TATA MOTORS : QUEST FOR BECOMING A GLOBAL CONTENDER

Group No 12.

Name Roll NoViraj Bhosale 07Sushant Cowlagi

12

Ashesh Joshi 21Sye Nihalani 34

INDIAN AUTOMOTIVE INDUSTRY

The automobile sector of India is the seventh largest in the world.

It manufactures over 11 million vehicles and exports about 1.5 million each year.

It attained a turnover of USD $35.8 million.

Contributes about 4 per cent in India's GDP.

India overtook China by emerging as the fourth largest exporter of cars in Asia.

Has provided direct and indirect employment to 13.1 million people.

The projected size in 2016 of the Indian automotive industry varies between $122 billion and $159 billion including USD 35 billion in exports.

AUTOMOTIVE COMPANIES IN INDIA

Formerly known as TELCO-Tata Engineering And Locomotive Company renamed Tata Motors in 2003.

Entered commercial vehicle sector in 1954 on joint venture with Daimler-Benz.

Founded by JRD Tata and currently handled by Ratan Tata headquartered in Mumbai.

Tata manufactures HCV,LCV,Passenger Cars, MUV and military vehicles.

India's largest automobile company, Leader in commercial vehicles in each segment and among top three in passenger vehicles.

The company is world's 17th-largest motor vehicle manufacturing company,4th largest truck manufacturer, and the world's second largest bus manufacturer.

Tata Motors ranked 314th in 2012 Fortune Global 500 ranking of the world's biggest corporations.

Revenue - 2,32,834 crores (2013-2014)

Employee Count-5,81,473 (2013-2014)

TATA MOTORS- Brief Introduction

Passenger & Utility Vehicles

Concept Vehicles

Commercial Vehicles

Military Vehicles

-Tata Indica-Tata Vista-Tata Nano-Tata Manza-Tata Indigo-Tata Indigo CS-Tata Indigo XL

-Tata Pixel-Tata Air Car Mini Cat-Tata Prima 2009-Tata Cliffrider 2006-Tata Xover 2005-Tata Indigo Advent 2004

-Tata Ace-Tata World Truck-Tata Daewoo-Tata Hispano-Tata Magic Iris-Tata Globus-Tata Winger-Tata Starbus

-Tata LSV-Tata Bantam-Tata Mobile Bunker-Tata Safari Armoured-Tata Sumo Armoured-Tata 4x4 Mine Protected

TATA MOTORS – Product Profile

EXTERNAL ENVIRONMENT : A PESTEL STUDYPolitical : operating in multiple countries across Europe, Africa, Asia, the Middle East, and Australia, it needs to pay close attention to the political climate. Tata’s headquarters in Mumbai, India, strictly controls and regulates operations and abiding on all labour laws in all the countries where they have plants in operations.

Economic :  A global approach enables Tata Motors to adapt and learn from the many different regions. They have experience and resources from five continents across the globe, thus when any variable changes in the market they can be gathered from other.

Social : TML is involved in supports for around 600 NGO’s. Tata Motors tends to use an integration and rarely separation technique with foreign companies they acquire.

Technology :Employing 1,400 scientists and engineers, Tata Motors’ Research and Development team is ahead of the pack in India’s market and right with the rest of the field internationally. Formation of Tata Technologies Limited.

Environmental – Huge money invested in R&D to produce eco cars and to adhere to Indian and International standards of Emission.

INDUSTRY ANALYSIS : PORTERS FIVE FORCES

Industry Rivals – Facing competition from domestic and foreign automotive Manufacturers. Improving infrastructure has made foreign companies enter India market via merger with existing Indian ones or starting direct operations, this brings regular innovation and up gradation.

Bargaining Power of buyers – The bargaining power of buyers is higher in Consumer Vehicle segment than in Passenger Vehicle ones.

Bargaining power of Suppliers – Tata motors have a good grip over the suppliers, however in capital intense industry, Switching cost of supplier is high.

Threats of Substitutes – Two and three wheelers are direct substitute products while public transportation is an indirect one

Threats of New entrants – High investment and barriers for new comers but easy of existing ones to enter into new markets

GROWTH STRATEGY : ANSOFF MATRIX

Market Penetration :  Tata Motors used this strategy when they reached UK market by take over Jaguar-Land Rover to increase profits and develop goodwill due to good reputation of Brands

Product Development : Introduction of Tata Nano in the existing market of India & tata star bus and tata Xover

Market Development : Tata Motors has developed their market overseas; they reached South Korea market in 2004, Spain market in 2005, Thailand market in 2006, UK market in 2008 and many more. Tata Motors sells their existing products like buses, trucks, and cars in those markets. 

 Diversification : Tata Motors diversified their products when they entered UK market and took over Jaguar-Land Rover in 2008. It allowed Tata Motors to produced new products line, for example, Jaguar X-Type and Land Rover LRX.

SWOT ANALYSIS :

STRENGTHS

International StrategyAcquisitionsBrand NameR&DFinancialsProduct Portfolio

WEAKNESS

Luxury SegmentStrong in the Indian Sub continent onlyAdvertisingRelatively Old Product Platforms

OPPURTUNITIES

JV’s – New MarketsScope of innovationsExpanding Market

THREATS

Rise in CostsCompetitionNeed for Innovations Stress on Environment

BCG ANALYSIS

Indica Vista, Starbus, Ace, Manza, Winger, Magic, Tata Prima, Other LCE’s.

Tata Nano, Versa, & Other new innovations.

Jaguar, Land Rover, Safari, Sumo, Indigo CS, Indigo XL.

Sierra, Estate.

VRIO FRAMEWORK :

V

•Customer Understanding /

Brand / R&D

R

•Supplier base / Market Know how

I

O

• Organizational Culture / Human Resource / Strategic Alliances • The TATA legacy – Policies and

Codes to exploit the VRI variables

SUSTAINABLE

COMPETITIVE

ADVANTAGE

COMPETITIVE

ADVANTAGE

TEMPORARY COMPETITIV

E ADVANTAGE

Tata Motors

Financial Crisis of 1998 3 Recovery phases

Launch of the Nano / Integrating the Jaguar / Land Rover

International Strategy

BRIEF OF THE CASE

Passenger Car Segment

Commercial Car Segment

Stem the bleeding

Consolidating the

Domestic Position

International Diversificati

on

Economies of Scale.

Standardized Products

Uniform service to global customers.

Global sourcing of raw materials, energy, and labor.

12 countries as priority

markets

Strategic Alliances / Acquisitions

INTERNATIONAL STRATEGIESTATA MOTORS –

SEEKING TO ADOPT

QUESTION 1 - Evaluate companies commercial vehicles (Trucks/Buses) strategy from 2003 to 2007

In 2004 Acquired Daewoo commercial vehicles. By Identifying about 12 countries as priority markets,

rather than 60 to 70 countries try to tap previously. Acquired Nissan’s plant in south Africa as a assembly

plants to serve the African countries. In 2005 Acquired a 21% stake in Spanish Bus & coach

manufacturer. Which help to learn Spanish expertise in Luxury buses targeting Europe, US, Africa & Latin America.

In 2006 formed JV with Brazil based Marcopolo, global leader in body-building for buses & coaches.

In 2006 formed JV with Thonburi auto for manufacturing Pick-up trucks.

Tata Motors has over 130 models of light, Medium & Heavy trucks.

QUESTION 2 - Evaluate the companies passenger car and multi utility vehicle strategies from 1991 to 2007

Compact car Tata Indica launched in 1998. Utility Vehicle Tata Sumo Launched in 1994 & tata safari launched in 1998 & then revamped in 2005.

Focus more on Commercial vehicles & passenger cars.

Introduced the Sadan Indigo in 2002 & then station Wagon, Indigo marina in 2004.

Joint venture with Fiat in 2006 at Ranjangaon( Maharashtra).

Mini – Truck segment in 2005 with Tata Ace & it famous in short span of time, in June 2007 launched passenger variant named as Magic & first maxivan “The Tata Winger”.

Greenfield Venture. Tata selected as one of the 7 global campanies approved by Thai government.

Environment Friendly vehicles- Collaboration with Norwain Firm.

Passenger car share on 2008 was just 14.2%. Innovating continuously.

QUESTION 3 A - What is the standing of TATA motors in the global automobile industry

Ranked 19th worldwide

In 2007, worlds 2nd largest Medium and Heavy Bus Manufacturer ( Source: Case )

In 2007, worlds 5th largest Medium and Heavy Commercial Vehicle Manufacturer.

Presence in over 120 countries

M / A / JV with Daewoo (Korea ), Hispano Carrocera ( Spain ),

Marcopolo ( Brazil ), Thonburi ( Thailand ) etc.

QUESTION 3 A - What is the standing of TATA motors in the global automobile industry

Origins in 1868 TATA brand – Trust Knowhow of the Indian Market – Nano Case Supplier / R&D base / Manufacturing plants Threat of New Entry Resources – Strategic Alliances / facilities / HR / Brand Capabilities – Market Sensing / Learning Curve / Experience

/ Range / R&D

QUESTION 3 B - Does being an Indian company offer any competitive advantage

Competitive Advantage

Story of the Nano Plant transfer Necessity ( West ) v/s Luxury ( India

) Cost factor Issues after the launch Re-branding – Awesome / Smart Car

QUESTION 4 - Were the two big bets of 2008 (Nano launch & acquisition of land rover) Justified?

Justified but

Positioning went wrong

Total cost – $ 2.3 billion Access to premium segment Extension of its multi utility all terrain

vehicles Access to Knowhow / Export Markets A step towards a Global company

In line with the Vision /

Mission

Competition in India Launch of the Nano Integration of the Jaguar / Land Rover Understanding Markets abroad Innovating continuously Competing Globally Economic scenario Rising Costs

QUESTION 5 - What execution challenges will the company face in contending to be global company

Opportunity Analysis Segmentation strategies Strategic Partnerships ( M&A/JV ) Globalization importance Importance of leaders

Through effective implementation of the Integration Generic Strategy >>> TATA MOTORS ( 1 of the crowned jewels of the TATA group ) is well on its way in becoming a Global Contender…

LEARNINGS AND CONCLUSION

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