The Tata Group
Managing a Conglomerate in an Emerging Market
Environmental Analysis
In 1991 the Indian government introduced a series of drastic reforms, liberalizing its government owned and controlled economy. Product expansion and new market entry became easier for companies in virtually every sector of the economy. This presented Tata with many opportunities to leverage its strong brand equity and financial resources to enter new markets and industries. The strong brand image gave it a tremendous advantage over competitors in a variety of industries. However, the government reforms also lowered barriers to entry and increased competition in all of Tata’s industries. Foreign
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Perhaps the most significant is the strength of the Tata name. Tata Sons owns the name and trademark, which are registered in India and around the world. The Tata name is symbolic of India 's industrialization and innovation. The company’s entrepreneurial spirit has driven much of its growth, and has facilitated successful ventures into growing industries such as high technology, biotechnology, and alternative energy. The group’s companies all operated under a common corporate culture characterized by independence, entrepreneurship, and ethics. The strong brand name, entrepreneurial spirit, and corporate culture have helped to unify this large and disparate group of companies under the
Tata motors is a reputed brand in the Indian Auto motive industry and also internationally. Tata automobiles are known for its quality and comfort especially commercial vehicles. Tata group is the parent company of Tata motors. Tata group have several business in all over the world.
The story of Tata begins in 1868 when a young boy named Jamsetji Tata joined his father's small trading company. Thirty-five years later, that same boy was the owner of India's largest textile company, Tata Textile. Over the last century, Tata has excelled in many different business sectors including Materials (Steel and Mining), Agriculture, Energy, Consumer Products, Information Technology, Consultancy, Finance, Automobiles, Chemicals, Engineering and Hospitality. Tata Group of Industries reported $17.6 billion in revenues in 2005, which is equivalent to 2.8 percent of India's GDP. In 2006, it is projecting its annual revenue to be around $24 billion. Figure 1 shows the breakdown of Tata's revenues for the
Tata Motors Limited is India 's largest automobile company, with consolidated revenues of Rs. 92,519 crores (USD 20 billion) in 2009-10. It is the leader in commercial vehicles in each segment, and among the top three in passenger vehicles with winning products in the compact, midsize car and utility vehicle segments. The company is
TATA being a brand which follows the concept of branded house in which the company name is used across all its product categories. Thus it has been made easier for the consumers to identify the brand though they are enormously diversified.
The first advantages of going international for Tata is to achieve benefits of economies of scale; Tata has more than 100 operating companies in seven main business groups doing business in 80 countries: chemicals, information systems and communications, consumer products, energy, engineering, materials, and services. Its two largest businesses are Tata Steel and Tata Motors. Its Tata Tea, which owns the valued Tetley brand, also is one of the largest tea producers in the world. It ranked 6 on the
The case discusses the strategies adopted by the soft drinks and snack foods major PepsiCo to enter India in the late 1980s. To enter the highly regulated Indian economy, the company had to struggle hard to 'sell' itself to the Indian government. PepsiCo promised to work towards uplifting the rural economy of the terrorism affected north Indian state of Punjab by getting involved in agricultural activities. In addition, it made a host of other promises that made its proposal very attractive to the regulatory authorities. The case also discusses the criticisms leveled against the company, in particular, criticism of its failure to honor
Chapter 7: Merger and Acquisition Strategy ---- House of Tata: Acquiring a Global Footprint (written by Tarun Khanna, Krishna G. Palepu, and Richard J. Bullock)
This is a detailed and comprehensive case describing the market entry of two global consumer product companies, PepsiCo and Coca-Cola Corporation into a Big Emerging Market (BEM), India. It traces the history of the challenges encountered by these two companies in the developing country environment of India from the late 1980s to the present time. Emphasis is placed on lessons learned by the two companies as they adjust to competing in an unfamiliar and rapidly-changing environment.
Economic With business practices all over the world , Tata Motors concentrates on global economies while focusing on individual markets within countries. In recent years Tata Motors has experienced high growth since 2004. They have created joint ventures with 5 countries across the
Since its establishment, Tata has shown a strategy of incremental change. Arguably, that point was important because so the group might vary within the current market. In the nineteenth – century steel was seen as an unprofitable section. Even more than 50 independent steel producers went into bankruptcy in the USA (Business Monitor International Ltd, 2010: 54).
Answer- 1: Answer- 1 India was a closed economy in the beginning. Policy banning imports. The Liberalization of India’s Government in 1991. New Industrial Policy. Strict policies regarding the entry of foreign brands. Trade rules & regulations simplified. Foreign investment increased. Pepsi enters in 1986. Coca-Cola follows in 1993. Contd …
The obstacles for Tata in this scenario are less, as it is an indian based company. Generally when a company want to enter Indian market, it should first apply for the approval from Foreign Investment Promotion Board, Secretariat for Industrial Approval and the Ministry of Industries in India. In addition, the company should also get the approval from the Reserve Bank of India, Ministry of Finance for the dividend fees, investment capital, remittance etc. This process is heavy and time consuming, which Tata will not face. Further the trade marks and patents are protected by law in India which is good for the company; they have no problem in protecting the intellectual rights in India. (Cravens & Piercy, 2006)
Of the 50-plus[2] MNCs with a significant presence in India, the nine market leaders, including British American Tobacco (BAT), Hyundai Motor, Suzuki Motor, and Unilever, have an average return on capital employed of around 48 percent. Even the next 26 have an average ROCE of 36 percent. The most successful MNCs in India have some common characteristics. Resisting the instinct to transplant to India the best practices of other countries, they have treated the country as a strategic market. These companies have also taken a long term view. They have invested time and resources to understand local consumers and business conditions. They have understood that the price points that matter in India are different from those in other countries. In a country where the middle and lower-end segments are critically important, affordability is a crucial factor.
Tata Motors marks the biggest turnarounds in the history of Indian automobile manufacturing industry which happened in 2001. This success story of Tata Motors can be entirely attributed to the timely change adopted by the Tatas and the then MD Ravi Kant who led the change.