Corporate Level Planning :

Tata Motors

Chintan (10)
Siddhi (34)
Yash (41)
Sneha (43)
 Contents
Indian automobile industry
Porter’s 5 forces analysis
TATA Group
TATA Motors
Competitors
Making waves internationally
SWOT Analysis
Source of cost efficiency
BCG Matrix
Ansoff’s Strategic model
Balanced Scorecard
Conclusion
References
 INDIAN AUTOMOBILE INDUSTRY
Grew at a computed annual growth rate (CAGR) of 11.5 percent
over the past five years
Indian Automobile industry can be divided into three segments
i.e. two wheeler, three wheeler & four wheeler segment.
The domestic two-wheeler market is dominated by Indian as well
as foreign players such as Hero Honda, Bajaj Auto, Honda
Motors, TVS Motors, and Suzuki etc.
 Maruti Udyog and Tata Motors are the leading passenger car
manufacturers in the country. And India is considered as strategic
market by Suzuki, Yamaha, etc.
Commercial Vehicle market is catered by players like Tata
Motors, Ashok Leyland, Volvo, Force Motors, Eicher Motors etc.
Key facts
India ranks 12th in the list of the worlds top 15
automakers
Entry of more international players
Contributes 7% to the GDP
Production of four wheelers in India has increased from
9.3 lakh units in 2002-03 to 28 lakh units in 2008-09
Targeted to be of $ 145 Billion by 2016
Exports increased from 84,000 units in 2002-03 to
380,000 units in 2008-09.
PORTER’S FIVE FORCES ANALYSIS OF
INDIAN AUTOMOBILE INDUSTRY
Industry rivalry
Industry concentration
High fixed costs
Diversity of rivals
Highly competitive industry
Threats of new entrants
Economies of scale
Government policies
Threat of substitutes
Bargaining power of suppliers
Bargaining power of buyers
 TATA group
More than 150 years old
Tata Group is the largest private corporate group in India
It has interests in steel, automobiles, information
technology, communication, power, tea and hospitality
Group has operations in more than 85 countries across six
continents and its companies export products and services
to 80 nations
The TATA group is 11th most reputable company in the
world according to Forbes
Revenue - $78.42 billion (July 2010)
Employees – 3,63,039
 It has 29 subsidiaries. The major ones are
Tata Steel
Corus Steel
Tata Motors
Tata Consultancy Services
Tata Technologies
Tata Tea
Voltas
Titan Industries
Tata Power
Tata Communications
Tata Teleservices
Tata AutoComp Systems Limited
Taj Hotels
 About Tata Motors
Industry – Automobile.
Founded in 1945 by JRD Tata.
Previously known as TATA Engineering and
Locomotive Co. (TELCO)
Revenue - $14.2 billion.
 About Tata Motors
Flagship co. of TATA group.
Leader in commercial vehicles.
2nd in passenger cars.
Acquired Jaguar & Land Rover (JLR) from Ford.
World’s 4th largest truck manufacturer.
World’s 2nd largest bus manufacturer.
 Products
Passenger cars.
Utility vehicles.
Trucks.
Commercial passenger carriers.
Defense vehicles.
 Competitors
Ashok Leyland • Renault
Eicher • Honda
Swaraj Mazda •Toyota
Maruti Suzuki •Mahindra & Mahindra
GM
•Skoda
•Mercedes
Ford
•BMW
Hyundai •Audi
Volkswagen
Making Waves Internationally
TATA Daewoo Commercial Vehicle (South Korea)
Hispano Carrocera- (Spain)
Tata Marcopolo (Brazil)
Tata Motors (Bangladesh)
Tata Motors (South Africa)
Tata Motors (Thailand)
JLR – worldwide.
SWOT analysis
Strengths
Excellent brand equity and strengths in Indian Market
Legacy and Dignity of Tata brand heritage which is almost as old as Ford
Motor Company
Sound global recognition in light trucks and buses
Sound fundamentals in turbo diesel engines that they developed in joint
venture with Cummins
Sound presence in Asian Markets
Ownership of the heritage of British motor brands – Land Rover and Jaguar
Strategic tie up with Mercedes Benz which is one of the hottest cars in
premium car market segment in India
World class quality accreditations (ISO 9001, ISO 20000, ISO 14001)
Excellent cost management framework (Ariba Spend Management)
Excellent Supply Chain Management using the SAP framework
Experienced, high quality, productive and low cost work force
Weaknesses
Never done well in US, UK and European car markets (although done reasonably
well in light trucks and buses) – as presented earlier, they failed miserably in their
City Rover launch in Europe
Not yet prepared fundamentally to handle the global markets of Land Rover and
Jaguar
Weak technical competencies when compared to companies like Ford Motor
Company
Current Manufacturing capacities not adequate to meet the demands of Nano –
already taken a risk of over commitment and under delivery pertaining to the Tata
Nano economy-car.
Perceived as too Indianized – it will take them a long time to establish a global
branding
Do not possess localization skills outside India markets – this is one of the primary
reasons for their failure in the City Rover venture
Focus is more on cost – thus their car models lack advanced features that are
common in western markets
opportunities
Gain control over UK and Europe markets by re-enforcing the heritage of Jaguar
and Land Rover
Deep roots of British style manufacturing processes given their own heritage of
the British rule in India – can help them do better with Jaguar and Land Rover
Introduce Asian variants of Jaguar and Land Rover by promoting their “Power
Icon” branding – this may work very well with Asian politicians, Capitalists and
Bureaucrats
Develop more joint ventures like Tata – Mercedes Benz and introduce their cars in
the Asian markets
Tata Nano has taken the world by surprise whereby many economy car
manufacturers of the world are yet to even think of such a cheap car
Excellent test drives and experience reports of Tata Nano can invite attention of
urban middle class at global level – if they build their manufacturing and supply
chain effectively, they have the opportunity to virtually capture the market
segment which doesn’t even exist in the world – a market of $2500 cars (many
bikes are more expensive than this car which is spacious enough to accommodate
four six feet tall people)
Threats
Jaguar and Land Rover requires lot of funds initially which may strip
down the company to cashless levels.
 
The Singur crisis has already hit their manufacturing backbone for Tata
Nano cars – the company has not yet come out of the draining down of
cash in excess of $300 Million.
Urgency in shifting the Singur plant to alternate place has hit their
supply chain very badly – a large number of suppliers had established
plants in Singur to support Tata Motors – many of them may not be
having enough cash to shift to new location of Tata Motors Nano plant.
Many companies across the world are busy developing their own models
of Economy Cars – they may launch in competition with Tata Motors
giving them tough time in the market that currently seem to be
monopolistic in favor of Tata Motors.
 TATA’s Source of cost efficiency
Economies of scale Experience Product/Process Design Supply Cost

Tata Motors Tata Quality TAL Manufacturing Location of business

Management Solutions
Tata Steel Services TACO Supply Chain
Telco Construction Management
Tata BP Solar India Tata Services Equipment Company

Tata Power Tata Strategic TRF

Management
Tata Petrodyne (Oil & Group Tata Projects
Gas)
Tata Asset Management TCE Consulting
Rallis India Engineers
Tata Financial Services
Tata Chemicals Tata Technologies
Tata Investment
Tata Pigments Corporation

Tata Consultancy
Services
BCG Matrix for Tata Motors
 Ansoff’s strategy model

Tata Motors is currently implementing high risk strategies given

that they have attempted to enter two new markets where they do
not possess any expertise – UK and European premium car
markets with the help of Jaguar and Land Rover and the $2500
Nano car that may altogether develop a new car market globally.
If things favor them, they have the potential to become the next
Ford of the world but if the happenings do not favor them (like
the Singur crisis witnessed by them), then they can suffer losses
that will take decades for them to repair.
Balanced Score card of Tata Motors
Financial:
To improve financial performance in coming years
To improve cash flow in coming years to ensure
positive present value of cash flow even at high
discount rates.
To re-pay principal components of debts as fast as
possible
To consistently pay dividends to investors
To improve market capitalization on NYSE and
establish as a powerful global player.
 Balanced Score card of Tata Motors
Customer:
To continue to provide high quality products to
customers with localized customizations.
To develop Tata Nano to meet global standards etc.
To develop new small car markets in developed as well
as developing countries more aggressively.
 Balanced Score card of Tata Motors
Vision and Strategy:
To become the number one small car supplier of the world with
the help of innovations and timely delivery of Tata Nano.
To meet the European emission and safety norms in Tata Nano.
To continue to delight the domestic customers of India.
To drive new innovations to delight the global customers.
To manage risks more effectively.
To find out gaps in internal processes and bridge them gradually.
To improve quality and knowledge management practices.
To continue to nurture Jaguar and Land Rover to achieve better
big car markets in UK and Europe.
 Balanced Score card of Tata Motors
Internal Business Process:
To improve the Supply Chain by using global
suppliers as well.
To get the best out of Jaguar and Land Rover.
To enhance the customer delivery and support
processes specifically to meet the commitments of Tata
Nano.
 Balanced Score card of Tata Motors
Learning and Growth:
To manage the systematic risks of the company more
effectively by learning from the past.
To develop multiple variants of Tata Nano as per
global needs by applying suitable innovations.
To learn from the mistakes of Singur and develop
internal practices to avoid such mistakes in future.
To establish as many plants possible in quickest
possible time to meet the delivery commitments of
Tata Nano.
 Conclusion
They possess a strong, efficient & low cost supply chain
network localized in India but practically no supply chain at
global levels.
One of their major challenges is to meet European safety &
emission standards on Tata Nano because they have already
failed once in the European market and are not yet known for
developing global cars and hence have not yet built a sound
global brand equity.
. Hence, currently they appear to be an overambitious company
whereby an effective market campaigning of Tata Nano has
brought them at a global platter but it appears that end of the
day they may just end up capturing their local Indian market.
 References
www.tata.com
www.tatamotors.com
http://en.wikipedia.org/wiki/Tata_motors
http://en.wikipedia.org/wiki/Tata_group
http://en.wikipedia.org/wiki/Indian_automobile_industry
www.rediff.com
www.ndtv.com
Kelly School of Business Report on Tata Motors Limited
Comprehensive Strategic Analysis
IHS Global Insight Report: India
Tata motors annual report.
THANK YOU