Does Tata Possess A Distinctive Competency?

The purpose of this paper is to explain the fact that Tata Company possesses a distinguishing competency in the global market. The Tata group is a global enterprise comprising of over 100 independent operating companies with its headquarters in India. It was founded in 1868 by Jamsetji Tata. The main mission for the group is to improve the quality of life of the communities they serve globally through long term stakeholder value creation based on their leadership with trust. It has as a diversified conglomerate structure that reflects in Indian ancestry as a legacy of British colonial managing agency systems, with the aim of providing its own infrastructure in the absence of that infrastructure in the emerging Indian market (Verbeke, 2013).

According to Witzel (2011) the company operates in more than 100 counties and markets across Asia, Africa, Australia, Europe, Europe, North America, South America, Middle East and North Africa. It has 29 publicly listed enterprises with a combined market capitalization of about $134 billion as on March 31, 2015.These enterprises include Tata Steel, Tata consultancy services, Tata Power, Tata Chemicals, Tata Teleservices, Tata Global Beverages, Tata Communication and Indian  Hotels, Titan, Tata Motors and Tata Sons. The enterprises operate separately under the guidance and supervision of its own board of directors and shareholders and they jointly employ over 600,000 people.

Read also Tata Group Global Strategic Analysis

They have managed to show their global competitive in many ways, for example, Tata Motors was ranked among the top ten best commercial vehicle manufactures in the world. Tata Steel was also ranked among the top fifteen best steelmakers and Tata Communications the best international wholesale voice provider. In addition to the list, Tata Consultancy Services was ranked the second largest IT services in the World by market capital and profit (Ramadorai, 2011).The second largest tea company in the world is Tata Global Beverage while Tata Chemicals is the second largest manufacturer of soda ash.

Tata companies have combined their product and geographic diversification through various ways. First, they have employed a diverse workforce in their operations contributing to significant local investments in different geographical locations. They have also made a good brand that is gaining international recognition and that gives their customers worldwide better benefits to their lives. They have endowed institutions for science and technology, medical research, social studies and performing arts, though the Tata Trusts which is the majority shareholders of Tata Sons. The trust also promotes diversification through the assistance to non governmental organizations working in areas of education, health care and livelihoods of the people (Witzel, 2011). In addition to that, the companies take part in different social welfare activities at the locations of their operations and set up sustainable business practices. They are also structuring multinational businesses that aim to distinguish themselves through customer-centricity, improvement, entrepreneurship credibility and value driven operations while balancing the interests of diverse stakeholders including employees and the civil society.

The alliances and acquisitions of different companies have played many roles in Tata’s strategy to attack U.S. markets starting in 2013.First; the introduction of the Tata Brand Equity Scheme provided a primary connection between the Tata companies and other subscriber companies. Through this brand, the subscriber companies were able to use the Tata company brand and gain access to the resources of the broader groups (Verbeke, 2013).These companies would sign a Brand Equity and Business Promotion (BEBP) agreement that specified required code of conduct that helps to ensure high standards of quality and integrity across the company. Secondly, because the Tata brand is highly recognized, a group company that is not well recognized in its market will get enormous boost in its marketing the moment it subscribes to the brand.

The different companies get financial, intellectual and other resources of the other groups behind them despite the fact that they work independently. These kinds of supports allows the group companies to work as a larger company in making acquisitions, investing in new technologies and making any strategic moves. The power of this assistance can be seen in the acquisition of Tetley Tea by Tata Tea in 2000, Corus by Tata Steel in 2007 and Jaguar Land Rover by Tata Motors in 2008 (Verbeke,2013).All of this acquisition represented an acquisition of a company much larger than Tata Company that acquired it. It is evident that this acquisition would not have been possible without the aid of the broader group. This strategy used by Tata has increased its revenue in the long run, and affecting the U.S. markets since most of the best performing companies were either being acquired or getting alliances with the Tata Companies. Almost 60 percent of Tata Group revenue came from outside India market as of 2010 analysis.

Most companies apply innovative corporate strategy to add value to their level of productivity and competitiveness but in some cases it fails to get realized in practice. It is therefore very important to apply the strategies carefully. Taking in consideration the Tata’s Group approach to growth and internalization, it should apply the corporate strategy analysis carefully in order for it to drive the future growth of the company. Being a large conglomerate, Tata companies was organized into seven business sectors. These are Engineering products and services, Information  Technology and Communication, materials like Tata Steel, Services like Taj Hotels Resorts and Palaces, Energy like Tata Power, Beverages like Tata Tea and Chemicals like Tata Chemicals. For the group to achieve success in all the sectors, a well-executed improvement of centralized functions must be applied in all the supporting group companies. It should also connect and elevate the individual companies on many different levels while at the same time allowing the independence to succeed on their own (Witzel, 2011). The individual companies should be given opportunities to show their contributions to overall growth of the Tata Company.

It should also drive its future growth by focusing on the changing market demands and the comfort of its employees. With the aid of Tata Management Center, it must provide and encourage further training of its employees in order to attract and retain the best talents in the company (Ramadorai, 2011). It must also encourage entrepreneurship so that they may be able to make new innovations that will market their brand even more.

In conclusion, it is evident that Tata Company possesses a distinctive competency to all its competitors. Through the acquisition of best performing companies and forming of alliances, it is seen as a threat by the companies. The application of the company’s code of practice, which is built on values and integrity, boosts the marketability of their brand.

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