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

GROUP-5 Rocquel Carrecter Amanda Richardson Joshua Standifer Sugam Rijal Yashikiya Harley Edwina 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: Tata Steel:

U.K Indian Hotel: USA Tata Chemicals: U.K. Tata Coffee: U.S.A Tata Sons: And..

Tetley Tea from U.K. Corus Steels from Ritz-Carlton-Boston from Brunner Mond from 8 oclock coffee from Energy Brands from U.S.A

Worlds Smallest Car

Tata Motors:
Flag ship Company of

Passengers Car and Commercial Truck from South Korea. world.

Daewoo Commercial Vehicle

Tata Nano: Smallest Car in the

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

Regulations

Economic Downtown

Advanced Products

PERSPECTIVES

Perspectives
Dont put all of your eggs in one Indian

basket!

Porters Five Forces

Perspectives From Porters View


Barriers of Entry Buyers

Time and Cost of

Differentiation
Buying Volumes Price Elasticity

Entry Cost advantages Technology

Differentiation
Buying Volumes Price Elasticity

Perspectives From Porters View


Competitive Rivalries
Number of Competitors Switching Costs Diversity of Competitors Industry Concentration

Suppliers
Number of Suppliers Size of Suppliers Unique Product

Substitutes
Substitute Performance Cost of Switching

Buyer Willingness

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

McKinseys 7s Framework:
Strategy:
Focus Strategy Acquisition Philosophy Target Bottom of the

Structure
Mechanistic-Organic Mixed Organizational

Pyramid Market Brand Positioning Combination of Ansoffs Product Development and Diversification Strategy Offset A for B Corporate Social Responsibility

Structure DecentralizationAutonomous 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