One rainy day in Bangalore India, Ratan Tata, Chairman of India’s Tata Group on his way to the airport spotted an entire family on a two-wheeled scooter. This was not out of the ordinary in India for families to travel this way. Unexpectedly, the scooter skidded and overturned in front of Tata’s car. Tata ran over to the family. Suddenly Tata dreamed of the idea of inventing an affordable car that would meet India’s requirements. Tata wanted the car to be priced around $2,200. Regardless of the challenges that he might face due to an increase in parts and commodity prices during the time of development.
Ratan Tata decided to be a part of the project along with Ravi Kant, the Vice Chairman of Tata Motors to ensure the project received senior support. When the Nano project started the least expensive car ...view middle of the document...
This is how the Nano became a radical innovation. In March of 2009 the Nano project was invented, at its intended price point and meeting all of India’s government safety regulations. Shortly after, there were several incidents of cars catching on fire that caused some bad publicity for Nano. This caused Nano to receive a bad reputation. In the end, Tata did fulfill his dream to invent a car with a low price point and a modified design.
The Tata Nano is a radical innovation that was developed after an entire family overturned on a two-wheel scooter. The Nano is considered to be a competence-enhancing product because it was benchmarked against existing cars. It was just modified to meet the demand to make it less expensive. Tata Nano is considered an architectural innovation because the overall design of the car had to be developed for all the components to function properly.
I think the earlier challenges the Nano faced influenced the rate in which consumers have adopted. With the negative reputation they received because several cars caught on fire the Nano is now seen as an unreliable and poorly manufactured car. Since the price of the Nano is so low it may be able to overcome the bad publicity and rise above in its industry wants it all blows over.
One of the advantages of Tata collaborating with another automaker is to work together to brainstorm ideas. Another advantage would be to share resources that may be beneficial to the success of the product. A disadvantage would be not being able to take full credit for the product.
I believe with some minor teaks to the model the Tata Nano has the potential to be profitable. In doing so, it might mean adjusting the price point to allow some additional research and development and some minor adjustments to the design. Tata can use the Tata Nano as a competence-enhancing product that can lead to other advantages in future auto platforms developed.