Tea Industry

Tea Industry: Tata Tea Ltd Group 9 Section E

Vibhor Goyal- 2009303 Vinayak Kumar-2009304 Vineet

Brief Background of the Firm: Tata Tea Ltd was set up in 1964. In 1983, Tata Tea bought the stake belonging to

the James Finlay group to form the individual entity Tata Tea. In the same year, the company decided to move from the commodities business to consumer branding.

The Tata Tea Group of Companies, which includes

Tata Tea and the UK-based Tetley Group, today represent the world's second largest global branded tea operation with product and brand presence in 40 countries.

Vision “To be India`s foremost tea based beverage

Market Structure Of The Firm:

The market structure in which the company

operates is monopolistic competition because in this sector there are large numbers of players (i.e. producers and sellers) with slight differentiation in the features of the products. For example, in case of tea these differences has

been made by on the basis of taste or smell and with some innovative product like tea bag or instant tea give an edge to the firm over another. Competition: HUL, DS Group, ITC, Waghbakri Tea

Company, Williamson Magors, Harrisons Malayalam Mcleod Russel , Bishnauth Tea

Market Structure Of The Firm:

Price Differentiation:

Tata Tea follows a Third Degree Price

Differentiation

Same product in different Geographic areas

are priced differently depending on Demand. The product is sold as Tata Tea in India and

Tetley for Europe and USA.

Challenges § Prioritize growth agenda across the globe § Sustain growth in key markets through § Value added segments e.g. Fruit & Herbal Launches § Consumer driven insights

§ Utilize distribution networks to leverage product/category extensions

Resolutions & strategies to combat challenges Growth strategy  Post acquisition of Tetley, Tata Tea restructured its business to

emerge as a brand-centric beverage company with operations in all major global markets.

 Acquiring Tetley meant capturing the higher end of the value

chain

 Tetley is well-established in international markets  Tata’s gross margin is 36%, while Tetley’s is a more efficient 55%.  The combination of the two companies would allow for synergies

that competitors couldn’t match.  

 Tata Tea has also ventured into other beverages like high value

specialty and green tea, coffee, mineral water and ready-to-drink beverages.

 They acquired the Good Earth Teas brand, which has a significant

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