BY GROUP 5, SECTION 1

HARSH KAMAL BHATNAGAR

(FT151009)
PRIYANKA MANOJ KUMAR
(FT151012)
SREERAM K MOORTHY
(FT151033)
MAYANK MODH
(FT151057)
ANOOP KRISHNAKUMAR
(FT151077)
KUSHAL KISLAY
(FT151093)
DIKSHA MEHTA
(FT151097)

House of Tata:
Acquiring a Global Footprint

Group 15:
Amar Pratap Singh
Chandni Gupta
Jyoti kumar Rastogi
Vishal Drolia
Yash Sobti

Jamsetji Tata (1839 1904)

JRD Tata (1931 1991)

Ratan Tata (1937 Till Date)

Graduated with a degree in Architecture and

Structural Engineering from Cornell University.
Also completed advanced management programme
at Harvard Business School.
Appointed the Director-in-Charge of The National
Radio & Electronics Company Limited (Nelco) in
1971.
Became the Chairman of Tata Industries in 1981.
Took over as Tata Group Chairman in 1991

Evolution and Trend

Evolution and Trend

Evolution and Trend

Structure

TATA Group

Globalization Strategy

Basis for Globalization Strategy

Basis for Globalization Strategy

Motivation for
Globalization

Routes

Sustainability

Globalization

Why Globalization?
Resources and
Capabilities

Technology
Superior Human
Resources
Innovation

Government Regulation
and Taxation

Risk Diversification

Various Routes to Globalization

Export

Transport
Costs

Tariff Barriers

Set-up
Subsidiary

Marketing

Manufacturing

Full Scale
Operations

Joint Venture or
Alliance

Independent
Operations

Free Trade
Agreements

TATA Group Global Network

North America
- Present for over 60
years
- More than 24000
employees
- More than 80 offices
across N. America

- Started in UK in
E
1907 as first
U
base
R
- Largest Indian
O
Employer in UK
P
- 45000 Strong
E
Workforce

- Strong Base
A - Headquarter in
S
India
I - Building
A
significant
presence in China

Australia
- Operating here for
over 30 Years

South America
- Presence since 1990s
- More than 8000
employees across S.
America and Latin

A
F
R
I
C
A

- Began
Relationship in
1977
- Over $100mn of
Investment

Tata company

Acquired company

Country

Stake acquired

April

Tata Chemicals

Olam International, Republic of

Gabon

Republic
of
25.1 per cent
Gabon

August

Tata Chemicals

EPM Mining Ventures

Canada

30.6 per cent

January

Tata
Communications

BT Group's (BT) Mosaic

business

UK

100 per cent

April

TRF

Hewitt Robins International

UK

December

Rallis India
(through Tata
Chemicals)

Metahelix Life Sciences

India

53.5 per cent

Tata Chemicals

British Salt

UK

100 per cent (wholly-owned)

Tata International Bachi Shoes India

India

76 per cent

Tata International Euro Shoe Components

India

76 per cent

Tata

Neotel

South
Africa

30 per cent

Grand

Russia

33.2 per cent

Merger and Acquisitions

2011

2010

2009
January

Communications
March

Tata Tea
(now Tata Global
Beverages)

July

TRF

Dutch Lanka Trailer

Manufacturers

Sri
Lanka

51 per cent

October

Tata Motors

Hispano Carrocera SA

Spain

Remaining 79 per cent

Tata Chemicals

General Chemical Industrial

Products (now Tata Chemicals
North America)

US

100 per cent stake

Tata Projects

Artson Engineering

India

2008
January

Merger and Acquisitions

March

June

Tata Motors

Jaguar and Land Rover brands

UK

Telco Construction Equipment

Company (Telcon)

Serviplem SA

Spain

79 per cent

Telco Construction Equipment

Company (Telcon)

Lebrero SA

Spain

60 per cent

Tata Communications

China Enterprise

China

50 per cent equity

Communications Limited (CEC)

August

Voltas

interest

Rohini Industrial Electricals

India

51 per cent

Geodynamics

Australia

10 per cent

Norway

50.3 per cent

Centre Plc

Miljbil Grenland /
Innovasjon

TCS

Citigroup Global Services

US

100 per cent

January

Tata Steel

Corus

UK

100 per cent

March

Tata Steel

Rawmet Industries

India

April

Indian Hotels

Campton Place Hotel

US

Tata Power

Acquired Coastal Gujarat Power

India

Tata Tea through Tetley group

Vitax and Flosana

trademarks

Poland

(now Tata Global Beverages)

Tata Communications

Transtel Telecoms (TT)

South

September Tata Power

October

December

Tata Motors European Technical

2007

Africa
June

October

Tata Power

PT Kaltim Prima Coal

Indonesia

30 per cent equity

and PT Arutmin Indonesia

stake

TRF

York Transport Equipment (Asia) Singapore

51 per cent stake

Tata Metaliks

Usha Ispat, Redi Unit

India

100 per cent

(wholly-owned)

Tata Interactive

Tertia Edusoft Gmbh

Germany

90 per cent

Tertia Edusoft AG

Switzerland 90.38 per cent

2006
January

February

TCS

Tata Infotech

India

March

Tata Chemicals

Brunner Mond (now Tata

UK

36.5 per cent

Thailand

67.11 per cent

Merger and Acquisitions

Chemicals Europe)
April

Tata Steel

May

Tata Tea through Tata Tea JEMCA

(GB)
(now Tata Global
Beverages)

Czech
Republic

Assets: intangible and

tangible

June

Tata Coffee

US

100 per cent (whollyowned)

South Africa

33.3 per cent

Millennium Steel

Eight O' Clock Coffee Company

(now Tata Global

Beverages)
September Tata Tea through Tata Tea Joekels Tea Packers
(GB)
(now Tata Global
Beverages)
Indian hotels

Ritz-Carlton hotel

US

Tata Steel

NatSteel Asia Pte

Singapore

100 per cent (whollyowned)

Tata Motors

Hispano Carrocera

Spain

21 per cent

March

Tata Chemicals

Indo Maroc Phosphore

S.A. (IMACID)

Morocco

Equal partner

April

Tata Motors

Tata Finance

India

Merger

July

Indian Hotels

The Pierre

US

Management contract

Tata Industries

Indigene Pharmaceuticals
Inc

US

<30 per cent

Tata Communications

Teleglobe International

UK

Tata Technologies

INCAT International

UK

Trent

Landmark

India

Wndsch Weidinger

Germany

November
2005
February

August

September Tata AutoComp

76 per cent

October

Tata Tea through Tata Tea

Good Earth Corporation & FMali

(GB)
(now Tata Global

Herb Inc

US

100 per cent (whollyowned)

Merger and Acquisitions

Beverages)
TCS

Financial Network Services

Australia

TCS

Pearl Group

UK

November

TCS

Comicrom

Chile

December

Indian Hotels

Starwood group (W Hotel)

Sydney

Structured deal

100 per cent (whollyowned)

Tata Chemicals

Brunner Mond (now Tata Chemicals

Europe)

UK

63.5 per cent (December

2005)

TCS

Airline Financial Support Services

India

100 per cent (wholly-

2004
January

India (AFS)

owned)

March

Tata Motors

Daewoo Commercial
Vehicle Company

Korea

100 per cent (whollyowned)

June

Tata Chemicals

Hind Lever Chemicals

India

Amalgamation

November

Tata Communications

Tyco Global Network

US

Tata Communications

Gemplex

US

Tata Sons

Tata Communications
(formerly VSNL)

India

100 per cent (whollyowned)

Regent Hotel

India

Effective 100 % stake

Tata Sons (TCS)

Computer Maintenance Corporation

(CMC)

India

Tata Tea and

Tata Sons

Tetley group

UK

2003
July
2002
February

September Indian Hotels

2001
November

2000
February

100 per cent

(wholly-owned)

M&A Analysis
Tea Industry

S
t
r
a
t
e
g
i
c
O
b
j
e
c
t
i
v
e
s

Tetley (UK)

India Hotels
(IHC)
Regeant Hotels,
The Pierre, W
Hotel, Ritz
Carlton Boston,
Innovative Foods

Steel Industy

Automotive

Corus (UK),
NatSteel (Spore)
and Millennium
Steel (Thailand)

Daewoo
Commercial
Jaguar Land
Rover (Under
Consideration)

M&A
Companies

Access to
developed Markets
complementing
Tata tea brands

Chain of hotels
seamless
support internal
and external
guests

Yes
disintegrated
strategy

Yes
complementing
exciting
product
portfolio

Strategic Fit
for the TATA
Group

In line with
management vision
of global expansion

Yes access to
gateway markets

Yes

Alignment
with
Management
Vision?

Addition of value
added tea brands

New premium
properties

Diversified
Product Mix

Product
Portfolio

Access to new
markets

Yes New
international
markets

Access to new
strategic
markets

Yes reach
middle class
and bottom of
pyramid
markets
Diversification
of product
portfolio
trucks, buses,
cars (low to
premium)
Access to new
markets
specifically in
Europe and
USA

Software/Servic
es
CMS, Phoenix,
Hughes Telecom,
Aviation
Software, TKSTeknosoft, Total
Communication
Solutions
Yes
frontrunner for
Global market in
India First
Mover
advantage
Yes achieve
global presence
and brand
building
Diverse

Mature and
emerging
Markets

M&A Analysis
S
t
r
a
t
e
g
i
c
O
b
j
e
c
t
i
v
e
s

Market Reach

N/A

N/A

Access to niche,
advanced
technology

Yes access to
advanced
technology

Technology

Yes
Complimenting
TATA tea with
Tetley

Yes leveraging
the Taj brand

Synergies
with TATA
Group
Companies
EVA Positive

Yes

Yes

Yes leverage
each others
strengths and
achieve
backward
integration
Yes

Yes
complementing
the already
existing
products of the
TATA stable
Not yet

Complimenting
and synergistic
with existing
portfolio
Yes complementing
the already
existing products
of the TATA
stable
Yes

Yes

Yes

Yes

Yes

Yes

Achieve
Economies of
Scope

Yes

N/A

Yes key value

proposition

Yes achieve
synergies
across the
supply chain in
diverse markets

N/A

Supply Chain

Yes

N/A

Yes key value

proposition

N/A

Yes
achieve
synergies
across the
supply chain
in diverse
markets

M&A Analysis Conclusion

One hundred years from now, I expect the Tata to be much bigger than it
is now. More importantly, I hope the group comes to be regarded as being
the best in India best in the manner in which we operate, best in the
products we deliver, and best in our value systems and ethics. Having said
that, I hope that a hundred years from now we will spread our wings far
beyond India..
-- Ratan Tata

Despite of all pits and falls, it is moving its wing Over India. The way TATA is
growing, definitely we can not neglect its role in Globalization.

Strengths of Tatas Organization Structure:

A strong integrated corporate identity
Share of Tata Sons was 29% which served
two purposes
Gave them veto rights and hence a
protection from any potential takeover.
Ensured a centralized operational control
over the group.
Establishment of GEO and GCC to oversee
group operating companies and ensure
better coordination amongst them.
Strong leaders across all divisions.

Tata Teas acquisition of Tetly:

Challenges in taking it to global platform:

Building a vision, structuring it and making it relevant so that it can

be implemented.
Raising capital by way of debt from the future earnings of the large
global organisation which was yet to be acquired was difficult.
The strategic direction which may lead to building synergies in
future was missing.

Tactics Used:

The financial tools used ensured that other business were

unaffected by the debt so raised.
Tetlys strong management was retained.
Task forces were created for successful integration.
Identification of areas where it was possible to synergize better and
develop efficiencies.

SWOT Analysis of Tata Group:

Strengths

Weakness

Experience

Distribution

Resource
capabilities(People and
raw material)

Macro environment

Business model
culture

Opportunities

Threats

Exports

Free market

New products

Low barriers

New markets

Globalization of
economy

Acquisitions and
mergers

Situational Analysis:

Hold significant share of countrys passenger cars

and dominates Indias commercial truck market.
VEHICLE

MARKET SHARE

Cars

17%

Light trucks

34.82%

Medium/heavy
trucks

64.74%

Buses

51.12%

Brand targeting low and middle income economies

and the middle of the market segment
Targeting low end auto segment through Nano

Analysis of JLR:

Ford acquired Jaguar ,a British luxury and sports car

brand in 1989 which has been unprofitable under
Fords ownership
Ford acquired Land Rover ,mid-range and luxury
sports-utility vehicles in 2000 which was reported to
be profitable under Fords ownership
Ford made losses of $12.6 bn in 2006 which was
mostly due to Jaguar
Jaguar sales growth in 2006 was 32% less than the
previous year in US.

Advantages of Acquisition:
Access to the high end of the auto business
Customer having various options to choose the product, with increased
portfolio
Strategic opportunity to acquire brands with global presence and a
repertoire of well established brand (opportunities to become one of
the major players)
Reduced dependence on the Indian market which accounted for
majority of sale(help mitigate risk)
Access to latest technology, robust designing and R&D capabilities
which can help in improving their core products in India
Synergy creation
Cost competitive advantage and opportunities of synergy by using
Steel supplied by Corus
Established brand available at affordable investment ($1 bn-2bn)
Strong brand image of JLR can facilitate the acceptance of Tata product
in the international market.
Using JLR distribution channel for their product to enter in US market
which seems unlikely without the acquisitions

Road Ahead:
Tata Motors should go ahead with the deal as it gives
access to Global market
They should be able to leverage the existing
distribution network
Should be able to instill confidence that the premium
brand is in safe hands
They should handle the union judiciously and
employee productively
Integration of the culture of the two companies as a
part of their corporate strategy.