FULLY COMPLETED REPORT 2 ON CHOSEN MNE , TATA MOTORS (KENYA) ltd - Multinational enterprises (MNEs) that have a great deal of success in their home country may find it not that easy to replicate their successes in expanding operations to other locations around the globe. More specifically, expandin...
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1) Political systems ……………………………………………………………………... 5
2) Economic systems …………………………………………………………………… 6
3) Legal systems ………………………………………………………………………... 7
4) Key implications for Management Action …………………………………………. 8
1) Evaluation of whether Tata Motors (Kenya) Ltd possesses a comparative
advantage in the location ……………………………………………………………. 17
2) Key implications for Management Action ………………………………………….. 18
Foreign Direct Investment (FDI) ......................................................................................... 19
1) Key implications for Management Action …………………………………………… 22
Index of comments ............................................................................................................... 31
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Executive Summary
4.1
This report focuses on the analysis of Tata Motors (Kenya) Ltd., an MNE and its
operations in a host country in Kenya, East Africa, and the institutional context it
operates in. The report provides a brief history of Tata Motors' entry into these
markets and its subsequent expansion in East Africa.
The main purpose of this report is to highlight the significance of both the formal and
informal institutional frameworks on business operations, and how these institutions
are the key to success or failure within the MNE in the African context. Additionally,
the report evaluates the comparative advantage of Tata Motors (Kenya) Ltd using
the VRIO framework, the OLI paradigm of ownership, location and
internationalisation, as well as the challenges and opportunities of the Kenyan
market.
The report highlights Kenya's presidential democratic republic and the political
instability of formal institutions affecting the operations of Tata Motors (Kenya) Ltd.
Political instability can have implications for supply chains, and distribution networks
and create an uneven playing field for foreign companies.
The report further discusses Kenya's mixed economy, which is heavily dependent on
agriculture, tourism, and services with significant strides in economic development,
but is still characterized by poverty, inequality, and high unemployment rates.
The report identifies Tata Motors (Kenya) Ltd's strong brand recognition, innovative
technological capabilities, and investment in local manufacturing as key drivers of its
sustainable competitive advantage. However, political instability and Kenya's mixed
economy, pose challenges to the MNE's operations.
Based on the findings of this report, it is recommended that Tata Motors (Kenya) Ltd.
closely monitors the formal institutional frameworks to ensure compliance and
adaptability to changes, focus on sustainable business practices, invest in research
and development to enhance its technological capabilities and localise its operations
to create a positive impact on the local economy
4.2 and society.
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