case study
Case Study: Tata
Bong, R., Ji M. (2017). Tata Nano’s Execution Failure: How the People’s Car Failed to Reshape the Auto Industry and Create New Growth.
1. Identify and explain what the four pillars of Blue Ocean (value innovation) strategy are.
Four Pillars of Blue Ocean
● Eliminate- eliminate what the current industry takes for granted. ● Reduce- factors that did to be reduced below industry standards. ● Raise- factors that did to be increased well above industry standard. ● Create- which factors should be created that the industry does not offer.
While eliminating and reducing the factors of production, the company can cut costs, raise profit margins simultaneously. Then increasing and creating new factors of production, the company will be able to increase overall value through the value chain and ultimately for the consumer. With all four in place the company lowers cost and increases value, therefore making competition irrelevant.
Blue ocean strategy is the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. It is about creating and capturing uncontested market space, thereby making the competition irrelevant. It is based on the view that market boundaries and industry structure are not given and can be reconstructed by the actions and beliefs of industry players.
2. Apply the Blue Ocean strategy pillars to the Tata Nano case, be specific and include case citations.
● Eliminate- Tata decided not to focus on passenger seat cars. They placed the fuel inlet and under the nose of the car to eliminate the need to cut a hole in the side of the car (pg
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3). Thinking about motorcycle riders. ● Reduce- Tata made its engine smaller, reduced the number of seat adjustment positions,
and many other adjustments to parts to save parts and costs (pg 3). ● Raise- by having the smaller engine, Tata was able to focus on having lower emissions
than all of its competitors (pg 4). ● Create- Tata created a small compact car meant to replace a scooter for the typical Indian
family. The team also designed a small steering angle to achieve a small turning circle which they thought was critical to the Nano’s practicality and character (pg 3).
The innovations that Ratan Tata was able to conceive to market a four-wheeled car that was smaller, more affordable, safer, and better suited for the consumer were inventive and resourceful but fell short during the commercialization of the vehicle.
3. Provide your assessment of the Tata execution and diagnose both what was done well and what was done poorly. If something was done poorly, then also provide justification that explains WHY it was not done well (e.g. Tata was not successful at A, as evidenced by B (pg. 3)).
Done well: Tata did very well in designing the Nano and taking out multiple parts to reduce costs as they were able to cut many costs from changing the engine (pg 3).
Done poorly: Tata ended up having to dismantle their factory and spend many more dollars and time transporting and rebuilding their company (pg 6). Additionally, Tata should not have attempted to change its market image because it was too late which resulted in them being “stuck in the middle”.
This study source was downloaded by 100000836165662 from CourseHero.com on 11-09-2021 23:31:54 GMT -06:00
https://www.coursehero.com/file/44675793/Case-Study-Tata/
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