SWOT Analysis of Tata Motors

Tata Motors began in 1945 and has produced more than 4 million
vehicles. Tata Motors Limited is the largest car producer in India. It
manufactures commercial and passenger vehicles, and employees in
excess of 23,000 people. This SWOT Analysis is about Tata Motors.
Strength
1. The internationalisation strategy so far has been to keep local
managers in new acquisitions, and to only transplant a couple of
senior managers from India into the new market. The benefit is that
tata has been able to exchange expertise. For example, after the
Daewoo acquisition, the Indian company leaned work discipline and
how to get the final product “right first time”.
2. The company has a strategy in place for the next stage of its
expansion. Not only is it focussing upon new products and
acquisitions, but it also has a programme for intensive management
development in place in order to establish its leaders for tomorrow.
3. The company has had a successful alliance with Italian mass
producer Fiat since 2006. This has enhanced the product portfolio
for Tata and Fiat in terms of production and knowledge exchange.
For example, the Fiat Paleo style was launched by Tata in 2007 And
the companies have an agreement to build a pickup targeted at
Central and South America.
Weakness
1. The company’s passenger car products are based upon 3 rd and 4th
generation platforms, which put Tata Motors Ltd at a disadvantage
with competing car manufacturers.
2. Despite buying the Jaguar and Land Rover brands (see opportunities
below); tata has not got a foothold in the luxury car segment in its
domestic Indian market. Is the brand associated with commercial
vehicles and low- cost passengers cars to the extent that it has
isolated itself from lucrative segments in a more aspiring India?
3. One weakness which is often not recognised is that in English, the
word ‘tat’ means rubbish. Would the brand sensitive British
 consumer ever buy into such a brand Maybe not but they would buy
into Fiat Jaguar and Land Rover (C opportunities and strengths).
Opportunities
1. In the summer of 2008 Tata Motors announced that it had
successfully purchased the Land Rover and Jaguar brands from Ford
Motors for UK £ 2.3 million. Two of the world’s luxury car brands
have been added to its portfolio of brands, and will undoubtedly of
the company the chance to market vehicles in the luxury segments
2. Tata Motors limited acquired Daewoo Motor’s commercial vehicle
business in 2004 for around USD $ 16 million.
3. Nano is the cheapest car in the world - retailing at little more than a
motor bike. Whilst the world is getting ready for greener alternatives
to gas guzzlers, is the Nano the answer in terms of concept or brand?
Incidentally the New Land Rover and Jaguar models will cost up to
85 times more than a standard nano!
4. The new global track platform is about to be launched from its
Korean (previously Daewoo) plant. Again at a time when the world
is looking for environmentally friendly transport alternatives is now
the right time to move into this segment. The answer to this question
(and the one above) is that new and emerging industrial nations such
as India, South Korea and China will have a thirst for low-cost
passenger and commercial vehicles. These are the opportunities.
However, the company has put in place a very proactive social
responsibility (CSR) committee to address the potential strategies
that will make this operation more sustainable.
5. The range of Super Milo fuel efficient buses are powered by Super
-efficient ecofriendly engines. The bus has optional organic clutch
with boosters assist and better air intakes that will reduce fuel
consumption by up to 10%.
Threat
1. Other competing car manufacturers have been in the passenger car
business for 40, 50 or more years. Therefore, Tata Motors limited
has to catch up in terms of quality and lean production
2. Sustainability and environmentalism could mean extra cost for this
low-end cost producers. This could impact its underpinning
competitive advantage. Obviously, as Tata globalises and buys into
other brands, this problem could be alleviated
3. Since the company has focused upon the commercial and small
vehicles segments it has left itself open to competitions from
overseas companies for the emerging Indian luxury segments For
example, ICICI Bank and Daimler Chrysler have invested in a new
Pune based plant, which will build 5000 new Mercedes Benz per
annum. Other players developing luxury cars targeted at the Indian
market include Ford Honda and Toyota. In fact, the entire Indian
market has become a target for other global competitors, including
Maruti General Motors Ford and others.
4. Rising prices in the global economy could pose a threat to Tata
Motors limited on a couple of fronts. The price of steel and
aluminium is increasing, putting pressure on the cost of production
Many of Tata’s product run on diesel fuel, which is becoming
expensive globally and within its traditional home market.
Questions
1. Do you agree with the SWOT analysis of Tata Motors? Explain
2. Enumerate the weakness of Tata Motors, as explained in case
above. What are the suggestive measures to improve
3. What are the opportunities Tata motors can avail in future.
Explain.
Answer
1. Do you agree with the SWOT analysis of Tata Motors? Explain
Yes, the SWOT analysis of Tata Motors provides a comprehensive
overview of the company's internal strengths and weaknesses, as well
as external opportunities and threats. The strengths, such as the
internationalization strategy, strategic alliances, and management
development programs, are well-supported by examples and illustrate
Tata Motors' ability to leverage its resources effectively. The successful
acquisition of Jaguar and Land Rover brands adds a significant
opportunity for the company.
The weaknesses, particularly in the passenger car segment with reliance
on older platforms and the potential negative connotation of the brand
name, are also well-identified. The threats, including competition from
established car manufacturers, sustainability challenges, and increasing
global prices, are valid concerns that need attention.
Overall, the SWOT analysis offers a balanced evaluation of Tata
Motors' current strategic position, allowing for a better understanding
of its competitive landscape and potential areas for improvement.
2. Enumerate the weaknesses of Tata Motors, as explained in the
case above. What are the suggestive measures to improve?
a. Reliance on Older Platforms for Passenger Cars:
Suggested Measures: Invest in research and development to upgrade
passenger car platforms, introducing newer models with advanced
features to compete with contemporary designs from other
manufacturers.
b. Lack of Presence in the Luxury Car Segment in India:
Suggested Measures: Develop a focused strategy to penetrate the
luxury car segment in the domestic market. Introduce high-end models
under the Tata brand or leverage the Jaguar and Land Rover brands for
a stronger foothold in this lucrative segment.
c. Potential Negative Connotation of the Brand Name:
Suggested Measures: Consider rebranding efforts to mitigate the
negative association, especially in English-speaking markets.
Emphasize other strong brand names in the portfolio, such as Jaguar
and Land Rover, to diversify the brand perception.
3. What are the opportunities Tata Motors can avail in the future?
Explain.
a. Exploiting Jaguar and Land Rover Acquisition:
Tata Motors can capitalize on the acquisition of Jaguar and Land Rover
brands to establish a strong presence in the luxury car segment globally
and in the Indian market. Focused marketing and innovation in luxury
vehicle offerings can enhance market share.
b. Leveraging Nano and Low-Cost Passenger Vehicles:
With the Nano being the world's cheapest car, Tata Motors can further
explore the market for affordable and environmentally friendly
vehicles. Invest in research and development for green alternatives and
innovative features to stay competitive in this segment.
c. Global Track Platform and Sustainable Transport:
The launch of the new global track platform provides an opportunity to
tap into the demand for environmentally friendly transport alternatives.
As new and emerging industrial nations show a thirst for low-cost
vehicles, Tata Motors can position itself as a leader in providing
sustainable transportation solutions.
d. Super Milo Fuel Efficient Buses:
The Super Milo fuel-efficient buses with eco-friendly engines present
an opportunity to cater to the growing demand for sustainable public
transportation. Tata Motors can explore partnerships with governments
and municipalities to introduce these buses in various regions.
In summary, Tata Motors has several promising opportunities that, if
effectively leveraged, can contribute to its sustained growth and
competitive advantage in the global automotive market.