...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...
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...Evolution of Tata Global Beverages Limited - Background in a nutshell TATA group made foray into the beverages segment by an alliance with James Finlay way back in 1964 followed by taking control of production and marketing in 1976. The brand name "Tata Tea" was announced on 1983, by 100% buyout of James Finlay. A family of brands under Tata tea was introduced : Kannan Devan, Agni, Gemini and Chakra Gold. Interestingly the same route taken to enter into the domestic market was followed for Tata Tea's entry to the global market as well. In 1993, Tata signs a joint venture with Allied-Lyons PLC to establish Tata Tetley and by 2000, Tata group acquired Tetley Group Limited, having a legacy of 163 years at the time of acquisition for USD 432 million. After the renowned acquisition, which was once the largest takeover of a foreign company by an Indian company, they acquired and added globally renowned brands to their kitty which includes, Good Earth (Tea brand in USA), Eight O' clock (Coffee brand in USA), Jemča (the leading tea brand in Czech Republic), Vitax (Polish tea brand), Himalayan Water (Mineral water), Grand (coffee brand in Russia), MAP Coffee ( Australia's famous coffee brand). By 2010, Tata Tea integrated beverage brand and announced the Corporate Brand - Tata Global Beverages Limited. Recent developments are the JV with Starbucks and acquisition of MAP Coffee, the coffee brand from Australia. The company operates in three segments: tea, which involves cultivation...
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...speaks of the health benefits of tea. To that extent this valuable claim is now a generic claim. Looking deeper into the market one notes that it is the strength of the individual brands that dominate the market. The global leaders Lipton, Tetley, Brook Bond and the like have won the ‘trust’ of their consumer and have the strength to market leading tea variants without any association to Ceylon Tea. Of course they have Ceylon Tea products too. However, the fact is that the strength of their individual company brand makes it possible for them to market the larger share of their volume and variants without the Ceylon tea story. Looking into the shelves of supermarkets particularly in the developed markets we note many tea brands with no reference to Ceylon Tea at all. Given this scenario it is time for us to ask the question, is Ceylon Tea losing its power to influence the consumer with a relevant, credible and differentiating value proposition? Call for urgent consumer research We often speak of Ceylon being famous for quality tea, and some may assume that the entire world knows about it. However, when have we last verified this assumption through in depth research in the key markets? Is it our own perception or that of those involved in the tea trade, or only in the minds of the older generation? Does today’s ‘new consumer’ know about it? Even more important, when another brand of tea (local or foreign owned) uses the slogan ‘Pure Ceylon Tea’ what impact has that on the buyer...
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...Sector overview Tea Michael Groosman Oct 2011 Table of Content Acronyms and Abbreviations ........................................................................................................................... 2 Introduction ..................................................................................................................................................... 1 Supply Chain .................................................................................................................................................... 1 Producers ............................................................................................................................................................ 2 Processors ........................................................................................................................................................... 3 Trade Phase ......................................................................................................................................................... 3 Blenders .............................................................................................................................................................. 4 Retail ................................................................................................................................................................... 4 Market Overview .........................................................................
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...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 Tania Braga, By 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 systems solutions. We cannot solve individual problems in silos. The...
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...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 systems solutions. We cannot solve individual...
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...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 Tania Braga, By 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 systems solutions....
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...Tea production industry in China Essay by: Mari Carmen Almodóvar Cárdenas. Table of contents 1.Introduction 2. History of tea 3. Tea industry. 4. Currently China’s tea industry. 5. Problems that tea industry in China faces. 6. What’s the future for tea industry? 7. Conclussions. 1.Introduction: China is one of the most important tea-producing countries. The written history of tea consumption in China goes back longer than in any other country, thousands of years. In ancient China, tea was originally used as a medicine; over hundreds of years it slowly shifted towards being viewed first as a tonic, and then as a beverage as it is today. China, together with India, is one of the two largest producers and consumers of tea. In 2007, China produced over 30% of the world's production of tea, almost 1.2 million tons of tea out of the world's almost 3.9 million tons. Most of the tea produced in China is consumed in China, although tea is also an important export good for China. A myriad of styles of tea originated in China, which produces and consumes black, green, white, oolong, and pu-erh teas, as well as the less well-known yellow teas. Chinese teas are astoundingly diverse, as within each of these broad types of tea, there are countless different styles, both ancient and modern. China has also come to produce styles of tea...
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...are the challenges, that Tata Tea, and to some extent Tetley Tea were facing as far as the Tea Industry was concerned. • There was an increased level of competition, and it didn’t look like it was going to reduce anytime soon. Some of the African countries such as Kenya were fast increasing Tea Production, and exporting them. The quality of this tea was good enough to compete with the Premium that Indian Tea once commanded. • The consumption patterns were changing, and it was not good for both Tata Tea, and Tetley Tea. Russia had been a prominent importer of Indian Tea in the past, but steadily it had reduced its imports from India drastically. The Tea Consumption in UK, Ireland etc. had been reducing drastically. This was not good news for the British Giant Tetley Tea. Trends in Tea Consumption in developed countries were not encouraging wither. • Due to Supply-Demand disparity in favour of Supply (Supply being more than demand), the prices of Tea were falling globally. Even though India had around 30% share in the Tea Market around 1995, due to diversity available in the variants of Tea, it could not control the global Tea prices. Internal Challenges These are the challenges looked at from the point of view of Tata Tea and Tetley Tea specifically, as far as their coming together was concerned. • Tata Tea was no doubt a huge company as far as its business was concerned. But when we put it in the context of it contemplating to acquire Tetley Tea, we need to look at the fact...
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...4 2.0. INTRODUCTION 6 3.0. TEA PRODUCTION IN BANGLADESH 9 3.0.1. BASIC FACTS OF BANGLADESH TEA INDUSTRY 12 3.0.2. CHARACTERISTICS OF BANGLADESH TEA 12 3.0.5. GRADES OF TEA 13 4.0. EXPORT OF TEA 17 5.0. MAJOR TEA IMPORTING COUNTRIES FROM BANGLADESH 28 6.0. PROSPECTS OF BANGLADESHI TEA IN THE INTERNATIONAL MARKET 28 7.0. MAJOR COMPETITORS IN TEA MARKET 31 7.0.1. INDIA: THE LARGEST TEA CONSUMER 34 7.0.2. STILL HEAVILY PROMOTED TO DEFEND FROM ALTERNATIVES 34 7.0.3. UNILEVER: THE CLEAR MARKET LEADER 35 7.0.4. TATA TEA: AMBITIONS IN INTERNATIONAL MARKETS 35 7.0.5. CHA BARS: PREMIUM TEA AS A LIFESTYLE CHOICE 36 8.0. PROBLEMS RELATING TO TEA EXPORT AND TEA MARKET EXPANSION 36 9.0. SUGGESTIONS 39 10.0. CONCLUSION 40 11.0. BIBLIOGRAPHY 42 1.0. EXECUTIVE SUMMARY Today, tea is the second most consumable beverage in the world after water. A total of 3,200,000 tons of tea were produced worldwide in 2004. India, China, Sri Lanka and Kenya, in that order, are the major producers of tea leaves. The USSR, Poland, Egypt and Pakistan emerged as major markets for Bangladeshi Tea. These ‘captive’ markets ensured protection to the industry and whatever, irrespective of quality, found its way to these markets. The price received for Bangladeshi tea was higher than its actual value in the open international market. Hence we lost our position as a supplier to those markets e.g. the U.K. who found alternative sources of similar quality of tea to meet their demand. However...
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...characteristics of Tata Tea’s target customers – what influences these customers to purchase their product? Tata Tea’s target market: * Indian middle class and upper middle class that accounts for nearly 300 million people. * Targets the youth by embracing them with social awakening messages * Targets women in a view to empower them socially * Calls out to housewives since they are influencers and deciders in the buying process Factors influencing purchase of tea & coffee In selecting tea & coffee, the consumers may be considering some factors. These factors were price, quality, taste, flavor, environmental concerns, social concerns, impact on health, family preferences, peer acceptability, familiarity with the supplier, reputation of the supplier, certification mark and promotions and discounts… 2. How have Economies of Scale helped/hindered Tata tea in their overall global operations – in what areas are there advantages and disadvantages for Tata tea? In microeconomics, economies of scale are the cost advantages that enterprises obtain due to size, output, or scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output. The purpose of mergers and acquisitions of Tata Tea is reaching the operational efficiency in the worldwide The restructuring combined with business strategy will bring many benefits for Tata tea brand in the international tea market; to be a...
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...TEA INDUSTRY INTRODUCTION: Background Tea is indigenous to India and is an area where the country can take a lot of pride. This is mainly because of its pre-eminence as a foreign exchange earner and its contributions to the country's GNP. In all aspects of tea production, consumption and export, India has emerged to be the world leader, mainly because it accounts for 31% of global production. It is perhaps the only industry where India has retained its leadership over the last150 years, along with China whose precise numbers are not published. Tea in India is grown primarily in Assam, West Bengal, Tamil Nadu and Kerala. Apart from this, it is also grown in small quantities in Karnataka, HP, Tripura, Uttaranchal, Arunachal Pradesh, Manipur, Sikkim and Meghalaya. India primarily has a dual tea base, unlike most other tea exporting countries. Both CTC and Orthodox tea is produced in India, along with Green and Oolong tea with comparatively lesser production. It is an agro based and labour intensive industry. It provides direct employment to over 1 million persons. Through its forward and backward linkages another 10 million persons derive their livelihood from tea. In Northeast India alone, the tea industry employs around 900,000 persons on permanent rolls. The Tea Industry is one of the largest employers of women amongst organised industries in India. Women constitute nearly 51% of the total workforce The three most distinct known varities of tea in India...
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...PIYALA POINT The traditional tea house Subject: Entrepreneurship Submitted to: Prof. I.Sidduiq Submitted by: Zafar Hameed S.Anees Abdullah FaiQ SECTION: E Company Description: PIAYALA POINT is a traditional tea house which serves different varieties of tea in a traditional and pleasant environment which includes different teas. Pyala point primarily serves customers traditional tea and light refreshments. Our café's location will be in the Mall Road to provide a place where our customers can enjoy traditional tea in a quiet and relaxing atmosphere. Our company's mission is to consistently provide high quality products that traditional culture in a unique atmosphere, so our customers can experience quietness and socially interact with family and friends. We will strive to broaden our consumers understanding of tea by promoting healthier and better living style through our products. INNOVATIVE FEATURE OF OPPORTUNITY: People mostly prefer to have a tea after a long workload or when they are tired or would like to relax for a while, actually they use it as a energy drink in Pakistan but they cannot find any peaceful place in this rushy world even not in their houses ,but PIYALA POINT would offer that relaxed and peaceful place to their customer where they can sit and have a cup of tea and relaxed their mind and also we are providing a small library where the customers get daily newspapers, magazines, novels, poetries and different famous...
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...Chinese Revolution take home essay The Opium War The Opium War lasted from the late 1830’s until 1860, encompassing a series of conflicts between China and the British Empire over trade and diplomacy. Basically what happened was China traded a lot of goods including tea, and in return China gained opium that the British Empire imported from India. However, when China realized that opium was ruining their nation through mass addiction, China outlawed opium. This lead to war with The British Empire, because the British didn’t want to be pushed out of this important trade that they had with China. The British ultimately won because they had a navy and China did not. Through these naval conquests the British acquired the small fisher island of Hong Kong and made it into a large trade port under British rule. Somewhat were some of the deeper issues of these wars and why were they unavoidable? Who stood to benefit most in this lopsided war and why didn’t the Chinese win? From the beginning, the ruling Tang dynasty opposed the importation of opium into its territory and actively discouraged its use by placing a stigma of immorality on those who used the drug. However, the British importers saw opium, as merely a product for which there was a strong demand for in China. Opium did not have anything to do with morality or lack thereof in the British mind. These two divergent viewpoints eventually...
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...significant was national resentment of foreign interference in bringing about the collapse of the Qing dynasty 1911-1912? I believe that national resentment was extremely significant in bringing about the collapse of the Qing dynasty. Despite this however I believe that it was not the only factor in the fall of the dynasty. I believe that other reason such as the failure to reform, and the unequal treaties were also vital reasons for the failure of the Qing dynasty. I believe that the fall of the Qing dynasty started with ‘the unequal treaties.’ It's hard to get by when the country you need goods from does not really need to trade goods with you. This is what happened with Great Britain and the Qing Dynasty. There was a high demand for China's tea in Great Britain but a low demand for Britain's goods in China. Great Britain was in debt with China and they had to do something to get out. As a result, they turned to selling silver to make the imbalance better. China couldn’t care less about Great Britain's silver so Great Britain was still behinds in payments. When selling silver did not work they began selling opium. China's people became quickly addicted to the drug and traded silver, originally from Great Britain to get opium. Opium was illegal and China wanted the trade of opium to stop. China tried to make new restrictions against foreign merchants and ships and Great Britain did not like this idea and fought back resulting in the Opium War. Of course Britain came out on top because...
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