CHAPTER-1

INTRODUCTION

1.1 INTRODUCTION OF TATA MOTORS

Tata Motors Limited is India's largest automobile company, with consolidated revenues of

INR 1,88,818 crores (USD 34.7 billion) in 2012-13. It is the leader in commercial vehicles in

each segment, and among the top in passenger vehicles with winning products in the

compact, midsize car and utility vehicle segments. It is also the world's fifth largest truck

manufacturer and fourth largest bus manufacturer.

The Tata Motors Group's over 60,000 employees are guided by the mission "to be passionate

in anticipating and providing the best vehicles and experiences that excite our customers

globally."

Established in 1945, Tata Motors' presence cuts across the length and breadth of India. Over

8 million Tata vehicles ply on Indian roads, since the first rolled out in 1954. The company's

manufacturing base in India is spread across Jamshedpur (Jharkhand), Pune (Maharashtra),

Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand), Sanand (Gujarat) and Dharwad

(Karnataka). Following a strategic alliance with Fiat in 2005, it has set up an industrial joint

venture with Fiat Group Automobiles at Ranjangaon (Maharashtra) to produce both Fiat and

Tata cars and Fiat powertrains. The company's dealership, sales, services and spare parts

network comprises over 6,600 touch points.

Tata Motors, also listed in the New York Stock Exchange (September 2004), has emerged as

an international automobile company. Through subsidiaries and associate companies, Tata

Motors has operations in the UK, South Korea, Thailand, Spain, South Africa and Indonesia.

Among them is Jaguar Land Rover, acquired in 2008. In 2004, it acquired the Daewoo

Commercial Vehicles Company, South Korea's second largest truck maker. The rechristened

Tata Daewoo Commercial Vehicles Company has launched several new products in the

Korean market, while also exporting these products to several international markets. Today

two-thirds of heavy commercial vehicle exports out of South Korea are from Tata Daewoo.

In 2005, Tata Motors acquired a 21% stake in Hispano Carrocera, a reputed Spanish bus and

coach manufacturer, and subsequently the remaining stake in 2009. Hispano's presence is

being expanded in other markets. In 2006, Tata Motors formed a 51:49 joint venture with the

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Brazil-based, Marcopolo, a global leader in body-building for buses and coaches to

manufacture fully-built buses and coaches for India - the plant is located in Dharwad. In

2006, Tata Motors entered into joint venture with Thonburi Automotive Assembly Plant

Company of Thailand to manufacture and market the company's pickup vehicles in Thailand,

and entered the market in 2008. Tata Motors (SA) (Proprietary) Ltd., Tata Motors' joint

venture with Tata Africa Holding (Pty) Ltd. set up in 2011, has an assembly plant in Rosslyn,

north of Pretoria. The plant can assemble, semi knocked down (SKD) kits, light, medium and

heavy commercial vehicles ranging from 4 tonnes to 50 tonnes.

Tata Motors is also expanding its international footprint, established through exports since

1961. The company's commercial and passenger vehicles are already being marketed in

several countries in Europe, Africa, the Middle East, South East Asia, South Asia, South

America, CIS and Russia. It has franchisee/joint venture assembly operations in Bangladesh,

Ukraine, and Senegal.

The foundation of the company's growth over the last 68 years is a deep understanding of

economic stimuli and customer needs, and the ability to translate them into customer-desired

offerings through leading edge R&D. With over 4,500 engineers, scientists and technicians

the company's Engineering Research Centre, established in 1966, has enabled pioneering

technologies and products. The company today has R&D centres in Pune, Jamshedpur,

Lucknow, Dharwad in India, and in South Korea, Italy, Spain, and the UK.

It was Tata Motors, which launched the first indigenously developed Light Commercial

Vehicle in 1986. In 2005, Tata Motors created a new segment by launching the Tata Ace,

India's first indigenously developed mini-truck. In 2009, the company launched its globally

benchmarked Prima range of trucks and in 2012 the Ultra range of international standard light

commercial vehicles. In their power, speed, carrying capacity, operating economy and trims,

they will introduce new benchmarks in India and match the best in the world in performance

at a lower life-cycle cost.

Tata Motors also introduced India's first Sports Utility Vehicle in 1991 and, in 1998, the Tata

Indica, India's first fully indigenous passenger car.

In January 2008, Tata Motors unveiled its People's Car, the Tata Nano. The Tata Nano has

been subsequently launched, as planned, in India in March 2009, and subsequently in 2011 in

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Nepal and Sri Lanka. A development, which signifies a first for the global automobile

industry, the Nano brings the joy of a car within the reach of thousands of families.

Tata Motors is equally focussed on environment-friendly technologies in emissions and

alternative fuels. It has developed electric and hybrid vehicles both for personal and public

transportation. It has also been implementing several environment-friendly technologies in

manufacturing processes, significantly enhancing resource conservation.

Through its subsidiaries, the company is engaged in engineering and automotive solutions,

automotive vehicle components manufacturing and supply chain activities, vehicle financing,

and machine tools and factory automation solutions.

Tata Motors is committed to improving the quality of life of communities by working on four

thrust areas - employability, education, health and environment. The activities touch the lives

of more than a million citizens. The company's support on education and employability is

focused on youth and women. They range from schools to technical education institutes to

actual facilitation of income generation. In health, the company's intervention is in both

preventive and curative health care. The goal of environment protection is achieved through

tree plantation, conserving water and creating new water bodies and, last but not the least, by

introducing appropriate technologies in vehicles and operations for constantly enhancing

environment care.

1.2 BACKGROUND & HISTORY OF THE SWOT ANALYSIS

The origins of the SWOT analysis technique is credited by Albert Humphrey, who led a

research project at Stanford University in the 1960s and 1970s using data from many top

companies.

The goal was to identify why corporate planning failed. The resulting research identified a

number of key areas and the tool used to explore each of the critical areas was called SOFT

analysis.  Humphrey and the original research team used the categories “What is good in the

present is Satisfactory, good in the future is an Opportunity; bad in the present is a Fault and

bad in the future is a Threat.”

In 1964 Urick and Orr at a conference changed the F to a W, and it has stuck as that, SOFT to

SWOT

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Some researchers reference the 1965 publication “business Policy, text and cases” by

Learned, Christensen, Andrews and Guth (from Harvard University) in which a framework is

used which closely resembles a SWOT analysis, however these words are not used and

certainly the framework is not described as succinctly as we know it today. In this book the

terms used are:

Opportunities,

Risks,

Environment &

Problems of Other Industries.

In fact these authors reference a course note from K R Andrews “a concept of corporate

strategy “for much of the strategy framework.

1.3 INTRODUCTION OF SWOT ANALYSIS

SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats. A SWOT

analysis is a strategic balance sheet of an organization; that is the strengths of the

organization, the weaknesses of the organization, the opportunities facing the organization,

and the threats facing the organization. It is one of the cornerstone analytical tools to help an

organization develop a preferred future. It is one of the time tested tools that has the capacity

to enable an organization to understand itself. To respond effectively to changes in the

environment, we must understand our external and internal contexts so we can develop a

vision and a strategy that link the two. We need to weave together our understanding of our

organization and our actions to develop a future. The purpose of the SWOT analysis is to

provide information on our strengths and weaknesses in relation to the opportunities and

threats we face.

The analysis and subsequent lists (the outcome of a SWOT analysis is a point form list) is not

valuable unless a rigorous discussion takes place with background insight, and unless the list

reflects the final views of the organization. A major purpose of any strategic discussion is to

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arrive at a deeper level of insight. Any response to threats and opportunities must be based on

an intimate knowledge and understanding of the organization's strengths and weaknesses.

One outcome that should follow a SWOT analysis is an identification of distinctive

competencies (for further insight on the latter see: Prahalad/Hamel. "The Core Competencies

of the Corporation." HBR. 1990). The benefits of a SWOT analysis are that it provides

learning and knowledge vital to the organization's survival and prosperity. Nutt and Backoff

talk about SWOT as a clarifier of the "tension fields" in organizations. It is a juxtaposition of

the ying and the yang of organizations. Another outcome of the SWOT analysis which is

becoming extremely important is an understanding of our boundaries and the development of

boundary-spanning skills and insight to help navigate the changing environment we face. The

technique is credited to Albert Humphrey, who led a research project at Stanford University

in the 1960s and 1970s using data from Fortune 500 companies.

POSITIVE FACTOR NEGATIVE FACTOR

INTERNAL FACTOR STRENGHTS WEAKNESSES

EXTERNAL FACTOR OPPORTUNITIES THREATS

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An overview of the four factors (Strengths, Weaknesses, Opportunities and Threats) is given

below-

STRENGTHS AND WEAKNESSES ARE EXAMINED IN A SWOT ANALYSIS

The strengths and weaknesses analysis is an internal examination that focuses on your past

performance, present strategy, resources and capabilities. It is based on an analysis of facts

and assumptions about the company, including:

People (Human Resources)

People and skills (in particular marketing, export experience)

Staff development

Properties (Buildings, Equipments and other facilities)

Processes (Such as quality, finance, M.I.S. etc.)

Financial resources (debt to asset ratio and personal equity)

Governance

Management/ leadership

Staff development

Communication

Products (Publications etc.)

Sales

Products

Markets

Capabilities/ scaleability

Capital structure suppliers

Customers (market research)

Intellectual property

Some organizations us the framework PRIMO-F as the structure for capturing SW factors of

a SWOT analysis:

People

Resources

Ideas/ Innovation

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Marketing

Operations (products services etc)

Finance

In other words -

Strengths

What do you do well? Is there anything you do better than most? Better than anyone

else?

Weaknesses

What should be improved? What do you do poorly? What should you avoid, based on

mistakes in the past?

OPPORTUNITIES AND THREATS ARE EXAMINED

The opportunity and threat analysis is carried out by examining external factors in your

domestic and export markets. This is usually broken down into environmental factors and

competitors, including:

Environmental Factors Competitor Factors

Demographics

Economic

Political/legal

Sociological

Environmental

Technology

Cultural

Capability

Resources

Ownership

New entrants

Market segments

Products

Prices

Promotion

Distribution

Substitute products

Suppliers customers

Product life cycle

Risk and cost of intellectual property

violation of your product

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Opportunities and threats factors of a SWOT analysis are often taken from a PESTLE

analysis –

In Other words -

Opportunities

Where can you find, or create, a competitive advantage? What are some major trends

in your business?

– Consolidation / Diversification?

– Specialization / Generalization?

– Changes in technology. Such as computer software that lets you perform services

that others cannot.

– Changes in the types of businesses in your potential market, such as the demand for

healthcare or telecommunications expertise.

– Changes in social patterns, population profiles, lifestyle.

– Changes in creative trends.

– Changes in demand for certain types of services, perhaps related to interactive /

Internet.

Threats

What obstacles do you face?

What are your competitors doing that may result in a loss of clients, customers,

market share? Are the required specifications for your job, products or services

changing?

Is changing technology threatening your position? Do you have cash-flow problems?

1.4 APPLICATIONS OF SWOT ANALYSIS

A SWOT analysis can be used for:

Workshop sessions

Brainstorm meetings

Problem solving

Planning

Product evaluation

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Competitor evaluation

Personal Development Planning

Decision Making (with force field analysis)

1.5 AIM OF A SWOT ANALYSIS

Reveal your competitive advantages

Analyze your prospects for sales, profitability and product development

Prepare your company for problems

Allow for the development of contingency plans

A SWOT analysis is a process to identify where you are strong and vulnerable — where you

should defend and attack. The result of the process is a ‘plan of action’, or ‘action plan’.

The SWOT analysis can be performed on a product, on a service, a company or even on an

individual.

Done properly, a SWOT analysis will give you the BIG PICTURE of the MOST

IMPORTANT FACTORS that influence SURVIVAL and PROSPERITY. As well as a

PLAN to ACTION.

DEVELOPMEMNT MEMBER OF SWOT

The most common users of a SWOT analysis are team members and project managers who

are responsible for decision-making and strategic planning.

But don't overlook anyone in the creation stage!

An individual or small group can develop a SWOT analysis, but it will be more effective if

you take advantage of many stakeholders. Each person or group offers a different perspective

on the strengths and weaknesses of your program and has different experiences of both.

Likewise, one staff member, or volunteer or stakeholder may have information about an

opportunity or threat that is essential to understanding your position and determining your

future.

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1.6 DEVELOPMENT PROCESS OF A SWOT ANALYSIS

1. Designate a leader or group facilitator who has good listening and group process skills, and

who can keep things moving and on track.

2. Designate a recorder to back up the leader if your group is large. Use newsprint on a flip

chart or a large board to record the analysis and discussion points. You can record later in a

more polished fashion to share with stakeholders and to update.

3. Introduce the SWOT method and its purpose in your organization. This can be as simple as

asking, "Where are we, where can we go?" If you have time, you could run through a quick

example based on a shared experience or well-known public issue (even the new TV season).

4. Depending on the nature of your group and the time available, let all participants introduce

themselves. Then divide your stakeholders into smaller groups. If your retreat or meeting

draws several groups of stakeholders together, make sure you mix the small groups to get a

range of perspectives, and give them a chance to introduce themselves.

The size of these depends on the size of your entire group – breakout groups can range from

three to ten. If the size gets much larger, some members may not participate.

5. Have each group designate a recorder, and provide each with newsprint or dry -erase

board. Direct them to create a SWOT analysis in the format you choose-a chart, columns, a

matrix, or even a page for each quality.

a. Give the groups 20-30 minutes to brainstorm and fill out their own strengths, weakness,

opportunities and threats chart for your program, initiative or effort. Encourage them not to

rule out any ideas at this stage, or the next.

b. You can provide these tips for listing:

As you list, keep in mind that the way to have a good idea is to have lots of

ideas. Refinement can come later. In this way, the SWOT analysis also

supports valuable discussion within your group or organization as you

honestly assess.

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In the beginning, though, it helps to generate lots of comments about your

organization and your program, and even to put them in multiple categories if

that provokes thought.

In the end, it is best to limit your lists to 10 or fewer points and to be specific

so the analysis can be truly helpful.

6. Reconvene the group at the agreed-upon time to share results. Gather information from the

groups, recording on the flip-chart or board. Collect and organize the differing groups' ideas

and perceptions.

Decide before hand how you will gather the input. There are at least two ways to do so:

a. Proceed in S-W-O-T order, recording strengths first, weaknesses second, etc.

b. Or you can begin by calling for the top priorities in each category -the strongest strength,

most dangerous weakness, biggest opportunity, worst threat--and continue to work across

each category.

There are also at least two ways to take information from the groups.

a. Ask one group at a time to report ("Group A, what do you see as strengths?") You can vary

which group begins the report so a certain group isn't always left "bringing up the end" and

repeating points made by others. ("Group B, let's start with you for weaknesses.")

b. Or, you can open the floor to all groups ("What strengths have you noted?") for each

category until all have contributed what they think is needed.

Whichever way you proceed, the facilitator or recorder should keep writing until the input

from all groups is recorded. Note repeated items across groups for "weighting" of important

possibilities.

You might want to discuss some of the items as they come up. In fact, cross connections

between categories-"This strength plays into that opportunity"-is what you're pursuing, so a

good facilitator will tease out those insights as they arise.

At the same time, you want to keep the process moving until all the chart is complete, so

facilitator and recorder should work together to begin a fifth column or new page-one for

working ideas.

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Encourage the participants to also make notes of ideas and insights as you build so the

drawing together process will continue to be creative and collaborative.

7. Discuss and record the results. Depending on your time frame and purpose:

Come to some consensus about the most important items in each category

Relate the analysis to your vision, mission, and goals

Translate the analysis to action plans and strategies.

8. If appropriate, prepare a written summary of the SWOT analysis to give or e-mail to

participants for continued use in planning and implementing your effort.

1.7 RULES FOR A SUCCESSFUL SWOT ANALYSIS

Be realistic about the strengths and weaknesses of your organization

The Analysis should distinguish between where your organization is today, and where

it could be in the future.

Be specific. Avoid gray areas

Always analyze in relation to your competition i.e. better than or worse than your

competition

Keep your SWOT analysis short and simple – but only as short and simple as the

application or situation demands – it is about ‘fitness for purpose’

Avoid unnecessary complexity and over (swot) analysis

There is no point listing an opportunity (O) if the same opportunity is available to

competitors

It is pointless to say you have strengths (S) if your competitors have the same

1.8 EFFECTIVE WORKING OF SWOT ANALYSIS

Due to the collaborative nature of a SWOT analysis, your working group will need certain

qualities to succeed:

Trust – The questions that a SWOT analysis will bring up, particularly in the

Weaknesses and Threats categories may be uncomfortable. Your group must be at a

point in its working relationship where weaknesses and potential threats can be faced

openly and objectively.

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Ability and willingness to implement change.

Diversity – The team conducting the SWOT analysis should be representative of

your entire planning team.

Time – Taking time to do a thorough SWOT analysis and assessment will help your

group move forward in developing a workable plan.

1.9 ADVANTAGES OF SWOT ANALYSIS

SWOT Analysis is instrumental in strategy formulation and selection. It is a strong tool, but it

involves a great subjective element. It is best when used as a guide, and not as a prescription.

Successful businesses build on their strengths, correct their weakness and protect against

internal weaknesses and external threats. They also keep a watch on their overall business

environment and recognize and exploit new opportunities faster than its competitors.

SWOT Analysis helps in strategic planning in following manner-

a. It is a source of information for strategic planning.

b. Builds organization’s strengths.

c. Reverse its weaknesses.

d. Maximize its response to opportunities.

e. Overcome organization’s threats.

f. It helps in identifying core competencies of the firm.

g. It helps in setting of objectives for strategic planning.

h. It helps in knowing past, present and future so that by using past and current data,

future plans can be chalked out.

SWOT Analysis provide information that helps in synchronizing the firm’s resources and

capabilities with the competitive environment in which the firm operates.

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CHAPTER- 2

SWOT ANALYSIS OF TATA MOTORS

2.1 STRATEGIC USE: ORIENTING SWOTS TO AN OBJECTIVE

If SWOTS analysis does not with defining a desired end state or objective, it runs the risk of

being useless. A SWOT analysis may be incorporated into the strategic planning model.

An example of strategic planning technique that incorporates an objective- driven SWOT

analysis is SCAN analysis. Strategic Planning, including SWOT and SCAN analysis, has

been the subject of much research.

If a clear objective has been identified, SWOT analysis can be used to help in the pursuit of

that objective. In this case, SWOTs are:

STRENGTH: attributes of the organization that are helpful to achieving the objective.

WEAKNESSES: attributes of the organization that are harmful to achieving the

objective.

OPPORTUNITIES: external conditions that are helpful to achieving the objective.

THREATS: external conditions that are harmful to achieving the objective.

Identification of SWOTs is essential because subsequent steps in the process of planning for

achievement of the selected objective are to be derived from the SWOTs.

First, the decision makers have to determine whether the objective is attainable, given the

SWOTs. If the objective is not attainable a different must be selected and the process

repeated.

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2.2 STRENGTHS OF TATA MOTORS

1. Strong domestic player(Indian market)

Tata has a strong presence in India and is a key manufacturer of commercial

vehicles. It is a market share of ~64% which has almost remained constant. Also,

Tata Motors is India’s largest automobile manufacturer by revenue. Tata Motors

Limited is India’s largest automobile company, with revenues of 1,88,818 crore in

2012–13. It is the leader in commercial vehicles in each segment, and among the

top three in passenger vehicles in India with products in the compact, midsize car

and utility vehicle segments. Tata vehicles are sold primarily in India, and over 4

million Tata vehicles have been produced domestically since the first Tata vehicle

was assembled in 1954.

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2. It is a demand driven, and customer-oriented, taking care of customers‟ preferences

and taste.

3. Long list of portfolios:

Its products include passenger cars, trucks, vans and coaches. It is world’s 4th

biggest truck producer, it is also world’s second biggest bus producer.

4. Global Presence

Tata Motors has been in the process of acquiring foreign brands to increase

its global presence. Through acquisition, Tata has operations in the UK, South

Korea, Thailand and Spain. Among these acquisitions is Jaguar Land Rover, a

business comprising two struggling iconic British brands that was acquired from

the Ford Motor Company in 2008. In 2004, Tata acquired the Daewoo

Commercial Vehicles Company, South Korea’s second largest truck maker.

Today two-thirds of heavy commercial vehicle exports out of South Korea

are from Tata Daewoo. Tata Motors has expanded its production and assembly

operations to several other countries including South Korea, Thailand, South

Africa and Argentina and is planning to set up plants in Turkey, Indonesia and

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Eastern Europe.

Tata also has franchisee/joint venture assembly operations in Kenya, Bangladesh,

Ukraine, Russia and Senegal. Tata has dealerships in 26 countries across 4

continents.

5. Dealership, Sales and Service Access: The Company’s dealership, sales, services

and spare parts network comprises over 3500 touch points.

6. Research and Development Activities.

Tata Motors is known as an innovative global leader. The company has a very strong

R&D having over 3000 engineers and scientists. The Engineering Research Centre

(ERC) in Pune was setup in 1966 and is among the finest in the country. It has been

honoured with two prestigious awards - 'The DSIR National Award for R&D

Effort in Industry - 1999' and 'National Award for Successful Commercialization of

Indigenous Technology by an Industrial Concern - 2000.' Tata Nano was a recent

outcome from the ERC .

2.2.1 TATA MOTORS HAS PILLARS OF STRENGTH TO DRIVE

GROWTH

Karl Slym took over as the Managing Director of Tata Motors in September, at a time when

the company’s profits and sales were not doing well. The company’s global vehicle sales fell

4 per cent in September from a year ago, while sales at its key Jaguar Land Rover subsidiary

also fell 4 per cent. Slym talks to Business Line on his priorities at Tata Motors, the

company’s plans for the Nano, and plans to increase market share. Excerpts from an edited

interview:

What are your immediate priorities at Tata Motors?

I don’t know whether you can call them priorities, I would say that the company has a lot of

pillars of strength. We have pillars of strength in engineering, manufacturing capabilities, and

we have a commercial vehicle business which is dominant in the market place. We have new

friends in Jaguar Land Rover (JLR). Our disappointment is not delivering the Tata Motors

passenger cars to the market place and not getting the volume and success they deserve. So,

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really my priority is to make sure that we pull all these pillars together and the vehicle that

comes to market represents that strength.

Nano, the world’s cheapest car, which the industry expected to replace two-wheelers, is not

doing well. What are your plans for the Nano?

I don’t think Nano is the new two-wheeler. It’s a little bit of an exaggeration (Nano will

replace two-wheelers), a mistake that people thought that it would be. We do want to provide

value for money mobility solution, but we also wanted this to be a niche product. We will do

what we have to do with any other product. Now we are seeing the sales coming to 9,000 a

month, it’s only better. It’s certainly not where we would expect it to be and it’s certainly not

where the capabilities are…It is going to take additional changes to make sure it meets all the

demands. We are going to bring in the CNG (compressed natural gas) version, and eventually

the diesel version down the line. It is not just stripping down the car to give you a low price

point, but actually, still giving you a sizeable experience of driving the Nano, but it’s

growing.

At present, about 70 per cent of your revenues are from the commercial vehicle segment. Are

you looking at changing the ratio, and passenger cars bringing in more revenues?

We would obviously do a lot more of passenger cars than what we are doing today, but that

doesn’t obviously mean that we are switching the emphasis. We are an expert in the truck

business and will continue to be so, and we intend to keep current volumes in trucks.

You have being launching vehicles — Prima range of trucks earlier, Manza today, and Safari

Storme . Is the economy in the country right for an array of launches?

There is never ever a wrong time to launch a new car in India. We got the festival season

from now to Diwali, Christmas and then New year, so introductions are things that drive

sales. People are looking for new things, and we need to make sure we keep offering them

new things, and continue to refresh our vehicle portfolio.

The company’s profits were down in the last quarter, while sales also fell. How are you

tackling it?

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This is a cyclical business we are in. If we are looking at last quarter from a commercial

vehicle point of view, then it was a growth quarter. However, our market share is the key. We

want to look at market share, and in some segments where we were not able to grow, the

market share in the right way, that’s where we need additional activity.

2.3 WEAKNESSES OF TATA MOTORS

1. Return on Investment on TATA motors shares in low.

2. Tata motors products are not considered as luxurious. The products are generally targeted

for economy class rather than for luxury. Hence, the company lacks a strong footprint in the

sector of luxury products.

3. Safety standards are not maintained/ often ignored. This has led to diminish of public

image of the TATA automobiles (eg Tata Nano). FRIDAY, APRIL 9, 2010: TATA NANO

caught fire

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SOURCE TIMES OF INDIA 9 TH APRIL 2010

4. Limited consumer base

5. Though Tata is present in many countries it has only managed to create a large consumer

base in the Indian Subcontinent, namely India, Bangladesh, Bhutan, Sri Lanka and Nepal.

Tata has a growing consumer base in Italy, Spain and South Africa.

6. Relatively smaller proportion of market share in Passenger vehicles in India.

7. One weakness which is often not recognized is that in English the word tat means rubbish.

Would the brand sensitive British consumer ever buy into such a brand?

8. The company passenger car products are based upon 3rd and 4th generation platforms,

which put Tata Motors Limited at a disadvantage with competing car manufacturers.

2.4 OPPORTUNITIES OF TATA MOTORS

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1. In the summer of 2008 Tata Motors announced that it had successfully purchased the Land

Rover and Jaguar brands from Ford Motors for UK £2.3 million. Two of the Worlds luxury

car brand have been added to its portfolio of brands, and will undoubtedly off the company

the chance to market vehicles in the luxury segments.

2. Tata Motors Limited acquired Daewoo Motors Commercial vehicle business in 2004 for

around USD $16 million.

3. Nano is the cheapest car in the World - retailing at little more than a motorbike. Whilst the

World is getting ready for greener alternatives to gas-guzzlers, is the Nano the answer in

terms of concept or brand? Incidentally, the new Land Rover and Jaguar models will cost up

to 85 times more than a standard Nano!

4. The new global track platform is about to be launched from its Korean (previously

Daewoo) plant. Again, at a time when the World is looking for environmentally friendly

transport alternatives, is now the right time to move into this segment? The answer to this

question (and the one above) is that new and emerging industrial nations such as India, South

Korea and China will have a thirst for low-cost passenger and commercial vehicles. These are

the opportunities. However the company has put in place a very proactive Corporate Social

Responsibility (CSR) committee to address potential strategies that will make is operations

more sustainable.

5. The range of Super Milo fuel efficient buses are powered by super-efficient, eco-friendly

engines. The bus has optional organic clutch with booster assist and better air intakes that will

reduce fuel consumption by up to 10%.

2.5 THREATS OF TATA MOTORS

1. Other competing car manufacturers have been in the passenger car business for 40, 50 or

more years. Therefore Tata Motors Limited has to catch up in terms of quality and lean

production.

2. Environmental Regulation: Sustainability and environmentalism could mean extra costs for

this low-cost producer. This could impact its underpinning competitive advantage.

Obviously, as Tata globalizes and buys into other brands this problem could be alleviated.

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3. Intense competition: Since the company has focused upon the commercial and small

vehicle segments, it has left itself open to competition from overseas companies for the

emerging Indian luxury segments.

For example ICICI bank and DaimlerChrysler have invested in a new Pune-based plant

which will build 5000 new Mercedes-Benz per annum. Other players developing luxury cars

targeted at the Indian market include Ford, Honda and Toyota. In fact the entire Indian

market has become a target for other global competitors including Maruti Udyog, General

Motors, Ford and others. Presently, Tata Motors face intense competition from its domestic

as well as foreign competitors including General Motors, Honda Motor, Maruti Udyog,

Mitsubishi Motors, Fiat, Ford and so on. Competition is expected to intensify further as

Indian automobile manufacturers obtain greater access to debt and equity financing in the

international capital markets or gain access to more advanced technology through alliances.

Additionally, in recent years, the government of India has permitted automatic approvals for

foreign equity ownership of up to 100% in entities manufacturing vehicles and components in

India.

4. Rising cost of manufacturing: Rising prices in the global economy could pose a threat to

Tata Motors Limited on a couple of fronts. The price of steel and aluminum is increasing

putting pressure on the costs of production. Many of Tatas products run on Diesel fuel which

is becoming expensive globally and within its traditional home market.

5. Low safety standards can hamper the public trusts it has already attained which may prove

fatal to its domestic market.

2.5.1 TATA'S JLR FACTORIES FACE STRIKE THREAT IN UK.

LONDON: Tata Motors' owned Jaguar Land Rover production line in the UK may grind to a

halt within weeks after delivery workers from DHL voted for strike, demanding a large pay

rise and similar terms and conditions on par with the JLR staff.

The staff of logistics giant DHL, which has about 1,800 workers at JLR's three main factories

- 1,000 between Castle Bromwich and Solihull in the Midlands and 800 at Halewood,

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Merseyside, perform a key role in managing warehouse operations and bringing parts to

production lines.

"The fear is that production could stop within a matter of hours without parts reaching the

line," a source told 'The Sunday Times'. DHL staff often work side by side with colleagues on

better paid JLR contracts and are demanding a large pay rise to put them on similar terms and

conditions.  Unite, their trade union, balloted DHL workers at JLR's two plants in the

Midlands last week and about 74% voted in favour of taking industrial action.  Those at

Halewood are due to vote tomorrow and a similar outcome is expected. 

According to the newspaper, DHL has offered a 4.5% pay rise in the first 12 months, starting

from January this year, plus a 3% or inflation increase next year. However, this is well short

of the demand from Unite, which wants a 12.8% rise over two years for workers, who sort car

parts and bring them to the production line, plus a 20.6% rise in the period for drivers. 

JLR is not involved in the dispute as executives are concerned any intervention could spark

secondary action from their own staff, many of whom are also members of Unite. Any

shutdown could potentially dent JLR's position as the biggest exporter of manufactured goods

in the UK. 

Sales of its luxury cars in China, Russia and America have boomed in the past two years, and

it is one of the most profitable carmakers in the world under the Tata Group. Britain's iconic

luxury car brands saw a major revival under the Tata banner and now generate export

revenues of almost 11 billion pounds a year and employ 24,000. 

In May, the company had revealed record annual pre-tax profits of 1.68 billion pounds and is

investing 2.7 billion pounds this year to help launch new models to keep up with soaring

demand from the emerging economies of India and China.

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2.6 LIMITATIONS OF SWOT ANALYSIS

SWOT Analysis is not free from its limitations. It may cause organizations to view

circumstances as very simple because of which the organizations might overlook certain key

strategic contact which may occur. Moreover, categorizing aspects as strengths, weaknesses,

opportunities and threats might be very subjective as there is great degree of uncertainty in

market. SWOT Analysis does stress upon the significance of these four aspects, but it does

not tell how an organization can identify these aspects for itself.

There are certain limitations of SWOT Analysis which are not in control of management.

These include-

a. Price increase;

b. Inputs/raw materials;

c. Government legislation;

d. Economic environment;

e. Searching a new market for the product which is not having overseas market due to

import restrictions; etc.

Internal limitations may include-

a. Insufficient research and development facilities;

b. Faulty products due to poor quality control;

c. Poor industrial relations;

d. Lack of skilled and efficient labour; etc

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CHAPTER-3

CASE STUDY OF TATA NANO TECHNOLOGY

3.1 INTRODUCTION OF TATA NANO TECHNOLOGY

“Dream-dream and dream, because dream gives vision, vision gives thoughts and finally

thoughts lead to the action". Each letter of these motivational words said by India's former

President Dr. A.P.J. Abdul Kalam goes exactly with Mr. Ratan Tata, Chairman of Tata

group, who in the year 2003, dreamt of producing a safe, affordable Car for the common

man. Finally after the wait of five years, crossing all financial and technological barriers,

Ratan Tata kept his promise and unveiled Tata 'Nano' on 10th January 2007, at the 9th Auto

Expo 2008 in New Delhi. Tata Nano, cool & smart, launched by Tata Motors is world's

cheapest Car with a price tag of $ 2500.

The Tata Nano is a proposed city car debuted by India's Tata Motors at the 9th annual

Auto Expo on January 10, 2008 at Pragati Maidan in New Delhi, India. Called the people’s

car in Tata's promotional material, it was projected to be the least expensive production car

in the world. The standard version of the Nano is projected to sell for Rs. 100,000

(approximately US $2500, GBP 1277, or € 1700) , not including fees or delivery.

Newsweek identifies the Nano as a part of a "new breed of 21st-century cars" that embody

"a contrarian philosophy of smaller, lighter, and cheaper" and portend a new era in

inexpensive personal transportation —and potentially, "global gridlock". The Wall Street

Journal confirms a global trend toward small cars, led by the Nano.

The prefix "Nano" derives from the Greek root 'Nanos', meaning dwarf — as with

nanometer. "Nano" also means "small" in Gujarati, the native language of the Tata family,

and founders of the Tata Group.

The project to create a 1 lakh (1 lakh = 100000 rupees) car began in 2003, under the

Chairman of Tata Motors, Ratan Tata. The strategy behind the project was the awareness of

the number of Indian families who had two wheeled transport, but couldn't afford a four

wheel car, and was based on the company's success in producing the low cost 4

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wheeled Ace truck in May 2005. The Nano was unveiled at the 2008 New Delhi Auto Expo.

NANO which is a brain child of Ratan Tata raised hope for a lot of Middle class families by

giving them the status of owning a car. Expectations were increasing amongst the customers

regarding the product features and its efficiency. Competitors were eagerly waiting for its

arrival to find “what’s inside NANO?”. The only factor the customer knew in advance was its

price tag of 1 lac as conveyed by Ratan Tata. But why was it not a big hit and why is it still

lagging to grab the market in spite of its good and convincing features? We probed into the

health of Tata Nano as a brand and as a product and carried out a SWOT analysis on NANO.

3.2 STRENGTHS OF NANO TECHNOLOGY

SR. No Strength

 1Cost-reducing innovations

2Twin benefits: affordable and eco-friendly

341 patents for innovation

421% more space than Maruti 800

5Marketing strategy as people’s car

Price itself was a major strength factor for the mini magical vehicle which created a sensation

all over the world. Even US president Obama was all praises for the Nano during his Indian

visit, an appreciation which soon spread across the world. The five seater car Nano from Tata

finally arrived in the market. The strengths of the product included its small size, ease in

handling and good mileage efficiency. It directly took on the motorcycle market and tried to

attach a status symbol to itself such that customers prefer the Nano above buying a

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motorcycle. Thus they get a four wheeler instead of a two wheeler. However, sales did not

happen as expected and Tata Nano lagged behind.

3.3 WEAKNESS OF NANO TECHNOLOGY

S.R.

No.Weakness

1Does not meet the European or American Safety Standards

2Lacks facilities like airbags, anti-locking breaking system, AC, Boot space, engine

cooling.

3Disconnect in the kind of people they were reaching out to and the kind of people

they wanted to sell to.

4Many cases of car catching fire actually reduced the brand equity.

The launch price came in two variants ranging between 1.2 lacs to 1.5lacs. It was 20 – 50%

higher then the proposed rates which was a major setback to customers. Within a few months

of initial sales, technical problems were found in the product and there were a few reports of

Nano catching fire, which further weakened the trust for the brand ‘Nano’ as a whole. Tata

also faced political problems and had to shift the plant location which led to production

delays. And now due to inflation, Nano’s prices have further increased due to increase in the

prices of raw material such as steel, rubber and others.

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Safety standards are not maintained/ often ignored. This has led to diminish of public image

of the TATA automobiles (eg Tata Nano). FRIDAY, APRIL 9, 2010: TATA NANO caught

fire.

3.4 THREATS OF SUBSTITUTES FOR NANO TECHNOLOGY

The threat of substitute for Nano car is that of electric car, the new entrant in the small car

sector is the Morbi-based world famous clock- maker Ajanta group. The company is planning

to manufacture an electric car at its unit at Kutch district and market it at a price lower than

Rs 1- lakh Nano. The company is already manufacturing electric scooters and bikes under

Oreva' brand. Production of electric car is not difficult for them as the technology is almost

similar and 70 per cent of its parts can be produced in-house, giving them an edge over the

vehicle's pricing. The Ajanta group is serious in its attempt to keep the basic price of the

proposed car as low as Rs 85,000.

At present, in the electric car segment only Reva car is available in India. Another player in

the small car segment, the Rajkot-based Field Marshal group, is in negotiations with

Australian company Farnow Technologies for a joint venture for a low cost electric car. Tata

itself is believed to be making an electric version of the Nano, called theE-Nano which might

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well turn out to be the "world's cheapest electric car" which is more eco- friendly. It's

supposed to be as cheap as the conventional gasoline version.

Economic Times reported that the "electric Nano" would still make good sense for economic,

clean and green personal mobility in countries around the world.

Since two-wheeler owners are used to getting 60-70 km per litre, as compared to the Nano's

20+, the cost of ownership of a Nano is likely to be far higher than that of a two-wheeler. One

time investment of buying car can be done by the lower income group people but it will be

difficult for them to overcome maintenance cost and cost of running i.e. fuel these people

would like to remain in bike segment only.

So there is a high threat of substitutes for Nano as electric cars trying to keep prices lower,

less cost of running as a product differentiation

S.R.

No.Threat

1New competitors like bajaj chery, Honda Siel, General Motors, Reva – Electric

car.

2New government regulations

3Rising cost of raw materials

After the launch of Nano there were many manufacturers who wanted to take advantage of

the hype of the Tata nano, and started working on manufacturing an alternative for Nano.

Upcoming cars like H800 from Hyundai priced around 1.6 lac, Maruti Cervo 600cc priced

around 1.7 lacs to 2lacs were imposing threats to further growth of Nano’s market share.

Vehicles like Alto, Chevy Spark and second hand vehicles were major substitutes for Nano.

People were looking for alternatives for the main reason that it cannot be much used for

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driving in highways or long distances as the engine cc is low. The main threat was from an

indirect competitor – Motorcycles. Nano was in between motorcycles and car and it was

proving to be unreliable due to technical glitches. Thus some people were going for the cost

effective solution of buying motorcycles thereby affecting Nano sales.

3.5 OPPORTUNITIES OF NANO TECHNOLOGY

S.R. No. Opportunities

1First of its kind in the market

2      Diesel and electric variant

3      Sync with the recessionary times-low cost, low budgets and lower spending

4      New 2013 model will have 800cc which might compete with 800cc segment cars.

Though Nano is considered to be a boon for middle class people ,it is most often bought by

the people who already own one or two cars!! Nano is considered to be a vehicle of

convenience to drive in metro traffic. Nano 2012 is a new ray of hope in increasing number

of sales and making many satisfied customers. The increase in buying power of the younger

generation is a major factor for India’s automobile growth. Tata Nano diesel priced at 3.5lacs

has already created a hype among its customers as Tata is known for its diesel products with

high mileage efficiency like Indica and Indigo CS

Even Rata tata has admitted that they were wrong in the positioning of the Nano and that the

initial marketing effort was poor. Instead Nano should have been marketed as a utility car

rather than a “cheap car”.

Many manufacturers are still striving hard to compete with Nano, even they will have many

drawbacks and failures and it should be a better product than Nano. Certainly revolutions

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aren’t usually neat and tidy to start with; hence Nano too is a revolution in Indian Automobile

history.

CHAPTER- 4

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APPENDICES

4.1CONCLUSION

SWOT Analysis is a strategic planning tool used to evaluate the Strengths, Weaknesses,

Opportunities and Threats involved in a project or in a business venture. It involves

specifying the objective of the business venture or project and identifying the internal and

external factors that are favorable and unfavorable to achieving that objective. The technique

is credited to Albert Humphrey, who led a research project at Stanford University in the

1960s and 1970s using data from Fortune 500 companies. SWOT analysis is SCAN analysis.

Swot analysis determine the positive factor and negative factor of the company, positive

factor includes strength and opportunities and negative factor such as weakness and threats of

the company. Swot analysis also determine the internal and external factor, internal factors

are strength and weakness, while external factor are threats and opportunities.

In n this project I basically analysis the swot analysis of tata motors, Tata Motors Limited is

India's largest automobile company, with consolidated revenues of INR 1,88,818 crores in

2012-13. It is the leader in commercial vehicles in each segment, and among the top in

passenger vehicles with winning products in the compact, midsize car and utility vehicle

segments. It is also the world's fourth largest truck and bus manufacturer. Established in

1945, Tata Motors' presence cuts across the length and breadth of India. Tata motors acquired

Jaguar Land Rover, in 2008. Tata motors has a various strength such as it is a Strong

domestic as well as global market player and Tata has a strong presence and is a key

manufacturer of commercial vehicles. It is a market share of 64% which has almost

remained constant. Also, Tata Motors is India’s largest automobile manufacturer by

revenue. Tata motors is a demand driven, and customer-oriented, taking care of customers‟

preferences and taste. They have various kinds of cars and start from various range in terms

of price. Tata has a Dealership, Sales and Service Access: The Company’s dealership,

sales, services and spare parts network comprises over 3500 touch points and there Research

and Development Activities is known as an innovative global leader. The company has a

very strong R&D having over 3000 engineers and scientists.

I also analysis some weaknesses of tata motor such as Return on Investment on TATA

motors shares in low. Tata motors products are not considered as luxurious. The products are

generally targeted for economy class rather than for luxury. Hence, the company lacks a

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strong footprint in the sector of luxury products. Safety standards are not maintained/ often

ignored and many tata nano were caught fire. And they have proportion of market share in

case of passenger vechicles. The company passenger car products are based upon 3rd and 4th

generation platforms, which put Tata Motors Limited at a disadvantage with competing car

manufacturers.

Tata motors has various opportunities such as in the summer of 2008 Tata Motors announced

that it had successfully purchased the Land Rover and Jaguar brands from Ford Motors for

UK £2.3 million and it attract high class passengers. Nano is the cheapest car in the World -

retailing at little more than a motorbike and it attrack lower middle class customer.

Swot analysis also analysis threats of the company, so the threats of tata motors are Other

competing car manufacturers have been in the passenger car business for 40, 50 or more

years. Therefore Tata Motors Limited has to catch up in terms of quality and lean production.

Environmental Regulation: Sustainability and environmentalism could mean extra costs for

this low-cost producer. This could impact its underpinning competitive advantage.

Obviously, as Tata globalizes and buys into other brands this problem could be alleviated.

Intense competition: Since the company has focused upon the commercial and small vehicle

segments, it has left itself open to competition from overseas companies for the emerging

Indian luxury segments.

And for better understanding I took case study of swot analysis of tata nano technology

which determine strength, weaknesses, opportunities and threats of the tata nano technology.

And tata motors has the huge scope in domestic as well as global market.

4.2 ABBREVIATIONS

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1. CNG= Compressed Natural Gas

2. CSR= Corporate Social Responsibility

3. ERC= Engineering Research Centre

4. JLR= Jaguar Land Rover

5. MIS= Management Information System

6. R & D= Research and Development

7. SKD = Semi Knocked Down

8. SWOT= Strength, Weaknesses, Opportunities and Threats.

9. UK= United Kingdom

4.3 BIBLIOGRAPHY

BOOKS

Page | 34

1. BARNEY B. JAY, HESTERLY S. WILLIAM - STRATEGIC MANAGEMENT AND

COMPETITIVE ADVANTAGE CONCEPTS- PUBLISHED BY PHI LEARNING

PRIVATE LIMITED, NEW DELHI.

1. DR. KAZMI AZHAR – BUSINESS POLICY AND STRATEGIC MANAGEMENT-

PUBLISHED BY TATA McGRAW HILL PUBLICATIONS

NEWS PAPER AND MAGAZINES

1. THE HINDU NEWS PAPER article was “Tata Motors has pillars of strength to drive growth” published on 17 October 2012

2. INDIAN EXPRESS article was “TATA NANO CAUGHT FIRE” published on FRIDAY, APRIL 9, 2010.

3. TIMES OF INDIA article was “Tata's JLR Factories Face Strike Threat In UK” published on 7th july 2013

4. BUSINESS STANDARD

WEBSITES

1. Tata Motors Official Website [www.tatamotors.com]

2. Tata Nano Official Websites [www.tatanano.com]

3. Term Paper Ware House The Research Factory Paper [www.termpaperwarehouse.com]

4. [www.managementparadise.com]

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