Recently TATA has introduced world’ s cheapest passenger car (NANO) priced only $ 2500. In fact TATA wants to help the poor people with this product. Poor families of medium income families can afford a car with the introduction of NANO. While most of the other car manufacturers are trying to develop luxury cars, TATA thinks in the opposite direction. They wanted to make car which is affordable to even poor people and the outcome was NANO. Contaminated drinking water is causing thousands of deaths in India. In order to help poor people to purify drinking water, TATA introduced TATA Swatch or water purifier priced less than 1000 Indian rupees in 2009(Graham, 2010, p. 9).
It should be noted that there is no need for TATA like big companies to introduce products such as water purifier. However, they introduced this product only to demonstrate their social commitments. “ The TATA group has a set five core values; integrity, understanding, excellence, unity and responsibility” (Angwin, 2011, p. 133). These core values can be seen in every TATA business segments. Even though TATA’ s business groups are operating independently, they understand each other work strictly in accordance with the vision, mission and core values of TATA group.
In short, TATA’ s business culture is more oriented towards the servicing of poor. For TATA, business is not at all about making money or profits; it is about how well an organization can service the community without sins. Community servicing has many roles in TATA’ s business strategies which is evident from the fact that charitable trusts hold majority of the TATA shares. TATA group was established in 1868 when Jamsedji Tata established a trading company in Mumbai.
During the last 144 years of operations, TATA group has grown significantly and they are one of the prominent companies in the world at present. Even though TATA started its business operations as a trading company, they are currently operating in different fields such as engineering sectors, service sectors, energy sector, chemical sector and consumer product sectors. Steel industry, investment industry, telecommunication industry, automobile industry, tea plantation and distribution etc are some of the major business portfolios of TATA. They have business units in various parts of world including India, China, Europe, Africa, Asia Pacific, Middle East, North America, South America and United Kingdom.
Even though diversification is perceived as a business strategy which involves high risk, TATA had no hesitation in accepting it. In fact they perceived diversification as a strategy for survival in international market. It should be noted that TATA is currently producing ordinary cars such as NANO as well as luxury cars. Their acquisition of Jaguar-Land rover clearly states that they are interested in luxury car manufacturing segment also. In other words, TATA group is interested in doing business is all consumer segments irrespective of the abilities of the consumers in purchasing ordinary products or luxury products.
They know very well that both luxury segments as well as ordinary product segments are important for them to prosper in international market. It should be noted that the purchasing power of the consumers depend on their financial abilities. Since each country has different consumer segments, it is necessary to have products which cater the needs of all people irrespective of their purchasing abilities.
That is why TATA is producing NANO like cars on one side and acquiring firms such as Jaguar and Land Rover on the other side.
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