Porter s five force model analysis of tata motors

One important observation that Michael E Porter made about these forces is that if these forces are intense then almost no company gains distinct competitive advantages and earns attractive returns on investments.

But the advent of electronic media and internet provides alternative medium to advertise and market products.

Over the next one year, some 20 new cars will be seen on Indian roads.

Potential of new entrant into Industry: India is on the peak of the Foreign Direct Investment wave. Substitute products all depend on the geographic location of the consumer. 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.

Tata Motors Limited has to manage all these challenges and build effective barriers to safeguard its competitive edge. But this did not hold true when Honda Motor Co.

Passenger vehicles increased marginally from 1. This put pressure on Tata Motors Limited profitability in the long run. Products with similar the function, might limit the prices that firms can charge.

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. Accounting information is static and depends upon history; complex calculations like time value of cash cannot be incorporated in the profitability factors of accounting statements.

But with launch of Nano the 1 lakh car the whole momentum of the market has shifted. The overall value of the firm is defined by Ross, et al as the sum of the overall market value of equities and the overall market value of debt.

They already have their small trucks Tata Sierra operating in UK which must have developed their knowledge on UK and European market requirements. For projects anticipating even flow of cash and exhibiting behavior of project in the mode of a single duration project, the present value technique is more suitable.

However, in the modern context there are many factors that contribute to the insufficiency of accounting information in deciding the value of a company.

The some parts of the NANO car are obtain from the supplier who them are big enough and limited substitutes are available against them. On the NYSE, the company opened with a huge big bang with PE ratio about but has crashed substantially after that.

The management of an organization try to smoothen different inputs and outputs to reduce environmental risks which are reflected in these variance analysis and hence they can be logical indicators of systematic risks pertaining to the common stocks of an organization.

However the researchers predicted that the Present Value technique already introduced earlier. Substitute is lower quality Tata Motors A lower quality product means a customer is less likely to switch from Tata Motors to another On the other hand, new parts are lasting longer, which is great for consumers, but is not suchgood news for parts makers.

Building capacities and spending money on research and development. And above all this the image and trust the name TATA carries with it. The threats of new entrants and substitute products and services are prevalent in industries where major innovations are underway that can potentially cause creative destruction of the existing products and services.

The threats of new entrants and substitute products and services are prevalent in industries where major innovations are underway that can potentially cause creative destruction of the existing products and services. By understanding the core need of the customer rather than what the customer is buying.

The automotive sector in India is growing at around 18 per cent per annum. The dealer is planning to seek a price cut for the NANO.

The industry experts, actually, use comparable firm statistics to make their perceptions as accurate as possible. Following are some some barriers to entry: The management of a firm should project the future cash receivables and payables, subtract payables from receivables to find out the cash flow and then apply the discount level that keeps the present value of the net cash flows greater than zero.

Accounting information is static and depends upon history; complex calculations like time value of cash cannot be incorporated in the profitability factors of accounting statements. Obviously, as Tata globalises and buys into other brands this problem could be alleviated.

There are four broad methodologies of company valuation:. Tata Motors Limited Porter Five Forces Analysis Strategic Management Essays, Term Papers & Presentations Porter Five Forces Analysis is a strategic management tool to analyze industry and understand underlying levers of profitability in a given industry.

Porter's 5 forces model is a powerful way of analysing the competitive forces that shapes every industry in general. This was developed by Michael E.

Porter of Havard Business School in This. 5 Forces TATA Motors. Uploaded by Jean Stephany. Related Interests. Car; Share on Twitter, opens a new window; Share on LinkedIn; Share by email, opens mail client; Embed.

Description: PORTER's analysis. View More. PORTER's analysis Porter’s Five Forces and Complementors: The Automobile Industry. Threat of New Entrants: LOW The. 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 MarutiChevy Spark, Alto, Estilo, Wagon R, Reva electric car etc. Tata Motors Limited Porter Five Forces Analysis Strategic Management Essays, Term Papers & Presentations Porter Five Forces Analysis is a strategic management tool to analyze industry and understand underlying levers of profitability in a given industry.

PORTER'S FIVE FORCES ANALYSIS OF INDIAN AUTOMOBILE SECTOR. It's true that the average person can't come along and start manufacturing automobiles. The emergence of foreign competitors with the capital, required technologies and management skills began to undermine the market share of various companies.

Porter s five force model analysis of tata motors