International Expansion Strategy Of The Tata Group †Free Samples

Question: Discuss about the International Expansion Strategy Of The Tata Group. Answer: Introduction: The current report lays stress on the international expansion strategy of the Tata Group, which has been undertaken in the past under the leadership of Ratan Tata. The expansions have been carried out mainly through stake acquisitions in global firms in steel, automobile, mining and hotel industries. Hence, the report would shed light on the various issues that the group is facing along with devising out strategies for minimising the problems. Source problems: The initial problem of Tata Group is to develop consistent vision while operating in various markets and industries (Buckley et al., 2016). Another problem is to set out strategies for more than 100 organisations in above 80 nations. The next problem is to find out a way of absorbing the struggling Corus mills. Finally, the most challenging problem for the group would be to fill up the vacant space of the visionary and energetic leader, Ratan Tata, after his retirement. Secondary problems: The secondary problems confronting the Tata Group in the global arena include the following: Expansion of businesses and investments, since the group is subject to various market situations and culture of each market Continuing the operation of Corus Mills, since it is loaded with debt of $7.4 billion and greater operating cost minimises the profit level of Tata Steel (Contractor, Kumar Dhanaraj, 2015). Business sustainability against the sustainability of corporate social responsibility during economic downturn with a debt burden of $7.4 billion already in the books Managementcontrol in Tata Group, as the organisation has not found an effective successor of Ratan Tata in accordance with the case study Analysis: For expansion of businesses and investments, there is absence of common corporate strategy for Tata Group, which might hinder its overall productivity. This might act as a restraining force and hence, it could be linked with the force field analysis of Kurt Lewin. Continuing the operations of Corus Mills is a serious challenge for Tata Group due to high debt burden of $7.4 billion. However, one of the significant competitive advantages that Tata Group enjoys over its rivals is backward integration, since it has its own sufficient iron ore and coal reserves for manufacturing raw steel at lower cost in India. Raw steel is shipped to the first-class mills of Corus for manufacturing steel products. However, the financial data of Tata Motors, as provided in the case study, states that it was the least profitable business in 2007. With the help of competitive advantage and acquisition of Corus Mills, Tata Group could use Corus Mills and Tata Steel for manufacturing steel car parts at lower costs in order to minimise the cost of revenue for Tata Motors (Yadav, Tikoria Dadhich, 2017). In order to deal with the sustainability issue, Tata Group could minimise contributions for charitable causes like minimising or terminating the yearly $40 million contribution for charitable acts in Jamshedpur for sustaining its business operations. However, it might result in loss of reputation for the group because of negative media and press reporting (Koontz Weihrich, 2015). In relation to themanagement control in Tata Group, it has adopted family type organisational culture, in which it takes adequate care of its staffs along with providing continual employment. This is depicted in the form of contribution of $40 million yearly in its home base of Jamshedpur and the remuneration policy of its staffs until they reach the age of 60. This would increase the overall expenses of Tata Group for achieving its corporate social responsibility. Criteria of evaluation: For identifying and segregating between the businesses related to cash cows and stars and the businesses related to question mark and dog within the next half year. Minimising the debt burden of $7.4 billion of Corus within the upcoming five years Minimising the yearly charitable expense within the upcoming five years Finding out a successor within the upcoming two or three years Alternative strategies: Short-term: S1: Identifying and grouping the various business segments in accordance with the BCG matrix S2: Determining the business areas to be focused and those to be liquidated Long-term: L1: Minimising the debt burden of $7.4 billion of Corus with the help of refinancing of debt loan at a lower rate of interest L2: Minimising the yearly charitable expense of $40 million by 5% per annum in the initial four years and 10% in the fifth year along with fall in staff benefits as well L3: Finding out a successor for changing its family type organisational culture Recommended strategies: Based on the evaluation of the possible alternatives, the following strategies could be selected: S1: Identifying and grouping the businesses S2: Determining the business operations to be continued and those to be shut down L2: Minimising the yearly charitable expense Justification of recommendations: The short-term strategies S1 and S2 are selected, since it would help in resolving the expansion of businesses due to the absence of common group strategy with an identical objective for Tata Group. The long-term strategy L2 is chosen, since it would help the group in freeing up additional capital for boosting the stars businesses. Implementation, control and follow-up: In order to implement S1 and S2, consolidation needs to be executed with utmost care in order to avoid staff redundancy (Thite et al., 2016). After successful execution, the corporate office of Tata Group need not launch extensive business expansion plans without careful considerations. The corporate office needs to monitor the implementation of the strategies with a specific timeline developed in the form of a guide for restricting any delay or procrastination. For implementing the L2 strategy, utmost caution is needed, since quick implementation might dampen the reputation of the group because of negative media and press reporting. The minimisation would be carried out gradually in five years and the corporate office of the group would have to adhere closely to the timeline (Tung, 2016). Conclusion: From the above evaluation, it could be inferred that the major issues confronting the global business operations of Tata Group include business sustainability,management control, expansion of businesses and successor. For eliminating these issues, it is recommended to the organisation to group the businesses, ascertain the business operations to be carried out and shut down and finally, minimising the yearly charitable expense. References: Buckley, P. J., Munjal, S., Enderwick, P., Forsans, N. (2016). Cross-border acquisitions by Indian multinationals: Asset exploitation or asset augmentation?. Contractor, F. J., Kumar, V., Dhanaraj, C. (2015). Leveraging India: Global interconnectedness and locational competitive advantage.Management International Review,55(2), 159-179. Deresky, H. (2017).International management: Managing across borders and cultures. Pearson Education India. Koontz, H., Weihrich, H. (2015).Essentials of Management: An International, Innovation, and Leadership Perspective. McGraw-Hill Education. Morschett, D., Schramm-Klein, H., Zentes, J. (2015).Strategic international management(pp. 978-3658078836). Springer. Thite, M., Wilkinson, A., Budhwar, P., Mathews, J. A. (2016). Internationalization of emerging Indian multinationals: Linkage, leverage and learning (LLL) perspective.International Business Review,25(1), 435-443. Tung, R. L. (2016). New perspectives on human resource management in a global context.Journal of World Business,51(1), 142-152. Yadav, N., Tikoria, J., Dadhich, A. (2017). Pathway towards Competitiveness through Sustainable Enterprise: A Case Study of Tata Group.International Journal of Global Business and Competitiveness,12(1), 45-58.