 800. Tata Motors is follows a multicounty strategy.in. Tata Motors is use Low Cost Leadership Strategy. Tata-Corus. but also it should not be perceived frills-free which will turn off prospective customers.g. e. e. from India to Brazil and vice-versa. driver & passenger comfort and other specifications necessary to have in a passenger car (reuters.S. Economic. 2008).641 [$3. Tata Motors with “Tata Nano” uses the policy of using the lower-cost edge to under price competitors and attract price sensitive buyers in great numbers. hence a company like Tata Motors cannot choose to be adamant to follow a uniform strategy in different countries. whereas its focus in the UK is a niche market with their recent acquisition of Jaguar-Land Rover.to different product attributes. In this way the firm reaps the benefits of both a bigger profit margin per unit sold and added profits on
. etc. This includes steel plants [Tata Steel. This firm has taken all the mandatory and necessary steps in order to make their car inviting for the prospective customers. Marketing campaigns run by Tata Motors in different are quite different from its home country India. sociopolitical.
. The survey included 600 global companies. the competitors’ and industry wide happenings. In this low cost market segment it has the first mover’s advantage and this attribute can win the firm the desired market share. the concerned company but also. Because Tata Motors is employing strategic alliances and collaborative partnerships. Tata Motors’ strategies can be defined as follows:
The 2009 annual survey by the Reputation Institute ranked Tata Group as the 11th most reputable company in the world. Tata Motors does a good job in controlling the cost drivers such as economies of scales.com.incremental sales. SWOT Analysis SWOT analysis is a useful analysis for a company because. first mover’s advantage and strategic choices and operating decisions. the benefits of vertical integration versus outsourcing. 2008). it takes into consideration not only. so it internals structure has to adapt to the changes so made by its acquisitions and mergers. The SWOT analysis and the Value Chain Analysis of the firm also allude to the same conclusion. The company employs the correct strategy of low cost leadership as it has a massive customer base in India’s middle class (merinews. the cost of key resource inputs and links with other activities in the company or industry value chain.
Lack of competence
Opportunities • • • • Largest aspiring middle class Huge unexploited market The company has a chance to market vehicles in the luxury segments.Strengths Strengths of a company include the advantages enjoyed by it in the industry. Tata launched the Fiat Palio Style in 2007. which make it stand out in the industry. Tata Motors Limited acquired Daewoo Motor's Commercial vehicle business in 2004
for around USD $16 million. • It also has a program of intensive management development in place in order to
establish its leaders for tomorrow. For example. Weaknesses • • Tata has not got a foothold in the luxury car segment in its domestic. and the companies have an agreement to build a pick-up targeted at Central and South America. • • • • Goodwill of the TATA brand Owns steel plants Large shareholder base The company has had a successful alliance with Italian mass producer Fiat since
2006. This has enhanced the product portfolio for Tata and Fiat in terms of production and knowledge exchange. • Threats • Competition from well established brands in India and worldwide Tata ‘Nano’ is the cheapest car in the World
. They also include the attributes of the company. Indian market.
. Tata Technologies Limited (TTL) was an internal start-up as it was built as a new business subsidiary from scratch. This group along with its automobile arm. The biggest threat to Indian automobile industry is the invasion of foreign car manufacturers in to the Indian market.TTL operates in the US and Europe through its wholly owned subsidiaries in Detroit and London respectively. For example. Maruti. Due to their superior technology foreign manufacturers hold an edge over their Indian counterparts. Tata motors haven’t been able to cut in to the Indian luxury car market. it has the advantage of being one of the pioneers in the Indian automobile industry. The biggest opportunity. Tata Motors enjoys very large brand equity. nearly all of them import their engines or outsource their engines to a foreign company based in India. is in a joint venture with Suzuki motors of Japan. TTL provides Engineering and Design (E&D) solutions to the Automotive Industry. Along with Godrej and Reliance industries. etc. It also has a presence in Thailand. Tata Motors is the oldest Indian automobile company though started with a joint venture with a foreign company producing trucks in India. Tata is one of the most trusted brands in India. So.• • •
Safety and reliability issues Rising prices in the global economy could pose a threat to Tata Motors Limited Sustainability and environmentalism could mean extra costs for this low-cost
producer One of the foremost strengths of Tata group and also of Tata motors is the benchmark of solidarity among the Indians. i. owing to various factors like lack of marketing of these brands in India and many more. This middle class is getting richer and as well as increasing its size every passing day. Tata Technologies is a software service provider in the IT services and BPO space. One weakness that plagues the whole Indian automobile industry is the lack of technological know-how. The biggest problem of Indian automobile companies is the engines.e. is the middle class of India. hence all the car manufacturers in India have a great opportunity to exploit this niche market. which is the no. Indian companies prefer to partner with a international company to learn the latest technology. 1 company. which attracts foreign car manufacturers in India. Tata motors have outsourced their car engines to Renault motors of France. Toyota. Tata Motors specifically faces threat for its newly acquired luxury brands jaguar and land rover to the foreign car manufacturers like BMW.
With TTL (Tata Technologies Limited) Tata Motors diversified in to unrelated business. TTL’s value chain does not match with Tata Motors and this shows the intent of Tata Motors to spread risks evenly throughout the businesses. Value chain analysis of Tata motors 1.
Value Chain Analysis of Tata Motors Tata Motors when diversified through joint-ventures and acquisitions almost always had an identical value chain to other companies. Tata Motors is achieving its goal of maximum performance benefits. Marketing and sales details • Pan India presence and global footprint
. General Motors.client list includes Ford. By employing strategies according to situations prevailing in the markets. These almost identical value chains helped Tata Motors to reduce costs and also allowed both the companies to use common brand. This helped Tata Motors a great deal in transferring skills and technologies to and from its partners. Toyota and Honda. Marcopolo and Iveco had almost the same value chain as Tata had and that point of time. Inbound logistics • • Maintenance.other car manufacturers use Tata motor’s paint shop facilities
2. For example Hitachi.technical competence Capacity utilizations. Tata Motors by partnering and acquiring the foreign companies is also building its competitive advantage in order to compete better in the world auto sector. Tata Motors is outstanding in diversifying its businesses. Outbound logistics • • Stockyards all across the countries It uses SAP
Operation Details • • Assembly units scattered all across the subcontinent Kaizen and TPM teams continuously trying to increase efficiency
5. is the constant pursuit of technological excellence. Service details • • Easy availability of spare parts Large network of dealerships
6. which would actually take the car out of the low cost market segment in the industry
. Even after all the competitors enter the market segment there would be very less chances of product differentiation as it is dictated by the price of the product. They devote a substantial amount of their budget to develop new technology. If any company wants to introduce product differentiation in the segment it has to invariably increase its prices. which Tata motors enjoy. Technology development • • Formal benchmarking processes “Technology Day” observed across all plant locations
One of the competitive advantages. Firm infrastructure • • Multi product facility Large product portfolio
7. One can safely predict that after the new entrants in the market segment. there would be vigorous price competition among the competitors. Human resource management • Vast pool of competent engineers and managers
Large network of dealers use of technology: DMS
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