Drivers of a successful acquisition: The case of Jaguar Land Rover’s acquisition by Tata

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Type de publication:

Conference Paper

Source:

Gerpisa colloquium, Paris (2015)

Mots-clés:

ACQUISITIONS, Ford, Jaguar Land Rover, luxury brand management, success factors, Tata Motors

Résumé:

Title: Drivers of a successful acquisition: The case of Jaguar Land Rover’s acquisition by Tata

Jaguar and Land Rover are two British premium automobile brands that were acquired by Indian car maker Tata Motors from Ford in the year 2008 for $2.3 billion. Literatures, in the past, have discussed several mergers and acquisition cases from the automobile industry. Although, being one of the largest & successful acquisitions in the industry, this acquisition has not received scholarly attention. What make the acquisition more interesting is the fact that Tata being an Indian low-cost car manufacturer attains success in handling a premiere brands like Jaguar Land Rover, while Ford in spite of its huge experience and size in the industry, failed to live up to the expectation.

Since the acquisition has taken place, sales and profits of Jaguar Land Rover have seen a tremendous growth. In 2014, financial experts estimated that the valuation of Jaguar Land Rover increased from $2.3 billion to $14 billion in just 5 years. This paper aims to identify the various factors behind Tata-Jaguar Land Rover’s success story by comparing the post-acquisition strategies adopted by the two owners, Ford and Tata and thus, create the opportunity for the following research question:

RQ1. What are the reasons behind Jaguar Land Rover’s success under Tata’s leadership?

As Tata is a low cost car manufacturer and Jaguar Land Rover is a premium car maker, literature suggest some major challenges for maintaining the brand image of luxury products after change of such ownerships. In Tata-Jaguar Land Rover case, maintaining the ‘Country of origin, manufacturing and design’ status was found to be a serious challenge for Jaguar Land Rover. This research aims to identify the branding hurdles for Jaguar Land Rover after the change of ownership from Ford to Tata with the help of the following research question:

RQ2. How has Jaguar Land Rover managed the brand image of “Premium British Brands’’ after the acquisition despite the new owner being a low cost car maker from India?

This paper uses qualitative study primarily based on ten interviews with top management portfolio holders from Ford, Jaguar Land Rover and Tata as well as industry experts to study the differences in post-acquisition strategies adopted by the two owners. The preliminary findings show that market expansion and increased R&D investments are the major drivers behind the success of the Tata’s acquisition. The study reveals that Ford used organizational integration strategies, which limited the quality of decision making of Jaguar Land Rover management team. On the other hand, Tata has implemented “Separation strategy” and empowered decentralized decision making to Jaguar Land Rover’s managers. That has allowed Jaguar Land Rover to reinvest their profits in technology development and promotion of their brand image. In addition to increased investments and separation strategy, both Jaguar Land Rover and Tata have adopted effective pre and post acquisition communication strategies to develop trust among the internal and external stakeholders, which helped Jaguar Land Rover to sustain its brand image of being a “Premium British Car Maker”.

Copyright© Gerpisa
Concéption Tommaso Pardi
Administration Géry Deffontaines

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