House of Tata Global Footprint PDF

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HOUSE OF TATA: ACQUIRING A GLOBAL FOOTPRINT

by Aravind Venkatesh

Tea Industry India Hotels Steel Industy Automotive Software/Services


(IHC)
M&A Tetley (UK) Regeant Hotels, Corus (UK), Daewoo CMS, Phoenix,
Companies The Pierre, W NatSteel Commercial Hughes Telecom,
Hotel, Ritz (Spore) and Jaguar Land Aviation Software,
Carlton Boston, Millennium Rover (Under TKS-Teknosoft,
Innovative Steel Consideration) Total
Foods (Thailand) Communication
Solutions
Strategic Fit Access to Chain of hotels Yes Yes Yes frontrunner
for the TATA developed seamless deintegrated complementing for Global market
Group Markets support internal strategy exisiting in India First
complementing and external product Mover advantage
Tata tea brands guests porfolio
Alignment In line with Yes access to Yes Yes reach Yes achieve
with management gateway middle class global presence
Management vision of global markets and bottom of and brand building
Vision? expansion pyramid
markets
Product Addition of New premium Diversified Diversification Diverse
Strategic Portfolio value added tea properties Product Mix of product
brands portfolio
Objectives
trucks, buses,
cars (low to
premium)
Market Reach Access to new Yes New Access to Access to new Mature and
markets international new strategic markets emerging Markets
markets markets specifically in
Europe and
USA
Technology N/A N/A Access to Yes access to Complimenting and
niche, advanced synergistic with
advanced technology existing portfolio
techology
Synergies with Yes Yes leveraging Yes Yes Yes -
TATA Group Complimenting the Taj brand leverage each complementing complementing the
Companies TATA tea with others the already already existing
Tetley strengths and existing products of the
achieve products of the TATA stable
backward TATA stable
integration
EVA Positive Yes Yes Yes Not yet Yes
Achieve Yes Yes Yes Yes Yes
Economies of
Scope
Supply Chain Yes N/A Yes key Yes achieve N/A
value synergies
proposition across the
supply chain in
diverse markets
JLR Acquisition Key Issues:

Brand Name and Established brand name


Iconic status; luxury and niche market segment
Positioning
2 brands of High brand equity
Valuation High investment in the brand for TATA Group

Mainly through Debt; increased risk on TATA


Financing group

Technology Initial resistence to technology transfer


Transfer
JLR-Land Rover Specific demands by JLR unions
Group Sentiments Managing JLR employees sentiments

Conclusion:

Tatas vision is to make technology accessible to the middle class and bottom of pyramid markets.
Furthermore, the group has an ambitious vision to promote the TATA brand in advanced and
developing markets. In line with this, the acquisition of Jaguar-Land Rover may provide value to the
Groups strategic objectives. However, the group should work on maximizing value to the
stakeholders from a long term perspective.

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