House of Tata PPT

8/13/2019 House of Tata PPT

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CASE-ANALYSES PRESENTATION

“HOUSE OF TATA: ACQUIRING A GLOBAL

FOOTPRINT”

GROUP-5Rocquel CarrecterAmanda RichardsonJoshua StandiferSugam RijalYashikiya Harley

Edwina Russaw



BACKGROUND & SITUATIONAL ANALYSES



History

Founded as a Trading firm in1868.

Family business:

Current CEO: Ratan Tata

From Textiles toCommercial Vehicles:



House of Tata:

Tata Company as a Conglomerate:



Acquiring a Global Footprint:

Tata Tea: Tetley Tea from U.K.

Tata Steel: Corus Steels fromU.K

Indian Hotel: Ritz-Carlton-Boston fromUSA

Tata Chemicals: Brunner Mond fromU.K.

Tata Coffee: 8 o’clock coffee fromU.S.A

Tata Sons: Energy Brands from U.S.A

And………………..



World’s Smallest Car



Tata Motors:

Flag ship Company ofPassenger’s Car andCommercial Truck

Daewoo Commercial Vehiclefrom South Korea.

Tata Nano: Smallest Car in the

world.

Dilemma: Jaguar and LandRover???



Daewood Commercial Vehicles



ISSUES



Should Tata Motors contemplate for

bidding for Land Rover and Jaguar?

o 1. Foreign Competition

o 2. Market and ProductRange

o 3. Losses

o 4. Expenditures



PEST Analysis

VALS-Survivor

Category

AdvancedProducts

EconomicDowntown

Regulations



PERSPECTIVES



Perspectives

Don’t put all of your eggs in one Indianbasket!



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 processin the organization:

From point A to point B.

GDP

http://www.google.com/publicdata?ds=wb-wdi&met_y=ny_gdp_mktp_kd_zg&idim=country:IND&dl=en&hl=en&q=india+gdp+growth

http://www.google.com/publicdata?ds=wb-wdi&met_y=ny_gdp_mktp_kd_zg&idim=country:IND&dl=en&hl=en&q=india+gdp+growth



McKinsey’s 7s Framework:

Strategy: Focus Strategy

Acquisition Philosophy

Target Bottom of thePyramid Market

Brand Positioning

Combination of Ansoff’sProduct Development and

Diversification Strategy Offset A for B

Corporate SocialResponsibility

Structure Mechanistic-Organic

Mixed OrganizationalStructure

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 resourcesto overcome some of the disadvantages ofbeing newcomers into the automotive carbusiness.



Assess the Possibilities:

Newcomer in automotive carmarket

Extreme risk-Ratan Tata-had aglobal mindset

CEO ,

Global Brand will give entranceinto North America market

Joint Ventures

Acquisitions

Intense ManagementDevelopment



Impact of the Decision

Jaguar and Range Rover will bring well knownglobal 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 topurchase a western brand to upgrade itsproduct range

Parent Group could support expansion Decentralize Tata Group to reduce overlap

“Project Prune”

Be market leader in low, middle and highincome class

Increase domestic market share



CONSEQUENCES



Consequences

$850 million debt on the purchase contributed to acredit-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 theJaguar/Land Rover

Jaguar/Land Rover lost an additional $510 million inthe 10 months

Faces a huge R&D bill as high as $1.1 billion



Consequences

U.S. and European economiespick up Jaguar sales could increase Jaguar XJ has already received

good reviews

Land Rover remains a morecomplicated issue invest in a new line of smaller,

more economical cars

Cut 300 jobs at a plant inBritain 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

Documents

House of Tata PPT