Long term survival for the organization in the industry is difficult in today complex environment
where national boundaries are transparent, competition is complex and external environment can
change at any time. The word change always remain same for the organizations, not updating
products and services soon means that you will be soon out of the industry.
Porter suggested three strategies for the organization to retain the long term sustainable competitive
advantage. The strategies are called as cost leadership, differentiation and focus, company can
adapt one or more than strategies depends upon the resources and the level of competition.
Cost leadership
Cost leadership strategy best fit in the industry where the customers are price sensitive and change
in price impact on demand. Utilization of assets, refine processes can reduce the cost. If the
organization have the ability to control over production cost of product and service and easily
quote low prices for their offering in the market by maintaining good quality. The organization
can also survive in the situation when the country economic conditions are at low level and
inflation increases with speed.
Dell computer provide personal computer and laptops at lower cost to their customers without
sacrificing the quality because they have well defined processes and procedures. Southwest
Airlines offer low cost traveling with comfort, elimination of cost is possible for southwest by
route selection and not providing extra luxuries services which increase the cost. Wal-Mart
proper inventory management allows them to cut the cost result in variety of products at lower price.
Differentiation Strategy
Why customer prefer your offering over your competitor if there is no price difference in this
case cost leadership strategies never works. In Oil industry price are decided by authorities not by
the organization, differentiation is created by providing services and relax environment.
Companies add new feature and value added feature in their offering which competition is
missing out in their product. Disney is the organization totally based upon differentiation; they
provide the new experience to their customer. The organization where people are skillful and
more involve in R & D can create differentiation with ease.
Focus Strategy
Organization focuses on the segment to which they can provide better offering. These
organizations are specialized on their domain and continuously bring improvement for customer
satisfaction. BMW produce adopt focus strategy, high pay executives are the niche for the
organization. BMW is the expensive brand has limited market of potential customer that’s why
they are enjoying better financial status.
Combination of Strategies
As I make this point clear that it’s not important to follow one strategy, combination of these
three strategies can create better competitive advantage.
Tata Buys Jaguar (Pest Analysis)
Tata buys Jaguar in £1.15bn deal
Thousands of workers at Jaguar and Land Rover plants were told that the marques have been
sold to the Indian conglomerate Tata.
A deal between Tata and Ford over the sale of two of the best known names in British car
making was concluded after months of painstaking negotiations.
Overview of the two companies:
Tata:
Tata Motors Limited is India's largest automobile company, with revenues of Rs. 32,426 crores
(USD 7.2 billion) in 2006-07. It is the leader by far in commercial vehicles in each segment, and
the second largest in the passenger vehicles market with winning products in the compact,
midsize car and utility vehicle segments. The company is the world's fifth largest medium and
heavy commercial vehicle manufacturer, and the world's second largest medium and heavy bus
manufacturer.
PEST ANALYSIS
Political:
• Strong tax incentives for inbound investors
• Strong political motivation for globalization
• Strong reputationand trust
• Adaptive legislative framework
• Negative effect on the IT industry after 2009 as the government’s initiative of Tax holiday
under STPI expires (Thinking Street 2007).
Economic:
• Strong technical skills
• Strong export base
• Strong infrastructure links
• Competitive labour cost model
• Adaptive investment authority to technological investments
• Highly mobile work force
Social:
• Strong science and educational culture
• Strong management culture
• Adaptive English speaking population
Technological:
• Strong R & D culture and facilities
• Strong tie-ups with western technology companies
• Adaptive to new technologies
Jaguar:
Jaguar Cars Limited is a luxury car manufacturer based in Whitley, Coventry, United Kingdom
with two production plants in Castle Bromwich and Halewood. It was founded as the Swallow
Sidecar Company in Blackpool in 1922, changing to SS Cars Ltd in 1934 in Coventry, and
finally becoming Jaguar Cars Ltd in 1945, followed by several...
Pest Analysis On Tata
INTRODUCTION : - Tata Group was Established under the parent company in year 1945. Tata
Motors Limited has become India’s largest automobile company. It was the first Indian
automobile company to list on the New York Stock Exchange. Tata Motors began manufacturing
commercial vehicles in 1954 with a 15-year collaboration agreement with Daimler Benz of
Germany. This partnership has led Tata Motors to not only become India’s largest automobile
company but also India’s largest commercial vehicle manufacturer; the world’s top five
manufactures of medium and heavy trucks and the world’s second largest medium and heavy bus
manufacturer. Having just entered the passenger vehicles market segment in 1991, Tata Motors
now ranks second in India’s passenger vehicle market.
Tata has enjoyed the prestige of having developed Tata Ace, India’s first indigenous light
commercial vehicle; Tata Safari, India’s first sports utility vehicle; Tata Indica, India’s first
indigenously manufactured passenger
car; and the Nano, the world’s least expensive car. They have long been known for their
commercial vehicles and in the past ten years entered into the passenger car market. Currently,
Tata Motors has a line of five passenger vehicles and a large line of commercial vehicles
producing pickups, trucks, tractor trailers, tippers, and buses. Both product lines of the Tata
Motors group have seen success, but much of this has been built upon the more deeply
established commercial vehicle product line.
PEST ANALYSIS
A PEST analysis is one of them that is merely a framework that categorizes environmental
influences as political, economic, social and technological forces. Sometimes two additional
factors, environmental and legal, will be added to make a PESTEL analysis, but these themes can
easily be subsumed in the others. The analysis examines the impact of each of these factors on
the business. The results can then be used to take advantage of opportunities and to make
contingency plans...
It is the only fully integrated automobile manufacturer that now stands as India's largest and the world’s
5th largest passenger automobile and commercial vehicle manufacturing company with a product range
designed to meet national and international transportation needs.
Tata Motors has a wide portfolio ranging from a Tata Mercedez Benz truck to diversifying into passenger
cars like Tata Sierra,Tata Estate,Tata Indigo and Indica, concept vehicles like Aria Roadster and Tata
Elegante, commercial vehicles like Tata heavy trucks and military vehicles.
Tata Motors was first listed on the NYSE in 2004. It created wealth of Rs. 320bn during 2001-2006 and
stood among top 10 wealth creators in India.
It has its manufacturing bases in Jamshedpur, Lucknow and Pune. Tata Motors has recently had
a couple of important mergers and acquisitions like with Daewoo in South Korea, Hispanso and
a JV with Fiat.
Tata Motors is a company of the Tata and Sons Group, founded by Jamshetji Tata and is
currently headed by Ratan Tata who is the chairman. The company has the workforce of 22000
employees working in its three plants and other regional and zonal offices across
the country. This report analyses the current market position of Tata Motors and gives details
regarding the company’s plans and strategies for growth in the future.
[pic]STRENGTHS
Post liberalization, in order to expand rapidly, the company adopted the route to joint ventures
(JV):
• 21% stake in Hispano Carrocera, a Spanish bus manufacturing company and introducing its
high-end inter-city buses in the country.
• A 70% JV with Thailand’s Thonburi (auto...
