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Tata Case Study

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CASE STUDY : TATA, STEELING ITSELF FOR THE

FUTURE
MBA16B
GROUP 1
Anas
ARHBAL

Mohamed
EL KAMALI

Azzeddine
OULAHRIR

Module: Mergers, Acquisitions and Alliances


By : Professor Duncan ANGWIN
Program: ENPC-EHTP MBA

Youness
HRA

Moha
ER-RICH

16/01/2015

TATA COMPANY
96 operating companies
Active in 54 countries

Revenues of USD 28.8bn


2.9% of Indias GDP

Employees: 330,000 people

A SHORT HISTORY OF TATA

KEY MARKET SECTORS

Chemicals

PESTEL ANALYSIS

Economics

Politics

Technology

2007 World recession but


good GDP growth in India.
Lack of investments
Unemployment

Government infrastructure
investment in India
Regulation: Import and
export rates and tariffs.
Foreign equity investment up
to 75%

R&D (Nano cars)


Boom of e market

Ecology

Social

Legal

Power of the green political


parties
Awareness of reduction of
CO2 emission and pollution
(Steel and car industries / Eco
cars...)

Global corporate social


responsibility policies

Due to political climate,


laws are able to change
(Labor rates, forex...)

ANSOFF MATRIX

PROS & CONS OF SINGLE & DIVERSIFIED BUSINESSES

Single Business:

+ Expert
+ Clear identity
- Risk

Diversified Business:

+ Spreading risk
+ Increased opportunity
- Complexity / management

WHY TATA CONTINUE WITH DIVERSIFICATION STRATEGY TODAY?


Risk reduction and/or spreading
Escape from business crisis
Stability of profit flows

To make use of surplus cash flows


Large cash balances attract corporate raiders

To build shareholder value


Create synergy among the businesses of a firm
Make 2 + 2 = 5: The whole should be greater than the sum of the parts

TATA Leaders Believe


The group can survive on the world stage only by being both too big to beat
and too good to fail

TATA PARENTING ADVANTAGE

Organization

Culture

Operations

TATA PARENTING ADVANTAGE

1. Culture
The parenting is done in a Partnering Mode.
TATA has made a lot of efforts to understand the local culture of the subsidaries.

2. Operations

Limit the changes in the operations as maximum possible.


Benefit the subsidaries from the strong logistic power
Sharing best practices
Manifacturing excellence.
Cross fertilization of R&D.

TATA PARENTING ADVANTAGE

3. Organizationnal level:
SIC Strategic Integration Committee.
Facilitate the integration.
Create a virtual organization across combined business.

Parent
Company

Subsidiary

The both teams are working in


perfect synergy in order to
identify the area of changes.

What types of acquisition are in TATA?


Market Relation

Same

Production
Relationship

Long-linked

Unrelated

Same

Different

Horizontal

Market extension

M&A

(Concentric Technology)
M&A

Vertical backward*

Vertical forward*

M&A

M&A

Product extension

Conglomerate

(Concentric Marketing)
M&A

(M&A)
TATA

TATA MOTORS: BCG MATRIX


High

Growth rate

LUXURIOUS
BRANDS

NANO

Low
High

Low
Relative Market share

TATA MOTORS: PARENTING MATRIX

NANO

JAGUAR
LAND
ROVER

References
http://conceptdraw.com/samples/marketing-salediagrams-matrices
http://www.tata.com/company/articlesinside/HCy
!$$$!RNqd0vk=/TLYVr3YPkMU=

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