Compose a 2750 words assignment on international business economics. Needs to be plagiarism free!
In this pursuit, an M&A team also had been setup to seek out prospective targets (Dutta and Chaturvedi, 2005). The main target of globalizing the company was in terms of boosting up exports substantially. Entering the Chinese market through joint ventures or transfers of technology was also on the cards. But these aspirations failed to materialize and instead when the opportunity to acquire Daewoo, a concern that had a market share of 22 percent even with large idle capacities, arrived, Tata Motors grabbed it (Dutta and Chaturvedi, 2005).
The objective of the present endeavor is to look at the acquisition in detail to the extent allowed by the scope. In what follows we look at the strategic and economic rationale of Tata Motors that motivated acquisition, seek to explore aspects like the strengths of Daewoo Motors that made it potentially valuable for Tata Motors, the major challenges faced by Tata Motors in the process of acquiring Daewoo and the major potential synergies and their materialization.
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To perceive the rationale of the acquisition, it is first necessary to understand where Tata Motors stood just before this breakthrough phenomenon in the history of the Indian Automobile industry.
Although Tata entered the sphere of manufacturing automotive vehicles way back in 1954 when it collaborated with Daimler-Benz, it spent the following two decades or so in enhancing its R&D base of operations through a multitude of collaborations and manufacturing mainly construction equipment (Dutta and Chaturvedi, 2005). The first commercial vehicle was manufactured in 1977 and by 1983, Telco, as Tata Motors was known until 2003, initiated its production of heavy commercial vehicles. ‘TATA 407’, the company’s first light commercial vehicle that was completely indigenous in design was launched in 1986.