CASE-ANALYSES PRESENTATION“HOUSE OF TATA: ACQUIRING A GLOBAL FOOTPRINT”

GROUP-5Rocquel CarrecterAmanda RichardsonJoshua StandiferSugam RijalYashikiya HarleyEdwina Russaw

BACKGROUND & SITUATIONAL ANALYSES

History

Founded as a Trading firm in 1868.

Family business: Current CEO: Ratan

Tata From Textiles to

Commercial Vehicles:

House of Tata:Tata Company as a Conglomerate:

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………………..

World’s Smallest Car

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???

Daewood Commercial Vehicles

ISSUES

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

PEST Analysis

VALS-Survivor Category

Advanced Products

Economic Downtown

Regulations

PERSPECTIVES

Perspectives

Don’t put all of your eggs in one Indian basket!

Porter’s Five Forces

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

The Competition looks good

KNOWLEDGE

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

ACTIONS

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

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

Updates:

Market Share of Luxury Cars in America