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Tata Tea Leadership System TATA TEA has adopted the Tata Business Excellence Model (TBEM) as a means of driving excellence through the organization as also the Balanced Score Card (BSC) methodology for tracking progress on longer term strategic goals. This enables the organization to focus on issues beyond financial performance, vis-à-vis its

employees, customers and the society at large. The senior leadership of TTL and TTGL consists of the Joint

Management Board. This body sets long-term direction, in the global context for the Tata Tea Group as a

whole. The leadership system ,which consists of various Functional heads and Team leaders across

locations, operations and projects utilizes a structured Plan-Do-Check-Act (PDCA) cycle and ensures a focus

on balancing value for all stakeholders. The key requirements of stakeholders are the cornerstone and

yardstick of our short-term and long-term strategies. This is the road map used to create and execute action

plans, ensure fact-based business decisions, prioritize and allocate resources and drive continuous

improvement.

Additionally, every unit head is engaged in appropriate monitoring and reporting of compliance issues under

Clause 49 of SEBI Regulations. The process considers both identification of comprehensive risks including

high risk areas, and self-certification by each entity indicating compliance level from each entity. These

compliances are periodically reviewed by Internal / External Auditors to look at the rigour of compliance and

to suggest areas for improvements in critical processes.(Source:CSR report of TATA TEA)

Identification of frontier environmental and social issues:

Tata tea has devised consumer facing solutions that address the Bottom of the Pyramid( B O P) stakeholders. The key Environmental, Social report that redefined Governance (ESG) issues

relevant has been identified in the section.

They include :

1) exit strategy from the plantations while evolvingsustainable business model for their stand alone operations.

2)Brand expansion with inclusive growth.

3)Ensure fair labour standards across the value chain.

At Tata Tea Limited (TTL),there has been a constant remodelling from small branded business and instant tea

operations to a large plantation organization to currently

the beverage arena which has been managed by branded operations. In the late 80's and 90's, TTL engineered the consumer

polypack revolution in India and grew to become the largest integrated

tea company in the world in both the plantation and branded operations.

The Tetley group was acquired in the year 2000 and now it reprsents the second largest global

branded tea operation with product presence in more than 40 countries.

PRODUCTS OF TATA TEA

TTL's two main products are branded black tea

and instant tea for exports. The business is divided into three distinct

operations:

1. Branded tea- India is the largest tea consuming market in

the world at 773 million Kgs in 2006. Consumption of

branded tea in India is estimated to be growing at around 3%

annually in the last decade, ahead of the growth in population.

The size of this market in 2006 was 354 million kilograms of

which TTL's share was 18.5%. Our branded operations reach

out to 40 million households across all states of India through

our five main brands viz., Tata Tea, Kanan Devan, Chakra

Gold, Gemini and Tetley.

2. Instant tea & Tata Tetley Division - Both the businesses do

not operate currently in a direct consumer competitive

environment since they are 100 % EOUs and primarily suppliers

to Tata Tea Inc. and TTGL respectively. Over time, we foresee an

increasing focus on value added products, including for other

prospective customers.The formal coming together of two large business houses namely the Tatas and James Finlay PLC in early 1960 lead to the formation of a fledging company named Tata Finlay Limited. Tata Finlay Ltd, the company incorporated in 1962 envisaged the setting up of two business operations which today are identified as the Packet Tea Division at Bangalore and the Instant Tea Operation at Munnar. James Finlay Ltd had with them the know how for the manufacture of Instant Tea powder - the fully soluble solids of Tea - which was the new and fast growing product in a resurgent American market.

Commissioned in 1964 the Instant Tea factory today has a rated capacity to manufacture around 4.5 mn lbs per annum (2 mn kgs). From a small but steady beginning our factory today is the largest Instant Tea manufacturing factory outside USA.

Instant Tea Operation is a 100% EOU and an ISO 9002 accredited division located in Munnar, South India and is where Tata Tea owns 2,500 acres of Tea Estates. Fresh Green leaves of the plant Camellia Sinensis being one of the main raw material for this plant, is available throughout the year in abundance.

This unique process of extraction from leaves of the plant Camellia Sinensis developed in-house after extensive research gives the product a unique tasting profile which is the USP of our product.

The equipment used for the manufacture of Instant Tea powder are state of the art and have been constantly been upgraded. From a manual operation in the 1960's and 70's, a high level of automation has been achieved today. Instant Tea is manufactured to international standards laid down by customers in the most developed countries of the world. Instant Tea Operation caters to customer specific product and are used for light density 100% Teas, Iced Tea Mixes and in the preparation of Ready to Drink (RTD) beverages. Instant Tea powder from this plant is packed in bulk packages of 20/25/35 kg each.

The Instant Tea powder is exported mainly to the USA as also to Switzerland, Austria, Germany, Italy, Taiwan, Singapore, Japan and Australia. The entire exports to USA are sent to Tata Tea Inc, a 100% subsidiary of Tata Tea Limited.

It is estimated that the worldwide production of Instant Tea powder is approximately 25 m lbs (11.34 m kgs) and the main factories manufacturing Instant Tea powder are in USA, India, Kenya, Sri Lanka, Chile and China and these are owned by large MNC's viz. Tata Tea, Nestle, Liptons, James Finlay etc.(Source: http://www.tatatea.com/instant_tea.htm)

3. Plantations- The North India plantations (NIPO) comprising

24 estates and two plantations in South India- Pullivasal and

Periakanal - are involved in cultivating tea that is auctioned and

also goes into Tata's brands.

(Source: CSR Report of TATA TEA)

Some Other Services of TATA TEA

GBDBulkTea 

Tata Tea today is able to deliver fresh Tea from it's own plantations and also ship customized blends to discerning Tea importers around the globe.

The bulk tea business consists of both North Indian and South Indian teas.

The Export Oriented blending/packaging factory at the South Indian City of Coimbatore is capable to meet international customer requirements for blended teas from Tata Tea's own gardens and also sourced from various other gardens through the auctions. This Export Oriented Unit is also eligible under Government of India regulations to import Teas from other origins to be blended with Indian Teas and exported as per customer specifications. The factory has facility to house-stuff Tea in containers - both palletized and loose.

Tata Tea exports teas in bulk form to leading tea-importing destinations such as Iraq, Russia, Saudi Arabia, UAE, Tunis and Europe. Competent tea tasters who can deliver teas on standards to the various overseas buyers man the International TeaTradingdivision.

SouthIndianTeas

The Pachaimallai Orthodox factory situated in the Annamallai's District of South India produces some of the best medium elevation teas. Chundavurrai, Thenmallay, Devikulam and Yellapatty factories in the High Range district of South India produce flavoury Orthodox teas specially known for the distinctive aroma and flavor of the Kannan Devan Hills. Organic Tea grown in the High Range is manufactured specially in the dedicated Chittavurrai factory, which is fully geared to manufacture organic teas fully certified as per EEC norms with effect from January2002.

NorthIndianTeas

The Assam Orthodox tea has a substantial market in Dubai and Europe while we export Darjeeling Orthodox teas totheUnitedKingdom.

Tata Tea's Orthodox factories are benchmarked against the best Orthodox teas in the world and Teas are specially manufactured to the requirements of the various international buyers.

Tata tea also produces Speciality / Extraction teas, which are second-flush Assam teas and have a market in Germany and Dubai.

Source(:http://www.tatatea.com/gbd_bulk.htm)

Strategy of Tata Tea:

The changing socio-economic conditions has led to redefinition of the business strategy of the company. The inputs for Strategic Planning Process (SPP) come several sources like: various factors shaping the tea, strategic challenges,internal and external evaluation,brand play to drive growth,feedback received from formal/informal meetings.

Based on the outcome of the SPP, we have

reinvention takes place to expand horizontally and vertically.

TEA

STEPS:

At global No 2 challenging for thought leadership in tea. Our geographical expansion and operations in tea was no longer the most suitable brand portfolio growth shall be achieved through option. The addressal of innovative alternate entry into new markets such as Czech Republic,Russia and South Africa. This is in addition to our economic, employee-welfare and environment related existing markets in India, United Kingdom, USA .

The Acquisitons in all demographics are an example of the ambitious plans of Tata tea.

They are also in the league of launching green tea polyphenols,other green tea extracts and new age beverage/Ready-To Drink configuration.

SWOT ANALYSIS

STRENGTHS OF TATA TEA

1)Positioning:

"Taste Kamyabi Ka",the earlier positioning has been replaced by "Jaago Re",which has been a nation wide success.

2)Taste Basis

3) No celebrity is used rather they raise social issues to promote.

4) There was a television commercial which featured singer Sunidhi Chauhan and sports star Sania mirza,hence to attract the younger generation.

5)Political factor

No political factor is involved and Tata tea is not involved in any political problems.

6)Economical Factors

The tea is affordable by large number of people.

WEAKNESSES

1)Social factors

Unability to hold on to all the regions because of the different taste preferences and low income of people

2)Technological Factors

Crop declines by 10% due to adverse weather conditions and old farming technologies.

3)Cost Control

Beyond the affordability of every individual.

4)Health related Issues

Doesn't suit the taste buds of every individual and hence can cause health related issues.

OPPORTUNITIES

1)Unexploited Rural Market.

2)Increasing number of Youth who prefer Tea.

3)Need for Tea.

4)Target Audience is middle class and Upper middle class people.(Income<20,000)

Threats

1)Competitive Market

Biggest threat is HUL which own two brands under its name :Lipton and Brook Bond.

2)Strong presence of regional Competitors .

Local players have already established in the region.

3)Customer Retention.

Source:CSR report of TATA TEA.

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