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Positioning the Tata Nano (A)
Sania Moazzam
Corporate Strategy
Revolutionize
• Ultra low cost cars• SEC C & D
Product Development
• Improve life’s quality
• Develop hybrid & electric cars
• Conserve natural resources
Acquisitions and Ventures
• Global presence
Market Invasion 2008Jaguar and Land Rover – FMC$2.3 billion Global expansion
2007
-2008
Relatively decreased
STILL 60% of all sales of all passengers and utility vehicle
2009Dropped to 54%
Industry Facts
2009> 11 million
vehicles
Average annual growth rate
17%
Two-wheelers as % of all vehicles
76%
Passenger vehicles as % of all vehicles
16%Country Per Capita Automobile Ownership
US 76.5%
UK 42.6%
India 12%
Indica’s Longitudinal Performance Years No. of Indica cars sold Percentage increase 2003-04 80,000 -2004-05 105, 521 31.9%2005-06 111,574 5.7%2006-07 144,690 29.6%2007-08 135,642 -6.25%2008-09 111,254 -17.9%
Years Passenger vehicles Indica’s Percentage 2003-04 N/A -2004-05 1,209,876 8.7%2005-06 1,309,300 0.88%2006-07 1,545,223 9.3%2007-08 1,777,583 7.6%2008-09 1,838,593 6.1%
Country per capita automobile ownershipUS 76.5%UK 42.6%India 12%
Case Facts
• Capacity limitation led to booking process• Online booking service fee(Rs 200)• Tata dealership booking service fee(Rs 300)• Booking fee represented the majority of the
final cost• Contracting with entrepreneurial engineers• Maruti 800 (the car for the Indian masses)• The two wheeler segment posed tougher
competition on the Nano
Qualitative Statements
“A Tata company shall be committed to good corporate citizenship, not only in the compliance of all relevant laws and
regulations but also by actively assisting in the improvement of quality of life of the people in
the communities in which it operates. The company shall encourage volunteering by its
employees and collaboration with community groups” Code of Conduct
Qualitative Statements
Tata promise to improve the quality of life--- guided its product development
Quality of life for women and children in India by supporting education and employment
Qualitative Statements
TML Dealership“Such a figure- a million cars- has never been
achieved in the country before. If it had to be done the conventional way, it would have meant investing many billions of dollars. So we looked at a new kind of distributed manufacturing, creating a low cost, low breakeven point manufacturing unit that we
design and give to entrepreneurs who might like to establish a manufacturing facility”
Exhibit 1: Ad for the Tata IndicaPOSITIONING THE TATA NANO (A) KEL602
Exhibit 1: Ad for the Tata IndicaPOSITIONING THE TATA NANO (A) KEL602
Exhibit 2: Top Competitors
Exhibit 3: Comparison of Nano Models
Exhibit 4: Comparison of Tata Nano and Maruti 800
Exhibit 5: Ad for Maruti Suzuki
Exhibit 6: Comparison of Tata Indica and Maruti Alto
Core Problem
Improve
Quality of Life
Threat to
environment
Positioning
Core Problem
- Introducing small, fuel efficient, low priced vehicles
- Contributing to air pollution- Against the Tata Code of Conduct
Other Problems
• Conflict at Singur – Protests from farmers
• Initial plan of producing 350,000 Nanos– Limited to 50,000
• Distribution of Nanos in rural areas– Hire entrepreneurial engineers– TML not confident for providing warranty
Recommendations
• Focus on college students– grab market share– achieve competitive
advantage
Recommendations
• Market share of Tata Motors and Maruti Suzuki India are 16.45% and 46.07% respectively.– aggressive marketing
• Unable to assume responsibility for warranty or liabilities on cars assembled by independent groups.– intensive training to engineers – design a proper task force team for quality checks
at different stages
Thank You