House of Tata

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HOUSE OF TATA

The Business

Agricultural Products
Base Metals
Non-Metallic Mineral Products
Chemicals
Construction & Allied Activities
Electrical and Non-Electrical Machinery
Electricity & Non-Conventional Energy
Electronics
Services
Shipping & Exports
Hotels
Financial
Drilling
Real Estate
Other
Watches
Pulp & Paper Press
Engineering & Locomotive

Vertically integrated
Focus in domestic market (India)

Resources

Financial Capital
Managerial Expertise
Business Network
Established brand

Structures, Systems & Processes

Corporate communication
Weekly cross-company director’s meetings

Autonomous business unit operations

Uniform Policies across the Tata Group

SBU’s annual contribution system (franchise)
J.R.D. Quality Value Award

Uniform code of conduct
High quality
Ethical business practices

Recruitment process
Hand picking chairmen
Head hunting talented individuals for SBUs (Tata Administrative Services)

Controlling interest
0.01 to 15% in current SBUs
25-50% in new ventures
Investors with +26% have legal right to block take over resolutions

Strategy

.Convert Tata Group into a tighter, leaner organization to deliver a stronger collective identity. Synergize
Merge Tata’s 3 electric companies
Divest
Loss Making Tata Oil Mills Company Ltd.

Increase SBU’s control/ownership
Purchase equity in SBU’s

Branding
SBUs adherence via contribution system
Promote brand in foreign markets

Growth

Partner up with other companies
Jardine Matheson Group (Hong-Kong)
Singapore Airlines
Singapore Consortium
Bell Canada
Raise investment capital via selling 20% of TIL equity
Explore JVs with Government Revitalise its management development program

Characteristics

Private Equity - Expansion Capital

1.Which, if any, of the following initiatives undertaken by Ratan Tata do you think were good ideas? •Creation of a Group Brand
•Building of equity interlocks among the Tata companies
•Sale of a part of Tata Industries Limited to the Hong Kong-based Jardine Matheson Group. The sale of part of Tata Industries Limited to the Hong Kong-based Jardine Matheson Group was a good idea for the following reasons.
It increased the share capital of TIL.
It enabled the capital influx to be used for venture capital start –ups. •Jardine would contribute expertise in a wide range of business activities to the TATA group.

Revitalisation of Tata Administrative Services.

Creation of a group brand was a good idea for the House of TATA because it gave the companies that subscribed to the Tata Brand Equity Scheme, the following :

Buying& borrowing power ,when raising money in domestic and global markets. •Negotiating power, when negotiating joint ventures and access to managerial and financial support from the Group. •Quality company perception, with the JRD quality value award. •Advantage of opportunities &ward off competitive threats. •It would give the group a stronger collective identity. whilst benefitting from the centrally promoted company. •Funds derived from the contributing companies was used to build a national & international group brand image through advertising. •If the group brand was a bad idea the board of directors of the various Tata companies would not have passed a resolution approving the resolution. •The group brand enabled Ratan to sell a stake to Jardine Matheson group.

Revitalisation of TATA Administrative services was a good idea because of the following: •It led to a retention rate of 67% for a TAS officer within the Group, whilst organisations outside the group only held a 10%--25% retention rate. •It was perceived as a premium career through the media among up and coming business leaders. •Audio –visual presentations promoted TAS and TATA group to prospective employees. •The revitalisation led to TAS officers having three different industry exposure through planned job...
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