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    Strategic Memo - Tata Ace

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    Vikram Arora
    The document discusses Tata Motors' mini truck called Tata Ace, which was launched in India in 2005. It initially captured a large market share but lost ground to competitors like Mahindra & Mahindra in later years. The document proposes various marketing, sourcing, and internationalization strategies to help Tata Motors regain lost market share for the Ace. These include expanding dealership networks, introducing customized Ace variants, improving after-sales service, treating service as a profit center, and carefully coordinating technology appropriation from partners. A SWOT analysis and Porter's Five Forces analysis are also presented.

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    Strategic Memo - Tata Ace

    Uploaded by

    Vikram Arora
    1K views22 pages
    The document discusses Tata Motors' mini truck called Tata Ace, which was launched in India in 2005. It initially captured a large market share but lost ground to competitors like Mahindra & Mahindra in later years. The document proposes various marketing, sourcing, and internationalization strategies to help Tata Motors regain lost market share for the Ace. These include expanding dealership networks, introducing customized Ace variants, improving after-sales service, treating service as a profit center, and carefully coordinating technology appropriation from partners. A SWOT analysis and Porter's Five Forces analysis are also presented.

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    The document discusses Tata Motors' mini truck called Tata Ace, which was launched in India in 2005. It initially captured a large market share but lost ground to competitors like Mahindra & Mahindra in later years. The document proposes various marketing, sourcing, and internationalization strategies to help Tata Motors regain lost market share for the Ace. These include expanding dealership networks, introducing customized Ace variants, improving after-sales service, treating service as a profit center, and carefully coordinating technology appropriation from partners. A SWOT analysis and Porter's Five Forces analysis are also presented.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    1K views22 pages

    Strategic Memo - Tata Ace

    Uploaded by

    Vikram Arora
    The document discusses Tata Motors' mini truck called Tata Ace, which was launched in India in 2005. It initially captured a large market share but lost ground to competitors like Mahindra & Mahindra in later years. The document proposes various marketing, sourcing, and internationalization strategies to help Tata Motors regain lost market share for the Ace. These include expanding dealership networks, introducing customized Ace variants, improving after-sales service, treating service as a profit center, and carefully coordinating technology appropriation from partners. A SWOT analysis and Porter's Five Forces analysis are also presented.

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    Download as PPTX, PDF, TXT or read online from Scribd
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    At a glance
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    The document discusses several topics related to business management including strategy, leadership, and organizational structure.

    The main topics discussed include strategic planning, leadership styles, organizational culture and change management.

    Some of the key events mentioned include developing a strategic plan, implementing organizational changes, and adapting to new market conditions.

    Group A5

    Guru Gobind Singh ji


    Aroon Sheshadari (10010) Piyush Kakkar (10030) Rahul Malhotra(10035) Vikram Arora(10057) Loma P Desai (10086) Vishwas Sharma (10119)

    Strategy for sustaining momentum for Tata Ace

    Brief Background of Ace


    y India's first mini truck y Launched in May 2005 y Tag line Small is Big y Answer to the marketing myopia of three wheelers

    Idea behind launching Tata Ace


     Market Situation
    y y

    Govt plans of road expansion. High GDP growth rate positively correlated with truck penetration. High probability of increased demand in LCV segment.

     Company Situation
    y

    Tata product portfolio lacked greater than 45 tons and sub one ton vehicles. Scope of enhancing market share

    Gap Analysis based on Market Research


    Demand Side Gap : Large and Medium Trucks Restrictions in entering cities during peak hours ongested and narro lanes in commercial areas Demand Side Gap : Three Wheelers Banned in certain metros and bigger cities Restrictions on high ays and express ays due to speed and safety concerns Failure in enhancing the social image of the user Supply Side Gap Portfolio lacking sub 2 ton offerings Needed immunity against the cyclical trends in commercial vehicles segment

    Higher per unit transportation cost and poor conditions of roads makes them unsuitable for rural customers

    Marketing Strategy- Segmentation &Target


    TATA ACE S CORE MARKET

    FEATURE SENSITIVE (7%) BALANCED PERSPECTIVE (25%)

    PRICE CONSTRAINED CO STRAINED (13%)

    ROI SENSITIVE (55%)

    Tata Motors focused on capturing these two segments.

    Marketing Strategy -Positioning


     POSITIONING y Ace was positioned as a vehicle that offered the

    price, fuel efficiency, and maneuverability of a three wheeler


    y but with the safety, durability, additional payload, and

    comfort of a four-wheeled truck.

    Sourcing & Production Strategy


    y Aggregate Outsourcing
    Sourcing complete assemblies such as rear axle frame rather than assembling these modules in-house from outsourced costs

    y E-Sourcing
    Company posted its requirements on intranet site where pre qualified suppliers could review specs and submit bids.

    y Manufacturing Facility Location-Pune


    Chose underutilized existing plant at Pune which allowed company to tap existing vendor base and savings on outbound freight costs since 70% of Ace s demand came from South and West India.

    LCV Market* in 2006 post Ace s launch


    3% 2% 6% Tata Motors 21% Mahindra & Mahindra Swaraj Mazda Eicher 68% Others

    LCV market consists of 3 wheelers as well as 4 wheelers

    Data Source: www.siamindia.com www.tatamotors.com

    LCV Market* in 2010


    2% 2% 4% Tata Motors 31% 61% Mahindra & Mahindra Swaraj Mazda Eicher

    Data Source: www.siamindia.com www.tatamotors.com,

    Clearly Tata s have lost market share to M & M

    Porter s Five force Model-2006


    Threat of substitutes

    Power of suppliers

    Rivalry Among competitors

    Power of Buyers

    Entry of new competitors

    Porter s Five force Model-2010


    Threat of substitutes

    Power of suppliers

    Rivalry Among competitors

    Power of Buyers

    Entry of new competitors

    SWOT ANALYSIS

    Proposed Strategies
    y For regaining lost market share y Internationalization Strategies

    For regaining lost market share


    Marketing Strategies For North and East India
    y Aggressive marketing campaign y Design local advertisements y Road shows

    For South and West


    Loyalty bonus or exchange offer Financing facility through Tata Finance for rural penetration

    For regaining lost market share


    y Leveraging strong dealership network to target fleet

    owners. y Channel expansion


    y Hub and Spoke Model
    1S dealership

    1S dealership

    3S dealership

    1S dealership

    1S dealership

    Internationalization Strategies
    Resource Based View
    roduct Reliability

    Service Networ

    hannel Reach

    Sustainable competitive advantage lies not in one, but a combination of multiple resources, each of which individually complement other resources to build competitive advantage

    Internationalization Strategies
    Three Dimensional Recommendation Matrix
    Based on resource view Dimension 1 : Tangible
    Strategy National Footprint Sustaining the First Mover's Advantage of ACE Tata Motors has an unparalleled network of dealers and service stations across the country for Medium and Heavy Commercial Vehicles (M and HCV). However most of these service stations are along inter-city routes. It would need to replicate this network at intracity level for its hugely successful LCV - the Tata ACE. For this Tata Motors can liaise with small garages, train them and certify them as 'Tata Authorized Service Station'.

    Product Portfolio

    Tata Motors has positioned ACE as a multipurpose vehicle (MPV). Tata Motors should endeavour to move form a multi-purpose positioning to a mass customization positioning for ACE, wherein multiple variants are offered on the ACE platform, each uniquely suited for a specific application - such as tippers, long base trawlers, milk carriers.

    Internationalization Strategies
    Dimension 2 : Intangible
    Strategy Unique Customer Experience Intangible Assets

    In commercial vehicles industry, the uniqueness of customer experience is largely driven by the efficacy of the 'Support' framework. If your car breaks down, you can take a taxi to office. But that's not so for a transport operator. For him, his vehicle is at the heart of his business and hence responsive after-sales support is critical. Minimizing downtime calls for a service network that is highly responsive and easily accessible. Besides, Tata Motors should also 1. Consider introducing mobile service units for Tata ACE that can respond to customer calls anywhere within a given city. 2. Start treating "Services" as a dedicated profit center. Towards this end, the company should "productize" annual maintenance contracts.

    Brand Reputation

    Building a reputation will help sustain sales, without having to engage in discount sales.

    Internationalization Strategies
    Dimension 3 : Capabilities
    Strategy Technology Appropriation Capability Acquisition

    Technology Appropriation is the key to Tata Motor's ambitions to offer variety of products . As the share of light commercial vehicles grows, the company will need to face up to technologically superior players like Volvo , Diamler Chrysler. Here, Tata will have to carefully spearhead its strategy by carefully coordinating technology appropriation from its numerous international technology partners, notably Daewoo, Fiat and Hispano.

    obust Chain

    Supply Tata Motors has made significant investments in IT systems to network its countrywide service network. This helps them maintain very high spares parts availability at their service stations and minimize downtime. In the years to come, it would need to include their LCV service station within this framework. This will however be a big challenge, since these service stations would largely be managed by illiterate and not-so-tech-savvy repairmen.

    References
    y www.tatamotors.com (annual reports) y www.siamindia.com y www.wikipedia.com y HBR case study Tata Motors: The Tata Ace by Krishna

    G. Palepu, Vishnu Srinivasan 21 pages. Publication date: Sep 18, 2007. Prod. #: 108011-PDF-ENG y http://www.business-standard.com/india/news/tatasace-mini-truck-suddenly-gets-competition/396000/

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