Tata Nano International Market Selection with the Worlds Cheapest Car - Case Study Example

TATA NANO INTERNATIONAL MARKET By Introduction The objective of creating new market segments underpinned Tata Nano’s entry into the ultra-low-cost car market. The realization of the unexplored opportunities and the desire to invent solutions to the challenges afflicting the low-income and middle-income earners contributed to the strategic move of exploring the low-cost market in India and the global market (Chacko, Noronha & Agrawal, 2010, p. 41). An understanding of the network of forces that culminated in the market choice should begin with the understanding of the different challenges that attend to the Indian transport sector. India remains one of the countries with a high reliance on the motorbike transport system. An average Indian family owns a motorbike or scooter on which it depends for the purposes of transport. Rising cases of accidents and high rates of fatalities resulting from these accidents provided hints at the high element of risk in this means of transport. Choice for ultra-low-cost car market Tata Nano’s revolution of the global car industry began with the desire to solve India’s inequalities as witnessed through the challenges that afflicted the middle-income and low-income commuters. In essence, the challenge lay in the fact that the Indian society features high levels of inequality with a significant percentage of the population struggling with poverty (Freiderg, Freiberg & Dunston, 2011). This category of families generally rely on the risky means of transport generally deemed as more affordable and aligned to the specific needs of the middle-income categories. Established carmakers showed little interest in this segment of the market. Tato Nano made the decision partly with the acknowledgement of the fact that the middle-income market was rapidly growing due to the micro-economic and macro-economic conditions that prevailed at the time of the inception (Freiderg, Freiberg & Dunston, 2011). Global forces had affected significantly the markets in a way that favored established industry players such as Toyota, Chrysler, and Daimler Benz. The established industry were tailored their products to suit that tastes of high-income earners. Competition in the industry was concentrated within this segment of the market. In some sense, the market was flooded with their products and a hedge existed to bar new entrants into this market category (McLoughlin & Aaker, 2010, p. 121). Tata Nano could not compete favorably in this category of the market because its products due to the presence of the stronger brands that had controlled the segment for years. Its pioneering entry into the ultra-low-cost market had the implication of expanding the market niche in the country in ways that increased possibilities and opportunities for local and international players. The growth of this segment of the market resulted partly from the synergies of globalization and liberalization of the market economy. These global forces helped Tata Nano to establish a strong operational base since the growth in the purchasing power of the middle class signaled the ability to own cheaper cars that could align well with the needs of the industry (Thakur, 2009). In general, some of the issues that affected the choice related to the desire to invent alternative ways of business practice with regard to the global car industry. In essence, some of the issues that related to the growth of the industry revolved around the need to provide the clientele with alternatives away from the generally acceptable ways of conducting business. In this regard, Tata Nano became revolutionary in the manner in which it contributed to the realignment of the global car industry as perceived from the perspective of industry players. Essentially, the need for alternatives was necessitated by the apparent inequalities that favored global players at the expense of the local investors. Strategically, the choice for the ultra-low-cost car market positioned Tata Nano on a vantage position from which it could roll out from its Indian market niche to the global market with relative ease. Tata Nano’s Advantages in Emerging Markets Benefits of pioneering, cost-effectiveness, fuel efficiency, expanded market niche, and consumer preferences comprise some of the advantages associated with Tata Nano’s entry into the ultra-low-cost car market (Peng, 2008, p. 58). The synergies of a globalized market economies, and preferences for low fuel-consuming engines comprise some of the factors that engage the interest of the markets within the liberalized economic system. The attendant issues merge at the forces of the market to determine levels of growth and the capacity to break into new market segments. Tata Nano is one of the revolutionary innovations in the car market industry. Past and recent trends in the consumption patterns of the global clientele illustrate a preference for newer inventions with particular interest with technological efficiency. Tata Nano bills itself as a user-friendly and cost effective model. It is suited for the normal and casual processes of life. The idea behind its invention anchored on the aspect of social utility. The close association between the Tata Nano and the middle-income families adds to the interest of the customers around the globe (Wells, 2010, p. 74). Families, communities, and groups that value such values often prefer to purchase goods and services that reify their beliefs and values as expressed in the life of the community. In this regard, it makes sense, to assess the value of the Tata Nano in light of its impact on the social connections in the society and the manner in which these associations ultimately affect its position and strength on the markets. The user-friendly aspect of the Tata Nano will endear it to specific aspects of the market that do not necessarily follow the trends of complexity and sophistication found in alternative car technologies around the world. Compared to its global competitors, Tata Nano’s potential operates from the perspective of its potential to reduce expenses in the middle class families while adding some element of comfort and efficiency (Domansky, 2006). Generally, competitors from the established car firms tend to concentrate on the aspects luxury and other superficial aspects that align more with class and prestige than utility. As a pioneer, Tata Nano expects to enjoy a consistent pattern of improved brand image. This is because some the ultra-low-cost industry will grow together with the identity of the pioneer. The advantages of the industry bear some significant impact on the levels of brand enhancement as understood within the corporate world. An enhanced brand image naturally translates into increased volume of sales and high levels of profitability. On this score, it might be necessary to determine the trends of growth in the industry from the points of progress attained by the pioneer product. Environmental concerns often play to the advantage of the Tata Nano. The manufacturers contend that the Tata Nano is one of their bold steps towards improving environmental conversation. The car is considered as emitting low levels of pollutants than conventional cars (Wormald, 2004). This aspect is likely to win the car some significant endorsement from various sections of the market in ways that will ultimately develop its brand image. Fuel Concerns, rising prices, and fears of depletions will shape the direction and performance of the firm to some significant degree. On this note, it is possible to determine some of the possible barriers that might deny Tata Nano the expected synergies for growth and development (Domansky, 2006, p. 26). It is important to consider the fact that most of the issues that attend to the development of technology derive from the capacity to develop some close interest from the clientele from multiple perspectives. Some of the issues that relate to the issues of general growth are often tied together with the need to enhance the market potential of an invention in ways that are ultimately related to general growth and the development of the industry. Concerning the developments in the informal sector, there is a high likelihood that some of the issues that determine the trends in the motor vehicle industry will ultimately affect positively on the industry. As such, it would be important to relate the various challenges of growth to the multiple issues that determine the degree to which a market segment grows from the point of the macro-economic and micro-economic factors. Generally, some of the issues that determine the stability of systems are essentially related to the aspect of needs and preferences of the clientele. It is important to consider the fact some of the issues that attend to the growth of the company were tied to the weaknesses of the other competitors. An awareness of the competitors’ levels of weakness is one of the factors that contribute to the designing of the most effective strategy of business growth and brand development. Screening Techniques For Tata Nano, the screening technique must consider the various issues that relate to potential and capacity. The technique should be defined by a matrix that combines both region and income status of the clientele. As such, it becomes necessary to consider the fact that some of the issues that concern the screening process are affected by the general objective of the firm. Tata Nano aspires to be one of the leading car low-cost car companies that affect and in in-turn affected by the global competition in the industry (Thakur & Pandey, 2009, p. 54). The screening technique should focus on the ability of the factory to achieve its stated objectives and goals within the global market. Essentially, some of the issues that affect screening are generally anchored on the need to adopt the most suitable methodologies that would allow the company to explore the synergies of the market with regard to its missions. Such strategies will also focus on the opportunities, weaknesses, threats, strengths, and opportunities. In this regard, the challenge that affects the company must be assessed within the overall framework of the screening technique in order to develop the best possible approach of sustaining its innovative approaches in the car industry. As such, the screening process will seek to develop strategies of overcoming the structural challenges that affect the global markets as understood within the framework of international markets. The method of choosing the market should entail an active search for locations that have the most necessary features of advancing the objectives of the company. Such approaches are necessarily related to the element of international commerce and competition as understood within the discourse of globalization and secularization. Favorable Countries for Tata Nano’s Market In order for Tata Nano to enhance its growth on the global market, it should explore all the available opportunities on the market in markets that have not been reached by the seasoned competitors on the market. The developing parts of the world are the most appropriate in addressing the emerging needs of the market. Such markets could be found in Sub-Saharan Africa and the Caribbean. However, the marketing strategy should not be limited to the specifics of low pricing. The company should explore all possible ways of enhancing the image of the company in ways that would naturally create the possible synergies for growth and development. On this score, some of the issues that affect the growth and development of the company must be conducted in ways that are necessarily related to the global forces that determine the trends in the car industry. Consistently, Tata Nano should engage in research activities that seek to determine unexplored markets and the possible weaknesses in the marketing methods and products developed by global competitors. The company should exploit such weaknesses by providing services that address such weaknesses. Its position as a pioneer in the car industry offers positive effects to the general growth and development of the company. This could be achieved through a strategic expansion of its range of inventory in ways that address the specific needs of the company. In essence, some of the issues that relate to the growth of the car industry across the board. Consistency in the level of growth is often associated with the ability to create a marketing strategy that responds well to the challenges afflicting the whole industry as whole and specific competitors in particular. Critics to the company’s potential contend that some of the issues that afflict the market potential of growth relate to the choice of strategy that effectively addresses a particular segment of the market for growth. For instance, the growth of the company suffers from lack of initiative into the angle of prestige as understood together with a range of issues that concern the development and growth of the sector. In essence, it might be argued that Tata Nano’s image as a low-priced car effectively denied its entry into the upper segments of the market. Critics contend that some of the challenges that relate to the growth of the industry are necessarily related to the aspect of growth as understood together with matters that relate to diversity in products. In Sri Lanka, its association with lower income categories has tainted Tata Nano’s market. Most of the users of the car have tended to direct it towards taxi business and other aspects of business that are generally associated with the elements of growth and class. Conclusion Tata Nano is regarded as one of the companies that created the most innovative approaches in the global car industry. Its intention of manufacturing cheap and user friendly cars received positive remarks from the global markets. Although originally intended for the Indian middle class and low-income earners, the Tata Nano model has spread to other parts of the world. It also continues to receive diverse responses from various sections of the global markets. However, there is a sense in which the company continues to contribute to consistency in growth in car innovations. Some of the challenges that have affected the development of the Tata Nano model relate to the marketing strategies that have had the unintended consequence of lowering its prestige of the car. This effectively locked away the car from the higher-level income of clientele. Much of Tata Nano’s potential lies in the emerging markets. The growth of Tata Nano is tied to the development of new market segments previously ignored by established global players in the industry. It might be necessary to consider the fact that some of the issues that afflict the growth of the industry relate to the relative potential of other companies to engage with the markets and other aspects of business. It is recommended for the company to embark on aggressive marketing strategies that might help the company in redeeming some of the image lost through its single-angled dimension of marketing. On this note, some of the issues that concern the development of the company are usually brought into perspective with emergent challenges in ways that significantly compromise the potential for reaching out to new market segments and other issues that relate to the expansion of clientele in non-traditional areas. The element of zoning remains one of the challenges that affect the potential of the company to break into new segments of the market. It is important to determine the fact that the potential of Tata Nano lies in its capacity to develop new inventions and models to in order to offer varieties to the global clientele. Recommendations Tata Nano should engage in the active process of rebranding in order to capture the diversity of the market and undo the damage done by past marketing strategies that failed to capture the entirety of market segmentations. The company should explore strategies of expanding beyond the current market niche by exploring all possible weaknesses of competitors in order to convert them into its own strengths. In the same way, it should work to lessen the impact of its own weaknesses as a way of improving its profile in the market. Tata Nano should strategize on ways of handling adverse internet and media images that pose questions on the quality of its products. This will serve to reassure the global clientele in order to recapture ground lost in the negative images and messages about the quality of the products. The company should invest more in research activities in order to find out the diverse opinions from the market regarding the need to revamp its image within the global perspective. Such issues will necessarily require some renewed effort in the process of recapturing lost ground and improving its performance on the market. It is important to consider the fact that some of the issues relating to growth are significantly related to the element of growth. The company should also explore ways of reinventing its advertising and marketing strategies with the intention of improving its image on the global market and deriving benefits and advantages from the combined effects of the global economic and financial factors with regard to the car industry. These measures would ensure growth in performance, which would be necessary to return the company back to profitability and sustainable growth rate. Past approaches were largely localized, and operated without regard to the long-term impact on dependent economies. Works Cited Chacko, P, Noronha, C & Agrawal, S 2010, Small Wonder: The Making of the Nano, Westland Ltd./HOV Services, Westland. Domansky, L, R 2006, Automobile Industry: Current Issues, Nova Publishers, New York. Domansky, L, R 2006, Automobile Industry: Current Issues, Nova Publishers, New York. Freiderg, K, Freiberg, J & Dunston, D 2011, Nanovation: How a Little Car Can Teach the World to Think Big and Act Bold, Thomas Nelson Inc, Nashville, Tennessee. McLoughlin, D & Aaker, D, A 2010, Strategic Market Management: Global Perspectives, John Wiley & Sons, New York. Peng, M, W 2008, Global Strategy, Cengage Learning, London. Thakur, A, P & Pandey, S 2009, 21st Century India : View and Vision, Global Vision Publishing Ho, New Delhi. Thakur, P 2009, Tata Nano: The Peoples Car, Pentagon Press, New York. Wells, P, E 2010, The Automotive Industry in an Era of Eco-Austerity: Creating an Industry As If the Planet Mattered, Edward Elgar Publishing, Northampton. Wormald, M, J 2004, Time for a Model Change: Re-engineering the Global Automotive Industry, Cambridge, Cambridge University Press. Read More