Two Centuries of Indian Business
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Tata: The industrial conglomerate that wins the heart of India's success on the global trade platform. For nearly two centuries, the Tata group has shut down many industries in India and remains a market leader in most of them. You've probably heard of Tata Motors, their division, but as you will soon find out, their reach extends far beyond that one subsidiary. In this, we will go through a generation of Tata businessmen to see how they built one of the most successful people in India.
The story of Tata begins during the reign of the British Empire. India was a major exporter of cotton back then, but the British East India Company's brutal rule left little room for the development of local entrepreneurship. Poor treatment by the British eventually led to a rebellion against him in 1857, which ended the power of the British East India Company and replaced it with the British Raj. Now, compared to his ruthless predecessor, Raj was more focused on maintaining peace. Raj did not rigorously exploit the Indian population and invested a lot of money in building India's first railway example. Of course, at the end of the day, the British Raj was still an oppressive colonial power, but at least it ultimately gave the local population an economic opportunity to develop itself. Because India was an exporting country, Indian entrepreneurs came from the same region and one of them was Jamsetji Tata. He was the son of an exporter in Mumbai in 1858 and was the perfect time to take advantage of the economic reforms of the British Raj. As his father's export business was sinking, in 1859 Jamsetji went to Hong Kong to develop a subsidiary there and, given the large scale of British commerce, he realized that the Tata export business was indeed a global potential. During the next decade, he would distribute to Japan, China, and Great Britain, which established a network of distribution for the father's business. He eventually built his own export company in 1868 and, using the money he had built, he began building his own textile mills, effectively building a vertically-integrated business. Jamsetji's philosophy from the beginning has been the best practices used throughout the world and bringing them back to India. In their textile mills, they implemented policies almost unknown to most people in India, such as offering sickness benefits and pensions to employees.
But Jamsetji was not content with just the textile industry: he saw the miracles that the Industrial Revolution had produced in Europe and wanted to bring them back home. He began work on the steel production plan tin in 1901, which he saw in Germany. Even more ambitious was his hydroelectric project, inspired by a 1903 visit to the Niagara Falls power plant. Jamsetji realized incredible powers and so he started a chain of hotels, starting from the Taj Mahal Mahal Hotel, which is one of the most recognizable buildings in Mumbai even today.
Jamsetji was truly dedicated to the businessman who was dedicated to helping people through it: he took education to the point where he donated the land building to building the Indian Institute of Science, the famous university of India. However, it should not live up to the realization of most of these projects, as he died during a business trip in Germany in 1904, which was already making the Tata company too big for his two sons. Together, they consolidated their ownership as a single holding company, which in turn is owned by charitable trusts for future generations.
Jamsetji's sons fulfilled many of their father's ambitions: they oversee the construction of India's first steelwork in 1907, India's first cement plant in 1912, and the first indigenous insurance company in 1919. Sons consisted of 14 different companies. This time, however, instead, in the tone of Jamsetji's grandson, a far more interesting background fell into the hands of a distant cousin rather than the lead. Jahangir Tata, popularly known as JRD, had joined the company since 1925, but was raised in France and was a close friend who had made his first flight to the English Channel. In other words, JRD was a passionate aviator, and in 1929 that it obtained India's first pilot license, so its first major project, uncertainly, was to develop Tata an airline. In 1932 he built the Tata Air Service, which was only mailed, but then started passenger flights in 1938, helping the British in the Second World War.
Now, you imagine that India's independence would be beneficial for 19 imagine Tata, but in reality, private businesses, as well as governments, were in crisis due to newly formed policies. The first Prime Minister of India saw how unsuccessful JRD was with his airline and in 1953 he unilaterally decided nationality. He held JRD as the airline's president until 1977, and as you can imagine, the company only went downhill, sometimes rising-sinking. Of course, JRD would not allow politics to become the way of business and hence he tried his best to make Tata grow. He built Tata Motors in 1945, originally thinking of building locomotives, but in 1954 he built commercial vehicles in a partnership with the German car company Daimler. During his 52 years of leadership, JRD expanded the Tata group from 14 companies to 95, but to do so he was dramatically owned by Tata Sons to appease the socialists. In 1969 the Indian government introduced TheMonopolies and Restrictive Trade Practices Act, which was essentially targeted at Tataeven, although they were far from monopolized by Western standards. But as JRD expanded the group and reduced ownership in individual subsidiaries, it began to lose control.
The man whom some of his companies sent to fix him was not demonstrating this man: Ratan Tata. He is one of Jamsetji's great-grandchildren, he joined the Tata group in 1962.
His first major project came in 1971 and it was very difficult: Ratan was given charge of a struggling Tata company, known as Nelco, which was India's largest producer in 1950. Radio, but just twenty years later it had fallen to a 3% market share. Ratan's focus was on technology and The future, so instead of trying to salvage radio, he funded the development of new products such as satellite communication, which restored NELCO Ratan claimed the leadership of Tata Groupin 1991, as a wave of economic liberalization in India. The Socialists lost power and India eventually shut down the global capital market, but it presented a major threat to the Tatas. Until now it had operated in a very protected area, which was suddenly open to competition from foreign companies. Worse, JRD had made Tata extremely vulnerable, so it would be very slow to adapt to new competitors. Ratan had no choice but to reestablish ownership of all Tata subsidiaries and it did not come cheap. He sold 20% of the holding company Tata Sons and used that money to buy shares in Tata's subsidiaries, notably Tata Steel and TataMotors. He then reorganized all the hundred subsidiaries into seven territories, establishing a framework with which he could control them. But there is not just enough electricity around a struggling business and in the 1990s every Tata company was losing out to international competitors.
However, Ratan's answer was brilliant: He started acquiring foreign competitors and incorporated them into the Tata group, effectively supplying all his talents and expanding his home business in India, while also expanding internationally. Supplied chain and experience to strengthen. Ratan's shopping spree began in the year 2000 when his beverage company Tata Tea acquired Tetley Company of Great Britain. Over the next decade, Ratan acquired hundreds of companies for each subsidiary of the Tata group. Most notably, he bought the European SteelTanian Chorus for $ 12 billion in 2007 and then Jaguar Land Rover in 2008 for $ 2 billion. As you can imagine, the international bing pry is paying dividends for the Tatas and today most of their revenue comes from outside. India. Even more beautiful is that the majority of Tata subsidiaries are public companies whose shares you can buy at the stock market in India.
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