House of Tata -- Acquiring

House of Tata -- Acquiring a Global Footprint:

Since its inception Tata Group had evolved to become one of the largest business enterprises in India because of its growth alongside the country's economy and transforming portfolio of its constituent companies. In 2007, this company was at the fore front of emerging market firms that were asserting themselves more bravely in the booming mergers and acquisitions market across the globe. Through its global business strategy, Tata Group companies were active in the global marketplace long before they made headlines through their international acquisitions. In relation to where they procured, manufactured, and sold goods and services, the companies developed more global or international profiles.

Despite of its rich history and continued development and growth, Tata Group faced a major issue in 2007 regarding the possibility of a big global acquisition bid. The group contemplated bidding for Land Rover and Jaguar that were owned by Ford Motor Company, a struggling automaker based in the United States. These plans followed the Group successful acquisition of Corus that was based in the United Kingdom and estimated to be approximately $12.1 billion. While Land Rover and Jaguar were two iconic British automotive brands, bidding for them presented many questions and concerns to the Tata Group and its leadership.

Some of the major concerns included the fact that Tata Group would require a huge financial turnaround for loss-making Jaguar unlike its past international acquisitions. Secondly, the acquisition of these Western luxury car brands would present a stretch to Tata Group that mainly focused on commercial trucks and passenger vehicles. The stretch could prove to be detrimental to Tata Group since it concentrated on meeting the needs of middle-class customers in India (Khanna, Palepu & Bullock, p. 1).

Third, the possibility of this acquisition also came at a challenging stage for Tata Motors as it was planning for capital expenditures for the next four years. The company's leadership needed to carefully balance monetary risks of leveraged transactions with opportunities for expansions. This was accompanied by the need to weigh domestic vs. global opportunities and maintain the character of acquired firms while completely realizing the strengths of the acquisitions.

Internal Factors, Primary Resources, and Capabilities of Tata Group:

One of the major capabilities of Tata Motors is its reputation as a firm that produces sturdy vehicles that withstand the poor road networks and conditions in India and across the world. The company has attained this status because of its commitment to compete with Mercedes and Japanese brands in global markets by the strategic pricing of its spare parts. While Tata Motors has not pursued the mergers and acquisitions strategy like the other constituent firms of Tata Group, it has sought out similar acquisitions to complement its current business.

The other capability of the company has been its long-standing commitment and focus on manufacturing vehicles for low- and middle-income customers, economies, and the middle-of-the-market segment. While many firms in this industry have targeted top of the pyramid, Tata Group has successfully focused on the middle-of-the-market segment by targeting niches in its product development.