STRATEGIC MANAGEMENT-1

TATA MOTORS

Presented by Group 10
23P064 A Kevin Silvacus
23P068 Abhishek Srivastava
23P078 Astha Mishra
23P081 Bhavya Bansal
23P089 Harshul Jain
23P105 Sagaram Pranav
23P118 Srivatsa Patnaik
 Industry Overview

Indian Automobile Industry

4th largest in the world
Produced 25.93 Mn vehicles in FY23
Contributes 7.1% towards Indian GDP
Employees 19 Mn people both direcly and
indirectly
No. of automobiles produced in India (source: IBEF)
Market share of 2 wheelers is 74% and passenger
vehicles is 18%
Industry is expected to reach $ 300 Bn by FY26
The sector is divided into the following segments
Two wheelers
Three wheelers
Passenger vehicles
Segment-wise Domestic Market Share in FY23 (%) Commercial vehicles
(source: IBEF)
 Industry Overview

Market share
Growth drivers
Company
(%)(Nov’23) Support of Government policies like Make in
India, Automotive mission plan 2026,
Maruti Suzuki 41.60 NEMMP 2020, Production Linked Incentive
scheme, etc.
Tata Motors 14.85
Growing demand due to rising population,
easy availability of financing options, high
Hyundai 13.79
level of infrastructure development
Mahindra 10.80 Huge investment in R&D for electric
vehicles, technology upgradation, etc.
Kia 5.52 Opportunities
India is emerging as the fastest growing
Market share of top 5 automobile companies in India
(source: IBEF) manufacturing hub
Electric battery manufacturing and
semiconductor fabrication units
 COMPANY
OVERVIEW 1945
Began journey
with a focus on
1998
Entry into the
passenger car
2004
Strategic
acquisition of
2008
Acquisition of
Jaguar Land
2009
Introduction of
Tata Nano,
commercial segment with Daewoo Rover, marking emphasizing
vehicles Tata Indica international accessible
expansion mobility

Non-Executive Director & Chairman

Market Dominance
Integral to the Tata Conglomerate, Tata Motors leads India's
Mr. Natarajan Chandrasekaran commercial vehicle and passenger car markets.
Strong global presence with a focus on exports.
Established in 1945, Tata Motors Maintained leadership in commercial vehicles during the Covid-
Limited is a key player in the 19 pandemic, targeting infrastructure opportunities.
automotive industry, valued at
nearly $42 billion.
Part of the Tata Group, it has a rich
Investment and Innovation
history of innovation and Significant investment from TPG in its EV subsidiary, highlighting
expansion, encompassing commitment to electric vehicle technology.
commercial vehicles and passenger Constant innovation driving the company's growth and
cars. sustainability efforts.
 Value Rarity
VRIO
Extensive Global Advanced Manufacturing

ANALYSIS Network
Leadership in Electric
Techniques
Strategic Acquisitions
Vehicles Proprietary Technologies
After-Sales Services and
Customer Care

Inimitability Organization
R&D and Innovation Strategic Partnerships for
Ecosystem Innovation
Brand Heritage and Global Talent Pool
Legacy Financial Management
Integrated Supply Chain
 THE MINTZBERG 5 P'S OF STRATEGY

PLAN PLOY PATTERN POSITION PERSPECTIVE

Expansion into Competitive Emphasis on Leadership in Innovation as a
Electric Vehicles Pricing for Market Sustainable India's EV Market Driving Force
Global Market Penetration Mobility Strong Global Sustainability at
Penetration Revitalizing JLR Portfolio Presence with the Core
Advancements in Brand Diversification Local Adaptation Global Strategy
Autonomous Strategic Customer-Centric Versatile with Local Focus
Technologies Partnerships for Innovations Automotive
Technological Edge Manufacturer
COMPETITOR ANALYSIS
Challenges from Competitors

Market Share & Brand Image

Maruti Suzuki dominates the passenger car
segment with a strong brand image,
making it difficult for Tata Motors to gain
significant market share, especially in the
budget and mid-range segments.

Feature-Rich Competitors
Hyundai's focus on offering feature-rich
cars at competitive prices puts pressure
on Tata Motors to enhance features in
their vehicles without compromising
affordability.

Global Automotive Giants

Toyota's established brand recognition,
diverse product portfolio, and
technological advancements in hybrid and
electric vehicles pose a challenge,
particularly in the SUV segment.
 KEY CHALLENGES
1. Huge Debt 2. Heavy competition

Tata motors has huge debt that has been consistently

Maruti Suzuki reigns supreme with a 42% market
increasing from the past few years. Tata Motors carries a debt
share in the passenger car segment, dwarfing Tata
of over ₹1 lakh crore), limiting its ability to invest heavily in
Motors. Their extensive service network further
R&D or aggressive marketing campaigns.
strengthens their position.

With its new “Reimagine” & “Refocus” strategy, it aims to be

In the EV vehicle segment, Tata Motors has a 72%
debt-free by 2025.
market share
 KEY CHALLENGES
3. Shortage of Semiconductor chips 4. Technological Advancements
Electric vehicles segment demands continuous
investment in EV technology and infrastructure.
Advancements in autonomous driving, connected car
technologies, and other emerging trends requires
significant resources.

5. Brand Perception

Compared to established global brands like Ford and

General Motors, Tata Motors struggles with brand image,
especially in the premium car segmen

6. High Commodity Prices

The shortage of semiconductor chips is a
major problem for automobile
The rising inflation commodity prices have increased due
manufacturers and it has adversely
to which, the margins of the company would take a toll.
impacted the JLR segment, which
With the increase in the price of steel and aluminium,
contributes a major chunk of revenue for
the margins too have taken a toll.
the company.
 TETRA THREAT FRAMEWORK
Imitation Substitution

1. Patents
1. Product Differentiation
a. Secured patents across CESS-related technologies (9856 global
a. Wide range of vehicles - passenger vehicles, utility vehicles, buses,
patents)
trucks & luxury vehicles (Jaguar, Land Rover)
b. India FY23: 158 patents & 71 grants (Record)
b. Multiple variants of the same model to cater different preference
2. Strong Brand Identity
and budgets. E.g. - Nexon.ev Model XE (Base), XM, XZ, XZ+
a. Strong Brand equity of Tata automobiles (Jaguar, Land Rover)
2. Improving Quality & Safety
b. New brand Identity, Tata.ev ->adoption of clean energy mobility
a. Safety related tech - Electronic Stability Control, Automatic
solutions -> ~70% India market share in EV
Traction Control, and Hill Start Aid across PVs, EVs, & CVs
3. Upgradation
b. GNCAP safety ratings of 4 and 5 stars - Altroz, Punch, Tiago, Tigor,
a. Continuous investments in R&D. E.g. - Alternative fuel
and Tigor EV
technologies
c. All manufacturing divisions have been certified with ISO TS 16949,
b. Open Innovation Strategy aims to offer future ready vehicles that
ISO 9001, ISO 14001 and OHSAS 18001
are difficult for competitors to replicate quickly
Added Value

Appropriated

Hold Up Slack
Value

1. Continuous Improvement Programs

1. Diversifying Supplier Base
a. implements lean manufacturing practices, emphasizing waste
a. TaMo sources components and materials from a global network
reduction and process optimization through techniques like Six
of suppliers to optimize cost and reduce dependency on a single
Sigma, JIT and Kanban systems to enhance productivity and
geographic location avoiding risk of hold up
minimize inventory costs.
2. Integrating Vertically
2. Performing Monitoring Systems
a. Leveraging the group’s vast resources, it gains direct access to
a. Ensure product quality through comprehensive quality
raw materials. E.g.- Tata steel, supplies steel diminishing
management systems, including ISO 9001 standards
dependence on external suppliers
b. Tata Motors utilizes advanced MES for real-time production
b. Expanding its manufacturing capabilities, producing components
monitoring, providing visibility into KPIs such as production rates
and assemblies in-house. Leads to greater control over the quality,
and downtime, enabling bottleneck identification and process
cost, & availability of essential parts
optimization.
STRATEGIES DEPLOYED
Market Share Dip & Loss of Rs. 26961 Cr in 2018 Cr in December
2018 Quarter

Decrease Platforms and achieve EOS- From 10 platforms to 2 platforms

Entry into EV Space- First mover advantage (Capturing 72% market share)

Group Companies support- TCS, Tata Power, Tata Elxsi, Tata Capital, TCM

Safety of Vehicles and Premium Designs- Brought market attention to safety

Jaguar Land Rover’s Success-

Defender and Range Rover have
seen neOn the other hand, the
Jaguar brand makes up 17% of the
total sales volume at JLR, with
sales figures reaching 60,000
units.
RECOMMENDATIONS PE Ratio over the years

Before 2019 PE ratio for Tata

Motors was positive but as
debt started piling up, the PE
ratio started going down and
EPS became -ive.
However, PE ratio has risen
back to ~17 which is one the
best figures as compared to
the peers. Quarterly profits
and attractive valuation

Recommendations

Enhance Customer
Expand EV Portfolio Sustainability Initiatives
Experience

Autonomous and Connected

Investing in R&D Partnerships and Collabs
Vehicles
THANK YOU