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Tata Group Case Study Essay

Decent Essays

1-A: Describe the various advantages that firms like Tata employ to become large industrial conglomerates.
The Tata Group has already established 90 separate firms in seven distinct business sectors. Because of their success, they have obtained vast financial resources and access to capital on favorable terms which has allowed them to expand their operations and become a large industrial conglomerate. Since the Tata Group uses its sister subsidiary companies to help supply its other companies (i.e. using Tata Steel to provide steel for Tata Motors’ Nano manufacturing) as well as having access to the low-cost Indian labor pool, they have been able to maintain a competitive cost structure which is a major advantage (Cabusgil, Knight, & …show more content…

(Cabusgil, Knight & Riesenberger, 2012, p. 271).

2-A: What makes emerging markets attractive for international business?
According to Cavusgil, Knight and Riesenberger (2012) emerging markets can be used in international business as target markets, manufacturing bases, and sourcing destinations which makes them attractive (p. 262). Emerging markets can be used as a target market for a variety of products and services because of their growing middle class which indicates an increased demand for various products and services and potential for income to increase over time (Lydon, 2013). Another attractive feature of emerging markets is their potential as manufacturing bases. Such markets are home of low-cost labor and cheap production costs, and they are well-known for their vast natural resources manufacturing and assembly operations (“Six global trends,” n.d.). Emerging markets can also be used to help firms obtain a competitive through outsourcing which refers to obtaining value-adding activities from independent suppliers or company-owned subsidiaries. Firms can rely on foreign suppliers or production bases (known as global outsourcing or offshoring) to procure these value-adding activities (Cabusgil, Knight, & Riesenberger, 2012, p. 264). Offshoring is attractive to firms because they can obtain value-adding activities at a lesser cost then it would be for them to perform such activities

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