house of tata ppt
TRANSCRIPT
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CASE-ANALYSES PRESENTATION
“HOUSE OF TATA: ACQUIRING A GLOBAL
FOOTPRINT”
GROUP-5Rocquel CarrecterAmanda RichardsonJoshua StandiferSugam RijalYashikiya Harley
Edwina Russaw
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BACKGROUND & SITUATIONAL ANALYSES
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History
Founded as a Trading firm in1868.
Family business:
Current CEO: Ratan Tata
From Textiles toCommercial Vehicles:
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House of Tata:
Tata Company as a Conglomerate:
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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………………..
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World’s Smallest Car
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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???
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Daewood Commercial Vehicles
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ISSUES
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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
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PEST Analysis
VALS-Survivor
Category
AdvancedProducts
EconomicDowntown
Regulations
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PERSPECTIVES
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Perspectives
Don’t put all of your eggs in one Indianbasket!
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Porter’s Five Forces
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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
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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
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The Competition looks good
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KNOWLEDGE
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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
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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
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McKinsey 7s Framework
Systems: lean manufacturing
Flexible Mass Production
Waste Minimization
Continuous Improvement
Assets, Operations and Systems platforms
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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
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Acquisition Philosophy:
Target Characteristics
Research
Risk Assessment Funding
Disposal to reduce debts
Elimination of excess overhead
Creation of incentives
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ACTIONS
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Tata Global Focus
Tata had to create complements of resourcesto overcome some of the disadvantages ofbeing newcomers into the automotive carbusiness.
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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
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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
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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
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CONSEQUENCES
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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
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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
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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
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Updates:
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Market Share of Luxury Cars in
America