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The Century of Trust

Shyam Zalavadia (s2708810)


Abhishek Samant (s2705371)
Aditya Kakatkar (s2705942)

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Agenda

• Historical Overview
• Company Profile
• Company Statistics
• Deep rooted history
• Introduction to Tata Steel
• Tata Steel Mission & Vision
• Global Steel Industry
• Company growth phases
• Business strategies
• Porters five force
• Future outlook
• Mergers & Acquisition
• Conclusion

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Historical Overview
• Jamsetji Nusserwanji Tata started a private trading firm, laying the foundation
of the Tata Group in 1868.

• The Central India Spinning, Weaving and Manufacturing Company is set up,
marking the Group's entry into textiles in 1874.

• Ratan Tata joined the TATA group in December 1962.

• In 1981, Ratan Tata named as chairman of TATA Industries.

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Company profile
• TATA group of industries is India’s largest business group in
India.
• Diverse businesses in 7 sectors.

• Group revenue: FY 2008: US$ 62.5 billion/ Rs 251,543 cr.

• Group profit: FY 2008: US$ 5.4 billion/ Rs 21,578 cr.

• International income: 61% of group revenue.

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Company profile

• Operations: over 80 countries.

• Products & Services exported to 85 countries.

• It is one of the Largest employer in private sector over


300,000 employees.

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Company profile

• TATA group of companies is diverged in 7 business


sectors.
– Materials
– Engineering
– Chemicals
– Information technology & communications
– Energy
– Services
– Consumer products

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Company Statistics

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Core Values

• Integrity

• Understanding

• Excellence

• Unity

• Responsibility

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Mission & Vision

• Mission: to be a competitive value provider in international


business for Group companies and all our partners.
• Vision: Become a globally networked enterprise seizing
opportunities worldwide to generate USD 25 million annual
profits by 2008.

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Deep Rooted History

Foundation Consolidation Expansion


1868-1931 1990
1932-1989
onwards

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1874 Central India Spinning, Weaving and Manufacturing Company

1902 TAJ MAHAL PALACE AND TOWERS

1907 TISCO, TATA LIMITED IN LONDON

1910 TATA ELECTRIC COMPANIES

1911 INDIAN INSTITUE OF SCIENCE

1912 EIGHT HOUR WORKING DAYS

1917 TATA OIL MILLS


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Consolidation

• The Tata group ventured into new areas and built on the
foundations, in spite of the restraints imposed by a controlled
economy.

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1932

1939

1945

1952

1954

1962

1968
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Expansion

• The liberalization of the Indian economy unleashed a period of


remarkable growth for the Tata group, in India and worldwide.
• Tata ventured in to mergers and acquisitions in the late 1990s.

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Introduction to TATA STEEL
 Established – 1907

 Fortune 500 Company

 Worlds 6th largest steelmaker: 28 MTPA(million ton per annum)

 Presence in 50 markets; manufacturing in 24 countries.

 Revenue is $32.83 bn. (domestic – 37%, International – 63%).

 Expansion Plan

– Brownfield: Jamshedpur works


– Greenfield: India and Overseas

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TATA Steel

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Source: Tata Annual Report (2008)
Mission & Vision ( Tata Steel)

• Vision - “We aspire to be the global steel industry benchmark


for Value Creation and Corporate Citizenship”.
• Mission – Create differential value for the customers with the
help of continuous improvement in their business process and
technology.

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Global Steel Industry

Source: Krishnamurthy 2005 18


Company Growth Phases
First Phase :
• The First phase is the year up to 1991.
• Tata Steel was the first integrated steel company in Asia.
• There were price control – an administered control of the
economy.
• Tata Steel was not greatly innovative, not greatly business
minded.
• Technology-wise, Tata Steel was a dead company by 1991.

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Company Growth Phases
• The ten years from 1991 to 2001 was about
laying business foundations.

• Tata Steel threw out the old furnaces and


scrapped capacity.

• Tata Steel spent Rs. 10,000cr doing all the


restructuring.

• Tata steel re-engineered its business processes.

• Tata Steel became one of the lowest-cost


producers and one of the most modern
companies in the world ( 2001).

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Source: Iron & Steel Statistics Bureau USD $1= Rs 50.
Company Growth Phases
Third Phase :
• After 2001, Tata Steel Started thinking of growth and
globalization.
• In last 3 to 4 years, Tata Steel has been trying to do Mergers &
Acquisitions globally.
• Tata Steel is now the 6th largest Steel Producer in the world.

Worlds 6th
largest steel
producer 21
Major Mergers & Acquisitions

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Source: Goldman, M 2007
Brand Profile

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Business strategy

• Green field project:


– Primary steel will be produced in India, where there are large deposits
of iron ore.
– Other Asian market like Thailand, Vietnam, Shanghai etc.

• Brown field project:


– Its target is nearly on the way of completion e.g. Jamshedpur.

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Porters 5 force

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Porter Five Forces Model

• Threat of New entrants – High - steel industry is a capital intensive


business.

• Intensity of rivalry among existing competitors – High The major


domestic rivals are SAIL, JSW, ISPAT& ESSAAR steel.

• The bargaining power of suppliers – High – Since the domestic raw


material sources are insufficient to supply the Indian steel industry, a
considerable amount of raw materials has to be improved.

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Continued

• The threat of substitute products – Low – Plastic and


composites pose a threat to Indian steel in one of its biggest
markets- automotive manufacture.
• The bargaining power of buyers – Mixed- some of the major
steel consumption sectors like automobiles, oil and gas,
shipping, consumer durables and power generations enjoy
high bargaining power and get favourable deals.

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Future Outlook

• The Tata steel group will pursue strategic growth through


capacity expansions and securing access to raw materials.
• Tata group is also looking at further integration upstream in
raw materials with an ambition to achieve 100% self-
sufficiency in India and around 50% self-sufficiency in Europe
over time.

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M&A

• Tata Tea -acquires the Tetley Group, UK. This is the first major acquisition of an
international brand by an Indian business group in 2000.

• IHCL- The Indian Hotel Company And its subsidiaries are collectively known as Taj
Hotels Resorts and Palaces, which is recognized as one of Asia's largest and finest
hotel companies. Incorporated by the founder of the Tata group Jamsetji Tata.

• Tata AIG - Tata AIG Life Insurance Company Limited (Tata AIG Life) is a joint
venture company , formed by the Tata Group and American International Group, Inc.

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Continued

• Tata Coffee – In 2003 TATA Coffee acquires US based Eight o’ Clock Coffee co.

• Telco Construction - Tata Group company, signed a deal in March 2008 to acquire a 79
per cent controlling stake in Spain-based Serviplem SA at a cost of Euros 45 million.

• Tata Motors – The Tata Motors has signed the Jaguar and Land Rover (JLR) deal with
Ford last evening, which is estimated to be valued between 2.5 billion dollars.

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Continued

• TCS – Acquires Sydney-based Financial Network Services


(FNS).
• Tata communications - The Tata Group acquires a
controlling stake in VSNL.

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Company Logos

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TATA Nano

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Conclusion

• After conducting an in depth study of one of India’s most


admired companies, we find that the company has many
strengths and opportunities which it may capitalize on to truly
become a world leader in steel making along with setting high
standards for corporate citizenship and social responsibility
towards a long term sustainable growth.

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References
• Corus Group, 2008, Corus is a part of Tata group, viewed on 18 October 2009,
<http://www.corusgroup.com>
• Goldman, M 2007, India’s Tata Group: Shifting Gears; viewed on 13 October 2009,
<http://www.gibsreview.co.za/>.
• Gopalkrishnan, R 2003, Experiences at Tata Group, viewed on 15 October 2009,
<http://www.tata.com>.
• Johnson G., Scholes K., and Whittington R 2005, Exploring Corporate Strategy, Prentice

Hall; Harlow; Ed. 7th; ISBN: 0273687395.


• Krishnan, R 2007, Land Rover, Jaguar bid fits into Tata strategy; The Hindustan Times,
viewed on 08 October 2009, <http://www.hindustantimes.com/>.
• Krishnamoorthy, V 2005, The McKinsey Quarterly: An interview with Ratan Tata, viewed on
16 October 2009,< http://venkatkrish.blogspot.com/>.

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References
• Sriwastawa, S 2006, More Steel for emerging India, viewed on 16 October
2009, <http://www.atimes.com/>.

• Tata Leadership with Trust, 2009, Heritage, viewed on 12 October 2009,


<http://www.tata.com>.

• Tata Steel company, 2009, Annual Report 2008, Viewed on 14 October 2009,
<http://wwwtatasteel.com>.

• Tata Chemical, 2009, News Report 2008, viewed on 17 October 2009,


<http://www.tatachemical.com>

• Tata Motors, 2009, Tata nano media report 2009, viewed on 16 October 2009
<http://www.tatamotors.com>.

• Tata Indicom, 2009, Press Realiese, viewed on 18 October 2009, <http://www.tataindicom.com


>.

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