Tutorial 6. Economics

1. The various advantages that firms like Tata employ to be large industrial conglomerates: * Vast financial resources* Access to capital favorable terms* Strong corporate image* Connections with countless high-quality business partners * Competitive cost structure* Huge, low-cost Indian labor* Long-standing relationchips with national and state goverments in India Their reputation is growing. They counts on sister subsidiary Tata steel to continuously provide steel. The emerging giants tap abudant low-cost labor, tech talent, and mineral resources to increasingly target the world’biggest growth market. Tata caotalizes on its family conglomerate networks to enhance its position as government supplier in numerous business sectors.

2. Emerging markets attractive for international business because a) Emerging markets as target markets:* Emerging markets have become important for marketing a wide variety pf products and services. The growing of midle class in these countries implies subsantial demand for a variety of consumer products. * Emerging markets are excellent targets for manufactured products and technology. * Governments and state enterprises in emerging markets are major targets for sale of infrastructure-related products and services. b) Emerging markets as Manufacturing bases

* Emerging markets have long served as platforms for manufacturing. The reason is that these markets are hone to low-wage, high-quality labors for manufacturing and assembly operations. In addition, some emerging markets have large reserves of raw materials and natural resources. c) Emerging markets as Sourcing Destinations

In recent years, companies sought ways of transferring or delegating non-core tasks or operations from in-house groups to specialized contractors (outsourcing) Outsourcing helps foreign firms become more efficient, concentrate on their core competences and obtain competitive advantages. Emerging markets have served as eexcellent platforms for sourcing.

3. Throughout India, Tamo works continuosly to satisfy government authoreties. India has a reputaion for “sufforcating bureaucracy” and its civils servants are among the least efficent in Asia. The country is awash in trade barriers, business regulations, and administrative hurdles. Many commodities can be imported after receiving government approval. Import tariffs on parts and components an be subsantial.

The government of India ong discouraged international trade by imposing high trade barriers and bureaucracy. As these restrictions loosened in the 1990s, Tata’s international operation flourished. Tata motors began producing cars in joint ventures with Fiat and Daimler-Benze.

4. Tamo should target for sales of Nano cars in China, Brazil, Russia. Country-level factors Tato should consider as it evaluates the potential of various emergign markets are per-capital income, middle class and comrehensive Index like market size, market growth rate, market intensity, market consumption capacity, commercial infrastructure, economic freedom, market receptivity, country risk.

5. To improve its corporate social responsibility toward future customers in emerging markets, Tamo should invest on education health, agricultural development projects/ To minimize the impact of its operations on the natural environment in Asia and elsewhere, Tamo should use friendly-environment energy, reduce using wood-burning stove.