Tata Presentation On Global Business Stratergies

The Century of Trust Shyam Zalavadia (s2708810) Abhishek Samant (s2705371) Aditya Kakatkar (s2705942) 1

Agenda • Historical Overview • Company Profile • Company Statistics • Deep rooted history • Introduction to Tata Steel • Tata Steel Mission & Vision • Global Steel Industry • Company growth phases • Business strategies • Porters five force • Future outlook • Mergers & Acquisition • Conclusion 2

Historical Overview • Jamsetji Nusserwanji Tata started a private trading firm, laying the foundation of the Tata Group in 1868.

• The Central India Spinning, Weaving and Manufacturing Company is set up, marking the Group's entry into textiles in 1874. • Ratan Tata joined the TATA group in December 1962. • In 1981, Ratan Tata named as chairman of TATA Industries.

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Company profile • TATA group of industries is India’s largest business group in India. • Diverse businesses in 7 sectors. • Group revenue: FY 2008: US$ 62.5 billion/ Rs 251,543 cr. • Group profit: FY 2008: US$ 5.4 billion/ Rs 21,578 cr. • International income: 61% of group revenue.

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Company profile • Operations: over 80 countries. • Products & Services exported to 85 countries. • It is one of the Largest employer in private sector over 300,000 employees.

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Company profile • TATA group of companies is diverged in 7 business sectors. – – – – – – –

Materials Engineering Chemicals Information technology & communications Energy Services Consumer products

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Company Statistics

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Core Values • Integrity • Understanding • Excellence • Unity • Responsibility

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Mission & Vision • Mission: to be a competitive value provider in international business for Group companies and all our partners. • Vision: Become a globally networked enterprise seizing opportunities worldwide to generate USD 25 million annual profits by 2008.

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Deep Rooted History

Foundation 1868-1931

Consolidation 1932-1989

Expansion 1990 onwards

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1874

Central India Spinning, Weaving and Manufacturing Company

1902

TAJ MAHAL PALACE AND TOWERS

1907

TISCO, TATA LIMITED IN LONDON

1910

TATA ELECTRIC COMPANIES

1911

INDIAN INSTITUE OF SCIENCE

1912

EIGHT HOUR WORKING DAYS

1917

TATA OIL MILLS 11

Consolidation • The Tata group ventured into new areas and built on the foundations, in spite of the restraints imposed by a controlled economy.

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1932 1939 1945 1952 1954

1962 1968 13

Expansion • The liberalization of the Indian economy unleashed a period of remarkable growth for the Tata group, in India and worldwide. • Tata ventured in to mergers and acquisitions in the late 1990s.

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Introduction to TATA STEEL  Established – 1907  Fortune 500 Company  Worlds 6th largest steelmaker: 28 MTPA(million ton per annum)  Presence in 50 markets; manufacturing in 24 countries.  Revenue is $32.83 bn. (domestic – 37%, International – 63%).  Expansion Plan –

Brownfield: Jamshedpur works

–

Greenfield: India and Overseas

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TATA Steel

Source: Tata Annual Report (2008)

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Mission & Vision ( Tata Steel) • Vision - “We aspire to be the global steel industry benchmark for Value Creation and Corporate Citizenship”. • Mission – Create differential value for the customers with the help of continuous improvement in their business process and technology.

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Global Steel Industry

Source: Krishnamurthy 2005

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Company Growth Phases First Phase :

• The First phase is the year up to 1991. • Tata Steel was the first integrated steel company in Asia. • There were price control – an administered control of the economy. • Tata Steel was not greatly innovative, not greatly business minded. • Technology-wise, Tata Steel was a dead company by 1991.

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Company Growth Phases •

The ten years from 1991 to 2001 was about laying business foundations.

•

Tata Steel threw out the old furnaces and scrapped capacity.

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Tata Steel spent Rs. 10,000cr doing all the restructuring.

•

Tata steel re-engineered its business processes.

•

Tata Steel became one of the lowest-cost producers

and

one

of

the

most

modern

companies in the world ( 2001).

Source: Iron & Steel Statistics Bureau

USD $1= Rs 50.

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Company Growth Phases Third Phase : • After 2001, Tata Steel Started thinking of growth and globalization. • In last 3 to 4 years, Tata Steel has been trying to do Mergers & Acquisitions globally. • Tata Steel is now the 6th largest Steel Producer in the world.

Worlds 6th largest steel producer

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Major Mergers & Acquisitions

Source: Goldman, M 2007

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Brand Profile

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Business strategy • Green field project: – Primary steel will be produced in India, where there are large deposits of iron ore. – Other Asian market like Thailand, Vietnam, Shanghai etc.

• Brown field project: – Its target is nearly on the way of completion e.g. Jamshedpur.

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Porters 5 force

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Porter Five Forces Model • Threat of New entrants – High - steel industry is a capital intensive business. • Intensity of rivalry among existing competitors – High The major domestic rivals are SAIL, JSW, ISPAT& ESSAAR steel. • The bargaining power of suppliers – High – Since the domestic raw material sources are insufficient to supply the Indian steel industry, a considerable amount of raw materials has to be improved.

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Continued • The threat of substitute products – Low – Plastic and composites pose a threat to Indian steel in one of its biggest markets- automotive manufacture. • The bargaining power of buyers – Mixed- some of the major steel consumption sectors like automobiles, oil and gas, shipping, consumer durables and power generations enjoy high bargaining power and get favourable deals.

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Future Outlook • The Tata steel group will pursue strategic growth through capacity expansions and securing access to raw materials. • Tata group is also looking at further integration upstream in raw materials with an ambition to achieve 100% selfsufficiency in India and around 50% self-sufficiency in Europe over time.

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M&A • Tata Tea -acquires the Tetley Group, UK. This is the first major acquisition of an international brand by an Indian business group in 2000. • IHCL- The Indian Hotel Company And its subsidiaries are collectively known as Taj Hotels Resorts and Palaces, which is recognized as one of Asia's largest and finest hotel companies. Incorporated by the founder of the Tata group Jamsetji Tata. • Tata AIG - Tata AIG Life Insurance Company Limited (Tata AIG Life) is a joint venture company , formed by the Tata Group and American International Group, Inc.

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Continued • Tata Coffee – In 2003 TATA Coffee acquires US based Eight o’ Clock Coffee co. • Telco Construction - Tata Group company, signed a deal in March 2008 to acquire a 79 per cent controlling stake in Spain-based Serviplem SA at a cost of Euros 45 million. • Tata Motors – The Tata Motors has signed the Jaguar and Land Rover (JLR) deal with Ford last evening, which is estimated to be valued between 2.5 billion dollars.

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Continued • TCS – Acquires Sydney-based Financial Network Services (FNS). • Tata communications - The Tata Group acquires a controlling stake in VSNL.

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Company Logos

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TATA Nano

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Conclusion • After conducting an in depth study of one of India’s most admired companies, we find that the company has many strengths and opportunities which it may capitalize on to truly become a world leader in steel making along with setting high standards for corporate citizenship and social responsibility towards a long term sustainable growth.

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References •

Corus Group, 2008, Corus is a part of Tata group, viewed on 18 October 2009,

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Goldman, M 2007, India’s Tata Group: Shifting Gears; viewed on 13 October 2009, .

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Gopalkrishnan, R 2003, Experiences at Tata Group, viewed on 15 October 2009, .

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Johnson G., Scholes K., and Whittington R 2005, Exploring Corporate Strategy, Prentice Hall; Harlow; Ed. 7th; ISBN: 0273687395.

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Krishnan, R 2007, Land Rover, Jaguar bid fits into Tata strategy; The Hindustan Times, viewed on 08 October 2009, .

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Krishnamoorthy, V 2005, The McKinsey Quarterly: An interview with Ratan Tata, viewed on 16 October 2009,< http://venkatkrish.blogspot.com/>.

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References •

Sriwastawa, S 2006, More Steel for emerging India, viewed on 16 October 2009, .

•

Tata

Leadership

with

Trust,

2009,

Heritage,

viewed

on

12

October

2009,

. •

Tata Steel company, 2009, Annual Report 2008, Viewed on 14 October 2009, .

•

Tata

Chemical,

2009,

News

Report

2008,

viewed

on

17

October

2009,

•

Tata Motors, 2009, Tata nano media report 2009, viewed on 16 October 2009 .

•

Tata Indicom, 2009, Press Realiese, viewed on 18 October 2009, .

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