SWOT Analysis of Maruti Suzuki and Tata Motors

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1.

Albert Humphrey: Albert Humphrey is often credited with developing the SWOT analysis
framework. Although there is no single definitive quote from him, he introduced the concept
of SWOT analysis as a tool for organizational planning in the 1960s.
2. Kenneth Andrews: Kenneth Andrews, a prominent management scholar, defined SWOT
analysis as follows: "SWOT analysis is a structured planning method that evaluates the
strengths, weaknesses, opportunities, and threats involved in a project or in a business
venture. A SWOT analysis can be carried out for a product, place, industry, or person."
3. Michael Porter: Michael Porter, a renowned strategy expert, offered his perspective on SWOT
analysis in his book "Competitive Strategy": "The essential complement to internal analysis is
an understanding of a firm's competitive environment. This environment encompasses the
interaction of competitors, suppliers, customers, and potential entrants. The framework
most suited to an analysis of these interactions is the SWOT analysis."
4. Jay B. Barney: Jay B. Barney, a leading scholar in the field of strategic management, described
SWOT analysis in his book "Gaining and Sustaining Competitive Advantage" as follows:
"SWOT analysis is a tool for auditing an organization and its environment. It is the first stage
of planning and helps marketers to focus on key issues. SWOT stands for strengths,
weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors.
Opportunities and threats are external factors."
5. Philip Kotler: Philip Kotler, a renowned marketing expert, defined SWOT analysis as follows:
"A SWOT analysis is a powerful tool for scanning the internal and external environments of
an organization. It is designed to help managers identify and evaluate the organization's
internal strengths and weaknesses, as well as external opportunities and threats."
6. Igor Ansoff: Igor Ansoff, a pioneer in strategic management, described SWOT analysis in his
book "Corporate Strategy" as: "A SWOT analysis is an examination of the internal strengths
and weaknesses of an organization, coupled with an analysis of the external opportunities
and threats. It provides a useful framework for understanding the competitive environment
and identifying the key factors that can impact an organization's success."
7. Peter F. Drucker: Peter F. Drucker, a highly influential management consultant, provided his
perspective on SWOT analysis in his book "Management: Tasks, Responsibilities, Practices":
"SWOT analysis is a systematic way of assessing the environment and a company's internal
capabilities to identify strategic opportunities and threats. It helps managers understand the
organization's strengths and weaknesses, as well as the external factors that can affect its
performance."
8. John A. Pearce II and Richard B. Robinson: In their book "Strategic Management:
Formulation, Implementation, and Control," John A. Pearce II and Richard B. Robinson
defined SWOT analysis as: "SWOT analysis is a technique for analyzing an organization's
internal strengths and weaknesses, as well as external opportunities and threats. It provides
a comprehensive overview of the factors that can influence an organization's strategic
decisions and helps identify areas where the organization can leverage its strengths and
address its weaknesses."

Tata Motors is a leading global automobile manufacturing company and is a $44 billion big
organisation. It has a diverse range of products which includes an extensive range of cars,
trucks, buses, sports utility vehicles and defence vehicles. It is one of India’s largest Original
Equipment Manufacturer offering a wide range of smart, integrated and e-mobility
solutions.
Founded in 1945 by the name of Tata Engineering and Locomotive Company ( TELCO ). The
company manufactured its first commercial vehicle in 1954 with Daimler – Benz Az, a
collaboration that ended in 1969.
The company entered the passenger vehicle market in 1988 by launching Tata Mobile
followed by Tata Sierra in the year 1991 and became the first Indian manufacturer achieving
the capability of developing a competitive indigenous automobile.
In 1998 Indica launched the first fully developed Indian passenger car. Then came the
world’s most affordable car, Tata Nano in 2008. In 1988 Tata Motors entered into
manufacturing passenger vehicles and it never looked back.
Products of Tata Motors
 Automobile 
 Luxury Vehicles
 Commercial Vehicles
 Automotive parts
 Pickup trucks
 SUV’s

1. Strengths of Tata Motors


 
 Recognized Brand Image:- Tata Motors is a well-recognized global automotive
brand. The company itself sells its vehicles under various brand names like Jaguar
Land Rover, Tata Hitachi, Tata Daewoo, Tata Marcopolo etc. This has not only
expanded the company’s market but has also increased the brand value and the
brand image of the company
 Market value:- The estimated market capitalization of Tata Motors by Forbes is 4.5
billion dollars in 2021. They ranked as the 1037th position in the Global 2000 top
companies in 2020.
 Established Distribution System:- Tata Motors has a global distribution network of
over 1600 workshops that cover 90% of the country’s district. Manufacturing units in
different countries prove that the company has an active supply chain system.
 Market Penetration:- Established distribution system gives a competitive
advantage which helps in market penetration. Also providing basic services like
rental cars, and taxi cabs has allowed the company to diversify and reach a greater
customer level.
 Research and Development:- The company spends more than 23% of its complete
budget on research and development. It shows the company’s dedication to its
productivity and growth. Tata Motors has also established its research centres in
countries like the UK, India, Spain, and South Korea.
 International Presence:- Tata Motors is running its business in more than 125
countries globally 
 
2. Weaknesses of Tata Motors 
 
 Greater operational costs and a lower rate of profits:- Though the company has
the acquisition of brands like Jaguar and Landrover which were successful in the
initial years it made the company more dependent on its subsidiaries. This resulted
in a decrease in the overall sales and profits of the company over the last five years.
 Controversies:- Back in 2008 the company launched the construction work of Tata
Nano in India, Singur and West Bengal. During that time the West Bengal
government interfered and controlled the land under the Land Acquisition Act 1894,
where a factory was going to be built by the company. This happened because West
Bengal wanted Tata Motors to establish a company within the state.
 No Foothold in the Luxury Segment:- Tata Motors is still struggling to find a strong
foothold in the luxury market, where profit rates are more.
 Limited Presence:-  As we saw that Tata Motors is operating the business in over
125 countries globally. But, unfortunately, the company failed to make a strong
impact like its competitive brands like Ford, Toyota, Honda and Volkswagen.
 
3. Opportunities of Tata Motors
 
 Digital Marketing:- We are all familiar with the terms of digital marketing and
the benefits of marketing a product digitally. Almost every top brand and company
is using social media to connect with their target audience. Tata Motors should also
take full advantage of all the platforms of social media and increase its
engagement with its target audience. Which will help the company to get proper
feedback about improving the products and services.
 Tata Nano:- Being the most affordable Tata Nano was not a great success in India
and got shut down in 2018, but still the company can implement this model in other
countries and see the feasibility.
 The Supply Chain and Service:- The best way for the company to enlarge its market
further is by expanding its supply chain system and distribution network in its
current market.
 Acquisition, Merger, Joint Venturing:- This has already helped the company before
as it already has famous brands like Jaguar, Daewoo, Hitachi etc. The company
should keep following the same pattern as other brands. As it will help the company
to increase its sales and profitability.
 

(Source: Business Insider)


4. Threats to Tata Motors
 
 Pandemic:- Pandemic was not only deadly to health but also to the economy as well
all around the world. During the pandemic,- people lost jobs and lots of companies
went out of business. A pandemic will always be a big threat to all the companies
and businesses out there.
 Competitors:- Tesla, Honda, Hyundai, BMW etc are big competitors of Tata Motors.
Competitors’ market share growth and customer’s market expansion result in lower
market share for the company.
 Price:- The competitors are always in competition with Tata Motors on price as they
offer the latest advanced designs and features at lower prices. Which in turn impacts
the sales and profit of Tata Motors.
 Innovation of Competitors:- Their competitors have got lots of access to skilled
professionals and resources which helps them to create innovative technology and
designs with better engineering in this industry. Innovation is good for industrial
growth but is one of the threats to the industry.

Maruti Suzuki is an Indian automobile manufacturer based in New Delhi which was
previously known as Maruti Udyog Limited and incorporated its journey in 1982, February
24. On 1982, October 2, Maruti signed a license agreement and a joint venture with The
Japanese Company Suzuki. The company started their operations in 1983 by launching the
Maruti 800 and entered into the foreign market by exporting 500 cars to Hungary.
Maruti Suzuki is regarded with ushering in the country’s vehicle revolution. In India, the
company engages in the passenger vehicle manufacture and sales business. Maruti Suzuki
has grown from a small beginning with the famous Maruti 800 automobile to a huge array
of 16 car models with over 150 variants. 
Maruti Suzuki’s model line includes anything from little automobiles like hatchbacks to
sedans and crossovers. Facilitation of pre-owned automobile sales, fleet management, and
car financing are among the other activities. The company has production facilities in
Haryana’s Gurgaon and Manesar, as well as a cutting-edge R&D facility in Rohtak, Haryana.
Currently, Maruti Suzuki holds 56.2 percent of the company’s stock. The stock of the
company is traded on the National Stock Exchange (NSE) and the Bombay Stock Exchange
(BSE).

Products by Maruti Suzuki


deals in the following products: 
 Automobiles
 Commercial vehicles
 Automotive parts
 Manufacturing hatchbacks
 Motor vehicles, components and spare parts

Strengths of Maruti Suzuki


The strengths of a company are the unique qualities that provide it with an advantage in
acquiring more market share, attracting more customers, and maximizing profitability.
Maruti Suzuki’s strengths are as follows:
 Market Share: Maruti Suzuki has a large market share with a share value of 45
percent which is comparatively more if compared to its competitors and this is one
of the biggest strengths of Maruti Suzuki.
 Number of Sales: Maruti Suzuki registered the highest number of domestic sales in
the previous fiscal year, with 9,66,447 units. This has recently surpassed the national
sales mark of 10 million.
 Brand Value: Maruti Suzuki has high brand recognition and a large consumer base.
Also earned a good reputation for selling second-hand vehicles of good quality
through its true value chain.
 Strong Advertising & Reliable Suppliers: Effective approaches of advertising, good
product range, and largest dealers network to attract people. It has a strong base of
reliable suppliers of raw material thus enabling the company to overcome any
supply chain bottlenecks.
 Product Quality: Maruti Suzuki engine capacity is supreme which provides more
mileage as compared to its competitors, their cars require less maintenance and
service cost is the lowest in the market. These advantages give Maruti Suzuki a
complete edge over its competitors in terms of capturing the market of the lower
and middle class whose percentage is more as compared to the rich class.
 Cost Optimization: Maruti’s cost optimization strategies have benefitted the
company in the long run, for example during Covid-19 the brand localized its imports
and re-structured its way of functioning.

Weaknesses of Maruti Suzuki


Weaknesses are elements of a company or brand that can be strengthened. The following
are Maruti Suzuki’s flaws:
 Weak Interior Quality: Maruti Suzuki’s interior quality is weak in comparison with
the high-quality interior of Hyundai, Maruti Suzuki, Volkswagen etc. Also, the build
quality of Maruti Suzuki cars is a little bit low compared to these competitors.
 Government Intervention: Government intervenes because of having a share in
Maruti Suzuki as it’s owned by the government and a public company. Strategic
decisions are dependent upon government approvals.
 Penetration Inability: Maruti Suzuki’s one of biggest inabilities is not being able to
penetrate the world market. The company is only popular in India and some of the
Asian regions other than this Maruti Suzuki’s presence in Europe and the North
American market is not that fascinating.
 Weak Managerial & labour Relationship: The relationship between management
and labour unions is not good. Employee strikes, worker’s wages strikes have
declined the reputation of Maruti Suzuki in terms of being the best working place.
 Diversification in the Workforce: The workforce at Maruti Suzuki Motors is
analyzed with mostly local workers, and low amounts of workers from other ethnical
backgrounds. Lack of diversification makes it difficult for employees from different
ethnical backgrounds to adapt at the workplace, leading to loss of talent.

Opportunities for Maruti Suzuki


Potential areas of attention for a corporation to enhance results, expand sales, and,
ultimately, profit are known as opportunities. Maruti Suzuki’s opportunities are 
 LPG Version of Cost-Effective Hatchbacks: Maruti Suzuki is popular in the taxi
sector and most of the taxis are connected with LPG. A recently positive move by
Maruti Suzuki is that it introduced its LPG version of Wagon R which is a smart move
taken by the company.
 Collaborations: Maruti Suzuki can jointly work with big car manufacturers to bring
innovations to the market by improving relations. Just like recently, Maruti Suzuki is
working with Toyota on a project to launch small electric SUVs in the market.
 Technological Developments: Technology succeeds with numerous advantages
among many departments. Operations can be automated to diminish costs.
Technology enables better data to be obtained from customers and improves
trading accomplishments.
 Immense Production Potential: Maruti Suzuki has immense potential in foreign
markets and it is a rapidly growing market for automobiles. It can tap into European
and other untouched markets where growth potential is even more.
 Transport Industry: The transportation industry has been thriving in recent years
and has significant growth potential in the future. This has reduced transportation
costs, which benefits Maruti Suzuki by lowering its overall costs.

Threats to Maruti Suzuki


Environmental variables that can damage a company’s growth are known as threats. Maruti
Suzuki’s threats include the following:
 Fall in Market Share: Maruti Suzuki has experienced a great fall in its market share
because of the higher increment in market share of other brands, such as Figo, Ford,
and Volkswagen. Also, Maruti Suzuki registered a sales drop in January 2022. 
 Intense Competition: China intends to join the Indian car market which can create
immense competition. Also, Maruti Suzuki has other competitors from global
automotive brands.
 Controversies: Maruti Suzuki is facing certain controversies such as its cars failing
accident tests and safety benchmarks which is one of the most important aspects
customers look into before purchasing any car. 
 Costs and Expenses: Higher fuel costs including demonetization expenses and
economic recession has caused decreasing purchases by customers. 
COMPARISON OF SWOT ANALYSIS OF TATA MOTORS AND MARUTI SUZUKI

STRENGTHS

TATA MOTOS MARUTI SUZUKI


 Diversified product portfolio  Strong market presence and
encompassing passenger cars, dominant market share in India,
commercial vehicles, and electric extensive product portfolio catering
vehicles, strong international to diverse customer needs, strong
presence, focus on innovation, and brand reputation for reliability and
strong domestic brand reputation. value-for-money vehicles, extensive
dealership and service network.
 Strong presence in the commercial
vehicle segment, robust distribution  Extensive market share in the
network, expertise in manufacturing compact car segment, strong focus on
heavy-duty vehicles, investments in cost-effective manufacturing and
electric vehicle technology and R&D efficient supply chain management,
capabilities. established customer trust and
loyalty, collaboration with Suzuki
Motors providing technological
expertise.

WEAKNESS

TATA MOTOS MARUTI SUZUKI


 Quality perception challenges in  Dependence on the Indian market,
international markets, dependence limited presence in the premium
on the commercial vehicle segment. segment.
 Perception of limited brand appeal  Limited presence in the premium and
compared to global competitors, high luxury segments, vulnerability to
reliance on the domestic market for changes in government policies and
revenue generation. regulations impacting the automobile
industry.

OPPORTUNITY

TATA MOTOS MARUTI SUZUKI


 Growing demand for electric and  Growing domestic demand in India,
hybrid vehicles, opportunity for opportunity to tap into the electric
international expansion. vehicle market.
 Growing demand for SUVs and  Increasing demand for compact and
electric vehicles, opportunity to fuel-efficient vehicles, potential for
enhance brand perception and appeal market expansion in emerging
in international markets, strategic economies, focus on developing a
partnerships and collaborations for stronger presence in the electric
technology-sharing and market vehicle market.
access.
THREATH

TATA MOTOS MARUTI SUZUKI


 Intense competition in various  Intense competition in the Indian
markets, economic volatility affecting automotive market, changing
financial performance. customer preferences towards SUVs
 Fluctuations in commodity prices and electric vehicles.
affecting production costs, increasing  Rising competition from new entrants
competition from international and established players in the Indian
automakers in domestic and global market, potential impact of economic
markets. downturns on consumer spending
and automotive sales.

In summary, Maruti Suzuki has a strong foothold in the Indian market with a diverse product
portfolio, while Tata Motors boasts a broader international presence and a focus on innovation.
Both companies face intense competition and must adapt to changing customer preferences.
Maruti Suzuki has an opportunity to leverage the growing domestic demand and expand its
presence in the electric vehicle market, while Tata Motors can capitalize on the demand for
electric and hybrid vehicles and seek further international expansion. It's important to consider
that this comparison is a general assessment and may not capture all nuances and specific
factors influencing the companies' SWOT profiles.

Tata Motors vs Maruti Suzuki Revenue Growth (2017-2022)


  2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

Revenue (in
         
m)

Tata Motors 2,972,818 3,062,338 2,643,384 2,555,873 2,828,778

Maruti
797,226 887,522 789,944 733,083 900,745
Suzuki

Revenue
         
Growth (%)

Tata Motors   3.0% -13.7% -3.3% 10.7%

Maruti
  11.3% -11.0% -7.2% 22.9%
Suzuki
Tata Motors vs Maruti Suzuki Sales Volume Growth (2017-2022)
2017- 2018- 2019- 2020- 2021-
 
2018 2019 2020 2021 2022

Sales Volume (in


         
lakhs)

Tata Motors 12 13 10 8 11

Maruti Suzuki 18 19 16 15 17

Sales Volume
         
Growth (%)

Tata Motors   4.3% -24.6% -12.9% 29.7%

Maruti Suzuki   4.7% -16.1% -6.8% 13.4%

Tata Motors vs Maruti Suzuki Market Share April-March 2022


Market Share Tata Motors Maruti Suzuki

Passenger Vehicles 12.1% 43.4%

Commercial Vehicles 49.8% 4.7%

Tata Motors vs Maruti Suzuki Profit Margins (2017-2022)


2017- 2018- 2019- 2020- 2021-
 
2018 2019 2020 2021 2022

Operating Profit
         
Margin (%)

Tata Motors 10.6% -2.1% 5.7% 6.2% 8.2%

Maruti Suzuki 15.4% 12.6% 9.7% 7.6% 8.3%

Net Profit Margin


         
(%)

Tata Motors 2.3% -9.6% -4.2% -5.2% -4%

Maruti Suzuki 9.9% 8.7% 7.3% 6% 4%

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