2. 1 - IDENTIFY THE STRATEGY(IES) BEING FOLLOWED
BY TATA MOTORS
MARKETING
• Focus on customer retention in order to continue their good marketing
strategy.
• Their strategy should be in merging and acquisition.
• They need collaboration to withstand against global players and to
stabilize their organization during economic recession.
FINANCIAL
• Frame a financial strategy that can avoid them from failures in future
business.
• They framed an approach which involves cost reduction methods by
efficient manufacturing, being a strong domestic player to strengthen
their market share and expansion with acquisition to form global network
in order to face the competition
3. RESEARCH & DEVELOPMENT
• First class R&D support enables TATA Motors in producing high quality
products.
• It has 3000 employees and research scientist who work for R&D
department with centers almost all over India along with Spain, UK and
South Korea internationally.
• They introduced very recently in 2008 the people's car Tata Nano which
created huge market domestically and attracted the world's attention.
1 - IDENTIFY THE STRATEGY(IES) BEING FOLLOWED
BY TATA MOTORS
4. 2 - HOW EFFECTIVE IS THE STRATEGY
• Tata Motors Group had a successful fiscal year 2012 with net revenues
increasing by 36% and profit after tax increasing by 46%.
• Market share now captured 62.2%
• 19% domestic sales increased with commercial vehicles and dominating
increase of market share in light vehicles up to 60% well.
• Domestic passenger car grew about 4 % according to industry growth
rate.
• Domestic passenger car prices increased about 3.3%.
• Acquired of Jaguar/Land Rover increased growth in this segment about
29%.
5. 3 – THREE YEARS FINANCIAL ANALYSIS OF THE TATA
MOTORS.
6. 4 – STRENGHTS & WEAKNESS OF THE COMPANY
STRENGTHS:
• Breakthrough car design in low cost car at the right time.
• The ownership of Jaguar and Land Rover in premium brands. So nobody
under estimate in Tata’s brand.
• 1st largest manufacturer in India.
• 3rd largest bus manufacture by volume.
• 3rd largest passenger vehicle manufacturer in India.
• 4th largest in manufacturing trucks by volume in the world.
WEAKNESS:
• Very limited in debt and financing agreements.
• Tata Nano cannot go global without costly additions and re-design
(questionable safety standards make this poor performing car a major
weakness).
• Large variety of cars they design can increase complications in their
supply chain management.
7. 5 – OPPURTUNITIES & THREATS OF THE COMPANY
OPPURTUNITIES:
• New JLR models to boost sales and will impact customer’s perception
in to Nano’s brand.
• Infrastructure growth in India could boost Tata's sales on the home
market.
• Penetrate the rural market in India before the competitor.
• New acquisitions and increasing exportation in nations such as China,
England, and South East Asia where sales are increasing for Tata.
8. 5 – OPPURTUNITIES & THREATS OF THE COMPANY
THREATS:
• Poor economic conditions in the foreign and domestic markets.
• A lowering growth rate, Poor availability of credit, Lower disposable
income, High fuel prices and Inflation issues that are only predicted to
be worse in the future.
• Increased competition from foreign market (in the cheap, affordable
car market with GM, Ford, and Renault to selling affordable cars
international with well-equipped than the Nano).
• Increased domestic competition (domestic competitor Indian
companies such as Maruti ).
9. 6 – IFE & EFE MATRICES
INTERNAL FACTOR EVALUATION (IFE) MATRIX
STRENGTHS
KEY INTERNAL FACTORS
WEIGHT RATING WEIGHED SCORE
GLOBAL PRESSENCE 0.06 3 0.18
NEW VISION & STRATEGY 0.07 3 0.21
LARGEST MANUFACTURER IN INDIAN MKT 0.08 4 0.32
STRONG BRAND MANAGEMENT 0.07 4 0.28
RESEARCH AND DEVELOPMENT 0.08 4 0.32
LARGE SCALE OF EMPLOYEES & QUALIFIED ENGINEERS 0.07 3 0.21
WIDE RANGE OF AUTOMOBILES 0.07 3 0.21
FLEXIBLE PRICE RANGE AS PER VEHICLE TRAITS 0.06 3 0.18
WEAKNESSES
KEY INTERNAL FACTORS
WEIGHT RATING WEIGHED SCORE
SENSITIVENESS TO FUEL PRICES 0.07 3 0.21
CUSTOMERS PREFERENCE CHANGE 0.07 3 0.21
COUNTRY POLITICAL SITUATION 0.06 4 0.24
GREEN CAR DEMANDS AND DEVELOPMENT 0.07 4 0.28
TECHNICAL PROBLEMS 0.09 4 0.36
RAW MATERIAL PRICE INCREASE & INFLATION 0.08 4 0.32
1.00 3.53
10. 6 – IFE & EFE MATRICES
EXTERNAL FACTOR EVALUATION (IFE) MATRIX
OPPORTUNITIES
KEY EXTERNAL FACTORS
WEIGHT RATING WEIGHED SCORE
LOW PRICE BUT PROFITABLE 0.07 3 0.21
LARGEST MARKET SHARE 0.08 4 0.32
DIVERSIFICATION IN VEHICLES 0.08 3 0.24
COULD PENETRATE IN RURAL MARKET 0.07 3 0.21
NEW ACQUISATION CAN BOOST IN UK, CHINA AND OTHER COUNTRIES SALES 0.09 4 0.36
VERTICAL INTEGRATED INTEGRATION FOR BETTER CONTROL 0.08 3 0.24
THREATS
KEY EXTERNAL FACTORS
WEIGHT RATING WEIGHED SCORE
GLOBAL RECESSION AND POOR ECONOMIC CONDITION 0.08 4 0.32
LONG TERM FINANCING PROBLEM 0.07 3 0.21
HIGH FUEL PRICES 0.08 4 0.32
NEW ENTRANTS WITH BETTER TECHNOLOGY 0.07 4 0.28
POLITICAL PRESSURE 0.08 4 0.32
GOVERNMENT POLICIES 0.08 3 0.24
FAILURE OF NEW TECHNOLOGY 0.07 3 0.21
1.00 3.48
12. 9 – THREE ALTERNATIVE STRATEGIES THAT THE
COMPANY COULD FOLLOW WITH PROS AND
CONS
• Cost cutting strategy would be the first and foremost option Tata motors
should posses in order to compete with global leaders.
• They already have Goodwill over their products and it will be an added
advantage if they could reduce the manufacturing and raw material
costs through efficient commodity chain development.
• The next important factor to be considered would be the sustainability
riskseach and every product developed by Tata motors must be
multifunctional, so that customers may have their options to utilize and
explore their product much more than normal.
16. 11 – RECEMMENDATION OF FINAL STRATEGY
• A proper customer relationship management is a must too for Tata
motors.
• Production, manufacturing and product delivery should be done
professional ways to attract global customers.
• Tata motors should aim at developing a fuel efficient vehicle with the
help of breakthrough technologies like Biogas and Biodiesel methods.
• If it is done in short period of time (say within 5 years) then it will be an
important revolution in automobile industry which is oscillating due
improper oil prices every day.
