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MBA 5905 Strategic Management
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- University Of South Africa (Unisa)
MBA 5905 Strategic Management
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TATA MOTORS IN 2014 CASE STUDY. 01/2018Question 1
Describe innovation as a characteristic of the global motor vehicle industry
and explain its strategic significance for motor vehicle manufacturers
Strategic innovation represents a new way of competing or a fundamentally different
strategy for competing in an industry. It is not the same as technological innovation
(which is the use of new processes, machinery or applications that embody new
knowledge). However, an understanding of technology and its influence is important
to strategic managers since the use of technology has the potential to create or
destroy markets.
Customer expectations of vehicle quality, reliability, safety, and utility are at an all-
time high. At the same time, worldwide overcapacity has put pressure on the industry
to maintain, and even reduce, vehicle price.
We are witnessing major structural changes in the automaking business, too.
Globalization of the industry is being realized through business alliances and
industry–academic–government partnerships that have realigned the world’s vehicle
manufacturers into six major groups.
Continuous innovation in manufacturing can help companies to gain a competitive
advantage and achieve:
greater responsiveness to customer demands
faster turnaround times
reduced waste levels and downtime
improved product design and quality
greater potential for a wider product range
streamlined relationships with suppliers and customers
,Question 2
What are the driving forces in the global motor vehicle industry
Driving forces are the internal and external factors that influence the decisions and
policies organizations make to stay competitive
Growing markets worldwide
Innovation
Thinking differently
Welcoming change
Preparing for the unknown: Uncertainty due to globalisation and advanced
technologies
Finding solutions: for the customer needs
Recognizing opportunities
Question 3
What are the Key Success Factors for a successful firm in the global motor
vehicle industry
Strategic Focus (Leadership, Management, Planning)
People (Personnel, Staff, Learning, Development)
Operations (Processes, Work)
Marketing (Customer Relations, Sales, Responsiveness)
Finances (Assets, Facilities, Equipment)
Question 4
Identify the strengths and competitive capabilities that Tata Motors’ can utilize
to seize market opportunities
(Resources and capabilities)
strong brand image
ethics and culture
strong focus in the research and development
many products and vehicles that lead the company to earn huge profits.
, Breakthrough car design in low cost car at the right time.
Advanced technology
The ownership of Jaguar and Land Rover in premium brands. So, nobody
under estimate in Tata’s brand.
1st largest manufacturer in India.
3rd largest bus manufacture by volume.
3rd largest passenger vehicle manufacturer in India.
4th largest in manufacturing trucks by volume in the world.
Has a very high employee satisfaction of 65%.
Question 5
What weaknesses and competitive deficiencies does Tata Motors have that
may negatively affect the company’s future and ability to withstand threats
Flawed strategy: Formulating proper strategy related to globalization and
internalization is not done properly as there are no competent managers that
will take care of the international client relations of the company. It also
causes problems in the adoption of proper strategy of mergers and
acquisitions with other foreign countries.
Poor execution
Very limited in debt and financing agreements
Tata Nano cannot go global without costly additions and redesign
(questionable safety standards makes this poor performing car a major
weakness).
Large variety of cars they design can increase complications in their supply
chain management
Recruitment of desired candidates in the strategic department is absent in the
different branches of Tata motors
Many models of cars are not selling up to the expectation of the company.
The sales prediction usually fails in many issues of strategic management
, Question 6
Would you describe Tata Motors’s international strategy as global,
transnational or multi-domestic strategy? Explain your answer. Does this
appear to be the optimal strategy?
Global Strategy
A firm using a global strategy sacrifices responsiveness to local requirements within
each of its markets in favor of emphasizing efficiency. This strategy is the complete
opposite of a multidomestic strategy. Some minor modifications to products and
services may be made in various markets, but a global strategy stresses the need to
gain economies of scale by offering essentially the same products or services in
each market.
Microsoft, for example, offers the same software programs around the world but
adjusts the programs to match local languages. Similarly, consumer goods maker
Procter & Gamble attempts to gain efficiency by creating global brands whenever
possible. Global strategies also can be very effective for firms whose product or
service is largely hidden from the customer’s view, such as silicon chip maker Intel.
For such firms, variance in local preferences is not very important.
Multi-domestic Company Characteristics
A company that follows a multi-domestic strategy fits its products to each country in
which it does business. Your product features are tailored to the local domestic
environment, taking into account different food preferences, religious customs and
other characteristics that define the locality. If you feel the goods produced by your
business would be better received by local customers, opt for this strategy to avoid
being branded solely as a foreign company.
Transnational Company Characteristics
A firm using a transnational strategy seeks a middle ground between a multidomestic
strategy and a global strategy. Such a firm tries to balance the desire for efficiency
with the need to adjust to local preferences within various countries. For example,
large fast-food chains such as McDonald’s and KFC rely on the same brand names
and the same core menu items around the world. These firms make some
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