SWOT Analysis of TATA Motors

SWOT Analysis of TATA Motors
Sresth Verma
BBA 6A
05290201718
What is SWOT Analysis?
Acronym of SWOT is Strengths, Weaknesses, Opportunities and Threats. It is process of accessing
four major aspects of the company before taking any strategic decision.
• Strengths
1. Strengths are nothing but the areas where you are good at. The qualities or the offerings that
makes you stand out in the competition. For example: Before launching Jio, Reliance has good
market capital and telecom infrastructure. That helped them to capture more market in less time
by offering services at lower price.
• Weakness
1. Weakness are the areas where there is scope of improvement. The qualities or the offerings that
may fire against you in the competitive environment. We can say that Reliance has no experience
in Telecom Industry before launching JIO, inexperience can be considered as their weakness. We
can find weaknesses if we evaluate our self critically.
• Opportunities
1. Opportunities are the external avenues that can help you or that can be explored to gain
advantage or bring positive result.
2. We can make a huge difference if we will be able to utilize these kind of opportunities. Again
for Reliance, the high cost of internet services was the opportunity. They took opportunity
with both hands and penetrated into market by reducing the prices to minimum.
• Threats
1. Threats include the factors that can affect your business negatively. It is important to identify
the threats as early as possible to avoid the major losses. We can focus on our competitors
when we are accessing the threats in the markets.
2. Not only competitors but any external political, social and technological factors also
constitutes threats. The major threat for reliance can be in retaining their customers, who
joined Jio seeing less price if they increase prices in future.
TATA Motors- Company Overview
Company Overview
• TATA Motors is one of the biggest automotive manufacturing
companies started in 1945 by JRD TATA. It is a subsidiary of
TATA Group, the biggest Indian conglomerate. It was earlier
called Tata Engineering and Locomotive Company Limited.
The main focus of the company was to manufacture
locomotives till 1971.
• TATA Motors entered into manufacturing passenger vehicles

in 1988 and never looked back.
Competitors
• Even though TATA hold major share in the Auto market in India,
there experience high competition from Mahindra & Mahindra,
Maruthi Suzuki, Ashok Leyland, Bajaj Auto Etc.
• Auto Industry is going through a rough phase for the last few years
due to demonetization, economic slowdown, the latest corona
pandemic, etc. Let us look into the SWOT Analysis of TATA
Motors.
Competitors
Strengths of TATA Motors
• Brand Loyalty
• TATA is regarded as one of the country's trusted brands for a century
and has its presence worldwide. This is one of the competitive
advantages for TATA Motors.
• Acquisition Strategies
• Mergers and acquisitions, if adequately implemented, increase the
profits due to the synergy effect. TATA Motors has the most
significant history of acquiring Jaguar Land Rover, Daewoo, Hispano,
etc., and making profits from those acquisitions.
• Strong Management team
• MR. Guenter Butschek, the former COO of Airbus, heads Tata Motors and
has a strong leadership team consisting of stalwarts like MR. N.
Chandrashekaran, M. O. P Bhatt, etc., is the biggest asset in the tough
times. TATA motors have reached 52-week record high share price and gain
a quarter on quarter profits from the last three quarters after recovering
from its poor performance from the previous five years.
• Established distribution and service Network

• TATA motors have a distributed service network across the country, with
over 1600 workshops covering 90% of our country's districts. This
established distribution network also helps in having a competitive
advantage which helps in market penetration.
Weaknesses of TATA Motors
• Increase in Operation cost and reduced profits
• Even though the acquisition of Jaguar and Landover was successful for the initial few
years. It made the company more dependent on this subsidiary for its overall
performance. This is decreasing the overall sales and profits of the company from last
five years.
• Unsuccessful in finding a foothold in Luxury Segment

• TATA Motors is still struggling to obtain its foothold in the luxury market, where the
profit margins are more. The brand is yet viewed as best for its low-cost vehicles.
• Limited Presence compared to International Moto Manufacturers

• TATA motors have a limited presence across the world than international
competitors like Toyota, Honda, Volkswagen, etc.
Opportunities of TATA Motors
• TATA NANO
• Even though TATA NANO was not a great success in our
country and got shut down in 2018, they can implement
this model in third world countries and see the feasibility.
• Shift focus in developing luxury car brands

• TATA Motors is known for its low-cost cars. As they have
acquired a good number of subsidiaries in last decade.
They should take the leverage in developing.
• Low credit rate
• Due to the economic slowdown, the government has slashed credit rates and has not
increased them for at least two years. TATA Motors can use this as an advantage for
market penetration by raising credit from the market to increase production
• Increasing the cost of Research and Development

• TATA Motors products are seen as traditional models, though they tried to diversify
to meet millennial' needs. Though the company is spending more than the industry
average on Research and development, it is comparatively low with big players in the
industry. This might open new avenues for the company.
• Electric Vehicles:
• TATA is seeing opportunities and expanding its market to electric vehicles also,
introduction of Hybrid Cars, Electric cars and fuel efficient cars.
Threats of TATA Motors
• Uncertainty in fuel price hikes
• The fuel price is continuously varying from low to high nearly from last year. The
OPAC countries try to reduce the production due to the Covid pandemic and
constant truffle between Russia and OPAC countries. This uncertainty might create
a negative impact on buying decisions of the buyer.
• Increase Tax on Fuel Consumed
• The central and state governments have been increasing their tax rates for the last
years through the fuel oil price per barrel decreases. The cost of petrol nearly
reached 100/litre. The increase in petrol prices impacts negatively on the sales of
the automotive industry.
• Rivalry
• The automotive industry is the oldest in our country. Big brands like Maruti,
Mahindra & Mahindra, Hero, and Bajaj Auto are both experienced in the industry
and innovative in their solutions. This stiff competition is always a threat for TATA
Motors.
• Base -VI Norms

• The government's decision to introduce Basel -VI norms from Basel- IV is creating
confusion in users' minds over the purchase decision from the last year. To make
the vehicles compliant with new standards, automakers have to move to new
technology. This increases the cost of production and decreases the profit margin
for players across the Auto industry.
Overall Analysis
• Overall, from the SWOT Analysis of TATA Motors, we
can say that it is a company with tremendous potential
led by one of the country's best management minds
under TATA Group's shadow.
• It should focus more on improving profits that were

stagnant for the last five years and finding its foothold
in the Luxury car market.

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What are some of TATA Motors' strengths?

What opportunities can TATA Motors leverage?

SWOT Analysis of TATA Motors

• TATA Motors entered into manufacturing passenger vehicles

• Established distribution and service Network

• Unsuccessful in finding a foothold in Luxury Segment

• Limited Presence compared to International Moto Manufacturers

• Shift focus in developing luxury car brands

• Increasing the cost of Research and Development

• Base -VI Norms

• It should focus more on improving profits that were

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