Page 88 - DCOM506_DMGT502_STRATEGIC_MANAGEMENT

Strategic Management

Notes Weaknesses
1. The company's passenger car products are based upon 3rd and 4th generation
platforms, which put Tata Motors Limited at a disadvantage with competing car
manufacturers.
2. Despite buying the Jaguar and Land Rover brands (see opportunities below); Tat has
not got a foothold in the luxury car segment in its domestic, Indian market. Is the
brand associated with commercial vehicles and low-cost passenger cars to the extent
that it has isolated itself from lucrative segments in a more aspiring India?
3. One weakness which is often not recognised is that in English the word 'tat' means
rubbish. Would the brand sensitive British consumer ever buy into such a brand?
Maybe not, but they would buy into Fiat, Jaguar and Land Rover (see opportunities
and strengths).

Opportunities
1. In the summer of 2008 Tata Motor's announced that it had successfully purchased the
Land Rover and Jaguar brands from Ford Motors for UK £2.3 million. Two of the
World's 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 Motor's 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%.
Threats
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. Sustainability and environmentalism could mean extra costs for this low-cost
producer. This could impact its underpinning competitive advantage. Obviously, as
Tata globalises and buys into other brands this problem could be alleviated.
3. 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
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