STRATEGIC MANAGEMENT- II

TATA MOTORS

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PROF. SAIKAT BANERJEE
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NAME ENROLLMENT ID
Hardik Maheshwari 21A1HP037
Abhijeet Pillai 21A1HP029
Abhinav Jaitely 21A2HP430
Rajkumar B J K 21A1HP041
Gaurav jain 21A1HP026
Brighton Dmello 21A1HP033
Aditi Goyel 21A1HP051
 TATA MOTORS

ABOUT THE COMPANY:

Tata Motors Group (Tata Motors) is a $37 billion organization. It is a leading global automobile
manufacturing company. Its diverse portfolio includes an extensive range of cars, sports utility vehicles, trucks,
buses, and defense vehicles. Tata Motors is one of India's largest OEMs, offering eeeeeeeeeeeeeee range of
integrated, innovative, and e-mobility solutions.
Tata Motors Limited is an Indian multinational automotive manufacturing company headquartered
in Mumbai, India, which is part of the Tata Group. The company produces passenger
cars, trucks, vans, coaches, buses, luxury cars, sports cars, and construction equipment.
Formerly known as Tata Engineering and Locomotive Company (TELCO), the company was founded in 1945
as a manufacturer of locomotives. The company manufactured its first commercial vehicle in 1954 in
collaboration with Daimler-Benz AG, which ended in 1969. Tata Motors entered the passenger vehicle market
in 1988 with the launch of the Tata Mobile, followed by the Tata Sierra in 1991, becoming the first Indian
manufacturer to develop a competitive indigenous automobile. In 1998, Tata launched the first fully indigenous
Indian passenger car, the Indica, and in 2008, the Tata Nano, the world's most affordable vehicle.
Tatvehicleotors acquired the South Korean truck manufacturer Daewoo Commercial Vehicles Company in
2004. Tata Motors has been the parent company of Jaguar Land Rover since the company established it for the
acquisition of Jaguar Cars and Land Rover from Ford in 2008.
Tata Motors' principal subsidiaries include British premium car maker Jaguar Land Rover (the maker of Jaguar
and Land Rover cars) and the South Korean commercial vehicle manufacturer Tata Daewoo. Tata Motors has a
construction-equipment manufacturing joint venture with Hitachi (Tata Hitachi Construction Machinery) and a
joint venture with Stellantis w, which manufactures automotive components and Fiat Chrysler and Tata branded
vehicles. On Oct 12, 202,1, private equity firm TPG invested $1 billion in Tata Motors' electric vehicle
subsidiary.
Tata Motors has auto manufacturing and vehicle plants in Jamshedpur, Pantnagar, Lucknow, Sanand, Dharwad,
and Pune in India, as well as in Argentina, South Africa, the United Kingdom, and Thailand. It has research and
development centers in Pune, Jamshedpur, Lucknow, wad, India, South Korea, the United Kingdom, and Spain.
Tata Motors is listed on the BSE (Bombay Stock Exchange), a constituent of the BSE SENSEX index,
the National Stock Exchange of India, and the New York Stock Exchange. The company is ranked 265th on
the Fortune Global 500 list of the world’s biggest corp most giants as of 2019.

COST LEADERSHIP
Cost leadership is used when a company projects itself as the cheapest manufacturer or provider of a particular
product or commodity in a competition. It is a challenging strategy because the management must constantly
work on reducing costs to remain competitive.

HOW DOES TATA MOTORS LIMITED USE A COST LEADERSHIP STRATEGY?

The primary objective of using this strategy is to preserve the market leadership position through efficient value
chain management.
This strategy allows Tata Motors Limited to expand the market share by targeting the middle class, which
makes up the most significant portion of overall consumer mar mi most countries. Middle-class supers generally
place high importance on the ton pricing factor, and cost leadership is the best strategy to cater to the needs of
this consumer segment.
Tata Motors Limited focuses on affordability and easy accessibility of its products globally, v.
Besides charging low prices by lowering production costs and maximizing supply chain efficiency, Tata Motors
Limited frequently offers discounts and coupons to achieve sales targets and handle the competitive pressure
from its closest rival. The intended outcome of these discount and promotional campaigns is to increase brand
popularity and encourage consumption.

MATRIX ORGANIZATION STRUCTURE

A matrix organizational structure doesn't follow the traditional hierarchical model. In the matrix structure, you
share resources and staff across teams and projects, as well as within departments or functions.
What is a matrix organizational structure?
A matrix structure combines two or more types of organizational structures. It is a way of arranging your
business to set up reporting relationships as a grid, or a matrix, rather than in the traditional hierarchy.
Employees usually have dual reporting relationships with their functional and project managers in this structure.
Typically, one reporting line will take priority over the other (e.g., staff may have to report to their manager
before reporting to the project manager).
Examples of matrix structure
Different forms of matrix structure exist. These fall under three main categories, depending on the level of
power of the project manager:

 Functional or weak matrix - the functional manager retains most of the power and is in charge of the
people and resources. The project manager has a minimal role and tends to carry out administrative or
coordinating tasks.
 Strong matrix - the project manager holds most of the power and authority, controls the project budget,
and manages staff. The role of the functional manager is limited.
 Balanced matrix - the functional and project managers share the power and authority over staff and
budget.

In large organizations, it is possible to involve all these matrix structures at different levels within a business.
This is sometimes referred to as a 'composite organization.’

The main advantage of the matrix structure is that it can:

 improve decision-making since there are two chains of command

 help break down traditional 'silo' barriers
 improve communication across the business
 allow staff to apply their skills in different roles
 help share best practices and ideas across teams
 increase efficiencies due to sharing resources across departments

The matrix structure can also help businesses achieve quick market adaptation to changing customer needs, as it
can decrease the lead time to produce a new product. This structure is most suitable for companies operating in
a dynamic environment.
A matrix structure may not be well suited for businesses working in a more settled environment with customer
requirements. Because of its complexity and the need for employees to report to two bosses, it can lead to:

 confusion regarding roles, responsibilities, and priorities

 divided loyalties between project teams
 blurred lines of accountability
 difficulties in coordinating tasks or functions
 power struggle between the project manager and the functional manager
 enormous overhead costs, on account of having multiple managers

TATA MOTORS ORGANISATION STRUCTURE:

Tata Motors has a Matrix Organizational Structure with heads of functions (Human Resources head, Marketing
head, Chief Financial Officer) and heads of vehicle divisions (Passenger Vehicles Head, Commercial Vehicles
Head, Advanced Engineering Head) forming part of the top management of the company. It is through the
collaboration of the various departments that day-to-day operations occur. Each Head of Division/Function is
solely responsible for perforce romance of their subordinates.
Tata Motors has a Board of Directing of 9 members from different parts of the Tata Group, with Mr. Cyrus
Pallonji Mistry as their Chairperson. Mr. Guenter Butschek serves as the CEO and the MD of the company. All
company top-level management y(such as Chief Financial Officer, Human Resources Head, Chief Information
Officer, Secretary, Heads of Vehicle Divisions, etc.) report to him directly.

BUSINESS STRATEGY OF TATA MOTORS:

Tata Motors aims to emerge as a world-class automobile leader with an excellent price-performance ratio in
combination with hyper-efficient engines to acquire significant market share internationally.
Tata Motors’ mission is to create an organization people enjoy working for, doing business with, and investing
in. It focuses on customer needs to provide them with a range of innovative products and maintain long-term
relations by working closely with its workforce and business partners. The company’s purpose is to consistently
create shareholder value by generating greater returns and fostering with the vendors and channel partners
(Global Reporting Initiative 2010).
The company’s objective is to invest INR28.8billion over the next few years to increase its production and
INR60billion to expand the existing manufacturing plants and set up vehicle testing facilities (Automotive
Manufacturing Solutions 2010).
Tata Motors’ unmatchable ability to manufacture low-cost vehicles gives the company a greater scope of
earning high-profit margins and a good market share. The economic slowdown has excited the competition-
priced low, priced but the best quality vehicles. Understanding the rural Indian economy and the growing
incomes of the farmers, Tata Motors views increased opportunities for its commercial sector (Thakkar 2010).
Nevertheless, Tata Motors has a range of upcoming Jaguar and Land rover cars for luxury brand buyers to
capture the higher-income/premium customer segment. This could create tremendous success shortly.
Tata Motors have remarkable manufacturing advantages in India compared to other MNC competitors. It
benefits from the low labor cost, extensively skilled and interwoven backward and forward linkages, boosting
IT engineering, strong auxiliary industry, substantial knowledge of the market, improving infrastructure, and
increasing domestic demand.
Tata Motors aspires to be a world-class maker of quality vehicles by striking a balance between the needs of its
customers, employee, suppliers, investors, and the community as a whole.
BUSINESS STRATEGY OF TATA GROUP

A company’s marketing mix comprises all the elements and variables they choose to develop a market offering.
The combination of the features of the marketing mix determines the extent of success of a company in the
market. It consists of 4 elements (4Ps): Product, Price, Place, and Promotion. Let’s break down the marketing
mix of Tata Group.

PRODUCT STRATEGY
The Tata Group owns 30 companies that offer customer services in various sectors. This comprises the group’s
product mix. Each enterprise operates under its separate board of directors and is free from the supervision of
Tata Sons, the principal investment holding company. It functions under the following sectors:

PRICING STRATEGY 
Since Tata Group consists of various subsidiaries, each subsidiary follows its pricing strategy for its products
and services. However, as a whole, the Tata Group follows a differential pricing strategy. Being a multinational
conglomerate, it enjoys the benefit of charging different prices to consumers based on geographical location,
age, gender, etc.
Such a strategy enables the group to maximize its profit and maintain a market capitalization of over Rs. 12
trillion (as of Feb 2020.) The company also uses penetration pricing, which sets a price lower than the industry
trend to penetrate the market and gain acceptance from the customers. This strategy enables them to secure a
significant market share and build an image in the eyes of the general public. 

PLACE AND DISTRIBUTION STRATEGY

The Tata Group is present in over 100 countries across six continents. It occupies a vast global market requiring
extensive place and distribution strategy. It adapted to the technological shift effectively in the 2000s. It not
only follows the physical channels of distribution under which it makes the products and services directly
available to the consumers but also provides them through online modes of sale such as websites.
The Tata Group has fully functional websites for different geographic regions worldwide. It promotes online
shopping through its platform Tata Cliq and the sale of electronic products through the online platform Croma. 
Let’s have a look at the promotional and advertising strategies of Tata Group.

PROMOTIONAL AND ADVERTISING STRATEGIES

The Tata Group doesn’t follow the same promotional and advertising strategy as all the companies. The
companies formulate their own promotional and advertising plans. Some of the advertising techniques used by
them during recent years are as follows:
Use of televised advertisements 
Promotion through celebrities holding a solid fan base and social media presence
Use of Print media such as newspapers, magazines, and printed journals

ONLINE ADVERTISEMENTS 
Provision of sales promotion offers during festivals
The organization of promotional events across different locations around the globe
Providing sponsorships for world-famous events
Such strategies are launched with a dual objective of maximizing reach and staying ahead of their competitors
in the market. Since the Tata Group has many competitors, we’ll analyze them in this blog’s next segment.