Tata Group's Growth Strategies
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TATA Group - Under Ratan Tata
Organic Growth Strategies
Ratan Tata strongly believed that to achieve growth at the Tata Group, it was necessary to create technologically superior and exciting products. According to him, the Tata Group would have to distinguish itself from other companies through innovation and low costs....
Inorganic Growth Strategies
Although Jamsetji Tata, the pioneer of the Tata Group, had tried to establish European operations, the Tata Group's overseas ventures had never been large enough to be worth a mention. Ratan Tata, however, was keen on the Group companies entering new markets as he felt that global operations would make them more competitive and efficient. He also believed that a company should be able to take advantage of global opportunities. "The objective of globalization is to move towards becoming globally competitive and to expand your market," he said....
The Tata Group operated in several sectors ranging from materials, engineering, energy, consumer products, chemicals, information technology and communications, to services. These sectors contributed significantly to the group's revenues domestically as well as internationally. Industry experts felt that the success of the Tata Group was majorly attributable to its global acquisitions since the group reported international revenues of US$ 48.3 billion for the FY ended 2011 ...
Though the conglomerate grew through acquisitions and JVs it had to face the challenge of divesting non-performing firms on a regular basis. The group also had to deal with the integration challenges since it followed the inorganic route to growth. It had to deal with the challenge of retention of personnel and co-ordination of sales and marketing functions in case of international acquisitions. The group also had to face the worrisome prospect of brand dilution when acquiring global companies...
The Road Ahead
Despite receiving criticisms for its disparate businesses, the Tata Group continued to grow with its inorganic growth strategies. In January 2012, the Tata Group entered into a JV with international coffee retail chain, Starbucks Corporation to form “Starbucks Coffee—A Tata Alliance”. The JV planned to launch 30-50 outlets in India in 2012...
Exhibit I: Timeline of Tata Group