The Development of Tata Nano
Response to Question 1: Tata is one the reputed automobile organizations in India, and also, around the world. In the following context, Tata is recognized to understand of dominating the market with a mini sized car. Accordingly, similar vehicles were developed by Volkswagen (Beetle), Ford (Model T) and British Motor Corp (Mini). These cars were affordable and were sold to millions of customers, who were observed to struggle to afford one. Thus, Tata new innovative idea of ‘Nano’ was designated to create a revolution in the automobile industry (Shafiulla, 2014). The company had planning to create their global market scene where they would be recognized as a small-car manufacturer, while delivering these cheap products to the lower middle class (“bottom of the pyramid”) people of the society.
According to a journal by Kanagal (2015), 49.9% population of Indian population are employed, however 21.9% are still under national poverty line. Affording a car is a huge investment for most in the respected nation, though the importance and comparable benefits are clear and concise to most. In the following case, Mr. Tata also shared his experience of watching a ride of a scooter with four members of a family. This is extremely dangerous as any unintended accident is subjected to cause a lot of harm to all the parties, riding. Thus, it questioned the mind of the designer to create such a vehicle which will be affordable and convenient to Indian’s needs and requirements, and also will be light on money. Thus, the engineers and designers, understanding the importance of such development, produced a safe, all-weather and an affordable form of transport for the family. The car was called ‘Nano’ under Tata Motors.
Response to Question 2: Tata Nano was produced under the criteria of developing it under $2,500, so that the price would be affordable to most of the Indian nationals. Moreover, it requires a lot of innovation and bright ideas to produce something under a low budget. Thus, Tata eliminated air conditioning, power brakes, radios and more features to develop the cost-friendly system. Noticeably, the all components were adjusted to cut costs. For $10 savings, they redesigned to eliminate the actuators in the headlights, levellers angles were also adjusted accordingly. Nano is also recorded to be lighter than its competitive models due to the lessened amount of steel usage during manufacturing. However, the most innovative aspect is considered to be the modular design, as it can be built, shift and assembled at various locations.
Material Quality and Features of Tata Nano
Any product, when allocated to deliver a quality base material yet have cost-efficiency, might support inferior quality (Krishnan & Jha, 2018). Tata Motors have developed a system which is cost-efficient, that is, under $2500. However, it might question the material quality of the Nano. After overall understanding of the features and development quality, it has been noticed that the model is not strip out of existing cars for creation. For cost-efficiency, the model was designed and built to meet the demands of a car-owner, while luxurious features may become non-existent. The car also has fuel efficiency (50 miles per gallon) and extra space; compared to its competitors. The car also features safety component like intrusion-resistant doors, crumple zones, strong seats and anchorages and tailgate of rear side being glass bonded to the body. The tubeless tires are fitted to enhance the safety. The body is all-sheet-metal. Thus, cheap price is not equal to cheap quality, in this developmental respect to Nano.
Response to Question 3: TATA announced about the TATA NANO project in the year 2006. The project was to be setup at Singur, West Bengal, India. The company started to face the problem as soon as it bought the 1000 acre of the farmland for the factory. The farmers were offered compensation by the government but, the farmers with small land holding refused that compensation. The company insisted that the supplier has to be close to maintain the low cost of Nano. After no outcome of the steps taken to avoid the situation the project was shifted to Gujarat with a MoU (Memorandum of Understanding) signed by the Chief Minister Narendra Modi (Schuster & Holtbrügge, 2011).
Agriculture is considered to be most important field of Indian economy (Randhawa, 2016). It accounts nearly 18% of India’s GDP (Rao, 2018). Agriculture, also has been calculated to provide employment to almost 50% of Indian workforce (Jordan, 2014). The action of setting manufacturing plant of Nano over at Singur failed miserably for the company officials, as the farmers could not submit their daily harvested land and the only way income for a low compensation. Indians is a developing country which prioritizes every work same and important (Wells, 2015). Thus, any wrongful action will be judged emotionally. If any wrongdoing is found to be evaluated, movements such as protests, riots, etc. can hamper a company’s business altogether. Civil rights act as a fundamental part in every aspect of Indian movements. Thus, processes should be measured before implementation of any business in India (Ray & Ray, 2017).
Nano’s Impact on the Indian Market
Response to Question 4: The introduction of the Tata Nano has created a new field in automobile industry. Tata has created a four-wheeler which has elegant features yet is light on budget ($2500). Automobile makers are always looking to spread their business across countries like China, India and Brazil, where cheap priced vehicles are often among the best sellers (Singh & Shalender, 2014). Moreover, the new “Nano” had dominated its competitors in these segment of budget vehicle. The vehicle has immense scopes of usage either as a taxi vehicle or entrepreneurship business transports to enhance carriage, mobility and social status. However, the low budget of cars made profit margins as low as 5 percent. Thus, it would take a significant time to income profitable amount.
Nevertheless, it is mentionable to signify the leadership role of Tata among its competitors. They created a vehicle which was called to be “the first mover advantage” by two experts from China and India. It is meant to be a future platform than being only a present’s. The product can be modified according to the circumstances while treating it like a group of capabilities. On the other side, competitors mainly focus on current features, distribution channels, customers and the branding; which limits them to be fixed in the present conditions. Tata has shown leadership through the grasp of establishing low-cost models for Indian market with ease while broadening their future plans (Cooper & Kleinschmidt, 2016). This is overlooked by most companies. The company is also working on electric and hybrid versions of the same model of Nano. Moreover, Tata shows a comprehensive advantageous position to their rivals and are always looking for better innovation that enhances their leadership in the market.
Response to Question 5: Nano has already been a moderate-hit in the Indian market. Tata was approaching to a stage of introducing the same model in foreign countries. Entrance of such car in the European and U.S. market will potentially cause financial damage for reputed automakers like GM and Ford. The same model, which is sold for $2500 in Indian middle-class market; could be sold in an upgraded model for nearly $8000 in the rich European and U.S. markets. This could change the whole game for Tata’s business.
However, low cost does not fix everything in business (Cormican & O’Sullivan, 2014). In rich countries, low budget cars are more like luxury, than a necessity (Prahalad, 2015). However, upgradations on the model which may feel suitable to the markets of U.S and Europe is predicted to make a better environment of sales for Tata. After a review event in U.S., the car was justified from most critical to most optimistic viewpoints. The car needed certain specifications which were appropriate for the foreign market, such as Luxurious feel, more slots for objects and some of the described arguments. Again, it was also said to be “Just good enough” car due to the no unnecessary fancy features. Moreover, the American standards should be reviewed and evaluated to justify their upgrades according to their needs. Then, success for the model can be strengthened.
References
Cooper, R. G., & Kleinschmidt, E. J. (2016). Benchmarking the firm’s critical success factors in new product development. Journal of Product Innovation Management: AN INTERNATIONAL PUBLICATION OF THE PRODUCT DEVELOPMENT & MANAGEMENT ASSOCIATION, 12(5), 374-391.
Cormican, K., & O’Sullivan, D. (2014). Auditing best practice for effective product innovation management. Technovation, 24(10), 819-829.
Jordan, J. (2014). An agricultural atlas of India: a geographical analysis. An agricultural atlas of India: a geographical analysis.
Kanagal, N. B. (2015). Innovation and product innovation in marketing strategy. Journal of Management and marketing research, 18, 1-25.
Krishnan, R. T., & Jha, S. K. (2018). Innovation Strategies in Emerging Markets: What Can We Learn from Indian Market Leaders. ASCI Journal of Management, 41(1).
Prahalad, C. K. (2015). Bottom of the Pyramid as a Source of Breakthrough Innovations. Journal of Product Innovation Management, 29(1), 6-12.
Randhawa, M. S. (2016). A history of agriculture in India. A history of agriculture in India.
Rao, V. M. (2018). Inclusive growth in India-agriculture, poverty and human development. Indian Journal of Agricultural Economics, 63(2), 276.
Ray, S., & Ray, P. K. (2017). Product innovation for the people’s car in an emerging economy. Technovation, 31(5-6), 216-227.
Schuster, T., & Holtbrügge, D. (2011). Tata Nano: The car for the bottom-of-the-pyramid. In Fallstudien zum internationalen management (pp. 83-102). Gabler Verlag, Wiesbaden.
Shafiulla, B. (2014). Tata Nano to tata no-no. IUP Journal of Marketing Management, 13(1), 78.
Singh, N., & Shalender, K. (2014). Success of Tata Nano through marketing flexibility: A SAP–LAP matrices and linkages approach. Global Journal of Flexible Systems Management, 15(2), 145-160.
Wells, P. (2015). The Tata Nano, the global ‘value’segment and the implications for the traditional automotive industry regions. Cambridge Journal of Regions, Economy and Society, 3(3), 443-457.
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