Tata Nano: Not Just a Car but Also a Platform

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The company is reportedly also working on hybrid and all-electric versions of the Nano. It is only by treating the Nano as a platform that Ratan Tata and his colleagues can hope to conquer market opportunities not just in India but worldwide.

Underlying Capabilities

The key to leveraging any product or service as a platform for future growth is to treat it as a bundle of capabilities instead of becoming overly constrained by its current features, branding, distribution channels, or targeted customers. Underlying capabilities—either singly or in combination—can be leveraged across different markets far more easily than is the case with end products or services (look at corporate intranet searches powered by Google). They can also be upgraded and/or combined with new capabilities to create entirely new products and services (this is how the iPod led to the iPhone/iPod Touch).

Jeff Bezos and his team are grand masters at viewing their company, Amazon.com (AMZN), as not just a retailer but also as a bundle of capabilities. It is precisely such a perspective that has made it possible for them to figure out how Amazon could go beyond selling on its own account and also become a gateway for other merchants, and even get into entirely new businesses such as cloud computing services that are seemingly unrelated to the retail business.

Viewed from the lens of underlying capabilities, the Nano is not just a particular type of car designed for the peculiarities of the Indian market. It is also a bundle of proprietary technologies, supplier relationships, and a mindset that prizes frugal engineering. These capabilities, when applied to the needs of the rich European and North American markets, could easily result in an upgraded car that may sell for, say, $8,000 and give a competitor whose product sells for $12,000 a run for its money. As global auto companies look at the Nano, the question they should ask is not whether customers in the rich economies would care for such an inexpensive-but-simple car, but whether Tata Motors could show up in their backyards with a competitive or better product that sells for 30%-35% lower prices than their own in these markets.

Gupta is the INSEAD Chair and Professor of Strategy at INSEAD and based at the Institute's campus in Singapore. He is the author of Getting China and India Right (Jossey-Bass, 2009) and The Quest for Global Dominance (Jossey-Bass, 2008). He can be reached at anil.gupta@insead.edu. For his articles and videos, please see www.anilkgupta.com. Wang is Managing Partner of the China India Institute, a Washington DC-based research and consulting organization. She also serves as an Adjunct Professor of Strategy at INSEAD. She is the author of Getting China and India Right (Jossey-Bass, 2009) and The Quest for Global Dominance (Jossey-Bass, 2008). She can be reached at hwang@chinaindiainstitute.com. For her articles and videos, please see www.gettingchinaandindiaright.com.

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