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Here Comes Tata (And Other Developing-Country Multinationals)

There's no denying the audacity of the bid of the Indian company Tata to buy Jaguar and Land Rover--the company has never sold a car in the U.S.--but there's also no denying its distinguished pedigree. Tata Group is a huge conglomerate of 98 companies producing everything from tea to steel and solar power with annual revenues around $30 billion.

The implausibility of the bid was magnified when Tata rolled out its newest product--a tiny, stripped-down car that will sell for a mere $2,500. So few Americans have heard of Tata because much of its fortune has been made selling to its home market and to other developing countries, rather than to the U.S. and Europe.

Meeting the challenges of making money in developing countries can help a company like Tata become a formidable global competitor, since figuring out how to earn a profit in markets where your selling prices are necessarily low forces a company to be innovative. That may be why a huge wave of what you might call developing-country multinationals--like Mittal Steel, Lenovo, Chery Automobile, and Cemex--have begun to move aggressively into Western markets.

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