Expensive acquisitions have dented the group’s financial position
Hunger for growth and expansion should be in-built in the DNA of an ambitious business corporation, for only then can it make the cut. It is indeed a trait we would want the Tatas to retain. After all, their role in the evolution and growth of India Inc. since the early 20th century can hardly be overestimated.
However if ambition is not combined with prudence and a clear understanding of the competitive landscape, it can lead to terrible consequences. Tata’s over-ambitious acquisitions of Corus, Jaguar & Land Rover have landed this business giant in quite a bit of bother. If the purchase of the Anglo Dutch steel manufacturer, Corus (in 2007) catapulted the combined entity, Tata-Corus (worth $8 billion) to the position of the fifth largest steel producer in the world; it also brought along a debt burden of $6 billion.
Hunger for growth and expansion should be in-built in the DNA of an ambitious business corporation, for only then can it make the cut. It is indeed a trait we would want the Tatas to retain. After all, their role in the evolution and growth of India Inc. since the early 20th century can hardly be overestimated.
However if ambition is not combined with prudence and a clear understanding of the competitive landscape, it can lead to terrible consequences. Tata’s over-ambitious acquisitions of Corus, Jaguar & Land Rover have landed this business giant in quite a bit of bother. If the purchase of the Anglo Dutch steel manufacturer, Corus (in 2007) catapulted the combined entity, Tata-Corus (worth $8 billion) to the position of the fifth largest steel producer in the world; it also brought along a debt burden of $6 billion.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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