India’s New Global Challenger, Case Study Example

1a. Describe the various advantages firms like Tata employ to become large industrial conglomerates?

From its early history Tata took advantage of its long standing relationships with state and national governments. It used this relationship to get lucrative government contracts. This strategy laid the ground work for not only future relationships and financial position. It also used its long standing relationships with high quality business partners. It employs the cheap labor, mineral wealth and tech savvy populace to its advantage. An added bonus is its strong access to capital on favorable terms and it financial position and profitability. Tata developed innovative business models honed over generation in a challenging market riddled with regulatory and bureaucratic stumbling blocks.

1b. How can Tata use the same advantages to succeed in foreign markets?

It employs the cheap labor, mineral wealth and tech savvy populace to its advantage. It also employs its vast experience with dealing with bureaucratic inefficient governments to maneuver very swiftly through the legal minefields not to mention any trade barriers they may encounter. It is almost as though everything Tata learned over the last 100 years has been preparing them to go global. The advantages Tata has domestically are being mirrored on a global scale. It lies also with the vast Indian Diaspora all over the world especially in emerging markets that it has a religious and family tie to that makes this business model unique. The same stumbling blocks it faced in its home operations are almost exactly the same one it will face in the emerging markets arena. All Tata has to do is tap into its 100 year experience to deal with whatever happens. This will be anything from cultural barriers to government bureaucracy.

2. What makes emerging markets attractive?

What makes emerging markets attractive is summed up in one word, ‘the numbers’. The experience of emerging from what was up until recently a third world country has given Tata an excellent position. The bottom of the pyramid is the most ignored market segment in the world. This happens to be the largest market in the world to sell to. The Nano car is the world’s cheapest car. This will go well with Africa, Asia and Latin America. This is potentially of 3 billion people who aspire to drive. The numbers speak for themselves even if just 10% market share is achieved in these areas the profit margins will be astronomical.

3. What markets should Tamo target?

With the large populations emerging out of absolute poverty in the Middle East, Latin America, Africa and South East Asia. The prospects look very good for the simple reason billions of low income earners would love to own a car but have no alternatives. The recent financial has brought out new opportunities in that the emerging economies came out very well. Their low exposure to western oxic debt has meant places in Africa and Latin America are showing strong GDP growth rates. With rising incomes it has meant that the Nano is not out of reach.