Managment Technology

1. Is the Tata Nano a radical innovation or an incremental innovation? Competence enhancing or destroying, and from whose perspective? Is it a component or architectural innovation? It is pretty clear from the opening case that the Tata Nano is not an incremental innovation, nor is it a component innovation (since many of the cost improvements required completely rethinking how to create the functionality with different materials, fewer parts, etc.). Certainly the development of the Nano helped to create new valuable competencies at all of the firms that were involved with it, but at the same time it may obviate competences that were more valuable (i.e., profitable) at those same firms. That is, while Tata and its suppliers wanted to meet the challenge of producing a radically less expensive car, it was not clear that doing so would ultimately prove to be profitable, both because it appeared that there was relatively little profit margin in accomplishing what they were doing, and because most of their innovations would likely be readily imitable by competitors. Other stakeholders (e.g., customers, oil companies, gas and service stations, etc.) clearly benefit from the innovation.

2. What factors do you think influence the rate at which consumers have adopted (or will adopt) the Tata Nano? Since the Nano was well publicized, and operates nearly identically to a typical car, information and complements (e.g., roads, service stations) will not pose obstacles to adoption of the Nano. There are other factors such as perceived safety, perceived status, and competing products as factors that will influence the rate of adoption. 3. What would have been the advantages or disadvantages of Tata collaborating with another automaker on the Tata? Who might it have collaborated with? If Tata had collaborated with another automaker, it would have been able to pool R&D funds and share some competencies that might have made it less expensive and less risky to develop the car. It