Strategic Analysis: Maruti Suzuki and Tata Motors in Indian Market

This report provides a comparative analysis of Maruti Suzuki and Tata Motors, two major players in the Indian automobile industry. It examines their company backgrounds, employing VRIO (Value, Rarity, Imitability, Organization) and PEST (Political, Economic, Social, Technological) analyses to assess their resources, capabilities, and external environments. The report delves into industry structure, including Maruti Suzuki's market dominance and Tata Motors' commercial vehicle leadership, as well as firm-specific and industry-specific factors that contribute to their competitive positions. Ethical considerations, particularly the balance between innovation and imitation, are also discussed. The analysis aims to determine how each company leverages its resources to achieve a sustainable competitive advantage in the dynamic Indian market, addressing whether internal capabilities are the sole determinants of success.

Running head: MARUTI SUZUKI V/S TATA MOTORS IN INDIA
Maruti Suzuki v/s Tata Motors in India
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1MARUTI SUZUKI V/S TATA MOTORS IN INDIA
Table of Contents
1. Introduction............................................................................................................................2
2. Discussion..............................................................................................................................2
2.1. Company background.....................................................................................................2
2.2. VRIO analysis of Maruti Suzuki and Tata Motors.........................................................2
2.3. PEST analysis of Maruti Suzuki and Tata Motors..........................................................3
2.4. Industry Structure............................................................................................................3
2.4.1. Maruti Suzuki...........................................................................................................3
2.4.2. Tata Motors..............................................................................................................4
2.5. Firm-specific capabilities/resources v/s industry-specific factors..................................4
2.5.1. Firm-specific capabilities/resources and industry-specific capabilities of Maruti
Suzuki.................................................................................................................................4
2.5.2. Firm-specific capabilities/resources and industry-specific capabilities of Tata
Motors................................................................................................................................5
2.6. Ethical considerations (innovation v/s copycat).............................................................5
3. Conclusion..............................................................................................................................5
References:.................................................................................................................................6

2MARUTI SUZUKI V/S TATA MOTORS IN INDIA
1. Introduction
A company frames its competitive advantage by studying about its internal as well as
the external environment. With the same, building better position where it increases the value
for its clients is also one of the most essential part for creating competitive advantage (Zack,
2017). In the international market, the companies that are multinational produce the products
in the host nations and at the same time, develops the competencies, resources and the
capabilities of their own. This report would elaborate on presenting a compare and contrast of
the capabilities and resources of Maruti Suzuki and Tata Motors, two of the largest
automobile companies or India. It would shed light on how these two companies manage the
domestic and international government and influence the Indian business market.
2. Discussion
2.1. Company background
Tata Motors is considered to be the biggest CV manufacturers in the Indian market. It
has an average domestic market share of 59.4% in the FY12 and along with this, is also
regarded as the 2nd largest producer of the passenger vehicles. It has acquired 13.1% of share
in the FY12. It is to note that Tata Motors was found in the year 1945 and is headquartered in
Mumbai, India. It has also acquired the Jaguar and the Land Rover in 2008 (Grant, 2016).
Maruti Suzki on the other hand is the largest manufacturer of passenger vehicles in India and
at the same time, has an average share of 40% in the Indian market. It was founded in 1981.
2.2. VRIO analysis of Maruti Suzuki and Tata Motors
It is to note that VRIO analysis is the process of comparing a particular resource of
more than one organisations in order to determine the one who is stronger in the respective
market (McDonald & Wilson, 2016). VRIO stands for Valuable, Rare, Immitable and
Organised for exploiting. The table 2. Below, a VRIO analysis of Maruti Suzuki and Tata
Motors has been conducted in tabular form (Table 2.)
Identification of the company Resources
Maruti Suzuki Tata Motors
 Product portfolio
 Cost Experience
 Brand reputation
 National Service
 Technology appreciation
 Supply chain
 Supply chain
 Finance
 Customer experience
 Brand Value
 Technology
 National Footprint
 Product portfolio
Table 1 (Identification of Resources)
VRIO Maruti Suzuki Tata Motors
Valuable  Brand Reputation
 National Service
 Cost Experience
 Supply Chain
 Brand Value
 Supply chain
 Customer experience
 National Footprint
Rare  Technology
appreciation
 Product Portfolio
 Supply chain
Inimitable  Finance  Supply Chain
 Product portfolio
 Finance

3MARUTI SUZUKI V/S TATA MOTORS IN INDIA
Organised  Supply Chain  Product portfolio
 Supply Chain
Table 2 (VRIO analysis of Maruti Suzuki and Tata Motors)
2.3. PEST analysis of Maruti Suzuki and Tata Motors
Political Economic Social Technological
 Increase in the
measures of
protectionism for
the business
opportunities.
 Anti-trust laws
that are in
relation to the
main Auto
Manufacturers in
India.
 Level of
corruption in
India is high.
 Employee
benefits need to
be given to all
employees who
are working
under the
companies.
 Pricing
regulation in
India.
 Legal framework
for contract
enforcement.
 Rate of the
economic growth
 Educational level
in India
 Stage of the
business cycle
 Labour costs and
productivity in
the Indian
economy
 Rate of
unemployment
 Rate of interests
in India
 Attitudes of
modern
customers
towards
environment or
increase in
environmental
consciousness
 Indian
Demographics
 Level of
technological
diffusion
 Effect of
technology on
the product
offerings
 Effect of value
chain structure in
Consumer Good
sectors
Table 2 (Business environment in India for the automotive industry)
2.4. Industry Structure
2.4.1. Maruti Suzuki
Maruti Suzuki in India make use of the H-Index. It is to note that the H-Index is a
process of measuring the concentration of market share which is been held by a particular
supplier in a specific market. The H-Index is a total of squares of the percentages of the total
market shares which is held by the firms that are present in a particular market. Maruti
Suzuki could be regarded as a monopolistic company. This is due to the fact that it is about
40% of the total Indian market share (Flath, 2018). However, just a few years ago, it was also
considered to be an oligopoly due to the fact that its total share was more than 50% and
according to the H-index, these firms could be known as the oligopoly. Maruti Suzuki has
successfully formed an entirely new market segment by the process of supplying to the
middle class- that is- the lower income sector (Kale, 2017). Moreover, it is also to mention
that the annual sales report of Maruti Suzuki and the balance sheet, it has been analysed that
this firm is earning a significant amount of profit. Along with this, the Mraginal Cost of the
firm is all about meeting its marginal revenue. Therefore, the company is charging much

4MARUTI SUZUKI V/S TATA MOTORS IN INDIA
higher price for its products as compared to the total manufacturing cost and therefore, it is
making a good money on every sales unit.
Notwithstanding these facts, it is also to mention that India has been in a political
turmoil which has been a very significant barrier for the complete expansion of the Asian
nation’s economy. There is a very high degree of corruption in the Indian market and at the
same time, there is lack of moral behaviour and ethics among the Indian politicians have
distracted ample of FDIs in the Asian nations. Maruti Suzuki is a subsidiary of Suzuki Motor
Corporation of Japan. In India, it is considered to be the largest car manufacturers which have
above 50% of the total Indian market share within the passenger vehicles segment in 2017
and 2018. Moreover, the firm has recorded its highest sale in FY18 of above 1,770,572 sales
units. Within April to November of the year 2018, the total growth of sales of the company
has increased to more than 1.28 million. With the same, Maruti Suzuki have about fifty
percent of the market share in the segment of passenger vehicle and has highest ever sale of
1.78 million in FY18. Also, it has a standalone net income of about 45,600 crore rupees in H1
FY19. In 2012, Maruti Suzuki was also ranked first in the customer satisfaction for the 13th
time in a single row. Moreover, it has exported the very first ‘Made in India’ car to Japan
nation. With the same, in 2018, Maruti Suzuki also entered into electric vehicles segments. It
has begun with the field testing of vehicles.
2.4.2. Tata Motors
Tata Motors Pvt. Ltd. Have several plants all over India. It is considered to be the
market leader in the commercial truck business and has many plants in India, including
Lucknow, Jamshedpur and Pune. It has also dominated for the last fifteen years and the total
number of attempts have been made by the Japanese and the other countries into this
segment. However, it is also to mention that this company is also making its presence felt in
the global borders too. It has now expanded its business in the South African countries as
well with a roll out of the 5000th vehicle. It is to note that the South Africa has now turned out
have a high appetite for both the passenger and the commercial vehicles. Ever since the year
2005, the company has sold about 40,000 passenger cars and also 50,000 commercial
vehicles in South Africa (Chatterjee, 2015). Moreover, since 2014, it has remained true to all
its commitments towards the nations in which it serve. It has played a very notable part in the
process of pursuing the strategy of the industrial development for both the heavy and medium
commercial vehicle sector of the nation. The state of the art facility in the Rosslyn have been
instilled with the potential of assembling a total of 2000 trucks on an yearly basis could put
together all the vehicles from around eight to seventy five tons of payloads. With the same, it
is also to note in this context that Nepal has very strong relationship with India and that too
on several different fronts. The trust and the faith in the Indian and the Indian indigenous
products is visible when it comes to the question of brand loyalty of the automobile industry
of India. Tata Motors by far is considered to be one of the strongest brand in Nepal as well.
About 14000 passenger vehicles of Tata Motors ply on the roads of Nepal and out of them
about 5000 were sold in the last 3 years.
2.5. Firm-specific capabilities/resources v/s industry-specific factors
2.5.1. Firm-specific capabilities/resources and industry-specific capabilities of Maruti
Suzuki
Maruti Suzuki offers very unique opportunity for both personal as well as professional
growth as a significant part of multi-faced corporation where each and every employee work
with each other collaboratively and maintain unity. It is aimed at creation of cars which
would give its customers a never-had-before driving experiences. With the same, this
company also makes sure that the environment is not hampered in any way in this process

5MARUTI SUZUKI V/S TATA MOTORS IN INDIA
(Deshpande, 2016). Furthermore, the Research and Development group of the company
combines the innovation and passion for not only making sure the customer delight but at the
same time, also for staying ahead of their requirements and needs. Maruti Suzuki has also
launched a factory that is fitted to the CNG variants for five different models of cars and as
always, is working for introducing more effective and more fuel efficient vehicles for the
coming future. Also, a wide range of widely recognised new models have been launched in
the past 6 years. All the car model of Maruti adhere to the ELV* norms of the European
countries as well.
2.5.2. Firm-specific capabilities/resources and industry-specific capabilities of Tata
Motors
Jaguar Land Rover business of Tata Motors has been globally recognised as a strong
and reputable brand. It has a wide series of product portfolio about the award-winning luxury
performance cars and the premium all-terrain vehicles as well as the R&D capabilities. Being
one of the important parts of the acquisition of Jaguar Land Rover business, the firm have
gained about 3 major manufacturing facilities that are situated in Halewood and Solihuli and
the two main advanced design and the engineering facilities which are situated at the Whitley
and Gaydon (Amine & Raizada, 2015). All of them are in United Kingdom. Tata Motors
have also gained the 3 major manufacturing facilities which are situated in Castle Bromwich,
Solihuli and Halewood. In 2004, the firm has become the very first one in the Indian
automobile industry to be listed on the New York Stock Exchange. All their ADSs are traded
on the NYSE under the symbol of “TTM”. Our Ordinary Shares and ‘A’ Ordinary Shares are
traded on the BSE under the codes 500570 and 570001, respectively, and the National Stock
Exchange of India Ltd., or NSE, under the symbols “TATAMOTORS” and
“TATAMTRDVR”, respectively.
2.6. Ethical considerations (innovation v/s copycat)
Being one of the responsible citizens of India, Maruti Suzuki has always strived for
following every highest standards of Corporate Governance. It was one of the most notable
and reputable companies of India and is listed under the top 15. Every action that this
company does, it ensures that the primary focus of all that is to gain the public attention and
accordingly, there is high need for the reinforcement of the commitment of the Maruti
towards the maintenance of the highest standards of the Corporate Governance (Parasramka,
Tanmay & Roy, 2018). Furthermore, it is also to mention that this Code of Business Conduct
and Ethics helps in ensuring that compliance with the standards of business conduct & ethics
and at the same time, with all the regulatory needs as well. Furthermore, every Senior
Management Personnel are expected that they would read and understand the Code of
Business Conduct and Ethics and uphold all these standards in daily activities and at the same
time, comply with every applicable policies, procedures and standards of the company.
Moreover Maruti Suzuki has also created an entirely new market segment by means of
supplying the middle class, that is-the lower income sector. According to the annual sales
report of Maruti Suzuki’s and as per the balance sheet, it has been assessed that company is
earning a very good amount of profit. Along with this, it is also seen that the Mraginal Cost
of the firm is meeting with its marginal revenue at the same time. It is a known fact that there
is high level of corruption in the Indian states and with the same, there is lack of moral
behaviour in the Indian politicians and this has distracted ample of FDIs in the other Asian
nations. Maruti Suzuki in India, is considered to be the largest car makers about 50% of the
market share within the passenger vehicles segment for the last two years.

6MARUTI SUZUKI V/S TATA MOTORS IN INDIA
3. Conclusion
Hence, from the above analysis it can be concluded that the outlook of Indian
automobile industry is very bright. With the reforms of post-liberalisation in place, ever since
1991, India has gained some notable development on the overall economic front by means of
achieving well-sustained rate of growth for its economy in the recent years. Notwithstanding
this fact, Maruti Suzuki is far better than the Tata Motors in most aspects.
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