Case of Tata Motors-

7/29/2019 Case of Tata Motors-

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TATA MOTORS-Corporate Level Strategy

Prepared by:

Aditya Roy

Anish BhatnagarSandeep Chinnam

Indra Adhikari

Navdeep Rathore

Jorawar Singh.


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TATA MOTORS-A BRIEF HISTORY

Founded in 1945 as a manufacturer oflocomotives, the company manufactured its first

commercial vehicle in 1954 in a collaboration

with Daimler-Benz AG, which ended in 1969

Tata Motors entered the passenger vehiclemarket in 1991 with the launch of the Tata Sierra

and in 1998 launched the first fully indigenous

Indian passenger car, the Indica.

Tata Motors acquired the South Korean truck

manufacturer Daewoo Commercial Vehicles

Company in 2004 and the British premium car

maker Jaguar Land Rover in 2008.


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PROBLEMS

1999 was a very difficult year for Tata Motors

A 40% fall in the demand for consumer vehicles

Huge stocks, unsold cars. The situation looked bleak

Ashok Leyland became the first mover to launch heavy trailertrucks while Tata Motors faced a financial windfall


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RESPONSE TO ENVIRONMENTAL

CHANGES Cut over heads, increase sales, reduce inventory

Deal with the economic slowdown and understand the

pattern that consumer vehicles have

Product Diversity

Vertical Integration was the need of the hour


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CORPORATE LEVEL STRATEGY

PRODUCT DIVERSITY

In 1995, Tata tied up with Daimler Benz and started Mercedes Benzmade its arrival in India

Tata Sumo Deluxe in 1996

Tata Sierra Turbo in 1997

Tata Safari in 1998

Tata Sierra-1991 Tata Estate-1992 Tata Sumo-1994


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INTERNATIONAL DIVERSITY

Inorganic growth with the acquisition of Daewoo

corporation and Land rover

JV with Spanish(Hispano) and Brazilian(Marcopolo)

companies starting from minority holders to majority

holders

Thailand for manufacturing pickup trucks

Licensing technology to Fiat for Latin America markets


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THE BIG MOVES

From 2001 to 2004, Tata Motors radically downsized and cut

costs saving 1700 crores in that period

Cut raw material costs, reduced costs in manufacturing &

overhead costs & managed internal investments with much

skill

Achieved cost savings of 10 billion by 2008 by outsourcing,

productivity improvements, process improvements.

Sold non-core business stakes in Joint Ventures with

Mercedes Benz, Bridgestone, Asahi Glass & IBM


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THE STRATEGIC BLUEPRINT

Focus on business growth and developing some non-cyclicalrevenue stream

Immense scope for the Hub and spoke model of

transportation growth

Tata Motors started to focus on high performance consumervehicles such as trucks with higher power-to-weight ratio

Also started fully built buses through contract manufacturing

for bodybuilding while focusing on customer financing


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THE STRATEGIC BLUEPRINT

Aggressively pursued cost reduction to maintain

competitiveness

Entered into JVs in Spain and Brazil to develop capabilities

in fully built buses. Launched new platforms in Passenger Vehicle segment

Launched Indica in both petrol and diesel versions

Developed multi point fuel injection technology in-house

for petrol engines


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GLOBAL REACH

Increased exports, got into allied activities like manufacturing

spare parts, and vehicle financing

Dismantled the independent export division

Entered emerging markets to capitalize its strength on fuelefficiency and low cost products

Chose developing countries that would be receptive to their

products and then expanded organically

Segmented customers into price sensitive to performanceoriented

Targeted the quick payback segment


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GLOBAL REACH

2003: Tata acquired DCVL to gain entry into markets of

South Africa, Asia, China and some parts of Europe

Strategy of enhancing capabilities by partnering with

world class players JV with Fiat gave Tata access to a world class car engine

technology

JV in Thailand to tap into the growing ASEAN market

Tata-JLR: entry into the premium car and SUV segment


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ENTERING NEW MARKETS

Thailand for production of pickup truck and environment

vehicle

Other emerging economies like South Africa

Spain and Brazil for Bus

South Korea for Consumer Vehicles

UK for passenger vehicle

Emerging economies as infrastructure and product

requirements were the same. Developed countries (throughinorganic growth)


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FIRST MOVER ADVANTAGE

In emerging economies which had the same economic cycleas India, TML had proprietary and technology leadership

Developing entry barrier by capturing the market

Developing economies of scale

LATE MOVER ADVANTAGE Leveraging Indias production advantage

International business experience in emerging economieswould help in minimizing risk while entering developedmarkets

Relationship building


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CORPORATE LEVEL STRATEGIES

WITNESSED

1. Managerial Expertise in domestic and international market

Organization transformation

Customer centric activities

2. Economies of Scope

Aggressive Cost reduction

Re-engineering processes

3. Diversification

Revenue growth

Significant presence in international markets

New generation products

Capitalizing on production, development skills and cost globally


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THANK YOU

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Case of Tata Motors-