Tata Case Study Short Analysis
Tata Steel (TISCO)
As an Indian based company originating in 1907 Tata Steel (TISCO) was able to accomplish being India’s first and largest private sector steel company by 2007.
As of 2007 TISCO earns the Tata Group 21% of their combined operating companies’ revenue.
TISCO was protected by the Indian Government in which their margins were assured and competition remained minimal due to large duties imposed on imports up until 1990’s when the Indian Government decided to take actions of liberation. o In the 1990’s Tata was in a state of unrest when ties with the government dwindled and Tata had to re-vamp its policies and management controls to remain competitive and cut-costs to remain profitable.
This might have cause the Tata group to lose some ground in the steel industry globally in comparison to other steel companies not based in India.
Acquisitions made by Tata group in the steel industry o Feb 2005 - Nat Steel Asia – Singapore – value $285.4 Million o Apr 2006 – Millennium Steel – Thailand – value $167 Million o Mar 2007 – RawMet Steel – India – value $23 Million o Apr 2007 – Corus Steel – U.K. – value $12.1 Billion
As a result of the Corus deal, the Tata group will receive 65% of their revenues from operations outside of India.
I believe that by the end of 2007 the Tata Group had effectively employed a globalization strategy that lends to drastic potential growth of the group’s global operations and company holdings
Although competition amongst major steel company’s remains tough. The Tata group remains mid-level in comparison to major steel companies in terms of 3 year growth of net income. o I recommend that the Tata group stay active in pursuing more M&A’s in the steel industry to remain globally competitive.
(b) Should Tata Motors’s bid for