We can do it better than Ford
Seamless integration is a key B-school jargon. A major M&A headache, its a lot more effort an money than what went to the original seamless stuff. Buying a company is one thing whereas creating a set of business processes to match the direction and vision of the new parent while keeping the distinct fingerprint of the child is a major challenge. Its for this very reason that M&A is big business - to buy out stake requires cash/stock/kind exchange but the advise in that crucial stage about the long term and the short term pros and cons of the merger is a very important step. Which therefore makes the M&A strategy consulatants the high seat of consultancy consisting mainly the creme-la-creme of the crowd shared only by the I-Bank pros at the Wall Street.
Consider the complexities of the current case.
At stake are twin luxury behemoths of the auto industry who have been in red for the past decade or more and still bleeding. causing worry not only for them but grief for their parent company as well.
The acquirer is a conglomerate whose automobile portfolio include medium to heavy duty trucks/trailer, a small car, a mid sedan and a car making news these days whose total cost might equal some of the trivial options on one of the luxury cars mentioned above.
Not exactly a marriage made in heaven right? Well it does not take a lot to figure out that its Tata's takeover bid of Jaguar/LandRover.
Luxury cars are weird - as of today most of them are owned by one mass-product manufacturer or the other - but a lot of effort is taken to ensure that the shadow of the parent does not even cross the path of the child. Imagine the Rolls Royce Phantom and BMW M7 series sharing the same dash component - not only will it be blasphemous but also spell doom for the former. Secondly their buyers expect to pay a lot for the badge and exclusivity, hence immense care has to be taken to ensure that - one pays for a Lexus ES/GS 300, but if Toyota comes out with a car as good as that in its Avalon XlS its bad for both. Thirdly the image has to be preserved and thats the biggest thorn in flesh for the Tata's takeover - dealers across the globe are skeptical about Tata's name being tied to these marque brands.
On the other hand there is Mr Ratan Tata, the septuagenarian Tata Chief who cannot be described in a few words. In a period of 16+ years at the head of the group he has turned the group to an entity to reckon with in the global business world.The half a dozen major operating companies in the group are now transformed entities and global players, every one of them. The Tata group does not stand at the top of the list of India's most valuable business houses, and Ratan Tata himself does not figure in any listing of billionaires. But he is certainly India's tallest businessman. (The Ugly Duckling).
Every big businessman thrives amidst strong skepticism and sets high standards for himself but when it comes to Mr Tata, he raises the bar so high that his peers are left gasping.
Only time can tell the outcome of the merger. As of now to quote Mr Tata himself "We can manage Land Rover and Jaguar better than Ford."
Consider the complexities of the current case.
At stake are twin luxury behemoths of the auto industry who have been in red for the past decade or more and still bleeding. causing worry not only for them but grief for their parent company as well.
The acquirer is a conglomerate whose automobile portfolio include medium to heavy duty trucks/trailer, a small car, a mid sedan and a car making news these days whose total cost might equal some of the trivial options on one of the luxury cars mentioned above.
Not exactly a marriage made in heaven right? Well it does not take a lot to figure out that its Tata's takeover bid of Jaguar/LandRover.
Luxury cars are weird - as of today most of them are owned by one mass-product manufacturer or the other - but a lot of effort is taken to ensure that the shadow of the parent does not even cross the path of the child. Imagine the Rolls Royce Phantom and BMW M7 series sharing the same dash component - not only will it be blasphemous but also spell doom for the former. Secondly their buyers expect to pay a lot for the badge and exclusivity, hence immense care has to be taken to ensure that - one pays for a Lexus ES/GS 300, but if Toyota comes out with a car as good as that in its Avalon XlS its bad for both. Thirdly the image has to be preserved and thats the biggest thorn in flesh for the Tata's takeover - dealers across the globe are skeptical about Tata's name being tied to these marque brands.
On the other hand there is Mr Ratan Tata, the septuagenarian Tata Chief who cannot be described in a few words. In a period of 16+ years at the head of the group he has turned the group to an entity to reckon with in the global business world.The half a dozen major operating companies in the group are now transformed entities and global players, every one of them. The Tata group does not stand at the top of the list of India's most valuable business houses, and Ratan Tata himself does not figure in any listing of billionaires. But he is certainly India's tallest businessman. (The Ugly Duckling).
Every big businessman thrives amidst strong skepticism and sets high standards for himself but when it comes to Mr Tata, he raises the bar so high that his peers are left gasping.
Only time can tell the outcome of the merger. As of now to quote Mr Tata himself "We can manage Land Rover and Jaguar better than Ford."
posted by shaun's world at
9:21 AM
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