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Authors:
Published by:
IBS Research Center (2008)
Length:
9 pages
Data source:
Published sources

Abstract

Competitiveness today does not stem from the size of a corporates resource pool; but from the gap that exists between its present resources and its aspirations. Creating stretch, a misfit between resources and aspirations, is the single most important task top management faces today. The top management can leverage its resources to meet the resource gap in five distinct ways - by concentrating, accumulating, complementing, conserving and recovering existing resources wherever possible. Stretching undoubtedly begets risk, but alternatively, it also provides a framework on how resources can be used to build competitive advantage. Tata Motors (previously known as TELCO) provides a rare glimpse on how a company operating in an emerging market can achieve this. A company basically into the manufacturing of commercial vehicles faced a saturated market, falling profits, and plummeting stock prices during the period (1994-1996). The company aspired to move into passenger cars. Though the two businesses shared the same Standard Industry Code (SIC), they were strategically different. Therefore, a potential resource gap was created. Its existing resources and capabilities were not sufficient to take care of the company''s aspirations and goals. The case identifies how the company leveraged its existing resource base to plug the resource gap and transform the company into a new growth trajectory. It also highlights potential issues regarding outsourcing and supply chain management (SCM). The role of top management in this successful transformation has also been dealt with.

Topics

Tata Group (TATA); Automobiles - emerging market; Business integration; Supply chain management; Resource gap; Resource stretch and leverage; Innovation; Transformational leadership; Strategic alliance; Outsourcing; Synergy; Capability; Value-chain; Strategy implementation; Performance
Location:
Industry:
Size:
INR31,000 crore
Other setting(s):
1994-1999

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