Tatamotors

The market entry Tata

Despite the global trend of significant decline in car sales there are certain car segments are growing dynamically. According to Datamonitor (2006b) sales of commercial vehicles and commercial vehicles were wearing very healthy. Windecker (2005) emphasizes the influence of the socio-cultural preferences are increased to more fashionable, sport cars equipped SUV. The extremely high growth of SUVs has been identified in the United States and United Kingdom.

The objective of market access will Tata in the UK. There were several reasons for choosing the United Kingdom that the target market. These positive factors were the status of India as an economic agent favorable market dynamics in the United Kingdom and the potential for cars, the similarity of language. Other countries that were considered potentially relevant were: the United States - the larger market in the world, Russia - emerging markets with sales potential. The option of the United States as a target market has been refused because of the demands of high quality and other non-tariff barriers that make it difficult for new entrants to penetrate this market. In addition, this market is very mature and experiences at extreme competitive pressure. Regarding Russia, there were several adverse factors that made it less attractive then the UK - the uncertainty of the status of other economic barriers to entry and no well-developed distribution network .


Analysis of the external environment of the UK market

There are many many factors that could be included in the PEST analysis. But due to various constraints (time, maximum number of words), the factors are described, while emphasis will be placed on several sub-factors (as the Pareto Principle, it is likely that about 20% of factors represent 80% of the potential effect on the company (Wit & Meyer, 1998).

Political factors
The political and legal factors play a role in the development of the industry. These factors shape the rules of competition, operating costs and requirements of supply chain.

Oil prices due to international instability - Special attention should be paid to oil prices and its impact on market demand. According to Mintel (2006) the increase in oil prices has created a strong trend to smaller engines, hybrid engines and diesel engines. Current high oil prices increase the pressure on sales of luxury and luxury cars, most of which are powered by large (more than two liters).

Administrative barriers (quality control and operational requirements) (KPMG, 2004) - Administrative barriers should be seriously concerned various requirements of safety standards and emission levels could increase production costs and reduce the margin Operating profit.
Because the legislation Park - According to Mintel (2006) the experience of the United Kingdom to the threat of overcapacity high with the burden of excessive traffic on road networks.
Political relations between countries of operations (plans for / protectionism) (Hill, 2002) - India is cooperating with the United Kingdom within the concession system which involves certain advantages as reduced tariff and nontariff barriers tariffs.

Rules on foreign ownership (The method of market expansion (Hill, 2002) - Today the UK is regarded as one of the most pro-EU in the IDE. The large number of industries, including automotive one, are deregulated. This means that regulation provides foreign companies abroad with the possibility to choose between all possible inputs and modes of expansion.

Economic factors
One of the main determinants of choice of location are the conditions of current demand and future as they will affect the potential market growth, the PRI.