Question

TATA was founded in 1868 by Jamsetji Nusserwanji Tata. The company began as a textile trading company in Mumbai, India.The following year, Jamsetji Tata expanded into his fledgling company into textile manufacturing and that expansion set the foundation of a company that would go on to be India’s largest conglomerate in the next 147 years. What were the advantages of Tata entering so many different businesses?

Answer 1

Solution:

Tata entered a variety of businesses which were crucial for the developing economy of India. There was lack of businesses which were actually using the resources at India's disposal to set up the world level businesses and help drive the wheels of Indian Economy by producing jobs and employment for the people of India.

When Tata entered so many different businesses, it first helped in creating a lot of jobs in India due to increasing in the industrialization and increasing businesses of Tata. From a business point of View, Tata helped in diversifying its businesses by entering into different business lines which were the need of the hour and reducing the risk of operating in a single industry. This allowed Tata to take the benefits of interlinkages of different industries it was operating into and thus further grow their business. The ability of Tata to provide world-class culture, employment opportunities and providing homegrown products made the people of India trust the brand which further led to increase in the brand value of Tata and their businesses helped gain momentum in India.

Hence, the diversification, ability to cater to the needs of developing the economy and provide employment to the citizens of India were some of the prominent advantages of Tata entering a variety of businesses.