Pest Analysis on Tata

Topics: Tata Motors, Automotive industry, Ford Motor Company Pages: 5 (1410 words) Published: October 5, 2010
INTRODUCTION : - Tata Group was Established under the parent company in year 1945. Tata Motors Limited has become India’s largest automobile company. It was the first Indian automobile company to list on the New York Stock Exchange. Tata Motors began manufacturing commercial vehicles in 1954 with a 15-year collaboration agreement with Daimler Benz of Germany. This partnership has led Tata Motors to not only become India’s largest automobile company but also India’s largest commercial vehicle manufacturer; the world’s top five manufactures of medium and heavy trucks and the world’s second largest medium and heavy bus manufacturer. Having just entered the passenger vehicles market segment in 1991, Tata Motors now ranks second in India’s passenger vehicle market.

Tata has enjoyed the prestige of having developed Tata Ace, India’s first indigenous light commercial vehicle; Tata Safari, India’s first sports utility vehicle; Tata Indica, India’s first indigenously manufactured passenger car; and the Nano, the world’s least expensive car. They have long been known for their commercial vehicles and in the past ten years entered into the passenger car market. Currently, Tata Motors has a line of five passenger vehicles and a large line of commercial vehicles producing pickups, trucks, tractor trailers, tippers, and buses. Both product lines of the Tata Motors group have seen success, but much of this has been built upon the more deeply established commercial vehicle product line.

A PEST analysis is one of them that is merely a framework that categorizes environmental influences as political, economic, social and technological forces. Sometimes two additional factors, environmental and legal, will be added to make a PESTEL analysis, but these themes can easily be subsumed in the others. The analysis examines the impact of each of these factors on the business. The results can then be used to take advantage of opportunities and to make contingency plans for threats when preparing business and strategic plans. PEST also ensures that company’s performance is aligned positively with the powerful forces of change that are affecting business environment. PEST is useful when a company decides to enter its business operations into new markets and new countries. The use of PEST, in this case, helps to break free of unconscious assumptions, and help to effectively adapt to the realities of the new environment..

Political: -It deals with government stability, spending, taxation, etc. * Strong tax incentive for inbound investors.
The investors who invested in TATA Motors had a strong incentive.From 2006 to 2007 there was an increase from 336.6 million to 405.5 million in 2007. It has been increasing in terms of revenues greatly annually from 4422.0 million in 2005 to 7354.0 in 2007. Countries such as Europe, Africa, Asia, Middle East and Australia have invested in TATA Motors. 18% of its revenues are from international business. The company’s objective is to expand its international business.

* Strong political motivation for globalization.
Close attention to the political climate but also laws and regulations in all the countries it operates, while also paying attention to regional governing bodies. Laws governing commerce, trade, growth and investment are dependent on the local government as well as how successful to local markets.

* Strong Reputation and Trust.
Reputation – Largest automobile company with revenues of Rs 32,426 cores in 2006 – 2007. It is the leader by far in commercial vehicles in each segment and the second largest in the passenger vehicles it has good reputation and trust of investors as well as customers. * Adaptive Legislative framework:

Tata Company follows legislation framework lead by government of india.So it has a better adaptive legislative frame work. * Negative effect on IT industry after 2009 as the government’s initiative of tax holiday under STPI...
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