CASE-ANALYSES PRESENTATION“HOUSE OF TATA: ACQUIRING A GLOBAL FOOTPRINT”
GROUP-5Rocquel CarrecterAmanda RichardsonJoshua StandiferSugam RijalYashikiya HarleyEdwina Russaw
History
Founded as a Trading firm in 1868.
Family business: Current CEO: Ratan
Tata From Textiles to
Commercial Vehicles:
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 o’clock coffee from U.S.A Tata Sons: Energy Brands from
U.S.A And………………..
Tata Motors:
Flag ship Company of Passenger’s Car and Commercial Truck
Daewoo Commercial Vehicle from South Korea.
Tata Nano: Smallest Car in the world.
Dilemma: Jaguar and Land Rover???
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
Perspectives From Porter’s View
Barriers of Entry Buyers
Time and Cost of Entry
Cost advantages Technology
Differentiation Buying Volumes Price Elasticity Differentiation Buying Volumes Price Elasticity
Perspectives From Porter’s View
Competitive Rivalries Number of Competitors Switching Costs Diversity of
Competitors Industry Concentration
Substitutes Substitute Performance Cost of Switching Buyer Willingness
Suppliers Number of
Suppliers Size of Suppliers Unique Product
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 point B.
GDP
McKinsey’s 7s Framework:
Strategy: Focus Strategy Acquisition Philosophy Target Bottom of the
Pyramid Market Brand Positioning Combination of Ansoff’s
Product Development and Diversification Strategy
Offset A for B Corporate Social
Responsibility
Structure Mechanistic-
Organic Mixed
Organizational Structure
Decentralization-Autonomous
MBO New Corporate
Culture
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
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
$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