SWOT Analysis - Tata Motors Limited

The company began in 1945 and has produced more than 4 million vehicles. Tata Motors
Limited is the largest car producer in India. It manufactures commercial and passenger
vehicles, and employs in excess of 23,000 people.

Strengths
• The internationalisation strategy so far has been to keep local managers in new
acquisitions, and to only transplant a couple of senior managers from India into
the new market. The benefit is that Tata has been able to exchange expertise. For
example after the Daewoo acquisition the Indian company leaned work discipline
and how to get the final product 'right first time.'
• The company has a strategy in place for the next stage of its expansion. Not only
is it focusing upon new products and acquisitions, but it also has a programme of
intensive management development in place in order to establish its leaders for
tomorrow.
• The company has had a successful alliance with Italian mass producer Fiat since
2006. This has enhanced the product portfolio for Tata and Fiat in terms of
production and knowledge exchange. For example, the Fiat Palio Style was
launched by Tata in 2007, and the companies have an agreement to build a pick-
up targeted at Central and South America.

Weaknesses
• The company's passenger car products are based upon 3rd and 4th generation
platforms, which put Tata Motors Limited at a disadvantage with competing car
manufacturers.
• Despite buying the Jaguar and Land Rover brands (see opportunities below); Tat
has not got a foothold in the luxury car segment in its domestic, Indian market. Is
the brand associated with commercial vehicles and low-cost passenger cars to the
extent that it has isolated itself from lucrative segments in a more aspiring India?
• One weakness which is often not recognised is that in English the word 'tat' means
rubbish. Would the brand sensitive British consumer ever buy into such a brand?
Maybe not, but they would buy into Fiat, Jaguar and Land Rover (see
opportunities and strengths).

Opportunities
• In the summer of 2008 Tata Motor's announced that it had successfully purchased
the Land Rover and Jaguar brands from Ford Motors for UK £2.3 million. Two of
the World's luxury car brand have been added to its portfolio of brands, and will
undoubtedly off the company the chance to market vehicles in the luxury
segments.
 • Tata Motors Limited acquired Daewoo Motor's Commercial vehicle business in
2004 for around USD $16 million.
• Nano is the cheapest car in the World - retailing at little more than a motorbike.
Whilst the World is getting ready for greener alternatives to gas-guzzlers, is the
Nano the answer in terms of concept or brand? Incidentally, the new Land Rover
and Jaguar models will cost up to 85 times more than a standard Nano!
• The new global track platform is about to be launched from its Korean
(previously Daewoo) plant. Again, at a time when the World is looking for
environmentally friendly transport alternatives, is now the right time to move into
this segment? The answer to this question (and the one above) is that new and
emerging industrial nations such as India, South Korea and China will have a
thirst for low-cost passenger and commercial vehicles. These are the
opportunities. However the company has put in place a very proactive Corporate
Social Responsibility (CSR) committee to address potential strategies that will
make is operations more sustainable.
• The range of Super Milo fuel efficient buses are powered by super-efficient, eco-
friendly engines. The bus has optional organic clutch with booster assist and
better air intakes that will reduce fuel consumption by up to 10%.

Threats
• Other competing car manufacturers have been in the passenger car business for
40, 50 or more years. Therefore Tata Motors Limited has to catch up in terms of
quality and lean production.
• Sustainability and environmentalism could mean extra costs for this low-cost
producer. This could impact its underpinning competitive advantage. Obviously,
as Tata globalises and buys into other brands this problem could be alleviated.
• Since the company has focused upon the commercial and small vehicle segments,
it has left itself open to competition from overseas companies for the emerging
Indian luxury segments. For example ICICI bank and DaimlerChrysler have
invested in a new Pune-based plant which will build 5000 new Mercedes-Benz
per annum. Other players developing luxury cars targeted at the Indian market
include Ford, Honda and Toyota. In fact the entire Indian market has become a
target for other global competitors including Maruti Udyog, General Motors, Ford
and others.
• Rising prices in the global economy could pose a threat to Tata Motors Limited
on a couple of fronts. The price of steel and aluminium is increasing putting
pressure on the costs of production. Many of Tata's products run on Diesel fuel
which is becoming expensive globally and within its traditional home market.
SWOT Analysis Toyota
Strengths.
• New investment by Toyota in factories in the US and China saw 2005 profits rise,
against the worldwide motor industry trend. Net profits rose 0.8% to 1.17 trillion
yen ($11bn; £5.85bn), while sales were 7.3% higher at 18.55 trillion yen.
Commentators argue that this is because the company has the right mix of
products for the markets that it serves. This is an example of very focused
segmentation, targeting and positioning in a number of countries.
• In 2003 Toyota knocked its rivals Ford into third spot, to become the World's
second largest carmaker with 6.78 million units. The company is still behind
rivals General Motors with 8.59 million units in the same period. Its strong
industry position is based upon a number of factors including a diversified
product range, highly targeted marketing and a commitment to lean
manufacturing and quality. The company makes a large range of vehicles for both
private customers and commercial organizations, from the small Yaris to large
trucks. The company uses marketing techniques to identify and satisfy customer
needs. Its brand is a household name. The company also maximizes profit through
efficient manufacturing approaches (e.g. Total Quality Management).

Weaknesses
• Being big has its own problems. The World market for cars is in a condition of
over supply and so car manufacturers need to make sure that it is their models that
consumers want. Toyota markets most of its products in the US and in Japan.
Therefore it is exposed to fluctuating economic and political conditions those
markets. Perhaps that is why the company is beginning to shift its attentions to the
emerging Chinese market. Movements in exchange rates could see the already
narrow margins in the car market being reduced.
• The company needs to keep producing cars in order to retain its operational
efficiency. Car plants represent a huge investment in expensive fixed costs, as
well as the high costs of training and retaining labour. So if the car market
experiences a down turn, the company could see over capapacity. If on the other
hand the car market experiences an upturn, then the company may miss out on
potential sales due to under capacity i.e. it takes time to accommodate. This is a
typical problem with high volume car manufacturing.

Opportunities.
• Lexus and Toyota now have a reputation for manufacturing environmentally
friendly vehicles. Lexus has RX 400h hybrid, and Toyota has it Prius. Both are
based upon advance technologies developed by the organization. Rocketing oil
prices have seen sales of the new hybrid vehicles increase. Toyota has also sold
 on its technology to other motor manufacturers, for example Ford has bought into
the technology for its new Explorer SUV Hybrid. Such moves can only firm up
Toyota's interest and investment in hybrid R&D.
• Toyota is to target the 'urban youth' market. The company has launched its new
Aygo, which is targeted at the streetwise youth market and captures (or attempts
to) the nature of dance and DJ culture in a very competitive segment. The vehicle
itself is a unique convertible, with models extending at their rear! The narrow
segment is notorious for it narrow margins and difficulties for branding.

Threats.
• Product recalls are always a problem for vehicle manufacturers. In 2005 the
company had to recall 880,00 sports utility vehicles and pick up trucks due to
faulty front suspension systems. Toyota did not g ive details of how much the
recall would cost. The majority of affected vehicles were sold in the US, while the
rest were sold in Japan, Europe and Australia.
• As with any car manufacturer, Toyota faces tremendous competitive rivalry in the
car market. Competition is increasing almost daily, with new entrants coming into
the market from China, South Korea and new plants in Eastern Europe. The
company is also exposed to any movement in the price of raw materials such as
rubber, steel and fuel. The key economies in the Pacific, the US and Europe also
experience slow downs. These economic factors are potential threats for Toyota.

WOT Analysis Dell

Strengths.
• Dell is the World's largest PC maker. Profits for the 3 months to July 2005 were
in excess of $1 billion US, representing a growth of around 28%. For the last
couple of years it has held its position as market leader (it took it from rivals
Hewlett-Packard). The Dell brand is one of the best known and renowned
computer brands in the World.
• Dell cuts out the retailer and supplies directly to the customers. It uses
information technology, and Customer Relationship Management (CRM)
approaches to capture data on its loyal consumers. So a customer selects a generic
PC model, and then adds items and upgrades until the PC is kitted out to the
customer's own specification. Components are made by suppliers, never by Dell.
PC's are assembled using relatively cheap labour. You can even keep track of
your delivery by contacting customer services, based in India. The finished goods
 are then dropped off with the customer by courier. Dell has total command of the
supply chain.

Weaknesses.
• The company has such a huge range of products and components from many
suppliers from a plethora of countries, that there is the occasional product recall
that can cause Dell some embarrassment. In 2004 Dell had to recall 4.4 million
laptop adapters because of a fear that they could overheat, causing electric shocks
or fires.
• Dell is a computer maker, not a compute manufacturer. It buys from a group of
concentrated hi-tech component manufacturers. Whilst this is a tremendous
advantage in terms of business operations, allowing Dell to focus on marketing
and logistics, the company is reliant on a few large suppliers, and to an extent is
locked in for periods of time (i.e. unable to switch supply dues to the lack of large
suppliers in the World).

Opportunities.
• Kevin Rollins replaced Michael Dell in 2004 as Dell's Chief Executive Officer.
Dell remained the company's Chairman. Despite founder Dell's massive success,
new blood and a change in management thinking could lead the company into a
new, even more profitable period. Dell was born in 1965, and founded Dell in
1984 with $1000 whilst studying at the University of Texas. He became the
youngest Fortune 500 CEO in 1992, and will be a tough act to follow.
• Dell is pursuing a diversification strategy by introducing many new products to its
range. This initially has meant good such as peripherals including printers and
toners, but now also included LCD televisions and other non-computing goods.
So Dell compete against iPod and other consumer electronics brands.
• Dell is making and selling low-cost, low-price computers to PC retailers in the
United States. The PC's are unbranded and should not be recognised as being Dell
when the consumer makes a purchase. Rebranding and rebadging for retailers,
although a departure for Dell, gives the company new market segments to attack
with the associated marketing costs.

Threats.
• The single biggest problem for Dell is the competitive rivalry that exists in the PC
market globally. As with all profitable brands, retaliation from competitors and
new entrants to the market pose potential threats. Dell sources from Far Eastern
nations where labour costs remain low, but there is nothing stopping competitors
doing the same - even sourcing the same or similar components from the same or
similar suppliers. Remember, Dell is a PC maker, not a PC manufacturer.
• Dell, being global in its marketing and operations, is exposed to fluctuations in
the World currency markets. Although it is a very lean organization, orders do
 have to be placed some time ahead due to their size or value. Changes in
exchange rates could leave the company exposed to potential loses in parts of its
supply chain.

SWOT Analysis Apple

Strengths.
• Apple is a very successful company. Sales of its iPod music player had increased
its second quarter profits to $320 (June 2005). The favourable brand perception
had also increased sales of Macintosh computers. So iPod gives the company
access to a whole new series of segments that buy into other parts of the Apple
brand. Sales of its notebooks products is also very strong, and represents a huge
contribution to income for Apple.

• Brand is all-important. Apple is one of the most established and healthy

IT brands in the World, and has a very loyal set of enthusiastic customers that
advocate the brand. Such a powerful loyalty means that Ample not only recruits
new customers, it retains them i.e. they come back for more products and services
from Apple, and the company also has the opportunity to extend new products to
them, for example the iPod.

Weaknesses.
• It is reported that the Apple iPod Nano may have a faulty screen. The company
has commented that a batch of its product has screens that break under impact,
and the company is replacing all faulty items. This is in addition to problems with
early iPods that had faulty batteries, whereby the company offered customers free
battery cases.
• There is pressure on Apple to increase the price of its music download file, from
the music industry itself. Many of these companies make more money from
iTunes (i.e. downloadable music files) than from their original CD sales. Apple
has sold about 22 million iPod digital music players and more than 500 million
songs though its iTunes music store. It accounts for 82% of all legally
downloaded music in the US. The company is resolute, but if it gives in to the
music producers, it may be perceived as a commercial weakness.
• Early in 2005 Apple announced that it was to end its long-standing relationship
with IBM as a chip supplier, and that it was about to switch to Intel. Some
industry specialists commented that the swap could confuse Apple's consumers.

Opportunities.
• Apple has the opportunity to develop its iTunes and music player technology into
a mobile phone format. The Rokr mobile phone device was developed by
 Motorola. It has a colour screen, stereo speakers and a advance camera system. A
version of Apple's iTunes music store has been developed for the phone so users
can manage the tracks they store on it. Downloads are available via a USB cable,
ands software on the handset pauses music if a phone call comes in. New
technologies and strategic alliances offer opportunities for Apple.
• Podcasts are downloadable radio shows that can be downloaded from the Internet,
and then played back on iPods and other MP3 devices at the convenience of the
listener. The listener can subscribe to Podcasts for free, and ultimately revenue
could be generated from paid for subscription or through revenue generated from
sales of other downloads.

Threats.
• The biggest threat to IT companies such as Apple is the very high level of
competition in the technology markets. Being successful attracts competition, and
Apple works very hard on research and development and marketing in order to
retain its competitive position. The popularity of iPod and Apple Mac are subject
to demand, and will be affected if economies begin to falter and demand falls for
their products.
• There is also a high product substitution effect in the innovative and fast moving
IT consumables market. So iPod and MP3 rule today, but only yesterday it was
CD, DAT, and Vinyl. Tomorrow's technology might be completely different.
Wireless technologies could replace the need for a physical music player.
• In 2005 Apple won a legal case that forced Bloggers to name the sources of
information that pre-empted the launch of new Apple products. It was suspect that
Apple's own employees had leaked confidential information about their new
Asteroid product. The three individuals prosecuted, all owned Apple tribute sites,
and were big fans of the company's products. The blogs had appeared on their
sites, and they were forced to reveal their source. The ruling saw commercial
confidentiality as more important as the right to speech of individuals. Apple are
vulnerable to leaks that could cost them profits.

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