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

1. GROUP-5RocquelCarrecterAmanda RichardsonJoshua StandiferSugamRijalYashikiya HarleyEdwina Russaw CASE-ANALYSES PRESENTATION“House of Tata: Acquiring a Global Footprint”

2. BACKGROUND& SITUATIONAL ANALYSES

3. History • Founded as a Trading firm in 1868. • Family business: • Current CEO: Ratan Tata • From Textiles to Commercial Vehicles:

4. House of Tata: Tata Company as a Conglomerate:

5. 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………………..

6. World’s Smallest Car

7. 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???

8. Daewood Commercial Vehicles

9. ISSUES

10. Should Tata Motors contemplate for bidding for Land Rover and Jaguar? • 1. Foreign Competition • 2. Market and Product Range • 3. Losses • 4. Expenditures

12. PERSPECTIVEs

13. Perspectives • Don’t put all of your eggs in one Indian basket!

14. Porter’s Five Forces

15. 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

16. 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

17. The Competition looks good

18. KNOWLEDGE

20. 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

21. 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

22. McKinsey 7s Framework • Systems: • lean manufacturing • Flexible Mass Production • Waste Minimization • Continuous Improvement • Assets, Operations and Systems platforms

23. 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

24. Acquisition Philosophy: • Target Characteristics • Research • Risk Assessment • Funding • Disposal to reduce debts • Elimination of excess overhead • Creation of incentives

25. ACTIONS

27. Tata Global Focus • Tata had to create complements of resources to overcome some of the disadvantages of being newcomers into the automotive car business.

28. 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

29. 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

30. 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

31. Consequences

32. 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

33. 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

34. 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

35. Updates:

36. Market Share of Luxury Cars in America