Sunteți pe pagina 1din 19


TATA Motors
Porters 5 Force & SWOT

Bargaining Power of Suppliers

number of substitute inputs

When there are a large number of substitute inputs,

suppliers have less bargaining leverage over producers.

This is due to competition among substitutes. Greater

competition positively affectsTata Motors.


competition among suppliers

High levels of competition among suppliers acts to reduce

prices to producers.

This is a positive sign forTata Motors.

Bargaining Power of Suppliers

distribution channel

The more diverse distribution channels become the less

bargaining power a single distributor will have.

This positively affectsTata Motors.


production inputs are similar

When critical production inputs are similar, it is easier to

mix and match inputs, which reduces supplier bargaining

This positively affectsTata Motors.

Bargaining Power of Suppliers

switching costs

The easier it is to switch suppliers, the less bargaining

power they have.

Low supplier switching costs positively affectTata Motors


is critical to suppliers

When suppliers are reliant on high volumes, they have less

bargaining power, because a producer can threaten to cut
volumes and hurt the suppliers profits.

This can positively affectTata Motors

Bargaining Power of Customers

is important to customers

When customers cherish particular products they end up

paying more for that one product.

This positively affectsTata Motors


require special customization

When customers require special customizations, they are

less likely to switch to producers who have difficulty
meeting their demands.

Buyer customization positively affectsTata Motors

Bargaining Power of Customers

buyer price sensitivity

When buyers are highly sensitive to prices, a minor

increase in prices would lead to a loss of customers to a

This demand negatively affectsTata Motors


number of customers

When there are large numbers of customers, no one

customer tends to have bargaining leverage.

Limited bargaining leverage helpsTata Motors

Bargaining Power of Customers

Switching Costs

If switching to another product is simple and cheap the

customers does not think much before doing it.

In case of NANO car the switching cost from bike to car is

too high.


The brand image of the TATA is not very attractive but the
segment in which the NANO operates has been the most
attractive thing for them

Intensity of Existing Rivalry

industry size

Large industries allow multiple firms and produces to

prosper without having to steal market share from each

Large industry size is a positive forTata Motors


industry growth rate

When industries are growing revenue quickly, they are less

likely to compete, because the total industry size is also

The only way to grow in slow growth industries is to steal

market-share from competitors.
Fast industry growth positively affectsTata Motors

Intensity of Existing Rivalry

Advertising battles may increase total industry demand,

but may be costly to smaller competitors.

Products with similar function limit the prices firm can


Price competition often leaves the entire industry worse




Even if the product fails in the market its not that easy for
the company to exit the market just like that because
ofthe heavy investment it has made in the initial stage.

Threat of Substitutes


The threat that consumer will switch to a substitute

product if there has been an increase in price of the
product ort here has been a decrease in price



A lower performance product means a customer is less

likely to switch fromTata Motorsto another product or

Threat of Substitutes

relative to present industry products.




A lower quality product means a customer is less likely to

switch fromTata Motorsto another product or service

Barriers to Entry

capital requirements

High capital requirements mean a company must spend a

lot of money in order to compete in the market.

High capital requirements positively affectTata Motors


distribution network required

Weak distribution networks mean goods are more

expensive to move around and some goods dont get to
the end customer.

The expense of building a strong distribution network

positively affectsTata Motors

Barriers to Entry


Advanced technologies make it difficult for new

competitors to enter the market because they have to
develop those technologies before effectively competing.

The requirement for advanced technologies positively

affectsTata Motors


brand names

If strong brands are critical to compete, then new

competitors will have to improve their brand value in order
to effectively compete.

Strong brands positively affectTata Motors

Barriers to Entry

requires economies of scale

Economies of scale help producers to lower their cost by

producing the next unit of output at lower costs.

When new competitors enter the market, they will have a

higher cost of production, because they have smaller
economies of scale.

Economies of scale positively affectTata Motors


learning curve

When the learning curve is high, new competitors must

spend time and money studying the market before they
can effectively compete. High learning curves positively
affect profits forTata Motors

SWOT Analysis


Indias largest automobile company.

Tata Motors puts emphasis on R&D.

New products, quality improvement and enhancement of

the consumer experience keeping in view the changing
market, customers aspirations and regulatory needs.

Jaguar Land Rover re-affirmed confidence in the premium

car market - JLR posted record sales of 434,311.

The employees, suppliers and channel partners remain

their major source of strength.

SWOT Analysis


International strategy- about new acquisitions.

Brand Name-Tata Motors has a strategy to work with the

old name of the company which Tata bought or acquires
that does not effect the brand value.

Globalization- The company has a strategy to expand its

network world wide.

DomesticStrategy-Tata Motors is the most trusted

vehicle brand in India, and Tata is putting effort to be in
same position.

Employment-Tata Motors is known for good employee

base and management

SWOT Analysis


Less Luxury- Tata has not got a foothold in the luxury car
segment in the domestic Indian market.

Safety-Tata Motors does not provide standardsafetyfeatures

in their vehicles in the domestic market. Most of the
automobiles Tata manufactures are based on older platforms.

Poor Product Design- Tata Nano, the peoples car sales is

continuously decreasing The main reason behind this is lack
of security features in the car and it cannot be made to drive
in the Highway

Wrong marketing- Media is focusing on failure of Tata Nano

nowadays. Payment system for Tata Nano that is Rs.99.

SWOT Analysis


New and mandatory government policy of infrastructure

oriented spending for national development.

The evolving infrastructure in India - demand for better

quality and more comfortable vehicles.

With increase in FDI in Defense sector (from 26% to 49%) increasing their offerings in from providing only pure
logistics solutions to tactical and combat solutions.

Growing wealth in rural markets.

With increasing awareness and education of the Indian


Thus the Companys R & D group is capable of developing

solutions for different regulatory and emission norms as per
market specifications in minimal time.

SWOT Analysis


Business is seasonal in nature.

Input Costs / Supplies: Prices of commodity items used in

manufacturing automobiles, including steel, aluminum,
copper, zinc, rubber, platinum, palladium and rhodium have
become increasingly volatile in recent years.

Environmental Regulations:

Intensifying Competition:

Underperformance of distribution channels and supply


Changes in tax, tariff or fiscal policies and regulations:

Disruption in the manufacturing, design and engineering