Tata motors limited is one of the largest automobile companies, which offers a wide range of passenger, commercial, and defense vehicles to its clients and customers. While founded in 1945, the company has formed a more comprehensive range of networks worldwide and it is divided into segments such as the hatchback, SUV, and sedan. The company aims at ensuring customers’ safety and comfort, and it faces a market problem in its reduced sales. Over the years, the company has incurred debts and uses a loan to finance its operations. Poor product positioning, marketing, and advertising strategies have impacted its sales including poor ratings by local dealers. This paper will indicate a situation analysis on the TATA Motors limited. The situation analysis shows the internal and external factors of the business, strengths and weaknesses, relative market shares, and the critical elements in the situational analysis.
Strength of Tata Motors
Tata Motors is one of the leading companies in the automobile industry. It is one of the most trusted brands and has high market penetration in Asia. Also, its great quality for customers’ satisfaction has given them a good potential for entering new markets; in most instances, the entering to new markets in Asia have been successful. The company provides repair services to a large consumer base, and offers expert service provisions, making it trusted and recognized.
Tata Motors also has a highly diversified product portfolio – through innovation that enables the customers to have a wide range of products from which they can choose (Garg, 2019). Tata motors have a legacy that indicates a strong brand over the years and strives on ensuring that they build a strong brand portfolio. The company has created reliable suppliers and dealers – over the years, established an alliance with suppliers of raw material. Hence, it’s able to avoid challenges in raw material supplies. The company has built a strong relationship with the dealers who enable product and brand promotion.
Weakness of Tata Motors
Weakness help indicates where the company needs to work on and improve, the company various weaknesses which include its limited international presence compared vis-à-vis, other car manufacturers.
The company has various opportunities to expand in the automobile market, however, this would give the company an edge into entering the global market that will enable them to increase its competitiveness with its competitors. Social influences on consumer behavior and behavioral influences on organizational buying will allow for new markets, vibrant sales, and diversifying products to meet consumer’s needs.
The changes forces and threats that have impacted the Tata motors company include globalization, increased competition, technology, mergers and acquisitions, e-commerce, and weak market policies. Globalization has strengthened opportunities for trading among different countries. Thus, it has also removed the trade barriers. With increased competition with global integration and new technological developments, competition in the automotive industry has increased (Garg, 2019). This is due to the new entrants and old entrants innovating new models; hence competition in the automobile industry has grown. To be competitive, Tata motors need to research and design products that consumers want. However, implementing an innovation without sampling consumers may be seen as a threat to the company since the company is yet to realize what consumers want and needs only after their huge investment in the innovation. With digitalization, people are more aware of different brands and the quality of the brands. Tata motors have to fuel the clients’ needs to ensure it stays competitive in the industry.
Relative market shares
Currently, tata motors hold a relative market share of 7.07% in the passenger vehicle segment. More than a decade ago, the company had a 10% market share, and the shares have continuously reduced over the years. The reduction in sales has caused a reduction in the shares (Grover, 2020).
The company is well-known for its efficient and low fuel cost vehicles in Asia. The demand for low-cost, efficient vehicles is high compared to luxury cars. Tata motor can focus on the needs of its clients, which include fuel efficiency, affordable cars, and durability. The company believes in constant innovation to meet the clients’ needs. Hence innovations of new products and cost-efficient cars give them a competitive advantage in the automobile industry
Critical elements in the situation analysis
The company has strength s and opportunities that allow it to expand its market to other areas, increase its revenue source, and attract new customers. The company should strive on the production of low costs and efficient cars, and marketing affordable cars, rather than its efficient qualities they may cut out on potential buyers.
Due to globalization and the entry of new and existing vehicle companies into the market, competition has increased. There are also changing trends in consumer demands, which need to be addressed for the company to remain competitive and relevant.
Tata motors limited has a strong brand; hence its ability to venture into a new market makes the company feel alive and doing business. The company should consider developing sufficient market mix and marketing strategies to ensure that they attract and maintain a wide range of consumers The company has a competitive strategy of manufacturing cheap and efficient cars hence has a competitive advantage over other companies in the automobile industry.
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Garg, S. (2019). Internationalization of Tata Motors: Strategic analysis using flowing stream strategy process. International Journal of Global Business and Competitiveness, 14(1), 54-70.
Grover, P. (2020). Analysis Of Profitability: A Comparative Study Of Maruti Suzuki, Tata Motors, Hindustan Motors And Mahindra And Mahindra.