SWOT Analysis

Swot Analysis of TATA Motors

by Faizul Haque

The SWOT of TATA Motors will elaborate on the strengths & weakness of and the opportunities & threats for one of the biggest automobile companies in India.

TATA Motors is one of the oldest multinational companies of India, founded in the year of 1945. It was previously known by the name TELCO. TATA Motors is the worlds fifth-largest automobile manufacturing company. The founder and chairman of TATA are Ratan Tata, and the headquarters is in Mumbai, India. In its diversified portfolio, it has many types of products. The products include trucks, passenger cars,  vans, buses, coaches, and military vehicles, construction equipment.

Swot Analysis of TATA Motors

The Strengths of Tata Motors

Diversified Portfolios: Tata has a large, well-diversified portfolio of products. The well-diversified portfolio of vehicles makes it bring stabilization in its sales and profit. It brings confidence to the investors who are interested in this company to invest.

Stabilized Earning: It has been earning stabilized profit. Tata has a good management policy. It can be noticed when they acquire new companies. One study showed that Tata will only purchase those companies which have the same management system. They follow this policy only because they have confidence over their management policies.

Recognized Brand: TATA is a well-known brand in the home country, and in the neighbour country like Pakistan, Bangladesh etc. One of its most recognized brands is Jaguar Land Rover PLC, among others. 

Number of Employees: It has a large number of employees. Under Tata group, more than 660,800 employees are working. And 66000 people are working in the automobile company as of 2016.

The Weaknesses of Tata Motors

Indifferent to Changes: Automobile industry is a very competitive industry. Every company in this industry remain competitive as most of the automobile companies are very old and experienced in this business. They offer a new model and tech-savvy cars. But Tata Motors is indifferent in this case. Its large model base is old.

Global Presence: Automobile industry is not limited to the local market. If it is limited to a specific area, then it’s a strong barrier to the growth as other foreign companies may enter the same market. Tata remained silent in achieving global market shares. It has not penetrated in many international markets until now.

Weak Marketing Policy: Strong marketing policy is the strength of a company. It is the way a company can know the demands of their customers and produce the products accordingly. Also, it helps the company to communicate with consumers and inform about the value they are planning to deliver. The TATA does not have strong marketing policy to promote its product world-wide.

Narrow Domestic Market: As Tata did not enter too many global markets, it developed its business in the local market. But only the local market is not enough for a company like Tata motors.

The Opportunities for Tata Motors

Global Positioning: For developing a strong brand image, all it needs to have a strong marketing policy. This can make a new customer base in the local market and worldwide as well. If TATA Motors wants to position its products heavily, it can. All it needs to have stronger marketing and promotional policies.

Opportunities for Merger and Acquisitions: Merger and acquisition is a pretty common tradition in the automobile industry. Tata has a long experience as it is one of the oldest companies in India. As it has grown bigger, it has grabbed the capabilities for acquisitions. Also, it has its own proved management policies that may help to manage newly acquired companies.

Increasing Purchase Power of Indian People: The sales of a product largely depends on the price of the products. If prices are reasonable, a company can easily develop tech-savvy modern cars and meet the sale target. as the people of India are earning more than before, they are having more purchase power.

Expanding Auto Market: The world is becoming modernized. People are being dependent on transportation facilities heavily. It will increase the sales of motor vehicles. As Tata still has the opportunities to enter a different foreign market, it has a great expansion opportunity.

The Threats for Tata Motors

Fuel Price: The cost of fuel affects the sale of a vehicle not only in India but also all over the world. The fuel price and the sales of the cars directly negatively related. So, if the product price increases, it will reduce the sales volume. This is one of the biggest threat for the car companies.

Government Law on Environment: Many countries are developing law on carbon emission. If India develops such kind of law, TATA might need to develop more carbon-efficient cars which may need additional investment. This requires additional investments.

Market competition: The automobile market is so much competition. These companies are frequently offering newly developed cars which have fuel efficiency, modern models, technologies, and environmental friendliness. TATA has many strong competitors in this sector. So, it has to remain cautious and become more competitive.

Increasing Production Cost: In this modern era, competition has increased. As a result, the production cost is more than before as the company has to be more competitive for offering innovative products.

Bottom Line

Tata Motors has more strengths than weaknesses. It is a locally organized company means most of its business operations are in the local market. It should develop new strengths and utilize its future opportunities to grow it further.

Related:

Sources:

  1. https://en.wikipedia.org/wiki/Tata_Motors
  2. www.tatamotors.com/
  3. www.tatamotors.com/trucks-buses/
  4. www.tata.com/company/profile/Tata–Motors
  5. http://marketingdawn.com/swot-analysis-of-tata-motors/