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Peru Merger Strategy

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TATA steel strategy was to integrate the value chain of steelmaking to aid the growth of Asia’s bubbling construction economy. When presented with the opportunity (financially the government policies made it easier) to gain access to the other markets, they later acquire CORUS which was an established name in Europe, but were not cost effective in their operations (Tarun Khanna, Krishna G. Palepu and Richard J. Bullock, 2009). This acquisition provided them the right synergy by combing the low cost upstream production in India with the high-tech research aspects of Corus and areas like procurement, marketing, back office operations and R&D. This was also required due to the trends in world steel industry whereby there has been a global …show more content…

They therefore had to transform itself into a high-margin global distributor of specialty teas and other healthy beverages and at the same time, looks towards vertical disintegration. Therefore, in knowing the demands of the market and in its attempt to meet it, they therefore acquired Tetley which not only was a brand with global appeal, but at the same time provided them access to the market in both the developed and emerging markets, thereby reducing dependency on one geography. Through this acquisition they also gained technology to create unique products (i.e. herbal, flavoured tea) which they could offer to the markets which they are already established (i.e. India, Middle East and Russia) and attain cost synergies through the manufacturing of tea and distribution via the global supply chain approach. In its bid to further diversify their portfolio and transform into a beverage company, they later acquired EBI which was sold 9 months later to earn them a profit of $600M. This was not due to the fact of a change in their strategy, but similar to Indian Hotel, they would prefer to have a controlling stake in the company in-order to attain the full benefits of gaining the technology of producing enhanced water and brand control which was lacking due to the fear of knowledge spill over. Overall their focus was on growth rather

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