INTERNATIONAL BUSINESS ECONOMICS

International Business economics



International Business economics

Introduction

In essence, Ford Motor Company is a leader in the world of automobile manufacturers and as such, it was the manufacturer of the luxury brands such as Jaguar and Land Rover. Ford is the second largest automaker in the United States and at the same time the fifth-largest in the world. This is in terms of the sales made. On the other hand, Tata Motors Limited (TML) is one of the India's largest and respected business conglomerates which were established by Tata formerly a trading firm in 1968. TML was established in 1945 to manufacture locomotives along with engineering products as the Tata group part. Land Rover is one of the oldest sports utility vehicle abbreviated SUV.

In line with this, SUV brands have been in the market as such they are so popular around the world. Jaguar on the on the other hand is the popular name of a brand that is associated with sports car racing to ultimate luxury. It was founded by William Lyons as the Swallow Sidecar Company in 1992. Arguably, 2006 witnessed declining financial performance of Ford and as a result, Ford had to sell its luxury brands Land Rover and jaguar to restructure it portfolio for reasons of creating a strong company and profitable growth.

Strengths of Jaguar and Land Rover most Valuable for Tata

In mergers and acquisition, manifold benefits have been identified and so to speak, mergers and acquisitions seek to enhance as well as develop long-term profitability. This is accomplished by means of expanding the company's operations and in this case the company which is acquiring the other benefits as well as the one which is being acquired. This was the case for Tata Motors limited which sought to acquire the Jaguar and Land Rover (JLR). It applied a long term strategy that would enable it to come out of the level of low operation since it has been hit by the economic downturn. Following the acquisition, it is important to bring out the point that Tata Motors limited (TML) would benefit by the mere fact that it would benefit from the global market share. Along with this point, TML acquisition of JLR enables it to access technology and a complementary range of products.

In respect to this point, TML will enjoy the strength of launching products at low levels of investments as compared to competitors at the global level. As well, it would reduce the overdependence of Tata Motor's on the Indian market which is estimated to have accounted for about 90 percent of its sales. The acquisitions would expose Tata and as such bring it into the broad view of the global market whereby trading can be carried out with efficacy. This is to suggest that TML would benefit from the opportunity to spread its business in varied and different geographical areas and as such reach a large pool of customers.

Along with this point, acquisition of JLR would enable TML to gain complementary ...