Tata Motors & Fiat Auto Vrio Frame Work Analysis - Essay Example

Tata Motors & Fiat Auto Vrio Frame Work Analysis Introduction Both Tata and Fiat are two large companiesconcentrating in the manufactures or automatic. TATA has waded through the storms from commercial car manufacturing company to be the largest vehicle manufacturing in India and other parts of the world. The two companies have adopted various strategies that have been successfully towards problem solving within and outside the operations. In addition, these strategies have promoted market development within their region and the global market.

This essay analyses the case of Tata and Fiat joining forces using the VRIO analysis frame work. Value The joining forces between Tata and Fiat have added value to the two companies because both companies have improved on the good will and this has really increased on the trade activities within their operational country and other neighboring countries that have developed loyalty towards their products. In addition, the joining of forces has also worked to improve on the client bases of individuals and organizations that are purchasing the products as it has worked towards improving network and customer service of all the stakeholders of the two companies.

The joining forces have also made competition for the two companies favorably as it has served to build the image for the two companies (Thakur, 780. The two companies have also shared mutual relationships as they have combined their strategies and spare parts; therefore their products have tremendously improved on quality. Moreover, joining of forces created value in that the alliance made the company better financially by improving profits, increasing the total sales turnover and synergies benefits.

Value created by the alliance to increase profits is through the shift of skills from one motor company to the other which aided in boosting weaknesses of each company, and strengthening their individual strengths. For example, since Tata is more widely recognized this alliance will help boost Fiat’s image and reputation. Furthermore, the alliance increases sales of motors hence getting more profits then uses the profits to expand the business which translates to a more strong financial value for both companies.

This is also in line with the reduction of manufacturing costs due to large production and manufacturing rates and the strength in numbers which eliminates competition from rival companies. Rarity Many developed and developing companies have taken it their role to manufacture their own vehicles, therefore, improve on the revenue and increase their employment opportunities. Vehicle manufacturing is controlled by a large number of firms in India, therefore, the joining forces between Tata and Fiat faces stiff competition from other major firms manufacturing vehicles in India and markets their vehicles both locally and internationally.

In addition, the joining forces also faces stiff competition from these firms as they have also joined forces between themselves to capture the market and compete favorably in the face of competitions posed by other firms (Tata Motors Case Study). Imitability The vehicles manufactured by the two joining forces are not imitable therefore; the joined companies have a major competitive advantage over other companies. There are different vehicle manufacturing companies in India and all have their brands for each particular vehicle they manufacture.

Therefore, prospective or would be competitors of the joined forces of Fiat and Tata might make similar brands of vehicle, but will differ in terms of spare parts, engines and other parts from those manufactured by these joined forces. Therefore, both Tata and Fiat have a permanent advantage over their competitors as they autos can not be directly imitated. The competitive advantage that the company have over the other competitors have allowed the them to lay focus and emphasis in high-volume segment manufacturing and employ pricing strategies that guides in the high-volume segment that is normally characterized to be price sensitive segment (Blitterswijk, & Rosen).

Organization The joining forces of the two companies were as result of the need to find solutions to the various bottlenecks problems that each company was experiencing in the trading attempts. There was the need for financial aid that they could not be granted by well wishers and donors, and being that they shared the same goals, their alliance worked to solve the different bottlenecks issue they were facing within the company. The organization also had a lot to benefit from each other. An example is that Tata a good image and by Fiat bringing in their spare parts, the organization stands to greatly benefit from the alliance as they will have enough resources to conduct their manufacturing activities.

Conversely, Fiat was facing various challenges as they posed a low market share in the manufacture of autos. It was also experiencing contractual safeguards problems as most of their partners were not willing to stick to the terms of their agreements. The common problems shared by the two companies made it suitable for them from an alliance that would increase their productivity in the auto manufacturing industries (Sengupta & Avadhanam 56). Conclusion Conclusively, the joining forces of Fiat and Tata have significantly improved the operations and productivity of the now merged companies.

Despite the challenges that the newly formed alliances are experiencing, the alliance has made it suitable for the two companies to compete favorably and acquire both local and international markets. Works Cited Tata Motors Case Study: The World's Cheapest Car Is Launched. S.l.: Datamonitor Plc, 2011. Internet resource. Sengupta, Sanjit, and Avadhanam Ramesh. Round Two: Repositioning the Tata Nano. Bingley: Emerald Group Publishing Ltd, 2011. Internet resource. Thakur, Pradeep. Tata Nano: The People's Car.

New Delhi: Pentagon Press, 2009. Print. Blitterswijk, Miel , and Rosen Karadzhov. Financial and Strategic Analysis of Ford Motor Company and Tata Motors. Frederiksberg, 2009. Internet resource.