Entry Strategies - TATA

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Exports

● Tata started exports on November 30, 1962 and to date they export products to 54 nations worth 2 billion USD.

● Export portfolio- Metals, Leather products, Agribusiness, Automobiles & Construction, Minerals

● Till 1991, as trade and exports were restricted, Tata has a low share in exports. However, now it acquires the Golden Super Star Trading

House by DGFT, GOI.

● Most of the Tata motors exports are done across Bangladesh &Africa. It boasts of a luxury segment car brand of Land Rover.

● Despite the slowdown in the economy and falling demands, Tata motors has managed to export 29845 commercial vehicles in FY 20.

● Most of the agri products like sesame, rice, cashew, sugar are exported to African countries and ASEAN nations. The agri export is worth

36 million USD to Africa currently, which is expected to rise further.

● Tata group boasts of being the second largest finished leather product with its tie-ups being with H&M, Zara, Clarks. Tata plans to

introduce “Saydo” a premium women footwear segment to be exported to Europe.

● 2.36 million tons of steel is exported to South east Asia and Europe.
Acquisition
Tata Steel:
❖ In January 2007, the group pulled off India's biggest ever takeover of an overseas company to buy Anglo-Dutch steelmaker Corus in
a $12 billion deal that made it the combined entity the world's fifth largest producer of the commodity.
❖ In 2006, the group acquired Singapore's NatSteel, which also has a presence in Thailand, China, Malaysia, Vietnam, the Philippines
and Australia followed by the acquisition of Thailand's Millennium Steel for a $421 million.

Tata Motors:
❖ South Korea's Daewoo Commercial Vehicle Co was acquired by the company in March 2004 for $102 million and gained, in the
process, a market share of 30 percent and access to markets where it had no prior presence.
❖ This was followed by the acquisition of a 21 percent stake in Spanish bus maker Hispano Carrocera for $18 million with an option to
pick up the remaining stake at a later date. This helped the company get technology to make top-end busses.

Tata Consultancy Services:

❖ In the second half of 2005, TCS acquired financial services company FNS of Australia for $26 million and then Chile's outsourcing
major Comicrom for $23 million.
❖ TCS also entered into a structured deal with the British insurance major, the Pearl Group, which essentially called for the two entities
to set up a subsidiary with TCS as the majority partner.
Licensing
In 1996,under an agreement titled TATA brand equity and Business promotion, Companies using TATA’s name
have to directly shell out 0.25% of the annual revenue or 5% of the profit before tax, whichever is less. Those
companies which use the name indirectly pay 0.15% of turnover.

❖ Tata Global Beverages Ltd grants 5-year renewable license pact for its brands in
Russia to Tea Trade LLC.

❖ Tata Steel had signed a licensing agreement with mining major Rio Tinto for
commercial development of environment-friendly direct iron smelting process
called HIsarna.

❖ Posco South Korea signed a cross-licensing agreement with Tata Steel Europe Ltd.
(TSE) for steel plating technology.
Franchising
❖ Allows simultaneous expansion to different regions ❖ Limited returns
❖ Long term commitment ❖ Low Integration
❖ Low investment and low risk ❖ Risk of franchisees becoming future competitors
❖ Low Control ❖ Wrong franchisee may destroy company’s reputation

❖ Tata Motors has franchisee/joint venture assembly operations in Kenya, Bangladesh, Ukraine, Russia and Senegal as
well as JLR's fast-expanding operation in the UK and US. They provide sales, service and spare parts for the
complete range of Tata Motors' commercial vehicles and passenger cars.
❖ In Ukraine, Tata Motors has franchise agreements with Etalon [BAZ / CHAZ] and UkrAVTO Corporation subsidiary
Universal Motors Group (UMG) [UkrAvto / ZAZ]
❖ In Senegal, Tata Motors has a franchise agreement with Unitech Motors SARL
❖ Tata Motors has partnered with Nitol Motors in Bangladesh as a franchise.
❖ In Russia, TML Truck Rus imports and distributes Tata Motors’ commercial vehicles and original spare parts.
❖ Tata subsidiary JLR has franchisee agreement with the likes of Dick Lovett Group, Guy Salmon, Group 1 automotive,
Holman Automotive etc..
❖ Tata's subsidiary Trent has franchise agreement with British retail giant Tesco, to provide support to Trent's Star
Bazaar chain of hypermarkets.
Joint Venture
❖ Tata Group has many Joint Venture across the Globe ❖ Global Presence
❖ Intention to enter into new and emerging markets ❖ Access to labor, capital and technological resources to
❖ Helping in business expansion achieve economies of scale
❖ Majority of Joint Ventures are running successfully

Company Group Operation JV Name Stake(TATA) Status Comments

Singapore Airlines Tata Sons International Vistara 51% Successful Opened new market opportunities for Tata and it will be good for
the economy and bad for competitors.

Thonburi Automotive Tata Motors Thailand No Name 70% Successful Helped Tata Motors to enter the second largest pickup market in
the world after US. The Thai market for pick-ups has been
growing at 20%.

Marco Polo S.A Tata Motors India Tata-Marcopolo 51% Successful Tata Motors to make their presence felt overseas and to
strengthen its heavy segment in India. Target the export markets.

Thyssenkrupp’s steel Tata Steel Europe NA NA Unsuccessful Antitrust authorities of the European Commission

Starbucks Corporation Tata Consumer India Tata Starbucks 50% Successful Opened up exciting business opportunities and made a global
Products presence

Mitsubishi Corporation TCS Japan TCS Japan 66% Successful This JV helped TCS to make his presence in Japan with the help
of Japan’s largest integrated business enterprise.
It has achieved double-digit revenue growth in each of last 2
years.

NTT Docomo Tata Teleservices India Tata Docomo 73% Unsuccessful Different Goals, Policy Instability, Lack of Innovation
Wholly Owned Subsidiaries
Founded in 1868 by Jamsetji Tata, the company gained global recognition after purchasing several international companies. One of
India's largest conglomerates, Tata Group is owned by Tata Sons. Over the years the company has bought various companies under
its different businesses :-

❖ TATA POWER - Trust Energy Resources Pte. Ltd.

❖ TATA STEEL - NatSteel Holdings Pte Ltd.

❖ TATA CONSULTANCY SERVICES - APTOnline Limited, C-Edge Technologies Limited

SPECIAL CASE OF TATA MOTORS (JAGUAR LAND ROVER)

❖ In June 2008, India-based Tata Motors Ltd. bought two of the iconic British brands – Jaguar and Land Rover (JLR) from the US-based
Ford Motors for US $ 2.3 billion and fully joined into Jaguar Land Rover Limited in 2013.
❖ Under Tata ownership, Jaguar Land Rover has launched new vehicles including the Range Rover Evoque, Jaguar F-Type, the Jaguar XE

PROS Cons

➢ diverse customer segments-governments, celebrities, ➢ tight competition from companies like Audi, Lexus etc
➢ economies of scale, technological know-how ➢ economic slowdown in European and American markets
➢ reducing the dependence on indian market ➢ stricter impositions on emission norms
➢ viable networks, upgrade in TATA’s old products ➢ uphill task of maintaining JLR’s standards
Turnkey Projects
● Provides turnkey solutions for the construction of roads, bridges, fully integrated rail & metro systems, commercial building & airports
and setting up power generation plants, power transmission & distribution systems, chemical process plants, water and waste
management and complete mining and metal purification systems etc.

● Some of the main competitors are L&T , Essar , Punj Lloyd Group, Reliance Infrastructure etc.

● Give tough competition by On-time delivery of projects via sustainable, long-term partnerships with respected vendors and suppliers. For
instance, Tata projects is one the fastest growing company, adds value to its customers by completing projects ahead of schedule with a
focus on cost competitiveness with a key focus on global purchasing and supply management.

● Tata Projects, part of the Tata Group, contributes majorly in Turnkey projects

● Tata Group has revenues of over $100bn, with 39.39% year on year growth, more than 100 operating companies and a presence across
seven business sectors, and a global footprint with operations in more than 85 countries and 450,000 employees worldwide.

● Some Turnkey projects undertaken by TATA -Bangladesh water supply, internationalisation ion- Ethiopia T/L, Thailand T/L, western
freight corridor, 11km railway siding for GMR Kamalanga Energy power plant; 10km of ballastless track for the Ministry of Defence. Etc

● Entering into new market segments such as : social infrastructure(collaboration with Brookfield multiplex, Australia), mobility solutions
(electric vehicles)


THANK YOU

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