Tata Group_Group 2

8/10/2019 Tata Group_Group 2

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TATA GROUPGroup 2 || Corporate Strategy


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Assessment of Tata Group oCompanies


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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


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Contribution of different businesses

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


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

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

MarketGrowth

Market Share

TCS (BPO & Infra division)Indian Hotels Company

Ginger Hotels (Economy hotels sector:Roots Corp.)

Tata CommunicatTata Teleservice

Tata CapitalTata AIG General Ins

Tata AIA Life Insur

Low

High

High

Tata Business Support STata AutoComp Sys

Air Asia India

TCS (ApplicationDevelopment softwareProducts)


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IT and IT infrastructure services Business process outsourcing Consulting Enterprise solutions and others

199 offices across 44 countries 124 delivery centers in 21 countries

Provides services to business entities acrossvarious sectors (B2B)

Acquired Computational Research Laboratory

for high performance computing application &cloud services

Acquisition of AFS, Phoenix Global, Pearl Group,Supervalue services which are BPOs in varioussectors like Insurance, banking, airlines, etc.

Luxury: Taj, Taj Exotica, T Premium: Vivanta by Taj Mid-market: Gateway Ho Economy: Ginger

93 hotels in 55 locations a 16 international hotels

Integration of customer lservices like Inditravel, Jiv

Own Institute of Hotel M

with University of Hudde

Tata Consultancy Services Indian Hotels

Product Scope

Geographic

Scope

Vertical Scope

HorizontalScope

Parameter


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Strategic alliance with HP, Intel, SAP TCS: Firm believer in organic growth &

acquisition of entities which are in line with TCSstrategic long term goal

High Attrition Issues in overseas operations like visa issues,

labour laws and related legal issues Increased competition putting pressure on

revenue growth Adverse impact of world economic fluctuations

Cost cutting by large clients in US & Europe sofocus on fast developing IT markets like MiddleEast, Australia

Focus on employee satisfaction Creation and effective positioning of intellectual

property assets

Partnership with Bihar Yyoga service

Tie ups with Jyoti FabrConcept (Housekeeping)

High operating costs and Increased competition fro

well as economy hotels Low occupancy rate

Leverage on the biggest equity

Focus on mid-scale segmGateway

Option of entering into hbusiness (Currently restawith Taj: 2ndhighest mark

Tata Consultancy Services Indian Hotels

Other factors

Challenges

Strategy

Parameter


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Product Scope

Geographic Scope

Integration of entities

Other Factors

B2B offerings: Commercial finance, infrastructure finance, leasiTech Finance, PE, Investment Banking

B2C Offering: Consumer Finance & Wealth Management

Headquarters in Mumbai & branches in more than 100 cities in International operations through offices in London and Singapo

Subsidiaries like Tata Capital Financial Services Limited, Tata SeTata Cards, etc.

Tata Securities acquired Tata Capital Markets Limited in 2011 Advantages of synergetic linkages & commonality of business i

Strong alliance and partnership contracts within the subsidiariehas outsourced the client acquisition platform in the form of BP

Parameter Tata Capital Limited


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TATA CHEMICALS

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

Product Scope

Living essentials - Tata Salt , TataSwach

Industrial essential - Soda ash , sodiumbi carbonate , caustic soda, chlorine

based products, bromine basedproducts

Farm essentials - Fertilizers

Geographic scope 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 chainthat can service customers across the globe

Vertical sc Tata Chemicals a

General ChemicaUSA

Over 50 per centthe natural routemore economicaAsh than the syn


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TATA CHEMICALS

Current Challenges

Indirect control over fertilizer price Uk and Kenyahigh energy cost and

pension fund liability

Future Sco

Restructured the UK buthe soda ash facility. Thneeds reconfiguration o

The agri segment has bbest performers in the Ithus they need to invest

up with nutraceutical Due to rapid urbanizatio

drive of consumers towand branded products fproducts.


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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 co

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

MarketGrowth

Market Share

Low

High

LoHigh

Tata Tea,Tata Coffee

Starbucks Coffee Company ATata Alliance,Tetley

Tetley Black Tea

Tetley Green Tea,Eight O Clock Coffee

JEMA


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TATA GLOBAL BEVERAGES

Product Scope

Living essentials - Tata Tea, Tetley,Good Earth Teas, JEMA,Starbucks Coffee Company, Eight OCoffee

Industrial essential Tea leaves, Coffeebeans

Farm essentials - Fertilizers

Geographic scope

Manufacturing facilities in Karnatakaand Kerala in India

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

Vertical sc

The company India and Sri Lin Assam, Wesand Kerala in t

Tetley has accproduction ba

Competitors

Lipton Brooke Bond Nestle Sara Lee Unilever Regional Competitors

Competitive Advantage

One of the largest companies in theworld

Brand Loyalty Distribution channels

Opp

Unexploited Increasing m

youth


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TATA GLOBAL BEVERAGES

Current challenges

Shrinking volumes and mounting advertising andpromotion spends pose challenges to profitability in

Tata Global Beverages' international tea and coffee

operations

There is competition from the local tea brands that are

acquiring market share from Tata Global Beverages

There is a decline in the growth of black tea market

Future scop

Introduction of product categoriGluco Plus has done to increase i

To increase market share amon

introduce low fat tea variants an

The decline in the black tea

opportunity to create a differenthe regular milk tea like making

tea or with friends

Promotion of Tata beverages at S

Exploitation of rural markets

increase market share


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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

Power Generation, Green Energy,

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

Geographic scope 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 withThe Royal Government of Bhutan

Vertical s Thermal and H

storage units through its su

Trust Energysand fuel tradin

Operations anProjects

Shipping and


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Tata PowerChallenges

Major Projects in process of deveeither based on hydro or enginee

Improved opportunities in the arrenewable energy such as solar a

Sustainability- Club Enerji

Green Energy Development

Increase in coal prices

Policies regarding Coal Import

Vertical Scope

Thermal and Hydro Projects requirepumped storage units and coal mines inIndonesia through its subsidiaries

Trust Energys core business is fuellogistics and fuel trading for the TP Group

Operations and Maintenance of PowerProjects

Shipping and Logistics

Competition

Reliance Power

NTPC

Adani Power

Opportunities

Increase in the demand for Pow

Non Conventional Sources for P

Expansion into third world counglobally


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Competitive Advantage

Exposure to HydroPower

Base in Mumbai

Risks

Changing EnvironmentConcerns

Investment in coalmines provides astrong natural hedgeas it stands to benefitfrom any increase in

coal prices (the currenttrend) but may notnecessarily lose if theprices fall (as the coalcan be used in house).

Sugg

Seeking incapacity tprojects, InternatioacquisitioExpansion

Seeking b

integratioacquiring Berths

Growth inBusinesse

Tata Power


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Tata Steel

Product Scope

Flat products Hot rolled, Cold rolled,Metallic coated, Pre-finished steels,Electro-plated steels

Long products Rail infrastructure, wires,

SectionsConstruction products for walls, roofs,modular, floors, structural steel

Agricultural implements

Bearings

Geographic scope

Manufacturing facilities in 26countries including Australia, China,

Geographic distribution of revenue India-30%, Asia-13%, Europe-52%,Rest of World 5%

Vertica

Electrical steels by

PowerResearch on Non-gSteel

Indian multinational steel-making company headquartered in Mumbai, MaharashIndia with a turnover of Rs. 148614 Crores in 2013-2014

11THlargest steel producing country in the world


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Tata Steel

Challenges

Volatile raw material prices Systemic weakness in demand in key

markets due to overhang of the economiccrisis and significant overcapacity

Future Scope

Leverage its European success inunexplored markets of Europe

Update its technology to ensurecontinuous raw material supply

Construction steels should be promore due to increased governmespending and signs of revival of

construction sector is visible Increase production in Australian

subsidiaries due to increased dem

Expansion in other areas to reductransportation cost


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Tata Engineering

Product ScopeEngineering consultancy services

(TCE);

Automobile sector (Tata Motors);

Air Conditioning solutions (Voltas);

Material handling and Constructionequipments (TRF)

Geographic Scope

Tata Motors presence in Europe,North America, China, Russia and

Brazil apart from India;

TCE is present in emerging marketsof middle-east, Africa and the US.

Voltas has pan-India presence andglobally in UAE, Qatar, Saudi Arabia

and Singapore

VerticaTML Drivelines

axles

80% stake in Tdesign

TDCL suppdistribut


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Inorganic Growth Strategy

Tata Motors

Jaquar Land Rover luxury car segment Tata Cummins 50:50 JV between Tata

Motors and Cummins, US manufacturesdiesel engines for Tata Motors medium andheavy CVs

TAL manufacturing solution 100%subsidiary of Tata Motors providesmanufacturing engineering services

Tata Hitachi Construction Machinery- 60:40JV between TM and Hitachi ConstructionMachinery supplies a range of constructionequipments

Tata Consulting Eng

Acquisition of Ecofirst servicsustainability solutions for benvironments

Strategic relationship with Aenhance value to its buildinginfrastructure customers


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Challenges

Tata Motors

Subdued demand ofCVs and PVs

High costs due tostringent emissionnorms & rise in fuel

costs

Economic slowdownin China, UK and

Europe

Tata Consulting

Engineers

Balancing customerrequirements &

existing capabilities

Slowing growth inIndian power sector

Strict govtregulations in

infrastructure sectorglobally

Future Sc

To meet the subdued demandTata Financial Services can s

business to enable affordabil

TM can utilize the design faimprove upon its existin

Voltas and Ecofirst can workto provide holistic gree


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Major Recommendations for the Group

Acquisition of Steel Plants and Solar Energy Plants in untapped markets of EuMiddle 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

Documents

Tata Group_Group 2