Through mergers and acquisitions, Indian companies have been going global in the recent past. The companies having been successful in the local market have endeavored to raise their status and test the international market. Tata Motors Company has not been left behind in this trend. The Indian company has started making forays in the international market. The strategy employed by the company is that of acquisitions through which the company acquires other companies in foreign markets. The acquisition of jaguar for instance is a manifestation of the company’s zeal to invest out of India.
Tata motors’ is an Indian motor company with its headquarters in Mumbai. It is part of the large Tata Group which was previously named TELCO. The company has revenue of USD 16 billion. The company has recently acquired the British company jaguar and Landrover (2008). Tata motors’ is the largest automobile and commercial vehicle maker in India. The company was established in 1945. During the initial times, it used to manufacture locomotives in conjunction with foreign companies. The most recent production is the prestigious Nano car which is the cheapest vehicle in the world costing only USD 2300. The company is listed on two exchanges, the Bombay stock exchange and the New York stock exchange. The company ranks well in the domestic market specifically with regard to revenue.
Tata motors’ is part of the Tata group which is owned by Tata sons. It was established in 1935 as a manufacturing unit for locomotives. The company saw the expansion of its activities to the commercial sector in 1954. This was accelerated by the joint venture with Daimler-Benz of Germany. Despite its success in the locomotives sector the company sought to diversify its product portfolio. Tata Indica was India’s first passenger car and was manufactured by the Tata motors in 1999.
Strategy for global operations
The company’s endeavor to venture in the global market has been successful in many aspects. The company has primarily used mergers, acquisitions and joint ventures as a strategy for its globalization efforts. With a string of acquisitions already accomplished, the company has gradually been donning a global hat. The company purchased Daewoo’s track from South Korea in the year 2004. This was one of the initial strides towards globalization for the company. Tata motors acquired Hispano Carrocera SA which became a subsidiary of the company. The 2008 acquisition of jaguar and land rover from the ford company was a significant step in the company’s globalization efforts. It marked the beginning of the company’s success in the global environment. Tata motors’ has manufacturing plants in India as well as outside India. The strategy of acquisitions has seen the company expand to foreign countries through the purchasing of existing companies (Sear et al 2007).
Acquisition of Hispano Carrocera
After a careful analysis and evaluation, the company chose Hispano carrocera as its globalization gimmick due to the fact that the plant was fully built and successful in the domestic market. Tata motors henceforth purchased 21% stakes in the company. The company was then a leading automobile maker in Europe. This was a clear strategy for global operations bearing in mind that it was the first buyout by the company in foreign market (Park & Vance 2006).
Jaguar and Land rover
Tata motors began claiming the global mantle immediately after the acquisition of the world most popular brands, jaguar and land rover. Acquisition also involved Daimler and Lanchester brands. This was a clear strategy of entering the European market as well as making an international name. The deal was valued at USD 2 billion. This made the company gain access to design centers in the UK (Kozlowski et al 2008).
Joint ventures have been instrumental in the company’s strategy for global operations. Tata motors joint venture with the Marcopolo of Brazil was fundamental in the manufacture of buses and coaches. The joint venture was meant to consolidate technology and expertise as far as the manufacture of locomotives is concerned. The company has consequently made a joint venture with the Fiat. This involves various productions around the world. This allowed the company to acquire access to diesel engine technology (Vercic et al 2009).
Globalization has become mandatory for companies which seek success in the business environment. The domestic market is not enough for the operations of business firms. Therefore every company seeks to include the international market in its operations. After recording success in the domestic market most of the companies desire to extend their position to the international market. However in order to do so the companies must come up with a strategy for global operations. This involves the methods the company will employ so as to gain access to international markets. There are various Strategies that a company can employ in its endeavor to go global. Tata motors’ is a perfect example of a company’s zeal to access global markets. The company has used almost all options available to ensure that it makes it to the international arena. However the company has predominantly used the strategy of mergers and acquisitions in order to access global markets. Through the purchase of foreign companies the motor company has been successful in its efforts to globalize its operations. The motor company has consequently employed the strategy of joint ventures through which it enters foreign markets through partnership with foreign companies. It can thus be said that in order to gain aces to global markets a company needs a well crafted strategy for global operations.
Kozlowski, et al (2008). Global powers in the 21st century: strategies and relations. Houston: MIT Press.
Park, Y. & Vance, C., (2006). Managing a Global Workforce. Washington: M. E. Sharpe.
Sear, et al (2007). Trading places–SMEs in the global economy: a critical research handbook. New York: Edward Edgar.
Vercic, et al (2009). The Global Public Relations Handbook Revised Edition: Theory, Research, and Practice. New York: Taylor & Francis.