A detailed report on Tata motors as a company and their strategy horizonext.

2. Presented by
Deekshita K Kotian
Deepak lal C K
Pilvina Pais
Swathi Shetty
3rd Semester
Department of MBA-2014 Mangalore institute of Technology And Engineering
Moodabidre, Mangalore
Karnataka
India

3. Facts of the case:
• Tata motors unveiled its new customer focused strategy to put its passenger
vehicle business back on track.
• The new strategy is horizonext.
• To infuse growth and excitement in its passenger vehicle business where sales fell
35% in 2012-2013.
• Horizon next will be their next step, in which they will be re-launching their entire
passenger vehicle business.
• Plan of 8 new launches across 5 brands.
• Along with passenger vehicles they are also launching 11 service programmes.
• Product portfolio planned till 2020.

4. Inflexion point.
The time of transition of company's competitive position that
requires the company change the current path and adapt to the
new situation or risk declining profits.

5. • Tata Motors is the India’s largest automobile company.
• The company is the fourth largest truck manufacturer and the second
largest bus manufacturer.
• Tata motors is one of the largest automobile company established in 1945
.
• It delivered its first model on roads of India in 1954.
• Now it is present all over the country.
Review of the company, products,
markets and customers

6. • The company’s manufacturing base in India is spread across
Jamshedpur (Jharkhand), Pune (Maharashtra), Lucknow (Uttar
Pradesh), Pantnagar (Uttarakhand), Sanand (Gujarat) and Dharwad
(Karnataka).
• The company is establishing new plant in Sanand in Gujarat. Over
5.9 million vehicles are running on Indian roads.
• Tata Motors the first company from India’s engineering sector to be
listed in NewYork stock exchange in 2004.
• In 2008 it acquired Jaguar Landrover, in the same year it from Ford
motors and in the same year it launched Nano, people’s car.

7. • In 2004 it acquired Daewoo Commercial Vehicles South Korea’s second
largest truck maker
.
• Tata Motors developed the first indigenously light commercial vehicle,
Sports Utility Vehicle and in 1998, the Tata Indica, India’s first fully
indigenous passenger car.
• Within two years of launch, Tata became India’s largest car in its segment.
• The company’s dealership, sales, services and spare spats network
comprises over 3500 communication points.

8. • Tata Motors is equally focussed on environment-friendly
technologies in emissions and alternative fuels.
• It has developed electric and hybrid vehicles both for personal and
public transportation.
• It has also been implementing several environment-friendly
technologies in manufacturing processes.
• The company’s support on education and employability is focused
on youth and women.
• . The company has won several awards recognising its training
programmes.

9. PRODUCTS AND SERVICES
Passenger cars:
• The range comprises Tata Indica(compact car), Tata Indigo(Sedan), Tata
Indigo Marina(Station-Wagon), and Tata Nano(small car).
Utility Vehicles:
• A range comprising of Tata Aria(Crossover), Tata Safari(SUV), Tata
Xenon(Lifestyle- Pickup) and Tata Sumo Grande MK II, Tata Sumo Range and
Tata Venture(People carriers).

10. Commercial Vehicles for Goods Transportation:
Commercial Vehicles: Tata Ace India’s first indigenous Mini-truck.
Light Commercial Vehicles: Pick-Ups and trucks ranging from 2T Small to 7.5T .
Commercial Vehicles for Transportation
Tata and Tata Marcopolo range of light, medium and heavy buses from 2T onwards.
Multi-purpose vehicles:
Tata Magic, Tata Magic Iris, Tata Winger and Tata Venture for urban and rural transportation

11. Subsidiary Companies
• Jaguar Land Rover
• Tata Macropolo Motors
• Tata Daewoo
• Hispano Carrocera
• Tata Motors( Thailand)
• Telcon
• Tata Motors European Technical Care
• Tata Technologies
• TAL Manufacturing Solutions
• HV Transmission and HV Axles
• Tata Auto comp
• TML Distribution.Co
• Tata Motor Finance
Competitors
• Ford
• Toyota
• Hyundai
• Maruti Suzuki
• Honda
• Chevrolet
• Fiat

12. Market and Positioning
STP
Segment
Hatchback, sedan & SUV segment
Target
Group
Targeted towards upper middle class
Customers
Positioning Positioned as a leader in automobile
market inculcating innovative
technologies to deliver value to
Customers

15. Structure and Leadership
• Tata Motors is having relatively Flat structure, it helps them in easy
interaction between various level in structure which improves knowledge
and ideas sharing with an Organisation.
• All the departments of Tata Motors are interconnected with intra
networking system, as well as the divisions are connected with inter
networking system.

16. • In 2012, Mr. Cyrus Mistry was appointed as the chairman of Tata
Sons.
• In addition, he is also chairman of all major Tata companies including
Tata Industries, Tata Steel, Tata Motors, Tata Consultancy Services,
Tata Power, Tata Teleservices, Indian Hotels, Tata Global
Beverages andTata Chemicals.
• Under his leadership Tata motors is taking up the turnaround
strategy by adapting the horizon next Strategy, in which they will be
re-launching their entire passenger vehicle business.

17. Does the company have its formal structure for
Strategy ? What is its strategy making
hierarchy?

19. Corporate level strategy (directional strategy)
• Growth
• Stability
• Diversification
Corporate strategy ?
Business level strategy
(competitive strategy)
?
Business level strategy
(competitive strategy)
Cost leadership
Differentiation (product)

20. Functional
level strategy
• Marketing strategy (4 p’s)
• Financial strategy (sources of finance)
• R&D strategy (technological leader, innovation)
• Operation strategy (production strategy)

21. Effectiveness in Strategy
implementation
• new internationalization strategy, the company has decided to focus on a
narrow base of 14-15 countries where market conditions are similar to
that of India
• In these countries, Tata Motors now has dedicated manufacturing
facilities, marketing teams and sales teams
• The company evaluates locations on the basis of market opportunities
and labour skills.
• In the framework pertaining to international expansion strategies, Tata
Motors can be identified as an Extender, and is focusing on expanding
into markets similar to those of the home base, using competencies
developed at home

22. • Sustainable competitive advantage lies not in one, but a
combination of multiple resources, each of which
individually need not necessarily be the best
• Tata Motors, the combination of resources providing it
competitive superiority on a weighted average basis
includes:
• Product Reliability
• Service Network
• Channel Reach

23. Contingency Plans
• Mass customization has its own shortcomings. Hence They
propose that the sales of the customized vehicles be closely
tracked and in case sales achieved within a reasonable timeframe
do not merit the additional resource outlay, then the company
should revert to the original multipurpose positioning.
• In the background of rupee appreciation, exports will become
costly. Hence it is prudent to open integrated production plants
in other countries rather than just concentrating on exports.

24. The strategically relevant components of the
company’s external environment

25. PEST Analysis of TATA motors
• Pest is abbreviation for Political, Economic, Social,
Technological factors
• Its scan of an organisation’s external environment
• The purpose of Pest is to identify factors that may
impact on the services, customers (or Patients),
products, markets, staff, profitability, etc. of the
organisation.

26. POLITICAL ANALYSIS.
• The foundation of the company’s growth internationally is a
deep understand of economic stimulation, customer needs,
and individual government regulations and laws
• Laws governing commerce, trade, growth, and investment are
dependent on the local government as well as how successful
local markets and economies will be due to regional, national
and local influence
• Tata Motors operates in multiple countries across Europe,
Africa, Asia, the Middle East, and Australia, it needs to pay
close attention to the political climate. On March 26, 2008,
Tata Motors reached an agreement with Ford to purchase
Jaguar and Land Rover

27. • Tata’s headquarters in Mumbai, India, strictly controls and
regulates operations in all dealerships and subsidiaries, in
addition to knowing and abiding by all labour laws in the
multiple countries where they have manufacturing plants it
has to watch political change
• By all labour laws in the multiple countries where they have
manufacturing plants it has to watch political change

28. ECONOMIC FACTORS
• Tata is in a rapid growth period, expanding or forming a joint venture in over five
countries world-wide since 2004
• a global approach enables Tata Motors to adapt and learn from the many
different regions within the whole automotive industry.
• The company's dealership, sales, services and spare parts network comprises
over 3,500 touch points; Tata Motors also distributes and markets Fiat branded
cars in India.

29. SOCIAL FACTORS.
• Social factors include the cultural aspects and include health
consciousness, population growth rate, age distribution, career
attitudes and emphasis on safety.
• Undoubtedly, the beliefs, opinions, and general attitude of all the
stakeholders in a company will affect how well a company performs.
• Tata Motors tends to use an integration and rarely separation
technique with foreign companies they acquire

30. • On the other hand, some economic issues that Tata Motors face must also be
looked at from a more localized perspective. For instance, the market in India
for cars is much different than the market for cars in Italy
• For one, India has over one billion more people than Italy does, thus the market
is much larger or not as limited. Second, you must also take into effect the
demographics and the average income of each market.
• Italians have a higher average income per capita than Indians and Italian
citizens tend to drive larger and fancier cars. For this reason, the Tata Nano
might not do so well in the Italian market.

31. TECHNICAL ANALYSIS:
• Tata Motors and its parent company, the Tata Group, are ahead of the game
in the technology field. The Tata Group as a whole has over 20 publicly listed
enterprises and operates in more than 80 countries world-wide. This
equates to Tata Motors having lots of experience and resources to draw
fromfor research and development purposes
• Tata recognizes this and dedicates lots of resources and time into research
and development to be even with or preferably ahead of other competitors,
global trends, and changing economies

32. • Tata Motors European Technical Centre (TMETC) was set up in 2005, which is
primarily involved in design engineering and development of products,
supporting Tata Motors skill sets. Approximately 2% of the annual profits of the
company invested in research and development. On May 11th of every year,
“Technology Day” organized across allTata plant locations
• Tata motors should give more importance to R&D in order to develop highly
efficient automotive technology at an optimal cost

33. What are the driving forces which impact the company ? what are the
KSF’s?
Driving Forces which impact the company are
• Emerging new internet capabilities and applications
• Increasing globalisation
• Changes in who buys the product and how they use it
• Product innovation
• Technological change and manufacturing process innovation
• Marketing innovation
• Entry or exit of new firms
• Changes in cost and efficiency
• Changing societal concerns, attitudes and lifestyles
• Regulatory influences and govt. policy changes.

34. Key success factors of Tata motors are
There could be number of factors that contribute to the success of the
company. But the key factors for the success of Tata include:
• Quality
• Innovation
• Distribution channel
• Brand image
• Variety of products
• Promotion
• Product attributes

35. Application of Porters 5 force Model

36. Threats from new entrants
Its not only the existing players in an industry pose threat to each other, a new
entrant can also affect the competition. The factors that
can limit threat of new entrant are called as Barriers to Entry.
Following are some barriers to entry:
• Economies of scale:
• Demand side benefit of scale
• Customer switching cost
• Capital requirements

37. Threat of Substitutes
Substitute products are different goods are services from outside a given
industry that perform similar or the same function as a product that the
industry produces.
If we talk about the substitute for automobile then there are mainly two
substitutes are:
• Railways
• Airlines

38. Bargaining Power of Suppliers
A company to manufacture its products require raw material labour etc. This
creates buyer-supplier relationship in an industry. To manufacture a vehicle
number of inputs is used like steel, seat covers, technology, and tyre etc.
Bargaining Power of Buyers
The bargaining power of buyer is very high as there are lot of choice available
to the buyer and service do not vary from one service provider to the other.
When automobile company can go for backward integration in that case buyer
have the high bargaining power. Like Tata which have its own steel plants so
can face the problem of shortage of raw material. When buyer power is
strong, the buyer is the one who sets the price in the market.
.

39. Industry Rivalry
This describes the competition between the existing firms in
an industry.
Greater the competitive rivalry, lesser are the profit margin.
Rivals
• Maruthi
• Hyundai
• GM and others

40. Swot Analysis
STRENGTHS:
1.One of the most established company in automobile sector
2. Distribution Network
3. Good market penetration
4. Expert service professionals available
5. International presence
6. Dedicated engineering and R&D department
7. More than 60,000 employees
8. Highly diversified product portfolio

41. WEAKNESS
1.Limited international presence
2. Sometimes faces alleged quality and durability issues
3. Limited consumer base
OPPORTUNITY:
1. Expanding automobile market and Augmenting the distribution and
service network in various countries
2. Increasing per capita income and purchasing capability of potential
customer base
3. Leveraging customer engagement experience to acquire new customers
4. Leveraging mergers and acquisitions to acquire newer technology

42. THREATS:
1. Increasing fuel costs
2. Competition from other big automobile giants
3. Competitive products offering same level features at a lesser price
4. New entrants

43. MULTI COMPANY OPERATIONS
• Through subsidiaries and associate companies, Tata Motors has operations in
the UK, South Korea, Thailand, Spain, South Africa and Indonesia. Among
them is Jaguar Land Rover, the business comprising the two iconic British
brands.
• Tata Motors, the first company from India's engineering sector to be listed in
the New York Stock Exchange (September 2004), has also emerged as an
international automobile company.

44. • In 2005, Tata Motors acquired a 21% stake in Hispanso Carrocera,
a reputed Spanish bus and coach manufacturer, ,
and subsequently
the remaining stake in 2009.
• In 2006, Tata Motors 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 is also expanding its international footprint,
established through exports since 1961. The company's
commercial and passenger vehicles are already being marketed
in several countries all over the world.

46. Financial Highlights
• Market Capitalisation (as on March 31, 2014) 1,18,777 crores
• Total Revenue 2,33,662 crores
• Consolidated profit before tax 18,869 crores
• EBITDA margin 16.1%
Quarter ended 30 June 2014 (in lakhs)
• Total Income 7,61,289.00
• PBT 39,365.00
• Net Profit 39,365.00
• EPS Rs.1.21

50. Strategic group map.
• A strategic group is a concept used in strategic
management that groups companies within an industry
that have similar business models or similar
combinations of strategies..

51. 30
25
20
15
10
5
0
Maruthi/Hyundai
-10 0 10 20 30 40 50 60 70
-5
Price
sales volume for passenger car vehicles
BMW
Skoda/VW
Ford
Toyota/Honda
Tata/mahindra
*Approximate market share

52. Outlook for the industry offering the company
prospects with profitability and growth
Tata Motors has never had it so good. Today the company is the undisputed
market leader in the commercial vehicles industry in India and is gradually
emerging as one of the key players internationally too.
It has been forging ahead on a number of fronts in an attempt to further
entrench its position as a market leader. In the SUV segment, the company has
witnessed unprecedented success with the launch of the pioneeringTataACE.
In the Mand HUV segment, the company has been taking determined steps to
further consolidate its position. The company enjoys a number of key
strengths that enable it to present a unique value proposition to its customers.
However this success is far from being a given. The company must focus on
combining its unique strengths, as it endeavours to replicate its
recent successes in new segments and across new geographies.

53. Stars
Safari dicor,indica
vista, Tata ace,magic,
tata prima, star bus,
winger other lcv’s
QUESTION MARKS
Venture,
Other new inventions,
nano, versa, essota
Cash cow
Safari, manza,sumo,
indigo cs, indigo xl
Dog.
Sedan, sierra, estate
High
Growth
Low
High Market Share
Low

55. • A business model describes the rationale of how
an organization creates, delivers, and captures value, in
economic, social, cultural or other contexts.
• In theory and practice, the term business model is used for a
broad range of informal and formal descriptions to represent
core aspects of a business, including purpose, business process,
target customers, offerings, strategies, infrastructure,
organizational structures, trading practices, and operational
processes and policies

56. Horizonext strategy

57. • In their Horizon next journey towards great products that exceed
customer needs, Connect Next is one of the key ‘Next’ pillars
personifying the ‘connect’ of theircars with customers and their
environment.
• HORIZONEXT, a four-pronged customer-focused strategy,
provides the best customer .
• Experience from best vehicle experience to superlative purchase
experience and followed by
technology intense after-market service support.

58. The four pillars horizonext strategy
• Intense product focus
• Focus on world-class manufacturing practices
• Enriched customer purchase experience
• Consistent quality of service

59. A few pointers on what Tata Motors ought not
to do are captured below
• Compete on price because proportion of individual players is low.
• Engage in rapid capital expansion given the high debt to equity ratio.
• Focus on rapid acquisitions and instead focus on consolidation in the foreign
market.
• Lose focus on the 'Value for Money' positioning, especially in the soon to be
launched offering in the Ultra Heavy Commercial Vehicle segment

60. Conclusion
• Tata Motors is an overall strong company that has found strength and
expansion through its parent company, Tata Group, but also through its
numerous acquisitions and mergers. Although Tata Motors stock prices have
fallen since the start of the 2008 year due to suggestions that Tata Motors is
overreaching by adding luxury brands to pair with the Nano, the world's
cheapest car.
• The future presents challenges and opportunities for the company in equal
measure both domestically and internationally. While pitfalls are many, Tata
Motors looks well positioned indeed to capitalize on these opportunities and
take on the world.