Tata Motor's transformational resource acquisition path: A case study of latecomer catch-up in a business group context

In the mid 1990s India's Tata Motors Ltd. entered the passenger car business after having prospered for more than 40 years as a manufacturer of commercial vehicles. Based on archival data and on expert interviews the paper analyses the resource acquisition and internationalisation strategies and processes of this latecomer firm which has evolved in only 15 years from an initial entrant into a medium-sized passenger car manufacturer. The case reveals a pattern of top-down driven overlapping strategic initiatives in a catch-up process which combine external international resource acquisition with internal capability building and deliberate learning and upgrading processes. As Tata Motors is an affiliate of India's largest private business house, the Tata Group, the case study examines in a second part the role of group affiliation in the catch-up process. It is found that Tata Motors' rapid resource acquisition and creation process has been supported by dynamic group level capabilities, significant central group support and resource sharing across group companies; without the affiliation advantage the much accelerated catch-up process would not have been possible. The case contributes to the on-going debate about latecomer firms (or emerging multinationals or challenger firms) and suggests to undertake further studies on the question which role business group affiliation plays in the catch-up and internationalisation processes of firms from emerging economies.