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Strategic Marketing Audit (Tata Motors)

Introduction

            International acquisitions by developing business sector based firms, from nations like India, are acquiring an inexorably noticeable portion of the worldwide consolidations deals. However, making progress in such arrangements is founded on the regularly desirable  administration alongside lucky break like the existence of an effective internal business environment (Pathak, 2016). Tata Motors, an Indian auto producer, obtained the notable Jaguar and Land Rover (JLR) organizations from Ford at an estimated cost of US$2.3bn in 2007  (Pathak, 2016). After an initial struggle, Jaguar, Range Rover and Land Rover, also the world perceived marquee brands have now begun doing really well under Tata possession. JLR’s incomes recorded an improvement from GBP 4.9 bn in the fiscal year 2008-2009 to GBP 21.8 bn in between 2014 and 2015 (Pathak, 2016). Additionally, benefit before taxes has also recorded an improvement from a deficiency of GBP 376 m in 2008-2009 to a benefit of GBP 2.6 bn in 2014-2015 (Pathak, 2016). This paper provides a strategic market audit for Tata motors in the automotive sector. The fundamental aspect addressed includes macro-environmental factors, micro-environmental aspects, a SWOT analytical framework, and the fundamental strategic challenges experienced by the firm.

Macro Analysis

            Completing a macro-environmental analysis is regarded as an effective business aspect implemented to scan the possible threats and opportunities, which influences the sector, as well as well as the outside factors that controls the industry.

Political-Legal Environmental Factors

Effective legal frameworks are conceived to guarantee consistence with the arrangements of relevant laws and that such systems are working viably. Tata Motors is focused on an effective legal compliance. New laws are increasingly being established within the Indian automarket which influences how the firm operates. “Legatrix” has been actualized by Tata Motors, which is an online consistence apparatus that encourages the firm to follow and oversee consistence of different administrative and legitimate necessities (Tata Motors, 2017). The business conform to new and existing laws, guidelines and strategies with respect to expanded efficiency, marked down ozone harming substance and different outflows, vehicle security, assessments and evaluating approaches. The Central Motor Vehicle Rules of India and Bureau of Indian Standards are examples of rules which influence the performance of the business by encouraging its compliance to ensure the wellbeing of the people and the environment.

India has fundamental obligations under the World Trade Organization Agreement which can potentially cut down on the level of importation tariffs of vehicles and its components. The significant reductions will result to an increased competition in the sector, thus requiring Tata to invest more in its marketing and promotions to avoid losing its sales (Tata Motors, 2013). New or evolving laws, guidelines and government strategies with respect to expanded mileage, decreased ozone destruction, and car safety may altogether affect the operations of Tata. Notably, the business is subjected to high levels of governmental regulations on instance of emissions, safety and noise among others which they must comply with.

Economic-demographic

            Inflation is one of the significant economic factors that influence the performance of Tata. The rise in inflation will increase the costs of the materials thus creating a shortage in the short and long run. Tata Motors (2013) states that the consistent ascent in material and other information costs, effect of forex and progress to BS6 standards, have in total raised the expense of assembling vehicles. The organization had so far retained the expansion in expenses, yet with the consistent ascent in accordance with the market pattern, it has gotten basic to pass on at any rate a bit of the expense increment to clients through proper value modifications. Appendix 2 provides an illustration of the company’s complete PEST analysis.

Micro Analysis

Market

            Tata Motors’ market is mainly located in India, South Korea, UK, and Italy among other international destinations. It is a fact that Tata has more than 8.5 million branded vehicles offered to the consumers across the globe. The firm has been striving to expand its international footprint by investing its efforts in exportation since 1961 (Tata, 2021). The latest consensus data suggest that Tata is likely to record a 7% increase in revenues by the end of the 2021 financial year. This is founded on the fact that the consumer products will also increase by 5.7% during the same year (Simply Wall St, 2020). Appendix 3 A below provides an insight on Tata Motor’s market segmentation. It is evident that between 2010 and 2020, the company’s market performance has been recording a positive trend as illustrated in the graph below.

Source: Statistica (2021).

Customers

            The demographics of Tata’s consumer group include people from both genders, financial status, and those mostly aged more than 18 years. Tata Motors offer products to consumers in different parts of the globe. However, individuals in Northern part of India are likely to have SUV’s since the region is composed of a rough terrain and hence not suitable for Tata’s products such as the Nano.

Competitors

            Tata Motors mainly competes against players such as Maruti Suzuki, Ashok Leyland, Force Motors, and Mahindra & Mahindra Ltd. Hyundai, Toyota and Volkswagen are company’s competitors. The competitor perceptual map is displayed in Appendix 3 B below. The map provides a depiction that although the firm’s competitors are focused on the delivery of auto commodities through the implementation of several strategies of competition such as price and quality, it is evident that different players will not meet the requirements to issue a strong competition against Tata. Toyota and Ford are some of the competitors who have relied on the use of low price strategy and the delivery of high quality products focused on meeting the requirements of the consumers (Saxena, 2018).

Internal analysis 

3.1 Strategy review

            This part of the analysis documents the strengths and weaknesses of Tata Motors by utilizing its marketing assets models and capabilities. The models used in this section of the study are provided in Appendix 4.

3.2 Functions Review

Marketing assets and the 7ps model is implemented to review the marketing functions of Tata Motors with the full frameworks listed in Appendix 4B and 4C respectively.

Productivity Review

            Tata Motors CBBE Model is available in Appendix 4 below. From the model, it is evident that the company seeks to offer products to meet the convenience of the consumers by offering products seeking to meet the requirements of the members of the working class. The firm is also effectively performing in the auto sector in India. The other sections of the model are summarized in the Appendix 4 below.

Summary 

TOWS matrix

Strategic challenges

            The primary strategic challenges experienced by Tata motors include a sluggish economic growth, tight financial rules, weak liquidity, and a low rural income which not only affects the business’s performance but also its consumer sentiment (Business Today, 2019). Failure to address the strategic challenges exposes the business to an environment whereby it will record a low performance resulting to its market failure.