strategy final(2)(2)

8/8/2019 Strategy Final(2)(2)

1/31

Project report on Strategies used by TATA

motors for its Domestic and GlobalExpansion

Group 1:

Abhishek Mathur (01)

Abhinav Gupta (02)

Aditi Mehrotra (03)

Agni Chatterjee (04)

Akash Chauhan (05)

1


2/31

Executive Summary

TATA Motors previously known as TELCO was started way back in 1945

primarily as a manufacturer of Heavy and Medium Commercial Vehicles. It

entered the passenger car segment in 1998 with the production of first

indigenous car of India INDICA. The company has been expanding rapidly

both geographically as well as in the terms of offering new products to the

customers. The company started as a traditional auto maker has now

resorted to adoption of blue ocean strategy with the production of TATA

Nano. One can also see that the company in the past 5 years has

diversified its kitty to a large extent. The automotive giant is seen

manufacturing the peoples car NANO and Jaguar Land Rover. It has also

formed a JV with the Brazilian Bus Manufacturing Giant MARCOPOLO.

Although the company had posted profits in the past 5 years, the year

2008-09 was not one which TATAS would like to remember. The J-LR deal

had been a setback for the company. But with the support of TATA Sons

the parent company it will be sail through this also and emerge as a

winner.

However, the bottom line is that TATA Motors is an Indian Company which

has managed to create a niche in the global market for itself.

2


3/31

Index

S. No TOPIC Page No

1. Indian Automobile Industry 4

2. TATA Motors Limited 6

3. SWOT Analysis 8

4. Expansion in the Domestic Market 9

5. Expansion Abroad 11

6. Reasons to Move Ahead 13

7. Four Grandiose Strategy-International Expansion 15

8. Future Strategies for Global Expansion 17

9. Resources 19

10 Value Chain 23

11 New Product Introduction 26

12. Strategy Analysis 27

13. Conclusion 30

3


4/31

Indian Automobile Industry

The seeds of the Indian automobile industry were laid during 1940s. After

independence, in 1953, the Government of India and the private sectorlaunched efforts to create an automotive component manufacturing

industry to supply to the automobile industry. However, the growth was

relatively slow in the 1950s and 1960s due to nationalization and the

license raj which hampered the Indian private sector. After 1970, the

automotive industry started to grow, but the growth was mainly driven by

tractors, commercial vehicles and scooters. Cars were still a major luxury.

In the 1980s, a number of Japanese manufacturers launched joint-

ventures for building motorcycles and light commercial-vehicles. It was at

this time that the Indian government formed a collaboration with Suzuki

under the name Maruti Suzuki to manufacture small cars. Following the

economic liberalization in 1991 and the gradual weakening of the license

raj, a number of Indian and multi-national car companies launched

operations.

At present it holds a promising tenth position in the entire world with

being number 2 in two wheelers and number 4 in commercial vehicles.

Automobile industry of India can be broadly classified under passenger

vehicles, commercial vehicles, three wheelers and two wheelers, with two

wheelers having a maximum market share of more than 75%. Automobile

companies of India, Korea, Europe and Japan have a significant hold on

the Indian market share. Tata Motors produces maximum numbers of mid

and large size commercial vehicles, holding more that 60% of the market

share. Motorcycles tops the charts of two wheelers with Hero Honda being

the key player. Bajaj by far is the number one manufacturer of three

wheelers in India.

Passenger vehicle section is majorly ruled by the car manufacturers

capturing over 82% of the total market share. Maruti since long has been

4


5/31

the biggest car manufacturer and holds more that 50% of the entire

market.

Global recession has impacted, the Indian automobile industry also andcan be seen clearly in the sales figures of the last financial year. Even

then this industry has high hopes in 2009-2010, as banks have reduced

loan interest rates and the major chuck of automobile customers belong to

the middle income group who are becoming economically stronger with

every passing day.

5


6/31

Tata Motors Limited A brief History

Tata Motors is a part of the Tata Group and its share-holding is managed

through Tata Sons. The company was established in 1945 as a locomotivemanufacturing unit and later expanded its operations to commercial

vehicle sector in 1954 after forming a joint venture with Daimler-Benz AG

of Germany. Despite the success of its commercial vehicles, Tata realized

his company had to diversify and he began to look at other products.

Based on consumer demand, he decided that building a small car would

be the most practical new venture. So in 1998 it launched Tata Indica,

India's first fully indigenous passenger car. Designed to be inexpensive

and simple to build and maintain, the Indica became an instant hit in the

Indian market. It was also exported to Europe namely the UK and Italy.

Since then it has never looked back. In 2004 it acquired Tata Daewoo

Commercial Vehicle and in late 2005 it acquired 21% Aragonese Hispano

Carrocera giving it controlling rights of the company. It has formed a Joint

Venture with Marcopolo of Brazil and introduced low-floor buses in the

Indian Market. Recently TATA Motors limited has been in news because of

acquiring Jaguar Land Rover and for manufacturing the cheapest car in

the world TATA Nano.

Following are some key events from Tata Motors' history:

1945 - Tata Engineering and Locomotive Co Ltd (TELCO) set up as a

locomotive maker at the end of World War Two

1954 - Company shifts to making trucks in a joint venture with Germany's

Daimler Benz

1977 - Commences production of commercial vehicles

1994 - Enters venture with Daimler to make Mercedes Benz cars in India

1998 - Launches fully indigenous passenger car, the Indica

2001 - Ends joint venture with Daimler

6
http://en.wikipedia.org/wiki/Arag%C3%B3nhttp://en.wikipedia.org/wiki/Arag%C3%B3n


7/31

2002 - TELCO renamed Tata Motors Ltd

2003 - Announces plan to build world's cheapest car, to sell for 100,000

rupees

2004 - Acquires South Korea's Daewoo Commercial Vehicle Co, and lists

on the New York Stock Exchange. Launches Indigo sedan

2005 - Buys 21 percent stake in Spanish bus maker Hispano Carrocera SA,

launches mini-truck Ace in India

2006 - Signs manufacturing and distribution agreement with Fiat, enters

venture with Brazilian bus maker Marcopolo

2008 - Unveils the Nano at Delhi Auto Expo

- Buys Jaguar and Land Rover from Ford Motor Co for $2.3 billion

7


8/31

SWOT ANALYSIS

Strengths

Strong presence in the commercial vehicle market Brand recognition High investment in R&D Wide distribution channels

Weaknesses

Limited product portfolio in the passenger segment Operations mainly restricted to India

Opportunities

Increasing demand for cars in India Expansion in international markets

Threats

Increase in prices of raw materials Intense competition from global players

Expansion in the Domestic Market

8


9/31

After years of dominating the commercial vehicle market in India, Tata

Motors entered the passenger vehicle market in 1991 by launching the

Tata Sierra, a multi utility vehicle. After the launch of three more vehicles,

Tata Estate (1992, a station wagon design based on the earlier 'TataMobile' (1989), a light commercial vehicle), Tata Sumo (LCV, 1994) and

Tata Safari (1998, India's first sports utility vehicle), Tata launched the

Indica in 1998, the first fully indigenous passenger car of India. After this

there was no looking back. Indica was followed by many other models

both in LCV and MHCV namely Indigo, Indigo Mariana, Xenon, Ace and

many more.

The expansion in Indian Markets has also been on account of two major

joint ventures:

A.Marcopolo Brazil

Tata Motors has formed 51:49 joint venture with the bus body

manufacturer, Marcopolo of Brazil. This joint venture is to

manufacture and assemble fully-built buses and coaches targeted at

9


10/31

developing mass rapid transportation systems. The joint venture will

absorb technology and expertise in chassis and aggregates from

Tata Motors, and Marcopolo will provide know-how in processes and

systems for bodybuilding and bus body design. Tata and Marcopolohave launched a low-floor city buses in Mumbai, Delhi etc.

B.Fiat India

Tata Motors also formed a joint venture with Fiat and gained access

to Fiats diesel engine technology. Tata Motors sells Fiat cars in India

and is looking to extend its relationship with Fiat and Iveco to other

segments. Fiat's first body-on frame pickup will have the same

styling as TATA Xenon and is to be named Fiat Terra. This

acquisition has also helped in stream lining the production and

sharing the load of the CAR Plant.

10


11/31

Expansion Abroad

Tata Motors has been aggressively acquiring foreign brands to increase its

global presence. Tata Motors has operations in the UK, South Korea, Thailand and Spain. Among them is Jaguar Land Rover, a business

comprising the two iconic British brands that was acquired in 2008. Tata

Motors has also acquired from Ford the rights to three other brand names:

Daimler, Lanchester and Rover. In 2004, it acquired the Daewoo

Commercial Vehicles Company, South Koreas second largest truck maker.

The rechristened Tata Daewoo Commercial Vehicles Company has

launched several new products in the Korean market, while also exporting

these products to several international markets. Today two-thirds of heavy

commercial vehicle exports out of South Korea are from Tata Daewoo. In

2005, Tata Motors acquired a 21% stake in Hispano Carrocera, a reputed

Spanish bus and coach manufacturer, giving it controlling rights of the

company. Hispanos presence is being expanded in other markets. On

Tata's journey to make an international foot print, it continued its

expansion through the introduction of new products into the market range

of buses (Starbus & Globus) as well as trucks (Novus). These models were

jointly developed with its subsidiaries Tata Daewoo and Hispano

Carrocera. In May, 2009 Tata unveiled the Tata World Truck range jointly

developed with Tata Daewoo They will debut in South Korea, South Africa,

the SAARC countries and the Middle-East by the end of 2009. In 2006, it

formed a joint venture with the Brazil-based Marcopolo, a global leader in

body-building for buses and coaches to manufacture fully-built buses and

coaches for India and select international markets. Tata Motors has

expanded its production and assembly operations to several other

countries including South Korea, Thailand, South Africa and Argentina and

is planning to set up plants in Turkey, Indonesia and Eastern Europe. Tata

also franchisee/joint venture assembly operations in Kenya, Bangladesh,

Ukraine, Russia and Senegal. Tata has dealerships in 26 countries across 4

continents. Though Tata is present in many countries it has only managed

to create a large consumer base worlwide.

11


12/31

S. Asia

22%

Latin America

7%

W. Asia

9%S. E. Asia

10%

Europe

44%

Australia

1%

Africa

7%

Percentage wise distribution of business abroad

World wide Presence

12


13/31

TATA Motors and its reason to move Abroad

Recent years have seen a number of foreign automobile enterprises

coming to India, attracted by a growing economy and an expandingmarket. The reverse Indian auto companies seeking new frontiers

abroad is a trickle, but Tata Motors is working hard to change the

equation.

Tata Motors has come a long way since the 1950s and 1960s, when it

needed technical assistance from Daimler Benz and had just commercial

vehicles to power sales. Today the company is the country's largest

automobile manufacturer and has a passenger vehicle business that has

broken new ground in exemplary fashion. But domestic patronage, hefty

as it may be, is ultimately limiting, particularly with increasing

competition. Which is why, the exploration of foreign markets is an

imperative for ambitious automobile companies such as Tata Motors.

Besides competition, the automotive business, particularly the commercial

vehicle market, is characterised by its considerably strong link to national

economies. Companies looking to do more than just stay afloat cannot

afford to keep their business connected solely to the fortunes of one

country.

Another reason that Tata Motors is looking outwards is cost advantage.

Until now Indian companies, manufacturers in particular, have been

protected by high duty structures and a generally depreciating rupee. Butsometime in the near future, if import restrictions are relaxed or the rupee

begins to gain ground, India may not continue to have the low-cost

manufacturing advantage it has enjoyed thus far. In that scenario, a

presence in countries that offer greater cost advantages for

manufacturing will pay off.

A third argument for overseas expansion is the fact that the automotive

business relies so much on economies of scale, which translate into price

13


14/31

benefits. Tagging along is the competitiveness factor, where quality and

efficiency are directly improved (or should be) as a result of the high level

of competition in foreign markets.

One of the important strategies that TATA motors have adopted is to

widen its foreign campaign to more than just exports.

In 2002, recognising the need to integrate its international strategy with

its domestic one, the company split its previously independent

international business arm into commercial and passenger segments and,

as part of its overall business strategy, merged them with its commercial

and passenger vehicle business units.

14


15/31

Four grandiose strategy adopted by TATA

for International Expansion:

As part of its plans, the company has plotted four routes to international

expansion.

The first is the traditional method of export, at which the company has

been quite successful, notching up export revenue of Rs 969 crore in the

first nine months of FY 2004-05, recording a growth of 41 per cent from

sales in Europe, Africa, the Middle East and Asia.

The second is setting up assembly operations abroad. This does not

necessarily involve establishing a full-scale manufacturing unit, but an

operation where kits are sent in semi knocked down or completely

knocked down assemblies, or as a fully assembled vehicles and sold in

that market. Tata Motors worked this into its strategy when it set up its

first assembly operation in Malaysia in 1974. Since then the company has

similarly expanded into Malaysia, Bangladesh, Senegal, South Africa and

Ukraine. All these assembly operations are set up by the distributors of

Tata Motors for these countries.

The third scenario would be actual acquisition, the route Tata Motors

took with Daewoo South Korea. Here, Tata Motors bought the full-fledged

heavy vehicle-manufacturing unit and, in the process, gained not just a

manufacturing asset base, but access to the market through an alreadystrong brand identity. The company was also presented a wide choice in

terms of the markets in which it could use the Daewoo brand and, more

importantly, access to R&D capability in the area of commercial vehicles.

In the short period of six years since the launch of passenger cars, Tata

Motors has already achieved the No 2 position in the domestic car market

in India. The company has successfully launched Indica in South Africa and

Turkey and is marketing it under its own brand name.

15


16/31

One of the greatest strengths of TATA motors is that it knows its market.

For example, the compact-sized Indica is marketed in countries where the

company perceives a substantial market for it, like it did in Europe.

Tata Motors' immediate goal is to achieve a 35-per cent contribution to its

overall revenue from its international businesses by 2010. This seems to

be realistic enough following the Daewoo acquisition, and its own products

getting into more than 70 countries. Looking at successful global auto

majors, for whom anywhere from 30 to 50 per cent of their business

accrues from overseas sales, Tata Motors is still a long way off, but

management believes that with its aggressive growth strategy a

contribution of around 45 per cent may be achievable in five-six years.

The trickle factor will by then begin to gather force.

16


17/31

Future Strategies for Global Expansion:

TATA Motors have been instrumental in a new direction to the

globalisation of the Indian auto industry. The wave of liberalisation has

given Indian corporates a new dimension to globalisation. Tata Motors, a

trendsetter in the Indian automobile industry, is setting a new direction to

the globalisation of the Indian auto industry.

The question that has been in the minds of the senior management at

Tata Motors was will they remain exporters of vehicles or do they

venture into the international automobile market as a company that can

match the best in the business? The answers were obvious.

The first step was to align the international business to the two business

units the Passenger Car Business Unit (PCBU) and the Commercial

Vehicle Business Unit (CVBU), to bring greater focus and increased

synergy between the domestic and international operations.

International business needs to be looked at from a perspective that goes

beyond volumes and presence in many countries. The company has now

embarked on a road where it have made exports an integral part of their

business. TATA do not think of sales outside the country as a separate

activity. It is now integrated within the mission of each of its businesses.

The Business Units have classified different markets in terms of size,

growth opportunities, product segments and target volumes. Therefore,

from being present as an exporter in 70 countries, the company today

focuses on 15 to 20 key countries, where it will have a significant

presence in terms of volumes and market shares.

The implementation of the business strategy will be in three stages;

product upgradation, sales and distribution processes and penetration into

new markets. The three stages could run concurrently, depending on the

market and product needs.

17


18/31

Tata Motors has taken a number of initiatives to strengthen both product

reliability and durability and marketing processes. Enhancing distribution

reach and a robust sales process system have been key elements in

consolidating the companys leadership position in the domestic market.The implementation of this strategy has begun in a few markets abroad

and in Mr Kants words "What we needed was an integrated approach

where we invest in all the critical elements product upgradation, sales

processes, distribution and above all, people."

The companys approach has been successful in Sri Lanka and Malaysia

where the installation of a sales process system and face-to-face customer

meets through road shows and service workshops has started yielding

results. Recently, a large contingent of dealers from South Africa was

invited to visit the companys facilities in Pune and experience the new

face of the international business.

The second part of the business strategy is to make an entry in new and

yet uncharted markets, such as China and the CIS countries. Besides the

assembly plants that Tata Motors has in Bangladesh and Malaysia, the

companys recent order for 500 buses from Senegal will involve providing

technical and commercial assistance to the Senegalese government for

setting up a bus body building plant. Tata Motors has been short-listed for

South Africas "Taxi Project" in which the government will provide an

entirely new transport system in that country. A joint venture project for

bus body building in Ukraine and serious due diligence into the

opportunities available in the Chinese market are other areas where TataMotors is looking to create new opportunities.

On the road to globalisation, the Rover agreement has been an important

step in helping Tata Motors to gain very quick access to a fairly large

market and a large distribution network. Dr.Sumantran, executive

director, PCBU feels that it would take more than three years to show

positive results that they expect from rover agreement.

18


19/31

Innovation, knowledge, commitment and pride have been Tata Motors

greatest asset and it takes right mix of people with the right skills to make

this happen.

Resources

Technological Resources:

R & D establishments called ERC in Jamshedpur, Lucknow and Pune.

These facilities employ more than 1400 engineers.

TATA Motors has a certified crash test facility and hemi anechoic

chamber for testing of noise and vibration.

TMETC (TATA Motors European Technical Centre) set up in 2005-

primarily involved in design engineering and development of

products. It also acts as a support system for TATA Motors skill sets.

TATA Daewoo, the JV between TATA Motors and Daewoo Group, has

its R & D facility in Gunsan, South Korea.

The JV with Spanish Hispano Carrocera has a R & D facility atZaragoza Spain.

19


20/31

Operational Resource:

Operational Resources have two main models. The first model is TATA

Business Excellence Model which derives its roots from the Malcolm

Baltridge Model. This model applies across the various Business Units of

the TATA Group

The model has been given below:

The second model which TATA Motors follows is the Enterprise Process

Model. The model has been described below:

20


21/31

Both the models work in congruence with each other to create synergy

between the business unit, the group and the various stakeholders.

Besides the above two models, the other operational resources employed

by TATA Motors are:

Sound leadership- Ratan TATA, Sumant Moolgaonkar

Ethical business Practices- TATA Code of Conduct (TCOC)

Successful Integration of various JVs and strategic alliances

Reputation of the Brand TATA worldwide

21


22/31

Financial Resources:

Before the fiscal year 2008-09, the financial flows to the company had

been stable and it was showing a huge profit margin. However, with the

slump and the acquiring of Jaguar- Land Rover, there has been a little

setback in the financial side but still with the support of the parent brand

TATA Sons it will be able to sail through the current financial crunch.

Besides this it has easy access to capital markets due to the reputation of

the Brand TATA. It also has a tie up with TATA Financial Services which

has been supporting the ambitions of the company with easy cash flow.

22


23/31

Value Chain

The value chain of the TATA Motors has been given as below:

ValuThe various primary activities of the value chain have been discussed

below:

1. Inbound Logistics: The main features of inbound logistics have

been discussed below:

Tata Motors believes in establishing long term contract

with service providers transporters and agents.

Talented Personnel have been deployed at regional offices

for over seeing the smooth transit of goods.

23


24/31

The company aims at maintaining transparency and

monitoring through deployment of IT all transactions

through SAP.

DTL supplies for critical high value items. Efficient storage facilities easy storage and retrieval

2. Operations: For the smooth functioning of operations TATA Motors

has the following features:

Capital Equipment Manufacturing division TATA Motors

prides itself in having tooling development capabilities of

global standard.

Apprentice Trainee Course This helps the organization in

ensuring stable source of skilled manpower.

Kaizen & TPM team the two teams strive for continuous

methods to improve efficiencies.

Automated manufacturing processes.

Distributed manufacturing Assembly units at South Africa,Thailand, Bangladesh, Brazil etc.

Maintenance technical competence.

Capacity Utilization Mercedes Benz cars make use of Tata

Motors paint shop facilities.

3. Outbound Logistics: the following methods form a part of

outbound logistics:

Stockyards, all across the country to stock inventory

Long term contracts with transporters higher volume of

business to transporters ensures competitive price.

Regional Sales Office and Vehicle Dispatch Section linked

through SAP.

Efficient security system for prevention of any kind of

pilferage.

24


25/31

4. Marketing & sales: The important features of marketing and sales

are:

Structured approach to understanding the requirements of

individual customers QFDs conducted at regular intervals.

Clear identification of product requirements, leading to

development of innovative products Tata 207 DI, Tata Ace

Pan India presence and global footprint.

Independent teams for addressing the requirements of

institutional customers Defense, State Transport Units

Helping to augment the scarce resources Fiat sellingvehicles through Tata dealerships, in return Tata has access to

Fiats technology and unutilized capacity.

Quick assessment of the changing market dynamics and

consumer preferences Tata 407 LCV

Large network of dealers use of technology: DMS.

5. Service: TATA Motors provides the following after sales services:

Easy availability of spare parts throughout the country

Efficient collection of data from field and communication to

the respective plants.

Pan India presence, as well as global presence.

Large network of workshops Dealer workshops and sales

workshops

Training facilities for dealer end and sales personnel

25


26/31

New product Introduction

Innovation is the key to sustainability. TATA Motors believes firmly in this

statement. The following chart explains the process of develop newproducts.

This methodology makes it easy for TATA Motors to reduce the time for

new product to reach the market.

Strategy Analysis

26

Phases

MarketanalysisCompetitorassessmentExplore Prod.OptionsProduct

planning

Activities

(Indicative)

Gateway

Deliverables

(Partial)

ConceptalternativesQFDStyling themesPackagingManf. FeasibilityCost targeting

Performance &Weight analysisStyle & Specdevmt. & Freeze

Vehicle &Aggregate plansProduct costing

Financial analys

Design analysis& simulationAlpha prototests

Aggregate testsCrash testsManf. Planning

Detail costing

Full designvalidationBeta proto testsProduction tooling

Vendor parts dev.Install &comm.Facilities

Quality Proving&ProcessvalidationP0 & PP BuildsVendor partsapproval

Homologation

9BOX &supporting

docs

DR1 Sign-offsProduct Profile &tech targetsRecommendedstyle themePrelim. Cost / wttargetsPrelim. Biz case

DR2 Sign-offsProduct spec &Features listVehicle Test PlanStyle & packagingsign offTime & res. planFull Biz. case

DR3 Sign-offsDesign releaseLong lead tooling

signed offComponentreliability planBiz. Casevalidation

DR4 Sign-offsCritical issuesbrochure

Vehicle testrequirements metControl planssignoff

DR5 Sign-offsLaunch volumesQP buildcompletionVendor partsfully approvedRamp up plan

Ramp-up

PL Build

ProductStrategy &PlanningPhase

ConceptEvaluation

Phase

ConceptDevelopment

Phase

ProductDesign anddevelopment

Phase

Design Validation&

ProductionisationPhase

Pre-Production

Phase

Ramp-upPhase

Gateways

DR0DR0

ProductStrategyReview

ProductStrategyReview

ConceptSelection

ConceptSelection

Concept andProject

Approval

Concept andProject

Approval

DesignRelease

DesignRelease

ProjectReview

ProjectReview

ProductionRelease

ProductionRelease

Tata Motors Vehicle NPI Process Conceptual Overview

DR1DR1 DR2DR2 DR3DR3 DR4DR4 DR5DR5 LLPIPI

Project

Initiation

Launch


27/31

Mergers and Acquisitions with key companies that enhanced

its foothold in global as well as local market: M&A has been

one of its key strategies for expansion. Its acquisition of Daewoo

Commercial Vehicle helped it earn a plant in Korea which improvedomestic market share, exports and top line profits.

Tata buyout of JLR helped the company acquire a global footprint

and enter the high-end premier segment of the global automobile

market.

TATA Fiat dealers network agreement.

Huge investment in developing strong R&D: World-class

automotive research and development are key factors that

contribute to the leadership of the Company. Research centre at

Jamshedpur and The Engineering Research Centre in Pune are the

finest in the country and it regularly upgrades it components and

aggregates.

With 1400 engineers and scientists, the TATA Motors Engineering

Research Centre has enabled pioneering technologies and products.

Every vehicle is developed in close conjunction with customer

needs, virtually simulated, prototyped and then operated in real

time on the most arduous terrain.

Today, the R&D network of TATA Motors is truly international. This

covers R&D centres in India located at Pune, Jamshedpur and

Lucknow, besides centres in South Korea, Spain and UK.

Product Innovation: With so much investment in R&D, product

innovation has to be the output. TATA Nano The cheapest car in

the world costing $2500 is the best example of product innovation.

Other than this, Tata Motors has the unique distinction of giving

India its first and only indigenously built passenger car - the Tata

Indica and the premium feature sedan - the Tata Indigo.

27


28/31

ACE The mini truck is also a very good example of innovation.

They are the small trucks with more roads capable to accommodate

them.

Tata Safari 4X4Dicor is one more highly acclaimed innovations by

TATAs. It has Reverse Guide System. A weather-proof camera is

fixed to the rear car to help the driver while reversing the car.

Focus on key Subsidiaries: TATA motors have strong focus on its

subsidiaries. Tata Motors has 30 subsidiaries in India and abroad,

out of which 21 are profit making. These subsidiaries contributed to

Rs.6453.67 crore revenue out of the total consolidated revenue ofRs.37,000 crore.

Key subsidiaries of Tata Motors are Tata Construction, Tata Daewoo

Commercial Vehicle (TDCV) and Telco Construction Equipment

Company (TELCON), a 60:40 JV between Tata Motors and Hitachi.

TDCV is the largest subsidiary in sales terms while TELCOM is the

highest profit making subsidiary, as such these two may be first one

to get listed.

Tata hived its automotive technology and R&D division into Tata

Technologies which services engineering and design requirement of

automobile and aerospace industry.

Expanding presence in overseas market

Focus on Bus market: TATA motors has expanded its product

range offering for Russian market. Companies focus is now to

explore the possibility of entering various segments of medium and

heavy trucks and buses over the next three years. TATA motors

Trucks and Buses are being marketed in several countries in Europe,

Africa, the Middle East, South Asia, South East Asia and South

America.

28
http://www.malaysiaminilover.com/tata-safari-4x4http://www.malaysiaminilover.com/tata-safari-4x4


29/31

TATA motors believe that focusing on small vehicles wont hit the

margins, hence focusing on Bus and Truck segment is imperative.

Plan to streamline production

Joint ventures to upgrade technology

Great Marketing Strategies:

- The internationalization strategy so far has been to keep local

managers in new acquisitions, and to only transplant a couple

of senior managers from India into the new market. The

benefit is that Tata has been able to exchange expertise. For

example after the Daewoo acquisition the Indian company

leaned work discipline and how to get the final product right

first time.

- The company has a strategy in place for the next stage of its

expansion. Not only is it focusing upon new products and

acquisitions, but it also has a programme of intensive

management development in place in order to establish its

leaders for tomorrow.

- 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. For example, the Fiat Palio Style was

launched by Tata in 2007, and the companies have an

agreement to build a pick-up targeted at Central and South

America.

Nano- A blue ocean strategy

- Creation of an unconsolidated market space

- No competition

- Capturing new demand

- Breaking the value cost trade off

29


30/31

- Differentiation and low cost

30


31/31

Conclusion

Buying of premium vehicle brands such as Land Rover and Jaguar has

bolstered Tata Motors image as a global company and increased itsglobal reach and scale. Overall, the Tata group has spent around $15.5

billion in acquiring foreign companies The Tata name is a unique asset

representing leadership with trust. TATA Motors is trying to leverage this

asset to enhance group synergy and has been successful. The synergy has

developed as a result of the strengths of domestic and foreign market

share, congregating under the umbrella of Tata group.The Tata Group as a

whole has over 20 publicly listed enterprises and operates in more than 80

countries world-wide - lots of experience and resources to draw from for

research and development purposes. Strong corporate governance based

on rich legacy of fair, ethical, and transparent governance practices has

helped to ensure that its employees act ethically and the business

continues to run smoothly.

strategy final(2)(2)

Documents