Tata to (i) operate and maintain the Company’s production

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

Conclusion

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People are concerned about
the safety issues so Tata Nano should address the safety needs of the people.
The complex buying behavior people seek a lot of information before they
actually buy any product. Therefore, Nano should make effective communication
to such segments who are its prospective customers. Often it has been seen and
observed that females associate themselves to Tata Nano easily. They find it
easy and convenient to drive because of its small size, yet features required
to commute. Tata Motors should think of launching special editions of the car
targeting the Female drivers. Tata Nano should also
look ahead to target other segments of the society who can be their prospective
buyers. College going kids who consider cars to be cool and parents who think
cars are comparatively safer .New people joining the IT and bank sector. Old
age people who regard costly car as waste of money or just need a simple and
convenient means of transport

Recommendations

The main problem faced by
the Tata Nano was delayed in production because of relocation of plant, as
it is natural that setting the plant is a harder task Rising materials prices
have also disproportionately affected the Nano.Tata Nano was actually
considered 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 complying
with a wide variety of foreign laws and regulations. Additional capital expenditure and Research
& Development expenditure to (i) operate and maintain the Company’s
production facilities, install new emissions controls or reduction technologies

Challenges

The distribution network of Tata Nano was also
very different from contemporary one. Lower income customers were apprehensive
and hesitant to walk into large Tata Motors Ltd. showrooms.

Tata Nano was built without any compromise on
quality, emission and safety standards. A development, which signifies a first
for the global automobile industry, Nano brought the comfort and safety of a
car within the reach of thousands of families

They have consider 3 factors in designing
process first was cost requirement (Rs 1 lakh) second is regulatory and safety
requirement and the third one was minimum amount that a customer would accept. The
idea was to develop an innovative, attractive and cost-effective means of
transportation for the underprivileged while balancing the customer’s
expectations and meeting the regulatory requirements. Innovation with new
market segment requires major process reengineering which has to be accepted by
the customers. A lot of fibre and plastic were used instead of steel to keep
the weight of the car low. No radio, power windows, air conditioning, anti lock
brakes, air bags, remote locks or power steering were part of the car.

Design, manufacturing, distribution &
marketing and sales of TATA Nano project

Delivering reliable and high quality products
with focus on world-class quality processes- There are several projects initiated
to deliver high quality products by improving internal process capabilities and
supplier processes. The Company leverages its strong partnerships with product
and services companies to harness the potential of Information Technology
towards competitive advantage. The Company has committed to the development of
its employees to strengthen their functional and leadership capabilities.

 

In-house engineering capabilities and extensive
distribution network. Deep understanding of economic conditions and customer needs,
and the ability to translate this understanding into desirable products though
research and development. In line with the Company human resource strategy, it
has implemented various initiatives in order to build better organizational capabilities
to sustain competitiveness in the global marketplace.

Business Capabilities

 

The firm must sell this
large quantity of product, high levels of production lead to a fight for     market share and results in increased
rivalry. This is happening in the automobile industry all   player are big and put huge investment.

Industry Rivalry

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. Price sensitive customers were some of the
factors that determine the extent of influence of the buyers in this industry.

Bargaining Power of Buyers

To manufacture a vehicle
number of inputs is used like steel, seat covers, technology, and tyre these
will add value to the suppliers. When we talk about steel major input for the
automobile industry. Inputs like seat cover, plastic which can easily switch
and cost is nil of switching. So in this case bargaining power of supplier will
be low.

Bargaining Power of
Suppliers

Airline and railway are
not a substitutes for every customer and in every situation. Like for a short
journey airlines will not be substitutes. And journey to a place where railway
can’t reach in this position railway will not be substitute. Automobile
industry lots of completion and substitutes like two wheels any car can be
substitute after the launch of Nano the price factor also remove and owned car
or car on rent are the substitute for each other.

Threat of Substitutes

New players easy can’t get
benefit 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 the
product. Customer in automobile industry has high switching cost. Capitals
require to start an automobile company is very high. Land and machinery
requirement and human resources requirement and after then there is high
competition so it will be very risky for new company. It’s not easy to capture
the distribution channels

Barriers to entry

Porters five forces
analysis

Increases in price of raw
materials like steel, aluminum and plastic. The low standard in safety may
reduce sell of cars. Labor force issues and entrance of new competitors in the
market, having threat on Natural disasters.

Threats

TATA Motors benefits from
low cost car they can enter into third world countries where people can afford
this car. In 2008, Tata Motors completed a deal with Ford Motor Company. Experienced
knowledge and technologies for manufacturing and marketing luxury vehicles. The
exchange of knowledge between two companies will significantly progress Tata
Motors ability to continue to grow and boom in both developing and developed
market segments.

Opportunities

Technological advancement
is not up to the mark as compared to its competitors. Sale of Tata motors is
not up to the score in domestic market. Excess debt lack of working capital. Week
balance sheet

Weakness

Dominating biggest part of
the market share of the automobile company. Good employee based company and
high productivity. Having vertical integration and strategic alliances. Extending
brand name and image and expanding the business throughout the world Favorable
government policies .Insistently acquiring overseas brands to enhance its
global presence and strong in research and development.

Strengths

SWOT analysis

The oil resources are declining is an
opportunity for Tata Motors as it assists in bringing the new technology and
the innovation in the realm of motors. Climate change concerns and the promotion of
new technologies, such as autopilot, encourage customers to look beyond
standard factors (such as price, design, performance, brand image or comfort and
features) in favor of more fuel efficient, convenient and environmentally
friendly vehicles.Ex.World’s first commercially produced CNG Hybrid Bus and 3
Times more fuel efficiency than Gasoline

Environmental Factors

Difficulties and delays in contract implementation
and the collection of receivables under the legal systems of foreign countries.
The risk of non-tariff barriers, regulatory and legal requirements affecting
the Company’s ability to enter new markets through joint ventures with local
entities.

Legal Factors

Huge technological development create
opportunities for TATA Motors .E-commerce also having major role in their
business. Developments in technology provide great opportunities for the
company to expand its business and to operate its business in a smart and
productive way.

Technological Factors

The culture of buying cars is the major factor
in most of the families. Buy hybrid cars will automatically enhance the
opportunities for the companies like Tata Motors. The interest of individuals
of a society in the cars especially in the electric cars opens new avenues for
the Tata Motors. Threat in this gap between the wealth of different class of
Indian society. This gap often widens the economic disparities between the
social classes and become a threat to the business and affect the trade as a
whole.

Social Factors

Decline in key economic factors, such as GDP
growth rates, interest rates and inflation, as well as the reduced availability
of financing for vehicles at competitive rates in countries where Jaguar Land
Rover has sales operations may result in a decrease in demand for automobiles.The
speedy growth of India’s economy has always been an great opening for the Tata
MotorsGrowth of the country   economy is always a thing of great concern for
the Tata Motors Company.

Economic Factors

Most important factor that impact on the
company is the free trade agreements with India. The he political stability in
the major markets of the states is one of the significant factors. The support
from the government for the things like eco free environment is something of
great significance while marking out the policies and assessing the success of
the company. Low crude oil prices, Middle East geo political
situation, currency devaluations and political strife cast a big shadow over
the Company’s strong markets of Middle East and Africa last  year, with the exception of the newly opened
market of Tunisia which grown more than 100%. The Company was able to grow
market shares in the key markets of Nepal and Bangladesh. Doing business in the United Kingdom,this
uncertainty, along with any real or perceived impact of Brexit, could have a
material adverse effect on the Company’s Jaguar Land Rover business, results of
operations and financial condition

Political Factors

Macro Analysis

In 2002  Ratan Tata decided to initiate tata nano
project and 2003 in Auto show in Geneva in announced about new dream car
project. Appointed five engineers for the project and presented 60 presentation
on dream of building a low cost car. Girish Wagh appointed as team head of this
project. Tata Nano created new segment the ultra-low cost priced between three
wheel and Maruti Suzuki .In 2006 they received 206000 orders but their interim
facility had the capacity of 50 000.After launching the new plant they have the
capacity of producing 350 000 unit annualy.Tata Motor’s aspiration of 250000
unit sales annually at the time of launch, sales in 2016-17 was 7591 units
only.

TATA NANO

Tata Motors Limited is
a leading global automobile manufacturer with a portfolio that covers a wide
range of cars, sports vehicles, buses, trucks and defence vehicles. There R&D centers located in India, the UK, Italy
and Korea try to innovate new products that achieve performances that will fire
the imagination of GenNext customers. The
Company manufacturing base in India is spread across the country. They went
international in 1961, and sell vehicles in more than 50 countries. The Company
has manufacturing facilities in the UK, South Korea, Thailand, South Africa,
Brazil and Indonesia. The Company’s product portfolio of Tata-brand vehicles
includes the Nano, Indica, Tiago,Indigo, Sumo, Sumo Grande, Safari, Safari Storme,
Aria, Zest, Bolt, Tigor, Hexa and Venture, which enable it to compete in
various passenger vehicle market categories.

Introduction on TATA MOTORS