TATA GROUP

A CASE STUDY
THE TATA GROUP TILL
EARLY 1990’S.
 Started textile trading business in Bombay in 1868.
 First textile mill in India in 1874.
 Indian hotel’s company was formed in 1902.
 TISCO in 1907 marked 1st fray into the steel
industry.
 Tata hydro-electric power supply company-1910.
 The Andhra valley power supply company-1916.
 Tata power-1919.
 Tata engineering & locomotive company (TELCO).
 Lakme1952, entered into cosmetic field
 India’s first billion dollar IT company (TCS).
 Titan watches-1987
 Tata chemicals-1989
TILL 1990,how Tata group
works:-
 Management of each firm
exercised complete authority
on the affairs of the company.
they ran their company as their
fiefdom (full control).
 Tata managed most of their
companies with a very small stakes
& their was no formal set of values
the group companies subscribed to.
 The conservative style of
management slowed the decision-
making process.
What type of benefit Tata group
enjoyed before 1991-92.
 A closed economy means no
threat from outside world.
 Brand name was the biggest
asset for the group.
 Not much competition
What type of problem Tata
faced during 1991-92.
 Substantial changes in the
market structure brought by
LPG (liberalization, privatization,
globalization).
 From a closed economy, the
nation moved towards a
demand-driven economy.
 Tough competition,
What steps Tata group has
taken :-
 Consumer satisfaction-move closer
to the consumer.
 Efficient and cost effective- bring the
new term “cost erosion”.
 Change in distribution network-
marketing tactics.
 Reduce the number of companies to
80 – effective control.
 Increase Tata son’s stake (from 1.7
to 26%)
 CONT…..

 Internal restructure of the company :-

1. cost leadership
2. global competition
3. need to be among the top three in
any market.
4. modernise its infrastrure.
5.changed the product mix.
6.under took cost cutting initiative.
What type of problem faced by
Tata(1997 crisis).
 The market of commercial
vehicle collapsed by almost 45%
during 1997-98.
 Tata mobile network fray was
also not very fruitful- acquire
less market.
 Mismanagement.
What policies adopted by Tata
during 1997 crisis & their after :-
 Acquisition process:-
- acquire 46% stake in VSNL.
- acquire CMC ltd.
 Moving away from commodities to services &
branded products.
 Expansion of business.
 Hived of some business & merge some subsidiary
& holding companies.
 Looked for new growth opportunities
- launch of car ‘Indica’ by TELCO.
 Open new hotel in customer’s economical range
under the brand name ‘Indone’.
 Reduce the number of company from 80 to 30.
 Looks for opportunities in overseas market
- acquisition and joint venture.