21st March 2022
SWOT Analysis of Tata Motors
Today, we will analyze the SWOT analysis of Tata Motors in detail. Tata Motors is a member of Tata Group, an Indian multinational automotive company. They have a diversified product portfolio with amazing offerings such as SUVs, military vehicles, buses, pickup trucks, and commercial cars. They have grabbed significant profit from its wide range of vehicles and effective marketing. Here, we will discuss Tata Motors’ strengths, weaknesses, opportunities, threats, competitors, and history.
About Tata Motors:
Tata Motors comes at the first number when it comes to leading automobile manufacturing companies. India is the largest equipment manufacturer with e-mobility, smart, and integrated solutions. With such an excellent range of vehicles, they are doing well in the Indian market, even in the presence of international companies like Toyota and Hyundai.
It was formerly known as TELCO and was founded in 1945. The company is famous for its innovative and super affordable cars like Indica and Nano. The company developed its first vehicle in 1954.
Company Name: Tata Motors
Founders: J. R. D. Tata
Founded: 1945, Mumbai, India
Headquarters: Mumbai, India
Parent Company: Tata Group
CEO: Marc Llistosella (Nov 2, 2021-)
Type: Public
Sector: Automobiles
Tagline: Inspired by People
Unique Selling Proposition: A brand with diversified products, strong market penetration and extensive distribution.
Customers: Middle class and lower middle class
Target Consumers: Customers from upper-middle-class
Revenue: $33,944 million (2021)
Net Income: $1,952 million (2021)
Tata Motors’ Products:
- Commercial cars
- Automotive parts
- Pickup trucks
- Automobile
- Luxury cars
- SUVs
Tata Motors’ Competitors:
- Toyota
- Maruti Suzuki
- Hyundai
- Chevrolet
- Tesla
- Mitsubishi Motors
- Caetano Bus
SWOT
Strengths of Tata Motors | SWOT Analysis of Tata Motors
Strong Brand Reputation:
In the Indian automobile market, no company could beat the level of Tata Motors. It has a strong brand image and recognition in the domestic as well as international market. It has many subsidiaries such as Tata Hitachi, Tata Marcopolo, Jaguar Land Rover, Tata Daewoo, etc., that are generating huge profits for the company. They helped the company to expand its reach and market share. Such brand reputation gives Tata Motors a competitive edge.
Market Value:
According to Forbes, the market value of Tata Motors is approx. 4.5 billion dollars (2021). On the other hand, the company has received many accolades and statuses due to its market value and annual revenue.
Robust Distribution Network:
Tata Motors’ competitive advantage over its competitors is its established distribution network. They have 1600 workshops in the country along with several manufacturing units in different countries. In short, the company has a robust and active distribution system which is its biggest strength.
Market Diffusion:
Due to a strong supply chain network, the company has greater market penetration than competitors. They are also offering taxi cabs and rental cars that also contribute to its success. These are some important factors that are considered as the company’s strength.
R&D:
They spend about 23 percent of their total budget on research and development. Thus, it shows how dedicated Tata Motors is toward its productivity and innovation.
It also has several research centers in different countries like South Korea, the United Kingdom, Spain, and India.
Global Presence:
The company is running its business in over 125 countries internationally, which is its biggest strength.
Weaknesses of Tata Motors | SWOT Analysis of Tata Motors
Higher Operational Costs:
The company is highly dependent on its subsidiaries like Land Rover and Jaguar because they were extremely successful in the start. It creates a weakness for the company because they are susceptible to these subsidiaries. Moreover, the increasing operational costs are also decreasing Tata Motors’ profit which is another alarming thing.
Controversies:
Conflict with the West Bengal Government shows a major weakness of the brand. Such controversies can destroy the image in the eyes of investors as well as customers. They purchased land in West Bengal, which the Government later acquired. They wanted the company to build its building within the state.
Weak Foothold in Luxury Sector:
As of today, the company does not have a strong presence in the luxury vehicle segment. There is no doubt that the luxury segment is highly profitable, but Tata Motors couldn’t manage to hold a strong foothold in the luxury industry.
Limited Global Reach:
As we know, Tata Motors is currently operating in over 125 countries, but they only have a strong position in the Indian market. They have failed to create a powerful footprint in other countries just like Toyota, Hyundai, Volkswagen, etc.
Opportunities for Tata Motors | SWOT Analysis of Tata Motors
Digital Marketing:
We all know the blessings of digital marketing. Indeed, digital marketing can create all the difference for the success of any business. In fact, Tata Motors doesn’t have a strong digital marketing strategy. They can address this issue to increase their brand reputation and overall perception. Tata can easily connect with customers through digital platforms and present their vehicles in more tempting ways. They should take full advantage of this thing in order to increase its profit and reach.
Tata Nano:
Tata Nano was a big hit in India due to its affordability, but they have to shut down its manufacturing. Moreover, the company can make similar models outside of India to attract new customers, it is a sign of opportunity for the company and they can increase their market share.
Supply Chain:
As they already have a robust distribution system but they can enhance it by exploiting the latest technologies. It will pace up the growth of the company in other markets.
Joint Ventures:
Tata Motors should make new mergers, acquisitions, and joint ventures to expand its business. They have some famous subsidiaries such as Daewoo, Hitachi, and Jaguar. However, they should think about more partnerships with international organizations.
Threats to Tata Motors | SWOT Analysis of Tata Motors
Pandemic:
The recent pandemic of Covid-19 has proven deadly for the companies as well as the economy. Because of that, people lost their jobs and some companies faced a severe financial crisis. Indeed, such disasters or pandemics can threaten the lucrativeness and business operations of the company. Indeed, It is one of the biggest threats for any company these days.
Stiff Competition:
The Indian automotive market is highly crowded with heavyweights such as Tesla, BMW, Hyundai, Toyota, Maruti Suzuki, etc. They are eating each other’s market share by offering high-quality vehicles at cost-effective prices. These competitors can disturb the growth of the company and lower the market share.
Price:
Competitors of Tata Motors are offering innovative vehicles with the latest features at lower prices. They need to introduce modern features in their cars in order to retain customers and be competitive in the market. It can impact the profit and revenue stream of the company.
Advancement of Competitors:
Compared to Tata Motors, competitors like Hyundai and Toyota have skilled workers, better resources, and the latest manufacturing plants. So, they are manufacturing tempting vehicles at lower costs. It is another major threat to the growth of the company and they should overcome this by exploiting the latest technologies.
Summary:
Now you fully understand the internal as well as external business scenarios of Tata Motors. Unquestionably, it is a top automotive company in the world with amazing offerings. Moreover, they have achieved this status with immense hard work. Factors like distribution, research, and development, market value have played a big role in its success. However, to remain competitive in the automotive market, they should strengthen their foothold in the luxury cars segment. For this purpose, they need to make effective mergers and acquisitions to provide innovative and inexpensive vehicles to customers.
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