Advantages of Jaguar Land Rover Acquisition by Tata Motor Group

Running head: GLOBALIZATION 1
Globalization:
Name:
Institution:

GLOBALIZATION 2
Due to globalization, the business environment is changing rapidly. Considerably, there
has been the emergence of new business trends owing to the tremendous interaction between
companies over the last few decades. Thus, most businesses have opted to adopt these new
trends in order to survive in the competitive global market. Notably, the most common trend
witnessed as a result of globalization is the element of merger and acquisition (Hill, Hult,
Wickramasekera, Liesch & MacKenzie, 2017, pp. 30). Therefore, this essay explores the
advantages that Jaguar Land Rover was able to get after being acquired by Tata Motor Group.
The acquisition gave JLR Group an advantage to use the parent company Tata to
penetrate in the new markets and make profits (Mukherjee, 2016, pp. 48). The first way was to
use Tata’s financial resources in researching and developing new cars which are strong. Since
JLR was lacking new powerful car models appealing to all prospective customers, Tata parted
with $2 billion in research of new models of cars and also gave $12 billion to help the company
in producing new cheaper cars for new emerging markets in India and China. Secondly, JLR
Group utilized the opportunity to open new assembling branches in countries like Brazil where
the countries have a friendly FDI policy. This helps to reduce costs that the customers incurs
from taxes linked with car importations thus making the cars cheaper. Lastly, JLR Group used
Tata’s good relationship with governments in the emerging economies to help it penetrate into
the countries like China where they have opened their industries to manufacture and sell cheaper
cars in those countries (Mukherjee, 2016, pp. 48). However, leverage and reliance on the parent
country might turn to be a disadvantage since Tata might not be ready to inject more funds to
JLR Group since it continues to produce low profit percentages due to economic fall in emerging
economies like China.