Program & Batch:

PGDM 2014-16

Term:

IV

Course Name:

STRATEGY MANAGEMENT

Name of the faculty:

DR. RAKESH GUPTA

Topic/ Title :

TATA MOTORS STRATEGY MANAGEMENT

Original

ORIGINAL

or Revised Write-up:
Group Number:
Contact No. and email of
Group Coordinator:
Group Members:

GROUP 3

Sl
.
1
2
3
4
5
6

Gaurav Suryavanshi
7042257379
Roll No.
Name
1401-01107
1401-03039
1401-03106
1401-03136
1401-02045
1401-02143

Niraj Singhee
Atin Mehra
Namrata Jha
Rohan Chavali
Gaurav Pradip Suryavanshi
Yashwant Karlapalem

Table Of Contents
Executive Summary..............................................................................................3
Introduction..........................................................................................................4
Portfolio Analysis Tata Group..............................................................................7
Global Operations................................................................................................8
PEST Analysis......................................................................................................9
Tata Motors Business Operations Model............................................................13
SWOT Analysis....................................................................................................18
The Value Chain..................................................................................................20
Research & Development....................................................................................22
Sustainability Strategy..........................................................................................23
Conclusion...........................................................................................................24
References..........................................................................................................25

Executive Summary
Tata Motors is an Indian Multi National Company and is a subsidiary of Tata Group
conglomerate. It has operation across the globe and is one of the most trusted companies in India.
Tata Motors is a household name in India which primarily deals in the passenger car, utility
vehicles, construction equipment and military vehicles.
TATA has created its brand value not only in India but even outside India it has created its brand
by acquiring Jaguar-Land Rover, Corus Steel during 2007-08. TATA has been named among top
10 brand companies by Fortune Magazine in the year 2008. It has got into top 100 companies in
the survey of Standard & Poor Modys research in the year 2008.
Being into most valued brand in world the consumer satisfaction to its customers is very
important for TATA and thus they are continuously working into this area where their objective is
to provide best products with full value of the money of their customers.
In this report, we have captured the environment analysis for the TATA Motors and the business
environment in which it operates. Tata Motors has evolved its strategy over the years and has
become more competitive in the Indian as well as overseas automobile landscape. We have
studied the various factors involved and the results thereby of the TATA Motors over the last few
years by going through the annual reports. We have used various frameworks like PEST analysis,
SWOT analysis, BCG matrix, value chain analysis, blue ocean strategy to study the various
facets of the TATA Motors strategy.

Introduction

Tata Motors Ltd is an Indian multinational company which has operations spread across
geography. It is an automotive manufacturing company which has its headquarters in the
financial hub of India i.e. Mumbai. Tata Motors is one of the most important subsidiaries of Tata
Group. Tata Motors deals and manufactures across the automobile segment ranging from
passenger cars, trucks, vans, coaches, buses, construction equipment and military vehicles. It is
one of the most respected and trusted brands of India in the automobile domain. It is also the
17th largest automobile manufacturing company in the world, fourth largest truck manufacturer
and second largest bus manufacturer by volume.
The manufacturing facilities of Tata Motors is spread across the country. They have
manufacturing and assembly units in various cities like Jamshedpur, Pantnagar, Lucknow,
Sanand, Dharwad and Pune in India. It also has manufacturing plants in Argentina, South Africa,
Thailand and United Kingdom.
Tata Motors has always given importance to its Research & Development department which uses
cutting edge and state of the art technology to produce some of the best motorered automobile
specimens in the world. Various R&D centres of Tata Motors are located in Pune, Jamshedpur,
Lucknow and Dharwad in India and in South Korea, Spain and United Kingdom.
Tata Motors consists of various subsidiary units. Some of the major subsidiary units of Tata
Motors are Jaguar Land Rover, Tata Daewoo etc. In addition to subsidiary units, it also has joint
venture with bus manufacturing firm Marcopolo S.A. also known as Tata Marcopolo. Tata
Hitachi Construction Machinery is a joint venture with Hitachi to manufacture construction
equipment.

Tata Motors started its operations by manufacturing locomotives in 1945. The first commercial
vehicle was launched by Tata Motors in 1954 in collaboration with Daimler Benz. Tata Motors
further expanded its operations by entering into passenger vehicle segment in 1991. Tata Sierra
was the first passenger vehicle launched by Tata Motors which made it the first Indian
automobile company which developed indigenous automobile in India.
In 1998, Tata launched the first fully indigenous Indian passenger car, the Indica, and in 2008
launched the Tata Nano, the world's most affordable car. Tata Motors acquired the South Korean
truck manufacturer Daewoo Commercial Vehicles Company in 2004 and purchased Jaguar Land
Rover from Ford in 2008.

The Marketing mix of Tata Motors is as follows:

1. PRODUCT: Tata Motors produce a wide variety of automobile products. The automobile
can be broadly classified into passenger vehicles, utility vehicles, trucks and commercial
passenger vehicles., defense vehicles.
Passenger cars UtilityVehicles

Trucks

Commercial
Passenger Carriers

Indica vista

Safari Dicor

Tata Novas

Buses

Indigo XL

Sumo Grande

TL 44

Winger

Nano

Sumo

Fiat cars

Xenon XT

Magic

2. PRICE: Tata Motors aim to cater the larger masses of the Indian market due to which
they usually keep the prices of the manufactured automobiles in the affordable range.
General public at large considers the prices of TATA Motors to be competitive in the
automobile market which helps them to cater to a larger customer base.
Tata Motors had also launched Tata Nano for the economically lower background who
used to travel by two wheeler like scooters and bikes. Tata Nano helped them to purchase
their first four wheel car. Heavy discount and special promotion offers are generally
5

offered by Tata Motors on regular intervals which makes its products more competitive in
the market.
3. PLACE: Tata Motors has one of the most extensive dealer network in India which helps
it to leverage better customer relationship management through excellent after sales
service. The distributor network of Tata Motors is spread across national and international
markets. The channel of distribution, physical location, and dealership method of
distribution and sales is generally adopted.
4. PROMOTION: Advertising in print and electronic media and active promotions through
dealership network and outdoor advertising helps the company to promote and leverage
the brand of TATA to its advantage.
5. PEOPLE: Tata Motors owe our prosperity to the exceptionally energetic and

gifted

staff. Our enlistment division picks the crme-de-la-crme from head colleges,
administration and designing organizations in India. they put them through thorough
preparing projects to sharpen their entrepreneurial abilities and give complete item
learning.
6. PROCESSES: Tata motors take after Balanced Scorecard Arrangement, Inc for attaining
to magnificence in general Organization execution.
7. PROGRAM: The administration of the organization has figured out how to keep their
trusts alive even in this retreat and trusts that the more awful is behind Tata Motors as of
late propelled the most anticipated auto of the year, Tata Nano and the organization has
officially gotten 203,000 booking that are completely paid and 70 percent of the
candidates are prepared to hold up till the end of 2010 for the auto to be produced.

Portfolio Analysis of the Tata Group

A point by point examination (utilizing the BCG Network) of the arrangement of organizations
in the Tata Bunch. This included investigating the parts in which the Tata gathering works and
the organizations in the Tata Amass inside every division. We mulled over the operational and
budgetary exhibitions of every organization to comprehend their development stories. Unique
accentuation was laid on recognizing the natural and inorganic development courses sought after
by each of these organizations under the Tata umbrella. The conclusions drawn about these
organizations are taking into account examination of the worldwide system of the Tata bunch and
on nitty gritty discussions with top administrators in the Tata Bunch.
The examination uncovers that Tata Steel, Tata Power, Tata Motors and Indian Lodgings rise as
clear Stars (high market development, high piece of the overall industry). Henceforth, they ought
to be held and the interest in these organizations ought to be expanded. Tata Chemicals and Tata
Tea rise as the Money Cows (low market development, high piece of the overall industry) and
ought to be clutched for the present. A portion of the Question Marks (high market development,
low piece of the overall industry) are Tata Teleservices, Voltas and Tata Correspondences. These
outcomes are demonstrated below.

Fig. 1 Portfolio Analysis of the Tata Group using the BCG Matrix

The productivity of the Tata Gather in the telecom area has demonstrated a steady decay from
10% in 2003 to 4% in 2006-07. Regardless of the telecom blast in India, the inquiry on the
vicinity of the Tata Gather in the information transfers area warrants further dialog. For the Tatas,
the expansive target behind entering any division is to be among the main 3 in that area.
Regardless of having had a vicinity for a long time in the customer durables fragment, the Tatas
have been not able to catch the initiative position in the section through Voltas. Besides, the
development enlisted by Voltas in the course of recent years has likewise been a long way from
amazing which requires the need to basically assess its execution in this fragment.

Global Operations

Jaguar Land Rover, a business embodying the two famous English brands that was

procured in 2008.
In 2004, it procured the Daewoo Business Vehicles Organization, South Korea's second
biggest truck creator. Today 66% of substantial business vehicle fares out of South Korea

are from Tata Daewoo.

In 2005, Tata Motors procured a 21% stake in Hispano Carrocera, a Spanish transport and
mentor.
8

Tata Motors has extended its creation and gathering operations to a few different nations
including South Korea, Thailand, South Africa and Argentina and is wanting to situated up

plants in Turkey, Indonesia and Eastern Europe.

Tata likewise has franchisee/joint wander gathering operations in Kenya, Bangladesh,

Ukraine, Russia and Senegal.

Tata has dealerships in 26 nations over 4 landmasses.
Tata Motors proceeded with its product offering extension through the presentation of new
items into the business sector scope of transports (Starbus & Globus) and additionally

trucks (Novus).
Though Tata is show in numerous nations it has just figured out how to make a huge
shopper base in the Indian Subcontinent in particular India, Bangladesh, Bhutan, Sri Lanka
and Nepal and has a developing customer base in Italy, Spain and South Africa

PEST Analysis
POLITICAL
Since Tata Motors works in numerous nations crosswise over Europe, Africa, Asia, the Center
East, and Australia, it needs to give careful consideration to the political atmosphere additionally
laws and regulations in all the nations it works in while likewise paying consideration on
territorial overseeing bodies. Laws representing trade, exchange, development, and speculation
are reliant on the nearby government and also how effective neighborhood markets and
economies will be because of territorial, national and nearby impact.
In Tata Motors concurrence with Passage to buy Puma and Area Rovero, Tata Motors must have
a full understanding of the administering bodies and laws controlling business in United
Kingdom.
Tata's central command in Mumbai, India, entirely controls and directs operations in all
dealerships and backups, notwithstanding knowing and submitting to all work laws in the
different nations where they have assembling plants it needs to watch political change.
The establishment of the organization's development globally is a profound comprehend of
monetary incitement, client needs, and individual government regulations and laws. Despite the
fact that it is the home office extreme obligation to verify every individual office and extension is
working and maintaining the nearby laws, it will get to be progressively more essential for that
obligation to be dealt with at the provincial.

ECONOMIC
Working in various nations over the world, Tata Motors capacities with a worldwide financial
viewpoint while concentrating on every individual business. Since Tata is in a fast development
period, extending or shaping a joint wander in more than five nations worldwide since 2004, a
worldwide methodology empowers Tata Motors to adjust and gain from the a wide range of
districts inside the entire auto industry.

10

They have experience and assets from five mainlands over the globe, along these lines when any
variable changes in the business they can accumulate data and assets from everywhere
throughout the world to address any issues. Case in point, if the cost of the aluminum needed to
make motor squares goes up in Kenya, Tata has the alternative to get the aluminum from
different suppliers in Europe or Asia who they would typically get from for generation in
Ukraine or Russia.
Tata Motors likewise needs to give careful consideration to moves in cash rates all through the
world. Cash variances can liken to higher or lower requests for Tata vehicles which thus
influence productivity. It can likewise mean an ascent in expenses or a drop in returns. In any
case they additionally need to pay consideration on the household coin, the rupee, as well as to
the dollar, euro, bhat, won, and pound, to simply name a couple. Only on the grounds that the
rupee is solid against the dollar does not mean it is solid against the various monetary standards.

SOCIAL
Without a doubt, the convictions, conclusions, and general state of mind of every last one of
partners in an organization will influence how well an organization performs. This incorporates
each partner from the President and President, down to the line laborers who screw the entryway
board into spot, from the speculator to the client, the way of life and demeanor of all these
individuals will eventually focus the eventual fate of an organization and whether they will be
beneficial or not. Thus, Tata Motors has a tendency to utilize an incorporation and seldom
detachment procedure with remote organizations they get.
Then again, some monetary issues that Tata Motors face should likewise be taken a gander at
from a more limited point of view. For example, the business in India for autos is very different
than the business for autos in Italy. For one, India has more than one billion a larger number of
individuals than Italy does, subsequently the business sector is much bigger or not as restricted.
Second, you should likewise take into influence the demographics and the normal pay of every
business sector. Italians have a higher normal wage every capita than Indians and Italian subjects
have a tendency to drive bigger and fancier autos.

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Thus, the Tata Nano may not do as such well in the Italian market. In summation, Tata Motors
sees the economy from a worldwide point of view with operations over the whole globe; in any
case, they should likewise keep up a neighborhood business comprehension and learning
regarding item situating and situation all through the distinctive markets Tata conducts business
in.

TECHNOLOGY
Tata Motors and its parent organization, the Tata Gathering, are on the ball in the innovation
field. The Tata Aggregate all in all has more than 20 openly recorded undertakings and works in
more than 80 nations around the world. This compares to Tata Motors having loads of experience
and assets to draw from for innovative work purposes. The establishment of the organization's
development is a profound comprehension of financial jolts and client needs, and the capacity to
make an interpretation of them into client sought offerings through driving edge Research and
development . Utilizing 1,400 researchers and specialists, Tata Motors' Innovative work group is
in front of the pack in India's business sector and right with whatever is left of the field
universally. Among Tata's firsts are "the first indigenously grown Light Business Vehicle, India's
first Games Utility Vehicle and, in 1998, the Tata Indica, India's first completely indigenous
traveler auto," and the undeniably popular Tata Nano, which is anticipated to be the world's least
expensive creation auto. In the car business, it is getting to be progressively critical for producers
to stay on top of the innovation bend with new issues continually climbing, for example,
heightening gas costs and contamination issues. Tata perceives this and commits loads of assets
and time into innovative work to be even with or ideally in front of different contenders,
worldwide patterns, and evolving economies. Altogether, a vehicles maker must change, adjust,
and advance to stay aggressive in the car amusement, and this is precisely what Tata is doing
with their fast development, and far reaching innovative work.

12

Fig 2. Market Share and Growth of Tata Motors

Fig 3. BCG Matrix of Tata Motors

13

Tata Motors Business Operation Model

De-permitting in 1991 put the Indian car industry on another development direction, which
pulled in remote auto titans to set up their creation offices in the nation to exploit the different
profits it offers. Huge working class populace, developing gaining force and solid mechanical
ability have been boosting vehicles interest for as long as few years. Notwithstanding monetary
lull, the Indian vehicles segment is relied upon to see high development in impending years,
particularly in traveler autos fragment, said our new research report, ''Indian Auto Division
Examination".
From 1945 till now Tata motors has changed a considerable measure and this is because of their
opportune distinguishment of chances and dangers in the business sector. When they initially
propelled a traveler vehicle in 1988, the interest for their item was huge and they kept on
focusing all the more on that specific item with interest. Anyway when they caused misfortune at
2002, and their benefits were decreased Tata motors began investigating the shopper markets
need and why their business vehicle item was no more effective. They recognized the interest for
development, which is must by then of time, thus they began considering securing or marking
Update of Comprehension (MoU) with worldwide auto industry accomplices to elevate their
image name and worth. They succeeded in that mission as well and by 2005 their vicinity was
felt in South Africa, Senegal, Turkey, Europe, Thailand and West Asia (TATA MOTORS,2010).
This imaginative method in arranging and execution helped them to make the world's least
expensive auto in 2009 which is called "Tata Nano". Thinking past the outskirts and acting
rapidly to the business sector change has taken Tata motors as far as possible in world's car
division.
The traveler vehicle market, which constitutes around 80% of auto deals, has gigantic
development potential as traveler auto stock remained at around 11 every 1,000 individuals in
2008. Envisioning the future business sector potential, the creation of traveler vehicle is guage to
develop at a CAGR of around 10% from 2009-10 to 2012-13.

14

Withstanding a development rate of 18% every annum, Indian vehicles industry; producing
autos, transports, three wheelers, bikes, business vehicles, substantial vehicles, gives vocation to
countless. Various driving worldwide auto organizations went into joint endeavors with
household makers of India and consequently began the huge scale creation of vehicles in India.

(A)

FACTOR CONDITIONS:

Tata motors have the immense chance to profit the human asset force of Indian economy. A
nation of more than 1 billion populace with the developing Data innovation economy, Tata
motors holds the ability to enroll youthful personalities from different parts of the nation from
different colleges of the country and unite every one of them to scatter information and to use the
earth and base superbly. In this manner they have a superb environment with individuals
exceedingly taught and ready to work for their enterprise. This can lessen the capital for work
which is typically being put resources into extensive sum and accordingly gives a chance to
diminish their creation costs.

(B)

DEMAND CONDITIONS:

The fast development of urbanization in India and in world business sector has made a game
changer for the organizations. On the off chance that advancement is the main key to attain to the
interest of the purchasers then, it merits considering. Tata motors precisely do likewise and they
have made a brand name for advancement. They have delivered the world's least expensive auto
named Tata Nano , which has now a tremendous request in business and created a sound rivalry
among the contenders.
(C)

RELATED AND SUPPORTING INDUSTRIES

Tata motors securing and internationalization methods have been an enormous accomplishment
in the vehicles area as they began considering new improvements with the assistance of these
fusing exercises which gave a decent store network administration. In this way the segments of
their methods and an in number industry affiliation have helped Tata motors to stay one of a kind
to test their rivals.

15

(D)

FIRMS STRATEGY, STRUCTURE AND RIVALRY:

Globalization has accumulated a tremendous effect the world economy particularly in auto
industry, where worldwide players start to take part and rival the neighborhood business
suppliers. In this manner the opposition was tremendous and it is essential for every firm ought
to investigate the business sector environment and the need of their item to the nearby
purchasers. In such case Tata motors dissected the certainty for the need of a family auto in
Indian economy and they laid out an arrangement for Tata Nano and embraced it, in which they
are truly fruitful .They additionally had organization with Passage, and other major universal
organizations to withstand in the business sector with contenders. It is clear that Tata motors have
an arrangement and they have adjusted to it truly well with their business procedures.

(E)

GOVERNMENT:

The part government plays is essential for any business area. As per Tata motors, the
neighborhood commonplace legislatures of Uttar Pradesh and Gujarat have given a huge number
of sections of land of area for its plant development with motivations and tax reductions which
are truly gigantic for any organization. In this manner, government impacted their business
advancement by financing them and made goodwill on their image esteem.

(F)

CHANCE:

Tata motors are very much aware of the way that going worldwide is the best way to make due in
the business and they have embraced a methodology to gain and build up their association with
worldwide brands and get got to their suppliers and human asset to be a sound contender.
Consequently, Tata motors are great in obtaining and using their chances and opportunities.

(G)

THE

EXTERNAL

OPERATING

ENVIRONMENT

OF

THE

INDUSTRY
The car business is one of the developing businesses today on the planet with expanding
customers and their requirement for a vehicle. Pretty much every business relies on the
transportation and each family needs comfort in life. Both are the other way around. Auto area
fulfills their needs with their item and I have highlighted in the range of few focuses which are
truly fundamental to be talked about in investigating their operations. They are as per the
following:
16

(H)

RAW MATERIALS

The main source of raw materials used in automobile industry includes steel, aluminium and
petroleum products like vinyl and plastics. These materials are purchased from different
suppliers all far and wide with real parts are being delivered from its limb operations Tata steel
restricted. They have inner and outside crude material suppliers which make them deliberately
solid to deliver more items. Tata motors do a vertical coordination technique to upgrade their
business. Consequently it provides for them the choice to enhance, gather and production an item
for gigantic amount of shoppers with gainful store network administration.

(I)

ENVIRONMENT CONCERNED

Tata motors have joined with United Countries worldwide reduced to shield nature from unsafe
emanations and it assumes a noteworthy part in corporate social obligation by group
advancement exercises in close by areas of their assembling units. The organization uses the
world's most exceptionally prepared instruments for discharge check and control. Their
pronouncement incorporates lessening in natural contamination and restoring the biological
parity. Its join exertion with Cummins motor organization, USA in 1992 helps them to receive
emanation control innovation and they have additionally actualized End of Life Vehicle (ELV)
treatment for reusing old items.

(J)

ECONOMIC UNSTABILITY AND GROWTH

The retreat and financial downturn in 2008 brought about lessened business vehicle creation and
different vehicles in India. India has the world's most elevated extent of individuals under thirty
five years old. They are the working populace (the potential purchasers) for a group and they are
relied upon to develop all the more in future. Accordingly, there is an open door for the
organizations to draw in more clients with imaginative items in vehicles segment. Subsequently,
Tata motors has chosen to enhance their profit and their assembling units to benefit the
opportunity to support them.

(K)

SAFE AND SECURED

Tata motors furnish a safe situation with lodging offices for its workers, and they have appealing
impetuses and representative evaluation projects to make their works agreeable and in addition

17

secured. (Allude table 8 in reference section) This makes them feel like they are reinforced with
the organization and make them to work and perform better for their association.

(L)

MARKET SHARE

At present major Indian, European, Korean, Japanese vehicles organizations are holding critical
pieces of the pie. In business vehicle, Tata Motors overwhelms more than 60% of the Indian
business vehicle market. Tata Motors is the biggest medium and overwhelming business vehicle
maker.
Among the bike fragment, including bikes and mopeds- cruisers have- significant experience the
business sector. Legend Honda contributes half cruisers to the business in which Honda holds
46% offer in bike and TVS makes 82% of the mopeds in the nation. In the three wheeler industry
in India, Piaggio holds 40% of the piece of the pie. Bajaj is the pioneer by making 68% of the
three-wheelers.
Auto producers in India overwhelm the traveler vehicle advertise by 79%. Maruti Suzuki is the
biggest auto maker in India and has 52% offer in traveler autos and is a complete imposing
business model in multi reason vehicles. In utility vehicles Mahindra holds 42% offer. Hyundai
and Tata Motors is the second and third auto maker in India.

(M) DOMESTIC SALES

Built under the guardian organization, Tata Bunch, in 1945, Tata Motors Constrained has turned
into India's biggest auto organization. It was the first Indian car organization to rundown on the
New York Stock Trade. Tata Motors started assembling business vehicles in 1954 with a 15-year
cooperation concurrence with Daimler Benz of Germany. This organization has driven Tata
Motors to turn into India's biggest auto organization as well as India's biggest business vehicle
producer; the world's main five produces of medium and substantial trucks and the world's
second biggest medium and overwhelming transport maker. Having quite recently entered the
traveler vehicles business sector portion in 1991, Tata Motors now positions second in India's
traveler vehicle market.

18

Tata has appreciated the notoriety of having created Tata Expert, India's first indigenous light
business vehicle; Tata Safari, India's first games utility vehicle; Tata Indica, India's first
indigenously produced traveler auto; and the Nano, the world's slightest lavish auto.

SWOT Analysis
Strengths

Market leader in Automobile Industry with huge market share, huge employee base with
high productivity percentage per employee.

Produces low price car with low fuel consumption.

One of the most reputed brand in Indian Industry.

Indias largest automobile company, with revenues of Rs. 92,529 crores.

Strong research and development department.

TATAs management is strengthened by the collective experience of its partners and

acquired companies this includes general management, marketing, sales and operations.

Aggressively acquiring foreign brands to increase its global presence.

High corporate responsibility.

Weaknesses

One weakness which is often not spotted is that in English the word 'tat' means rubbish.
Rand sensitive British consumer might not buy a TATA product considering this meaning.

The company's passenger car products are based upon 3rd and 4th generation platforms,
which put Tata Motors Limited at a disadvantage with competing car manufacturers.

Return on Investment on shares in low.

Not got a foothold in the luxury car segment in its domestic market.
19

Manufacturing practices trail its competitors.

Opportunities

Can take the advantage of their low cost car production by entering into countries where
people have lower purchasing power.

Using Joint ventures TATA can enter into other countries and ne markets.

TATA motors should devote more focus in developing luxury cars.

Nano is the cheapest car in the World - retailing at little more than cost of a motorbike.

Super Milo fuel efficient buses are powered by super-efficient, eco-friendly engines.

Emerging industrial nations such as India, South Korea and China will have a thirst for
low-cost, environmentally friendly passenger and commercial vehicles.

Increase its product line in light & heavy vehicle so that it can leverage on its Brand
image.

The Company should focus on both Passenger & Commercial Vehicle for improving its
Design (interior & exterior) & Quality of Fiber.

Threats

Competitor car manufacturers have been in the passenger car business for 50 or more
years. Tata Motors Limited has to stay at par in terms of quality and lean production.

Companys focus has been essentially on the commercial and small vehicle segments. So
it is open to competition from foreign companies for the emerging Indian luxury
segments.

Rising prices in the economy could pose a threat to Tata on some fronts. The price of
steel and aluminum is has been constantly increasing putting pressure on manufacturing
cost.

TATA motors have the advantage of low cost over its competitors, once the competitors
find out the low cost production methodology then there will no competitive advantage.

Pakistans Transmission Motor Company has built a four-wheeler family car for only
$2,100 for global market. This car is cheap and the Pakistan Transmission Motor
company has already started exporting them to Sudan, Qatar, and Chile which could be a
threat for low cost Tata cars.
20

The low safety standards can be a threat.

The Value Chain

The figure shown displays typical Value Chain of Tata Motors. Starting from Inbound logistics to
End Service all steps have been indicated to be integrated wit IT (SAP). At each level which
party plays a major role has been indicated.
For Inbound logistics, long term contracts should be signed with service providers like
transporters and agents and assign personnel at transit offices for smooth transit of goods. Use of
IT at this level should be done in terms of SAP transactions to make the process faster and
21

automated. DTL (Daily Transport Logistics) should be implemented for critical items. Efficient
storage facilities should be available for easy storage and retrieval of goods.
For Operations level, Tooling development of global standards need to be implemented.
Appropriate amount of skilled labour should be available at all times with the use of programs
like apprenticeship. Higher Efficiencies should be constantly promoted with the use of Total
Quality Management. Automation of all manufacturing processes to meet global standards and
high standards of safety and maintenance should be adhered to. Tata Motors make extremely
good use of its capacity, example of that being Mercedes Benz cars using Tata Motors paint shop
facilities.
For outbound logistics, again long term contracts should be signed with transporters. Integration
of all activities with SAP transactions are an absolute must at this level too.
For Marketing and Sales, a very structured approach is used by Tata Motors where core focus is
on understanding the needs of the consumer. This helps them to come up with innovative
products like Tata Ace which is a big hit in the market. Tata Motors have independent teams for
institutional customers like Defence and State Transport which helps them to cater to their needs
efficiently. They are very quick in assessing changing market dynamics, example of that being
Tata 407LCV. Tata motors also has a very large network of dealers which managed through the
use of CRM-DMS.
For Service, Tata Motors is a pioneer in providing spares for vehicles as they have PAN India
presence. Dealers are also integrated through the use of IT.

Research & Development:

The foundation of the company's growth is a deep understanding of economic stimuli and
customer needs , and the ability to translate them into customer desired offerings through R&D.

22

Tata Motors has emerged as an International Automobile company. The company's Engineering
and Research Center was established in 1966, and has facilities in pine, Jamshedpur and
Lucknow. At first glance the Engineering and Research Centre in Pimpri doesn't seem to be the
kind of place where great ideas are born. The ERC center is the biggest Research and
Development Centre any Indian Corporation has started in the recent times.
As per 2012 , around 5500 people working in R&D spread across India and rest of the world..At
any point in time , there are several R&D projects going on both at the company and inside many
global Universities , different start-up companies and different vendor partners , that Tata has
collaborated with across the world i.e. US, Europe and India. No other Indian Car maker has
gone this distance to develop a research and development capabilities. Its nearest competitor
Mahindra and Mahindra has gone closest with 1200 man R&D center in Chennai , but it focused
mainly on utility vehicles where as Tata focused on Auto firm with global footprint.
The pace of new product development has fastened through an Organization wide structured
services . The process for producing new vehicles in the market brings in greater discipline. The
New Product Innovation (NPI ) process helped Tata Motors create a new segment by launching
Tata Ace , India's first Mini truck. The work on safety engineering also occupies a large part of
R&D focus. Right now its R&D is focusing on launching products equipped with new
technologies for future like Communication, entertainment and navigation.
Why is Tata Motors pushing forward , as when looking at Tata Motors R&D effort is that an
attempt by an Indian Company to build a product that can thrive in an open market place. Tata
Motors products have to be globally competitive , be it in technology, pricing, quality. When
compared to other markets like Japanese, Chinese and the Koreans. So comparatively in India,
Only Tata Motors fit that .If they dint do that Research and Development, they would have never
survived.

Sustainability Strategy:
Over past seven decades , Tata Motors has grown to become an Institute of Trust - trusted by
customers of superior value. This trust plays an important role for Tata Motors to match ahead
with Integrity, Passion and Quality. They believe to live by their values to benefit stakeholders
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across the value chain to create a seamless enterprise that plays as One team and One vision.
Sustainability will persist to be in motion in the company which will enable to drive innovation
across policies, processes and products.
True to the tradition of Tata group, Tata Motors is committed

to Corporate Social

Responsibility. It is a signatory to the United Nations global compact, and engaged in community
and social initiatives on labour and environment standards in compliance with global compact.
To Sustain in the market, their Corporate level strategy has been to maintain stability and
retrenchment, their competitive strategy is their Cost leadership and product differentiation. and
its functional level strategy is Investing a lot in its R&D both in India and in Global markets to
innovate in their products to become a technological leader to look forward into the future. To
ensure long term competitiveness of Tata motors the company also took several steps under
Horizonext strategy-new products, quality improvement and enhancement of the customer
experience that will help improve sustainable profitability.
India's GDP growth continued to be below 5% and Industrial growth continued to remain in
negative territory. Consequently, the Indian Auto Industry witnessed a decline in both passenger
vehicles and in commercial vehicles segment by 4.7 % and 22.4 % respectively. Tata motors
domestic business in this tough environment, lost market share in both commercial vehicles and
passenger vehicles business. They have been able to sustain and that's why operated in over 175
markets and have over 6600 sales and service touch points.

Conclusion:
Tata Motors has been one of the most prominent and trusted names in the Indian Automobile
Industry. This reputation has been built through years of hardwork, innovation and quality
standards that the company has displayed. Tata Motors has always laid heavy emphasis on
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understanding the needs of its customers and satisfying the same. That is the reason why
company is doing well in India. Tata motors have always tried to diversify its product range too
and been a tough competitor in all segments that they have ventured into, be it LCV or HCV or
passenger vehicles. Through its innovation and dream to satisfy customers, they were successful
in producing a car that costs less than a Lakh which was a revolution as it was the cheapest car in
the world. Production of Tata Ace was another brilliant move and it shows in the figures if one
looks at the dominance of Tata Motors in that segment. With the same strategy Tata Motors is
now looking to set a strong foothold in the international markets. In our view, we recommend
that since Tata Motors has been successful in understanding the customer requirements in India,
they should lay a lot of focus on doing the same in the international markets to be a key global
player in the years to come.

References
1) http://smartinvestor.business-standard.com/BSCMS/PDF/ttmt_100113.pdf (Tata MotorsIndia Business Re-structuring)
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2) http://www.vikalpa.com/pdf/articles/2014/vikalpa-39-1-1-20.pdf (Driving Business

Strategy through BSC in Tata Motors)
3) http://www.indianresearchjournals.com/pdf/IJSSIR/2012/January/5_IJSSIR_J_SOWMY
A.pdfhttp://www.theglobaljournals.com/ijar/file.php?
val=December_2012_1357020806_becca_31.pdf (An Understanding of TATA-JLR deal
with the concepts of Downsizing, Corporate Culture and Leveraged Buyout)
4) http://www.indianresearchjournals.com/pdf/IJSSIR/2012/January/5_IJSSIR_J_SOWMY
A.pdf (The drivers of Change: Tata Motors)
5) http://www.tatamotors.com/investors/pdf/investorPresentationSep14.pdf (Tata Motors
Investor Presentation-2014)
6) http://articles.economictimes.indiatimes.com/2014-01-19/news/46347209_1_tata-motorssmart-city-car-karl-slym
7) http://www.tatamotors.com/media/pdf/061213-Final-release-horizonext.pdf (Tata Motors
Horizonext Strategy)
8) TATA Motors Annual Reports from 2005-2013

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