Tata Motors Acquiring Daewoo Sample Essay

he company was started in 1868 as a Tata group company that was involved in textile industry.

The company was invented by Jamsetji Tata at Nagpur in Maharashtra. He brought foremost fabric Millss in the state every bit good one of the most epicurean hotels in India. In add-on. he made it possible for the India to hold the first air hose. Tata Company did really good turning from fabric to automobile company.

In recent old ages. its turnover has raised significantly. For illustration in 2004. the company turnover was $ 14. 25 billion. This made a 2. 6 % GDP part in India.

In 2010. the company had a turnover of $ 27. 3 billion. which is about twice times growing. This may hold been brought by the recent acquisition that they have done towards several companies ( Center of direction research. 2005 ) .

The company had 91 companies universe broad in 2004 with aims to acquire more. These companies deal with diverse maps such as Engineering. energy. consumable merchandises chemicals every bit good as communicating and information services. Of the whole group. Tata motors is rated as the biggest and has been ranked as fifth largest makers of commercial vehicles worldwide.As a portion of the bigger bracket of the Tata Group Company.

it started as Tata Engineering and Locomotive Company Limited ( TELCO ) at around 1920. TELCO was originally a company that was owned by the Peninsular Locomotive Company that came into being in 1923. This company was taken by the East India Railways to guarantee that it was used in. fabrication transition bearers for the Indian railroads. It was until 1945 when the Tata boies bought it from the authorities of India utilizing it to fabricate steam boiler engine engines. They continued their industry under the TELCO name. Afterwards they joined with Marshals Sons from United Kingdom as they manufacture steam roads roller.

They besides worked together with Krauss Maffei from West Germany in the continuance of their steam engine locomotor industries.From so the company has been turning steadily. The company collaborated with Daimler-Benz that is automobile makers from West Germany. This made them to hold the first vehicle get turn overing after six months. The company acquired diverse engineering that made the company in 1986 to hold their autochthonal to the full designed light commercial vehicle that is TATA 407. From at that place. the company got a interruption through that made it get down doing their ain designed rider autos such as Tata Sierra and Tata Estate.

This made the company to emerge as the prima industry of commercial vehicles. riders vehicles. building. metal grinding and cutting machines. industrial shutters. high quality steel among others merchandises ( Tatamotors. 2010 ) .Despite jobs that the company has encountered in the concern particularly in 2001 where the turnover of commercial vehicles went down.

the company has bounced back. In 2004. Tata motors had gross of 132 million doing a net income of 8.

1billion. The company has become one of the highest commercial vehicle exporters. Through it s variegation and competent fabrication.

it was capable of being listed in the New York Stock Exchange going the first Indian car to b vitamin E listed.DaewooThe individual behind foundation of this Company was Kim woo Chung widely known as Kim. This company was ab initio founded as fabric industry in 1967. Through the intercession of the authorities. the company was able to hold a important growing.

This was done through government- approved adoptions. This made the company to turn significantly over the Earth going the 18th largest universe corporation in the late ninetiess. The company had 24 companies worldwide Daewoo Group being the biggest. These companies have diverse concern runing from ship building. building. Technology every bit good as securities. In the spirit of enlargement. the company started car company in 1978.

This was hatched when the company acquired 50 % of the Saehan Motor Company. as the other half interest was owned by General Motors ( GM ) ( Center of direction research. 2005 ) .

In 1983. both the GM and Daewoo Group agreed that they should call their venture Daewoo Motor Company. In 1987. they produced rider auto that did non make good due to the quarrels that they were witnessed between the two companies.

The GM Company withdrew doing the Daewoo group to finish the purchase of the remainder 50 % interest. This made the company to be the taking South Korea car industry. Therefore. the company replaced KIA and Hyundai Company. The company was expanded through debts in a scheme to guarantee that it go a top 10 automobiles shapers.

The company in 1998 was able to get Ssang Yong Motors. However due to the economic crisis that expanded in the Southeast Asia. the company was left in fiscal crisis. The company was declared bankrupt by the authorities of South Korea and that it was out for sale.

Therefore. many companies declared their involvement of purchasing the company that included General Motors. Ford. and Isuzu among others. However. due to the dept that kept on roll uping in the company.

in 2000. the dept exceeded its equity. made the company to be put under tribunal receivership. Otherwise. GM and the Daewoo creditors came together to organize a new company through an understanding. The company was called GM-Daewoo Automobile and Technology Company.The strategic and economic principle for the acquisitionAfter the Tata Company analyzed Daewoo Company on the chase of making involvement to get it.

it realized that the company had 22 % market portion and 25 % capacity use. This ensured that the company increased its involvement in the company. The company scheme to guarantee that it expands globally and to increase its economical addition in the market. Daewoo acquisition was seen to be the best. The Daewoo Company had established a fastness in the South Korea market therefore it will do Tata company to hold more market incursion. Its acquisition would guarantee that the Tata Company would be provided by a close propinquity to planetary clients and significantly entree to new clients base and market.

The company strategic economic principle was guaranting that it allows itself to get a company with high competition as Daewoo was. This acquisition would guarantee that Tata Company increases their fight in the international sphere. This is through absorbing the company advantages that the company had. This would do the place of the Tata Company to increase its economical place. It would besides do the company to hold high operation constructions as Daewoo had established itself good before the economic crisis.Through this acquisition. the company would streamline its supply ironss of their manufactured cars to the market that Daewoo Company had established increasing their gross revenues turnover.

This is through taking advantage of the proficient squad of the company of the Daewoo that was really experient in international gross revenues. The company would besides be able to increase their production public presentation. Easy entree to the installations that Daewoo Company had like their works that made the Tata Company to hold even more push to get the company.Daewoo Company had higher engineering that would hold made the Tata Company recognize their economical end. as they would be made possible to entree it. Through this acquisition. the Tata Company would take advantage of the rational in the company that they would work their cognition in spread outing their concern globally. It would be really simple for the company to understand the authorities policies in their hunt of foreign market.

This would be an advantage. as they would non blow many resources in research. It would do the company have a more market entry in South Korea than it would hold done without geting Daewoo Company. This would do the company be really competitory in the car globally as Daewoo Company was rated as six biggest in the universe at that clip.Harmonizing to Center of direction research.

2005. Daewoo Company had huffy every many confederations with other companies in the universe during its operation. This would do the Tata Company to familiarise with local every bit good as international topographic points where Daewoo Company had ventured in and they had non in their call for economical enlargement. Harmonizing to Tarun. Palephu & A ; Bullock 2009.

the company would hold a job in understand the South Korea labour market as they had a scheme that required the company to retain most of Daewoo workers set up a more Korean gustatory sensation. This would do the Tata Company be able to understand fast fabrication installations that existed in the company and how they work and therefore guaranting that they start operation right off. This would do certain that their investing would hold start paying instantly.

Therefore. through the acquisition of the company was about to make. they were apt of achieving their economic scheme faster.The Strengths of Daewoo Motors. which were most valuable for Tata motorsThe Daewoo Company was of really great aid to Tata Company due to assorted advantages that it withheld. The first 1 was experient proficient squad that understood really good international coaction. This was has been brought due to the coaction that it had in assorted states like West Germany among others. This proficient squad would be really of import to Tata Company which had been had international concern involvement.

Therefore. this proficient squad would hold been used to the company’s advantage.The other thing that the Tata Company was willing really much to get from the Daewoo Company is their works.

This works would do certain that Tata Company increases its production that accordingly would increase their gross revenues turnover. The most of import thing with the works was that it was good equipped to domestically plan and industry cars. Daewoo Company had great engineering that they had embraced through their assorted coaction and being in operation for a longer clip ( Tarun. Palephu.

& A ; Bullock. 2009 ) . This would be of great aid to the company as they will be able to larn the engineering that would guarantee that they upgrade their car industry. This would do them bring forth quality vehicles due to the engineering that they would mix with theirs.The company would besides be offered a ready market of their one tone pickup in the Korean market. This pickup would hold the international design that the Daewoo Company would offer.

Further. the Daewoo company had a really strong policy devising procedure that would be really advantageous to Tata company. This would do certain that Tata Company besides develops this devising certain that they are able to acquire good result from this. The Daewoo Company requires no much publication through advertizement. After all. it was rated as six largest car makers in the universe doing the Tata Company to be in place non to utilize more of its resources. Finally. the company was non merely vehicle assembly programs.

but besides autochthonal makers in South Korea. This places the Tata in a really good competitory border after geting it.Major challenges for Tata motors in this acquisitionThe Tata Company however experienced several challenges in the acquisition of the company. The trade brotherhood in Korea was bossy therefore offered a great barrier to fast acquisitioned the company.

This is because there were so many bureaucratism in guaranting that the company has made any due procedure to get it. This first made Tata Company to hold jobs in the geting procedure.The 2nd challenge was that the company was unwilling to strike any trade with Tata Company. This was seen as the Tata squad realized that the company was willing to join forces with European company as they argued that they would convey more engineering to the company.

This was cited from the cordial reception that Tata Company squad was offered during the dialogue clip. European squad was offered Gunsan Best Hotel as the Tata Company squad was offered ordinary Tourist Hotel. Therefore. this interaction made Kant recognize that their desire to get was traveling rancid.The company besides had to over come really many and great rivals that had posed their involvement to get the company. This challenge called for good scheme that would take much of their clip and their resources. They would besides be required to make research to acquire to cognize better about how they could travel about their biding procedure. Their rivals included Calyle Investment Corporation a house that manus a really strong advisors like George Bush Sr who was US president.

Tongil Corporation that was a Korean company among others European based companies ( Tata motors. 2004 ) . Therefore. they would non hold underrated the whole procedure.The Tata Company was besides challenge by the degree of the success that Daewoo had. They were seeing that due to the success that the company had particularly in South Korea being the biggest car in the state. they would hold a job in incorporating this to the people.

They knew there might be a job in the procedure that would hold caused their company investing. This needs them to set in topographic point good direction scheme to guarantee that they attain their ends after geting the company.Major possible synergisms of Tata CompanyThe major possible synergisms that the Tata Company would get from the trade were as follows:Market enlargementThere were projections that the company would enlarge their market for their merchandises. Due to the market that the company had antecedently covered.

the Tata Company would take it advantage to follow the same path as they market their merchandises. It was projected that the company would increase their domestic and export selling through this acquisition. They were projecting increased international market a line that they antecedently did non hold.RealizationAfter geting the Daewoo Company. Tata Company was able to venture in countries such as South Korea through guaranting that most of the employees who were in the company were amalgamated in the company direction. This is one of the market that they had non ventured earlier therefore. their market was expanded. In add-on.

the company was able to venture in other parts of the universe particularly through the. fabrication of the Tata heavy commercials that were sold across the Earth. The selling of these heavy commercial among other light vehicles and their trim portion were realized through Tata Motor Distribution Network that was made available worldwide ( Tata motors. 2004 ) .

.CompetitivenessThis acquisition was seen by the company to be positive as the company was out to look into the competition that it was sing from companies as Volvo Indian Unit. This is through guaranting that they start bring forthing heavy trucks of up to 210 horsepowers that they did non bring forth antecedently. This was through incorporating the Daewoo company engineering. Therefore.

they were to go on fabricating these trucks as the Daewoo company had been making as they had heavy commercial vehicles that ranged from 210- 450 horsepower ( Tarun. Palephu. & A ; Bullock. 2009 ) .RealizationThrough the keeping that they did to the former workers. they were able to larn the market particularly international concerns where their entry was non a great job. They besides offered their merchandises at well inexpensive monetary values doing the company vie really good with the other rivals particularly in the European states.

This is because despite of their low priced vehicles. they were able to bring forth quality vehicles. Due to good competitory border that the company has realized.

the company has become one of the biggest heavy commercial exporters in the universe.Increased turnoverThe turnover of the company was projected to increase as the acquisition of the company would increase Tata company gross revenues of cars both domestically and through exports. This was projected to gain the company turnover to increase four to five times the current place. This was besides projected to be tantamount to the net income that the company would do.RealizationThe turnover of the company has been increasing steadily since that twelvemonth with the 2010 duplicating the 2004. The turnover of the company has lifting since so from $ 14million in 2004 to $ 27million in 2010. This has been realized through capitalising with the demand of the people across the state and around the universe.ProductionThe production degree of the company was projected to increase after the company acquires Daewoo Company.

The Tata motors were expected that they would increase the capacity of them by 60 % with a span of three old ages. This would accordingly increase export volume by 25 % by 2007. The production of the company was to travel hard in difficult with the resources that Daewoo Company had particularly through its works. Therefore. the Tata Company was about certain that production would lift due to the resources that they had.RealizationThe productiveness of the company increased significantly after the Tata Company acquired Daewoo Company. This was realized through upgrading of their vehicles to Euro III.

This was because Daewoo Company had Euro III compliant engines that ensured that the Tata company to increase and diversify their production ( Tata motors. 2004 ) . Their systematic integrating of their engineering ensured that they were able to increase truck productions that did good in the European states every bit good as China. The production of the company was besides realized by incorporating the company design that saw the company have a good design of the truck that projected future market entry.DecisionThe Tata Company had become a great menace in the car fabricating field particularly after to the full geting the Daewoo Company. The company has seen it competitiveness in fold over the old ages as it had been able to entree new market topographic points. Due to the fight that the Daewoo company had introduced across the Earth. Tata company has seen it manner through many markets without much battle as they were able to unite the engineering that they wren both existed in the companies.

The company bend over has grown up to $ 58. 3 million in 2010 harmonizing to Tatamotors. 2010. Its production has besides increased following use of the Daewoo company works and resources.

The company ids besides able to vie particularly with European company. as they are able to offer merchandises at considerable lower monetary values. The company has besides increased their engineering to a great extent as the company has been able to integrate the company’s old employees who had diverse experiences and engineering. This has seen the company be a force to think with particularly in the affairs of heavy commercial vehicles.


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