1. Discuss the advantages and drawbacks of going international using Tata Group’s experiences.
Based on Tata Group’s experience, we can see the advantages and drawbacks of going international as follows:
Advantages of going international; ①
The first advantages of going international for Tata is to achieve benefits of economies of scale; Tata has more than 100 operating companies in seven main business groups doing business in 80 countries: chemicals, information systems and communications, consumer products, energy, engineering, materials, and services. Its two largest businesses are Tata Steel and Tata Motors. Its Tata Tea, which owns the valued Tetley brand, also is one of the largest tea producers in the world. It ranked 6 on the list of the world’s most admired companies in the steel industry.
With the economies of scale in the domestic and international market, Tata can lower operational costs potentially and become a stronger competitor, both domestically and internationally;
Tata controls many businesses ranging from Eight O’clock Coffee Co. in the United States to the Taj Group of hotels, which took over management of the landmark Pierre Hotel on Central Park in New York City. Through international bold moves like these, Tata have the opportunity to learn more about a particular market or world region and to supplement or strengthen domestic growth;
The Tata Group is the largest conglomerate in India. Its latest revenues are estimated at $67.4 billion, of which 61 percent is from business outside India. Its global and diversified strategy makes it exploiting interdependencies among multiple countries. And international operation will make it take advantage of locating for tax benefits and regulations strategically.
Drawbacks of going international;
Tata Group is the largest conglomerate in that country. Its latest revenues are estimated at