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THE TATA GROUP

Natasha Anand
Nikhil Nadiminti

For Prof. Mattheu Lardeau(name to be checked)

International Strategic Diagnostics

Ecole Superiore de Commerce, Troyes


INTRODUCTION:
The Tata Group is a multinational conglomerate company headquartered in
Mumbai, India. In terms of market capitalization and revenues, Tata Group is
the largest private corporate group in India. It has interests in steel, automobiles,
information technology, communication, power, tea and hospitality. The Tata
Group has operations in more than 85 countries across six continents and its
companies export products and services to 80 nations. The Tata Group
comprises 114 companies and subsidiaries in seven business sectors, 27 of
which are publicly listed. 65.8% of the ownership of Tata Group is held in
charitable trusts. Companies which form a major part of the group include Tata
Steel, Corus Steel, Tata Motors, Jaguar, Land-Rover, Tata Consultancy
Services, Tata Technologies, Tata Tea, Tetley, Tata Chemicals, Titan Industries,
Tata Power, Tata Communications, Tata Teleservices and the Taj Hotels.

The chairman of the Tata group is Mr. Ratan Tata, whose name is present in the
list of the most influential people in the world according to the FORBES
magazine. However, his name is not listed among the richest billionaires in the
world due to the sole fact that most of his earnings are spent on charitable
purposes and his net worth on paper is approximately 1 Billion Dollars. What is
unique about the Tata group is that though it started as a small firm producing
textile during colonial India, it has grown to such an extent that nowadays,
people say that there is no household in India which does not have a product
that belongs to the Tata group.

The vision of the Tata group is to improve the quality of life of the communities
that they serve through leadership in sectors of national and economic
significance.

Their mission is to become the leader in all industries they venture into with a
good reputation and help as many communities as possible within a stipulated
time frame.
HISTORY:
The Tata group was founded by a visionary Mr. Jamshetji Nusserwanji Tata
who established a private trading firm in 1868. As business prospered, by
January 1st 1877, which is the same day Queen Victoria was proclaimed the
empress of India, the chairman J.N.Tata opened his first textile mill. Ten years
later, he took his son Dorab as a partner and converted his trading firm into a
company and got it registered. Five years later, the “J.N.Tata Endowment for
higher education” was set up which was in actuality one of the world’s first
charitable trusts. Mr.Tata being a man who wanted to strive hard for
developing his country’s economy, wanted to venture into the energy sector.
He believed that water is one of the best renewable sources of energy. So, he
went to meet George Westinghouse in 1893, who took him to see the Niagara
Falls so that Mr.Tata could understand how hydropower generation worked.
This would be a huge asset for the Tata group in the future as they were
pioneers in hydropower generation in India. By 1903, the Tatas opened the Taj
Mahal palace which was India’s first luxury hotel and one of the first buildings
in Bombay (now Mumbai) with electricity. A year later, J.N.Tata died leaving
his son Dorab Tata to take over as the chairman of the company Tata Sons.
Three years later, in 1907, keeping his father’s vision in mind, Dorab Tata
issued the first public offering on the Bombay Stock Exchange for the Tata Iron
and Steel company with plans to build a steel mill in the village of Sakchi. This
village was later on renamed as Jamshedpur to commemorate Mr. J.N.Tata.
The city is even now regarded as one of the most disciplined and well
developed cities in India. To continue its philanthropic activities, by 1911, The
Indian Institute of Science, dedicated to higher education and scientific research
in India was opened in Bangalore (now Bengaluru). There was a time in the
mid 1920s when Tata Steel was on the verge of bankruptcy. However, the
chairman Dorab was so loyal to his employees that he pledged his entire
fortune, including his wife’s jewels just so that he could pay salaries and also
clear his debts. After going to the bottom of the pit, there was only one way for
the Tatas to go, upwards. Soon, in 1932, Nowroji Saklatwala took over as the
chairman of Tata Sons and launched Tata Airlines which was the first Indian
Airlines company. The first flight of the company was piloted by J.R.D.Tata
himself, who would soon be the chairman of the company by 1938. A year later
in 1939, Tata Chemicals set up a soda ash factory in Gujarat, on the Arabian
Sea. A year before India attained its independence from the British rule, in
1946, Tata Airlines became a public company and was renamed Air India Ltd.
This company was nationalized in 1953 and Air India is still a successful airline
company today with flights operating in many countries in all the continents of
the world.

The Tata Motors Company (then known as Tata Engineering and Locomotive
Company) entered into a partnership with Mercedes Benz AG to manufacture
commercial vehicles in India. This venture resulted in the formation of Tata-
Mercedes Benz vehicles rolling out of the factories which were very much in
demand in 1954. Moving on to the I.T. sector, in 1968, Tata Consultancy
Services was founded which is right now one of the leading I.T. service
providers in the world. India was a closed economy till 1991, when there was a
change in the economic policy of the country. With the introduction of the
liberalization policy, foreign companies were invited to invest in India and set
shop in such a market where there were billions to be made due to the huge and
diverse population. In this same year, Ratan N. Tata became the chairman of
Tata Sons. It is after he became the Chairman, that the Tata group really started
going global and started expanding drastically in all continents. Continuing his
family’s legacy of philanthropy, Ratan Tata founded the TCCI - Tata Council
for Community Initiatives in 1996 to promote the sharing of best practices in
community engagement and employee volunteering. By 1998, Tata Motors
launched the Indica which happened to be the first indigenously manufactured
passenger car in India. When the world was getting heated up about the Y2K
issue, the Tata group schemed well to take over the Tetley Company in 2000,
which also happened to be India’s first cross-border leveraged buyout. With the
acquisition of Corus Ltd in 2007, for 12 Billion Dollars, Tata Steel jumped up to
claim the sixth position in the list of largest Steel Companies from the position
of 52. A year later, Tata Motors bought the luxury brand Jaguar Land Rover for
2.3 Billion Dollars from Ford. Though Tetley, Corus and Jaguar Land Rover
are the most famous buys of the Tata group, there are many other acquisitions
and mergers which the Tata group made which made them to become a 70
Billion Dollars enterprise with 90 major operating companies and 350,000
employees in 80 countries.
TATA GROUP’S ASSETS:

The Tata group’s assets can be understood from the above diagram which
shows the companies which belong to the Tata Sons and the Tata Industries.
We can understand that 65.89% shareholding of the Tata Sons belongs to the Sir
Ratan Tata trust which is a charitable and philanthropic organization. In turn,
28.62% shareholding of the Tata Industries belongs to the Tata Sons.

Apart from the physical assets, the other assets of the Tata group are intangible.
They are:

Family Values: The Tata group treats the whole organization as one huge
family. There have been instances in the history of the organization where even
though the company was in a crisis, the chairman pledged his fortune just to pay
his employees’ salaries. Till date, the chairperson of the Tata group has been a
person within the Tata family.

Innovation: The Tata group believes in brainstorming and coming up with new
ideas for improving the way of life through technological advances. For
instance, the Computational Research Laboratories, a division of Tata Sons,
recently developed EKA, one of the fastest supercomputers in the world and the
fastest in Asia.
Sustaining Good Will: The Tata group treats their internal and external
customers like family. This is a huge benefit for them because it means that the
credibility of the company is amazingly high. When there were terrorist attacks
in Mumbai in November 2008 and the terrorists took hostages in many places
including the Tata owned Taj Mahal Palace, there were many deaths and a lot of
destruction that took place. However, as soon as the hotel was repaired and re-
opened to the public, there was a huge queue of people waiting to check in to
the hotel. This shows the immense trust which the general public has for the
company.

It is due to these assets that we can understand how the Tata group runs 96
businesses out of which 28 Companies are publically listed on various stock
exchanges throughout the world.

Following is the expansion of the Tata group through the years and the various
companies in acquired in various sectors across the world.
I.T. & COMMUNICATIONS:
The companies in the