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Business -- Intercultural Communication -- Tata Motors
Tata Motors sought to win a 2004 bidding war for acquisition of Daewoo Commercial Vehicle Co Ltd. in South Korea. Though not initially favored to win the bidding war, Tata Motors won over the decision-makers through shrewd adjustments to South Korea, education the decision-makers about Tata Motors, display of Tata Motors' strengths and listening to Daewoo employees. Tata Motors succeeded where the other nine bidders failed, enabling Tata Motors to effectively expand its business into the Southeast Asia automotive market.
Tata Motors is an East Indian automobile titan founded as Tata Engineering and Locomotive Co Ltd. (Telco) in 1945. Tata Motors is a highly successful intercultural communications business because of its ability to learn from significant events, such as the 1999 recession, and to use strategic planning to internationalize and flourish. Despite the challenges of the economy, technology, competition and the local customs/laws of its host countries, Tata has distinguished itself as a world leader in its industry.
One of its significant acquisitions was Daewoo Commercial Vehicle Co Ltd., part of the old Daewoo automotive Group. Daewoo was a South Korean automotive enterprise founded in 1982. The Daewoo Group collapsed...
Its separate sectors were sold, including Daewoo Motor Co. Ltd., which included Daewoo Commercial Vehicle Co Ltd. Daewoo Motor Co. Ltd. was sold to General Motors. Daewoo Commercial Vehicle Co Ltd. was separated from Daewoo Motor Co Ltd. in 2002. In 2004, Tata Motors acquired Daewoo Motor Co Ltd.
Arguably East India's most successful automotive concern, Tata Motors made it clear that it wished to expand its operations into Southeast Asia. Daewoo Commercial Vehicle Co Ltd. was ideal for Tata Motors' ambitions because it was a known operator in a developed Southeast Asian market. Though there were 10 bidders for acquisition of Daewoo Commercial Vehicle Co Ltd., Tata won the bidding war.
Though Tata Motors was initially not the most favored bidder, Tata Motors won that bidding war through shrewd adjustments to the South Korean economy, technology, competition and local customs/laws. Though not the initially favored bidder, Tata Motors paid attention to the needed adjustments and visibly made them. For example, while still in the bidding war, Tata Motors sent a due diligence team of operations, marketing, human resources and IT managers to South Korea to make sure that the acquisition decision would be made…
Though Tata Motors was initially not the most favored bidder, Tata Motors won that bidding war through shrewd adjustments to the South Korean economy, technology, competition and local customs/laws. Though not the initially favored bidder, Tata Motors paid attention to the needed adjustments and visibly made them. For example, while still in the bidding war, Tata Motors sent a due diligence team of operations, marketing, human resources and IT managers to South Korea to make sure that the acquisition decision would be made according to important business decisions and by people who would actually run the company if Tata Motors won the bidding war. In addition, Tata Motors educated the decision-makers at Daewoo about East India and about Tata Motors so the decision-makers would be more familiar and comfortable with the prospect of choosing Tata Motors' bid. The "education" consisted of several messages: that Tata Motors had significant global business connections; and that Tata Motors was not a run-of-the-mill company but was instead a company of unique and admirable ownership structure, management, ethics and strong company governance. Tata Motors also displayed its strong work ethic to the decision-makers through its small due diligence team, which worked long hours and even on weekends. Finally, Tata Motors' team asked the opinions of Daewoo's drivers and operators, who were surprised and gratified by Tata Motors' interest in their opinions. In the end, Tata Motors won with a modest bid through its highly intelligent approach to winning over the decision-makers in that bidding war.
C. Conclusion
Tata Motors' acquisition of Daewoo Commercial Vehicle Co Ltd. is a lesson in intercultural communication. Though not the favored bidder among 10 bidders for acquisition of Daewoo in 2004, Tata Motors wished to expand its business into the Southeast Asian market and took great pains to make it happen with this acquisition. Tata Motors sent a due diligence team of operations, marketing, human resources and IT managers to South Korea, educated the decision-makers at Daewoo about East India and about Tata Motors, displayed its strong work ethic and asked the opinions of Daewoo's drivers and operators. Its highly intelligent approach allowed Tata Motors to win the bidding war with a relatively modest bid, teaching the importance of measures that are more than dollars and cents.
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