Transcript File - Joshua M. Standifer E-Portfolio

CASE-ANALYSES PRESENTATION
“HOUSE OF TATA: ACQUIRING A GLOBAL
FOOTPRINT”
GROUP-5
Rocquel Carrecter
Amanda Richardson
Joshua Standifer
Sugam Rijal
Yashikiya Harley
Edwina Russaw
BACKGROUND & SITUATIONAL ANALYSES
History
 Founded as a Trading firm in
1868.
 Family business:
 Current CEO: Ratan Tata
 From Textiles to
Commercial Vehicles:
House of Tata:
Tata Company as a Conglomerate:
Acquiring a Global Footprint:
 Tata Tea:
 Tata Steel:





Tetley Tea from U.K.
Corus Steels from
U.K
Indian Hotel:
USA
Tata Chemicals:
U.K.
Tata Coffee:
U.S.A
Tata Sons:
And………………..
Ritz-Carlton-Boston from
Brunner Mond from
8 o’clock coffee from
Energy Brands from U.S.A
World’s Smallest Car
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???
Daewood Commercial Vehicles
ISSUES
Should Tata Motors contemplate for
bidding for Land Rover and Jaguar?
o 1. Foreign Competition
o 2. Market and Product
Range
o 3. Losses
o 4. Expenditures
PEST Analysis
Regulations
VALS-Survivor
Category
Economic
Downtown
Advanced
Products
PERSPECTIVES
Perspectives
 Don’t put all of your eggs in one Indian
basket!
Porter’s Five Forces
Perspectives From Porter’s View
Barriers of Entry
 Time and Cost of
Entry
 Cost advantages
 Technology
Buyers
 Differentiation
 Buying Volumes
 Price Elasticity
 Differentiation
 Buying Volumes
 Price Elasticity
Perspectives From Porter’s View
 Competitive Rivalries
 Suppliers
 Number of Competitors
 Number of Suppliers
 Switching Costs
 Size of Suppliers
 Diversity of Competitors
 Unique Product
 Industry Concentration
 Substitutes
 Substitute Performance
 Cost of Switching
 Buyer Willingness
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 process
in the organization:
 From point A to point B.
GDP
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
 DecentralizationAutonomous
 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 resources
to overcome some of the disadvantages of
being newcomers into the automotive car
business.
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
 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
 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
CONSEQUENCES
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
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
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