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Tata Group Growth Strategies

Executive Summary

Tata Group is a growing multinational conglomerate of India. It has number of business portfolios that helps the organization to shift risk of loss to different business. The growth strategies of Tata include the organic growth and inorganic growth. The management of Tata is looking for the big moves in international market. The new government is taking economic reforms that provide new opportunities of investment in the local and foreign markets. On the other hand, the policies of the Modi’s administration are also attracting the foreign investors in India. Tata is mostly focusing on the co-generic acquisition strategy. This helps the organization to grow in international market. Moreover, the innovation strategies and commitment with customers makes the organization to expand its business in different markets. The local operations of the company are more customer-oriented. Tata Group is focusing on providing the international standards and quality of products and services to its local customers at lower prices. From the past decade, Tata Group has rejuvenating existing business, expanding into foreign markets, entering new ones, manufacturing breakthrough products and innovations in different markets among the initiatives the group during the period. In addition, Tata has to improve the network, increased reliability and also to give better customer service. These will help the organization to increase the market share in international market. The fundamental center of the association was on the inorganic development that helps the association to extend its business in the worldwide markets. Then again, the inorganic procedures incorporate the merger, joint endeavors and the acquisitions of alternate organizations and business that are comparable in the business with Tata.

 

Table of Contents

Introduction. 3

Global Goals. 5

Tata’s Growth Strategies. 5

Organic Strategies. 6

Inorganic Strategies. 7

Assess the strategic changed management in Tata. 9

Critical Analysis of the Tata’s innovation strategies. 10

Risk Management 11

Conclusion. 12

References. 14

 

 

 

 

 

 

 

 

 

Introduction

The Tata Group is an India multinational conglomerate founded in 1868 in Mumbai. The international recognition gained after the purchasing several global and intentional companies. Tata is one of the largest company and conglomerates of India. The start of the 1990s, the business in India was rapidly grown. The economic reforms opened many doors in many sectors (Chatterjee, 2015). This also helped to increase the competition and the arrival of the foreign companies and investors in India. From the past decade, Tata Group has rejuvenating existing business, expanding into foreign markets, entering new ones, manufacturing breakthrough products and innovations in different markets among the initiatives the group during the period. On the other hand, in year 1996, Tata Teleservices was set up to tap Indian market and telecom industry.

The pursuit of business excellence has become the values and norms that pay attention on innovation. In addition, the group does not have any kind of the compromise on ethical business practices. The Group is committed with the environment in which it is operating. Moreover, the growth strategies of the Tata make this Group famous and a multinational company (Crabtree, 2014). Mostly the growth strategies of the company include the merger and acquisition for the expansion of the business. The business of the Tata operates independently under the supervision and guidance of own board of directors and shareholders. The Tata companies Includes:

  • Tata Steel
  • Tata Consultancy Services
  • Tata Power
  • Tata Global Beverages
  • Tata Motors
  • Indian Hotels Company
  • Titan
  • Tata Chemicals
  • Tata Teleservices
  • Tata Communication

Moreover, in the consumer market, the company is trying to make the low cost and high quality products to capture the large market share and to attract the customers. The Tata Group is offering its products and services at lower price (Dheera, 2014).

Global Goals

This century has seen Tata companies looking beyond the shores of Indian for growth opportunities and to become a well-known company in global market. The main growth strategy for Tata is acquisitions of foreign business. In 2000, the Tata Tea made its first acquisition of Tetley (Duggan, 2011). After the four years in 2004, Tata acquired the heavy vehicles units of Daewoo motors and then Tata Steel acquired the Singapore-based NatSteel. In addition, Tata Chemicals secured a controlling shareholder in Burnner Mond Group, UK. Besides all this, the largest acquisition happened in 2007 by acquiring the Anglo-Dutch Corus by Tat steel. This shows that the expansion and growth strategy of Tata group is primarily focus on the acquisition of the other companies. In addition to this, the Tata Motors added Land Rover and Jaguar brands to make its position stable in the open market competition (Ekins, 2000).

Tata’s Growth Strategies

There are different levels of the strategies that are made for the progress and success of the organization. These are three levels of the strategies at which the strategic actions has determined to compete with competitors in the market (Kumar, 2014). These are corporate strategies, Operational strategies and the business unit strategies. The corporate strategies are those that a company is doing business. The business unit strategies are those that are used to track the competition and make policies according to the local market and targeted segmentation of the customers. The third and the last one are operational or functional strategies that are made to implement the policies and new tactics to run the operations of the business (Quarterly, 2005).

Tata Group is mostly used two types of the growth strategies. The growth strategies are those that help a business to expand in the local and international market. These strategies are made at corporate level and business level (Velayanikal, 2015). Mostly the Tata is using the Merger and acquisition as the growth strategy in the market. With the observation of the past perforce, the most suitable growth strategy of Tata Companies is the acquisition. The growth strategies are made at the corporate level. Therefore, the companies made expansion with the strategy is made at the corporate level or the directors are involved in the decision making of the strategy or growth opportunity (icmrindia.org, 2012).

Organic Strategies

The success of the Tata Group is due to implementation of organic strategies within the organization. The organic strategies include the innovation and the expansion of the product lines. The Tata is investing in the steel business and expand the plants to other cities (icmrindia.org, 2012). The company is planning to the set and invests more in the organic expansions. For this purpose they are expanding Tata Steel at the Kalinganagar plant in Odisha. Moreover, the organic expansion also relates with Jaguar Land Rover (JLR) brand in Brazil and China. In addition to this, Tata Motors introduced the cheapest car of the world “Tata Nano” for its customers and the market (indianbusiness, 2015). This is happened with the help of the innovation and research & development. On the other hand, the policies and economy reforms helps the company to grow more in the local as well as international market. After becoming the member of the BRIC economy corridor, India is attracting the foreign investors in the country (indianbusiness, 2015). This supports the growth strategies of Tata in the country.

In simple words, the organic strategies of Tata include the product development and innovation. The main focus of the company is to provide the cheapest local products and services. In addition, Tata Motors is also acquiring the heavy vehicles Daewoo (invest, 2009). The Tata motors are manufacturing the trucks for transportation, buses exports to adjunct areas like Bangladesh and Sri Lanka, cars and urban transports. However, after the acquisition of Corus, Tata Group increases its investment in organic strategies as compare to inorganic strategies. The company is investing more in innovation and product development that helps to maintain the financial position of the company. Tata Motors is establishing a strong position in the automobile industry of India. This is just because of focusing more on the organic strategies (tata, 2015).

Inorganic Strategies

The inorganic growth strategies are those strategies in the operations of the business that arises from the takeovers, mergers and the acquisitions of the other companies or business enterprises. This is not includes the core activities of the business (tata.com, 2015). This is about the taking of another business or the corporation in order to expand the business of the company units. The inorganic strategies of Tata group include:

  1. Acquisition
  2. Merger
  3. Joint venture

These inorganic strategies help the Tata Group to enter into new markets and increase the area of the target customers. The acquisition of the generic company like Tata Motors acquire the Jaguar Land Rover and Tata Tea acquire Tetley helps to cut down the competition in the market. On the other hand, this also helps the organization to grow and consolidate in size instantly (Chatterjee, 2015). In organic strategies are those strategies that increase the size of a group, company or corporation in the market. This is very beneficial in global markets. On the other hand, this also helps the organization to enhance learning of the employees. On the other hand, the organization employs new technology in context of improved products, processes and human capital (Crabtree, 2014).

In simple words, the inorganic strategies are made for external growth of the organization. For this purpose, huge investment is required by the company to purchase the business of others. On the other hand, this will increase the area, customers, and market share and product differentiation in the market. The Tata is mostly acquires the conglomerate and the co-generic business (Ekins, 2000). For example, Tata motors acquire the Daewoo, Jaguar Land Rover and also manufacturing its own cars and vehicles for local and international markets. Same as the Tata tea is also acquires another tea manufacturing company Tetley. In addition to this, the turnaround strategy is also made at the corporate level under the inorganic strategy. This strategy helps the company to make some feasible and strategic moves.

For example, Tata power Delhi Distribution by winning heats and changing the mindsets and behavior of the customers with improved technology and commercial savvy. The main focus of the Tata is on the innovation both in the organic and inorganic strategies.

Assess the strategic changed management in Tata

The necessary thing for the expansion and growth of the business is the structure and the environment of the organization. Due to advancement in the technology, the trends and climate of the markets at local and international level is changing rapidly. For a company, this is mandatory to adopt and adapt change in order to remain in the business (Quarterly, 2005). This is also mandatory to competition in the intense competition. The multinational companies have the flexible structure within the organization. The reason is that these will the organization and management to implement the change according to the need. Tata Group is growing global. Therefore, the structure of the organization is flexible. However, it has to manage the change in the organization. This is very difficult and complex task to remove the resistance by employees in change process. This is the responsibility of the lower manager to execute the plans and policies of the change. The working environment and communication channels influences and impacts on the process of change within the organization (Velayanikal, 2015). There are number of problems and challenges are associated with the change management.

The strategic change management becomes feasible with the organizational level strategies of Tata. For this purpose, organization has developed a Tata Management Training Centre. There are number of the programs run in this centre about the development of the employees, training and change management within the organization (indianbusiness, 2015). This is primarily the in-house training centre for the Tata Group. This management training centre helps to meet corporate development and learning needs of the employees and acts as cradle of change for the executives of Tata. The successful implementation of the change policies are the duties and responsibility of the effective and efficient leadership. The executives give training on different types of the methods and techniques for the execution of the plans and strategies within the organization. Moreover, this also helps the management to eliminate the fear of change from the employees so that they accept the change instead of resistance (tata, 2015).

In addition, the Human Resource Development Program was launch in 2006 for the recognition of the specialist roles and corporate leadership that HR managers are required to fulfill. The role of HRDP is to find the new talent from the institutes of India that are capable to perform best with interest and commitment. The diverse workforce in the organization is also necessary because it provides a knowledge sharing and learning environment of the organization (tata, 2015). This supports the process of the change management in the organization. On the other hands, the human capital and the unique resource are used to transform the capabilities of organization into strategies during the change management. On the other hand, the HRDP in association with Tata Management Training Centre performs the sub-functions like sourcing, recruitment, performance management system, employee relations, community development and training and development of the employees.

Critical Analysis of the Tata’s innovation strategies

The success factor of the Tata Group is the corporate level strategies. The main focus of the organization was on the inorganic growth that helps the organization to expand its business in the global markets. On the other hand, the inorganic strategies include the merger, joint ventures and the acquisitions of the other companies and business that are similar in the business with Tata. Now the company is also planning to pay attention on the organic growth that includes the expansion of the products in the new markets and the new precuts development. Moreover, the Tata is investing more in the innovation.

The very familiar example of the innovation and the commitment of the Tata is the manufacturing of the Tata Nano. This is the cheapest car in the world. The automobile engineers made research and develop a new car for the local customers (Quarterly, 2005). The price of the case determines that Tata management is committed with its goals and missions and adopting the customer-oriented strategies. This car makes the customers to buy this at lower price. Moreover, this economical car disturbs the market of other competitors like Toyota and Honda in India. In addition to this, the acquisition of the Jaguar Land Rover by Tata also helps to turn the competition in favor of Tata group.

The main focus of the innovation strategy is to provide the high quality and enhancing the customer satisfaction. On the other hand, the principal goals of Tata are to achieve the international quality standards for the core products of the services and products (tata, 2015). Moreover, there are numerous quality improvement programs both internally and externally run to achieve its goals. The Tata Consultancy Services are the also the big capital expenditure portfolio that helps the customers other departments on various things related with improvement of the business (Crabtree, 2014).

Risk Management

In the business the risk is the fundamental factors that involves in it. The risk is the main factor that puts in consideration by the management to overcome and to make the strategies accordingly. The risks increase when the organization approaches to the international market. The external factors in global markets are difficult to assess (Genicot & Ray, 2003). However, Tata is doing well in the global as well as the local market. The risk is managed by rotation and sharing the burden. Tata Group is running the business portfolio therefore; the risk is controlled with different types of the organic and inorganic growth in the market. The differentiation strategy helps Tata to get benefits from the large pool of skills and experience. The customers, market position, sales and assets are quickly acquired immediately by the corporate management. This also helps to reduce the competition in the market (Genicot & Ray, 2003).

Moreover, the focus of management in order to manage the risk is on the defence and infrastructure attempts to capitalize on changes in plans. In addition, about two-thirds of the revenues of Tata come and generated from the international operations. However, from the recent years the Tata has to make more struggles to improve the performance (Velayanikal, 2015). The success of the IT division, company becomes able to get strong global position in revenue and profit growth that minimize risks for the organization. The strategy of the Tata has little more modest than a truly global one. The approach to other geographies has meaningful presence. Moreover, the management is trying to approach those market in the international markets in which they impact more. This will help the organization to management risk.

Conclusion

Tata Group is the multinational company that is playing well in local and international market. The core growth strategies include the acquisition and mergers. For the most part the development procedures of the organization incorporate the merger and procurement for the extension of the business. The matter of the Tata works autonomously under the supervision and direction of own directorate and shareholders. Tata Group is for the most part utilized two sorts of the development methodologies. The development procedures are those that assist a business with expanding in the neighborhood and worldwide business sector. These techniques are made at corporate level and business level. This is happened with the assistance of the advancement and examination and improvement. Then again, the approaches and economy changes helps the organization to develop more in the neighborhood and worldwide business sector. In the wake of turning into the individual from the BRIC economy passage, India is pulling in the outside financial specialists in the nation. These are backings the development systems of Tata in the nation.

Then again, this additionally assists the association with growing and unites in size quickly. In natural techniques are those systems that build the extent of a gathering, organization or enterprise in the business sector. This is extremely useful in worldwide markets. Then again, this additionally helps the association to upgrade learning of the workers. Then again, the association utilizes new innovation in setting of enhanced items, procedures and human capital. The Tata needs more efforts to make it the market leader in international and local markets.

References

Chatterjee, D. (2015). Tatas join hands with ICBC of China. Retrieved December 2, 2015, from http://www.business-standard.com/article/companies/tatas-join-hands-with-icbc-of-china-115120200259_1.html

Crabtree, J. (2014). India’s Tata group earmarks $35bn for global expansion plan. Retrieved December 2, 2015, from http://www.ft.com/intl/cms/s/0/7348fea8-179a-11e4-87c0-00144feabdc0.html#axzz3t91x6eZI

Dheera. (2014). The TATA Way. Retrieved December 2, 2015, from http://www.theceoinsights.com/joomla/index.php?option=com_content&view=article&id=125:the-tata-way&catid=83:tip-4-u&Itemid=126

Duggan, K. J. (2011). Design for Operational Excellence: A Breakthrough Strategy for Business Growth: A Breakthrough Strategy for Business Growth. McGraw Hill Professional.

Ekins, P. (2000). Economic Growth and Environmental Sustainability: The Prospects for Green Growth. Routledge.

Genicot, G., & Ray, D. (2003). About risk management Arrangements. Review of Economic Studies, 70, 87-113.

icmrindia.org. (2012). Tata Group's Growth Strategies. Retrieved December 2, 2015, from http://www.icmrindia.org/casestudies/catalogue/Business%20Strategy/Tata%20Groups%20Growth-Excerpts1.htm#Organic_Growth_Strategies

indianbusiness. (2015). India's Economic Reforms. Retrieved December 2, 2015, from http://indiainbusiness.nic.in/newdesign/index.php?param=economy_landing/217/2

invest. (2009). Our Strategy. Retrieved December 2, 2015, from http://www.wikinvest.com/stock/Tata_Motors_(TTM)/Strategy

Kumar, A. (2014). Under Mistry, Tata Group steps up organic expansion. Retrieved December 2, 2015, from http://www.business-standard.com/article/companies/under-mistry-tata-group-steps-up-organic-expansion-114091000610_1.html

Quarterly, M. (2005). What's Next For Tata Group? Retrieved December 2, 2015, from http://www.forbes.com/2005/10/28/india-software-tata-cx_1028mckinsey.html

tata. (2015). Tata Management Training Centre. Retrieved December 2, 2015, from http://www.tata.com/careers/articlesinside/TMTC

tata.com. (2015). Human Resource Development Program. Retrieved December 2, 2015, from http://www.tata.com/careers/articlesinside/Human-Resource-Development-Program

Velayanikal, M. (2015). Consolidation in Indian auto ecommerce: CarTrade buys CarWale. Retrieved December 2, 2015, from http://www.business-standard.com/article/companies/consolidation-in-indian-auto-ecommerce-cartrade-buys-carwale-115111200473_1.htm

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