Starbucks, Tetley, Jaguar Land Rover: A Tribute to Ratan Tata's Global Vision
By :
Ratan Tata, the
esteemed philanthropist and former chairman of the Tata Group, who passed away
at the age of 86, was a crucial figure in the globalization and modernization
of one of India’s oldest business conglomerates. His willingness to embrace
bold business risks set the foundation for a high-profile acquisition strategy
that ensured the relevance of the salt-to-steel conglomerate established 155
years ago by his ancestors, especially following India’s economic
liberalization in the 1990s.
At the dawn of the
new millennium, Tata orchestrated the largest cross-border acquisition in
Indian corporate history by acquiring Tetley Tea, the world’s second-largest
tea bag producer. This iconic British brand was three times larger than the
small Tata subsidiary that purchased it.
Tata's ambitions only
expanded in the following years, leading to the acquisition of prominent
British industrial giants, including the steelmaker Corus and the luxury
automotive brand Jaguar Land Rover. While not all acquisitions proved
profitable—Corus, for instance, was acquired at inflated prices just before the
global financial crisis of 2007, negatively affecting Tata Steel's performance
for years—these moves were undeniably strategic.
Mircea Raianu, a
historian and author of "Tata: The Global Corporation That Built Indian
Capitalism," remarks that these acquisitions symbolized “the empire
striking back” as a company from a former colony acquired assets in the
motherland, overturning the condescension British industrialists had towards
the Tata Group a century prior.
**A Vision of
Globalization**
According to
economist Andrea Goldstein, who studied the internationalization of Indian
companies with a focus on Tata, the Group’s aspirations have been
“outward-oriented” since its inception, with Tata companies partnering with
foreign entities as early as the 1950s. Ratan Tata aimed for substantial
international expansion rather than token, incremental advances.
His unique education
in architecture and firsthand exposure to the family's business operations
likely shaped his ambitious perspective. The structural changes he implemented
within the group were essential for realizing his global vision. Upon assuming
the chairmanship of Tata Sons in 1991—coinciding with India's economic liberalization—he
faced significant internal opposition. Tata began centralizing the previously
decentralized, domestically focused operations by ousting several long-standing
executives at Tata Steel, Tata Motors, and the Taj Group of Hotels who operated
with minimal oversight from the holding company.
This centralization
allowed him to surround himself with a team capable of executing his global
strategy, preventing the Tata Group from fading into obscurity as India opened
its markets. He introduced foreign executives, non-resident Indians, and
globally connected leaders into the management team, and established the Group
Corporate Centre (GCC) to guide strategic direction and support mergers and
acquisitions. Researchers from the Indian Institute of Management in Bangalore
noted that the GCC facilitated fundraising for significant buyouts, such as
Jaguar Land Rover, thus reshaping the global image of a company originally
known for manufacturing tractors.
The acquisition of
JLR was widely perceived as “revenge” against Ford, which had disdainfully
declined to acquire Tata Motors in the early '90s, only to be overshadowed by
Tata in this deal. Together, these acquisitions indicated that Indian
corporations had firmly established their presence on the global stage,
coinciding with rising growth rates and the benefits of liberalizing reforms.
Today, the $128
billion Tata Group operates in over 100 countries, with a significant share of
its revenues generated outside of India.
**Challenges and
Setbacks**
Despite the Tata
Group's overseas achievements in the 2000s, domestically, the Tata Nano—touted
as the world’s cheapest car—marked a considerable setback. This project was
ambitious but misjudged, as brand analysts noted that the aspirational Indian
market preferred distancing itself from the stigma associated with a
"cheap car." Ratan Tata eventually recognized that branding the Nano
as a "poor man’s car" had become a liability. Despite hopes for its
revival, the Nano was ultimately discontinued after experiencing a sustained
decline in sales.
Succession planning
also became a complex issue for the Tata Group. Tata remained deeply involved
in the conglomerate's operations even after his retirement in 2012, primarily
through the Tata Trust, which controls a majority of Tata Sons’ stock. Experts
argue that while not solely responsible, Tata's involvement in the succession
conflict with Cyrus Mistry, who tragically died in a car accident in 2022,
damaged the Group's reputation. Mistry was ousted as Tata chairman in 2016 in a
boardroom coup, leading to a protracted legal battle that ultimately concluded
in favor of the Tatas.
**A Lasting Impact**
Despite numerous
missteps, Tata retired in 2012, leaving behind a significantly strengthened
business empire, both domestically and internationally. His focus on
modernization and information technology greatly benefited the Group. Even when
some of his ventures faltered, Tata Consultancy Services (TCS) and JLR played
pivotal roles in sustaining the Group’s overall performance. Today
