How TATA Group expanded their Business?

Here we will discuss Tata Company history, how Business and carried over by Tata Sons, JRD Tata, and Ratan Tata and how they expanded it from an export business to over 100 independent operating companies.

TATA Company History

The story of TATA begins with the reign of the huge British empire. India back then was a huge exporter of cotton, but the brutal regime of the British East India Company left little room for local entrepreneurs to develop. The poor treatment by the British eventually resulted in a rebellion against them, in 1857, which ended the power of the British East India Company and replaced it with the British Raj. 

Now compared to its ruthless predecessor, the Raj was much more focussed on keeping the peace. The Raj didn’t exploit the Indian population quite as harshly and it also invested a lot of money in building India’s first railways. Of course, at the end of the day, the British Raj was still an oppressive colonial power, but at least it finally gave the local population the economic opportunity to develop themselves. 

Because India was an exporting country, the first entrepreneur came
from exactly, that sector and one of them was Jamsetji Tata.

Jamsetji Tata

He was the son of an exporter in Mumbai and he graduated in 1858, exactly the perfect time to take advantage of the economic reforms of the British Raj. Because his father’s export system was growing, in 1859 Jamsetji went to Hong Kong to develop a subsidiary there and upon seeing the sheer scale of British commerce there, he realized that the Tata export business had truly global potential. Over the course of the next decade, he traveled to Japan, China, and Great Britain establishing a network of distribution for his father’s business. He’d eventually create his own exporting company in 1868 and using the money he made, he started building textile mills of his own, effectively creating a vertically-integrated business.


Jamsetji Tata

From the very start, Jamsetji’s philosophy was to find the best practices used across the world and bring them back to India. In his textile mills, he enacted policies that were virtually unknown to most of India, like offering sickness benefits and pensions to his employees. But Jamsetji wasn’t content with just the textile industry: he saw the wonders the industrial revolution had created in Europe and he wanted to recreate them back home.

He began working on a steel production plant in 1901, modeled after the ones he had seen in Germany.

Even more ambitious was his hydroelectric project, inspired by his visit to the Niagara falls powerplant in 1903. 

Jamsetji realized the incredible power of tourism and so he also created a chain of hotels, starting with the Taj Mahal Palace Hotel, which even today is one of the most recognizable buildings in Mumbai. Jamsetji was truly a man dedicated to business and to helping people through it: he valued education to the point where he donated land and buildings towards the creation of the Indian Institute of Science, the eminent University of India.

He would not, however, live to see most of his projects realized, because he died while on a business trip in Germany in 1904, leaving the already sizable Tata company to his two sons.


Tata Sons

Together they consolidated their ownership into a single holding company, which in turn is owned by a charitable trust they created for future generations. Jamsetji’s son he obtained India s fulfilled many of their father’s ambition: they oversaw the creation of India’s steelworks in 1907, India’s first cement plant in 1912 and the first indigenous insurance company in 1919. 

By the time the leadership mantle passed onto the next generation in 1938, Tata Sons were comprised of 14 different companies. This time, however, instead of it going to one of Jamsetji’s grandsons, leadership instead went into the hands of a distant cousin with a very interesting background. 

JRD Tata

Jehangir Tata, better known as JRD, had been in the company since 1925, but he had been raised in France and was a close friend to the man who made the first flight across the English channel. In other words, JRD was a passionate aviator and in 1929 he had obtained India’s first pilot license, so unsurprisingly his first big project at Tata was to develop an airline.

JRD Tata


In 1932 he created the Tata Air Service, which originally only carried mail, but then in 1938 started doing passengers flights as well, even helping out the British in the second world war.

India’s independence, it did not prove to be beneficial to the Tatas. The socialist policies of the newly-created government were at odds with private business. India’s first prime minister saw just how successful JRD had been with his airline and in 1953 he unilaterally decided to nationalize it. He kept JRD as the airline’s chairman until 1977 and as you can imagine, the company only went downhill from there, drowning in ever-increasing debt. of course, JRD would not let politics get in the way of business and so he did his best to grow Tata while avoiding the wrath of the socialists. 

He created Tata Motors in 1945, originally with the idea if building locomotives, but in 1954 he branched out into commercial vehicles through a partnership with the German car company Daimler. Over the course of his 52 years of leadership, JRD expanded the Tata Group from 14 companies to 95, but to do that he had dramatically lower the ownership Tata Sons had in each one in order to appease the socialists.

In 1969 the Indian government introduced the Monopolies and Restrictive Trade Practices Act, which was essentially targeted at Tata even though they were very far from a monopoly by western standards. But as JRD expanded the group and lowered its ownership in the individual subsidiaries, he started losing control. Some of his company just weren’t performing and the man he sent to fix all the issues was Ratan Tata.

Ratan Tata

He is one of the Jametji’s great-grandchildren and he joined the Tata Group in 1962. His first major project came in 1971 and it was pretty difficult: Ratan was given charge of a struggling Tata company known as NELCO, which in the 1950s was India’s biggest producer of radios, but just twenty years later it had fallen to a 3% market share. Ratan’s focus was on technology and the future, so instead of trying to salvage the radio, he instead funded the development of new products like satellite communications which restored NELCO in the 1980s and made Ratan the apparent successor of JRD. 

Ratan Tata

Ratan claimed leadership of the Tata Group in1991, right as a wave of economic liberalization swept across India. The Socialists lost power and India joined the global capital market, but this presented a big threat to Tata. 

Up till now it had operated in a very protected economy, which was suddenly open to competition from foreign companies. Worse yet, JRD had let Tata become extremely decentralized, so it would be very slow to adapt to new competitors. Ratan had no choice but to re-establish ownership over all the Tata subsidiaries and that didn’t come cheap. He sold 20% of Tata Sons, the holding company and used that money to buy shares in the Tata subsidiaries, especially Tata Steel and Tata Motors.

He then reorganized all hundred subsidiaries into seven sectors, establishing a framework along which he could actually control them. But just yielding power isn’t enough to turn around a struggling business and in the 1990s pretty much every Tata company was losing ground to international competitors. Ratan’s answer, however, was brilliant: he started acquiring foreign competitors and absorbing them into the Tata Group, effectively buying all their talent and supply chains and experience in order to strengthen his business back home in India while also expanding internationally.

Ratan’s buying spree began in the year 2000 when his beverage company, Tata Tea, acquired the Tetley company from Great Britain. Over the next decade, Ratan ended up acquiring hundreds of companies for pretty much every subsidiary in the Tata Group. Most notably, he purchased the European steel titan Corus for $12 billion in 2007 and then Jaguar Land Rover for $2 billion in 2008.

As you can imagine, the international buying spree has been paying dividends for Tata and today the majority of their revenues actually come from outside of India. 


Author: kismica

KISMICA is a universal blog, where we try to be unique. It’s a technology hub, where we target the articles based on technological advancements, latest gadgets and automobile technology.

3 thoughts on “How TATA Group expanded their Business?

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