Tata drive to go global

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Tata drive to go global

  1. 1. Global Drive for India’s Tata Case Study All data relevant to April 2005 By: Lalit Aggarwal Harleen Batra Soham Banerjee Ankit Shrivastava Deepak Sharma Tanya Chakraborty Section A - Group 6
  2. 2. Quick Glance at Tata Group – 1991-’99 • Ratan Tata takes over in 1991 from JRD • 300 firms listed under Tata Group, each going it’s own way • Tata’s own less than 5% of stake in many of these companies • Telco reeling under losses due to fall in demand for trucks and heavy vehicles • Indica wins less than half the expected market share
  3. 3. Strategy and strategic moves • Grow without joint ventures despite good offers from VW and Toyota • Acquire and grow inorganically in a global market • Raise stakes in critical firms and exit crowded markets • Takeover of Tetley Tea (British global brand) in 2000 • Turn Telco into a flagship company of the Tata Group • Use TCS as cash cow • Merge TCS and VSNL to seamlessly provide software and network services • $300m takeover of Singapore based NatSteel
  4. 4. Tactical Moves • Float 14% of TCS ownership in the Indian market • Use money from the market to pay down debts of Tata Sons (holding company for the group) • Use money from TCS to fund merger of TCS and VSNL • Buying old AT&T fiber optic cable network from Tyco in Nov 2004 for a fraction of the price it was worth • 4 group companies run by foreign nationals
  5. 5. Tata Motors • Wish to prove world class manufacturing capabilities in India • 40% job cuts and halving the number of suppliers • Change in focus from trucks to passenger vehicles • In 3 years, Indica and Indigo account for about 25% of their respective markets • 7 years after producing its first car, PBT is 10% • Moving into markets like SA, EU and Central Asia
  6. 6. Parenting styles – Financialcontrol control Strategic Planning Issues Actions Implications • Identify core • Focus on certain • Streamlined • • Too manyareas business firms Reduce debt of Tata sectors with Tata • Reduced number • Used a Tata Steel operations • • Need of a flagship Sons Too less stake Motors group of companies • Better control of Covered debt over • Leveraging on core company company as Tata conglomerate sons • • Finance other new Severe losses • and TCS as Increased funds source of stakes competencies • Co-ordinate actions flagship cos • Ventured into • Retaining ventures • in companies from and create • Bought VSNL, Staying away competitive proprietary linkages AT&T fibre- optic, JV’s business technology between • Tetley, Natsteel Growth plans • Continuation as an units • Succession mentor planning
  7. 7. The Delta Model (Tata Motors) Strategy- Telco to be Lock In Flagship Mission Of Business Mission Of Business •Remove focus from •Scope •tractors •Passenger vehicles • Competency Cost effectiveness, Competitive Industry Market Mass Structure Indigenous Indica Positioning 40% job cuts Takeover of-Land Rover Business Strategy No JV Innovation Nano Vendors to assemble Nano Operational Effectiveness Customer Targeting Foreign Brand Adaptive processes
  8. 8. Thank you

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