...Executive Memo To: TATA Motors Limited Senior Management From: MBS Group TATA Date: 29 September 2014 Re: Game Embedded Strategy Dear TATA Motors Senior Management, This memo accompanies the presentation given on 15 September 2014 which put forward a case for TATA’s senior management to adopt Game Embedded Strategy (GEMS). The objective is to address the key points of the game dimension for TATA and to offer a set of recommendations focusing on evolution of the game in the future. The game dimension discussed in the memo follows framework T/3, type, technology and time approach, which encompasses the game dimension for the Indian geographical region for low cost compact cars between 2009 to 2014. Background – What Market Should TATA Be In? TATA Motors entered the market of low cost compact cars by introducing the cheapest car in the world with the famous “Tata Nano” in April 2009 at $2,400. With Maruti Suziki India Ltd as the Dominant Incumbent and near rival holding a 49% majority market share of the passenger car market in India, Hyundai Motor India Ltd holding 21% market share, the continued threat of Nissan (1.2%) and Ford India as the Extant Incumbent player with 2.3% market share, TATA Motors played the game against its competitors as the first mover by launching the first ever car of this price range. TATA were thus in an oligopoly market and by using historic data on competitors are able to predict how these competitors will behave with 78% probability, as...
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...Tata Motors is one of the crown jewels of the Tata Group, India's premier industrial house. In the fiscal year 2008 the company sold 585,649 vehicles and had a turnover of INR335 billion (Indian rupees) (US$8.4 billion), making it the largest automobile company in India. Tata Motors had ambitious plans to double the number of vehicles that it sold in a mere five years by maintaining its lead in the booming Indian market and by establishing a greater global presence. The case describes Tata Motors' journey to becoming a global contender. It traces the company's business portfolio and strategy, its dramatic turnaround in 2000-2002, its strengthened position in India in both commercial vehicles and passenger cars, as well as its diversification into international markets through greenfield ventures, as well as acquisitions and alliances - notably the Jaguar LandRover purchase in 2008. In January 2008, Tata Motors unveiled the Tata Nano, priced at INR100,000 or one lakh (US$2,500), the cheapest car in the world. By entering two of the fastest growing areas of the automotive industry (the premium and small car segments), Tata Motors company was firmly on the path to becoming a global contender. Learning objectives: The case has the following objectives: (1) introduce students to Tata Motors - an emerging global player in the auto industry from India; (2) understand and critique the company's domestic strategy to date (including the launch of the Nano); (3) review its international...
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...Vertical View A Nano Car in Every Driveway? How to Succeed in the Ultra-Low-Cost Car Market Henry Ford’s historic promise in 1908 to “build a car for the great multitude” resulted in the production of more than 15 million Model Ts and created unprecedented mobility for consumers everywhere. Will India’s Tata Motors deliver on its equally bold promise to a new generation of consumers to bring the Nano to market for the “great multitude” at a price of $2,500? T o fulfill his promise “to build a car small enough for the individual to run and care for, [of ] the simplest designs that modern engineering can devise, [and] low in price,” Henry Ford exploited innovative product design, vendor relationships, manufacturing techniques and distribution methods. One hundred years later, entrants into the ultra-low-cost car (ULCC) market have the same agenda in their attempt to build a car with a price tag of $2,500 to $5,000, which is lower in comparable dollars than Henry Ford’s $850 Model T. Vertical View But this is not a history lesson that can be easily repeated. Today, all indicators point to an automotive industry in recession, requiring its leaders to balance the global economic crisis with future market demand. Industry consolidation and restructuring in global markets will accelerate, propelled by the lack of availability to capital and consumer financing, high fuel costs and low consumer confidence. Undoubtedly, a new and improved automotive...
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...Q1. What is the Purpose & Values of TATA Group as a whole? Answer 1. Tata Group companies has evolved a collective commitment to evolving stronger connections between their values and first- in-class business practice – not by putting either one ahead of the other, but by finding mutually beneficial bridges between them. “In a free enterprise, the community is not just another stakeholder in business, but is in fact the very purpose of its existence.” Jamsetji N. Tata (Founder, Tata Group, 1868) “The Tata philosophy of management has always been and is today more than ever, that corporate enterprises must be managed not merely in the interests of their owners, but equally in those of their employees, of the customers of their products, of the local community and finally of the country as a whole.” – J. R. D. Tata Purpose Tata group is committed to improving the quality of life of the communities they serve. They do this by striving for leadership and global competitiveness in the business sectors in which they operate. Their practice of returning to society what they earn evokes trust among consumers, employees, shareholders and the community. They are committed to protecting this heritage of leadership with trust through the manner in which they conduct their business. They have a comprehensive document that serves as an ethical road map for Tata employees and companies, and provides the guidelines by which the group conducts its businesses.it has 21 clauses...
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...Company: TATA Motors Group – India Business & Jaguar Land Rover Mission “To be passionate in anticipating and providing the best vehicles and experiences that excite our customers globally” Vision Most admired by our customers, employees, business partners and shareholders for the experience and value they enjoy from being with us. Marketing Objectives Tata motors is a leading automobile brand. It is most widely known for its commercial vehicles such as buses and trucks. However, TATA motors has also started an excellent expansion in passenger cars and it is rapidly gaining market share. The Marketing mix of Tata Motors talks about the 4P of the brand which has helped the brand rise in the automobile empire. 1. Product in the marketing mix of Tata Motors Tata has a very wide range of products it has passenger cars, utility vehicles, JLR, Commercial passenger Carriers and Defence Vehicles Passenger cars Utility Vehicles Jaguar Land Rover Commercial Passenger Carriers Zest,Bolt,Tiago Safari Dicor Jaguar Buses Indigo XL/Vista Sumo Grande Land rover Winger Nano Sumo Magic Fiat cars Xenon XT Novas, TL4*4 2. Price in the marketing mix of Tata Motors The prices of Tata motors are generally affordable acceptable by the general public at large. Tata always have something for the lower class people with Nano being their trump card. Giving discount every month and special promotion for certain type of vehicle also one of the strong strategy use by Tata Motors. Discount...
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...problem for India’s biggest conglomerate – Tata Group. Ratan Tata joined the company after college and took over his late uncle’s business 16 years ago. He is involved in more issues than he should be. The authoritarian Tata is the chairman of key units including Tata Motors and Tata Steel and is involved in all major deals and making all the key decision. 2. SECONDARY PROBLEMS 2.1 Short Term A bid for Jaguar and Land Rover might present an even more daunting challenge for Ratan Tata. It would be an uphill climb to restore Jaguar’s luxury cachet, which was damaged by sharing basic designs with Ford. As the organization gets bigger and more diverse, talent and retaining the value system will pose the biggest challenge in Tata Group (Engardio and Lakshman 2007) 2.2 Long Term Succession “is a problem”. Ratan Tata is 69 years old, not married and has two dogs at his beachfront home he designed himself. He commands most Tata companies, which makes his failure to designate a successor all the more disconcerting. In Asian culture, the eldest son will take over the family business, however Tata is not married therefore he does not have any family members to take over his empire. Ratan, who is single and childless, could be the last Tata to oversee the group. His younger brother and three half-sisters aren’t involved in Tata business; his reclusive half-brother is unclear whether he’s tycoon timber (Engardio and Lakshman 2007). Ratan Tata public listed his companies, which also...
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...Tata Motors Case Write-up Executive Summary The Current Situation In May 2005, Tata Motors launched a revolutionary product, Tata Ace, a four-wheel auto vehicle with a successful sale. The Key Problem Despite the decent sale of Tata Ace, Tata Motors has to figure out some way to further gain their market share. Alternative Solutions and Reasoning 1. Targeting the three-wheeled cargo vehicle market in India This means that Tata Motors to modify the Tata Ace to suit for the three-wheeled cargo market in India, which will hopefully help selling 67,500-70,000 pieces with a relatively low profit margin in this segment. 2. Targeting the four-wheeled passenger market The four-wheeled passenger market segment seems to be under-estimated, therefore if Tata Motors can endeavor into this field, it will take a smooth lead position, which helps selling 57,700-60,000 pieces with relatively higher profit margin compared to the three-wheeled cargo vehicle. 3. Targeting the remaining regional Indian four-wheeled cargo market Tata Ace is now sold in only 25% of the India region, and a expand to the whole Indian market will gain 60,000 more pieces sold, with a high profit margin, but low risk, and the product do not need a modification, which is best recommended. The Current Situation The three-wheel and four-wheel auto vehicles are the major part of the Indian commercial vehicle sector. And Tata Motors is the market leader of the four-wheel segment with a market share of 51% in...
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...Introduction of Tata Steel Limited Tata Steel Limited (previously Tata Iron and Steel Company Limited (TISCO)) which was established in 1907, it was the Asia’s first and India’s largest privately owned steel company. This company was the flagship company of Tata group, which started by Jamsetji Tata. Tata Steel had expended the business globally and successfully; their business have been running all over the world. It was ranked the 11th largest steel producing company in the world in 2013. Frame work Is Tata Steel Limited successful just because it is using the right market strategy? Is Tata Steel Limited earning a big profit just because the workers are hard-working? In this essay, I will be using PESTEL and Porter’s Five Forces as my main models to analysis Tata Steel Limited. The purpose of doing this research is to see how Tata Steel Limited managing the business tremendously successful in a real market by applying these analysis methods. Political Factor At all times, government is always acting an key role in the development of different industries. It takes charge of the labor law, tax policy, tariffs, environmental law, trade restrictions and political stability. Political factor may also include what the government wants to provide or not to provide. After 200 years ruled by the British, India became an independent nation in 1947 and India’s economy changed to a free market economy in 1991. Government put a lot effort to change the economy. They increased...
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...The Tata Ace : Case Study Analysis One of the biggest conglomerates in India, the TATA Group are a name to reckon with . The revenue generated by the TATA group in 2006 was equal to 2.8% of India’s GDP . It has several sectors in IT, transportation , steel etc . One of the biggest revenue provider of the TATA group is the TATA motors which is an independent body and the TATA group holds 32% equity in it . Though TATA motors is such a big company, it showed a loss of Rs 5 billion in 2001 , biggest in TATA motors as well as in the history of INDIA’s motor sector . TATA motor Group MD, MR Ravi Kant decided some drastic measures were necessary to uplift the company once again . The idea of TATA Ace came to the manager of the TATA motor Group MD, MR Ravi Kant when he identified the market need for a commercial vehicle in the Medium Segment. Thus the idea of tata ace was born. India’s small and medium commercial vehicle sector was majorly controlled by the 3 wheeled autos and goods vehicles which were neither good to look at nor reliable and fell in the price range of 100000 – 200000 . Ace was targeted to be priced at 200000 but was subsequently launched at 225000. It was priced at 50% less than other 4 wheeled goods carriers . The project was given to the 30 year old engineer Wagha . There were quite a few reason for Ace’s success : 1. It offered a feel good factor for drivers as compared to 3 wheeled autos etc . 2.Though it has a higher initial cost, the maintenance cost was...
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...Ans-1 The global commercial vehicle industry witnessed negative growth during 2006-2011; however, over 2012-2017, it is forecast to experience moderate growth and is estimated to reach $521.5 billion by 2017.The global commercial vehicle industry consists of the production of light commercial vehicles (LCVs), heavy trucks, and buses and coaches. It focuses on the freight and Transportation sector as its major customers. India will become the third largest market in the world after China and the US for light vehicles, including passenger cars and light commercial vehicles (LCVs), by 2020, according to market research firm JD Power Asia Pacific. The country, however, will have to improve its infrastructure, as well as resolve component supply chain issues, in order to realise its huge potential. “Our forecast is that by 2020, India will become the third biggest market for light vehicles, that includes passenger cars and LCVs, with total sales of nearly 12 million units,” the JD Power Asia-Pacific Executive Director, Mr Mohit Arora, told PTI. In a report — ‘India Automotive 2020: The Next Giant from Asia’ — the firm said India would have jumped from sixth place at present to be slotted after China and the US by 2020, with total sales of 11.9 million light vehicles. In 2010, 2.7 million light vehicles were sold in India, up from just 700,000 light vehicles in 2000. By 2020, China’s light vehicles market is expected to reach 35 million units, while that of the US will rise to 17...
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...1. Which, if any, of the following initiatives undertaken by Ratan Tata do you think were good ideas? a) Creation of a Group Brand b) Building of equity interlocks among the Tata companies c) Sale of a part of Tata Industries Limited to the Hong Kong-based Jardine Matheson group d) Revitalisation of Tata Administrative Services 2. What do you think of some critics’ opinion that Ratan Tata was moving the group of companies in exactly the opposite direction from where it should be going? The Indian economy following the 1991 crisis swiftly moved away from central planning economy towards market-based economy with the government having less intervention and control. As a result, companies were operating in what is called emerging markets. Khanna & Palepu (1997, pp.41-2) describe emerging markets as hardly uniform that lack in providing the institutions vital for basic business operations. Companies that operate in such environment must adapt their strategies to fit their institutional context. Appendix 1 of the case study clearly shows market failures of Indian economy in mid 1990s compared to the UK and US. Some of the market failures include: information problems (e.g. limited phone lines, TVs, newspapers) capital markets problems (e.g. low bank assets, limited watchdog bodies, limited access to local capital markets and market information asymmetries) political and risk factors problems (e.g. corruption, low efficiency of judicial system, state intervention...
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...Quadrant 2 – International Strategy. Low requirement for centralised quality check and strategic decision making eliminating the need to adapt to individual countries. Mixed strategy combining low demand for integration and responsiveness. Quadrant 3 – Transnational Strategy. High requirement for integration and differentiation. Emphasizing both global integration and local responsiveness. Quadrant 4 – Multi-domestic Strategy. High requirement for differentiation but low concern for integration. Emphasize on local adaption. 2.1 ANALYSIS Adaption from the Case Studies and Research Cases Tata Group uses two different strategies locally and internationally when dealing with its businesses. Local businesses under Tata Group’ umbrella uses the Domestic Strategy which requires product differentiation base on the local adaption. Such example is the Tata Nano Car and the Tata Ace...
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...Tata Motors 1. Describe the economic characteristics of the global motor vehicle industry. The characteristics of the global motor vehicle industry are a boom in certain places and a bust in others all due to economic conditions in different nations. Four years after tow of Detroit Michigan’s big three went into bankruptcy American car makers are going “full throttle” with sales in August hitting an annual rate that if substantiated can take them back over 16 million and that is a rate that was last hit before the economic crisis and 80% higher than 2009 when GM and Chrysler went into bankruptcy. The opposite is happening in Europe being in its sixth year slump now and with a weak economy, high petroleum prices and an aging population being weighing factors on mass market car makers. This has led to cost cutting and over capacity for European car makers. This seems to be a trend worldwide as well as car makers are depending on there luxury brands to make them profitable. Tata has seen a profit due to Jaguar and Land Rover surging there net sales up 71% to 566 million dollars and raising revenues 31% to 568.82 billion rupees. This came dispute as the company said “a weak operating environment in the India business which was more than offset by increasing wholesale volumes and richer product and market mixes at JLR”. This is similar to Renault depending on Nissan and sales of cars produced in low cost factories in Romania to cover domestic losses. Mercedes and BMW are generating...
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...Tata Group is following policy of growth strategy based on Mergers & Acquisitions. So, Corus takeover is a part of a whole series of mega acquisitions in diverse areas since 2000. Tata Steel's acquisition of Corus of the UK clearly reinforces the strategic logic dictating `consolidation' in the highly fragmented steel industry. The historic merger of Arcelor and Mittal Steel laid the foundation for this deal. For Tata Steel, which has been pursuing inorganic growth in the Asian region for a while, the move into Europe appears to go well with its strategy of global growth. Tata steel chose the equity mode to enter the European market. Equity mode or Foreign Direct Investment is the principle way in which firms enter and compete in the modern global economy. Acquisition is the part of FDI. The acquirer inherits the company’s strategic assets (managerial, technological, and marketing resources), without having to build them from scratch, as would be the case when setting up overseas operations through Greenfield investment. Increasingly, acquiring strategic assets have become a motivation for OFDI from emerging economies Tata have chosen Acquisition for many reasons. Some of these reasons can be explained by theory, while others not. Now we will discuss the prime motives that encourage Tata to adopt aggressive Acquisition policy while entering European Steel Market. The main advantages to Tata by choosing Acquisition are as follows: Economy of scale: This acquisition...
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...TATA MOTORS FY 2014 Performance Overview: GLOBAL ECONOMY: The global economic situation showed signs of strengthening, with US economy speeding up, but the environment in the Euro zone remained weak with some early signs of improvement. GDP growth in China and India were low as compared to the high growth rates in the past. GLOBAL AUTO INDUSTRY: US, China and Europe The global auto industry recorded a surge in sales with impressive growth, with strong demand in the world’s top two automobile markets – China and the US. The automotive industry in the US came back to strength, supported by low interest rates and improving consumer sentiment. Sales in China, the world’s largest auto market since 2009 crossed the 20 million cars mark. In Europe there were some early signs of recovery, but with high levels of unemployment, a clear turnaround was not visible. Consumer behaviour in that region remains cautious. Indian Auto Industry: India’s GDP growth continued to be below 5%, while, Industrial remained negative. Consequently, the Indian auto industry witnessed a decline in both passenger vehicles and in commercial vehicles segment by 4.7% and 22.4% respectively. For most of last year, the economy was hamstrung by rising inflation and high interest rates, leading to relatively low consumer interest. However, reduction in excise duty later in the year did help in recovery of sentiment, to a limited extent. TATA MOTORS GROUP: The Tata Motors Group recorded a 22.2% growth...
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