The House of Tata - Assignment Example

This strategy is positive in that the new products that are introduced in the market will receive applause since the brand is already known. However, in some instances, the new products that are introduced in the market are not pleasing since the brand of other products is not performingwell. b) Building of equity interlocks among the Tata companies Building interlocks of equities creates a scenario where the companies are working in unison. The companies are better placed as they have a lot of activities in common.

For instance, the group of companies will have substantial equities that will make a greater investment. This is like pooling resources together in the group of companies. Therefore, the group of companies will be able to invest in other activities that need a huge investment (Khanna, Krishna and Wu Melito, 2). However, companies that are not indulged in interlocking equities are not well prepared to invest in activities that need a large sum of accounts. Similarly, interlocking equities brings ahighrate of interest.

For instance, the interest rate that is accrued on lump sum equity is much more than the interest that is accrued on minute equity. Therefore, this was a prudent activity to the companies as it would increase the company’s gains in the long run. . Therefore, in this case selling part of Tata company was againstthecompany’s need for expansion. This limited its market segments and would lead to diminished performance of the company. Similarly, selling part of the company was a step that reduced the operating capital of the company.

Therefore,most of its activities in the market were reduced. d) Revitalisation of Tata administration The administration of a company is considered a vital aspect that will dictate its performance. A company that has utterly trained and experienced administration is likely to give positive results at the end of each financial year. However, any company thatdoes not have an experienced and dedicated administration is not likely to make a positive accrual in the business. In this case, Tata was vigilant in ensuring the administration was functioning to its advantage.

The change in administration meant that the company was prepared to make an improvement in its activities. Similarly, this would record an improvement in the financial management, economic development and all other activities that are vital in the company. Similarly,there is positivity in that revitalisation of the administration improved on the specialisation in the company. The people that are well trained in particular places will be given an opportunityto serve the company to their best. As such,they will increase the performance of the business to greater heights as they will have an enhanced position.

This is a prudent aspect that would improve the performance of the company and give the company an added advantage. 2. Corporate portfolio in 1995 The corporate portfolio that was done in 1995 was a vital activity to the company (Khanna, Krishna and Wu Melito, 4). This