Swot Analysis of Tata Motors

Topics: Tata Motors, Tata Nano, Automobile Pages: 12 (4075 words) Published: February 25, 2013
Assignment 1 Situation and SWOT Analysis Group 5 Section 201 (Hoang Vi Khanh Nguyen, Iris Zhou, Akash Multani, Charles Walker, May Chau)

Introduction The company that we have chosen to focus on for our analysis is Tata Motors, India’s largest automobile company. This report will take a look at the marketing environment by which Tata is surrounded; will attempt to identify key strengths and opportunities that Tata Motors may wish to capitalize on; and will find and warn against glaring weaknesses and hidden threats that Tata Motors needs to guard against. Owing to the fact that Tata Motors is an enormous international company and this is but a brief report, we have decided to focus our attention on the Indian market: this makes up the vast majority of Tata Motors’ sales and is fundamental to understanding the macro-environment that Tata Motors is situated in. Consumer Profile Tata tends to position its brand for a fairly specific kind of consumer. The demographic they target are usually relatively new to the workforce, aged from their middle 20s to early 30s and with a low to middling income (Rahul). These consumers are more impulsive to buy on a whim that the older generation. Further, they want their vehicle to reflect their young image whilst providing reliable and good value transport (Rapp). Their consumers research their product using the web, social media sites, family recommendations, and very often simple car dealerships. Buyers are more often male than female, which despite being hardly surprising given India’s gender power imbalance, is an important factor to take into consideration. Since their purchasing power is relatively low, they tend to care a lot about resale value and maintenance costs. The Indian automobile market is the sixth largest in the world, with over 3.9 million cars being sold in 2011 alone (Rapp). Of this, perhaps just over half would be potential consumers given that India is not a first world country. Direct competitors would be automobile companies such as Toyota, Nissan, Ford, Chevrolet, Hyundai, Skoda, among many others. These are all companies selling substitute products. Indirect competitors include major moped manufacturers such as Honda as well as slightly more upmarket firms such as BMW or Audi. Of course the usual marketplace competitors exist: any form of transport you can think of could potentially replace Tata’s vehicles. However the only form I consider relevant is that of cheap public transport, which Tata’s consumers could very well choose to substitute given their income restraints.

Company and Corporate Partners Tata Motors Limited is India’s largest automobile company, with revenues of Rs. 170,678 crores (32 billion USD) in FY 2011-2012 (Tata Motors Annual Report, 2012). It was established in 1945 by the parent company Tata Sons, India’s largest conglomerate. Tata Motors is the largest commercial vehicle manufacturer, and the third largest passenger vehicle manufacturer in India (Tata Motors Annual Report, 2012). The company has manufacturing plants in throughout India, as well as various R&D facilities in Europe, Africa, and Asia. These separate spheres are relevant, but are beyond the scope of this report. Tata has a diverse product portfolio including more than 30 models of vehicle, ranging from basic passenger cars to commercial, defence and homeland vehicles (Tata Motors Annual Report, 2012). Tata Motors’ success is founded on an organisational culture of continuous innovation, a dedicated work-force with a strong customer focus, and a culture of accountability. Jaguar Land Rover and Daewoo, the two businesses acquired by Tata Motors, have been extremely profitable (Tata Motors Annual Report, 2012), demonstrating the company’s effective strategic leadership. In taking these, then failing brands, Tata showed real long term marketing vision. Instead of having to create and forge in their consumer’s minds a Tata luxury brand, why not simply smoothly acquire one as...

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