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What Is The Role Of Government Business Linkages In Creating Emerging Market Challengers? Do

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needs and generate profits. For example, establishing chains of low-cost clinics is helping ad-
nt’s medical
dress Africa’s health care needs. 46
The application of business models such as local entrepreneurship, microfinance, targeted
marketing, and MNE direct investing holds enormous potential for addressing poverty in
Africa. However, critics charge that MNEs do much harm in Africa, such as exploiting local
resources, operating sweatshops, and generating pollution. Where do you stand? Can MNEs
successfully address poverty and other problems in Africa, or do such firms do more harm
than good?
CLOSING CASE
Prowling for Success: The Revival of Jaguar Land Rover
Transforming TATA into an emerging market challenger amid the well as resilience. TATA motors continued to invest money in Jaguar
opening up of the Indian economy in 1991 and steering it to a Land Rover amid a global downturn in the sales of luxury car brands.
$100 billion global company operating in over 80 countries is con-
It finally succeeded in transforming the acquisition into a business
sidered to be Ratan Tata’s crowning success. He stepped down in
that generated over $ 5.82 billion in 2012, with profits of over $533
2012.
million.
The TATA group’s growth had come from spending over $20 bil-
lion in acquisitions. But it was the $2.3 billion takeover of the UK’s
Background of Jaguar Land Rover
loss-making car manufacturer, Jaguar Land Rover (JLR) Group, from
Historically separate car brands, Jaguar and Land Rover were part
Ford in 2008 that created history for the group.
of Ford’s premier automotive group (PAG) and acquired together by
Analysts had argued that TATA motors overpaid for Jaguar Land
TATA motors .
Rover in 2008. True enough, JLR needed more cash injection from
Jaguar was founded by William Lyons to build motorcycle side-
the TATAs and continued to lose money for another 2 years. Sales
cars in 1922 as Swallow Sidecars. The name Jaguar was created
dropped to just under 72,000 units in 2009. The company, already in 1935, to reflect speed, sleekness, and raw power according to
saddled with a $3 billion debt, suffered losses of almost $468 million
Jaguar Heritage Trust. A succession of mergers followed until in
in 2009, with Jaguar Land Rover contributing to over $100 million
1989, the Ford Motor Company acquired Jaguar Cars for $2.5 bil-
of this loss.
lion. Ford was forced to sell Jaguar Land Rover in 2008 amid contin-
Newspaper reports indicated that JLR would need to close at
ued losses and to concentrate on its core U.S. business
least one of its plants in the UK. But as we saw in this chapter, chal-
Today, Jaguar sells over 55,000 cars across 4 models; the XF, XI,
lengers from emerging markets demonstrate an appetite for risk as
XK, and the R series. Sixty-six percent of total sales comes from theEconomics