a r

e k
rivge n
Gr ow t h

ou p- V alu es
a
d
n
Ta ta Gr
it R
A m
D r mit R a n gn e k a r

r
[email protected]
A m
D
 Tata Group 2008 (1868)
• Always aligned biz with nation building & values
•
r
India’s biggest private group, most respected, 3% GDP

a
k
• Sales- $50 bn (incl Corus & JLR), $29 bn excl
•
•
ne
Tata Steel + Tata Motors + TCS= 75% of sales
98 companies, 3 Lakh employees
•
ng
Total market cap $66b ($12bn in 2003) India’s highest
•
•
Ra
27 listed firms, 3mn Shareholders
Operations- 80+ countries, exports- 85 countries.
•
it
5 core values: integrity, understanding, excellence, unity

m
and responsibility- enshrined since inception

A
Dr [email protected]
 7 sectors: engineering, materials,
services, information systems,

Engineering
a r
Services Materials

e k
g n
a n Information

R
Energy & Tata’s

t
systems

i
communications

A m
Dr Consumer
products
Chemicals
 Tatas
• Founder- Jamshetjee Tata- 1868, Trading
• 1903- Taj, Mumbai- Luxury Hotels
•

a r
1907- Tata Steel- Asia’s 1st steel plant

k
• 1910- Tata power- Hydro Power
•
• 1968- TCS- Software
ne
1932- Tata Airlines- Civil Aviation

• 1998- Tata Indica

ng
a
• 2008- Tata Nano- World’s cheapest car

it R
A m
At Tata’s, we have retained the fire of idealism and in its glow we have

r
come to recognise that no wealth or power can be more valuable than

D
our dignity; no loss of profit can be more critical than the loss of our
credibility; no skills or qualifications can substitute the integrity of our
[email protected]
character- JRD Tata
 Other firsts
Industrial Educational
• 1912- 8 hour work day • Foreign scholarships
• 1915- Free Medical Aid
a r • IIS, Bangalore
• 1917- Free Schooling
e k • TISS, TIFR, NCPA
• 1920- Paid Leave, PF
g n • Tata Memorial Hosp

a n
it R
2008 Trust Grants-

A m 300 crores

Dr [email protected]
Bombay

House

a r
e k
g n
a n • Group HQ 1926
• Trusts & holding Co.s

it R • 9 Board Members
• Provide strategic vision

m
• Control Tata brand

r A • Big Deals
• Mentor managers

D • Perspective
• Promote values & CSR
[email protected]
 Tata Sons Board
JJ Irani
RK Krishna Kumar
Director
Director

r
TQM

a
Aru

k
Ex n Ga
la ec

e
aw a D n dh
o on an M & i r ec i

n
N S airm A, t
Ch Ta or

g
Vice x

n
Ratan Tata

Ra Chairman
Tata Sons

t
Ala
Ex n Ro
e
In c Di sling
t er
na recto
mi h
k ar
au Inds
C ta ess

A
tio KA Ta sin
na r

r
u
l R Gopalakrishnan Ishaat Hussain MD w b
Ne

D
Exec Director Fin Director
Brand, HR Finance, Legal
[email protected]
 Sir Dorabji Tata Trust + Sir Ratan Tata Trust + Other Tata Trusts

66% shareholding
29%
Tata Sons (1868) shareholding

r
(Major Holdings)
Promoter of all Tata companies

ka Tata Industries (1945)

e
(Major Holdings)

•TCS •Titan
g n
•Tata Steel
•Tata Motors
a n
•Voltas
•Tata Elxsi •Tata Advanced Materia
•Tat Power
•VSNL t R
•Trent
i
•Rallis
•Idea Cellular
•Tata Teleservices
•Tata Chemicals
A m•Tata Investment•Information Tech Park
•Tata Autocomp System

r
•Tata Tea •Tata Teleservices

D
•Indian Hotels •Tata International
•Tata Infotech
[email protected]
 JRD RNT
led leads Tatas
Tatas from since 1992
1938 to 1991 till date
(200cr to (10600+ cr
10600cr)

a r to

k
53 years (200,000 cr)

ne
ng
Ra
it
A m
Dr [email protected]
 Ratan Tata
• Born December 28, 1937
• School- Campion, Mumbai
•
•
US- Age 15, for further studies

a r
k
Degree- Arch & Structural Engg- Cornell
•
• Joined Tata Group, 1962
ne
AMP- Harvard Business School.

•
ng
Director in Charge- Nelco 1971-94
•
•
Ra
Chairman Tata Steel- 1977…
Chairman Tata Motors, Industries- 1981…
•
it
Chairman Tata Sons, Tea- 1991…
•
•
A m
Chairman VSNL- 2002-2005
Chairman 1991- As India liberalised

Dr [email protected]
 RNT Restructuring 1992
Exit Enter Build

r
Marginal biz Potential biz Core biz

ka
e
Cosmetics Steel
Retail
Paints
Oil
g n
Telecom Motors

n Biotech Chemicals

a
Soaps Power
Technology
Pharma
Cement
it R
A m
Dr Pare group companies to 12
Transform group revenues, retain values
Ease [email protected]
satraps, from fiefdoms
 Tata Motors (1945)
• India’s largest auto company- 32500 cr, 1 trucks, 2 cars
• World- 5th M&H CV maker, 2nd M&H Bus maker
•
a r
1999- Indica (UK, SA, Spain & Italy)
•
• k
M&A- Daewoo's truck business, 465 cr, 2004

e
n
“We acquired Daewoo as we saw an opportunity in an entity that

g
had a certain market share, that had a product line that we did

n
not have, and that was a strategic fit for us. We brought in our

a
marketing reach and made the company more profitable.” RNT

R
t
• 2005- Ace mini-truck < Rs 3L, hit, 250,000 units
•
•
mi
Fiat JV- India, South America- cars & trucks
Plants- Pune, Jamshedpur, Lucknow, Pantnagar, Singur
•
r A
2,000 touch points

D [email protected]
 Ace Magic

a r
e k
g n
a n
it R
A m
Dr [email protected]
 Ace Ad

r
The success of Tata
Ace, a 4-wheeler, in a
ka
market dominated by
ne
g
3-wheeler load

n
carriers, was due to a
a
R
deep understanding

it
of the market needs

A m
and customer
requirements.

Dr
 •World's ULCC
Nano- •Set to revolutionise
Indian car market
2008 •Global implications
•Huge export potential

a r
e k
g n
a n
it R
A m
Dr [email protected]
 Innovation
• 1998- Tata Safari, India’s 1st SUV
•
r
1999- Indica, India’s 1st fully indigenous car

a
•
k
2005- Ace, sub-1Ton CV, new segment

e
n
• “Innovation is primarily implementing a new idea to give the

g
company a competitive edge, in all aspects of the value chain“
Kant

a n
• “I can’t think of any other product or service which has built up

t R
such a strong brand without spending money. Within 24 hours of

i
the launch, the Nano website had four million hits. Now that’s a
hit.” Kant.

A m
r
•

D [email protected]
 Jaguar-Land Rover M&A
• Marquee brands acquired from Ford
• Apr08- $2.3 billion
a r
• Access to premium markets

e k
n
• SUV global entry
•
ng
Distribution set-up for Tata Motors
•
a
Unique- Worlds cheapest (Nano), most rugged (Land

R
Rover) & costliest (Jaguar)

it
A m
Dr [email protected]
 Tata Chemicals (1939)
• Rs 5,800 cr
• Tata Salt- India's largest salt
a r
k
brand
• 2005- M&A Brunner Mond
UK, 526 cr
ne
• 2008- M&A General
ng
a
Chemicals US, 4020 cr

R
• Global No.2 soda ash

t
producer
• Fertilisers
mi
r A
D [email protected]
 Indian Hotels (1903)
Taj • 1903- Taj Mahal Hotel, Mumbai

r
Palaces- • 1974- 1st Intl beach resort- Aguada, Goa
Luxury •
ka
2008- Rs 2600 Cr, India's largest-
Taj •
e
10500 rooms, 88 hotels, India 72, 12 nations
n
g
Resorts- • 16% share of organised hotel sector
Leisure •
•
a n
M&A 2005- The Pierre (New York) 202 Cr
2005- The Ritz Carlton (Boston)
Taj
Residency-
•
•
it R
2007- Campton Palace, San Francisco 235 Cr
Taj Air- luxury private jets & luxury yachts

m
Business
• Expansion Rs 2100 crores over N3-4Y
Ginger-
r A
• 147 hotels, 20000 rooms
Budget
D [email protected]
 a r
e k
g n
a n
it R
A m
Dr [email protected]
 Tata Teleservices (1995)
• 6000 cr
• M&A Hughes Telecom in 2001

a r
k
• Largest retail chain, 5,000 outlets
•
•
ne
India's 2nd largest CDMA mobile-phone &
Early CDMA entrant, but distant second (25 mn

ng
subscribers) to Reliance (45 mn)

a
• Excellent response in L2Y

provider
it R
• Tata Indicom- broadband & wireless service

m
• Alliance- Virgin Mobile, target India's fast-growing

A
youth market

Dr [email protected]
 a r
e k
g n
a n
it R
A m
Dr [email protected]
 a r
e k
g n
a n
it R
A m
Dr [email protected]
 Tata Power (1911)
• 6000 cr
•
a r
India's largest private-sector power generator
• 2,300 mw installed base
e k
•
n
Secret of Mumbai’s superb power situation

g
n
• Expansion- invest $4 bn, double capacity 4500 mw
•
a
Building power plants in Arabia, Africa & Asia

R
t
• 30% stake in PT Koltim, Indonesia – to acquire coal
deposits
mi
r A
D [email protected]
 a r
e k
g n
a n
it R
A m
Dr [email protected]
 Tata Steel (1907)
• “In the early '90s, Tata Steel was saddled with antiquated plants, bloated
payroll & no market orientation. . . we were a good study in demise"
Muthuraman

r
• Mid-90s, slashed workforce from 78,000 to 38,000

a
• Early retiring workers- full pay till 60, lifelong health care

e k
• Jamshedpur- Spend $40mn/year supply all civic services & schools but
employ only 20,000 of 700,000 residents

g n
• Spent $2.5 billion on modernization

a n
• M&A NatSteel Singapore (2004) 1282 cr
• M&A Millennium Thailand (2005) 1818 cr

it R
• 2008- 23000 cr, nimble player, Key group dynamo

m
• One of the world's lowest cost producers of steel

A
• Triple capacity to 15 million metric tons by 2010

Dr [email protected]
 a r
e k
g n
a n
it R
A m
Dr [email protected]
 Corus Acquisition 2007
• M&A- Corus (UK-Dutch) steelmaker $12bn

r
• Global No.5
•
a
Asia, Middle East, Europe & Africa
k
e
• Focus on high-value specialized steels- automobiles
•
n
$7.4 billion debt? Lay offs? High-cost ops? Margins?

g
n
Strategy

Ra
it Finish Earn

m
Make Ship
goods at higher
A
Use low cost to
Corus
r
own raw Corus Margins

D
RM plants
steel
[email protected]
 Tata Tea (1950)

• JV- James Finlay, UK

a r
k
• 1980s- From commodity player to branded tea producer

e
• Operate 54 tea estates in India
•
•
g n
Industry- rising inputs, shrinking margins, MNC
M&A- Tetley UK (2000) 1831 cr
•

a n
Rationale- Tata plantations + Tetley’s global reach
M&A- Good Earth Tea (US) 144cr, JEMCA(Czech) 100cr, Eight O'

R
•
Clock coffee (US) 990 cr
•
it
M&A- Himalayan Mineral water- Premium, at source

m
• Glaceau- M&A, sold in 9 months to Coke- $400 mn profit

A
• Now- Build Tata Tea brand, NPL, exit tea plantation biz

r
• Overtook HUL in beverage volumes in 2007 in India

D [email protected]
 Tata BP Solar
• $260 million JV- BP (UK)
•
r
Renewable energy- Solar power, home & street lighting

a
k
• Exporting solar cells, modules, and power systems
•
e
Germany- Rooftop solar-electric systems for buildings

n
g
• EMs- Bring affordable power to villages not in power grid
•
n
Low-cost, solar-powered water pumps, refrigerators, &
a
Rs 1200 lanterns that burn for 2 hours on charging

t R
• Fitted 50,000 homes with Rs 12000 systems that can
i
power 2 lights, a hot plate, a fan, and 14-inch TV

m
• “This is a drop in the ocean, we ought to be touching
A
r
millions" Tata BP Solar CEO K. Subramanya

D [email protected]
 a r
e k
g n
a n
it R
A m
Dr [email protected]
 TCS (1968)
• India's oldest & Asia's largest software firm
• $4.3 bn, 1 lakh+ employees
• Major home player, unlike most others
•
a r
2004- 10% equity, IPO raised $1.3 billion
•
k
Poised to tap outsourcing boom & growing geographies
e
n
• Gen-next IT products- Transportation, retail, finance,
•
g
M&A to extend geographic reach- TKS 360 cr Technosoft

n
a
• Software for Fiat, Ferrari F1, Iveco, CNH

it R
A m
Dr [email protected]
 Titan (1984)
• JV- TIDCO, introduced India to quartz

r
• Rare Indian company to acquire collaborator, Ebauches
•
•
JV- Timex, discontinued 1998

ka
e
2008- Sales 3041cr, Profit 150cr, 60% MS, 12000 outlets

n
• Global No. 6, India’s largest, 9mn watches, 30 countries
•
g
Began ‘watches as gifts’, Psychographic segmentation

n
a
• Titan, Edge, Raga, Heritage, Wall Street, Regalia,
Classique, Royale, Aviator, Nebula, Octane, Fastrack
•
• t R
Market Xylys, Tommy Hilfiger & Hugo Boss

i
Sonata, India's largest selling watch brand
•
m
Tanishq (1994)- India's largest jewellery brand Rs 2000 cr
A
r
• Jewellery (66%), Watches (31%), Others (3%) sunglasses,
Rx eye wear, precision components
D [email protected]
 a r
e k
g n
a n
it R
A m
Dr [email protected]
Voltas (1954)

a r
e k
g n
a n •2400 cr

R
•AC & Engg-services

it •Turnaround
•Tapping AC boom in malls,

A m offices, residences

Dr •Middle East major- Bahrain

City Centre, Royal Palaces &
Burj Dubai Tower- world's
[email protected]
tallest building
 Trent (1998)
• 632 cr, Retail foray
• 3 formats
a r
•
e k
Westside- 29 lifestyle dept stores,17 cities
•
g n
Star Bazaar- Hypermarket (3)
•
a n
Landmark- Books & Music (10)
•
t R
Target- Indian middle-class
i
•
• m
Indian franchisee-Sisley’s (3)
A
Dr
Run by Noel Tata

[email protected]
 a r
e k
g n
a n
it R
A m
Dr [email protected]
 Infiniti Retail (2006)
• 100% subsidiary of Tata Sons
•
a r
Croma- consumer durables & electronics
e k
n
• 21 large stores (15-20,000 sq ft each)
•
ng
6000 products, 8 categories, 200 brands
•
Ra
World class in-store experience
• it
Woolworths (Australia)- technical support

A m
& strategic sourcing

Dr [email protected]
 a r
e k
g n
a n
it R
A m
Dr [email protected]
 Tata Communications (2002)
•7200 cr
•Global thro’ M&A
•VSNL (2002)

a r •Tyco (‘04) 585 cr

k
•TeleGlobe (2005)

ne 1075 cr
•Global voice and

ng data services leader

Ra •India's top ISP &

intl wholesale voice

it carrier

A m •2008- India WiMax

rollout, worlds

Dr [email protected]
largest
 Other Tata Firms
Firm Estd Sales Sector Business
Cr
Autocomponent Sys 1995 2600 Engineering Autocomponents

r
Tata International 1962 2300 Materials Leather Exports
Tata Asset Mgt 2000
a
2100

k
Finance Financial planning

e
Telco Construction Equip 1998 1617 Engineering JV Hitachi- Earthmovers
Tata Technologies 1994

g n 961 IT Auto /Aerospace Design

Tata Projects
Rallis
1979

a
1948 n 938
702
Engineering
Chemicals
Engineering , Construction
Agrochemicals
Tata Elxsi

it R
1989 308 IT Product design

m
Tata Business Support 2004 145 IT BPO
Tata Interactive
Tata Sky
r A 1990
2001
93 IT
Comm
Custom e-learning
DTH Satellite TV
Tata AIG
Advinus
D 2000
2005
Finance
[email protected]
Chemicals
Insurance Premium 2100cr
Drug discovery
 Strategy Mix
Year Strategy Motive
90s Divest businesses Beauty, Pharma, Oil, Soaps- Focus
1998 NPD Indica Passenger car entry, indigenous
2003 M&A Daewoo trucks (SK)

a r
Chinese market & small truck segment entry
2003 Strategic stake

e k
Indonesian coal mine, SE Asian steel mills

n
00s M&A- Hotels in US Consolidate, enter premium segment
2004 M&A Tyco Intl- $130 mn

ngTata, one of the world's biggest carrier of

a
(Undersea telecom cables) international phone calls

(UK), $91 million

it R
2004 M&A Incat International Tata Tech- major outsourced industrial design
supplier for US auto & aerospace

m
2007 M&A Corus $13 bn, UK Scale, range, access to global automakers

r A
2007 Divest Glaceau to Coke Tata Tea made $523mn profit in 9 months

D
2008 M&A Ford's JLR brands Global auto map, distribution setup, SUV
2008 NPD Nano ULC car, redefined
[email protected] global auto dynamics
 Diversification Synergies

Power
a r Hotels
Consumer
e k IT

g n
a n
Synergy
R
Retail Telecom

it
Steel
A m
r
Voltas

D Automobile Finance
[email protected]
 Firm Holding
Shareholding in
Group firms Tata Steel 27%

• 2002- Fortify promoter Tata Motors 34%

holdings in group firms to
ward off predators
a r Tata Coffee 51%
• Huge funds involved, but
critical
e k Tata Chem 29%

g n
• Creeping acquisitions (5-10%

n
pa) Tata Power 32%

• Tata Steel a
• Crossholdings in group firms

R Tata Tea 29%

• 4%(1970s)
it
• 18%(2000)
• 27%(2002)
A m Tata Elxsi 38%

Dr Trent

Voltas
[email protected]
27%

26%
BSE 31 Mar 2006
 Growth strategies in a globalizing economy

“ We have 2 guiding arrows. One points overseas,

where we want to expand markets for our existing

r
products. The other points to India, where we want
a
e k
to explore the emerging large mass market- not by
following but by breaking new ground in product

g n
development and seeing how we can do something

n
that hasn’t been done before.”

a
R
“ We expand into geographies where we can have a

it
meaningful group presence, and where we could make
an impact and participate, in that country’s

A m
development, as in India. When you visit a country or

r
examine a company, you intuitively know if there’s an

D
opportunity, and then you flesh out that opportunity in
one form or other.” [email protected]
 Domestic Expansion
• N5Y outlined $28 billion capital investments
• Steel
a r
• Auto
e k
• Telecom

g n
n
• Power
• Chemicals

Ra
t
• Technology

mi
r A
D [email protected]
 The RNT era
• Rocky first decade as chairman
• Commissioned sweeping review to plot strategy
• Eased out group veterans
a r
•
k
Focus- emerging businesses, technology, geographies
e
n
• Unorthodox group structure
•
g
Agile, individual companies to respond to new

n
opportunities and threats
a
• "We rescaled our thinking in terms of growth. We just
R
t
forced and cajoled our businesses to make this happen”

mi
r A
D [email protected]
 Key issues
• Successor, with values & CSR

r
• Tata family members own just 3% shares in Tata Sons
•
a
Building coherent vision, retaining diverse focus
k
e
• Cases- Daewoo (South Korea), Charoen Pokphand

n
(Thailand) & Salim Group (Indonesia)

g
• Compete in developed and developing markets

n
a
• In tough times- growth, retain talent, value system &
ethics

t R
• CSR initiatives- tempting targets for cuts
i
A m
Dr [email protected]
Group Numbers 2005-07 (‘000 Cr)

a r
e k
g n
a n
it R
A m
Dr [email protected]
 Market Cap (‘000268Cr)
239
221

a r Cap

k
M -
BSE
129

ne 5 % o f

ng
Ra
it
2005
A m
2006 2007 2008

Dr [email protected]
 Sectoral Contribution %
Sales PAT Exports HR Key Firm
% %

a r % %
Services 7 18
e k 6 10 Taj Hotels
Materials 21
g
34
n 9 18 Tata Steel
Engineering 31
a n
21 14 14 Tata Motors
Energy 6

it R 6 2 2 Tata Power

m
Consumer 5 5 1 16 Titan
Chemicals
r A5 5 1 2 Tata Chemicals
Info & Comm
D 25 11 67
[email protected]
38 TCS
 Top 12 Firms (2006-07)
Firm Estd Sales Cr % Contr Sector
Tata Motors 1945 30000 26 Engineering
Tata Steel 1907

a
23000
r 20 Materials
TCS 1968
k
17000

e
15 IT

n
Tata Communications 2002 7200 6 Communications
Tata Teleservices 1995

ng 6000 5 Communications

a
Tata Power 1911 6000 5 Energy
Tata Chemicals
Titan
it R
1939
1984
5200
2800
4.5
2.5
Chemicals
Consumer
Autocomponent Systems

A m1995 2600 2 Engineering

r
Taj Hotels 1903 2600 2 Services

D
Voltas 1954 2400 2 Engineering
Tata International 1962 2300 2 International
[email protected]
92
 Company M-Cap (%) Apr 08

a r
e k
g n
a n
it R
A m
Dr
M-Cap of Top 5= 87%[email protected]
 How Do they Innovate
• Global innovation- think, aspire & experiment
•
r
Tetley- beverage-dispensing machine without electricity

a
•
k
Tata Chemicals- bio-fuels & ethanol from biowaste

e
n
• TCS - academia (Stanford & MIT) interaction
•
g
Ginger Hotels- Profitable from year1

n
a
• Innometer- thermometer to gauge degree of innovation at

R
every Tata company

it
• R&D teams across the Tata universe share learnings

A m
• “We don’t believe that what we are doing is innovative. It is
just a part of the day’s work”

Dr [email protected]
 a r
e k
g n
a n
it R
A m
Dr [email protected]
 References
• http://images.businessweek.com/ss/08/03/0312_tata/index_01.ht
•
r
http://www.rediff.com/money/2007/dec/28sld1.htm
a
•
• k
http://images.businessweek.com/ss/07/08/0802_tata/index_01.ht

e
n
Ratan Tata: India's shining jewel

g
Pete Engardio, BusinessWeek

n
• Business World Jan, 2008
a
R
• Business Today Jan, 2008

it
• Mckinsey Quarterly- Interview 2005

A m
Dr [email protected]
• “Tatas understand the Indian consumer

a r
and have a passion for growing India. The

e k
Tata Group has always been

g n
professionally run and has paid attention

a n
to building very high intellectual capital

it R
and has the financial strength to mount
big, audacious and innovative projects” V

A
Govindrajan m
Dr [email protected]