Tata Motors| “TATA NANO” in usa|
This due-diligence report concludes our findings regarding the feasibility of implementing the Tata Nano, the world’s cheapest car, for expansion into the U.S. market. Taking into consideration the general environmental analysis, we have concluded that increasing oil prices and a stagnant economy have coupled to increase opportunities of market demand for vehicles that are; inexpensive, fuel-efficient and compact with very basic features. The Buy American Act and other U.S. Governmental policies and regulations are such that; emissions and safety standards represent a threat to the viability of manufacturing the Tata Nano in the U.S. without major re-engineering processes in order to make them compliant. These improvements and higher U.S. labour costs could potentially increase the price tag of the Nano to $8,000 USD. According to Michael Porter’s Industry Analysis, the Automotive Industry in the U.S. is fairly attractive due to the low threat of new entrants, low suppliers power and the low threat of substitutes. In turn this industry may be fertile for Tata to expand their operations. The internal resources and capabilities of Tata have been analyzed, and it is determined that their core competencies include operational efficiency and effective design and innovation (fuel and cost efficient). From the Competitor and Competitive Analysis we are able to conclude that the Hyundai Accent and Nissan Versa base models are Tata Nano’s potentially biggest rivals. Moreover, it is plausible to suggest that the Tata Nano would only have a temporary competitive advantage in the U.S. In comparing three potential strategy alternatives to penetrate the U.S. market choosing from; Joint Venture, Merger and Acquisition, Greenfield, or to merely keep the Status Quo, we have identified that the acquisition strategy is most suitable as well as financially feasible. To conclude, we highly recommend that Tata explore new opportunities and expand their operations into the U.S. market through the acquisition of an existing facility.
Introduction of the Firm1
Introduction to the Project1
General Environment Analysis1
Industry Environment Analysis (Porter’s 5 Forces)4
Value Chain Analysis6
Current Strategy Identification12
Introduction of the Firm
Tata Motors, established in 1945, is considered to be India’s largest automobile company having generating revenues of over USD 27 Billion in 2010-11 (Tata Motors, 2011). Tata Motor’s has been a leader manufacturer in the commercial segment of automotive with having its manufacturing bases distributed all across the country (Tata Motors, 2011). Tata’s largest manufacturing businesses are “Steel” and “Motors” and the company’s apart from its operations in India, has developed itself as an International brand, currently having its operations in UK, South Korea, Thailand and Spain through subsidiaries and associate companies. Its recent acquisition of the two very famous British iconic brands Jaguar and Land rover in 2008, its launch of the world’s cheapest People’s car “Tata Nano” in 2008 and the 2004 acquisition of Daewoo have triggered Tata’s brand image as a globally competitive automotive manufacturer. Introduction to the Project
The purpose of this project is to critically analyze the feasibility and various strategies to be undertaken for Tata Motor’s to succeed in their plan to launch their low cost automotive vehicle “Tata Nano” in USA in the year 2011 – 12 (Ireson,...