Strategic Analysis of Tata Motors in the United Kingdom: Recommendations for Nigeria MarketAdeniranAdetayo OlaniyiAweGbenga TitusDepartment of Transport Planning and Logistics, University of Ilesa, Ilesa, Osun State, Nigeria.
Evidence has revealed that Tata Motors has been successful in recent years by grasping foreign opportunities. The money earned from overseas locations was about 9% in 2016; in the two years, it rose to 79.80% in 2018. The bendy strategy framework is employed to assess the strategies adopted by Tata Motors in a selected country, which enhanced to acquire a global presence in the automotive manufacturing sector, mainly in the United Kingdom. This framework aims to manage the changing dynamics of the market and, at the same time, ensure organizational continuity into the unforeseeable future. The tendency of the organization to properly blend continuity and alternate characteristics has aided it in dominating the worldwide market. The company is constantly developing new principles to maintain leadership and avoid being carried away by competitors. This study delves into the strategic risk management of competition administration and internationalization of Tata Motors from India to the United Kingdom, a framework for extending automotive manufacturing operations into Nigeria.
Tata motorsStrategyAnalysisManagementIntroduction
As of 2004, Tata Motors emerged as the foremost automaker in India and will be listed on the New York stock exchange. Tata Motors’ unexpected price reduction was perplexing because most observers still believe their stock is cheap; this opinion is fair [1]. Other businesses include information technology, machine tools, and factory vehicle services [2].
Ratio analysis is often used to examine financial accounts. Banks and other borrowers founded it to assist them in obtaining loans from competitors [3]. Because of the merger and acquisition of Tata Motors, Jaguar, and Land Rover, the sales of Tata Motors internationally have increased. Tata's pre-tax earnings in the most recent quarter totaled one billion dollars [4]. Ratan Tata, 77, intended to enter the car sector by producing low-cost indigenous vehicles [4]. Tata Motors' revenues are generated mainly by its Jaguar Land Rover [5] division, which is predicted to profit by 73% in 2020 [6]. The organization has kept afloat in a changing business climate by focusing on global potential.
International returns as a percentage of overall sales climbed to 79.80% in 2018, up from 9% in 2016. Until now, exports had been Tata Motors' principal source of foreign earnings. Following the acquisition of luxury brands such as Jaguar and Land Rover, the company's global sales have expanded and accrued more than its revenue outside the United Kingdom. Compared to other auto manufacturers, there was a consistent growth of 2.8% between 2018 and 2019, and the company performed well in the passenger car category, increasing sales by 13.9% [7].
The current ratio hit its highest level in three years in 2017. It has steadily fallen to 0.85 in 2019. The corporation’s ratio has decreased from 0.7 to 0.28. It fell by 0.05% in 2018. Over time, liquidity has decreased from 0.44 to 0.28. The capacity of Tata Motors is reducing, which is understandable considering the company’s size. Tata Motors is heavily in debt [8–10]. When the three fiscal years (2017, 2018, and 2019) are compared, 2017 comes out on top. The business will likely bounce back if the assets are well-managed and its debt is funded. One significant strategy for good management is to expand industrial activities to other nations, particularly Nigeria. The measures put in place by Tata Motors to stay afloat in countries other than India will be investigated, as it will be a way of advocating its economic expansion in Nigeria. Because Tata Company has yet to create a manufacturing network in Nigeria, the nation was chosen for this study. Nigeria is the most populous country in Africa and the commercial hub of West Africa.
The International Outlook of Tata Motors
Tata Motors is embedded in the established philosophies and vision of Tata group, which was formed in 1868 by Tata [11]. It is among the leading automobile manufacturers in the world. The organization has 76 enterprises in India and overseas [8], [12].
The organization employs approximately 60,000 people and accrues revenue of $42 billion. It has sold over 9 million vehicles and has over 6,000 service locations and dealerships. The firm dominates the heavy and medium vehicle markets. It was first in the commercial vehicle sector in 2017-2018, with a market share of 48.13% [13].
Manufacturing and production facilities for the organization are situated in India; nonetheless, some are also located in Argentina, South Africa, South Korea, Thailand, and the United Kingdom, indicating the company's global reach [14]. Aside from India, the Research and Development (R&D) centers are situated in other places, and the facilities can also be found in many countries of the world, without exempting the United Kingdom, where ideas for Nigerian stores would be investigated. Through mergers and acquisitions, the organization has extended its global market share and acquired Land Rover and Jaguar, two British premium automobile manufacturers [15].
Marketing Mix Decisions for Tata MotorsProduct
The product tactics used by Tata Motors are:
− Tata Motors usually designs a wide variety of cars. These cars comprise utility cars, hatchbacks, and sedans, including buses and trucks. Their advertising mix entails Jaguar and Land Rovers. Tata Motors is known for producing dependable, high-quality, and efficient autos. Due to its extensive industry experience, it stresses innovation and is constantly designing fashionable autos with high technical and digital specifications. It also complies strictly with pleasant standards as well as felony regulations.
− The organization has unveiled an electric version of the Tata Indica automobile and the Tata Ace commercial vehicle that operate on lithium batteries as part of its commitment to innovation. Tata Motors provided CNG-electric hybrid buses to the Delhi transport corporation as part of an environmentally friendly bus fleet for the Commonwealth Games. Tata Motors has several brands, including Aria, Sumo, Safari, Indica, Indigo, Magic, Manza, Marina, Nano, Winger, Xenon, Venture, and Visita. Since its inception, about 6 million vehicles have been sold, and the organization can follow the global standards established in those nations.
Price
Because of its varied portfolio, Tata Motors requires a unique approach to setting prices. The organization unveiled Tata Nano, the cheapest vehicle in the world as of 2008. Because of its broad portfolio, the corporation must design personalized pricing methods. Each product in its repertoire requires a distinct pricing. The organization adopted a pricing strategy to establish itself as a competitive manufacturer. Tata Motors adopted a pricing strategy to establish itself as a competitive manufacturer. Low costs and insufficient media coverage piqued the curiosity of the automobile media, and sales skyrocketed within a few months.
Place
Tata Motors is among the most significant sales and service networks in India. The management stakeholders have collaborated with several distributors that buy and sell automobiles in India, including service centers that are adequately equipped with spare parts. India has a robust distribution network, and recent model initiations are publicly shown for customers to test. To purchase defense vehicles, Tata Motors built offices in cities of India and provided extended services. As a consequence, Tata Motors' marketing mix is examined. It also has factories in the United Kingdom, demonstrating its worldwide reach.
Promotion
Tata Motors' expedited market promotion tactics are shown below:
− This organization is renowned for its daring advertising and promotion strategies. Hollywood celebs have been enlisted as marketing ambassadors for Tata Motors' industrial vehicle segment to uphold the sales of passenger vehicles. Footballers identified with the company's global employer agency ambassador in record time. Tata Motors is an excellent supporter of various events that helped boost public knowledge of new automobile brands. Due to India's excursion services, the employer offers price cuts to its customers, increasing customer excitement. The organization employed offline and online media platforms for advertising and product promotion.
According to search engine results, the organization employed social media and print approaches to advertise and market its brands to present and prospective customers. Because Tata Motors is known for its dependability, it used this collection to communicate with consumers. Customers are Tata Motors' major stakeholders; hence, they communicate with them daily. This was enhanced by the systematization and technology of Customer Relationship Management (CRM). They assess the viability of trending products and services offered. Customers and shareholders are designated to have stakes, which improves fiscal performance via initiatives, feedback, and resolution interactions.
Furthermore, relationship building, government involvement in engineering solutions and regulations, and discussions on sustainability measures are goals for regulatory institutions. Considering the society and community as a whole and keeping comments and questions open is essential. Employees are also regarded as stakeholders, hence the need for better and timely awareness of their roles, providing positive information and solutions, and feedback mechanisms on various performance levels. Automobile dealers in other nations play a significant role in developing technological know-how alongside the potential market and improving and transferring more client responses. Suppliers strive to deliver high-quality items on schedule.
Marketing Environment of United Kingdom: Recommendations
for Situating Outlets in Nigeria
To promote a lucrative growth plan, it is necessary to consider both the outside and internal assets. The Tata group has design and research departments. However, given India's global competitiveness, relying on the receiving enterprises' journey was once a reasonable approach. A combined assignment would have been a less challenging alternative, but it would have offered the companions less manipulation and ended in disagreement. In the 1990s, India's businesses were able to globalize due to a wide range of information available and the wind of liberalization [16]. As more organizations joined the Indian market, the country's structure altered substantially, resulting in “transformative developments” in the Indian economy (international economic openness) as well as changes in neighborhood policy [17].
As a result, opposition arose, resulting in new opportunities. The partnership legislation favoring generic agencies with firms like IBM or Mercedes-Benz gives more opportunities. The collaboration resulted in more information and expertise for the global market [18]. The Brexit issue, which increased the risks and uncertainties involved with relying only on the Indian market, was another stimulus for growth [8]. All European nations benefitted from Tata Motor. The benefit was originally that less costly automobiles should be purchased in specific locations. Furthermore, the objective was to take advantage of the economic distance in the United Kingdom, which has a highly sustainable economy, by supplying passenger autos at a lower price [9].
Risk Assessment
Strategic business management entails planning, positioning, manufacturing, and marketing corporate products or services in a domestic and global market to reach and compete in the worldwide community [19]. The business climate has been unpredictable in recent years due to a range of issues. Competitiveness is one of these important criteria for an organization's existence and success. Competitiveness is a company's capacity to compete in a changing business environment [20]. A corporation can surpass competitors in revenue, market share, profitability, and other criteria [21].
Strength, Weakness, Opportunity, Threat Analysis
Many of the world's successful organizations have engaged in strategic planning to increase effectiveness and guarantee that resources are appropriately allocated. In the view of Gürel [22], Strength, Weakness, Opportunity, Threat (SWOT) analysis is a step in the strategic management process that involves evaluating an organization's internal and external environments. An external analysis assists in identifying significant issues and opportunities a firm has in a competitive enterprise environment [23]. Internal analysis, on the other hand, assists in identifying an organization's strengths and weaknesses. SWOT analysis is useful for determining sources of competitive advantage [23]. The study will employ a SWOT analysis to examine the performance of Tatar Motors to discover the optimal strategies for organizational success in Nigeria. The strategic risk management of Tata Motors was carried out using a SWOT analysis (see Table 1).
Strategic risk management of Tata Motors using SWOT analysis.
This table is shown in the PDF version of the article.
Market leadership in the luxury design; High client Nigeria's lack of reliable data may hinder Tata Motors loyalty; from getting rooted.
Cross-cultural focus in vehicle manufacture and Nigeria relies mainly on foreign laws.
carrier provision; Foreign policies also influence the country's policies. Nigeria's authorities have guided a motor manufacturing organization to get rooted in the country.
Customer demand for luxury automobiles is Political instability in Nigeria can disturb Tata Motors' developing in Nigeria in recent times as technological getting rooted in Nigeria.
knowledge advances; Increased competitiveness among other motor Application of an enterprise graph for company manufacturing companies.
extension; Higher cost of indigenous vehicle parts in Nigeria.
The formation of strategic relationships with different New environmental laws may be unfavorable for Tata automobile manufacturing companies in the world Motors in Nigeria.
can be extended to Nigeria.
Based on the SWOT analysis, it is important to note that Tata Motors's strengths and opportunities for strategic risk management in Nigeria are greater than its weaknesses and threats. Hence, it can be affirmed that Tata Motors can extend its manufacturing operations in Nigeria.
When evaluating the functionality of an organization, Political, Economic, Social, Technological, Environmental, Legal (PESTEL) is usually employed. Nandonde [24] noted that PESTEL represents political, economic, socio-cultural, technological, environmental, and legal factors. They are also recognized as a macro- and micro-scale framework for illustrating the breadth of strategic management [25]. It is employed as part of an external study when evaluating a strategy or engaging in market surveys, and it provides a comprehensive picture of the various macro-environmental opportunities to investigate [26], [27]. Lawrence, Carr and Nanni [28] stressed that it is a premeditated means of evaluating the organization's growth, position, direction, and prospects. The following is the outcome of suggested analytical research in Nigeria to accommodate Tata Motor:
Political, Economic and Socio-Cultural Factors
Nigeria's political turmoil is similar to that of the United Kingdom. It has the potential to disrupt the operations and dynamics of the organization. In addition, there can be a metamorphosis of the government’s legal standards about how an automobile and the subsystems are built and implementation of tax and environmental policies in foreign markets, all of which the organization would be forced to adhere to. Exchange arrangements are another item to consider, as they deal with importation and exportation issues. These adjustments may necessitate reevaluating supply chain strategies and could lead to increased costs or delays in production. Consequently, the organization must remain agile and proactive in adapting to these changes to maintain its competitive edge in the ever-evolving global marketplace. Modifying the financial liberalization policies would also severely impact commercial and economic environments, making Tata Motors obsolete.
Technological Factors
Many corporations will end up extra competitive as technological knowledge advances and expands.
Environmental Factors
The automobile organization is likely to have several environmental issues. For instance, a German carmaker, Volkswagen, failed to fulfill CO2 emission requirements by using renewable energy, waste management, recycling, and other related issues that must be addressed to enhance environmental sustainability and minimize environmental hazards. Jaguar Land Rover [5] invests in novel technologies to suit luxury market needs while conserving technological development and eco-sustainability to improve fuel efficiency. The emissions emanating from CO2 are reduced, and hybrid electric cars have been introduced to the United Kingdom.
Legal Factors
Though there are policies that guide against CO2 emissions in Nigeria, the policies formulated are defective, and the institutions saddled with policy implementation and enforcement are weak; hence, Tata Company can extend its manufacturing operations in Nigeria to produce eco-friendly vehicles. In Nigeria, flexible legal frameworks will enhance Tata Company's swift operation. The Synopsis of PESTEL analysis from the micro level for Tata Motors in the United Kingdom and proposed Tata Motors in Nigeria is shown in Table 2.
Synopsis of PESTEL analysis from the micro level for Tata Motors in the United Kingdom and proposed Tata Motors in Nigeria.
This table is shown in the PDF version of the article.
Tata Motors in NigeriaPolitical FactorTechnology Factor
Proposed for Nigeria Peugeot Nigeria (assemble), globe motors (assemble of Hyundai), Dana motors (assemble of Kia), Cochairs motors (assemble for Ford), Stallion motors (assemble for Nissan), innoson motors (manufacture)
As of 2018, the registered vehicles in Nigeria are approximately 149,469
TATA Africa services (Nigeria) limited Online ads, Tata motor online campaign, TV and electronic media, Tata punch, vocal to local, press release 98 employees and 111 companies in the Tata Africa, Nigeria (D&B Hoovers)
Tata Africa holdings (SA) (Pty) limited, South Africa
5|Synopsis of Political, Economic, Social, Technological,
Environmental, Legal Analysis from the Macro Level for
The government can impose VAT and tax exclusion for some periods. The government system of democracy is a boost. Bribery, misuse of power, and corruption were militating factors.
Because many Nigerians are internet-savvy, adopting social media for commercial purposes using Tata Motors' skills will enhance the interest of viable customers and increase their brand image. Website inclusion will additionally expand sales. Using reliable tech such as robotics, artificial intelligence, cyber-security, and things to do on social media will enhance Tata Motors' manufacturing and income in Nigeria.
Environmental Factor
The introduction of renewable technology and the installation of voltaic electricity stations will facilitate a sustainable environment for Tata Motors to function in Nigeria. Improvements in Nigeria's tourism will enhance frequent purchases of Tata Motors. Evaluations are performed based on macro-scale and micro-scale indices, and the critical evaluation revealed that Tata Motors has every chance of being rooted and developing in Nigeria.
Recommendations Based on the Proposed Market Entry Strategy
The management of Tata Motors may also concentrate on the major businesses established around developed countries whose market characteristics seem similar to those of India. Automobile manufacturing, assemblage plants, and marketing and sales employees might be based in Nigeria. This industry is carefully chosen, and the strategy is rooted in dynamic, interconnected plans for sound products. Deliberate placement is required, including the correct commodities' timing. Tata Motors should take part in acquiring that which will catalyze its globalization. By leveraging benchmarks from excellent automobile manufacturers and increasing competitiveness and innovation, they may be able to dominate the market and work with ordinary Nigerian companies. Finally, as Tata Motors is advancing into the international markets with a healthy domestic base, leveraging skills won at home, they can situate automobile manufacturing and assemblage in Nigeria.
Targeting the Customers of Tata Motors in Nigeria
Nigeria is a large market for automobiles. Hence, Tata Motors' customers and prospective customers from Nigeria are mostly interested in the products. They must have seen or experienced their vehicles before purchasing them. Better strategies must be developed for displaying vehicles, thereby revealing the interior, exterior, engine, and other components. Using the internet, particularly social media, is not bad as it will also encourage more online shopping for new vehicle brands that are fashionable and trending.
The potential customers in the present era are mostly technology-driven for choice making, purchase decisions, complaints, and even referrals that are made online. Also, they preferred financial transactions to be performed online once there is clarity and security. The categories of customers that often engage in online transactions are primarily in their active and working ages between the ages of twenty and fifty years. They are known to have resources essential for online shopping on various platforms. Tata Motors can display its products online and facilitate online purchases and delivery. The organization can also embark on dishing out online information regarding vehicle services and maintenance, thereby integrating online vehicle clinics with physical services.
Customers of Tata Motors in Nigeria can be targeted by providing mobile mechanic services. They can bring the vehicle service clinic to the doorstep of their clients, and by so doing, they will gain more access to the Nigerian market. Tata Motors should employ skilled mechanics to drive the initiative. The mobile mechanic business is among the most flourishing, successful, and simple to establish in the automobile industry. Vehicle repair is a special service. Tata Company can have designated workshops for repairing all vehicles purchased in Nigeria. The service can be rendered at a discount to all customers. Apart from mechanical service, repair, and maintenance, they can also include electrical service. This idea should not be limited to cars only, but be extended to their vans, trailers, and trucks, among other vehicles. Apart from the skilled mechanic, Tata Motors should invest in other technical individuals who will carry out certain services such as wheel and balancing, cleaning services, engine repair and replacement, transmissions, general repairs, brakes and gear related, electric repairs, exhaust systems, radiators, and other maintenance and repair services. Finally, Tata Motors can partner with registered automobile distributors and spare parts dealers in Nigeria.
Conclusion
This study assessed Tata Motors' strategic risk management regarding competition, administration, and internationalization from India to the United Kingdom and the basis for extending Tata's automotive manufacturing operations in Nigeria. The study identified the strategies adopted by Tata Motors in the United Kingdom that enhance global presence in the automotive manufacturing sector. The framework employed to manage the changing dynamics of the market and, at the same time, ensure organizational continuity into the unforeseeable future was explored.
The study revealed the organization's tendency to blend continually, and the use of various alternate approaches has aided it in dominating the worldwide market. The company is always developing new principles to maintain leadership and avoid being carried away by competitors.
Author Contributions
AOA: Conceptualization, writing - original draft, resources; gta: writing, analysis.
The authors read and approved the final manuscript.
Institutional Review Board Statement
Not applicable.
Data Availability
The study has no associated data.
Funding
This research received no external funding.
Acknowledgment
The author appreciates the editor and reviewers for adding valuable input to the manuscript.
Clinical Trial Number
Not applicable
Informed Consent Statement
Not applicable.
Availability of Data and Materials
Not applicable
Conflicts of Interest
The author declares that there is no competing interest.
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