Corporate level strategies adopted by Tata Group

 

The Tata Group is a multinational conglomerate based in India that operates in a wide range of industries, including automotive, steel, hospitality, and information technology. The group has a long history of successful corporate-level strategies that have enabled it to become one of the largest and most respected companies in India. The group’s corporate level strategies, including diversification, acquisition, and innovation, have played a significant role in its success over the years. In this blog, we will explore some of the corporate level strategies adopted by Tata Group and their impact on growth and profitability. Through the analysis, we will gain insights into the role of corporate level strategies in the success of large multinational corporation like Tata Group.

Corporate Level Strategies adopted by Tata Group

Diversification Strategy	Acquisition Strategy	Innovation Strategy
IT Services : TCS Aviation Industry : Purchasing of Air India and very recently ordering 220 aircraft from American manufacturer Boeing	Strategic Acquisition         Jaguar Land Rover	R&D to innovate  Tata Nano
Restructuring Strategy	International Strategy	Inorganic Growth Strategy
Fertilizer Industry Sold the fertilizer business to Yara International	Steel Industry Acquisition of Corus Group	Tea Industry Acquisition of Tetley by Tata tea in 2000

1.      Diversification Strategy

Tata Group has a long history of diversification. In the 1990s, the company diversified into several new industries, including information technology, telecommunications, and consumer goods. This diversification allowed the company to reduce its dependence on the automotive industry, which had been its primary business for many years.

One of the most successful examples of Tata Group's diversification strategy is Tata Consultancy Services (TCS), which is now one of the largest IT services companies in the world. TCS was established in 1968 as the in-house IT department of Tata Sons, the holding company of Tata Group. Today, TCS has a global presence and provides a wide range of IT services to clients in various industries.

2.      Acquisition Strategy

Tata Group has also grown through strategic acquisitions. In 2008, the company acquired Jaguar Land Rover, a luxury car brand, from Ford for $2.3 billion. This acquisition was a significant move for Tata Group, as it allowed the company to enter the high-end automotive market and expand its global presence.

The acquisition of Jaguar Land Rover has been a huge success for Tata Group. The luxury car brand has become profitable under Tata's ownership, and its sales have grown significantly in recent years. In addition, the acquisition has helped Tata Group to establish itself as a major player in the global automotive industry.

           3.   Innovation Strategy        

           Tata Group has always been committed to innovation. The company has invested heavily in research  and development in various industries, including automotive, steel, and information technology. One of the most significant examples of Tata Group's innovation strategy is the Tata Nano, a low-cost car that was launched in 2009. 

            The Tata Nano was designed to be an affordable alternative to the traditional family car. It was priced at around $2,500 (INR 1,00,000), making it one of the cheapest cars in the world. Despite initial excitement, the Tata Nano faced several challenges, including quality issues and low sales. However, Tata Group continued to innovate and improve the car, and the latest version of the Tata Nano is more fuel-efficient and has a range of new features. 

            4.   Restructuring Strategy

Tata Group has restructured its businesses over the years to improve efficiency and profitability. One of the most significant restructuring moves was the creation of Tata Sons, the holding company of Tata Group. The formation of Tata Sons in 1945 enabled the group to centralize its management and provide better oversight of its subsidiaries.

Another significant restructuring move was the divestment of non-core businesses. In 2006, Tata Group sold its fertilizer business to Yara International, a Norwegian company. The move enabled Tata Group to focus on its core businesses and improve its profitability.

            5.   International Strategy

Tata Group has expanded its presence globally through strategic partnerships, acquisitions, and organic growth. One of the most significant international moves was the acquisition of Corus Group, a British steel company, in 2007. The acquisition was a significant move for Tata Group, as it enabled the company to become one of the world's largest steel producers.

Tata Group has also expanded its presence in the United States. In 2008, the company acquired the tea and coffee businesses of Good Earth Corporation and Eight O'Clock Coffee Company. In addition, the group's subsidiary, Tata Consultancy Services, has a significant presence in the US IT services market.

Tata Group has also established joint ventures and partnerships with companies in other countries. For example, in 2010, Tata Group entered into a joint venture with China's Weiqiao Textile Company to establish a textile manufacturing plant in Vietnam. The joint venture was a significant move for Tata Group, as it enabled the company to enter the Southeast Asian market.

Conclusion

Tata Group's success can be attributed to its corporate-level strategies, including diversification, acquisition, and innovation. The company has demonstrated that by diversifying into new industries, acquiring strategic assets, and investing in innovation, it can achieve sustained growth and success. The acquisition of Jaguar Land Rover has been a particularly significant move for Tata Group, as it has enabled the company to establish itself as a major player in the global automotive industry. Overall, Tata Group's corporate-level strategies are a real-life example of how companies can achieve success through strategic decision-making and a long-term perspective.