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TATA GROUP

TATA
Steel
Recommending a
Strategy
Ideas for Today and
Tomorrow

Rahul Yadav
Saurabh Kalia
Group Vivek Khanna
Members
TATA Motors
n TELCO (TATA Engineering and
Locomotive Company)
n Multinational Corporation.
n Headquarters in Mumbai.
n India's largest passenger
automobile and commercial
vehicle manufacturing company.
n World's 19th largest automaker.
n Sales : 19,654.41cr.
n Stock price: Rs. 347
Under TATA Motors
International Brands
n Jaguar Cars

n Land Rover

n Tata Daewoo Commercial Vehicle

n Hispano Carrocera

n Daimler

n Lanchester
Financial Data
TATA Steel
n TISCO (Tata Iron and Steel Company
Limited )
n World's sixth largest steel company
n Based in Jamshedpur, India
n Annual crude steel capacity of 28
million tones
n 100 million tonne by 2015 with 8
Greenfield in-progress
n Consolidated revenues of Rs
1,32,110 crore
Under TATA Steel
n Anglo-Dutch steel maker Corus
n Singapore based NatSteel Ltd
n Thailand based Millennium Steel
Financial Data
Present Strategic
Issues
n Global Leader/presence both in
means of Quality and Quantity.
n Security & procurement of raw
materials
n Entering the new markets
n Eliminating the RED color from
balance sheet
n Struggle to digest the big ticket
global acquisitions
n Leadership crisis within the
Global Leader/Presence

n Over last few years TATA have


acquired lot of companies across
the globe

n They have presence in 8 different


sectors with 118 different
companies and are working in more
than 85 countries.

n TATA make presence felt in every


Global Leader/Presence

n The future plans of the company


must be the consolidation of its
image and markets in which it
works.

n To become the leader the company


has either acquired new companies
, increased the capacity of exiting
companies or started green field
projects.
Global Leader/Presence

n So as to maintain good international


image the company has never
compromised with the quality.
n TATA has big portfolio in the
automobile sector from entry level
passenger cars , to SUV to luxury
brands , Light utility vehicles to
trucks , buses , concept car ,
electric cars to military vehicles etc
..
International Image

n When the TATA acquire new


companies it never scrapes off the
exiting management instead it mixes a
few people from its parent company
so as to maintain its international
image. Example : Tata Daewoo
Commercial Vehicle
n TATA motors has set a target move
from mid-size player to big player on
the world market to 1.8% market share
from 0.81% by 2015
Raw Materials

n Security & procurement of raw


materials is one of the major issue
company faces in this competitive
market.

n TATA steel can acquired of mines


and smelting units across the
global.

n TATA motors can go forward in


Raw Materials

n The TATA Motors have proper


distribution channel across India ,
but its utilization was much below
its capacity.

n Thus Tata Motors also formed a joint


venture with Fiat and gained access
to Fiat’s diesel engine technology
Raw Materials
n So as to maintain its Security of raw
material at different level , TATA
have extensive backward and
forward linkages and it is strongly
interwoven with machine tools and
metals sectors.
vFrom mines to chemicals required for
Steel production
vFrom engines to complete body for car
manufacturing
vRelay on scales of economy
RED Color
Red Color
Reasons :
n Total debt in the company crossed

1,00,000Cr

n Credit rating was brought down from


BB- to B+

n Company has to pay loan/interest of


about 20,000Cr by the end of August
2009
Red Color
What went wrong :
n Most of the companies were acquired
when their valuation were at/near their
peak level
n Acquired companies already had lot of
debt
n Demand fell because of global melt down.
n Government removed subsidy on steel
import
Red Color
Future strategy actions :
n Will have to dilute its stakes in
various companies
n Will have to attract more
international clients
n Generate funds from groups other
companies to pay of the loan by Aug
so as to improve its credit rating
and thereby avail more loan.
Leadership Crisis
Company will have shortage of
leaders

n CEO of TATA Motors – By Sept


n CEO of TATA Steel – By Dec

n Ratan Tata – By 1012

There are not much options within the


company
New Market
The share of the foreign brands of
TATA in Domestic market is less
than 10%.

Thus there is very large untapped


market.

n Jaguar Cars and Land Rover


n Electric version of TATA Ace
n Many construction/Trucks/Bus which
New Market
NANO
Which is expected to rolled out by July
can also be sold is African and
European countries as there is
strong demand of small cars.

NANO which has put TATA world


automobile map should be used to
trap the market in the developing
countries.
New Market
Tata OneCAT
n The world's first prototype of
a compressed air car.
n To begin production by 2010.
n Is being planned for European and
Australian market only.
n Good potential in South Africa and
Indian market also , TATA should try
to capture this markets also
New Market
The share of the domestic brands in
the international market is less than
18%

Domestic brand like Indica , Indigo


and Ace have a good demand in the
African market , TATA should try to
get hold in this market

Different version with international


standards should be sold.
Blue Ocean strategy
Why the Blue Ocean strategy works
well for the TATA Group ?

n TATA is all about the simultaneous


pursuit of differentiation and low
cost.
n TATA talks about entering the new
market or creating the new market
where there is no competition.
n Creating new value curve
Blue Ocean strategy


Thank You