Which are India's True Multinational companies of India? History of Indian companies acquiring in foreiggn countries Tata acquisition of Daewoo Tata acquisition of Tetley

1. INTERNATIONAL MARKETING
INDIA’S TRUE MULTINATIONALS
ANURAG RAIPURE
RAVI KUMAR
SHAGUN JHALANI
KAINESH PATEL
SHARATH N
ASHUTOSH SHARMA

2. CASE METHODOLOGY
2
Team of Outlook Business correspondents took four months
to put together 'The Global 50' list
The first true and comprehensive listing of Indian
multinationals based on their revenues and profits earned
overseas, employees working abroad and assets owned
beyond Indian shores
NOT a plain-vanilla compilation of India's leading exporters
As on March 2007,
India's top 50 multinationals employ about 124,000 people
abroad
India's top 50 multinationals earn almost Rs 1,15,284 crore in
revenues overseas (2.22% of GDP) Asset owned overseas
PARAMETERS USED

3. 3
THEORY INTRODUCTION
TOP INDIAN MULTINATIONALS
THOUGHT LEADERS STRATEGY
ORGANIZATION FOREIGN REVENUES IN
CRORES
(% total revenue)
ASSET ABROAD IN
CRORES
(% total assets)
EMPLOYEES OVERSEAS
(% total employees)
Tata Steel 97700 (73.5%) 75700 (60%) 45829 (56%)
Motherson Sumi Systems 10500 (70.4%) 8900 (74%) 15359 (35%)
HCL Technologies 19900 ( 95.6%) 10800 (55.5%) 15201(19%)
Hindalco 61800 (76.25%) 46600 (54.8%) 12000 (36%)
Suzlon energy 13300 (61%) 22300 (66%) 4179 (34%)
Tata Motors 111500 (67%) 76100 (62.8%) 18090 (30%)
Dr. Reddy’s Laboratories 8000 (82.4%) 5100 (50%) 3007 (20%)
Infosys 33000 (98%) 10100 (25%) 10350 (10%)
Tata communications 10700 (71%) 8600 (64%) 2276 (27.8%)

4. 4
THEORY INTRODUCTION
CHANGE IN THE PYSCHE OF INDIAN CEO
Focus on exports and considered as a primary metric of measuring global influence
Produce where it is cheap to produce or where the customer is located
Hire talent where it is available and needed
Obtain natural resources irrespective of where in the globe it is available
Seek and satisfy global customers
EARLIER
NOW
THOUGHT LEADERS
47% Bharat Forge’s employees, 24% of Asian paints employees are either foreign nationals or
Indians working abroad
STRATEGY

5. 5
THOUGHT LEADERS
• Tata Motor’s $102 million acquisition of Daewoo’s commercial
vehicles unit
• Tata Steel’s $484 million acquisition of NatSteel and $404 buyout of
Millennium Steel
• Tata tea buyout of Tetley in 2000 for $407 million
• Crafted the ’dual shoring’ strategy
• Decided that at least 20% of the company’s production must happen
near client’s location
• Set up a global manufacturing footprint ensuring proximity to the
global customer and greater intimacy with the client
THEORY INTRODUCTION THOUGHT LEADERS STRATEGY

6. MIX OF STRATEGIES
Product
Development
Strategy
Product
Development
Strategy
Product
Development
Strategy
Diversification
Strategy
PRODUCTS
MARKETS
NEWEXISTING
EXISTING NEW
KEY FOCUS AREAS
Acquisitions
Distribution
Chains
Talent pools
Global
customers
THEORY INTRODUCTION THOUGHT LEADERS
ANSOFF’S
STRATEGY

7. 7
CHOICE OF ENTRY MODE
THEORY INTRODUCTION THOUGHT LEADERS STRATEGY
CHOICE OF ENTRY MODE
Non Equity
Modes
Contractual
Agreements
Direct
Export
Alliances
Export
Licensing
Indirect
Export
Equity
Modes
Equity JV
Minority JV
Majority JV
WOS
Greenfield
M&A

8. 8
CHOICE OF ENTRY MODE
THEORY INTRODUCTION THOUGHT LEADERS STRATEGY
WOS offer companies the highest level of control and the lowest
levels of technology risk, but they also require the highest level of
resource commitments.
RESOURCE
COMMITMENT
LEVEL OF
CONTROL
TECHNOLOGY
RISK
DEMANDS
PERFORMANCE OUTCOMES
DEPEND UPON
Acquisitions are the fastest way to build a market presence in a
foreign market, yet they involve risks of overpayment, inability to
assess the real value of acquired assets, and post-acquisition
problems like cross-cultural assimilation.
Greenfield investments offer the greatest control over subsidiaries,
yet they often require the longest time to establish and need the
greatest transfer of resources and capabilities
WHOLELY OWNED SUBSIDIARIES
ACQUISITIONS
GREENFIELD INVESTMENTS

9. 9
INDIAN STRATEGIES
Almost all big global strides made through
acquisitions, most of them friendly. Very few of
the global moves have been organic
Deals like Tata Steel-Corus ($12.2 billion),
Hindalco-Novelis ($6 billion), Suzlon Energy-
REpower (€1.35 billion)
’Soft-touch' approach to integration: Indian
acquirers have not fired CEOs, shut down
plants or laid-off workers or even shipped jobs
back to India
IMPACT
made the task of integration easier, even
though returns may have been slower (Tata)
built a reputation for being benign acquirers
(Ford-JLR-Tata)
INTRODUCIONTHEORY INTRODUCTION THOUGHT LEADERS STRATEGY

10. 10
TATA CASE STUDY TETLEY
TETLEY ACQUISITION BY TATA TEA
In 2000, Tata Tea (now known as Tata Global Beverages) acquires the Tetley group, UK. This is the first major acquisition of an
international brand by an Indian business group.
DAEWOO OTHERS

11. 11
TETLEY ACQUISITION BY TATA TEA
GLOBAL
LEADERSHIP
GLOBAL SALES
AND DISTRIBUTION
TATA CASE STUDYTATA CASE STUDY TETLEY DAEWOO OTHERS

12. TATA MOTORS & DAEWOO
MajorAcquisitionsforinternationalexpansion
2003-04
Daewoo Commercial Vehicle
Company(100%), South Korea
FAILURE OF DAEWOO GROUP
2004-05
Hispano Carrocera(21%)
2008-09
Jaguar Land Rover(100%)
2010-11
Remaining 79% in Hispanno
• Established by Daewoo Group in 1982 and built into
the second largest automobile and truck
manufacturer in Korea
• Daewoo Group’s bankruptcy lead to the bankruptcy
of Daewoo Motors in 2000
• Car business of Daewoo Motors sold to GM in Nov
2002
• Tata Motors was considered to be inapt for
acquisition due to financial and technology prowess.
Tata Group was fairly unheard.
• Management of Daewoo was inclined to sell to
American or European Company
TATA CASE STUDYTATA CASE STUDY TETLEY DAEWOO OTHERS

13. EXISTING SYSTEM
The TATA WAY – EMPLOYEE MARKETING
WINNING DWCV EMPLOYEES MANAGING KOREAN CULTURE
Respecting hierarchy and values
Managing Unions
TATA CASE STUDY TETLEY DAEWOO
‘THE TATA EFFECT’
“I was wrong in thinking that an American or
European company would have been better.
With Tata Motors, we have a just partnership.
We have retained our voice; the company has
grown and employees have benefited."
Ki-Hee Won, MD, Administration Division
OTHERS
Structured program to educate DWCV about
India, Tata Group and Tata Motors
Communication (in Korean) to management,
unions and employees emphasizing Tata Motors
capabilities and Tata Group’s reputation for
good corporate governance
Respecting strong work ethics of Koreans
through significant efforts during the due
diligence process
Building the psyche “TATA is more strategic
partner than a venture capitalist”

14. EXISTING SYSTEM
CRUCIAL ACQUISITIONS BY INDIAN COMPANIES
TATA CASE STUDY TETLEY DAEWOO OTHERS

15. THANK YOU