Effectively setting and achieving the strategic objectives in each functional area in line with the aligned strategy propositions will ensure an overall high-performing and sustainable strategy.
Looking upstream, Tata brought in suppliers such as Bosch, a German maker of appliances and motors, and Delphi, a world leader in automotive parts, in early-stage design, challenging them to be full partners in the Nano innovation by developing lower-cost components.
No one disputes that the Nano is innovative on multiple levels—from its engineering to its marketing to its manufacturing. Creating a full set of consistent strategy propositions is essential whether a firm follows blue ocean or red ocean strategy.
Great companies are built on creating new markets, not increasing market share in existing ones. The Profit Proposition — creating a business model that enables the company to make money through its offering.
Where the two approaches diverge is in how organizations align their strategy propositions. Typically, executives with a strong functional bias cannot successfully fulfill this important role because they tend to focus on one rather than all of the three strategy propositions.
On the other hand, they have to figure out how to compete with these developing-world upstarts. Tata Motors matched this compelling value proposition with a compelling profit proposition; a series of cost innovations in design, manufacturing, marketing, and maintenance resulted in a profit proposition that was both differentiated and low cost.
Industry watchers and innovation experts soon reported on the engineering and supply-chain breakthroughs behind the car. Tata Nano, by providing a safe, comfortable, reliable, and respectable all-weather means of transportation for Indian families at the price of a two-wheeler, put an automobile within the reach of most Indians for the first time.
The People Proposition — motivating the people working for or with the company to execute the strategy. In India there are 50 million to million people caught in that automotive chasm.
The Big Three, by contrast, are insulated. The Nano garnered more media attention than any other car launch in the world at the time, and achieved the biggest sales uptake in the history of the global automobile industry. Under blue ocean strategyan organization succeeds when all three strategy propositions pursue both differentiation and low cost.
They have the technical know-how, the talent, and a grasp of global distribution networks that few carmakers in emerging markets can claim.
The customer was ever-present in the development of the Nano. In that respect, the Nano is a great example of the so-called blue ocean strategy.
Yet the Tata Nano, an initial success, failed to meet sales targets and public expectations. This makes it imperative for top executives to develop fully aligned strategy propositions, effectively communicate them to managers in functional areas along with clear responsibilities and expectations.
Some 14 months later, Tata showed off the commercial version of the Nano, on Mar. Looking downstream at the manufacturing and distribution chain, Tata plans to build the Nano as a kit yes a kit!!! The dispute hinged on the leasing of arable land for industrial use and the level of compensation for the local owners.
What can a humbled Detroit learn from the Tata Nano? What can they afford? A manufacturing department, for example, might neglect buyer needs, while a marketing department might focus only on the value proposition.
More than two hundred thousand orders poured in within two weeks of its March launch. It is this alignment in support of differentiation and low cost that ensures a successful blue ocean strategy that has sustainability. When the three strategy propositions are not properly aligned, even a compelling blue ocean idea with an impressive market entry may not sustain its appeal.
Understanding your customer, or potential customers, is another. What do your customers need? Developed markets such as the U.
Drop us a line at news blueoceanstrategy. The Nano shows that a new world order is possible in the auto industry, and this time the game will be altogether of a different kind.#BlueOceanShift and #BlueOceanStrategy are worldwide business strategy bestsellers, helping you to move beyond competing and start.
To demonstrate how Tata Nano reconstructed market boundaries across alternative industries and created a commercially viable blue ocean opportunity by following the right strategic sequence. To highlight the importance of matching value and profit propositions with an equally strong people proposition in ensuring the successful execution of a.
Tata Nano, by providing a safe, comfortable, reliable, and respectable all-weather means of transportation for Indian families at the price. Tata Nano Words | 9 Pages. Introduction Tata Engineering and Locomotive Co. Ltd was established in Inthe company launched its first automobile; between andit collaborated with Daimler Benz to produce commercial vehicles.
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