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GROUP-5 Rocquel Carrecter Amanda Richardson Joshua Standifer Sugam Rijal Yashikiya Harley Edwina Russaw. CASE-ANALYSES PRESENTATION “House of Tata: Acquiring a Global Footprint”. BACKGROUND & SITUATIONAL ANALYSES. History. Founded as a Trading firm in 1868. Family business:

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case analyses presentation house of tata acquiring a global footprint

GROUP-5RocquelCarrecterAmanda RichardsonJoshua StandiferSugamRijalYashikiya HarleyEdwina Russaw

CASE-ANALYSES PRESENTATION“House of Tata: Acquiring a Global Footprint”

history
History
  • Founded as a Trading firm in 1868.
  • Family business:
  • Current CEO: Ratan Tata
  • From Textiles to Commercial Vehicles:
house of tata
House of Tata:

Tata Company as a Conglomerate:

acquiring a global footprint
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………………..
tata motors
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???
should tata motors contemplate for bidding for land rover and jaguar
Should Tata Motors contemplate for bidding for Land Rover and Jaguar?
  • 1. Foreign Competition
  • 2. Market and Product Range
  • 3. Losses
  • 4. Expenditures
perspectives1
Perspectives
  • Don’t put all of your eggs in one Indian basket!
perspectives from porter s view
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 view1
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
mckinsey 7s framework
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
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 framework1
McKinsey 7s Framework
  • Systems:
    • lean manufacturing
    • Flexible Mass Production
    • Waste Minimization
    • Continuous Improvement
    • Assets, Operations and Systems platforms
mckinsey 7s framework2
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
Acquisition Philosophy:
  • Target Characteristics
  • Research
  • Risk Assessment
  • Funding
  • Disposal to reduce debts
  • Elimination of excess overhead
  • Creation of incentives
tata global focus
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
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
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
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
consequences1
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
consequences2
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
consequences3
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