House of Tata

Ratan Tata manages the Tata Group portfolio which organized around seven sectors: information systems and communications; engineering; materials; chemicals; consumer products; energy; and services. We suggest that Tata should to divest consumer products business sector because in year 2007 it’s generate only 5. 3% of group revenue while holding very high debt to equity ratio. After Tata eliminate consumer goods business, Tata should invest more funds or focus more in its core businesses which is engineering business.

|Pros |Cons | |Tata focus more in its core business which leads to better |Tata needs to resign the job position to employees whom work in Tata | |performances. |tea, Titan industries and Trent. | |Tata reduce the cost of consumer goods production and selling. |Tata lose the market share and revenue of consumer goods. | |Tata has more funds to improve core business. |Divest only one business sector may not help to increase better | | |performance of core business. | 3. Restructuring- Downsizing

As we know that the target customers of Tartar Motors in India are people who have low to middle income levels. Tata always find the way to reduce the cost of production and reaps the benefits of economies of scale which Tata does it very well. This competitive advantage make Tata is the largest automaker and hold highest market share of light trucks, medium/heavy trucks and buses in India. So if company would like to expand its market to global, Tata should use these advantages to compete with international competitors and also maintain sales in domestic market.

We suggest that Tata should reduce the number of firm’s employees in order to reduce the cost too because the number of Tata’s employees more than domestic competitors about two times which make Tata receive less profits and less funds to improve the production. |Pros |Cons | | | | |Tata gain the benefits of economies of scale. |If Tata try to lay off employees may leads to lower performance of | |Tata has more profits to invest in product developments. |productions. | | |Tata may loss of human capital.

| | |The layoff cost paying to the employees might be more than the | | |original salary. | | |Both domestic and international customers perceive Tata as low image | | |brand. | | |Tata have to use long times and high costs to enter the international| | |markets. | Recommendation We recommend that Tata Group should use the first alternative which is Horizontal Acquisition by the reason of to gain technology know-how and the awareness of brand reputation from customers. According to the low price of products, customers perceive Tata brand as the low class or bottom line of the car industry.

Therefore, after Tata acquire jaguar and Land Rover will increase the awareness of good image. Moreover, Tata group also gain the international market power and be more competitive in the in international market. Strategic Intent To be the global brand of business house with greatest capabilities and experience in global market. Strategic Mission Tata group is the house of business operated in various industries as its core competencies of engineering, materials, information system and communications distributed in both domestic of India and international market

Key Result Areas |Key result areas |Strategy(s) |Objective(s) | |Financial Department |Find the money supply from bank |To use fund in supporting the acquisition | | |Make contact with bank to gain loan |activities | | | |To support the bidding process | |Human Resource Department |Select employees to be expert to work in the subsidiaries |To standardize the organization structure and | | |Set the compensated program for those employees who work |culture | | |aboard |To provide knowledge of organization pattern to | | |

|foreign employees | |Research and Development Department |Research the new technology which is able to improve firm |To increase performance of the firm and product | | |ability |To gain technology know-how to adapt in existing | | |Develop the product by using new technology and knowledge |products | |Marketing Department |Managing the distribution channel in both domestic India |To increase customers’ awareness after acquisition| | |and international market |To gain the market power in both domestic and | | |Advertising via the TV and other media after acquisition |international market | | | |To improve sale |