Tata Tea

In: Business and Management

Submitted By jazzjazzb
Words 7354
Pages 30
The Employee Buy out: Case of Tata Tea
Dr Deepika M G, Faculty, Icfai Business School, Bangalore, India

The article discusses about the Employee Buy Out business model adopted by Tatas on their exit from plantation business in their southern plantation operations in Munnar district of Kerala in India. Tata Tea had sold off 17 tea estates in southern India to the company formed by its employees named Kanan Devan Hills Plantation Company Pvt. Ltd.(KDHPCL). In sharp contrast to the situation in the tea industry experiencing closures affecting thousands of employees, KDHPCL with 13,000 employees could not only recover within a year the loss of $ 24 million run up by Tata Tea, but could also register a post tax surplus of $ 50,000 as on March 31st 2006. However, when Tata Tea went onto implement a similar model in the North Indian Plantation Operations, it met with considerable resistance. The article discusses about the crisis that was facing the tea industry in India, the role played by Tatas in the formation of the KDHPCL and the challenges faced by the employees of South Indian Plantation Operations in accomplishing this unique business model. It also critically reviews the factors that are essential for the success of Employee Buy Out, by enumerating the factors that led to the success of EBO in southern operation of Tatas and its failure in their northern operations.


In February 2007, Tata Tea, an INR 3500 crore beverages company, decided to divest a major portion of its shares in its North Indian Plantation Operation (NIPO) to a group of investors and its own employee co-operatives. To be called as Amalgamated Plantations Pvt. Ltd. (APPL), it would cover a vast portion of tea estates of 24,000 hectares in Assam and West Bengal. Retaining only 20% of its stake in the new company, the remaining was to be bought by Infrastructure…...

Similar Documents


...over time to meet the demand. -new innovations. new methods has given the local industry the comparative advantage. 2.DEMAND CONDITIONS -a more demanding local/ global market has given INDIA the international / national advantage. -a strong trend setting local market has helped local firms anticipate global trends. 3.RELATED AND SUPPORTING INDUSTRIES. -local competition has created innovations and cost effectiveness. for the INDIAN BPOs AND KPOs. -this has also put the pressure on local suppliers to lift their game. 4.FIRM STRATEGY , STRUCTURE AND RIVALRY. -local conditions have affected various firms strategy. -local rivalry have forced firms to move beyond basic advantages. examples INFOSYS , WIPRO AND TCS [ TATAS] 5. THE ROLE OF THE INDIAN GOVERNMENT IN THIS MODEL -INDIAN GOVERNMENT is encouraging more BPOs / KPOs. -INDIAN GOVERNMENT IS stimulating with paperwork reforms. -INDIAN GOVERNMENT is helping to create more skilled labors. -INDIAN GOVERNMENT is providing infrastructures to attract more industries. -------------------------------------------------...

Words: 693 - Pages: 3


...main features of Japanese Management and Z-culture of American Companies, Chinese Style Management, Modern management techniques: an overview of various latest techniques: Business process Re engineering, business outsourcing, benchmarking, knowledge management, total quality management process, McKinsey's 7-S Approach, EBusiness Management. Note : Relevant Case Studies should be discussed in class. Suggested Readings /Books:  Heinz Weihrich, Cannice & Koontz, Management (A Global Perspective), Tata McGraw Hill  Griffin, Management: Principle & Applications, Cengage Learning  Stephen Robbins & Coulter Mary,Management, Pearsons Education  V S P Rao & V H Krishna, Management, Excel Books  P.Subba Rao, Principles of Management, Himalaya Publishing  Dubrin, Management: Concepts & Cases, Cengage Learning  Daft, Principles of Management, Cengage Learning  Ferrell, Business: A Changing World, Tata McGraw Hill  Mukherjee, Principles of Management and Organisational behaviour, Tata McGraw Hill. MBA102Organisational Behaviour Objectives: The course aims to provide an understanding of basic concepts, theories and techniques in the field of human behaviour at the individual, group and organizational levels in the changing global scenario. The course must be taught using case study method. Unit-I Organizational Behavior: What managers do, Definition of OB, contributing disciplines to OB, challenges and opportunities for OB. Foundations of Individual Behavior: biographical......

Words: 7594 - Pages: 31


...Q1. What is the Purpose & Values of TATA Group as a whole? Answer 1. Tata Group companies has evolved a collective commitment to evolving stronger connections between their values and first- in-class business practice – not by putting either one ahead of the other, but by finding mutually beneficial bridges between them. “In a free enterprise, the community is not just another stakeholder in business, but is in fact the very purpose of its existence.” Jamsetji N. Tata (Founder, Tata Group, 1868) “The Tata philosophy of management has always been and is today more than ever, that corporate enterprises must be managed not merely in the interests of their owners, but equally in those of their employees, of the customers of their products, of the local community and finally of the country as a whole.” – J. R. D. Tata Purpose Tata group is committed to improving the quality of life of the communities they serve. They do this by striving for leadership and global competitiveness in the business sectors in which they operate. Their practice of returning to society what they earn evokes trust among consumers, employees, shareholders and the community. They are committed to protecting this heritage of leadership with trust through the manner in which they conduct their business. They have a comprehensive document that serves as an ethical road map for Tata employees and companies, and provides the guidelines by which the group conducts its businesses.it has 21 clauses...

Words: 3974 - Pages: 16

Ratan Tata

...Studies and Research Cases Tata Group uses two different strategies locally and internationally when dealing with its businesses. Local businesses under Tata Group’ umbrella uses the Domestic Strategy which requires product differentiation base on the local adaption. Such example is the Tata Nano Car and the Tata Ace Truck (picture below), produced by Tata Motors at an affordable price for the people in India. Ratan Tata wanted to produce a car which is super cheap yet reliable. Aside from this example, Tata Group has also proven that the goods and services they produced have subsequently benefited the people in India. As such would be the Solar system project which helped villages circulated off the power grid with power. Tata Group made power available to these villages at an affordable price. International businesses under Tata Group’s umbrella develop its international strategy depending on the nature of the industry, opportunities and competitive dynamics at global stage of each operating company. We look at each of the strategy available and the application of Tata Companies to them. (Tata Group, 2012) 1. Global Strategy – Such example would be Tata Global Beverages, the Good Earth brand specialises in flavoured and herbal teas. The recent re-launch in the US with 12 new organic blends, had the original sweet and spicy flavoured Good Earth still the most popular blend. Good Earth teas have also made a successful UK debut. (Tata Group, 2012) 2.......

Words: 2785 - Pages: 12


...Tata Motors is one of the crown jewels of the Tata Group, India's premier industrial house. In the fiscal year 2008 the company sold 585,649 vehicles and had a turnover of INR335 billion (Indian rupees) (US$8.4 billion), making it the largest automobile company in India. Tata Motors had ambitious plans to double the number of vehicles that it sold in a mere five years by maintaining its lead in the booming Indian market and by establishing a greater global presence. The case describes Tata Motors' journey to becoming a global contender. It traces the company's business portfolio and strategy, its dramatic turnaround in 2000-2002, its strengthened position in India in both commercial vehicles and passenger cars, as well as its diversification into international markets through greenfield ventures, as well as acquisitions and alliances - notably the Jaguar LandRover purchase in 2008. In January 2008, Tata Motors unveiled the Tata Nano, priced at INR100,000 or one lakh (US$2,500), the cheapest car in the world. By entering two of the fastest growing areas of the automotive industry (the premium and small car segments), Tata Motors company was firmly on the path to becoming a global contender. Learning objectives: The case has the following objectives: (1) introduce students to Tata Motors - an emerging global player in the auto industry from India; (2) understand and critique the company's domestic strategy to date (including the launch of the Nano); (3) review its international...

Words: 269 - Pages: 2

Unilever Tea

...This title is part of the IDH Case Study Series, published in December 2010. Another title in this IDH Case Study Series is: • nilever sustainable tea, Part II: U Reaching out to smallholders IDH also has a Best Practices Series, whose titles include: • Marketing sustainability • Sustainable sourcing among SME’s • Beyond auditing • Sustainable trading • Retailers and sustainability • Sustainable sourcing and procurement Case study Unilever sustainable tea Part I: Leapfrogging to mainstream y Tania Braga, B Aileen Ionescu-Somers and Ralf Seifert, IMD’s Center for Corporate Sustainability Management Dutch Sustainable Trade Initiative (Initiatief Duurzame Handel) Utrecht, The Netherlands www.dutchsustainabletrade.com office@dutchsustainabletrade.com Foreword A tipping point happens when a critical mass of people begin to shift their perception of an issue and take action in a new direction. As I look across the global landscape, I feel that we are approaching a tipping point concerning global sustainability. It is catalyzed by at least three important realizations by business, government, and civil society: The first is a realization that the world is finite and that a growing population with a higher ambition for living standards will inevitably lead to a world which will be resource and carbon constrained. The second is the realization that to solve the challenges for this future world we need......

Words: 11040 - Pages: 45

Tata Nano

...INTRODUCTION 1.1 BACKGROUND OF THE COMPANY Tata Motors is India’s largest automobile company, with revenues of USD 14 billion in 2008-2009. Through subsidiaries and associate companies, Tata Motors has operations in the UK, South Korea, Thailand, and Spain. The company’s 24,000 employees are guided by the vision to be “best in the manner in which we operate best in the products we deliver and best in our value system and ethics” (Tata Motors, 2010) According to the Equity Bulls (2010), Tata Motors' total sales (including exports) of Tata commercial and passenger vehicles in January 2010 were 65,478 vehicles, a growth of 77% over 36,931 vehicles sold in January 2009. The company's domestic sales of Tata commercial and passenger vehicles for January 2010 were 62,202 vehicles, a 74% growth over 35,704 sold in January last year. Cumulative sales (including exports) for the company for the fiscal at 498,108 vehicles, recorded a growth of 24% over 400,284 sold last year. 1.2 TATA MOTORS – TATA NANO In January 2008, Tata Motors unveiled its People's Car, the Tata NANO, which India and the world have been looking forward to. Tata’s NANO is a new product with a new technology which promises the market of an efficient car with a very low cost. The Tata NANO has been subsequently launched, as planned, in India in March 2009. A development, which signifies a first for the global automobile industry, the NANO brings the comfort and safety of a car...

Words: 2827 - Pages: 12


...assignment on business policy and strategic management TATA GLOBAL BEVERAGES LIMITED A strategy for the DIVERSIFICATION IN SMARtPHONE BUSINESS Guided by, Dr. S.S. Patil Submitted By, 13323 Ritesh Raut 13324 Yogesh Sathe 13325 Sandesh Shendkar 13327 Amit Bhusare 13328 Harshal Patil 13329 Dev Roy PUMBA (2013-15) TATA TEA LTD.: DIVERSIFICATION IN SMARTPHONE BUSINESS AN OVERVIEW OF TATA TEA LIMITED * TATA Tea was set up in 1964 as a joint venture with a UK based James Finlay and Company to develop value added tea. * From a mere share of 3% in the mid 70's to become India's second largest tea producer, Tata tea has come a long way. (www.Tatatea.com) * The operations of Tata tea and its subsidiaries focus on branded product offerings in tea but with a significant presence in plantation activity in India and Sri Lanka. * The Tata tea brand leads market share in terms of value and volume in India and has been accorded the ‘super brand' recognition in the country. * Tata tea also has 100% export oriented unit manufacturing instant tea in the state of Kerela, which is the largest such facility outside the United States. Current Position of Tata Tea LTD. * After the financial collapse in the year 2000, Tata Tea is now moving forward toward the growth. Currently share value of Tata tea has moved up to Rs 700 per share. * Tata tea has been ranked as the most trusted beverage brand in......

Words: 1596 - Pages: 7


...Executive Memo To: TATA Motors Limited Senior Management From: MBS Group TATA Date: 29 September 2014 Re: Game Embedded Strategy Dear TATA Motors Senior Management, This memo accompanies the presentation given on 15 September 2014 which put forward a case for TATA’s senior management to adopt Game Embedded Strategy (GEMS). The objective is to address the key points of the game dimension for TATA and to offer a set of recommendations focusing on evolution of the game in the future. The game dimension discussed in the memo follows framework T/3, type, technology and time approach, which encompasses the game dimension for the Indian geographical region for low cost compact cars between 2009 to 2014. Background – What Market Should TATA Be In? TATA Motors entered the market of low cost compact cars by introducing the cheapest car in the world with the famous “Tata Nano” in April 2009 at $2,400. With Maruti Suziki India Ltd as the Dominant Incumbent and near rival holding a 49% majority market share of the passenger car market in India, Hyundai Motor India Ltd holding 21% market share, the continued threat of Nissan (1.2%) and Ford India as the Extant Incumbent player with 2.3% market share, TATA Motors played the game against its competitors as the first mover by launching the first ever car of this price range. TATA were thus in an oligopoly market and by using historic data on competitors are able to predict how these competitors will behave with 78% probability,......

Words: 661 - Pages: 3

Tata Tea

...Q 1.What is your assessment of Tata Tea’s situation at the end date of the case? Tata tea ,set up in 1964 as a joint venture with a UK based James Finlay and Company .The company has definitely come a long way from a meager share of just 3% in 70’s to now becoming India’s 2nd largest tea producing company. It has noteworthy plantations in India and Sri Lanka. The brand leads market share in terms of volume and value in India and has been accorded ‘super brand’ recognition in India. It also has a100% export oriented manufacturing unit of instant tea in the Indian state of Kerala which happens to be the largest such facility outside the US. Here is a brief history of the company: Tata Tea acquired Tetley in the first ever-leveraged buyout (LBO). This largest cross border acquisition by an Indian company made it the world’s 2nd biggest tea company with the combined turnover worth INR2800 – 2900 cr leading to its aggressive growth and worldwide expansion. The merger proved beneficial for Tata Tea as it slowed its main competitor (in India) HLL’s share (Hindustan Lever limited, a Unilever subsidiary), which was gaining a major market share. Tata Tea Before merger: Post merger Scenario: The right moves at the times Though Tata Tea ranks among the smaller of the Tata companies, yet it has been the most internationally active one. It made the world stand up and notice it when it acquired Tetley, a company nearly twice its size, in a risky leveraged buyout in......

Words: 2671 - Pages: 11


...OREGANO TEA Uses: * Oregano tea is believed to have a soothing effect and helps in getting restful sleep. Preparation * wash fresh or dried oregano leaves * chop then add in 4 cups of water for every 1 cup of oregano leaves. * let it boil for 10 to 15 minutes * Let it steep then strain the leaves. * Drink half cup of Oregano three times a day. * Oregano concoction can be stored in suitable glass container for later consumption. BAYABAS Uses: * Bayabas, Herbal Medicine For Stomach Problems * For diarrhea and control stomach parasites Preparation * Gather fresh Bayabas leaves, * Boil chopped pieces of about 4 to 6 tablespoon for every 18 ounces of water. * Strain and let cool. * Drink ¼ cup of decoction every 3-4 hours until symptoms improve. TAWA TAWA Uses * Tawa-tawa tea for Dengue treatment: Procedures in making * Take 5 to 6 full whole Tawa-Tawa plant * Cut of  the roots * Wash  thoroughly * Fill a boiling pot with 1 liiter of clear water * Boil the Tawa-Tawa for 1 (one) minute in slow rolling boil Cool * Let the Dengue victim drink  only the Tawa-Tawa water for 24 hours * Slip 1 to 1.5 glasses of Tawa-Tawa water for every hour Uses * Aloe vera contains hormones called gibberellins and polysaccharides which kills acne-causing bacteria. Preparation * Extract the gel from a fresh aloe vera leaf and rub it on the affected area. * Let for 3 – 5......

Words: 2394 - Pages: 10


...Vertical View A Nano Car in Every Driveway? How to Succeed in the Ultra-Low-Cost Car Market Henry Ford’s historic promise in 1908 to “build a car for the great multitude” resulted in the production of more than 15 million Model Ts and created unprecedented mobility for consumers everywhere. Will India’s Tata Motors deliver on its equally bold promise to a new generation of consumers to bring the Nano to market for the “great multitude” at a price of $2,500? T o fulfill his promise “to build a car small enough for the individual to run and care for, [of ] the simplest designs that modern engineering can devise, [and] low in price,” Henry Ford exploited innovative product design, vendor relationships, manufacturing techniques and distribution methods. One hundred years later, entrants into the ultra-low-cost car (ULCC) market have the same agenda in their attempt to build a car with a price tag of $2,500 to $5,000, which is lower in comparable dollars than Henry Ford’s $850 Model T. Vertical View But this is not a history lesson that can be easily repeated. Today, all indicators point to an automotive industry in recession, requiring its leaders to balance the global economic crisis with future market demand. Industry consolidation and restructuring in global markets will accelerate, propelled by the lack of availability to capital and consumer financing, high fuel costs and low consumer confidence. Undoubtedly, a new and improved......

Words: 3565 - Pages: 15


...The Tata Corus merger has made Tata Steel the fifth largest steel manufacturer in the world. This is the biggest foreign takeover by an Indian company. Tata and Corus are both happy with the merger and Tata steel is likely to reap many benefits from this deal. The Tata Corus merger has earned Indian steel giant the status of the fifth largest steel manufacturer of the world. Described as the biggest foreign takeover by an Indian firm by BBC, the deal was values at an estimated $11 billion. The two parties had agreed at a value of 455 pence per share of Corus. Earlier in 1999, Corus was formed by a merger of Hoogovens, a Dutch group and British Steel. Tata steel, on the other hand has been India's leading steel manufacturer. Corus had held discussion with Indian, Russian and Brazilian firms for this merger. The ultimate deal with Tata was described as "the right partner at the right time at the right price and on the right terms" by Jim Leng the chairman of Corus. For the Tata chairman Ratan Tata it was a "defining moment. As a part of the deal Tata also contributed to the Corus pension fund. The Tata Corus merger is expected to provide an estimated $400 million worth of savings to Tata Steel in three years time. The estimated savings till March 2008 is 130 million dollars. A prime reason for such high volumes of savings is the availability of cost saving technology through this acquisition. According to Mr. B. Muthuraman, managing director of Tata Steel, a breakthrough......

Words: 1214 - Pages: 5


...employing 8% of workforce, and declining – producing 40% of GDP. * Urban informal sector – the growing sector – represents the residual. * TATA Motors: This type of labor market has provided Tata Motors skilled and un skilled labor force to grow and expand its operations in India. . Geography and Demographics * India is a country of great diversity with a wide range of landform types, including major mountain ranges, deserts, rich agricultural plains, and hilly jungle regions. * Indeed, the term Indian subcontinent aptly describes the enormous extent of the earth's surface that India occupies, and any attempt to generalize about its physiography is inaccurate. * India shares its borders with Pakistan, Bangladesh, China, Bhutan, Sri Lanka, Nepal and Burma. * TATA Motors: The great diversity, landforms provided sufficient resources to the company and also helped Tata to expand its distribution networks to neighboring countries. Economy * India, with the second highest population globally, possesses a thriving world economy that is on the increase. * India is expected to boost economic growth by at least nine percent annually within the next ten years. * India’s economy offers investors a variety of opportunities. India’s service sector forms fifty percent of its economy; it was an added advantage for Tata Motors. * India’s economy has gone through some ups and downs throughout the past few years, as it has grown to the third......

Words: 378 - Pages: 2


...ROOF AND WALL CLADDING BRAND 1 BRAND 1 BRAND 2 All new Galvanised Roofing Sheets look alike... Right Hardness for Roofing Maximum Strength Optimum Chromating Uniform Zinc Coating Excellent Zinc Adherence Assured Thickness Accurate Dimension Superior Packaging Printed Thickness and Zinc Coating Fixed and Transparent Pricing Perfect Overlapping Superior Distribution Network ...but only the best stand the test of time. TATA Shaktee GC sheets truly last the longest. After all, they are brought to you from the house of TATA's. The sheets pass through stringent quality tests that ensure uniform Zinc coating, proper hardness for roofing, superior Zinc adherence, high tensile strength and accurate dimensions. All this and more add up to the quality valued by millions of consumers over decades. FOR MORE DETAILS, PLEASE GET IN TOUCH WITH MARKETING & SALES Tata Centre Tata Steel Limited 43 Jawaharlal Nehru Road, Kolkata 700 071 Phone: (91) (033) 2288 7051/ 3061/ 1951 Fax: (91) (033) 2288 5926 e-mail: tatashaktee@tatasteel.com PHONE NUMBERS OF SALES OFFICES Chennai Delhi Kolkata Mumbai Ahmedabad Aurangabad Bangalore Chandigarh Faridabad Guwahati Indore Jaipur Jamshedpur Kanpur Ludhiana Nagpur Pune : Ph: (044)6696 0008 Fax:(044)2826 9101 : Ph: (011)5535 9659 Fax:(011)2334 3196 : Ph: (033)5550 8154 Fax:(033)2288 1687 : Ph: (022)2267 5945 Fax:(022)2261 9902 : Ph: (079)6661 2606 Fax:(079)5561 2604 : Ph: (0240)562 1477......

Words: 7326 - Pages: 30