Tata Motors

Topics: Tata Motors, Luxury vehicle, Luxury good Pages: 4 (503 words) Published: July 1, 2015
Tata Motors Limited: Ratan's Next Step
Executive Summary
Ratan Tata, chairman of Tata Motors Limited (Tata Motors), came out with the good reputation "the world's cheapest car" into New Delhi Auto Expo. Introduction of Tata's background

Situational Analysis
Strengths
Manufacturer of the world's cheapest car
81% of domestic sales in India
Diverse and complete range of resources (98 companies in 80 countries) Own steel factory resource
Ratan’s well-known understanding of business (auto design and steel industry) Successful joint ventures and overseas acquisitions
Human integration and international experience through overseas acquisitions (Daewoo and Hispano Carrocera) Weaknesses
Lack of foothold in luxury vehicles sectors
Brand is not in niche segment and no safety standard
Need to take a large loan of short duration if Tata won the bid, so ROI will be low

Opportunities
Broaden transportation and increasing demands of automobile due to National Highways Authority of India (NHAI) Act Stand at the top of the market for customer satisfaction (2006 Customer Satisfaction Study) U.S motor vehicle production decline to 13%

Threats
Brawny competitors (Hyundai and Maruti Udyog)
63% increase in China production industry
U.S luxury car owners want to buy used cars more than new ones Raw material prices grow up and so much dependent on suppliers

Key Issue
Tata is currently successful as an automobile company in producing “the world’s cheapest car”, should Ratan choose “the acquisition of JLR as a global luxury brand” or “the growth of the current Tata Motors brands” to enter overseas markets? Alternative actions and Evaluation of Alternative actions

Alternative actions
Pros
Cons
1. Related constrained diversification strategy with the acquisition of Daewoo and HC (current strategy) Share resources and activities among its businesses
Competitive advantage in the international automobile market Creating value for its customers...
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