Tata motors
From the market trend report, Tata motors are clear leaders despite the challenges facing the industry, especially the Indian automobile industry, where according to FY 2019-20, the industry slowdown was reported at 4.2% from 6.1% in the year 2018-19. Research conducted by Autobei Consulting Group (2019) shows a correlation between the sales and market share with the company’s product life cycle or OEM, a reasonable basis why Tata motors have kept its market share and continue to be one of the global leaders. In previous years, Tata motors have been exploiting its international opportunities. The FY 2019-20 shows that the company’s consolidated profits for FY18, FY19, and FY20 was Rs. 2,92,341, Rs. 3,01,938 and Rs.2,61,068 respectively. This is a clear progressive growth despite the global economic downfall, which all affected businesses in 2020.
There has been an increasing demand for OEMs and related companies to produce news car components that reduce emissions and follow the greenhouse regulations to ensure efficiency (Villanueva-Reyet al., 2018). Tata has tried to meet these needs in its innovative business strategies by producing a light vehicle that has reduced fuel consumption.
Industry Lifecycle
The automotive industry life cycle has gone a long tail past decades. It has been evolutions in which product architecture has become a key variable affected by environmental constraints and customer requirements. The early phase of the automobile industry life cycle (the 1980s through 1960s) product development continues with no significant product differentiation or product innovation (Fujimoto, 2014). From the 1970s to 2010s, the industry’s upward trend was characterized by technological advancement, which contributed to rapid incremental innovation. Since then, product architecture’s evolutionary framework has been fundamental in meeting customer expectations, requirements, and government and societal constraints.
A shift in the industry dynamics started when the Lancaster model of customer demand started taking shape when customers demand shifted to modular product models, integral products, and price function frontiers. The product architecture is currently and in future is determined by the market and environmental factors, and these are likely to remain the integral and complex fast-moving determinants in the microarchitecture of automobile products (Ellingsen et al., 2014: Gopal and Thakkar, 2016; Nordelöf et al., 2014.). While the modularization of future automobile designs will be determined by the market forces and technology hence the architecture sequence in the industry life cycle will be differentiated by product, technological advancement, price-function frontier, and market-societal restrictions.
Structure of the organization
Tata Motors rolled out its new organizational structure for the head office. The managing director seeks to engineer the spectacular turnaround meant to fasten the corporate decision making and shape customer focus (Thakkar, 2016). The new initiative that the company terms it as “turnaround 2.0” aims to capture additional market share to its commercial vehicle and passenger vehicle segments. This strategic model aims to bolstering customer confidence and building acceptable portfolios for both old and new customers—the move in conjunction with its previous activity that saw the company regain share in the domestic market.
To achieve turnaround 2.0, the new organization structure eliminates middle management and has empowered its business units with accountability and strengthened its functional leadership. Consequently, the new design aims at becoming the top three makers in the country and globally for commercial vehicles. The Tata motors organization structure seeks to bring organization agility, simplicity, and improved speed. This will bring recovery from previous management that straggled in reviving the company finances and market share. However, the company’s unclear definition of excellence, silo approach problems, lack of accountability, and the organizational culture problems is something that the new structure needs to look at to revive sales and improve brand perception. This affects the organization’s performance and innovativeness, where the leadership is not knowledge-oriented (Donate and de Pablo, 2015). Thus the company needs to develop a business model that will offer a strategic place to bring the company back and gain customer trust.
Porter’s Five Forces analysis
Porter’s five forces identified by Michael Porters shape competition within an industry and useful ways to adjust strategies to suit a competitive environment and improve the organization’s potential to generate profits. This model is significant in analyzing Tata Motors’ information as it will set out the information on the company’s competitive environment attractiveness of the industry and its potential profitability (Lin, Chen, and Huang, 2014: Garg, 2019). I will Look at each specific force independently, and this will be possible to identify factors such as environmental and internal facets and map them the current company’s strategic position. I will also incorporate SWOT analyses to identify its strengths, weaknesses, opportunities, and threats and will later match the analyzed strengths and opportunities and threats and weaknesses through TOWS analyses (Jasiulewicz-Kaczmarek, 2016). TOWS analyses will offer directions on how Tata Motors can reduce its risks, take advantage of the existing opportunities, exploit its strengths, and eliminate the current weaknesses.