The TATA Group

Presented to : Dr. Divakar Kamath

Joyjit Pal A042

Apoorva Parikh A043
Sudarshan Raghunathan A045
Surya Rajendran A046
Chandan Sahni A047
Radhika Shah A048
Sahil Sharma A049
Himanshu Shekhar A050
Salvi Shrivastava A051
Harsh Shukla A052
Jaspartap Singh A053
 Agenda

Introduction

Strategic Frameworks
Core Competency model
SWOT analysis
Mintezberg 5P
BCG Matrix
IE Matrix
CPM Matrix
GE McKinsey Matrix
Porters Five Forces Model
Return on Management (RoM)
Ansoffs Matrix
Blue ocean strategy
 Group Overview
Revenues increased almost 17 times in the last
Founded by Jamsetji Tata in 1868
20 years
A global business group with products
and services in over 150 countries 108.78

Over 660800 employees and operations Bn

100.09
103.27 103.51
in 100 countries 96.8
83.3
67.3% revenue generated outside India
Global leader in several sectors 67.4

62.5

Tata Steel, Tata Motors, Tata Consultancy

Services, Tata Power, Tata Chemicals, Tata 21.9
Global Beverages, Tata Teleservices, Titan, 14.2
8.9
Tata Communications and Indian Hotels.
FY00 FYO4 FY06 FY08 FY10 FY11 FY12 FY13 FY14 FY15 FY16

Market Capitalisation (India) of 29 listed companies as on 31st March 2017 US$ 130.13
bn
Most valuable business group in India
6.9% of Bombay Stock Exchange's total market capitalisation (US$ 1,875 bn)
4.1 mn shareholders
Exchange rate on 31st March 2017 $= Rs64.84
Ranking- Global,India
 Core Competencies
A 149 years old legacy
More than 100 independent operating companies spread across six continents

Diversified Portfolio with

Globalization
Companies across 7 sectors
Footprints in about 150
countries
Around 67.3% revenue is
generated from international
operations
Cost Efficiency
Economies of Scale
Supply Cost
Experience
Product/process Design Value Innovation
Means to deliver breakthrough
products, services & processes
R & D expenditure: 12500
Crore
Simultaneous pursuit of low cost
and differentiation
 STRENGTHS (+) Name of the company Rs Cr $ billion
Tata as a group : Strategic alliances , M&A, catering to local taste
TCS
Tata Tea: Starbucks, Tetley 480,725 75.02
Tata
TCS Motors 109,979 17.16
Tata Steel 58,715 9.16
Titan Company 54,115 8.44
WEAKNESSES () Tata Motors: Sluggishness in response ( BSIV transmission), Nano

Tata Power 20,840
Debt of 30,000 cr Tata Tele Services, Loss making entity
3.25
Tata
TGBL Motors
is over (DVR) 11,181
reliant on black tea, in particular 1.74 tea
black standard
Tata Communications 16,805 2.62
Tata Chemicals 14,663 2.29
Luxury Segment, Nano Segment
Tata Global Beverages 9,849 1.54
OPPORTUNITIES (+) Rcom JV
Voltas
Teapigs in Europe and the relaunch of Tata 17,213
Tea Premium2.69
in India in
Indian
2015 Hotels 12,386 1.93
Trent
Health conscious innovations 8,825 1.38
Rallis 4,404 0.69
THREATS () Tata
Jio Investment Corporation 4,262 0.67
Tata Elxsidisruptions, Medium-sized companies
Weather 5,059share similar
0.79
strategies
Tata Coffeeto expand globally 2,246 0.35
Tata Teleservices (Maharashtra) 1,286 0.2

Sources: Annual Reports , Euromonitor, Business Standard

 Porter 5 Forces- Tata Motors
Supplier bargaining power
More than 500 auto component
manufacturer in the organized
sector and around 5000 in the
unorganized
Automobile companies can thus
easily switch suppliers
High
Buyers bargaining power
No. of potential customers
increasing with the growth in
economy
Various options to choose from
in similar range of products
Threat of new entrant
Threat of new entrant
Economies of scale needed
Low Capital intensive industry
Need of building strong brand
With 100% FDI, slightly easier for
established foreign players to
Industry Rivalry enter
High industry
concentration
High fixed costs
Moderate
Economy linked growth
leading to price wars Moderate
Diversity of rivals-
Moderate
Threat of substitutes
Alternate mode of
High transportation (buses, metro,
etc)
Rise of two-wheeler segment
which has low switching cost
 IFE Weighted Matrix

Strengths & Weaknesses Weight Rating Weighted Score

26-28% operating margin, highest in the industry showing cost leadership
0.15 4 0.60
of TCS
Deep contextual knowledge of customers' business model 0.15 3 0.45
Customer centric vision, far sighting investments in emerging
0.10 3 0.30
technologies
Except Retail & HiTech, all the other industry vetical grew in double
0.10 3 0.30
digits in FY2017
Attrition rate of 10.5% in FY 17, lowest in the industry 0.10 3 0.30
Focus on research & innovation; 493 patents filed in FY17 0.10 4 0.40
Tapping on newer technologies like Blockchain, AI 0.10 4 0.40
TCS Co-Innovation Network (COIN ) has been connecting with start-
0.10 3 0.30
ups, venture capitalists, and academia for over a decade
Talent management, Digital competency development program for
0.05 4 0.20
employees, making current employees digitally competent
High dependence on North America with 54% revenue contribution 0.05 2 0.10
Siginificant exposure to financial services market 0.05 2 0.10
 EFE Weighted Scores

Opportunities and Threats Weight Rating Weighted Score

Rapidly evolving technologies and business models demanding agility 0.20 1 0.20

Changing global politics & ecocnomic scenario (elections in key european

0.15 2 0.30
markets) can impact gobal spending

Restrictions on Global mobility due to protectionist measures taken by US

0.15 2 0.30
and other countries

Volatility in currency exchange movements results in transaction and

0.10 2 0.20
translation exposur

Data privacy and protection 0.10 1 0.10

Capitalizing on ares such as life sciences & manufacturing (segment

0.10 3 0.30
expanding more rapidly than TCS penetration rate)
Developing expertise in cloud computing, AI and other emerging
technologis 0.10 3 0.30

Tapping into Asia-Pacific markets which cureently contributes 9.8% of

total revenues 0.10 3 0.30

TOTALS 1.00 2.00

 Matrix snapshot, explanation
IFE Weighted
Strong Average Weak
Scores 3.0-4.0 2.0-2.99
EFE Weighted
1.0-1.99
Scores

3.45
3.0-4.0
Strong

Market Penetration and Product development

Grow & Build

Average
2.0-2.99

2.0
1.0-1.99
Weak
 CPM Passenger Car
Industry
Competitive Profile Matrix(CPM) in Passenger Car Industry
Tata Motors Maruti Suzuki Hyundai
Critical Success Factors Weight Rating Score Rating Score Rating Score
Market Share 0.18 1 0.18 4 0.72 3 0.54
R&D 0.16 1 0.16 3 0.48 4 0.64
After sales service 0.12 2 0.24 4 0.48 3 0.36
Distribution Network 0.10 2 0.20 4 0.40 3 0.30
Product Portfolio 0.10 2 0.20 4 0.40 3 0.30
Financial Profit 0.08 1 0.08 4 0.32 3 0.24
Cost Competitve Operations 0.08 3 0.24 3 0.24 3 0.24
Global Presence 0.07 4 0.28 2 0.14 3 0.21
Production Capacity 0.06 4 0.24 3 0.18 2 0.12
Marketing Strategies 0.05 2 0.10 4 0.20 3 0.15
Totals 1.00 1.92 3.56 3.10

Sluggishness in reading the market scenario

Lack of new product launches
Delay of product launches (Tiago)
Demonetization, BS IV emission standards
Turnaround of the bleeding domestic passenger car business ( 5% Market Share)
Skoda and Tata Motors?
GE McKinsey Matrix Passenger Car SB
Passenger Car Industry Attractiveness
Factor Weight Rating Value Rationale
Potential to grow upto 5.5 million units from 4.2
Market Size
0.3 4.0 1.2 million units by 2020 (*PWC Report)
Growth Rate 0.2 4.0 0.9 CAGR of 10.09% FY06-16 (*IBEF Report)
Trend of Prices 0.2 4.0 0.9 Upward Trend
Historical Profit Margin 0.1 3.0 0.4 7-8%(Top 5 players average)
Competitive Intensity 0.1 1.0 0.1 Stiff competiton By Maruti, Hyundai etc.
Total 1.0 3.5

Tata's Passenger Car SBU Attractiveness

Factor Weight Rating Value Rationale
5% market share 2016-17, 10% average over the last 3
Market Share 0.3 3.0 0.9 years (*Annual Reports)
Cumulative Sales 6 % vs 22 % Industry Growth Rate,
Relative Growth Rate 0.2 3.0 0.8 Sales Picking up with Tiago(*ET)
Resources 0.2 3.0 0.6 High Production Capacity, Good Management
Company's proiftability 0.1 1 0.2 Low profitability
Brand Value 0.1 2.0 0.2 Moderate
Total 1.0 2.6

The SBU will fall under the Selectivity/ Earnings box

The TATA group should invest in it after the Invest/ Grow Box SBUs
 Ansoffs growth strategy matrix
Market penetration
Tata AIG launched ad campaigns and
Existing
animated characters to increase their
insurance product penetration in India
Tata Motors came up with Indica, Indigo,
Ace and other models to increase
M penetration in the existing market
A Tata Sky, a JV between the Tata Group and
R 21st Century Fox is a direct to home services
K
E
New
Market development
T The Tata Group has increased their exposure to
other markets through mergers, acquisitions and
alliances.
Tata Steel acquisition of Corus to enter
European markets
Tata Teas acquisition of Tetley Group (Worlds
second largest tea company based in UK)
Tata Communications bought Teleglobe (Now
VSNL International Canada) to enter Canadian
markets
Existing
PRODUCTS
Product development
The Tata Starbucks joint venture: The
coffee shops in cities across India helped the
group add to its wide range of beverages
Ginger Hotels were established under the
category Smart Basic Hotels to cater to
budget travellers in the Indian market
companies
Diversification
Tata Motors acquisition of Jaguar (UK
market) gave it access to premium markets
in the luxury car segment
Tata entered the communication services
space by acquiring 45% stake in VSNL
JV with Singapore Airlines for Vistara to enter
into full service airlines and JV with Air Asia
for budget airlines
New
 5 P Application: Tata

PLAN
Strategy formulation around 1- Sustainable innovation
2- Change management
R&D Centers : Technology , Chemical, Motor, Drug Discovery, Automotive
Publish 2000 patents/year

Pedestrian airbags on cars Safety watch for workers Neutral Automation System

Was only available in Volvo V40 Design Thinking to tap Automate and optimize IT
Range 12-30 MPH into 30 Billion USD operations
market Operational risk reduction
Tata steel worker Enhance user experience
 5 P Application: Tata
PLOY

Diversification of the portfolio by gaining the First mover advantage.

 5 P Application: Tata
PATTERN

TQMS rolls out TBEM (Tata Business Excellence Model)

On a scale of 1000 if > 650 points then nominated for JRD QV award
Average score: 215(1995) 463(2004) 492 (2013)
Tracks change management
a) Basic assessment Early maturing
b) Regular assessment Maturing
c) Advanced assessment - Matured

Src: http://www.tata.com/ebook/tata-review-july-2014/consolidated-tata-review-july-2014.pdf
 5 P Application: Tata

POSITION

Gain on first mover advantage

Lays ploy for the competitors.
Portion of company earnings ranked in the
order of dividend amount
Builds diversification around strong brands.
 5 P Application: Tata
PERSPECTIVE

Culture based decisions taken by congruence model and cultural web.

Downtime cut by 40% over the years.
Ensure sustainable innovation
1) Pollution Prevention Supply chain of JLR re-hauled.
Result: Manufacturing energy use dropped by 23%.

2) Resource Recovery
Package material reuse- 69% of wood packaging for shipments in
vendor park
Src: http://www.environmentalleader.com/2013/02/jaguar-land-rover-sustainability-report-normalized-manufacturing-energy-use-drops-23/
 BCG MATRIX

Stars
Question Marks
- Tata Steel - Tata Communications
Market Growth Rate/Cash Usage

- Tata Motors -
- Tata Power Titan -

BCG
TCS

Cash Cows
- Tata Global Beverages Dogs
- Tata Chemicals -Tata Tele Services

Relative Market Share/ Cash Generation

 Winning without fighting Blue Ocean Strategy

3 wheelers were unsafe,

uncomfortable, high operational
cost, rustic

TATA ACE
Indias first four wheeled mini
truck
Launched in 2005
Small and efficient diesel engine
Low maintenance, High
performance
Other Value innovations of TATA Safe for both urban and rural
use
TATA TATA Car like features comfort and
Swach Nano safety

Within 7 years 10L Ace on the road

 TATAS INORGANIC GROWTH
Tata Tea acquired Tetley for 271mn (2000)

Greater market penetration

Helped Tata Tea's operating efficiency (Operating margin: Tetley(20%), Tata Tea(14%) in
1999-2000)
Instant expansion of product lines; access to Tetleys worldwide distribution network
Leverage Tetleys proven skills in blending, branding and exotic packaging, which fetches
higher premiums
Tata Tea became 2nd biggest tea company in the world (Combined turnover: ~INR2850cr)

Tata Steel acquired Corus Group for 6.7bn (2007)

Created worlds 6th largest steel company (Prior acquisition Tata Steel- 56th)
Tata Steels entry into European market
Lowest cost position in two continents Western Europe and Asia
Market presence in automotive, construction and packaging
Growth through new, higher end-markets and a more sophisticated customer base
Cross-fertilization of R&D capabilities and transfer of technology, best practices and
expertise of Corus management
Combined enlarged distribution network
Currently, talks to merge its European steel business with Thyssenkrupp AG continue
 TATAS INORGANIC GROWTH
Tata Motors acquired Jaguar Land Rover for $2.3bn (2008)

Global footprint; enter high-end premier segment of the global automobile market
Expand Tatas product portfolio and diversify its dependence on Indian market (which
contributed to 90% revenue)
Access to latest technology (two advance design studios) to improve core products in India
Cost competitive advantage as Corus was the main supplier of automotive high grade steel
to JLR; provided a synergy for Tata Group

TCS acquired Citigroup Global Services for $505mn (2008)

Post acquisition, TCS became the 2nd largest BPO player globally
TCS would be the single largest vendor for Citigroup
Allows TCS to take core banking services to small and medium sized banks
Combine tools created by Citigroup along with TCS financial products

Tata Global Beverages and Starbucks formed JV (2012)

TATA Starbucks will own and operate Starbucks cafs

JV will enable an expanded range of beverage offerings
Jointly leverage assets and innovation to offer a premium tea product branded, Tata Tazo
Starbucks brings unique retail expertise as well as a shared sense of business values
 Organic Growth Strategy

Builded technologically superior and exciting product through innovation

and low cost.

In 2013-14, the group saw record capital expenditure of Rs. 95,634 crore
(Source: Capitaline database) on the back of Tata Steel Expansion at
Kalinganagar Plant, Odisha

TCS recorded a capital expenditure of Rs 4000 crores (Source: Capitaline

database) to expand its services in Japan

Nano, an innovation from Group Company Tata Motors was launched in

2009

Tata Motors launched Ace truck in 2005, just above Rs 2 lac

 Overseas Strategy

Philosophy
Expand to geographies where as a group they can have presence

Enter countries where they felt they could make an impact (as compared to
only having a 5% market share)

Make a difference in the development of the country

Tata Motors TCS

50 countries worldwide
Acquired Daewoo Commercial
Vehicle Co. Ltd in 2004
Tata Hispano started as JV with
Hispano Carrocera in Spain in 2005.
In 2009, it became a fully owned
subsidy
Predominantly overseas focussed
with operations in 46 countries
Overseas acquisition
JVs with GE in Saudi Arabia
JV with Mitsubishi to offer IT, back-
office and infra services