In contrast, India’s Tata Motors was moving forward with a strategy focused on small inexpensive cars, even though this was a highly competitive market segment, dominated by Japanese auto makers. The company’s aim was to design a small car that would be significantly cheaper to make and buy than any other model, and thus to satisfy India’s mass market demand for low – cost transportation. The result was the Nano, with a sales price of 100, 000 rupees (US$2,500), which was half the price of its closest competitor in India. Tata Motors achieved this by designing everything from scratch, deleting features that were taken for granted by other auto makers (for example air conditioning, power brakes, radios), using lightweight steel and an aluminium engine, and building in fuel efficiency. The car’s other impo
In contrast, India’s Tata Motors was moving forward with a strategy focused on small inexpensive cars, even though this
was a highly competitive market segment, dominated by Japanese auto makers. The company’s aim was to design a small
car that would be significantly cheaper to make and buy than any other model, and thus to satisfy India’s mass market
demand for low – cost transportation. The result was the Nano, with a sales price of 100, 000 rupees (US$2,500), which
was half the price of its closest competitor in India. Tata Motors achieved this by designing everything from scratch, deleting
features that were taken for granted by other auto makers (for example air conditioning, power brakes, radios), using
lightweight steel and an aluminium engine, and building in fuel efficiency.
The car’s other important feature was its modular design, enabling the Nano to be distributed across the country in kit form
and assembled by local businesses. The global reaction to the Nano catapulted the Tata Group into 6th place on Business
Week’s list of the world’s most innovative firms (behind Apply, Google, Toyota, General Electric and Microsoft).
TATA Motors, the name does not need any introduction. The company has always focused on capitalizing their core
competencies or competitive advantages for enhancing their market share according to their strategy.
TATA, The Name Speaks
Being the part of such a large TATA group is itself a competitive advantage. This affiliation provides the company with the
needed knowledge and technology resources for taking their business to various parts of the world.
Geographic Location
Being active and dynamic, TATA motors has competitive advantage for being located in India for the low cost labor base.
The company fully understands not only the Indian market but many emerging markets as well. The products are
manufactured at lower costs and sold to the new markets earning huge profits. India is known for least expensive
automobile parts which gives TATA a direct access. Moreover the policies and regulations in India are very favorable for
TATA for business expansion.
Innovation and R&D
The excellent innovation and research and development at TATA motors have created examples for the rivals. The company
has come up with the least expensive car model NANO which is one of its own kind and no other car manufacturer has ever
created such. This automobile has astonished the industry for its low cost and material and technology. The main
competitive advantage came from their remarkable innovation and development. TATA has various research centers
throughout the India working on the improvement of the engine efficiency, design, style and instrumentation of vehicles.
Mergers and Acquisitions:
Continuous growth and expansion is the company goal. TATA has successfully acquired various companies for breaking
into the foreign markets. While the company has delivered amazing results in domestic market, its subsidiary Jaguar land
rover has broken all the records of competitors as a top luxury automobile manufacturer. This mega expansion mode calls
for major product development, capacity capitalization and various national and international mergers.
Effective HR Management
The people strategy is lean and strong since ever. TATA has a very strong workforce base however it has cut off the surplus
staff recently in June 2017 as a part of organization restructuring and gaining a competitive advantage. The organization is
refreshed by changing the functions and locations of various employees. The staff is also provided necessary training and
skill development courses. The company gives utmost importance to dealer training as well to improve their productivity.
Few outsourcing activities like logistics and facilities management has also called up for downsizing of the workforce at
TATA.
Product Development
TATA aims to fulfill the emerging needs of the automobile industry by coming up with new range of products. These products
are manufactured with purpose of providing comfort, reliability, safety, capacity and value to the end customers. In order to
stay ahead of the competition, the company is going for huge investments in the area of product development. TATA Ace is
being introduced in commercial vehicle market for snatching the market share of its rivals. Another sporty vehicle Nexon
with both diesel and petrol engine is also attracting customers already.
.
Describe the market that Tata was focused on and compare and contrast the competitive advantage of Tata Motors with that
of US car producers as highlighted in the
case.
As the HR manager of Tata motors, explain how you would address the challenges faced by Tata motors using both external
and internal analysis, and evaluate the implications thereof on Human Resource Management.
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