The paper "Multinational Strategy of TATA Jaguar Land Rover" is a good example of a marketing assignment. In relation to the TATA Jaguar Land Rover case study, there seems to be a perfect example which clearly depicts a link between two theoretical concepts from the modules and they include companies making use both economic and strategic rationale while acquiring companies. When viewed from the economic rationale perspective the acquisition of Jaguar Land Rover by Tata Motors was done for a number of reasons. The acquisition was part of the strategy of TATA Motors.
Through the acquisition would have succeeded in launching TATA worldwide by offering better technology and also broadening their product range. Initially, TATA was well established in India but at the same time, it experienced problems so as to expand globally since there were a number of entry barriers. Through the acquisition of JLR was able to be in charge of two major brands that were well known in the globe thus ensuring TATA of ease of access to other international markets. Companies’ needs to make acquisitions that are beneficial to them now and in the near future (Rugman & Collinson 2012).
This was the same as the acquisition of JLR by TATA. By acquiring JLR aimed at improving their technology so as to ingress in the international markets and JLR was the most effective company by offering the much needed technological know-how. The acquisition would also to expand the range of products in that, in the beginning, the company focused more on low-end cars. Additionally, they would broaden their consumers by making the sale of the luxury market.
This supports the theoretical concepts that companies should tend to use what they have as a source of competitive advantage, for example, technology, distribution and logistical advantages as well as brand names. This case applied effectively in that by acquiring JLR they had a competitive advantage over their key competitors in the Indian market (Rugman & Collinson 2012). Another aspect that is in a way linked to the economic rationale is a good performance in the financial markets. The acquisition made TATA motors to perform better in the financial market.
This shows that by diversifying their operations and the public, TATA diversified its risks and this in a way decreases the chances of bankruptcy. As a matter of fact, TATA has also made use of risk-averse investors which assures a less risky investment. This shows that the companies need to be on the safer side by ensuring they have insured themselves against risks. This will be of great advantage to the company since the investors will have confidence in them (Rugman & Collinson 2012). Additionally, through the acquisition of JLR the company had a strategic opportunity of acquiring an iconic brand that had a great global presence and a great heritage and this played an essential role in increasing the company business diversity across a number product segments and markets. Another theoretical concept is having a clear strategy so as to attain the goals set out by the company.
TATA had a clear strategy which dealt precisely with keep investing in the Indian market but at the same time expanding their operations in the international market and these would be achieved by focusing more in the development of products and also by engaging in collaborations and acquisitions (Slywotzky 2007).
The theoretical concept also revolves around the idea of keeping brand identities intact and this was what TATA after acquiring JLR. Through the acquisition, TATA could enter the global market easily by diversifying their products and adding on to the already existing technology. At the same time, they would reach a selected market segment and mostly in the emerging markets since such countries had been expressing growth in the near future. A lot of theory presumes that to e global relates o the looking for the required markets, resources and productive advantages.
This seems to be a similar case for TATA in the acquisition of JLR and they also aimed at expanding their business in the emerging markets and more so in the luxury market segment. This asserts the theory that companies should not depend solely on one market as it was the case of TATA in the Indian market. This was evident in that the Indian market was responsible for a great percentage of the sales made by TATA and the new strategy supported the theory as a growth necessity.
Consequently, TATA would expand its market both geographically and also across the various segments. Through the acquisition, TATA achieved efficient and more so in relation to the economies of scale with the increase of sales and thus an increase in profits. Another concept that is closely related to the economy of scale is the economy in terms of scope. The acquisition meant that there would be an acquisition of expertise and technology and all this will be aimed at improving their low-ends cars without incurring any additional expenses since the company acquired JLR.
This has over time been of great benefit to TATA since the production of cars mainly depends a lot on ongoing improvements and research and by acquiring JRL TATA will decrease their costs considerable and at the same time improves the vehicles they offer to their customers all over the globe. The strategy was effective for TATA since they will have the opportunity to sell in the high-level segments globally that is the luxury segment.
The segment is a very attractive one since I always on demand for the products and this group of customers tend to be loyal to their brands. Additionally, this group of customers is more willing to upgrade their cars when new and advanced models are available (Elmuti & Kathawala 2001).
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