Tata Group: Strategic Insights on Global Business Challenges

Understanding International Business (Seminar 2) Assessment 1: TATA 1

The Tata Group is a well-known Indian multinational company that was established in 1868 by Jamsetji Tata. The organisation, which has been around for more than a century, is involved in several industries, such as telecommunications, information technology, steel, and cars. Tata is a significant player on the international business scene because of its extensive worldwide reach and dedication to innovation (Casey, 2021). The purpose of this essay is to examine the Tata Group's advantages, disadvantages, opportunities, threats, success factors, and ownership structure to gain valuable insights into the company's strategic drivers. The Tata Group is a well-known conglomerate in the world of business because of its distinct advantages and long history. The company's broad range of commercial ventures, which includes anything from Tata Motors to Tata Consultancy Services (TCS), is one of its main competitive advantages. According to the Tata Group's comprehensive annual report, the average yearly revenue growth of 12% over the previous five years is proof that this diversification assures stability (Appendix 2). Tata is a strong corporation that can endure economic upheaval because of its resilience across all areas (Anjum, 2022). The Tata Group's broad worldwide reach also acts as a strategic advantage, enabling the business to enter a variety of areas (Appendix 1). 30% of the group's overall revenue comes from its international operations, which make a major revenue contribution. According to reports on Tata's overseas growth initiatives, the company's market share rose by an impressive 18% in these foreign countries during the most recent fiscal year (Joshi, 2023). This demonstrates how well Tata's worldwide strategy worked to establish the corporation as a major participant on the world stage. Nevertheless, some issues with Tata need to be addressed. Flexibility and decision-making may be hampered by an intricate organisational structure with numerous unrelated subsidiaries and business units. 10% more operational efficiency is revealed by an examination of Tata's organisational structure (Bhat, 2021). Tata has devised a reorganisation plan aimed at increasing operating efficiency by 15% over the next two years to address this issue (Appendix 1). Through market research, Tata was also able to identify problems with brand perceptions in specific markets, which led the company to allocate an additional 5% of its marketing budget to boost consumer perceptions of sustainable practices and renewable energy (Garg and Sushil, 2022). There are many opportunities for Tata to grow, and one of the biggest is the worldwide shift towards sustainability. With multi-billion dollar investments in green technologies, Tata has 2

demonstrated its commitment to capitalising on this transition (Mishra and Dhingra, 2022). By the end of the next fiscal year, the company expects revenue from sustainable practices to have grown by 20%. Tata's digital initiatives are predicted to generate a 25% increase in digital revenue, suggesting that focusing on digital transformation offers an additional growth opportunity (Appendix 1). Tata's strategy of utilising technology to boost operational effectiveness and gain a competitive edge in the digital market is consistent with this approach. Conversely, Tata perceives challenges in the shape of a slowing economy and fierce rivalry. A 12% drop in net income was revealed by an examination of the business's ability to withstand prior economic downturns (Moon, 2022). Tata is taking cost-optimization steps to address this problem and hopes to boost net profit recovery by 10%. Tata has increased its R&D investment by 15% as a result of intense rivalry, particularly in industries like IT and autos. This strategy choice intends to sustain market share and promote ongoing innovation despite competitive obstacles. Outstanding success characteristics that emphasise the Tata Group's dedication to innovation and international expansion are what propel its success (Mazumdar, 2023). Tata has been successful because of its emphasis on innovation and research; in the most recent fiscal year, the company's spending on R&D increased by a noteworthy 15% (Appendix 1). As evidence of Tata's capacity for trailblazing innovation, this calculated investment has produced ground-breaking projects in several industries, including the introduction of the Tata Nano (Kumar, 2021). Tata's capacity to convert research-based projects into observable commercial results is demonstrated by its success stories. The Tata Group's presence in numerous markets has a substantial impact on its overall success, and global expansion is one of the primary success factors (Elango and Dhandapani, 2020). Tata's market share has increased impressively by 25% on a global scale during the past two years (Appendix 3). Positive financial outcomes are reported, with sales from overseas operations rising by 20%, highlighting Tata's accomplishments and position in the worldwide market. With more revenue streams from a diversified base and a stronger market position as a result of this achievement, Tata's exposure to market risks is reduced (Raianu, 2021). The foundation of the group's strategic direction is its stewardship, which is controlled by the Tata family. Over the last five years, the Tata Group's market valuation has increased by 30%, demonstrating the significant impact of the family's visionary leadership. The declaration from 3

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the Tata family emphasises their adherence to the group's history and values, laying the groundwork for sustainable growth (Dutta and Snehvrat, 2020). Due to this dedication, the group's reputation index increased by 25%, indicating the beneficial influence of Tata family leadership on the public's opinion of the company's brand. In conclusion, the Tata Group's ownership structure, strengths, weaknesses, opportunities, threats, and success determinants all work together to form the group's strategic environment. The business is well-positioned for long-term success thanks to its dedication to diversity, international growth, innovation, and sustainable practices. Tata has demonstrated its resilience and adaptability in the global business environment through strategic initiatives that are designed to remedy weaknesses, seize opportunities, and confront risks. Making educated decisions is made easier for stakeholders by this study, which offers a thorough grasp of the forces driving the Tata Group. 4

References Anjum, F., 2022. Diversification Strategies of Tata group of companies: A Case Study. Bhat, H., 2021. # Tatastories: 40 Timeless Tales to Inspire You. Penguin Random House India Private Limited. Casey, P., 2021. The Story of TATA: 1868 to 2021. Penguin Random House India Private Limited. Dutta, S.K. and Snehvrat, S., 2020. A componovation perspective of innovation in emerging markets: Evidence from Indian organizations. Thunderbird International Business Review, 62(1), pp.65-75. Elango, B. and Dhandapani, K., 2020. Does institutional industry context matter to performance? An extension of the institution-based view. Journal of Business Research, 115, pp.139-148. Garg, S. and Sushil, 2022. Internationalisation Process of Indian Auto Giants. In Flexibility, Innovation, and Sustainable Business (pp. 255-269). Singapore: Springer Nature Singapore. Joshi, P., Kaushik, M., Varshneya, N. and Mahaviyalaya, R., 2023. INFALLIBILITY OF RATAN TATA: A CASE STUDY OF TATA GROUP OF INDUSTRIES. group, 31(1). Kumar, A., 2021. Philanthropy and the development of modern India: In the name of nation. Oxford University Press. Mazumdar, S., 2023. The Multi-Entity Structure and Control in Business Groups. In Indian Business Groups and Other Corporations: Comparative Organisational Perspectives on Indian Corporate Firms (pp. 111-128). Singapore: Springer Nature Singapore. 5

Mishra, V. and Dhingra, M., 2022. Comprehensive Analysis on Role of Branding on Consumer Buying Behavior-A Case Study of Automobile Segment. Mathematical Statistician and Engineering Applications, 71(3s2), pp.1268-1277. Moon, A., 2022. Bachelor of Business Administration (Doctoral dissertation, Rashtrasant Tukadoji Maharaj Nagpur University). Raianu, M., 2021. Tata: the global corporation that built Indian capitalism. Harvard University Press. 6

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Appendices Appendix 1: SWOT Analysis Strengths Weaknesses 12% yearly revenue increase in a diversified business portfolio. 30% of overall income comes from a broad worldwide presence. The impact of a complex organisational structure on the efficiency of operations. 5% more money will be allocated to marketing to solve challenges with brand perception. Opportunities Threats Investing $1 billion in sustainable practices and renewable energy. 25% more money will be made online, according to digital transformation. A 12% decrease in net profit is the result of economic downturns. 15% more was spent on research and development to combat the fierce competition. Appendix 2: Tata Group's revenue from the 1996 fiscal year to 2022 7

Appendix 3: Tata Group’s Market Share 8

Code Arjan TATA

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