TATA GROUP

Group 2 || Corporate Strategy

Assessment of Tata Group of

Companies

TATA GROUP OF BUSINESSES

Founded in 1868 by Jamsethji Tata as a Trading Company

Operations in more than 80 countries and 6 continents

INR 8.2 Trillion ($ 103.27 billion) as of July 2014

Tata Sons is the majority shareholder of all these companies

Contribution of different businesses

Contribution of each sector in terms of financial makeup of Tata Group

Services

Includes hospitality, financial services-insurance, IT consulting & communication

Contributes ~ 24% of the Tata Groups revenues including 20% by IT & communications

Market Growth

High

Tata Communications
Tata Teleservices
Tata Capital
Tata AIG General Insurance
Tata AIA Life Insurance

TCS (BPO & Infra division)

Indian Hotels Company
Ginger Hotels (Economy hotels sector:
Roots Corp.)

Tata Business Support Solutions

Tata AutoComp Systems
Air Asia India

TCS (Application
Development software
Products)

Low

High

Market Share

Low

Parameter
Product Scope

Geographic
Scope

Tata Consultancy Services

IT and IT infrastructure services

Business process outsourcing
Consulting
Enterprise solutions and others

199 offices across 44 countries

124 delivery centers in 21 countries

Indian Hotels Company

Luxury: Taj, Taj Exotica, Taj Safaris

Premium: Vivanta by Taj
Mid-market: Gateway Hotel
Economy: Ginger

93 hotels in 55 locations across India

16 international hotels

Vertical Scope
Provides services to business entities across Integration of customer loyalty program with
various sectors (B2B)
services like Inditravel, Jiva spas
Acquired Computational Research Laboratory Own Institute of Hotel Management & tie up
for high performance computing application &
with University of Huddersfield: access to talent
cloud services
Horizontal
Scope

Acquisition of AFS, Phoenix Global, Pearl Group,

Supervalue services which are BPOs in various
sectors like Insurance, banking, airlines, etc.

Parameter

Other factors

Challenges

Strategy

Tata Consultancy Services

Indian Hotels Company

Strategic alliance with HP, Intel, SAP

Partnership with Bihar Yoga School for In-room
TCS: Firm believer in organic growth &
yoga service
acquisition of entities which are in line with TCS Tie ups with Jyoti Fabricare (Laundry), Forbes
strategic long term goal
Concept (Housekeeping)
High Attrition
High operating costs and inflation
Issues in overseas operations like visa issues,
Increased competition from other premium as
labour laws and related legal issues
well as economy hotels
Increased competition putting pressure on
Low occupancy rate
revenue growth
Adverse impact of world economic fluctuations

Cost cutting by large clients in US & Europe so Leverage on the biggest strength of brand
equity
focus on fast developing IT markets like Middle
Focus on mid-scale segment between Ginger &
East, Australia
Gateway
Focus on employee satisfaction
Creation and effective positioning of intellectual Option of entering into high end restaurant
business (Currently restaurants in partnership
property assets
with Taj: 2nd highest market share

Parameter

Tata Capital Limited

Product Scope

B2B offerings: Commercial finance, infrastructure finance, leasing solutions, Clean

Tech Finance, PE, Investment Banking
B2C Offering: Consumer Finance & Wealth Management

Geographic Scope

Headquarters in Mumbai & branches in more than 100 cities in India

International operations through offices in London and Singapore

Integration of entities

Subsidiaries like Tata Capital Financial Services Limited, Tata Securities Limited,
Tata Cards, etc.
Tata Securities acquired Tata Capital Markets Limited in 2011
Advantages of synergetic linkages & commonality of business interests

Other Factors

Strong alliance and partnership contracts within the subsidiaries: For eg. TCFSL
has outsourced the client acquisition platform in the form of BPO to TBSS

TATA CHEMICALS

Tata Chemicals (TCL), established in 1939, is the second largest producer of soda ash in the world
with manufacturing facilities spread across four continents.

Product Scope

Geographic scope

Vertical scope

Living essentials - Tata Salt , Tata

Swach
Industrial essential - Soda ash , sodium
bi carbonate , caustic soda, chlorine
based products, bromine based
products
Farm essentials - Fertilizers

Manufacturing facilities in India, UK, US and

Kenya
Customer base across five continents
World's most geographically diversified soda
ash company, with an efficient supply chain
that can service customers across the globe

Tata Chemicals acquired 100 per cent stake in

General Chemical Industrial Products Inc,
USA
Over 50 per cent of the capacity came from
the natural route, which is a significantly
more economical route of producing Soda
Ash than the synthetic route.

TATA CHEMICALS
Current Challenges
Indirect control over fertilizer price
Uk and Kenya high energy cost and
pension fund liability

Future Scope
Restructured the UK business by closing
the soda ash facility. The Kenya business
needs reconfiguration options too.
The agri segment has been one of the
best performers in the Indian economy
thus they need to invest in R&D to come
up with nutraceutical
Due to rapid urbanization, there will be a
drive of consumers towards packaged
and branded products from loose
products.

TATA GLOBAL BEVERAGES

Tata Global Beverages, formerly Tata Tea Limited, established in 1964 in Kolkata

It is the world's second-largest manufacturer and distributor of tea and a major producer of coffee.

It has ventured into the coffee industry as well as water industry

Market Growth

High

Starbucks Coffee Company A

Tata Alliance,
Tetley

Tetley Green Tea,

Eight O Clock Coffee

Tata Tea,
Tata Coffee
JEMA
Tetley Black Tea

Low

High

Market Share

Low

TATA GLOBAL BEVERAGES

Product Scope

Geographic scope

Vertical scope

Living essentials - Tata Tea, Tetley,

Good Earth Teas, JEMA,
Starbucks Coffee Company, Eight O
Coffee
Industrial essential Tea leaves, Coffee
beans
Farm essentials - Fertilizers

Manufacturing facilities in Karnataka

and Kerala in India
Tata Global Beverages has now
product and brand presence in 50
countries including India, U.K.,
Canada, U.S.A., Czech Republic

The company owns 51 tea estates in

India and Sri Lanka, especially
in Assam, West Bengal in eastern India
and Kerala in the south.
Tetley has access to these gardens and
production base.

Competitors

Lipton
Brooke Bond
Nestle
Sara Lee
Unilever
Regional Competitors

Competitive Advantage
One of the largest companies in the
world
Brand Loyalty
Distribution channels

Opportunities
Unexploited Rural Markets
Increasing market share among the
youth

TATA GLOBAL BEVERAGES

Current challenges

Future scope

Shrinking volumes and mounting advertising and

Introduction of product categories and flavors like Tata

promotion spends pose challenges to profitability in

Tata Global Beverages' international tea and coffee
operations

There is competition from the local tea brands that are

Gluco Plus has done to increase its market share

To increase market share among the youth, they can
introduce low fat tea variants and green tea

The decline in the black tea market is also an

acquiring market share from Tata Global Beverages

opportunity to create a different advertising point for

There is a decline in the growth of black tea market

the regular milk tea like making family moments with

tea or with friends
Promotion of Tata beverages at Starbucks
Exploitation of rural markets as this would help
increase market share

Tata Power

Established in 1911, It has grown into Indias largest integrated power company

Installed generation capacity of 6,899 MW

Large investments in JVs, subsidiaries and Associations

Both Standalone & Cons PAT has increased in a past few years

Product Scope

Geographic scope

Vertical scope

Power Generation, Green Energy,

Transmission & Distribution
Fuel Assets
Shipping & Logistics
Trading, Power Project Services

Headquartered in Mumbai.
Indonesia Singapore- Trust Energy Resources
South Africa- joint venture called Cennergi
Australia- Geothermal and clean coal
technologies
Bhutan Hydro project in partnership with
The Royal Government of Bhutan

Thermal and Hydro Projects require pumped

storage units and coal mines in Indonesia
through its subsidiaries
Trust Energys core business is fuel logistics
and fuel trading for the TP Group
Operations and Maintenance of Power
Projects
Shipping and Logistics

Tata Power
Competition
Reliance Power
NTPC
Adani Power

Vertical Scope
Thermal and Hydro Projects require
pumped storage units and coal mines in
Indonesia through its subsidiaries
Trust Energys core business is fuel
logistics and fuel trading for the TP Group
Operations and Maintenance of Power
Projects
Shipping and Logistics

Challenges

Major Projects in process of development are

either based on hydro or engineering.

Improved opportunities in the area of

renewable energy such as solar and wind.

Sustainability- Club Enerji

Green Energy Development

Increase in coal prices

Policies regarding Coal Import

Opportunities
Increase in the demand for Power
Non Conventional Sources for Power
Expansion into third world countries and
globally

Tata Power
Competitive Advantage
Exposure to Hydro
Power
Base in Mumbai

Risks
Changing Environment
Concerns
Investment in coal
mines provides a
strong natural hedge
as it stands to benefit
from any increase in
coal prices (the current
trend) but may not
necessarily lose if the
prices fall (as the coal
can be used in house).

Suggestions
Seeking increase in
capacity through New
projects, Domestic &
International
acquisition and
Expansion
Seeking backward
integration by
acquiring Captive Coal
Berths
Growth in Other
Businesses

Tata Steel
Indian multinational steel-making company headquartered in Mumbai, Maharashtra,
India with a turnover of Rs. 148614 Crores in 2013-2014
11TH largest steel producing country in the world

Product Scope
Flat products Hot rolled, Cold rolled,
Metallic coated, Pre-finished steels,
Electro-plated steels
Long products Rail infrastructure, wires,
Sections
Construction products for walls, roofs,
modular, floors, structural steel
Agricultural implements
Bearings

Geographic scope
Manufacturing facilities in 26
countries including Australia, China,
Geographic distribution of revenue
India-30%, Asia-13%, Europe-52%,
Rest of World 5%

Vertical scope
Electrical steels by acquiring Cogent
Power
Research on Non-grain oriented
Steel

Tata Steel
Challenges
Volatile raw material prices
Systemic weakness in demand in key
markets due to overhang of the economic
crisis and significant overcapacity

Future Scope
Leverage its European success in
unexplored markets of Europe
Update its technology to ensure
continuous raw material supply
Construction steels should be produced
more due to increased government
spending and signs of revival of
construction sector is visible
Increase production in Australian
subsidiaries due to increased demand
Expansion in other areas to reduce
transportation cost

Tata Engineering

Product Scope
Engineering consultancy services
(TCE);
Automobile sector (Tata Motors);
Air Conditioning solutions (Voltas);
Material handling and Construction
equipments (TRF)

Geographic Scope
Tata Motors presence in Europe,
North America, China, Russia and
Brazil apart from India;

Vertical Scope
TML Drivelines gear boxes and
axles for HCV

TCE is present in emerging markets

of middle-east, Africa and the US.

80% stake in Trilix SRL Italian

design & engg.

Voltas has pan-India presence and

globally in UAE, Qatar, Saudi Arabia
and Singapore

TDCL supports sales and

distribution in India

Inorganic Growth Strategy

Tata Motors
Jaquar Land Rover luxury car segment
Tata Cummins 50:50 JV between Tata
Motors and Cummins, US manufactures
diesel engines for Tata Motors medium and
heavy CVs
TAL manufacturing solution 100%
subsidiary of Tata Motors provides
manufacturing engineering services
Tata Hitachi Construction Machinery- 60:40
JV between TM and Hitachi Construction
Machinery supplies a range of construction
equipments

Tata Consulting Engineers

Acquisition of Ecofirst services to add Total
sustainability solutions for building green
environments
Strategic relationship with Autodesk to
enhance value to its building and
infrastructure customers

Future Scope

Challenges
Tata Motors

Subdued demand of
CVs and PVs

Tata Consulting
Engineers

To meet the subdued demand in CV segment,

Tata Financial Services can start CV leasing
business to enable affordability to customers

Balancing customer
requirements &
existing capabilities

TM can utilize the design facility of JLR to

improve upon its existing products
High costs due to
stringent emission
norms & rise in fuel
costs

Slowing growth in
Indian power sector

Economic slowdown
in China, UK and
Europe

Strict govt
regulations in
infrastructure sector
globally

Voltas and Ecofirst can work in collaboration

to provide holistic green solutions

Major Recommendations for the Group

Acquisition of Steel Plants and Solar Energy Plants in untapped markets of Europe and
Middle East

Seek backward integration by acquiring Captive Coal Berths

Invest heavily in R&D to venture into Nutraceutical Products

Reduction in the stringent regulations associated with loan issuance

Low fat tea variants will help attract the youth

Provide Leasing Finance for commercial vehicles