Tata Motors And Tata Steel

TATA GROUP TATA Steel

Recommending a Strategy Ideas for Today and Tomorrow

Group Members

Rahul Yadav Saurabh Kalia Vivek Khanna

TATA Motors n

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TELCO (TATA Engineering and Locomotive Company) Multinational Corporation. Headquarters in Mumbai. India's largest passenger automobile and commercial vehicle manufacturing company. World's 19th largest automaker. Sales : 19,654.41cr. Stock price: Rs. 347

Under TATA Motors International Brands n Jaguar Cars n Land Rover n Tata Daewoo Commercial Vehicle n Hispano Carrocera n Daimler n Lanchester

Financial Data

TATA Steel n

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TISCO (Tata Iron and Steel Company Limited ) World's sixth largest steel company Based in Jamshedpur, India Annual crude steel capacity of 28 million tones 100 million tonne by 2015 with 8 Greenfield in-progress Consolidated revenues of Rs 1,32,110 crore

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Anglo-Dutch steel maker Corus Singapore based NatSteel Ltd Thailand based Millennium Steel

Financial Data

Present Strategic Issues n

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Global Leader/presence both in means of Quality and Quantity. Security & procurement of raw materials Entering the new markets Eliminating the RED color from balance sheet Struggle to digest the big ticket global acquisitions Leadership crisis within the

Global Leader/Presence n

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Over last few years TATA have acquired lot of companies across the globe They have presence in 8 different sectors with 118 different companies and are working in more than 85 countries. TATA make presence felt in every

Global Leader/Presence n

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The future plans of the company must be the consolidation of its image and markets in which it works. To become the leader the company has either acquired new companies , increased the capacity of exiting companies or started green field projects.

Global Leader/Presence n

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So as to maintain good international image the company has never compromised with the quality. TATA has big portfolio in the automobile sector from entry level passenger cars , to SUV to luxury brands , Light utility vehicles to trucks , buses , concept car , electric cars to military vehicles etc ..

International Image n

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When the TATA acquire new companies it never scrapes off the exiting management instead it mixes a few people from its parent company so as to maintain its international image. Example : Tata Daewoo Commercial Vehicle TATA motors has set a target move from mid-size player to big player on the world market to 1.8% market share from 0.81% by 2015

Raw Materials n

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Security & procurement of raw materials is one of the major issue company faces in this competitive market. TATA steel can acquired of mines and smelting units across the global. TATA motors can go forward in

Raw Materials n

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The TATA Motors have proper distribution channel across India , but its utilization was much below its capacity. Thus Tata Motors also formed a joint venture with Fiat and gained access to Fiat’s diesel engine technology

Raw Materials n

So as to maintain its Security of raw material at different level , TATA have extensive backward and forward linkages and it is strongly interwoven with machine tools and metals sectors. vFrom mines to chemicals required for Steel production vFrom engines to complete body for car manufacturing vRelay on scales of economy

RED Color

Red Color Reasons : n Total debt in the company crossed 1,00,000Cr n

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Credit rating was brought down from BB- to B+ Company has to pay loan/interest of about 20,000Cr by the end of August 2009

Red Color What went wrong : n

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Most of the companies were acquired when their valuation were at/near their peak level Acquired companies debt

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Demand fell because of global melt down. Government removed subsidy on steel import

Red Color Future strategy actions : n

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Will have to dilute its stakes in various companies Will have to attract international clients

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Generate funds from groups other companies to pay of the loan by Aug so as to improve its credit rating and thereby avail more loan.

Leadership Crisis Company will have shortage of leaders n n

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CEO of TATA Motors – By Sept CEO of TATA Steel – By Dec Ratan Tata – By 1012

There are not much options within the company

New Market The share of the foreign brands of TATA in Domestic market is less than 10%. Thus there is very large untapped market. n n n

Jaguar Cars and Land Rover Electric version of TATA Ace Many construction/Trucks/Bus which

New Market NANO Which is expected to rolled out by July can also be sold is African and European countries as there is strong demand of small cars. NANO which has put TATA world automobile map should be used to trap the market in the developing countries.

New Market Tata OneCAT n

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The world's first prototype of a compressed air car. To begin production by 2010. Is being planned for European and Australian market only. Good potential in South Africa and Indian market also , TATA should try to capture this markets also

New Market The share of the domestic brands in the international market is less than 18% Domestic brand like Indica , Indigo and Ace have a good demand in the African market , TATA should try to get hold in this market Different version with international standards should be sold.

Blue Ocean strategy Why the Blue Ocean strategy works well for the TATA Group ? n

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TATA is all about the simultaneous pursuit of differentiation and low cost. TATA talks about entering the new market or creating the new market where there is no competition. Creating new value curve

Blue Ocean strategy     

Thank You