The locomotive business has a vital part in the expansion of global economy. Locomotive industries improve markets, manufactures, designs and sell motorized automobiles. In the world it is among the most significant financial segments by profits. The locomotive business is the second most reliable production with 69% of the technology that is leading with 81% (Cavusgil, Knight & Riesenberger 2007). In fact, the locomotive industry does not comprise motor oil filling stations and repair shops whose amenities are used after bringing the automobile to the consumer.
Throughout its development, the automotive business has been subjective to many inventions as well as fuels, infrastructure, and manufacturing practices. It all began in 1876 after the engine was invented that made the very first motor cars in America as well as Europe. In early 1900s the growth in new machinery, for instance the steering wheel plus the floor-mounted accelerator that made automobiles comfortable to use. An additional key occurrence in the automotive past is Henry Ford’s great assemblage line in 1913 that permitted vehicles to be mass manufactured. For that reason, automakers began to combine with other businesses for instance in 1918 General Motors bought Chevrolet and to develop to other markets (Cavusgil, Knight & Riesenberger 2007).
Tata Motors Limited (TML) is a Tata Group subsidiary. It is a car manufacturing company whose headquarters are based in Mumbai, Maharashtra in India. It is a corporation that has been rapidly growing, and that has a wide customer base all over the world. Tata vehicles can be found in almost any country, and it is well known especially for its trucks that are considered to be of high quality. One of the reasons Tata has a customer wide range is due to its wide range of vehicles from cars to trucks. Moreover, Tata works together with other companies to achieve its objectives that give it an addition boost. It was the first Indian Motor vehicle company to be renowned worldwide. A lot of the companies activities are based in India but it has other companies in different countries. The following essay explores Tata Motors, process, benefits, internationalization channels, insurance and logistics.
Tata was founded in 1945 and manufactured its first vehicle 1945. In 1991, the company started manufacturing commuter vehicles and launched Tata Sierra. Tata became the first manufacturer in India to develop competitive vehicles locally. The Indica, its first fully indigenous car was launched in 1998 and in the Tato Nano in 2008 that was the world’s cheapest car. In 2004, Tata Motors bought Daewoo Commercial Vehicles Company (DCVC) that is a South Korean truck manufacturer. In the Fortune Global 500 ranking list of 2014 its ranked 287 among the largest companies in the world (Cavusgil, Knight & Riesenberger 2007).
The products it produces are coaches, buses, cars, vans, trucks, military vehicles, and construction equipment. In the bus manufacturing industry, it is the second-largest manufacturer by volume. In truck manufacture, it is the fourth largest. In the motor vehicle industry, it is the seventeen largest motor vehicle manufacturer.
It has auto assembly and manufacturing plants based in Pune, Jamshedpur, Lucknow, Pantnagar, Dharwad, Sanand all in India. Others are in the United Kingdom, Argentina, Thailand and South Africa. Its development and research centers are found in Spain, South Korea, United Kingdom and Dharwad, Lucknow, Pune, Jamshedpur in India.
Tata Motors acquired Jaguar Land Rover the manufacturer of Range Rover, Land Rover, and Jaguar in 2008. Also, it has a joint venture with FiatChrysler. FiatChrysler makes car parts for Tata vehicles and FiatChrysler. It also has a joint venture with Marcopolo S.A. in which they work together to manufacturer buses. Another venture is that with Hitachi the Tata Hitachi Construction Machinery (THCM) for manufacturing construction equipment.
In 1992, Tata launched a station wagon named Tata estate, in 1994 the Tata Sumo and 1998 it launched the first sports utility vehicle manufactured in India known as Tata Safari (Cavusgil, Knight & Riesenberger 2007). After launching the passenger vehicle Indica, Tata was initially criticized by analysts. However, excellent marketing strategies, a good fuel economy and powerful engine enabled it to end up being among the best selling cars in India's history.
Tata Motors manufactures both Heavy Commercial Vehicles (HCV) and Light Commercial Vehicles (LCV) segments. Tata faces very high competition in the Light Commercial Vehicles in which Tata ACE is one of its largest successes. Internationalization is a vital feature of the strategy of Tata Motor’s and as a result, it has been able to penetrate other markets like Argentina and Thailand through joint ventures and acquisitions. It requires improving its service channel and network, product reliability so that it can replicate and maintain its success in different markets. Tata can engage in a small commercial vehicle (SCV) mass customization options, improving technology and brand reputation to create an HCV segment that is world class. In 2006 to 2007 Tata brought in $7.2 billion in revenue being the largest Indian automobile company. In 2004, Tata became the first company in the Indian engineering sector listed on NYSE (Hill, 2008).
About 18% of Tata’s revenues are from international trade. It aims to business through inorganic and organic growth routes in the international scene. The company has been performing well over the years in spite of its cyclical nature. Tata Motors has been adding the stake of exports in the revenue sources so as to counter the problem of cyclicality. The problem of cyclicality has been facing the automobile industry.
Tata has come up with a new strategy of internationalization. It has decided to concentrate on a small base of about 14 to 15 countries, those who have market situations that are similar to the market conditions in India. Tata Motors plan to dedicate sales teams, marketing teams, and manufacturing facilities to those countries. In those few countries, they aim to develop self-sustained operations. It evaluates the locations on a basis of labor skills and market opportunities. Tata Motors in matters concerning international expansion strategies is an Extender and is concentrating on using competencies created at home to expand into similar markets.
In Thailand, Tata Motors and Thonburi Automotive Plant (TAP) formed a joint venture. The Thailand market poses a significant opportunity for Tata to invest in since it is the second most competitive region for pickups. Hence, Tata's new pickup trucks can be sold in both the export and domestic markets.
Strategies such as mass customization have some disadvantages. In the first place, mass customization puts a considerable strain on the supply chain of the company, such that it becomes a wasted effort if the patterns of demand are not well understood. As a result, the manufacture of vehicles that are customized ought only to be observed carefully and if they do no match up to the additional resource a reversion to the original multipurpose positioning should ensue.
Tata has maintained its growth by using appropriate practices, good marketing and overall having a good management. One of its aims is to maximize its profits and minimize the losses while at the same time producing quality cars for its consumers. Tata has been in business for a long time. Hence, there is no question about the experience the company has in car manufacturer. With good designers and the appropriate resources, Tata can produce cars that are consumer friendly. Also having a consumer friendly price encourages consumers to purchase its automobiles.
In the truck industry, Tata has medium and heavy vehicles and light vehicles. The light vehicles are composed of vans, coaches, and pick-ups that are up to three point five tons in weight. In the past five years, the sector of light trucks has experienced a growth rate of up to 20%. Producing new models of cars consistently enables Tata to remain relevant in the market as technology changes and new designs are introduced.
The heavy and medium trucks include coaches, heavy buses and commercial vehicles that weigh from 3.51-16 tons Daniels, J., (Radebaugh & Sullivan 2008. The sector is estimated to grow by 10% in the coming five years. Ashok Leyland and Tata Motors are the primary players in this sector accounting for over 85%.
Having a superior competitive advantage depends not on having one superior resource but having many different resources which when combined create the best terms and best solution. The resources Tata Motors uses to gain a competitive advantage include service network, product reliability and channel reach. Tata offers high-quality products but gets a lot of competition from Ashok Leyland, a local competitor, and Volvo, a foreign player. The distributor network and service of Tata is the most extensive as a result Tata has a great competitive advantage over its competitors regardless of whether they have better products or not. The large distribution and service network allows Tata to reach a high number of customers and having easy access to service means customers will prefer to but its vehicles. The distribution network also enables Tata to have many employees working under it hence creating many job opportunities for young people. Job creation in itself is a way of marketing the company.
Conferring to Yip's concept, there are four drivers of globalization that show the international strategy of corporations as the competitive benefit. The four drivers of globalization about the locomotive industry are listed below.
Market drivers of globalization
The automotive business is recognized by the ensuing market drivers:
Mutual customer needs. Clients' desires related to locomotive manufacturing are to a great extent snowballing their globalization propensity. The choice of automobiles is grounded on the quality, dependability, and value, than on loyal base, environment and beliefs affect needs. For instance, in nations like Russia and China are predisposed to display their societal status and frequently use big, lavish cars. In Canada and the USA, for instance, such automobiles are used as a result of safety and quality ideals. Conversely, in Japan whereby space is valuable, vehicles with smaller, metropolitan designs are favored.
Transferable marketing. Manageable product names and promotion need little indigenous adaptation.
Leading nations in the business make calculated partnerships. For Instance: Ford and Toyota declared on August 2011, that they will together grow as equivalent associates a different rear-wheel drive fusion structure and constituent machinery for SUVs and light trucks
Drivers of cost globalization
Markets of high immovable charges in a business. Competition directs the income limitations towards lesser ranks.
Effectiveness of tracking- central acquiring for resources can contribute to lesser prices
Merchandise improvement prices- new machinery used in expansion of effective petrol automobiles tend to be costly.
Drivers of globalization in government.
Legislature. In numerous nations, administration sectors enforce severe ecological rules dealing with petrol economy and releases regulate on automobile companies. Nonetheless, the common companies approve that the ecological rules will help the business as massive sums of cash are devoted to the promotion of the new-generation cars.
Favorable trade watches- Tax lessening subject to the efficacy created by new automobile. Previously used vehicles are also entitled to a fee or tax decrease if they meet the criteria. For instance, South Korea charges with eight kinds of taxes on automobiles giving into consideration their fuel consumption, engine among other things.
Fuel efficacy and release principles. For instance, importation of used cars in South Africa is not permitted.
Competitors that are global. Car producers capitalize to manufacture amenities in developing consumer market so as to lessen manufacture budgets.
Nations interdependence. Once events like manufacture become mutual between nations, the market of a competitor’s portion in a given nation upsets its balance and general fee activity that is shared.
The following are the key factors leading to the success of Tata Motors.
Commitment to quality (Rugman & Collinson 2008). Tata Company is devoted to a steady staffing program at manufacturing that guarantees a stable stream of high quality. It offers on the job engineering teaching of fledgling professionals with the joint venture with Pretoria University. The procurement of Jaguar the corporation builds the appearance of a posh product hence, gaining the consumers trust.
Merchandises having precise stipulations as per the market. The business benefits through the creation of merchandises stern on guidelines and emissions standards. It introduced the energy proficient Tata Nano.
Competitive prices. The company grasped the global watch with a very cheap commuter car. Generating another section for commuter vehicles business. Tata Nano is a vital feature of the forthcoming realization of the corporation.
Effective service after the sales. Tata Centers for Service are can be found each 50-70 kilometres alongside India’s freeways. The corporation has been linked with consumers via communication programs organized at channel associates and gets opinions to develop its services.
Capacity to satisfy consumer needs via sought after merchandises and R&D practices. Technological control is a major factor for the continual accomplishment of the company.
In 2004, Tata Motors got into the South African market with the intent to built-up two manufacture facilities (Rugman & Collinson 2008). Tata Motors would transfer cars to market in Europe this way. South Africa has a populace of forty-six million people and an above eighty-five percent literacy level. Even though the key competitors Toyota and Volkswagen are fighting to be main producers in the nation, Tata has proposed small commuter automobiles to function best for the consumer sector in South Africa.
Tata Motors came into the marketplace of South Africa through the introduction of Indica. Due to an absence of vehicle sellers when it commenced the exhibition, approximately 1,000 Indicas are owned by consumers to this day. Tata Motors is set to raise this figure to at least 7,000 in the coming year trusting in its fruitful co-operation with vehicle dealers. Combined with Indica, Tata Motors correspondingly exports four additional passenger car models — The Safari, The Indigo, The Indigo SW and Tata Indica Vista. Also, the company also exports more than 20 commercial vehicle models comprising buses and pick-ups.
The company has never before experienced such success. Today Tata Motors is the unquestionable forerunner in the commercial vehicles market and industry in India (Rugman & Collinson 2008). It has progressively developed into one of the key players all over the world too. It has been pioneering on several fronts to promote its place as a spear header on the marker. In the SCV division, Tata Motors has seen unprecedented triumph with the unveiling of the groundbreaking Tata ACE. In the M and HCV sector, the company has undertaken projects to additionally assert its place in the market. Tata Motors revels in several key strengths that allow it to introduce a unique price proposition to its consumers.
Nevertheless, the company’s success is not guaranteed. It must pay close attention to combining its unique advantages, as it aspires to reproduce its current accomplishments in new divisions and through new locations and markets. In addition to product reliability, the key contributing factor of impending achievements would be Tata Motors' ability to reinforce its support framework. Should the company succeed in this, the rewards could certainly be spectacular. Not only would that hurl the company to the lead in crafting an exceptional customer experience, but also help generate altogether fresh revenue inflows. The future introduces contentions and openings for the company in equal measure, internationally and domestically. While there are numerous drawbacks, Tata Motors appears to be undeniably well positioned to take advantage of the opportunities and go up against the world.
Hill, C.W.L. 2008, International Business, 7th Edition, McGraw Hill Higher Education, London.
Rugman, A.M., & Collinson, S. 2008. International Business, 5th Edition, Financial Times and Prentice Hall, New York.
Daniels, J., Radebaugh L. & Sullivan D., 2008, International Business 12th Edition Pearson Education, USA.
Cavusgil, T., Knight, G., & Riesenberger, J., 2007, International Business: Strategy, Management and New Realities, Prentice Hall, USA.