Inggris Indonesia

Analisis Lingkungan Internasional: Kasus Esai Tata Group

Daftar isi

1. Tata’s Environment
2. PESTLE Analysis of TATA
3. Dunning’s theory
4. TATA’s UK Environment
5. Why UK?
6. What does internalization mean to UK
stakeholders?
7. List of References

Tata adalah salah satu raksasa bisnis India yang terlihat berkembang secara drastis, mengakuisisi berbagai bisnis di luar negeri.
Mulai dari bisnis manufaktur hingga layanan konsultasi. Misalnya, Tata Motors (2006) mengakuisisi divisi truk dari Daewoo Korea
pada tahun 2003.

Tata steel telah mengakuisisi pabrik baja di banyak tempat termasuk Eropa. Tata Tea membeli Tetley Tea pada tahun 2000
sementara konsultan Tata telah menyebarkan bisnisnya ke seluruh penjuru. Di Inggris misalnya, Tata mempekerjakan sedikitnya
45.000 pekerja; Konsultasi Tata mempekerjakan lebih dari 5.000 staf sementara Tata UK adalah produsen terbesar di negara itu dan
mempekerjakan lebih dari 40.000 pekerja.

Pabrik baja di Stockbridge saat ini berada di bawah kepemilikan Tata. Dalam langkah bisnisnya baru-baru ini, Land Rover yang
sebelumnya diambil alih oleh Tata meluncurkan Evoque yang merupakan kendaraan sport mini. Ini adalah kendaraan yang menarik
kekaguman banyak orang sehingga menghasilkan pesanan hingga 20.000 sebelum pembukaan penjualannya. Ini hanyalah sekilas
penyebaran tentakel Tata.

Lingkungan Tata
Lingkungan internal mencakup kekuatan dan kelemahannya dalam manajemen, strategi, dan produk. Dalam strategi
internalisasinya, TATA berencana untuk selalu mempertahankan manajer yang sudah ada di perusahaan yang diakuisisi dan
menggabungkan mereka dengan beberapa manajer senior dari konstituen India. Dengan mempertahankan staf manajemen di
perusahaan yang diakuisisi, Tata akan mampu menghadapi tantangan manajemen yang mungkin timbul, terutama yang berkaitan
dengan sumber daya manusia.

Beberapa tantangan tersebut adalah mengembangkan inisiatif SDM untuk mengelola semangat kerja karyawan di lingkungan baru
dan mengelola produktivitas dan ketidakamanan mereka (Shah 2006). Perusahaan juga tertarik pada pengembangan manajemen
para pemimpin.

Mereka memiliki program yang dimaksudkan untuk meningkatkan keterampilan para manajer. Dalam aliansinya, perusahaan
meningkatkan portofolio produk untuk kedua perusahaan (Greer 2002). Misalnya, mereka membuat perjanjian dengan Fiat untuk
bersama-sama membuat truk pikap yang dirancang untuk pasar Amerika Tengah dan Selatan pada tahun 2007.

Salah satu kelemahan mereka adalah mobil penumpang yang ditawarkan Tata Motors seringkali diproduksi dengan platform
generasi lebih rendah sehingga tidak memungkinkannya bersaing dengan kuat di pasar yang persaingannya kuat. Tata juga belum
bisa masuk ke segmen mobil mewah meski sudah mengakuisisi Jaguar dan Land Rover. Mungkin karena masyarakat
mengasosiasikannya dengan kendaraan niaga berat. Lingkungan eksternal juga terdiri dari kekuatan dan kelemahan.
The increase in oil products for instance can be considered to be a blessing in disguise, especially in America. As Tata corporation
intends to introduce the low consumption Tata Nano. The economic challenges facing America calls for more jobs and the entry of
Tata could not be such timely as now (Green 2002). In globalizing, Tata is a fast learner and takes its lessons from among others,
Daewoo. It is able to diversify from metal to tea, from chemicals to hotels and several other lines of investments.

One of the big threats is the shift from big cars to smaller compact cars that is becoming the trend of many manufacturers. The
emergence of new technology electrical engine by Chevrolet is a looming threat. Since it is a home car, Americans might favor the
Chevrolet over the Indian Tata even though they have the same specifications.

The electric engine might also receive more attention with greater environmental awareness today. The company also faces serious
problems in parochialism where the top management is dominated by Indians. The diversification could also be counted as a
disadvantage; Tata seems to be dragging both performing and non-performing sectors along. Some examples are Tata Teleservices
and Tata Financial services (Windecker 2011).

On the side of human resources, the challenge comes in developing equitable pay plans for individuals working in different
countries. There would also need some extra knowledge in identifying and training expatriate managers to do overseas
assignments and developing some human resource initiatives that will be directed towards workforce diversity, which means there
would be need for diversity training programmes (Green 2002).

There is a threat in TATA being a family business. It would seem also that its chairman, Ratan Tata, is one of a major investment
himself. Replacing him would not be easy considering that he has led the company through major transformations right from its
restructuring to innovations.

Being a family business, it would mean that the other one in line is also a family member which raises the question whether this
concept would continue working wonders in it internalization and its survival in the developed world markets. Rattan Tata retires in
the end of 2012. There is no obvious heir of the business as Ratan has no children. If it becomes the end of a trend of inheritance, it
is not yet the end of the company strategy and it will depend much on the direction in which the company is driven (Shah 2006).

PESTLE Analysis of TATA

In terms of entry barriers there may not be much lobbying to do to enter the American market even though they will have to have
their cars approved by the appropriate agencies before they are allowed to enter. This may include some modifications as specified
by the agencies. A company that is trying to keep a competitive advantage may not succeed well especially if they are also trying to
be among the cheapest (Chaudhuri & Muthukumar 2004).

Even though the economic crisis can be used to market cheaper cars, Tata may have to adapt its strategy keeping in mind that this
will also affect their business in other ways. For instance, the exchange rates, inflation, and GDP trends. This is a crisis in itself
because the company might be considering the job creation it will bring through entering the market (Biswas 2005). Tata will have to
look into the environmental footprint since there are current trends of higher environmental requirements.

If their car is not environmentally friendly, it may receive a cold reception from an environmentally aware clientele. The company
may therefore have much to do with corporate social responsibility (Nieuwenhuis & Wells 2003). The company might need to do
something about its image as compared to the home brands so as to counter the sour attitude or comparison of home versus
Indian product (Encarnation 1982).

Due to the presence of the electric Chevrolet Spark, more research and development will be required to bring such a product into the
market if it will have to be competitive in the long run. Engine technologies are also changing fast and they need to adapt to this so
that they do not become obsolete in the fast changing arena (Chaudhuri & Muthukumar 2004). Indian policy towards investments
abroad had always been a dilemma for the government.

It was highly restrictive but in the recent times, investments abroad have been seen as India’s way of promoting its exports. The
general guidelines that governed Indian company participation in joint investments abroad by 1995 had the following specifications:
Only industrial ventures; the Indian participation could only be minority; there should be no cash remittances to start up the
companies; There should be Indian participation in terms of machines, equipment and technical know-how; and the reserve bank of
India should be the single window clearance agency and many other regulations (Encarnation 1982).
All these guidelines were restrictive, reflecting that effort was to conserve foreign exchange. These policies were to ensure that the
investments abroad would lead to increased export of Indian-made machinery. After 1995, the government policies were liberalized
and it saw a wave of increased investments abroad. However, an annual ceiling of $500 million was introduced as a precaution.
April 2003 saw the ceiling abolished and the companies were now free to invest abroad (Biswas 2005).

In contrast to earlier waves of investments abroad, the current wave seems to be focused on developed nations like U.S and U.K.
some investment projects are still directed towards other developing countries of the world (Agmon & Kindieberger 1977).

India is now in joint ventures in such areas like light engineering, oil and seed crushing, chemicals and pharmaceuticals, glass and
glass products, commercial vehicles, cement and other manufacturing, consultancy and many other fields (Dunning 1981).
Statistical evidence shows that most of these investments have taken the form of acquisitions.

Dunning’s theory
Dunning’s theory of investment development path shows that outward investments and also inward investments create more
structural development in the home economy as compared to the countries of destination. According to the theory, as a country
develops it may be able to expand its industries further to neighboring countries or to other countries that are behind it in terms of
development.

As development becomes advanced, it becomes possible to invest even in countries that are more developed than that investing
country (Dunning, Hoesel & Narula 1998).

It would be expected that after India liberalizing its policy, there would be more concentration on its domestic market instead of
concentrating on other markets where percentage growth is lower than in India. The explanation could be that India seems to follow
the theory of investment development path (Ruta 2005).

These investments eventually culminate to India’s development. With India’s preoccupation with foreign currency reserves, it would
be expected therefore that the outward flow of investments will fluctuate with the level of foreign currency reserves (Bhat 1973).

TATA’s UK Environment
The UK market is highly influenced by the bargaining power of competitors. The presence of powerful competitors in the UK like
Ford, GM, Toyota, Peugeot and others makes it a highly consolidated market. Intense price wars would therefore arise and
necessitate differentiation of products (Windecker 2011).

The bargaining power of the buyers in the UK market also characterizes TATA’s UK environment. Due to the high competition of the
several companies in UK, buyers also have immense bargaining power. They have also in the recent times exhibited high level of
bargain seeking behavior.

One cannot also fail to recognize the bargaining power of the suppliers. Even with the consolidation of the vehicle manufacturers,
suppliers groups have also consolidated and so car dealers experience a lot of bargaining power due to the overcapacity problem.

TATA’s UK environment is also determined by threat of new entrants into the market. There is future potential of Chinese
manufacturers flooding the EU markets if there is no protection measures implemented in the near future.

Even when the threat is minimized by the entry barriers of value, investment capability and product development, the globalized
nature of the industry makes entry of new competitors not clear cut (Aggarwal & Johann 1998). The UK market is characterized by
slow pace of market entry. The high competition in the UK market means that the market window for Tata Motors is narrow. This
may undermine that company’s success on this market (Shah 2006).

Despite the threat posed by these challenges Tata could position itself strategically and not only concentrate on low cost cars but
also SUVs since after market recovery, there would be high demand for them. They could also take advantage of the expansion of
the EU market.
Why UK?
TATA chose UK due to presence of several favorable business and environmental factors like economic stability, medium entry
barriers, growth of the car market segments and the future market expansion prospects into the EU, using UK as the base. Fast entry
mode was chosen where there was establishment of contractual relationships with UK operating market agents through joint
ventures (Windecker 2011).

This would guarantee Tata fast market penetration and market knowledge. There was a negative aspect that had to be
counterbalanced. The fact that Tata heavily relied on its Indian success undermined its competitive pressure. In order to counter
this, Tata proposed to focus on building customer relations and enhance customer loyalty. A consideration is being given by Tata to
come up with a SUV model to suit customers who are looking for sports type, environmentally friendly high quality but cheap cars.

This is a large market that Tata could focus on. It would use price as one of the attractive factors and this would work wonders for
price sensitive individuals. In its strategy, the company will launch advertising campaigns to create awareness about the car. The
company also intends to cooperate with different car dealers and develop e-commerce to ensure the products are available.

In a very recent research study of Tata by a branch of its UK consultancy segment, some sustainability strategy tailored to the UK
segment was proposed. The ten year sustainability strategy is designed to complement its growth and expansion. The areas
addressed were steel, automobile, software consulting, chemicals, tea and other major interests it invests in.

First, creation of a Tata Sustainability Solutions (TSS) was proposed. While much of its operational details will not be discussed
here, TSS will ensure centralized consulting support for all business units, increased transparency, financial independence, and
management development, ease of raising funds, strategic continuity and consistency of business practices.

In this research it was suggested that when the support structures are in place alongside TSS, the initiatives that reflect each unit’s
target market needs, business expertise needed and such variables can start being looked at. The initiatives should be tracked in
aggregate by TSS perhaps with an exception of the Corporate Social Responsibility.

All details should be addressed using a specific timeline to avoid jumping the gun. If Tata was to adopt such strategy, several current
strategies could be affected right from human resource practices to operations (Windecker 2011).

What does internalization mean to UK stakeholders?

Even if capital gains are not channeled to the UK, accommodation of such investments as those coming from the East is crucial for
its economy too. The advantages could be counted especially on job creation. Counting Tata only, it has been confirmed that there
are 40,000 jobs in UK only coming from such an investment.

This would mean that if the acquired companies were still under previous management, there would perhaps be downsizing owing
to the poor performance of these companies. Allowing such foreign investments also brings in new ideas into already existing
knowledge base (Shah 2006).

Such investments also make UK the hub of activity in the EU and bring market not only for the foreign company products but also
for home products.

It brings business to such other industries like the flight industry, freight, outsourcing and others (Windecker 2011). The presence of
competition also can be considered an advantage in that it brings product improvement, differentiation and makes prices affordable
for the customers. Company standards also rise due to the competition bringing aspects like HR practices and services to a new
level.

All these combined are a plus to the local economy. The competition it brings can however be considered a negative in the sense
that it takes business away from local producers. This compared to other advantages that foreign investments bring, can be
considered as healthy competition (Green 2002).

The stockholders are above all better positioned to benefit from the diversified investments. The internalization of companies
especially from the developing countries of the East and their entry into the UK can therefore be regarded as important for the UK.
List of References
Aggarwal, R., and Johann, K., 1982. Foreign operations of third world multinationals: A literature review and analysis of Indian
companies. Journal of Developing Areas, 17(1), 13-29.

Agmon, T., & Kindieberger, C. P., 1977. Multinationals from small countries. Cambridge: The MIT Press.

Bhat, V. M., 1973. “Indian investment and collaboration in foreign countries.” In C. N. Vakil (ed.), Industrial development of India: policy
and problems. New Delhi: Orient Longman.

Biswas, S., 2005. Sektor jasa pengetahuan akan menghasilkan perekonomian $ 200 miliar pada tahun '20. The Economic Times ,
New Delhi, 12 April, hal. 16.

Chaudhuri, AR, dan K. Muthukumar, 2004. “Penuaan Dunia, dan Tangan Tua Bekerja di Sekitar Anda”, The Economic Times , New
Delhi, 15 Juni, hal. 9.

Dunning, JH, 1981. Menjelaskan posisi investasi langsung internasional suatu negara: menuju pendekatan dinamis atau
pembangunan. Arsip Weltwirtschaftliches, 117 (1), 30-64.

Dunning, JH, Hoesel, V., & Narula, R., 1998. “Perusahaan multinasional dunia ketiga meninjau kembali: Perkembangan baru dan
implikasi teoretis,” dalam JH Dunning (Ed.). Globalisasi: Perdagangan dan investasi asing langsung. Amsterdam: Elsevier

Encarnation, D., 1982. Ekonomi politik usaha industri patungan India di luar negeri. Organisasi Internasional, 36 (1), 31-59.

Greer, CR, 2002. Manajemen sumber daya manusia strategis: Pendekatan manajerial umum , edisi ke -2 . Singapura: Pendidikan
Pearson.

Nieuwenhuis, P., & Wells, PE, 2003. Industri otomotif dan lingkungan: Masa depan teknis, bisnis dan sosial. Cambridge: Penerbitan
Woodhead

Ruta, CD, 2005. Penerapan teori manajemen perubahan pada implementasi portal SDM di anak perusahaan Perusahaan
Multinasional. Manajemen Sumber Daya Manusia, 44 (1), 35-53.

Shah, K., 2006. “Mimpi Buruk”. Waktu Ekonomi . New Delhi, 10 Juni, hal.7

Tata Motors, 2006. Laporan Tahunan. Tata Motor . [online] Web.

Windecker, R., 2011. Ukuran besar dan kelas atas memimpin. Industri Otomotif, 184 (6), 18