Case Study on Tata Motors

    Issues:

1. Tata’s Indian government is unpredictable
2. Tata has a brand name issue
3. Tata has strong competition

Analysis:

1. So far the Indian government is trying to increase the standard of living in India. However, more regulations in the automotive sector are slowly driving up costs. The government wants to increase safety standards by enforcing them on Tata. They also are creating artificial demands by letting out rumors about increasing taxes on diesel vehicles. This makes business difficult when the rules are constantly being changed or manipulated.
2. Tata is unknown brand in the west. India also has a poor reputation from most western countries. So far using the brand name Tata has not worked well. They have resorted to buying up western car brands and then began building them for cheap in India without many westerners knowledge that their Land Rovers are being built by Indians.
3. There are many major players powerful players in the automotive industry. Many are trying to build very cheap cars like Tata. The Chinese are very competitive, and the Asian market is very large. The first one to capitalize on the Asian market will come out very rich.

Management Action:

1. Tata must begin lobbying its government like the rest of the world does. Keeping the government from regulating your industry is one of the most important considerations needed by business in today’s corrupt and socialized government environment. It’s unfortunate that business needs to stoop to this level in order to be productive, but our politics are still outdated.
2. Tata must continue to buy up other brands if they want to assimilate into western markets.  I just don’t think Americans will ever want to drive a “Tata”. However, if they should strive to keep their brand to recognize themselves as cheap reliable cars. There is nothing wrong with being the McDonalds of the car industry.
3. Tata should focus on dominating the Asian market and try to stomp the Chinese out of the Idian markets. They already built a brand in the east, so they should stay focused in their own territory and forget about the west. There should be enough growth in Asia to satisfy them. The west already has many car companies and they don’t understand the consumer in the east as well as Tata.

Risk Evaluation

1. The Risk is low for lobbying because that’s how business works in today’s world. India is notorious for corrupt politics.
2. I feel there is low risk in perfecting what you’re good at. Tata wont ever be a luxury brand and that should be fine. Continuing what Tata is good at should be their priority.
3. Not expanding into the west is very low risk, there is always more risk when you expand into unknown foreign markets.