Strategic Business Proposal: TATA Motors Expansion in Australia

This document presents a comprehensive business proposal focusing on TATA Motors' strategic expansion into the Australian market. The proposal begins with an overview of the company's vision and market opportunity, including an analysis of the external environment, industry dynamics, and competitor landscape. It delves into the internal organization, highlighting core competencies and value propositions. The core of the proposal outlines the business-level strategy, customer profiles, and competitive advantages. The document further elaborates on growth strategies, with a focus on diversification as a key approach. It details corporate-level strategies, including the level and type of diversification, and justifies the reasons behind the chosen strategies. The proposal explores various corporate-level strategies, such as international strategies, and market entry modes, recommending a merger and acquisition strategy with Holden. It also covers organizational controls, including strategic and financial controls, to ensure the successful implementation of the expansion plan. The proposal concludes with a concept map, providing a visual representation of the key concepts and strategies discussed throughout the document.

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STRATEGY IN ACTION (ASSESSMENTS 2 AND 3)
BRIEF
You are an entrepreneur with a new idea. It is the next big thing, or at least it could
be; that is, if you can translate this idea into a viable business model that will
entice a venture capital (VC) firm to invest.
Drawing on your unit readings, activities and discussions, author a high-level
business proposal for a venture capital firm using the template provided.
*Assessments 2 and Assessment 3 combine to create a subject artefact (the
business proposal document).
ASSESSMENT 2 (40%)
Create a business proposal document.
Drawing on your learnings from weeks 1-3, create your foundational business
model and business-level strategy.
ASSESSMENT 3 (50%)
Continue developing your business proposal document.
You have received investment from a venture capital firm, and your business has
generated early success due to a well formulated and executed strategy. Your
business is growing quickly and is ready to expand into new markets.
Complete the final sections of your business proposal document to secure a
second round of funding.
Drawing on your learnings from weeks 4-6, continue developing your business
model, particularly in relation to corporate-level strategy.
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ASSESSMENT 2 – PART A
VISION
1. OUTLINE YOUR ORGANISATIONAL PURPOSE
Maximum: 1-2 sentences
MARKET OPPORTUNITY
2. EXTERNAL ENVIRONMENT – ANALYSIS
Approx.: 600 words
a) General Environment
b) Industry Analysis
c) Competitor Analysis
SOLVING THE PROBLEM
3. INTERNAL ORGANISATION – ANALYSIS
Approx.: 400 words
a) Core competencies
b) Value proposition
STRATEGY
4. BUSINESS-LEVEL STRATEGY – STRATEGY FORMULATION
Approx.: 400 words
a) Business-level strategy
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b) Customer profile
i. Who will be served?
ii. What needs do your target customers have that your business will satisfy?
iii. How will their needs be satisfied?
c) Justify your choice of business-level strategy
d) Competitive advantage
ASSESSMENT 2 – PART B
VALIDATION
5. ASSESSMENT 2 (PART B) – STAKEHOLDER FEEDBACK REFLECTION
(EPORTFOLIO)
Approx.: 500 words
a) Blog posts
Please note: Blog post entries are excluded from your word count.
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ASSESSMENT 3 – PART A
GROWTH STRATEGY
6. ARTICULATE YOUR GROWTH STRATEGY
Approx.: 250 words
TATA Motors, with its niche market in India, is seeking to effectively expand the
business in newer markets which would appropriately enhance its business operations as
well as would develop new horizons for the company to earn higher profitability. In
addition to this, the organization is also working on developing new and effective business
strategies in order to grow in these expanding markets (Scholes, 2015).
There are several growth strategies which the company could use as its strategic
direction in order to appropriately leverage their core competencies into the newer
markets. The growth strategies include Market Penetration, Product Development, Market
Development and Diversification. All these strategies are capable enough for the
organization to effectively enhance its business operations in newer markets. However,
out of all these strategies, the company would effectively be using diversification as its
growth strategy.
The reason for which it is chosen is that it would help the firm in leveraging its core
competencies in newer markets. For instance, the firm is planning to expand its business
in Australia and for the same, employees within the company would be developing new
and creative skills which would be an advantage for the organization to develop its new
offerings. In addition to this, the firm has strong cash flow and effective global presence,
which would be helpful and useful for TATA Motors to develop its new offerings, which is
two wheeler for its female customers in Australia. While the cash flow would help the
company with designing its offerings with immense fuel efficiency, it s brand awareness
would help TATA Motors in market the same in Australia (Thompson, Strickland and
Gamble, 2015).
The core competencies of the company is quite prominent in international markets
as its cash flow could allow the firm in employing local resources and effective and
essential markets which would appropriately enhance its business operations. Moreover,
its appropriate and effective skills within their employees would allow the firm in
developing their offerings in ways which is required by the firm to succeed in Australian
market.
DIVERSIFICATION
7. CORPORATE-LEVEL STRATEGY: DIVERSIFICATION
Approx.: 500 words
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a) Level and type of diversification
Diversification refers to introduction of new products and services in new markets. It
is a quite effective strategy, which allows the company to build a unique and new
customer base with its offerings (Higgins, Omer and Phillips, 2015).
There are various different levels and types of diversification. As for levels, there
are prominently three levels which could be opted by TATA Motors to diversify its
offerings. The first level of diversification is low, where the firm would be aiming at
effectively earning between 70% to 90% of its revenues from its offerings in Australia. The
other level of diversification is moderate diversification, more than 70% revenues would
be earned through dominant businesses by the firm, however, its resources and
technologies would be equally distributed within its dominant businesses as well as its
new units in Australia. High Diversification levels would separate each business unit from
one another. However, the firm would be opting for moderate diversification as it would
not be focusing on revenue from its new business unit, rather than appropriate expansion
of market (Chang, 2016).
As for types, there are various different as well as distinct types of diversification
which the company could adopt in order to effectively carry on its business effectively. For
instance, the first type is Value-Creating Diversification, which would be focused on
extending its resources as well as capabilities through creation of economies of scope,
financial economies or market power in order to build a competitive edge and earn higher
customer value. Another prominent type which the firm could opt for is Value-Neutral
Diversification. In this type, TATA Motors would be diversifying in order to gain
opportunities and incentives present in nternal and external environments. Moreover,
another type is Value-Reducing Diversification, in which, the managers would opt for
certain strategies in diversification which would reduce organizational value, but would
enhance personal compensation for managers. Out of all these aspects, TATA Motors
would be choosing Value-Creating Diversification as its long term strategy for its
expansion within the Australian Markets (Schaltegger, Hansen and Lüdeke-Freund, 2016).
b) Reasons for diversifying
There are several reasons for which the firm would be opting diversification as its
strategy while expanding its business in Australia. The first and foremost reason for the
same is that TATA Motors aim at enhancing their business operations through effectively
enhancing its economies of scale by providing two wheeler for its female customers in
Australian Markets. Furthermore, the firm is aiming at increasing its performance through
provision of new products with use of innovative factors like ensuring fuel efficiencies in
design. In addition to this, TATA Motors would be implementing Value-Creating
Diversification. Reason for the same is that it would directly help the organization in
appropriately enhancing their performance through creating more customer value as well
as by implementing new techniques, processes as well as employees for achieving
effective design, performance as well as durability in their new products in a way which
provide maximum benefits to customers as well as to stakeholders.
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STRATEGY
8. CORPORATE-LEVEL STRATEGY: STRATEGY FORMULATION
Approx.: 500 words
a) Choice of strategy
There are several strategies which could be effectively used by TATA Motors in
relation to appropriately enhance its operations to ensure better diversification. In addition
to this, there are several essential and effective strategies which would provide different
benefits and methods for the firm to enter as well as expand its business operations in
Australia effectively.
The very first strategy is International Strategy. These refer to the strategies which
the firm would adopt in relation to effectively expand its business internationally, in this
case, in Australia. In addition to this, there are several International Corporate-level
strategies which could help the firm in achieving the same. For instance, one such
strategy is Transitional Strategy in which, the firm aims at both local responsiveness as
well as global efficiency. Apart from this, another type of corporate-level strategy is global
Strategy, in which the firm would be dealing in standardized products throughout the
world. Multi-domestic Strategy is another corporate-level strategy which aims at tailoring
products which could suit the local market (Yuliansyah, Rammal and Rose, 2016).
Another aspect which the firm would be taking in consideration is several market
entry modes. There are several ways through which the firm could enter in the Australian
Markets. The first mode is through Exporting its products in Australia, in which the
company would be sending its products to the country and would let other local
companies sell it. However, it would incur the firm with high cost and low control. Another
prominent mode is through licensing, where the firm would authorize a local company to
expand its operations within the country. However this method incurs low cost, there will
be little control of TATA Motors over its operations in Australian Markets. There is another
mode through which the firm could enter Australia, which is Merger and Acquisition. The
company could merge with another automotive organization of same level and global
presence and could share resources with each other in expanding its business and
providing two wheeler to their female customers. Out of all the strategies mentioned
above, the firm would be opting for Merger and Acquisition as its corporate-level Strategy
to enter and expand their business in Australian Markets.
The firm would be merging with Holden, which is an Australian Car Manufacturing
organization. It is perhaps one of the best strategies as with effective market presence, it
would enhance the operations of the company through sharing its resources with that of
Holden. Moreover, with such effective local presence, this merger would assist the
company in expanding itself appropriately and target its potential customers, who are
female customers within the Australian Markets. Furthermore, these companies would also
be sharing their expertise and resources, which would appropriately enhance their scope
of success in offering their two wheeler in Australia. However, the firm would have to work
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towards implementing a flexible work culture which could incorporate both the employees
effectively and enhancing the scope of their business success and harmony within the
organization (Martinez-Simarro, Devece and Llopis-Albert, 2015).
ORGANISATIONAL CONTROLS
9. STRATEGIC AND FINANCIAL CONTROLS
Approx.: 250 words
In order to achieve the future goals i.e. to gain the top most position in
transportation or automobile industry, management of Tata Motors has developed
a strategic control as well. It refers to the process of controlling the formation as
well as execution of strategic plan, that includes way of financial management to
handle the uncertainty and ambiguity in business (Yuliansyah, Rammal and Rose,
2016). This plan will provide guidance to entire team of present company to keep
the financial record, payments, expenses and more, in proper manner for
managing the company's finance. For this purpose, four main strategies are
developed. It includes Testing the Validity of Assumptions, Strategic Surveillance
Control, Special Alert Control and Implementation of control measures, where each
strategy helps in managing the finance more effectively.
Hereby, for implementation of control measures include the procedure of
setting the performance standards, analysing the cause that may increase chance
of failure etc. For this purpose, the main focus is given to control budget,
milestone, schedules and more. While to anticipate the external threat which may
affect business, management of Tata Motors have developed strategic surveillance
control tool to monitor the entire process and quickly respond towards changes.
ASSESSMENT 3 – PART B
THE BIG PICTURE
10. CONCEPT MAP
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Please note: There is no required word count in the concept map. The concept map
component is equivalent to 1000 words.
In order to provide information to stakeholders about what Tata Motors is
going to launch at Australian marketplace and which segment of customers, it is
targeted, its management team has prepared a concept map, as given below:-
As per this map, it has depicted that in order to gain high profitability in
transportation industry, Tata Motors is going to launch a two wheeler product. This
product will be served to female working professionals especially of age group 20
to 30 years. With a primary focus on changing dynamics of the transportation
industry, it has observed that number of female passengers are increasing for bus
and taxi services (Rosemann and vom Brocke, 2015). This would reflect that
launching new product in this sector and targeted to female workers will prove
crucial for given company, via minimizing the concerns of these customers towards
transportation. Furthermore, in order to develop cost leadership, the application of
strategies viz pricing and skimming will prove significant for this company,
because it will enable to target the mentioned group of customers with its new
product launch in an efficient manner. As Tata Motors is currently seek to
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Illustration 1: Concept Map of Tata Motors

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positioned itself in a market where an intense war is increasing between
organizations that deals in automobile industry, therefore, adoption of cost
leadership approach will help in achievement of same objectives. Along with this,
the main competitive advantage of this new product is depicted from its innovation
criteria where, new features which include diversification in new product from
other two wheeler include the reduction of dependencies on the machinery for
operating it. Since this product is especially designed for females workers
therefore, it will weigh near about 95kg only. In addition to this, it includes facilities
to kick and self -start as well as digital fuel indicator, tubeless tyres and more.
Moreover, 75kmpl mileage is considered as its main advantage feature along with
3 years warranty period.
Mission/ Vision/ Values/ Strategic Themes/ Results
Strategy
Map/
Objectives
Measures Targets Initiatives
Sustainability Fuel Efficiency
technology
Reduce usage
of fuel by 5%
Automatic Fuel
Indicators
Cost
Effectiveness
Price
Skimming
Strategies
Provide top
quality
products at
affordable
pricing
Effective
market
analysis in
terms of cost.
Feasibility Technological,
Costly and
Environmentall
y Feasible
Lowest cost of
manufacturing
Adopting
processes like
recycling and
Lean
Approach.
Financial
Perspective
Ensuring
effective cash
flow and
approaching
better financial
options
Quarterly
Sales growth
as well as
enhanced
market share
in terms of
revenue
Using
integrated
systems of
electronic
payments and
pitching a good
deal with
suppliers
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Customer
Perspective
Provide
customers a
set share of
sales as
cashback and
on-time
delivery and
service
Provide them
quality
products at
affordable
pricing
Acquisition of
customer
feedback and
making it a
firm a strong
basis for new
product
development
Training Adopting
performance
management
techniques
Making each
employee
technologically
sound and
active in terms
of
management
Implementing
training
workshops and
seminars
Innovation
and
Processes
Modifying R&D
Approaches to
ensure
innovation
within product
development
Enhancing
technological
and
manufacturing
capability
Employing
skilled
employees and
purchasing
technologically
advanced
equipments
After developing the given concept map, management team of Tata Motors
also take reviews of stakeholders to ensure that if they are engaged with same.
This would also help in determining that map is visually distinguish the relevance
of ideas, concepts, targeted market and key features (Amran and et. al., 2016).
Thus, to take constructive feedback, a discussion is made with a customer of
targeted audience, investor and higher authority, to judge if concept is clear and
concise or not. Through this process, if necessary, then some modifications can be
done in order to successfully execute the project plan. This will provide opportunity
to gain support of stakeholder team in developing better strategy at each stage of
product life-cycle especially at growth stage.
Here, under this process of discussion with stakeholders, the management of
Tata Motors have got positive feedback and their support in executing the major
strategies that have developed before, to launch new product at Australian
market. For this purpose, respective company concerns more on cascading the
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nature of each strategy as well as its relevance for different functions of business.
Therefore, after considering the importance of business policies as well as impact
on strategy execution, management have adopted the approach of merger &
acquisitions in order to develop diversification in business (Linder and Williander,
2017). This would help in getting excess resources and capabilities to successful
launch the new product at Australian marketplace, where focus is given more on
maintaining the pursuit of stakeholder interest and competitive advancement. The
main reasons behind chosen of acquisition strategy is aim to increase market
power, overcome from international barriers, increase diversification and enhance
capabilities of business.
Hereby, to execute the mention strategies, special focus is given on main
key concept of business as well, which includes finance management, marketing,
operations and human resources. Since Tata Motors has seek to adopt the
approach of merger and acquisition, therefore, this would help in getting resources
like labor on less wages. Here, this company with help of acquisition, will gain
benefits in introducing the best talented and eligible workers, who have possessed
knowledge and experience to be worked efficiently in automobile sector. For
developing competencies in business, training and development program will also
organise where new workers get chance to understand the new working
environment of Tata Motors and get familiar with its unique culture – i.e. workers
having diverse background have to work in collaboration with each other as a
single unit. This company will also ensure that no discrimination will take place so
that higher commitment of employees can be gained. Furthermore, it is also very
important to align functional strategies with other strategies. As for production
strategy, the firm would be manufacturing its new products with innovation related
to environment and sustainability. Moreover, with hiring of skilled employees, the
firm would be effectively addressing its organizational strategy by improving its
structure. Moreover, the firm would be investing in R&D to ensure proper and
effective new product development.
In addition to this, there are several ways through which TATA Motors could
effectively expand its activities beyond business within the Australian Markets.
Through effectively pitching customers through their marketing and
commercializing efforts, the firm is planning to expand and grow within the
Australian markets. Furthermore, through performance of market research, the
company would be diversifying its products and would be effectively providing the
same to their potential customers, preferably women, within the country. In
addition, to ensure customer support, TATA Motors would be focusing on other
activities outside business as well, which are charities and supporting several
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humanitarian causes. This would help the firm to pitch the support of the
community. This is how the firm would be expanding its activities.
Furthermore, to increase awareness among customers about the new
product, strategies are also developed for marketing function. Hereby, social
media and road campaigning will be taken to promote this product, where through
effective communication technique marketing team will influence targeted
audience towards the same (Burlton, 2015). For this purpose, pages are made on
top four widely used networking sites in Australia, that are Facebook, YouTube,
Instagram and WordPress.com, by establishing the business goal on company's
page at these sites. At these pages special focus is given on creating the website
in an attractive manner to gain highly attention of female working professionals.
Along with this, for conducting the major operations, latest technologies viz
Artificial intelligence, automatic intelligence, new-generation data driven
information etc. are incorporated at operations and management department. This
would help to trigger the development of smart work for conducting entire
functions more effectively.
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References
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Schaltegger, S., Hansen, E.G. and Lüdeke-Freund, F., 2016. Business models for
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(Amran and et. al., 2016)(Linder and Williander, 2017)
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