tata 5 force

8/9/2019 TATA 5 Force

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TATA Motors

Porters 5 Force & SWOTAnalysis



+Bargaining Power of Suppliers

Large number of substitute inputs

Wen tere are a large number of substitute inputs!suppliers a"e less bargaining le"erage o"er pro#ucers$

Tis is #ue to competition among substitutes$ %reatercompetition positi"ely aects Tata Motors$

(ig competition among suppliers

(ig le"els of competition among suppliers acts to re#uceprices to pro#ucers$

Tis is a positi"e sign for Tata Motors$




)i"erse #istribution cannel

Te more #i"erse #istribution cannels become te lessbargaining power a single #istributor will a"e$

Tis positi"ely aects Tata Motors$

*ritical pro#uction inputs are similar

Wen critical pro#uction inputs are similar! it is easier to

mi+ an# matc inputs! wic re#uces supplier bargainingpower$

Tis positi"ely aects Tata Motors$




Low switcing costs

Te easier it is to switc suppliers! te less bargainingpower tey a"e$

Low supplier switcing costs positi"ely aect Tata Motors

,olume is critical to suppliers

Wen suppliers are reliant on ig "olumes! tey a"e less

bargaining power! because a pro#ucer can treaten to cut"olumes an# urt te supplier-s pro.ts$

Tis can positi"ely aect Tata Motors



+Bargaining Power of *ustomers

(ig buyer price sensiti"ity

Wen buyers are igly sensiti"e to prices! a minorincrease in prices woul# lea# to a loss of customers to a

competitor$

Tis #eman# negati"ely aects Tata Motors

Large number of customers

Wen tere are large numbers of customers! no onecustomer ten#s to a"e bargaining le"erage$

Limite# bargaining le"erage elps Tata Motors



+Bargaining Power of *ustomers

Low Switcing *osts

3f switcing to anoter pro#uct is simple an# ceap tecustomers #oes not tin1 muc before #oing it$

3n case of 4A4O car te switcing cost from bi1e to car istoo ig$

Bran# 3mage

Te bran# image of te TATA is not "ery attracti"e but tesegment in wic te 4A4O operates as been te mostattracti"e ting for tem



+3ntensity of +isting 6i"alry

Large in#ustry si0e

Large in#ustries allow multiple .rms an# pro#uces toprosper witout a"ing to steal mar1et sare from eacoter$

Large in#ustry si0e is a positi"e for Tata Motors

Fast in#ustry growt rate

Wen in#ustries are growing re"enue /uic1ly! tey are less

li1ely to compete! because te total in#ustry si0e is alsogrowing$

Te only way to grow in slow growt in#ustries is to stealmar1et7sare from competitors$

Fast in#ustry growt positi"ely aects Tata Motors



+3ntensity of +isting 6i"alry

Price *ompetition

A#"ertising battles may increase total in#ustry #eman#!but may be costly to smaller competitors$

Pro#ucts wit similar function limit te prices .rm cancange$

Price competition often lea"es te entire in#ustry worseo$

+it Barriers

"en if te pro#uct fails in te mar1et its not tat easy forte company to e+it te mar1et 8ust li1e tat because

of te ea"y in"estment it as ma#e in te initial stage$



+ Treat of Substitutes

Price ban#

Te treat tat consumer will switc to a substitutepro#uct if tere as been an increase in price of te

pro#uct ort ere as been a #ecrease in priceof te substitute pro#uct$

Substitute-s performance

A lower performance pro#uct means a customer is less

li1ely to switc from Tata Motors to anoter pro#uct orser"ice



+ Treat of Substitutes

Buyers willingness

Pro#ucts wit impro"ing price9performance tra#eosrelati"e to present in#ustry pro#ucts$

Substitute-s /uality

A lower /uality pro#uct means a customer is less li1ely to

switc from Tata Motors to anoter pro#uct or ser"ice



+Barriers to ntry

(ig capital re/uirements

(ig capital re/uirements mean a company must spen# alot of money in or#er to compete in te mar1et$

(ig capital re/uirements positi"ely aect Tata Motors

Strong #istribution networ1 re/uire#

Wea1 #istribution networ1s mean goo#s are more

e+pensi"e to mo"e aroun# an# some goo#s #on-t get tote en# customer$

Te e+pense of buil#ing a strong #istribution networ1positi"ely aects Tata Motors



+Barriers to ntry

A#"ance# tecnologies

A#"ance# tecnologies ma1e it #i2cult for newcompetitors to enter te mar1et because tey a"e to#e"elop tose tecnologies before eecti"ely competing$

Te re/uirement for a#"ance# tecnologies positi"elyaects Tata Motors

Strong bran# names

3f strong bran#s are critical to compete! ten newcompetitors will a"e to impro"e teir bran# "alue in or#erto eecti"ely compete$

Strong bran#s positi"ely aect Tata Motors



+Barriers to ntry

3n#ustry re/uires economies of scale

conomies of scale elp pro#ucers to lower teir cost bypro#ucing te ne+t unit of output at lower costs$

Wen new competitors enter te mar1et! tey will a"e aiger cost of pro#uction! because tey a"e smallereconomies of scale$

conomies of scale positi"ely aect Tata Motors

(ig learning cur"e Wen te learning cur"e is ig! new competitors must

spen# time an# money stu#ying te mar1et before teycan eecti"ely compete$ (ig learning cur"es positi"elyaect pro.ts for Tata Motors



+SWOT Analysis

Strengts

3n#ia-s largest automobile company$

Tata Motors puts empasis on 6&)$

4ew pro#ucts! /uality impro"ement an# enancement ofte consumer e+perience 1eeping in "iew te cangingmar1et! customers- aspirations an# regulatory nee#s$

:aguar Lan# 6o"er re7a2rme# con.#ence in te premium

car mar1et 7 :L6 poste# recor# sales of ;<;!<==$ Te employees! suppliers an# cannel partners remain

teir ma8or source of strengt$



+SWOT Analysis

Strengts

International strategy 7 about new ac/uisitions$

Brand Name- Tata Motors as a strategy to wor1 wit te

ol# name of te company wic Tata bougt or ac/uirestat #oes not eect te bran# "alue$

Globalization- Te company as a strategy to e+pan# itsnetwor1 worl# wi#e$

Domestic Strategy- Tata Motors is te most truste#

"eicle bran# in 3n#ia! an# Tata is putting eort to be insame position$

Employment- Tata Motors is 1nown for goo# employeebase an# management



+SWOT Analysis

Opportunities

4ew an# man#atory go"ernment policy of infrastructureoriente# spen#ing for national #e"elopment$

Te e"ol"ing infrastructure in 3n#ia 7 #eman# for better/uality an# more comfortable "eicles$

Wit increase in F)3 in )efense sector @from C to ;?CD 7

increasing teir oerings in from pro"i#ing only purelogistics solutions to tactical an# combat solutions$

%rowing wealt in rural mar1ets$ Wit increasing awareness an# e#ucation of te 3n#ian

customer$

Tus te *ompany-s 6 & ) group is capable of #e"elopingsolutions for #ierent regulatory an# emission norms as per

mar1et speci.cations in minimal time$



+SWOT Analysis

Treats

Business is seasonal in nature$

3nput *osts 9 SuppliesE Prices of commo#ity items use# inmanufacturing automobiles! inclu#ing steel! aluminum!

copper! 0inc! rubber! platinum! palla#ium an# ro#ium a"ebecome increasingly "olatile in recent years$

n"ironmental 6egulationsE

3ntensifying *ompetitionE

n#erperformance of #istribution cannels an# supplycainsE

*anges in ta+! tari or .scal policies an# regulationsE

)isruption in te manufacturing! #esign an# engineeringfacilitiesE

tata 5 force

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