Case Analysis of Tata Motors Essay Example | Topics and Well Written Essays - 2500 words

Case Analysis of Tata Motors - Essay Example It was a very conscious effort considering the situation of global car market and the company’s competitive advantages. Nano has been marketed as the â€Å"World’s Cheapest Car† and the company has adopted a very unique development and business model for this special child of it. One of the most important advantages that the company enjoys is that it has more than enough knowledge about its home market i.e. India, its competitors and its suppliers. Tata Motors and its chairman Ratan Tata want Nano to create same magic that Mini did in Britain and Beetle did in Germany. Furthermore, the company and its visionary management could foresee the future of global car market which is expected to be very much dominated by the low-cost as well as ultra-low-cost cars. This paper includes the answers of four questions that are based on a case of Tata Motors and its Nano. The paper aims to discuss the reasons behind the Tata Motors’ decision to enter the market of ultr a-low-cost cars, competitive advantages of Tata Motors as well as Nano, probable screening criteria for the Nano’s IMS process and the potential market for Nano beyond India and China. Main Reasons for Tata Motors entering the ultra-low-cost car market Global car industry and its competitive landscape have been experiencing significant alterations which are permanent and dramatic. One of the main reasons behind this is the change in nature of demand of the end users across the globe. A completely new and unique class of car buyers has been emerging in the industrializing countries like China and India. Such incident has created a huge potential for cars which can be found in the price range of $2500 - $5000. Such cars are popular among the manufacturers and buyers as ultra-low-cost cars. A report of A. T. Kearney says that till 2020, almost 16 million cars from this category will be sold every year. India and other Southeast Asian countries will be the key market for such typ e of cars (A. T. Kearney, 2008). Chinese and Russian consumers are expected to look beyond ultra-low-cost cars as they have moved ahead of their Indian counterparts in terms of income level. This new category of cars is likely to experience tremendous demand especially from India. In 2005, almost 208 million Indian had an income that theoretically allows them to buy a car that costs in between $2500 - $5000. It is expected that by the end of 2020 there will be around 439 million people who will be looking for these ULCCs. It is important to mention that most of these people will be ‘first time buyer’ of car. Research shows that if the car is priced at around $4000 then almost 270 million Indians will be in a position to buy it, whereas if the starting price is set at around $2500 then the number moves up to 530 million (A. T. Kearney, 2008). Tata Motors, being an India based car maker knows the market more than any other company. The company is very much aware of the ab ove mentioned facts and figures; hence this huge potential of ULCCs has definitely influenced Tata Motors to make an entry in ULCC market. Tata Motors did its own research before coming up with the plan of Nano. The company targeted the market that no other auto maker in the country has done it. It has targeted the two wheeler owners. India is such a country where people use two-wheelers as their