Tata-Corus: Spearheading India's Global Drive to Growth

Tata-Corus: Spearheading India's Global Drive to Growth

Copyright © 2008 London Business School. All rights reserved. No part of this case study may be reproduced, stored in a retrieval system, or transmitted in any form or by any means electronic, photocopying, recording or otherwise without written permission of London Business school. This case was prepared by Dr Krishna Kumar,ICFAI Business School Research Centre, Chennai and Dr Kishore Kumar Morya, ICFAI Business School, Jaipur India as a basis for classroom discussion rather than to illustrate either effective or ineffective handling of a management situation. The case study was supported by the Aditya Birla India Centre at London Business School.

ecch: 310-281-1 Dr Krishna Kumar London Business School REF: CS-10-005 Dr Kishore Kumar Morya Date: 2008 Tata-Corus: Spearheading India’s Global Drive to Growth “It‟s a tremendous strategic acquisition. I believe this will be the first step in showing that Indian industry can in fact step outside the shores of India in an international marketplace and acquit itself as a global player.”1 “The completion of this acquisition of Corus by Tata Steel is a major step forward in the company's global strategy and represents an exciting future for both businesses.”2 – Ratan Tata, Chairman Tata Group Tata had recently won the bid to acquire the European steel maker Corus Group PLC for $8.1 billion to become a world player in the steel industry. The deal had been concluded with Tata offering to pay 608 pence a share, 22% more than the offer they made six months earlier. Critics believed that Tata had gone over the acceptable risk-limit as the leveraged buy-out deal could become a financial burden for the company. Would a deal this size, a first in Indian corporate history take Tata‟s to the commanding heights of the global steel industry?

1 “Tata Steel wins bid for Corus”, http://www.iht.com/articles/ap/2007/01/31/business/AS-FIN-COM- India-Tata-Corus.php?page=1, January 30 th 2007. 2 “Tata-Corus deal becomes effective”, http://www.rediff.com/money/2007/apr/02corus.htm, April 2 nd 2007.

London Business School ecch: Copyright © 2008 London Business School 2 Company Background Tata Steel Jamshedji Nusserwanji Tata, the founder of the Tata Group, began by setting up a textile mill in central India in the 1870s. His dynamic vision inspired the creation of steel and power industries in the country, positioned the foundation for technical education, and placed India firmly on the road to becoming an industrialised nation. Tata Steel was established in the year 1907, with the ideals and philosophy laid down by its founder, Jamshedji Tata. After Jamshedji, 34 year old Jehangir Ratanji Dadabhoy Tata (JRD), his grandson, became the chairman of the Group in 1938, by when the Tata group was already India‟s biggest business conglomerate. In 1939, the group included fourteen companies with sales of INR 2,800 million.3 JRD‟s vision for the Tata Group was manifest in the formation and emergence of companies such as Tata Steel, Indian Hotels Company Ltd, Tata Power, Tata Engineering and Locomotive Company (TELCO), Tata Chemicals, Tata Consultancy Services (TCS), Tata Indicom and Tata Tea. Besides this, the Tata Group was strongly committed to social causes like the expansion of metropolitan Mumbai and the development of sports. The Tatas were the leaders in the implementation of Corporate Social Responsibility (CSR) strategies which had been put into practice in their different group companies.

Tata Steel introduced the concept of paid leave in 1920, which was later established by law only in 1945 in the whole country. Tata Steel further set up a provident fund scheme the same year that was legalised in 1952. Tata Steel was also one of the earliest companies in India to have a dedicated human resources department. In 1937, a Research and Control laboratory was opened where researchers developed an extensive variety of special steels. The lab also developed a type of high-tensile alloy steel – Tiscrom – which was used in building the Howrah Bridge at Calcutta. This was the first time that such a bridge was built entirely from Indian construction material. Another corrosion resistant, low-alloy, high-yield strength steel – Tiscor, was used for the manufacture of all- metal steel coaches for the Indian railways. In 1971, except Tata Steel‟s coal mines, the rest of the coal industry in India was nationalised. Mohan Kumaramangalam, the then Indian industries emphasised, “The efficiently run mines like Tata Steel‟s coal mines would provide a model for the other nationalised mines.”4 The company had three Greenfield steel projects in the Indian states of Jharkhand, Orissa and Chattisgarh, and planned to establish steel making facilities in Vietnam and Bangladesh. Tata Steel, through its joint venture with Tata BlueScope Steel Limited, had also entered the steel building and construction applications market. The iron ore mines and collieries in India gave the company a distinct advantage in raw material sourcing. Through their joint ventures in Thailand, Australia, Mozambique, Ivory Coast (West Africa) 3 “The Tata titans”, http://www.tata.com/0_about_us/history/pioneers/index.htm. 4 “JRD Tata: A life extraordinary”, http://inhome.rediff.com/money/2004/aug/19tata.htm, August 19 th 2004.

London Business School ecch: Copyright © 2008 London Business School 3 and Oman, Tata Steel was striving towards raw materials security. Exploitation of opportunities in titanium dioxide business in the South Indian state of Tamil Nadu, founding a high carbon ferro-chrome plant in South Africa and setting up of a deep-sea port in coastal Orissa were all integral to the growth and globalisation objectives of Tata Steel. Through investments in Corus, Millennium Steel and NatSteel Asia, Singapore, Tata Steel had created a manufacturing and marketing network in Europe, South East Asia and the Pacific-rim countries. Corus, which manufactured 18.3 MT of steel in 2006, had operations in the UK, the Netherlands, Germany, France, Norway and Belgium. Tata Steel (Thailand) was the largest producer of long steel products in Thailand, with a manufacturing capacity of 1.7 MT. NatSteel Asia produced about 2 MT of steel products annually across its regional operations in seven countries.5 Tata Steel was a global player with a balanced presence in the developed European and fast growing Asian markets with a strong position in the construction, automotive and packaging markets (Exhibit I).

The company‟s social outreach programme covered the company-managed city of Jamshedpur and over 800 villages in and around its manufacturing units. Planned initiatives for income generation, health and medical care, education, sports, and other relief work were undertaken by the company. Tata Steel took proactive measures to ensure optimum utilisation of natural resources. This was reflected in the ISO-14001 certification that all its operations had achieved optimum levels in environment management. 6 It also received the SA 8000 certification for work conditions and improvements in the workplace at the steel works in Jamshedpur Tata Steel pioneered numerous employee welfare measures like the 8-hour working day and the three-tier joint consultation system of management which became the platform for nearly 80 years of industrial harmony in its Steel Works at Jamshedpur.7 In 2007, the consolidated turnover of Tata steel excluding Corus increased by 23% at INR 27,437 crores ($6,311 million) and the consolidated profit after Tax excluding Corus also increased by 12% at INR 4,177 crores ($961 million).8 Gross Steel sales also increased by 8% at 4.79 million tonnes.9 The financial performance of Tata Steel had shown progress from the year 2006 to 2007 in terms of gross sales, operating profit and earnings per share.

The first Indian private sector steel plant which started with a production capacity of 100,000 tonnes had been transformed into a global giant. It had been Asia‟s first integrated steel plant and India‟s largest integrated private sector steel company. Tata Steel‟s vision was to be the global steel industry benchmark for value creation and corporate citizenship. 5 “Tata Steel - Profile”, http://www.tatasteel.com/Company/profile.asp. 6 “Tata Steel - Profile”, op. cit. 7 Ibid. 8 “Tata Steel – Towards Growth and Globalisation”, http://www.tatasteel.com/investorrelations/an200607/AnalystMeetFY-07-18May0 7.pdf, May 18 th 2007. 9 Ibid.

London Business School ecch: Copyright © 2008 London Business School 4 It was one of the few steel companies in the world that was Economic Value Added (EVA) positive. It was ranked in the list of “World's Best Steel Maker”, for the 3rd time by World Steel Dynamics in its annual listing in February, 2006. 10 (Exhibit II) Tata Steel was awarded the Prime Minister of India‟s Trophy, five times, for the Best Integrated Steel Plant. Tata Steel completed 100 glorious years of existence on August 26th 2007. It was the world‟s second most geographically diversified steel producer, with operations in 24 countries and commercial presence in over 50 countries. After taking over Corus, it had become the world‟s 5th largest steel company with an existing annual crude steel capacity of 28 million tonnes.11 Steel Industry Overview In the year 2007 the World Crude Steel output reached 1343.5 million tonnes and showed a growth of 7.5% over the previous year. It was the fifth consecutive year that world crude steel production grew by more than 7%. China remained the world‟s largest Crude Steel producer in 2007 (489.00 million tonnes) followed by Japan (112.47 million tonnes) and USA (97.20 million tonnes). India occupied the 5th .position (53.10 million tonnes) for the second consecutive year. The International Iron & Steel Institute (IISI) in its forecast for 2008 predicted that 2008 would be another strong year for the steel industry with apparent steel use rising from 1,202 million tonnes in 2007 to 1,282 million tonnes in 2008 i.e. by 6.7%. Further, the BRIC (Brazil, Russia, India and China) countries will continue to lead the growth with an expected increase in production by over 11% compared to 2007.12 The Indian steel industry entered into a new development stage from 2005-06, riding high on the resurgent economy and rising demand for steel. Rapid rise in production resulted in India becoming the fifth largest producer of steel. Price regulation of iron & steel was abolished by the Indian government on 16.1.1992. Since then, steel prices had been determined by the interplay of market forces. There had been an increase in the domestic steel prices since 2006-07 and which continued till January, 2008. Rise in raw material prices, strong demand in the international and domestic markets and an up-trend in global steel prices were some of the reasons cited by the industry for the increase in steel prices in the domestic market. It had been estimated by certain major investment houses, such as Credit Suisse, that India‟s steel consumption would continue to grow at nearly 16% annually, till 2012, fuelled by demand for construction projects worth US$1 trillion. The scope for raising the total consumption of steel was huge, given that per capita steel consumption was only 40 kg – compared to 150 kg across the world and 250 kg in China. The Indian National Steel Policy envisaged steel production to reach 110 million tonnes by 2019-20. However Ministry of Steel projected that the steel capacity in the country was likely to be 124.06 million tonnes by 2011-12 (based on the assessment of the then ongoing projects, both in Greenfield and Brownfield areas). Further, based on the status of 10 “Tata Steel - Profile”, op. cit. 11 Ibid. 12 “An Overview of Steel Sector”, http://steel.gov.in/overview.htm, June 20 th 2008.

London Business School ecch: Copyright © 2008 London Business School 5 MOUs signed by the private producers with the various State Governments, it was expected that India‟s steel capacity would be nearly 293 million tonnes by 2020.13 With the expected buoyancy in the steel markets, the Tata-Corus deal came at the appropriate time to cater to the increased consumption of steel in industry. The acquisition was ranked fifth in the list of mergers that had taken place in the global steel industry during that decade (Exhibit III).

The merger was also ranked fifth in terms of capacity amongst the top ten steel producers in the world (Exhibit IV). The union would also bring Tata Steel into the prominent Fortune 500 list of top international companies. This would not only enhance the brand name of the company, valued at $9 billion by industry experts, but also bring it on par with other business giants like Morgan Stanley, Goldman Sachs, FedEx and Chrysler. Also, the acquisition would list Tata Steel on the United Kingdom stock exchanges and allow its stock to be traded. This would further help the Tatas to acquire other companies, if they wanted, on the basis of stock deals rather than total cash transactions. 14 Moreover, within the framework of backward integration the merger could be widely seen as a strategic move to consolidate the procurement of steel as a raw material for their sister concern Tata Motors, who had boosted productivity by taking over Landrover and Jaguar in the UK, and made a strong commitment towards the production and delivery of their one-lakh rupee people‟s car in India, the Nano, by October, 2008.

The IISI predicted that demand for global steel would average 4.9% per year till 2010 and it would moderate to 4.2% per year from 2010 to 2015. Much of this demand would be generated from China and India, where IISI estimation of growth rate was 6.2% to 7.7% annually from 2010 to 2015.15 According to IISI forecasts, world steel demand would increase to 1.32 billion tonnes by 2010 and 1.62 billion tonnes by 2015. Arcelor-Mittal, the first rank world steel producer constituted just 6.8 percent of the projected demand in 2015. Therefore, there was considerable scope for consolidation in the steel industry. Tata Steel would have remained a medium sized player even after increasing capacity, by Greenfield investment strategy implementation, in the coming decade.16 This necessitated the need for large acquisition opportunities. However, apart from Corus, there were not many amongst the top ten steel makers, which would become possible acquisition targets in the future.

One of the major advantages for Tata Steel was that after acquiring Corus it could plan to become the third largest steel producer in the world by 2015 with a total estimated production capacity of 55.7 mtpa (Exhibit V). 13 Ibid. 14 “Ratan Tata‟s Corus acquisition is a master move”, http://www.parinda.com/news/feb2007/02.shtml, February 3 rd 2007. 15 Mathew Rex, “Tata-Corus: Visionary deal or costly blunder?”, http://www.domain- b.com/companies/companies_t/tata_steel/20070201_tata_corus.htm, February 1 st 2007. 16 Ibid.

London Business School ecch: Copyright © 2008 London Business School 6 With Indian companies increasingly venturing into European and American markets, Tatas wanted to be in the frontline of mergers and acquisitions, spearheading India‟s global drive to growth and prosperity. In the year 2002, its tea division bought a controlling stake in the UK firm Tetley for $407 million. In 2004, Tata Steel acquired Singaporean firm Natsteel for $486 million. In 2005, Videsh Sanchar Nigam Limited (a Tata company) acquired US firm Teleglobe, a provider of voice, data and mobile signalling services, for $239 million. In 2006, Tata Tea bought a stake in the US water manufacturer Glaceau for $677 million, and Tata Coffee acquired Eight O'Clock Coffee of the US for $220 million. In January, 2007, Tata Steel acquired the Anglo-Dutch Corus Group for £4.3 billion (INR 366.5 billion). The first decade of the new millennium saw the Tatas vigorously expanding their horizons on the international scale. (Appendix I) Tata Corus Deal: Issues and Challenges In the steel sector, Ratan Tata emphasised that Tata Steel would not impose its leadership on Corus. He said, “Our intention is that Corus will retain its identity for the foreseeable future, will remain an Anglo-Dutch company. The management will be substantially the same.”17 Commenting on the get-together with Tata, Corus Chairman Jim Leng said that the firm had been scouting for a strategic partner and a presence in a low-cost country with raw material availability. “India, with its strong and growing economy, indigenous raw materials, rising consumer demand and infrastructure needs was always a favoured location.”18 The union of these two companies Tata and Corus was built on a global strategy with both companies seeking to address new markets. Together, they planned to build a stronger and bigger combination in terms of global output. In the beginning of the acquisition itself Tatas had stressed that Corus would retain its identity and remain an Anglo-Dutch company with the existing management structure in place even after the takeover. The major benefits expected by Tata Steel through this deal were economies of scale, strong downstream business process operations, enhanced Research & Development capabilities, distribution channels in some of the most developed markets and premium customer care functions. Along with the expected synergies, there were problems such as the valuation of the deal, the integration of ownership, the cultural fit (Exhibit VI) between the two conglomerates, with a reality check on expected outcomes and the ultimate benefit to both companies.

According to market analysts, the Tatas were interested in the takeover as it would expand their geographic reach. The union of the two companies offered Tata Steel the latest technology in making high-tech carbon steel to cater to high-end customers. Corus had become a subsidiary of Tata Steel with about 24mtpa of production capacity. The deal 17 “Tata acquires Euro Steelmaker Corus”, http://ibef.org/artdisplay.aspx?cat_id=60&art_id=13821&in=28, October 23 rd 2006 18 “Tata acquires Euro Steelmaker Corus”, op. cit.

London Business School ecch: Copyright © 2008 London Business School 7 received an uninterested response from Corus‟ biggest shareholder Standard Life Investments. Nearly 49% of Corus was owned by UK shareholders, 11% by North American shareholders, 10% by shareholders in the Netherlands and another 30% by shareholders in Germany, France, Belgium and other countries.19 As part of the integration process, Tata Steel and Corus had started joint sourcing and purchase of materials, including ore, coal and refractories. Both the companies also decided to jointly explore new iron-ore sources in Africa, Australia and Brazil. Tata Steel was 80% self-sufficient in raw materials and their main objective was to achieve self- sufficiency in raw materials for Corus also. The integration process also examined the ways in which it could leverage the strengths of the other Tata group companies in the UK such as Brunner Mond and TCS. The integration was done internally with international consultant Accenture appointed to look at the performance issues. All this was in line with Tata Steel‟s global strategy to continuously seek out low-cost production options, facilitate backward integration with raw material procurement, and consistently expand its market share in the high-end of the steel value chain. Tata steels global strategy with the means of the Global Strategy Framework is shown in Appendix II.

Tata Steel had pioneered the development of a contemporary grade of high-strength steel, HS-800. Corus had also tested HS-800 and declared it to be „far superior‟ to most of the 800 tensile strength grades it had been producing. Having received the process of manufacturing HS-800, Corus developed it and launched it in the market. Similarly, Corus had advanced technology for „metallic-fuel-tank‟ grade steel. Tata Steel, on its part, also developed this superior „fuel-tank‟ grade steel in India, utilising the technology available with Corus.

Tata Steel had lost $1 billion in market capitalisation in October 2006 (The BSE (Bombay Stock Exchange) Sensex increased 18% during the same period). The market perception was that the Tata Group had paid more for the Corus acquisition. Several brokerage houses had pointed out that the deal implied a high enterprise value earnings before interest, taxes, depreciation and amortisation (EV/EBITDA) multiple of 9 for Corus versus 4.6 for Tata Steel.20 Ratan Tata disagreed with this opinion and said, “We believe that, looking back in time, the price today will prove to be one that was worthwhile because the price of steel companies is likely to be even higher in the coming year.”21 Despite the disapproval from the market, the Tata Group was convinced of the long-term synergies- post Corus- in manufacturing, access to global customers, opening up of the steel sector in India and leveraging Research and Development for Tata Steel‟s Greenfield projects. Tatas further believed that the combined entity could also explore options for more effective future acquisitions in the buyouts of finished steel and iron ore. It also expected that the combined entity would increase Tata Steel‟s capacity exponentially and give it a wider customer base with an enhanced product portfolio. The merger was expected to 19 “World's 5th Largest Steel Co”, http://www.financialexpress.com/old/fe_full_story.php?content_id=144090, October 21 st 2006. 20 Piya Singh, “TATA-CORUS - Making Corus Work”, http://businessworld.abp.in/content/view/297/337 21 Ibid.

London Business School ecch: Copyright © 2008 London Business School 8 save about $400 million annually, after the first three years, to the company.22 The savings would come basically from synergies in logistics, manufacturing, procurement and marketing. The Tata-Corus coming together meant combining the manufacturing practices, services, purchasing norms and complementary strengths and functions of both companies. For example, Corus had strong R&D and product development capabilities for value-added products in the international automotive, construction and packaging markets, which was well-balanced by Tata Steel‟s strong presence in the Asian markets. The main challenge for Tata Steel was to restore the competitiveness of the Corus group. The „Restoring Success‟ programme of Corus had been implemented in the company‟s UK plants, focusing on the main steel-making businesses there. Over and above restructuring in the UK, the combined entity increased focus on safety and customer service. The new organisational structure (Exhibit VII) of Tata-Corus included an umbrella management team or „group centre‟ that consisted of senior Corus Group and Tata Steel executives, co-chaired by Tata Steel‟s managing director B Muthuraman and Corus CEO Philippe Varin. The group centre was set up to ensure a common approach across all key functions – technology, integration, finance, strategy, corporate relations, communications and global markets. According to Ratan Tata, “The reorganisation is designed to help realise the group‟s ambition of becoming one of the leading players in the global steel industry.”23 Tata Steel Chairman Ratan Tata would continue to head the integration committee. There was a great amount of cultural fit between the two companies, which was the most important facet in any post-acquisition integration process between two large conglomerates. Corus believed there was a positive cultural fit between Tatas and themselves with both having similar work practices.

The merger maintained a balance between the growing markets of developing countries and the mature markets of the developed world with high-end products and technology. Corus also responded to unexpected cost increases with a rise in prices for wire rod products. Corus increased its UK wire rod prices by £70 to £90 per tonne on deliveries as of March 31st 2008. Gareth Beese, General Manager Sales and Marketing of Corus, said, “Recent agreements concluded for iron ore contracts are at prices considerably above analyst forecasts. Coking coal contract prices were also considerably above 2007 levels. In addition, increases in scrap prices, combined with the additional costs of bulk freight and utilities are resulting in unprecedented levels of input cost increases.”24 The acquisition paved the way to the opening up of new markets and product segments for Tata Steel. The presence in mature markets would also provide Tata Steel an opportunity to go further up the value chain as demand for specialised and high-value-added products in these markets was high. The market reach of Corus also helped Tata Steel in seeking 22 “Tata-Corus merger will lead to $400 mn savings”, http://www.tata.com/tata_steel/media/20070910_1.htm, September 7 th 2007. 23 “Tata Steel rejigs senior team to integrate Corus”, http://www.tatanagar.com/industries-news-of- tatanagar/tata-steel-rejigs-senior-team-to-integrate.html.

24 “TEXT-Tata Steel unit Corus raises prices for rod products”, http://in.reuters.com/article/companyNews/idINWEB715720080229, February 29 th 2008.

London Business School ecch: Copyright © 2008 London Business School 9 longer-term deals with buyers and to explore opportunities for pushing branded products into differentiated markets. Corus was very strong in Research and Technology development, which added to the competitive strength of Tata Steel. Both companies learned from each other to achieve better efficiencies by adopting the best practices available. This combination served its worldwide customers more efficiently with more consistent offerings around the globe supported by higher supply chain efficiencies. Worker issues such as increases in labour costs were high priority for the unions representing most Corus workers. They wanted Tata Steel to invest an additional $600 million in the Port Talbot plant in the UK, and assure them the company would remain competitive, and not cut jobs. Ratan Tata had acknowledged that there would be no jobs cuts, in Corus, in the early stages of the merger. He had agreed to refinance the majority of Corus‟ debt but said the company could not give any guarantee over safety of jobs as its prime responsibility was to make the UK operations more profitable. Besides, funds would also be required for upgrading some of the Corus plants to improve efficiencies. Tata Steel would have to manage all these issues without jeopardising its Greenfield expansion plans which could cost a staggering $20 billion over a ten-year period. Tata Steel management had acknowledged that it would not be an easy task to manage the next five years (from the year 2007) when Corus would have to hold on to its margins without the help of cheaper inputs supplied by Tata Steel. If the group could survive this initial period without much financial damage, life may become much easier for the Tata Steel management. The company added that the investors would consider Corus a burden for Tata Steel until such time there was a perceptible improvement in its margins. That would keep the Tata Steel stock price passive and any decline in steel prices would have a disproportionately negative impact on the stock.

Investors were worried about the financial risks owing to the high costs incurred in the deal. However, the joint venture provided an initial saving of $130 million in the first year itself, up to 31st March, 2008. Corus group Chief Executive Philippe Varin expected global demand for steel to grow annually by 5 to 6%. 25 Tata Steel Managing Director B Muthuraman said the steel industry was witnessing 14% demand growth in the domestic steel sector every year. He expected to increase the return on capital to 30% till 2012.26 The Corus transaction had loaded Tata Steel with $7.4 billion in debt. The debt facilities were structured in such a way that they could be serviced largely from the cash flows of Corus. Interest rates on credit facilities were much higher than market rates because of the risks involved. At an expected interest rate of 7% per annum, the interest would be over $650 million per year.27 Along with repayment of principal, the annual fund requirement to service this debt would be around $1.5 billion - assuming a 10-year repayment horizon.28 The current cash flows of Corus were not sufficient to cover this, even after considering the synergy gains. If the international steel prices declined, Tata Steel would have to dip into its own cash flows or find other sources like an equity dilution to service the debt. 25 “Tata Steel rejigs senior team to integrate Corus”, op. cit. 26 Ibid. 27 “Tata-Corus: Visionary deal or costly blunder”, op. cit. 28 Ibid.

London Business School ecch: Copyright © 2008 London Business School 10 The consolidated total income of Tata steel increased from INR 25,212.38 crore for the year ended March 31st 2007 to INR 131,535.88 crore for the year ended March 31st 2008 (Exhibit XII). The integration of Corus with Tata Steel had resulted in it becoming India‟s second-largest company in the private sector with consolidated revenues of over INR 1,32,110 crore during the year ended March 31st 2008. Tata Steel had also emerged as India‟s second-most profitable company with a consolidated net profit of over INR 12,350 crore during fiscal year 2008.29 It was higher than the previous fiscal (2007), boosted mainly by its acquisition of Corus. The Tata Steel stock also increased 1.90% to INR 757.10 on the Bombay Stock Exchange.

As of July 2008, Tata Steel was looking for acquiring an iron ore mine in Western Australia for developing iron ore reserves for Corus plants. Eric Ripper, Treasurer and Minister of State Development, Government of Western Australia, said, “Tata Steel has expressed interest to invest in Western Australia's iron ore sector.” 30 Tata Steel‟s executive acknowledged that it was only logical for the company to look for iron ore mines in Western Australia since the region had huge reserves. The company also planned to set up a corporation overseas for consolidating its raw material assets and raise funds in the next 6 to 12 months for acquisitions. By July 2008, Corus had 19 million tonnes annual capacity, with mainly imports of iron ore from Brazil to feed its production. This reflected badly on its performance as was evident from the company‟s EBIDTA margin, a pointer to the health of a firm, which was 9% for the year ended March, 2008 as against Tata Steel‟s Indian operation at 43%.31 The Indian operations of Tata Steel helped the company post a relatively good show on EBIDTA margins for the year ended March 2008, which was about 14.05%.

Many analysts felt confident that Tata Steel‟s successful low-cost model in India would help them to recover from the initial financial stress of the multibillion dollar takeover. Hitesh Agarwal metal analyst with Angel Broking said, “There are lots of synergies between the Tata Steel-Corus combine in the long term, like logistics, procurement of raw materials, geographical mix. But the higher valuation of Corus would put pressure on the consolidated financials of the company.”32 29 Kant Krishna, “Corus buy hauls Tata Steel next to Reliance”, http://economictimes.indiatimes.com/Corus_takes_Tata_Steel_closer_to_No_1_s pot_/rssarticlesho w/3170078.cms, June 27 th 2008. 30 “Tata Steel shops for mine Down Under”, http://www.business- standard.com/common/news_article.php?leftnm=1&subLeft=1&chklogin=N&autono=3 28603&tab=r, July 14 th 2008. 31 Ibid. 32 “Tata-Corus: Cautious welcome to High Fives”, http://in.rediff.com/money/2007/feb/01corus3.htm, February 1 st 2007.

London Business School ecch: Copyright © 2008 London Business School 11 Competitors The leading competitor for Tata-Corus was Arcelor-Mittal with crude steel production capacity in excess of 110 mtpa. Arcelor-Mittal employed over 320,000 people in more than 60 countries.33 It led the concept of consolidation in the international steel industry and could claim to be the only truly global steel maker. It enjoyed leadership in steel making for the construction, automobile and packaging industries worldwide. The group held competitive advantage in R&D and technological innovation, possessing large captive supplies of raw material with an extensive distribution network. Arcelor-Mittal had representation in all key markets, emergent or mature, in the continents of Europe, America, Asia and Africa.

The next three positions in the list of top ten steel makers were occupied by the Japanese Nippon Steel, South Korea‟s POSCO and JFE Steel, also from Japan. Nippon Steel used the world‟s most advanced technologies for medium-high grade steel which were corrosion resistant with high-strength welds. This provided Nippon the competitive advantage to offer a variety of steel to customers as well as a range of solutions including processing and welding. Pohang Iron and Steel Company, or POSCO was the next competitor for Tata Steel. POSCO acquired land in the state of Orissa in India, to establish a plant, thus directly competing with Tata Steel on its home ground. POSCO was viewed by many Koreans as a symbol of national pride and „can do‟ spirit. With the strong Korean shipbuilding and automobile industry dependent on POSCO for steel, the company had been seen as the bedrock of Korea‟s industrial development over the past 40 years. POSCO had specialization in producing Hot Rolled Steel, Steel Plate, Wire Rod, Cold Rolled Steel, Electrical Steel, and Stainless Steel. POSCO was consistently considered the world‟s best steel manufacturer in terms of productivity in the latter half of the 1980s. JFE Steel Corporation, a part of JFE Holding Inc. possessed the most innovative technology for steel production. The Steel Research Laboratory at JFE Steel was one of the largest of its kind in the global steel industry; the Laboratory, known for its innovation in process technology and product development. The technology developed at the Laboratory was used in related areas such as the chemical engineering industry and the environmental systems business. JFE had always been engaged in product development, it pioneered the development of high-strength steel sheets that were suitable for weight reduction in automotive parts. JFE had expertise in technologies based on precipitation, transformation structure, and texture control in steel production.34 These were the top global steel players which were ahead of Tata-Corus. Besides these, the major threat that could emanate was from China‟s steel production companies. China was the largest consumer of steel due to its burgeoning economy. There were around 800 isolated firms in China that were producing steel and out of these some 125 were integrated steel companies.35 China‟s Bao Steel was at the sixth position in the top ten steel producers. The other big names for steel manufacturing in China were Anshan-Benxi 33 http:// www.arcelormittal.com. 34 http://www.jfe-steel.co.jp/en/research/syoukai.html. 35 http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4158.

London Business School ecch: Copyright © 2008 London Business School 12 and Laiwu-Jinan which were also amongst the top steel making companies of the world. Although China had a very large number of steel companies, most were not expected to become very efficient because they depended on imported raw material, which limited their pricing power. Tata Steel might also have had to face competition from Russian and South American Companies. US companies were not going to be a significant threat to Tata Steel as the nearly saturated American Market absorbed most of the home production. In India, the major competitors were SAIL (Steel Authority of India Limited), a government owned enterprise, Essar Steel and the Jindal Group, but these were manufacturers with lower efficiencies in steel making, who were unlikely to be a serious threat to the Tatas. The Road Ahead Tata had indicated its long-term commitment to Corus with the announcement of a £74 million investment at the Port Talbot works to improve production and reduce emissions. Peter Fish, Director of Sheffield-based Steel Consultancy MEPS said, “Tata did not buy Corus just to close the plants down, the technology transfer was the biggest thing behind the takeover. The idea is to get all the information they need from Corus to push Tata‟s products back in India more upmarket.”36 Corus announced that it would be increasing the price of reversing mill plate by £80 a tonne as a result of robust global demand in all key plate-consuming market sectors. Martin Maley, Director, Commercial for Construction & Infrastructure at Corus Long Products, said “This rise has come about because demand is so robust. It is also an opportunity for us to reflect in our UK prices where prices have got to elsewhere in the European Union.”37 Robert Dangerfield, Manager of Corus Communications acknowledged that the steel was a cyclical industry and it was very difficult to determine the long-term process. He further stated that he was confident Corus had the best possible future under Tata.38 One of the main strategies that drove Tata Steel to acquire Corus was that its low cost plants in India would be used as points of supply for Corus‟s finishing plants, to supply and expand its high-end customer franchises in Europe. But to bring in this efficiency would be a challenge for Tata Steel, because Corus‟s operating profit was only $1.9bn on a production capacity of 18 million tonnes compared to Tata Steel‟s operating profit of $1.5bn on a production capacity of 5 millions tones.39 It remained to be seen how Tata Steel was going to leverage this low cost advantage to Corus. 36 Will Smale, “Welsh steel dragon roars again”, http://news.bbc.co.uk/2/hi/business/7389767.stm, May 11 th 2008. 37 “Corus announces UK reversing mill plate price increase”, http://www.corusgroup.com/en/news/news/2008_jul_reversing_mill_price_increa se, July 9 th 2008 38 “Welsh steel dragon roars again”, op. cit. 39 “Pedal to the Metal: Challenges of Tata Steel‟s Corus Takeover” http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4109, October 31, 2006.

London Business School ecch: Copyright © 2008 London Business School 13 For the year end 2007, Tata Steel‟s net profit increased by 11% to INR 4,687.03 crores, while revenues also increased by 11% to INR 17,985 crores and the shares of Tata Steel increased by 1.9% due to the contribution from Corus businesses. Tata Steel‟s Muthuraman said, “Ownership of raw materials and a continuous improvement in production has been the key to Tata Steel‟s profitability. In fact we‟ve believed in owning raw materials for the past 100 years.”40 The Group Chief Financial Officer of Tata Steel acknowledged, “We are looking at an overseas group structure below Tata Steel to create the appetite for acquisitions. Since it would require capital, we are looking at various options.”41 Tata Steel had been able to withstand raw material price fluctuations due to its captive iron ore mines. Tata Steel was one of the least-cost makers of steel in the world at the time, where other private steel companies, hit by iron ore and coal price increases, passed on the hikes to their customers, prompting the government to clamp down on such price hikes in order to control inflation. Tata Steel imported nearly one-third of its total coal needed for local production. Coal prices had increased by $200 per tonne over three months (from April 2008). However, Tata Steel faced no market restrictions overseas as Corus, which bought both coal and iron ore from international markets, had passed on all price increases to customers. Furthermore, Tata Steel and Corus together sold more than two- thirds of their production in Europe.

Since the merger, Tata and Corus began discovering mutual benefits in several areas of research and steel-making. Apart from the 15 R&D projects that the two sides have identified for fast-track implementation, there were several „harvesting projects‟42 which could be exploited commercially by either side. Around 50% of the projects being exchanged by the two sides were said to be „harvesting‟ projects, where each side put the others intellectual property rights (IPR) directly into use for production. Among several harvesting projects of Tata Steel, „hydrogen harvesting‟ was one of the projects to be adopted by Corus. (Tata Steel developed a process of cracking water into hydrogen and oxygen by way of sprinkling water on hot slag. While the heat in the slag would otherwise have gone to waste, hydrogen released in the process could be collected for future use and also used as a fuel.) Tata Steel had outlined its „Vision‟ for the future which was to increase the return on investment (ROI) from around 16% at 2008 to 32% by 2012. The group hoped to be the global steel industry benchmark for value creation and corporate citizenship. The vision also envisaged the safety and environmental aspects of manufacturing and encompasses the Tata Steel Group‟s aspiration to become an „employer of choice‟. It also focused on reducing the implementation time of projects and improving product mix as well as cost 40 “Tata Steel plans pooling of raw materials”, http://economictimes.indiatimes.com/News/News_By_Industry/Indl_Goods__Svs/S teel/Tata_Steel_ plans_pooling_of_raw_materials/rssarticleshow/3169810.cms, June 27 th 2008. 41 Ibid. 42 On the occasion of World Environment Day, Tata Steel launched new projects such as rain water harvesting, hydrogen harvesting, to create awareness in society.

London Business School ecch: Copyright © 2008 London Business School 14 efficiencies. Both companies also took several steps to tap new sources of raw material and re-engineer two of the Corus plants in Europe. The product mix of Tata Steel would now include more of auto grade steel, skin panels, special rods, HR auto structurals and steel for high carbon applications. An investment of about $260 million was being made at Corus‟ manufacturing facility in the UK, where rails up to 105m in length would be manufactured. In addition, steps had been taken to upgrade the production of tyre cords. The initiatives taken by the Tata Steel Group were to create a focus on value creation rather than just concentrating on product and sales volumes. With renewed attention on performance improvement and margins, Corus, in turn, was committed to creating incremental value of $600 million every year.43 Currently, Tata Steel is witnessing about 14% demand growth in the domestic steel sector every year. The company is also preparing a vision document for the year 2015 which would be completed by December 2008. Tata Steel is working on a strategy roadmap entitled „Vision 2015‟ to outline the plans to emerge as a top league player in the global steel industry. It is also planning to utilise alternative technologies, developed by Corus, at its proposed steel plants in India. The new concepts would use iron ore fines and coal for iron making instead of the more expensive lump-ore and coking-coal.

With the acquisition of Corus, Tata Steel is on its way to becoming one of the top three steel makers globally by the year 2015. But, will Tata Steel be able to reach the top rung of the global steel industry in the years to come? Ratan Tata is quietly confident, “I believe this will be the first step in showing that Indian industry can in fact step outside the shores of India in an international marketplace and acquit itself as a global player.”44 He specifies optimistically on behalf of India Inc., “The future potential is enormous but the country's destiny is in our hands. The time has come to move from small increments to bold, large initiatives. The time has come to stretch the envelope and set goals which were earlier not seen to be possible.”45 43 “Tata Steel outlines „vision‟ 2012”, http://www.thehindubusinessline.com/2008/03/04/stories/2008030452400200.htm , March 4 th 2008. 44 “Tata Steel wins bid for Corus”, op. cit. 45 “Ratan Tata Quotes”, http://www.woopidoo.com/business_quotes/authors/ratan-tata/index.htm.

London Business School ecch: Copyright © 2008 London Business School 15 Exhibit I Products of Tata Steel Products  Its Jamshedpur steel works produce hot and cold rolled coils and sheets, galvanised sheets, tubes, wire rods, construction rebars, rings and bearings.  In an attempt to 'decommoditise' steel, the Company introduced several branded steel products, including Tata Steelium (the world's first branded Cold Rolled Steel), Tata Shaktee (Galvanised Corrugated Sheets), Tata Tiscon (rebars), Tata Pipes, Tata Bearings, Tata Structura, Tata Agrico (hand tools and implements) and Tata Wiron (galvanised wire products).  In the financial year 2006-07 revenue from the sale of these branded steel products was 26% of the company's sales revenues.  Corus' main operating divisions comprise Strip Products, Long Products and Distribution & Building Systems Division.

 Combining international expertise with local customer service, the company supplied a range of long and strip products to demanding customers worldwide in markets including the construction, automotive, packaging and engineering sectors.  The NatSteel group produced construction grade steel such as rebars, cut-and-bend, mesh, precage bore pile, PC wires and PC strand.  Tata Steel Thailand produced round bars and deformed bars for the construction industry. Source: “Tata Steel - Profile”, http://www.tatasteel.com/Company/profile.asp

London Business School ecch: Copyright © 2008 London Business School 16 Exhibit II Awards and Recognition – Tata Steel Awards and Recognition  World Steel Dynamics ranked Tata Steel as the world's best steel maker (for two consecutive years) in its annual listing in February 2006.  Tata Steel has been conferred the Prime Minister of India's Trophy for the Best Integrated Steel Plant five times.  It has been awarded Asia's Most Admired Knowledge Enterprise award in 2003, 2004 and 2006.

 Conferred the prestigious Global Business Coalition Award for Business Excellence in the Community in recognition of its pioneering work in the field of HIV/ AIDS awareness.  Tata Steel works has been conferred the prestigious social accountability (SA) 8000 certification by social. Accountability international (SAI), USA. It is the first steel company in the world to receive this certificate.  Corporate Sustainability Report of Tata Steel hailed by United Nation's Environment Programme (UNEP) and Standard & Poor as strongest, submitted by any corporate house from emerging economies.

 Best governed company Award 2006 for setting high standards in governance practices.  Tata Steel conferred Mother Teresa Award for Corporate Citizenship.  Tata Steel won "Award for Corporate Social Responsibility in Public health" by US- Indian Business Council (USIBC), Population Services International (PSI) and the Center for Strategic and International Studies (CSIS) in 2007. Awards 2008  Tata Steel wins TERI Corporate Award for its HIV / AIDS initiative Jamshedpur, June 1, 2008  National safety awards for Tata Steel‟s West Bokaro and Jharia division Jamshedpur, May 07, 2008  Tata Steel‟s Dr. T Mukherjee awarded the IOM3 Bessemer Gold Medal Jamshedpur, April 23, 2008  Tata Steel wins Amity Corporate Excellence Award Jamshedpur, February 22, 2008 Source: (a) “Tata Steel - Profile”, http://www.tatasteel.com/Company/profile.asp (b) “Awards 2008 – Tata Steel”, http://www.tatasteel.com/newsroom/awards.asp

London Business School ecch: Copyright © 2008 London Business School 17 Exhibit III World’s Big Deals BIG DEALS... Target Buyer Value ($bn) Year Arcelor Mittal Steel 32.2 2006 NKK Corp Kawasaki Steel 14.1 2001 LNM Holdings Ispat Intl 13.3 2004 Krupp AG Thyssen 8.3 1997 Corus Tata Steel 8.0 2006 Dofasco Arcelor 5.2 2005 Intl Steel Mittal Steel 4.8 2005 Source: “Corus accepts takeover bid by Tata Steel”, http://www.rediff.com/money/2006/oct/20tata.htm, October 20 th 2006 Exhibit IV The World’s Top Steel Producers Rank Name of the Company Capacity (million tones) 1 Arcelor-Mittal 110.0 2 Nippon Steel 32.0 3 Posco 30.5 4 JEF Steel 30.0 5 Tata Steel – Corus 27.7 6 Bao Steel China 23.0 7 US Steel 19.0 8 Nucor 18.5 9 Riva 17.5 10 Thyssen 16.5 Source: http://www.domain- b.com/companies/companies_t/tata_steel/20070201_tata_corus.htm

London Business School ecch: Copyright © 2008 London Business School 18 Exhibit V Aggregate Production Capacity of Tata-Corus (million tonnes per annum) Present Capacity Projected Capacity by 2015 Corus Group 19 19 Tata-Steel Jamshedpur 5 10 Tata Steel Jharkhand* - 12 Tata Steel Orissa - 6 Tata Steel Chatisgarh - 5 NatSteel-Singapore 2 2 Millennium Steel-Thailand 1.7 1.7 Total 27.7 55.7 *-planned steel plants in India. Source: http://www.domain- b.com/companies/companies_t/tata_steel/20070201_tata_corus.htm Exhibit VI Powerful Combination – Strong Culture Fit Source: “Tata Steel and Corus: A Unique Global Partnership”, http://www.tatasteel.com/images/Pressmeeting1130hrsUK.pdf, October 20 th 2006

London Business School ecch: Copyright © 2008 London Business School 19 Exhibit VII Combined Group Structure Source: “Tata Steel and Corus: A Unique Global Partnership”, http://www.tatasteel.com/images/Pressmeeting1130hrsUK.pdf, October 20 th 2006

London Business School ecch: Copyright © 2008 London Business School 20 Appendix I Mergers and Acquisitions of Tata Group Tata company Acquired company Country Stake acquired Value Year Tata Motors Jaguar and Land Rover UK 100 per cent $2.3 billion 2008 Tata Steel Corus UK 100 per cent $7.6 billion 2007 Indian Hotels Starwood Group (W Hotel) Australia 100 per cent (wholly- owned) USD29 million December 2005 The Pierre US USD9 million Lease of property July 2005 Regent Hotel (renamed Taj Lands End) India Effective 100 per cent stake Rs450 crore September 2002 Tata Autocomp Systems Wündsch Weidinger Germany Euro 7 million September 2005 Tata Chemicals Brunner Mond UK 63.5 per cent Rs508 crore December 2005 36.5 per cent Rs290 crore March 2006 Indo Maroc Phosphore S.A. (IMACID) Morocco Equal partner USD38 million (Rs166 crore) March 2005 Hind Lever Chemicals India Amalgamation June 2004 Tata Coffee Eight 'O Clock Coffee Company US 100 per cent (wholly- owned) USD220 million (Rs1015 crore) June 2006 Tata Consultancy Services Tata Infotech India February 2006 Comicrom Chile November 2005 Pearl Group UK Structured deal October 2005 Financial Network Services Australia October 2005 Phoenix Global Solutions India July 2004

London Business School ecch: Copyright © 2008 London Business School 21 Aviation Software Development Consultancy India (ASDC) India March 2004 Airline Financial Support Services India (AFS) India January 2004 Tata Industries Indigene Pharmaceuticals Inc US < 30 per cent Not disclosed July 2005 Tata Interactive Tertia Edusoft Gmbh Germany 90 per cent Not disclosed January 2006 Tertia Edusoft AG Switzerland 90.38 per cent Tata Metaliks Usha Ispat, Redi Unit India 100 per cent (wholly- owned) Rs115 crore January 2006 Tata Motors Tata Finance India Merger April 2005 Hispano Carrocera Spain 21 per cent Euro12 million (Rs70 crore) February 2005 Daewoo Commercial Vehicle Company Korea 100 per cent (wholly- owned) KRW120 billion (USD102 million, Rs465 crore) March 2004 Tata Steel Millenium Steel Thailand 67.11 per cent USD167 million (Baht6.5 billion) April 2006 NatSteel Asia Singapore 100 per cent (wholly- owned) S$468.10 million February 2005 Tata Sons VSNL India February 2002 Tata Sons (TCS) Computer Maintenance Corporation (CMC) India November 2001 Tata Sons through Tata Ltd and Tata Tea Energy Brands Inc US 30 per cent USD677 million October 2006

London Business School ecch: Copyright © 2008 London Business School 22 through TTGB Investments Tata Tea and Tata Sons Tetley Group UK 100 per cent (wholly- owned) GBP271 million February 2000 Tata Tea through Tata Tea (GB) Joekels Tea Packers South Africa 33.3 per cent GBP0.91 million September 2006 Tata Tea through Tata Tea (GB) JEMCA Czech Republic Assets: intangible and tangible GBP11.60 million May 2006 Tata Tea through Tata Tea (GB) Good Earth Corporation & FMali Herb Inc US 100 per cent (wholly- owned) USD31 million October 2005 Tata Tech INCAT International UK August 2005 Tata Teleservices Hughes Telecom (India) India 50.83 per cent Rs858.83 crore December 2002 Trent Landmark India 76 per cent USD24.09 million (Rs103.60 crore) August 2005 VSNL Tata Power Broadband India September 2005 Teleglobe International US July 2005 Tyco Global Network US November 2004 Dishnet DSL's ISP division India March 2004 Gemplex US July 2003 Source: “Mergers and Acquisitions”,http://www.tata.com/0_about_us/tatam&as.htm, January 20 th 2008

London Business School ecch: Copyright © 2008 London Business School 23 Appendix II Illustration of Tata steels Global Strategy with the use of Global Strategy Framework 1. Identify business unit: Amongst the various SBU of Tata groups, I have selected Tata steel company (with special reference to their take over of Corus) as the SBU for the study of global strategy framework. 2. Evaluate Industry potential for globalisation: Market factors pushed for globalization. The market needs for steel was homogeneous and they had global customers. Because of homogeneity of needs, the brands and advertising were transferable. Economic factors were also favourable for globalization. Because of standardization of core products, the company was able to enjoy economies of scale in manufacturing. Since the company is ninety nine years old, they also enjoy the benefit of steep learning curve. Again, the raw material cost in U.K. is high. This can be offset by sourcing from India, where raw materials are comparatively cheaper. Environmental factors increased the potential for global strategy. Since Corus had good sales network at various countries, the transportation costs of Tata steel will be reduced. Again, government policies like easing foreign currency restrictions both in UK and India were favourable for global strategy. Global moves of competitor i.e. Mittal acquiring Arcelor also forced the Tata steel to go for global strategy.

3. Evaluate current extent of globalization: The current extent of globalization is measured under 5 dimensions.  Market participation: Tata steel has sales in various countries like USA, Sri Lanka, Nepal, Shanghai etc but it lacked global identity or image.  Product standardization: The basic product was standardized throughout the world. At final stages the product was customized as per the requirements.  Activity concentration: Tata steels technological and integration, finance, strategy etc were concentrated only in India whereas the manufacturing activities were dispersed in India, USA, UK, Thailand, Vietnam, Malaysia etc. Trading was done in Bangladesh, Sri Lanka, Nepal, South Africa, Hong Kong, etc.  Marketing uniformity: The market positioning and marketing mix strategy were uniform throughout the world.

 Integration of competitive moves: Tata steel has taken an integrated approach to global competitors. They have tough competition with Mittal steels in almost all countries. 4. Identify strategic need for change in the extent of globalization: From the previous analysis, Tata steel concluded that its extent of globalization was significantly lower than the industry potential and lower than its competitor‟s global strategy. The Mittal Arcelor is ranked number one in steel industry in the world whereas the Tata steel ranked fifty sixth

London Business School ecch: Copyright © 2008 London Business School 24 (before acquiring Corus). Furthermore, the industry potential for Tata steel had a strong need to develop a more global strategy. The next issue was whether Tata steel would be able to implement such a strategy. 5. Evaluate organisational / internal factors: To internal ability of Tata steel to implement global strategy is tested under the following factors:  Structure: The head quarter of Tata steel was located in India. The five main functions such as technological and integration, finance, strategy, corporate relation and communication and global minerals were centralized. While the production, selling and distribution was decentralized and the divisions heads were given autonomy to take decisions.

 Management processes: The management processes were favourable for global strategy. Since the strategy and corporate communication was centralized, there was well cross- border co-ordination.  People: There were no foreign nationals working in India either at corporate or divisional levels. There were many foreign nationals overseas, but these were mostly in their home countries and there was little movement between international and domestic jobs. But the leader Ratan Tata, through his action and statements had a global approach.

 Culture: Tata steel had a strong Indian national identity than a global identity. But some SBU of Tata group like Tetley Tea, Taj group of Hotels had created global identity. 6. Identify organizational ability to implement globalization: Tata steel had the ability to implement globalization because of its rich experience of 99 years of running a business successfully in India. Hence it had the ability to acquire big steel company like Corus. 7. Diagnose scope and direction of required changes: The most important change, the Tata steel has to do is to encourage the transfer of people between nations. According to IISI data, the average hourly rate of pay in UK steel was 6 times that of Brazil and 10 times that of India. So by movement of people, the company can reduce the cost and strengthen its competitive advantage of low cost leadership. Tata groups in foreign countries should blend into the adopted corporate culture. For better brand visibility, more Tata companies will have to go abroad and learn to flourish abroad.

Source: Kamath Shilpa “Global Strategy Framework- an Illustration of Tata Steels”, http://www.articlesbase.com/international-business-articles/global-strategy -framework-an-illustration- of-tata-steels-441441.html, July 6 th 2008

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