International Business: Tata Motors Market Analysis and Expansion

This report analyzes the international market expansion potential for Tata Motors, an Indian multinational automobile manufacturer. The analysis focuses on identifying potential target markets such as the US, Canada, Indonesia, Turkey, and Malaysia. The report employs the SMART model, using both quantitative and qualitative data to evaluate these countries based on factors like target market availability, government support, and competition. It also includes a PEST C analysis to assess the political, economic, social, technological, cultural, and competitive factors influencing Tata Motors' potential success in each market. The report concludes with a comparative analysis using a weighted scoring system based on the SMART model and a detailed PEST C analysis for each country, providing insights into the most promising markets for Tata Motors' international expansion strategy.

RUNNING HEAD: INTERNATIONAL BUSINESS

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Established in 1945, Tata Motors Limited is an Indian multinational automobile manufacturer
that was established in India. It is one of the most essential parts of the 100 billion Tata Group
and is also one of the largest automobile companies in India. Apart from its spread in India, the
company also has its presence worldwide. It has its operations in the UK, South Korea, South
Africa, and Thailand (Palepu, Anand, & Tahilyani, 2011) The company makes use of the
SMART tool in the analysis of the potentials of the target locations. The Report focuses on the
analysis of the potential markets for the company by means of SMART tools. It will further
analyze the advantages and disadvantages of the macro environment in those target areas by
using a PEST C analysis.
Countries that are potential Market for Tata Motors:
1. US
2. CANADA
3. INDONESIA
4. TURKEY
5. MALAYSIA
Possible reasons for the success:
The choice of the target locations has been done based on some of the advantages that the
company can get from these countries if they aim at expanding their business in these places.
The US is a country that has high buying power and so is Canada. Moreover, though these areas
are highly dominated by the automobile giants, there are, however, few companies that cater to
the needs of the middle classes (Mulyana & Djajadiningrat, 2013).. Tata Motors will be able to
provide this opportunity in this market. Moreover, the trade policies and regulations in the US
are quite lenient that make any business a successful one. Canada is a place where the company

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is shifting slowly in the service-based model and is highly focused on consumer data and
customer experience. Tata Motors with its comfortable service and low price will be able to
target a large segment of customers.
Turkey is also a good choice for the company as it has been recently the seat of foreign
investments and thus is having an economic foothold. The company can also profit from the
liberal trade policies by the government.
Indonesia and Malaysia are the two countries in the southeast that has a large market
sector for the low range of cars. Thus, these two areas automatically fall under the suitable
locations for the cars. Moreover, the automotive industry in Indonesia plays a crucial role in the
economic growth of the nation, contributing to 10.16 of the GDP.
Qualitative and Quantitative analysis of five potential countries using SMART Model:
Defining the marketing goals refers indirectly to the defining of the company goals for
any organization. The SMART method uses both quantitative and qualitative data to analyze and
narrow down the available countries for international expansion decisions. In defining the
qualitative as well as the quantitative marketing goals, the economic key figures are generally
not taken into account. In analyzing the qualitative and quantitative data about the five countries,
the Tata Motors Company at first must take into accounts the key success factors of venturing in
the new markets. The main issues that need to be taken into consideration are;
1. Availability of potential target market
2. Availability of considerable help from the government of the host company and
3. The number of competitors.
4. Availability of the target market:

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It has been analyzed that the company will not get enough target market in the US. With
the high buying power in general, consumers generally end to buy a high range of cars.
However, the scarcity of low range cars for middle-class consumers in the area will make enough
scope for the company to have a successful business. In the case of Canada, it will also have a
high demand for the automobile sector. More than luxury cars, trucks, buses, auto parts have
special markets in Canada which will be beneficial for the Tata Company. The company can
easily target the industry by producing and supplying auto parts, tires, etc. Tata Motors will have
the best market in Indonesia and Malaysia in terms of having the target market. These two
regions of the southeast are particularly dominated by the middle range incomers. Moreover,
more than personal cars, cars are required by various travel agencies for tourism purposes. This
will make a good market for companies like Tata Motors who have great reputations in building
a low range of cars. Turkey will also be a profitable market for the Tata Motors Company by
means of the target market. This area is highly known for its foreign investments and thus, the
common people aim for having middle range cars with enhanced features.
2. Availability of considerable help from the government of the host company:
The company is not likely to get help from the government of the US with respect to promoting
their cars since at present the government has been focusing on the promotion of public
transports (Bargain, Dolls, Immervoll, et al. 2011). However, political stability and a variety of
positive trade regulations will be helpful for the company from the side of the US. The Canadian
government is however lenient in terms of the trading policies and the economy flourish in the
country also makes the government to encourage such business. The company will also be
getting trade regulations related to help from Malaysia and Indonesia, however, there is less
chance of having financial backup by the government of these countries. The increase of foreign

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investments in Turkey also makes the government encourage automobile business as the
automobiles produced in this country are largely required for industry use and commercial
usage.
3. The amount of the competitors:
The competitor analysis and looking at their positions is a driving factor for any company to set
up a business there. It is generally a common notion where the competitors are highly equipped
and famous, venturing in those countries will not be profitable for any company. In the US, the
main domination is of the automobile giants like Tesla, BMW, etc. which have totally a separate
customer base and thus, cannot be counted as the rival for the Tata Motors. There are however
other companies that have the middle range car production business are, however, more or less
famous in the area (Tata Motors. (n.d.). Annual Report 2019). Canada also has a number of
companies that produce low range cars and thus, competition in this country will be tough. In the
case of Indonesia and Malaysia, the company will have less competition and more market
opportunity. Tata Motors’ reputation is mainly because of their local responsiveness which will
give a high market opportunity in Indonesia.
According to the SMART model, Indonesia will be the most profitable venture for Tata
Motors to indulge in.
Key success
factors
weight US CANADA TURKEY INDONESIA MALAYSIA
GRADE=
SCORE
GRADE=
SCORE
GRADE=
SCORE
GRADE=
SCORE
GRADE=
SCORE
AVAILABILITY
OF TARGET
30 8= 240 5= 150 7= 210 8= 240 150

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MARKET
HELP FROM THE
GOVERNMENT
50 5= 250 5= 250 6= 300 5= 250 250
AMOUNT OF
COMPETITORS
20 7= 140 7=140 6= 120 8= 160 160
TOTAL 100 630 540 630 650 560
SCORE= GRADE*
WEIGHT
PEST C Analysis:
PEST business strategic tool is used in this section to validate the countries selection for the
international expansion strategy of Tata Motors.
US & CANADA:
POLITICAL- the political condition of the US and Canada is more or less stable and there is less
amount of corruption according to the international statistics (Kara, 2018). Moreover, the trade
war between China and the USA provides a good opportunity for the Indian company to
penetrate into the company of the US. The Canadian government is also liberalists mainly and

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advocates a liberalize trade policy that is of great use for any company. However, both Canada
and the US have taken a mission of developing their own economy which will be quite difficult
for an outsider company.
ECONOMIC- The economic condition of both the countries are quite flourishing. Canada is
known for being a wealthy economy. The economy of both the countries has quite a stable
position. Per capita income and GDP growth rate is consistently progressing over the years
(David, 2018)..
SOCIAL- the social life of both the country is, however, a hindrance to the growth of the TATA
Motors. The people, particularly the young generation s quite status-conscious and the stable
economy has led to the preference of luxury and high range commodities. However, with the
recent loss in Tesla’s 9 models, it has been identified that the luxury car market in the area has
become quite saturated.
TECHNOLOGY- the technological advancement of these two countries provides a great scope
for the automobile companies.
CULTURAL- the culture of the US and Canada has a culture of preserving the environment.
Thus, cars that emit more fuel may not found a solid place in these markets. Moreover, Canada
and the US has a culture of using high profile cars. Thus, middle-range companies like Tata
motors may not find a market there.
INDONESIA AND MALAYSIA:
POLITICAL: the main problem regarding the political condition of the countries is the excess
extremist's activities that target both the official as well as the private sector. Terrorism is one of
the rising concerns in this area. However, the government at present are more focused on the
business-friendly activities.

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ECONOMIC: the robust growth of the banking industries and the success in having the loan
growth in the two areas makes a good economic platform for the Tata Company. The company’s
overall GDP is however low which an obstacle for the automobile industry is. However, the
specialty of the company in making a low range of cars will be a success in the area.
SOCIAL: though the country faces petty issues o pickpocket and burglary, there is, however, no
evidence of a higher level of corruption. The country includes a large range of diverse cultures
and a high literacy rate. This will help the company in having a good working environment.
TECHNOLOGY: the two countries are extremely keen on the technological development that
will help the company in developing more technologically advanced parts of automobiles in a
low range.
CULTURE- the area is ethnically diverse and the literacy rate is high in the country. Tata Motors
can find a good market in the area because of this diversity and thus a variety in the choice of the
people.
Reference List:
.
Bargain, O., Dolls, M., Immervoll, H., Neumann, D., Peichl, A., Pestel, N., & Siegloch, S.
(2011). Tax policy and income inequality in the US, 1978-2009: A decomposition
approach.]

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David, J. (2018). PESTEL Analysis of Canada. Howandwhat. Recuperado de https://www.
howandwhat. net/pestel-analysis
Halim, E. (2013). Factors Affecting Internationalization of Indonesia Franchise
Companies. Binus Business Review, 4(1), 30-40.
Kara, E. (2018). A contemporary approach for strategic management in tourism sector: pestel
analysis on the city Muğla, Turkey. İşletme Araştırmaları Dergisi, 10(2), 598-608.
Mulyana, F., & Djajadiningrat, S. T. (2013). Maximizing the contribution of mining industry to
sustainable development: Case study at PT freeport Indonesia. Indonesian Journal of
Business Administration, 2(19), 68536.
Palepu, K., Anand, B. N., & Tahilyani, R. (2011). Tata Nano-The People's Car. Harvard
Business School Strategy Unit Case, (710-420).
Statistica. (n.d.). Tata Motors Group net revenue from FY 2010 to FY 2019. Statistica. Retrieved
from https://www.statista.com/statistics/316925/revenue-of-tata-motors/
Tata Motors. (n.d.). Annual Report 2019. Tata Motors. Retrieved from
https://www.tatamotors.com/investors/annual-reports/