Article: Tata Nano

What environmental factors influenced the Tata Group to design the Tata Nano? Global Competition: Tata Group wanted to increase the competition in car industry by building a car which will be small in size and the price will be within the rage of middle class people around the world. Natural Resources: As the natural resources are diminishing really fast and the price of the fuels is increasing, Tata group wanted to invent a car which will be lower in cost and fuel efficient. Suppliers: For building Tata Nano, 97% of the parts are supplied from India which is really cheap in cost in comparison to the European countries. Technological Advancement: Tata group wanted to focus on new technologies and innovation to build a series of world-class businesses in selected sectors. To expand their business and profit, they build Tata Nano for middle-class families. Consumers: As it costs half the price of its nearest competitor in India, Tata Nano is the dream car for the nearly 300-million strong Indian middle class. Identify and analyze the strategic and management factors of the Tata Group that played a critical role in the design and production of the Tata Nano. Modular Design Strategy: Tata Nano is constructed with parts that can be shipped and assembled at a variety of locations and to be sold in kits which can be assembled, distributed and serviced by local entrepreneurs. Satellite Assembly Operations: Tata Motors has built a network of satellite assembly operations by training the various entrepreneurs in assembly operations and monitoring their quality. With help of this strategy, Tata Motors will actually have

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entrepreneurs who can build the cars in different parts of the country for their customers. Innovation from the Suppliers: In order to achieve the parameters of its design process, Tata Motors took measures to refine its manufacturing process and encouraged innovation by seeking new design approaches from suppliers. Cross-Functional Team: Tata Motors formed a large cross-functional team which was a mixture of the experienced and the young employees to design the cheapest car in the world. Different Versions of Nano: To compete with their closest rivals, Tata Nano came up with different versions such as one standard version which has no radios, no power steering, no power windows and no air conditioning and deluxe version which includes air conditioning but no power steering. Identify the leadership qualities of the Tata Group. Farsightedness: Tata Motors forecasted that to be competitive in India, they need to be competitive in world. Keeping that in mind, Tata Motors started to invent the worlds cheapest car, Tata Nano. Acquiring Resources at the Opportune Time: Tata Motors alliance and acquisition (Daewoo Commercial Vehicle Company, Land Rover, Jaguar etc.) of some of the big companies in the world has put them in a comfortable place to compete in the global market. Equal Opportunity for the Employees: Formation of cross-functional team (mixture of experienced and young employees) in Tata Motors has ensured equality among the

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employees. As a result, employees are more motivated and committed to the organization. Cost Leadership: Tata Motors used the cheap Indian labor market and the burgeoning level of skilled people to set up the innovative Nano project. Moreover, to keep the price of Nano within the range of the middle earning people, 97% of the parts are supplied from India which is less expensive than European countries. Understanding Market Demand: Because of the rapid growth of the Indian economy, Tata Motors started to realize that the demand for miniature commercial vehicles is increasing. Moreover, due to increase in petrol prices, people are demanding small cars for low cost and fuel efficiency. So for that, Tata Motors started to work on the Nano to grasp the market. Do you think strategic entrepreneurship is important in business? Discuss giving examples from the Tata Group and Tata Nano. Yes, strategic entrepreneurship is important in business to face challenges and also to compete with the competitors and its products. Examples: Tata motors has recently faced controversy involving Tata Nano as some environmentalists say that it has an adverse effect on pollution and global warming. To reduce these controversies, Tata Motors has taken some initiatives such as, Tata Motors has formed alliance with French firm Moteur Development International (MDI) to develop technology that compresses air into a fuel. Tata Motors has already started working on making the electric version of the Nano which will be known as E-Nano. The car will also have solar panels attached. Tata Motors is planning to launch hybrid version of the Nano in the near future. Tata Motors is working on the existing version of Nano to reduce the environmental pollution by updating some of its technologies.

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Reference:
Alam, Q., & Majumdar, N. A. (n.d.). Tata Nano: an inspiration from an Indian conglomerate. In Cases in Business and Management (pp. 88-94).

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