Previously we looked at the SWOT Analysis of Nissan, a leading Japanese automotive company. In this case study, we will analyse the SWOT Analysis of Tata Motors.
Tata Motors Limited, a subsidiary of the Tata Group, is an Indian multinational automobile manufacturer. They encompass a wide range of vehicles, including automobiles, SUVs, buses, trucks, pickup trucks, and military vehicles.
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Let’s start with Tata Motors’ history, founding, finances, services, and market competitors in this SWOT Analysis of Tata Motors.
About Tata Motors
Tata Motors is a leading global automobile manufacturing company and is a $44 billion big organisation. It has a diverse range of products which includes an extensive range of cars, trucks, buses, sports utility vehicles and defence vehicles. It is one of India’s largest Original Equipment Manufacturer offering a wide range of smart, integrated and e-mobility solutions.
Founded in 1945 by the name of Tata Engineering and Locomotive Company ( TELCO ). The company manufactured its first commercial vehicle in 1954 with Daimler – Benz Az, a collaboration that ended in 1969.
The company entered the passenger vehicle market in 1988 by launching Tata Mobile followed by Tata Sierra in the year 1991 and became the first Indian manufacturer achieving the capability of developing a competitive indigenous automobile.
In 1998 Indica launched the first fully developed Indian passenger car. Then came the world’s most affordable car, Tata Nano in 2008. In 1988 Tata Motors entered into manufacturing passenger vehicles and it never looked back.
|Founder||J. R.D Tata|
|No. of Employees||Mumbai, Maharashtra India|
|Company Type||78,906 (2021)|
|Market Cap||$25.37 Billion (2021)|
|Annual Revenue||$42 Billion (2021)|
|Net Profit||$−1.7 Billion (2021)|
Products of Tata Motors
- Luxury Vehicles
- Commercial Vehicles
- Automotive parts
- Pickup trucks
Competitors of Tata Motors
- Mitsubishi Motors
- Caetano Bus
- Hyundai Motor
Now that we have covered the demographics of the company, let’s dive into the SWOT Analysis of Tata Motors.
SWOT Analysis of Tata Motors
SWOT analysis comprises the strengths, weaknesses, opportunities and threats of a brand. Now we’ll discuss the detailed swot analysis of the world’s leading automobile company and also analyze the internal and external factors impacting the company.
1. Strengths of Tata Motors
- Recognized Brand Image:- Tata Motors is a well-recognized global automotive brand. The company itself sells its vehicles under various brand names like Jaguar Land Rover, Tata Hitachi, Tata Daewoo, Tata Marcopolo etc. This has not only expanded the company’s market but has also increased the brand value and the brand image of the company
- Market value:- The estimated market capitalization of Tata Motors by Forbes is 4.5 billion dollars in 2021. They ranked as the 1037th position in the Global 2000 top companies in 2020.
- Established Distribution System:- Tata Motors has a global distribution network of over 1600 workshops that cover 90% of the country’s district. Manufacturing units in different countries prove that the company has an active supply chain system.
- Market Penetration:- Established distribution system gives a competitive advantage which helps in market penetration. Also providing basic services like rental cars, and taxi cabs has allowed the company to diversify and reach a greater customer level.
- Research and Development:- The company spends more than 23% of its complete budget on research and development. It shows the company’s dedication to its productivity and growth. Tata Motors has also established its research centres in countries like the UK, India, Spain, and South Korea.
- International Presence:- Tata Motors is running its business in more than 125 countries globally
2. Weaknesses of Tata Motors
- Greater operational costs and a lower rate of profits:- Though the company has the acquisition of brands like Jaguar and Landrover which were successful in the initial years it made the company more dependent on its subsidiaries. This resulted in a decrease in the overall sales and profits of the company over the last five years.
- Controversies:- Back in 2008 the company launched the construction work of Tata Nano in India, Singur and West Bengal. During that time the West Bengal government interfered and controlled the land under the Land Acquisition Act 1894, where a factory was going to be built by the company. This happened because West Bengal wanted Tata Motors to establish a company within the state.
- No Foothold in the Luxury Segment:- Tata Motors is still struggling to find a strong foothold in the luxury market, where profit rates are more.
- Limited Presence:- As we saw that Tata Motors is operating the business in over 125 countries globally. But, unfortunately, the company failed to make a strong impact like its competitive brands like Ford, Toyota, Honda and Volkswagen.
3. Opportunities of Tata Motors
- Digital Marketing:- We are all familiar with the terms of digital marketing and the benefits of marketing a product digitally. Almost every top brand and company is using social media to connect with their target audience. Tata Motors should also take full advantage of all the platforms of social media and increase its engagement with its target audience. Which will help the company to get proper feedback about improving the products and services.
- Tata Nano:- Being the most affordable Tata Nano was not a great success in India and got shut down in 2018, but still the company can implement this model in other countries and see the feasibility.
- The Supply Chain and Service:- The best way for the company to enlarge its market further is by expanding its supply chain system and distribution network in its current market.
- Acquisition, Merger, Joint Venturing:- This has already helped the company before as it already has famous brands like Jaguar, Daewoo, Hitachi etc. The company should keep following the same pattern as other brands. As it will help the company to increase its sales and profitability.
(Source: Business Insider)
4. Threats to Tata Motors
- Pandemic:- Pandemic was not only deadly to health but also to the economy as well all around the world. During the pandemic,- people lost jobs and lots of companies went out of business. A pandemic will always be a big threat to all the companies and businesses out there.
- Competitors:- Tesla, Honda, Hyundai, BMW etc are big competitors of Tata Motors. Competitors’ market share growth and customer’s market expansion result in lower market share for the company.
- Price:- The competitors are always in competition with Tata Motors on price as they offer the latest advanced designs and features at lower prices. Which in turn impacts the sales and profit of Tata Motors.
- Innovation of Competitors:- Their competitors have got lots of access to skilled professionals and resources which helps them to create innovative technology and designs with better engineering in this industry. Innovation is good for industrial growth but is one of the threats to the industry.
With this, we come to the end of the SWOT Analysis of Tata Motors. Let’s conclude the case study in the section below.
With this in-depth study of Tata Motors, we can conclude by saying that Tata Motors is the world’s leading automobile manufacturing company. The company has a recognised status in the motor industry with their esteemed market value, distribution network, and strong research and development. To continue holding their stance in the market they have to work on a foothold in luxury cars. Possible acquisitions, better pricings and efficient digital marketing will pose a great help.
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