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 2000

Its second major highlight was when it acquired superior water maker Energy Brands Inc, USA (Glaceau) in 2006 that was the largest overseas acquisition by an Indian company at that time. It then sold its stake to The Coca-Cola Company nine months later, for almost double of what it had paid netting an impressive profit of over $ 500 million, successfully silencing all its critics .
Moves that follow:
After the formation of Tata Global Beverages Limited (formerly Tata Tea Limited) It became the world's second-largest manufacturer and distributor of tea and a major producer of coffee. It then becomes the biggest-selling tea brand in Canada 2nd biggest-selling in the UK the US Another of its brand JEMČA is the biggest-selling tea brand in the Czech Republic
Taking it forward it also ventured into the Indian cafe market with a 50/50 joint venture with Starbucks Coffee Company. The coffee shops branded as "Starbucks Coffee - A Tata Alliance" will source coffee beans from Tata Coffee, a secondary company of Tata Global Beverages. Tata Coffee continues to surge when it acquires USA company Eight O’clock Coffee, in 2006.

Face of innovation for the company/constant innovation and change
In a dash it moved from the plain tea in polypacks to single origin and premium tea as well as flavored teabags and green tea. It also completed the acquisition of Mount Everest Mineral Water, which owned the Himalaya brand, giving it a presence across various beverage segment.
They have modified their operational pattern, gone ahead, and redefined their business model operations locally. They have kept their Profit and Loss and financial structure supple by keeping all the companies separate and always having managed a leveraged position. In terms of their advertisements too, they have moved from the freshness campaign “Taazaa ho le” onto the Jaago Re” emotional aspect of their brand.

The key mantras of the company: Competition, efficiency, gains, productivity, globalization and innovation.
The Tata story is complete with run-ins with the establishment and the political hostility, failure and frustration in some ways, it seems to be the story of India itself, only with a happier ending.
Tata Tea may be relatively small, but it is of all globalised company in the Tata portfolio is not Tata Steel, Tata Motors or TCS, it's Tata Tea which has always been torchbearer of the Tata globalization tale.
Company profile: - Tata Tea was set up in 1964 through a joint venture with UK-based James Finlay and the Tata Group for manufacturing tea and coffee. Currently Tata Tea and the UK-based Tetley group have the world’s second largest branded tea operations with a presence in 40 countries.The company has portfolio of five brands in the domestic market namely Tata Tea,Tetley, Kanan Devan, Chakra Gold and Gemini. It has distribution network of 38 C&F agents and 2500 stockiest catering over 1.7 million retails outlets. It has three subsidiaries namely Tata Tea Inc, Tata Coffee & Tata Tea (GB). The company has its headquarters in Kolkata and owns 27 tea estates in states like Assam, West Bengal and Kerala. It has a 100% export unit for instant tea located in Munnar, Kerala. It 15,900 hectares of land under tea cultivation. Tata Tea produces 30 million kg of black tea annually. Tetley offers customized products to each country ranging from black, green, fruit and herbal teas, iced ready-to-drink teas and an extensive range of exotic specialty tea. It caters to Australian, Middle East, West Asia, North Africa, Poland, Russia and Kazakhstan markets. Tetley contributes to two-third of the total turnover of Tata tea. Tata Tea is also into strawberry preservation business. It offers vocational rehabilitation as well as an additional source of income to elder children (TATA, 2012).
Milestones
Tata Tea won the Mother Teresa Commendation Award for Corporate Citizenship. It received Golden Peacock Innovative Product & Service Award. It received National Safety Council, Kerala Chapter Award (2001) for outstanding performance in Industrial Safety as Runner Up by achieving the lowest frequency rate of accidents in Gr. III(B) Engineering Industries.
Future plans:
Tata Tea is going in for an image makeover to attract youth consumers through its 'Jaago re' campaign, its retail initiative of 'Chai Unchai' and by launching newer products like ready-to-drink beverages. Q 2.Explain and assess the firm’s current strategy of expansion into the international market.

As a well known business historian and author Gita Piramal had once said. “Tata was at the right place at the right time, and could see what was happening around him and respond accordingly.”
Tata Tea is now the second largest player in the branded tea division globally and has a presence in both the emerging and developed markets. It has been through international expansion and has surely moved beyond Tetley UK, to create its global brand portfolio.

Expansion into untouched territories
The group’s decision of entering chiefly black tea markets but surprisingly by acquiring companies who are strong in nonblack teas may sound somewhat strange. The logic is that in the process they tend to gain distribution and at the same time boost their nonblack tea offerings too." international, the style is steadily changing towards non-black teas and the acquisitions give Tata Tea a readymade product portfolio with which it can enter other markets as well.
The company has since diversified into other areas like agriculture tourism. Last year, it launched a similar undertaking for the tea gardens in Assam and West Bengal and planning to replicate globally. (Russell, 2011)
New products new ideas
With the shifting of focus from packaged tea to brands and now to beverages, the company has reinvented itself over time, from primarily being in the a black tea business, when it was acquired, to now having a noteworthy presence in fruit herbal teas and medicinal teas. With ready to drink and iced teas starting to pick up in countries like Canada and Australia, the company is expanding its beverage range internationally. They believe that the focus and competition is now from Unilever to Coca-Cola and Pepsi (Freeman Et Al., 2010).
Recently, Tetley set up a new corporation, Tea Pigs which has a more premium position as compared to Tetley, a conventional brand in the UK. "It was a team at Tetley that came up with the idea—Tea Pigs has been spun off into a separate company and the angel investors role has been rendered by Tetley. "At a later date we will bring it back into the company," says Unsworth. "This method of incubation of new business models is an important way of driving activity." Tetley has undertaken a similar exercise for its hot beverage retailing business, where the management retains some equity in the new company. They are setting up subsidiaries to incubate new business models where the management retains some equity in the company (Goldstine, 2008).
If there is one constant in Tata Tea's approach to the business, it has been change
They firmly believe that if they are good at something , they should move away from it in two three years, whether it is business models, marketing, distribution, brand positioning and placement.

Q3. What challenges will Tata Tea face if it decides to proceed with plans for acquiring tea companies in an expansion strategy?

In the rapid changing business scenario due to the phenomenon of globalization the need to speed up growth and the limitation of product cycles has forced companies to think about using "mergers and acquisitions" as a part of their business tactic to meet their business goals. The merger can broadly fit into any one of the four situations - rescue, partnership, adversarial, hostile depending on how the two companies see their position. Whatever the reasons for the merger the objective is to produce advantages for both the buying and selling companies (Angel broking, 2011). Challenges faced in an Effective Acqusition

Challenges : Assessing the corporate cultures.
Mergers might fail to meet their objectives during the process of integration. Most cases of failures could be because of employees not being able to adjust to the new environment, and or many good employees leaving the organizations during the process of the integration. Dealing with the diverse skill set, working culture of employees and objectives of both the organization may cause a big challenge to Tata Tea while pursuing their expansion strategy .For example there is a great concern about how British employees would react to an Indian Manager as India was a part of British colony.
One company may be driven by a sale mentality while another may be focused on innovation HR just anticipate cultural challenges and take steps to integrate the two different ethical and work cultures (Ashley, 2010).
Acquisitions are a gamble
Acquisitions are like a gamble they may or may not pay off as they are anticipated to. After spending a lot of precious time and energy on a particular project the chances of its success are unsure and what is at stake is the company’s reputation and a massive amount of cash .There are many chances that the stakeholders may be wary of a merger and this might reflect on the share prices. The market of Tata tea may suffer after an acquisition as share prices may drop within a year. The company may be seen negatively by the market for some years to come. So they should cautiously chose the approach of integrating the process and find out the synergies between the companies in the absence of any kind of time pressure and maintaining the operational costs (Ghosal, 2013).
Financial restructuring
As the acquisitions involve huge funds the company may have to put its other growth, expansion and modernization plans elsewhere on a hold for a considerable time period. After an acquisition, Tata Tea might have to do the financial restructuring in order to meet the new financial liabilities and comply with the laws and regulations of the country where such acquisitions are made or are in the pipeline.

Q.4. Strategies that Tata Tea could consider in their global expansion strategy: - strategy except acquisition and should right the assessment of this strategy
If any organization wants to compete and expand at a global level, quality is the critical success factor and that goes for Tata also. Tata can plan go beyond tea and coffee and can also start production of health drinks and water bottles and expand outside from India including US also. According to Tata’s global CEO Mr. Peter Unsworth, Tata tea is currently worth of 1.5 billion US much market share Tata tea has to reduce the dependency of tea which is whopping 85 percent of the total market of Tata tea and indulge in other products to further improve the products portfolio in order to improve the customers database and gain competitive edge over competitors. Competition amongst tea and coffee industry is increasing on a daily basis and for Tata to compete globally they have to look for other green pastures in order to move to high growth markets. Tata has already considered this strategy and has already integrated with industry giants like PepsiCo and star bucks which already have their distribution network set up in most parts of the world. Risk needs to be taken because U.S. is a risky market but if Tata gets it right in the first place then it is also one of the best markets in the world. It will also allow Tata tea beverages to evolve since the competition is one of the highest in the world in U.S. Therefore Tata should aim to establish in U.S. as Tata will need funding to acquire business in let it be Asia, Africa, Europe, Russia and beginning with U.S. can earn them a lot of money in terms of profit. Tata tea being an Indian company also needs to include diversification in their products that is in terms of employees and products change according the surroundings they are installed in (Ranga, 2011). To sustain its volume leadership in the branded tea sector in India, Tata Global Beverages (TGBL) is scripting a fresh game plan which includes expansion into new geographies, new launches, rural initiatives and a sharper focus on local brands. “Our strategy would be to look at both the large loose tea market and the local brands for gaining competitive share. This would happen by strengthening our current brand portfolio and expansion,” said Sanjiv Sarin, regional president – South Asia, Tata Global Beverages. At present, Tata Tea leads the pack in the branded Indian tea sector with a market share of 19.5%.(Nielsen). On Tata Globe’s core strategy, Sarin said the company plans to continue with its initiatives at the rural level with ‘Gaon Chalo’ programme. “Going forward, we will continue to look at aggressive volume growth. We plan to continue with our wholesale-led programmes at the upper end by having clear visibility drives and consumer contact programmes for modern trade,” he added (TATA, 2012).

References
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3. Ghosal S., 2013, Tea industry targets youth market to lift numbers, [Online], Available at:- http://www.just-drinks.com/comment/comment-tata-global-beverages-continues-expansion-journey_id104116.aspx http://articles.economictimes.indiatimes.com/2013-12-16/news/45256084_1_tea-board-mgvk-bhanu-black-tea-production [Accessed on 21st January, 2014]
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8. Ashley M, Et Al., 2010, Tata group sustainability strategy, [Online], Available at: - www.aspencasecompetition.org/presentations/round1/notre.doc‎ [Accessed on 21st Janaury, 2014]