Types and Patterns of Innovation: Tata Nano Essay
Types and Patterns of Innovation: Tata Nano
1) After learning about the Tata Nano, it is easy to see that this unique vehicle was a radical innovation. Tata’s goal was to manufacture the most affordable car in the world. Radical mechanical changes were needed lower the cost to only $2,200. This was done through a complete re-invention of parts and systems. Tata Motors is a company founded under the Tata Group. Since 1945 they have been manufacturing vehicles such as vans, cars, and coaches. From the perspective of the Tata Group, having such long term experience and existing knowledge in the auto industry gives the Nano competence enhancing innovation. From the perspective of a firm who has never been in the auto industry, this innovation might be competence destroying. The Nano is definitely an architectural innovation. This vehicle was completely stripped and reconfigured from scratch. From hallow steering columns to single fuel injection valves, the entire car was re-invented to meet weight and cost objectives.
2) As stated at the end of the case, Nano sales were nowhere near estimated. I believe technological improvement was a key factor for this. With such a large amount of architectural innovation put into the Nano, a first generation vehicle is bound for problems. Slow adoption was drawn from some of the Nano’s catching on fire. Once Tata had a deeper understanding of their technology, they were able to reinforce the exhaust system. Even though the issue was resolved, this impacted the Nano’s reputation. S-curves in technology diffusion also explain the slow adoption. Technology diffusion plots the total number of adopters against time. The initial slow adoption of unfamiliar technology creates the s shaped curve. Over time once technology is better understood, the Nano will reach a mass market. The curve will drop once the market gets saturated.
3) One advantage of collaboration is a dominant design. Working with a reputable company that has unmatched resource and technology capabilities would greatly increase the quality and lower the amount of time needed to produce a unique product like the Nano. There would most likely be less initial problems as well. A company like Ford or Toyota would be a good fit because of their history in the market. A disadvantage to collaborating with another automaker would be Tata missing out on solely controlling a unique market segment like India. “Segment Zero” As the Nano continues to grow by servicing a low-end market like India with simple technology, there is a possibility that they could eventually reach a mass market because of their low price point.
4) The Tata Nano has had its issues throughout the last 3.5 years. Slow sales after release and problems with the car catching fire have not been positive. Although Tata has experienced adversity with the Nano, I believe that overtime the car could turn a profit. If they learn from their past mistakes and focus on a dominate design, they could do well. Having the cheapest car in the world has given the Nano worldwide popularity. There is talk of a redesign to be implemented into Europe and the US. Obviously this would be a completely different car given that the vehicle would be under much stricter standards. Either way, Tata will continue to be successful in the automotive industry and continue to build auto platforms of the future.
University/College: University of California
Type of paper: Thesis/Dissertation Chapter
Date: 26 December 2016
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