CASE-ANALYSES PRESENTATION

House of Tata: Acquiring a Global Footprint

BACKGROUND & SITUATIONAL
ANALYSES
 History

Founded as a Trading firm in 1868.

Family business:
Current CEO: Ratan Tata
From Textiles to Commercial Vehicles:
House of Tata:
Tata Company as a Conglomerate:
Acquiring a Global Footprint:

Tata Tea: Tetley Tea from U.K.

Tata Steel: Corus Steels from U.K
Indian Hotel: Ritz-Carlton-Boston from USA
Tata Chemicals: Brunner Mond from U.K.
Tata Coffee: 8 oclock coffee from U.S.A
Tata Sons: Energy Brands from U.S.A
And..
Worlds Smallest Car
 Tata Motors:

Flag ship Company of Passengers

Car and Commercial Truck

Daewoo Commercial Vehicle from

South Korea.

Tata Nano: Smallest Car in the

world.

Dilemma: Jaguar and Land

Rover???
Daewood Commercial
Vehicles
ISSUES
Should Tata Motors contemplate
for bidding for Land Rover and
Jaguar?
o 1. Foreign Competition

o 2. Market and Product Range

o 3. Losses

o 4. Expenditures
 PEST
Analysis

VALS-
Regulations Survivor
Category

Economic Advanced
Downtown Products
PERSPECTIVEs
Perspectives

Dont put all of your eggs in one Indian basket!

Porters Five Forces
Perspectives From Porters View

Barriers of Entry Buyers

Time and Cost Differentiation

of Entry Buying Volumes

Price Elasticity
Cost
Differentiation
advantages
Buying Volumes
Technology
Price Elasticity
Perspectives From Porters View

Competitive Rivalries Suppliers

Number of Competitors Number of Suppliers
Switching Costs Size of Suppliers
Diversity of Competitors Unique Product
Industry Concentration
Substitutes
Substitute Performance
Cost of Switching
Buyer Willingness
The Competition looks good
KNOWLEDGE
McKinsey 7s Framework:

Organization not
just a structure;
Fit between all
these seven
elements;
An effective tool in
initiating change
process in the
organization:
From point A to GDP
McKinseys 7s Framework:

Strategy: Structure
Focus Strategy Mechanistic-Organic
Acquisition Philosophy Mixed Organizational
Target Bottom of the Pyramid Structure
Market
Decentralization-
Brand Positioning Autonomous
Combination of Ansoffs MBO
Product Development and
Diversification Strategy New Corporate Culture
Offset A for B
Corporate Social Responsibility
 McKinsey 7s Framework

Systems:
lean manufacturing

Flexible Mass Production

Waste Minimization

Continuous Improvement

Assets, Operations and Systems platforms

 McKinsey 7s Framework:

Skills:
Technical Skills
Innovation
Shared Values:
Core Values, Pride, Corporate Culture
Style:
Management participation
Effective Leadership
Staffs:
Mutual Trust, Communication
Respect for People
Continuous Improvement
Acquisition Philosophy:

Target Characteristics
Research
Risk Assessment
Funding
Disposal to reduce debts
Elimination of excess overhead
Creation of incentives
ACTIONS
Tata Global Focus

Tata had to create complements of resources to

overcome some of the disadvantages of being
newcomers into the automotive car business.
 Assess the Possibilities:

Newcomer in automotive car market

Extreme risk-Ratan Tata-had a global
mindset
CEO ,
Global Brand will give entrance into North
America market
Joint Ventures
Acquisitions
Intense Management Development
Impact of the Decision

Jaguar and Range Rover will bring well known global brand
and to the Tata Portfolio
Research and Development
new technology
advanced market distribution channels
Strategic Partnerships
Tata Group Expands

The first emerging market auto maker to

purchase a western brand to upgrade its product
range
Parent Group could support expansion
Decentralize Tata Group to reduce overlap
Project Prune
Be market leader in low, middle and high income
class
Increase domestic market share
Consequences
Consequences

$850 million debt on the purchase contributed to a credit-rating downgrade

Downgraded the company's credit rating from B+ to B.
The luxury-car market idles
Depressed revenues
Invested nearly $400 million in the Nano launch
Struggled to pay off the expensive $3 billion loans for the
Jaguar/Land Rover
Jaguar/Land Rover lost an additional $510 million in the 10
months
Faces a huge R&D bill
as high as $1.1 billion
 Consequences
U.S. and European economies pick
up
Jaguar sales could increase
Jaguar XJ has already received good
reviews

Land Rover remains a more

complicated issue
invest in a new line of smaller, more
economical cars
Cut 300 jobs at a plant in Britain in
mid-July
 Consequences
Paying down debt on the Jaguar/Land Rover
Aggressively, listing a $1.16 billion payment
$840 million
Negotiated to extend the end date on the remaining $850 million to the end of
2010.

Stock up more than 150% in 2009

More than 30% in 30 days
Commercial Vehicles Sales
Updates:
Market Share of Luxury Cars in America