It sure does add to the already growing stature of India and Indian businessmen across the globe. From writing great software, we have moved on and on, to the extent that now we will own two iconic automotive brands that the world swears by. But is a sum of $2.3 billion for two struggling luxury brands a great bargain? Well, according to industry experts, the Tata Motors’ pledge for Jaguar & Land Rover (jlr) deal sure is!
An exhuberant Ratan Tata commented that Tata Motors “will endeavour to preserve and build on their (jlr’s) heritage and competitiveness, keeping their identities intact.” The acquisition, which was finally announced on March 26 has not inspired that much confidence at the stock markets. Tata Motors’ shares fell by more than 7% on the day of the deal announcement, which is ample indication of concerns shared by investors.
In terms of volumes, Jaguar and Land Rover are niche brands. In the year 2007, the entities manufactured a combined 300,000 units, a figure that is not sustainable, considering three factories in ‘expensive’ Britain. Since Tata has pledged that it would neither close plants nor transfer production to a cheaper alternative; volumes will be the only option to offset the labour-product ratio. Tata Motors plans to invest an additional $1 billion to reinvigorate the brands without interfering in the jlr management.
According to some reports, the Tatas may divest more stake in some group companies to finance the acquisition and future endeavors in the direction. Ford has already promised to infuse $600 million towards its share of pension liabilities and Tata is expected to bear its part. However, there are new opportunities, too. As per Overdrive’s Bertrand D’souza, “The company is already selling its Safari and Xenon suvs as part of its assembling operations in Europe and jlr will give Tata more mileage to establish itself as a highly competent automaker in Europe, especially as Tata wants to sell Nano in Europe as well.” Additionally, the strategic importance of the jlr brand platform, technology expertise & sales network will have far reaching advantages. As per news reports, Land Rover has already turned profitable with profits crossing $1 billion in 2007. And it’s anticipated that Jaguar will get rid of the red once its high aspiration xf hits the roads.
Clearly, the deal is an aspirational one to ultimately place the Tatas firmly on the global auto map. But the first challenge for the Tatas is to successfully manage two brands that belong to a genre unknown to it, add to that the fact that it has had to opt out of the lucrative outsourcing model. Once that can be done, the rest will automatically fall in place.
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Source : IIPM Editorial, 2008
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
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the developed world. Their growing presence, influence and interest in politics of world’s richest individuals raises many questions especially in developing countries. Can money and billionaires make politics more people friendly when people in developing countries hate politics? Or will it mark the return of ‘billioanophobia’?
Foremost MNCs of the US do their Budgeting through this methodology. And these countries owe success of their economies to this technique – Capital Budgeting! And that’s exactly the reason why developing economies should adopt it. And why should India bereft itself from it? With increasing expansion and complications of government functioning and intricacies of the economic structure, the addictive hype about revenue budget, capital Budgeting provides a method to the madness of understanding the entire amount of capital that is generated within the country under various flows.
stock market rout around the world is similar to the 1998, 1990 or 1987 corrections, which all provided great buying opportunities or whether we just completed the first leg of a more severe and longer lasting bear market. I can sympathize somewhat with the goldilocks’ crowd view that the current decline does provide a buying opportunity because the magnitude of the decline is similar to the 22% drop in 1998 (from the October 9, 1998 low the stock market rallied by 33% to the end of the year) and the 19.3% decline in 1990, which was followed by the great bull market of the 1990s.
and for two weeks we could not find it,” said a senior World Food Programme official at the recently concluded World Economic Forum in Davos. With the soybean & wheat prices going sky high, the official lamented that so acute is the food crisis that the countries are too niggardly in sharing their produce. While there are many who blame this on the ever reducing agricultural land, another set of experts completely blame the rising population for the dwindling food supplies. The Optimum Population Trust believes, if the current rate of population growth goes on, it is likely to touch 134 trillion figure by 2300. While that may be a bit farfetched, the UN estimates cite that the global population is likely to stabilise at 10 billion mark by 2200. And according to experts, such large chunk of human species are likely to make it 50% more difficult to manage climate change; prevent the overuse of natural resources & make it 50% harder to provide food for the entire lot. However, more excruciating than the population increase is the fact that global consumption has been rising at an alarming rate. According to noted environmentalist George Monbiot, “By 2100, global consumption will increase by roughly 1,600% & economic growth this century could be 32 times; as big an environmental issue as population growth.” Consumption or population – the fact is that mankind needs to deliberate on being a little more judicious.
The young, boyish-looking man asked for a small favour and got talking. It was then that he revealed that he was Aditya Mittal, the son of L. N. Mittal, and the CFO of the world’s largest steel company, ArcelorMittal. But his humility and his willingness to interact with the Indian media came to the fore when he readily agreed for an interview at a later date. Unlike other businessmen, he stuck to his words.
in 2000; with universal primary schooling for all boys and girls, as one of its goals, alongwith seven other similar goals, UN members and leading institutions which participated, were over-excited and over-confident over accomplishing it. But at halfway of 2015 deadline, when poor countries are in need of additional $11 billion for spreading education, major developed powers are lackadaisical.
numbers, but this guy is different, for his core competence is science. Label it as a trendsetting expedience or a step well thought of by the company, fact is that in an era where the top slot has invariably been occupied by sales & marketing executives, the appointment of a scientist can be truly considered as an epoch in the pharmaceutical industry. Undoubtedly, Lechleiter’s scientific expertise should provide Eli Lilly an edge over other drug making companies especially in the R&D. Buoyed by the announcement on December 18, the company’s stock price rose slightly to reach 53.49 cents (trading at 56.06 cents currently on January 8).
test if the Unite Union did not call off the airport strike. The Unite Union had threatened to strike on January 7, along with planned walkouts for January 14 & January 17 against the airport company BAA’s decision to end the final salary pension scheme for new workers. “BAA has just posted profits of over five hundred million pounds & the Spanish owners, Ferrovial, have seen their profits rise by nearly 60%. It is clear that our members’ pension scheme is financially sound, & should be left alone,” said Unite’s national aviation secretary Brendan Gold. However, a marathon discussion on the New Year eve averted the January 7 strike.
that politicians and governments spend sleepless nights worrying about a voter backlash every time an election looms on the horizon. They say that issues that affect the day-to-day life and economic well-being of voters decide electoral outcomes. Can we say that about India?
$2.8 billion in 2003 is now facing water shortage in New Province. And as if that’s not enough, the UN Environment Programme has also cited that the tourism in Bahamas has resulted in 2.2 pounds of solid waste and litter each day per tourist. Places like Hawaii and Grenada are also victims of such abrasively enterprising tourism. Also it would be really unfair not to mention the Corals which are threatened with extinction. Australia might be basking in the glory of $229,506 million which its tourism industry has generated (2007), but what it fails to perceive is that Corals from the bottom of seas around North-West Australia is almost disappearing, owing to tourists, who choose to take back the Corals from the seas. In India too, places like the Taj Mahal, Nandankanan (Orissa) and the Himalayan tourist hotspots are no exceptions.