Innovation at TATA Motors and Toyota

Running head: INNOVATION AT TATA AND TOYOTA
Innovation at TATA Motors and Toyota
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INNOVATION AT TATA AND TOYOTA
Introduction:
TATA Motors
The company was started in the year 1945, which was named earlier as Tata Locomotive
and Engineering Company that was renamed in the year 2003 to Tata Motors. The headquarters
of the company is located in India from where the business is operated on a global scale. The
company started manufacturing vehicles on a commercial manner by collaborating with
Daimler-Benz AG, which is now known as Daimler AG. By the mid of 2008, the company
acquired the Jaguar Land Rover business from Ford Motor Company. The acquiring of the
company resulted in designing and manufacturing sports and luxury sedans for Land Rover,
which helped the company in gaining international recognition in a better manner. The business
of the company is situated on a global scale and after the acquisition took place, the company
was also able to gain the three main facilities of manufacturing located in Castle Bromwich,
Halewood and Solihull. It also gained the engineering and design facilities that are located in
Gaydon and Whitley in the United Kingdom. This helped the company in innovating the
products in a better manner so that it can gain a competitive advantage in the market and the
level of profit can increase ("Tata Motors Limited - Largest Indian Automobile Manufacturer",
2018).
The company is known to take care of the employees so that they can act in the best
interest for the company, which will help the company gain a competitive advantage in the
market.
Toyota
The company was started in the year 1918 by Sakichi Toyoda and was specialist in
manufacturing the cars at a cheaper rate for the customers. The company was known to introduce

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the ‘just in time’ inventory, which meant that the necessary parts of the cars will be produced
within the time that was actually needed for the production of the car. By the end of 1980, the
company as able to sell 300 million cars in Japan itself. This led to the fact that the company had
to expand in the market. The company makes it a point to value the employees in a better manner
so that they can be motivated and can remain with the work force. This will help in increasing
the level of capability of the employees within the organization. In the month of July 1982, the
company was renamed as Toyota Motor Corporation. In the present times, the company is
innovating its technology, as the customers are aware of the pollution that can be created in the
market due to the effects of carbon footprint. This has resulted in manufacturing environment
friendly cars so that it can help in increasing the competitive advantage of the company in the
market ("Toyota Motor Corporation Global Website", 2018).
The company is known to manage the employees in an efficient manner. The company
identifies the level of skills of the employees based on which they are assigned the roles and
responsibilities within the organization. They are provided with adequate training facilities so
that the employees can improve their skills and knowledge. This helps in increasing the level of
production, as innovation takes place in the organization on a constant manner.
PESTEL Analysis:
Political
The second largest country with respect to democracy is the United States of America
where the president is elected for a period of four years. The elections that take place in the
country are done in a transparent manner so that the head can be chosen in a fair manner. The
political scenario in the country is very stable and recently it has seen some challenges but it
does not affect the political climate of the country. The country also plays an influential role in

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the dynamics of politics for some of the countries for which the country faces criticism. The
country needs to reduce its intervention policies so that it can stay away from the criticisms that
it faces in the other countries (Grant, 2016).
The stable political environment within the country helps in promoting the advanced
technologies and infrastructure so that the companies can thrive in the market. The country is
open towards the Foreign Direct Investment (FDI), which has helped in the rise of the many
industries. The government supports the technological innovations that are taking place within
the automotive industry along with the opportunity of international agreements on trade. The
support that is received from the government allows the automotive industry to develop its
infrastructure in a proper manner with the help of the technological advancements (Pavlínek,
2018).
Economic
The country is one of the largest economies in the world with a high Gross Domestic
Product (GDP). Most of the headquarters of major companies are located in the country that
helps in operating in an efficient manner. The recession that took place in 2009 had affected the
economy of the country in a better manner, which led to the increase in the rate of
unemployment and the collapse of the companies. The labour force in the country is not cheap
and has to be procured at a higher rate. This has led the company to invest in labour force in
countries like China and India where the rate is less. This has led to the outsourcing of many
companies that are present in the country (Wheeten et al., 2017).
The automotive industry of the company has seen many opportunities due to the growth
of the economy within the country. The developing market is also growing at a faster rate, which
has been providing great opportunities to the automotive industry as well. The growth of the

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economy has been a boost to the industry due to the rise in the value of dollar, which has helped
the industry. The products have been exported to the other countries at a higher rate of returns
(Pavlínek, 2016).
Social
The country is the third largest populous country and has a population of about 300
million. The country is also very diverse in its culture, which consists of Asian, African, Native
American and Latin people as well. The country has one of the best education and medical
facilities, which has resulted in increasing the life expectancy of the population. The population
is most conscious about its health, as they know the ill effects of obesity and other types of
illnesses. The mind-set of the population is largely liberal nevertheless the country has faced
racial abuses in the past (Alkhafaji & Nelson, 2013).
This has led to an advantageous position for the automotive industry. There has been an
increase in the demand for the electric and the hybrid automobiles due to the knowledge among
the customers regarding the effect of pollution. The automotive industry is suffering due to the
gap in the wealth among the society. There has been an increase in the wealth accumulation
among the rich section of the people whereas the poor people cannot accumulate the wealth
(Kushwaha & Sharma, 2016).
Technological
The country leads with the innovation with respect to technology and science. The people
of the country have a fascination to adopt the latest technologies so that they can minimize the
effort that they need to put in within the companies. The technological advancements in the
country has led to address many weaknesses of the country so that they can be developed in a
proper manner. The country is one of the global leaders in the world with respect to technology.

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They try to apply the technologies in all the fields so that the work can be done in an easy
manner. It has helped the country in lowering its cost of production with its innovation process in
technology (MacKay & Chia, 2013).
The automotive industry has also been developing due to the increase in the technological
innovations. It has helped the companies in using the support systems that are attached with
mobile support so that the marketing of the vehicles can be done in a better manner. However,
the industry is facing threat of the alternative fuel options that are being presented within the
vehicles, as there are less number of fuel stations. The automotive industry needs to focus on
improving the services so that they can be competitive in the market (Du, Hu& Song, 2016).
Environmental
The country has a diverse climate and geography, which helps in attracting a large
number of tourists every year. The country also faces one of the toughest climatic conditions,
which has led to many disasters with respect to weather conditions. The automotive industry will
be affected with the change of the climate that the country faces. This is due to the fact that the
availability of the raw materials will be difficult during the crisis period. The industry can
increase its opportunity of producing the vehicles that will have a lower rate of carbon footprints
so that it can help in reducing the pollution in the environment. The industry can also capitalize
on the fact that the oil reserves are declining on a global scale, which will give rise to alternate
solutions for the vehicles. The innovative technologies that will be used by the automotive
industry will result in manufacturing the vehicles that will not depend on the oil reserves. This
will allow the industry to gain a competitive advantage in the market based on the new
technologies and innovations that are being implemented by them (Martin-Pena, Diaz-Garrido &
Sanchez-Lopez, 2014).