Megafactories: Tata Nano

NANO’S VALUE PROPOSITION

The core value proposition for Nano consumers starts with “delivering the impossible”; where the “1-lakh price tag” was not deemed feasible in the industry (Radjou, Prabhu and Ahuja 2012). By incorporating effective supply chain strategies and capitalising on their conglomerate nature (e.g. working with Tata Steel), the value realized from innovative cost-saving measures are directly delivered via lower costs without compromising safety standards.  Other than basic utility purposes, Nano was designed to handle harsh environmental conditions such as the monsoon seasons in India. Nano’s modular design makes it easier for customization options, which ensures their product caters towards wider segment of users. Their extensive distribution network, financing and service offerings attributed significantly towards purchase experience of its consumers (Singh 2012). 

Moving on, this paper seeks to explore the case study of Tata Nano, how the group adapts towards changing environmental needs to develop and sustain their core competencies.

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ENVIRONMENTAL FACTORS

PEST Analysis

Political

Since reforms, the Indian authorities are have made significant efforts towards the growth of automobile industries (e.g. incentives, lower interest rates). However the issue of political instability remains prevalent and in the context of Nano, its near-completed manufacturing plant had to relocate from West Bengal to Gujurat due to massive objections and political issues which incurred massive delays and losses (Ghosal 2010) . 

Economic and Socio-Cultural

India’s economic growth has seen a trend of growing middle income class with rising demand for consumer goods; according to World Bank, India’s PPP per capita increased 25 percent since 1998 (World Bank 2013) . In this sense, increased purchase power led to changes in buying attitudes where price may not be the sole deciding factor. While financing schemes are still catered, Tata Motors...