The turnover in automotive industry is growing significantly. Companies need to sell their product across borders. To realize this, companies must evaluate the market forces in target markets in order to increase sales. One strategic tool used in evaluating market forces is porters five forces model. This tool highlights the key factors that determine the industry competition and the viability of such a market. The porters five forces model has been evolving with time. The principle ‘’the state of competition in an industry depends on five basic forces’’ (Porter, 2008 P.3) is still relevant. This analysis model covers a wide range of factors affecting the industry. Companies with awareness about their environment are able to make strategic decisions concerning their business. This paper discuses the application of Michael porter’s five forces model by Tata Motors Company on their new product, Tata Nano. Tata motors are the largest automobile company in India with revenues in excess of USD 16 billion in 2011. Tata motors have subsidiary companies and associate companies involved in various industries including mining, oil, manufacturing, and telecommunications. Tata motors have operations in Spain, Korea, Thailand, UK, and South Korea. The paper begins by identifying porters five forces. Second, a brief history of the Tata Nano is discussed. Third, the paper discuses how Tata Motors have applied the porters five forces model in its quest to make Tata Nano brand a success.
Development of a business competitive strategy is essential for the success of a business firm. There is need to study the forces that can be harnessed by an organization to provide competitive advantage. In his book, Michael Porter (2008) gave the idea of deployment of five- force model for industry analysis. These five forces are (1) Bargaining power of buyers, (2) Bargaining power of