tata tea

tata tea

• 1.
  Presented By: Group 1 CharlesCherian (P122008) Sonal Dengle (P122044) Pashupathinath Rajan (P122032) Pooja Gupta (P122033) Prarthana Nayyar (P122034)
• 2.
   Introduction to TATA TEA  Tetley  Competitive Analysis  SWOT Analysis  Tata-Tetley Deal  Brand Valuation ◦ Techniques  Actual Valuation of Tetley
• 3.
   1964 : Tata Finlay is born with JV of Finlay, UK  1983 : Finlay is bought out, Tata Tea is born  1991 : Enters the brands business  1993 : JV with Allied Lyons PLC, Tata Tetley is born  2000 : Tetley is acquired  2005-2009 : Good earth USA, Eight o’clock coffee USA, Jemca Czech R, Jokels Tea SA, MEMM, Vitax Poland, Grand Coffee Russia  2010 : Tata Global Beverages corporate brand announced  2011-2012 : Rising Beverage Co, JV- Pepsi Co and JV-Starbucks
• 4.
   CEO is mulling over growth strategy and buyout of Tetley Tea  Regulated tea industry & HUL was on the chase  Owned plantations as well as bought at auctions  “Fresh tea bush to tea cup”  Existed with 5 major brands  Top exporter of instant tea  76% black tea and 24% green tea  Market share : 3 to 21 %  Production : 125 mil to 280 mil  Invested 1 mil per year on R&D
• 5.
   Competition to Tata Tea was HLL with a market share of 40% compared to 21% for Tata  Lipton and Brooke Bond with 30% exports were the major brand of HLL  International competition was Nestle, Sara Lee and Unilever and Tetley
• 6.
   Tetley was born in the 19th century in London  They were the pioneers for Tea bags  Specialize Fruit flavoured teas and Ice teas  Tetley had a good MS outside UK/Canada/Russia/US/Poland/Australia  TATAs lost the 1st bid of Tetley in July 1995 was brought by a management buy in offer
• 7.
   They already lost the bid 5 years back  Why would they want a buy when they can invest the same and strengthen their global presence  Price demanded by Tetley was 300 million almost twice of what it was valued 5yrs back  Does Tata have those skills to be able to capitalize on the market already built by Tetley
• 8.
  Strengths Weaknesses Opportunities Threats One of the Technological Unexploited Strong presence largest tea effectiveness rural markets of regional companies competitors Brand Loyalty Cost Control Increasing Competitive number of pricing working youth who prefer tea Distribution Need for tea Less production Channels Innovative Flavors for Indian taste buds Advertising Strategy
• 11.
   Estimating the total financial value of the brand Financial Brand Management Strategy/Business Case Development •Investor Relations •Brand Performance •Brand Positioning •Mergers and management •Brand Architecture Acquisitions •Brand Portfolio •Brand Extension •Licensing/Royalty rate Management •Brand Launch setting •Resource allocation •Business Case for •Financial/Securization •Brand brand Investment •Tax Valuations Tracking/dashboards •Co-branding/JV •Balance Sheet •Return on Investment analysis Valuations Analysis •Organizational Brand Engagement •Management KPIs
• 12.
   Cost Approach  Market Approach  Income Approach ◦ Price Premium method ◦ Volume Premium method ◦ Income Split method ◦ Multi-period Excess Earning method ◦ Incremental Cash Flow method ◦ Incremental Cash Flow method ◦ Royalty Relief Method
• 13.
  Measures the Measures that Measures the ability of Financial Performance Brand Strength Role of Brand Organization’s raw portion of the the brand to secure the delivery of the expected financial return to decision to future earnings it’s investors purchase that is attributed to the Evaluated across 10 dimensions of a brand: brand. Commitment, Protection, Exclusive of other Clarity, Responsiveness, aspects of the Authenticity, Relevance, product like price or Understanding, Consistency, Presence feature and Differentiation Measured on 0-100 scale,
• 14.
  Operating Profit = NetRevenue – COGS – indirect Expenses Brand Value = Capital Charge = Branded WACC Branded Earnings = Earnings * NOPAT = Operating Economic Profit Profits – Taxes Brand Strength * * Role of Brand Economic Profit = Discount Rate NOPAT - WACC