1. Presented By:
Group 1
Charles Cherian (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 =
Net Revenue – 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