Tata Motors is an overall strong company that hasfound strength and expansion through its parent company, Tata Group, but alsothrough its numerous acquisitions and mergers. Although Tata Motors stockprices have fallen since the start of the 2008 year due to suggestions thatTata Motors is overreaching by adding luxury brands to pair with the Nano, theworld’s cheapest carConclusionPeople are concerned aboutthe safety issues so Tata Nano should address the safety needs of the people.The complex buying behavior people seek a lot of information before theyactually buy any product.
Therefore, Nano should make effective communicationto such segments who are its prospective customers. Often it has been seen andobserved that females associate themselves to Tata Nano easily. They find iteasy and convenient to drive because of its small size, yet features requiredto commute. Tata Motors should think of launching special editions of the cartargeting the Female drivers. Tata Nano should alsolook ahead to target other segments of the society who can be their prospectivebuyers. College going kids who consider cars to be cool and parents who thinkcars are comparatively safer .New people joining the IT and bank sector. Oldage people who regard costly car as waste of money or just need a simple andconvenient means of transportRecommendationsThe main problem faced bythe Tata Nano was delayed in production because of relocation of plant, asit is natural that setting the plant is a harder task Rising materials priceshave also disproportionately affected the Nano.
Tata Nano was actuallyconsidered to be targeted at the people who had never thought of buying a car.Difficulties in obtaining regulatory approvals,environmental permits and other similar types of governmental consents,difficulties in negotiating effective contracts and the burdens of complyingwith a wide variety of foreign laws and regulations. Additional capital expenditure and Research& Development expenditure to (i) operate and maintain the Company’sproduction facilities, install new emissions controls or reduction technologiesChallenges The distribution network of Tata Nano was alsovery different from contemporary one. Lower income customers were apprehensiveand hesitant to walk into large Tata Motors Ltd.
showrooms.Tata Nano was built without any compromise onquality, emission and safety standards. A development, which signifies a firstfor the global automobile industry, Nano brought the comfort and safety of acar within the reach of thousands of familiesThey have consider 3 factors in designingprocess first was cost requirement (Rs 1 lakh) second is regulatory and safetyrequirement and the third one was minimum amount that a customer would accept. Theidea was to develop an innovative, attractive and cost-effective means oftransportation for the underprivileged while balancing the customer’sexpectations and meeting the regulatory requirements. Innovation with newmarket segment requires major process reengineering which has to be accepted bythe customers. A lot of fibre and plastic were used instead of steel to keepthe weight of the car low. No radio, power windows, air conditioning, anti lockbrakes, air bags, remote locks or power steering were part of the car.
Design, manufacturing, distribution and sales of TATA Nano projectDelivering reliable and high quality productswith focus on world-class quality processes- There are several projects initiatedto deliver high quality products by improving internal process capabilities andsupplier processes. The Company leverages its strong partnerships with productand services companies to harness the potential of Information Technologytowards competitive advantage. The Company has committed to the development ofits employees to strengthen their functional and leadership capabilities. In-house engineering capabilities and extensivedistribution network. Deep understanding of economic conditions and customer needs,and the ability to translate this understanding into desirable products thoughresearch and development. In line with the Company human resource strategy, ithas implemented various initiatives in order to build better organizational capabilitiesto sustain competitiveness in the global marketplace.Business Capabilities The firm must sell thislarge quantity of product, high levels of production lead to a fight for market share and results in increasedrivalry.
This is happening in the automobile industry all player are big and put huge investment.Industry RivalryWhen automobile companycan go for backward integration in that case buyer have the high bargainingpower. Like Tata which have its own steel plants so can face the problem ofshortage of raw material. When buyer power is strong, the buyer is the one whosets the price in the market. Price sensitive customers were some of thefactors that determine the extent of influence of the buyers in this industry. Bargaining Power of BuyersTo manufacture a vehiclenumber of inputs is used like steel, seat covers, technology, and tyre thesewill add value to the suppliers. When we talk about steel major input for theautomobile industry. Inputs like seat cover, plastic which can easily switchand cost is nil of switching.
So in this case bargaining power of supplier willbe low.Bargaining Power ofSuppliersAirline and railway arenot a substitutes for every customer and in every situation. Like for a shortjourney airlines will not be substitutes. And journey to a place where railwaycan’t reach in this position railway will not be substitute. Automobileindustry lots of completion and substitutes like two wheels any car can besubstitute after the launch of Nano the price factor also remove and owned caror car on rent are the substitute for each other.
Threat of SubstitutesNew players easy can’t getbenefit of economies of scale due to high price competition from exiting players.TATA having the large number of customer base and build the trust in theproduct. Customer in automobile industry has high switching cost. Capitalsrequire to start an automobile company is very high.
Land and machineryrequirement and human resources requirement and after then there is highcompetition so it will be very risky for new company. It’s not easy to capturethe distribution channelsBarriers to entryPorters five forcesanalysisIncreases in price of rawmaterials like steel, aluminum and plastic. The low standard in safety mayreduce sell of cars. Labor force issues and entrance of new competitors in themarket, having threat on Natural disasters.ThreatsTATA Motors benefits fromlow cost car they can enter into third world countries where people can affordthis car. In 2008, Tata Motors completed a deal with Ford Motor Company.
Experiencedknowledge and technologies for manufacturing and marketing luxury vehicles. Theexchange of knowledge between two companies will significantly progress TataMotors ability to continue to grow and boom in both developing and developedmarket segments.OpportunitiesTechnological advancementis not up to the mark as compared to its competitors. Sale of Tata motors isnot up to the score in domestic market. Excess debt lack of working capital. Weekbalance sheetWeaknessDominating biggest part ofthe market share of the automobile company. Good employee based company andhigh productivity. Having vertical integration and strategic alliances.
Extendingbrand name and image and expanding the business throughout the world Favorablegovernment policies .Insistently acquiring overseas brands to enhance itsglobal presence and strong in research and development.StrengthsSWOT analysisThe oil resources are declining is anopportunity for Tata Motors as it assists in bringing the new technology andthe innovation in the realm of motors. Climate change concerns and the promotion ofnew technologies, such as autopilot, encourage customers to look beyondstandard factors (such as price, design, performance, brand image or comfort andfeatures) in favor of more fuel efficient, convenient and environmentallyfriendly vehicles.Ex.World’s first commercially produced CNG Hybrid Bus and 3Times more fuel efficiency than GasolineEnvironmental FactorsDifficulties and delays in contract implementationand the collection of receivables under the legal systems of foreign countries.
The risk of non-tariff barriers, regulatory and legal requirements affectingthe Company’s ability to enter new markets through joint ventures with localentities.Legal FactorsHuge technological development createopportunities for TATA Motors .E-commerce also having major role in theirbusiness. Developments in technology provide great opportunities for thecompany to expand its business and to operate its business in a smart andproductive way. Technological FactorsThe culture of buying cars is the major factorin most of the families. Buy hybrid cars will automatically enhance theopportunities for the companies like Tata Motors.
The interest of individualsof a society in the cars especially in the electric cars opens new avenues forthe Tata Motors. Threat in this gap between the wealth of different class ofIndian society. This gap often widens the economic disparities between thesocial classes and become a threat to the business and affect the trade as awhole. Social FactorsDecline in key economic factors, such as GDPgrowth rates, interest rates and inflation, as well as the reduced availabilityof financing for vehicles at competitive rates in countries where Jaguar LandRover has sales operations may result in a decrease in demand for automobiles.
Thespeedy growth of India’s economy has always been an great opening for the TataMotorsGrowth of the country economy is always a thing of great concern forthe Tata Motors Company. Economic FactorsMost important factor that impact on thecompany is the free trade agreements with India. The he political stability inthe major markets of the states is one of the significant factors. The supportfrom the government for the things like eco free environment is something ofgreat significance while marking out the policies and assessing the success ofthe company. Low crude oil prices, Middle East geo politicalsituation, currency devaluations and political strife cast a big shadow overthe Company’s strong markets of Middle East and Africa last year, with the exception of the newly openedmarket of Tunisia which grown more than 100%.
The Company was able to growmarket shares in the key markets of Nepal and Bangladesh. Doing business in the United Kingdom,thisuncertainty, along with any real or perceived impact of Brexit, could have amaterial adverse effect on the Company’s Jaguar Land Rover business, results ofoperations and financial conditionPolitical FactorsMacro AnalysisIn 2002 Ratan Tata decided to initiate tata nanoproject and 2003 in Auto show in Geneva in announced about new dream carproject. Appointed five engineers for the project and presented 60 presentationon dream of building a low cost car.
Girish Wagh appointed as team head of thisproject. Tata Nano created new segment the ultra-low cost priced between threewheel and Maruti Suzuki .In 2006 they received 206000 orders but their interimfacility had the capacity of 50 000.After launching the new plant they have thecapacity of producing 350 000 unit annualy.Tata Motor’s aspiration of 250000unit sales annually at the time of launch, sales in 2016-17 was 7591 unitsonly.
TATA NANOTata Motors Limited isa leading global automobile manufacturer with a portfolio that covers a widerange of cars, sports vehicles, buses, trucks and defence vehicles. There R&D centers located in India, the UK, Italyand Korea try to innovate new products that achieve performances that will firethe imagination of GenNext customers. TheCompany manufacturing base in India is spread across the country.
They wentinternational in 1961, and sell vehicles in more than 50 countries. The Companyhas manufacturing facilities in the UK, South Korea, Thailand, South Africa,Brazil and Indonesia. The Company’s product portfolio of Tata-brand vehiclesincludes the Nano, Indica, Tiago,Indigo, Sumo, Sumo Grande, Safari, Safari Storme,Aria, Zest, Bolt, Tigor, Hexa and Venture, which enable it to compete invarious passenger vehicle market categories.Introduction on TATA MOTORS