House Of Tata: Acquiring A Global Footprint Harvard Case Solution & Analysis

Q. What is your assessment of the role of the Tata Group in enhancing the competitiveness and the performance of the individual companies? 

Tata group is one of the largest and fastest growing groups in India, which was founded by Jamsetji Tata in 1868, headquartered in India. The House of Tata delivers quality products and services such as hydroelectric power, steel, research capabilities, consultancy services and technical education. The company comprises of more than 270,000 employees and operates over 100 companies. Tata Group has established a Group Corporate Centre or GCC to facilitate the Tata group companies and to make utilize the synergies between the group members.

Moreover, the GGC helped the company in its internationalization process and hired Alan Rosling, as an executive director of GCC in 2004, to coordinate the group’s globalization. Furthermore, the group established offices in key markets such as China, United States, United Kingdom, Bangladesh, and South Africa, in order to coordinate the government and media relations and also the Tata brand promotions and procurement. The objective of establishing overseas group operating companies is to gain competitive and customers' advantage in the long run, and to prosper the growth of the company.

The role of the group is to leverage the opportunity and bring the representatives of different companies in the same country to identify the mutually beneficial initiatives. GCC made the TATA group as a unified corporate entity and provided a venture capitalist type of support to the individual companies. The GGC provides numerous resources and capabilities including financial and non-financial to individual companies. Moreover, the group established an integration committee to help combine the entities and realize synergies.

Furthermore, the group provided some centralized functions to the individual companies and also helped the new and existing member companies to synergize their resources and capabilities for the overall benefit of the Tata group as a whole. However, due to the decentralized nature of Tata group, it was not able to successfully implement the group’s standards and practices through all operating companies and acquisition. Therefore, the company established various strategies to remain competitive such as cost-saving initiatives, quality products and services, and global expansion.

Q. Why did Indian Hotels, Tata Tea and Tata Steel (member companies of the Tata Group) decide to pursue international expansion at the (different) times?

Indian Hotels Company (IHC), a parent of the group hospitality businesses, is the earliest among the all other group companies to begin globalizing its business. The overall preferences of the company were the small equity positions with a management contract for international expansion. Moreover, the company developed an expansion strategy and took an incremental approach to expand its business internationally, in order to gain competitive and customer’s advantage in the long run. The reason to go on a global platform is that the company was facing financial losses from the acquired properties outside the home country. Furthermore, the strategy of the company is to focus on higher-end properties befitting the Taj brand.

Tata Tea was facing slow growth as well as low market share in the tea industry in India, therefore, the company decided to expand its business internationally to pursue growth and profit in the long run. Moreover, the company acquired Tetley, which is much larger than Tata tea, in order to gain more market share. Furthermore, in order to seek growth opportunities, the company acquired Good Earth, a specialty tea company in the United States, to capture the flavored and herbal tea consumer market.

In the 1990s, Tata Iron and Steel Company faced various problems after the government programs of liberalization began. Therefore, the company acquired many steel companies to improve its competitiveness and also help to stand as a global competitor. Moreover, this strategy helped the company to be the 6th largest steel maker industry. Furthermore, the strategies to acquire Corus and other companies in globalized markets led TATA to enhance its research and development capabilities as well its operating process.

The Indian Hotel Company is an example of institutional consideration by acquiring two adjacent properties in London such as Buckingham Gate and St. James Court Hotel. On the other hand, the Tata Tea and Tata Steel are an example of resource-based consideration of acquiring the different brand and increasing its resource advantage. Moreover, the strategy of the group operating companies is more towards the market extension merger.......................

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