Strategic Analysis of
Table of contents
Rationale of the study
Objective of research
Analysis and interpretation
Tata Motors was established in 1945 with annual revenues in excess of USD 10 Billion, and they are known to launch the first $2000 car of the world (Tata Nano) which has been in world news very recently. They are the first Engineering Sector Company from India to be listed on the New York Stock Exchange. They are the no. 1 vehicle manufacturers (especially cars and trucks) of India and have impressive export records as well. In terms of size, they are much smaller compared to
This dissertation is dedicated to Strategic Analysis techniques of Tata Motors. the strategic valuations like Michael Porter’s Diamond Model, SWOT Analysis, Balanced Score Carding, etc. are of great interest to both internal and external investors.
The Tata Group was founded in 1868 when India was under British Empire. The group formed their textile business in 1874 and Steel manufacturing in 1907. In 1945, Tata Sons Limited started the automotive business with manufacturing steam locomotive boilers after purchasing the shops of East Indian Railways from Government of India, which was under the British Government in that year. After purchasing these shops, the Tata sons decided to establish Tata Engineering and Locomotive Company Limited (TELCO Limited) and establish the primary manufacturing facility in Jamshedpur (an industrial city in Eastern India). This company was managed by J.R.D. Tata from 1945 to 1973 and by Sumand Moolgaokar from 1973 to 1988. Sumand established the second manufacturing facility in Pune India looking into the boom in the auto market. In 1991 Ratan Tata took over the Tata Empire from his uncle and moved the Tata group out of the sectors where they were not very competitive – like Cement and Textiles. Today, Tata’s largest manufacturing businesses are Steel and Motors after the consolidation carried out by Ratan Tata. As on end of financial year 2008, the Tata Group has an annual turnover in excess of $30 Billion out of which more than $9 Billion is contributed by Tata Motors. TELCO Limited is now widely known as Tata Motors that is among the world’s top five manufacturers of medium and heavy trucks and world’s second largest manufacturer of medium and heavy busses. Tata possess a strategic engagement with Mercedes Benz for assembling and selling Mercedes Benz commercial vehicles and passenger cars in India. Another strategic tie up that they possess is with Cummins pertaining to their diesel engines through Tata Holset Limited. In fact, Tata Motors contributed to the Cummins Diesel engines by adding turbo chargers on them vide their joint manufacturing operations with Tata Holset Limited.
The only partnership of Tata that didn’t go well was with Rover Group of Britain that went bankrupt in year 2005. Tata tried entering the European markets through a model named City Rover that faired poorly due to its negative publicity, higher price and poor quality compared to the competition.
Ratan Tata is now 70 years old but still presents the image of a dynamic, innovative and revolutionary entrepreneur. He is known for high aggressive moves for the benefits of Tata Motors customers. In 1997, Tata Motors launched its first indigenously developed car named Indica that currently possesses more than 15% of the car market share in India.
The other car models of Tata Motors that are popular in India and some markets of Asia are Tata Indigo, Tata Sierra, Tata Sumo and...
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