Description
Taata group strategy through –Domestic expansion, De-integrated strategy, Mature market M&A, Raw materials security, Downstream products, Logistics control
What is your assessment of the Globalization Strategies of the Tata Group Operating Companies , particularly Indian Hotels, Tata Tea and Tata Steel.
Q1.
Indian Hotels
• Strategy
– Incremental approach to international expansion
• Approach
– Strategy from Outright ownership to Small equity positions
• Focus areas
– The key focus areas were renovation, brand building, technology and people training – Focus on higher end properties befitting Taj
Q1.
Tata Tea
• Approach
– Used M & A as a tool of transformative internationalization
• Focus areas
– Realize the synergies of acquisitions – Senior management retained
• Major acquisition
– Acquired UK based Tetley in Feb 2000
Q1.
Tata Steel
• Approach – Growth through 6 connectors
– Domestic expansion – De-integrated strategy – Mature market M&A – Raw materials security – Downstream products – Logistics control
• Major acquisition
– The Corus Acquisition
Q1.
Tata Steel
• Approach – Growth through 6 connectors
– Domestic expansion – De-integrated strategy – Mature market M&A – Raw materials security – Downstream products – Logistics control
Expand production in India, in Jamshedpur where the company’s entire production capacity was based
• Major acquisition
– The Corus Acquisition
Q1.
Tata Steel
• Approach – Growth through 6 connectors
– Domestic expansion – De-integrated strategy – Mature market M&A – Raw materials security – Downstream products – Logistics control
Supply India sourced raw and semi- finished materials to finishing facilities closer to consumer end Markets
• Major acquisition
– The Corus Acquisition
Q1.
Tata Steel
• Approach – Growth through 6 connectors
– Domestic expansion – De-integrated strategy – Mature market M&A – Raw materials security – Downstream products – Logistics control
Acquire companies in advance markets to improve R & D operating practices
• Major acquisition
– The Corus Acquisition
Q1.
Tata Steel
• Approach – Growth through 6 connectors
– Domestic expansion – De-integrated strategy – Mature market M&A – Raw materials security – Downstream products – Logistics control
vertical integration made it the world’s lowest cost steel producer
• Major acquisition
– The Corus Acquisition
Q1.
Tata Steel
• Approach – Growth through 6 connectors
– Domestic expansion – De-integrated strategy – Mature market M&A – Raw materials security – Downstream products – Logistics control
Moved into value added product segments and sell branded steel products
• Major acquisition
– The Corus Acquisition
Q1.
Tata Steel
• Approach – Growth through 6 connectors
– Domestic expansion – De-integrated strategy – Mature market M&A – Raw materials security – Downstream products – Logistics control
Established the JV with shipping company.
• Major acquisition
– The Corus Acquisition
Q1.
Tata’s Globalization strategy
• New Product development • Merger & Acquisitions • Partnership with established companies to enhance product portfolio and knowledge exchange • Developing programs from intensive management development
Q1.
Q1.
Conclusion
The strategy of TATA group operating companies are more in terms of market extension merger
Q1.
What is your assessment of the role of the Tata Group Center in globalization?
Q2.
Need for Group Center
• Centralization of Tata group. • Need to acquire firms bigger than operating Tata companies.
Q2.
Role of Group Center
• Mr. Alan Rosling and Mr. Arun Gandhi were hired. • Establish offices in key markets • To coordinate government and media relation. • Tata brand promotion and procurement. • Bring together representatives of different operating companies working in same country.
Q2.
Contd..
• Internationalization of common business processes. • The group also helped Tata operating company as well as the acquired firm during the process. • Integration committee after acquisition.
– Project Prune
Q2.
Project Prune
• Cost saving initiative Project Prune => To look at procurement cost across group companies and negotiate with providers to supply the best deals to all Tata companies. • Economies of scale
Q2.
Conclusion
• To smoothen the M &A • To provide the financial muscle power during acquisition of a larger firm. • Increase the visibility of Tata group as a whole.
Q2.
Should Tata Motors bid for Ford’s Jaguar and Land Rover units as part of its globalization efforts? What are the pros and cons?
Q3.
Pros
• The acquisition would bring in a global footprint for Tata Motors. • Easy Entry into US market • Portfolio Enhancement: - 2 well known global brands - Advanced Technology - Better market distribution channels
Q3.
Cons
• Difficult conditions for acquiring: - Ford would maintain a minority stake after the sale - Common factory and business processes for both the brands • Jaguar was the biggest contributor to losses for PAG(A higher end cars of Ford) • The primary objective for Globalization was mitigating the risk, which was not the case in this acquisition. • Poor Operating profitability might lead to long pay back periods
Q3.
Cons
• Tata’s expertise in passenger cars is limited • High cost of maintaining existing infrastructure • Unlike Tata’s focus on medium they are premium brands.
Q3.
Need for Strategic Interdependence
High Low
Symbiosis
High
Preservation
Need for Organizational Autonomy
Low
Absorption
Holding
Q3. Acquisition Integration Approaches model of Philippe Haspeslagh and David Jemison
Conclusion
• Acquisition might not be beneficial. • No complete autonomy as Ford would still have a minor stake in the company • The acquisition would involve a lot of risk
Q3.
Thank You
Global Strategy Framework
• • • • Identify Business unit Evaluate Industry potential for globalization Evaluate current extent of globalization Identify strategic need for change in the extent of globalization • Evaluate organizational / internal factors • Identify organizational ability to implement globalization • Diagnose scope and direction of required changes
Q1.
doc_223810078.pptx
Taata group strategy through –Domestic expansion, De-integrated strategy, Mature market M&A, Raw materials security, Downstream products, Logistics control
What is your assessment of the Globalization Strategies of the Tata Group Operating Companies , particularly Indian Hotels, Tata Tea and Tata Steel.
Q1.
Indian Hotels
• Strategy
– Incremental approach to international expansion
• Approach
– Strategy from Outright ownership to Small equity positions
• Focus areas
– The key focus areas were renovation, brand building, technology and people training – Focus on higher end properties befitting Taj
Q1.
Tata Tea
• Approach
– Used M & A as a tool of transformative internationalization
• Focus areas
– Realize the synergies of acquisitions – Senior management retained
• Major acquisition
– Acquired UK based Tetley in Feb 2000
Q1.
Tata Steel
• Approach – Growth through 6 connectors
– Domestic expansion – De-integrated strategy – Mature market M&A – Raw materials security – Downstream products – Logistics control
• Major acquisition
– The Corus Acquisition
Q1.
Tata Steel
• Approach – Growth through 6 connectors
– Domestic expansion – De-integrated strategy – Mature market M&A – Raw materials security – Downstream products – Logistics control
Expand production in India, in Jamshedpur where the company’s entire production capacity was based
• Major acquisition
– The Corus Acquisition
Q1.
Tata Steel
• Approach – Growth through 6 connectors
– Domestic expansion – De-integrated strategy – Mature market M&A – Raw materials security – Downstream products – Logistics control
Supply India sourced raw and semi- finished materials to finishing facilities closer to consumer end Markets
• Major acquisition
– The Corus Acquisition
Q1.
Tata Steel
• Approach – Growth through 6 connectors
– Domestic expansion – De-integrated strategy – Mature market M&A – Raw materials security – Downstream products – Logistics control
Acquire companies in advance markets to improve R & D operating practices
• Major acquisition
– The Corus Acquisition
Q1.
Tata Steel
• Approach – Growth through 6 connectors
– Domestic expansion – De-integrated strategy – Mature market M&A – Raw materials security – Downstream products – Logistics control
vertical integration made it the world’s lowest cost steel producer
• Major acquisition
– The Corus Acquisition
Q1.
Tata Steel
• Approach – Growth through 6 connectors
– Domestic expansion – De-integrated strategy – Mature market M&A – Raw materials security – Downstream products – Logistics control
Moved into value added product segments and sell branded steel products
• Major acquisition
– The Corus Acquisition
Q1.
Tata Steel
• Approach – Growth through 6 connectors
– Domestic expansion – De-integrated strategy – Mature market M&A – Raw materials security – Downstream products – Logistics control
Established the JV with shipping company.
• Major acquisition
– The Corus Acquisition
Q1.
Tata’s Globalization strategy
• New Product development • Merger & Acquisitions • Partnership with established companies to enhance product portfolio and knowledge exchange • Developing programs from intensive management development
Q1.
Q1.
Conclusion
The strategy of TATA group operating companies are more in terms of market extension merger
Q1.
What is your assessment of the role of the Tata Group Center in globalization?
Q2.
Need for Group Center
• Centralization of Tata group. • Need to acquire firms bigger than operating Tata companies.
Q2.
Role of Group Center
• Mr. Alan Rosling and Mr. Arun Gandhi were hired. • Establish offices in key markets • To coordinate government and media relation. • Tata brand promotion and procurement. • Bring together representatives of different operating companies working in same country.
Q2.
Contd..
• Internationalization of common business processes. • The group also helped Tata operating company as well as the acquired firm during the process. • Integration committee after acquisition.
– Project Prune
Q2.
Project Prune
• Cost saving initiative Project Prune => To look at procurement cost across group companies and negotiate with providers to supply the best deals to all Tata companies. • Economies of scale
Q2.
Conclusion
• To smoothen the M &A • To provide the financial muscle power during acquisition of a larger firm. • Increase the visibility of Tata group as a whole.
Q2.
Should Tata Motors bid for Ford’s Jaguar and Land Rover units as part of its globalization efforts? What are the pros and cons?
Q3.
Pros
• The acquisition would bring in a global footprint for Tata Motors. • Easy Entry into US market • Portfolio Enhancement: - 2 well known global brands - Advanced Technology - Better market distribution channels
Q3.
Cons
• Difficult conditions for acquiring: - Ford would maintain a minority stake after the sale - Common factory and business processes for both the brands • Jaguar was the biggest contributor to losses for PAG(A higher end cars of Ford) • The primary objective for Globalization was mitigating the risk, which was not the case in this acquisition. • Poor Operating profitability might lead to long pay back periods
Q3.
Cons
• Tata’s expertise in passenger cars is limited • High cost of maintaining existing infrastructure • Unlike Tata’s focus on medium they are premium brands.
Q3.
Need for Strategic Interdependence
High Low
Symbiosis
High
Preservation
Need for Organizational Autonomy
Low
Absorption
Holding
Q3. Acquisition Integration Approaches model of Philippe Haspeslagh and David Jemison
Conclusion
• Acquisition might not be beneficial. • No complete autonomy as Ford would still have a minor stake in the company • The acquisition would involve a lot of risk
Q3.
Thank You
Global Strategy Framework
• • • • Identify Business unit Evaluate Industry potential for globalization Evaluate current extent of globalization Identify strategic need for change in the extent of globalization • Evaluate organizational / internal factors • Identify organizational ability to implement globalization • Diagnose scope and direction of required changes
Q1.
doc_223810078.pptx