International business in terms of multinational enterprises is whereby companies have operations in more than one country. These companies are called Multinational cooperation and they expand overseas through joint ventures, foreign acquisition, licensing agreement, Greenfield investment and export (Ghoshal & Nohria, 2003). Strategies such as International strategy, Transnational strategy, Global strategy and Multidomestic strategy are used by multinational cooperation to enter and compete in the international environment. In this essay, an analysis on India based automobile company Tata Motors Limited’s actions, experiences and challenges faced for their international business plan will be explained. Overview
Tata Motors Limited is an Indian multinational automotive which is part of the well know Tata Group. They are based in Mumbai, India and are India’s largest automobile company with total revenue of US$ 27 Billion in 2010-2011 (Tata Motors, 2011). It deals with products such as passenger cars, buses, trucks and vans. The company’s employees are guided by the vision to be “best in the manner in which we operate best in the products we deliver and best in our value system and ethics” (Tata Motors, 2011). Established in 1945, Tata Motors Limited started off as a manufacturer of locomotives and they used to be known as Tata Engineering and Locomotive Company instead. The company’s manufacturing base is spread all over India in states such as Jharkhand, Maharashtra, Uttar Pradesh, Uttarakhand, Gujarat and Karnataka (Tata Motors, 2011). Tata Motors Limited only started producing commercial vehicles in 1954 after having a joint venture with Daimler-Benz AG of Germany which is famous for being the makers of Mercedes but the collaboration ended in 1969. They still continued to produce commercial vehicles till today and have sold an astonishing 6.5 million vehicles ever since then in India alone (Tata Motors, 2011). Tata Motors Limited is the first engineering company from India to be listed in the New York Stock Exchange in September of 2004 (Goldstein, 2008). They have become an international automobile company through its subsidiaries and associate companies and have operations in countries such as South Africa, United Kingdom, South Korea, Thailand and Spain (Ito, Kojima, Mckenzie and Urata, 2010). Tata Motors uses the International strategy for its international business plan as they limit customization for their products. In 2004, Tata Motors Limited bought over Daewoo Commercial Vehicle Company which was South Korea’s second biggest truck builder (The Economic Times, 2004). In 2005, they bought a 21% percent stake in Hispano Carrocera, a well known Spanish bus and coach manufacturer and subsequently the remaining shares in 2009. They formed a joint venture with Brazil based Marcopolo in 2007, a world renowned builders of buses and coaches body to fully built them in India and selected international markets. The major coup for Tata Motors Limited was in the year 2008 when they bought over UK based Jaguar Land Rover which consisted of two iconic British brands. Tata Motors Limited do not only focus on globalisation but also do give back to the community by being committed to improve the quality of life of communities by focusing on areas such as education, employability, health and environment. Their support for education and employability is focused on women and youth ranging from technical institutes to schools and facilitation of income generation (Sonar, 2011). As for the support for health, they train village health workers to be able to conduct preventive and curative health services. Tata Motors Limited aim of environment protection is achieved through factors such as reducing pollution through tree plantation and building their vehicles with appropriate technology for improving environment care (Sonar, 2011). The acquisition of Daewoo Commercial Vehicle Company
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