nano in america
DESCRIPTION
TRANSCRIPT
NANO in US
INTRODUCTION
Tata’s International Presence
• First Indian engineering company to be listed on New York Stock
Exchange
• Acquired international companies Daewoo (South Korea), Carrocera
(Spain), Jaguar Land Rover (Britain)
• Commercial and passenger vehicle cars marketed and exported in
Europe, Africa, Middle East, South East Asia, South Asia and South America
Vision : Best in the manner in which
we operate, best in the products we deliver, and
best in our value system and ethics
PEOPLE’S CAR
High Fuel Efficiency
Minimum Weight
Low CO2 Emissions
Roomy Passenger
Compartment
STRENGTHS WEAKNESSES
OPPORTUNITIES THREATS
• Cheap car
• Compact, cute and adorable
• Use for a year and change
attitude
• Other smart car brands expensive
like Mercedes
• Easy parking
• Does not comply with US safety
standards
• Labeled as “cute death trap” in
US
• Unfit for travel on highways
• Labeled as a kids use car
• Fuel Efficient
• Environment friendly
• Large single population
• Large Generation Y
• Budget conscious buyers
• Sexy factor
• Low profit margins
• Safety low as compared to large
heavy cars
SWOT ANALYSIS
MAJOR EVENT EFFECT OF THE EVENT ON OUR BUSINESS(+3 TO -3)
PROBABILITY OF THE EVENT OCCURING (0 TO 100)
Termination of Cash for Clunkers program – POL1 -1 80
Obama’s second term /Democrats – POL2 1 60
USA emission cut target by 2020 for Copenhagen meet
leads to new emission standards for new cars – ECL1 1 60
Global protest on resource wastage – ECL2 2 50
Hybrid cars becoming technologically superior &
cheaper – TEC1 -2 50
Increased penetration of Information Technology for
consumers – TEC2 -1 60
Change in cultural norms – SOC1 2 70
Change in consumer attitudes – SOC2 2 60
Revival of Economy – ECO1 -1 70
Depreciation of USD with respect to INR – ECO2 -2 70
SCENARIO MAPPING
OASIS – Most Optimistic Scenario •Based on consumer awareness and
regulatory requirements
•Environmental Friendliness
•Safety
•Cost efficiency
NOSTRADAMUS – Most Likely
Scenario
•Cash for Clunkers
•Preference for US products
•Depreciation of USD with respect to
INR
•Nullification of the cost advantage
enjoyed by Indian and Chinese car
manufacturers
CURSE OF BLOSSOM – Most
Pessimistic Scenario
•Increase in purchasing power due to
end of recession
•Increase penetration level of IT
•Breakthrough in Hybrid technology
OPTIMISTIC MOST LIKELY PESSIMISTIC
KEY SUCCESS
FACTORS
Cost of
ownership
Environmental
friendliness
Safety
Customer’s
brand
perception
Customer value
for money
Fuel efficiency
and
environmental
friendliness
Design
Convenience
Variance
Fuel efficiency
MAIN
COMPETITORS
Chinese cars
US cars
Japanese Cars
US Brand cars
imported from
India & China
Chinese & Indian
Cars
Japanese cars
US Cars
Japanese Cars
Hybrid/ Electric
Cars
COMPETITOR ANALYSIS
Very
Important
Less
Important
Weak Strong
Cost of
Ownership
Environment
Friendliness
Safety
Chinese carsJapanese carsUS cars NANO
US cars
Japanese carsNANOChinese cars
Chinese cars NANO Japanese cars US cars
OPTIMISTIC
SCENARIO - OASIS
Very
Important
Less
Important
Weak Strong
Brand
Perception
Value For Money
Fuel efficiency
Japanese carsNANOChinese cars US cars
NANO
Japanese cars
US cars
US cars Japanese cars Chinese cars NANO
Chinese cars
MOST LIKELY SCENARIO -
NOSTRADAMUS
Very
Important
Less
Important
Weak Strong
R&D
Environment
Friendliness
Purchasing factor
PESSIMISTC SCENARIO –
CURSE OF BLOSSOM
US carsNANOChinese carsJapanese cars
US cars
Japanese carsNANO
US cars Japanese carsChinese cars
NANO
Chinese cars
1 OPTIMISTIC MOST LIKELY PESSIMISTIC
Point of
difference
Lowest price, fuel efficient Fuel efficient, convenience Mass customization and
convenience
Brand/
Image
Propositi
on
•Inexpensive
•Safe
•Fuel efficient car for short distance
travel primarily within the city
•Budget car with a superior
performance
•Small
•Efficient
•Less pollution car - caters to the
needs of all the low income
customers
•Convenient
•Hip
•Affordable
Product -Basic Model: Comes in 5 different
colours.
- Tata should also speed up its R&D
on hybrid technology to launch
hybrid version along with gas-
powered version
- Leverage brand image of Jaguaar
-Nano comes with Basic and
Micro-Hybrid versions.
- 5 different colors.
- Add some accessories to appeal
to university students
- Leverage brand image of Jaguaar
-Meet existing US automobile
emission standard and safety
standard
- More colour variance
- Allow customers to customize
the car stickers or to add
accessories to appeal to the
young and modern customer
segments
- Leverage brand image of Jaguaar
Price •Recommended price is
USD2600
•Target profit margin is 8%
(compared to 2-3% for current
model)
•Target customers – Price
Sensitive. Hybrid version to be
sold at USD3500 with the
promise of mileage of 65 mpg
based on EPA fuel efficiency
test.
•Recommended price is
USD2800
•Target profit margin is 10%
(compared to 2-3% for current
model)
•Target Customers - Less price
sensitive. Price is USD3000
• The profit margin is 15%
(compared to 2-3% for current
model). The hybrid version will
be sold at USD3700.
•Price can be increased to raise
the contribution margin.
Higher margins would make
mass-customization viable.
Place/
Distributio
n
- Use dealers for distribution, competitive distributor margin is given
- Selective strategy in the short term, start with smaller cities
- Increase the Intensity gradually to reach throughout the country
- Set up show rooms and service centers at major cities
- Customers can also book their cars through internet website and select the required features.
OPTIMISTIC MOST LIKELY PESSIMISTIC
Oasis (in USD '000s)
2010 2011 2012
No of Units Sold 80 120 180
Profit Margin Per unit 0.4 0.45 0.4
Revenue 208000 312000 468000
COGS 176000 264000 396000
Gross Profit 32000 54000 72000
Marketing Expenses
TV, Media 5200 7800 11700
Internet 6240 9360 14040
PR 5200 7800 11700
Road Shows Etc. 4160 6240 9360
TOTAL Marketing Exp 20800 31200 46800
Other Expenses 8320 12480 18720
Net Profit 2880 10320 6480
Cummulative Profit 13200 $19,680.00
Break Even 73 97 164
OASIS
NOSTRADAMUS
Nostradamus (in USD '000s)
2010 2011 2012
No of Units Sold 46 51 60
Profit Margin Per unit 0.6 0.55 0.55
Revenue 138000 153000 180000
COGS 101200 112200 132000
Gross Profit 27600 28050 33000
Marketing Expenses
TV, Media 3450 3825 4500
Internet 4140 4590 5400
PR 3450 3825 4500
Road Shows Etc. 2760 3060 3600
TOTAL Marketing Exp 13800 15300 18000
Other Expenses 5520 6120 7200
Net Profit 8280 6630 7800
Cummulative Profit 14910 $22,710.00
Break Even 32 39 46
CURSE OF BLOSSOM
Curse of Blossom (in USD '000s)
2010 2011 2012
No of Units Sold 20 22 19
Profit Margin Per unit 0.8 0.75 0.7
Revenue 60000 66000 57000
COGS 44000 48400 41800
Gross Profit 16000 16500 13300
Marketing Expenses
TV, Media 1500 1650 1425
Internet 1800 1980 1710
PR 1500 1650 1425
Road Shows Etc. 1200 1320 1140
TOTAL Marketing Exp 6000 6600 5700
Other Expenses 2400 2640 2280
Net Profit 7600 7260 5320
Cummulative Profit 14860 $20,180.00
Break Even 11 12 11
CONSUMER BELIEFS
Low Price 52%
Environment
Friendly
15%
Safe 33%
OASIS
5
Relative market
share
1
%
100
%
30
%
70
%
EVA ( in $ ’0,000 ) 1 1
0
3 7
5
Payback period(in
years)
1 1
0
3 7
50%Market share
1.5%of small
Car market
Units sold
35000
Units
NOSTRADAMUS – Most likely Scenario
NOSTARDAMUS
5
Relative market
share
1
%
100
%
30
%
70
%
Brand Development
Index
1 1
0
3 7
5
Percent Good
Value
1 1
0
3 7
50%
Market share
2.5%of small
Car market
Units sold
59000
Units
NOSTRADAMUS – Most likely Scenario
CURSE OF BLOSSOM
THANK YOU !!