The market of Tata's entry
Despite the global tendency for the significant fall of car sales there are certain car segments which experience dynamic growth. According to Datamonitor (2006b) the sales of commercial vehicles and port utility vehicles were very healthy. Windecker (2005) stresses the influence of socio-cultural forces which formed the increased preferences towards more fashionable, sport-type, SUV equipped cars. The extremely high growth of SUVs was identified in US and UK.
The focus of Tata's market entry will be UK. There were several reasons for selecting UK as the target market. These favourable factors were the status of India as the favourable economic agent, UK Car market dynamics and potential, language similarity. The other countries which were considered as potentially attractive were: the USA – the largest market size in the world, Russia – emerging market with significant sales potential. The option of the USA as target market was declined due to extremely high quality requirements and other non-tariff barriers which make it hard for a new entrant to enter this market. Besides, this market is highly mature and experiences extreme level of competitive pressure. With regards to Russia, there were several unfavourable factors which made it less attractive then the UK – the uncertainty of the further economic state, high entry barriers and no well—developed dealership network.
Analysis of External Environment of the UK market
There are numerous number of factors that might be included into P.E.S.T. analysis. But due to various limitations (time, word limit), the factors will be outlined, whereas the major focus will be made on several sub-factors only (according to the Pareto Principle, it i ...