Answer To: Tata Motors Ltd. and Ford Motors (Jaguar and Land Rover brands)should be in essay type. introduction...
Abhishek answered on Jul 15 2021
STRATEGIC MANAGEMENT
Table of Contents
Introduction 3
Background of the Company 3
Tata Motors Ltd 3
Ford Motors 3
Tata Motors and Ford Motors after Merger 4
Nature of the Merger 4
The Rationale behind the Acquisition of JLR 5
Problems Faced by Tata Motors due to the Acquisition 5
Problem 1: Lack of Access to Credit to Repay the Loan of $ 3 Billion 5
Problem 2: The Financial Crisis in the World 6
Problem 3: Increasing Material and Fuel Price 6
Analysis of the Decision for Acquisition 7
The Cost Synergy 7
Revenue Synergies 8
Performance of Jaguar and Land Rover Business in Key Markets 8
Conclusion 9
References 10
Introduction
The automobile sector is one of the major sectors in the world. With the advancement of technology, the growth of this sector was rapid and unstoppable. The growth of the sector is also resulted of some major changes undertaken by the majority of the companies in this filed. Like any other industry, the major changes such as the search for the new market, globalisation of the products, merging with other companies created a huge advantage for this industry as well. In this easy of corporate strategy the proper analysis of the merger tools of the two companies are discussed.
The two companies that are selected for the purposes are Tata Motors and Ford Motors the two giant of the automobile industry. The details discussion of the background of the two companies is given in the essay. The nature of the merger is put under the shade of the light side by side the detailed reason behind such merger is also stated in this essay. The response the merger received by the stakeholders and the governmental agency along with the lesson learned after such major merger of the two companies are also discussed in here.
Background of the Company
Tata Motors Ltd
Tata Motors limited, which is also termed as the Tata Engineering and Locomotive Company, is the Indian based company of automobile sector. It is the multinational company, which was established in the year 1945 under the legacy of the Tata family (Negi, Dhariyal & Sharma, 2017). The company is in market for more tam 75 years, which has provided the numerous amounts of truck, vans, buses, sport cars and passenger cars. The manufacturing plant of the company is present in the several cities of India, which include Pune, Jamshedpur, Lucknow and others.
The company owns its research centre in the countries such as South Korea, Spain and Great Britain apart from India. The automobile manufacturing company slowly spread its wings in the sector by launching several kinds of cars at a separate time in accordance to the demand of the market. there are several models are available of this company, which includes Tata Hispano, Tata Marco Polo, Fiat Tata and most recently the major merger with Ford led to the operation of Jaguar and Land Rover.
Ford Motors
The American automobile giant Ford Motor company, which is also termed as Ford, is the multinational company, which has its headquarters in the Dearborn Michigan in the suburb area of Detroit. The legacy of the Ford Motors was established by Henry Ford in the year 1903, 16th June. The company have two separate unit, which deals with the two separate markets. The market diversification of the Ford Motors was done in respect to the luxury customers and the commercial vehicles.
The luxury cars are operational under the name of the Lincoln brand on the other hand the Commercial vehicle comes with the brand name of Ford. The automobile company has many operational units all over the world, which includes the countries of Europe, East and South-East Asia, South America, Africa and many more (Wee & Wu, 2009). The automobiles company is in charge of creation of many products such as current marquees, trucks, tractors, buses, sports cars of different kinds and others.
Tata Motors and Ford Motors after Merger
The two automobiles giant merged with each other in the time of economic slowdown of the entire world. The financial crisis of Ford Company has given enormous opportunity to the Tata Motors for the acquisition of the Jaguar Land Rover (JLR) Limited. In the year 2008 the acquisition of the British registered car brand was become part of Tata Motors (Batra & Khairajani, 2012). After the merger, the two units of cars were divided in the separate units for their production and both of them underwent several fundamental reconstruction. However, the parent company of the cars renamed after the merger and now, it is termed as Jaguar Land Rover Automotive PLC. The company even after the merger continued to work in the same research centre; however, the one research centre becomes active in Indian premises.
Nature of the Merger
The merger of these two companies in the real sense is one supporting another to establish a impeccable futuristic cars. The total payable amount by the Tata Motors for the subsidiary of the two most renowned luxury brands of cars Jaguar Land Rover was approximately estimated at around $2.3 billion (Joshi, 2008). Whereas the American...