BCG MARIX AND SWOT ANALYSIS OF TATA GROUP

PRESENTED BY:ROHIT

School of management, NIT Warangal

TATA Group Profile• Founded by Jamshedji Tata in 1868.• Total revenue of TATA companies taken together is 67.4 billion

dollar.• 28 publicly listed enterprises having combined market

capitalization of 101.96 billion dollar.• It comprises over 90 operating companies in 7 business sectors: --communication and information technology --engineering --materials --services --energy --consumer products --chemicals

IT SERVICES- TCS• Founded in year 1979• 76th most trusted brand according to brand trust report• Revenue- $8.2bn- 29.1% year on year rise• Net income- $1.9bn- 31.1% year on year rise• Market capitalization- $52bn

MATERIALS- TATA STEEL• Formerly known as TISCO• Worlds 7th largest steel company• Total revenue- $22.741 bn• Profit- $423.5 million

SEGMENTS OF TATA GROUP

TATA Teleservices and Communications• It serves 85million customers in 450,000 villages and towns• DoCoMo, Tata sky• First private player to launch 3G service in India• Revenue- 111.94bn rs.- 9.67% year on year rise• Net income- 33.83bn rs.- 15.60% year on year fall

SERVICES- Indian Hotels (TAJ)• Started in 1903 as TajMahal palace in Mumbai• Company also operates in diversified areas such as TAJ Air, TAJ

safaris etc.• Revenue- 1724.92 cr rs.- 13.45% year on year rise• Profit- 141.25 cr rs.- 7.74% year on year fall

ENGINEERING- TATA MOTORS• Worlds 4th largest Truck manufacturer and 2th largest bus

manufacturer• 70% share in light and heavy commercial vehicle segment and 13%

in passenger vehicle segment• Revenue- 52136cr rs.- 35.9% year on year fall

TATA AIG (housing and insurance)• Established in 2001 with 74% stake of Tata sons and 26% stake of

American international holding (AIG)• Ranked no. 1 in customer satisfaction and Ranked no.2 in claims

settlement satisfaction• Income- 469cr rs. - year on year rise by 34%• Annual turnover- 11.5cr rs. –loss of 7.2cr rs. From the previous

year

ENERGY- TATA Power• Tata power started generation of electricity in year 1915 with

India’s first largest hydro-electric project• It has entered into a 51:49 joint venture with Power grid

corporation of India for the 1200km TATA India’s 1st Transmission project

• Revenue- 19450.76cr rs• Net income- 970cr rs• Market capitalization- 30123cr rs

OTHER SEGMENTS- TATA CONSUMER PRODUCTS- salt, tea- TATA CHEMICALS- REAL ESTATE AND HOUSING- VOLTAS

What is BCG matrix• It is a chart created by Bruce D. Henderson in 1970 to help

corporations to analyze their business units and portfolio analysis.• It was created for the Boston consulting group that’s why it is

called BCG matrix.• The whole BCG matrix is based on relative market share and

market growth rate.• On the basis of market share and growth rate the main four

element of matrix is determined i.e. cash cow, dogs, star, question mark.

-STAR- high growth and high relative market share -QUESTION MARK- high growth but relatively low market share -CASH COW- low growth and a high market share -DOG- low growth and low relative market share

BCG ANALYSIS OF TATA GROUPSTAR• TATA steel are on star position in the matrix because they are

having having high market growth with high market share.• Tata steel is the market leader in Indian steel market with 8.9%

market share• The reason is mainly its standard quality and low manufacturing

cost.• In the field of IT, TCS is the market leader with 10.1% market share

in IT sector. Growth rate is 13%• It has the highest market capitalization of rs 495930.34cr• TATA consultancy services comes on the star position because of

its leadership and high growth rate and high market share• Tata hotel industry market is related with tourism and hospitality

with the revenue of 1724.92 cr rs. - 13.45% year on year rise

CASH COW• commercial vehicle and heavy vehicle segments of Tata motors are

cash cows of TATA group due to low market growth rate which is 20.1% fall yearly but they are having high market share

• Reason of being market leader is unavailability of number of competitors and also greater quality product and services

• consumer products like Tata tea and Tata salt are also in the cash cow position because they are having a strong market

• Tata power is having market capitalization of 30123cr rs with the revenue of 19450.73cr rs so it also comes in the cash cow position

QUESTION MARK• TATA teleservices and TATA communications comes under question

marks as they are having high market growth and low market share• Tata DoCoMo, Tata sky are the some products of this segments• Tata Telecommunication and wireless communication segment is on

the 7th position in the market with 7% market share

DOG• Passenger vehicle and light vehicle segment of Tata motors are in

the position of dogs in BCG matrix.• They are having only 10% market share in comparison to Maruti

Suzuki which is the leader of this segment in market with 45% market share

• The yearly fall in this segment is 6.05%• Due to low market growth and low market share it comes in the

dog position• Tata real estate and housing segment and AIG is also having low

market growth and low market share so they also comes in the dog position in the BCG matrix

STARS(High market growth and high market share)

--INDIAN HOTELS--TCS--TATA steel

??? (High market growth and low market share)

--TATA COMMUNICATIONS--TATA TELESERVICES

CASH COW(low market growth and high market share)--TATA POWER --TATA motors heavy vehicle and commercial vehicle segment-- CONSUMER PRODUCTS LIKE TEA, SALT

DOG(low market growth and low market share)--TATA motors passenger vehicle segment and light vehicle segment--TATA AIG--REAL ESTATE--HOUSING

HIGH

LOW

HIGH

LOW

What is SWOT analysis

• SWOT analysis is a structured planning method used to evaluate the strengths, weakness, opportunities and threats involved in a project or business venture

• A SWOT analysis can be carried out for a product, place, industry or person

• It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve the objective

• STRENGTH: characteristics of the business or project that give it an advantage over other

• WEAKNESS: characteristics that place the business or project at a disadvantage relative to others

• OPPORTUNITIES: elements that the project or business could exploit to its advantage

• THREATS: elements in the environment that could cause trouble for the business or project

Analysis of TATA GroupSTRENGHT• Global network delivery model In the field of information

technology • Largest addition to workforce of 69685 professional in 2010-11• Tata teleservices ltd has diversified into many sectors like mobile

services, wireless desktop phones, public telephony services, wire line services, Tata sky etc.

• Tata motors focus on small car market-fuel efficient and low cost• Tata motor trying to tap markets in us and Europe• Turned around JLR(JAGUAR LANDROVER) into a profit making• Tata steel having target to achieve 100 million ton by 2015• Overseas acquisition have added capacity of 21.4 million tones

• Recently started a joint venture in airlines as AIR ASIA• With the increase In tourism and travel in India company needs to

gear up with innovative ideas to keep up with competition• Tata hotels -The best 5 star quality service in India• Association with companies like GVK hotels and oriental hotels are

also in process for setting up new properties• Continues to pursue contracts in India as well as south east Asia• Tata power is planning to generate 8000MW in next 3-5years• Tata power has announced its partnership with sun energy an

Australian firm to build India's first floating solar plant• Tata AIG is planning to launch products in four different categories-

rural, well assurance, SMEs and high net worth individuals

WEAKNESS• Unable to hold the market strongly in light vehicle and passenger vehicle

segment• Maruti Suzuki is the leader in the Indian market with 45% market share

and Tata motors is not able to compete it in this segment• Mahindra and Mahindra gives Tata motors a strong competition in heavy

vehicle and commercial vehicle segment• With the rise of other insurance and housing companies TATA AIG is not

able to attract customers• Not able to expand its real estate business, housing and insurance sector• In Telecommunication segment bharti Airtel and Vodafone gives a strong

competition• Failure of Tata DoCoMo• Late entry in wireless communication market• Poor advertising strategy • Poor network coverage

OPPORTUNITY• Travel and tourism in India• Make in India projects• Merger and collaboration with the other big companies in different

sectors• New market, exports and acquisitions• Focus on Consumer products • Expand in the countries US UK Australia middle east • Construction• Oil and gas sector

THREATS• Startups in hotel industry like OYO ROOMS• Strong market capitalization of other automotive industries• Infosys Accenture IBM in IT field• Free Indian market• Other Public sector units

• STRENGTH

--Experience--Micro environment--Business Model--Resources and capabilities--Culture

• WEAKNESS

--Value chain--Distribution--Macro environment

• OPPORTUNITIES

--Exports--New Products--New Markets--Acquisition & Mergers

• THREAT

--Free Market--Low Barriers--Globalization Of Economy

CONCLUSION• In the whole TATA group is acquiring different strategy in different

market such as in home country Tata’s strategies are same as to cost leadership and differentiations.

• No frill strategy- combines a low price and low value added, low perceived product/services benefits and a focus sensitive market

• A hybrid strategy- to achieve differentiation and a price lower than competitors

• It is India’s largest private sector employer, biggest taxpayer and greatest foreign-exchange earner

• 134 years old TATA group is having a brand name and the most trusted brand in India so it should also focus on other emerging business segments and technology, it can enter in any segment freely

THANK YOU