Innovative Company

8/4/2019 Innovative Company

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INNOVATIVE COMPANY:TATA

MOTORSSubmitted By:

Piyali Bhattacharjee

Nilabjwa Chowdhury.



Innovative Products:

• The innovative products that best exemplify Tata Motor’s

Innovation are the Indica , the Ace and the Nano.



TARGET SEGMENT

There are several innovativeProducts being launched by the

Company.

Let us concentrate on TATA NANO, the most innovativeamong them all.

TATA NANO TARGET SEGMENT:

• Target the masses.

• Target the family people who risk it on scooters or bikes.



• Target people who has small budget cars like

MARUTI 800 or prefer to buy low priced cars.

• Mainly focuses on semi –urban areas.



POSITIONING OF TATA NANO

• Tata Nano should try and attract customers

who own cars at the entry level.

• They should mainly target middle class

people.

• Target people who owns scooters or bikes.



Value Proposition of Tata Nano

• Providing car to prospective customers at a much cheaper

rate.

•

Ensuring that the car conforms to safety standards andmeasures.

• The customer value proposition is to get families of two-

wheelers.



Business model for Tata Nano:

• Tata Nano is priced at a significantly lower rate than other

cars.

•

Open up a new market altogether.

• Mainly cater to the middle class people and people who has

cars at the entry level.

• Will also entice two wheeler customers.



• They plan to sell more , attract to a larger customer base and

thus generate revenue.

•

Tata Motors also had to think of a plan to cut down on itsproduction cost so as to enable them to provide car at such a

cheap rate.

•

Tata used lighter steel for Nano.

• Small engines were used.



• Long term sourcing agreement with part suppliers.

• Innovative distribution system.

• So all these ensured TATA MOTORS incurred less cost.

• Ensured greater profitability.



FINANCIALS:

• Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

• 12 mths 12 mths 12 mths 12 mths 12 mths

• Operating Profit 4,771.31 4,178.28 1,723.10 3,030.52 2,586.51

• PBDIT 4,807.45 5,111.28 2,644.39 3,764.69 3,700.89

• Interest 1,143.99 1,103.84 704.92 471.56 455.75

• PBDT 3,663.46 4,007.44 1,939.47 3,293.13 3,245.14

• Depreciation 1,360.77 1,033.87 874.54 652.31 586.29

•Other Written Off 106.17 144.03 51.17 64.35 85.02

• Profit Before Tax 2,196.52 2,829.54 1,013.76 2,576.47 2,573.83

• Extra-ordinary items 0.00 0.00 15.29 0.00 -0.07

• PBT (Post Extra-ord Items) 2,196.52 2,829.54 1,029.05 2,576.47 2,573.76

• Tax 384.70 589.46 12.50 547.55 660.37

• Reported Net Profit 1,811.82 2,240.08 1,001.26 2,028.92 1,913.46

• Total Value Addition 8,561.20 6,626.23 4,898.16 4,805.58 4,547.86

• Preference Dividend 0.00 0.00 0.00 0.00 0.00

• Equity Dividend 1,274.23 859.05 311.61 578.43 578.07

• Corporate Dividend Tax 192.80 132.89 34.09 81.25 98.25

• Per share data (annualised)

• Shares in issue (lakhs) 6,346.14 5,705.58 5,140.08 3,855.04 3,853.74

• Earning Per Share (Rs) 28.55 39.26 19.48 52.63 49.65

• Equity Dividend (%) 200.00 150.00 60.00 150.00 150.00

• Book Value (Rs) 315.31 262.30 240.64 202.70 177.59



INNOVATION INITIATIVES

• Sustainability of innovation in products needed to becomplemented with

• innovative changes in the organizational processes too. Someexamples are:

• Adoption of the Tata Business Excellence Model (TBEM): It isbased on Malcolm Baldridge Award for business excellence andBalance Score Card. This has created a culture of exploringvarious innovative ways to achieve excellence in all theorganizational processes. Tata Motors in the past has received

the “Hall of Fame” award for BSC, JRQV award, CII-EXIM awardand many other such

awards which prove the effective deployment of the model.



• Use of IT systems has been a benchmark and highly leveraged in theorganization throughout the VALUE CHAIN.

• Supply Side – Free-Markets/ ARIBA for e-Sourcing, Supplier

Relationship Management (SRM).

•Design – PLM, Advanced Computer Aided design (CAD), etc.

• Enterprise Resource Planning – SAP for enhancing transaction

• effectiveness.

• Demand side -(CRM) with SIEBEL , a comprehensive Customer

• Relationship Management program, enabling it to gain marketinsights by exploiting the huge online customer transactiondatabase. It is the largest deployment of a customer managementtool across the automotive world till date



• PEOPLE:

• The changing business environment and increasing complexity of business

posed a huge challenge in achievement of business plans. Tata Group, of which

Tata Motors is a part of, is well known for identifying and nurturing leaders.

TataMotors in the past has adopted several innovative means to leverage itshuman

resource capabilities for achieving extremely challenging goals.

• Identifying leaders through assessment centres – This process has been

effectively utilized by Tata Motors to identify young managers with very high

potential. This process was started some 20 years back and has progressivelycreated a pool of very strong and effective leaders who have proven their

capabilities in some very challenging assignments given to them. This process

has now been replicated by many other organizations too.



• Putting them into challenging assignments and giving them

International exposure – Key projects like ACE and NANO are

examples of some challenging projects which constituted of

young leaders and engineers.

• Breaking the functional silos by shifting from a hierarchical

organization to a more CFT approach.



How value is created and delivered

• Two concepts are implemented.

• One is Target Pricing. The other one is Target Cost.

• Target Pricing attempts to determine what features a

customer wants in a car.

• Once the features are set target costs are assigned to eachcomponent.



• Parts are bought from customers in bulk. Thus allowing

suppliers to provide parts at a cheaper rate.

• Thus value is created……and delivered…...providing a safe ,

reliable car at an affordable rate.

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Innovative Company

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