Chapter 6

Corporate Level & International

Strategy
 Corporate Strategy
• The current strategy of TATA Motors can be
best summarized as “Disruptive Innovation.”
• Tata Nano has taken the world with awe.
• The strategy & learnings have gone a long way
with TATA Motors earning net profit of more
than 1000 crores, even during the lean
financial year of 2008-09 too.
• It focused on domestic & international growth
through new products & improved sales &
services.
• Cost reduction Initiatives.
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 Diversification

TATA MOTORS follows related diversification as it provides a wide range of vehiclesfor different
customer segments. It has launched various models according to the emerging demands in the demands.

• The chronology is as follows –

 1977– First CV (commercial vehicle) from Pune plant.
 1983– First HCV (heavy commercial vehicle) rolled out.
 1986– First LCV (light commercial vehicle) (Tata 407) launched followed by Tata 608.
 1991– First passenger car Tata Sierra launched.
 1992– Tata Estate launched.
 1994– Launch of Tata Sumo.
 1995– Mercedes Benz car E220 launched
 1997– Tata Sierra Turbo launched.
 1998– India’s first SUV launched.
 1998– India’s first indigenous Passenger Car Indica launched.
 2001– Second Generation Indica v2 launched.
 2008– Launch of Suma Grande
 2008– Launch of Nano at ninth Auto Expo
 International Diversification
OTHER COLLABORATIONS/M&A & JVs
West Europe Russia*
• Tata Daewoo Commercial Vehicle
• Hispano in Spain & Marcopolo In Brazil U.K. Ukraine*
• JV with Jardine Matheson for Italy
ConcordeMotors Central Asia
• Technology Tie Ups at Spain,Italy Afghanistan East Asia
Uzbekistan China
North Africa South Korea*
Egypt
South Asia
West Africa Bangladesh *
Senegal Nepal, Sri Lanka

LATAM
South East Asia
Brazil West Asia Malaysia*
Saudi Arabia Thailand
Iraq, Iran
South Africa East Africa
South Africa* Kenya*
 Cont..
• Global context it caters to three main market segments: Passenger cars, utility vehicles and
commercial vehicles.
• They followed the strategy of acquisition and joint ventures in its mid-stage and launched new
products at a rapid pace in different market segments.
• Tata Motors has operations in the UK, South Korea, Thailand and Spain.
• In 2004, it acquired the Daewoo Commercial Vehicles Company, South Korea's second
largest truck maker.
• Tata Motors is also expanding its international footprint, established through exports since
1961. company's commercial and passenger vehicles are already being marketed in several
countries in Europe, Africa, the Middle East, South East Asia, South Asia and South America.
• In 2005, Tata Motors acquired a 21% stake in Hispano Carrocera, a reputed Spanish bus and
coach manufacturer, giving it controlling rights of the company.
• Tata Motors has expanded its production and assembly operations to several other countries
including South Korea, Thailand, South Africa and Argentina and is planning to set up plants
in Turkey, Indonesia and Eastern Europe
 Product/Market Diversification

• On Tata's journey to make an international foot print, it continued its

expansion through the introduction of new products into the market range
of buses (Starbus & Globus) as well as trucks (Novus)

• These models were jointly developed with its subsidiaries Tata Daewoo
and Hispano Carrocera.

• In 2006, it formed a joint venture with the Brazil-based Marcopolo, a

global leader in bodybuilding for buses and coaches to manufacture fully-
built buses and coaches for India and select international markets.
Products of TATA Motors

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 COMMERCIAL VEHICLES
TROOP CARRIER

LSV
TATA 407

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 TATA MOTORS - bcg matrix
The BCG matrix method is based on the product life cycle theory that can be used to
determine what priorities should be given in the product portfolio of a business unit. To
ensure long-term value creation, a company should have a portfolio of products that
contains both high-growth products in need of cash inputs and low-growth products that
generate a lot of cash. It has 2 dimensions: market share and market growth. The basic idea
behind it is that the bigger the market share a product has or the faster the product's market
grows the better it is for the company.

The bcg of Tata motor is as follows

The top products of tata motors

1.Stars- TML Passenger vehicle segment, LCV(TATA Ace)

2. question mark - NANO,JLR ( New inventions)
3. cash cows - HCV and LCV
4. dogs - ********
 STRATEGY ANALYSIS
• INTEGRATION STRATEGIES
YEAR ACQUIRED COMPANY COUNTRY STAKE ACQUIRED VALUE
1993 Cummins Engine co.

2004 KRW120 billion

Daewoo Commercial 100 per cent
Korea ($102 million /
Vehicle Company (wholly-owned)
Rs465 crore)
2005 Tata Finance India Merger
2005 Euro12 million
Hispano Carrocera Spain 21 per cent
(Rs70 crore)
2008 Jaguar and Land $2.3 billion
UK  
Rover brands (approximately)
2009 Hispano Carrocera Remaining 79
Spain
SA per cent
DIVERSIFICATION & EXPANSION
STRATEGIES
 DIFFERENTIATION STRATEGY
• TATA Motors are manufacturing Rover
branded TATA Indicas offering Luxury cars to
Indian Market.
• TATA Motors Vehicles meet International
norms like EURO III Emission for passenger car
and EURO II for LCV’s.
• European Standards for frontal and side safety
impact for passenger cars.
• Offer a wide range of product line and the
cheapest car of the world--- TATA NANO.
Value Creation Activities by Corporate
Parent
TECHNOLOGICAL RESOURCES:
R&D establishments at Jamshedpur, pune and lucknow – over
1400 engineers.
India’s only certified crash test facility for cars and hemi
anechoic chamber for testing of noise and vibration.
Tata Motors European Technical Centre (TMETC) set up in 2005
primarily involved in design engineering and development of
products, supporting Tata Motors skill sets.
Tata Daewoo commercial vehicles has its R& D IN Gunsan, South
Korea.
Value Creation Activities by Corporate
Parent
• Sound leadership : JRD, Sumant Moolgaokar, Ratan
Tata.
• Ethical business practices: guided by the tata code of
conduct.
• Successful handling of integration issues:
Tata Daewoo, Jaguar and Land Rover.
• Reputation and recognition: Tata brand.
• CSR initiatives.
• Adaptability to the changing business dynamics.
 Ansoff Matrix
Existing Product New Product
Existing  Market Penetration  Product Development
Market  Faster and reliable customer  Planning to introduce more
service to build stronger inexpensive cars (by launching more
relationships with the inexpensive cars in the Indian market
customers. they can create a monopoly in the
 Providing free services for low-end markets because no
certain period of time. competitors has an ability to offer
such high quality at low price).
New  Market development  Diversification
Market  Mergers & acquisitions with  By Producing the hybrid cars in
international companies in Europe and Africa has a promising
new potential markets. future due to the increased
 Celebrity endorsements environmental awareness.
 Entering European markets with
small cars and high fuel efficiency
 International Strategy based on
competitive advantage
• New Product (e.g. Tata Nano, the cheapest car in
the world)
• Acquisitions (e.g. Land Rover & Jaguar brands
from Ford Motors)
• Partnership with established companies (eg.
Alliance with Fiat since 2006) to enhance the
product portfolio & knowledge exchange.
• Facilities for learning from other companies
• Developing programmes for intensive
management development.
 Parenting & Synergies (2+2=5)
• To buy premium vehicle brands such as Land
Rover & Jaquar bolster Tata Motor’s image as
a global company & increase its global reach &
scale.
• Overall, the TATA group has spent around
$15.5 billion in acquiring foreign companies.
• Leveraging the unique asset of trust which it
has created to enhance group synergy &
become globally competitive.
 Parenting & Synergies (2+2=5)
• Synergy developed as a result of the strengths
of domestic & foreign market share,
congregating under the umbrella of Tata
Group.
• The TATA group has a whole operating in
more than 80 countries worldwide share with
its various SBU’s, lots of experience &
research for development purposes.
Corporate Advantage From Diversified Business