Strategic Analysis of Tata Motors: Business Strategy Report

This report provides a comprehensive analysis of Tata Motors' business strategy. It begins with an introduction to the company, detailing its market strategies and competitive advantages, including its tangible and intangible resources. The report utilizes Porter's Five Forces model to analyze the competitive market and examines Tata Motors' CSR activities in alignment with the UN Sustainable Development Goals. It covers the company's performance over the past three years, strategic initiatives, and market position. The report also includes recommendations for Tata Motors. The report includes an executive summary, table of contents, introduction, strategies, resources, competitive analysis, CSR, recommendations and conclusion with references.

Running head: BUSINESS STRATEGY OF TATA MOTORS
BUSINESS STRATEGY OF TATA MOTORS
Name of the Student
Name of the University
Authors Note

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Executive Summary
The regulation of strategic management goes beyond developing strategic plans for the
organization, which includes prior planning processes and strategic planning. Tata group is a
universal corporate unit known for its standard quality and commitment. This report throws the
light on the strategic management action plan of Tata Motors, part of Tata Groups. It is the
leading automotive corporation in India and is known as a market leader in both passenger
vehicles as well as commercial vehicles segment. This report initially shared the introduction of
the company with a detailed description of its market strategies, its tangible and intangible
resources led by the firm for its competitive advantages. This paper also focused on the Porters
Five forces model and its interpretation into the competitive market, highlighting the UN
sustainable development goals of agenda and CSR activities carried by Tata Motors.
Table of Contents

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Introduction......................................................................................................................................3
Tata Motors Limited........................................................................................................................3
Strategies of Tata motors over the past three years.........................................................................5
Tata Motors tangible, intangible Resources....................................................................................9
Competitive analysis of Tata motors using Michael Porter’s Five Force Analysis......................11
CSR of Tata Motors in line with United Nation’s Sustainable Development Goals of Agenda
2030...............................................................................................................................................13
Recommendation for Tata motors.................................................................................................16
Conclusion.....................................................................................................................................20
Reference.......................................................................................................................................21

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Introduction
Tata motors limited is the dominating automobile manufacturing industry formerly
TELCO, an Indian global company headquartered in Mumbai. It has entered into the joint
ventures and strategic acquisition in its mid-stage and launched new products at a swift pace in
various markets. It aims to provide Customers satisfaction at their best value; Tata Motors has an
outstanding portfolio for passengers and commercial customer’s vehicles and leaders in Indian
commercial space for several years. It employees 695,699 workers around the world and
operates for around one hundred and fifty years and is now active in more than one hundred
countries, covering six continents, selling its goods to more than one hundred and fifty nations. It
mainly focuses on connecting the aspirations of tech-enabled products helps in establishing the
forefront of the market. It is the world's leading car, bus, utility vehicles, truck, and vehicle
manufacturers. The portfolio of Tata motors automobile products ranging from all varieties of
passenger cars, buses, and coaches, it also includes gross weight trucks and pickup trucks of
1ton-49 tons.
Tata Motors Limited
Tata Motors Limited incorporated in 1945, an Indian multinational automotive
manufacturer based in Mumbai, Maharashtra, India. It is the world's leading car, bus, utility
vehicles, truck, and vehicle manufacturers. As the most significant Indian automobile firm and
part of the $ 100 billion Tata group, Tata Motors operates in the UK, Thailand, South Korea,
South Africa, and Indonesia with a robust global network with 76 subsidiaries and affiliates,
including Tata Daewoo South Korea and Jaguar Land Rover in the United Kingdom. In India,
Tata Motors is the market ruler in commercial vehicles with 9 million vehicles on Indian roads

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and is one of the top passenger car manufacturers (Tatamotors 2020). The company’s
innovations are much more focused on developing pioneering technologies that are sustainable
and well situated for evolving aspirations for the market as well as for customers. Tata Motors
venture to launch new products that fire the artistry of GenNext customer’s
vehicle, fueled by state of the creative design and Research & Development
centres located in the UK, India, Korea, and Italy.
Currently, Tata Motors established five-passenger vehicles and a huge production of
commercial vehicles includes trucks, pick-ups, tippers, tractor-trailers, buses and vans. Both
product lines of the Tata Motors Group have been productive and are based on the more deeply
developed commercial vehicle product line. Tata Motors' commercial line has been operating for
many years in a variety of market segments such as the Middle East, Africa, Europe, Australia,
South East Asia and South Asia. Tata Motors grew its business and market share worldwide
through a sequence of acquisitions (Athreye. and Kapur 2015).
Tata Motors expands through acquisition rather than spending a decade in building a
business. It builds its reputation through commercial vehicles accounted for 80-85 percent of the
company's profits. The same business strategy continued to move into the passenger car market.
In 2008, Tata Motors made international headlines in the automotive industry by acquiring
Jaguar and Land Rover from Ford (Su et al. 2016.). Tata motors have much more experience in
luxury automobile, entitling the brand new segment of the company to be managed by previous
management. The success of the company shortly can be derived through its acquisition —
success, diversity and competitiveness of Tata motors derived through the significant outbreak in
the automotive industry.

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It has acquired tremendous market share by endorsing passenger vehicles, commercial
vehicles globally. For instance, the memorandum of understanding was signed in 2017 with
Volkswagen to develop vehicles for the Indian market. In 2018, to unlock their potential Tata
sold its aerospace and defence business to other Tata group entities. Later in 2019, Tata motors
come into a partnership with Nirma University in Ahmadabad to provide a B.Tech degree
program for its employees of the Sanand plant. Tata motor is India's fifth-largest vehicle maker;
it is growing in commercial vehicles; still, the domestic passenger vehicle segment is declining.
In 2016 Tata motor's passenger car grew its sales up to 25% about 55,000 units. In 2017 the sales
were 57,300 units, but it dropped down to 52,796 units in 2018; thus, falling 7.8 percent of the
domestic sales market (Agnihotri and Bhattacharya 2018). The critical challenge for Tata motors
to be relevant in the local market as it fails to achieve any market share over the next 2-3 years
due to the low economic activity and uncertainty of consumer's buying behaviour. The market
seems to be critical for acquiring its position back in the local market by 2021. There is a chance
of steady growth of Tata motors and achieving 5 to 10 percent of the market share by 2021-2022.
Strategies of Tata motors over the past three years
Business strategy is concerned about how to compete, and corporate strategy address to
compete in which business. Whereas, the growth strategy is an action plan designed to capture a
large number of market share. It mainly focuses on the target market, and industry occupied.
These strategies aim to achieve long-term business success.
Previously the domestic passenger car market share was just three percent, and now it
has increased about seven to eight percent. Tata Motors has recently undergone an organisational
transition. To gain a competitive advantage, lay off redundant workers and transferred jobs
around the company for restructuring purposes (Rajashekar and Mallika 2018). Tata Motors are

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more involved in decision-making and to concentrate more on their customers. It aims to focus
on transparency and have good realistic leadership. Tata motors also recruited experts from
Roland Berger and Accenture to help them improve cutthroat competition.
Tata motors embarked on an aggressive strategy that aims at the comeback of its
passenger vehicle and also re-energizing the status of the market leader in the commercial
vehicle sector. The organisation has three advocacy plans: Filling of products gap, Controlling
cost, Comprehensive supply chain strategy. Considering the massive loss of 28,000 crores in
2016-2017 operates on strategic supplier based design to build a proper supply chain
(Rothaermel 2017). Tata motors aim at establishing a productive bottom line and bringing
strength in the whole organisation by kicking-off structural revamp the program, which is
designed specially to bring simplicity, speed and agility by reducing the managerial level from
fourteen to five and Ensuring empowerment within the business segment and facing frontline
roles in improving customer-centricity.
The passenger vehicles of Tata motors provide additional sales, also incur a massive loss
through technology-driven products like Tigor compact sedan, Tiago hatchback and Hexa
crossover. In the financial year 2018, the company also signed an Indian armed force contract
and supplied 3192 Tata Safari Storme 4x4s. With an advanced modular platform, aims to cut
down the number of distributors from two-hundred to one-hundred. To leverage the full benefit
of a modular platform and reducing structural cost (Sugre 2018). It targets to get the third
position in the Indian passenger vehicle market. Tata pursues to be the market leader even
though its market share of commercial vehicles and numbers has been drastically dropped to
42.79 percent and later, it drops down to 40.99 percent. The whole focus shifted to a commercial
vehicle from passenger vehicles. Tata Motors aims to renovate its commercial vehicle, reduced

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production cost, delivered fast volumes and launched products on time. This strategic plan
helped them to drive sales. The company sight of modifying the commercial vehicle from the
modular platform by reducing the complexity and increasing the flexibility. The overachieving
goal is produced to manufacture more product at lower cost the comprehensive strategy of the
commercial vehicle involves 15,000 crore investment across the segment. Developing a full
range defence sector product commercial vehicle exports contributes 20 percent topline.
Tata Motors launched a new range of MHCVs and LCVs, which helped in meeting the
customers growing demand for commercial vehicles and improved the total cost of ownership. In
May 2018, Launching of M&HCVs and LCVs enhanced Tata registers a strong growth of 58%
and sale of 54,295 units in contrast 34,461 units in the previous year. It boosts the sale and
increases the performance of both commercials as well as passenger vehicles in the domestic
market. Tata motors aggressively plan to introduce the advanced technological product that helps
in connectivity and passenger solution in the last-mile (MANICKKAVASAGAM and
RADHIKA 2019).
The M&HCV truck sector continues to thrive with 12,424 units, 90% compared to the
previous year. This growth is possible due to the government's focus on infrastructural
development, irrigation, road construction, and housing projects throughout the country. With
4,106 units, I&LCV truck segment recorded a significant increase of 73% compared to May
2017. This growth was due to the introduction of new products, electronic commerce, and
increased rural consumption. The recently launched Tata Ultra ILCV truck series has received
considerable acceptance and contributed to volume growth. M & HCV domestic sales decreased
9% to 15,337 units in March 2019, compared with 16,876 units sold in March 2018. Sales of
LCV trucks in the local market recorded a steady growth of 23% to 56,996 units in the fiscal

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year2019 (April 2018 - March 2019) compared with 46,311 in the previous year. In March 2019,
I & LCV truck segment grew by 17% to 6,730 units compared to 5,737 units during the last year.
This segment is influenced by lower diesel speed and increased axle load, which leads to
improvement in this segment (Kamani 2017).
The Supreme Court's decision to transfer BSIII to BSIV, sales were affected in the first
quarter of last year due to substantial upfront purchases and limited supply of BSIV vehicles. In
May 2018, growth based on various macroeconomic factors such as increased investment in
industrial activity, expanding infrastructure and strong demand in sectors driven by private
utilisation. Introduction of SCR BS-IV and EGR technologies have become a successful trial for
Tata Ultra electric 9m bus covering 160 kilometres at a solo charge (Badal 2017). In the past
year, Tata also took the lead in alternative fueled mobility by developing and showcasing India’s
first LNG and fuel cell bus Starbus Hybrid. Tata motors not only focus on improving its sales
but also enhance achieving profitable growth. In the next few years, the company aims at
launching more than ten to fifteen new models based on two new architectures, Omega and
Alpha, which will begin early next year (Gopal et al. 2017).
The Company’s new launch helps Tata motors to fill the gaps in its product portfolio and
compete aggressively in the market. Broadly, Tata Motors is worthwhile, but not limited, and can
be emulated by the immense resources of its rivals. Operations are currently undergoing a
change, which puts Tata Motors at a competitive consistency, but not at a sustained competitive
advantage. Tata Motors' unmatched ability to manufacture low-cost vehicles gives the company
enormous scope for earning high-profit margins and enjoys a more significant market share. The
economic slowdown has intensified competition to produce low-priced but best-quality vehicles.

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Understanding the rural economy of India and growing farmers ' incomes, Tata Motors
witnessed increased opportunities for its commercial sector.
Nevertheless, Tata Motors has a range of upcoming Jaguar and Landrover cars for luxury
brand buyers to capture the premium customer segment leads to greater success for the company
shortly (Bihari and Rath2015). Tata Motors have remarkable manufacturing advantages in India
compared to other MNC competitors. It benefits from low labour costs, intensely professional
and interwoven backwards and forward linkages, enhancing IT technologies, substantial market
penetration, improving infrastructure, a large auxiliary sector, and growing domestic demand.
Tata Motors tangible, intangible Resources
Like all businesses, Tata Motors uses the tools and skills to develop and grow more to
perpetuate its quality. Tools and potentials are classified as tangible and intangible resources
used by a business to select and execute its action plan. In general, Tata Motors has positioned
itself as a well-known automobile producing company, but throughout time, Tata Motors has
encountered several issues that continue to address every year. In recent, the market share of
Tata Motors dropped by 15.7 percent, generating adverse effects in the market. Due to the
problem created by Jaguar Land Rover which leads to the unemployment of 9,000 employees for
two weeks because of shutting down the Solihull plant (Donnelly et al. 2017). After losing one-
sixth of its market capitalisation, Jaguar Land Rover subsidiary announced the two-week
shutdown in one of its manufacturing plants due to low demand Tata Motors' decreased its
chances of gaining back sustainable competitive advantage. For example, Tata Motors lost its
market share for 4-5 years, not only of its struggle to ensure meeting foreign trade policies
instead ensure concerns for its consumers. Commercial vehicles drop 44.4% of its market share
in the local market, considerable failure in a business, which can be focused more to boost

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market share and build a steadily expanding market. When Tata Motors merged with Jaguar
Land Rover enhances increase in sales, Tata Motors is at equivalent competitive level
demonstrating the lack of a resource-based operation which affected the company adversely. The
reason behind the vast decrease of market share is because Tata Motors is entirely dependent on
Jaguar Land Rover, and it is struggling with weak demand, less money flow, and a loss of market
share (Sharma and Kaur 2019). Tata Motors could improve more as a car manufacturing
company to ensure its products are remarkable, unique and exceptional that their organisation
continues to operate successfully.
Tata motors uses one of the finest core competencies in India, as it is the largest
domestic car manufacturer in India. And also, they produce steel in different locations in India so
that their strategy is teamwork and honesty among employees. Electric vehicles car
manufacturers have incorporated into car choices or other options, such as General Motors and
Tesla, in 2017 (Túry 2018). Tata Motors should tend to have a competitive balance rather than a
sustainable competitive advantage. Tata motors fall behind and indicate lack of risk as it fails to
implement and demonstrate the relevant attributes and improved standards in comparison to its
rival manufacturers, adherence and persistently displaying average results. To handle this
situation, Tata Motors expands an active market by building a great marketing strategy. Its
demand can be increased by demonstrating the production of the Electric Vehicle and delivering
the relevant information to customers, encourages them to link with Tata Motors. The company
plans to develop a 320-volt battery with a range of 300 plus kilometres to deliver efficiency,
faster acceleration, including fast charging (Gujarathi 2015).
Tata Motors initially Grapple to be competitive on its electric vehicle market, due to its
persistent drive including electric vehicles in the similar product range, they are strengthening

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themselves as a group and taking care of customer's needs. Tata Motors needs to take a
continuous step to become a better company and increase its market share by entering in an
active market.
Competitive analysis of Tata motors using Michael Porter’s Five Force
Analysis.
Michael Porter’s five force Analysis presents Tata Motors with vital information
regarding the competitive environment, the competitiveness of the market and the possible
profitability of the business.
The first force of Porter’s model is the threat of a new entrance; it depicts the level of
threat of entering a potential firm into an automobile company. Some obstacles to new entry
include economies of scale, pre-existing customer expectations, high upfront capital costs, or
loyalty, government regulation, patents, trademarks and advanced technologies. Since Tata
Motors operates in such industry which requires high costs at an early stage, a good
understanding of government regulations incurs high costs of advanced technologies and many
more, it is said that entry barriers are high for new companies. As a result, the threat of new entry
is weak but still exists for the automobile industry, like Toyota, Maruti Suzuki; Ashok Leyland
made a strong entrance into the market (Gandhi 2017). Tata Motor is successfully operating for
decades with an excellent grasp of government policies and regulations for the industry. It is
famous for innovative technology, to excellent engineering and many research facilities. Tata
Motors, along with Jaguar Land Rover, ranked 13th in global Research & Development
investment last financial year (2017-2018). Enhancing standard quality, Tata Motors not only
attracts new customers but also keeps existing or old customers loyal. Another important barrier