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Threat from Substitute Products Rivalry among the existing players. Porter Five Forces is a holistic strategy framework that took strategic decision away from just analyzing the present competition. Managers at Tata Motors Limited can not only use Porter Five Forces to develop a strategic position with in Auto Manufacturers - Major industry but also can explore profitable opportunities in whole Consumer Goods sector.
Tata Motors Limited has to manage all these challenges and build effective barriers to safeguard its competitive edge. By building economies of scale so that it can lower the fixed cost per unit.
Building capacities and spending money on research and development. New entrants are less likely to enter a dynamic industry where the established players such as Tata Motors Limited keep defining the standards regularly.
It significantly reduces the window of extraordinary profits for the new firms thus discourage new players in the industry. Bargaining Power of Suppliers All most all the companies in the Auto Manufacturers - Major industry buy their raw material from numerous suppliers. Suppliers in dominant position can decrease the margins Tata Motors Limited can earn in the market.
Powerful suppliers in Consumer Goods sector use their negotiating power to extract higher prices from the firms in Auto Manufacturers - Major field. The overall impact of higher supplier bargaining power is that it lowers the overall profitability of Auto Manufacturers - Major. By experimenting with product designs using different materials so that if the prices go up of one raw material then company can shift to another.
Developing dedicated suppliers whose business depends upon the firm. One of the lessons Tata Motors Limited can learn from Wal-Mart and Nike is how these companies developed third party manufacturers whose business solely depends on them thus creating a scenario where these third party manufacturers have significantly less bargaining power compare to Wal-Mart and Nike.
Bargaining Power of Buyers Buyers are often a demanding lot. They want to buy the best offerings available by paying the minimum price as possible.
This put pressure on Tata Motors Limited profitability in the long run. The smaller and more powerful the customer base is of Tata Motors Limited the higher the bargaining power of the customers and higher their ability to seek increasing discounts and offers.
This will be helpful in two ways. It will reduce the bargaining power of the buyers plus it will provide an opportunity to the firm to streamline its sales and production process.
By rapidly innovating new products. Customers often seek discounts and offerings on established products so if Tata Motors Limited keep on coming up with new products then it can limit the bargaining power of buyers.
New products will also reduce the defection of existing customers of Tata Motors Limited to its competitors. Threats of Substitute Products or Services When a new product or service meets a similar customer needs in different ways, industry profitability suffers.
For example services like Dropbox and Google Drive are substitute to storage hardware drives. The threat of a substitute product or service is high if it offers a value proposition that is uniquely different from present offerings of the industry.
By understanding the core need of the customer rather than what the customer is buying.I have developed a Porter’s Five Forces analysis for the organization. I identified strategic strengths and weaknesses and identified core competencies of the organization. The company that I have taken into account to analysis the Porter’s Five Forces is the Tata Motors%(7).
Established under the parent company, Tata Group, in , Tata Motors Limited has become India’s largest automobile company. It was the first Indian automobile company to list on the New York Stock Exchange. Tata Motors began manufacturing commercial vehicles in with a year collaboration agreement with Daimler Benz of Germany.
Here is the five forces analysis for Tata nano - The threat of new entrants is very high for the small car industry. Substitutes for this Tata ‘Nano’ already existed in the market from players like Maruti , Chevy Spark, Alto, Estilo, Wagon R, Reva electric car etc.
Porter's Five forces analysis on Tata Nano. Uploaded by. Marzia Karim. As Porter's 5 Forces analysis deals with factors outside an industry that influence the nature of competition within it, the forces inside the industry (microenvironment) that influence the way in which firms compete.
TATA motors have great knowledge/ experience in. Analysis Of Ford Motor Company And Tata Motors As Per Michael Porters Five Forces In , Michael Porter presented the five forces that shape competition in the industry for any business organization as ' Rivalry among existing competitors, threats of new entrants, bargaining power of suppliers, bargaining power of buyers, and threat of substitute products or services.
Porter S 5 Forces Analysis Of Tata Motors.
Porter’s Five Forces – Competitor Analysis Michael Porter’s five forces is a model used to explore the environment in which a product or company operates to generate competitive advantage.