Tata Motors

PESTEL Analysis:
It is a framework used to analyse the external factors that directly or indirectly
affects the working of an organisation.
1. Political Factors: Government had played a very important role by providing a
conducive environment to support automobile manufacturing in the country.
In the export of the cars and vehicles produced by the company the most important factor
that laid a direct impact is the region like free trade agreements with India. The more
flexible the trade agreements are, the more success and sale the company will get. To
support the trade amongst nations the government has also come up with things like Eco
free environment which has also helped in the success of the company.

2. Economic Factors: The rise in the Disposable income has also led to an increase in the
discretionary expenditure of the people. The rapid growth of India’s economy has always
been an opportunity for the company like Tata Motors. The better the business growth of
a state will be, the more opportunities for the company will be there. By and large, the
GDP of the state is a significant factor assisting in the success of the organization like
Tata Motors. Therefore, the growth of the state economy is always a thing of great
concern for the Tata Motors Company.

3. Socio – Cultural Factors: Rise in the demand of Cars by people (Corporate class) has
played an important role in the Growth of Automobile sector. For Ex: The states where
people are more fond of Hybrid Cars and Electric Cars will create an opportunity for the
companies like Tata Motors. The difference between the wealth of different class of
society and the change in demand and taste of people can be the major challenge. This
gap often widens the economic disparities between the social classes and become a threat
to the business and affect the trade as a whole.

4. Technological Factors: The boom in technology and the rising trend of E-commerce
has always been an opportunity for the automobile companies like Tata Motors company.
Developments in technology provide great opportunities for the company to expand its
business and to operate its business in a smart and productive way.

5. Environmental Factors: The decline in the reserves of the oil is also an opportunity
for Tata Motors as it assists in bringing the new technology and the innovation in the
realm of motors. The certain environmental friendly stance by the global companies is
one the fundamental concern for the company.
 6. Legal Factors: Tata Motors has been producing the stuff that has always been as per the
state laws and has able to sustain a very positive image in the Motor market. The
consumer of the products made by Tata Motors has always found very much satisfied
with the legal issues.

SWOT Analysis:
1.Strength:
a. Tata Motors is the Asia’s Largest and 17th largest automobile manufacturing company in the
world.
b. With over 60,000 employees, it’s one of the fortune 500 companies of the world.
c. Their major Innovations were, coming up with the brands like Jaguar and Land Rover.
d. Tata motors are more focused on Customers Aspirations and pricing.

2. Weakness:

a. Despite buying the Jaguar and Land Rover brands, Tata has not got a base in the luxury car
segment in its domestic Indian market.
b. Although the cars of Tata motors comes with Trendy Features and Appealing look, still the
service quality of cars like Hyundai and Maruti at ground is not at par. If focused properly in
these segments, it can help them to gain the Customer Loyalty for Long run.

3. Opportunities:
a. The two areas of Opportunities for Tata Motors is the Domestic and International Market. In
domestic Market, the car “Tata Nano” hasn’t done as per the expectation but as per the trend in
the automobile sector a thought of introducing Nano as an Electric Vehicle may become a Game
changer as price and the vehicle aspirations meet the Upcoming EV market.

4. Threats:
a. For Every auto company, the major threat is from EV segment. As consumers are preferring
more EV cars, Tata motors being a new entrant in this segment will have to compete with the
new EV companies.
b. Other competing car manufacturers like Toyota, Maruti, Volkswagen are already in the
Business for years. Therefore, Tata Motors Limited has to catch up in terms of Quality and lean
production.

References:
Case: “TATA Motors: Crafting Growth Strategies in Global Industry” – “International Business”
by Daniels, Radebaugh, Sallivan, Salwan, 15th Edition, Pearson India - Noida
https://www.swotandpestle.com/tata-motors/

https://www.linkedin.com/pulse/analysis-factors-impacting-tata-motors-pestel-satya-saketh-t-s

http://fernfortuniversity.com/term-papers/pestel/nyse4/864-tata-motors-limited.php