BS7312C International Business Environment and Trade Assignment Sample
Module code and Title: BS7312C International Business Environment and Trade Assignment Sample
Introduction
Decision-making in global businesses is highly essential for organisations in order to ensure better management while having a prospect of efficient networking and relationship building capabilities. In this connection, the following report has focused on Tata Motors that are operating in the automobile industry, which would be evaluated and analysed based on its expansion management capabilities, cross-border collaboration, ethical consideration, and innovation perspective.
Referring to understanding the concept of this study, Bartlett and Ghoshal Matrix would be justified to understand the mentality of the organisation, which would give an overview of Tata Motors’ approach towards their decision-making in the global business marketplace.
Discussion and analysis
Expansion abroad
Tata Motors Limited is widely regarded as one of the world’s leading automobile manufacturers with the support of a product portfolio that includes trucks, cars, defence vehicles, buses, and several other vehicles. Tata Motors is without a doubt one of the top 10 CV manufacturers in the world today with the presence of over 46 countries (Tata Motors, 2018).
With the introduction of their Tata 407 light commercial vehicle (LCV) in 1986, the company has begun to make waves in the marketplace (Tata Motors, 2018). Given its dependability, the truck became very prevalent not only in India but also in a number of other nations across the world.
Tata Motors has very strategically expanded into the global marketplace, such as; in 1991, the organisation structured a joint venture with Nitol Motors to operate across Vietnam, South Africa, Myanmar, Kenya, and other places (Tata Motors, 2018). Given the importance of being sustainable with automobile products, Tata Motors has also set up a joint venture with Cummins Engine in order to introduce powerful diesel engines that can significantly generate less carbon emission.
Apart from this, in Europe Tata Motors entered after the acquisition of Jaguar and Land Rover from Ford Motors in 2008 (Tata Motors, 2018). These are the processes through which the organisation has slowly and strategically structured its global expansion.
The reason behind their expanding abroad is to address their mission statement in order to be passionate to provide the best vehicle and experience to their customers at a global level along with increasing their presence in the entire global marketplace. Apart from this, in order to be competitive in the industry Tata Motors has the vision to expand PV (Passenger vehicle) and CV (Commercial vehicle) operations in several other countries, which also comes across as a major reason behind their global expansion (Tata Motors, 2018).
Mentality
Referring to the context of Bartlett and Ghoshal matrix, the organisations operating in multiple countries are operating with the perspective of multinational, transnational, global, and international aspects. According to Bartlett and Ghoshal’s matrix, the businesses are based on two stances that are local responsiveness and global integration (Westney, 2021).
Businesses that are highly inclined toward the objective to reduce cost as much as possible by creating an efficient economy of scale are highly globally responsive. On the other hand, businesses that are willing to adapt production services specifically to local needs are highly locally responsive (Voci and Karmasin, 2022).
Tata Motors is significantly having an international strategy with low integration and low responsiveness. The statement can be justified, as Tata Motors facilities are spreading across the level of countries in order to enhance their strategic market. This is contributing to its total export, which increased by 20% in the financial year 2021 from the financial year 2018 that was only 8% (Sengupta, 2018).
Tata Motors Limited is significantly targeting the international market with their specific commercial value while referring to developing their suitable products with enhancing customer experience, optimal sourcing, and manufacturing (Sengupta, 2018). This refers to the fact that they are specifically focusing on their exporting strategy, which according to Bartlett and Ghoshal matrix significantly indicates that they have a very low integration and low responsiveness towards international expansion. Hence, from this context, it can be stated that Tata Motors is fitting to Bartlett and Ghoshal matrix specifically referring to their approach towards international business strategy.
Organisation
Tata Motors is highly organised because its approach towards the business is highly efficient. Tata Motors has offered education about traffic signs that need to be considered by individuals while driving along with offering defensive driving tips for new drivers with an approach towards a perspective of safety for building a safer environment.
Apart from this, they are organised in terms of understanding the sustainable perspective, as they have aligned their business management with Waste Management Hierarchy in order to eliminate wastage (Tata Motors, 2018). Tata Motors has vertically integrated its manufacturing activities in house, which is efficient in terms of complying with regulatory requirements along with utilising high calorific value wastage that can significantly help in mitigating hazardous waste (Tata Motors, 2018).
Moreover, the organisation has also initiated “Prolife” in order to strategies their commercial vehicle customers to ensure their product life in the financial year 2019-2020 approximately 33,615 engines have been recycled, which is 5% higher than the previous years. This helps in maintaining energy consumption efficiently (Tata Motors, 2018).
From this perspective, it can be stated that Tata Motors has a high mentality of increasing their local market efficiently along with making it more sustainable towards their local responsiveness. This approach towards sustainability makes Tata Motors morally organised and fit with international strategy while considering social responsiveness towards consumers and the environment.
However, there are still a few challenges and problems that have emerged due to the global pandemic that can be faced by Tata Motors such as in terms of supply chain issues, runway commodity inflation along with differentiating their value proposition (Outlook, 2022). Apart from this, due to the changing business environment, Tata Motors’ business operation has been impacted a lot while creating a few issues.
The overall financial health of transporters has been impacted due to the lockdown that leads to the inability to reach out to customers through traditional means (Mhapralkar, 2021). Apart from this, there are also other factors such as driver shortages, which have increased the dependency on higher electronic content that leads to destruction in the entire flow of the organisation (Mhapralkar, 2021).
Creating worldwide innovation
Innovation is embedded in the DNA of Tata Motors and has been demonstrated by the organisation through its path-breaking vehicles. Tata Motors’ headquarters manage innovations from the first fully indigenous cars in India, such as Indica, Zest, Bolt, and Nano, to new generation cars such as Hexa, Tigor, and Tiago (Tata Motors, 2022).
The organisation has always been at the forefront in terms of innovation in order to satisfy the need of current as well as future passenger transportation of smart cities. Considering the ideas of the disruptive innovation theory, it is evident that disruptive innovations help companies to challenge other businesses and continue to move up in the market (Christensen et al. 2018).
It is evident that Tata Motors has always been focused on fostering innovation in order to satisfy the needs of consumers and sustain its business in the competitive marketplace. In order to foster innovation, the organisation has been investing in research and development. For evidence, in September 2022, the R&D expense of the organisation was approximately US$ 0.972 billion with a 32.47% increase year-on-year (Macrotrends, 2022).
As a result of this, the organisation currently has R&D and design centres in the UK, South Korea, Italy, and Pune in India (Tata Motors, 2022). Additionally, Tata Motors also has an estimated 4500 technicians, scientists, and engineers who are responsible for making path-breaking innovations, which drive the performance as well as the form of future vehicles.
The organisation has a great focus on auto technology that has the ability to enhance the look and design of cars along with improving the driving experience for passengers. The latest innovations of the organisation are India’s first turbo-charged MPFI (multi-point fuel injection), the Diesel engine, petrol engine, the Revotron 1.2T engine, and others, which powered the new generation passenger cars such as Tiago, Bolt, Tigor, and Zest (Tata Motors, 2022). Therefore, the creation and management of innovation at the organisation have been fostering its competitive advantages and growth.
Cross-border collaboration
In order to sustain business in the competitive market and deal with competitors by gaining competitive advantages through innovation the organisation emphasised cross-border collaboration. In this regard, findings reflect that recently the organisation has collaborated with Renesas electronics, which is a Japanese chip maker (Business Standard, 2022).
This collaboration or strategic partnership between two companies is formed for manufacturing, designing, and developing semiconductor solutions for worldwide as well as domestic markets (Business Standard, 2022). However, along with cross-border collaboration, the organisation has also observed collaborating with Volkswagen in India for joint improvement of their products or passenger cars in the country in 2017 (Mukherjee, 2017).
Apart from business purposes, the organisation has also been focused on making cross-border collaborations to help and support the community in other countries, in which it is operating. Even the organisation collaborated with reputed NGOs and its distributor partners in different companies for continuing to support the marginalised community (Tata Motors, 2022).
For example, the international business division of Tata Motors launched the “Tata Motors SkillPro programme” in order to train talented youth in different countries around the globe. In this regard, the distribution partners of the organisation have helped it to identify underprivileged youth with significant potential (Tata Motors, 2022).
New management capabilities
There is a very efficient management capability in Tata Motors, as the company has its own diverse range of intellectual property assets, which they retain efficiently. Patents, digital rights, designs, brand name, property information, and property rights are among the company’s intellectual property (Tata Motors, 2022). In addition, the company requires accumulated engines, gearboxes, and camera systems, which are specifically manufactured in house or by any subsidiary companies, suppliers, or joint ventures.
Moreover, the essential features such as engines and transmitters are specifically covered by long-term purchase agreements (Tata Motors, 2022). From this perspective, it can be stated that Tata Motors has an efficient management capability that reflects its take on maintaining the project with a successful approach.
For example, Tata Motors has created the wheeled ICV Kestrel, a joint design development project between Tata Motors and VRDE (Vehicle Research and Development Establishment) (Tata Motors, 2022). The design and the project have been significantly developed for armoured fighting vehicles that have also passed both blast and mobility tests by DRDO (Defence Research and Development Organisation) (Tata Motors, 2022). Tata Motors has gained knowledge about armoured fighting vehicle technology with this project, which has enhanced their local marketplace to establish an efficient land system engineering capability beyond the government-owned entities.
Ethical considerations
Economic
With a great focus on innovation, the organisation has been able to secure its economic stability as it is capable of offering consumers vehicles that satisfy their needs and requirements. The organisation has also been focusing on its production in order to satisfy the needs of global consumers. For example, in 2020 the organisation achieved its milestone of manufacturing 4 million passenger cars, which indicates its focus on production to foster its economic growth (Tata Motors, 2022).
The sales volume of the organisation in the financial year 2021 was approximately 465,734 in India, 112,424 in China, 81,500 in the UK, 93,759 in North America, and 76606 in Europe, which are considered, as its main sources of profitability (Sun, 2022). Moreover, the findings indicate that the revenue of Tata Motors witnessed a significant and continuous growth between the financial year 2010 to 2016 (Carlier, 2022).
After different fluctuations in its revenue growth, the organisation generated significantly low revenue in 2021, which was approximately INR 2497.94 billion (Carlier, 2022). However, in the current year, the company was able to increase its revenue from the last year and it became approximately INR 2784.58 billion (Carlier, 2022).
Environmental
Tata Motors has been emphasising reducing its negative impacts on the environment through the achievement of its sustainability goals. The Tata Group has set out the new carbon reduction goal of reducing its absolute greenhouse gas by approximately 70% by 2025, which would be a significant step toward achieving its net zero emissions by 2030 (Tata, 2022).
Social
The organisation is taking initiative for helping the community and society both in India as well as in other foreign countries, as discussed above (Tata Motors, 2022). The Tata Group also has different CSR programs and it is determined to drive affirmative actions within its health education and employability. The organisation has also been working in accordance with international development goals such as SDGs (Sustainable Development Goals). Even the organisation will continue to monitor and evaluate its CSR process and programs to support society and the community (Tata Motors, 2022).
Conclusion and recommendation
Conclusion
Based on the overall discussion it is concluded that Tata Motors has been able to efficiently manage and operate a business in the local and global market. The organisation is focusing on its long-term growth and stability which is identified through the example of the joint work of the company with VRDE.
The organisation has also been emphasising innovation and increasing its investment in R&D to foster innovation, which is assisting it to design various vehicles that satisfy the needs of the current generation. Apart from that, the company has also been making cross-border collaborations in terms of business as well as community help purposes. However, the organisation witnessed issues in its supply chain management that need to be overcome for better performance.
Recommendations
Improving supply chain management
The above discussion clearly indicates that the organisation has already witnessed issues in its supply chain due to driver shortage and also has the potential to witness these kinds of issues in the future (Mhapralkar, 2021). Hence, it is recommended to the organisation to invest in improving the supply chain management by fostering the use of updated technologies such as blockchain, artificial intelligence, and others. Apart from that, it would also be beneficial for the organisation to increase and take initiative to retain drivers in order to avoid driver shortage issues in the future.
Enhancing the focus on working with different government policies
The findings indicate that the company has already encountered challenges regarding unfair trade policy, which needs to be overcome for positively operating business (Soolegal, 2022). The organisation is recommended to obey different government guidelines regarding labour wages, employee diversity inclusion, and equality.
Reference list
Business Standard, (2022). Tata Motors partners with Japan’s Renesas to develop chip solutions. [Online]. Available at: <https://www.business-standard.com/article/companies/tata-motors-partners-with-japan-s-renesas-to-develop-chip-solutions-122062900264_1.html> [Accessed 24 December 2022]
Carlier, M., (2022). Tata Motors Group’s net revenue from financial year 2010 to 2022. [Online]. Available at: <https://www.statista.com/statistics/316925/revenue-of-tata-motors/#:~:text=Revenue%20of%20Tata%20Motors%20FY%202010%2D2022&text=This%20statistic%20represents%20Tata%20Motor,in%20the%202022%20fiscal%20year.> [Accessed 24 December 2022]
Christensen, C.M., McDonald, R., Altman, E.J. and Palmer, J.E., (2018). Disruptive innovation: An intellectual history and directions for future research. Journal of management studies, 55(7), pp.1043-1078.
De Bruin, L., (2017). International Business Strategy. [Online]. Available at: <https://www.business-to-you.com/international-business-strategy/> [Accessed 24 December 2022]
Macrotrends, (2022). Tata Motors Research and Development Expenses 2010-2022. [Online]. Available at: <https://www.macrotrends.net/stocks/charts/TTM/tata-motors/research-development-expenses#:~:text=Tata%20Motors%20research%20and%20development%20expenses%20for%20the%20twelve%20months,increase%20year%2Dover%2Dyear.> [Accessed 24 December 2022]
Mhapralkar, B., (2021). CHALLENGES & OPPORTUNITIES. [Online]. Available at: <https://www.tatamotors.com/wp-content/uploads/2021/02/17073748/media-15feb21.pdf> [Accessed 24 December 2022]
Mukherjee, S., (2017). Tata Motors collaboration with Volkswagen, Skoda credit positive. [Online]. Available at: <https://economictimes.indiatimes.com/markets/stocks/news/tata-motors-collaboration-with-volkswagen-skoda-credit-positive/articleshow/57669762.cms?from=mdr> [Accessed 24 December 2022]
Outlook, (2022). Tata Motors Taking Right Actions to Navigate Challenges Amid Fluid Near-term Outlook: Chandrasekaran. [Online]. Available at: <https://www.outlookindia.com/business/tata-motors-taking-right-actions-to-navigate-challenges-amid-fluid-near-term-outlook-chandrasekaran-news-202854> [Accessed 24 December 2022]
Sengupta, N., (2018). Tata Motors cranks out international strategy. [Online]. Available at: <https://timesofindia.indiatimes.com/business/india-business/tata-motors-cranks-out-international-strategy/articleshow/65030433.cms> [Accessed 24 December 2022]
Soolegal, (2022). Tata Motors Held Liable for Unfair Trade Practices, Bombay High Court Directs to Compensate 52 Employees. [Online]. Available at: <https://www.soolegal.com/news/tata-motors-held-liable-practices-bombay-hc> [Accessed 24 December 2022]
Sun, S., (2022). Sales volume for Tata Motors in financial year 2021, by region. [Online]. Available at: <https://www.statista.com/statistics/1195972/tml-sales-volume-by-region/> [Accessed 24 December 2022]
Tata Motors, (2018). Deciphering the value of waste. [Online]. Available at: <https://www.tatamotors.com/sustainability/deciphering-the-value-of-waste/> [Accessed 24 December 2022]
Tata Motors, (2018). Tata Motors’ amazing journey towards global recognition. [Online]. Available at: <https://www.tatamotors.com/international-business/tata-motors-amazing-journey-towards-global-recognition/> [Accessed 24 December 2022]
Tata Motors, (2022). CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY FY 22-23. [Online]. Available at: <https://investors.tatamotors.com/pdf/csr-policy.pdf> [Accessed 24 December 2022]
Tata Motors, (2022). Innovation. [Online]. Available at: <https://www.tatamotors.com/innovationtest/> [Accessed 24 December 2022]
Tata Motors, (2022). Management Discussion and Analysis. [Online]. Available at: <https://investors.tatamotors.com/financials/70-ar-html/mda6.html> [Accessed 24 December 2022]
Tata Motors, (2022). Tata Motors Achieves the Milestone of Producing 4 million Passenger Vehicles. [Online]. Available at: <https://www.tatamotors.com/press/tata-motors-achieves-the-milestone-of-producing-4-million-passenger-vehicles/> [Accessed 24 December 2022]
Tata Motors, (2022). Tata Motors Limited – Profile & Capabilities. [Online]. Available at: <https://www.tatamotors.com/wp-content/uploads/2016/11/18070456/TML-Capabilities.pdf> [Accessed 24 December 2022]
Tata Motors, (2022). Tata Motors’ policies lay the guidelines for our operations spread across different geographies. Our strict adherence to them helps us collectively move forward with a unified approach. [Online]. Available at: <https://www.tatamotors.com/investors/corporate-governance/policies/> [Accessed 24 December 2022]
Tata Motors, (2022). The CSR interventions of Tata Motors extend beyond the boundaries of India. In partnership with reputed NGOs and our distributor partners in various countries, we continue to work to support marginalised communities. [Online]. Available at: <https://www.tatamotors.com/corporate-social-responsibility/international-initiatives/> [Accessed 24 December 2022]
Tata, (2022). Growing with aGreen Footprint. [Online]. Available at: <https://www.tata.com/newsroom/business/tcs-net-zero-sustainability-aalingana#:~:text=In%20May%202021%2C%20the%20company,net%20zero%20emissions%20by%202030.> [Accessed 24 December 2022]
Voci, D. and Karmasin, M., (2022). Cross-Border Media Management in a Digital Environment: Challenges and Lessons Learned for Change Management. In Media and Change Management (pp. 13-31). Springer, Cham.
Westney, D.E., (20210. MNCs and cross‐border strategic management. Strategic management: State of the field and its future, pp.301-318.
Know more about UniqueSubmission’s other writing services:
Dear immortals, I need some wow gold inspiration to create.