Argumentative Analysis Of Tata Motors

Potential Entrants

Threats of entrants can be reduced by high fixed costs

Tata Motors dominance over the market of commercial vehicles will be challenged

by other market forces such as Mercedes-Benz, Volvo, and Navistar etc. also the world's

largest truck maker Daimler heavy duty trucks of Bharat Benz brand is biggest challenge to

Tata Motors. In commercial segment a fuel efficient vehicle is being developed Tata Motors

to meet the competition head-on, this kind of an approach is to eliminate any sort of threats

from entrants by keeping the fixed costs of production high that cannot be achieved by new

players.

Tata motors has taken some measures to mark its dominance in world automobile

industry by introducing 50 new products

also the world's

largest truck maker Daimler heavy duty trucks of Bharat Benz brand is biggest challenge to

Tata Motors. In commercial segment a fuel efficient vehicle is being developed Tata Motors

to meet the competition head-on, this kind of an approach is to maintain the shareholders

trusts.

Market concentration

Tata Motors strategy would be to focus 14-15 countries having same market structure

as of India. In these targeted countries the company is having excellent manufacturing

facilities, market teams and sales teams. Incorporating above strategy the company evaluates

best opportunities and skilled labor to cut down cost of production, hence maximizing profits.

Various operation in involved in these market concentration are as follows-

Korean Operation-Company has merged and leveraging the technology so acquired to

for developing the trucks for Indian and world markets.

Thailand operation-It is the most competitive market and hence product such as

pickup trucks have been introduced to be sold in domestic as well as international markets.

Restriction of access to distribution Channels

South African Operations-Tata motors have introduced fragmented approach

After successful

completion it could target other countries as well.

Exit Barriers

Tata motors passenger vehicle for low budget customer Tata Nano didn’t get the

desired response from customer and became a huge liability for the Tata motors, but even if

the product fails in the market it cannot be discontinued and company to exit the market

because of the heavy investment done in initial stage. Thus If the NANO fails Tata motors

will not exit but be in a state to slow production and manufacturing facility can be used for

spare parts modification of other new variants of passenger vehicles.

Amount of Fixed costs-Automobiles industry experiencing a rise in competition and

hence product quality ,service centers etc. needs to be provide which is extra costs that

incurs, to maintain low cost, companies consistently has to make manufacturing

improvements to keep the business competitive. This requires extra funding which tends to

decrease companies profit margins as the cost of production gradually increases. As