The world sat up and took notice of the Tata Group in the first decade of the 21st century. How? A string of prestigious acquisitions
abroad and an unimaginably cheap car, transformed the 140-year-old Indian business house into a global conglomerate. However, it will be interesting to see where the group heads for in the next decade when its charismatic chairman Ratan Tata makes way for a younger person to take over the reins.
Just imagine, at the beginning of the millennium, the Tata group was staring at two disappointments — a huge loss of Rs 550 crore at its flagship company Telco (now Tata Motors) and the financial mess at Tata Finance. However, after a decade, the group is a name to reckon with in the international corporate scene on the basis of Ratan Tata's daring acquisitions of coveted global assets, starting with Tetley in the fall of 2000 and moving to top gear with Jaguar Land Rover in June 2008.
Tata Steel's $13 billion Corus acquisition is the largest overseas deal by an Indian firm. The group's revenues have jumped nine times from Rs 35,937 crore in the late 90's to Rs 3,25,334 crore in 2008-09, with 65% of the revenues coming from overseas.
But apart from these big-ticket deals, what made the group tick was the creation of a business model that will tap the masses — a model that was inspired by the bottom of the pyramid theme. And here's where the Nano drives in — an almost impossible feat, a people's car with a Rs 1 lakh tag.
It was the brainchild of Ratan Tata, a Capricorn, who turned 72 a couple of days ago, became the group's chairman in 1991. According to a a Tata veteran, the group has gone through three phases since then. One, he established control over the group, which was then tightly managed by a few people. Two, he kicked off the restructuring and restrategising programme: He set a goal to be among the top three players in the businesses the group has a presence in, to increase the group's minuscule holding to a comfortable position; and formation of a common brand identity in the two-dimensional Tata blue logo.
Third, perhaps the most ambitious, was building a global empire. The group had some setbacks too during the decade. For example, the abandonment of the $3 billion investment in Bangladesh, pulling out the Nano project from West Bengal, the terror attacks on its hotel, Taj Mahal Palace and Tower, and the financial stress it experienced as a result of the global meltdown.
However, the next decade would see a major change in the Tata group. Ratan Tata would retire from Tata Sons in 2012, when he turns 75, to make way for a successor. However, he may continue to be the chairman of Sir Dorabji Tata Trust and Sir Ratan Trust — the two charitable trusts that hold a major stake in Tata Sons — a position his predecessor JRD Tata held till his death. He has built a global business empire. What's next for the Tata Group?