Tata can’t merely operate in home market, says Mukund Rajan

  • Ramsurya Mamidenna, Hindustan Times, Mumbai
  • Updated: Dec 02, 2015 15:31 IST
File photo of Tata Sons brand custodian and member, group executive council, Mukund Rajan.

With 70% of its revenue coming from overseas markets, the $109 billion Tata group is largely global. But the Mumbai-based group, whose parent holding company Tata Sons is 66% controlled by charities, continues to expand in India - the recent Rs 25,000-crore steel plant at Kalinganagar, Odisha is an example. In an exclusive interaction with Ramsurya Mamidenna, Tata Sons brand custodian and member, group executive council, Mukund Rajan shares plans on how the Tata brand has been evolving.

Excerpts from an interview:

With global markets affected due to economic and non-economic factors, will large conglomerates like yours have to rethink on the corporate brand?

A. We do live in a volatile world and the elements that create and sustain a global brand have multiplied. What remains critical is global presence. With India liberalising and tariff barriers falling, if we had remained solely on home market we would have come under pressure as foreign companies moved in. To counter this was to expand overseas. One of the key foundations for success has been development of the Tata Business Excellence Model. Group chairman Cyrus Mistry is now building on this platform with Vision 2025.

The Tata brand evolved by assimilating changes brought in by liberalisation. Given the current environment, will the brand need to be changed?

The enormous equity of the Tata brand has been built on twin pillars of trustworthiness and good corporate citizenship. Trust has been reinforced through adoption of the Tata Business Excellence Model and the Tata Code of Conduct. Good corporate citizenship is embedded in our DNA due to the unique ownership structure where 66% is held by charities. For a group with such strong values, I do not believe there is a need to change the brand.

How is the group addressing the changing business mix, specially with digital business?

Our brand values have stood the test of time. That does not mean we do not change We have had a history of pioneering. This continues with products, services and business models. In digital, we are launching an omni-channel e-commerce initiative, a digital health-care platform, and a big data analytics venture. The advent of new digital technologies offers new opportunities to reach customers.

With growth of emerging markets what kind of positioning should the group do?

We see a variety of global opportunities. India accounts for just 30% of total turnover and much of the remaining 70% is generated in the UK and the US. While India’s growth rate has been high, we recognise that we cannot merely operate in our home market. Overseas expansion has brought us access to new markets, technologies. We track and address global trends be it increasing empowerment of women in workforce or needs of ageing populations. Our values also resonate strongly with millenials, a very influential group.

With the refugee crises forcing migrations to Europe and fundamentalist groups reaching newer areas, the developed world is beginning to develop nationalist tendencies…

Our Code of Conduct requires companies to contribute to the development of communities of the countries we operate in while respecting their culture. We have adopted systems and processes to ensure that we are seen as part of the local fabric. So in Korea we are seen as a Korean company. In Britain, we have nurtured and retained quintessential British brands like Tetley and Jaguar. With such an ethos, we see little need for change in our brand positioning.

The Tata brand has been adjudged India’s most creative brand for its willingness to take risks. Please elaborate?

There are plenty of examples. Mr Tata’s thrust on internationalisation when Indian corporates were nudging government towards higher trade barriers, was pioneering. The decision on a series of small acquisitions before the largest - Jaguar Land Rover and Corus Steel. Corus, which was profitable, was described as a very logical acquisition and JLR had its share of critics. Today, alongside other major global steel companies, we face challenges but JLR has been outstanding. While you cannot predict future, you have to be willing to take risks. Be it the launch of India’s largest jewellery brand, Tanishq, or the continuous innovation on India’s best-known satellite television brand, Tata Sky, or Tata Steel’s success in offering premium branded steel products in a market otherwise considered a commodity business, the risks continue to pay off.

What was the idea behind the appointment by Tata Motors of Lionel Messi as the global brand ambassador?

As Tata Motors said, the core idea of the Made of Great campaign, in association with Lionel Messi, is that – ‘What drives us from within is what makes us great’. This is a reflection of the core Tata principle.

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