Tata Nano: The World’s First Rs. 1 Lakh Car

556 words - 3 pages

Executive Summary
to: Mr. Ratan tata, chairman, tata group
subject: TATA NANO: THE WORLD’S FIRST Rs. 1 lakh car
date: 2/1/2016

Introduction and Case Background

The case presents the path breaking endeavor to manufacture world’s cheapest car priced at approximately $2,200. This car was developed by Tata Motors, a conglomerate under the umbrella of Tata Group, one of India’s oldest and most revered companies. The company was founded in 1886 by Mr. Jamsetji Tata and is now preceded upon by Mr. Ratan Tata.
Business Problem

Tata Nano enjoys the reputation of conceptualizing the unique idea of producing world’s cheapest car and was even successful in delivering results. However, it has been facing several hurdles throughout the process. Weight and cost limitations dictated the entire manufacturing process. Even ...view middle of the document...

Important Factors and Analysis
Tata Motors enjoys an upper hand in terms of industry experience, market dominance and low threat of new entrants. However some of the major issues encountered were high threat of substitutes, compromised security features, lower than average expected sales and a weak marketing strategy. Some of these problems can be effectively resolved by collaborating with other automakers to improve security features and strengthening their market strategy.

Alternative Strategies
Tata Motors came up with the revolutionizing idea of launching world’s cheapest car and received a very favorable market reception. However, owing to cost and weight constraints, various compromises were made in the basic model in terms of security and other accompanying features. Lack of electric windows or locks, anti-lock brakes, air-bags etc., single windshield wiper and rear-view mirror etc. were some of the major concessions made. Tata Nano tried to live up to the consumer expectations but failed in certain areas which led to a slow market growth. Some alternative strategies they could have adopted are:
1. Collaboration with other automakers who specialize in producing low-cost vehicles without compromising on security features like air-bag installation. Seeking assistance from international automakers will even help in targeting the global market.
2. Introducing a customer interactive marketing strategy by using detail customer analytics to trace customer behavior pattern. Social media platforms can be used effectively to gauge customer preferences.
The recommendation involves a collaboration of the above strategies. A collaboration with specialized automakers will provide Tata Motors the expertise required to manufacture cars within limited resources. Also this will offer them the leverage of entering into international markets. Furthermore, a comprehensive quality control to ensure production of safer and robust cars is required. Additionally, adoption of a customer interactive marketing strategy by employing consumer analytics will help Tata Motors understand customer preferences and offer superior customer service.

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