Case study on Tata Motors International Strategy - Free Sample

Question: Discuss about The Tata Motors Case Study. Answer: Source Problems The business vertical chosen for the conducting the case study analysis Tata is Tata motors. The study will put emphasis on various issues and problems faced by Tata motors while adopting globalization as international strategy of expansion. Tata motors globally aims in maintaining the traditional value and the image of the brand in the target market. The diversification strategies along with the management strategies of the business division of Tata motors will be discussed in the study[1]. Apart from that, there are recruitment problems, maintenance of corporate social responsibility and upgrading of the standards of the company at global level. The main source problem lies in managing the tradition of Ratan Tata in the different business verticals of the conglomerate company. Tata Motors at global level is facing some issues in the organizational level. The role model of all the business verticals is the world famous culture of Ratan Tata[2]. Secondary Problems Secondary problems faced by Tata motors are categorized into short term and long-term categories. The problems discussed in this section will have an impact on the future regarding profitability of the business verticals. Short term Tata motors is facing an economic downturn due to the slowdown of economy not only in Indian market but also in other countries. The B and C category of cars are facing losses, as they are not selling at a first pace. There are many car companies such as Mahindra, Nissan, Skoda, Volkswagen, Hyundai, Honda, etc. that are selling the same categories of cars in the market[3]. In the section of commercial vehicles, Tata motors face tough competition from brands like Mercedes Benz, Volvo and Navistar. Long Term Tata motors is facing issues in entering into new markets. the main of the company is to achieve a substantial market share. The cost of manufacturing cars from the raw materials available in the foreign country is a challenging factor. The company is facing issues in maintaining a low cost of manufacturing of different models of cars in the foreign country[4]. Analysis The part of analysis includes the detailed analysis of the problems faced by the automobile section of the Tata conglomerate. The main problems of Tata motors includes in the expansion strategy along with the maintenance of operation of different processes of business in the foreign countries. It is seen that Tata motors faces huge cost in the manufacturing sites of different vehicles[5]. The company is lacking in finding proper supplier list in the target country. The core culture of Tata is focusing on the research and development department of its various divisions of business. Tata motors also emphasize on the development of new features on the vehicles manufactured by the company especially in the car section. SWOT analysis along with BCG matrix of the different products of Tata motors will also be described in the analysis section of the study[6]. Strengths: Strengths of Tata Motors include its strong brand image. The main market of Tata motors is its domestic market i.e. India. Customers of India along with other countries such as United States have a good knowledge of the ethics and culture followed by Tata motors in the company. Apart from that, the companys strong focus in the research and development department is considered as core strength[7]. Weaknesses: Apart from having much strength, there are many weaknesses that are prevalent in Tata motors, Recruitment of desired candidates in the strategic department is absent in the different branches of Tata motors. Formulating proper strategy related to globalization and internalization is not done properly as there are no competent managers that will take care of the international client relations of the company[8]. It also causes problems in the adoption of proper strategy of mergers and acquisitions with other foreign countries. Opportunities: Opportunities for Tata motors include immense opportunities in the foreign markets. The automobile industry worldwide is very competitive in nature. There are many countries where Tata has not entered their automobile business verticals. Tata has a worldwide reputation and has different scopes related to the operational and expansion strategies[9]. Threats: Threats of Tata motors refers to the increasing competition in the global markets. In Indian markets, many automobile companies are entering into the country for their increased sales. Lack of integration between the international strategies with the organizational goals is also considered as a threat to the organization. Ansoff Matrix of Tata motors Ansoff Matrix Analysis The Ansoff Matrix of the company describes about the position of different vehicles of Tata motors in different position of the matrix. It shows about the section of problems faced by the company in the global level along with the market share. Tata Motors can develop its new product in the new market[10]. Another problem of globalization of Tata motors is merger and acquisition. The company has done two mergers with Land Rover and Jaguar cars. The success of the merger depends on the proper implementation of the strategy regarding the internalization of the company. Internal problem is the reason of improper implementation of the strategies in the different internationalization policies. Sometimes the company chooses wrong entry modes to penetrate foreign markets. It leads to lower market share in the company. It is noticed that the market of Tata motors gradually falls in the international market due to technical bounces[11]. This is a short term in nature. Buy on stock is an issue that is hindering the company to earn its reputation and deserving market share in the target countries[12]. As per the BCG Matrix, the company has many products or vehicles that lead the company to earn huge profits. Many models of cars are not selling up to the expectation of the company. The sales prediction usually fails in many issues of strategic management and Criteria of Evaluation The evaluation of the Tata companies helped in accomplishing the goals. Vision and strategy of the company is accomplished through the four segments that will be discussed in the form of performance indicators. The performance indicators used for the evaluation of the strategies are as follows: Financial: Financial indicators include the main section of repaying the debt that Tata motors have lend from the bank. Reduction should be present in the debt level that is mentioned in the balance sheet. It should be performed within five years. Customer: With the development of the new car segments, Tata motors will be able to target new segments of customers in the newly penetrated foreign markets. The company should make a projection of the future sales that are targeted based on the target customers. International Business Processes: Development in the small car segment for higher income segments. Within the coming years, the availability of the product and the improvement of sales in the various segments of cars at tomorrow. Learning and growth: The vision, mission and the goals for improving the internalization strategies along with some internal operational problems are considered under the learning and growth of the employees and company as a whole[13]. Alternatives The major feasible actions are categorized under short term and long-term categories. These alternatives can be used if the recommended strategies are not working properly in the practical field. Short term Various types of trainings and developmental programs are formed for the present employees of Tata motors so that they can manage the operations of the company. Cross-cultural communication is practiced so that these managers can communicate with the other managers that are located in the foreign locations. It will help in cracking the deals of Tata automobiles with other companies. It is an alternative method that Tata motors can use instead of recruitment and selection of new candidates from the countries as it is a time and cost incurring method. Long term Long term strategies includes the proper selection of entry modes while capturing a market share in a foreign countries. The company can also think other strategies that will motivate the research and development department of the company to develop several approach and strategies both for developing models in commercial vehicles and small cars for middle-income group people. In the developing countries, there are many people that belong to middle-income group. They are considered as huge segments of target customers for the company[14]. Recommended Strategy Short term The recruitment policies of the company must be changed or modified as per the current trends of the market. Employees will shift to other companies if they found competitive advantage in the required designation. However, Tata has many advantages in the schemes of HR policies. However, there are lack of people that are actually eligible in the designations that are involved in the internalization. Organizational culture is not followed properly in many verticals of Tata automobiles. The senior management should focus on this issue particularly to cope up the gap created by the officials of the organization. Long term Tata motors have to formulate sustainable strategies related to the manufacturing sites that are present in foreign location. It should also focus on formulating strategies that controls the cost of production of the cars in the manufacturing sites of the company. Research and development department should find some new features and systems that attract the customers compared to other products of the market[15]. Focusing on higher price segment cars in developed countries of North American and Europe will lead to profitability and increase in the market share. Selection of proper entry mode while penetrating a new target market is essential for maintaining market share in the global automobile market. Justification of Recommendations The recommendations that are suggested in the previous paragraphs for the short term and long-term categories are justified. There are many strategies Tata can implement to mitigate the strategic issues in the field of globalization and internalization. However, the above-recommended strategies are the best methods of solution provided to the company. Recruitment of the deserving candidates by implementing improved methods is the best solution that can easily handle the organizational problems[16]. Employee benefits are also introduced for the new recruited employees to motivate them in their field of work. Development of cars for the high-income segment in the foreign countries is a good example of long-term strategy that will help in gaining a significant market share in the global automobile market. Innovation in the field of the research and development is an example of development of new products in the market. Various policies of management should be introduced in the organizat ional level and its impact on other operational process of the company is essential for the long-term success. Short-term policies are involved in the change of the environment and process of operations in the manufacturing facilities of Tata motors at different foreign locations. Implementation, Control and Follow-up Creating recommendations for the company is not the only task to be commenced. It is important for the mangers of the company to check whether the recommended strategies are properly implemented in the company or not. The management team of the company in different branches must control implementation of the recommended approaches. A centralized approach should be followed in the management of the organization. Control of the new strategies helps in mitigating the effect of these approaches in the respective divisions of the company. Follow up of the approaches is a crucial thing that is used by the middle level management for checking the degree of implementation. A team should be framed in every branch of Tata motors so that they are responsible for creating a report on the working procedures of the new strategies formulated for the Tata motors. Various departments of the implemented approaches must communicate with the head present in the branches of the office. References Agarwal, Ritu, and Peter Weill. "The benefits of combining data with empathy."MIT Sloan Management Review54, no. 1 (2012): 35. Banerjee, Bhabatosh. "Working Capital Management in Tata Motors Ltd."The MA Journal51, no. 5 (2016): 84-87. Becker-Ritterspach, Florian, and Gert Bruche. "Capability creation and internationalization with business group embeddednessthe case of Tata Motors in passenger cars."European Management Journal30, no. 3 (2012): 232-247. Bhardwaj, Garima, and Sumit Agarwal. "Business ethics and corporate social responsibility at tata group."International Journal in Management Social Science2, no. 9 (2014): 37-47. Farooque, Asma. "An empirical study on identifying developing the training program for problem solvingTata Motors Ltd, Lucknow."ZENITH International Journal of Multidisciplinary Research5, no. 11 (2015): 30-39. Grant, Robert M.Contemporary strategy analysis: Text and cases edition. John Wiley Sons, 2016. Kamley, Sachin, Shailesh Jaloree, and R. S. Thakur. "Long Term and Short Term Investment Strategy for Predicting the Performance of BSE using MLP Model."Indian Journal of Science and Technology8, no. 22 (2015). Khosla, Rekha. "Knowledge Transfer Mechnasims: A Study of Tata Motors."Review of Knowledge Management3, no. 1/2 (2013): 23. Lim, Chaisung, Seokhee Han, and Hiroshi Ito. "Capability building through innovation for unserved lower end mega markets."Technovation33, no. 12 (2013): 391-404. Maya, G., and Uma Rani. "PERMANENT PROBLEMS OF TEMPORARY WORKERS IN AUTOMOBILE INDUSTRY."International Journal of Logistics Supply Chain Management Perspectives2, no. 4 (2013): 679. Mullick, N. H., and Gaurav Tripathi. "FIAT: a good product with a wrong strategy."Emerald Emerging Markets Case Studies3, no. 1 (2013): 1-13. Perwez, Syed Khalid, Abdul Khalique, H. Ramaseshan, and T. N. V. R. Swamy. "The Link between Salary and Psychiatric Problems among the Industrial Workers."Asian Social Science10, no. 7 (2014): 87. Perwez, Syed Khalid, Abdul Khalique, H. Ramaseshan, TNV R. Swamy, and Mohammed Mansoor. "Nature of Job and Psychiatric Problems: The Experiences of Industrial Workers."Global journal of health science7, no. 1 (2015): 288. Trivedi, Lisa. "David Arnold. Everyday Technology: Machines and the Making of India's Modernity."The American Historical Review119, no. 5 (2014): 1667-1668. Verma, S. S. "Latest developments of a compressed air vehicle: A status report."Global Journal of Research In Engineering13, no. 1 (2013). Williams, Timothy, and Nicholas S. Vonortas. "Strategic Alliances/Knowledge-Intensive Partnerships." InInnovation Policy, pp. 47-63. Springer New York, 2015.