TATA Tea Limited (A)

Submitted by:
Group 4, Section B
S. Vishwas | Shorya | Shubham | Tushar
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 One of the largest tea companies of the world and second largest seller of
packet tea in India
Success was built on its From tea bush to Tea cup philosophy
TATA Tea spends about US$ 1 million/year on R&D
TATA Tea had a joint venture with Tetley which exported tea to Poland, Russia
and confederations of independent states

Were there possibilities for growth in Indian market?

How to go about in international market, whether to acquire or go alone?

 Tetley was one of the global player in Tea selling industry, having market share of
7%
Produced 20 billion Tea bags and generated 263.6 million euros as revenue
Centralized Tea buying at UK head office
Brand had been developed un campaign Tetley Tea folks, seven characters
representing all that was good about Tea

The company was disappointed with there financials and was speculated to be
sold out
TATA tried to acquire Tetley 5 times before and failed due to inability to arrange
finances
Acquiring Tetley means capturing high end of value chain

Ratings (6Brand strength Multiple

20)

Comments

Leadership

18

2nd in worldwide market after Unilever

Stability

10

Instability in bottom line

Market

17

Diverse products serving several markets

International Scope

19

Presence in many countries

Trend

13

Average Value assumed as no data is available

Support

13

Average Value assumed as no data is available

Protection

13

Average Value assumed as no data is available

Average

14.71

Brand Valuation

Without Exceptional Item

1999 Operating Income before exceptional items

Less: Estimated operating income of an equivalent
unbranded product -1999

24,991

Tea Bags - 1999

Microsoft Excel
Worksheet

With Exceptional Item

18,837

17,669

13,318

Other Products - 1999

1,375

1,036

Adjusted operating income - 1999

5,947

4,483

1998 Operating Income before exceptional items

Less: Estimated operating income of an equivalent
unbranded product- 1998
Tea Bags- 1998

41,063

49,119

29,032

34,727

Other Products-1998

2,259

2,702

Adjusted operating income - 1998

9,772

11,689

Weighted two years Adjusted Operating income (2:1)

7,222

6,885

Less - Taxes (@30%)

2,167

2,065

Net Income after tax

5,056

4,819

Brand strength multiple

14.71

14.71

Estimated Brand Value in 1999

74,390

70,915