Tata Motors : An Indian Based Automaker

The globalization of the world has made business markets even more competitive. The auto industry in The United States has not escaped this. “Global competition resulted in less market share for U.S. car manufacturers and threatened company profits as more foreign brands entered the U.S. market. The total market share of General Motors fell from 28.2% in 2000 to 17.6% by 2014. The other two of the Big Three car manufacturers also lost U.S. market share during this same period. Ford fell from 24.1% to 14.7%. Fiat-owned Chrysler now holds only 12.7% after having 15.7% of the market in 2000.” (2) It is undeniable that a global market has infiltrated the US auto industry. There are many factors that make a foreign car appealing to US consumers such as: new and unique products, brand appeal, new technology (fuel efficient engines), safety features, allegiance to birth country, product quality and reputation, reliability, cost, and the list goes

Difficulty in finding similarities in markets or operational capabilities; Tata has more than 100 operating companies in seven main business groups doing business in 80 countries: chemicals, information systems and communications, consumer products, energy, engineering, materials, and services. It’s difficult to find similarities in markets or operational capabilities, so they need more effort to develop to different strategies for different markets especially for consumer products. More complex and challenging process of managing strategically it face.

Transnational companies sell their products in multiple countries across the globe. This strategy differs, however, in the way the product is marketed in each country. A transnational product keeps its same characteristics, regardless of the country in which it is sold. The product does not change according to local customs or preferences, so that the product sold in Asia or Mexico is exactly the same as the version sold in the United States or Europe. However, in 2013, the company announced that it was closing 50 stores in Brazil and China. Nevertheless, taking a second look at their transnational strategy due to poor performance in countries. In India, they are ended their relationship with Bharti Enterprises due to difficulties in navigating regulations on foreign investment. In South Korea, they pulled out in 2006 due to their shoes-to-sausage product line did not persuade the shopping habits of many non-American shoppers. (Wall Street Journal, 2013)

This paper examines the expansion of General Motors overseas in its various phases, as well as triggers for internationalization and the problems faced during the process. The paper also considers what benefits have been achieved through international growth, and how the company can be classified with regards to Bartlett and Ghosal’s 4 typologies. Finally, the paper discusses the concept of a “world car,” meeting the demands of customers across the globe.

Increasing globalization in the automotive industry is changing the way of traditional partnerships. Ten years ago, it was questionable to pursue business in markets such as India and China because political and business conditions were not conducive to direct foreign investment (Emerging Markets, Emerging Opportunities, 2012).As a result, many automotive

In this report I aim to analyze and compare the motives and strategic operations of US and European car manufacturers that have recently set up production plants in Emerging Markets and Asia Pacific regions.

2. How else could Tata Motors compete with ford, Honda, Toyota, and other rivals? Could Tata Motors focus on competing as a parts supplier instead?

What were the key challenges facing Tata Motors in the process of moving to produce passenger cars from successfully producing commercial vehicles?

After analyzing the case study we understand that the two companies Bharat forge and Suzlon are the Indian companies who were mainly focused to enter global market with different strategies bringing them closer to their objectives. Bharat forge and Suzlon trade in different products. Bharat forge deals with automotive industry where as Suzlon deals with textile manufacturing industry and later changes to wind turbine manufacturer. Both the companies started as small industry and made it big in the industrial domains. Below are the major key points and differences used by both the companies to establish themselves in the global market as global players.

Today automobile industry is recognized at global level. For every automobile company it is important to enter into foreign market because of increase in competition if companies will not expand their market they can face a huge loss and every company wants to grow and wants to be recognized all over the world. For example if manufacturers such as Ford, Toyota or Volkswagen expanded their market for growth if such manufacturers had still been dealing in their own country they wouldn’t have been able to generate good profit. And competing globally also helps company to learn new technologies and ideas. Therefore it is important for such automobile companies to grow globally for long term success and competitive advantage.

The Company has been facing many challenges that led it to bankruptcy. The struggle of the Company led it to attain a market share of 19.6 percent in the year 2011. This market share dropped in the year 2012 to 17.9 percent. This has been caused by the stiff competition that the Company face from the competitors. According to the research, the performance of GM in the market is not promising has it faces a stiff competition from the Japanese Company.

Company's global plans to reduce domestic exposure, domestic commercial vehicle market is highly cyclical in nature & prone to fluctuations in the domestic economy. Tata Motors has a high domestic exposure of ~94% in the MHCV segment and ~84% in the light commercial vehicle (LCV) segment.

For example, Tata motors just acquired Jaguar and Land Rover from Ford Co. To gain success through these newly acquired companies they must fully understand the laws and regulations that United Kingdom practices. Tata Motors headquarters is located in Mumbai, India and is strictly controlled by the local government. The Indian government regulates operations of all dealerships. Regulations are different in every country. Tata Motors has manufacturing plants all over the world and have to be constantly watched for political change. The reason why Tata Motors is so successful in the international market is because its understanding of the countries economic situation, customer needs, and government regulations.

4. I think the diversifying strategic alliance is the best option for Tata, because we know in a long way Tata Motors were highly dependent on Indian markets. So in that way, it will be less dependent on the Indian market. As a key to acquisition, if Tata purchase Jaguar and Land Rover, it can bring separate market share reputation and more. In this case, Tata can avoid the damage to brand image. Besides, Jaguar and Land Rover both can increase the design services and sourcing like low cost

This made their business make an economic sense that was to be in a long term, this also injected a fresh blood into their economy across the national boundaries (Masum & Fernandez, 2008). The study also found that there were the best supporting roles between them. For example, Suzuki Company was much supported by Volkswagen’s company. Also Volkswagen bought shares which supported the by company. Also, there was a good opportunity for innovation. By working together in partnership, there was high chances of innovating new products. In addition, there was an advantage of providing the practical solutions for the company. By the international marketing, the products produced were sold to other countries. There Suzuki’s company was given a solution of mapping new marketing for the small vehicles in Germany. And finally on advantages, the internationalization provided a competitive advantage in the national market. They were able to access new markets and customers. Also, were able to create networks among other countries across abroad.