Tata's JLR deal: Of strategy, personality, brands
Business Standard — March 31, 2008

With plushy automobile brands, Jaguar and Land Rover, now in the Tata stable, it’s time to revisit the issue of strategy. The two acquisitions are majestically positioned in the premium segment all right but are not exactly cash cows; from afar they look more like white elephants losing money.

For Tata, it points at strategy in the “entrepreneurial mode,” characterised by the active search for new horizons and opportunities. And that ‘problems’ are deemed secondary. It suggests not so much careful and detailed planning, as mercurial and intuitive strategic thinking.

How it would enhance brand value and synergy is a billion dollar question. The larger challenge is to sufficiently reduce the risks embedded in path-breaking entrepreneurial vision. Much is at stake.

JLR brands are indeed upmarket, luxury ones. A brand’s strength does derive from its consumer appeal, the market segment in which it is placed (read ‘positioned’), its internationality or otherwise, amongst other factors. But brand strength can also be seen as an attribute of the reliability of its future earnings.

Actually, the brand strength, together with brand earnings does provide a means for deriving and evaluating brand value. The concept can be used to review, even improve, the performance of the brand, characterised as brand management.

That said, in the premium segment à la JLR, a brand’s personality, embodying all the myriad qualities seen to be on offer, is the key to sustained value. In that realm, brand personality is perceived as a more important component than say primary characteristics and the functional purpose involved. But it’s critical that a brand’s personality should never be seen or even felt as such to perceptibly change. Rather, it ought to only evolve over time or be so visualised.

As JLR brands have a change of ownership, how the notion of their brand personality remains unchanged, or better still, evolves for the better, would be the yardstick to measure brand management. It is notable that the existing management team driving JLR would reportedly continue to stay in charge.

When it comes to iconic brandscapes, a sense of continuity and direction would be just what the doctor ordered. Instead of a state of flux, a business-as-usual internal brand environment can often, in effect, make all the difference to determining the enthusiasm and commitment of those at the steering wheel.

But the fact remains that the strategic move to acquire JLR is a rather bold entrepreneurial course of action. It appears more like racing in to make good an opportunity relatively on the quick, proactively. Given the fluid, uncertain external environment, the ability to go with the tide may well make eminent sense.

But adeptness to roll with the punches notwithstanding, the very process of personalised, entrepreneurial leadership and strategic vision can remain, by and large, a “black box.” Sure, it can mean flexibility and adaptability.

However, it can also happen, as it often does, that the entrepreneurial drive becomes preoccupied with the operating details and nitty-gritty on the ground, ignoring the emerging big picture. Losing sight of the nuanced strategic considerations around the corner can mar initiative and follow through.

There’s the risk of the other extreme, too. Entrepreneurial insight may then “end up in the clouds,” aloof and far removed from routine operations, not necessarily in terms of physical presence. And the required lack of ‘visionary’ attention may mean rigidities and perverse effects right across the board. It’s not implausible.

How Tata manages a high-profile brand portfolio, and implements strategy formed in an entrepreneurial setting, will be closely watched. In the past, it has been usual for startups and organisations in trouble to imbibe strategy in the entrepreneurial mode. But then, the future is seldom what it is expected to be.