Global Business Strategy

Case Study- Growth Strategies

Of Tata Group
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Abstract

The presented case study comprise of a brief comprehension of the concept of global corporate
strategies, which is demonstrated by the business operations of TATA steel co. The purpose of the
study is to recognize the numerous business strategies implemented by the organization in order
to ensure its sustainability and future growth and expansion. The study further presents a brief
understanding and analysis of several alliances, corporate governance, CSR, as well as other
fundamentals that contribute to the safeguarding of the organization’s position in the market.
 Table of Contents
Introduction......................................................................................................................................4
Question 1- Portfolio, Integrated Organization Perspectives and Competitiveness........................5
Question 2- Business Model Innovation and Technological Innovation through Strategic
Alliances, M&As.............................................................................................................................7
Question 3- Corporate Governance, CSR, Sustainability and Leadership....................................10
Question 4- Personal Reflections on Learning..............................................................................11
Reference list.................................................................................................................................13
Introduction
Global strategy can be defined as the amalgamation of several international, as well as global
corporate strategies that are fundamentally required in order to expand the business operations of
an organization to a global range. In contrast to this, global strategies are described as the
category of business strategies that provide a paramount standard of assistance in creating a
strong global presence of the organization, which can help them provide their customer
requirements in a significant manner. Furthermore, global strategies have also been described as
the fundamental guidelines that are required to be followed by an organization in order to attain
their short term as well as long term business objectives (Buckley et al., 2015). However, it is of
utmost importance to consider the numerous forms of global expansion that take birth as a result
of the capabilities, international position as well as resources of the organization. The following
analysis of global strategies is being demonstrated by the case study of TATA co.’s global steel
production industries’ corporate growth strategies. TATA has been positioned as one of the top 3
steel production business organizations in a global range. According to reports, TATA steel has
currently expanded their business horizons in nearly 26 distinctive nations around the world
(Hotho et al., 2015). Furthermore, the following assignment has also presented a .critical
analysis of the relevant set of theories that complement the theme of global corporate policies as
well as strategies. Lastly, it also comprises of portfolio, integrated business perspective,
competitiveness, and innovative corporate model analysis.
Question 1- Portfolio, Integrated Organization Perspectives and Competitiveness
TATA Group has been globally renowned for their application of both portfolio, as well as
integrated organization perspective, in terms of their diverse range of products. The main
purpose of strategic portfolio management is to provide TATA group with utmost information
regarding the proper application of finite resources in course attaining their strategic business
objectives in a significant manner. This is because it is theoretically proven that considering the
strategic perspective has always benefitted the organization largely. Most of the business
activities that include the involvement of a company are demonstrated under the respective
portfolio, as it is an amalgamation of all the fundamental business activities, transformation plans
and the course of action that is to be implemented in order to encourage customer growth, which
eventually results into organizational expansion. In contrast, integrated organization perspective
can be further described as the significant integration of the internal and external growth factors
of the business organization (Hotho et al., 2015). In brief, the internal factors of an organization
can be identified by its diverse management styles, organizational culture, workforce and
structure of the company. The external factors comprise of their services associated with input /
output, socio-political key factors, business models etc.

As it is evident, both of these diverse perspectives have their own set of benefits and demerits. In
contrast to this, the primary benefit of implementing strategic portfolio perspective is that it helps
the organization in more efficient decision-making, in terms of utilization of appropriate
strategies in order to attain the key objectives of the organization. Furthermore, the secondary
benefit associated with this particular perspective is that it effectively diminishes the risk
exposure status of the business operations of a company to a significant amount. In addition,
Furrer (2016) stated that portfolio provides a paramount standard of assistance to the
organization to the company in minimizing their project costs, by demonstrating a much efficient
usage of their resources. On the contrary, the primary disadvantage of portfolio perspective is
that business organizations usually tend to lose the grasp of leading the business towards a
positive path under its influence. In this context to this, Yeung et al. (2015) have stated that the
primary benefit of integrated organizational perspective is that it demonstrates the company to
reduce their infrastructural expense by maintaining a certain level of transparency of
information. This can be highly exploited by the organization in order to make more effective
decisions, in terms of future expansion and growth.

As of now, TATA Steel has been globally renowned as the second largest business organization,
in terms of steel manufacturing and distribution. According to their official reports, this company
is currently conducting their business operations in over 26 different national territories.
Furthermore, it has been estimated that the commercial presence of this particular organization is
in nearly around 50 different nations around the world. It has been acknowledged from their
2015-2016 annual reports that under the demonstration of integrated organization perspective,
TATA steel has been able to save 34 crores from their budget (Antras et al., 2017). This has been
helpful, in terms of the labor expenses of the organization. In context to this, the manpower
expense of TATA steel, which was of $250 per tons, has been effectively diminished by a value
of 100, which determines it as $150 (Daft, 2015). Furthermore, following the labor expenses, the
company has also efficiently minimized their inventory costs by Rs. 100. The presented data has
also provided a paramount standard of importance in acknowledging the course of action
followed by the organization in order to enhance their global presence to a significant extent. In
context to this, TATA steel has been focused on the production of newer products in order to
obtain a stronger position in the global market, in terms of competitiveness. Furthermore, the
portfolio of TATA steel products is highly diverse, as it comprise of more than 100 distinctive set
of product ranges. This further reflects on the competitive advantage of the organization in the
market, in comparison with rival companies, as they have a greater set of products to offer. It
further provides the company with a paramount standard of assistance in meeting up to the
various needs of their customers in a significant manner.

TATA steel have reportedly replaced the utilization of wooden saddles that are implemented in
railway wagons, trucks etc. with one of their new products. The organization has been provided
with the opportunity to avail easy accessibility of steel coil transportation services. In addition,
TATA steel has been on the strong supporters of reducing the industrial impact on the
environment. This has encouraged TATA steel to implement newer strategies that are
fundamentally helpful in opting for alternative energy sources. In context to this, Segabinazzi et
al. (2016) have stated that TATA steel has been associated with a third party agreement that
helped them in purchasing and implementing slower power energy source in their industrial
plants. In brief, the company has signed a contract to purchase an amount of 18 units of solar
power energy amidst every consecutive business year period, within the time period of 2015-
2021.

In addition, the environmental protection concern of TATA steel is reflected through their
production of eco-friendly leather, which is chrome-free. Furthermore, the organization also
manufactures waterproof leather and re-washable leather, which has been categorized as easy-to-
use product, according to American standards. In order to implement more fuel-efficient boiler
installations in their industrial plants, the organization has made an investment of around 80 lakh
rupees (Cuervo-Cazurra et al., 2016). The company has been reportedly installed the modern
power pump package unit technology in order to maintain the adequacy in their capacity, which
has been primarily implemented in order to gather the steam condensate of the boilers, in order
to reuse it for secondary purposes. Henceforth, both of the organizational perspectives have been
proven to be of utmost importance in demonstrating TATA steel the correct path to maximize the
utility of their resources in a significant manner.

Question 2- Business Model Innovation and Technological Innovation through Strategic

Alliances, M&As
Business model innovation can be practically defined as the procedure that amalgamates
numerous modern and distinctive organizational concepts, which provide a paramount standard
of assistance in boosting the financial position of the company. The primary purpose of this
development process is to familiarize the organization with its key sources of revenue, which can
further be of great help for the company in making necessary enhancements in their products and
service quality. It has been acknowledged though various reports, that the business models have
undergone numerous alterations over a brief period of time (Cui et al., 2018). This is due to the
introduction of modern technological advancements in the market, which are highly advanced in
terms of innovation. Nevertheless, two of the easiest business model tools in terms of
implementation are merger and acquisition. The primary benefit associated with merger and
acquisition is that it helps the company is acquiring a greater amount of monetary assistance, at
the same time as increasing their product range and services. In context to this, Noe et al. (2017)
have stated that merger and acquisition provide the company with a much diverse set of product
range, which can be exploited by the organization in order to earn a greater amount of revenue
and profitability.

According to their official reports, TATA steel is a multinational steel production company that
has been classified as one of the major supporters of the merger and acquisition methods in their
several business operations. The implementation of this technique has historically provided
TATA steel with several opportunities to earn huger profitability through their business
operations. Further evaluation of the TATA steel 2015-2016 annual reports has helped in
acknowledging that the company has recently acquired Corus, which is an UK based steel
production company (Mahajan, 2017). Corus Co. was previously recognized as one of the major
steel manufacturing business organizations operating in the market sphere of United Kingdom,
which is currently headquartered at London. The acquisition of Corus co. has been perceived as a
positive sign for both the organizations, as it this would provide a paramount standard of
assistance to them in merging their business operations, and ultimate provide better quality
goods to their customer base. This initiative has further enabled TATA steel co. to engage in
collaborative business performance with workers that operate in different geographical areas,
which enhances their productive effectiveness and product efficiency to a significant level. The
company has reportedly acquired remaining 24% market shares of famous shoes company,
Bachi, in 2016 (Dietz et al., 2018). Through this course of action, Bachi shoes co. is now a
completely subsidiary company, owned by parent company TATA co.

On the other hand, strategic alliances can be defined as the legal framework that binds two or
more independent business organizations in a specific agreement. In brief, the strategic alliance
provides a paramount standard of assistance in amalgamating numerous companies in order to
cooperatively process, manufacture, distribute and market various products / services.
Furthermore, strategic alliances can be briefly classified into two distinctive types, such as joint
venture, equity, and non-equity strategic alliances.

Joint venture- It refers to the agreement where incorporation is established amidst two
independent business organizations, and it further lays the foundation of a new individual entity.
For instance, Company 1 and engage in a joint venture with Company 2 with a deal of 50-50
shares, and together they can lay the foundation of Company 3. The primary advantage of a joint
venture is that it enables both the business organizations in reaping equal profitable benefits, and
become equal owners of the newly constituted organization.

Equity strategic alliance- It refers to the agreement, through which an organization is enabled to
purchase a considerable percentage of another company. For instance, an equity strategic alliance
can be said to implement when company XYZ purchases supposedly 60% market shares of
company ABC.

Non-equity strategic alliance- It refers to a general contractual agreement amidst two

independent organizations that enables the companies to utilize their resources at maximized
level, in order to cooperate and reap profitability together.

Altogether, strategic alliance is of utmost importance for companies to implement in order to

transform the competitive market environment into a collaborative work sphere, and improve
their ongoing business operations. According to Paul et al. (2016), the need of implementing
strategic alliance can be effectively justified by the three product life cycles, which are highly
useful in understanding the fundamental requirement of newer innovating product range in the
industry. Slow cycle provides great help in longevity, and provides great competitive advantages
in the market. Standard cycle states that the organization is consistently introducing new
products in the market, and failing to sustain. Fast cycle states that the competitive advantages of
the organization are fragile, and the operations complement fast lifestyle in terms of product
development.

According to various reports, TATA steel has currently established strategic alliances with
numerous multinational organizations, which is calculated to be worth $8.4 million USD (Damle
et al., 2017). This has provided TATA with the opportunity to boost their marketing potential
across the global market. One of the most preferred strategies by the company is Blue ocean
strategy, which mainly revolves around newer business opportunities that are not crowded with
immense no of companies in the market. In 2014, the company had launched their new steel door
range “Pravesh door”, which was designed through modern technology with keeping the beauty
of wooden products and strength of steel materials as central factors. In this context, the physical
appearance of the door is of a wooden façade, while it provides the strength and durability of
steel. This product prevents the consumer from investing in pesticide, external maintenance etc.,
and is fire-resistant as well. It has a simple installation process, and is highly eco-friendly in
nature.

Question 3- Corporate Governance, CSR, Sustainability and Leadership

Corporate governance refers to the system which enables higher authorities, such as chief
executives, director board etc. to demonstrate the business operations of numerous organizations.
Corporate governance strives to implement a highly effective and entrepreneurial management
system within a company, which can boost future business expansion in a significant manner.
The directors act in accordance with the strategic aims in order to implement the required
leadership and management system in order to direct the successful business operations of the
company. The 2015-2016 TATA steel Annual report has stated that the board of directors (TATA
Steel) has implemented several appropriate strategies in order to secure the organization’s future.
The board of directors has reportedly implemented TATA Group Guidelines on Board
Effectiveness in order to fulfill their duties towards the organization in a significant manner. The
superior board has the power, as well a responsibility to ensure and secure the sustainability of
TATA co. in the market. The guidelines strictly imply that the board members are independent, in
terms of decision making. This further implies that are free to take any decision in account of the
organization (Chakraborty et al., 2016). Regardless, the board members are elected by the N&RC
based on their personality, experience, expertise etc.

On the other hand, it is of utmost importance for a company to contribute to the society, and
safeguard the environment in order to maintain a sustainable position in the market. This refers
to corporate social responsibilities, which can be described as one of the most popularized
business models in the global market sphere. The primary motive of CSR is to ensure the
sustainability and brand image of the company, through the fulfillment of several social, cultural,
environmental, and philanthropic responsibilities. Furthermore, it has been classified into various
models. However, the present section focuses on Carroll’s CSR model, which can described
corporate social responsibilities as a fundamental set of duties that can provide a paramount
standard of assistance to an organization in safeguarding its sustainability in the global market.
The main features associated with Carroll’s CSR model are listed below, which are as follows-

 Ethical duties should be considered prior to CSR activities

 CSR is primarily constructed upon profitability
  CSR guarantees its compliance with all of the rules and regulations

Carroll’s CSR model comprise of a 3 dimensional framework, which illustrates the business
performance in a manner, which is easy to comprehend. The responsibilities mentioned in this
framework are ethical, economic, legal and philanthropic activities (Spence, 2016).

On the other hand, another CSR model being analyzed in the current section is the Halal Model,
which is primarily focused on the workplace environment in general. In brief, it states that there
is a fundamental required to maintain the balance amidst the workplace environments, which can
enable the workforce to function in accordance with their preference.

Furthermore, Ackerman’s CSR model states that CSR can be divided into three distinctive
categories. The first and foremost phase of CSR is related to the upper tier management of the
organization, which is responsible to ensure that the organizational issues are being dealt with
effectively (Scherer, 2018). Furthermore, the second phase revolves around the implementation
of strategies by the company. Finally, the third phase reflects towards the specialist strategies
being implemented in the organization. Furthermore, various employee benefitting policies such
as retirement plan, training, medical benefits etc. are provided by the management system of an
organization.

Question 4- Personal Reflections on Learning

TATA steel has been classified as one of the largest manufacturing companies operating in the
global market sphere, in terms of steel production. The company is globally renowned due to the
immense diversity present in their product portfolio, which comprise of over 100 different
product ranges. Regardless, the company finds itself amidst numerous challenges while
implementing various business strategies, in certain scenarios. The company has been observed
to implement a diverse set of strategic alliance in order to enhance their organizational growth.
As a result, various strategies have generated distinctive results in account of the company. The
business organization has been hugely impacted by the implementation of global business
strategy. Furthermore, TATA steel co. caters to the fundamental requirements of a widely diverse
customer base, which justifies the diversity in their products. However, this also introduces a
new wave of challenges for the company as well. The company had engaged in numerous merger
and acquisition initiatives throughout the business period of 2015-2016, which had enabled the
company to function in a much effective manner. Furthermore, the company has been highly
benefitted by the implementation of portfolio and integrated organization perspective. TATA steel
is constituted by an excellent management system, and directed by an effective leadership
technique that consistently strives to enhance the company’s growth and expansion in a
significant manner.
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