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Answered Same DayMar 22, 2020HI5003

Answer To: This Major Assignment is in two parts and together creates a complete International Business Report....

Arun answered on Mar 28 2020
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TATA MOTORS INVESTMENT OVERSEAS 8
TATA Motors Investment Overseas
Table of Contents
Introduction    4
Overview of TATA Motors Company    4
PESTLE analysis of Pakistan    5
Economic analysis     5
Political and legal analysis    9
Culture and ethics    9
Conclusion    11
References    13
Executive summary
The report identifies the causes for doing business in Pakistan for TATA Motors Company. The analysis reveals a weak ethical framework in Pakistan. Pakistan economy is also not able to sustain the GDP growth and other indexes for economic development. The poor infrastructure
and unavailability of electricity are major deterrent for economic growth of Pakistan. Also, the political upheaval and rise of Islamic fundamentalism threatens the democratic system of Pakistan as the military often has a final saying. The role of cultural environment is also poor to the growth of the company as there is a general antagonistic view against the Indian company prevails. The crimes rates are high in the country and so the corruption. Therefore, the TATA Motors is suggested to keep in consideration of these facts before investing in Pakistan.
Introduction
The report explains out TATA Motors Company initiative to invest in Pakistan. To know the feasibility of this decision, the PESTLE analysis of Pakistan is conducted. The PESTLE analysis also reflects the impact over the TATA Motors Company business operation. The report concludes with findings.
Overview of TATA Motors Company
TATA Motors is a world recognised company and has a robust business operation. It was established in 1945 as a name of TATA Engineering and Locomotive Co. Ltd. It offered locomotives and other engineering products to the customers at that time. Now it is the largest automobile company in India having revenue of Rs. 25.660.79 crores in the year of 2008-9. It was the first company from Indian engineering sector to be listed in the New York exchange in 2004. The businesses of TATA Motors are spread in UK, Thailand, Spain and South Korea. Now two third of the heavy vehicles imported by south Korea is from the TATA Motors company. TATA Company has worldwide presences and its commercial and passenger’s products are marketed in various countries in Europe, Middle East, south-east Asia, south Asia, and South America and in Africa. TATA Motors is truly a world class company as the findings suggest. Company has joint venture assembly operation as well in Bangladesh, Kenya, Russia, Ukraine and Senegal to supply the vehicles with relative ease. Company is also promoting research and development activities and therefore, it is able to produce the first indigenous car of TATA Indica that becomes the largest selling car in its segment after the launch. It has also launched TATA Ace vehicle in 2005. TATA Motors is known for its focus towards customers and therefore, to fulfil the customer’s desires to purchase a low budget car, it has introduced NANO car in 2009. The R&D centres are in Jamshedpur, Pune and Lucknow as well as in Spain, South Korea and UK.
Company offers passenger cars such as indica Vista, Indica V2 and Turbo etc, Utility vehicles such as Safari Dicor, Sumo Granda, trucks such as medium and heavy commercial trucks, light commercial vehicles and intermediate commercial vehicles, commercial passenger carriers such as buses, winger and magic, and defence vehicles. The subsidiaries of the company are Jaguar Land Rover, TATA technologies, HV transmissions Ltd, Concorde Motor (India) Ltd, and many other companies.
The TATA Motors is eying to enter into the Pakistan market and therefore to know the feasibility of investment in Pakistan, the report conducts a PESTLE analysis.
Pestle analysis of Pakistan
Economic analysis
The economic survey of Pakistan reports that country has achieved the GDP growth of the 5.28 percent during the financial year of 2016-17 against the target of 5.7 percent. This has taken the economy beyond the US$ 300 Billion. The GDP is found higher than in the last decade. The annual fiscal deficit for Pakistan during the 2016-17 achieved its target and is stood at 3.8 percent. The inflation rate was decreased in financial year 2016-17 and it was around 4.1 percent that was lower than expected target of 6 percent. The industrial sector though missed the target of 7.7 percent growth rate as it was hovering at 5.00 percent during the financial year 2016-17. The large sector manufacturing grew at 4.9 % comparing to the target of 5.9 percent. The small-scale manufacturing sector posted a growth of 8.2% in the financial year 2016-17 and it was almost fulfilling the set target of growth. The services sector however did well and surpassed growth rate of 5.7% by reaching to 6% during the financial year 2016-17. The wholesale and retail trade sector posted impressive growth of 6.8% against the set target of 5.5%. Agricultural growth hit the target of 3.5 percent in the financial year 2016-17 (Analysis: Economic Survey of Pakistan , 2016-17).
The national debt is found rupees 20.8 trillion. The tax revenue collection did not meet the target as it amassed only rupees 2518.7 billion. The tax revenue collection amassed only y2518.7 rupees against the set target of 3621 billion for financial year2016.17. The non-tax revenue collection for the nine months stood at rupees 451 billion only and is highly unlikely to meet the target of 951 billion. The government could not enhance the investment to GDP ratio as it was only 15.78 percent against the target of 17.7 percent. The gas and electricity generation and the distribution have posted good growth though and there was a 3.4 percent growth registered in this area but it was also way below the set target of 12.5 percent. The construction sector has registered an impressive growth of the 9.05 percent though it also did not meet the target of 13.2 percent.
The economic analysis reveals positive points such as the large internal market and dynamic demographics, expatriate’s workers are offering substantial remittances, inexpensive and abundant labour, and significant provider of Islamic finance.
The country is dependent on energy resource and there is inadequate sanitation as well as insufficient educational and agricultural infrastructure. There are income inequality as...
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