Investigating the Tata Nano Market Failure: BUSN20019 Report

This report examines the Tata Nano's market failure, delving into the factors that contributed to its lack of success. It begins with an introduction and background, outlining the initial goals of the project and the context of the Indian automotive market. The report identifies the core problem statement, focusing on the issues that hindered the Nano's marketability, including safety concerns and inadequate operational management. It poses research questions that address operational management, the broader concepts behind the failure, and the microenvironmental changes that could have improved the project's outcome. The literature review explores brand recognition, operational management strategies, and marketing tactics. The methodology section outlines the research approach. The findings and analysis section presents the key factors that led to the market failure. The report concludes with recommendations for future projects, a discussion of the implications, and a conclusion summarizing the key takeaways from the analysis. The report highlights the importance of brand image, effective operational management, and strategic marketing in product success. This report is essential for understanding the complexities of market entry and the challenges of launching a new product.

Running Head: TATA NANO
Tata Nano Market Failure
Name of Student:
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Table of Contents
Introduction......................................................................................................................................3
Background and Justification.......................................................................................................3
Problem Statement.......................................................................................................................3
Research Questions......................................................................................................................4
Literature review..............................................................................................................................5
Brand Recognition.......................................................................................................................5
Operational management.............................................................................................................5
Marketing.....................................................................................................................................9
Methods.........................................................................................................................................10
Findings and Analysis....................................................................................................................11
Recommendations..........................................................................................................................12
Discussion and Conclusion............................................................................................................13
References......................................................................................................................................14

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Introduction
Background and Justification
Various factors are essential in the marketability of a product, with the price being one of
the most pivotal (Federgruen & Hu, 2015). In such regard, Tata motor has been in the production
line of vehicles for the Indian population. However, the average retail price, before the
introduction of the Tata Nano in 2008, was approximately $2000. The reduction of market price,
as such, was aimed at reaching the majority of the population who fall in the middle-class
category. Considering that it was everyone's dream to own a motor vehicle, the introduction of
the cheaper alternative aimed at providing that every Indian owned a car. With the coverage of
the local market, Tata aimed at reaching out to the international market demands. The primary
target, in this regard, was the Chinese.
Problem Statement
The problem statement, as such, surrounds the several issues have hampered the success
of the Tata Nano. The marketability of the product, for one, has seen a drastic reduction in sales
mainly because the vehicle has been produced substantially. The core issue, in this regard, was
that the car was hazardous to the local population, leave alone the international market. Lack of
a cooling mechanism within the build of the car resulted to fire incidents, and considering that
the rival companies such as Maruti ensure that the design specifications embedded a cooling
technology, it is clear that the vehicle was not meant to succeed either locally or internationally.
The lack of a professional model, aggravated by the fact that the company did not consider the
marketing strategy, resulted in an excessive demand and supply.

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Research Questions
One of the research questions aims at identifying operational management factors that
may mitigate future failure. In line with this, it is clear that there are factors that hampered the
successful delivery of the vehicle into the industry. Operational management focuses on ensuring
that the production line is within the specified requirements. Control and redesign of the
production process are essential in providing that the commodity is as per the market
expectations. In that regard, it is clear that the operational management strategy employed by
Tata may have fallen short of the required standards.
Secondly, there is a need to understand the broad concepts that failed the Tata Nano
program. Through an understanding of the failure blueprint, the company may have a proper
mitigation strategy to ensure that al future operations are successful. This, as such, aims at
understanding the internal and external factors that may have led to the failure of the project and
providing a proper methodology to ensure future success.
Finally, by understanding the blueprint of the Tata Nano project, it is equally important to
understand the changes in the microenvironment to ensure that all future endeavors are
successful. Project success is dependent on the microenvironmental factors as well as the
macroenvironmental factors. However, because the macro environment does not fall under the
control of the company, it is essential to understand the internal changes that may ensure that all
future operations remain successful. The research question, as such, aims at understanding the
concepts of management, advertising, marketing, and human resource management that may
ensure the successful implementation of a similar project.

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Literature review
Brand Recognition
One of the essential factors in the production of a commodity is to ensure that the market
embraces the brand (Gbadamosi, 2017). In such regard, brand recognition is one of the critical
elements that ensure that a product remains marketable over the years. By definition, brand
recognition refers to the ability of a consumer to identify the product based on the quality as well
as the standard it represents (Jianga et al., 2016). With that in mind, it is clear that brand damage
may have a devastating effect on the production of a commodity, despite the ability of a
company to reinvent the product. The initial destruction of the brand, in this regard, represents
destruction in the core values of a company (Huang, Gao, & Hsu, 2019).
According to studies, it has been indicated that Tata tried to reinvent the brand through
various proposals, but the fact remained that the car was a hazard to society. The inability to
restore the image of a company, as such, is one of the factors that may lead to the downward
spiral of the marketability of products. This may be attributed to the fact that the company may
be considered inconsistent in the production methodology. As such, it affects the value chain of a
product, such as Tata Nano.
Operational management
Moreover, research indicates that operational management is essential in the
marketability of a product. The inability to produce quality products ensures that there is no
brand recognition, which necessitates the need to ensure that the operational management
process is successful in its entirety (Gohab & Eldridge, 2019). Nevertheless, operational
management has been identified as the multi-disciplinary approach that is used in the

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management of the whole production process (Schönsleben, 2016). This means that there is a
need to ensure that there is quality in the supply chain all through on the production process.
According to research, each company specifies its operational management strategy
depending on the product or service produced (Ávilaa et al., 2019). However, the aspect of
operational management does not apply only to a big company, and there is also a need to ensure
that even the small companies maintain the required strategies in executive management
(Prokopets, 2012). Accounting management, employee management, and even the marketing
options are vital in ensuring that the company is in line with the goals and objectives (Tavares et
al., 2012). In that regard, companies that may be more technologically efficient maintain their
operational strategies in a securely, meaning that the ability to produce quality products depends
on the strength of the company to utilize technology most efficiently.
However, in implementing successful systems, there is a need to ensure that various
aspects of the production process are designed in the most efficient and controlled manner. In
that regard, one of the factors to take into consideration is system design (Andrade, Moazeni, &
Ramirez-Marquez, 2018). Research indicates that there is a need to ensure that the product
development process is maintained in the most professional manner. This means that there is a
need to ensure that the management has taken into consideration the characteristics of the new
product. However, the company should also ensure that there is an analytical framework that
takes into consideration the needs of the customers and their preferences. With all the
aforementioned factors into consideration, the operational management system should also
ensure that there is an installation of all the equipment and amenities that will monitor and
control the production process. Therefore, there are various aspects that the system design needs
to consider: Product design process design and facility design (Heragu, 2018).

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Taking into consideration the Tata Nan product, the essential factor in ensuring that the
product design achieves its production goals is to ensure that there is a thorough analysis of the
product characteristics and the product functions (Berg & Vance, 2017). In such regard, the
product design involves the determination of the quality of the product, the cost of the product
and the performance features. By doing a thorough investigation of all these factors, the
company has the capability of ensuring that products can optimize on aspects of quality and
functionality (Attr & Gover, 2015). This is especially important in the production of a new
commodity such as the Tata Nano since it plays an integral role in the Design for Manufacturing
and Assembly (Kathryn, 2018). In such regard, the product design ensures that there is
minimisation of wastage resources and the improvement of the product quality.
On the other hand, the process design involves the determination of the overall
methodology to be sued in the production of a commodity. This consists of the technicality of the
product components and the economies associated with the product (Klochkov & Gazizulina,
2016). In such regard, it is essential to ensure that there is a selection of the product engineering
components based on economic factors. Research indicates that the economy of production plays
a vital role in meeting the market demand. This is because the process involves the determination
the demand of the product as per the product specifications (Hammer, 2015). When the market
demand meets the product specification, then the company ensures that there is mass production
of the commodity, but if this is not the case, the company has to ensure that the output is per the
demand factors. Secondly, the economies involve the determination of the variability in the
customer demand so that there is variability in the production process. Finally, the economy
determines the seasonality in demand and the ability to maintain operational costs.

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Another essential factor in operational management is facility design. This refers to the
location of the production facility concerning the demand (Eskandarpoura et al., 2015). The
strategic location of a company ensures that the facility meets the demand in the most
appropriate manner. This may fall in the context of Tata nano production since research
indicates that there was a delay in the delivery of the product which resulted in a decrease in the
marketability of the product. Ensuring that there is the strategic location of the facility is vital in
maintaining the long term productivity of the company since it reduces inconvenience and the
customer expenditures associated with the transportation (Sahebjamnia, Fathollahi-Fard, &
Hajiaghaei-Keshteli, 2018)
Moreover, it is essential to ensure that the facility location can maintain the supply chain since
the supply of raw material is imperative in determining the eventual cost of the product
(Christopher & Ryals, 2014)t. Within the aspect of facility location, it is also essential to ensure
that the facility layout falls within the production goals. On this, there is a need to ensure that the
departments are arranged most effectively to ensure that there is efficiency in the production
process.
The second factor in operational management regards the implementation strategy (Attr
& Gover, 2015). In this regard, it is essential to ensure that the implementation phase is taken
into adequate analysis before the actual production of the commodity. The operational
management team needs to ensure that the product falls within the required capacity and
timeline, factors that may be hard when there is a change in the blueprint of the system
(Hammer, 2015).

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Planning and forecasting of the system are essential in ensuring that the company can
meet the production goals in the short term and in the long run. In such regard, the forecasting
stage involves the study of the market factors and the ability of the current production
methodology to meet th change in market requirements. It may include an understanding of the
technological capacity of the company to adapt to changes in the production methodologies
Marketing
The marketing strategy is another crucial aspect in meeting the market demand. This
involves the analysis of the product’s ability to fit into a specific section of the market segment
(Goller & Hoffmann, 2013). Research indicates that successful products depend on powerful
marketing strategies. In such regard, there is a need to identify the methodologies that will ensure
the successful delivery of the product to the target market. With that in mind, one of the factors
to provide effective marketing is an analysis of the market. This means that the company has to
understand the product specification, the competitors, and the cultural trends, among others
(Makkar & Yap, 2018). Secondly, it is essential to ensure that there is a definition of marketing
research so that the product can meet the market needs at the right time. Thirdly, the distribution
method is essential in ensuring that the product reaches the target market at the right time. Last
but not least, there is a need to ensure that the company employs the right advertisement
methodology. This ensures that the company has a straightforward approach in displaying the
product specifications as per market needs.

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Methods
The Tata Nano project has been a classic example of market failure. In this regard, there
are several scholarly articles available in the analysis of the project. With that in mind, the use of
the Google search engine to identify the unsuccessful implementation of the project has been
informative. In this regard, the search involves the use of keywords that can identify the project
among the terabytes of data in Google’s database. The keywords, in this regard, are “Tata Nano
project failure.” This ensures that the search results underpin the Tata nano project. In this
regard, the use of the search engine provides a proper list of all the factors that played a role in
the failure of the project. The literature also provides a clear description of the methodologies
that would have ensured the success of the product. Therefore, there is a need to ensure that the
operational capacity of the company is taken into consideration throughout the search process.

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Findings and Analysis
Qualitative Research
RQ1- What changes could have been done in the operational management of Tata Nano
for the success of it in the future?
The company needs to revisit its operational management process in ensure effective product
design and facility location. The operational management process utilized by the company was
not effective, resulting in delays. Moreover, there was no strategic facility location.
According to research, it is clear that Tata did not employ a proper operational design
methodology. Research indicates that there was a lack of adoption because the company had an
18-month delay in the delivery of the product. Moreover, the production methodology did not
ensure quality production. In such regard, the company would have improved the marketability
of the company by providing that there was efficiency in implementation, facility design, product
design, and forecasting.
RQ2- What is the necessary mitigation that could be learned from the past experience
from the Tata Nano program?
The marketing strategy of the company was poor. There is a need to align the production goals
with the culture of the target market. Moreover, there is a need to ensure that the operational
management takes care of both engineering and economics. The two measures were not
implemented in Tata Nano.
Research indicates that the marketing strategy of the company was at fault. The company
ventured into the production of low-cost vehicles, which is highly inappropriate in India. In such
a context, research notes that the purchase of a low cost vehicle tends to associate a person with a
low social status, which reduces marketability. In such regard, investing in intensive market

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research before the actual production process will ensure that the product fits well within the
market. The economics of production, as well as the engineering capabilities, have to be
justified.
RQ3- How can changes could be made not to repeat the same mistake that has been done
in the case of Tata Nano?
The company needs to ensure that there are intensive marketing approaches and a proper
operational management framework. As the study indicates, there was a misfit between the low
cost vehicles and the culture of India, while at the same time, the company did not take action to
ensure efficiency in the operational management framework.
Marketing is imperative in understanding the culture of the target market and ensuring that the
production criteria meet the need. The lack of a proper marketing strategy results in a shortage in
demand for a commodity. On the other hand, the operational management framework provides a
methodology to develop the most cost-effective products regardless of the engineering
requirements. Engineering, nevertheless, ensures quality production.

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Recommendations
 As far as the company is a concern, one of the factors that resulted in the lack of market
adoption regards substandard production. This is mainly because of lack of efficient
operations management systems. It was the leading cause of the fires. In such regards, it
is crucial to ensure that the company employs a detailed product design. This concept
entails assurance of the engineering concepts as well as the economic theories. There
needs to be an analysis of the system to ensure that there is quality design as per the
market needs.
 The company needs to ensure that there is an intensive marketing approach. According to
the study, there was a misfit between the low cost vehicles and the culture of the country.
The cheapness of the car was associated with low-class citizens. Intensifying the
marketing analysis to identify the market culture would ensure long term productivity.
 Strategic facility location and the implementation of an efficient operational management
system is another essential factor. The delay in 18 months production, coupled with the
fact that the vehicle was of poor quality, was repulsive to the market. By ensuring that the
two factors are in line with the goals of the organization, such a failure can be mitigated
in the future. This is because the product will be manufactured as per the specifications of
the market and will be delivered within the expected timeframe.

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Discussion and Conclusion
Therefore, looking at the facts indicated, it is essential to ensure that the internal factors
of the company are appropriate as far as the external environment is concerned. In that regard,
the operational management of a company needs to ensure that the economies and engineering
aspects of the product are understood, there is appropriate facility design, and there is a
necessary product design methodology. The operational management of the company, moreover,
should adequately understand the implementation process to ensure that all variances in the
production process are maintained. Brand image is another critical factor to consider since it
provides excellent customer relations. The fact that lousy brand reputation is destructive to a
company means that a company should put in place measures that will ensure quality products as
per the market needs. The marketing strategy, moreover, has to be based on intense market
research. Such an analysis is essential for a company to understand the culture of the population
as per the design specifications of a product.

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